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 UNFUNDED MANDATES REFORM ACT ANALYSIS

FOR THE SPARK-IGNITION (SI) STATIONARY RECIPROCATING INTERNAL 

COMBUSTION ENGINE (RICE) NESHAP UNDER THE CLEAN AIR ACT

(August, 2010)

This document provides an analysis of the effects of the U.S. Environmental Protection 

Agency’s (“EPA”) stationary spark-ignition (SI) reciprocating internal combustion engine 

(RICE) national emissions standard for hazardous air pollutants (NESHAP) rulemaking under 

Title III of the Clean Air Act (“CAA”) on State, local, and tribal governments, and the private 

sector as required by the Unfunded Mandates Reform Act of 1995 (“UMRA”). EPA has 

determined that an UMRA analysis is required because the SI RICE rulemaking will affect units 

operated by State and local governments, and will impose a cost on the private sector greater 

than $100 million in any one year.

This UMRA analysis examines the impacts of the rule on units that are owned by State, 

local, tribal governments and the private sector. This analysis is based on the regulatory impact 

analysis (“RIA”) prepared for this rule. The RIA for this rule includes EPA’s assessment of 

costs, benefits, and economic impacts and can be found in the docket for this rulemaking at 

www.regulations.gov. 

This final rule includes a maximum achievable control technology (MACT) standard for 

SI RICE that are major sources of HAP and a generally available control technology (GACT) 

standard for RICE that are area sources of HAP. Existing spark-ignition engines will incur 

compliance costs (the costs of control measures and testing, monitoring, recordkeeping, and

reporting) under this rule. New spark-ignition engines will not be affected by this rule. This rule 

will be promulgated on August 10, 2010 as directed under a court-order. 

This rule affects existing SI RICE (defined as RICE constructed before June 12, 2006) 

but not new ones. Estimates of existing SI RICE by engine type and compliance cost estimates 

by engine type were used as inputs to calculate the economic impact of the rule. SI RICE are 

defined as emergency and non-emergency engines based on their extent of use in a typical year. 

Most engines affected by this rule are in the non-emergency category. Emergency engines will 

not be required to add controls to meet the final rule’s requirements, but will have to submit to 

monitoring, recordkeeping, reporting, and testing requirements. 

The economic impact analysis (“EIA”) that is included in the RIA indicates that prices of 

affected output from the affected industries will increase as a result of the rule, but the changes 

will be small. The largest impacts are on the electric power generating industry because it bears 

more costs from the rule than any other affected industry (slightly more than 50 percent of the 

total annualized costs). For all affected industries, annualized compliance costs are 0.5 percent 

or less on average of sales for firms. 
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Based on the estimated compliance costs associated with this rule and the predicted 

changes in prices and output in affected markets, the estimated social costs are $253 million 

(2009 dollars), which is the same as the estimated compliance costs. 

It is estimated that HAP emissions from existing RICE will be reduced by 6,000 tons per 

year by 2013. Reductions in formaldehyde, acetaldehyde, acrolein, methanol, benzene and other 

HAPs are included in this estimate. The rule will also achieve in 2013 reductions in criteria 

pollutants. Reductions in carbon monoxide (CO) will total about 109,000 tons per year, about 

31,000 tons of volatile organic compounds (VOC), and nearly 96,000 tons per year of nitrogen 

oxides (NOx). 

Exposure to CO can affect the cardiovascular system and the central nervous system. 

Emissions of NOx and VOC can also transform into PM (including PM2.5) in the atmosphere. 

Exposure to PM emissions can result in premature fatalities and many respiratory problems (such 

as asthma and bronchitis). NOx and VOC can also transform into ozone, and this can also lead 

to premature mortalities and many respiratory problems. 

The total monetized benefits of the rule range from $510 million to $1.2 billion (2009

dollars) in 2013 with a 3 percent discount rate and $460 million to $1.1 billion (2009 dollars) in 

2013 with a 7 percent discount rate. The monetized benefits are comprised primarily of the 

benefits from reductions in directly emitted PM2.5 and PM2.5 created from transformation of NOx 

and VOC. We cannot provide a monetary estimate for the benefits associated with reductions of 

HAP and CO due to a lack of scientific knowledge of the links between the reductions in 

incidence of the health and environmental effects listed and a value that can be placed on them. 

EPA currently has research going on to provide such monetized estimates. The methodology for 

estimating monetized benefits is discussed in more detail in the RIA. Overall, the monetized net 

benefits of the final rule are $250 million to $980 million and $210 million to $860 million, at 

3% and 7% discount rates, respectively. 

Our analysis also includes the economic impacts on small entities. The analysis of 

impacts on small entities is done as part of compliance with the Small Business Regulatory

Enforcement Fairness Act (SBREFA), and is referred to by reference in this report. We estimate 

that all small private sector entities will have annualized costs of less than 1 percent of their sales 

in all industries except NAICS 2211 (electric power generation, transmission, and distribution)

and NAICS 111 and 112 (Crop and Animal Production). For NAICS 2211, the number of 

private sector small entities having annualized costs of greater than 1 percent of their sales is less 

than 5 percent. For NAICS 111 and 112, the number of small entities having annualized costs of 

greater than 1 percent of their sales is about 30 percent, but no small entity has an impact of 2 

percent or greater. We conclude that there is no significant impact on a substantial number of 

small entities (SISNOSE) that results from this rule.

Small government entities may also be affected by this rule as well as small private sector 

entities. As presented in the RIA, we find that no small government entity will have compliance 

costs of more than 0.2 percent of their revenues. Hence, no small government entity will be 

impacted significantly by this rule. 
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Although this rule will not have a SISNOSE, EPA nonetheless has tried to reduce the 

impact of this rule on small entities. EPA carefully examined the regulatory alternatives, and 

selected the lowest cost/least burdensome alternative that EPA deems adequate to achieve the 

statutory requirements of Clean Air Act section 112 and effectively reduce emissions of HAP

from major and area sources. Some alternatives considered that provided more than the 

minimum level of control were deemed as not technically feasible or cost-effective for EPA to 

implement for small engines and emergency engines. All of these actions should reduce the 

level of small entity impacts including impacts to small governments.