Air Quality
ENVIRONMENTAL QU

... LITY

Heather McTeer Toney Regional Administrator USEP A Region 4 Atlanta Federal Center 61 Forsyth Street, SW Atlanta, GA 30303-8960 March 24, 2016 PAT MCCRORY

D ONA LD R

. V AN D E R V A A RT
Secre t at:r

SH E I LA C

. HOLMA N Director

Subject: Revision to North Carolina's Clean Air Act Section 110(a)(2)(D)(i)(I) "Good Neighbor" State Implementation Plan for the 2010 1-Hour Nitrogen Dioxide Standard

Dear Ms. Toney :

I am pleased to submit this certification demonstrating that the North Carolina Department of Environmental Quality, Division of Air Quality (DAQ) has met the requirements of the Clean Air Act Section 110(a)(2)(D)(i)(I) for the 2010 1-hour nitrogen dioxide (N02) primary National Ambient Air Quality Standard (NAAQS). This submittal serves as a revision
to North Carolina's final certification submitted to the U.S. Environmental Protection Agency (EPA) on August 23, 2013, demonstrating compliance with Clean Air Act Section l lO(a)(l) and (2) infrastructure State Implementation Plan (SIP) requirements for the 1-hour N02 primary NAAQS. Attachment 1 contains the public notice and the EPA's no-comment letter. An exact duplicate electronic copy is being provided on a compact disk.

The North Carolina General Statutes identified in this certification are cited as reference material only, and should not be adopted as part of North Carolina's SIP. The DAQ believes that legal documents and statutes are not required to be adopted into the SIP based upon the EPA Federal Register (FR) notice on May 19, 2010 regarding California's legal authority (75 FR 27938). In this final rule, the EPA states, "'We also noted that the actual statutory provisions and other legal documents relied upon to support a State's assurance of adequate legal authority need
not be approved into the SIP under CAA section 110 or [USEPA's] SIP regulations under 40 [Code of Federal Regulation] part 51 (although such provisions are required to be submitted with the plan). Thus, [USEP A] could approve, consistent with CAA and [USEP A] requirements, and did so in this instance
, wholesale revisions to the original legal authority chapter without also approving the actual statutory provisions and other legal documents cited there."

The DAQ issued a public notice announcement on February 19, 2016, in accordance with 40 CFR 51.102, indicating that the "Revision to North Carolina's Clean Air Act Section J JO(a)(2)(D)(i)(I) "Good Neighbor" State Implementation Plan/or the 2010 I-Hour Nitrogen Dioxide Standard " was available for public comment and posted on the DAQ website for review. The public notice announcement indicated that anyone may request a public hearing.

State of North Carolina I En v ironmental Quality I Air Quality
1641 Mail Setvice Center I 217 W

. Jone s Street, Suite 4000 I Raleigh, NC 27609-1 6 41
919 70 7 8400 THeather McTeer Toney March 24; 2016 Page 2

In addition to posting on the DAQ website, the public notice announcement was sent to a number of e-mail distribution lists managed by the DAQ that includes numerous stakeholders from industry and environmental groups. The DAQ believes that sending the public notice announcement to these groups is more effective than publishing the notice in a few local newspapers and is consistent with the requirements described in the April 6, 2011, memorandum, "Regional Consistency for the Administrative Requirements of the State Implementation Plan Submittals and the Use of Letter Notices. "

Additionally, the Rich Site Summary (RSS) feed on the DAQ website offers regular delivery to persons interested in receiving updates to the website content. The document was also made available for review during normal business hours at the DAQ Central Office in Raleigh and each of the DAQ's seven Regional Offices.

The public comment period was open from February 19, 2016 through March 21, 2016. The DAQ did not receive any requests for a public hearing or any comments from the public or the EPA.

The DAQ believes it has in good faith addressed the requirements of Section 110(a)(2)(D)(i)(I) for the 2010 1-hour N02 primary NAAQS. If you should have any questions regarding this submittal, please contact Randy Strait of my staff at (919) 707-8721.

SCH/rps

cc: Michael Abraczinskas, NCDAQ Sushma Masemore, NCDAQ Randy Strait, NCDAQ Scott R. Davis, USEP A Lynorae Benjamin, USEPA Sincerely,



# &LCM~ Sheila C. Holman, Director Division of Air Quality, NCDEQ

William Barnette, Forsyth County Office of Environmental Assistance and Protection Leslie Rhodes, Mecklenburg County Air Quality David Brigman, Western Regional Air Quality Agency

# FINAL

Revision to the North Carolina State Implementation Plan

Demonstration that North Carolina Complies with the

“ Good Neighbor ” Requirements of Clean Air Act Section 110(a)(2)(D)( i)(I)

for the 20 10 1

- Hour Nitrogen Dioxide National Ambient Air Quality Standard

Prepared by North Carolina Department of Environment al Quality

Division of Air Quality

March 24 , 201 6

### Preface: This revision to the North Carolina State Implementation Plan (SIP) for the 2010 1

-

Hour Nitrogen Dioxide standard provides information related to infrastructure requirements for interstate transport or the “good neighbor” provision of Clean Air Act Section 110(a)(2)(D)(i)(I)

.Revision to North Carolina Infrastructure State Implementation Plan Final

Clean Air Act Section 110(a)(2)(D)(i)(I) “Good Neighbor” Demonstration i 2010 1

- Hour Nitrogen Dioxide NAAQS March 24 , 201 6 

## Table of Contents

1.0 Interstate Pollution Transport (Good Neighbor) Provision

................................ ...................... 1 2.0 North Carolina’s Good Neighbor SIP Demonstration

................................ ............................. 3 2.1 Control Measures, Means, and Techniques

................................ ................................ ............. 3
2.2 Review of Current NO 2 

### Monitoring Data

................................ ................................ ................ 4 2.3 Trends in Nitrogen Oxide (NOx) Emissions

................................ ................................ ........... 5 2.4 Interstate Transport Considerations

................................ ................................ ....................... 10
2.5 Interstate Coordination

................................ ................................ ................................ ........... 11 3.0 Concluding Remarks

................................ ................................ ................................ .............. 11



## List of Tables

Table 2

- 1. Monitored 2010 1

- Hour NO 2 

### NAAQS Design Values (ppb)

................................ ....... 4 Table 2

- 2. Summary of Nitrogen Dioxide Concentrations at Near Road Monitoring Stations in North Carolina for 2014

................................ ................................ ................................ .................. 5 Table 2

- 3. North Carolina Annual Statewide NOx Emissions (Thousand Tons per Year)

........... 5 Table 2

- 4. Current Air Pollution Controls at North Carolina’s Coal Plants

................................ .. 7



## List of Figures
Figure 2

- 1. Trends in North Carolina’s Statewide NOx Emissions.

................................ .............. 5 Figure 2

- 2. North Carolina NOx Emissions in 2002 and 2011.

................................ ..................... 6 Figure 2

- 3. Power Plant Related Emission Trends (1999

- 2013).

................................ .................. 9 Figure 2

- 4. Projected Power Plant R elated Emissions (2017

- 2030).

................................ ............. 9Revision to North Carolina Infrastructure State Implementation Plan Final

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- Hour Nitrogen Dioxide NAAQS March 24 , 201 6 

### (This page intentionally left blank)Revision to North Carolina Infrastructure State Implementation Plan Final

Clean Air Act Section 110(a)(2)(D)(i)(I) “Good Neighbor” Demonstration 1 2010 1

- Hour Nitrogen Dioxide NAAQS March 24 , 201 6 

### 1.0 Interstate Pollution Transport ( Good Neighbor ) Provision

Sections 110(a)(1) and (2) of the Clean Air Act (CAA) require all states to adopt and submit to the U. S. Environmental Protection Agency (EPA) any revisions to their infrastructure State Implementation Plans (SIP) which provide for the implementation, mai ntenance and enforcement of a new or revised national ambient air quality standard (NAAQS). The EPA revised the nitrogen dioxide (NO 2 

### ) NAAQS o n January 22, 2010 by adopting a new 1

- hour primary standard of 100 parts per billion (ppb), measured as a three

- year average of the 98th percentile concentration. The EPA made no changes to the existing annual standard of 53 ppb that was originally promu lgated in 1971. On January 20, 2012, the EPA designated all areas of the country , including North Carolina, as “ unclassifiable/attainment” for the 2010 NO 2 

### NAAQS

. The North Carolina Department of Environment al Quality , Division of Air Quality (DAQ) subsequently submitted North Carolina’s infrastructure SIP certification on August 23, 2013

.
This document serves a s a revision to the North Carolina infrastructure SIP to certify compliance with Section 110(a)(2)( D ) (i)(I) of the CAA. Section 110(a)(2)( D ) (i) (I) of the CAA requires that North Carolina’s S IP for the 2010 NO 2 

### NAAQS shall

- “(D) contain adequate provisions

–
(i) prohibiting, consistent with the provisions of this subchapter, any source or other type of emissions activity within the State from emitting any air pollutant in amounts which will

-
(I) contribute significantly to nonattainment in, or interfere with maintenance by, any other State with respect to any such national primary or secondary ambient air quality standard

S ection 110(a)(2)(D)(i)(I) of the CAA requires each state to prohibit emissions that will significantly contribute to nonattainment of a NAAQS, or interfere with maintenance of a NAAQS, in a downwind state. North Carolina’s August 23, 2013 infrastructure certification was based on the information available to the states and guidance given by the EPA. Spec ifically, it relied on t he August 21 , 2012 decision by t he U.S. Court of Appeals for the District of Columbia Circuit that vacate d the 2011 Cross

- State Air Pollution Rule (CSAPR) and clarified that only the EPA can determine “significant contribution” and that “a SIP cannot be deemed to lack a required submission or be deemed deficient for failing to implement the good neighbor obligation until after the EPA has defined the s tate’s good neighbor obligation.” 1 

### In addition, the November 19, 2012 EPA memo from Gina McCarthy, Assistant Administrator, cited the court decision that “a SIP cannot be deemed deficient for failing to meet the good neighbor obligation before EPA quantifies the obligation.”

However , o n April 29, 2014 the U.S. Supreme Court revers ed the D.C. Circuit Court ruling , and held that (i) the plain text of the CAA allowed the states in the first instance to determine whether and to what extent their interstate emissions were unlawful and, where a state failed to do so, EPA could impose a F ederal Implementation Plan, (ii) EPA’s calculation of the states’

1 EME Homer City Generation, L.P. b. USEPA, No. 11

- 1302 (2012).Revision to North Carolina Infrastructure State Implementation Plan Final

Clean Air Act Section 110(a)(2)(D)(i)(I) “Good Neighbor” Demonstration 2 2010 1

- Hour Nitrogen Dioxide NAAQS March 24 , 201 6 

### interstate contributions to downwind nonattainment was a permissible construction of the C AA
, and (iii) the CAA did not prohibit EPA from considering the cost of emission controls when deter mining the appropriate level of reductions. The Supreme Court further clarified CAA Section 110(a)(2)(D)(i)(I) and held that despite the lack of EPA guidance, states are required to meet their good neighbor requirements in a timely manner

. 2



### In accordan ce with the U.S. Supreme Court ’s decision, the DAQ reviewed the most recent three years of monitoring data for North Carolina and its neighboring states as well as statewide trends in NOx emissions. The results of the DAQ’s review is presented in this SIP revision which demonstrates that North Carolina does not contribute significantly to downwind NO 2 

### air quality problems in another state.

2 EPA v. EME Homer City Generation, L.P. 134 S.Ct 1584, 1600

- 01 (2014).Revision to North Carolina Infrastructure State Implementation Plan Final

Clean Air Act Section 110(a)(2)(D)(i)(I) “Good Neighbor” Demonstration 3 2010 1

- Hour Nitrogen Dioxide NAAQS March 24 , 201 6 

### 2 .0 North Carolina’s Good Neighbor SIP Demonstration

2 .1 Control Measures, Means, and T echniques

The following rules address additional control measures, means, and techniques that ensure that North Carolina is not interfering with attainment or maintenance of the 1

- hour NO 2 

### NAAQS in a downwind state:

 15A NCAC 2D .0400 “Ambient Air Quality Standards"

 15A NCAC 2D .0500 “Emission Control Standards"

 15A NCAC 2D .0600 “Monitoring: Recordkeeping: Reporting”

 15A NCAC 2D .1000 “Motor Vehicle Emission Control Standards”

 15A NCAC 2D .1200 “Control of Emissions from Incinerators”

 15A NCAC 2D .1400 “Nitrogen Oxides”

 15A NCAC 2D .1600 “General Conformity”

 15A NCAC 2D .2000 “Transportation Conformity”

 15A NCAC 2D .2200 “Special Orders ”

 15A NCAC 2D .2300 “Banking Emission Reduction Credits”

 15A NCAC 2D .2600 “Source Testing”

 15A NCAC 2Q .0500 “Title V Procedures"

 2002 North Carolina Clean Smoke Stacks Act (CSA) , Session Law 2002

- 4 (NCGS 143

- 215.107d)

o On September 26, 2011, the nitrogen oxide (NOx) and sulfur dioxide (SO 2 

### ) emissions caps in the CSA became federally enforceable as part of Nor th Carolina’s SIP (76 FR 59250)

 Federal Implementation Plan

- Cross State Air Pollution Rule (CSAPR)

Although North Carolina is not relying on CSAPR for maintaining compliance with the N O 2 

### NAAQS, CSAPR is a federally enforceable program that once fully implemented may yield residual NOx and SO 2 

### emissions reduction benefits. On April 29, 2014, the U.S. Supreme Court reversed the D.C. Circuit Court of Appeals ’ decision to vacate CSAPR. Following this ruling, on October 23, 2014 the D.C. Circuit granted the EPA’s request to lift the CSAPR stay and toll the CSAPR compliance dates by three years. Beginning on January 1, 2015 , NOx and SO 2 

### emissions levels under Phase I took effect. However, on July 28, 2015, the D.C. Circuit Court of Appeals issued a decision invalidating the EPA’s 2014 ozone

- season NOx budgets for North Carolina and 10 other states. 3 

### The Court remanded without vacatur to the EPA to reconsider the Phase II NOx budgets that may be too restrictive , but did not sustain other challenges to the rule. The EPA is addressing the Court remand to reconsider the o zone

- season NO x emissions budgets for certain states including North Carolina in its proposed Cross

- State Air Pollution Rule Update for the 2008 Ozone NAAQS

. 4 

### North Carolina is on track to comply with the Phase I CSAPR requirements which are federally enforceable.

3 EPA v. EME Homer City Generation, L.P. U.S. Court of Appeals for the D.C. Circuit , No. 11

- 1302 (July 28, 2015), http://www.epa.gov/airtransport/CSAPR/index.html

. 4 80 FR 75706 , December 3, 2015

.Revision to North Carolina Infrastructure State Implementation Plan Final

Clean Air Act Section 110(a)(2)(D)(i)(I) “Good Neighbor” Demonstration 4 2010 1

- Hour Nitrogen Dioxide NAAQS March 24 , 201 6 

### NCGS 143

- 215.107(a)(5), Air quality standards and classifications , provides the North Carolina Environmental Management Commission (EMC) with the statutory authority, “ To develop and adopt emission control standards as in the judgment of the Commission may be necessary to prohibit, abate, or control air pollution commensurate with es tablished air quality standards. ”

2 .2 Review of Current NO 2 

### Monitoring Data

For the purpose of evaluating compliance with the good neighbor provisions, the DAQ examined the 1

- hour NO 2 

### design values calculated from EPA

- validated monitoring data collected from 2012 through 2014 . F or North Carolina and for the states surrounding North Carolina
, the monitored design values are less than 50 percent of the 100 ppb 1

- hour NO 2 

### standard (see T able 2

- 1)

. These data
, along with the fact that the EPA has designated all areas of the country as “unclassifiable/attainment” for the standard, show that North Carolina does not contribute significantly to downwind NO 2 

### air quality problems in any state.

Table 2

- 1

. Monitored 2010 1

- Hour NO 2 

### NAAQS Design Values ( ppb)

State Location 2012

- 2014 Monitoring Data

Design Value Percent of 100 ppb NO 2 NAAQS NC Forsyth County 41 41 GA DeKalb County 49 49 TN Sullivan County 49 49 VA Charles County 43 43 SC No Valid Data No Valid Data Source: EPA

- validated design values in this table are taken from the EPA Air Trends website at: http://www3.epa.gov/airtrends/values.html ; f ile “ NO2_DesignValues_20122014_FINAL_08_06_15.xlsx ; Tab Table 6b. ” The design values in this table reflect the highest design value recorded by a monitor in each state.



### When the EPA established the 1

- hour NAAQS i n 2010 , it also established a new NO 2 

### monitoring network to support the new standard. As a part of the new network, state and local agencies are required to establish near

- road monitoring sites because on

- road mobile sources can be major sources of NO 2 

### emissions in urban areas . These micro

- scale near

- road NO 2 

### monitoring stations are required in each core

- based statistical area ( CBSA ) with a population of 500,000 or more persons and to be located near a major road with high average annual daily traffic ( AADT ) counts (i.e., to monitor a locati on of expected maximum hourly NO 2 

### concentrations ) . Stations in CBSAs with over 1,000,000 people were required to begin monitoring on January 1, 2014. To carry out this requirement, North Carolina established near

- road monitors in two CBSAs with over 1,00 0,000 people: the Charlotte

- Concord

- Gastonia area and the Raleigh area. Monitoring started in January 2014 in the Raleigh area and Ju ly 2014 in the Charlotte area.

Table 2

- 2 provides a summary of the 2014 near

- road monitoring data. These results show that monitored NO 2 

### concentrations are well below both the 1

- hour and annual NO 2 

### standards and ; therefore, emissions from mobile sources are highly unlikely to contribute to nonattainment, or interfere with maintenance
, of the NO 2 

### NAAQS in a downwind state

.Revision to North Carolina Infrastructure State Implementation Plan Final

Clean Air Act Section 110(a)(2)(D)(i)(I) “Good Neighbor” Demonstration 5 2010 1

- Hour Nitrogen Dioxide NAAQS March 24 , 201 6 

### Table 2

- 2

. Summary of Ni trogen Dioxide Concentrations at Near Road Monitoring Stations in North Carolina for 2014

CBSA Start Date 98 th percentile of 1

- H our D aily M aximums A nnual A verage of all Hourly V alues 2014 Percent

C ompleteness Charlotte July 17, 2014 39.3 ppb 11.4 ppb 36 % Raleigh Jan. 8, 2014 36.4 ppb 10.5 ppb 85 % Sources: Data downloaded from AQS Data Mart ( http://www3.epa.gov/airdata/ad_maps.html ) on Nov. 9, 2015

. Files from which the data were obtained are the annual summary data files for Remount Road and Triple Oak Road: “annual_37_119_0045_2014” and “annual_37_183_0021_2014,” respectively.



### 2

. 3 Trends in Nitrogen Oxide (NOx) Emissions

As shown in Figure 2

- 1 and Table 2

- 3, North Carolina’s statewide annual NOx emissions have significantly declined since 1996 due to the state and federal programs

. Based on the EPA’s triennial emissions inventory data, f rom 1996 through 2011, NOx emissions have declined by about 50 percent . From 2011 through 2017
, NOx emissions are estimated to decline by an additional 39 percent.

Figure 2

- 1

. Trends in North Carolina’s Statewide NOx Emis sions

.

Table 2

- 3

. North Carolina Annual Statewi de NOx Emissions (Thousand Tons per Year)
Pollutant 1990 1996 1999 2002 2005 2008 2011 2013 2017 NOx 631 739 660 609 523 459 3 65 296 234 Sources: For 1990 through 20 08 , emissions are from the EPA’s National Emissions Inventory located at http://www.epa.gov/air

- emissions

- inventories

. For 2011, emissions are from the EPA’s 2011 v6.2 modeling platform emissions summary, located at: ftp://ftp.epa.gov/EmisInventory/2011v6/v2platform/reports/2011eh_state_fullSCC_summary.xlsx

. For 2017, emissions are from the EPA’s 2017 v6.2 modeling platform emissions summary, located at: ftp://ftp.epa.gov/EmisInventory/2011v6/v2platform/reports/2017eh_cb6v2_v6_11g_stat e_sector_totals.xlsx

.

0 100 200 300 400 500 600 700 800

1990 1996 1999 2002 2005 2008 2011 2013* 2017* Thousand Tons / Year

Includes emissions from power plants, non electric generating units (EGU), mobile sources, and area sources. * Denotes projected values.Revision to North Carolina Infrastructure State Implementation Plan Final

Clean Air Act Section 110(a)(2)(D)(i)(I) “Good Neighbor” Demonstration 6 2010 1

- Hour Nitrogen Dioxide NAAQS March 24 , 201 6 

### T he NOx emissions values shown in Figure 2

- 1 and Table 2

- 3 for 1990 through 2011 and 2017 are based on EPA datasets. For 2013, emissions were estimated by the DAQ because EPA estimates were not readily available for 2013 . For the EG U and non

- EGU facilities in the 97 counties that report directly to the DAQ, annual emissions are based on the 2013 emissions reported by the facilities. For three local programs (Buncombe, Forsyth, and Mecklenburg), 2011 NEI emissions were adjusted to 20 13 using the 2013

- to

- 2011 NOx ratio of statewide EGU and statewide non

- EGU annual emissions reported by facilities in the 97 counties. For the onroad, nonroad, and area source categories, the EPA’s 2011 emissions modeling platform (EMP, version 2) emissio ns were adjusted to 2013 by using the 2013

- to

- 2011 NOx ratio of emissions for each sector developed from 2011 and 2013 emissions modeled for the Charlotte maintenance area for the 2008 8

- hour ozone standard. The 2013 estimates were checked for reasonablen ess against the EPA’s 2017 EMP , version 2 emissions estimates

. 5



### Figure 2

- 2 illustrate s the annual NOx emissions inventory for 2002 and 201 1 by sector

. Statewide e missions have declined dramatically, particularly in the electricity generating and onroad sectors. Total NOx emissions declined by nearly 40 percent from 2002 to 2011.

Figure 2

- 2

. North Carolina NOx Emissions in 2002 and 2011.

Total NOx emissions from the 

### electricity generating unit ( EGU ) sector have declined dramatically primarily due to North Carolina’s 2002 landmark legislation called the 

### CSA which set entity

- wide caps on the total annual emissions of NOx and SO 2 

### from investor

- owned coal

- fired EGUs. 6 

### The CSA emissions limits were set a t 56,000 tons/year for NOx by 2009 and thereafter and 130 ,000

5 The Charlotte maintenance area for the 2008 8

- hour standard includes all of Mecklenburg County and portions of Cabarrus, Gaston, Iredell, Lincoln, Rowan and Union Counties

. See Table 1 ( Counties and Townships within the Charlotte Nonattainment Area ) in th e Redesignation Demonstration and Maintenance Plan for The Charlotte

Gastonia

- Salisbury, North Carolina 2008 8

- Hour Ozone Marginal Nonattainment Area , April 16, 2015 located at: https://deq.nc.gov/about/divisions/air

- quality/air

- quality

- planning/state

- implementation

- plans/charlotte

- gastonia

salisbury

- nc

- 2008

- 8

- hour

- ozone

- area

. 6 Clean Smokes tacks Act, 2002 N.C. Session Law 72 (codified as amended at N.C. General Statutes §§62

- 133.6 and in other sections of ch. 143, article 21B (2011).Revision to North Carolina Infrastructure State Implementation Plan Final

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- Hour Nitrogen Dioxide NAAQS March 24 , 201 6 

### tons/year for SO 2 

### by 2013 and thereafter. This means that, relative to 1999 levels, coal

- fired EGUs must achieve a 77 percent reduction in NOx emissions and a 73 percent reduction in SO 2 

### emissi ons by 2013. These limits have been adopted into the North Carolina SIP and are federally enforceable.

An important feature of the CSA is that North Carolina's two largest utility companies, Duke Energy and Progress Energy (recently merged to form Duke Energy Progress), must achieve these cuts through actual reductions at their 14 EGU facilities in the state. By 2014, seven coal plants remained operating while four plants were converted to natural gas and three smaller plants were retired. The seven r emaining coal plants are retrofitted with selective catalytic reduction (SCR) or selective non

- catalytic reduction (SNCR) technologies for NOx control. SCR is the most efficient technology available to control NOx emissions and is in place at all but

seve n units. Table 2

- 4 summarizes the current emission controls at each of the seven operating coal plants.

Table 2

- 4

. Current Air Pollution Controls at North Carolina’s Coal Plants

The information in Table 2

- 3 does not reflect future actions that Duke Energy will be implementing at its GG Allen and Ashville plants that will significantly reduce NOx and SO 2 

### emissions. For the GG Allen plant, a consent decree agreement between the EPA and Duke Energy requires Duke Energy to meet a specified annual NOx emission rate and mass emissions limit for coal

- fired units 1 and 2 and permanently shut down u nits 1, 2, and 3 by December 31,Revision to North Carolina Infrastructure State Implementation Plan Final

Clean Air Act Section 110(a)(2)(D)(i)(I) “Good Neighbor” Demonstration 8 2010 1

- Hour Nitrogen Dioxide NAAQS March 24 , 201 6 

### 2024. 7 

### In M arch 2016, the North Carolina Utilities Commiss ion approved Duke Energy’s application to invest approximately $1 billion in its Ashville plant to construct two 280

- megawatt combined cycle natural gas

- fired EGUs to replace, by 2020, two coal

- fired EGUs with a combined generation capacity of 376 megawatt s. The company plans to work with the City of Asheville, Buncombe County and surrounding communities to decrease energy use in the nine

county service area. Over the next seven years, Duke Energy plans to file an application with the North Carolina Utili ties Commission for approval of a minimum of 15 megawatts of new solar generation and 5 megawatts of utility

- scale electricity storage at its Ashville plant. 8



### As of calendar year 2014, statewide NOx emissions from the affected EGUs continue to be below th e CSA limit. In 2014, annual NOx emissions were 34,847 tons, which is well below the 56,000 tons annual limit. Furthermore, EGU

- related NOx emissions levels during the ozone season have been below the 2012 CSAPR emissions limit which was put on hold duri ng the extended litigation period. North Carolina is well positioned to comply with the Phase I CSAPR limit which took effect on January 1, 2015. Note that although North Carolina is not relying on CSAPR for maintaining compliance with the NO 2 

### NAAQS, CSA PR is a federally enforceable program that once fully implemented may yield residual NOx emissions reduction benefits.
In addition to the early installation of emission control technologies, North Carolina’s power plants are ahead of the nation in transitioning from coal to natural gas and renewable resources. Between the period of 2002 and 2012, electricity generation fr om coal plants declined from 62 percent to 45 percent; while the generation from natural gas increased from 2 percent to 15 percent. Figure 2

- 3 illustrates the resulting change in NOx emission levels from all fuel types within the electric utility sector. This trend is expected to continue into the future, with further reduction in coal capacity utilization. Figure 2

- 4 illustrates the current projected NOx emission levels for the major electric power plants in the state.
According to the EPA’s emissio ns projections, emissions are expected to continue to decline through 2017 and beyond due to on

- the

- books national rules for onroad and nonroad mobile

sources including the following :

Onroad

 Tier 3 Motor Vehicle Emission and Fuel Standards Program,

 Light

- Duty Vehicle Tier 2 Rule,

 Heavy Duty Diesel Rule,

 Mobile Source Air Toxics Rule,

 Renewable Fuel Standard,

 Light

- Duty Green h ouse Gas/Corporate Average Fuel Efficiency S tandards for 2012

- 2016,

 Heavy

- Duty Vehicle Greenhouse Gas Rule, and

7 Consen t decree between the United States of America on behalf of the US EPA and Duke Energy Corporation, Civil Action No.: 1:00 cv 1262, September 10, 2015, see http://www2.epa.gov/enforcement/duke

- energy

corporation

- clean

- air

- act

- caa

- settlement

. 8 Duke Energy ( http://www.duke

- energy.com/western

- carolinas

- modernization/#C0R0 ) and Electric Energy Online ( http://www.electricenergyonline.com/detail_news.php?ID=566833&cat=;87;59&niveauAQ=0 ).Revision to North Carolina Infrastructure State Implementation Plan Final

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###  2017 and t he Later Model Year Light

- Duty Vehicle Greenhouse Gas Emissions and Corporate Average Fuel Economy Standards Rule.
Nonroad

 Clean Air Nonroad Diesel Final Rule

- Tier 4

 Control of Emissions from Nonroad Large Spark

- Ignition Engines, and Recreational Engin es (Marine and Land

- Based)

 Small Engine Spark Ignition (“Bond”) Rule

Figure 2

- 3

. Power Plant Related Emission Trends (1999

- 2013)

. 9



### Figure 2

- 4

. Projected Power Plant Related Emissions (2017

- 2030)

.

9 U S. Energy Information Administration, Energy Information Administration, State Electricity Profiles , See Table 7 ( Electric power industry emissions estimates, 1990 through 2013 ) http://search.usa.gov/search?affiliate=eia.doe.gov&query=eia+electricity+state+north+carolina+xls+sept+07+il+xls
, (accessed February 2015).Revision to North Carolina Infrastructure State Implementation Plan Final

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- Hour Nitrogen Dioxide NAAQS March 24 , 201 6 

### The DAQ believes that, in conjunction with the continued implementation of the state’s ability to limit NO x emissions through North Carolina’s CSA and federally enforceable emission limitations and other control measures, means, or technique s , low monitored values of NO 2 

### will continue in and around North Carolina

. In other words, NO 2 

### emissions and NOx precursor emissions from North Carolina are not expected to cause or contribute to a violation or interfere with the maintenance of the 201 0 1

- hour NO 2 

### NAAQS in another state.

2

. 4 Interstate Transport Considerations

Because of the short

- term form of the NO 2 

### standard, it is anticipated that a violation of the standard would be associated with local conditions near the emissions source(s) rather than caused by long

- range transport of NOx emissions. This is supported by the following statement on pages 15 and 1 6 of the EPA’s March 1, 2011 modeling guidance for the 1

- hour NO 2 

### standard :

“A general “rule of thumb” for estimating the distance to maximum 1

- hour impact and the region of significant concentration gradients that may apply in relatively flat terrain is approximately 10 times the source release height. For example, the maximum impact area and region of significant concentration gradients associated with a 100 meter stack in flat terrain would be approximately 1,000 meters downwind of the source, with so me variation depending on the source characteristics affecting plume rise. However, the potential influence of terrain on maximum 1

- hour pollutant impacts may also significantly affect the location and magnitude of concentration gradients associated with a particular source. Even accounting for some terrain influences on the location and gradients of maximum 1

- hour concentrations, these considerations suggest that the emphasis on determining which nearby sources to include in the modeling analysis should focus on the area within about 10 kilometers of the project location in most cases. ” 10



### T he DAQ reviewed r ecent Prevention of Significant Deterioration (PSD) program modeling studies completed for one new EGU natural gas facility ( NTE Energy ) and a modification to an existing natural gas EGU facility ( Duke Energy

– Rockingham ) in North Carolina . For these two facilities, PSD modeling using maximum allowable (i.e., worst

- case) NOx emissions indicate that the maximum 1

- hour NO 2 

### concentration of 98 ppb would be below the standard and would

occur at about 8 kilometers from each facility. The PSD modeling performed for these facilities followed EPA’s Tier 2 ambient ratio method that recommends use of 0.8 as the default NO 2 

### /NOx ambient ratio for the hourl y NO 2 

### standard.

For the Duke Energy

– Rockingham modeling analysis, maximum allowable emissions were modeled for the facility as well as 14 other facilities within 50 kilometers of the Rockingham facility (including Duke Energy’s Belews Creek coal plan t ). 11 

### Total maximum allowable annual

10 Additional Clarificat ion Regarding Application of Appendix W Modeling Guidance for the 1

- hour N O 2 ,National Ambient Air Quality Standard, EPA Air Quality Modeling Group to Regional Air Division Directors, March 1, 2011, http://www3.epa.gov/ttn/scram/guidance/clarification/Additional_Clarifications_AppendixW_Hourly

- NO2

- NAAQS_FINAL_03

- 01

- 2011.pdf

. 11 Air Permit Application, Alternative Short Term NOx BACT Limit for Five Simple Cycle Turbines, Rockingham County Combustion Turbine Station, Permit No. 08731T13, Facility ID No. 7900156, Reidsville, North Carolina. Prepared by Duke Energy Carolinas, LLC by URS Corporation, December 2014.Revision to North Carolina Infrastructure State Implementation Plan Final

Clean Air Act Section 110(a)(2)(D)(i)(I) “Good Neighbor” Demonstration 11 2010 1

- Hour Nitrogen Dioxide NAAQS March 24 , 201 6 

### emissions modeled for all 15 facilities combined were 103,0 20 tons

. To place things in perspective, t otal actual NOx emissions in 2011 are 58,911 tons for all of North Carolina’s EGUs combined, and 83,950 tons for all of North Carolina’s stationary point sources combined

. Thus, the total maximum allowable emissions modeled for this one facility are about 15 percent more than total statewide actual NOx emissions in 2011 for all of North Carolina’s EGU and non

- EGU point sources combined and yet the modeling showed attainment of the 1

- hour NO 2 

### NAAQS.

The modeling guidance and the PSD studies support the conclusion that potential exceedances of the 1

- hour standard would most likely be associated with local conditions and not associated with mid

- or long

- range transport of NOx emissions. T he EPA has designated all areas of the country as “unclassifiable/attainment” for the 2010 1

- hour NO 2 

### NAAQS
, indicating that emissions from existing sources are not contributing to NO 2 

### n onattainment issues in any state in the nation. All NO 2 

### monitors in North Carolina and neighboring states are measuring ambient NO 2 

### concentrations below the 2010 NAAQS as shown earlier in Table 2

- 1. A future major new or major modification to an existing NOx emissions source will undergo close review through North Carolina’s PSD program to identify and address any potential transport issues to ensure that North Carolina prohibit s emissions that would significantly contribute to nonattainment or interfere with maintenance of the 1

- hour NO 2 

### NAAQS in a downwind state.

2

. 5 Interstate Coordination The DAQ enjoys a good
, on

- going working relationship with our counterparts in our border states (i.e., Virginia, South C arolina, Georgia and Tennessee). The DAQ also maintains good working relationships with other state, local and federal agencies by actively participating as a member of the Southeastern States Air Resource Managers (SESARM) and Mid

- Atlantic Regional Air Management Association, Inc. (MARAMA) regio nal planning organizations. These relationships include sharing emissions data, modeling studies and other technical information to support multi

- state air quality planning to ensure compliance and maintenance with the NAAQS. Should a state raise a conce rn with North Carolina emissions sources potentially affecting the state’s ability to comply with the 1

- hour NO 2 

### NAAQS, the DAQ would coordinate with the state to share information and technical analyses to determine t he extent of contributions and to eval uate the need for emissions control measures, if required.

3 .0 Concluding Remarks Considering the monitoring data and downward trend in statewide NOx emissions previously discussed, we are concluding through this demonstration that North Carolina does not significantly contribute to 1

- hour NO 2 

### issues in downwind states. This in large part is due to the significant strides North Carolina has achieved in reducing its NOx emissions over the past several years. Based on EPA’s guidance contained in the January 22, 2015 memorandum, states shown to not contribute significantly to downwind air quality problems have no emission reduction obligation under the Good Neighbor Provision. 12 

### The DAQ concludes that North Carolina has met its Good Neighbor Provision under the CAA with respect to the 20 10 1

- hour NO 2 

### standard.

12 USEPA January 22 , 201 5 memorandum, Information on the Interstate Transport "Good Neighbor" Provision for the 2008 Ozone National Ambient Air Quality Standards under Clean Air Act Section 110(a)(2)(D)(i)(I)

.

### (This page intentionally left blank)

## Attachment 1

North Carolina Department of Environmental Quality

Public Notice and EPA No Comment Letter

### (This page intentionally left blank)NORTH CAROLINA DEPARTMENT OF ENVIRONMENTAL QUALITY PUBLIC NOTICE

PURPOSE:

COMMENT PROCEDURES:

REQUESTS FOR A PUBLIC HEARING:

INFORMATION:

Date:



# ~1 lS / U, The North Carolina Department of Environmental Quality, Division of Air Quality (NCDAQ) hereby gives notice regarding a Pre-Hearing Draft Revision to its 2010 1-Hour Nitrogen Dioxide (N02) Standard Infrastructure State Implementation Plan (SIP), Element 11 O(a)(2)(D)(i)(I), referred to as the "Good Neighbor" provision

. This SIP revision demonstrates that based on currently available air quality monitoring and modeling data and the downward trend in statewide NOx emissions, emissions activities within North Carolina will not significantly contribute to nonattainment or interfere with maintenance of the 2010 I-hour N02 NAAQS in a neighboring state

. Persons wishing to submit comments or request a public hearing are invited to do so. Any person wishing to comment may submit a written statement for inclusion in the record of proceedings regarding the Revision to the 2010 I-Hour N02 Infrastructure SIP, Element 11 O(a)(2)(D)(i)(I). Written comments should be received by no later than March 21, 2016. Requests for a public hearing must be in writing and include a statement supporting the need for such a hearing, an indication of your interest in the subject, and a brief summary of the information intended to be offered at such hearing. A public hearing will be scheduled if requested. A separate notice will be announced for the hearing including the date, time and location. Written requests for a public hearing should be received no later than Monday, March 21, 2016 and addressed to Randy Strait, Division of Air Quality, 1641 Mail Service Center, Raleigh, North Carolina 27699-1641. Copies of the Pre-Hearing Draft Revision to the 2010 1-Hour Nitrogen Dioxide Infrastructure SIP, Element 110(a)(2)(D)(i)(I), may be downloaded from the DAQ website at https: // deg

. nc

. gov / about / divisions / air-guality/air-guality-planning / stateimplementation-plans /1 1 Qi-infrastructure-certifications

.
Comments can be submitted electronically to: daq.publiccomments @ ncdenr.go v (Please type "2010 N02 SIP Revision" in the subject line)
Comments can be mailed or faxed to: Randy Strait NC Division of Air Quality 1641 Mail Service Center Raleigh, NC 27699-1641 Fax : (919) 707-8715
The Pre-Hearing Draft Revision to the Infrastructure SIP
, Element 110(a)(2)(D)(i)(I) may be reviewed in person during normal business hours at the following North Carolina Department of Environment and Natural Resources, Division of Air Quality offices: Raleigh Central Office
, Planning Section Asheville Regional Office Fayetteville Regional Office Mooresville Regional Office Rale i gh Regional Office Washington Regional Office Wilmington R eg ional Office Winston

- Sal e m R e gional Office



# ~~

**r** (919) 707-8721 (828) 296-4500 (910) 433-3300 (704) 663-1699 (919) 791-4200 (252) 946-6481 (910) 796

- 7215 (336) 771-5000

### (This page intentionally left blank)UNITED STATES ENVIRONMENTAL PROTECTION AGENCY REGION 4

Sheila C. Holman
, Director Division of Air Quality ATLANTA FEDERAL CENTER 61 FORSYTH STREET ATLANTA
, GEORGIA 30303-8960



# M

AR 1 7 20\6

North Carolina Department of Environmenta l Quality 217 W. Jones Street, Suite 400 Raleigh
, North Caro lin a 27609-1641

Dear Mrs. Holman:

Thank you for the opportunity to review your proposed revisions to the North Carolina's C l ean A ir Act Section 1 1 O(a)(2)D)(i)(I) "Good Neighbor " State Implementation Plan for the 2010 I -H our Nitrogen Dioxide Standard. We have comp l e t e d our review of this pr e hearing submittal and offer no comments at this time.

We look forward to continuing to work with you and your staff. 

### If you have any questions
, please
contact Ms. Lynorae Benjamin
, Chief
, Air Regulatory Management Section at ( 404) 562

- 9040
, or have your staff contact Ms. T i ereny B e ll at (404) 562

- 9088.

Sincerely
,

# ·12)Af~ R. Scott Davis Chief Ai r Planning 

### & Implementation Branch

Internet Address (URL) • http://www.epa.gov RecycledfRecyc l able • Pr i nted with Vegetable Oil Based Inks on Recycled Paper (Min i mum 30 % Postconsumer)