1 TABLE OF CONTENTS

CHAPTER 6 STATE PLAN S ..............................................................................2

CHAPTER 6 STATE PLAN S

................................ ................................ ................................ ...... 1 6.1.8 State flexibility to choose mass

- based and rate

- based goals after 2029

.......................... 2 6.1.9 Planning approach for alternative state goals

................................ ................................ ... 4 6.1.10 Other

................................ ................................ ................................ ................................ ... 5 6.2 Criteria for Approving State Plans

................................ ................................ ..................... 13 6.2.1 Enforceab le measures

................................ ................................ ................................ ........ 13 6.2.2 Emission performance

................................ ................................ ................................ ....... 24 6.2.3 Quantifiable and verifiable emission performance

................................ ......................... 25 6.2.4 Reporting and corrective actions

................................ ................................ ...................... 26 6.2.5 Other

................................ ................................ ................................ ................................ ... 27 6.3 State Plan Components

................................ ................................ ................................ ......... 34 6.3.1 Identification of affected entities

................................ ................................ ...................... 34 6.3.2 Description of plan approach and geographic scope

................................ ...................... 35 6.3.3 Identification of state emission performance level

................................ .......................... 36 6.3.4 Demonstration that the plan is projected to achieve the state's emission performance level

................................ ................................ ................................ ................................ ... 37 6.3.5 Milestones

................................ ................................ ................................ ........................... 42 6.3.6 Corrective measures

................................ ................................ ................................ .......... 42 6.3.7 Identification of emission standards and any other measures

................................ ....... 42 6.3.8 Demonstration that each emission standard is quantifiable, non

- duplicative, permanent, verifiable, and enforceable

................................ ................................ ........ 51 6.3.9 Identification of monitoring, reporting, and recordkeeping requirements

.................. 53 6.3.10 Description of state reporting and recordkeeping requirements

................................ 68 6.3.11 Certification of state plan hear ing

................................ ................................ .................. 74 6.3.12 Supporting material

................................ ................................ ................................ ......... 74 6.3.13 Other

................................ ................................ ................................ ................................ . 77 6.4 Process for State Plan Submittal and Review

................................ ................................ .... 81 6.4.1 State plan submittal and timing

................................ ................................ ....................... 81 6.4.2 Components of an initial state plan submittal and approvability criteria

................. 233 6.4.3 Process for EPA review of state plans

................................ ................................ ............ 247 6.4.4 Fai lure to submit a complete plan

................................ ................................ .................. 269 6.4.5 Modification of an approved state plan

................................ ................................ ......... 286 6.4.6 Plan templates and electronic submittal

................................ ................................ ........ 316 6.4.7 Multi

- state plans

................................ ................................ ................................ ............... 321 6.4.8 Other

................................ ................................ ................................ ................................ . 344 6.5 Additional Factors

................................ ................................ ................................ .............. 347 6.6 Resources

................................ ................................ ................................ ............................. 381 6.6.1 Decision Support Toolbox

- The agency requested comment on the types of tools and information that would be helpful for states as they develop their compliance plans.

................................ ................................ ................................ ................................ ......... 381 6.6.2 Other Resources

................................ ................................ ................................ ............... 400 6.7 Other

................................ ................................ ................................ ................................ .... 4112 6.1.8 State flexibi lity to choose mass

- based and rate

- based goals after 2029

This se ction addresses states flexibility in choosing the forms of each performance level (i.e.,
rate

- or mass

- based) for each performance period. Relatively few comments were received, but all sup ported the flexibility given to the states.

Commenters have raised a number of issues related to this subsection which are organized by topics (comments) below. Responses are also provided for these topics.

Comment 1: Multiple comments supporting states having the flexibility to choose between a
rate

- based and mass

- based performance level

. Response 1: The EPA agrees with comment s that a state should have the ability to choose the goal type and has provided both rate

- based and mass

- based goals in the final rule. If a state determines that it would like to revise its plan to switch between a rate

- based approach and a

mass

- based approach, or vice

- versa, between the interim and final periods, it should follow the process for modifying an approved state plan, w hich is discussed in section VIII.E. 7 of the final rule preamble of the CPP

. The following are summaries of the specific public comments under this comment:

C ommenters supported EPA's proposal that states should have the flexibility to choose between a
rat e

- based and mass

- based performance level for each performance period.

Commenter s stated that the process for switching between the forms of the goal should be simple and short. The commenter s suggested that the process could be a letter notification that would accompany the last annual report for a given performance period. The commenter s stated that for example, a state that is using a rate

- based goal for the 2030

- 2032 performance period could notify EPA of its intent to switch to a mass

- based goal for th e performance period starting in 2033, assuming the goals (mass

- and rate

- based) have been determined and approved prior to such notification.

Commenter s similarly stated that, if a state selects a rate

- or mass

- based goal initially, it should be allowe d to switch to the other type of goal with advance notice to EPA. According to the
commenter s , this would allow flexibility as states and regions develop more familiarity with, and develop new systems for, carbon emission tracking, reporting, and trading.

Commenter s stated that EPA should maintain a state's authority to calculate and implement either a rate

- based performance standard or a mass

- based performance standard. The
commenter s argued that a state should maintain the ability to switch between a rat e

- based and

mass

- based performance standard as it prefers.3 Comment 2: Comment disagreeing with comments submitted by State of Nevada (DNR, NDEP, PUCN), and agreeing that the EPA proposal allows flexibility for states in crafting state plans.

Response 2: The EPA appreciates the commenter s ’ support of the rule and agrees with the
commenter s that the flexibilities provided for in the final rule under the emissions standards and state measures approaches provide states with considerable discretion in crafting their plans to avoid the concerns raised by the “Nevada Agencies” The commenter s are correct in that final rule does not provide EPA with any authority over the PUNC or the state Energy Office nor does it require that entities other than EGU have federal ly enforceable requirements. For a further discussion of state plan approaches see the final rule preamble section VIII.C. For discussion of state plan submittal and timing flexibility see preamble section VIII.E. Additional state plan consider a tions are discussed in preamble sections VIII.G

, VIII.J

, and VIII.K.

The following are summaries of the specific public comments under this comment:

Commenter s addressed comments submitted by the State of Nevada, through the Department of Natural Resources, Nevada Division of Environmental Protection, the Public Utilities Commission of Nevada, and the Governor's Office of Energy, collectively the "Nevada Agencies."

Commenter s stated that the Nevada Agencies' comments assume that the EPA will have authority over the Public Utilities Commission of Nevada (PUCN) and the Energy Office. The
commenter s stated that because of the robust nod to state flexibility, this is not assumed nor supported by EPA's proposal. As delineated in the proposed regulation, the commenter s no ted that the state has the flexibility and discretion to decide how to craft their state plan and what elements of that plan become federally enforceable.

The commenter s suggested for example, a state could decide that what will be enforceable under their submission are the actual emissions reductions for each affected EGU. To make this happen, the commenter s stated that Nevada could develop a permit based program where the Nevada Division of Environmental Protection (NDEP) exercises its traditional authori ty to set emissions limits for each unit

- and owners of the EGUs can decide how best to meet that enforceable emissions limit. The commenter s noted that the state could decide to authorize tradable allowances or credits, whereby EGU owners could meet the carbon limit that has become a condition of their operating permit by holding an allowance or a credit representing investment in a lower

- carbon resource such as renewable energy or energy efficiency.

The commenter s stated that the PUCN would then be able to exercise its traditional authority by ensuring that the plans made by the owners of the EGUs to meet their "permit conditions" make sense. The commenter s stated that these policies and implementation strategies become enforceable at the Federal level/by citizen suit only if the states choose to make them enforceable by submitting them in their plan. In fact, the commenter s noted that the Agencies underscore the options available to them on page 4 of their comments, noting that the "state commitment
appro ach" would not create the enforcement scenarios they are objecting to.4 6.1.9 Planning approach for alternative state goals

This section addresses approaches to an alternative 2025 compliance goal. Relatively few comments were received on this specific top ic, all of which disagreed with the 2025 alternative goal approach.

Commenters have raised a number of issues related to this subsection which are organized by topics (comments) below. Responses are also provided for these topics.

Comment 1: Comments noti ng flaws and disagreeing with the alternative 2025 performance goal approach similar to the 2030 goal approach , and suggesting adjustment of goals under either approach, as needed.

Response 1 : See section VIII.B of the final rule preamble for the EPA’s re sponse to this
comment. See section V.A. of the final rule preamble of the CPP for the final BSER determination and sections VI and VII of the final rule preamble and the CO 2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule for more in formation regarding the final performance rates and goals. See section s VII.B and VII.E of the final rule preamble of the CPP for more information regarding states adjusting their goals and otherwise modifying their plans

. The EPA is not finalizing the alt ernative final goals representing emission performance that would be achievable by 2025 , so comments on this option are generally moot.

The following are summaries of the specific public comments under this comment:

C ommenters noted flaws with the alterna tive 2025 performance goal approach similar to the 2030 goal approach. C ommenter s s uggested adjustment of goals under either approach, as needed.

Commenter s noted that EPA requests comment on its alternative state goals and compliance timing requirements. The commenter s stated that each of the flaws identified with respect to the primary proposal apply to the alternative.

Commenter s stated that EPA should consider the specific concerns raised by states and by the electric utilities that operate in those s tates and adjust its assumptions and final goals accordingly. The commenter s noted that one way to recognize state

- specific concerns about the goals and the assumptions that underpin them would be to allow states to opt to pursue individual compliance plan s that achieve either the final 2030 or 2025 rate or mass emission levels proposed by EPA in the section 111(d) guidelines.

Importantly, the commenter s recommended that the Agency also allow for a continuing dialog on these issues with states as they subm it compliance plans. The commenter s stated that the interconnected power system is a complicated interstate machine and the proposed guidelines are similarly complex. The commenter s noted that even with an extended comment period, states may not be able to provide EPA a complete analysis of concerns related to the four Building Blocks as they apply to the particular facts and circumstances of each state. The commenter s5 stated that accordingly, EPA should consider any state

- specific issues identified in stat e compliance plans, permit modifications to state plans as appropriate and, where necessary, adjust final state goals.

Commenter s stated that the proposed alternative compliance time frame is impractical with front

loading of the reductions and final achie vement by 2025. The commenter s stated that this alternative would only allow a 5

- year window (between 2020 and 2024) to meet the final goal. Although the alternative does come with reduced overall and interim goals, the commenter s stated that the proposed time frame is impractical (discussed later) and would likely result in greatly increased costs to the ratepayers. The commenter s therefore did not support the alternative goal approach.

6.1.10 Other

This section addresses general issues related to system reliability . Comments generally express concerns that the EPA’s compliance timeline does not allow for adequate assessment of reliability impacts. Other related comments address load serving commitment timing (i.e., how generators commit generation to the RTOs) and potential adverse impacts of the CPP on existing

source

- specific plans to increase energy efficiency, renewable power and natural gas

- fired

resources.
Commenters have raised a number of issues related to this subsection which are organized by top ics (comments) below. Responses are also provided for these topics.

Comment 1 : Comment s that the EPA must adopt a dynamic reliability safety valve that provides the States the flexibility they need to ensure reliability , and that any reliability safety va lve must be dynamic in that deadlines for SIP submission, as well as compliance targets, must be adaptable to recognize the reliability situation within each state and/or region.

Response 1: The EPA agrees with the commenters that the final emission guidel ines should contain a “reliability safety valve” to address the possibility that an un

- anticipatable system emergency could cause a severe stress on the electricity system for a length of time such that the multi

- year requirements in a state plan may not b e achievable by given EGUs without posing an otherwise unmanageable risk to reliability. The reliability safety valve will allow a state to modify the emission standards for such EGUs for a maximum of 90 days. In the final rule

, we include several addition al measures to ensure that the rule does not interfere with the industry’s ability to maintain reliability. For example, if a state cannot address a reliability issue within the boundaries of an approved state plan, the state can submit a request to the EP A to modify the state plan. See section VIII. G.2 of the final rule preamble for a more detailed discussion of this issue.

The following are summaries of the specific public comments under this comment:6 Commenters stated that EPA must adopt a dynamic reliab ility safety valve that provides the States the flexibility they need to ensure reliability. Commenter s noted that in the Mercury and Air Toxics Rule, EPA recognized that overly aggressive schedules for implementation could undermine the reliability of the electric utility sector. The commenter s stated that EPA wisely provided in that rule for a reliability safety valve under which utilities could seek an additional year in which to implement the rule without running the risk of an enforcement action. The

c ommenter s stated that EPA should recognize that this rule too poses risks to reliability and that a safety valve provision is therefore a critical component of any final emission guideline. The
commenter s noted that all of the FERC Commissioners who have s poken publicly concerning the proposed rule have supported consideration and/or adoption of a reliability safety valve. The
commenter s noted that the ISO/RTO Council (IRC) and the Southwest Power Pool have also asked for a safety valve. The commenter s stat ed that the IRC proposed a reliability safety valve (RSV) under which system operators would work with states and relevant reliability regulators prior to finalization and approval of a SIP to identify reliability issues and solutions, provide for regulato ry review and approval of the assessment and solution, and then "accommodate the reliability solution under the CO2 rule and/or SIP by providing for appropriate compliance and/or enforcement flexibility while a long

- term reliability solution is developed a nd implemented. The commenter s noted that in explaining the need for a reliability safety valve, SPP's vice president of engineering, explained that "If the CPP compliance period begins before generation and adequate infrastructure can be added, the SPP re gion will face a significant loss of load and violations of regulatory reliability standards" For these reasons, like FERC and the Transmission Operators who are responsible for keeping the lights on in their regions, the
commenter s asked for a reliability safety valve that ensures that states are not forced to adopt SIPs that could undermine the reliability of the bulk electric system.

Commenter s noted that the full reliability impacts of implementing the proposed rule will not become evident until after states submit their state plans. Although it is likely that some electric reliability issues can be addressed with sufficient time and additional investment in transmission and generation infrastructure, the commenter s indicated that such investments could take time or face unexpected permitting or technical challenges. Consequently, the commenter s contended that it is possible that strict compliance with the EPA's proposed emission targets could lead to severe electric reliability impacts during the interi m compliance period (2020

- 2029). The
commenter s argued that a "safety valve" mechanism is therefore necessary to ensure that the proposed rule does not compromise electric reliability. The commenter s suggested that EPA establish a "safety valve" mechanism through which states could adjust their interim emission targets and possibly their final goal, if regional reliability studies indicate that implementation of approved state plans will compromise electric reliability in the state or region. The commenter s recommended that such studies be undertaken in collaboration with NERC and FERC and, where appropriate, include consultation among multiple affected states.

Commenter s similarly suggested that EPA should add a mechanism to address reliability constraints . The commenter s stated that certain unanticipated events could affect electric reliability. The commenter s noted an example of a severe weather storm or a shutdown at a nuclear power plant could threaten reliability, requiring more carbon

- intensive electr ic generation to prevent outages. The commenter s stated that similarly, if shortages develop in natural gas availability, electric generating use may have to be curtailed in order to allow gas for7 residential heating demand. Without a "safety valve" to rep lace that generation, States could potentially face power reliability constraints.

Commenter s suggested that states should be allowed to provide "off

- ramps" from compliance for demonstrated circumstances involving electric system reliability or cost.

Comm ent 2: Commenters stated that NERC, SPP, ERCOT, and others all call for a reliability safety valve. The commenters stated that this is a necessary component of any final rule based on this Rule Proposal. However, the commenters stated that a safety valve cannot simply be a uniform extension in compliance dates. For example, the commenters stated that EPA in the MATS Rule provided a 1

- year extension to achieving compliance. The commenters stated that unlike the MATS Rule, which generally requires the one

- ti me installation of control technology, the Rule Proposal requires an economy wide process progressing over the span of more than a decade. The commenters stated that these types of changes cannot be implemented and reliability cannot be assured through a 1

- or 2

- year extension.

The commenters stated that given the incredible complexity of the rule, there are numerous variables that can affect compliance dates and impact reliability. The commenters stated that these types of complications can spawn from reg ulatory and legal impediments (e.g. state regulations are not implemented in sufficient time; actions conflict with FERC or other federal requirements, permits for new facilities are slowed in the legal process), technical impediments (e.g. new generation or demand

- reducing technologies fail to meet performance expectations), and market impediments (e.g. new generation comes online later than anticipated), amongst others. Therefore, the commenters stated that any reliability safety valve must be dynamic. Th e commenters noted that deadlines for SIP submission, as well as compliance targets, must be adaptable to recognize the reliability situation within each state and/or region. If not, the commenters stated that the country's electric reliability will be put at risk.

Commenters advocated that the final CPP rules should include provisions for suspension or modification of compliance requirements in the event that unforeseen circumstances threaten system reliability or produce cost impacts that would significan tly harm customers. The commenters stated that the need for and importance of maintaining a flexible regulatory approach with ongoing review was presented in their January 2014 comments. The commenters stated that the EPA's proposed regulation of CO2 by th e utility sector is part of a larger scheme to reduce total greenhouse gases, and the EPA may implement separate regulatory schemes for different economic sectors or types of activity. The commenters stated that when establishing the parameters for carbon reduction by the utility industry, it is important that the EPA consider the flexibility and shifting use of electricity and natural gas in the United States (e.g., if electric or natural gas vehicle adoption increases). The commenters noted that changes i n the use of electricity could arrive without much warning, and it is important that the EPA adopt a regulatory scheme with sufficient flexibility to properly account for these changes as they occur. The commenters noted, for example, adoption of electric vehicles increases significantly, the utility sector would need to increase electric generation to meet the increased demand for electricity with a corresponding increase in CO2 emissions. The commenters contended that it would be economically inefficient and unfair to allow the entire burden of these increased8 emissions to fall on the utility sector and its customers. The commenters stated that the same could be said for natural gas. The commenters stated that the impact of new uses for electricity would b e lessened, but not eliminated, under a scheme focused on carbon intensity rather than total utility emissions. The commenters stated that the EPA must establish a scheme with the flexibility to properly account for unexpected shifts in the use of electric ity or natural gas in America. The commenters concluded that a relief valve and process for ongoing evaluation of CPP requirements will help assure that the CPP appropriately accommodates potential shifts in electric and natural gas usage.

Response 2: The EPA’s approach in this final rule reflects our commitment to ensuring that the final rule does not interfere with the industry’s ability to maintain the reliability of the nation’s electricity supply. Many aspects of the final rule’s design are intended t o support system reliability, especially the long compliance period and the basic design that allows states flexibility to include a large variety of approaches and measures to achieve the environmental goals in a way that is tailored to each state’s energ y resources and policies. The final rule features overall flexibility, a long planning and implementation horizon, and the widest possible range of options for states and affected EGUs to achieve the CO2 emissions goal. Comments from state, regional and f ederal reliability entities, power companies and others, as well as consultation with the Department of Energy (DOE) and Federal Energy Regulatory Commission (FERC), helped inform a number of changes made in this final rule to address reliability. A

more thorough discussion on this topic can be found in Section VIII.G of the final rule preamble of the CPP.

The EPA agrees with the commenters that the final emission guidelines should contain a “reliability safety valve” to address the possibility that an un

- anticipatable system emergency could cause a severe stress on the electricity system for a length of time such that the multi

- year requirements in a state plan may not be achievable by given EGUs without posing an otherwise unmanageable risk to reliabilit y. The reliability safety valve will allow a state to modify the emission standards for such EGUs for a maximum of 90 days. See section VIII.G.2.e of the final rule preamble of the CPP.

Regarding the commenters’ concern with the compliance timeframe, w e n ote the EPA has extended the time allowed for States to finalize their plans and has moved the start of the interim period from 2020 to 2022. See Section VIII.B of the final rule preamble of the CPP.

The following are summaries of the specific public comm ents under this comment:

Commenter s stated that the EPA's compliance timeline does not allow for adequate assessment of reliability impacts. The commenter s expressed concern that the timeline EPA set forth for compliance does not allow for adequate review of electric system reliability. To support this concern, the commenter s incorporated by reference a number of sources. The commenter s reiterated what they describe as an underlying theme within all of these sources, which is the fact that thorough analysis of grid reliability and stability cannot be completed within EPA's proposed timeline. Should EPA not grant what the commenters consider the appropriate timeline flexibility required for analyzing electric grid reliability and stability in its final rule, then the
commenter s recommended that, at a minimum, EPA provide some form of reliability safety valve. The commenter s stated that any such reliability safety valve must ensure that the electric9 grid can maintain its reliability as the proposed rules force the transition from base load coal

fired generation to base load natural gas generation.

Commenters supported a flexible approach that allows sufficient time for system reliability impact studies to be conducted after state plans are developed to comply wi th the Proposal, and for reliability mitigation projects to be implemented.

Commenters stated that NERC, MISO, SPP, and ERCOT among others have already raised significant reliability concerns regarding the compliance time frames of the rule. The
commenter s stated if these concerns come to fruition it will not only have major negative consequences for the efficacy of the CPP trading markets in the future but also could seriously compromise the overall program. Accordingly, the commenters urged EPA to allow for time for the RTOs and NERC to conduct the necessary reliability studies.

Commenters noted that in its November 2014 Report, NERC points out that NERC Reliability Standards and Regional Entity criteria must be met at all times to ensure reliable operati on and planning of the Bulk Power System. The commenters support ed these NERC standards, and noted that stakeholders have expressed to NERC their concerns that EPA's proposed time line does not provide adequate time to develop sufficient resources to ensur e continued reliable operation of the electric grid by 2020. The commenters supported NERC's recommendation that the EPA, FERC, the DOE, and state utility regulators employ the array of tools within their respective regulatory authorities to develop a reli ability assurance mechanism, such as a "reliability back

- stop." The commenters stated that these mechanisms should include timing adjustments and granting extensions where there is a demonstrated reliability need.

Comment 3: Comment stating that a complia nce mechanism should allow for fluctuations in generation profiles, weather, infrastructure concerns, and reliability.

Response 3: The EPA shares the commenters ’ concerns about weather impacts on generation and infrastructure assets, but we recognize that most of those events are of short duration and would not require major adjustments to emission standards on affected EGUs or state plans due to the length of the interim and final compliance period(s)

. The EPA agrees with the commenters that the final em ission guidelines should contain a “reliability safety valve” to address the possibility that an un

- anticipatable system emergency could cause a severe stress on the electricity system for a length of time such that the multi

- year requirements in a state p lan may not be achievable by given EGUs without posing an otherwise unmanageable risk to reliability. The reliability safety valve will allow a state to modify the emission standards for such EGUs for a maximum of 90 days. See section VIII.G.2.e of the fin al rule preamble of the CPP.

The following are summaries of the specific public comments under this comment:

Commenter s stated that the EPA must allow for a compliance mechanism that allows for year

- to

year variations in generation profiles and emissions due to weather, fuel delivery and supply shortages, and reliability concerns, etc.10 Comment 4: Comment stating that the EPA's proposed approach of establishing a dispatch

based mitigation goal that impacts other existing generation types without thorough

c onsideration of the impacts to resource adequacy may significantly degrade reliability.

Response 4: The EPA is not requiring a specific type of emission quantification approach or model, as long as the one chosen uses technically sound methods that establi sh a clear relationship between electricity grid interactions of the state enforceable measures, affected EGU dispatch, generation cost and operations within the time frame outlined in these guidelines. A more in

- depth discussion of this topic can be foun d in section VIII.D of the final rule preamble of the CPP

. The following are summaries of the specific public comments under this comment:

Commenter s stated that the EPA's proposed approach of establishing a dispatch

- based mitigation goal that impacts othe r existing generation types without thorough consideration of the impacts to resource adequacy may significantly degrade reliability. The commenter s noted that in November 2014, NERC issued an initial reliability review entitled "Potential Reliability Impa cts of EPA's Proposed Clean Power Plan" outlining the need for additional evaluations of the bulk power system and the resulting impacts from EPA's Clean Power Plan including: resource adequacy concerns due to fossil

- fired retirements and accelerated decli nes in reserve margins; transmission planning and timing constraints to related to building and integrating new infrastructure; changing resource mix including increased reliance on natural gas and renewable resources causing increased variability and unce rtainty to grid stability; and, the need for a reliability assurance mechanism that could allow for timing adjustments and granting extensions where there is a demonstrated reliability need. The commenter s stated that maintaining reliability of the grid is clearly a critical element in the successful implementation of EPA's Clean Power Plan. The commenter s stated that sufficient long

- term reliability can be supported through resource planning; however, it is often a local event in daily market operations th at impacts reliability. The commenter s stated that understanding the integrated transmission and generation system, while recognizing the differences associated with generation assets, is important in assessing potential reliability impacts.

Comment 5 : Co mment that the EPA should provide states and other stakeholders with flexibility to develop the needed policies and practices (e.g., encouraging a high level of banking and borrowing in mass

- based systems) to support emission reductions while continuing to meet Bulk Electric System constraints.

Response 5 : The EPA agrees with the commenter s in that the increased temporal flexibility provided by banking would further help address potential electric reliability concerns, as banked ERCs can be used to meet emi ssion standard requirements for an affected EGU. The EPA does not agree with the commenter s statements in support of borrowing credits to be “repaid” with future reductions and we are not making allowances for “borrowing” in the final rule. Banking under mass

- based emission budget trading programs, and the rationale for banking provisions, is11 addressed in the preamble to this final rule, section VIII.C. The final rule provides various options for states and regional planning groups to develop rate

- based or mass

- based emissions standards for affected EGUs.

The following are summaries of the specific public comments under this comment:

Commenter s argued that key changes are needed in the final rule to allow state plans to successfully use the power system t o achieve aggressive emission reductions. The commenter s stated that EPA must provide states and other stakeholders with flexibility to develop the needed policies and practices to support emission reductions while continuing to meet BES constraints. Accor ding to the commenter s , in addition to sufficient policy flexibility, EPA should encourage and support compliance flexibility to deal with the fact that the BES, in meeting the various economic and reliability constraints it must meet, cannot be used to co ntrol fuel use and hence CO2 emissions with precision. For example, the commenter s noted that changes in natural gas prices, the loss or retirement of one or several nuclear plants, or changes in economic growth can and do create changes in power sector CO 2 emissions of magnitudes comparable to those contemplated by the Proposal.

To accommodate such fluctuations within the overall context of effective regulation, the
commenter s suggested that EPA encourage and allow states to include two types of complianc e flexibility. First, the commenter s suggested that EPA allow significant inter

- temporal compliance flexibility for affected entities and for states as a whole. For example, the commenter s suggested that EPA allow and encourage a high level of banking and borrowing in mass

- based systems, or equivalently, longer compliance periods, in recognition of the fact that the total tons of emissions in the budget over the 10

- year period is of far greater import than the precise number of tons emitted each year. Simil arly, the commenter s suggested that EPA expand and clarify its definition of "self

- implementing" plans to include mass

- based plans with extended, multi

- year compliance periods or a high level of banking and borrowing, instead of requiring particular emissi ons

- per

- year "spot checks" and precise interim milestones. The commenter s stated that natural variability in emissions can be smoothed out and made consistent with overall emission reductions under long

- term compliance periods or similar measures, but is l ikely to cause state plans to fail specific "spot checks" even when they are working well.

Comment 6 : Comment expressing concern about load serving commitment timing (i.e., how generators commit generation to the RTOs).

Response 6 : The EPA agrees with th e commenter s . The final rule allow s states additional time
to work with regional planning groups to formulate, review and finalize their plans, as well as providing additional time before the start of the first interim goal monitoring period. The EPA
exp ects that such added time allows for considerations such as the practice of forward capacity marketing that the commenter s mention.

The following are summaries of the specific public comments under this comment:

Commenter s expressed concern about load ser ving commitment timing. The commenter s indicated that EPA should consider how generators commit generation to the RTOs. The12 commenters ’ understanding was that Ohio units are required to nominate units to serve loads in 2020 by the fall of 2015. According t o the commenter s , the owners of these units will have no understanding of their compliance obligations under state plans at this time, yet they will have to commit to serve load in the compliance year. The commenter s argued that EPA's timeline appears to g ive no consideration to this issue.

Comment 7 : Comment that the EPA's proposal upsets their company plan to increase energy efficien cy , renewable power and natural gas

- fired resources while reducing reliance on coal

- fired generation capacity by 32 percen t, and would prove to be unworkable.

Response 7 : The EPA is sensitive to the commenters ’ concerns regarding existing plans that have been designed to comply with existing regulations

. For the CPP’s approach to early action, please see Section VIII.B of t he final rule preamble of the CPP.

The following are summaries of the specific public comments under this comment:

Commenter s stated over the next 5 years, their company plans to increase its use of energy efficiency, renewable power and natural gas

- fire d resources while reducing its reliance on coal

fired generation capacity by 32 percent. According to the commenter s , by 2020, these changes will reduce CO2 emissions by 20

- 25 percent compared to current levels, while making effective use of the company's existing infrastructure and controlling costs. The commenter s stated that these changes, however, cannot be implemented without some additional cost. The commenter s stated that their resource plan is the most cost effective approach to meeting customer dem and in light of existing environmental requirements including the Regional Haze Rule (40 CFR 51.308); Mercury and Air Toxic Standards (40 CFR part 63 subpart UUUUU) and other environmental requirements. The commenter s stated that they submitted their 2014 Integrated Resource Plans (IRPs) to the Arizona Corporation Commission (ACC) on April 1, 2014 and the resource plans were presented in a number of public workshops. On November 7, 2014, Commission Staff recommended acknowledgement of both resource plans, a nd is expected to officially acknowledge them in the first quarter of 2015. The commenter s stated that the company plans to offset its reliance on coal with investments in efficient natural gas generation, renewable resources and energy efficiency. The com menter s stated that their 2014 IRP assumes compliance with Arizona's current Renewable Energy Standard (RES) target of 10% by 2020 and Energy Efficiency Standard (EES) targets of 22% by 2020, based on a percentage of retail sales.

The commenter s stated th at the EPA's proposal upsets this carefully balanced plan and would prove to be unworkable.

Comment 8 : Commenters suggested that EPA should encourage the states to adopt governance policies which require the generating units upgrade to the best available technologies for efficient operation. Commenters stated that this usually means upgrades to the plant controls and electrical mechanical auxiliary systems, as well as to the basic steam water cycle equipment itself. Commenters requested allowing for sprea ding the cost of such improvements into the rate base at nominal levels. Commenters stated that consumers routinely see upward variations to13 their essential utilities such as cable TV, internet, cell phones, etcetera, without any greater social benefit oth er than entertainment and the improved profitability of the service providers.

Response 8 : The final rule includes guidance to encourage state and regional planners to include many of the commenter s ’ suggestions when considering approaches to using Buildi ng Block 1, discussed in more detail in the final rule preamble, section V.C.

6.2 CRITERIA FOR APP ROVING STATE PLANS

This section addresses comments on Criteria for Approving State Plans, including Enforceable Measures, Emission Performance, and Reporting and Corrective Actions. We have organized the comments in this section under five subsections, 6.2.1 to 6.2.5. Responses to the comment topics of these subsections are discussed below along with summaries the specific public comments.

6.2.1 Enforceable m easures

Comments in t his section discuss enforceable measures and enforceability issues, including requests for additional information and examples of enforceable measures, differentiation between state and Federal enforceability, clarification on how to a ccommodate state energy efficiency programs, and statements of support for state enforceability.

Commenters have raised a number of issues related to this subsection which are organized by topics (comments) below. Responses are also provided for these top ics.

Comment 1: C ommenters stated that EPA must address enforceability issues.

Response 1: The EPA agrees with the commenters that the EPA must ensure that the carbon reductions required by the plan are real and verifiable and that the final rule is clear and enforceable. In this action, the EPA is finalizing a requirement that state plan submittals must include

, either immediately effective or as a plan backstop

, federally enforceable standards on affected EGUs

, and that the plan must demonstrate that each measure under the plan , including those that are not federally enforceable, is quantifiable, non

- duplicative, permanent, verifiable, and enforceable. The final guidelines include an explanation of how states should demonstrate that their plans are enforce able as a practical matter

. See section VIII.D.2 of the final rule preamble of the CPP.

The following are summaries of the specific public comments under this comment:

Commenter s supported federal enforceability of the state plan requirements. The
commente r s suggested that the EPA ensure that the carbon reductions required by the plan are real and verifiable (i.e., that a ton of carbon avoided in one state is treated the same a ton of carbon avoided in other states). The commenter s stated that EPA should en sure that the final rule is clear and easily enforced.14 Commenter s indicated that states need more clarity from EPA on what enforcement measures would meet EPA approval under a state or multi

- state plan and how such plans are expected to be enforced at the time of compliance.

Comment 2 : C ommenters sought additional information on enforceability of EE, RE and/or re

dispatch programs.

Response 2 : As explained in section VIII.C.6.d of the final rule preamble of the CPP , the EPA is not finalizing the propos ed portfolio approach, so comments specific to this proposed approach to 111(d) state plan design are moot

. We are finalizing the option of a state measures plan type
, which would only require federally enforceable measures on affected EGUs and not on stat e

only measures. State

- only measures would, however, need to be enforceable as a practical matter as defined in the emissions guidelines. See section VIII.D.2 of the final rule preamble. See section VIII.K.2 of the final rule preamble of the CPP for a disc ussion of emission trading programs using credits generated through EE and RE.

The final rule provides considerable discretion to the states in setting emission standards and related plan requirements for its affected EGUs. Consistent with longstanding pr actice under the Clean Air Act, if an affected EGU does not meet one of its requirements

, the EPA will address the affected EGU’s vi olation on a case

- by

- case basis to determine the appropriate response and resolution. Third parties have authority under sec tion 304 of the CAA that is similar to the EPA’s authority under section 113(a)

- (h) of the CAA. T he final emission guidelines require that federally enforceable standards only apply to affected EGUs and not measures that apply to entities other than affect ed EGUs that a state may decide to include in its plan. The final rule requires that a state demonstrate that each state measure will result in reductions that are quantifiable, non

- duplicative, permanent, verifiable, and enforceable as a practical matter

. The final rule defines the criteria that the EPA will use to determine whet her a state measure (such as EE and RE) is enforceable as a practical matter. These requirements are described in more detail at section VIII.D.2 of the final rule preamble of the CPP

. We agree with commenters that water and wastewater utilities are not affected EGUs under this rule

, but EE projects at water and wastewater utilities may be state measures under the state measures plan type or generate credits for emission trading pr ograms . The criteria and requirements for state measures and state measures plans are at section s VIII.C.3 and VIII.D.2 of the final rule preamble of the CPP , and the criteria and requirements for generating credits for emission trading programs are at sec tion VIII.K.2

. The following are summaries of the specific public comments under this comment:

Commenter s noted that the EPA has requested comment on whether it should issue guidance for the enforcement of state plans against entities other than EGUs. The commenter s strongly advised the EPA to do so considering the unique aspects of this rule. The commenter s asked:15 • If, for example, a renewable energy project is used for state credit because it results in a reduction in EGU generation, what is the obligati on of the owner of that project to continue operating and maintaining it?

• Who is the entity subject to regulation under the state plan, and responsible for ensuring the project continues to produce?

• If t he RE project is shut down for whatever reason, who is responsible for the loss of energy production and how is that energy generation to be made up and by whom?

Commenter s had questions as to what types of programs, in particular EE programs, would meet the definition of "federally enforceable." Commente rs requested information on how EE programs and other measures contemplated in BSER could be considered enforceable in Tennessee's unique regulatory context. Commenter s requested information on how EE programs and other measures contemplated in BSER could be considered enforceable in Tennessee's unique regulatory context.

Commenter s s tated that EPA must provide clear guidance on enforcement of RE, EE and re

dispatch measures. The commenter s stated that much of the uncertainty in the enforceability of
state plans stems from the CPP's proposed inclusion of the RE, EE and re

- dispatch as emission reduction measures in state plans. While the commenter s supported providing states with the option of using RE, EE and re

- dispatch for compliance, the commenter s state d that they realize there is uncertainty in how RE, EE and re

- dispatch measures in state plans would be enforced and encouraged EPA to provide clarity on the issue.

Commenter s stated that EPA should provide further guidance on enforceability for programs

a ddressing some of the less traditional building block areas, such as demand

- side management and energy efficiency. The commenter s stated that the guidance should ensure that the plans can be enforced as a practical matter.

Commenters requested that EPA de fine enforcement and compliance measures in the rule for EE projects undertaken to help reach the CPP's goals. Commenters argued that the proposed language is ambiguous and compliance and enforcement measures should be on the state or entity managing the o verall EE program and not the individual sites implementing EE/RE. Commenters wanted EPA to clarify that water and wastewater utilities are only responsible for submitting proper monitoring and verification materials to the sponsoring state or electric uti lity and are not considered regulated entities in this rule or subject to CAA enforcement under this rule.

Comment 3 : Commenter s asked about state vs. federal enforceability of state

- based allowance systems.

Response 3: The final guidelines require state

- based allowance systems to be state

- or federally

enforceable depending on the source of the allowances. T he EPA is finalizing the option of a state measures plan approach, which would only require federally enforceable measures on16 affected EGUs and not on state

- only measures. State

- only measures would

, however

, need to be enforceable as a practical matter as defined in the emissions guidelines. See section VIII. K .2 of the final rule preamble of the CPP for a discussion of emission budget trading programs u sing credits generated under a state measures plan

. For the requested detailed guidance on required plan elements, see section VIII.D.2 of the final rule preamble of the CPP.

The following are summaries of the specific public comments under this comment:

C ommenter s encouraged EPA to consider which specific elements of state

- based allowance systems must be made federally enforceable, and which may remain as state

- enforceable infrastructure for these programs. In doing so, the commenter s recommended that the EPA should consider whether key program components

- such as the total allowances in the system and the requirement that sources hold allowances to cover their emissions should be federally approvable while implementation details remain state law matters. The commenter s suggested that the EPA provide detailed guidance in the final rule to states on the required plan elements.

Comment 4 : C ommenter s described energy efficiency programs in Washington S tate and asked for clarification on several points relate d to enforceability.

Response 4: The final rule provides considerable discretion to the states in setting emission standards and related plan requirements , such as the incorporation of EE and RE. As explained in section VIII .C.6.d of the final rule preambl e of the CPP , the EPA is not finalizing the proposed portfolio approach

, so comments specific to this proposed approach to 111(d) state plan design are moot. Instead, the EPA is finalizing an option to submit either an “emission standards” plan type, which includes only federally enforceable measures on affected EGUs , or a “state measures” plan type. U nder a state measures plan type

, a mass CO2 emission goal may be partially or entirely achieved through state

- enforceable measures that impose requirements o n entities other than affected EGUs and that are not included in the federally enforceable 111(d) state plan, provided the state submits standards of performance for CO2 emissions from affected EGUs in the form of a federally enforceable “backstop” that wo uld be triggered if the state measures fail to achieve the required CO2 emission performance level or the state misses a performance milestone

. T he backstop emission standards constitute the standards of performance required by section 111(d), and the stat e plan provides for the implementation and enforcement of such standards of performance by specifying the trigger mechanism and conditions under which the backstop emission standards apply to affected EGUs. Upon EPA approval of a state measures plan under section 111(d), the backstop emission standards become federally enforceable requirements, which EPA and citizens may enforce against affected EGUs under section 113 and section 304 of the Act, respectively, once triggered and implemented to address a shor tfall in necessary emission reductions. See section s VIII .D.3 and VIII.C. 3 of the final rule preamble of the CPP

. The final rule provides considerable discretion to the states in setting emission standards and related plan requirements , such as the incorp oration of EE and RE. As explained in section VIII .C.6.d of the final rule preamble, the EPA is not finalizing the proposed portfolio approach

, so comments specific to this proposed approach to 111(d) state plan design are moot. Instead,1 7 the EPA is finali zing an option to submit either an “emission standards” plan type, which includes only federally enforceable measures on affected EGUs , or a “state measures” plan type. U nder a state measures plan type

, a mass CO2 emission goal may be partially or entirel y achieved through state

- enforceable measures that impose requirements on entities other than affected EGUs and that are not included in the federally enforceable 111(d) state plan, provided the state submits standards of performance for CO2 emissions from affected EGUs in the form of a federally enforceable “backstop” that would be triggered if the state measures fail to achieve the required CO2 emission performance level or the state misses a performance milestone

. T he backstop emission standards constitu te the standards of performance required by section 111(d), and the state plan provides for the implementation and enforcement of such standards of performance by specifying the trigger mechanism and conditions under which the backstop emission standards a pply to affected EGUs. Upon EPA approval of a state measures plan under section 111(d), the backstop emission standards become federally enforceable requirements, which EPA and citizens may enforce against affected EGUs under section 113 and section 304 of the Act, respectively, once triggered and implemented to address a shortfall in necessary emission reductions. See section s VIII .D.3 and VIII.C.2 of the final rule preamble of the CPP

. The final emission guidelines require that all 111(d) state plans, i ncluding state measures plans, specify CO2 emission monitoring, reporting and recordkeeping requirements for affected EGUs, demonstrate that plan measures are enforceable as a practical matter , and contain the process, content and schedule for state report ing to the EPA on plan implementation and progress toward meeting the required CO2 emission performance level. For state measures plans in particular, the final emission guidelines also require states to submit annual reports to the EPA that address period ic programmatic milestones to show progress in program implementation. The EPA intends to review each submitted state plan on a case

- by

- case basis to determine whether it satisfactorily addresses the Act’s enforceability requirements. Final EPA action on any submitted 111(d) state plan, including a state measures plan, is subject to judicial review under section 307(b) of the Act.

For a response to the request for clarification of how states can demonstrate enforcement capacity, including references to gu idance documents, see Section VIII.D.2 of the final rule preamble of the CPP. State plans must meet the listed requirements for demonstrating enforceability, but the state may work within these requirements to control costs and navigate any feasibility lim itations.

The following are summaries of the specific public comments under this comment:

Commenter s suggested that EPA allow states to rely on provisions with flexible compliance mechanisms in state plans and clarify how to address flexible compliance m echanisms when demonstrating enforceable achievement of the emission performance targets.

In order to achieve consistency between EPA regions and speed up the drafting and approvals of state plans, the commenter s requested clarification in the final rule on acceptable compliance mechanisms for state plans to demonstrate enforcement capability. The commenter s expressed concern that EPA may not approve state laws and public utility commission programs that contain measures with flexible compliance mechanisms established to contain costs to ratepayers and to reflect what is feasible and achievable by individual utilities. The commenter s requested18 clarification that EPA will accept cost control and feasibility limitations regarding state enforcement in the stat e plan.

Comment 5 : C ommenters supported EPA 's approach to enforceability and recommended that the mechanisms EPA requires in state plans should support existing programs for EE and RE.

Response 5: In response to this and other comments, t he final rule pr ovides considerable discretion to the states in setting emission standards and related plan requirements , such as the incorporation of EE and RE

. As explained in section VIII .C.6.d of the final rule preamble of the CPP , the EPA is not finalizing the propo sed portfolio approach

, so comments specific to this proposed approach to 111(d) state plan design are moot. Instead, the EPA is finalizing an option to submit either an “emission standards” plan type, which includes only federally enforceable

measures on affected EGUs , or a “state measures” plan type. U nder a state measures plan type , a mass CO2 emission goal may be partially or entirely achieved through state

- enforceable measures that impose requirements on entities other than affected EGUs and that are not included in the federally enforceable 111(d) state plan, provided the state submits standards of performance for CO2 emissions from affected EGUs in the form of a federally enforceable “backstop” that would be triggered if the state measures fail to ac hieve the required CO2 emission performance level or the state misses a performance milestone

. T he backstop emission standards constitute the standards of performance required by section 111(d), and the state plan provides for the implementation and enforc ement of such standards of performance by specifying the trigger mechanism and conditions under which the backstop emission standards apply to affected EGUs. Upon EPA approval of a state measures plan under section 111(d), the backstop emission standards b ecome federally enforceable requirements, which EPA and citizens may enforce against affected EGUs under section 113 and section 304 of the Act, respectively, once triggered and implemented to address a shortfall in necessary emission reductions. See secti ons VIII.D.3 and VIII.C. 3 of the final rule preamble of the CPP.

T he final rule provides considerable discretion to the states in setting emission standards and related plan requirements , such as the incorporation of EE and RE

. As explained in section VI II .C.6.d of the final rule preamble of the CPP , the EPA is not finalizing the proposed portfolio approach

, so comments specific to this proposed approach to 111(d) state plan design are moot. Instead, the EPA is finalizing an option to submit either an “em ission standards” plan type, which includes only federally enforceable measures on affected EGUs , or a “state measures” plan type. U nder a state measures plan type , a mass CO2 emission goal may be partially or entirely achieved through state

- enforceable m easures that impose requirements on entities other than affected EGUs and that are not included in the federally enforceable 111(d) state plan, provided the state submits standards of performance for CO2 emissions from affected EGUs in the form of a federa lly enforceable “backstop” that would be triggered if the state measures fail to achieve the required CO2 emission performance level or the state misses a performance milestone

. T he backstop emission standards constitute the standards of performance requir ed by section 111(d), and the state plan provides for the implementation and enforcement of such standards of performance by specifying the trigger mechanism and conditions under which the backstop emission standards apply to affected EGUs. Upon EPA approv al of a state measures plan under section 111(d), the backstop emission standards become federally enforceable19 requirements, which EPA and citizens may enforce against affected EGUs under section 113 and section 304 of the Act, respectively, once triggered and implemented to address a shortfall in necessary emission reductions. See sections VIII.D.3 and VIII.C.2 of the final rule preamble of the CPP.

The final emission guidelines require that all 111(d) state plans, including state measures plans, specify C O2 emission monitoring, reporting and recordkeeping requirements for affected EGUs, demonstrate that plan measures are enforceable as a practical matter, and contain the process, content and schedule for state reporting to the EPA on plan implementation an d progress toward meeting the required CO2 emission performance level. For state measures plans in particular, the final emission guidelines also require states to submit annual reports to the EPA that address periodic programmatic milestones to show progr ess in program implementation. The EPA intends to review each submitted state plan on a case

- by

- case basis to determine whether it satisfactorily addresses the Act’s enforceability requirements. Final EPA action on any submitted 111(d) state plan, includi ng a state measures plan, is subject to judicial review under section 307(b) of the Act. This will allow flexible compliance mechanisms in the state plans. See section VIII.C. 3 of the final rule preamble of the CPP. For the characteristics of an enforcea ble state measure and the existing guidance documents that states may reference when designing enforceable state measures, see section VIII.D.2.c of the final rule preamble of the CPP.

The following are summaries of the specific public comments under this comment:

Commenter s specifically appreciated the flexible approach taken by EPA with regard to state compliance options. Referring to a December 2013 letter from many of their states, the
commenter s noted that it is important for states with established an d proven clean energy and efficiency programs to be able to build on those programs for compliance. The commenter s recommended that the enforceability mechanisms that EPA requires in state plans support these existing programs, as well as new programs in o ther states, by minimizing program changes required purely to conform with federal requirements, while still providing enough additional program review and accounting to ensure that required reductions are achieved.

Commenter s stated that this approach to enforceability would enable a state

- sanctioned entity or state agency to take the lead on ensuring enforcement and compliance.

Comment 6 : Comment s arguing that states need clarity on how state plans will be enforced.

Response 6: In response to this and other comments, t he final rule provides considerable discretion to the states in setting emission standards and related plan requirements , including regulating the interconnected power system

. As explained in section VIII .C.6.d of the final rule preamble of the CPP , the EPA is not finalizing the proposed portfolio approach , so comments specific to this proposed approach to 111(d) state plan design are moot.

Instead, the EPA is finalizing an option to submit either an “emission standards” plan type, which includes only federally enforceable measures on affected EGUs , or a “state measures” plan type. Under a state measures plan type , a mass CO 2 emission goal may be partially or20 entirely achieved through state measures that impose requirements on entities ot her than affected EGUs and that are not included in the federally enforceable 111(d) state plan, provided the state submits standards of performance for CO2 emissions from affected EGUs in the form of a federally enforceable “backstop” that would be trigge red if the state measures fail to achieve the required CO2 emission performance level or the state misses a performance milestone

. T he backstop emission standards constitute the standards of performance required by section 111(d), and the state plan provid es for the implementation and enforcement of such standards of performance by specifying the trigger mechanism and conditions under which the backstop emission standards apply to affected EGUs. Upon EPA approval of a state measures plan under section 111(d ), the backstop emission standards become federally enforceable requirements, which EPA and citizens may enforce against affected EGUs under section 113 and section 304 of the Act, respectively, once triggered and implemented to address a shortfall in nece ssary emission reductions. See sections VIII.D.3 and VIII.C .3 of the final rule preamble of the CPP.

The final emission guidelines require that all 111(d) state plans, including state measures plans, specify CO2 emission monitoring, reporting and recordkee ping requirements for affected EGUs, demonstrate that plan measures are enforceable as a practical matter, and contain the process, content and schedule for state reporting to the EPA on plan implementation and progress toward meeting the required CO2 emis sion performance level. For state measures plans in particular, the final emission guidelines also require states to submit annual reports to the EPA that address periodic programmatic milestones to show progress in program implementation. The EPA intends to review each submitted state plan on a case

- by

- case basis to determine whether it satisfactorily addresses the Act’s enforceability requirements. Final EPA action on any submitted 111(d) state plan, including a state measures plan, is subject to judicia l review under section 307(b) of the Act. This will allow flexible compliance mechanisms in the state plans. See section VIII.C.4 of the final rule preamble of the CPP. For the characteristics of an enforceable state measure and the existing guidance docu ments that states may reference when designing enforceable state measures, see section VIII.D.2.c of the final rule preamble of the CPP.

The following are summaries of the specific public comments under this comment:

Commenter s argued that states need clar ity on how state plans will be enforced; the commenter s noted that enforcement concerns could limit states' flexibility when choosing among the options for state plan design. Related to enforcement concerns, the commenter s also stated that EPA should recog nize the powers reserved to the states in regulating the interconnected power system.

Comment 7 : Request for an example of enforceable measures.

Response 7: The final rule provides considerable discretion to the states in setting emission standards and related plan requirements. As explained in section VIII .C.6.d, of the final rule preamble, the EPA is not finalizing the proposed portfolio approach

, so comments specific to this proposed approach to 111(d) state plan design are moot. Instead, the EPA is finalizing an option to submit either an “emission standards” plan type, which includes only federally enforceable measures on affected EGUs , or a “state measures” plan type. Under a state measures plan type , a mass CO2 emission goal may be partially or e ntirely achieved through state measures that21 impose requirements on entities other than affected EGUs and that are not included in the federally enforceable 111(d) state plan, provided the state submits standards of performance for CO2 emissions from affec ted EGUs in the form of a federally enforceable “backstop” that would be triggered if the state measures fail to achieve the required CO2 emission performance level or the state misses a performance milestone . The backstop emission standards constitute the standards of performance required by section 111(d), and the state plan provides for the implementation and enforcement of such standards of performance by specifying the trigger mechanism and conditions under which the backstop emission standards apply t o affected EGUs. Upon EPA approval of a state measures plan under section 111(d), the backstop emission standards become federally enforceable requirements, which EPA and citizens may enforce against affected EGUs under section 113 and section 304 of the A ct, respectively, once triggered and implemented to address a shortfall in necessary emission reductions. See sections VIII.D.3 and VIII.C. 3 of the final rule preamble of the CPP.

The final emission guidelines require that all 111(d) state plans, including state measures plans, specify CO2 emission monitoring, reporting and recordkeeping requirements for affected EGUs, demonstrate that plan measures are enforceable as a practical matter, and contain the process, content and schedule for state reporting to t he EPA on plan implementation and progress toward meeting the required CO2 emission performance level. For state measures plans in particular, the final emission guidelines also require states to submit annual reports to the EPA that address periodic progr ammatic milestones to show progress in program implementation. The EPA intends to review each submitted state plan on a case

- by

- case basis to determine whether it satisfactorily addresses the Act’s enforceability requirements. Final EPA action on any subm itted 111(d) state plan, including a state measures plan, is subject to judicial review under section 307(b) of the Act. See Section VIII.C.4 of the final rule preamble of the CPP. For the characteristics of an enforceable state measure and the existing gu idance documents that states may reference when designing enforceable state measures, see section VIII.D.2.c of the final rule preamble of the CPP.

The following are summaries of the specific public comments under this comment:

Commenter s asked if EPA coul d provide an example of enforceable measures (and state

enforceable measures under the alternative "state commitment approach") for the following activities:

• Programs like Volt Var Optimization to reduce energy on transmission and distribution circuits;

• Solar thermal programs;

• Waste heat recovery;

• Participation in energy imbalance markets like the one operated by CA ISO;

• Performance contracting;

• Building energy codes;22 • Net

- metering energy savings;

• Voluntary RPSs; and

• Re

- dispatch (in regulated and non

- regulated states).

Comment 8 : Commenters stated that the EPA should clarify requiremen ts for "enforceability."

Response 8: We agree with the commenters that federal enforceability (which includes the ability of the Administrator and the state to enforce against violations and secure appropriate corrective actions pursuant to CAA sections 111(d )( 2 )( B) and 113(a)

– (h), and the ability of states and other third parties to enforce against violations and secure appropriate corrective actions pursuant to CAA sec tion 304 ) is distinct from state

- only enforceability of state programs. See Section VIII.D.2.b of the final rule preamble of the CPP. The EPA is finalizing the option of a state measures plan type, which would place federally enforceable measures only on a ffected EGUs. EE, RE, and other measures that are not on affected EGUs would not be federally enforceable under this plan type and would only be enforceable by the state. See Section VIII.C.4 of the final rule preamble of the CPP. For the characteristics of an enforceable state measure and the existing guidance documents that states may reference when designing enforceable state measures, see section VIII.D.2.c of the final rule preamble of the CPP. For the consequences if actual state emission performance does not meet the CO2 emission performance rates or state CO2 emission goal, see section VIII.F.3 of the final rule preamble of the CPP.

The following are summaries of the specific public comments under this comment:

C ommenter s stated that the EPA should differentiate EPA or citizen enforcement of "enforceable measures" from enforcement by a state, EPA, or citizen pursuant to state programs. The
commenter s stated that based on available information, "enforceability" generally refers to EPA or citizen enfor cement of an "enforceable measure," which is a requirement that could consist of (i) state commitments in plans, and (ii) measures for which regulated electric utilities are legally responsible (e.g., to meet emission limitations or a state

- imposed energy efficiency resource standard). Conversely, the commenter s stated that at a project level, "enforcement" may refer to the means available to a state, EPA, or citizens to ensure program requirements are met and to prevent fraud with respect to claimed energy savings of a project. The commenter s stated that a third party such as a building owner or energy service company may conduct a project voluntarily (e.g., the third party action may or may not be a requirement per se), but in pursuing incentives or credit , the third party submits the project to accountability and enforcement with respect to its accuracy.

Commenter s urged EPA to ensure that any final rule clearly establishes who is ultimately responsible for achieving carbon pollution reductions, ensures t hat the public has the right to seek enforcement of those requirements through, for example, citizen supervisions, and sets forth clear self

- correction provisions and penalties for non

- compliance.23 Comment 9 : Support for federally enforceable state plans a nd measures.

Response 9: We disagree with the commenter s that all measures used to achieve the emission performance level must be federally enforceable. As explained in section VIII .C.6.d of the final rule preamble, the EPA is not finalizing the proposed p ortfolio approach

, so comments specific
to this proposed approach to 111(d) state plan design are moot. In response to requests for flexibility for states in designing their plan measures and concerns about federal enforceability of measures placed on ent ities other than affected EGUs, the EPA is finalizing an option to submit either an “emission standards” plan type, which includes only federally enforceable measures on affected EGUs, or a “state measures” plan type. A state measures plan type would requ ire only measures applicable to affected EGUs to be federally enforceable. EE, RE, and other measures applicable to entities other than affected EGUs would not be federally enforceable under this plan type but must meet requirements for state enforceabili ty

. A state measures plan must also include a backstop of federally enforceable standards on affected EGUs that fully meet the emission guidelines and that would be triggered if the plan failed to achieve on schedule the required emission reductions. S ee Section VIII.C. 3 and VIII.C.4 of the final rule preamble of the CPP. For the mechanisms in the final emission guidelines that ensure that states keep pace with their emissions reductions trajectories, see Section VIII.F.3 of the final rule preamble of the CPP.

The following are summaries of the public comments under this comment:

Commenter s strongly supported EPA's proposal that all measures relied on to achieve the emission performance level be rendered federally enforceable by inclusion in a state plan. T he
commenter s stated that federal enforceability of state plan requirements will be critical to the overall effectiveness of the rules. While EPA's proposal provided states with flexibility to direct which facilities will be responsible to achieving emissi ons reductions, the commenter s stated that EPA must have the ability to directly enforce these reductions against individual facilities in order to ensure that states keep pace with their emissions reductions trajectories.

Comment 10: Commenters in this s ummary proposed that CPP penalties should be used to fund EE programs.
Response 10: Under this final rule, the entity subject to regulation, and the entity that may be subject to federal enforcement if it fails to meet its emission standard, is the affecte d EGU. The EPA will evaluate any instance of noncompliance by an affected EGU on a case

- by

- case basis, to determine the appropriate response and resolution. When assessing civil penalties, the EPA is guided by the statutory criteria in section 113 of the C AA. Any civil penalties that may be assessed are deposited in the United States Treasury by law. The EPA would not have authority to send CAA penalty money to the states without legislative authorization from Congress.
The following are summaries of the pu blic comments under this comment:
Commenters remarked that CPP penalties for noncompliance should not be used to fund activities implemented by the EPA. Commenters stated that penalties collected for noncompliance with the CPP should be redistributed to th e states to fund energy efficiency24 programs to improve low income housing. Commenters added that entities that are funded by penalties are incented to penalize to supplement their budget needs. Co mmenters explained that penalty distribution should be alloc ated to states on a weighted average income to ensure that each state benefits and that states with greater lower income customer have additional funds to increase low income housing programs. Commenters concluded by stating that whoever pays for the energ y efficiency improvements should get the credit.

6.2.2 Emission performance

This section discusses emission performance and emission reduction strategies.

Commenters have raised issues related to this subsection which are organized by topics (comments) below. Responses are also provided for these topics.

Comment 1: Commenters suggested that "various greenhouse gas (GHG) reduction measures, which could potentially be implemented through offsets mechanisms, align well with the EPA's proposed criteria for approvability of state plans." Commenters recommended EPA consider CO2 sequestration through forest and land

- use practices, mitigation of fugitive methane emissions from natural gas in the power sector and emissions of 111(b) EGUs reduced below limits as e missions reduction measures which "adhere to the four criteria specified by the EPA for approvability of state plans."

Response 1: The EPA disagrees with the commenters that out

- of

- sector offsets such as forest and land

- use practices and mitigation of fug itive methane emissions may be counted toward meeting a CO2 emission performance level for affected EGUs or a state CO2 goal, because ou t

of

- sector offsets such as these are not connected to the electrical grid and so cannot reliably address stack CO 2 emis sions from affected EGUs. Given the reason that we are not permitting
out

- of

- sector offsets to be counted toward meeting a CO2 emission performance level or state CO2 goal, strict standards on out

- of

- sector offsets could not ameliorate the issue. See Secti ons V.B.3.c and VIII.K.1.b of the final rule preamble of the CPP. However, the EPA agrees with the commenters that states may continue to operate cap

- and

- trade and offset programs that use out

of

- sector and non

- source

- based GHG offsets . We are finalizing t hat state plans may accommodate emission budget trading programs (which may include out

- of

- sector GHG offsets) as an option under the state measures plan type. See Section VIII.J.2.d of the final rule preamble of the CPP.

We disagree with the commenters t hat emissions from 111(b) EGUs should be approvable as CO2 reduction measures under the final emission guidelines. New, modified, and reconstructed EGUs covered under the CAA section 111(b) final Standards of Performance for Greenhouse Gas Emissions from N ew Stationary Sources: Electric Utility Generating Units rule are not approvable sources of electric generation for adjusting the CO 2 emission rate of an affected EGU under a rate

- based state plan. As discussed earlier in section VII.D of this preamble, a key concern under this rule is leakage to new units that are not covered by the emission guidelines.25 Emissions leakage, or increased CO 2 emissions due to increased utilization of unaffected sources, is contradictory to objectives of this rule and should, t herefore, be minimized. Allowing affected EGUs to adjust their emission rates as a result of lower

- emitting new NGCC units not covered under this section 111(d) rule would not mitigate leakage concerns, and could even exacerbate the situation. Consequently , new EGUs covered under the CAA section 111(b) rule are not allowable measures in state plans because the EPA believes it would result in increased emission leakage.

6.2.3 Quantifiable and verifiable emission performance

This section discusses Quantifiab le and verifiable emission performance, as well as tracking and confirming carbon pollution reduction.

Commenters have raised a number of issues related to this subsection which are organized by topics (comments) below. Responses are also provided for thes e topics.

Comment 1 : Emission performance must be consistent, enforceable, and trackable.

Response 1: The EPA agrees with the commenter s that reductions created through the CPP must be consistent, enforceable, and trackable. The final guidelines include d etailed requirements for evaluation, monitoring, and verification of emission reductions and issuance and tracking of emission reduction credits. See Section VIII. I of the final rule preamble of the CPP.

The EPA agrees that the final guidelines must ensur e that real and incremental progress is made in reducing emissions but disagrees that this requires binding annual targets. L onger averaging periods allow for operational and seasonal variability to even out and provide a basis for emissions reductions tha t are more realistic than short term averaging might otherwise demonstrate. The final rule specifies that compliance periods for emission standards for affected EGUs, on a calendar year basis, must be as follows for the interim period: January 1, 2022

– De cember 31, 2024; January 1, 2025

– December 31, 2027; and January 1, 2028

– December 31, 2029. Starting on January 1, 2030, the compliance period for each emission standard is every 2 calendar years. See section VIII.B of the final rule preamble of the CPP for the state plan performance periods and section VIII.D.2.b of the final rule preamble of the CPP for the compliance periods for each emission standard for affected EGUs.

The EPA also agrees with the commenter s that the final guidelines should ensure ac countability through strong and equitable enforcement mechanisms. The final guidelines require each state plan to demonstrate that each emission standard (under the emission standard plan type) or state measure (under the state measures plan type) is enfor ceable. See Sections VIII. C .2 (for the emission standard plan type) and VIII.C.3 (for the state measures plan type) of the final rule preamble of the CPP. The final guidelines also lay out the consequences if actual emission performance does not meet the C O2 emission performance rates or state CO2 emission goal. See Section VIII.F.3 of the final rule preamble of the CPP.26 The EPA also agrees with the need for clear instructions for tracking and confirming emission reductions, which we are providing in the fi nal guidelines. See Sections VIII.D.2.a.4, VIII.F.1, and VIII. I of the final rule preamble of the CPP.

The following are summaries of the specific public comments under this comment:

Commenter s stated that the CPP must be consistent, enforceable, and tra ckable. The commenter s stated that since 2004, the y have tracked their city's annual GHG emissions to identify progress and barriers in working towards long

- term reduction goals. Based on this experience, the
commenter s argued that the EPA should offer cle ar guidance for tracking and confirming carbon pollution reductions. Along with tracking mechanisms, the commenter s recommended that EPA set binding annual targets to make sure that real and incremental progress is being made in reducing emissions (and not left until the interim and final compliance years). In this vein, the
commenter s stated that the CPP should outline strong enforcement mechanisms to ensure accountability, and that enforcement stringency must apply equally to every state. The
commenter s s tated that the Clean Power Plan is most likely to serve its purpose with clear data management and reporting frameworks, uniformly equitable enforcement, and clear repercussions for noncompliance.

6.2.4 Reporting and corrective actions

This section discus ses emissions reporting and corrective actions and addresses the frequency and scope of these requirements.

Commenters have raised a number of issues related to this subsection which are organized by topics (comments) below. Responses are also provided for these topics.

Comment 1 : R eporting and verification of achieved emission reductions should occur annually.

Response 1 : The EPA disagrees that reporting and verification of achieved emission reductions should necessarily occur annually. C onsidering commen ts received concerning the burden of annual reporting and the goals of minimizing unnecessary burdens on states and ensuring program effectiveness, the EPA has reduced the frequency of reporting of emissions data to every 3 years for the first two interim steps and every 2 years thereafter. See Section VI II.F.2 of the final rule preamble of the CPP.

The following are summaries of the specific public comments under this comment:

Commenter s stated that reporting and verification of achieved emission reductio ns should occur annually, but in no event less frequently than every 2 years.

Comment 2 : R eporting requirements should include a nticipated and actual progress.27 Response 2 : The EPA agrees with the commenter s that reporting requirements should include the c omponents listed by the commenter s . See Sections VIII.D.2 and VIII.F.1 of the final rule preamble of the CPP.

The following are summaries of the specific public comments made under this comment:

Commenter s addressed EPA's request for comment on the appropr iate scope of these reporting requirements.

The commenter s stated that reporting requirements should include anticipated and actual progress, using projected and actual greenhouse gas performance data as well as projected and actual data on implementation measure deployment, toward the compliance milestones incorporated in approved State Plans.

6.2.5 Other

This section discusses other issues regarding state plans, including non

- air environmental impacts and giving deference to states in evaluating and ap proving compliance plans.

Commenters have raised a number of issues related to this subsection which are organized by topics (comments) below. Responses are also provided for these topics.

Comment 1: Commenters suggested procedural and substantive criteri a for evaluation of state plans.

Response 1: The EPA agrees that some of the suggested criteria must be included in state plan submittals, but disagrees that they must be listed as criteria. After reviewing all of the comments related to the approvability criteria, the EPA has decided against maintaining the four proposed approvability criteria (or additional approvability criteria, as suggested by this commenters) separately from the list of components required for an approvable plan, which may be confusi ng and potentially redundant. The EPA has determined that a satisfactory state plan that meets the required plan components will inevitably meet the proposed approvability criteria and some of the criteria suggested by the commenters. See Section VIII.D.1 of the final rule preamble of the CPP for additional discussion of the proposed approvability criteria and Section VIII.D.2 of the final rule preamble of the CPP for discussion of the required components of a state plan.

The following are summaries of the specific public comments under this comment:

Commenters suggested that the following criteria be used to evaluate state plans. The commenters noted that these criteria are divided into two sections: (1) procedural criteria, designed to ensure that the plan s are credible and enforceable; and (2) substantive criteria, designed to ensure that the plans consider factors important to controlling GHG emissions from the power sector. The commenters noted that a state plan need not include all of these elements;28 in deed, it would be inappropriate to require inclusion of all of the elements since they are not applicable to every state.

Procedural Criteria

1. Whether the plan was considered and approved in a regulatory/public process allowing for comment from interested parties.

2. Whether the plan milestones are established and monitored by a competent state entity, e.g., the state public service commission (PSC), the state department of environmental quality (DEQ), or other recognized governing authority (RGA). For examp le, the PSC may be the state agency responsible for oversight of a RPS program, or may require electric generators in the state to submit an integrated resource plan (IRP).

3. Whether the state plan has an appropriate tracking and monitoring system in place a nd a mechanism to reopen or amend the plan at appropriate intervals.

4. Whether the state plan considered and accounted for the retirement of GHG

- emitting units prior to 2012, and whether the state plan includes requirements, verifiable through legal obligat ion, for the retirement of certain units between 2012 and 2030.

5. Whether the state plan includes reasonable projections of future emissions from the affected units. For example, does the plan project the construction of new, low

- carbon or zero carbon gener ation? What impact does this new construction have on the emissions or emission rate of the portfolio of existing units?

6. Whether the plan requires monitoring and reporting of emissions and energy generation from affected units on a periodic basis and the calculation of state progress toward to the goal.

Substantive Criteria

1. Whether the state PSC, or other RGA, requires a company with affected EGUs to consider emissions of GHGs. For example, does the PSC require an estimate of the carbon intensity from ne w or decommissioned units, or an analysis of how a company would comply with the 111(d) plan?

2. Whether the state PSC, or other RGA, requires an electric distribution company to support, or achieve, certain levels of energy efficiency from customers; whethe r the level or cost threshold for such programs is appropriate.

3. Whether the state PSC, or other RGA, has a renewable portfolio standard, capacity standard, tax incentives or other renewable promotional programs; whether the state plan appropriately seeks to establish or expand such programs; whether the RPS creates a verifiable legal obligation.

4. Whether the state plan includes an analysis of the potential to retire or reduce the utilization of older, high

- carbon EGUs and consider the construction or increa sed29 utilization of lower carbon EGUs, taking into consideration costs, energy requirements, electric system reliability, remaining useful life, technical feasibility due to transmission constraints, contractual limitations, etc.

5. Whether the state has conv erted EPA's rate

- based goal to a mass

- based goal and provided the methodology for this conversion.

6. Whether the state is participating in a multi

- state emissions trading program designed to achieve GHG emission reductions over the applicable time period; w hether the plan is structured in a way that will allow it to achieve emission reductions or emission rate improvements.

7. Whether the state is participating in a multi

- state program to cooperate on elements of the state's compliance program, such as accounti ng for use of renewable energy capacity or credits, or measurement and verification of energy efficiency programs.

8. Whether other elements of the plan will help reduce the GHG emissions or carbon intensity of the electricity supply.

The commenters noted t hat it is not necessary for a state to include all of these criteria in its plan; a selection of these (or similar) substantive or procedural criteria will allow EPA to determine that a state is taking the appropriate, state

- specific measures and steps to achieve a reduction in GHG emissions from existing EGUs. The commenters noted that importantly, using such an approach is consistent with the structure and intent of Section 111(d) of the Clean Air Act to allow the states to set the performance standards f or their own sources based on the unique circumstances of the state.

Comment 2: Comment s requesting that EPA provide more detail regarding the criteria it will use to approve or reject state plans.

Response 2: The EPA agrees with the commenters that the d istinction between the proposed criteria and proposed plan components was unclear. After reviewing all of the comments related to the approvability criteria, the EPA has decided against maintaining the four proposed approvability criteria separately from t he list of components required for an approvable plan. The EPA has determined that a satisfactory state plan that meets the required plan components will inevitably meet the proposed approvability criteria. See Section VIII.D.1 of the final rule preamble o f the CPP.

The following are summaries of the specific public comments under this comment:

Commenters requested that EPA provide more detail regarding the criteria it will use to approve or reject state plans. The commenters stated that the proposed criter ia are too vague and therefore give the agency too much discretion to reject plans that in fact comply with the statute.30 Comment 3 : EPA should consider non

- air environmental impacts when approving compliance plans.

Response 3 : The EPA agrees with the com menter s that, under CAA Section 111(d), the EPA must take into account “any non

- air quality health and environmental impact” in determining the BSER and whether it is adequately demonstrated. See Section V.A.1 of the final rule preamble of the CPP. The EPA has taken non

- air quality health and environmental impacts into account in determining BSER and finalizing each of the three final building blocks. See Section V.A.4 of the final rule preamble of the CPP.

We disagree with the commenter s that the EPA shou ld evaluate the potential for such impacts when approving state plans. The EPA is providing states with great flexibility in developing approvable plans under CAA section 111(d), including the ability to impose source

- by

- source limitations reflecting the B SER performance rates to each affected EGU or to adopt rate

- based or

mass

- based emission performance goals, and to rely on a wide range of CO2 emission reduction measures, including measures that are not part of the BSER. States have the option to include renewable generation such as wind power in their plans. See Section VIII.C.4 of the final rule preamble of the CPP.

We note, however, that state plans must include a certification of a hearing on the state plan to ensure that states meaningfully engage wit h all members of the public, including communities, during the plan development process. This could include topics such as potential non

- air impacts, among others. See Section VIII.D. 2 of the final rule preamble of the CPP.

The following are summaries of the specific public comments under this comment:

Commenter s stated that EPA should consider non

- air environmental impacts when approving compliance plans. The commenter s stated that under Section 111(d), state plans must establish standards of performance that reflect the degree of emissions limitations achievable through the application of BSER that takes into account not only the costs of performance but also any non

air quality health and environmental impacts and energy requirements. The commenter s stat ed that while non

- air health and environmental benefits are discussed as they pertain to building blocks 1, 2, and 4, the commenter s noted that EPA minimizes the broader positive environmental and public health benefits of renewable, pollution

- free energy generation, such as wind energy. The commenter s stated that in particular, even though EPA acknowledges that generation from renewable energy, including wind energy, has associated non

- air health and environmental benefits, the agency does not state that i t will factor these benefits into its review of state plans. The commenter s stated that wind energy should be given consideration in the agency's review because its generation produces no solid waste, requires no cooling water, and lacks a fuel supply that brings its own environmental and health impacts, in addition to numerous other non

air health and environmental benefits. The commenter s noted that DOE has stated that wind power has the potential to reduce national electric

- sector water withdrawals (6 pe rcent in 2020, 15 percent in 2030, and 20 percent in 2050) and consumption (6 percent in 2020, 16 percent in 2030, and 28 percent in 2050), which helps reduce competition for scarce water resources in
water

- stressed areas. The commenter s stated that these benefits are one of the driving reasons for the broader implementation of renewable generation, alongside the reduction of carbon emissions. The commenter s requested that EPA ensure that state compliance measures do not31 impose greater non

- air health and en vironmental benefits than would be the case if, for example, renewable generation were used as a compliance tool rather than switching to another energy

source.

Comment 4 : EPA should give deference to the states in evaluating and approving plans that can reasonably and credibly be expected to meet the mass

- based target.

Response 4 : The EPA agrees with the commenter s that the success of the Clean Power Plan depends on the ability of states to find flexible and cost

- effective clean energy programs to achie ve emission reductions. The EPA is providing states with great flexibility in developing approvable plans under CAA section 111(d), including the ability to impose source

- by

- source limitations reflecting the BSER performance rates to each affected EGU or t o adopt rate

- based or

mass

- based emission performance goals, and to rely on a wide range of CO2 emission reduction measures, including measures that are not part of the BSER. However, we disagree that state resource planning modeling showing that emissions will meet the target and the state economic regulator’s approval are sufficient for the EPA to approve a state plan . T hey do not provide sufficient information for approval and they do not meet the statutory obligations under the CAA. The EPA is interpre ting CAA section 111(d)’s requirement that plans “provide for implementation and enforcement” of the standards of performance by making rules that set out the minimum elements that are necessary for a state plan to be “satisfactory” in meeting this
statuto ry requirement. This does not intrude on the state’s ability to decide what mix of measures should be used to achieve the necessary emission reductions or on the state’s ability to decide how to satisfy a component, and thus provides the desired flexibilit y. See Section VIII.D.2.d of the final rule preamble of the CPP.

The following are summaries of the specific public comments under this comment:

Commenter s stated that the EPA should give deference to the states in evaluating and approving plans that can r easonably and credibly be expected to meet the mass

- based target.

In a March 2014 comment resubmitted following proposal, commenter s stated that the environmental, economic and political success of the section 111(d) program depends on the ability of state s to find flexible and cost

- effective clean energy programs to achieve emission reductions. The commenter s stated that the EPA should not undercut the opportunity for success by imposing overly burdensome oversight on the states as they develop and impleme nt their plans. The commenter s suggested that if the state resource planning modeling shows that the emissions will meet the target, and the state economic regulator has approved the resource plan and its forecast emissions, the state's action should be a sufficient demonstration to EPA that the section 111(d) plan can be approved.

Commenter s stated the EPA rule must be federally enforceable and enforced. Commenter s said Section 111(d) of the Clean Air Act gives the EPA the authority to set guidelines for t he "best system of emission reduction" available for existing, stationary sources of dangerous air pollution. Commenter s stated each state is then required to develop a state plan that complies with those EPA guidelines. Commenter s said the EPA reviews tho se plans, and may approve or32 reject them. Commenter s stated that states have the primary responsibility for implementing and enforcing their plans, a process that could require establishing new laws and regulations if needed, and then taking enforcement ac tion against violators.

Comment 5 : Commenters addressed the four general plan approvability criteria and twelve required components for a state plan that the EPA proposes to use to determine whether a state’s plan is “satisfactory” under CAA section 111( d)(2)(A) and, thus, approvable.

Response 5 : After reviewing comments concerning the four proposed approvability criteria, the EPA has determined that listing approvability criteria separate from the 12 required plan components is potentially confusing and redundant. The EPA has concluded that a satisfactory state plan that includes the required components will meet the proposed approvability criteria and is not finalizing the criteria separate from the required plan components. See sections VIII.D.1 and D. 2 of the final rule preamble of the CPP

. The following are summaries of the specific public comments under this comment:

Commenters addressed the four general plan approvability criteria and twelve required components for a state plan that the EPA proposes to use to determine whether a state’s plan is “satisfactory” under CAA section 111(d)(2)(A) and, thus, approvable. The four proposed approvability criteria are: (1) Enforceable Measures; (2) Emission Performance; (3) Quantifiable and Verifiable Emission P erformance; and (4) Reporting and Corrective Actions.

Regarding the four general state plan approvability criteria, commenters stated that EPA has clear authority to approve or disapprove state compliance plans and emission reduction glide paths. As a pre liminary matter, the commenters stated that EPA should clarify that it will not disapprove any plan that satisfies the four approvability criteria set forth in the proposal.

Commenters noted that section 111(d) directs EPA to approve a state plan if it is "satisfactory."

Commenters stated that these criteria are more demanding than the "satisfactory" criterion in CAA section 111(d ) ( 2 ) ( A). The commenters argued that EPA cannot bootstrap the statute's single "satisfactory" criterion into something far more demanding.

The commenters stated that EPA notes that the approvability criteria and required components of a section 111(d) plan can differ from those required for a SIP under section 110 and EPA acknowledges that there are material differences between s tate plans submitted under Sections 110 and 111. Commenters argued that EPA fails to recognize, however, that the "satisfactory" criterion under section 111(d) is far more permissive than the substantive requirements of section 110. The commenters stated t hat the requirements of section 110, moreover, are themselves minimal. The commenters stated that nevertheless, the four criteria and twelve components frequently appear to require more of states than submission of a "satisfactory" plan and arguably
more t han could be required pursuant to section 110.

Commenters argued that because "section 111(d) gives states the primary responsibility for designing their own state plans for submission to the EPA" EPA cannot disapprove a plan simply33 if it does not conform to the four plan types it has identified. The Proposal and EPA's State Plan Considerations Technical Support Document ("State Plan TSD") identify the four types of plans that EPA believes will be approvable: (1) rate

- based CO2 emission limits applied to a ffected EGUs; (2) mass

- based CO2 emission limits applied to affected EGUs; (3) a state

- driven portfolio approach; and (4) a utility

- driven portfolio approach.

Commenters argued that EPA must approve state plans unless they are arbitrary or capricious and the EPA must have a reasoned basis for disapproving a state plan in whole or in part. See North Dakota v. EPA, 730 F.3d 750 (holding that EPA's refusal to consider existing pollution control technology in use at a plant because it had been voluntarily inst alled was arbitrary and capricious). The commenters stated that although EPA can use the four criteria to judge the adequacy of state plans, the EPA cannot second

- guess state decisions on how to reduce CO2 emissions. See 40 FR 53340, 53343.

The commenters argued that because states have the primary role in designing plans, the EPA should not be able to disapprove a state plan because EPA would have chosen different measures or applied the building blocks in a different way, or because it does not conform t o the plan types the EPA has identified. Commenters stated that courts have consistently recognized a state's primary discretion in setting the pace of implementation under the Act. [See, e.g., Bethlehem Steel Corp. v. Gorsuch, 742 F.2d 1028, 1036 ("Congr ess has given the states the initiate and a broad responsibility regarding the means to achieve those ends through state implementation plans and timetables for compliance...The Clean Air Act is an experiment in federalism, and the EPA may not run roughsho d over the procedural prerogatives that the Act has reserved to the states...") See also CAA section 110(a)(2), 42 U.S.C. section 7410(a)(2) ("Each implementation plan shall

- (A) include enforceable emission limitations and other control measures, means or techniques as well as schedules and timetables for compliance, as may be necessary or appropriate to meet the applicable requirements of this Act..."); The issues pertaining to the types of state plans, timing of the plans and flexibility of the plans are also implicit in the Agency's call for comments in the NODA. Commenters stated that APPA's comments on natural gas infrastructure for building block 2 also respond to the NODA

.

Comment 6: Comments that in approving plans, EPA should take into account plan features for continuous improvement and partnerships with local governments in implementing EE
programs.
Response 6: The EPA’s EM&V requirements must be applied to any EE activity that is used to generate ERCs or otherwise adjust an emission rate.

The fol lowing are summaries of the specific public comments under this comment:

Commenters advocated a flexible mechanism for reviewing state plan adequacy that to rewards plans on a continuous improvement basis and plans that demonstrate effective partnerships w ith local government implementers.34 6.3 STATE PLAN COMPO NENTS

This section addresses comments on the twelve State Plan Components. We have organized the comments in this section in subsections 6.3.1 to 6.3.13, corresponding to each of those twelve
compone nts. Responses to the comment s topics of these subsections are discussed below along with summaries of the specific comments.

6.3.1 Identification of affected entities

This section discusses the proposed plan component: identification of affected entitie s, including how identification applies to energy savings performance contract projects and allowing state flexibility in developing compliance plans.

Commenters have raised a number of issues related to this subsection which are organized by topics (comme nts) below. Responses are also provided for these topics.

Comment 1 : EPA should clarify how the identification

- of

- affected

- entities as a state plan element requirement applies to Energy Savings Performance Contract (ESPC) projects.

Response 1 : The commen ter s requested that the EPA clarifies how the identification of affected entities in a state plan element requirement applies to Energy Savings Performance Contract (ESPC) projects

. As explained in section VIII.B.2 of the final rule preamble , the EPA is no t finalizing the portfolio approach which would have included non EGU as affected entities. In the final rule only EGUs are considered to be affected sources

. I n the state plan submittal , states must identify the a pplicability of s tate p lans only to a ffect ed EGUs as defined in the regulations. A state adopting a state measures plan approach must provide as a part of the supporting documentation of its plan submittal, a description of all the state enforceable measures the state will rely upon to achieve the mass

- based state goal, the applicable state laws or regulations related to such measures, and identification of parties or entities implementing such state measures. A state measures plan submittal that relies upon RE and demand

- side EE programs and proje cts must also demonstrate in its supporting documentation that the minimum EM&V requirements apply to those programs and projects , including ESPC projects

. See section VIII.D.2 of the final rule preamble of the CPP for the components of a state plan submit tal.

The following are summaries of the specific public comments under this comment:

Commenter s stated that the EPA should clarify how the identification

- of

- affected

- entities state plan element requirement applies to Energy Savings Performance Contract (ES PC) projects. C ommenter s recommended that the states only be required to identify building or facility types (e.g., state

- owned buildings, hospitals, universities, etc.) targeted for ESPCs and to provide a reasonable estimate (developed by the state or a q ualified third party) of savings to be achieved from anticipated ESPC projects.35 Comment 2 : The final CPP should afford states maximum flexibility in developing compliance plans.

Response 2: The commenter s suggested that the final Clean Power Plan afford states the maximum flexibility in developing compliance plans to the extent allowed under Title I of the CAA. The EPA agrees with the commenter s and believes that the final emission guidelines offer states extremely broad flexibility and latitude in devel oping compliance plans and tailoring those plans to meet their respective energy, environmental and economic needs and goals, and those of their local communities. In particular the state measures plan type option provided in the final rule, would allow th e state mass CO2 emission goals to be achieved by affected EGUs in part, or entirely, through state measures that apply to affected EGUs, other entities, or some combination thereof. “State measures” refer to measures that the state adopts and implements a s a matter of state law. Such measures are enforceable only per state law, and are not included in and codified as part of the federally enforceable state plan. See section VIII.C of the final rule preamble for more information on the plan approaches avail able to states that afford the flexibility suggested by the commenters.

The following are summaries of the specific public comments under this comment:

Commenter s suggested that the CPP afford states the maximum flexibility in developing compliance plans to the extent allowed under Title I of the CAA. C ommenter s noted that such flexibility allows for states to authorize voluntary participation of non

- affected sources of GHG emissions in state emission

- reduction programs, and would enable affected sources t o partially satisfy their performance obligations by securing emission reductions from such sources, providing that any voluntary emission reductions satisfy established standards as permanent, surplus, quantifiable and enforceable

.
Commenters stated that the opportunity to meet the goals by including entities other than affected EGUs is an option that should be available to states in developing their plans. Commenters asserted that such guidance should include potential affected entities such as transmiss ion line owners/operators, simple cycle turbines, gas

- fired reciprocating internal combustion engines and other EGUs that are not specifically named affected entities under the proposed rule. Commenters believed the guidance should be issued simultaneously with the final rule so state agencies have ample opportunity to utilize the guidance in developing the state plan.

6.3.2 Description of plan approach and geographic scope

[No comments were received on this topic.]36 6.3.3 Identification of state emission performance level

This section discusses Identification of state emission performance level and comments on the requirements multi

- state compliance plans to ensure their robustness.

Commenters have raised a number of issues related to this subsection which are organized by topics (comments) below. Responses are also provided for these topics.

C omment 1 : Commenter s recommended that the EPA require that multi

- state compliance plans contain some key elements to ensure their robustness.

Response 1: The final CPP offers states extremely broad flexibility and latitude in developing
state plans and tailoring those plans to meet their respective energy, environmental and economic needs and goals, and those of their local communities. One of such flexibilities is that states may choose to meet the requirements of the emission guidelines and CAA section 111(d) by submitting multi

- state plans that address the affected EGUs in a group of states. The EPA is finalizing three types of multi

- state plan approaches, describ ed in as described in section VIII.C.5 of the final rule preamble of the CPP.

These multi

- state plan approaches are result of the broad support in comments the EPA received for allowing states to implement multi

- state plan approaches. The EPA agrees with t he
commenter s that that the EPA require that multi

- state compliance plans contain some key elements to ensure their robustness. The EPA agrees that each state plan submittal must provide for the implementation and enforcement of the plan and the EPA in the final rule is requiring specific components to be included in the state plan submittal to the EPA, see section VIII.D.2 of the final rule preamble of the CPP for the components of a state plan submittal. States that choose to participate in multi

- state pl ans must adequately address all applicable plan components across all participating states in the multi

- state plan.

The following are summaries of the specific public comments under this comment:

Commenters recommended that the EPA require that multi

- state compliance plans contain some key elements to ensure their robustness and noted that multi

- state compliance plans should include:

• A n aggregated emissions reduction target that is equivalent to the combined emissions reductions that would accrue from the i ndividual states' targets and otherwise meets the EPA guidance,

• A multi

- state tracking and reporting system for emissions that meets standards set by the EPA,

• M ulti

- state enforceability provisions (for example, if the combined group of states falls short of the target, then all states must cut emissions proportionally to ensure compliance), and37 • A multi

- state plan for ensuring adequate low

- carbon resources, and the transmission to support them, is being planned, built and deployed.

6.3.4 Demonstration tha t the plan is projected to achieve the state's emission performance level

This section discusses the state plan component requiring demonstration that that plan is projected to achieve the states’ emission performance level. Commenters requested clarifica tion on these requirements and offered suggestions on the types of assessments needed and the role of ISOs and RTOs.

Commenters have raised a number of issues related to this subsection which are organized by topics (comments) below. Responses are also pro vided for these topics.

Comment 1: Request for clarification on what EPA envisions for the "demonstration" that the state plan is projected to achieve the state's emission performance level. Commenters requested that EPA provide assistance to states to he lp conduct their modeling, or allow states to use modeling conducted by third parties. Without Federal assistance, commenters said this requirement would equate to an unfunded mandate on the states.

Response 1: The commenters requested clarification on wha t the EPA envisions for the “demonstration” that the state plan is projected to achieve the state’s emission performance level. The type of demonstration required in a state plan depends upon the approach chosen by the state
to adopt and implement. If a st ate chooses an emission standard approach, the state plan needs to include emission standards applied to affected EGUs that ensure the applicable performan ce rates or state goal will be achieved . A projection of plan performance is n o t required unless the state chooses to apply rate

- based emission performance standards to individual affected EGUs at a rate that differs from the CO 2 emission performance rates or the state's rate

- based CO 2 goal. A projection of plan performance is required for states that cho ose a state measures approach. The final rule provides information regarding the necessary components to demonstrate a plan will
meet the corresponding emission performance level in Sections VIII.D.2.b.3 and VIII.D.2.c.4 of the final rule preamble of the C PP

. For more information about projections see also chapter III of the Technical Support Document for the CPP Final Rule : Incorporating RE and Demand

- Side EE Impacts into State Plan Demonstrations

. The commenters also requested that the EPA provide assist ance to the states to help conduct their modeling, or allow states to use modeling conducted by third parties. The EPA is not requiring a specific type of emission quantification approach or model, as long as the one chosen uses technically sound methods t hat establish a clear relationship between electricity grid interactions of the state enforceable measures, affected EGU dispatch, generation cost and operations within the time frame outlined in these guidelines. States are free to use third parties
to c onduct modeling on their behalf. Multi

- state modeling efforts would be the most cost effective way for states to conduct their analysis. EPA is developing a host of resources to help38 states develop approva ble plans in addition the President’s FY 2016 Budg et includes a $25 million increase to support states as they implement the requirements of the President’s Clean Power Plan. Of this increase, $17.5 million will be provided to support states’ Clean Power Plan modeling, technical analysis, and training eff orts under CAA Section 103 authority and $7.5 million will be allocated to states for Clean Power Plan activities under CAA Section 105 authority.
The President’s FY 2016 Budget also includes a $4 billion Clean Power State Incentive Fund to support states that choose to go beyond the minimum requirements established in the Clean Power Plan for the pace and extent of carbon pollution reductions from the power sector.

The following are summaries of the specific public comments under this comment:

Commenter s requested clarification on what EPA envisions for the "demonstration" under section 60.5740(a ) ( 4) that the state plan is projected to achieve the state's emission performance level. C ommenter s asked whether EPA meant for states to include modeling inputs and/or outputs. If so, commenter s noted that many states do not have the resources available to conduct their own IPM or utility dispatch modeling. C ommenter s requested that EPA provide assistance to states to help conduct their modeling, or allow states t o use modeling conducted by third parties. Without Federal assistance, commenter s said this requirement would equate to an unfunded mandate on the states.

Comment 2: EPA should require states to seek an assessment of the potential impacts of the proposed State Plan on state, multi

- state, and/or regional grid reliability from ISOs/RTOs.

Response 2: In response to these and similar comments, the EPA is requiring in the final rule that each state demonstrate as part of its state plan submission that it has c onsidered reliability issues while developing its plan , and recommends that a particularly effective way in which a state can make this demonstration is by consulting with the relevant ISOs/RTOs or other planning authorities as they develop their plans and documenting this consultation process in their state plan submissions. S ee section VIII.G.2.c of the final rule preamble of the CPP for EPA’s for add itional information on the requirement to address reliability in a state plan

. The following are summaries of the specific public comments under this comment:

Commenter s , in response to EPA's request for comments on the components of a State Plan, recommended that EPA require states to seek an assessment of the potential impacts of the proposed State Plan on s tate, multi

- state, and/or regional grid reliability from ISOs/RTOs in market areas and the NERC

- registered entities responsible for reliability in the state and/or region, e.g., reliability coordinator, planning coordinator, etc. with independent review by NERC or the Regional Entity, in non

- market areas. C ommenter s stated that this assessment should occur before the State Plan is submitted to EPA for review. C ommenter s noted that reliability assessments performed at this stage will: (1) enable interested s takeholders to identify grid reliability challenges and develop mitigation strategies that minimize impact to the timeline for achievement of state targets and (2) enhance the effectiveness and efficiency of the development39 and/or revision of State Plans b y ensuring that such plans account for transmission and generation usage and patterns, and other relevant operational and planning information available from system operators and planners. C ommenter s provided the following example:

If State A receives a s tate

- specific emissions target, and it develops its State Plan to meet the target without a reliability assessment, its State Plan could limit the run

- times of its resources or even drive unit retirements, which may impact reliability in State B, a net imp orter from State A. Without a reliability assessment of the proposed State Plan that is coordinated with the entities responsible for reliability in the state and/or region, e.g. , reliability coordinator, planning coordinator, etc., such an impact to state , multi

- state, and/or regional grid reliability would not be identified until the implementation of the State Plan, requiring State Plan modifications by States A and B, additional reviews by EPA, and potential impacts to interim goals, when other, more

av ailable corrective actions could have been taken if the issue had been identified earlier.

To effect this proposal, commenter s recommended that EPA revise the Proposed Rule to require that State Plans include a component that describes the evaluation of p otential impacts to state, multi

- state, and/or regional grid reliability. According to commenter s , this component would include an assessment/description of the assessment performed, the results of such assessment, and how the state considered and addresse d any identified impacts during the development of its State Plan. C ommenter s noted it should also allow states to submit supporting assessments and/or data as part of the Supporting Material component of its State Plan.

C ommenter s stated that including th is component will ensure that potential negative impacts to grid reliability are identified and considered early on, providing a valuable opportunity to mitigate potential grid reliability impacts. C ommenter s further suggested that any revisions to State P lans also contain this grid reliability component, i.e. , perform a reliability assessment on the implementation of the revised State Plan and provide a description of the assessment, the results, and the actions taken to mitigate any identified grid reliab ility issues. C ommenter s stated that by explicitly requiring that State Plans include a component describing the results of reliability assessments and how such results were considered and/or addressed during the development and/or revisions of the State P lan, and allowing states to submit additional data regarding such reliability assessments through the Supporting Material component, commenter s stated that EPA can meet its objectives while facilitating state, multi

- state, and/or regional grid reliability. C ommenter s provided recommended language for this component in Attachment A to their comment s

. As part of Attachment A

, commenter s submitted the following title and description of the component recommended for incorporation into the Final Rule to facilit ate consultation with appropriate entities responsible for reliability during State Plan development. C ommenter s recommended that the component be entitled "Description of Evaluation and Consideration of Impacts to State, Multi

- State, and/or Regional Grid Reliability" and require that:

"A State Plan must consider the impact of the plan to grid reliability and describe the assessment performed to identify the potential impacts of the proposed State Plan to state, multi

- state, and/or regional grid reliabilit y performed by ISOs/RTOs in market areas and the NERC

- registered entities responsible for reliability in the state and/or region, e.g. , reliability coordinator, planning40 coordinator, etc. with independent review by the NERC or the Regional Entity in

non

- ma rket areas; any state, multi

- state, and/or regional grid reliability issues identified as a result of the evaluation performed; and how the State Plan considered and/or addressed such impacts. This component should include, but is not necessarily limited t o, a description of: (1) the type of reliability assessment ( e.g. , long

- term or short

- term, local or regional); (2) the scope of the assessment (3) the assessment results ( e.g. , any near

- or long

- term grid reliability impacts identified) including any inte r

- state or regional dependencies or impacts identified (if relevant); and (4) how the state considered and/or addressed the assessment results in the State Plan including identification of any revisions or inter

- state and/or regional coordination."

Commen t 3: The ISO should support the state it serves in the development and implementation of the state plan.

Response 3: The CPP does not call for environmental dispatch and EPA expects that Security Constrained Economic Dispatch will continue to be used in t he US. Any regulation, or market change for that matter, that changes the relative cost of generating power will change the order in which plants are dispatched. This has always been the case and this rule is does not change that. Final rule preamble se ctions VIII

. C.3.b and VIII.G provide additional information about how credits and allowances are treated.

The following are summaries of the specific public comments under this comment:

Commenter s stated that the ISO should support the state it serves in t he development and implementation of the state plan. Specifically, commenter s stated that the ISO provides a platform which allows for the environmental dispatch of affected units in order to comply with the state's CO2 goal. C ommenter s stated that the env ironmental dispatch needs to be transparent with there being a clear connection between the value of a CO2 credit and the bid adder that the generation owner applies when the bid is submitted to the ISO so the independent market monitor can audit and assur e that there is no market manipulation occurring. C ommenter s stated that the ISO also has a role to play in terms of assuring that CO2 credits are not double counted by market participants, particularly if renewable and energy efficiency providers are give n CO2 credits.

Comment 4: FERC and/or the relevant RTO should certify plans will not adversely impact the broader energy system.

Response 4: As explained above and in section VIII.G.2.c of the preamble , the final rule requires states to demonstrate that they have considered reliability when they formulated their state plans.

The following are summaries of the specific public comments under this comment:41 Commenter s stated that given the complexities of the broader system which EPA does not have jurisdic tion over, prior to EPA approval of any state implementation plan, FERC (and/or the relevant regional transmission organization (RTO)) should first certify that the plan will not adversely impact the broader energy system or degrade reliability.

Comment 5 : The role for regional transmissions organizations (RTOs) should not be expanded.

Response 5: The final rule does not place mandatory requirements on RTOs

. Although some RTOs may offer to take on an active role in helping states design plans or run mark ets , t he EPA however does not require that they take on these responsibilities.

The following are summaries of the specific public comments under this comment:

Commenter s stated that the role for regional transmission organizations (RTOs) should not be

e xpanded

. C ommenter s stated that RTOs already have extensive electric reliability responsibilities. C ommenter s stated that it is important for RTOs to continue that role through a reliability safety valve that enables the RTOs to assess, and, as necessary, mitigate electric system reliability impacts resulting from related environmental compliance actions to maintain electric system reliability. C ommenter s stated that the creation of new, mandatory markets or trading platforms run by the RTOs will significan tly complicate the already overly complex competitive energy market and could very well add unnecessary costs that are, ultimately, passed
on to customers.

Comment 6: Commenters disagreed with the need for a pre

- implementation proposal and believes this i s another reason why this entire CPP proposal should be withdrawn.

Response 6: The EPA disagrees with the comment that state plans do not necessitate a pre

implementation demonstration that the plan is projected to achieve the final emission performance l evels. The EPA is finalizing as part of the components of the state plan submittal required demonstration that a state plan will achieve the CO2 emission performance rates or state CO2 emission goal. A state plan submittal must demonstrate that the federal ly enforceable emission standards on affected EGUs and/or state measures are sufficient to meet either the CO2 emission performance rates or the state’s CO2 emission goal in the emission guidelines for the interim and final plan performance periods. For mo re information on the required components of a state plan submittal see section VIII.D.2 of the preamble of the final rule.

The following are summaries of the specific public comments under this comment:

Commenter s noted that EPA is proposing that the sta te plan must contain a pre

- implementation demonstration that plan measures are projected to achieve the final emission performance level by 2030

. C ommenter s argued that no other Section 111(d) regulation necessitates a pre

implementation demonstration of p rojected emissions and/or modeling and that this is not the manner in which Section 111(d) is intended to be implemented. C ommenter s asserted that the EPA is attempting to force fit this package into a Section 110 SIP type proposal due to its overly42 comple x nature, which is not the intent of a Section 111(d) requirement. C ommenter s disagreed with the need for a pre

- implementation proposal and believes this is another reason why this entire CPP proposal should be withdrawn and revised to be consistent with t he requirements of the CAA.

6.3.5 Milestones

See sections 6.1.5 and 6.1.6

.

6.3.6 Corrective measures

See sections 6.1.5 and 6.1.6

.

6.3.7 Identification of emission standards and any other measures

This section discusses emission standards, with particul ar focus on compliance periods and averaging periods.

Commenters have raised a number of issues related to this subsection which are organized by topics (comments) below. Responses are also provided for these topics.

Comment 1: Compliance averaging time s hould be equal to the performance period.

Response 1: The EPA agrees with the commenter s that it is appropriate for the compliance period for emission standards for affected EGUs and the performance period for state plans to be equal. The final rule requi res that for state plans that include emission standards on affected EGUs, the EGU emission standards for the interim period must have schedules of compliance for each interim step 1, 2 and 3 for the calendar years 2022

- 2024, 2025

- 2027 and 2028

- 2029,
respe ctively. For the final period, EGUs must have emission standards that have schedules of compliance for each 2 calendar years starting in 2030 (i.e., 2030

- 2031, 2032

- 2033, 2034

- 2035, etc.) States can choose to set shorter schedules of compliance for the emis sion standards but no longer than the compliance periods the EPA is finalizing in this rulemaking. As finalized, these compliance periods for emission standards for affected EGUs are aligned to the interim and final state plan performance period. See secti on VIII.B .1 of the final rule preamble of the CPP for the state plan performance periods

, section VIII.D.2.b.1 of the final rule preamble for the compliance periods for each emission standard for affected EGUs and section VIII.F.1 of the final rule preambl e for compliance periods, monitoring and reporting requirements for affected EGUs

. The following are summaries of the specific public comments under this comment:43 Regarding EPA's request for comment on the 12

- month averaging time, commenter s stated that th ere is no apparent reason why the compliance averaging time cannot be equal to the performance period. C ommenter s stated that the 12

- month averaging time proposal is too short for existing units that may have to compensate for unforeseen circumstances such as increased run time due to inclement weather or unexpected outages of other generating units, etc.

Comment 2: EPA should allow state plans to provide a compliance period of up to 3 years regardless of whether the state selects a rate

- based approach or a mass

- based approach.

Response 2: In the June 2014 proposal, the EPA proposed that the appropriate averaging time for any rate

- based emission standard for affected EGUs be no longer than 12 months and no longer than 3 years for a mass

- based standard. The EPA solicited comments on longer and shorter averaging times for emission standards included in state plans. Commenters questioned why the averaging time should be shorter under a rate

- based emission standard than under a

mass

- based emission standard and w hy the affected EGUs compliance periods should be shorter that the state plan performance period.

The EPA agrees with the commenters that a multi

- year compliance period for affected EGUs is appropriate for both type of emission standards (rate

- based and mass

- based)

. The EPA also agrees with commenters that longer averaging periods allow for operational and seasonal variability to even out. The EPA i s finalizing compliance periods that apply to both rate

- and

mass

- based emission standards , provid e complian ce periods longer than one year, and establish block compliance periods rather than a rolling average approach.

The final rule requires that for plans that include emission standards on affected EGUs regardless of the type of emission standard (rate

- based or mass

- based) , for the interim period the EGU emission standards must have schedules of compliance for each interim step 1, 2 and 3 for the calendar years 2022

- 2024, 2025

- 2027 and 2028

- 2029, respectively. For the final period, EGUs must have emission sta ndards that have schedules of compliance for each 2 calendar years starting in 2030 (i.e., 2030

- 2031, 2032

- 2033, 2034

- 2035, etc.) States can choose to set shorter schedules of compliance for the emission standards but no longer than the compliance periods the EPA is finalizing in this rulemaking. As finalized, these compliance periods for emission standards for affected EGUs are also aligned to the interim and final state plan performance period. See section VIII.B. 1 of the final rule preamble of the CPP fo r the state plan performance periods and section VIII.D.2.b.1 of the final rule preamble for t he compliance periods for each emission standard for affected EGUs. As discussed in more detail in section VIII.F .1 of the final rule preamble of the CPP , the EPA recognizes that the compliance periods provided for in this rulemaking are longer than those historically and typically specified in CAA rulemakings. The EPA determined that the longer compliance periods provided for in this rulemaking are acceptable in t he context of this specific rulemaking because of the unique characteristics of this rulemaking, including that CO 2 is long

- lived in the atmosphere, and this rulemaking is focused on performance standards related to those long

- term impacts.

The following a re summaries of the specific public comments under this comment:44 Commenters suggested that state plans should be able to provide a 3

- year compliance period under either a mass

- based plan or a rate

- based plan.

Commenter s stated that the proposed rule provi des that, beginning in 2032, states will be required to demonstrate compliance with their final emission goal on a rolling 3

- year basis. However, commenter s noted that the EPA proposes that the appropriate averaging time for affected EGUs or other affected entities to demonstrate compliance with state plan requirements should be no more than 12 months for a rate

- based emission standard and no more than 3 years for a mass

- based standard. C ommenter s questioned why an affected entity's compliance period should be shorter than a state's compliance period, or why the compliance period should be shorter under a rate

- based emission standard than under a mass

- based standard.

Commenter s stated that a multi

- year averaging period is appropriate for rate

- based standard s because yearly variation in wind, solar, and hydrological conditions and maintenance cycles for affected and nuclear units can affect the dispatch mix of fossil and carbon

- free resources from year to year.

Comment 3: Use discrete periods for compliance reconciliation instead of the rolling

- average approach proposed.

Response 3: The EPA agrees with the commenters’ recommendation that this rule use discrete year periods for compliance reconciliation instead of the proposed rolling

- average approach and is finalizing discrete compliance periods each emission standard s for affected EGUs. The final requires that for plans that include emission standards on affected EGUs, the EGU emission standards for the interim period must have schedules of compliance for e ach interim step 1, 2 and 3 for the calendar years 2022

- 2024, 2025

- 2027 and 2028

- 2029, respectively. For the final period, EGUs must have emission standards that have schedules of compliance for each 2 calendar years starting in 2030 (i.e., 2030

- 2031, 2032

- 2033, 2034

- 2035, etc.) States can choose to set shorter schedules of compliance for the emission standards but no longer than the compliance periods the EPA is finalizing in this rulemaking. As finalized, these compliance periods for emission standards fo r affected EGUs are aligned to the interim and final state plan performance period. See section VIII.B. 1 of the final rule preamble of the CPP for the state plan performance periods. See section VIII.F.1 of the final rule preamble of the CPP for compliance periods, monitoring and reporting requirements for affected EGUs.

The following are summaries of the specific public comments under this comment:

Commenter s noted that the RGGI states currently use a 3

- year control period to measure generators' compliance with the rule. According to commenter s , this multi

- year approach allows generators to account for weather variations that may occur in a single year and mitigates price spikes in the CO2 allowance market due to those natural changes. C ommenter s recommende d that this rule use discrete 3

- year periods for compliance reconciliation instead of the rolling

average approach proposed

.45 Comment 4: Commenters recommended that that the EPA use a 10

- year average instead of using a 3

- year rolling average for compliance

. Response 4: The EPA does not agree with the commenter s ’ recommendation of using a 10

- year average for compliance. However, the EPA believes the block compliance periods in the final rule allow for operational and seasonal variability mentioned by the com menters to even out. The EPA finalizes that compliance periods for affected EGUs, on a calendar year basis, must be as follows for the interim period: January 1, 2022

– December 31, 2024; January 1, 2025

– December 31, 2027; and January 1, 2028

– December 31, 2029. Starting on January 1, 2030, the compliance period for each emission standard is every 2 calendar years. These compliance periods are longer than those historically and typically specified in CAA rulemakings. See section VIII.F.1 of the final rul e preamble of the CPP for compliance periods, monitoring and reporting requirements for affected EGUs.

The following are summaries of the specific public comments under this comment:

Commenters recommended that instead of using a 3

- year rolling average fo r compliance, commenters recommended that the EPA use a 10

- year average to help smooth variability due to hot summers, cold winters, droughts, or other factors that might require the regional transmission organizations or independent system operators and u tility companies to deviate from the plan to ensure reliable and affordable electricity to its customers. Commenters noted that a 3

- year rolling average is not adequate as most weather cycles in their area are closer to 10

- year cycles.

Comment 5 : Commente rs requested clarification on whether compliance must be determined at least as frequently as these intervals (3 years for mass

- based, 1 year for rate

- based), or if the averaging period (look

- back period) shall be no greater than these intervals. Commente rs also offered suggestions for the final approach.
Response 5 : The final rule uses discrete year periods for compliance reconciliation instead of the proposed rolling

- average approach. The EPA has also aligned the compliance periods for affected EGUs with the interim and final plan performance periods. The final requires that for plans that include emission standards on affected EGUs, the EGU emission standards for the interim period must have schedules of compliance for each interim step 1, 2 and 3 fo r the calendar years 2022

- 2024, 2025

- 2027 and 2028

- 2029, respectively. For the final period, EGUs must have emission standards that have schedules of compliance for each 2 calendar years starting in 2030 (i.e., 2030

- 2031, 2032

- 2033, 2034

- 2035, etc.) States can choose to set shorter schedules of compliance for the emission standards but no longer than the compliance periods the EPA is finalizing in this rulemaking. See section VIII.B. 1 of the final rule preamble of the CPP for the state plan performance peri ods. See section VIII.F.1 of the final rule preamble of the CPP for compliance periods, monitoring and reporting requirements for affected EGUs.

The following are summaries of the specific public comments under this comment:

Commenter s noted that t he propo sed rule establishes different maximum compliance periods for affected sources depending on whether the state pursues a rate

- based goal or a mass

- based goal.46 C ommenter s referred to the definitions of "Compliance period" in 40 CFR 60.5820 and "Emission stan dard" in 40 CFR 60.21:

Compliance period means the period of time, set forth by a state in its state plan, during which each affected entity must demonstrate compliance with an applicable emissions standard, and shall be no greater than a three year perio d for a mass

- based plan, and shall be no greater than a one year period for a rate

- based plan.

Emission standard means a legally enforceable regulation setting forth an allowable rate of emissions into the atmosphere, establishing an allowance system, or p rescribing equipment specifications for control of air pollution emissions.

C ommenter s stated that, taking these two definitions into account, it is unclear whether compliance must be determined at least as frequently as these intervals (3 years for mass

- b ased, 1 year for rate

- based), or if the averaging period (look

- back period) shall be no greater than these intervals. If compliance must be determined at least as frequently as these intervals, but the averaging period is up to the state to decide in its p lan, commenter s noted that a 3

- year compliance period under a mass

- based approach could lead to difficulties for states. C ommenter s provided for example, a state with a mass

- based goal of 1,000 tons CO2 per year (3,000 tons CO2 per 3

- years) and the followi ng actual emissions:

2030: 750 tons

2031: 1,000 tons

2032: 1,240 tons

2033: 1,240 tons

2034: 1,000 tons

2035: 750 tons

C ommenter s noted that the 3

- year periods from 2030

- 2032 and 2033

- 2035 meet the 3,000 ton/3

- year goal, but the 3

- year periods from 2031

- 2033 and 2032

- 2034 exceed 3,000 tons. According
to commenter s , if compliance is only determined every 3 years (e.g., EGU compliance is determined in 2032 for years 2030

- 2032, EGU compliance is determined in 2035 for years 2033

- 2035, and so on), it could r esult in difficulties for the state when trying to ensure the 3

- year rolling average does not exceed the goal.

On the other hand, commenter s stated that if the proposed "compliance period" definition means EGU compliance is determined each year but looking at the 3

- year rolling average of EGU emissions and generation is not allowed under a rate

- based plan for EGU compliance purposes, then this sets a level of stringency under the rate

- based approach that is more stringent than necessary to ensure the state meets its plan performance requirement, which is based on a rolling 3

- year average in 2030 and beyond and a 10

- year average from 2020

- 2029.47 C ommenter s suggested that the frequency with which compliance is determined (the first interpretation of compliance period above) should be no less than annually for both mass

- based and rate

- based approaches. Additionally, commenter s suggested that after 2030, rolling 3

- year periods should be allowed for the averaging period evaluated for EGU compliance purposes under e ither mass

- or rate

- based approaches. This way, commenter s noted that EGU compliance is checked every year and state plans can be developed to ensure that the state plan performance required rolling 3 year average is met without being more stringent than n ecessary to do so.

C ommenter s also suggested that for the interim period, states should require EGU compliance to be determined no less frequent than annually, but should have the option of using an averaging period consisting of the full interim period th at has passed as of the time of the compliance determination each year. C ommenter s provided for example:

In 2020, compliance is based on looking at 2020 emissions and generation.

In 2021, compliance is based on looking at total 2020

- 2021 emissions and gene ration.

In 2022, compliance is based on looking at total 2020

- 2022 emissions and generation.

In 2023, compliance is based on looking at total 2020

- 2023 emissions and generation.

In 2024, compliance is based on looking at total 2020

- 2024 emissions and gener ation.

In 2029, compliance is based on looking at total 2020

- 2029 emissions and generation.

Through such an approach, commenter s noted that a state will be determining EGU compliance every year, and this will still allow the state to ensure that its propo sed interim goal is met based on the state plan performance averaging period included in the proposed rule, without being more stringent than necessary to do so.

Comment 6 : A 12

- month averaging period for rate

- based emission standards is consistent and do able with the Clean Air Markets and the Federal Energy Regulatory Commission data reporting. The issue of averaging times is not critical for GHG emission standards relative to any GHG environmental impact.

Response 6 : The EPA agrees that information nece ssary to determine compliance with the rule should be reported and collected in accordance with the requirements of 40 CFR Part 75 Continuous Emission Monitoring . Hourly data will be collected in accordance with 40 CFR Part 75 necessary to determine compl iance with the averaging time established in the final rule.

The following are summaries of the specific public comments under this comment:

Commenter s stated that a 12

- month averaging period for rate

- based emission standards is consistent and doable with the Clean Air Markets and the Federal Energy Regulatory Commission data reporting. C ommenter s stated that the issue of averaging times is not critical for GHG emission standards relative to any GHG environmental impact.48 Comment 7 : Using a multi

- year contr ol period for emissions compliance is important for allowing operators flexibility to manage unforeseen events. EPA should create a “relief valve” to allow states to maintain reliability during unforeseen contingency.

Response 7 : The EPA agrees with the commenters that a multi

- year control period for emission compliance provides operators flexibility to manage unforeseen events. The EPA finalizes that compliance periods for affected EGUs, on a calendar year basis, must be as follows for the interim period : January 1, 2022

– December 31, 2024; January 1, 2025

– December 31, 2027; and January 1, 2028

– December 31, 2029. Starting on January 1, 2030, the compliance period for each emission standard is every 2 calendar years.

See section VIII.G

. 2.e of the fina l rule preamble of the CPP for EPA’s response to commenters recommendation that EPA creates a “relief valve” to allow states to maintain reliability

. The following are summaries of the specific public comments under this comment:

Commenter s stated that us ing a multi

- year control period for emissions compliance is an important first step toward allowing operators the flexibility they need to manage unforeseen
events. C ommenter s stated that the EPA should create a "relief valve" mechanism that would allow st ates to maintain reliability during an unforeseen contingency (e.g. the 2014 Polar Vortex, a major natural gas transmission outage, or a long

- term forced outage of a zero

- emissions resource).

C ommenter s noted that reliable delivery of electricity to consu mers is necessary to the functioning of modern society, and that the effects of outages and electricity price spikes have deleterious effects on the economy at large and on human health and welfare. C ommenter s noted that the power sector is frequently face d with unexpected events, many caused by weather patterns out of our control or by equipment failures that require a significant amount of time to repair. C ommenter s noted that many of these events have a direct impact on power sector emissions, and when g rid operators are given sufficient "room" to comply

- as currently is the case in SO2 and NOx markets

- emissions constraints imposed by regulation can be met without impacting reliability. C ommenter s noted that as more stringent constraints are imposed, g rid operators have less and less flexibility to respond to unforeseen events while still keeping the lights on.

C ommenter s noted that in states like New York, where EPA's proposed CO2 emissions rate target is significantly lower than the emissions rate of a natural gas fired plant, grid operators are reliant on the continued and uninterrupted operation of zero

- emissions resources to meet demand and keep emissions in check. C ommenter s stated that the unforeseen loss of one or more zero

emissions resources wo uld require operators to run fossil

- fired plants more frequently, thereby increasing emissions. C ommenter s noted that unexpected damage to a turbine blade at a hydropower facility can take months to repair, just as an operational issue at a nuclear plant c an cause a forced outage from which the plant never returns (e.g., the San Onofre plant in California).49 C ommenter s stated that the North American Electric Reliability Corp. analysis of the extreme cold weather event, or "Polar Vortex" in January 2014 sugge sts that the event exposed industry's vulnerability to various challenges with fuel supply and delivery as related to its increased reliance on natural gas. C ommenter s stated that the report also says that potential risks associated with increased dependen ce on natural gas are most acute in areas where power generators rely on interruptible natural gas pipeline transportation which is the case in portions of New York.

Comment 8 : A rolling 3

- year average to measure compliance is inadequate to average out th e effects of hydro

- generation variability. Commenters stated that at least 15

- year rolling averages are required to even out the effects of hydro variability.

Response 8 : The EPA agrees with commenters that hydropower can vary on an annual basis. The EPA also agrees with commenters that the proposed 3

- calendar year rolling average to determine compliance with the final emission performance levels does not adequately address operational and seasonal variability. Addressing these and other comments the final rule uses discrete year periods for compliance reconciliation instead of the proposed rolling

- average approach. The EPA has also aligned the compliance periods for affected EGUs with the interim and final plan performance periods. The final requires that for plans that include emission standards on affected EGUs, the EGU emission standards for the interim period must have schedules of compliance for each interim step 1, 2 and 3 for the calendar years 2022

- 2024, 2025

- 2027 and 2028

- 2029, respectively. For th e final period, EGUs must have emission standards that have schedules of compliance for each 2 calendar years starting in 2030 (i.e., 2030

- 2031, 2032

- 2033, 2034

- 2035, etc.) States can choose to set shorter schedules of compliance for the emission standards but no longer than the compliance periods the EPA is finalizing in this rulemaking. The EPA believes the block compliance periods in the final rule allow for operational and seasonal variability mentioned by the commenters to even out. See section VIII.B. 1 of the final rule preamble of the CPP for the state plan performance periods. See section VIII.F.1 of the final rule preamble of the CPP for compliance periods, monitoring and reporting requirements for affected EGUs.

For how the EPA used the hydro data for setting BSER see also section VI.D.3 of the final rule preamble of the CPP . The EPA made corrections to unit

- level 2012 data based on commenter s feedback. In addition, we also made some adjustments to 2012 data, not to address a correction, but to addr ess a concern about the representativeness of the data. Although the EPA determined that the 2012 data year better informed its BSER determination than a preceding year or a multi

year average, commenters did identify some limitations that we are addressin g through targeted adjustments. These are discussed below:

• Adjustments to state

- level data to account for annual variation in the hydrologic cycle as it relates to fossil generation.

• Hydropower plays a unique role in a handful of states in that it is 1) a significant portion of their generation portfolio, 2) varies on an annual basis, and 3) 2012 was an outlier year for snow

- pack (meaning hydropower was above and fossil generation was below its historical average). The EPA notes that these three conditio ns are not present in other50 weather

- based RE technologies like solar or wind. [1] Therefore, no similar adjustment was needed to account for weather patterns with these technologies.

• Unlike market conditions (e.g., changes in natural gas prices) that may pr oduce different generation profiles year

- to

- year but that do not change the overall generating potential of the state’s power fleet, variation in the hydrologic cycle does fundamentally change the generating potential of the state’s power fleet in hydro

- in tensive states as they no longer have the same generating potential in an average year as they had in a “high hydro” year. Appendices 3 and 7 of The CO 2 Emission Performance Rate and Goal Computation TSD for CPP Final Rule provides analysis and explains th e adjustment that the EPA made to the state

- level 2012 data for Alaska, Idaho, Maine, Montana, Oregon, South Dakota, and Washington to better reflect fossil generation in an average year over a 1990

- 2012 baseline. The EPA agrees with commenters that using a 2010

- 2012 baseline would not address the concern as 2011 was also an outlier year relative to historical snow

- pack and hydro generation.

The following are summaries of the specific public comments under this comment:

Commenter s stated that hydro genera tion variability will bias emission rates during compliance measurement periods, and said a different averaging period is warranted. C ommenter s stated that there will be multi

- year periods during future compliance periods when drought or other natural

even ts will significantly reduce hydro generation and require replacement power from NGCC generation at significantly higher emission rates. C ommenter s stated that the EPA must consider this large amount of variability when assessing compliance to avoid penali zing the state for spikes in fossil

- fueled generation based on unfavorable hydro conditions. Further, commenter s stated that the EPA's use of a rolling 3

- year average to measure compliance is inadequate to average out the effects of hydro

- generation variab ility. C ommenter s provided Figure 1 showing National Oceanic and Atmospheric Administration (NOAA) annual precipitation data for Idaho since 1950. According to commenter s , the figure clearly shows six periods with 3 or more consecutive years of below

- avera ge precipitation. C ommenter s stated that because the EPA proposes to only average 3 years of compliance measurement data, the EPA will effectively penalize the State for extended periods of below

- normal water while not crediting the State for above

- normal displacement of fossil fuel generation during extended periods of above

- normal precipitation. C ommenter s stated that simply extending the rolling average compliance period does not seem feasible. C ommenter s provided Figure 2 depicting Idaho Power's total s ystem hydro generation from 1975 through 2013 with rolling 5, 10, 15, and 20 year averages plotted. Based on the figure, commenter s concluded it would require at least 15

- year rolling averages to

[1] While solar and wind generation may vary on an hourly or daily basis, their annual generation profiles are subject to notably less variation compared to hydropo wer. The EPA’s calculation of the BSER relies on annual generation data, not on hourly or daily generation data.51 even out the effects of hydro variability so that it can be eliminated as a factor in measuring compliance.

6.3.8 Demonstration that each emission standard is quantifiable, non

- duplicative, permanent, verifiable, and enforceable

This section discusses the requirement that state plans demonstrate that each emission standard is quantifiable, non

- duplicative, permanent, verifiable, and enforceable. Commenters offered support for and clarification of this requirement.

Commenters have raised a number of issues related to this subsection which are organized by topics (c omments) below. Responses are also provided for these topics.

Comment 1: EPA should require state plans to demonstrate the requirements are legally and practically enforceable.

Response 1: The EPA agrees with the commenter s in that state plans should be required to demonstrate that the requirements are legally and practically enforceable. In the final rule the EPA is requiring that the states demonstrate in their plan submittals that the emission standards and/or state measures are quantifiable, non

- dupli cative, permanent, verifiable and enforceable. See section VIII.D.2 of the final rule preamble of the CPP for the components of a state plan submittal.

As provided in §§ 60.5740 and §§ 60.5745 and explained in detail in section VIII.C.3.b of the final rul e preamble of the CPP, a state may elect to use a mass

- based emission standard approach that is implemented through a market

- based emission budget trading program.

The EPA would assess the overall approvability of a plan using a state measures plan type b ased, in part, on the state’s satisfactory demonstration that the state measures, in conjunction with any federally enforceable emission standards on the affected EGUs that might be included in the plan, would result in the state plan’s achievement of eith er the CO 2 emission performance rates or the CO 2 emission goal for the state’s affected EGUs. The EPA’s determination that such a plan is satisfactory would be based in part on whether the state measures are adequately described in the supporting documenta tion and the plan submittal demonstrates that the state measures are quantifiable, verifiable, enforceable, non

- duplicative and permanent. This is necessary for the EPA to ensure that the results achieved through the plan are quantifiable and verifiable, a nd to assess whether the state measures are anticipated to achieve the CO 2 emission performance rates or state CO 2 emission goal for affected EGUs.

The federal enforceability considerations raised in the comment arose primarily under the proposed portfol io approach for state plans. In this action, the EPA is finalizing the state measures approach instead of the portfolio approach described in the proposed rule. As explained52 in section VIII.C of the final rule preamble of the CPP, the EPA is not finalizing the portfolio approach, which would have allowed state plan submittals to include federally enforceable measures that apply to entities that are not affected EGUs. However, as explained in depth in section VIII.C of the final rule preamble of the CPP, if the state is adopting the state measures approach, the state plan submittal will need to specify, in the supporting materials, the state enforceable measures that the state is relying upon in conjunction with any federally enforceable emission standards fo r affected EGUs to meet the emission guidelines.

Because the EPA is not finalizing the portfolio approach, which would have allowed states to include federally enforceable measures in a state plan that apply to entities that are not affected EGUs, such as in the context of RGGI, the agency is not providing additional guidance on federal enforceability of measures that might apply to such entities. As proposed, we are requiring that state plans include a demonstration that plan measures are enforceable, wh ich for state measures plans is provided for in § 60.5780 and discussed in section VIII.D.2.c.6 of the final rule preamble of the CPP. T he existing guidance documents pertaining to enforceability include: (1) September 23, 1987 memorandum and accompanying implementing guidance, “Review of State Implementation Plans and Revisions for Enforceability and Legal Sufficiency;” (2) August 5, 2004 “Guidance on SIP Credits for Emission Reductions from Electric

- Sector Energy Efficiency and Renewable Energy Measures; ” and (3) July 2012 “Roadmap for Incorporating Energy Efficiency/Renewable Energy Policies and Programs into State and Tribal Implementation Plans, Appendix F.”

The following are summaries of the specific public comments under this comment:

Commenter s stat ed that EPA should require state plans to demonstrate that the requirements are legally and practically enforceable. C ommenter s stated that under a budget trading program like RGGI, enforceability, measurement, and verification are already incorporated int o the program in a straightforward manner. C ommenter s stated that, based on consistent regulations adopted in each RGGI state, sources subject to RGGI are required to obtain and hold a sufficient amount of allowances by the relevant compliance deadline to cover emissions over the relevant compliance period. C ommenter s noted that under the existing terms of RGGI states' respective implementing regulations, this regulatory requirement is generally incorporated as a condition of each source's operating permit. Thus, commenter s noted that RGGI is enforceable directly against individual sources by the state where the sources are located, and the failure of a source to hold sufficient allowances constitutes violations of the state's program and of the source's per mit. C ommenter s stated that under an approved section 111(d) plan, this obligation of each individual source to comply with RGGI would become a federally enforceable condition of an individual source's Title V permit. According to commenter s , at the end of the compliance period, the "true

- up" process, in which states deduct allowances to cover sources' emissions, provides verification that the emission reductions included as part of the participating states' section 111(d) plans are actually achieved.

Com ment 2: Request that EPA provide guidance as to what specifically would qualify as "permanent and enforceable," especially with regard to Building Blocks 3 and 4, which focus on the quantification of renewable energy and energy efficiency measures.53 Respons e 2: To the extent the commenters’ concerns involve building block 4, demand

- side energy efficiency, because the EPA is not finalizing building block 4 as part of the BSER, it is not necessary to address those concerns in the context of it being one of the final building blocks. However, the final guidelines provide ample latitude for states and utilities to rely on demand

side EE, as well as RE, in meeting emission reduction requirements as part of a state measures approach. The EPA is requiring that state plans include a demonstration that plan measures are enforceable, which for state measures plans is discussed in section VIII.D.2.c.6 of the final rule preamble of the CPP. Under § 60.5780 a state may include state measures in support of its plan that ar e not emission standard(s) on affected EGUs, provided that each state measure must be quantifiable, verifiable, non

- duplicative, permanent, and enforceable with respect to each affected entity and the plan supporting materials includes the methods by which each state measure meets those requirements.
As proposed, we are requiring that state plans include a demonstration that plan measures are enforceable, which for state measures plans is provided for in § 60.5780 and discussed in section VIII.D.2.c.6 of th e final rule preamble of the CPP. The EPA guidance documents on enforceability as it pertains to RE and EE include: (1) September 23, 1987 memorandum and accompanying implementing guidance, “Review of State Implementation Plans and Revisions for Enforceab ility and Legal Sufficiency;” (2) August 5, 2004 “Guidance on SIP Credits for Emission Reductions from Electric

- Sector Energy Efficiency and Renewable Energy Measures;” and (3) July 2012 “Roadmap for Incorporating Energy Efficiency/Renewable Energy Policie s and Programs into State and Tribal Implementation Plans, Appendix F.”

The following are summaries of the specific public comments under this comment:

Commenter s requested that the EPA provide guidance as to what specifically would qualify as "permanent a nd enforceable," especially with regard to Building Blocks 3 and 4, which focus on the quantification of renewable energy and energy efficiency measures. C ommenter s noted that Indiana does not have a mandated RPS in place but does have a non

- binding goal. C ommenter s stated that the compliance timetable for plan development and implementation of this rule might not allow Indiana to pursue a RPS; therefore, the state may not have the mechanisms in place in order to properly enforce Building Blocks 3 and 4. C o mmenter s stated that more guidance with regard to what constitutes enforceability is crucial in order for Indiana to consider incorporating these building blocks into a state plan.

6.3.9 Identification of monitoring, reporting, and recordkeeping requireme nts

This section discusses monitoring, reporting, and recordkeeping requirements . Comments include input and questions on the type information to be collected and reported, how and where those data should be reported, and how long records should be retain ed.

Commenters have raised a number of issues related to this subsection which are organized by topics (comments) below. Responses are also provided for these topics.54 Comment 1: Multiple commenters questioned whether gross rather than net electrical produ ction should be monitored and reported.

Response 1: After carefully considering the comments regarding whether the agency should use net or gross energy as a basis for the emission standards and monitoring requirements, EPA is finalizing this rule to use a net energy basis, as proposed. See section VI.C.1.b of the preamble of the final rule of the CPP. Electric generators deliver net generation to the grid, power control authorities and dispatchers call upon electric generators to provide net power to t he grid. Electric generators participating in wholesale markets of electricity are paid on the basis of the availability and generation of net power and net energy to the electric grid. Commenters stated that utilities generally measure generating unit p erformance with net unit heat rate, which entails measurement of net generation. An emissions standard based on net energy provides a truer indicator of the emissions per unit of production and a better indicator of the emissions performance of the electr ic generator. A standard on a net energy basis also provides incentives for electric generators to minimize their parasitic loads and get credit for such improvements in this rule. Therefore, sufficient meters to determine net energy output are required to be employed in order to demonstrate compliance with this rate based emissions standard. See section VIII.F.1 of the preamble of the final rule of the CPP.

EPA believes that the vast majority of units have sufficient watt meters to report net generati on. Net generation is currently reported to EIA by approximately 92 percent of respondents to the EIA

- 923 survey. EPA requested comment on the specification of ANSI 0.2 class watt meters and received few comments on this matter. Regarding the comments a bout costs to install sufficient watt meters, not enough supporting documentation was submitted evaluate commenters’ assertions. Regarding the proposed ANSI standard for watt meters, commenters did not provide any suggested alternatives to this standard i n order to ensure consistent measurement of net electricity, which is essential to ensure that all parties are reporting this key compliance metric on a consistent basis. The fee to access the ANSI standard is nominal and should not have been a barrier fo r this industry to evaluate the standard. Therefore, in the final rule, EPA is requiring use of AN S I 0.2 class meters to measure and report net electric generation

. However, to ensure that the monitoring requirements for net electric output are not overl y burdensome at a facility, in the final rule, EPA is allowing a facility to request alternative monitoring under 40 CFR 60.13(i) to alleviate unreasonable costs or to allow for delayed installation of meters during the next planned period of downtime. St ates and tribes have the flexibility to require more stringent monitoring requirements for watt meters in their state plan submissions.

Regarding the metering of auxiliary loads that serves multiple units, the EPA will allow for reasonable apportionment o f such auxiliary loads to multiple units.

In response to the comment regarding auxiliary power meters not being able to differentiate the source of the power or whether a particular unit is on or off

- line, the EPA believes that control systems at the EGU can differentiate hours in which the unit is operating or not and whether the electricity in the auxiliary load circuit is originating from on

- site electric generators or from the grid. Also, commenters did not provide examples of cases in which there wo uld be uncertainly regarding the origin of auxiliary power.55 In response to the comment regarding consistency of monitoring requirements with 111(b), such consistency is not required.

In response to the comment regarding monitoring and reporting of net gen eration at an EGU in a state that elects to implement a mass based program, rather than a rate based program, the EGU still must monitor and submit net energy output data. This is required so the state may be able to demonstrate that compliance with the m ass based program also demonstrates that the state’s rate based goal is net. Owners and operators of utility and non

- utility EGUs already report net electric generation to EIA via Form EIA

- 923 on a prime mover basis and a sample of EGUs on a unit basis. This rule cannot use the EIA data directly for several reasons: some of the EIA data is reported in an aggregated manner to EIA and is not reported on a unit level as is commonly (but not always) metered; the discrete units of time measurement for which th e data is reported to EIA is insufficient for the purposes of this rule; there are occasions for which EIA alters reported data prior to publication. Many owners and operators of EGUs also report net generation to NERC via GADS. This rule does not impose a significant cost to install meters to measure net generation on this industry.

EPA is committed to work with states, tribes, and owners and operators of EGUs to implement this rule, especially as it relates to the measurement and reporting of emissions and net energy output, the reporting of data via the Emissions Collection and Monitoring Plan System ( ECMPS )

, and related changes to Data Acquisition and Handling Systems (DAHS).

The following are summaries of the specific public comments under this commen t:

Commenter s noted that EPA invited comment on the proposal for reporting of net rather than gross energy output and the proposed protocols. C ommenter s noted that EPA's proposed to require that EGUs
"install, calibrate, maintain, and operate a sufficient number of watt meters to continuously measure and record on an hourly basis net electric output." C ommenter s stated that "net electric output" is defined as "the amount of gross generation the generator(s) produce (including, but not limited to, output fr om the steam turbine(s), combustion turbine(s), and gas expander(s), as measured at the generator terminals, less the electricity used to operate the plant (i.e., auxiliary loads); such uses include fuel handling equipment, pumps, fans, pollution control

e quipment, other electricity needs, and transformer losses as measured at the transmission side of the step up transformer (e.g., the point of sale)."

C ommenter s noted that EPA stated in its part 75 monitoring considerations TSD that, "Given that these mea surements commonly occur at EGUs, the EPA understands that the equipment needed to convert gross generation to net generation on an hourly basis exists at all EGUs." C ommenter s argued that this statement is not accurate and the proposed requirement to meas ure net generation will be problematic for the following reasons.

• C ommenter s stated that vertically integrated utilities such as EGUs that are connected to the utility's own grid have no operational reason for metering to measure net generation from the g rid. According to commenter s , while such generating stations have some56 meters, they are not necessarily the appropriate type and quality or in the location needed to meet EPA's new reporting requirements.

• C ommenter s state that the proposed requirement to m easure net generation would introduce increased costs (especially as the meters are not "off

- the

- shelf' items), entail generation station outage time for meter installation, and uncertainties as to whether the supporting equipment (e.g. potential transform ers and current transformers) will be available. C ommenter s estimated that it will cost over $1 million to replace existing meters alone and each meter would require an approximately seven week installation period which would entail power plant outage time

.

• C ommenter s noted, because vertically integrated utilities operate EGUs that are connected to the utility's own grid do not have metering in place outside of its facilities, this would introduce additional costs and time to purchase and install new statio n service transformers. Therefore, commenter s stated that the following assumption contained in the TSD does not apply to vertically integrated utilities: "Station service transformers typically provide separately measured electricity from the grid to plan t auxiliary loads when the EGU is not in operation or is starting up."

• C ommenter s noted that the EPA proposes that the American National Standards Institute (ANSI) standard for electricity meters be used (i.e., a specification of 0.2 accuracy class
meters to determine net electric output). When commenter s attempted to access the ANSI standards for review, they found that the only way to review the standards was to purchase them and found that ANSI restricts the networking and transferring of the purchased f ile to another person or computer. C ommenter s stated that EPA's rationale is for proposing to require an ANSI specification of 0.2 accuracy class meters is unclear as the TSD only states that " Specification of certain equipment standards would ensure a lev el playing field regarding the minimum acceptable accuracy of equipment used to measure net electric generation while minimizing any additional burden of upgrading equipment used to measure net electric generation. " However, commenter s noted that the EPA h as not provided data indicating that EGUs are already using meters of the ANSI specification proposed

.

• C ommenter s noted that the auxiliary power meters at their generating stations do not differentiate the source of the power or whether a particular unit i s on or off

- line, so their existing meters would not be able to measure net electric output as proposed by EPA.

• C ommenter s noted that the EPA proposes that grid supplied electricity that is used at the station when the EGU has no gross generation would not be subtracted from the zero gross generation. C ommenter s stated that it is unclear how the current CEMS Data Acquisition and Handling System (DAHS) would interface with the proposed meter requirements. C ommenter s noted that the CEMS report gross generatio n values which represent hourly rates so for hours of partial operation, the value reported under Part 75 will not measure the actual output for an hour. C ommenter s stated that the current CEMS would be required to be reprogrammed or EPA would need to clar ify whether it would accept partial hour data

.57 • For these reasons, commenter s recommended that EPA not require EGUs to monitor net generation if their state has opted for a mass

- based goal. If a state opts for a rate

- based goal, commenter s recommended that EPA retain the existing requirement to report gross energy output per Part 75 rules rather than net energy output. C ommenter s stated that net generation can be a complex calculation, especially for vertically integrated utilities, and would incur significa nt additional cost to install new meters and reprogram the CEMS to record the additional data. C ommenter s also recommended that EPA work with vertically integrated utilities to address their unique situation and concerns with reporting of net generation

.

Commenter s questioned whether net rather than gross electrical production should be reported

. C ommenter s stated that this depends solely on how EPA finalizes its choice of net or gross generation for the 111(b) proposals. C ommenter s stated that this existi ng source rule should require electricity to be reported in the form used in the 111(b) rules (proposed to be gross generation) for consistency between reporting requirements and simplification of calculation of emission limitations between new and old sou rces.

Commenters recommended that EPA should utilize gross rather than net generation. C ommenters expressed concern with EPA's use of net rather than gross electricity generation as a basis for the emission rate goals in the proposal. C ommenters stated th at use of net generation penalizes utilities for the electricity that is used to power pollution control systems that are, in fact, mandated by other federal environmental regulations. In addition, commenters noted that EPA's proposed new source CO2 standa rds under section 111(b) are based on gross generation. For consistency with EPA's proposed new source CO2 standards and its long

- existing Part 75 CEMS requirements, commenters recommended that gross generation should also be used for the section 111(d) st andards

. Commenter s stated that the additional monitoring required to accurately determine net generation is burdensome and of little or no benefit beyond the current gross energy monitoring requirements.

Commenters advocated that decisions regarding net a nd gross electric output reporting, electric output meter specifications, and apportionment procedures for the station power (parasitic load) at multi

- unit stations be delegated to the states. Commenters suggested that states should defer to existing ANSI and IEC metering specifications, manufacturer recommended maintenance and calibration practices, and applicable FERC and NERC protocols. Commenters stated that layering additional EPA mandated electric metering specifications and quality assurance testing requirements would be duplicative and unnecessary. Commenters noted that affected EGUs have industry inherent incentives to ensure accurate and reliable electric power metering and reporting.

Comment 2: The EPA should revise its requirements for determini ng compliance with its net

output based goals and allow states to decide the best means of measuring and reporting the metrics needed to demonstrate compliance.

Response 2: The EPA does not agree since c onsistent monitoring and measurement is an important aspect of this rule , however, to a certain extent state flexibility beyond minimum58 requirements is generally provided for . Consistent measurement and reporting of net energy output is as important as consistent measurement and reporting of emissions For example, it

ensure s that the value of each tradable unit has consistent value regardless of the location of the EGU. States and tribes have the flexibility to require more stringent monitoring requirements for watt meters in their state plan submissions.

The following are summaries of the specific public comments under this comment:

Commenter s stated that the EPA should revise its requirements for determining compliance with its net

- output based goals. C ommenter s stated that EPA's proposal and technical su pport documents include various provisions intended to govern how net output should be monitored at existing generating units because EPA has defined its emission reduction goals for states on the basis of net output. However, commenter s stated that those provisions are inconsistent with other monitoring requirements that already apply to those units under other Clean Air Act programs, and they unnecessarily restrict state authority to determine the best means of implementing and enforcing EPA's proposed Cl ean Power Plan.

First and foremost, commenter s stated that section 111(d) of the Clean Air Act expressly grants to the states, not EPA, the authority to "implement and enforce" the "standards of performance" established in state implementation plans. Ther efore, commenter s asserted that the EPA should allow states to decide the best means of measuring and reporting the metrics needed to demonstration compliance under Section 111(d).

For the new monitors that may be needed at existing sources, such as net e nergy output watt meters, commenter s stated that the EPA should encourage states to adopt reasonable monitoring requirements that do not unduly burden existing sources. For example, commenter s stated that the EPA's proposal indicates that net generation me ters must be accurate to 0.2 percent, but fails to recognize that the accuracy requirements for other monitors are much more reasonable.

Comment 3: The rule should require all affected EGUs to monitor CO 2 emissions and net hourly electric output and repor t data using EPA’s Emission Collection and Monitoring Plan System (ECMPS).

Response 3: The Agency agrees with the commenters and the final rule require s all affected EGUs to monitor and report in accordance with 40 CFR Part 75. Reporting requirements und er 40 CFR Part 98 also required for the majority of the affected units subject to this rule rely on the emission monitored and reported in accordance with 40 CFR Part 75. 40 CFR Part 98 is a mandatory GHG reporting rule that encompasses pollutants beyond this rule making and therefore the Agency is not considering streamlining of the reporting requirements for these two distinctly different rules.

The following are summaries of the specific public comments under this comment:

Commenter s stated that th e rul e should require all affected EGUs to monitor CO2 emissions and net hourly electric output under 40 CFR Part 75, and report the data using the EPA's Emission Collection and Monitoring Plan System (ECMPS)

. C ommenter s stated that this would assure a59 more uni form monitoring and reporting process for all affected sources. C ommenter s stated that currently, some sources located in Oklahoma are not subject to 40 CFR Part 75, and the state does not possess the resources to develop and maintain a separate reporting system for these

sources. In regards to monitoring, recordkeeping and reporting, c ommenter s questioned the relationship between the proposed rule and the annual GHG emissions reporting provisions under 40 CFR Part 98. C ommenter s stated that most affected s ources currently report GHG emissions to the EPA quarterly pursuant to 40 CFR Part 75 and annually via 40 CFR Part 98. C ommenter s asked whether EPA is considering streamlining the apparently duplicative reporting requirements for the same emissions. The EP A references reporting requirements under Part 75 as being the preferred approach under the 111(d) state plans and that states can use that system to gather already reported emissions data from affected EGUs rather than creating a new system.

To the extent EPA seeks to provide guidance to states regarding its preferred monitoring and reporting procedures, commenters stated that the EPA should encourage states to avoid imposing additional monitoring and reporting burdens by taking advantage of the monitoring requirements that already exist to the greatest extent possible. For example, commenters noted that the Part 75 monitoring procedures used to comply with other programs, such as the Title IV Acid Rain Program, provide much of the data that would be needed to demonstrate compliance under the Clean Power Plan. Unfortunately, commenters stated that the EPA's proposal appears to mandate a monitoring approach that would eliminate key flexibilities provided in the Part 75 regulations, thus requiring utilities to maintain separate document collection and reporting procedures and potentially eliminating important alternative monitoring options intended to ensure representative, cost

- effective monitoring approaches are available. Commenters asked EPA to revise its p roposal to make clear that the procedures established under Part 75 will suffice or explain the need for any exceptions.

Comment 4 : Commenters recommend a record retention time of 12 to 15 years.

Response 4: In the June 2014 proposal, the EPA proposed that states must include in their state plans a record retention requirement for affected EGUs to maintain records for at least 10 years following the date of each occurrence, measurement, maintenance, corrective action, report or record. The EPA received mix comments regarding the length of the record retention requirement for EGUs. Some commenters recommended longer retention times while others did not agree with longer retention times. T he EPA is finalizing that states must include in their plans a rec ord retention requirement for affected EGUs of not less than 5 years following the date of each compliance period, compliance true

- up period, occurrence, measurement, maintenance, corrective action, report, or record, whichever is latest. Each record must be in a form suitable and readily available for expeditious review. The EPA finds that these final recordkeeping requirements are appropriate and consistent with the requirements for other CAA section 111(d) emission guideli nes and believes that these reco rd retention requirements will ensure the data is available for the interim and final compliance true

- up periods.

See section VIII.D.2.a. 4 of the final rule preamble of the CPP for the monitoring, reporting and recordkeeping requirements for affected EGUs.60 The following are summaries of the specific public comments under this comment:

Commenter s stated that a record retention time of 10 years will not be sufficient since the interim goal period is 10 years and the life of some EE reduction measures is great er than 10 years. C ommenter s recommended a slightly longer retention time of 12 to 15 years to ensure sufficient data is available to calculate and adjust the goals. In addition, commenter s recommended that data associated with EE measures that extend beyo nd 10 years maintain a record retention time for the entire life of the EE measure, with a maximum of 20 years.

Comment 5 : Request for clarification on the timeframe for records retention.

Response 5: See section VIII.D.2.a.4 of the final rule preamble f or EPA’s response to this comment and the record retention requirements states must include in their plans for affected EGUs. See section VIII.D.2.a.5 of the final rule preamble for the final state reporting and recordkeeping requirements.

The following ar e summaries of the specific public comments under this comment:

Commenter s requested clarification on the timeframe for records retention. C ommenter s noted that EPA states that it is "proposing that state plans must include a record retention requirement

o f ten years" on page 34914 of the preamble, but section 60.5810(d) stated that "A state must keep records at minimum for 20 years."

Comment 6 : There is no justification for records retention exceeding 10 years.

Response 6: In the June 2014 proposal, the EPA proposed that states must include in their state plans a record retention requirement for affected EGUs to maintain records for at least 10 years following the date of each occurrence, measurement, maintenance, corrective action, report or record. The EPA received mix comments regarding the length of the record retention requirement for EGUs. Some commenters recommended longer retention times while others did not agree with longer retention times. The EPA is finalizing that states must include in thei r plans a record retention requirement for affected EGUs of not less than 5 years following the date of each compliance period, compliance true

- up period, occurrence, measurement, maintenance, corrective action, report, or record, whichever is latest. Each record must be in a form suitable and readily available for expeditious review. The EPA finds that these final recordkeeping requirements are appropriate and consistent with the requirements for other CAA section 111(d) emission guidelines and believes th at these record retention requirements will ensure the data is available for the interim and final compliance true

- up periods.

See section VIII.D.2.a.4 of the final rule preamble of the CPP for the monitoring, reporting and recordkeeping requirements for a ffected EGUs.

The following are summaries of the specific public comments under this comment:61 Regarding EPA's proposal that state plans must include a record retention requirement of 10 years commenter s stated that there is no justification for record rete ntion exceeding 10 years. Similarly, commenter s disagreed that there is any need to specify record retention policies for CAA Section 111(d) plans because states have developed state level record retention policies.

Comment 7 : Commenters disagreed that a ffected entities should submit reports to EPA as well as to the state.

Response 7: The EPA requested comments on the appropriate scope of periodic reporting requirements for each affected entity in a state plan and whether the reports should also be submi tted directly by the affected entities to the EPA as well as to the state. Commenters stated that EPA has no need or legal basis for requiring that affected entities must submit reports to the EPA as well as the states. In the final rule the affected enti ties are the EGUs that meet the applicability criteria of § 60.5805. The EPA finalizes that in the state plan submittal states must specify how each emission standard is quantifiable and verifiable by describing the CO 2 emission monitoring, reporting and r ecordkeeping requirements for affected EGUs. The applicable monitoring, recordkeeping and reporting requirements for affected EGUs with are outlined in section VIII.F of the final rule preamble of the CPP . In the final requirements t he EPA finalizes that s tates must require all affected EGUs to monitor and report hourly CO 2 emissions and net energy output (including total net MWh output that is comprised of generation, and where applicable, useful thermal output converted to net MWhs) to the EPA on a quarte rly basis in accordance with 40 CFR part 75 (via the Emission Collection and Monitoring Plan System (ECMPS) ). This requirement applies for all types of state plans, regardless of whether the state chooses the option of the CO 2 emission performance rates, a state rate

- based CO 2 emission goal, or a state mass

- based CO 2 emission goal.

The following are summaries of the specific public comments under this comment:

The commenters noted that the EPA is taking comment on whether reports must be submitted to the E PA as well as states. Commenters stated that the EPA has no need or legal basis for requiring that affected entities must submit reports to the EPA as well as the states . The commenters stated that such a requirement is unnecessary and would create wastefu l reporting. The commenters stated that the EPA would have access to the reports from the state as well as the affected entities themselves. The commenters noted that the states' recordkeeping and reporting requirements included in the state plans will be federally enforceable once the plans are approved by the EPA. Further, the commenters questioned whether the EPA regional offices are prepared to receive, log, and retain the hundreds of reports that would be submitted. The commenters stated that unless th e EPA can provide a reasoned justification for why such duplicative reporting is necessary and what the EPA intends to do with the reports, the EPA should not adopt such a requirement in the rule.

Comment 8: Commenters suggested that the EPA should requir e annual state progress reports and should require affected EGUs to submit electronic reports to states and EPA alike

.62 Response 8 : The EPA agree s with the commenters and the final rule requires all affected EGUs to monitor and report hourly CO2 emissions a nd net energy output (including total net MWh output that is comprised of generation, and where applicable, useful thermal output converted to net MWhs) to the EPA on a quarterly basis in accordance with 40 CFR part 75 (via the Emission Collection and Moni toring Plan System (ECMPS) ). This requirement applies for all types of state plans, regardless of whether the state chooses the option of the CO2 emission performance rates, a state rate

- based CO2 emission goal, or a state mass

- based CO2 emission goal. For states,
t he EPA is requiring states to submit reports to EPA electronically. See section VII I .E. 8 of the final rule preamble of the CPP for electronic submittal of state reports to EPA. See section VIII.D.2.a.5 of the final rule preamble for the final sta te reporting and recordkeeping requirements.

The following are summaries of the specific public comments under this comment:

Regarding EPA's request for comments on whether electronically submitted reports from affected entities should be provided to EPA o r only to the relevant state authorities, commenter s stated that requiring affected sources to report to EPA in addition would help the public evaluate the progress that individual units achieve toward reducing emissions, the performance of different state s, and the effectiveness of the plan as a whole. C ommenter s suggested that a central clearinghouse of unit

- specific data would help interested citizens avoid having to negotiate the multiple different interfaces and software functionalities on which state agencies may rely. C ommenter s suggested that the EPA should require annual state progress reports and should require affected EGUs to submit electronic reports to states and EPA alike

.

Comment 9 : EPA should adopt additional requirements covering record retention that will facilitate the expeditious review of record.

Response 9 : The commenters requested that the EPA adopted additional requirements covering record retention that will facilitate the expeditious review of record. EPA does not agree with

com menters and believes the record retention requirements in this final rule are consistent with previous EPA on site/off

- site record keeping requirements and is not finalizing additional record retention requirements at this time

. The EPA notes that the fina l rule requires that each record must be in a form suitable and readily available for expeditious review. See section VIII.D.2.a.4 of the final rule preamble of the CPP for the record retention requirements for affected EGUs

. The following are summaries o f the specific public comments under this comment:

Commenter s stated that EPA should strengthen the record retention requirements

. C ommenter s stated that EPA's proposal to require affected sources to retain compliance records on site for only 2 years, afte r which records could be retained "off

- site and electronically" reduces the efficacy of onsite inspections and make compliance determinations only possible through information requests authorized under section 114 of the CAA and analogous state provisions (where they exist). C ommenter s stated that section 114 information requests by EPA's enforcement office have often been the subject of controversy, as well as attempted interference by Congress. C ommenter s stated that EPA's Office of Air and Radiation has also demonstrated a63 reluctance to apply to the Office of Management and Budget for permission under the Paperwork Reduction Act to employ section 114 requests to obtain information needed for rulemaking development. C ommenter s noted that state and local of ficials are particularly reliant on onsite inspections to ensure regulatory compliance but rarely use authority to conduct document

intensive offsite investigations (if they have it). C ommenter s stated that the prospect of essential information being store d at a remote location, which may lie outside the jurisdiction of the state or local authority, and in formats that may be difficult to access, presents a significant obstacle to enforcement (including citizen enforcement pursuant to section 304 of the Act ), especially in the current era of shrinking EPA and state agency enforcement budgets. Moreover, commenter s stated that the EPA has not identified any particular (or even generalized) basis for its proposal to permit offsite storage after 2 years. C ommen ter s stated that technological advances have reached the point where a year's worth of data, including scanned PDF documents, can be stored on a single flash drive, negating earlier arguments about space requirements.

To facilitate the expeditious review of needed information, commenter s asserted that the EPA needs to adopt additional requirements covering record retention. For example, under the subpart 98 reporting program for GHGs, records may be stored off site only "if the records are readily availabl e for expeditious inspection and review" and for any records stored electronically, "the equipment or software necessary to read the records shall be made available, or, if requested by EPA, electronic records shall be converted to paper documents." 40 CFR 98.3(g). C ommenter s stated that to properly implement the CAA's citizen suit provisions, EPA must clarify that "readily available" means available on demand, not just to EPA, but to state and local authorities, irrespective of jurisdiction over the site w here the records are stored, and to the general public. See 42 U.S.C. 7410(a)(2)(F)(requiring states to correlate emissions monitoring reports "with any emission limitations or standards established pursuant to this chapter, which reports shall be availabl e at reasonable times for public inspection"). C ommenter s stated that because these requirements apply to CO2 emissions data from power plants under the GHG reporting program, extending their application to the Clean Power Plan will ensure consistent requi rements and will impose little, if any, additional burden. See 40 CFR 98.47.

Comment 10 : The EPA should clarify that as long as the facility can access records from an onsite location, there is no reason for the data to be physically stored at the site.

Response 10 : The commenter s requested that EPA clarify the onsite/off

- site recordkeeping requirement. The commenter s stated that many records to be retained are recorded only in electronic form and depending on the facility’s management practices these rec ords may be retained at a central location to facilitate backups and other services. In t he final rule the EPA requires that states must include in their plans a record retention requirement for affected EGUs of not less than 5 years following the date of each compliance period, compliance true

- up period, occurrence, measurement, maintenance, corrective action, report, or record, whichever is latest, that affected EGUs must maintain each record onsite for at least 2 years after the date of the occurrence of each record and may maintain records offsite and electronically for the remaining years. Each record must be in a form suitable and readily available for expeditious review.64 The following are summaries of the specific public comments under this comment:

Commenter s opposed retaining records on site if it means that retention of electronic records that can be accessed "onsite" (even if they are physically located offsite) would not be sufficient. C ommenter s stated that many of the records to be retained ar e recorded only in electronic form and, depending upon the facility's management practices, may be retained at a central location in order to facilitate backups and other services. C ommenter s requested that the EPA should clarify that as long as the facili ty can access the records from an onsite location, there is no reason for such data to be physically located at the site.

Comment 11 : EPA must accept the authority of states to use existing state or regional tracking and accounting systems.

Response 11: EPA does not agree. The final rule requires that states must show that they have the appropriate tracking and accounting infrastructure that meets the requirements in the emission guidelines to administer the state plan requirements. However, s tates have t he flexibility to use existing state or regional tracking and accounting system to the extent these meet the requirements in the emission guidelines.

The following are summaries of the specific public comments under this comment:

Commenter s stated that EPA must accept the authority of states to use existing state or regional tracking and accounting systems.

Comment 12 : EPA should require that all affected entities report emissions performance and net generation data directly to EPA’s Clean Air Markets Divi sion (CAMD).

Response 12: T he EPA agrees with the reasoning provided in th is comment and the final rule require s the reporting of net generation through ECMPS along with other data required under 40 CFR Part 75. See section VIII.F.1 of the preamble of the final rule

. The following are summaries of the specific public comments under this comment:

In order to streamline reporting under section 60.5815, commenter s suggested that EPA should require in the final rule that all affected entities report the e missions performance and net generation data required directly to EPA's Clean Air Markets Division (CAMD)

. C ommenter s noted that CAMD currently requires reporting of gross generation and CO2 emissions by Part 75 and CAIR

- affected units, so CAMD already has the infrastructure in place to add reporting of net generation. C ommenter s stated that this method will allow states to easily access the reported data on the CAMD website in a timely fashion and will save states the expense and time required to develop t heir own individual state reporting systems, train affected entities, and process submitted reports. C ommenter s also noted that CAMD will provide a consistent reporting format and central data location to retrieve data for all affected units in all states.65 Comment 1 3 : Provide clear guidance on enforcement, including consistent methodologies to be used for measuring power plant emissions, reductions attributable to renewables, and demand

side efficiency.

Response 13: Although demand

- side energy efficiency, building block 4 in the proposed rule, is no longer part of the BSER, the final guidelines provide ample latitude for states and utilities to rely on demand

- side EE, as well as RE, in meeting emission reduction requirements as part of a state measures app roach.

As proposed, we are requiring that state plans include a demonstration that plan measures are enforceable, which for state measures plans is provided for in § 60.5780 and discussed in section VIII.D.2.c.6 of the final rule preamble of the CPP. T he guidance documents on enforceability as it pertains to RE and EE include: (1) September 23, 1987 memorandum and accompanying implementing guidance, “Review of State Implementation Plans and Revisions for Enforceability and Legal Sufficiency;” (2) August 5 , 2004 “Guidance on SIP Credits for Emission Reductions from Electric

- Sector Energy Efficiency and Renewable Energy Measures;” and (3) July 2012 “Roadmap for Incorporating Energy Efficiency/Renewable Energy Policies and Programs into State and Tribal Imple mentation Plans, Appendix F.”

Regarding the measurement of power plant emissions the EPA finalizes that state plans must contain requirements for tracking and reporting actual plan performance during implementation, including monitoring CO2 emissions from affected EGUs via CEMS. The emissions monitoring and reporting requirements for EGUs are largely incorporated from 40 CFR part 75 monitoring and reporting requirements. See Section VIII.F.1 of the final rule preamble of the CPP. This requirement in the emi ssion guidelines provide for consistent methodology for measuring power plant emissions. Regarding reductions attributable to demand

- side EE, the EPA is providing draft evaluation, measurement and verification (EM&V) guidance that is intended to help state s and EE providers quantify and verify savings in a manner that is consistent with industry standard best practices. This draft EM&V guidance is part of EPA’s model rule and federal plan proposal.

The following are summaries of the specific public comment s under this comment:

Commenter s stated that clear guidance should be provided with respect to enforcement, including consistent methodologies to be used for measuring power plant emissions, reductions attributable to renewables, and demand

- side efficiency

.

Comment 14: The required use of continuous CO 2 monitors along with certification and calibration requirements is burdensome.

Response 14: We disagree with the commenters that requiring continuous CO 2 emissions monitoring systems (CEMS) is burdensome, because CEMS is the most technically reliable method for monitoring CO 2 from EGUs. CEMS provides a measurement method that is performance

- based rather than equipment

- or fuel

- specific and provides a continuous66 measurement stream that can account for variabi lity in the fuels and the combustion process. Reference methods have been developed to ensure that all CEMS meet the same performance criteria which helps to ensure consistent and accurate data. See Section VIII.D.2.b.2 of the final rule preamble of the CP P. The monitoring methods allowed under 40 CFR Part 98 are appropriate for the Greenhouse Gas Reporting Program, which tracks data about GHG emissions from individual sources in multiple industry sectors for analyzing and developing a range of potential CA A GHG policies and programs. We disagree with the commenters that the monitoring methods allowed under the Reporting Program are appropriate for determining EGU compliance, whether actual emission performance meets the CO 2 emission performance rates or
sta te CO 2 emission goal, and other necessary determinations under the final guidelines.

For these reasons, we are finalizing that state plans must contain requirements for tracking and reporting actual plan performance during implementation, including monito ring CO2 emissions from affected EGUs via CEMS. The emissions monitoring and reporting requirements for EGUs are largely incorporated from 40 CFR part 75 monitoring and reporting requirements. See Section VIII.F.1 of the final rule preamble of the CPP.

Th e following are summaries of the specific public comments under this comment:

Commenter s stated that t he Proposed Rule imposes burdensome monitoring, recordkeeping and reporting requirements on each affected source. C ommenter s stated that continuous CO 2

mo nitors are required, along with certification and calibration requirements. C ommenter s suggested that the final rule provide options for these requirements, crafted somewhat along the lines of the current greenhouse gas (GHG) Mandatory Reporting Rule, Subp art C which provides levels (tiers) of monitoring and reporting based on heat input and type of fuel burned and allows standard default emission factors. C ommenter s stated that such options can provide lower cost alternatives for the regulated facilities, while maintaining sufficient accuracy to accomplish EPA's goals.

C omment 15: Commenters stated that no new reporting requirements for affected EGUs should be created within the section 111(d) requirements

. Response 15: The EPA agrees with the commenters and believes that the final rule provides flexibility for the states depending on the state plan type to develop the appropriate reporting requirements. The EPA also believes that the EGU reporting requirements in the final rule are consistent with the exi sting framework of regulations ( 40 CFR part 60 subpart B 60 subpart B. ) However the EPA finalizes that s tates must require all affected EGUs to monitor and report hourly CO 2 emissions and net energy output (including total net MWh output that is comprise d of generation, and where applicable, useful thermal output converted to net MWhs) to the EPA on a quarterly basis in accordance with 40 CFR part 75 (via ECMPS). This requirement applies for all types of state plans, regardless of whether the state choose s the option of the CO 2 emission performance rates, a state rate

- based CO 2 emission goal, or a state mass

- based CO 2 emission goal. The EPA believes that these requirements address the commenter s ’ suggestion for EGUs electronic reports. For states, the EPA is requiring states to submit reports to EPA67 electronically. See section VII I .E. 8 of the final rule preamble of the CPP for electronic submittal of state reports to EPA.

The following are summaries of the specific public comments under this comment:

Commen ters stated that no new reporting requirements for affected EGUs should be created within the section 111(d) requirements. The commenters argued that states should be given the flexibility, depending upon the nature of their plan, to develop appropriate re porting mechanisms and frequencies to include in their plans. The commenters stated that the EPA should not be incorporating specific and detailed regulatory requirements for reporting under this proposal given the broad nature of this proposal and purport ed flexibility for states to incorporate compliance options for various affected entities. In addition, the commenters stated that imposing an additional requirement that the state maintain a database accessible by the public is a burden that is not necess itated by this rule. The commenters pointed out that the EPA is proposing no funding as a result of this regulation and did not support this level of over sight and unnecessary reporting.

Comment 1 6 : Commenters do not foresee significant issues with an av erage 2

- year reporting cycle for EGU generation and emissions. However, they do anticipate issues with reporting verified EE avoided generation in MWh.

Response 1 6 : The evaluation, measurement and verification ( EM&V ) approach described in the EPA’s propo sed model rule gives states and EE providers the flexibility to apply different methods for quantification and verification, depending on the EE programs and projects being implemented, the variability of the expected savings, and other factors. It also pr ovides for forward corrections to savings on the basis of new information uncovered in the process of conducting routine EM&V, consistent with industry best practices. Furthermore, the EPA's model rule proposal specifies appropriate increments (in years) f or the application of EM&V methods, based on the EE program and policy type, as well as other considerations. The EPA expects that these provisions will enable states and EE providers to, with reasonable effort, adjust and report their EE savings in a tim ely manner. Your input and suggestions related to the presumptively approvable EM&V approaches in the model rule, as well as the draft EM&V guidance, are appreciated.

The following are summaries of the specific public comments under this comment:

Comment ers stated that they do not foresee any problems in an average 2

- year reporting cycle for emissions performance related to EGU (fossil and non

- emitting/renewable) generation and emissions.

However, commenters stated that they do anticipate significant iss ues with reporting verified EE avoided generation in MWhs . Commenters noted that North Carolina currently has a system in place for both third party EM

- V and reporting of EE avoided generation which currently requires electricity distribution companies to report the estimated EE MWhs saved annually from each EE program. However, commenters noted that the EM

- V of each MWhs may not occur in that same time frame. Commenters noted that the current reporting system allows for companies to68 perform EM

- V in several different ways, depending on the program. EM

- V reports for certain types of programs may take several years to finalize. Commenters stated that the current reporting system allows for corrections to be made from errors reported in the past. However,

comme nters noted that those corrections are not applied retroactively; instead, the avoided MWhs for the current year are adjusted to reflect the increase or decrease in generation.

Commenters recommended that EPA develop a different approach for incorporating RE and EE programs into this rule that is less burdensome and less legally difficult to implement.

6.3.10 Description of state reporting and recordkeeping requirements

This section discusses various issues regarding state reporting requirements

, reporting frequency

, recordkeeping requirements, submittal dates, method of reporting, and performance periods.

Commenters have raised a number of issues related to this subsection which are organized by topics (comments) below. Responses are also provided for thes e topics.

Comment 1: Commenters stated that the annual reporting requirement is too onerous and

r equest ed that the EPA allow for different reporting frequencies, depending on plan design or the type of report

. Response 1 : Commenters expressed concern ab out the additional administrative burden associated with the annual reporting requirements during the interim performance period. Commenters urged EPA to consider what frequency of reporting is necessary to ensure that states are achieving their plan goals , and to recognize that different reporting frequencies may be appropriate for different plan designs. The EPA agrees with the commenter s that different type of reports and reporting frequencies may be appropriate for different plan designs. In the final C PP rule the EPA is finalizing that states can choose to adopt and implement one of two types of state plans: emission standard approach plan type or state measures approach plan type. After consideration of the comments received regarding the state reporti ng requirements on plan implementation and progress toward meeting the CO 2 emission performance rates or state CO 2 emission goal, the EPA is finalizing state reporting requirements based on the type of plan approach the state chooses to adopt and implement

. The EPA is providing for less frequent reports for states implementing the emission standard approach plan type . The EPA believes that this is appropriate because this plan type applies all requirements for meeting the emission guidelines to affected EGU s in the form of federally enforceable emission standards. However the rule require annual reporting for states implementing the state measures approach plan type because it allows a state to meet the emission guidelines, in part, or entirely, through stat e measures that the state adopts and implements as a matter of state law. The EPA believes that this annual reporting requirement is necessary for the state measures approach plan type to ensure that the state is achieving the plan goals due to the inheren t flexibilities granted in such plan. These state reporting requirements are discussed in section VIII.D.2.b (for emission standards approach) and VIII.D.2.c (for state measures approach) of the final rule preamble of69 the CPP

. The EPA believe the final fre quency of reporting is appropriate to ensure that states are achieving their plan goals

. The following are summaries of the specific public comments under this comment:

Commenters noted that t he EPA proposes both annual and biennial reporting requirements for the states under proposed 40 CFR 60.5815. Commenters argued that the proposed frequency of reporting is burdensome

.
Commenters stated that the annual reporting requirement in proposed 40 CFR 60.5815 is too

onerous (for both states and EPA who reviews reports) and is not necessary that states are continuing to progress toward their final goals. Commenters noted that state agencies and the EPA are struggling with limited resources, and there is a significant concern that, even if states were able to comp lete reports in a timely manner, the EPA would not be able to review them in a timely manner. Commenters expressed concern about the additional administrative burden associated with the annual reporting requirements during the interim performance period. C ommenters urged EPA to consider what frequency of reporting is necessary to ensure that states are achieving their plan goals, and to recognize that different reporting frequencies may be appropriate for different plan designs. When warranted, commenters s uggested that EPA tailor the reporting burden to the plan design (e.g., replace annual reports with less frequent reports and find ways to make the reporting requirements less burdensome). Commenters stated that such changes made with attention to plan des ign would not diminish the integrity of the rule or achievement of emission reduction milestones, but would ease the administrative burden on the states and EPA.

A suggestion from commenters was to require full reporting less frequently, perhaps every two to four years , depending on how straightforward or complicated the plan may be. Commenters noted that straightforward plans may require very little interim reporting, while complicated plans may require more. Commenters stated that their state may be able to comply with annual reporting if the requirements are reasonable; however, full annual reporting as suggested in the proposed rule would be resource

- intensive for both states and EPA.

Commenters supported requiring regular reporting by states to measure progress in meeting the final goal. However, instead of the proposed annual reporting, commenters suggested that reporting every 2 or 3 years may suffice , and would allow states, EPA and interested stakeholders to effectively measure progress without undue administrative burdens.

Commenters stated that the proposed reporting frequency for states is more stringent than the reporting requirements for criteria pollutants. For Air Quality Management Plans under State Implementation Plans, reports are required e very 3 years for Reasonable Further Progress demonstrations. Commenters stated that this reporting interval should be sufficient for greenhouse gas programs.

Commenters stated that EPA should require states to provide updates on the progress of carbon emis sion reduction programs and initiatives on a reasonable schedule. Commenters stated that the report should not be required more frequently than every 2 years.70 Commenters stated that EPA requested comment on whether full reports containing all of the
repor t elements should only be required every 2 years. Regarding the frequency of reporting, commenters recommended that full reports should only be required every 5 years . Commenters stated that this is consistent with the precedent set for 5 year reports for reducing regional haze.

Commenters recommended that the EPA consider a longer reporting period (i.e., 3 years, 5 years, or even 10 years) dependent on how close a state is to its state goal.

Commenters noted that the EPA is requiring annual reports startin g July 1, 2021 but the EPA has yet to announce how it plans to provide additional funding to state air programs required to implement the 111(d) planning. Commenters expressed concern with the administrative burden of not only 111(d) plans, but also with r eporting on an annual basis beginning in 2021.

Commenters stated that annual reporting is appropriate, provided that, due to variations in power demand, tracking performance is compared to a multi

- year average.

Comment 2: Commenters stated that reporting deadline of July 1 is unrealistic. States should have at least a full year to submit reports from the previous calendar year

, request that the EPA allows states to propose an altern ative reporting submittal date and that report deadline extensions should be allowed.

Response 2 : In the June 2014 proposal, the EPA proposed that annual state reports are due to EPA no later than July 1 following the end of the reporting year. Commenters stated that the EPA's proposed reporting deadline of July 1 for the state s to submit annual reports for the prior calendar year is not realistic. Some c ommenters recommended that the EPA extend the due date of those reports while others requested that EPA allows state to propose an alternative reporting submittal date. The comm enters stated that this flexibility in designing reporting periods will be needed to address inherent temporal differences in data availability for various state programs, and it is especially needed when multi

- state compliance plans are developed.

The EPA does not agree that the reporting deadline should be allowed to be extended. S tate reports provide critical information on the progress of implementation and performance of state plans and the need to trigger of corrective measures or the backstop, cons equently the EPA is not extending the due date of the state reports in the final rule beyond July 1 following the corresponding reporting period. The EPA believes states can work with affected sources to receive the data needed for these reports in a timel y manner so that the state reporting requirement can be met. To maintain consistency in state reporting the EPA is not allowing states the opportunity to propose an alternative reporting submittal date within their state plans. See section VIII.D.2.a.5 o f the final rule preamble of the CPP for state reporting and recordkeeping requirements.

The following are summaries of the specific public comments under this comment:

Commenters stated that the proposed rule includes a requirement that the annual report under 40 CFR 60.5815 be submitted by July 1 each year. Commenters stated that because of the timing of71 current data collection, and the need to leave time to organize and submit the reports, allowing only 6 months after the close of the year may be a diff icult task. Commenters argued that a July 1st deadline for state reporting does not provide states sufficient time to gather information and prepare reports. Commenters were concerned that the generation data reported to EIA by non

affected units, such as wind farms, will not be publicly released by EIA in enough time for states to complete the annual compliance reports required in section 60.5815. Commenters noted that reports are due annually on July 1 for the previous year starting on July 1, 2021. Howev er, commenters pointed out that there is currently nearly a year lag between when the data is reported to EIA and when the final annual data is made publicly available. For instance, commenters noted that the final 2012 unit

- level generation data was not r eleased until November 2013. Commenters contended that EPA should not require states to submit annual compliance reports until all required data is publicly available. Commenters recommended extending the due date to at least December 31 for demonstrating compliance for the previous calendar year.

Commenters stated that the EPA's proposed reporting deadline of July 1 for the states to submit annual reports for the prior calendar year is not realistic. Commenters argued that states will need significantly mo re time if the state plan includes energy efficiency and renewable energy measures or a cap and trade program. At a minimum, commenters suggested that states should have at least a full year to submit reports from the prior calendar year, and states partic ipating in a multi

- state plan may require even more time. Given the 10

- year averaging time for the interim goal, commenters stated that requiring annual reporting from the states during the interim period is an unnecessary burden on the states. Commenters stated that the frequency of the state reporting should be reduced during the interim period.

Commenters stated that the July 1 deadline in proposed 40 CFR 60.5815(a) for states to submit annual reports to the EPA is not realistic. Commenters argued that the EPA has not considered all the components that might be need to be included in the report that are dependent of the approach a state might choose and what measures are included in the state plan. Commenters stated that the energy efficiency verificatio n process of energy efficiency measures from the prior year could take 8

- 10 months. Furthermore, commenters stated that if a cap and trade program is used, July 1 does not provide sufficient time for the state to review companies' annual reports and proc ess trades in order to assess the emission performance level as EPA requires in the annual reports. Commenters suggested that States should have, at a minimum, a full year to submit annual reports (i.e., December 31 of the following year). Commenters noted a multi

- state plan would be even more complicated and may require additional time to allow for coordinating activities between multiple states. Additionally, commenters stated that requiring annual reports starting in 2021 places an unnecessary burden on states. Commenters recommended removing the interim goals from the rule. However, if the EPA retains the interim goals, commenters recommended that EPA reduce the frequency of the state reporting requirements during the interim period. Given the 10

- year av eraging time for showing compliance with the interim goals, commenters stated that the annual reporting requirement during the interim period places an unnecessary burden on the states. Commenters noted that the states have the responsibility of ensuring c ompliance with state goals, not the EPA.

Other commenters asked that the EPA allow states the opportunity to propose an alternative annual reporting submittal date within state plans and that report deadline extensions should be allowed . Commenters stated that this flexibility in designing reporting periods will be needed to72 address inherent temporal differences in data availability for various state programs, and it is especially needed when multi

- state compliance plans are developed. Commenters stated tha t if the milestone approach is utilized for states' interim goals, then states could also establish the timing of reporting in their plans to coincide with milestone events , such as the closure of a coal

fired power plant. According to commenters, this wou ld allow states to focus on meaningful reporting, rather than yearly reporting that may not show much of a change in emissions reductions from year to year.

Commenters stated that consideration should also be given to how much time will be necessitated for other entities to prepare and provide reports to Ohio EPA after the end of the reporting year. The commenters noted that PUCO alone requires over a year's time to prepare and issue their annual report. The commenter s stated that 1 year is absolutely not e nough time for other entities to prepare reports and for Ohio to synthesize those reports into a final report that would meet the EPA's detailed guidelines

.

Commen t 3 : Commenters find c ontent of reports to be redundant and overly burdensome. EPA should co nsider reporting options that reduce the burden on both air agencies and EPA, including reducing the amount of data required

. Response 3 : The EPA is finalizing state reporting requirements based on the type of plan approach the state chooses to adopt and implement. These state reporting requirements are discussed in section VIII.D.2.b (for emission standards approach) and VIII.D.2.c (for state measures approach) of the final rule preamble of the CPP

. Commenters suggested that the EPA consider reporting opt ions which will reduce the burdens on both air agencies and EPA including reducing the amount of data required on annual reports, allowing states to submit checklists or fillable tables with the minimum amount of information needed to show that a deficienc y either does or does not exist. The EPA will continue to work with the states as implementation of the emission guidelines happens to ensure that state reports are complete. The EPA expects to be able to provide the states with implementation tools to fac ilitate preparing and submitting state reports , including electronic submission.

The following are summaries of the specific public comments under this comment:

Commenters suggested that EPA consider reporting options which will reduce the burdens on bot h air agencies and EPA. Commenters argued that full annual reporting will be a heavy burden, especially on small air agencies, as well as for EPA.

Commenters stated that the report requires multiple data points for each affected entity in the state. Comme nters stated that section 60.5815(a ) ( 2) requires the level of emissions performance for all affected EGUs for the reporting period and for prior reporting periods. Commenters asserted that these requirements are redundant and overly burdensome and will cr eate a strain on staff resources

. Commenters asked EPA to consider, for example, reducing the amount of data required on annual reports, allowing states to submit checklists or fillable tables with the minimum amount of information needed to show that a de ficiency either does or does not exist. If a deficiency does73 exist, commenters asked EPA to allow the state extra time to investigate why the deficiency exists and what corrective actions the state intends to take to correct it.

Comment 4 : Commenters arg ued the requirement to maintain records for at least 20 years will be heavily burdensome. Commenters recommended the recordkeeping requirement be reduced to 5 years.

Response 4 : The EPA agrees with comments that a 20

- year record retention requirement could be unduly burdensome, and has reduced the length of the record retention requirement for the final rule. During the interim period, states must keep records for 10 years from the date of conclusion of each compliance period for its EGUs and/or plan perfor mance period. During the final period, states must keep records for 5 years from the date of conclusion of each compliance period for its EGUs and/or plan performance period. See section VIII.D.2.a.5 of the final rule preamble of the CPP for EPA’s response to this comment.

The following are summaries of the specific public comments under this comment:

Commenter s noted that the proposed 40 CFR 60.5810(d) will require states to maintain records for a minimum of 20 years. C ommenter s requested that EPA justify and provide the rationale for requiring states to maintain records for such a lengthy period of time. C ommenter s argued that states will be heavily burdened by the expenditure of resources and man

- power to maintain records for at least 20 years. Additiona lly, commenter s stated that the cost of maintaining and retaining electronic records is rising, and the requirement to maintain additional records for 20 years will be financially burdensome. Commenters recommended that the recordkeeping requirement be red uced to 5 years, which is consistent with emissions guidelines for other existing sources (e.g. 40 CFR 60 Subparts DDDD and MMMM)

.

Comment 5 : R eports should be able to be submitted electronically similar to the eSIP electronic submittal pilot program.

Re sponse 5: The EPA agrees with the comment that state reporting should be done electronically and has included in the final rule a requirement for electronic submittal of state plans. S ee VIII.E. 8 of the final rule preamble for EPA’s electronic submittal requirements

. The following are summaries of the specific public comments under this comment:

C ommenter s recommended that reports can be submitted electronically, similar to the eSIP electronic submittal pilot program. Commenters recommended that reportin g should be done electronically and using the existing 40 CFR part 75 database with minor modifications, so the data would be readily accessible to the EPA and the state.74 Comment 6: Commenters stated that the proposed rule includes public participation

r equirements that are modeled after state implementation plan requirements under 40 CFR 51.120. Commenters stated that it is unclear whether the proposed annual and biennial reports will similarly be subject to both public review and comment prior to submis sion to the EPA.

Response 6: The final rule does not require state reports be subject to public review and comment requirements similar to 40 CFR 51.120 prior to submission to the EPA.

6.3.11 Certification of state plan hearing

This section discusses sta te plan hearings and regulations regarding their execution and certification.

Commenters have raised a number of issues related to this subsection which are organized by topics (comments) below. Responses are also provided for these topics.

Comment 1 : EPA should not be too prescriptive in regulations regarding public hearings on state plans.

Response 1: The EPA believes that the state requirements for public participation and public hearing in section VIII.D.2.a.6 of the final rule preamble of the CPP are needed to ensure meaningfully engage ment with members of the public, including vulnerable communities, during the plan development process.

The following are summaries of the specific public comments under this comment:

Commenter s noted that EPA is prop osing that a public hearing must occur on the final state plan and that a list of witnesses and their organizational affiliations along with a brief written summary of each presentation or written submission must be submitted. C ommenter s cautioned that the EPA should not be too prescriptive in their regulations with respect to this requirement. C ommenter s questioned how the EPA believes that any state can require the complete overhaul of the power generation, transmission and distribution system in its stat e without significant public input. C ommenter s asserted that this language illustrates that the EPA underestimates the regulatory burden and disruption being proposed as part of this regulation.

6.3.12 Supporting material

This section discusses supportin g materials and the sources and types of materials required in state plans

. Commenters have raised a number of issues related to this subsection which are organized by topics (comments) below. Responses are also provided for these topics.75 Comment 1 : Reque st for clarification on sources EPA would accept for information projecting EGU CO 2 emission performance in state plans.

Response 1: The type of demonstration required to show that a plan is projected to achieve the state's emission rate depends upon the a pproach chosen by the state. If a state chooses an emission standard approach, the state needs to document the mass or rate standards applied to affected EGUs. A projection of plan performance is not required unless the state chooses to apply rate

- based em ission performance standards to individual affected EGUs at a rate that differs from the CO 2 emission performance rates or the state's rate

- based CO 2 goal. A projection of plan performance is required for states that choose a state measures approach. The f inal rule provides information regarding the necessary components to demonstrate a plan will meet its rate in s ections VIII.D.2.b.3 and VIII.D.2.c.4 of the final rule preamble . For more information about state plan approaches, see Section VIII.C of the fin al rule preamble of the CPP

. For more information about projections s ee also chapter III of the technical support document for the CPP Final Rule: Incorporating RE and Demand

- Side EE Impacts into

State Plan Demonstrations

The following are summaries of t he specific public comments under this comment:

For the seven bulleted variables on page 17 of the Projecting EGU CO2 Emission Performance in State Plans, commenter s asked what sources of these key variables EPA would accept:

a. Electricity load growth pr ojections (energy peak and demand)

- State PUCs, EIA's AEO?

b. Fuel supply, delivery, and pricing assumptions

- RTO/ISO, EIA?

c. Cost and performance of electric generating technologies

- EIA?

d. EGU firm builds and retirements (e.g., those scheduled wi th a RTO/ISO)

- RTO/ISO?

e. Transmission capability and RTO/ISO transmission expansion plans

- RTO/ISO?

f. Applicable federal regulations (other than the EPA emission guidelines)

- RTO/ISO, NERC, FERC?

g. Applicable state regulations and programs (other than those that are included in the state plan)

- State where generation occurs, State where demand occurs?

Comment 2: EPA requires that state plans must show that the state will have adequate resources and authority to implement and enforce the plan. Commenters noted, however, that merely having legal authority is not sufficient if the state lacks resources to carry out the plan.76 Response 2: The EPA agrees and the final rule specifies that a state must adequately demonstrate that it has the legal auth ority (regulations/legislation) and funding to implement and enforce each component of the state plan submittal, including enforceable emission standards on affected EGUs and state measures.

The following are summaries of the specific public comments unde r this comment:

Commenter s noted that state plans must include a showing that the state will have adequate resources and authority to implement and enforce the plan. C ommenter s stated that EPA has proposed that state plans must include "[m]aterials demonst rating the state's legal authority to carry out each component of its plan," but has not expressly included a requirement that states also have adequate resources to implement and enforce the plan's requirements. 79 FR 34952 (proposed 40 CFR 60.5740(a ) ( 11 ) ( i)) For example, commenter s stated that EPA's Part 51 regulations require that state implementation plans must include: a description of the resources available to the State and local agencies at the date of submission of the plan and of any additional resources needed to carry out the plan during the 5

- year period following its submission. C ommenter s stated that the description must include projections of the extent to which resources will be acquired at 1

- , 3

- , and 5

- year intervals. 40 CFR 51.280; see also 42 U.S.C. section 7410(a ) ( 2 ) ( E). C ommenter s stated that a similar demonstration should be required for plans under the CPP. Id. C ommenter s stated that merely having the legal authority to implement and enforce plan provisions is not sufficient if th e state lacks the resources (or will not commit adequate resources) to carrying out the plan.

Comment 3: EPA should add a fifth provision for supporting material to include materials demonstrating the state’s analysis of the remaining useful life of the existing source to which such standard applies.

Response 3: The response to this comment is the same as the response to comment 1 of RTC 5.11.

The following are summaries of the specific public comments under this comment:

Commenter s suggested that in its regulatory language, EPA add a fifth provision to 40 CFR 60.5740(a)(11), "supporting material" to include "materials demonstrating the state's analysis of the remaining useful life of the existing source to which such standard applies" to address situation s where affected EGUs have made recent emission control retrofits or have significant remaining life so as to minimize costs to customers while continuing to structure plans that meet EPA's 2030 emission targets.

According to commenter s , among the key con cepts that should be retained in the final rule is that of remaining useful life of an affected source. C ommenter s pointed out that section 111(d) of the Clean Air Act provides the EPA Administrator the authority to develop regulations that allow
states to consider, among other factors, the remaining useful life of the existing source to which the standard applies. C ommenter s noted that recent regulatory drivers with near

- time deadlines, such as the Regional Haze Rules and the Mercury and Air Toxics Standar ds, have spurred electricity generators to make difficult decisions regarding whether to install controls or retire77 units to comply. C ommenter s said that EPA should respect these decisions and acknowledge remaining useful life considerations under the fina l rule and in the approval process for state compliance plans, taking into consideration the underlying agreements and significant expenditures triggered by other regulations.

6.3.13 Other

This section discusses various other issues of state plans, includ ing reliability assessments and implications, and risk analysis and mitigation.

Commenters have raised a number of issues related to this subsection which are organized by topics (comments) below. Responses are also provided for these topics.

Comment 1 : Commenters supported the 12 state plan components.

Response 1 : The EPA agrees with the commenter s that the components of the state plan submittal are familiar to states that have been required to prepare state plans for other sources under CAA sections 11 1(d) and 129. In the final rule the EPA is finalizing state plan components that are responsive to the constructive comments received from many commenters and additional considerations and that are appropriate for the types of state plans and the flexibil ity allowed in the final guidelines.

The following are summaries of the specific public comments under this comment:
Commenters noted that EPA seeks comment on all aspects of the elements of state plan content and the criteria for approval. Commenters sta ted that the twelve state plan components are familiar to states that have been required to prepare state plans for incineration sources under CAA sections 129 and 111(d) . Commenters stated that all of those twelve components are sensible and easy to compr ehend in the context of requiring particular sources to meet emissions limitations for identified pollutants. Commenters stated that the conceptual function of each of those measures is applicable to state plan preparation for the CPP, although the unique approach to BSER in the CPP

- the application to a pollutant that is neither a criteria pollutant nor a hazardous air pollutant, and the interplay of air quality regulation and electric sector considerations

- requires EPA to allow some flexibility in how a state satisfies each of the twelve components. Commenters noted that EPA has experience exercising appropriate flexibility and

case

- specific evaluation to make determinations that balance flexibility and achievement of the desired environmental result in the desired timeframe. Commenters viewed certain rule flexibilities in the final CPP as positive, understanding that EPA has the experience to apply flexibility appropriately, in a manner constrained by equity and achievement of the 30% reduction in power sector CO2 emissions.78 Comment 2 : Commenters discussed the overlap of the 12 components in 40 CFR 60.5740(a) with the requirements in subpart B.

Response 2 : The components of the state plan submittal in the final rule are consistent and with the framew ork of regulations in 40 CFR subpart B. Addressing the commenter s request to assure that the requirements in the emission guidelines are not duplicative of those listed in subpart B the EPA finalizes that subpart 60.25 e and f do not apply for these emiss ion guidelines.
The following are summaries of the specific public comments under this comment:

Commenters stated that 40 CFR 60.5740 should contain all requirements to be submitted to EPA as part of the state plan including a reference to requirements in subpart B . Commenters requested that EPA assure the requirements listed in 40 CFR 60.5740(a) are not duplicative of those listed in Subpart B and only those elements that must be included are listed.

Comment 3 : Commenters suggested that state plan submis sion could be simple for a mass

- based approach and suggested a few key items states could submit.

Response 3 : The EPA is finalizing requirements that states can choose to meet the emission guidelines through one of two types of state plans: an “emission s tandards approach” plan or a “state measures approach” plan. States that opt to meet a state CO2 emission goal can choose to meet the state CO2 emission goal as either a rate

- based goal or a mass

- based goal. The EPA agrees with the commenter s in that the c ontent of the state plan submittal will vary depending on which approach the state decides to adopt. However, each state plan submittal must provide for the implementation and enforcement of the plan. The final rule defines the specific components to be in cluded in the state plan submittal to the EPA. See section VIII.D.2 of the final rule preamble of the CPP for the components of a state plan submittal.

The following are summaries of the specific public comments under this comment:

In comments submitted to the Agency in March 2014 (and resubmitted during the comment period), commenters suggested that the state plan submission could be relatively simple, especially for a mass

- based approach. Commenters suggested that the state submit a few key items:

• An inv entory of covered units, their emissions, generation and emissions rate in the baseline period.

• A determination of the appropriate Section 111(d) standard to apply, to each unit, per the EPA guidance.

• Translation of the Section 111(d) standard by unit to a utility

- wide or statewide mass

based limit.79 • A description of the various clean energy programs (such as renewable standards, efficiency standards, plant retirements and other reduction activities) that will allow the state to achieve the mass

- based limit in the target year. This description may be accompanied by forecasting or similar modeling efforts already performed by utilities and submitted into public utility commission integrated resource planning processes. The total emissions of the utility or sta te as reduced by these programs would need to be credibly demonstrated to meet or beat the mass limit.

Comment 4 : State CPP compliance plans should be developed along with reliability assessments to address needed system improvements.

Response 4 : T he EPA agree that a system reliability assessment should be included in a state plan and t he final rule requires that states consider reliability in developing their plans. States must demonstrate that they have considered reliability in o r d er to have an approva ble plan. EPA has also moved the start of the interim period to support and a comprehensive reliability planning period. S ee section VIII.G.2.b. and c. of the final rule preamble for a discussion of the requirement for plans to asses s reliability

.
The fo llowing are summaries of the specific public comments under this comment:

Commenter s suggested that state CPP compliance plans be developed along with reliability assessments to address needed system improvements. C ommenter s stated that supportive federal and state policies will be required to provide for the timely planning, siting, and construction of needed facilities in order to achieve the EPA's goals. C ommenter s stated that a reliable electric and gas backbone is critical to accommodate the significan t generation and demand changes that are envisioned, as well as the reliable and economical integration of distributed energy resources and microgrids.

Comment 5 : EPA should provide additional time to study the potential reliability impacts of the
propose d rule

. Response 5 : The EPA agrees that system reliability needs to be addressed and the final rule requires that the states demonstrate that they have considered reliability as they develop their plans. We expect that states will consult with the relevan t ISOs/RTOs or other planning authorities as they develop their plans and document the consultation process in their state plan submissions. Once a state plan is submitted to EPA, the EPA has a full year to act on the plan The EPA will h old a public hear ing before acting on a state plan at provide an opportunity for all stake holders to comment on any impacts the plan may have on reliability

. See section VIII.G.2 of the final rule preamble of the CPP for a further discussion on the state plan’s reliabilit y assessment.

The following are summaries of the specific public comments under this comment:80 Commenter s stated that the EPA should provide additional time to study the potential reliability impacts of the proposed Clean Power Plan. C ommenter s stated tha t the EPA should allow at least 180 days following the filing of state compliance plans for the North American Electric Reliability Corporation (NERC), WECC, and other reliability entities to concurrently evaluate the potential reliability impacts of those plans. C ommenter s noted that the proposed Clean Power Plan is complex and could have far

- reaching and possibly unforeseen impacts. C ommenter s stated that the success of a state's compliance plan and the reliability of the BES are best served if the comply ing states and participating utilities, transmission planning regions, and other stakeholders are provided ample time for reliability analyses. According to commenter s , this would provide additional time for the following:

Evaluation of reliability implic ations

- All stakeholders identified above would require time to evaluate the reliability impacts of the state plans and for complying entities to develop remedial response plans. Additional studies

- voltage, transient and post

- transient stability

- must also be conducted as part of any reliability assessment. The challenges identified in these comments must be addressed during the planning and implementation phases of the proposed Clean Power Plan process. However, until individual states develop complian ce plans, it is difficult to identify and analyze specific reliability issues associated with the plans.

Multi

- state planning

- Optimal compliance plans will require time for interstate coordination and negotiation. Given the uniqueness of the Western Inte rconnection and the interdependence of Western states in terms of energy use and supply, additional time will be required to evaluate reliability implications.

Infrastructure investments

- The industry will need time to invest in generation and transmissio n infrastructure once states have developed their implementation plans and WECC and other entities have evaluated the reliability impacts of those plans. Additional time will be required for industry and states to make effective, prudent, and cost

- effectiv e decisions to implement state

approved plans due to the characteristically long lead times required for BES infrastructure modifications.

Comment 6 : EPA should create a process for reliability entities to highlight reliability implications of any state c ompliance plan.

Response 6 : See section VIII.G.2. of the final rule preamble of the CPP for EPA’s response to this comment.

The following are summaries of the specific public comments under this comment:

Commenter s recommended that EPA create and communic ate a process for reliability entities to highlight reliability implications of any state compliance plan in the Western Interconnection. C ommenter s requested that the EPA consider the range of BES reliability issues that may result from the implementation of the proposed Clean Power Plan and allow time for necessary studies and reliability assessments, state planning, and industry development processes. C ommenter s recommended creating a process within the proposed Clean Power Plan that considers timing adj ustments or the granting of extensions if there is a demonstrable reliability need identified.81 Once states develop implementation plans, commenter s noted that they will be able to consider additional analyses to understand the reliability impact on an inte rconnection

- wide basis.

Comment 7 : A risk analysis and mitigation plan should be included as a key part of state plans.

Response 7 : The commenter s believe that a risk analysis and mitigation plan should be included as a key part of the state plans. The E PA disagrees with the comment and is not requiring the states to submit as part of their state plan submittal a risk analysis and mitigation plan. However the EPA is recommending that states take a multi

- pollutant planning approach that examines the poten tial impacts of co

- pollutants on overburdened communities, and conduct an assessment to determine if any localized air quality impacts need to be further addressed.

The following are summaries of the specific public comments under this comment:

Commenter s stated that a risk analysis and mitigation plan should be included as a key part of state plans

.

6.4 PROCESS FOR STAT E PLAN SUBMITTAL AND REVIEW

This section addresses comments on the Process for State Plan Submittal and Review . We have organized the com ments in this section under nine subsections, 6.4, and 6.4.1 to 6.4.8. Responses to the comment topics of these subsections are discussed below along with summaries the specific public comments.

6.4.1 State plan submittal and timing

This section addresses issues associated with state plan submittal and timing. Commenters indicated that there was insufficient time in the proposed timeline for submittal and finalization of state and regional plans. Reasons cited by commenters included the complexity of the

r egulation; the length of required public review; and the need to work with state legislatures; electricity regulators; and neighboring states.

Commenters have raised a number of issues related to this subsection which are organized by topics (comments) bel ow. Responses are also provided for these topics.

Comment 1: Comment stating that the compliance timetable EPA has proposed, with initial reductions occurring by 2020, is unrealistic and should be extended to provide states adequate time to prepare SIPs.82 Response 1: In response to this and similar comments, i n the final rule EPA changed the compliance start date from 2020 to 2022 . See section III of the final rule preamble. See section VIII.E of the CPP final rule preamble for information on state plan s ubmittal and timing.

The following are summaries of the specific public comments under this comment:

Commenter s stated that the compliance timetable EPA has proposed, with initial reductions occurring by 2020, is unrealistic and should be extended to provi de states adequate time to prepare SIPs. The commenter s recommended that an additional year or more also should be provided for any regional compliance agreements. The commenter s noted, for example, that the northeast states required more than 6 years to n egotiate the RGGI carbon cap

- and

- trade program and model rule.

Comment 2: Comments supporting the option to extend the SIP submittal deadline for states developing individual state plans and groups of states developing multi

- state plans.

Response 2: In response to this and similar comments regarding timing and planning concerns such as the commenters mention, the EPA has extended the time allowed for states and regional planning groups to finalize their plans and meet the first interim goal. The final ru le includes this additional time and flexibility to manage complexities such as reliability, permitting, planning cycles, infrastructure addition and modifications, legislative changes, etc. In this final rule the EPA clarified that having legislation in place, drafted, or proposed is not a requirement for the initial submittal, and provided for an extension until 2018 for both single and multi

- state plans. T he EPA views this as being responsive to the commenter s ’ concern s regarding timing and that legisla tion would need to be drafted prior to the final rule. See section VIII.E.2, State Plan Submittal and Approval Process and Timing, of the preamble for the final rule.

The following are summaries of the specific public comments under this comment:

Commenter s supported the option to extend the SIP submittal deadline for states developing individual state plans and groups of states developing multi

- state plans. The commenter s stated that, considering the complexity of the proposed rule, states and multi

- state groups will need as much time as possible to develop realistic and well

- considered plans.

Commenter s agreed with EPA's proposal to allow more time for multi

- state engagement by giving states pursuing multi

- state approaches an additional year to submit the ir plans, while also ensuring progress toward development of a multi

- state program through the initial plan requirements. Commenters supported the recommendation that states that want to create multi

state compliance plans should be allowed additional time to submit them (up to a year extra, June 30, 2018, instead of June 30, 2017, as provided in the draft rule).

Commenter s noted that the proposed rule requires that states submit plans complying with the 111(d) guidelines by June 2016, with options for 1

- and 2

- year extensions if needed to accommodate state rulemaking, plan development/stakeholder coordination, and/or legislative action. The commenter s noted that a typical rulemaking can take at least 18 months just to meet all the state statutory requireme nts; complex rulemakings affecting a large number of83 stakeholders, such as this one, can take even longer. The commenter s noted that in order to meet a deadline of June 2016, they would need to begin drafting the state rule and plan prior to EPA's final gu ideline. For this reason, the commenter s supported the option to request an extension of at least 1 year on the state plan submittal

. In response to EPA's request for comment on circumstances for which an extension of time would be appropriate (79 FR 3491 5), commenter s recommended that states should be able to seek extensions of times whenever an extension can be reasonably justified.

Comment 3: Comments voicing the need to automatically give the states more time to develop and submit their carbon reduct ion implementation plans

. Response 3: See section VIII.E .2 , State Plan Submittal and Approval Process and Timing, of the preamble for the final rule. The EPA agrees with the commenter s ’ that states may need more time to develop state plans, but disagrees that extensions should be granted automatically. States that are unable to meet the State Plan submittal deadline of September 6, 2016 may instead make an initial submittal and a request for extension. The EPA, in the final rule, clarified that requiremen ts of the initial submittal are designed to be readily achievable by states that intend to submit an approvable final plan. For state submitting an approvable initial submittal , the EPA has extended by an additional year the time allowed for states to fina lize their plans and extended by two years the time to meet the first interim goal.

The following are summaries of the specific public comments under this comment:

Commenter s agreed with many of the points made by Mary K. Martin, Energy, Clean Air & Natu ral Resources Policy Counsel for the U.S. Chamber of Commerce in her statement at a public hearing in Washington, D.C. on July 29, 2014. Specifically, the commenter s agreed with the Chamber that the EPA should immediately do the following:

• Give states mor e time to develop and submit their carbon reduction implementation plans. The current deadline is June 30, 2016; while there is an option for some states to apply for a one

- or two

- year extension, it should be automatically granted to all states to give th em enough time to grapple with this incredibly complex rule.

Comment 4: Multiple comment ers voiced concern over the time needed for state legislative procedures and utility commission dockets and the proposed dates for plan submittal.

Response 4: In re sponse to the commenters concerns, the EPA has extended by an additional year the time allowed for states to finalize their plans and extended by two years the time to meet the first interim goal , which is seven years from promulgation . The final rule inc ludes this additional time and flexibility to manage complexities such as reliability, permitting, planning cycles, infrastructure addition and modifications, legislative changes, etc. Concurrent with this final rule EPA is also proposing model rules for s tate plans which, when finalized, states may use to facilitate the development of their state rule.84 See section VIII.E .2 , State Plan Submittal and Approval Process and Timing, of the preamble for the final rule. This section of the preamble discusses EPA’s response to the commenters

concerns.
The following are summaries of the specific public comments under this comment:

C ommenters discussed the time needed for state legislative procedures and utility commission dockets.

Commenters stated that EPA is prop osing that each state submit its implementation plan, along with certain required information, by June 30, 2016. For states that need more time

- to issue state regulations, to change state laws, to develop a multi

- state plan, etc.

- EPA is proposing submi ttal of (1) an initial plan by June 30, 2016 and (2) a final plan by June 30, 2017 (for a single

- state plan) or June 30, 2018 (for a multi

- state plan). The commenters asked EPA to reconsider these deadlines because states will need more time to issue state regulations, change statutes through legislative action, and engage in public dialogue over the optimal approach for meeting the 2030 target. The commenters noted that states vary in their capacity to undertake these actions quickly (e.g., some legislatur es do not meet year

- around, or even yearly). According to the commenters, states that wish to develop a regional compliance approach will face particular pressure in meeting the 2018 deadline. Commenter s added that infrastructure expansion is time

- intensiv e and to the extent a regional approach is likely to yield the most cost

effective strategies for compliance; EPA ought to allow enough time to encourage coordinated, regional implementation.

Commenter s w ere encouraged that the draft rule recognizes that, "state administrative procedures can be lengthy, some states may need new legislative authority, and states planning to join in a multi

- state plan will likely need more than thirteen months to get necessary elements in place," and supported the Agency's ab ility to provide states extensions. However, the commenter s believed the 13 months between the expected finalization of the rule (June 2015) and the deadline for states to submit implementation plans (June 2016), is not enough time for states to make any l egislative changes that may be needed in order to submit a complete SIP, given the incompatibility of the EPA's proposed timeline with state legislative calendars.

Commenter s noted that more than half the state legislatures will have adjourned from their regular session before the EPA releases its final rule and may not be able to begin legislatively addressing any required changes until their 2016 regular session. As a result, the commenter s stated that those states would have more in the range of 6 month s to develop an implementation plan. In addition, the commenter s noted that four states only hold regular session every other year putting them at an even further disadvantage. The commenter s explained that though state legislatures may hold a special sess ion, such sessions are often limited in scope and duration depending upon the state in question. The commenter s noted that, for those legislatures able to convene a special session (e.g., in 16 states, only the governor may call a special session), there

c an be significant costs to the state, which may run into tens of thousands of dollars per day. For additional information on the state legislative calendars and processes for special state legislative sessions, the commenter s suggested that the EPA consult their website (http://www.ncsl.org/research/about

- state

- legislatures/legis

- sessions.aspx; http://www.ncsl.org/research/about

- state

- legislatures/special

- sessions472.aspx).85 Commenter s stated that the schedule anticipated in the EPA's proposal

- a final rul e in June 2015 with states' plans due a year later

- is ambitious and will require the EPA to continue the unprecedented strong outreach and support it has provided states since issuing the proposal. The
commenter s noted that the opportunity for extending this schedule as contemplated in the proposal will likely prove important for Oregon as its legislature convenes a full session every other year. The commenter s stated that any new legislation required for enforcement of elements in Oregon's state plan wil l likely have to wait until the legislature's session in the first half of 2017.

Commenter s suggested that EPA should allow more time for states to develop plans. The
commenter s stated that 1 year is insufficient for a state to prepare a complex air quali ty plan; and 2 years is marginal given that 111(d) plans covering CO2 are a new type of plan for states to develop. The commenter s stated that in addition to developing and adopting new regulations, multiple regulatory agencies will be involved in the proc ess, increasing the complexity and time needed to complete the process. The commenter s noted that additional time may likely be required to receive additional grants of legislative authority and funding. The commenter s stated that 1 or 2 years is simply no t adequate to complete the technical analyses as well as legislative and regulatory processes.

Commenter s questioned whether the timeline proposed by EPA for states to both develop and implement their plans is sufficient given the significance of this rul emaking and its complexity. The commenter s noted that once the final rulemaking is issued, states will have until June 2016 to submit a draft implementation plan for EPA approval.

Commenter s argued that the proposed initial state plan submission timetable is unrealistic and should be extended to provide states adequate time to prepare SIPs. The commenter s stated that many states require legislative approval of SIPs, a process that can add 1 year or more to SIP development. The commenter s stated that an add itional 2 years or more also should be provided for the development of any regional compliance agreements. The commenter s stated that the Northeast Regional Greenhouse Gas Initiative (RGGI) required 6 years' of stakeholder deliberations to develop the RGGI Model Rule. The commenter s recommended that states should be given 2 years to submit single

- state plans, with the possibility of receiving an additional 1

- year extension. The commenter s stated that for multi

- state plans, states should be provided 3 years to prepare plans, with an additional 1

- year extension if states demonstrate reasonable progress toward a regional agreement.

Commenter s noted that many states have established legislation and extensive regulatory processes that codify the EE practices of utilities in their jurisdictions. The commenter s stated that the resulting requirements related to achievement of standards, cost caps, evaluation processes, and ratemaking activities oftentimes have established schedules that are inconsistent with the pro posed rule. Further, the commenter s stated that a portion of these processes have a direct bearing on the measurement and accounting issues identified earlier that the EPA will address "in the years to come." The commenter s noted that these specifics will need to be determined prior to the States initiating legislative or regulatory action to incorporate any such measures into a proposed state plan. Further, the commenter s noted that for some states (such as Texas), legislators meet every

- other year, theref ore the ability to develop state plans may take86 more than 24 months. The commenter s stated that this leaves inadequate time to address numerous important issues prior to initiating activity to comply with EPA's proposed rule.

Commenter s stated that EPA mus t acknowledge and accommodate legal, administrative, and technical realities states face implementing such an expansive rule. The commenter s stated that several states may need additional legislative authorization before finalizing and implementing 111(d) plans. The commenter s stated that the timing of legislative sessions dictates when they can seek such authority and may affect a state's pace for developing, proposing, and finalizing 111(d) plans. The commenter s stated that in terms of practicality and th e speed at which markets and infrastructure can be changed, many states will need latitude for establishing their path to the 2030 targets.

Commenters noted that state utility commission docket timelines may present another timing challenge for states and also must be considered.

Commenter s asserted that the same state and local dialogue that informed EPA's Clean Power Plan proposal must also inform its final rule. The commenter s stated that many of the commenters' members have focused their analysis on the numerous issues related to the calculation of individual state goals, and some states have expressed concerns that, due to the stringency of their proposed targets, their compliance flexibility is significantly limited. Further, while the commenter s appre ciated the extra time EPA is providing to develop state plans, the
commenter s stated that some agencies may still need additional time given their state legislatures' schedules and rulemaking timeframes.

Commenter s noted that section 111(d ) ( 1) authorizes EPA to "establish a procedure" for state submission of implementation plans. The commenter s stated that the procedure EPA has proposed here has multiple problems. The commenter s stated that first, the Proposed Rule would allow only 13 months for initial pl an submittal, with extensions of 1 or 2 years possible depending on whether states are submitting single

- state or multi

- state plans. The commenter s noted that EPA acknowledges the plans the Agency seeks here are unlike any regulatory plan states have exper ience preparing. The impacts of the Proposed Rule and the complexity of the issues it raises require much more time for plan development.

Commenter s stated that EPA should recognize that some states may face significant timing challenges when it comes to f inalizing their 111(d) plans. The commenter s stated that EPA must also carefully consider the interrelationship of this rule with utility commission and system operator responsibilities to assess the cost effectiveness of utility decisions and the reliabil ity of the Western grid. The commenter s noted that some Western states may need to obtain additional authority through legislation before finalizing and implementing their 111(d) plans. The

commenter s stated that with the final rule slated for June 2015, s tates will not be ready to go to their state legislatures any earlier than 2016 for any additional authority needed for 111(d) plans. The commenter s noted that five Western states, however, will not convene a legislative session or will have a budget

- only session in 2016.
As part of their request for more time, commenter s stated that state legislative and regulatory processes are an implementation barrier that states must resolve. According to the commenter s , many states cannot implement the emission reduc tion measures of the CPP under existing state87 laws. The commenter s noted, for example, a state with a deregulated electricity market may need to pass laws to authorize environmental dispatch of electric generators rather than the current least cost dispatc h virtually all electric regulatory commissions require. The commenter s provided another example

- that states with voluntary RPS and EERS may need to make their RPS and EERS legally binding to satisfy the enforceability criterion EPA requires for complian ce measures in state plans. The commenter s noted that RPS and EERS may also need to be amended so that their goals align with the CPP's state goals. The commenter s stated that implementing these legislative and regulatory fixes could easily take over a yea r given state legislative cycles, and that some state legislatures do not meet every year (e.g., state legislatures of Montana, Nevada, North Dakota and Texas meet biennially, in odd

- numbered years).

Further, the commenter s stated that there likely will be political opposition and legal challenges to state laws implementing the CPP, delaying the development and execution of state plans. The
commenter s stated, for example, there may be challenges to state authority to alter re

- dispatch methods because it cou ld abrogate of existing contracts on which multiple parties have relied. The commenter s argued that it will be impossible for most states to grapple with these thorny political and legal issues, rework their regulatory structures, and address inevitable le gal challenges in the time frame allowed in the CPP.

Commenters said that at most, states will have two years to develop a compliance plan. Commenter s said this is insufficient time to plan the best way to accomplish emission reductions. Commenter s said th is Proposal impacts power markets, generation fleets, reliability, environmental considerations, infrastructure and more. Commenter s said compliance programs will require state legislative action. Commenter s said incorporating these considerations into
act ionable programs will take more than one legislative session.

Commenters stated the state's Division of Environmental Protection will be responsible for developing the state's implementation plan and submitting it to the EPA for approval. Commenter s said m any states are already stretched for resources and Agency staff is constrained by budgets, allocated positions, and potentially time consuming approval processes at the Legislative level. Commenter s stated all of these factors may be beyond the control of an implementing agency. Commenter s said in the event that a state cannot submit its implementation plan in a timely manner to meet the schedule that has been set out, the EPA should provide some flexibility to those states which are demonstrating progress, before reverting to a Federal Implementation Plan.

Comment 5: Comments stating that the EPA should allow more time for the states to work together.

Response 5 : See section VIII.E, for a detailed discussion on state plan submittal and timing, in the pr eamble for the CPP final rule. In response to this and similar comments, EPA believes that the flexibilities afforded by the final rule, including the source

- category specific emiss i on performance rates for two subcategor i es of fossil fuel

- fired EGUs as we ll as equivalent rate and mass based statewide goals, provide states the opportunity to develop state plans within the time frames allowed in the rule. In addition to both rate and mass

- bases state wide goals, the final88 preamble describes two different typ es of state plans with several available approaches under each. As well, the final preamble allows states to set their own EGU emission levels for the interim step periods as long as they meet the interim and final goals articulated in the emission guideli nes no later than 2029 and 2030, respectively. Concurrent with this final rule EPA is also proposing model rules for state plans which, when finalized, states may wish to use to facilitate the development of their state rule. EPA believes that these divers e set of options provide states enough opportunity to develop state plans by 2018.

The following are summaries of the specific public comments under this comment:

Commenter s stated that while they appreciate the extra time EPA is providing to develop state plans, they noted that some states may still need additional time given their state's legislatures, schedules, and rulemaking timeframes.

Commenter s stated that EPA should allow more time for states to work together. The
commenter s stated that the curren t schedule is unrealistic.

Comment 6: Comments noting if states choose to develop a stand

- alone state plan the time required may be greater than if it chooses a regional approach, and that under a stand

- alone approach, both a new state rule and authorizi ng legislation will be required

. Response 6: In response to this and similar comments on the timing of individual state plan submittals, the final rule allows additional time for individual state plan submittals. See section VIII.C on state plan approache s and section VIII.E, addressing state plan submittal and timing, in the preamble for the CPP final rule.

The following are summaries of the specific public comments under this comment:

Commenter s requested that EPA afford states sufficient time to develop and submit their compliance plans regardless of whether they decide to go it alone or join in with other states in a regional approach. The commenter s noted if states choose to develop a stand

- alone state plan the time required may be greater than if it c hooses a regional approach. The commenter s believed that under a stand

- alone approach, both a new state rule and authorizing legislation will be required. The commenter s anticipated a lengthy process in facilitating a rule through the rulemaking process. T he commenter s stated that this process will include stakeholder outreach, proposal of draft rule to the state Pollution Control Board, pre

- hearing comment period, as many as three public hearings followed by another comment period, finalization of an amend ed rule that addresses all appropriate comments, submittal of final rule to the state legislature's Joint Committee on Administrative Rules and potentially additional hearings, and final publication assuming no objections or other challenges.

Comment 7: C omment stating that EPA has provided inadequate time for the states to submit their 111(d) Plans.89 Response 7: In response to this and similar comments regarding timing and planning concerns such as the commenters mention, the EPA has extended the time all owed for states and regional planning groups to finalize their plans and meet the first interim goal. The EPA disagrees with the commenter s that a final state plan is required in 2016 because states can receive two additional years provided they meet the b asic requirements of an initial submittal. The final rule includes this additional time and flexibility to manage complexities such as reliability, permitting, planning cycles, infrastructure addition and modifications, legislative changes, etc. In this f inal rule the EPA clarified that having legislation in place, drafted, or proposed is not a requirement for the initial submittal, and provided for an extension until 2018 for both single and multi

- state plans. The EPA views this as being responsive to the commenter s ’ concerns regarding the timing of when the state legislature meets and the commenters opinion that it would inhibit a state’s ability to submit a final state plan by the submittal deadline. See section VIII.E.2, State Plan Submittal and Approva l Process and Timing, of the preamble for the final rule.

See section VIII.C on state plan approaches, and section VIII.E for a discussion on state plan submittal and timing, in the preamble for the final rule.

The following are summaries of the specific public comments under this comment:

Commenter s stated that EPA has provided inadequate time for the states to submit their 111(d) Plans. The commenter s noted that absent an extension, states must submit their 111(d) Plan by June 2016. The commenter s noted that the Indiana General Assembly meets in 2016 from the second week of January to March 15. The commenter s stated that this does not allow the Indiana Department of Environmental Management ("IDEM") sufficient time to develop a plan and the legislature su fficient time to make required changes to state authorities. In effect, the
commenter s stated that EPA has left Indiana in a position where Indiana has to reorganize its electricity sector in a matter of months.

Comment 8: Comment stating that this time p eriod is insufficient and EPA must provide states with additional time to submit plans.

Response 8: In response to this and similar comments regarding timing and planning concerns such as the commenters mention, the EPA has extended the time allowed for s tates and regional planning groups to finalize their plans and meet the first interim goal. The final rule includes this additional time and flexibility to manage complexities such as reliability, permitting, planning cycles, infrastructure addition and mo difications, legislative changes, etc. In this final rule the EPA clarified that having legislation in place, drafted, or proposed is not a requirement for the initial submittal, and provided for an extension until 2018 for both single and multi

- state pla ns. While the commenter s assert that the Wisconsin administrative rulemaking process takes over 2 years to complete, only draft/proposed legislation or regulations are needed by the 2017 update and do not need to be final. The total of three years with an extension to submit a plan goes beyond the 2 years the commenter s say is needed for the state rulemaking process. The EPA views this as being responsive to the commenter’s concerns regarding the timing of the state rulemaking process and the commenters opi nion that it would inhibit a state’s ability to submit a90 final state plan by the submittal deadline. See section VIII.E.2, State Plan Submittal and Approval Process and Timing, of the preamble for the final rule.

The commenter s also stated that the EPA sho uld clarify what states must include in a state plan submission, short of a complete and final plan, in order to meet EPA’s deadlines and be in compliance with the rule. The EPA has clarified the requirements for initial state plans and 2017 updates in sec tion VIII.E.3 of the final rule preamble

. The following are summaries of the specific public comments under this comment:

Commenter s stated that EPA's proposal allows for additional time for submission of state plans in certain cases (a 1

- year extension fo r individual state plans and a 2

- year extension for multi

state plans). The commenter s stated that this time period is insufficient and EPA must provide states with additional time to submit plans. The commenter s stated that the Wisconsin administrative ru lemaking process alone takes over 2 years to complete for simple, noncontroversial rules. The commenter s stated that given the amount of planning, stakeholder engagement, and potential coordination with others states that will be required in developing thi s state plan, they anticipate that formulating a state plan followed by incorporation into state rules will take at least four years to accomplish in Wisconsin. Therefore, the commenter s stated that submission of a complete plan, including the required reg ulatory and statutory changes, by EPA's deadlines is unrealistic. The commenter s stated that in addition to reevaluating its proposed deadlines, EPA should also clarify what states must include in a state plan submission, short of a complete and final plan , in order to meet EPA's deadlines and be in compliance with the rule

.

Comment 9: Comment stating that the development and submission of a state implementation plan by June 30, 2016 is not practically achievable.

Response 9: In response to this and simil ar comments regarding timing and planning concerns such as the commenters mention, the EPA has extended the time allowed for states to finalize their plans and meet the first interim goal. The final rule includes this additional time and flexibility to man age complexities such as reliability, permitting, planning cycles, infrastructure addition and modifications, legislative changes, etc. In addition, the EPA is committed to continue extensive outreach to states and stakeholders and work closely with them t o provide timely assistance and support in form of additional tools, training and guidance to facilitate the development of approvable state plans within the timeframe specified in the rule. As guidance documents, tools, templates and other resources becom e available, the EPA, in consultation with the U.S. Department of Energy and other federal agencies, will continue to make these resources available via a dedicated website. Concurrent with this final rule EPA is also proposing model rules for state plans which, when finalized, states may wish to use to facilitate the development of their state rule.

See section VIII.E .2 for a discussion on state plan submittal and timing in the preamble for the CPP final rule, addressing both single state and multi

- state submittals

. The following are summaries of the specific public comments under this comment:91 Commenter s stated that the development and submission of a state implementation plan by June 30, 2016 is not practically achievable. The commenter s stated that eve n with the maximum allowable deadline extensions, the proposed timelines will be impossible for Oklahoma to develop a workable plan that is properly vetted by the Oklahoma Department of Environmental Quality and the Oklahoma Corporation Commission as well as other stakeholders. The
commenter s noted that it is even more unrealistic that multiple states could develop a regional plan by June 30, 2018.

Comment 10: Comment stating that the Alaska Plan submission deadline of June 30, 2016, can likely not be achi eved for several reasons.

Response 10: In response to this and similar comments regarding timing and planning concerns such as the commenters mention, the EPA has extended the time allowed for states to finalize their plans and meet the first interim goal. The final rule includes this additional time and flexibility to manage complexities such as reliability, permitting, planning cycles, infrastructure addition and modifications, legislative changes, etc. In addition, the EPA is committed to continue extens ive outreach to states and stakeholders and work closely with them to provide timely assistance and support in form of additional tools, training and guidance to facilitate the development of approvable state plans within the timeframe specified in the rul e. As guidance documents, tools, templates and other resources become available, the EPA, in consultation with the U.S. Department of Energy and other federal agencies, will continue to make these resources available via a dedicated website. Concurrent wit h this final rule EPA is also proposing model rules for state plans which, when finalized, states may wish to use to facilitate the development of their state rule. For commenters’ reference, EPA addresses state plans in section VIII of the preamble to the final rule. S ection III of the final rule preamble provides a summary of rule requirements to help states with planning and goals . See section VIII.A of the final rule preamble provides an overview of state plan types and component s. See section VIII.E o f the final rule preamble on state plan submittal and the approval process and timing. See section VIII.F on state plan performance demonstrations and section VIII. H of the final rule preamble for resources for states to consider in developing plans. Secti on VIII. G of the final rule preamble addresses additional considerations such as economic and employment development and workforce considerations. All these resources will help states address the requirements in the rule in a timely manner.

The following a re summaries of the specific public comments under this comment:

Commenter s stated that the Alaska Plan submission deadline of June 30, 2016, can likely not be achieved for the following reasons: (1) several Alaska government agencies along with several Al aska utilities must be involved with the development of the plan; developing a plan that will meet all of the requirements of these stakeholders will be time consuming; (2) changes to existing Alaska statute will likely be needed; (3) adequate opportunity for public input must be provided because the plan could result in a substantial increase in the cost of electricity for many Alaskans and negative economic impacts to select locations; and (4) EPA likely cannot approve or disapprove the plan within 12 mon ths after the required submission date because of competing priorities and limited budgets.92 Comment 11: Comment stating that the EPA acknowledged that potential compliance options within the proposed rules might require new legislation in some states, and that South Dakota is one of those states.

Response 11: In response to this and similar comments regarding timing and planning concerns such as the commenters mention, the EPA has extended the time allowed for states to finalize their plans and meet the f irst interim goal. The final rule includes this additional time and flexibility to manage complexities such as reliability, permitting, planning cycles, infrastructure addition and modifications, legislative changes, etc. In addition, the EPA is committed to continue extensive outreach to states and stakeholders and work closely with them to provide timely assistance and support in form of additional tools, training and guidance to facilitate the development of approvable state plans within the timeframe sp ecified in the rule. As guidance documents, tools, templates and other resources become available, the EPA, in consultation with the U.S. Department of Energy and other federal agencies, will continue to make these resources available via a dedicated websi te. Concurrent with this final rule EPA is also proposing model rules for state plans which, when finalized, states may wish to use to facilitate the development of their state rule. See section VIII.A of the final rule preamble of the CPP for an overview of the state plans section and section VIII.E for a discussion on state plan submittal and timing, in the preamble for the final rule. Section VIII.C of the final rule preamble covers state plan approaches and section VIII. H addresses resources for states to consider in developing plans.

The following are summaries of the specific public comments under this comment:

Commenter s stated that EPA acknowledged that potential compliance options within the proposed rules might require new legislation in some stat es. The commenter s noted that South Dakota is one of these states that would likely require new legislation in order to ensure enforceability of the state implementation plan, with one example being energy efficiency savings targets. The commenter s stated that EPA's proposed timeline requiring states to submit an implementation plan within one year of final rule publishing and, further, requiring all aspects of the plan be enforceable leaves little time for any legislative action to occur in South Dakota. T he commenter s noted that this is due to the fact that South Dakota's legislative session runs from January through March annually.

The commenter s stated that as an example, if the final rule is published on June 30, 2015, this leaves South Dakota with jus t five months to discuss compliance options with stakeholders, discuss compliance options with other states, perform detailed cost/benefit analyses of compliance options, develop a final plan for compliance, identify needed legislation, and then pursue leg islation in the 2016 session. The commenter s stated that this timeframe is unrealistic and will not result in good policy making. As such, the commenter s recommended EPA leave enough flexibility within the final rule timeline to allow for sound policy maki ng to occur at the state level rather than force policy making in a short period of time.93 Comment 12: Comment stating that the 13 months the EPA is allowing for state plan development is entirely insufficient for states to prepare adequate plans. At a min imum, the
commenter s stated that the EPA should provide states five full years to prepare and submit a state plan under this requirement.

Response 12: EPA disagrees with the commenter s that states need 5 full years to prepare and submit a state plan. In r esponse to this and similar comments regarding timing and planning concerns such as the commenters mention, the EPA has extended the time allowed for states to finalize their plans and meet the first interim goal. The final rule includes this additional ti me and flexibility to manage complexities such as reliability, permitting, planning cycles, infrastructure addition and modifications, legislative changes, etc. In addition, the EPA is committed to continue extensive outreach to states and stakeholders and work closely with them to provide timely assistance and support in form of additional tools, training and guidance to facilitate the development of approvable state plans within the timeframe specified in the rule. As guidance documents, tools, templates and other resources become available, the EPA, in consultation with the U.S. Department of Energy and other federal agencies, will continue to make these resources available via a dedicated website. Concurrent with this final rule EPA is also proposing mod el rules for state plans which, when finalized, states may wish to use to facilitate the development of their state rule. See section VIII.A in the final rule preamble for an overview discussion of state plans and sections VIII.B and E on state plan submit tal and timing. Section III in the final rule preamble summarizes the rule requirements, while sections V.C, V. D, and V. E discuss the building blocks.

The following are summaries of the specific public comments under this comment:

Commenter s stated that t he 13 months U.S. EPA is allowing for state plan development is entirely insufficient for states to prepare adequate plans. The commenter s noted that Indiana's statutory rulemaking process requires a minimum of 1.5 years to fully promulgate a rule, and

muc h longer for rulemakings that require extensive stakeholder involvement. The commenter s stated that Indiana currently lacks the necessary statutory authority to implement and enforce Building Blocks 2, 3, or 4. The commenter s stated that legislative action would be necessary for Indiana to contemplate the use of Building Blocks 2

- 4 in a state plan. The commenter s noted that U.S. EPA's proposed deadlines do not afford Indiana's legislature the time necessary to consider or act on the necessary authority cons iderations. The commenter s stated that the time frames, even with available extensions, are not long enough for the state to meet the requirements. The
commenter s noted that the CAA generally provides states three full years to develop State Implementation Plans to address specific requirements of the Act. The commenter s stated that this proposal is far more complex than any State Implementation Plan developed by Indiana thus far. At a minimum, the commenter s stated that the EPA should provide states five f ull years to prepare and submit a state plan under this requirement.

Comment 13: Comment saying that Arizona DEQ may not be able to meet the proposed state plan submission deadline due to the time needed for any requested legislative authorization before it can adopt a plan pursuant to EPA's proposed rule.94 Response 13: In response to this and similar comments regarding timing and planning concerns such as the commenters mention, the EPA has extended the time allowed for states to finalize their plans and m eet the first interim goal. The final rule includes this additional time and flexibility to manage complexities such as reliability, permitting, planning cycles, infrastructure addition and modifications, legislative changes, etc. In addition, the EPA is c ommitted to continue extensive outreach to states and stakeholders and work closely with them to provide timely assistance and support in form of additional tools, training and guidance to facilitate the development of approvable state plans within the tim eframe specified in the rule. As guidance documents, tools, templates and other resources become available, the EPA, in consultation with the U.S. Department of Energy and other federal agencies, will continue to make these resources available via a dedica ted website. Concurrent with this final rule EPA is also proposing model rules for state plans which, when finalized, states may wish to use to facilitate the development of their state rule. See section VIII. E.2 for a discussion on state plan submittal an d timing in the preamble for the CPP final rule.

The following are summaries of the specific public comments under this comment:

Commenter s stated that Arizona law currently prohibits an agency created by the governor, including the Arizona Department of E nvironmental Quality (DEQ), from adopting or enforcing "a state or regional program to regulate the emission of greenhouse gas [GHG] for the purposes of addressing changes in atmospheric temperature without express legislative authorization." [1] The comme nter s said Arizona DEQ may not be able to meet the proposed state plan submission deadline due to the time needed for any requested legislative authorization before it can adopt a plan pursuant to EPA's proposed rule.

Comment 14: Comment disagreeing that the time frames proposed in the rule allow for any significant stakeholder process within the state.

Response 14: EPA remains highly encouraging of stakeholder involvement throughout the process and requires that as part of the state plan submittal. EPA and multiple state government agencies have met often during the process of development, proposal, and post

- proposal for this rule, and EPA continues to encourage multiple state agencies to work together. The EPA’s determinations and decisions on plan sub mittal and timing are summarized in section s VIII. B and VIII. E in the CPP final rule preamble. Additional sections helpful in planning and developing state plans include section VIII.F on state plan performance demonstrations and compliance, section VIII. I on considerations for incorporating CO2 emission reduction measures in state plans, and section VIII. H on resources for states to consider in developing state plans in the CPP final rule preamble.

The following are summaries of the specific public comment s under this comment:

Commenter s disagreed that the time frames proposed in the rule allow for any significant stakeholder process within the state. The commenter s noted that this creates even more challenges in formulating a state plan and in promulgating a state rule. The commenter s stated that the electric sector is a complex system that involves multiple governmental agencies at both95 the national and state level. The commenter s stated that no single governmental agency has the knowledge to develop and i mplement a technically and legally sound plan on its own. The
commenter s stated that it is crucial that Indiana's various regulatory agencies have time to form a cooperative stakeholder group, along with the regulated community and citizens of the state, t o complete the task of developing and finalizing a state plan. The commenter s stated that failure to have an active and involved stakeholder process will likely result in an incomplete and flawed plan that will surely be subject to public and legal scrutin y.

Comment 15: Comment arguing that EPA's proposed timeline for submittal and finalization of state and regional plans and the proposed timeline for compliance with proposed goals are completely unrealistic.

Response 15: In response to this and similar c omments regarding timing and planning concerns such as the commenters mention, the EPA has extended the time allowed for states to finalize their plans and meet the first interim goal. The final rule includes this additional time and flexibility to manage complexities such as reliability, permitting, planning cycles, infrastructure addition and modifications, legislative changes, etc. In addition, the EPA is committed to continue extensive outreach to states and stakeholders and work closely with them to pr ovide timely assistance and support in form of additional tools, training and guidance to facilitate the development of approvable state plans within the timeframe specified in the rule. As guidance documents, tools, templates and other resources become av ailable, the EPA, in consultation with the U.S. Department of Energy and other federal agencies, will continue to make these resources available via a dedicated website. Concurrent with this final rule EPA is also proposing model rules for state plans whic h, when finalized, states may wish to use to facilitate the development of their state rule. See section VIII.E.2 for a discussion on state plan submittal and timing in the preamble for the CPP final rule. The following are summaries of the specific public comments under this comment:

Commenter s argued that EPA's proposed timeline for submittal and finalization of state and regional plans and the proposed timeline for compliance with proposed goals are completely unrealisti c . The commenter s stated that EPA had not appropriately considered the time required to develop and coordinate state and regional compliance plans, draft and finalize necessary changes to state laws and policies, conduct transmission siting and reliability studies, conduct environmental im pact assessments, coordinate development with other federal regulations such as the Endangered Species Act, and several other factors. The commenter s also noted that, for states to be able to create plans that can be successfully implemented, the rule will require unprecedented coordination of all aspects of government, the utility industry, utility regulatory commissions, institutional consumer advocates, FERC, NERC, WECC and the other regional reliability entities, RTOs, the National Security Agency, the U.S. Fish and Wildlife Service and other stakeholders. The commenter s said it is important to provide a realistic timeframe in order to work with all stakeholders and develop compliance and implementation plans based on sound policy and necessary engineeri ng and economic analyses than it is to meet an arbitrary deadline. Therefore, the commenter s recommended that EPA allow states significantly more time to develop draft compliance plans and should eliminate the interim compliance targets96 Comment 16: Commen t requesting that the EPA extend the deadline(s) for states to prepare its plans to comply with the final GHG rule.

Response 16: In response to this and similar comments regarding timing and planning concerns such as the commenters mention, the EPA has ex tended the time allowed for states to finalize their plans and meet the first interim goal, including allowing a two

- year extension for individual state plans. The final rule includes this additional time and flexibility to manage complexities such as reli ability, permitting, planning cycles, infrastructure addition and modifications, legislative changes, etc. In addition, the EPA is committed to continue extensive outreach to states and stakeholders and work closely with them to provide timely assistance a nd support in form of additional tools, training and guidance to facilitate the development of approvable state plans within the timeframe specified in the rule. As guidance documents, tools, templates and other resources become available, the EPA, in cons ultation with the U.S. Department of Energy and other federal agencies, will continue to make these resources available via a dedicated website. Concurrent with this final rule EPA is also proposing model rules for state plans which, when finalized, states may wish to use to facilitate the development of their state rule. See section VIII.E.2 for a discussion on state plan submittal and timing in the preamble for the CPP final rule. The following are summaries of the specific public comments under this comm ent:

Commenter s were concerned with the timetable for adoption of a state plan to meet such a substantial and complex rule, if a state chooses certain options in the GHG rule, rather than a regional approach as appears to be the EPA's favored option. Accor ding to the commenter s , rushing such a complex rule that requires wholesale changes to electric utility structuring in a state such as Illinois, with deregulation, some merchants, other not, who belong to two different ISO organizations (MISO and PJM) as w ell as companies with coal

- fired generation within the state that export energy to other states, presents plan development issues that require more time than allotted by the EPA in the GHG rule as proposed. The commenter s requested the EPA extend the deadl ine(s) for states to prepare its plans to comply with the final GHG rule.

Comment 17: Comment arguing that the proposed rule failed to provide sufficient time to develop a comprehensive state plan that meets the targets of the proposed rule

. Response 17: In response to this and similar comments regarding timing and planning concerns such as the commenters mention, the EPA has extended the time allowed for states to finalize their plans and meet the first interim goal. The final rule includes this addition al time and flexibility to manage complexities such as reliability, permitting, planning cycles, infrastructure addition and modifications, legislative changes, etc. No legislation or regulation is required to be finalized for the 2016 initial plan submitt al or the 2017 update (which requires only draft/proposed legislation or regulations). While the EPA acknowledges that different states may have different public participation requirements in their rulemaking process, we believe that allowing states up to three

- years is a sufficient amount of time to accommodate for their public participation requirements. In addition, the EPA is committed to continue extensive outreach to states and stakeholders and work closely with them to provide timely assistance and s upport in97 form of additional tools, training and guidance to facilitate the development of approvable state plans within the timeframe specified in the rule. As guidance documents, tools, templates and other resources become available, the EPA, in consulta tion with the U.S. Department of Energy and other federal agencies, will continue to make these resources available via a dedicated website. Concurrent with this final rule EPA is also proposing model rules for state plans which, when finalized, states may wish to use to facilitate the development of their state rule. See section VIII.E.2 for a discussion on state plan submittal and timing in the preamble for the CPP final rule. The following are summaries of the specific public comments under this comment:

Commenter s argued that the proposed rule failed to provide sufficient time to develop a comprehensive state plan that meets the targets of the proposed rule. According to the
commenter s , not only is there considerable time required to develop a state prog ram, there may be additional time required for legislative approval to authorize the agency (ies) to implement the state plan. The commenter s noted that, if the EPA's proposed rule is finalized in mid

- 2015 as indicated, the next legislative session for Iow a, Minnesota, South Dakota and Wyoming is not until January of 2016. For North Dakota, the commenter s noted that the next legislative session is not until January of 2017. Unless the legislature calls for a special session, at tax

- payer expense, the commen ter s indicated that the authority to enter into a multi

- state agreement may not be given by the legislature(s) until well into the limited period given by the proposed rule for state plan development. Even if a state has authority to adopt a state plan und er its administrative procedures act and delegated authority, the commenter s noted that it still must go through a lengthy public process to enact any such rules , again adding to the delay in the process of even presenting to EPA a plan for approval.

Comm ent 18 : Comment contending that the EPA must extend the timeframe for completion of section 111(d) compliance plans

. Response 18: In response to this and similar comments regarding timing and planning concerns such as the commenters mention, the EPA has extended the time allowed for states to finalize their plans and meet the first interim goal. The final rule includes this additional time and flexibility to manage complexities such as reliability, permitting, planning cycles, infrastructure addition and modifications, legislative changes, etc. In addition, the EPA is committed to continue extensive outreach to states and stakeholders and work closely with them to provide timely assistance and support in form of additional tools, training and guidance to f acilitate the development of approvable state plans within the timeframe specified in the rule. As guidance documents, tools, templates and other resources become available, the EPA, in consultation with the U.S. Department of Energy and other federal agen cies, will continue to make these resources available via a dedicated website. Concurrent with this final rule EPA is also proposing model rules for state plans which, when finalized, states may wish to use to facilitate the development of their state rule

. See section VIII.E.2 for a discussion on state plan submittal and timing in the preamble for the CPP final rule.

The following are summaries of the specific public comments under this comment:98 Commenter s contended that EPA must extend the timeframe for completion of section 111(d) compliance plans.

The commenter s argued that EPA has not provided sufficient time for states to complete their section 111(d) compliance plans. Due to the complexity of EPA's proposal, the commenter s indicated that state regul atory agencies will need to collaborate closely with affected entities in plan development, and time will be needed to complete the extensive discussions necessary to clearly identify to the satisfaction of EPA the measures that will be included in a state 's compliance plan as well as the timeline for implementation of these measures. The commenter s said this is particularly true in Arizona in light of the impacts that the proposed rule would have on the state's generation mix.

In addition to having to comm unicate with affected EGUs and coordinate across state agencies to develop and implement the emissions reductions mechanisms necessary to achieve the state goals, the commenter s said that ADEQ, as the Arizona agency responsible for plan development and sub mittal, will need to engage with the public and other interested stakeholders, including

non

- governmental environmental organizations. The commenter s noted that many states, including Arizona, also will be required to complete legislative processes or admi nistrative rulemakings to establish plans, which will be time

- consuming in its own right.

Comment 19 : Comments stating that state plan development will take significantly longer than the additional four months EPA proposes to provide, that additional coo rdination and time will also be required if a multi

- state plan is to be considered, and due to the fact that the rule would require most states to fundamentally reconfigure their electric generation industries and power supply markets. The comments also st ated even if an additional year or two were granted, these extensions provide minimal relief due to their burdensome requirements and the conflicts they create with regard to EPA's proposed compliance timeframe.

Response 19: In response to this and simila r comments regarding timing and planning concerns such as the commenters mention, the EPA has extended the time allowed for states to finalize their plans and meet the first interim goal. The final rule includes this additional time and flexibility to mana ge complexities such as reliability, permitting, planning cycles, infrastructure addition and modifications, legislative changes, etc. The EPA is allowing an additional two years for state plan submittal for states that need it and make a good faith showin g that they are able to submit a complete plan by 2018. The EPA is also not requiring formal legislation or regulations to be in effect in order to be granted an extension. In addition, the EPA is committed to continue extensive outreach to states and stak eholders and work closely with them to provide timely assistance and support in form of additional tools, training and guidance to facilitate the development of approvable state plans within the timeframe specified in the rule. As guidance documents, tools , templates and other resources become available, the EPA, in consultation with the U.S. Department of Energy and other federal agencies, will continue to make these resources available via a dedicated website. Concurrent with this final rule EPA is also p roposing model rules for state plans which, when finalized, states may wish to use to facilitate the development of their state rule. See section VIII.E.2 for a discussion on state plan submittal and timing in the preamble for the CPP final rule.99 The follo wing are summaries of the specific public comments under this comment:

Commenter s argued that states need more time to develop state plans. The commenter s noted that EPA proposed to finalize the rule by June 1, 2015, and require states to submit implementa tion plans by June 30, 2016. While EPA has acknowledged that the complexity of the proposal warrants greater time for SIP development than the nine months typically provided under the section 111(d) rules (79 FR 34915), the commenter s said state plan devel opment will take significantly longer than the additional four months EPA proposes to provide . The
commenter s noted that EPA's proposed goals would require most states to fundamentally reconfigure their electric generation industries and power supply marke ts. According to the
commenter s , doing so will likely require passing state legislation, developing and modifying agency implementing regulations, and agency planning and modeling of necessary infrastructure improvements, such as new natural gas pipelines, transmission lines, and EGUs . See State Plan TSD at 28

- 31 (discussing considerable efforts that must be undertaken to develop a state plan, such as utility

- scale capacity expansion and dispatch planning models). The commenter s argued that states cannot ac complish all of this in 13 months, and it is patently unreasonable, arbitrary, and capricious for EPA to require states to do so.

The commenter s noted that the Florida Legislature will almost certainly have to take some action in relation to Florida's stat e plan, either in passing specific statutory directives or authority, or ratifying rules promulgated by FDEP. According to the commenter s , Florida's Legislature meets for two months every year in March and April, and most bills have to be filed many months in advance. Assuming, optimistically, that EPA's final guidelines have an effective date of June 30, 2015, the commenter s said Florida will have approximately 6 months to determine what legislative actions may be needed in the 2016 and 2017 Sessions. The commenter s indicated this can only occur after it undertakes the enormous task of understanding what the final guidelines require, interacting with stakeholders, identifying measures that it can implement without legislative action, deciding which measures could achieve the state goal, determining the costs of each of these measures on the affected parties and Florida's economy, so as to minimize the impacts, and coordinating with the FPSC on measures that it may be able to implement or must oversee (while ensuring that there are no adverse impacts on reliability). The commenter s noted that promulgation of any new rules to implement these measures, which will almost certainly require legislative ratification pursuant to Florida law, must also be timed to fit the Legislature's schedule. The commenter s said any legal gaps in existing state agency authority to implement the final rule will require the Florida Legislature to enact new laws, a process that may not be completed, if at all, by EPA's compliance deadl ines. Accordingly, the commenter s contended that Florida would not have time to develop a complete state plan by June 30, 2016

.

The commenter s indicated that additional coordination and time will also be required if a multi

state plan is to be considered

. To illustrate, the commenter s cited the example of the Regional Greenhouse Gas Initiative (RGGI):

In 2003, nine northeastern states began to develop a regional cap

- and

- trade program for CO2 emissions from power plants. In December 2005, seven of those stat es agreed to implement the Regional Greenhouse Gas Initiative (RGGI), and by August 2006, published a model rule. It was not until the end of 2008, however, that each of the states completed their individual rulemaking processes and began participating in RGGI, nearly six years after the process began.100 The commenter s stated that the history of RGGI illustrates the time required for states to negotiate and develop a multi

- state plan. The commenter s noted that EPA proposes to provide states only two years, wh ich is clearly insufficient.

The commenter s noted that EPA proposes allowing states to seek an additional year for state plan development for single

- state plans, or an additional two years for multi

- state plans. Even if granted by EPA, the commenter s argue d that these extensions provide minimal relief due to their burdensome requirements and the conflicts they create with regard to EPA's proposed compliance timeframe. The commenter s noted that an extension request by a state must be submitted by June 30, 20 16, and must contain very detailed information, such as a description of the intended approach and progress made on each element of the plan, as well as "a comprehensive roadmap for completing the plan." 79 FR 34916. The commenter s stated that, even if see king an extension, each state still must decide by June 30, 2016, what its state plan will be. Even if an extension is granted, the commenter s said each state's interim compliance period would still begin in 2020, so any extension would leave a state with less time to actually implement its plan.

Accordingly, the commenter s argued that the state plan development schedule in EPA's proposal is arbitrary and capricious, and that EPA must provide states more time to develop state plans for such a complex and im pactful rule.

Comment 20: Comment recommending that the EPA include a provision in the final rule requiring each state's agency responsible for preparation of the state implementation plan to seek input from state legislators in drafting the plan and in c ommenting on the proposed plan.

Response 20: EPA encourages states to engage their representatives, agencies, and the public broadly. Section II. K of the CPP final rule preamble addresses stakeholder outreach and consultations conducted for this rulemakin g. In section I X. C of the final rule preamble, the agency outlines that states must engage with all members of the public, including vulnerable communities. Additionally, the agency outlines steps that states could take to engage meaningfully with communit ies. Additionally, in section IX.G of the final rule preamble, the agency describes how it will continue to meaningfully engage with vulnerable communities throughout the implementation process. The general information section of the final rule preamble under the executive summary in section I.A also provides context and a section on outreach and resources for stakeholders.

The following are summaries of the specific public comments under this comment:

Commenter s recommended that EPA include a provision in the final rule requiring each state's agency responsible for preparation of the state implementation plan to seek input from state legislators in drafting the plan and in commenting on the proposed plan, with sufficient time for the legislators to engag e their constituents and seek constituents' contributions to the plan and commitment to helping achieve its goals. In making this recommendation, the commenter s indicated they w ere not suggesting that EPA require formal legislative hearings on or approval of the state plan.101 Comment 21: Comments arguing that the EPA's proposed schedule does not allow sufficient time for states to develop state plans, for legislatures and administrative agencies to adopt necessary legislation and implementing regulations, fo r states to receive the requisite approval from EPA for plan implementation to begin and for utilities to perform the necessary planning and implementation of the approved state plan in time to comply with the state targets

. Response 21: In response to th is and similar comments regarding timing and planning concerns such as the commenters mention, the EPA has extended the time allowed for states to finalize their plans and meet the first interim goal. The final rule includes this additional time and flexib ility to manage complexities such as reliability, permitting, planning cycles, infrastructure addition and modifications, legislative changes, etc. In addition, the EPA is committed to continue extensive outreach to states and stakeholders and work closely with them to provide timely assistance and support in form of additional tools, training and guidance to facilitate the development of approvable state plans within the timeframe specified in the rule. As guidance documents, tools, templates and other res ources become available, the EPA, in consultation with the U.S. Department of Energy and other federal agencies, will continue to make these resources available via a dedicated website. Concurrent with this final rule EPA is also proposing model rules for state plans which, when finalized, states may wish to use to facilitate the development of their state rule. See section VIII.E.2 for a discussion on state plan submittal and timing in the preamble for the CPP final rule.

The following are summaries of the specific public comments under this comment:

Commenter s argued that EPA's proposed schedule does not allow sufficient time for states to develop state plans, for legislatures and administrative agencies to adopt necessary legislation and implementing regu lations, for states to receive the requisite approval from EPA for plan implementation to begin and for utilities to perform the necessary planning and implementation of the approved state plan in time to comply with the state targets. The commenter s state d that a closer look at EPA's proposed rule illustrates its infeasibility for the states. First, the commenter s noted that EPA proposed to require plan submission by June 30, 2016. The commenter s further noted that states may seek an additional year if the y are developing single

- state plans, or two years if they seek to join a multi

- state plan. Assuming that the proposed rule is finalized as planned (June 2015), the commenter s said this means that states will have as little as one year to develop a state pl an that will fundamentally reconfigure their entire electric generation industry and power supply market. The commenter s argued that this is simply not enough time for states to plan for and begin to implement the changes that EPA seeks to impose

-- on them and on potentially regulated entities (which could include but not be limited to EGU owners and operators, electric distribution utilities, private or public third

- party entities and other state agencies, authorities or entities). The commenter s noted that in Georgia currently, neither the state nor EPD has the authority to regulate these entities in the pervasive manner envisioned by EPA in the proposal.102 Comment 22: Comment stating that the EPA has significantly underestimated the ability and challenges t hat states face to actually finalize a state plan to meet EPA's mandate.

Response 22: EPA and multiple state government agencies have met often during the process of development, proposal, and post

- proposal for this rule, and EPA continues to encourage mu ltiple state agencies to work together. See section VIII.E on state plan submittal and timing; section VIII.F on state plan performance demonstrations and compliance ; and section VIII. H on resources for states to consider in developing state plans in the C PP final rule preamble

. The following are summaries of the specific public comments under this comment:

Commenter s believe d that EPA has significantly underestimated the ability and challenges that states face to actually finalize a state plan to meet EP A's mandate. The commenter s noted that energy production, dispatch, transmission and distribution are determined through a host of regulatory agencies and legislative requirements. For a state agency to actually develop such a plan, the commenter s said unp recedented coordination with other agencies is essential. In addition, the commenter s anticipated that several legislative changes would be required for the imposition of these mandates on utilities and energy consumers.

Comment 23: Comment stating that a ssuming all goes smoothly and every stakeholder agrees to the proposed state regulation, most states would have difficulty meeting this timeline

-- even with an extension.

Response 23: In response to this and similar comments regarding timing and planning c oncerns such as the commenters mention, the EPA has extended the time allowed for states to finalize their plans and meet the first interim goal. The final rule includes this additional time and flexibility to manage complexities such as reliability, permi tting, planning cycles, infrastructure addition and modifications, legislative changes, etc. The EPA is also not requiring formal legislation or regulations to be in effect in order to be granted an extension In addition, the EPA is committed to continue e xtensive outreach to states and stakeholders and work closely with them to provide timely assistance and support in form of additional tools, training and guidance to facilitate the development of approvable state plans within the timeframe specified in th e rule. As guidance documents, tools, templates and other resources become available, the EPA, in consultation with the U.S. Department of Energy and other federal agencies, will continue to make these resources available via a dedicated website. Concurren t with this final rule EPA is also proposing model rules for state plans which, when finalized, states may wish to use to facilitate the development of their state rule. See section VIII.E.2 for a discussion on state plan submittal and timing in the preamb le for the CPP final rule.

The following are summaries of the specific public comments under this comment:

Commenter s argued that states will have difficulty meeting the timeline for submitting state plans, for reasons discussed below.103 The commenter s note d that state agencies, governors, regional transmission authorities, stakeholders and other affected entities have been communicating feverishly since the release of this proposal on June 2, 2014. The commenter s indicated that, while some discussions have been held on the support/nonsupport of this proposal, most discussions have centered on how all affected entities can come up with a solution to meet the proposed interim and final goals. According to the commenter s , so that a state can meet the timeline t o submit a plan, even with a proposed extension to submit a multi

- state plan, countless man

- hours have already been spent to try to solve this issue. The commenter s indicated that, at this time, legislatures and governors are adamantly debating renewable p ortfolio standards, energy efficiency policies and the like. Even if these policies and standards are passed, the commenter s noted that most states, such as Indiana, have to draft and pass environmental rules prior to submitting such a plan to EPA. Assumin g all goes smoothly and every stakeholder agrees to the proposed state regulation, the
commenter s expected most states would have difficulty meeting this timeline

-- even with an extension.

The commenter s recalled that, on November 13, 2014, EPA's Acting Ass istant Administrator for the Office of Air and Radiation, Janet McCabe, presented EPA's Proposed Clean Power Plan at the Indiana Energy Conference. According to the commenter s , during her comments, Ms. McCabe stated that during her tenure with EPA to

- date, proposals have never been exactly the same as the finalized version of a rule, standard or guideline. Assuming this is indeed true for this proposal, the commenter s stated that this poses an extraordinary obstacle for state agencies, governors, regional t ransmission authorities and other affected entities to draft the necessary legislation, policies, regulations and submittals now to comply with a proposed guideline within the specified timeline without knowing exactly what the final version of this propos al will be.

Comment 24: Comment stating that more time is needed for submittal of state plans, and for states that may need to seek changes to state statutes to implement EPA's final rule, encouraged the EPA to simplify the requirements of the states' ini tial submittals and to allow additional time for final plan submittal, including recommendations for 3

- to 4

- year timeline extensions.

Response 24: In response to this and similar comments regarding timing and planning concerns such as the commenters ment ion, the EPA has extended the time allowed for states to finalize their plans and meet the first interim goal. The final rule includes this additional time and flexibility to manage complexities such as reliability, permitting, planning cycles, infrastruct ure addition and modifications, legislative changes, etc. The EPA agrees with the commenters statement that the initial plan submittal requirements should be simplified, and we have made changes in the final rule to clarify these requirements. The EPA is n ot requiring formal legislation or regulations to be in effect in order to be granted an extension. In addition, the EPA is committed to continue extensive outreach to states and stakeholders and work closely with them to provide timely assistance and supp ort in form of additional tools, training and guidance to facilitate the development of approvable state plans within the timeframe specified in the rule. As guidance documents, tools, templates and other resources become available, the EPA, in consultatio n with the U.S. Department of Energy and other federal agencies, will continue to make these resources available via a dedicated website. Concurrent with this final rule EPA is104 also proposing model rules for state plans which, when finalized, states may wi sh to use to facilitate the development of their state rule. The EPA did not make the commenter s ’ recommendation to allow two years for an in i tial plan submittal, but did extend the timeline for final plan submittal for individual state plans by one year u ntil 2018 . The EPA also believes that three years is adequate time to allow for coordination between states that are engaged in a multi

state plan. See section VIII .E.2 for a discussion on state plan submittal and timing in the preamble for the CPP final r ule

. The following are summaries of the specific public comments under this comment:

C ommenters stated that more time is needed for submittal of state plans. For states that may need to seek changes to state statutes to implement EPA's final rule, commente r s encouraged EPA to simplify the requirements of the states' initial submittals and to allow additional time for final plan submittal.

Commenters pointed out the EPA's aggressive timeline allows states only 1 year to develop a very complex plan that will need to address a series of adjustments to their electricity generation consumption, energy infrastructure that will come from forcing a change in the energy mix. The commenters noted that states have historically been given several years to develop and i mplement regulations for criteria pollutants that are a tiny fraction of the size and scope of the proposed regulations. The commenters asserted that forcing regulations of this magnitude on such a short time frame will limit the ability of states and stak eholders to thoughtfully prepare for the drastic changes that this rule will cause. Commenters contended that if this Administration is comfortable spending more than 5 years evaluating the Keystone XL Pipeline, it should feel comfortable taking its time t o craft a thoughtful rule that will fully evaluate the consequences of its proposed actions.

Commenter s stated that the overwhelming nature of EPA's proposal is enhanced by the complexities of developing first

- time environmental regulations that expand int o the domain of energy generation, transmission, and distribution and by the political roadblocks which vary
state

- by

- state. The commenter s stated that the existing state and regional programs that EPA uses for examples in its analysis and justification fo r the proposal were initiated under directives and support from governors, state legislatures, and executive agencies (i.e., they were not programs driven by federal regulation). The commenter s noted that climate change and carbon dioxide regulation alread y are contentious topics, and obtaining the statutory and regulatory changes that will be necessary to develop, implement, and enforce a Section 111(d) plan may be challenging for several states, including Kansas. The commenter s stated that this particular 111(d) plan will be unique in that the emission guidelines encourage reaching beyond the source fenceline for compliance with the standard which is action that requires the support of multiple levels of state and local government and the cooperation and c ollaboration of the Kansas Department of Health and Environment (KDHE), Kansas Corporation Commission, investor owned utilities, municipal utilities, electric cooperatives, and wind developers and merchants. For this complicated task, the
commenter s reques ted that the EPA consider extending the timeline for state plan submittals. The commenter s recommended that the initial single state plan submittal be due 2 years after the final rule with the complete single state plan due 3 years after the final rule. Si milarly, the105 commenter s recommended that the multi

- state plan timeline be extended by an additional year, allowing for a complete plan submittal 4 years after the final rule is issued.

Commenter s expressed concern about the short timeframes afforded. The commenter s stated that EPA is aware of the time frame needed for a rather straightforward plan like Regional Haze which impacts the ability of the State Air Office come up with a compliance plan, and puts a burden on the utility to come up with a budget an d compliance plan to address the states' compliance plan.

Commenter s stated that, most states will be faced with challenges in coordinating stakeholder discussions necessary to develop its plan due to the variety of state plan options available (mass

based , rate

- based, portfolio) to state planning officials. The commenter s noted the EPA has acknowledged the cost and time requirements that the proposal will demand of states:

" As discussed in the Supporting Statement found in the docket for this rulemaking, the development of state plans will entail many hours of staff time to develop and coordinate programs for compliance with the proposed rule, as well as time to work with state legislatures as appropriate, and develop a plan submittal ."

The commenter s arg ued that EPA's expectation that individual states will have the time necessary to evaluate fully the opportunities of such a complex plan and oversee its development is unreasonable. According to the commenter s , 1 year is clearly inadequate to develop a pl an with stakeholder input, have a meaningful public participation process, and promulgate and/or repeal state statutes and regulations. Therefore, the commenter s recommended that the EPA at a minimum allow a 3

- year timeline for states to submit their plans after the rule is finalized.

Commenter s noted and EPA's requirement that states submit a compliance plan 1 year after the rule is finalized is unrealistic. The commenter s stated that traditional state implementation plans (SIPs)

- analogous planning exerc ises with which states have considerable experience

- have historically taken several years to develop. In addition, the commenter s stated that the proposed 1

- year planning horizon puts states in the position of including potential compliance measures in
t heir plans that have not been approved by utility regulators. Furthermore, the commenter s stated that some potential compliance measures could require additional state legislative actions that would extend beyond the 1 year submittal deadline. For these re asons, the commenter s stated that the agency should provide a more realistic timeframe for state plan development and submittal.

Commenter s were concerned about the compliance timelines envisioned for states. If the rule is finalized, the commenter s noted that states will only have one year to submit a state plan to address its GHG reduction goals into a planning regime. The commenter s argued that this timeline is unnecessarily strict, given that states are typically afforded several years to develop plans for listed criteria pollutants like mercury, ozone, and particulate matter. In order to develop legally defensible state plans, the commenter s said EPA should treat the development and submission process with the same timelines and forbearance as other co vered pollutants in the Clean Air Act.106 Commenter s stated that the timeline proposed or otherwise implicated by EPA is unreasonable for Kentucky ratepayers. The commenter s argued that the timelines established by the proposed rulemaking, including but not limited to the 1

- year deadline for Kentucky to tender its state

specific plan and the impending compliance cliff beginning in 2020, are in no way reasonable for a rulemaking of this scope. The commenter s stated that such a timeline for a complex and state

wide resource planning initiative is not only impractical, but will place a premium on environmental compliance and energy projects, which will in turn drive up costs and jeopardize reliability. The commenter s advocated for a minimum 3

- year timeline with e xtension opportunities for good cause. Moreover, the commenter s stated that additional time may be necessary to address in state legislation the serious policy implications and unfunded mandate of the 111(d) proposal, while still preserving Kentucky's leas t

- cost approach to resource generation.

Commenter s noted that the guidelines require the states to submit their SIPs to the EPA by June of 2016, although a 1

- year extension is possible. The commenter s stated that even with the extension this time frame is too short. The commenter s noted that most states took 3 years to prepare a SIP for the Regional Haze Program which is a relatively straightforward program compared to this proposed program. The commenter s asserted that States need more time.

Comment 25: Comments stating that is unreasonable for the EPA to expect states to develop novel plans to implement a program that will transform the electric industry and the economy all while performing burdensome analysis that is not typically required to comply wit h environmental regulation.

Response 25: In response to this and similar comments regarding timing and planning concerns such as the commenters mention, the EPA has extended the time allowed for states to finalize their plans and meet the first interim go al. The final rule includes this additional time and flexibility to manage complexities such as reliability, permitting, planning cycles, infrastructure addition and modifications, legislative changes, etc. In addition, the EPA is committed to continue ext ensive outreach to states and stakeholders and work closely with them to provide timely assistance and support in form of additional tools, training and guidance to facilitate the development of approvable state plans within the timeframe specified in the rule. As guidance documents, tools, templates and other resources become available, the EPA, in consultation with the U.S. Department of Energy and other federal agencies, will continue to make these resources available via a dedicated website. Concurrent with this final rule EPA is also proposing model rules for state plans which, when finalized, states may wish to use to facilitate the development of their state rule. See section VIII.E.2 for a discussion on state plan submittal and timing in the preambl e for the CPP final rule.

The following are summaries of the specific public comments under this comment:

C ommenters noted that the Proposed Rule requires significant effort by the states in preparing their plans, including the requirement to include achi evement "demonstrations" that use utility

scale capacity expansion and dispatch planning models to show the state can meet the interim107 and final goals. The commenters stated that the level of effort EPA envisions requiring states to undertake is more exten sive than can be justified under section 111(d)'s permissive "satisfactory" standard for state plans and suggested that more time is needed for plan development. Commenter s noted that states have 3 years to develop state implementation plans under section 110 of the CAA to implement the NAAQS, which is the longest period of time EPA proposes to allow from the development of section 111(d) state plans. The commenter s stated that yet states have no obligation to conduct this sort of modeling during the develo pment of a state implementation plan. Commenter s stated that it is unreasonable for EPA to expect states to develop novel plans to implement a program that will transform the electric industry and the economy all while performing burdensome analysis that i s not typically required to comply with environmental regulation.

Comment 26: Comment stating that the EPA's proposed schedule for states to develop state implementation plans and implement the Clean Power Plan is arbitrary and not achievable.

Response 2 6: In response to this and similar comments regarding timing and planning concerns such as the commenters mention, the EPA has extended the time allowed for states to finalize their plans and meet the first interim goal. The final rule includes this addit ional time and flexibility to manage complexities such as reliability, permitting, planning cycles, infrastructure addition and modifications, legislative changes, etc. In addition, the EPA is committed to continue extensive outreach to states and stakehol ders and work closely with them to provide timely assistance and support in form of additional tools, training and guidance to facilitate the development of approvable state plans within the timeframe specified in the rule. As guidance documents, tools, te mplates and other resources become available, the EPA, in consultation with the U.S. Department of Energy and other federal agencies, will continue to make these resources available via a dedicated website. Concurrent with this final rule EPA is also propo sing model rules for state plans which, when finalized, states may wish to use to facilitate the development of their state rule. The EPA views the timelines outlined in the final rule as being consistent with the CAA and other complex submittals submitted to the EPA by states. See section VIII.E.2 for a discussion on state plan submittal and timing in the preamble for the CPP final rule

. The following are summaries of the specific public comments under this comment:

Commenter s stated that EPA's proposed s chedule for states to develop state implementation plans and implement the Clean Power Plan is arbitrary and not achievable. The commenter s stated that EPA's current schedule for development, submittal of plans and for compliance with the identified goals is unreasonable given the expected amount of planning, stakeholder engagement, rulemaking, need for legislative authorization and potential coordination with other states needed to fully implement the Clean Power Plan.

The commenter s noted that the Clean Air Act at 42 USC 7411(d) requires EPA to establish a procedure for submittal of state plans similar to those required under section 110 of the Act. The
commenter s stated that the regulation of greenhouse gas has more complex considerations than the well

- e stablished planning process for criteria pollutant ambient air standards. The
commenter s stated that given the wide reaching implications of the proposed rule and the varied108 means identified to achieve the standard, EPA must set a reasonable time schedule that respects state authorities and considers all steps needed to fully implement the proposed Clean Power Plan.

Comment 27: Comments asserting that the EPA's timeframe for submittal of state plans is impractical, unrealistic, not based on a serious con sideration of the extent of work involved such that the schedule is arbitrary and capricious, and stating that if the proposal is finalized with EE and RE components, those components will take significant time for states to develop, as it encroaches into a territory little states have experience with

-- implementing EE and RE programs that meet EPA definitions of quantifiable, non

- duplicative, permanent, verifiable, and enforceable so that plans may be approvable.

Response 27: EPA is committed to continue extensive outreach to states and stakeholders and will work closely with states to provide timely assistance and support in form of additional tools, training and guidance to facilitate the development of approvable state plans within the timeframe specifi ed in the rule. Section III of the CPP final rule preamble discusses the final rule requirements as well as the legal basis for them. Section VIII of the final rule preamble addresses state plans. EPA addresses state plan submittal and timing in section V III.E of the preamble to the final rule. This section also addresses approval of state plans and adjustments to state plans. EPA has adjusted the interim goal deadline for this final rule. See section VIII.F of the final rule preamble on performance demo nstrations and compliance. EPA is not finalizing building block 4

– demand side energy efficiency

– in the CPP final rule preamble. Section V explains the best system of emission reduction and associated building blocks while section V.E covers building bl ock 3 and RE. State plan components and approvability criteria are addressed in section VIII.D for the CPP final rule preamble.

The following are summaries of the specific public comments under this comment:

Commenter s noted that 40 CFR 60.23 requires that state plans be submitted within 9 months of promulgation of the emission guidelines, unless U.S. EPA specifies otherwise. The commenter s stated that the EPA is proposing state plans be submitted by June 30, 2016, more than 1 year after the expected finali zation date (June 1, 2015) of the emission guidelines, acknowledging "these plans may require states to develop new regulatory or statutory authority" and the EPA "recognizes that certain options...involve more analytic effort to precisely demonstrate sour ces of emission reductions" The commenter s stated that the EPA is proposing to give states the option of submitting a complete plan, or if justified, an initial plan when an extension is applicable.] The commenter s stated that the EPA notes a "state must a dopt rules and requirements in advance of submitting." The commenter s expressed serious concerns with the ability to meet the proposed timeline, extension or not. The commenter s stated that the EPA's expectation that states can adopt rules and requirements in advance of submitting when states have little more than a year to perform such an act is impossible. The commenter s asserted that the EPA's timeframe for submittal of state plans is impractical, unrealistic, not based on a serious consideration of the extent of work involved such that the schedule is arbitrary and capricious. Commenter s noted that the EPA requires states to submit a plan within 13 months, essentially 1 year, of the anticipated promulgation of the final rule with a possibility of a year extension if certain109 stringent conditions are met. The commenter s stated that the Section 111(d) proposal set out by U.S. EPA demands the restructuring of the power generation, transmission and distribution system in the United States. The commenter s argue d that a state cannot fulfill these requirements in either 1 or 2 years, and unless a state has some type of CO2 control program already in existence, the timeframe proposed by the EPA is not possible to meet for most states. The
commenter s stated that alm ost all states will need to adopt legislative authority to either modify or create the structure to regulate electricity in

- state in the manner proposed by the EPA. The
commenter s stated that once the EPA rules are finalized (assuming June 2015), states wi ll have to develop their plans to a certain degree to understand what legislation will be necessary. Then it will take at least 6 months to draft all of the necessary legislative changes (December 2015), and then 2 years for the legislature to introduce th e bill, hold hearings, and pass legislation, that become effective (December 2017). After the legislation is completed, it will be another 18 months for the various regulatory agencies to draft, propose, and adopt rules (June 2019), followed by 1 month for submittal to EPA (July 2019). The following would be a best case schedule assuming a June 2015 adoption of the Section 111(d) rules.

The commenter s asserted that it is not possible for states to meet the deadline of 2020 for the initial reductions. The c ommenter s argued that States should not be penalized for the arbitrary dates in the Presidential order that were chosen without a complete understanding of the process needed to modify state legislation, propose and adopt rules, and then have the regulated entities have adequate time to initiate control measures. The commenter s stated that the EPA's proposed schedule is arbitrary and unrealistic for state compliance plans to meet the initial compliance deadline of 2020. The commenter s asserted that states c annot achieve the initial state goals within the proposed time schedule. The commenter s stated that the EPA must abandon the current schedule and propose a more realistic schedule that takes into account the scope of the task U.S. EPA is proposing.

Comment er s stated that if the proposal is finalized with EE and RE components, those components will take significant time for states to develop, as it encroaches into a territory little states have experience with

-- implementing EE and RE programs that meet EPA d efinitions of quantifiable, non

- duplicative, permanent, verifiable, and enforceable so that plans may be approvable. The commenter s stated that EPA is well known for providing ill

- timed guidance that has made it difficult for states to prepare approvable p lans. The commenter s noted that the timing of state plan submittals is already overly aggressive without additional obstacles to overcome. According to the commenter s , states often find it necessary to revise submittals after ill

- timed guidance has been is sued, in order to address approvability concerns. The commenter s stated that this acts to consume the state's energy and efforts during implementation, which the commenter s ha ve already expressed as also not having sufficient enough time.

Comment 28: Co mments stating that the EPA's proposed procedures, however, pose practicability concerns and overstep the Agency's legal authority, and asserting that that states cannot develop plans fundamentally reconfiguring the electric generation industry and power

s upply market in the short time EPA proposes to provide.110 Response 28: EPA disagrees with commenter s that it has overstepped the Agency’s legal authority. Section III of the final rule preamble summarizes the rule requirements and the legal basis. EPA has c onsidered comments on timing of state plan submittals and has adjusted requirements and compliance in the final rule. Section VIII.E of the final rule preamble addresses state plan submittals and timing. Section VIII.D of the final rule preamble addresses state plan components and approvability criteria, while section VIII.F addresses state plan performance demonstrations and compliance. Note that EPA has moved the start date from
2020 to 2022.

The following are summaries of the specific public comments und er this comment:

Commenter s noted that the CAA empowers EPA to establish "a procedure similar to that provided by section 110 . . . under which each State shall submit to the Administrator" a section 111(d) plan. The commenter s stated that EPA's proposed p rocedures, however, pose practicability concerns and overstep the Agency's legal authority.

Commenters noted that the Proposed Guidelines' discussion of plan submittal and approval processes begins with an acknowledgement of the complexities and state con cerns over the time it will take to develop a plan. The commenters stated that EPA therefore proposes to require plan submission by June 30, 2016, longer than the 9 months allowed for under the existing Subpart B rules, and that states may seek an addition al year if they are entering into single

- state plans and may seek an additional 2 years if they seek to join multi

- state plans. The commenters asserted that states cannot develop plans fundamentally reconfiguring the electric generation industry and
power supply market in the short time EPA proposes to provide. Commenter s stated that regulatory and legislative requirements in many states require greater than 1 year to formally adopt a rule from the time the rule has been crafted, and the EPA seems to recogn ize that problem by proposing a two

- step approval process. The commenter s stated that given the complexity of this rule, there will be numerous decisions, involvement of numerous governmental and non

- governmental stakeholders, and conferences and high leve l meetings with regulatory bodies in other states before the state can even begin the process of drafting a rule. The commenter s stated that the tight deadline for adopting regulation obstructs the state's authority to develop appropriate regulation of aff ected facilities because it short

- changes the process and will force many states to adopt measures which are as close as possible (within regulatory and legal constraints within the state) to the structure of the Proposed Guidelines (the four Building Bloc k approach). Commenter s stated that indeed, the State of Arkansas has confirmed that, if the rule is finalized in June 2015, it "would then have to develop a state plan, seek any required legislation from the General Assembly and only then . . . submit the state plan to EPA for approval." The commenter s stated that the state concluded that the timeframe EPA has provided is not sufficient for the state to take those actions, noting that "the General Assembly will not even meet in regular session again to con sider any necessary legislation until January of 2017, when the state is scheduled to meet some of the renewable goals." Id.

Commenters noted that EPA proposes to require states, in initial submissions, to justify any 1

- or 2

- year deadline extension, and the Agency specifically asks for comments on whether there are justifications for extensions that EPA should reject. The commenters, along with
commenter s , stated that EPA should take at face value states' good faith efforts to attempt to111 comply with EPA's exceedingly complicated and amorphous Proposed Guidelines and accept any state assertion that more time is needed to develop a plan unless there is clear evidence to the contrary.

Commenters stated that in addition, EPA proposes a number of required elem ents for initial plan submission, including a detailed roadmap to plan completion, before any deadline extension will be considered. The commenter s stated that placing additional burdens on states already struggling to meet extended deadlines is a waste of resources. Moreover, the commenters stated that EPA should acknowledge that states have primary authority over plan contents and should defer to state judgments about what should properly be included in an initial plan submittal, consistent with section 1 11(d)'s requirement that states need only submit plans that are "satisfactory."

Comment 29: Comments arguing that the proposed rule mechanism under which states would have two years to submit a final plan if they submit an interim plan within one year pr ovides little help because the interim plan must reflect final decisions on the critical plan elements, and that the interim plan approach is also unworkable because it is dependent on EPA taking a final approval/disapproval action.

Response 29: EPA has c onsidered these comments in finalizing the rule and adjusted several deadlines and provided flexibility for states and utilities. The timeframe for mandatory reductions in the final Clean Power Plan begins in 2022 instead of 2020, which gives states more
t ime to get programs in place and gives utilities more time to plan. This change responds to concerns that the proposed 2020 start date was too soon and would raise concerns about electric system reliability, ratepayer bills, and stranded assets. This chang e gives utilities time to make investments in clean energy infrastructure. State plan approaches are described in section VIII.C of the final rule preamble. State plan components and approvability criteria are discussed in section VIII.D of the final rule preamble . The state plan submittal and timing process as well as the approval process are all discussed in section s VIII. B and E of the final rule preamble

. Compliance performance demonstrations are addressed in VIII.F of the final rule preamble

.
The foll owing are summaries of the specific public comments under this comment:

Commenter s argued that the proposed rule mechanism under which states would have two years to submit a final plan if they submit an interim plan within one year provides little help be cause the interim plan must reflect final decisions on the critical plan elements. For instance, the
commenter s noted that the interim plan must include "the plan approach," presumably meaning such fundamental elements as whether the final plan will use a mass

- based or rate

- based approach, whether the final plan will use "portfolio" measures or will rely solely on draconian reductions in operations of coal

- fueled EGU's, and whether the plan will be enforceable against third parties or just the regulated fac ilities. Similarly, the commenter s noted that the interim plan must include "an initial projection of emission performance that will be achieved under the complete plan." In order to estimate emission reductions, the commenter s noted that the interim plan must include a full compilation of measures, perhaps subject to change, from which to estimate the reductions. According to the commenter s , the state must also include a112 "comprehensive roadmap" for completing the plan, including milestones such as anticipa ted dates for required legislative action.

The commenter s pointed out that North Dakota, however, is highly unlikely to know any of this information at the end of one year. For instance, the commenter s noted that North Dakota will not know whether it can adopt an RPS of any particular amount until the state legislature adopts authorizing legislation. Without such legislation, the commenter s said North Dakota cannot even submit an interim plan including an assumption that the legislature will adopt the RPS, because no state agency can know in advance what the legislature will do. However, as EPA has formulated the state goals, the commenter s stated that states may need to develop an RPS as a compliance strategy in order to replace the large amount of coal ge neration that must be eliminated for states to meet their goals. As a result, the commenter s noted, if the legislature has not acted on an RPS within one year, the state will be left unable to formulate even an interim plan that sets forth what the state's overall approach will be, what emission reductions the state will make, and what the milestones for final completion of the plan will be. The commenter s stated that the notion that a state agency can represent to a federal agency when the state legislatur e will take action on any particular provision is unfounded.

Commenter s argued that the interim plan approach is also unworkable because it is dependent on EPA taking a final approval/disapproval action. Having submitted an interim plan, the
commenter s sai d that North Dakota will need to know quickly whether EPA will approve the plan, in which case the state can develop a final plan, or whether EPA will disapprove the plan, in which case the state is liable to become subject to a federal plan. However, the commenter s noted that EPA's history of acting within statutory or regulatory deadlines on SIP approvals or indeed for any other CAA actions is inconsistent, to say the least. Based on the Department's past experience, the commenter s said the likelihood is that EPA itself will cause the interim plan approval process to be unworkable, as it will not be able to timely process the necessary approvals.

Comment 30: Comments stating that the EPA has failed to describe the mechanisms states can use to develop and implement a plan that will reliably demonstrate compliance, and that the proposal lacks the clarity necessary to guide the development and approval of state plans within the aggressive time frame outlined in the proposal.

Response 30: EPA is committed to continue extensive outreach to states and stakeholders and will work closely with states to provide timely assistance and support in form of additional tools, training, and guidance to facilitate the development of approvable state plans within the timefra me specified in the rule. EPA has considered these comments in finalizing the rule and adjusted several deadlines. The timeframe for mandatory reductions in the final Clean Power Plan begins in 2022 instead of 2020, which gives states more time to get prog rams in place and gives utilities more time to plan. This change responds to concerns that the proposed 2020 start date was too soon and would raise concerns about electric system reliability, ratepayer bills, and stranded assets. This change gives utiliti es time to make investments in clean energy infrastructure. The final rule preamble discusses the state plan process in section VIII. The different state plan approaches are described in section VIII.C of the final rule preamble . State113 plan components and approvability criteria are discussed in section VIII.D of the final rule preamble . The state plan submittal and timing process as well as the approval process are all discussed in section VIII.E of the final rule preamble . Compliance performance demonstra tions are addressed in VIII.F of the final rule preamble

. The following are summaries of the specific public comments under this comment:

Commenter s stated that EPA has failed to describe the mechanisms states can use to develop and implement a plan that w ill reliably demonstrate compliance. The commenter s stated that EPA's description of the criteria for developing and evaluating state plans focuses primarily on issues related to federal enforceability and bureaucratic administration (79 FR 34900

- 34911) an d spends no time evaluating whether the framework laid out in the CPP provides a reasonable foundation upon which states can build a plan that is achievable or will reliably demonstrate compliance. The commenter s stated that the overall structure, the mult iple "building blocks," and the independent factors that influence their achievability, make the task of designing and implementing a plan that can consistently deliver emission reductions year

- over

- year, as contemplated by EPA, a practical impossibility.

The commenter s stated that the process and aggressive schedule to design, approve, and implement state compliance plans is unnecessarily disjointed and unachievable. The commenter s stated that while EPA attempts to analogize the CPP implementation process to the process of developing state implementation plans for ambient air quality standards, the two programs are significantly different. The commenter s noted that the CPP is an unprecedented effort to create an expansive framework that goes far beyond emi ssion rates that can be achieved through control installations or changes in operational practices at designated facilities alone. The commenter s stated that it is unrealistic for EPA to expect the implementation timelines to be similar because the propose d CPP involves a unique scope and complexity of factors that requires extensive coordination among a broad number of state and federal regulatory agencies, the regulated community, and other interested parties. The commenter s stated that this requires a pr ocess that is methodical, collaborative, and well

- informed

-- a process that requires a more extended schedule than that envisioned by EPA, even with the proposed extension options for states to develop plans.

Commenter s stated that EPA's proposal lacks th e clarity necessary to guide the development and approval of state plans within the aggressive time frame outlined in the proposal. The
commenter s noted that the CAA does not set a specific time for the submission of state plans, nor does it establish a ri gid compliance deadline for the designated facilities that are to be governed by the plans. The commenter s stated that EPA should reassess its schedule, given the realities of the tasks it has set before the states.

The commenter s stated that even if EPA s ubstantially revised its proposal to be consistent with the authorities granted by Congress, state regulatory development processes, including the public hearings and other processes required by the CAA, will take more than 13 months to complete. The comme nter s noted that states are ordinarily provided with much more time to develop plans under section 110. The commenter s stated that RTOs and others have indicated that they see a need for an option to review state plans, consistent with their long

- term plan ning responsibilities for the bulk electric system. The commenter s stated that since the current planning processes at114 the RTOs can take up to a year to complete, allowing time for these essential reliability safety checks suggests that a minimum of 2 year s may be necessary to develop sound state plans.

The commenter s noted that multi

- state planning efforts will take even longer to complete. The
commenter s noted that the RGGI states devoted 5 years to the planning, legislative, and regulatory development ef forts necessary to establish their program. The commenter s stated that EPA has provided no real world examples to support its time schedule for the development of state or regional plans, and must re

- evaluate the time frames included in its proposal.

Com ment 31: Comment arguing that the time allocated to the States is inadequate for developing highly complex state plans and obtaining the approval of state legislatures, and that the time allow ed between finalization of State Plans and 2020 interim goals is far too short.

Response 31: EPA has considered these comments in finalizing the rule and adjusted several deadlines. The final rule preamble discusses the state plan process in section VIII. The different state plan approaches are described in section VI II.C of the final rule preamble . State plan components and approvability criteria are discussed in section VIII.D of the final rule preamble

. The state plan submittal and timing process as well as the approval process are all discussed in section VIII.E of the final rule preamble . Compliance performance demonstrations are addressed in VIII.F of the final rule preamble

. The following are summaries of the specific public comments under this comment:

Commenter s argued that the time allocated to the States is i nadequate for developing highly complex state plans and obtaining the approval of state legislatures, which would likely be required by most states given how far afield the rule goes in terms of traditional environmental regulation. The commenter s also arg ued that the time allowed between finalization of State Plans and 2020 interim goals is far too short, particularly in light of the draconian cuts required in many states between 2017 and 2020.

Comment 32: Comment arguing that states do not have sufficien t time to draft and implement compliance plans due to time required to work with state legislatures, engage neighboring states, and implement the public review process that EPA requires, and suggested that the EPA could provide states with more time to dev elop their state plans if it eliminates the interim standards so that measures do not have to be in place and enforceable by 2020.

Response 32: EPA is not finalizing interim goals in 2020, and has moved the start date from 2020 to 2022. EPA has listened t o state comments concerning timing issues and addressed them in the final rule preamble. In section VIII of the final rule preamble, EPA discusses state plans. This includes state plan approaches (VIII.C) and additional considerations for incorporating CO2 measures into state plans (VIII. I ); state plan components and approvability criteria (VIII.D.); state plan submittal and timing as well as the approval process (VIII.E); and state plan performance demonstrations and compliance (VIII.F). Section VIII.E of the final rule preamble also covers initial state plan submittal. Additionally, there is a section on resources for states to115 consider in developing state plans (VIII. H ). EPA is committed to continue extensive outreach to states and stakeholders and will work closely with states to provide timely assistance and support in form of additional tools, training and guidance to facilitate the development of approvable state plans within the timeframe specified in the rule.

The following are summaries of the spec ific public comments under this comment:

Commenter s argued that states do not have sufficient time to draft and implement compliance plans. The commenter s noted that the proposal requires states to submit plans to EPA by June 30, 2016, with the possibility of a one

- year extension, to demonstrate how they will comply with the proposed interim and final CO2 emission rate standards. 79 FR 34,838. If the final rule is promulgated by June 1, 2015, as EPA has indicated, see I d., the commenter s said this provides states with only 13 months to develop their plans. According to the commenter s , the 13 months between anticipated promulgation of the final rule and the deadline for submittal of a state plan is simply not enough time for a state to develop a plan for such a comprehensive and complex program that is expected to cover not only jurisdictional sources but all aspects of the electricity sector. The commenter s pointed out that EPA is requiring states to develop plans that, at the least, will be complicated, and, in many instances, will be controversial within the state and may require legislation to authorize and fund the appropriate regulatory agencies to undertake the needed analyses and develop the requisite regulations.

The commenter s noted that state legisl atures simply will not be able to approve state plans that have such far reaching impacts on their electricity sectors and economies within 13 months, particularly if additional authority must be granted to the state environmental agency or public service commission to implement the elements of the plan or where there is resistance to action. The commenter s said this is compounded by the fact that many state legislatures only meet for a few months during the year and still others do not even meet every year . For example, the
commenter s noted that the state legislature of Montana only meets biennially.

The commenter s also stated that the state plan deadline does not provide states with sufficient time to engage with neighboring states and resolve issues that may affect the development of their state plans. For example, the commenter s noted that states will need to coordinate on which state receives credit for renewable generation when RE credits have been sold out

- of

- state. According to the commenter s , states may also wish to develop regional mass

- based reduction programs and will need time to engage in the needed discussions.

The commenter s further noted that states will need to complete a public hearing as EPA requires, and satisfy any state requirements fo r public comments, hearings and other administrative processes. According to the commenter s , it likely will take a state several months to facilitate public comment on a draft plan, review the comments, and revise its state plan, all before the plan can be submitted to EPA, where there will be another round of public review and comment.

Commenter s argued that EPA's proposal to allow states to seek a one

- year extension of the deadline to submit the plan will not provide sufficient relief to states. The comme nter s noted that, under the proposal, states granted a one

- year extension would still be required to make an "initial submittal" by the June 30, 2016 deadline. 79 FR 34,915

- 16. The commenter s stated that the option of making an initial submittal would not alleviate the burden on states to develop a116 plan quickly because EPA is proposing that the initial submittal be almost as substantial as a final plan. The commenter s noted that the "initial submittal" "must address all components of a complete plan, includ ing identifying which components are not complete." Id. at 34,915. The
commenter s also noted that the plan should be a "comprehensive roadmap outlining the path to completion, including milestones and dates." Id. at 34,915

- 16. The commenter s pointed out th at states must hold a public hearing on an initial submittal, the same as would be required for a final plan. Id. at 34,900, 34,915. The commenter s further noted that an initial submittal must be approved by EPA, although the commenter s said it is unclear from the proposal what standards EPA would use to evaluate initial submittals. Id. at 34,916. Based on the requirements for an initial submittal, the commenter s indicated that it does not appear to be a viable option to allow states more time to develop th e elements of their final state plan. Further, even if EPA were to provide simplified requirements for initial submittals to make it a viable option, the commenter s noted that states taking advantage of this option would then have even less time between
ap proval of a final plan by EPA and the 2020 interim standard deadline to implement the requirements of the final plan. As a result, the commenter s concluded that the ability to submit an initial plan would do nothing to alleviate the disruption expected fro m the interim standard requirements. The commenter s said EPA could provide states with more time to develop their state plans if it eliminates the interim standards so that measures do not have to be in place and enforceable by 2020.

Comment 33: Comment a ddressing several concerns with the CPP, including that the rule calls for an unprecedented expansion of power under the CAA to fundamentally reconfigure the electricity sector, and CPP's timeline for developing state plans is unreasonable given the many i mplementation obstacles states must overcome. The comment also suggests that the EPA should provide states additional time for implementation of the CPP by pushing back the deadline for submission of state plans, and that EPA should eliminate the interim g oals.

Response 33 : In response to this and similar comments, EPA has addressed the commenters concerns in the final rule preamble. The timeframe for mandatory reductions in the final Clean Power Plan begins in 2022 instead of 2020, which gives states more time to get programs in place and gives utilities more time to plan. This change responds to concerns that the proposed 2020 start date was too soon. This change gives utilities time to make investments in clean energy infrastructure. EPA is not finalizi ng interim goals for 2020. The performance rates are phased in over the 2022

- 2029 interim period, which leads to a glide path of reductions that “steps down” over time. The glide path is separated into three steps, 2022

- 2024, 2025

- 2027, and 2028

- 2029, and also achievable “on average” over the 8

- year interim period. States can also decide to customize their glide path. In addition to enhancing reliability, these changes provide states and utilities with the latitude to consider a broader range of options to achieve the required reductions. Regarding state plan submittals and timing, see section VIII.E of the CPP final rule preamble. Section VIII.E also discusses extensions, modifications, and revisions to state plans. Regarding interactions with New Source R eview, see section X.A of the final rule preamble. Regarding state plan approaches and additional considerations for both single

- and multi

- state plans, see section VIII.C of the final rule preamble. For a discussion of components of a state plan, see sect ion VIII.D of the final rule preamble . EPA is not finalizing the interim goals in 2020. EPA has moved the start date from 2020 to 2022.117 The following are summaries of the specific public comments under this comment:

Commenter s stated that EPA should amend the proposed rule to address the significant obstacles to implementation. The commenter s noted that the CPP calls for an unprecedented expansion of power under the CAA to fundamentally reconfigure the electricity sector, but gives short shrift to the imple mentation challenges such a radical shift in the regulatory paradigm entails. The
commenter s stated that the CPP's 13

- month timeline for developing a state plan does not reflect the magnitude of the varied technical aspects, procedural hurdles and politica l challenges states will face in developing state plans. The commenter s argued that EPA must provide states with additional time and flexibility to enact state laws, coordinate on regional plans and resolve interstate emission credit accounting issues, and develop a foundation for a mass

- based cap system. The commenter s charged that EPA has also failed to factor in the insufficient infrastructure, New Source Review issues, and reliability concerns that impede implementation of state plans. The commenter s st ated that EPA should resolve as many implementation barriers as possible by providing clear guidance and provide states with additional time for implementation.

The commenter s stated that the CPP's timeline for developing state plans is unreasonable given the many implementation obstacles states must overcome. To begin, the commenter s argued that state plans will not be created in a vacuum; state plans will be developed within existing state legislative and regulatory structures. The commenter s stated that EPA must allow states flexibility to work within their legislative cycles and rulemaking processes, which can be lengthy. The commenter s stated that considering the significant impacts of the CPP and the CPP's requirements for public participation in the development of state plans, EPA must provide states with the time to engaged interested stakeholders. The commenter s stated that EPA must also factor in the extraordinary coordination the CPP's proposed re

- dispatch to NGCC and RE units, increased end

- use E E and retirement of units would require between state environmental regulators and state and regional electricity regulators to ensure electric reliability and credible emissions reductions. Finally, the commenter s stated that EPA must provide states with time to resolve interstate emissions credit accounting issues and negotiate multistate plans.

The commenter s stated that EPA's proposal to allow states to seek a 1

- year extension of the deadline to submit the plan will not provide sufficient relief to stat es. The commenter s explained that the CPP's proposal of granting states a 1

- year extension would still require states to make an "initial submittal" almost as substantial as a final plan by the June 30, 2016 deadline. Further, the
commenter s stated that ev en if EPA were to provide simplified requirements for initial submittals to make it a viable option, states taking advantage of this option would then have even less time between approval of a final plan by EPA and the 2020 interim goal deadline to impleme nt the requirements of the final plan. As a result, the commenter s stated that the ability to submit an initial plan would do nothing to alleviate the disruption expected from the interim goal requirements. The commenter s noted that States submitting a mul ti

- state plan by June 2018, to be approved by June 2019, would have only 6 months before the onset of the stringent interim goals

- a significant disincentive to collaborate on multi

- state plans unless EPA eliminates the interim goals.

Commenter s stated t hat EPA should provide states additional time for implementation of the CPP by pushing back the deadline for submission of state plans. The commenter s also stated118 EPA should also eliminate the interim goals that drive the sudden implementation of state pla n measures in 2020 as well as the early onset of EE in 2017. In support of their request for more time, the commenter s discussed implementation barriers states must resolve (which are summarized elsewhere in this document).

Comment 34: Comment requesting more time to allow for coordination between state authorities, environmental agencies, and electricity regulators to address issues such as integrated resource planning programs that will have to be revised to account for re

- dispatch to NGCCs and the impos ition of requirements to accommodate new RE generation.

Response 34: Section s VIII .B and VIII.E of the CPP final rule preamble acknowledge the timing and planning concerns of many state commenters and the necessary coordination among different state and r egional bodies. See the Executive Summary in section I .A of the CPP final rule preamble. Also see the Overview in section VIII.A of the final rule preamble

. Section II .K of the CPP final rule preamble has a discussion on stakeholder outreach and consultati ons. Note that EPA has not finalized EE and demand side EE as part of the best system of emission reduction and associated building blocks. See section V of the CPP final rule preamble for more details on BSER. The ability of EGUs to implement BSER is also discussed in section V. Section V also addresses measures available because of the integrated electricity system. Section V go es into detail on RE, both as it comprises BSER and the building blocks and how it works in state plans. A TSD on resource adequ acy and reliability is available in the docket for this final CPP rule.

The following are summaries of the specific public comments under this comment:

As part of their request for more time, commenter s stated that coordination between state authorities, e nvironmental agencies, and electricity regulators is an implementation barrier that states must resolve. The commenter s noted that the complexity of the CPP will require unprecedented coordination between a state ’ s environmental regulators, electricity reg ulators, electric utilities and other entities that have a direct interest in or are affected by the plan. The
commenter s stated that this coordination is complicated by the fact that many states have ongoing integrated resource planning requirements for t he electricity sector that are disassociated from the planning of environmental regulators and the CPP ’ s deadlines. The commenter s noted that such states will have to incorporate the integrated planning process into the development of the state plan becaus e the state may need to rely upon the integrated planning process to make the measures of its state plan enforceable, particularly RE and EE measures.

The commenter s stated, for example, that integrated resource planning programs will have to be revised t o account for re

- dispatch to NGCCs and the imposition of requirements to accommodate new RE generation. According to the commenter s , many states with existing RPS will need to revise their programs to stimulate more RE to displace the fossil generation lev els presumed by the CPP. The commenter s noted that some state programs currently offer utilities alternatives to meeting their renewable energy targets, so these programs may be an unreliable indicator of the amount of fossil

- generation within the state th at can be avoided.119 Comment 35: Comment recommending that the EPA add more time to the state plan deadlines for states to engage with the appropriate state agencies.

Response 35: In response to this and similar comments regarding timing and planning conce rns such as the commenters mention, the EPA has extended the time allowed for states to finalize their plans and meet the first interim goal. The final rule includes this additional time and flexibility to manage complexities such as reliability, permittin g, planning cycles, infrastructure addition and modifications, legislative changes, etc. In addition, the EPA is committed to continue extensive outreach to states and stakeholders and work closely with them to provide timely assistance and support in form of additional tools, training and guidance to facilitate the development of approvable state plans within the timeframe specified in the rule. As guidance documents, tools, templates and other resources become available, the EPA, in consultation with the U.S. Department of Energy and other federal agencies, will continue to make these resources available via a dedicated website. Concurrent with this final rule EPA is also proposing model rules for state plans which, when finalized, states may wish to use t o facilitate the development of their state rule. See section VIII.E.2 for a discussion on state plan submittal and timing in the preamble for the CPP final rule.

The following are summaries of the specific public comments under this comment:

Commenter s re commended that EPA add more time to the state plan deadlines for states to engage with the appropriate state agencies to ensure the state plan concepts and other strategies for compliance would be deemed approvable before timely and costly actions are enac ted or adopted as enforceable measures.

Comment 36: Comment supporting the State of Iowa ’ s comments recommending allowing two years, until June 30, 2017 for the development of a state plan.

Response 36: EPA has listened to comments on the rule’s proposed timeline. EPA is not finalizing interim goals in 2020. The timeframe for mandatory reductions in the final Clean Power Plan begins in 2022 instead of 2020, which gives states more time to get programs in place and gives utilities more time to plan. For a discussion on the final rule state plan submittals, approval process, and timing, see section s VIII. B and VIII. E of the CPP final rule preamble.

The following are summaries of the specific public comments under this comment:

Commenter s stated that the prop osed rule is unprecedented in its scope and complexity and as such will require significant time for implementation. The commenter s argued that one year, with a possible one

- year extension, is insufficient for the development of a state plan. The
commenter s supported the State of Iowa's comments recommending allowing two years, until June 30, 2017 for the development of a state plan. With the extension of the plan development period by one year, the commenter s said the compliance period should be delayed by one year from 2020

- 2029 to 2021

- 2030 for the interim goal.120 Comment 37: Comment recommending that the due date for all states submitting individual or multi

- state plans be the multi

- state plan submittal date of June 30, 2018 given the massive resources th at will be required.

Response 37: EPA has aligned the single state and multi

- state plan submittal deadlines as recommended by the commenter s . See section s VIII.B and VIII.E of the preamble to the CPP final rule for a discussion of state plan submittals, the approval process, and timing.

The following are summaries of the specific public comments under this comment:

Commenter s stated that the proposed timeframe for the submittal of state plans is far too optimistic considering that this proposed rule is th e most complex and comprehensive program ever proposed by EPA. The commenter s recommended that the due date for all states submitting individual or multi

- state plans be the multi

- state plan submittal date of June 30, 2018 given the massive resources that w ill be required.

Comment 38: Comment stating that preparation of the Arkansas State Plan will take longer than the proposed deadlines for plan submittal, recommending that the Final Rule provide more time for development of State Plans, and suggesting tha t if the EPA does not remove or extend the time frame for the interim goal, then EPA needs to allow for an extensive assessment of the reliability impacts.

Response 38: EPA has not changed the final goal compliance deadline of 2030. EPA did not finalize t he 2020 interim goal deadline. The timeframe for mandatory reductions in the final Clean Power Plan begins in 2022 instead of 2020, which gives states more time to get programs in place and gives utilities more time to plan. For a detailed discussion on st ate plans, state plan components, and timing of submittals, see section VIII of the preamble to the final rule. Section VIII.C discusses state plan approaches; section VIII.G discusses additional considerations. Section VIII.D of the final rule preamble a ddresses state plan components and approvability criteria. Section VIII.E of the final rule preamble discusses state plan submittals, the approval process, and timing for both single

- and multi

- state plans and for the different state plan approaches. Sect ion VIII.F of the final rule preamble describes state plan performance demonstrations and compliance. Section VIII. H of the final rule preamble provides resources for states to consider in developing plans. Additionally, see section X of the final rule pre amble for interactions with other EPA programs and rules, including New Source Review. A TSD on resource adequacy and reliability may be found in the docket to the CPP final rule.

The following are summaries of the specific public comments under this comme nt:

Commenter s stated that preparation of the Arkansas State Plan will take longer than the proposed deadlines for plan submittal (i.e., June 16, 2016 with the option to extend 1

- 2 years). The
commenter s stated that the usual timeline to develop a SIP aver ages 18 months including:

1. research and development of regulation language;121 2. internal review of draft language;

3. rulemaking initiation with the Arkansas Pollution Control and Ecology Commission (hereinafter APC&EC);

4. public notice and public comment period;

5. r esponse to comment (time can vary according to comments received);

6. submission of rulemaking packet to Legislative Committees for approval;

7. adoption of rulemaking with APC&EC;

8. development of draft Section 111(d) Clean Carbon Plan;

9. public notice and public c omment period;

10. response to comment (time can vary according to comments received); and

11. Submittal of the Plan to EPA.

The commenter s noted that plans including controversial issues or multistate efforts can reasonably be expected to take longer. Considerin g all these steps necessary to develop the state plan, and the time for affected sources to meet their obligations under the plan, the commenter s recommended that the Final Rule provide more time for development of State Plans.

Similarly, commenter s stated that the time permitted to develop and finalize an appropriate state plan is far too short. The commenter s stated that the time frame contemplated in the proposed rule, including all options for modest extensions of the deadlines, simply does not provide the state with any realistic opportunity to develop a state plan, explore regional options and then obtain EPA approval for the plan as proposed to begin implementation. The commenter s noted that if the rule becomes final in June 2015 as is currently propo sed, states will then have only 1 year to develop a state plan. The commenter s stated that this is patently inadequate. The
commenter s noted that the development of a state plan will likely require the state's General Assembly to draft and pass legislation enabling and authorizing certain aspects of the plan. However, the commenter s noted that the state's General Assembly will not have the opportunity to even consider any necessary complementary legislation until 2017, which is the next regular session afte r the expected date of the final rule. The commenter s noted however, that the legislation will need to be in place before the state can submit its plan to EPA for approval, meaning that the state plan cannot be finalized before mid

- 2017 at the earliest. Th e commenter s stated that under the current proposed rule, by the time the legislation can be passed, the state will have already missed some of the proposed deadlines for its renewable goals.

The commenter s stated that another reason to avoid premature fi nalization of a state plan is to allow all the pending EPA air rules to be finalized first, so that appropriate economic decisions on the future of existing power plants can be made. The commenter s stated that the proposed changes to different air standard s may affect the available run times of EGUs, including both coal and natural gas fired units. The commenter s noted that economic decisions on the future of122 power plants depend heavily on their availability to generate electricity. Accordingly, the
comment er s stated that some EGUs may be shut down, significantly idled, or otherwise unable to generate an optimal amount of energy in the near future as a result of air pollution rules. The
commenter s stated that power plants are by their nature long

- term invest ments

-- the less a plant will be available to operate long

- term, the less sense it makes to make large investments, including costly pollution controls.

For example, the commenter s noted that if an aging coal plant cannot be operated economically
once retro fitted, the end result will be an economic burden that will fall in the first instance on those investing in state energy infrastructure and may ultimately be borne by the rate payers. The
commenter s stated that knowing the impact of all the rules and thei r associated compliance costs will greatly aid in efficient resource planning. The commenter s stated that in order to develop a state plan that properly accounts for EGUs that will continue operation under all pending EPA air rules, there must be sufficien t time to allow evaluation of all the rules to make sound economic decisions before the state plan is finalized and submitted to EPA for approval.

Commenter s noted that states may wish to consider and implement a regional approach to compliance as permitt ed under the proposed rule. However, the commenter s stated that the 1

- year time frame is simply unrealistic to allow sufficient time to consult with other states to determine whether a regional approach is feasible. The commenter s stated that any regional approach will be complicated and will require consideration of many different issues not present in an individual state plan. The commenter s stated that the rule as proposed only allows for 2 years for a regional approach which is not realistic and the tim e frame should be extended.

Commenter s requested that the interim goal be removed, but also suggested that if EPA does not remove or extend the time frame for the interim goal, then EPA needs to allow for an extensive assessment of the reliability impacts , so that some allowance can be made if compliance with the rule would negatively affect electric reliability. The commenter s stated that there also needs to be a possibility of some additional flexibility to prevent negative reliability impacts due to sta tes trying to meet the goals set for them by EPA.

For these reasons, the commenter s requested: (1) at least 2 additional years to submit a state implementation plan; (2) at least 2 additional years to develop a regional plan; and (3) removal of the interim goal timeframe or at least an extension to 2025 with the final goal to be met no earlier than 2035; or for a reliability assessment with the possibility of additional flexibility to prevent negative reliability impacts.

Comment 39: Comment stating the EP A should set the primary submission deadline for state plans at 2 years from the announcement of the final rule rather than the current proposal of 1
year.
Response 39: The EPA does not agree with the commenter s ’ recommendation to allow two years for the “primary” submission deadline, however, the EPA clarified in the final rule that many of what the commenters viewed as major obstacles in making a timely initial plan submittal (e.g. passed legislation) is not required in order to be granted an extension u ntil 2018.123 In response to this and similar comments regarding timing and planning concerns such as the commenters mention, the EPA has extended the time allowed for states to finalize their plans and meet the first interim goal. The final rule includes thi s additional time and flexibility to manage complexities such as reliability, permitting, planning cycles, infrastructure addition and modifications, legislative changes, etc. In addition, the EPA is committed to continue extensive outreach to states and s takeholders and work closely with them to provide timely assistance and support in form of additional tools, training and guidance to facilitate the development of approvable state plans within the timeframe specified in the rule. As guidance documents, to ols, templates and other resources become available, the EPA, in consultation with the U.S. Department of Energy and other federal agencies, will continue to make these resources available via a dedicated website. Concurrent with this final rule EPA is als o proposing model rules for state plans which, when finalized, states may wish to use to facilitate the development of their state rule. See section VIII.E.2 for a discussion on state plan submittal and timing in the preamble for the CPP final rule.

The fo llowing are summaries of the specific public comments under this comment:

Commenter s stated that given the complexity of the EPA proposed 111(d) rule for regulating carbon emissions at existing power plants, EPA should provide additional time between relea se of the final rule and the initial submission deadline for state plans. The commenter s stated that 1 year will not be enough time for states to digest the final rule, once announced, and effectively develop a state plan with the myriad of stakeholders wi thin each state, especially considering states may need to work with state legislatures and regulatory organizations within the state to develop enforceable mechanisms for implementing a state's plan. The commenter s recognized that EPA has provided states with the opportunity to request extensions to the state plan deadline of 1 and 2 years depending upon whether the state is developing a state

- specific or multi

- state plan, but those extensions represent the bare minimum amount of time that states will need to finalize state plans. The commenter s stated that the next legislative session for some states will occur January through April 2015, which is well before a final rule will be available. The
commenter s stated that following the anticipated June 2015 pub lication of a final rule, the legislature will not meet again for a regular session until January 2017, which is after the initial state plan deadline. The commenter s noted that states would not have sufficient time to develop a state implementation plan s hould any legislative action be necessary. The commenter s noted that if states run into complications in developing implementation plans, additional time beyond the extension period will be necessary. The commenter s stated that EPA should set the primary

s ubmission deadline for state plans at 2 years from the announcement of the final rule rather than the current proposal of 1 year.

Comment 40: Comment recommending harmonization of the 111(d) plan submittal deadlines, whether the selected pathway is either state

- only or a multi

- state or regional approach.

Response 40: EPA has aligned the single state and multi

- state plan submittal deadlines. See section VIII.E of the CPP final rule preamble for a discussion of state plan submittals and timing.

The followin g are summaries of the specific public comments under this comment:124 Commenter s recommended that harmonization of the 111(d) plan submittal deadlines, whether the selected pathway is either state

- only or a multi

- state or regional approach. The commenter s

no ted that EPA's proposal allows a one

- year extension for state

- only plans and a two

- year extension for regional plans. The commenter s noted that in all cases, the plan submission deadline should be no sooner than two years from EPA's issuance of the final g uidelines. The
commenter s stated that allowing for a single two

- year deadline not only provides the minimal time necessary for state agencies to prepare plans, but also encourages better coordination and consideration of a possible multi

- state or regional approach.

Comment 41: Comment arguing that the EPA's timeline for implementing the CPP is not feasible and should be amended, and recommending that the timeframe for submitting state plans should be extended until July 2017 to allow for the necessary stat e framework to be put in place to allow for implementation of state plans.

Response 41: EPA is not finalizing energy efficiency as part of BSER. Energy efficiency may be employed as a non

- BSER state compliance measure as the commenter s suggests. Section V III of the CPP final rule preamble addresses state plans. Specifically, section VIII.E addresses state plan submittals

– both single and multi

- state plans

– as well as timing.

The following are summaries of the specific public comments under this comment:

Commenter s argued that EPA's timeline for implementing the CPP is not feasible and should be amended. The commenter s recommended that the timeframe for submitting state plans should be extended until July 2017 to allow for the necessary state framework to be put in place to allow for implementation of state plans. According to the commenter s , the CPP suggests that municipals and cooperatives would need to submit to public service commission authority or whatever state regulatory body oversees the state's en ergy efficiency program. The commenter s pointed out that the CPP acknowledges that achieving this type of regulatory oversight may require a state to enact special legislation providing a public agency with this authority. The
commenter s contended that EPA 's suggested approach is not feasible for Utah relative to the proposed timeframe for Utah to submit its state plan and would face daunting legal problems.

The commenter s pointed out that their organization, as a joint action agency, and their members, [1 ] as municipal agencies, are not subject to the jurisdiction of the Utah Public Service Commission (PSC) for implementation of energy efficiency programs. The commenter s also noted that their organization does not have residential customer who would be the users of energy efficiency programs; consequently, their member utilities implement energy efficiency programs for their customers within their municipal service areas. For these reasons, the
commenter s stated it is not feasible for them to submit to PSC jurisdiction, and the commenter s recommended the EPA suggest an alternative pathway to allow for them to utilize Block 4 as a compliance measure.125 Comment 42: Comment arguing that a one

- year period of time with possible one

- year extension is not a sufficie nt amount of time for development of a comprehensive state plan that includes the twelve components required in section 60.5740.

Response 42: In order to address the concern that one year was not enough time for states to submit an initial plan the EPA, th e EPA clarified in the final rule that many of what the commenters viewed as major obstacles in making a timely initial plan submittal (e.g. passed legislation) is not required in order to be granted an extension until 2018. In response to this and similar comments regarding timing and planning concerns such as the commenters mention, the EPA has extended the time allowed for states to finalize their plans and meet the first interim goal. The final rule includes this additional time and flexibility to manag e complexities such as reliability, permitting, planning cycles, infrastructure addition and modifications, legislative changes, etc. In addition, the EPA is committed to continue extensive outreach to states and stakeholders and work closely with them to provide timely assistance and support in form of additional tools, training and guidance to facilitate the development of approvable state plans within the timeframe specified in the rule. As guidance documents, tools, templates and other resources become available, the EPA, in consultation with the U.S. Department of Energy and other federal agencies, will continue to make these resources available via a dedicated website. Concurrent with this final rule EPA is also proposing model rules for state plans wh ich, when finalized, states may wish to use to facilitate the development of their state rule. See section VIII.E.2 for a discussion on state plan submittal and timing in the preamble for the CPP final rule.

The following are summaries of the specific publ ic comments under this comment:

Commenter s argued that a one

- year period of time with possible one

- year extension is not a sufficient amount of time for development of a comprehensive state plan that includes the twelve components required in section 60.57 40. The commenter s recommended that EPA should allow two years, until June 30, 2017, for development of state plans, plus a possible one

- year extension. The commenter s recommended that EPA should allow three years, until June 30, 2018, for development of m ulti

- state plans, plus a possible one

- year extension.

Comment 43: Commenter s recommending that the EPA consider allowing three years for state plan development and two years for state plan approval, similar to the deadlines typically allowed under section 110 for other state implementation plans.

Response 43 : The EPA agrees with the commenter s ’ recommendation to allow up to three years (with the two

- year extension) for submittal of a final plan, however, we do not agree with the commenters statement that t wo years be allowed for the EPA to approve a state plan. Deadlines for EPA to act under CAA section 110 allow for EPA to act within 12 months of completeness, which is consistent with this rulemaking action

. In response to this and similar comments regardi ng timing and planning concerns such as the commenters mention, the EPA has extended the time allowed for states to finalize their plans and meet the first interim goal. The final rule includes this additional time and flexibility to manage complexities su ch as reliability, permitting, planning cycles, infrastructure addition and modifications, legislative changes, etc. In126 addition, the EPA is committed to continue extensive outreach to states and stakeholders and work closely with them to provide timely as sistance and support in form of additional tools, training and guidance to facilitate the development of approvable state plans within the timeframe specified in the rule. As guidance documents, tools, templates and other resources become available, the EP A, in consultation with the U.S. Department of Energy and other federal agencies, will continue to make these resources available via a dedicated website. Concurrent with this final rule EPA is also proposing model rules for state plans which, when finaliz ed, states may wish to use to facilitate the development of their state rule. See section VIII.E.2 for a discussion on state plan submittal and timing in the preamble for the CPP final rule.

The following are summaries of the specific public comments under this comment:

Commenter s w ere concerned that EPA has not allowed enough time for states to develop and submit their section 111(d) state plans. The commenter s asked EPA to reconsider the deadline in its proposal to ensure sufficient time is available for states to develop their section 111(d) plans. In particular, the commenter s recommended that EPA consider allowing three years for state plan development and two years for state plan approval, similar to the deadlines typically allowed under section 110 fo r other state implementation plans, and asked EPA to adjust the compliance deadlines accordingly.

Comment 44: Comments stating that it will be overly burdensome to meet the timeframe by which states have to submit their respective compliance plans, recomm ending that the initial single state plan submittal be due at least two years after the final rule, and the complete single state plan be due, at the very least, three years after the final rule, and recommending that the multi

- state plan timeline be exte nded by an additional year, allowing for a complete plan submittal four years after the final rule is issued.

Response 44: The EPA does not agree with the commenter s ’ recommendation to allow two years for initial plan submission, however, the EPA clarifi ed in the final rule that many of what the commenters viewed as major obstacles in making a timely initial plan submittal (e.g. passed legislation) is not required in order to be granted an extension until 2018. The EPA is providing for up to three years f or final plan submittal for both single and multi

- state plans. In response to this and similar comments regarding timing and planning concerns such as the commenters mention, the EPA has extended the time allowed for states to finalize their plans and meet the first interim goal. The final rule includes this additional time and flexibility to manage complexities such as reliability, permitting, planning cycles, infrastructure addition and modifications, legislative changes, etc. In addition, the EPA is comm itted to continue extensive outreach to states and stakeholders and work closely with them to provide timely assistance and support in form of additional tools, training and guidance to facilitate the development of approvable state plans within the timefr ame specified in the rule. As guidance documents, tools, templates and other resources become available, the EPA, in consultation with the U.S. Department of Energy and other federal agencies, will continue to make these resources available via a dedicated website. Concurrent with this final rule EPA is also proposing model rules for state plans which, when finalized, states may wish to use to facilitate the development127 of their state rule. See section VIII.E.2 for a discussion on state plan submittal and t iming in the preamble for the CPP final rule.

The following are summaries of the specific public comments under this comment:

Although the EPA incorporated flexibility in the proposed rule, commenter s believe d it will be overly burdensome to meet the timef rame by which states have to submit their respective compliance plans. The commenter s recommended that the initial single state plan submittal be due at least two years after the final rule, and the complete single state plan be due, at the very least, thr ee years after the final rule. Similarly, the commenter s recommended that the multi

- state plan timeline be extended by an additional year, allowing for a complete plan submittal four years after the final rule is issued.

The commenter s noted that the prop osed rule is broad in scope and raises a large number of practical issues related to planning and implementation. According to the commenter s , the complexities of developing first

- time environmental regulations that expand into the domain of energy generat ion, demand

- side management (DSM), transmission and distribution, and RTO integrated dispatching present potential roadblocks for states such as MO, KS and AR. The
commenter s pointed out that the existing state and regional programs that EPA used as exampl es in its analysis and justification for the proposed rule were initiated under directives and support from state specific governors, legislatures, and executive agencies. The commenter s noted that the issues were developed, debated, and approved under sta te sovereignty. The commenter s said they were not programs driven by federal regulation with disregard to the economics or abilities of each state.

Commenter s stated that obtaining the statutory and regulatory changes that will be necessary to develop, imp lement and enforce a section 111(d) plan will be challenging. According to the
commenter s , a response to this particular section 111(d) plan will be unique in that the proposed emission guidelines encourage reaching beyond the source fence line for complia nce with the standard. The commenter s pointed out that such action requires the support of multiple levels of state and local government and the cooperation and collaboration of state departments responsible for enforcement and implementation, public servi ce commissions, IOUs, municipal utilities, electric cooperatives, and RE developers and merchants. The commenter s indicated that it will be a complicated and time

- consuming task.

According to the commenter s , the proposed rule is a set of many different pro posed rule options, and includes both differing state specific emission rates for GHGs and broad outlines for the development, submission and implementation of state plans. The commenter s noted that their company maintains generation facilities in three st ates and has actively participated in stakeholder processes to scrutinize the underlying data in each of the state

- specific goals. The
commenter s also noted that state agencies are already reviewing the proposed rule; applying alternative approaches, scena rios and options; and requesting that EPA consider extending the timeline for state plan submittals.

If the rule is enacted, the commenter s indicated they would likely support an equitable multi

state approach that includes MO, KS and AR, at a minimum, as their company has generators in each of these states. According to the commenter s , each state must formally adopt the state plan128 through certain procedures which typically take at least 18 months. The commenter s noted that an existing multi

- state example such as the Regional Greenhouse Gas Initiative (RGGI) took years to develop a workable solution. In addition, if deemed appropriate, the commenter s indicated it will take additional time to develop a robust cap and trade framework.

Comment 45: Comment adv ising, at a minimum, an extension to the interim period to allow states and affected entities the time needed to implement the complex compliance plans that will be required to comply with the rule

Response 45: The timeframe for mandatory reductions in th e final Clean Power Plan begins in 2022 instead of 2020, which gives states more time to get programs in place and gives utilities more time to plan. For information on single state and multi

- state plan submittals, the approval process, and timing of submi ttals, see section s VIII. B and VIII. E of the CPP final rule preamble.

The following are summaries of the specific public comments under this com ment:

Commenter s stated that the overall timeline provided for the states to develop, submit, and comply with th e SIP is too restrictive. The commenter s noted that section 111(d ) ( 1) says that a procedure similar to that of section 110 should be developed for SIP submittals, and section 110(a ) ( 1) provides for up to 3 years for the states to develop and submit a SIP . The commenter s stated that given the complexity of the SIP necessary to implement these guidelines, the states should be given the full 3 years to submit the SIP.

The commenter s argued that states should also be given more time to implement the SIP. The
commenter s noted that the proposal calls for compliance assessments to begin in 2020, which would require affected entities to need to begin compliance measures even before the SIP would become final. The commenter s argued that compliance activities shoul d never be required to occur until after a SIP is final. The commenter s advised, at a minimum, an extension to the interim period to allow states and affected entities the time needed to implement the complex compliance plans that will be required to compl y with the rule.

Comment 46: Comment stating that the EPA should provide states and tribes with three years to develop plans and begin compliance activities two years after all state and tribal plans are approved by EPA.

Response 46: The timeframe for m andatory reductions in the final Clean Power Plan begins in 2022 instead of 2020, which gives states more time to get programs in place and gives utilities more time to plan. For information on single state and multi

- state plan submittals, the approval
pro cess, and timing of submittals, see section s VIII. B and VIII. E of the CPP final rule preamble. EPA is setting performance standards for tribes with affected EGUs (Navajo, Fort Mojave, and Ute ( Uintah ))

– see section VII of the CPP final rule preamble. Howe ver, tribes are n o t subject to the deadlines applicable to state action under the final rule emission guidelines but are addressed further in the proposed Federal Plan which is coincident with this final rule.129 The following are summaries of the specific pu blic comments under this comment:

Commenter s stated that EPA should provide states and tribes with three years to develop plans and begin compliance activities two years after all state and tribal plans are approved by EPA.

Comment 47: Comment recommendin g that the EPA grant states at least 3 years to submit their plans for implementing the agency's final guidelines.

Response 47: The EPA is allowing up to three years (including extension) for the submittal of a final state plan. In response to this and s imilar comments regarding timing and planning concerns such as the commenters mention, the EPA has extended the time allowed for states to finalize their plans and meet the first interim goal. The final rule includes this additional time and flexibility to manage complexities such as reliability, permitting, planning cycles, infrastructure addition and modifications, legislative changes, etc. In addition, the EPA is committed to continue extensive outreach to states and stakeholders and work closely with th em to provide timely assistance and support in form of additional tools, training and guidance to facilitate the development of approvable state plans within the timeframe specified in the rule. As guidance documents, tools, templates and other resources b ecome available, the EPA, in consultation with the U.S. Department of Energy and other federal agencies, will continue to make these resources available via a dedicated website. Concurrent with this final rule EPA is also proposing model rules for state pl ans which, when finalized, states may wish to use to facilitate the development of their state rule. See section VIII.E.2 for a discussion on state plan submittal and timing in the preamble for the CPP final rule.

The following are summaries of the specifi c public comments under this comment:

Commenter s stated that the existing source proposal imposes unreasonable and unlawful burdens on the states by failing to provide sufficient time to prepare and submit plans. The commenter s noted that simply digesting the proposal to determine what is or is not allowed, what measures can or cannot be counted towards achieving required reductions, etc. will take an extraordinary amount of time, given the proposal's complexity. In addition, the commenter s noted that many states will have to draft and pass enabling legislation, as well develop and implement entirely new regulatory programs in advance of the proposal taking effect.

The commenter s stated that EPA should provide states with more time to develop their plans fo r implementing the final guidelines promulgated by EPA. The commenter s stated that the current timeline is simply too restrictive for states to generate the comprehensive frameworks necessary for achieving compliance with this extraordinarily complex propo sal. The commenter s stated that section 111(d) specifically refers to section 110 as a model for the adoption of state implementation plans addressing emissions from existing sources in a category. The commenter s noted that section 110 allows states up to 3 years after promulgation of a NAAQS to submit state implementation plans. According to the commenter s , this period of time appropriately reflects the complexity of determining how to obtain the required emission reductions and the time necessary to adopt the laws and regulations necessary to achieve them. The commenter s1 30 recommended that EPA grant states at least 3 years to submit their plans for implementing the agency's final guidelines.

Commenters requested that EPA extend the timeline for state plan su bmittals. At a minimum, the commenters requested that EPA extend the submittal deadline for the CAA section 111(d) plan to three years following final rulemaking in parallel with the requirements for state implementation plans submitted under CAA section 1 10. The commenters recommended that the multi

- state plan timeline be extended to four years after final rulemaking.

The commenters noted that climate change and carbon dioxide regulation are contentious topics, and obtaining the statutory and regulatory c hanges that will be necessary to develop, implement, and enforce a section 111 (d) plan will be challenging for several states, including Kansas. The commenters stated that this 111(d) plan will be unique in that the emission guidelines encourage reaching beyond the source fence

- line for compliance with the standard. The commenters indicated that such action requires the support of multiple levels of state and local government and the cooperation and collaboration of the commenters' department, Kansas Corpo ration Commission, investor

- owned utilities, municipal utilities, electric cooperatives, and wind developers and merchants. The commenters said a multi

- state plan introduces further complexity with interstate issues. Simply put, the commenters indicated it will be a complicated task.

Commenters requested that take into account realistic planning and use its discretion in changing the compliance deadlines to the following:

State compliance plans should be due 3 years after promulgation of the final Section 111(d) rule

A 1

- year extension (or 4 years total) for individual state compliance plan submittals should be allowed in the final Section 111(d) rule.

A 1

- year extension (or 5 years total) for multi

- state compliance plan submittals should be allowed in the final Section 111(d) rule.

The compliance obligation for the first phase of the final rule should not begin until at least 5 years from the date that EPA approves a state's implementation plan.

The commenters recommended that states be allowed to extend co mpliance schedules based on the ability to install control measures, cost of compliance, impacts on reliability, and other relevant factors through procedures established in the state's compliance plan.

Commenter s requested that EPA extend the timeline for state plan submittals. At a minimum, the
commenter s requested that EPA extend the submittal deadline for the CAA section 111(d) plan to three years following final rulemaking in parallel with the requirements for state implementation plans submitted under CAA section 110. The commenter s recommended that the multi

- state plan timeline be extended to four years after final rulemaking.

Comment 4 8 : Comment stating that 1 year is inadequate for most States, supporting the allowance of an additional year, and s tating that in the case of a multi

- state plan where there is131 collaboration between States and state legislating action will almost certainly be necessary, 3 years (or by 2018) is not an achievable time frame.

Response 4 8 : The EPA agrees that states should have more time to develop plans. In response to this and similar comments regarding timing and planning concerns such as the commenters mention, the EPA has extended by an additional year the time allowed for states to finalize their plans and extended by two years the time to meet the first interim goal. The final rule includes this additional time and flexibility to manage complexities such as reliability, permitting, planning cycles, infrastructure addition and modifications, legislative changes, etc. The final rule clarifies that requirements of the initial plan submittal are designed to be readily achievable by states that intend to submit an approvable final plan. States have the flexibility to alter plan components after the initial submittal is app roved. To help facilitate the timely development of approvable plans, the EPA will continue its extensive outreach to states and work closely with them on the need for additional tools and guidance. In addition, concurrent with this final rule EPA is als o proposing model rules for state plans which, when finalized, states or multi

- state plans may wish to use to facilitate the development of their plans. Given the above EPA is confident that approvable individual and multi

- state plans can be developed with in the timeframes set out in the rule. EPA addresses these comments on the timing of state plan submittals in section VIII of the CPP final rule preamble. Specifically, in section VIII.E, EPA discusses state plan submittals, including single and multi

- stat e plans, as well as the approval process and timing.

The following are summaries of the specific public comments under this comment:

Commenter s stated that the schedule laid out in the proposal may not provide enough time to fully develop a state plan. Th e commenter s noted that States must decide by June 2016 whether to participate in a multi

- state plan; however, it seems highly improbable that two or more States will be prepared to commit to a multi

- state plan in such a short time frame given the long lea d times needed for reaching consensus on commitments of this level. The commenter s stated that the evaluation of the rule itself and determination of individual state impacts will take a significant amount of time during the first year. Following that, the commenter s stated that modeling and negotiations will be necessary to determine the merits and feasibility of a multi

state plan. If a multi

- state plan is ultimately decided on, the commenter s stated that it would almost certainly require state legislativ e action that, at a minimum, would add 1 or more years to the process. The commenter s stated that in the instance where one of the States has a biennial legislative schedule, this would likely take a minimum of 3 years.

The commenter s stated that even if a state decides to develop an individual state plan, the schedule is challenging. The commenter s noted that depending on the commitments the USEPA will require in the state plan, it may be necessary to develop enabling state legislation. The
commenter s sta ted that given the June 2015 to June 2017 time frame (with an assumed one

- year extension), it is very unlikely that submittal of a complete state plan is possible. The commenter s noted that much like the federal process, in Michigan, an EPA rule must first be evaluated, input from a stakeholder process gathered, and a public comment process met. The commenter s noted that this shortens the available time frame by 6 months or more. The commenter s provided a flow chart presenting the "Current Steps to Promulga te Michigan Air Rules." The commenter s stated that this process takes a minimum of 18 months and is based on the assumption that the132 Michigan Department of Environmental Quality (MDEQ) has enabling legislation to develop the appropriate rule(s). The commen ter s stated that the EPA must reconsider the time line for the development of state plans. The commenter s stated that 1 year is inadequate for most States, and supported the allowance of an additional year. The commenter s stated that in the case of a multi

state plan where there is collaboration between States and state legislating action will almost certainly be necessary, 3 years (or by 2018) is not an achievable time frame.

Comment 49 : Comment suggesting that the EPA should grant a minimum of 3 years to develop the state implementation plans.

Response 49 : The EPA agrees that states should have more time to develop plans. In response to this and similar comments regarding timing and planning concerns such as the commenters mention, the EPA has extended b y an additional year the time allowed for states to finalize their plans and extended by two years the time to meet the first interim goal. The final rule includes this additional time and flexibility to manage complexities such as reliability, permitting

, planning cycles, infrastructure addition and modifications, legislative changes, etc. See section V of the final rule preamble on the Best System of Emission Reduction and Associated Building Blocks and section VI of the final rule preamble on Source Cat egory

- Specific CO2 Emission Performance Rates. Section VII of the final rule preamble covers Statewide CO2 Emission Performance Goals. In section VIII.E, the CPP final rule preamble addresses state plan submittal and timing. Section VIII.D of the final rul e preamble covers state plan components and approvability criteria. Sections VIII.G and VIII.I of the final rule preamble address additional considerations for state plans, while section VIII. H looks at resources for states to consider in developing plans. Section VIII.F of the final rule preamble covers state plan performance demonstrations and compliance.

The following are summaries of the specific public comments under this comment:

Commenter s stated that EPA's Clean Power Plan is a multifaceted, complic ated rule with detailed concepts and theories that must ultimately be implemented on a state level. The
commenter s noted that in order to submit state plans, state regulators and their stakeholders will need ample time to interpret and understand the requi rements and targets in this proposal which is neither feasible nor realistic given the schedule that EPA has proposed (e.g., final rule by June 2015 and State plans submitted by June 30, 2016). The commenter s stated that there are still significant questio ns that remain unanswered and assumptions that remain unexplained regarding this proposal, and the EPA even sensed there was a need for additional information by issuing a NODA and supplemental data in the midst of the rule's comment period.

The commenter s stated that the EPA should seriously consider the task that has been set before the states which are already functioning with limited resources to complete the day

- to

- day tasks at hand. The commenter s noted that the process to devise a state plan, obtain approval from EPA, and adopt the requirements in state regulations is a lengthy one. The commenter s noted that the EPA has granted the states only a year to do so with an opportunity for a 1

- year delay (two years for a multistate plan). The commenter s sta ted that EPA has repeatedly emphasized the fact that states will be granted flexibility to design a program to meet its goal. However, the commenter s133 noted that EPA has presented state specific rate

- based targets that must be met within a specified timefra me and mass

- based targets that are difficult to interpret and understand. The commenter s noted that the complexity of the Clean Power Plan will play a significant role in implementation. Historically, the commenter s stated that environmental regulations th at are difficult to interpret, enforce and implement have created multiple challenges for states and ultimately results in delays in implementation.

The commenter s stated that EPA mentions in the proposal that an approvable state plan is one that includes "a projection of CO2 emission performance by affected EGUs under the plan. In addition a state plan that is using a mass

- based goal in determining the required level of emission performance under the plan will include a translation of the rate

- based emissi on goal in the emission guidelines to a mass

- based goal. This translation will involve a projection of CO2 emissions from affected EGUs during the initial 2020

- 2029 plan performance period and in 2030, under a scenario that assumes the rate

- based goal in t he guidelines is met."

The commenter s stated that EPA is very specific about what should be included in the state plan but yet it is stated numerous times that states will have flexibility in developing their plans. The
commenter s stated that EPA is also a ssuming that states have the available resources to make these performance projections. The commenter s stated that some of the tools that may be used in these projections are historical data and dispatch modeling.

The commenter s suggested that the EPA shou ld grant a minimum of 3 years to develop the state implementation plans and should provide as much flexibility as possible to state regulators to determine appropriate reduction strategies to be counted towards compliance. Most importantly, the commenter s suggested that the EPA should allow the decision

- making and the implementing procedures to be at the discretion of the states. Because this is likely to be a significant endeavor, the commenter s stated that EPA should afford states and regulated entities a dequate time to study, consider, comment on, and implement guidelines and state plans.

Comment 5 0 : Comment stating that EPA's proposed 1

- and 2

- year extensions would allow far too little time for states and other entities to meaningfully study, model, neg otiate, and formulate state plans that will achieve EPA's goals without leading to unacceptable impacts on ratepayers, transmission, and reliability, and suggesting that the EPA should allow states at least 3 years to submit interim single

- state plans, wit h an additional year if necessary. Also, comment suggested that States that choose a regional approach should be given at least 4 years, with an additional year if necessary.

Response 5 0 : The EPA does not agree with the timeframes proposed by the commenter s for the submittal of an initial and final. However, the EPA agrees that individual states should have more time to develop plans and has extended by an additional year the time allowed for states to finalize their plans and extended by two years the tim e to meet the first interim goal. The final rule includes this additional time and flexibility to manage complexities such as reliability, permitting, planning cycles, infrastructure addition and modifications, legislative changes, etc. In addition, the EP A also clarified that requirements of the initial plan submittal are designed to be readily achievable by states that intend to submit an approvable final plan. To help facilitate the134 timely development of approvable plans, the EPA will continue its extens ive outreach to states and work closely with them on the need for additional tools and guidance. EPA discusses comments on timing in the executive summary of the final rule and the overview of section VIII of the final rule preamble . Source category

- speci fic emission performance rates are found in section VI of the CPP final rule preamble. In Section VII, statewide CO2 emission performance goals are described, whereas information on state plans is found in section VIII of the CPP final rule preamble . Speci fically, sections VIII.B and VIII. C describe state plan performance periods and approaches, respectively. Section VIII.E addresses state plan submittals, both single

- and multi

- state, and timing.

The following are summaries of the specific public comments under this comment:

Commenter s stated that EPA's proposed timetable for state plan submission

-- even with EPA's proposed 1

- and 2

- year extensions

-- would allow far too little time for states and other entities to meaningfully study, model, negotiate, and formulate state plans that will achieve EPA's goals without leading to unacceptable impacts on ratepayers, transmission, and reliability. The
commenter s stated that in light of the many issues stakeholders have identified with the Proposed Rule, it is exp ected that EPA will significantly change its goal

- setting approach when it issues a final rule in June 2015. Therefore, the commenter s noted that states will be unable to begin the planning process in earnest until after EPA has issued a final rule. The co mmenter s stated that if the final rule resembles the current proposal, it will inevitably require states to undertake the extremely complex and time

- consuming process of developing a state plan and applying performance standards to all affected EGUs within the state. In addition, the commenter s noted that many states may enter into negotiations with neighboring states to develop a regional implementation plan. The commenter s stated that development of appropriate state and regional plans will require the co ordination of multiple state environmental agencies, state electricity regulators, federal reliability organizations, industry stakeholders, and consumer and environmental groups. The commenter s stated that these groups and organizations will need signific ant time to study EPA's final rule, to model the potential economic and electric sector impacts of the rule, to negotiate over the terms of a state or regional approach, and then to submit the approach to state governments for approval. The commenter s stat ed that each of these steps will take months at the very least. In addition, the commenter s noted that because many state legislatures are part

- time legislatures, short legislative schedules and public notice and approval procedures could further delay con sideration of proposed state plans. For example, the
commenter s noted that South Carolina's legislature meets for less than half of every calendar year, and changes to environmental regulations require board approval and notice to the legislature before th ose regulations can become law. The commenter s stated that consequently, EPA's proposal that final state plans would be submitted no later than 2017 (for single

- state plans) or 2018 (for regional plans) is neither realistic nor feasible for South Carolina and most other states. The commenter s stated that EPA should allow states at least 3 years to submit interim single

- state plans, with an additional year if necessary. The commenter s noted that States that choose a regional approach should be given at least 4 years, with an additional year if
necessary.

Commenter s argued that states should have more time to develop their state plans and suggested that, at a minimum, the deadline for state plan submission deadlines should be extended until at least three year s after issuance of a final rule (that is, a June 2018 deadline if a final rule issues in135 June 2015). The commenter s supported adoption of EPA's proposal to allow additional time to submit final, complete plans if appropriate, which now is proposed as an a dditional one

- year extension for individual state plans and a two

- year extension for multi

- state plans.

Comment 5 1 : Commenters noted that state plan submission deadlines should be extended so that states will not be required to submit their initial state plans until at least three years after issuance of a final rule such that a single state could obtain an extension to four years, and a multi

- state plan could obtain an extension to five years from the issuance of the final rule to submit a final plan

Res ponse 5 1 : The EPA does not agree with the timeframes proposed by the commenter s for the submittal of an initial and final plan . However, the EPA agrees that states should have more time to develop plans and has extended by an additional year the time allo wed for states to finalize their plans and extended by two years the time to meet the first interim goal. The final rule includes this additional time and flexibility to manage complexities such as reliability, permitting, planning cycles, infrastructure addition and modifications, legislative changes, etc.

. In addition, the EPA also clarified that requirements of the initial plan submittal are designed to be readily achievable by states that intend to submit an approvable final plan. To help facilitate the timely development of approvable plans, the EPA will continue its extensive outreach to states and work closely with them on the need for additional tools and guidance. For a discussion on the timing of state plan submittals, see section VIII.E of the CPP final rule preamble.

The following are summaries of the specific public comments under this comment:

Commenter s stated that providing states with only one year (with the possibility of a one

- year extension at EPA's discretion) to develop and promulgat e rules for the implementation of a single

- state program is inadequate. C ommenter s noted that the Proposed Rule sets an ambitious schedule for the submission of state plans, and as a general matter the current schedule does not appear to provide states wit h sufficient time to (1) pass enabling legislation (where necessary) to implement the applicable emissions rate goals at the state level, and (2) develop adequate institutional arrangements and a portfolio of programs for achieving the emissions reductions through federally enforceable requirements.

C ommenter s stated that there is no legal requirement for EPA to impose any specific state plan submission deadline. C ommenter s stated that EPA's own implementing regulations provide the agency with discretion i n setting a reasonable time frame for the submission of effective implementation plans under section 111(d) of the CAA. In light of this substantial discretion, the
commenter s urged EPA to defer to states on the establishment of reasonable plan submission deadlines that strike an appropriate balance between expeditious implementation of the section 111(d) program without imposing unrealistic demands on states in the development of comprehensive plans for transforming their electric power systems. C ommenter s noted that in so doing, the state plan submission deadlines should be extended so that states will not be required to submit their initial state plans until at least three years after issuance of a final rule. C ommenter s stated that with a three

- year wind ow to submit approvable plans, then the submission deadline would be three years from the EPA's issuance of a final rule (i.e., June136 2018, if EPA issues a final rule as scheduled, in June 2015). In addition, the commenter s supported EPA's proposal to provi de the option of additional time to submit final, complete plans if appropriate (such as an additional one

- year extension for individual state plans and a two

- year extension for multi

- state plans); thus, a single state could obtain an extension to four yea rs, and a multi

- state plan could obtain an extension to five years from the issuance of the final rule.

Commenter s argued that the proposed timeline of one year to develop a section 111(d) state plan is unreasonable given the proposed rule's complexity and the collaboration that needs to take place. While the EPA may grant a one

- or two

- year extension in certain circumstances, the
commenter s stated that a three

- year timeframe for all states to submit a section 111(d) plan is more realistic and removes the t ime that the states would need to develop and submit an extension request.

C ommenter s stated that developing a section 111(d) state plan will be like developing a State Implementation Plan (SIP) in terms of its scope. C ommenter s indicated that both proce sses require significant time and resources. According to the commenter s , both require communication and coordination among various stakeholders, including the regulated community, concerned citizens, local officials, the EPA Regional Office Staff, and pos sibly neighboring state officials, as well as their respective EPA Regional Office Staff. C ommenter s said that developing the section 111(d) plan will also require close coordination among many state government agencies. C ommenter s pointed out that, unlike the section 111(d) process, the SIP development process is well defined with many examples of prior SIPs, existing EPA guidance, and well

- understood expectations. C ommenter s noted that the CAA requires states to develop an ozone nonattainment SIP within 3 6 months after the EPA officially designates an

area as non

- attainment. Before that, the commenter s noted there can be one to two years of data analysis and state recommendations to the EPA on attainment status before the official the EPA designation. The commenter s said this "extra time" provides the state air agencies an additional time period to lay the ground work for SIP development prior to the "official" three year SIP development timeline. According to the commenter s , because Idaho has two NGCC EGUs and no coal

- fired EGUs, Idaho's only option to meet its assigned goal as set in the proposed rule is to implement EE and RE measures. C ommenter s indicated it will take significant collaboration amongst government agencies to arrive at suitable EE and RE m easures. C ommenter s then noted it must be determined how to make these measures enforceable, measurable and verifiable. Moreover, if a multi

- state plan looks feasible, the commenter s then noted there would be additional communication and coordination with other states, all of which would take a considerable amount of time.

Comment 5 2 : Comment s requesting giving states until three years after promulgation to submit their initial state plans.

Response 5 2 : The EPA agrees that states should have more time to develop plans. In response to this and similar comments regarding timing and planning concerns such as the commenters mention, the EPA has extended by an additional year the time allowed for states to finalize their plans and extended by two years the ti me to meet the first interim goal. The final rule includes this additional time and flexibility to manage complexities such as reliability, permitting,137 planning cycles, infrastructure addition and modifications, legislative changes, etc. EPA has aligned th e single

- and multi

- state plan submittal dates. Section VIII of the CPP final rule preamble addresses state plans. Specifically, section VIII. A begins with an overview that addresses many of the commenters concerns. Section s VIII. B and VIII. C cover state plan performance periods and state plan approaches. Section VIII. D lays out the state plan components and approvability criteria. Section VIII. E discusses submittal of state plans, the approval process, and timing. Section VIII. F talks about performance de monstrations and compliance while section VIII.I describes additional considerations for incorporating CO2 emission reduction measures in state plans. Section VIII. H provides resources for states to consider in developing state plans. EPA has moved the sta rt date from 2020 to 2022. EPA did not finalize demand side energy efficiency as part of building block 4, as discussed in the CPP final rule preamble section V. However, demand side energy efficiency may be used by a state as

a non

- BSER compliance measure

. The following are summaries of the specific public comments under this comment:

Commenter s argued that the CAA provides EPA with broad authority to extend the plan submission deadlines, and requested giving states until three years after promulgation to submit their initial state plans.

C ommenter s noted that the proposed rule requires states to submit detailed plans demonstrating that they will meet their state

- specific interim goals over the interim compliance period (2020

- 2029) and that they will meet their final goals over the final (2030

- 2032) compliance period and beyond. The commenter s further noted that states may also join together into multi

- state groups to implement a coordinated multi

- state plan that meets a blended goal for all states in the g roup. C ommenter s also noted that EPA proposes to give states until June 30, 2016 (13 months from the final rule's issuance) to submit their plans, with the possibility of a one

- year extension until June 30, 2017. By contrast, the commenter s noted that stat es developing multi

- state emissions reduction plans are eligible for an extension of up to two years, until June 30, 2018.

As a general matter, the commenter s supported the proposed two

- track approach whereby additional time is provided to those states th at commit to a multi

- state implementation plan. The
commenter s stated that development of a multi

- state plan will likely be an extremely complex and time

- consuming process. According to the commenter s , participating states will have to negotiate a multi

- st ate regulatory framework as well as develop and enact in law detailed rules for implementing that regulatory framework. However, as discussed below, the
commenter s believe d the proposed time schedule provides insufficient time for the development of both s ingle

- state and regional implementation plans.

C ommenter s pointed out that development of appropriate state and regional plans will require the coordination of multiple state environmental agencies, state electricity regulators, federal reliability organiz ations, industry stakeholders, and consumer and environmental groups. C ommenter s indicated these groups and organizations will need significant time to study EPA's final section 111(d) rule, to model the potential economic and electric sector impacts of th e rule, to negotiate over the terms of a state or regional approach, and then to submit the approach to state governments for approval. C ommenter s said each of these steps will take months at the very least. C ommenter s also noted that additional time is ne cessary given that states will most likely138 have to establish an entirely new regulatory framework to implement the applicable emissions rate goals at the state level. Among other things, the commenter s said states will need extra time
to:

• Pass enabling leg islation for establishing new state requirements, such as renewable energy (RE) standards and end

- use energy efficiency (EE) measures;

• Construct the institutional arrangements between the universe of regulators (such as public utility commissions, environm ental regulators, state energy offices);

• Obtain jurisdiction in the appropriate regulatory bodies non

- state jurisdictional entities, such as municipal utilities and rural cooperatives;

• Institute carbon

- driven resource planning and dispatch that meet EPA's criteria for federal enforceability; and

• Develop a portfolio of programs for achieving the emissions reductions through federally enforceable requirements.

Finally, the commenter s pointed out that EPA has considerable discretion in setting a reasonable tim e frame for the development and submission of an effective implementation plans under section 111(d) of the Clean Air Act (CAA or the Act). C ommenter s noted that the statute does not prescribe any specific deadlines by when states must submit their section 111(d) plans to EPA; nor does the Act impose any deadline by which EPA must approve or disapprove a plan.

For these reasons, the commenter s believe d that EPA should use its discretion to set extended timeframes for states' submission of their section 111( d) plans given the complexity and difficulty of the state implementation process. Specifically, the commenter s recommended that EPA extend the deadline for the submission of the initial state section 111(d) plan until three years after issuance of a final section 111(d) rule (i.e., June 2018 if EPA issues a final rule, as scheduled, in June 2015). As suggested in the EPA proposal, the commenter s also indicated that states should have additional time for their submitting the final, complete plans, with an ad ditional one

- year extension for individual

- state plans and a two

- year extension for multi

- state plans. C ommenter s further suggested that EPA's proposed compliance deadlines for affected fueled electric utility generating units (EGUs) and other regulated en tities would also have to be extended to reflect the additional time provided to states for the development of their section plans.

Commenters argued that states should have more time to develop their state plans and suggested that, at a minimum, the deadl ine for state plan submission deadlines should be extended until at least three years after issuance of a final rule (that is, a June 2018 deadline if a final rule issues in June 2015). The commenters supported adoption of EPA's proposal to allow additiona l time to submit final, complete plans if appropriate, which now is proposed as an additional one

- year extension for individual state plans and a two

- year extension for multi

- state plans.

The commenters stated that providing states with only one year (wit h the possibility of a one

year extension at EPA's discretion) to develop and promulgate rules for the implementation of a139 single

- state program is inadequate. 79 FR 34838. The commenters argued that the proposed rule sets an overly

- ambitious schedule for t he submission of state plans that does not provide states with sufficient time to (1) pass enabling legislation (where necessary) to implement the applicable emissions rate goals, and (2) develop adequate institutional arrangements and a portfolio of progr ams for achieving the emission reductions within the proposed timeline for compliance.

The commenters contended that EPA is not required by statute to impose any specified state plan submission deadline. Quite the opposite, the commenters said EPA's regula tions provide discretion in setting a reasonable time frame for the submission of effective CAA section 111(d) implementation plans. The commenters urged EPA to exercise its discretion by giving states a say in what would be reasonable submission deadlines that strike an appropriate balance between expeditious implementation of the target goals and adequate time for states and other stakeholders to develop comprehensive implementation plans.

Given the complexity and time required to develop new state regula tions and/or negotiate agreements with neighboring states, commenters suggested that states be given up to three years after final guidelines have been promulgated to allow for adequate development of state plans. Commenters believe d that three years for t he development of plans with such complexity is not unreasonable. In lieu of three years, the commenters suggested a phased approach could be utilized. In addition, the commenters recommended that consideration be given to allowing for flexibility in devel oping state plans with extended compliance deadlines, like those utilized in the Mercury and Air Toxics Standard. Commenters said this would allow for the recognition of existing investments in pollution control technologies and other major investments pre viously approved by Public Service Commissions or State agencies. Commenters said this would also recognize the time necessary to transition existing generation fleets so as to minimize financial impacts to electric customers and/or assure reliability of t he electricity supply.

Comment 5 3 : Comment stating that the EPA, in its final regulations, must allow time to implement modifications to PA's existing Act 129 EE programs, including new EM&V protocols and tracking mechanisms.

Response 5 3 : The EPA agrees that states should have more time to develop plans. In response to this and similar comments regarding timing and planning concerns such as the commenters mention, the EPA has extended by an additional year (for a total of three years) the time allowed for states to finalize their plans and extended by two years the time to meet the first interim goal. The final rule includes this additional time and flexibility to manage complexities such as reliability, permitting, planning cycles, infrastructure addition and modifications, legislative changes, etc. In addition, to help facilitate the timely development of approvable plans, the EPA will continue its extensive outreach to states and work closely with them on the need for additional tools and guidance, inclu ding EM&V protocols. . Section VIII.E of the CPP final rule preamble addresses state plan submittals and timing.

The following are summaries of the specific public comments under this comment:140 Commenter s stated that EPA, in its final regulations, must all ow time to implement modifications to PA's existing Act 129 EE programs, including new EM&V protocols and tracking mechanisms. C ommenter s noted that PA's Act 129 program employs a State

- Wide Evaluator (SWE) that independently audits and verifies EDC compli ance with Act 129 requirements. C ommenter s stated that the SWE serves as a third party verifier and auditor of EDC compliance and makes recommendations to the PAPUC at the conclusion of each phase of the program. C ommenter s noted that the SWE engages with the PAPUC, EDCs and EE providers in the development of EM&V protocols. C ommenter s stated that Act 129 EM&V protocols are currently developed to track incremental energy efficiency that occurs during a program phase attributable to that program. C ommenter s noted that baseline standard equipment electric use changes during each phase of the Act 129 program. However, the commenter s said the baseline standard equipment for the EPA proposal would remain constant at the 2012 market penetration assessment.

C ommen ter s ha ve determined that new EM&V protocols will need to be developed, along with additional tracking mechanisms, to account for the differences in the equipment baseline in the EPA proposal as well as to account for energy savings beyond the Act 129 prog ram. C ommenter s stated that EM&V protocols will also have to be modified to include savings obtained from the electric cooperatives and municipal electric authorities if those entities participate. In addition, the commenter s said new tracking mechanisms w ill have to be developed to track savings associated with building code changes and savings from equipment required to be utilized under the EPA proposal but are not encompassed within the Act 129 program.

Comment 5 4 : Comment arguing that the proposed rul e does not provide enough time for states to develop and submit plans for compliance with a statewide emissions rate goal, and recommending that the EPA extend the deadline until three years after issuance of the section 111(d) final rule.

Response 5 4 : Th e EPA agrees that states should have more time to develop plans. In response to this and similar comments regarding timing and planning concerns such as the commenters mention, the EPA has extended by an additional year (for a total of three years) the tim e allowed for states to finalize their plans and extended by two years the time to meet the first interim goal. The final rule includes this additional time and flexibility to manage complexities such as reliability, permitting, planning cycles, infrastruc ture addition and modifications, legislative changes, etc. The EPA also clarified that requirements of the initial plan submittal are designed to be readily achievable by states that intend to submit an approvable final plan. Section VIII of the CPP final rule preamble acknowledges the timing and planning concerns of many state commenters and the necessary coordination among different state and regional bodies. See the Overview in section VIII.A. See section VIII.E of the CPP final rule preamble on state pl an submittal, the approval process, and timing. Initial plan submittals, extensions, and modifications are also found in this section. EPA decided not to include EE as part of the best system of emission reduction and the associated building blocks. For mo re information on BSER, see section V of the final rule preamble . Section V also discusses the ability of EGUs to implement BSER. EM&V may be found in section VIII. I of the CPP final rule preamble. Section I.A, the141 executive summary for the CPP final rule preamble, includes a subsection on outreach and resources for stakeholders. Section II .K of the CPP final rule preamble also has a section on stakeholder outreach and consultations. Section IX of the CPP final rule preamble explains the steps that the age ncy has taken to help ensure that this rulemaking does not disproportionately impact vulnerable communities. Section VIII.D of the CPP final rule preamble covering state plan components and approvability criteria addresses state plan hearings. Section VIII .C of the CPP final rule preamble addresses state plan approaches including multi

- state plans.
The following are summaries of the specific public comments under this comment:

Commenter s argued that the proposed rule does not provide enough time for states to develop and submit plans for compliance with a statewide emissions rate goal. C ommenter s noted that EPA proposed to give states until June 30, 2016, (13 months from the final rule's issuance) to submit their plans, to demonstrate how they will comply wi th the proposed interim and final CO2 emission rate goals, with the possibility of a one

- year extension until June 30, 2017 for states developing individual state plans, or a two

- year extension, until June 30, 2018, for states developing multi

- state emissi ons reduction plans. According to the commenter s , if the final rule is promulgated by June 1, 2015, the deadline gives states only 13 months to develop their plans. C ommenter s stated that 13 months between anticipated promulgation of the final rule and the deadline for submittal of a state plan is not enough time for a state to develop a plan for such a comprehensive and complex program. Even with the possibility of a one

- year extension of the submittal deadline, the commenter s noted Utah would still be req uired to make an "initial submittal" by the June 30, 2016, deadline that addresses all components of a complete plan and nearly as substantial as a final plan. C ommenter s argued that this time frame is not reasonable for Utah and recommended that EPA exten d the deadline until three years after issuance of the section 111(d) final rule.

C ommenter s noted several reasons why the proposed time schedule provides insufficient time for the development of state plans. First, the commenter s noted that many elements of the state plan are likely to require Utah to change its regulations and policies. For example, the commenter s indicated that to enable the state to take credit for existing and planned energy efficiency programs, the Utah Public Service Commission may need to revise its existing evaluation, monitoring and verification ("EM&V") requirements to meet the EM&V standards under the final rule. Second, the commenter s noted that Utah will likely need to adopt new legislation to implement the rule. C ommenter s sa id the state currently does not have mandatory policies requiring utilities to implement energy efficiency programs or develop renewable energy resources. In order for the state to get compliance credit for energy efficiency and renewable energy, the comme nter s indicated that new legislation may be required. Third, the commenter s noted that the complexity of the proposed rule will require coordination between the Utah Department of Environmental Quality, the Utah Public Service Commission, electric utilitie s, end users that are affected by the plan, and neighboring states. For example, the commenter s said Utah will need to coordinate on which state should receive credit for renewable generation where renewable energy has been sold out

- of

- state. C ommenter s al so noted that Utah's primary electric company, PacifiCorp, has service territory that stretches across six states from the intermountain west to the west coast. C ommenter s said PacifiCorp plans and operates its six

- state service territory on a combined, un ified basis. Fourth, the commenter s noted that Utah and other states participate in a "Multi

- State Process" for the allocation of costs and revenues across PacifiCorp's142 six states. According to the commenter s , the development of a meaningful plan, the allo cation of costs associated with the plan, and assignment of costs and compliance credits for renewable energy generation developed by PacifiCorp, will all need to be recognized, and negotiated and incorporated into a new Multi

- State Process agreement. C omm enter s stated that implications of PacifiCorp's multi

- state planning and operating process are complex and cannot be ignored. Finally, the commenter s noted that Utah will need to comply with EPA's requirements for a public hearing as well as the Department of Environmental Quality's requirements for public comments, hearings and other administrative processes related to adopting a new air quality regulation. C ommenter s indicated it likely will take the state several months to facilitate public
comment on a draft plan, review the comments, and revise its state plan, all before the plan can be submitted to EPA, where there will be another round of public review and comment.

Comment 55 : Comment arguing that more time is needed for state plan development, appro val and implementation, suggesting that the EPA should grant states at least three years to submit their emission guidelines to EPA, and also recommending that the EPA grant more liberal extensions to states when a state can demonstrate that it is making a good faith effort to develop its state plan.

Response 55 : The EPA agrees that states should have more time to develop plans. In response to this and similar comments regarding timing and planning concerns such as the commenters mention, the EPA has exte nded by an additional year (for a total of three years) the time allowed for states to finalize their plans and extended by two years the time to meet the first interim goal. The final rule includes this additional time and flexibility to manage complexiti es such as reliability, permitting, planning cycles, infrastructure addition and modifications, legislative changes, etc. The EPA does not agree that an extension beyond three years to develop a complete plan is needed, however, the final rule provides tha t a state may revise its state plan, and states in a multi

- state plan may revise their joint plan. The EPA received broad support for allowing states to submit modifications to approved state plans and we agree that this is an important aspect of this prog ram. Section VIII of the CPP final rule preamble addresses state plans. Specifically, section VIII. C covers state plan approaches, section VIII. D addresses state plan components and approvability criteria, while section VIII. E describes the state plan subm ittal and approval process as well as timing. Section VIII. F is on performance demonstrations and compliance. EPA understands that states may face unexpected emergencies from time to time. Section VIII also addresses reliability, the reliability safety va lve, and adjusting a state plan.

The following are summaries of the specific public comments under this comment:

Commenter s argued that more time is needed for state plan development, approval and implementation. C ommenter s believe d that EPA should grant s tates at least three years to submit their emission guidelines to EPA, the same amount of time that section 110 allows states after promulgation of a NAAQS to submit implementation plans, based on the expected complexity of regulatory implementation and in frastructure improvements. C ommenter s did not agree with EPA ’ s proposal to allow states only about one year from the finalization of the emission guidelines to submit their state plans establishing and applying the standards of performance to affected faci lities in the state. While EPA did propose to allow states up to one year for an143 extension or two years for proposals covering multiple states, the commenter s argued that these time periods are still unrealistic, considering the complexity of implementatio n and the time necessary to adopt the adequate laws and regulations in each state to implement the state plans. In addition to the three

- year extension, the commenter s also recommended that EPA grant more liberal extensions to states when a state can demon strate that it is making a good faith effort to develop its state plan. Lastly, the commenter s stated that the proposed rule does not offer states any flexibility to adjust their goals based on unanticipated circumstances, reduced hydroelectric
power gener ation capacity, weather emergencies, environmental mandates, or energy emergencies, that would prevent a state or affected facility from complying with its emission reduction goals.

Comment 56 : Comment arguing that the EPA should provide states with more time to develop state plan, and recommending that state plans should be due, at a minimum, 3 years following promulgation of the rule.

Response 56 : The EPA agrees that states should have more time to develop plans. In response to this and similar comments regarding timing and planning concerns such as the commenters mention, the EPA has extended by an additional year (for a total of three years) the time allowed for states to finalize their plans and extended by two years the time to meet the first interim goal. The final rule includes this additional time and flexibility to manage complexities such as reliability, permitting, planning cycles, infrastructure addition and modifications, legislative changes, etc. Section VIII of the CPP final rule preamble ac knowledges the timing and planning concerns of many state commenters and the necessary coordination among different state and regional bodies. See the Overview in section VIII. A. Section VIII .E of the CPP final rule preamble addresses state plan submittals and timing regarding both single and multi

- state plans. EPA did not finalize demand side energy efficiency as part of building block 4. See section V on the building blocks in the CPP final rule preamble for a discussion of the best system of emission

r eduction. RE is addressed in section V .E of the CPP final rule preamble under building block 3 as part of the Best System of Emission Reduction and section VIII talks about how to use RE in state plans.

The following are summaries of the specific public co mments under this comment:

Commenter s argued that EPA should provide states with more time to develop state plans. C ommenter s recommended that state plans should be due, at a minimum, 3 years following promulgation of the rule. C ommenter s noted that, under the proposed rule, state plans will be due to EPA by June 30, 2016, though a one

- year extension to June 30, 2017, may be granted if justified. C ommenter s further noted that a two

- year extension is possible if Louisiana was to collaborate with one or more additional states. Commenter s stated that development of Louisiana's plan will necessarily entail extensive coordination with the LPSC, SPP, MISO, owners/operators of affected EGUs, and other governmental entities. While Act 726 allows LDEQ to set CO2 stan dards for existing EGUs based on "[r]eductions in emissions of carbon dioxide that can reasonably be achieved through measures undertaken at each fossil fuel

- fired electric generating unit," the commenter s pointed out it does not provide the department wit h the authority to establish or enforce RE standards or set energy efficiency goals. According to the144 commenter s , such authority resides with the Louisiana legislature and LPSC. As such, the
commenter s indicated that development of the state plan may promp t or necessitate additional legislation. In any event, given that the proposed rule will, by EPA's own admission, increase retail electricity prices, the commenter s said the entire process will be subject to heightened scrutiny and oversight. Once a viable plan has been developed, the commenter s stated that rulemaking will require an additional 6 months to complete.

Comment 57 : Comment a rgu ing that states need more time to develop section 111(d) state plans , stating that the CPP will require a systemic re organization of the entire electric utility industry, and asking the EPA to extend the deadline for submission of the section 111(d) state plans to three years from the date of final publication of EPA's Clean Power Plan

. Response 57 : The EPA agrees that states should have more time to develop plans. In response to this and similar comments regarding timing and planning concerns such as the commenters mention, the EPA has extended by an additional year (for a total of three years) the time allowed for stat es to finalize their plans and extended by two years the time to meet the first interim goal. The final rule includes this additional time and flexibility to manage complexities such as reliability, permitting, planning cycles, infrastructure addition and modifications, legislative changes, etc. Ho w ever, t he CPP does not require systematic reorganization of the entire electric utility industry as commenter s suggest. See the summary of major provisions in the Executive Summary of section I .A of the CPP fina l rule preamble, and also see section III of the final rule preamble on rule requirements and the legal basis. Section VIII of the CPP final rule preamble also addresses legal issues of the state plan process. See section VIII.E of the CPP final rule
pream ble on state plan submittals, the approval process, and timing, including for initial state plans and guidance on extensions and modifications. EPA also aligned the submittal deadlines for both single

- and multi

- state plans. EPA did not finalize EE as part of the best system of emission reduction and associated building blocks. See section V of the CPP final rule preamble for information on BSER and also the ability of EGUs to implement BSER. EPA finalized source category

- specific CO2 emission performance r ates and statewide CO2 emission performance goals as described in sections VI and VII of the final rule preamble , respectively. Section VIII of the CPP final rule preamble acknowledges the timing and planning concerns of many state commenters and the nece ssary coordination among different state and regional bodies. See the Overview in section VIII.A of the final rule preamble

. The following are summaries of the specific public comments under this comment:

Commenter s argued that states need more time to de velop section 111(d) state plans. C ommenter s asked EPA to extend the deadline for submission of the section 111(d) state plans to three years from the date of final publication of EPA's Clean Power Plan. C ommenter s contended that development of the state p lans will likely take longer than EPA's proposed deadlines would currently allow because the proposed section 111(d) Clean Power Plan will require more fundamental changes to the regulatory framework for the utility industry than any prior EPA rulemaking e ffort. C ommenter s noted that most EPA rules are relatively simple to implement procedurally, even those expected to have a significant impact on a state or an industry, because they typically fit well within the established Clean Air Act regulatory scheme.145 C ommenter s also noted that the process of implementing a new EPA rule often requires little more than adopting the new rule into the state administrative code, incorporating that rule by reference, or perhaps just submitting a delegation request to EPA to allow implementation of the federal rules without making any changes to the state regulations at all. Even where a state may have the flexibility and discretion to determine the specific emission control strategies needed to implement a new EPA emission r eduction requirement, the commenter s said the state's determination is typically based on a familiar analysis of individual emissions sources and the
cost

- effective control technologies available to reduce those emissions at the sources in question. Accord ing to the commenter s , the proposed rule is completely different from any prior EPA rulemaking in that it will require a systemic reorganization of the entire electric utility industry. C ommenter s stated that it also includes requirements that could potent ially reach beyond the industry itself to its consumers

-- in this case, any business or residence connected to the electricity grid. Due to the unprecedented scope of EPA's proposal, the commenter s indicated the Clean Power Plan will require close coordinat ion between state environmental agencies and state energy regulators to develop the means to require the type of changes to the electric power system that will be needed to achieve EPA's goals to an extent far beyond any prior EPA regulation.

C ommenter s s pecifically cited the situation in New Mexico, where the state's environmental
agency

-- the New Mexico Environment Department (NMED)

-- will need to coordinate with several other state agencies responsible for regulating the production of electricity from the state's energy resources, including the New Mexico Public Regulation Commission (NMPRC) and the New Mexico Energy, Minerals and Natural Resources Department (EMNRD). Without such coordination, the commenter s said any requirements that NMED seeks to impose could conflict with the policies and requirements already established by those other agencies, and the opposite may be true as well

-- without appropriate coordination, the NMPRC and EMNRD could enact new policies that would conflict with the steps NMED wil l need to comply with EPA's Clean Power Plan. While certainly past EPA rules have imposed costs on the energy sector that required some level of awareness and even approval by the NMPRC and EMNRD, the
commenter s contended that never before have the legal a uthorities wielded by all three of these organizations been so directly involved in the implementation of a new environmental program.

C ommenter s further contended that even the current legal authority of all three of these organizations

-- NMED, NMPRC, and EMNRD

-- may not be enough to implement EPA's Clean Power Plan. Because of the tremendous breadth of EPA's proposal, the commenter s indicated the New Mexico legislature may need to enact new statutes or revise existing statutes to grant those organizations t he authority they will need to require the changes that EPA expects New Mexico to make in reducing the carbon intensity of its electricity generators. For instance, the
commenter s indicated that New Mexico may need to revise its existing RPS to ensure that sufficient additional renewable capacity and generation are required because NMED does not currently have the authority to demand new renewable energy generation. Likewise, the
commenter s noted that current New Mexico law prohibits electric utilities from spending above a certain amount to fund the development and implementation of new renewable resources and new demand

- side energy efficiency programs. As such, the commenter s indicated legislative action may be needed to allow the state and state utilities to encourage additional renewable energy and energy efficiency efforts in the attempt to meet EPA's expectations and requirements. In addition, the commenter s noted there are some utilities in New Mexico that are not subject to146 the jurisdiction of the sta te's energy authorities (e.g., the City of Farmington), which will present additional compliance challenges for the state and likely require new legislative authority to resolve. C ommenter s noted that these legislative actions will take significant time to complete, but may be a necessary component of the state's section 111(d) implementation plan.

Commenter s noted that EPA has only allowed states that do not engage in multi

- state plans up to two years after publication of the final rule to complete their i mplementation plans, and then only if the state submits the bulk of its plan within one year. C ommenter s contended that one year is not enough to develop the initial plan that EPA has proposed, nor is two years sufficient to complete the entire plan, given all that must happen before a final plan capable of achieving EPA's requirements will be complete. C ommenter s pointed out that EPA itself admits that implementing its Clean Power Plan will require "technical work, state legislative and rulemaking activiti es, coordination with third parties, and coordination among states involved in multi

- state plans,'' but provides no basis for its assumption that all of these activities can be completed within the time allowed. C ommenter s further noted that EPA also prov ided no justification for requiring an "initial plan" in one year, prior to the final plan that even EPA admits will take at least two years to complete. C ommenter s asked EPA to reconsider the deadlines established for state plans to allow more time for th e unprecedented actions that will be needed before states will be able to develop those plans.

According to the commenter s , allowing three years for states to submit plans, and two years for approval of those plans would be consistent with CAA section 110, which applies to other state implementation plans, particularly given that the plans EPA is asking states to submit under section 111(d) will be at least as complex as the plans to which section 110 applies. In addition, the commenter s stated that consist ency between the procedures for section 110 and section 111(d) plans is entirely appropriate because section 111(d) requires EPA to "establish a procedure that is similar to that provided by section 110."

Comment 58 : Comment arguing that the EPA has not provided adequate time for states to submit plans, recommending that the EPA extend the deadline for state plan submittal to allow at a minimum three full years for plan submittal consistent with previous regulatory mandates, and additional extensions as necessitated by a state's legislative and rulemaking processes.

Response 58 : The EPA agrees that states should have more time to develop plans. In response to this and similar comments regarding timing and planning concerns such as the commenters mention , the EPA has extended by an additional year (for a total of three years) the time allowed for states to finalize their plans and extended by two years the time to meet the first interim goal. The final rule includes this additional time and flexibility to manage complexities such as reliability, permitting, planning cycles, infrastructure addition and modifications, legislative changes, etc. See section VIII.E of the CPP final rule preamble for a discussion of state plan submittals and timing. EPA has fina lized a compliance date of 2022 rather than 2020 for the beginning of the performance period. See section VIII.B in the CPP final rule preamble.

The following are summaries of the specific public comments under this comment:147 Commenter s argued that EPA has not provided adequate time for states to submit plans. C ommenter s recommended that EPA extend the deadline for state plan submittal to allow at a minimum three full years for plan submittal consistent with previous regulatory mandates, and additional exte nsions as necessitated by a state's legislative and rulemaking processes. C ommenter s recommended that EPA also consider extending the final 2030 deadline an additional 2

- 3 years as necessitated by the realities of getting an approvable state compliance
pro gram in place.

The commenter s contended that EPA has not provided adequate time for the states to submit state implementation plans. C ommenter s noted that EPA intends to finalize its proposed guidelines in June of 2015, and that states must submit their s ection 111(d) state plans by June of 2016, with an opportunity for a possible one year extension. C ommenter s noted that Indiana's utilities, including their own company, have pursued renewable generation and own energy efficiency programs, Indiana currentl y does not have authority in place to implement mandatory renewable energy standards or a state energy efficiency program. Assuming that the proposal guidelines are final in June of 2015, t he commenter s noted that the Indiana General Assembly meets in 2016 from the second week of January to March 15

-- only three months before a state implementation plan must be submitted to EPA. C ommenter s contended that this does not allow sufficient time for the Indiana Department of Environmental Management (IDEM) to deve lop a plan and the legislature sufficient time to pass legislation granting the necessary state authority. Once that authority is granted, the commenter s said IURC would then likely have to draft new regulations to implement the new renewable energy standa rd and an energy efficiency program. C ommenter s contended that the current timeline, which requires significant reductions by 2020, simply does not provide sufficient time to put the necessary regulations in place.

C ommenter s also noted that the interim target set by EPA requires Indiana to demonstrate specific and verifiable emissions reductions each year starting in 2020 through 2029. As these interim goals are "front loaded," the commenter s indicated they require a substantial percentage of the total e xpected emission reductions to occur in the early years of the interim period, which the commenter s indicated is virtually impossible to meet without potential significant risks to reliability. C ommenter s pointed out that EPA has recently conceded the poss ibility that it may need to adjust the interim goals and/or final goals in its recent NODA seeking further comment on the proposed guidelines.

Comment 59 : Comment requesting that the EPA extend the submittal deadline for the CAA section 111(d) plan to th ree years following final rulemaking in parallel with the requirements for state implementation plans submitted under CAA section 110, and that the multi

- state plan timeline be extended to four years after the final rulemaking.

Response 59 : The EPA agree s that states should have more time to develop plans. In response to this and similar comments regarding timing and planning concerns such as the commenters mention, the EPA has extended by an additional year (for a total of three years) the time allowed f

or states to finalize their plans and extended by two years the time to meet the first interim goal.148 The final rule includes this additional time and flexibility to manage complexities such as reliability, permitting, planning cycles, infrastructure additi on and modifications, legislative changes, etc. See section VIII.E of the CPP final rule preamble for a discussion of state plan submittal and timing.

The following are summaries of the specific public comments under this comment:

For the reasons stated in the following paragraph, commenter s requested that EPA extend the timeline for state plan submittals. At a minimum, the commenter s requested that EPA extend the submittal deadline for the CAA section 111(d) plan to three years following final rulemaking i n parallel with the requirements for state implementation plans submitted under CAA section 110. C ommenter s recommended that the multi

- state plan timeline be extended to four years after the final rulemaking.

Commenter s noted that climate change and CO2 r egulation are contentious topics and stated that obtaining the statutory and regulatory changes that will be necessary to develop, implement, and enforce a section 111(d) plan will be challenging for several states, including Kansas. C ommenter s noted that this section 111(d) plan will be unique in that the emission guidelines encourage reaching beyond the source fence

- line for compliance with the standard. C ommenter s indicated that such action requires the support of multiple levels of state and local gover nment and the cooperation and collaboration of KDHE, Kansas Corporation Commission, investor

owned utilities, municipal utilities, electric cooperatives, and wind developers and merchants. C ommenter s noted that a multi

- state plan introduces further complex ity with interstate issues. Simply put, the commenter s said it will be a complicated task.

Comment 60 : Comments stating that the state plan submission deadlines should be extended so that states will have at least 3 years after the rule is finalized to su bmit plans.

Response 60 : The EPA agrees that states should have more time to develop plans. In response to this and similar comments regarding timing and planning concerns such as the commenters mention, the EPA has extended by an additional year (for a t otal of three years) the time allowed for states to finalize their plans and extended by two years the time to meet the first interim goal. The final rule includes this additional time and flexibility to manage complexities such as reliability, permitting, planning cycles, infrastructure addition and modifications, legislative changes, etc. The dates for submitting single and multi

- state plans have been aligned, as discussed in section VIII.E of the CPP final rule preamble.

The following are summaries of th e specific public comments under this comment:

Commenter s argued that deadlines for submitting state/multi

- state plans should be extended. C ommenter s noted that, following the promulgation of a final rule, states will only have until the end of June 2016 t o submit their plan to EPA. According to the commenter s , the deadlines contained in the rule do not give states, utilities, and their customers enough time to pass legislation, revise policies, adopt budgets and make necessary generating resource adaptions to comply with new mandates without jeopardizing reliable service. C ommenter s argued that a rushed implementation schedule could expose their customers to unnecessary cost increases.149 C ommenter s believe d that the state plan submission deadlines should be e xtended so that states will have at least 3 years after the rule is finalized to submit plans.

C ommenter s noted that, in the proposed rule, if a state is developing a single

- state emissions reduction plan, it can seek from EPA a one

- year extension to June 30, 2017. C ommenter s further noted that states developing multi

- state emissions reduction plans are eligible for a 2

- year extension, until June 30, 2018. C ommenter s agreed with the underlying rule as it relates to opportunities to seek extension. C ommente r s believe d states should be able to seek an additional

one

- year extension for individual state plans and a two

- year extension for multi

- state plans.

Comment 6 1 : Comment suggesting that states should be given at least three years to fashion their state pl ans, similar to the typical three years for a criteria pollutant SIP.

Response 6 1 : The EPA agrees that states should have more time to develop plans. In response to this and similar comments regarding timing and planning concerns such as the commenters

men tion, the EPA has extended by an additional year (for a total of three years) the time allowed for states to finalize their plans and extended by two years the time to meet the first interim goal. The final rule includes this additional time and flexibilit y to manage complexities such as reliability, permitting, planning cycles, infrastructure addition and modifications, legislative changes, etc. See section VIII.E of the CPP final rule preamble. This section addresses state plan submittal, EPA’s approval p rocess, and timing.

The following are summaries of the specific public comments under this comment:

Commenter s suggested that states should be given at least three years to fashion their state plans, similar to the typical three years for a criteria pollut ant SIP. C ommenter s further noted that, while EPA invoked a claim of CO2 "urgency" to invoke a requirement for states to submit compliance plans within one year of promulgation, EPA proposed to extend its own review time by a factor of three. If EPA requir es three times the usual period to review state proposals, the
commenter s said states should have at least the three

- year period to fashion them.

Comment 6 2 : Comment recommending that the EPA provide individual states with more than a 1 or 2

- year extensio n on a case

- by

- case basis and that this will help to ensure the EPA will not have to embark on writing federal plans for a multitude of states

Response 62 : The EPA agrees that states should have more time to develop plans. In response to this and similar comments regarding timing and planning concerns such as the commenters mention, the EPA has extended by an additional year the time allowed for states to finalize their plans and extended by two years the time to meet the first interim goal. The final rul e includes this additional time and flexibility to manage complexities such as reliability, permitting, planning cycles, infrastructure addition and modifications, legislative changes, etc. South Dakota’s state goals may be found in section VII of the CPP final rule preamble. The source category

- specific CO2 emission performance rates are described in section VI of the CPP final150 rule preamble

. See section VIII.E of the CPP final rule preamble on state plan submittal, EPA’s approval process, and timing.

The following are summaries of the specific public comments under this comment:

Commenter s stated that EPA has proposed a timeline of finalizing this rulemaking on June 1, 2015, and for states to submit their 111(d) plan by June 30, 2016. C ommenter s stated tha t this tight deadline was established by the Presidential Memorandum

- Power Sector Carbon Pollution Standards signed by President Obama on June 25, 2013. C ommenter s noted that requiring states to meet such an aggressive deadline is not realistic. C ommente r s stated that it is even less realistic in South Dakota's case where EPA has proposed one of the most stringent carbon goals in the nation. C ommenter s recommended that EPA provide individual states with more than a 1 or 2

- year extension on a case

- by

- case basis. C ommenter s stated that this will help to ensure EPA will not have to embark on writing federal plans for a multitude of states.

Comment 6 3 : Comment stating that the EPA has not addressed the particular challenges in the West of developing new infra structure such as transmission lines, and that it is important for the EPA to allow the time needed for planning and permitting new energy and transmission projects on federal land.

Response 6 3 : The EPA agrees that states should have more time to develop plans. In response to this and similar comments regarding timing and planning concerns such as the commenters mention, the EPA has extended by an additional year the time allowed for states to finalize their plans and extended by two years the time to mee t the first interim goal. The final rule includes this additional time and flexibility to manage complexities such as reliability, permitting, planning cycles, infrastructure addition and modifications, legislative changes, etc. In addition, the glide path approach taken in the final rule allows measures such as the construction of new transmission lines to be phased in over time. See section X I of the CPP final rule preamble for a discussion of the impacts of this action, including the Endangered Species Act

, energy, employment, and economic impacts.

The following are summaries of the specific public comments under this comment:

Commenter s stated that the EPA has not addressed the particular challenges in the West of developing new infrastructure such as t ransmission lines. Compared to other parts of the country, the commenter s stated that utilities in the West have large service territories with unique geographical challenges. C ommenter s noted that federal lands cover vast portions of Utah and other Wester n states, triggering additional planning and permitting requirements under the National Environmental Policy Act (NEPA), Endangered Species Act (ESA), and other laws. C ommenter s stated that the EPA's proposal does not appropriately consider these issues.

Commenter s stated that a defining characteristic of the West is that federal lands cover vast portions of many Western states. C ommenter s indicated, according to the Bureau of Land Management (2010), the Federal Government owns 52% of the land area in the Western U.S. In Nevada, 83.1% of the land area is federally owned. Utah is 64.5%, Idaho is 62.5% and Oregon is151 52.6% federally owned. C ommenter s stated that these federal lands are one key to future clean energy generation and transmission that will enable Western states and companies to achieve the goals of EPA's Clean Power Plan. C ommenter s stated therefore, it is important for the EPA to allow the time needed for planning and permitting new energy and transmission projects on federal land. C ommenter s rec ognized that there are several ongoing efforts of federal land managers to address these issues in conjunction with Western states and we reiterate our willingness to continue working with EPA and other federal agencies on these important issues.

Comment 6 4 : Comment stating that the final rule should make it clear that a state qualifies for the available extension as long as they are committed to coordinating action with other states, that this should include allowing states to pursue a dual

- track approac h. Comment also asked if a state would be penalized if they receive an extension for pursuing a multistate plan, but then the agreement falls through and the state has to "go it alone."

Response 6 4 : The final rule clarifies that requirements of the init ial plan submittal are designed to be readily achievable by states that intend to submit an approvable final plan. States have the flexibility to alter plan components after the initial submittal is approved. The EPA received broad support for allowing st ates to submit modifications to approved state plans and we agree that this is an important aspect of this program. In this rulemaking, therefore, the EPA is finalizing that a state may revise its state plan, and states in a multi

- state plan may revise the ir joint plan. The EPA received broad support for allowing states to submit modifications to approved state plans and we agree that this is an important aspect of this program. In this rulemaking, therefore, the final rule provides that a state may revise its state plan, and states in a multi

- state plan may revise their joint plan. Section VIII of the CPP final rule preamble addresses state plans, both single

- and multi

- state. In section VIII. A there is an overview. Section VIII. B discusses performance peri ods and VIII. C contains information on state plan approaches. Section VIII.D covers the state plan components and approvability criteria while section VIII. E addresses state plan submittals, the approval process, and timing. State plan performance demonstr ations and compliance are discussed in section VIII.F. Additionally, considerations for state plan approaches may be found in section VIII.G and VIII.I , while resources for states to consider in developing plans are described in section VIII. H

.
The followi ng are summaries of the specific public comments under this comment:

Commenter s stated that the final rule should make it clear that a state qualifies for the available extension as long as they are committed to coordinating action with other states. C omme nter s stated that this should include allowing states to pursue a dual

- track approach

- continuing to evaluate both multi

- state options and single

- state options. C ommenter s stated that finally, EPA should provide greater clarity on the documentation requir ements and compliance options for multi

- state and regional plans, including for states to participate in more than one multi

- state program.

Commenter s asked if a state would be penalized if they receive an extension for pursuing a multistate plan, but the n the agreement falls through and the state has to "go it alone."152 Comment 65 : Comment stating that under the EPA's existing timeline, data collection and analysis will need to be completed within a few months in order to allow for the state to start dev eloping its single

- state or multi

- state implementation plan and that given this, the commenters believe that EPA's proposed timeline for plan development and submission is unrealistic. Comment recommending that the EPA provide enough flexibility in the com pliance timelines within the final rules to allow for detailed cost/benefit analyses to be performed.

Response 65 : The EPA agrees that states should have more time to develop plans. In response to this and similar comments regarding timing and planning co ncerns such as the commenters mention, the EPA has extended by an additional year the time allowed for states to finalize their plans and extended by two years the time to meet the first interim goal. The final rule includes this additional time and flexi bility to manage complexities such as reliability, permitting, planning cycles, infrastructure addition and modifications, legislative changes, etc. The EPA also clarified that requirements of the initial plan submittal are designed to be readily achievabl e by states that intend to submit an approvable final plan. State plan approaches are discussed in sections VIII.C of the CPP final rule preamble. Section VIII.D of the CPP final rule preamble addresses state plan components and approvability criteria for both single

- and multi

- state plans. The ability of EGUs to implement the best system of emission reduction and associated building blocks is discussed in section V of the CPP final rule preamble

The following are summaries of the specific public comments u nder this comment:

Commenter s noted that EPA has repeatedly stated that it is up to the individual state to determine what compliance approach is the most cost effective for its electric customers. C ommenter s noted that this suggests that EPA expects state s to complete cost/benefit analyses of its potential compliance options, then develop a plan that is the most cost effective for the state. C ommenter s stated that as based on EPA's own past cost/benefit analyses of various environmental regulations, conduc ting a thorough and detailed cost/benefit analysis is time consuming. Further, the commenter s stated that given that there are numerous compliance options available within the framing of the proposed rules, numerous cost/benefit analyses will need to be co mpleted.

C ommenter s noted that in order to complete its cost/benefit analyses, South Dakota will need to assess compliance options for a single

- state implementation plan while at the same time assessing compliance options for multi

- state plans. C ommenter s stated that data collection from numerous stakeholders will be required for a detailed analysis. C ommenter s stated that this includes collecting data from IOUs, generation and transmission cooperatives, distribution cooperatives, municipal electric provid ers, independent system operators, and other states. After data collection, the commenter s stated that a detailed model will need to be built to forecast the cost/benefit of potential compliance options in order to provide the state with foundation for its decision making. Under EPA's existing timeline, the commenter s stated that data collection and analysis will need to be completed within a few months in order to allow for the state to start developing its single

- state or multi

- state implementation plan. Given this, the commenter s believe d that EPA's proposed timeline for plan development and submission is unrealistic. C ommenter s recommended EPA provide enough flexibility in the compliance timelines within the final rules to allow for detailed cost/benefit analyses to be performed.153 Comment 66 : Comment suggesting that the EPA make the 2

- year extension currently available for negotiating multi

- state plans also available to states that are making good faith efforts to finalize single state plans.

Response 66 : The EPA agrees that states should have more time to develop plans . In response to this and similar comments regarding timing and planning concerns such as the commenters mention, the EPA has extended by an additional year the time allowed for states to finalize their plans and extended by two years the time to meet the first interim goal. The final rule includes this additional time and flexibility to manage complexities such as reliability, permitting, planning cycles, infrastructure addition and modif ications, legislative changes, etc. The EPA also clarified that requirements of the initial plan submittal are designed to be readily achievable by states that intend to submit an approvable final plan.

Section VIII of the CPP final rule preamble addresse s state plans

– both single and multi

- state. Specifically, section VIII.E discusses state plan submittals and timing.

The following are summaries of the specific public comments under this comment:

Commenter s explained that development of a state plan in Colorado will likely involve the Colorado Department of Public Health and Environment

- Air Pollution Control Division (APCD), the Colorado Public Utilities Commission (PUC), the Colorado Energy Office, and numerous stakeholders, including the owners and o perators of 36 different facilities, as well as environmental organizations and other groups. The commenter s stated that a number of different but related jurisdictions must be considered.

The commenter s explained that, in Colorado, the PUC has exclusive statutory authority to regulate the IOUs and associated electric resource decisions. The commenter s stated that the PUC has established processes that carefully evaluate load forecasts and variations, system reliability and costs, while balancing considera tion of the public health and welfare. The
commenter s stated that EPA's proposal could directly impact Colorado's existing processes governing dispatch and transmission. The commenter s stated that while BSER is established through the four building blocks, the lack of flexibility (discussed by the commenter s elsewhere) may require more development of renewable energy and/or DSM than Colorado's existing processes would allow. The commenter s stated that for example, Colorado's RES includes a statutory rate ca p (two percent on an individual ratepayer's bill), which could be impacted by higher renewable generation if that were a selected option in meeting the state goal.

The commenter s stated that, Colorado legislation may be needed to clarify or direct state
ag encies on their respective roles and authorities. The commenter s stated therefore, a 1

- year time frame would not be sufficient. The commenter s stated that procedurally, Colorado's state legislature requires SIP submittal by no later than January of each ye ar for review during that year's legislative session. The commenter s stated that the shortest scenario for Colorado's plan submittal to EPA would be summer 2017, assuming EPA finalizes the carbon pollution standards in June of 2015, Colorado takes only 1 y ear to formulate and adopt necessary rules, the state legislature reviews the plan in the 2017 Legislative Session, and the Governor submits a plan to154 EPA in summer 2017. The commenter s stated that in reality, the state plan may not be ready for legislativ e review until 2018. The commenter s stated that as a result, the commenter s suggested that EPA make the 2

- year extension currently available for negotiating multi

- state plans also available to states that are making good faith efforts to finalize single st ate plans.

Comment 67 : Comment arguing that the proposed timeframe does not even provide sufficient time to draft the initial plan required to request an extended timeframe for submission, and requesting that at minimum the following initial draft require ments be deleted from the final rule: a description of the plan approach, an explanation of the path to completion, and a summary of the state's response to any significant public comment on the approvability of the initial plan.

Response 67 : The EPA does not agree. The EPA has clarified in the final rule that requirements of the initial plan submittal are designed to be readily achievable by states that intend to submit an approvable final plan. The EPA has also extended the time allowed for states and r egional planning groups to finalize their plans and meet the first interim goal. The final rule includes this additional time and flexibility to manage complexities such as reliability, permitting, planning cycles, infrastructure addition and modifications , legislative changes, etc

. State plan approaches and additional considerations may be found in sections VIII. C and VIII.I of the CPP final rule preamble . Components of state plans and approvability criteria are described in section VIII.D of the CPP final rule preamble . In section VIII.E of the CPP final rule preamble , state plan submittals and timing are delineated. Compliance and performance demonstrations are discussed in section VIII.F of the CPP final rule preamble

. The following are summaries of the specific public comments under this comment:

Commenter s argued that the proposed rule does not provide sufficient time for states to pass enabling legislation, which will be necessary for many states, including Colorado, that do not have the regulatory str ucture necessary to develop and enforce a statewide plan. To adopt an enforceable state plan, the commenter s said Colorado will need to pass legislation granting regulatory authority over activities within the building blocks and establishing authority ove r traditionally non

- jurisdictional utilities. Following the finalization of the proposed rule, the
commenter s noted that the first opportunity the Colorado General Assembly will have to address the issue would be the January

- May 2016 legislative session. T he commenter s stated that the Colorado General Assembly will be tasked to debate and decide which governmental entity has the authority over affected utilities and how the carbon reduction mandates will be achieved. Assuming the adoption of such authorizin g legislation, the commenter s indicated that Colorado entities will only begin to draft the state plan by the June 1, 2015, deadline. The commenter s argued that the proposed timeframe does not even provide sufficient time to draft the initial plan required to request an extended timeframe for submission. The commenter s requested that at minimum the following initial draft requirements be deleted from the final rule: a description of the plan approach, an explanation of the path to completion, and a summary of the state's response to any significant public comment on the approvability of the initial plan.155 Comment 68 : Comment asserting that the final state emission rate goals and compliance periods must consider and accommodate the operational reliability req uirements of the interconnected power system, and that the EPA must be willing to allow states to address these changes (i.e., needed to be in compliance) by proposing revised compliance plans as necessary to meet the 2030 goals.

Response 68 : The EPA rece ived broad support for allowing states to submit modifications to approved state plans and we agree that this is an important aspect of this program. In this rulemaking, therefore, the EPA is finalizing that a state may revise its state plan, and states in a multi

- state plan may revise their joint plan. The final rule has several measures to ensure that it does not interfere with the industry’s ability to maintain reliability. EPA discusses reliability concerns and the reliability safety valve in section VI II

. I of the CPP final rule preamble. State plan submittal and timing as well as the approval process for state plans is found in section VIII.E of the CPP final rule preamble. EPA has also finalized a process to revise state plans in section VIII, as well.

The following are summaries of the specific public comments under this comment:

Commenter s asserted that the final state emission rate goals and compliance periods must consider and accommodate the operational reliability requirements of the interconnecte d power system. The commenter s stated that as EPA notes, states and electric utilities are in the process of transitioning the generating fleet and the transmission system so that it is cleaner and more resilient. The commenter s stated that achieving the i nterim and 2030 goals would accelerate this transition dramatically and require significant changes to the interconnected power system and the way that it operates. The commenter s stated however, the proposed state goals and compliance period do not accoun t for the complexity of power grid operations adequately, nor sufficiently address how the need to maintain reliability affects the pace and timing of implementing such changes. The commenter s stated that the need to maintain operational reliability while undertaking significant changes to the way in which power is generated, transmitted and consumed has important implications for EPA's BSER determination, the computation of the state

- specific emission rate goals and the achievement of the proposed interim average goals. The commenter s stated that it is essential that these changes be implemented in a way that maintains reliability for electricity customers. The commenter s stated that while EPA does not have the expertise to assess fully the implications of the proposed guidelines on the interconnected power system, that does not mean that the Agency can ignore the complexity of the electric system when developing state

- specific emission rate goals and compliance timelines. The commenter s stated that rather, EPA should take into account information from experts in reliable system operations to develop achievable final goals and a workable compliance period that does not jeopardize reliable electric service. The commenter s stated however, all of the reliability studies and information needed to assess the significant changes that will be required to achieve the interim and 2030 goals will not be available before EPA finalizes the proposed guidelines or even before states are required to submit compliance plans f or EPA approval. The commenter s stated that states, electric utilities, system operators and other regulators will need sufficient time to assess the changes that will be required to implement the state plans and will need the time required to make the sys tem changes and develop the infrastructure needed to implement the state plans and maintain reliability. The156 commenter s stated that going forward, EPA must be willing to allow states to address these changes by proposing revised compliance plans as necessa ry to meet the 2030 goals.

Comment 69 : Comment recommending that the EPA develop a method for updating or even allowing a complete replacement of a state plan due to unforeseen issues (e.g., multi

- state or third party agreements falling apart, extreme wea ther conditions).

Response 69 : The EPA received broad support for allowing states to submit modifications to approved state plans and we agree that this is an important aspect of this program. In this rulemaking, therefore, the EPA is finalizing that a st ate may revise its state plan, and states in a multi

- state plan may revise their joint plan. In section VIII.E of the CPP final rule preamble, EPA has finalized the ability to adjust state plans through plan revisions as a result of certain conditions.

The following are summaries of the specific public comments under this comment:

Commenter s recommended that EPA develop a method for updating or even allowing a complete replacement of a state plan due to unforeseen issues such as a multi

- state or third party agreements falling apart, extreme weather conditions, fuel supply shortages, and unforeseen economic crisis.

Comment 70 : Comment stating that the EPA should build more flexibility into the CPP by allowing states to update their state implementation plans during the interim compliance period.

Response 7 0 : The EPA received broad support for allowing states to submit modifications to approved state plans and we agree that this is an important aspect of this program. In this rulemaking, therefore, the EPA is finalizing that a state may revise its state plan, and states in a multi

- state plan may revise their joint plan. See section VIII.E of the CPP final rule preamble for a discussion on adjusting state plans.

The following are summaries of the specific publi c comments under this comment:

Commenter s stated that EPA should build more flexibility into the Clean Power Plan by allowing states to update their state implementation plans during the interim compliance period.

Comment 7 1 : Comment recommending that sta tes be given the option to submit an individual state plan first within the EPA's suggested timeframe, then be allowed 2 years of additional time to submit a multi

- state plan or modular agreements, and recommending that states that are unable to prepare fu ll plans within that timeframe should be allowed to submit non

- binding interim plans in exchange for an extra year.157 Response 7 1 : See section VIII.E of the final rule preamble of the CPP for EPA’s response to this

comment.
The following are summaries of th e specific public comments under this comment:

C ommenters recommended that the final rule address the situation where states submit an individual state plan, but later enter into a modular multi

- state plan or agreement.

Commenter s stated that EPA's propos al requires each state to submit a plan which demonstrates that it will meet its states' emission performance levels (state

- specific interim goals over the period 2020 to 2029 and final goals over the final compliance period 2030 to 2032) and beyond). The commenters noted that EPA proposes that each state plan contain twelve components which would be required to be submitted within 1 year (with the possibility of a 1

- to 2

- year extension) after EPA finalizes its rule. The commenters stated that EPA is also allowing multiple states to join such that the individual state performance goals in the emission guidelines would be replaced with an equivalent multi

- state performance goal. Commenter s stated that there are advantages to developing multi

- state plans (or modular agreements) because the interconnected electric grid crosses state borders, and because uncoordinated state

- level compliance plans may negatively affect the dispatch of the electric system and result in reliability issues. Commenters stated that th ese issues are complex and will take time to address in parallel with a state's development of its state plan. The commenters recommended that states be given the option to submit an individual state plan first within the EPA's suggested timeframe, then be allowed 2 years of additional time to submit a multi

- state plan or modular agreements. The commenter s stated that this additional time (i.e., a 2

- year extension consistent with the EPA's proposal for multi

- state plans) to develop binding legal agreements and adopt state legislation will likely be necessary to implement a multi

- state plan or modular agreements.

Commenter s stated that the process of developing a plan for reducing emissions from existing EGUs in an interconnected, multi

- state electric system that is subject to regulation at the local, state, and federal levels will take significant time. The commenter s noted that state environmental regulators, utility regulators, stakeholders, and consumer advocates will need time to coordinate their actions and resolve competing state requirements. According to the
commenter s , because state plans will impact generation, transmission, distribution and consumption both within the state and in neighboring states, states will also need to consult with stakeholder s in the private sector, other states, and regional and federal electricity market operators, reliability organizations, and transmission regulators. In addition, the commenter s noted because state plans for one state may affect ratepayers in neighboring s tates, states and utilities may need to participate in neighboring states' implementation planning processes at the same time that they are participating in their home state's process. Finally, the commenter s indicated that states are likely to initially p ursue a hybrid approach in which the state will submit a single

- state plan that will be predicated on approval of modular multi

- state agreements to address interstate effects and take advantage of potential multi

- state efficiencies.

Consequently, the comme nter s concluded that the preparation, proposal, adoption pursuant to public comment, and submission of state plans, as well as multi

- state agreements, will involve an iterative, multi

- stage consultation and negotiation process that could take years to conc lude. The
commenter s explained, in light of their experience working with state agencies in California and158 neighboring states as well as regional and federal transmission and reliability organizations, the state plan submission timelines proposed by the EP A are too aggressive to enable sufficient consultation and input from all relevant stakeholders and agencies. The commenter s stated that these short timelines could lead to a rushed consultation and analysis period at the state level, which could in turn r esult in the submission of flawed state plans that would not achieve the required CO2 emission reductions in the most efficient and cost

- effective manner possible. Moreover, the commenter s noted that states and regions must be given sufficient time to mode l and evaluate the potential reliability impacts of their proposed plans and those of neighboring
states.

The commenter s recommended that EPA give states 2 years to prepare single

- state plans, and 3 years to prepare multi

- state plans or plans that rely in part on modular multi

- state agreements. The commenter s suggested that states that are unable to prepare full plans within that timeframe should be allowed to submit non

- binding interim plans in exchange for an extra year to prepare and submit final impleme ntation plans. Under this alternative, the commenter s suggested that states could have as much as 3 years from the promulgation of a final rule to submit single

- state plans, and 4 years to submit multi

- state plans or plans relying on modular multi

- state ag reements.

The commenter s recommended that the final rule should also provide a process by which states could amend a plan, particularly if the state enters into a modular multi

- state agreement after its state plan is finalized. The commenter s noted that th e EPA should expect that state plans will need to be updated from time

- to

- time to reflect changes in the electric grid likely over the next decade. The commenter s also suggested that the EPA should provide clear guidance on the procedures states can use to propose and seek approval for such amendments.

Comment 7 2 : Commenter s recommending that the EPA build additional flexibility in the compliance timeline embedded within the final rules in order to allow for states to establish a regional trading program should they determine that is the most cost effective compliance option.

Response 7 2 : In response to this and similar comments regarding timing and planning concerns such as the commenters mention, the EPA has extended the time allowed for states and reg ional planning groups to meet the first interim goal. The EPA has extended the deadline for meeting the interim goal an additional 2 years from 2020 to 2022. Concurrent with this final rule EPA is also proposing model rules for state plans which, when fina lized, states may wish to use to facilitate the development of their state rule, as well as multi

- state plans.

For state plan submittals and timing, see subsection VIII.E of the CPP final rule preamble.

The following are summaries of the specific public c omments under this comment:

Commenter s stated that one possible compliance option EPA identified is that states could enter into a multi

- state plan that has a regional carbon trading program. The commenter s stated that EPA uses the Regional Greenhouse Gas Initiative (RGGI) as an example carbon trading program. The commenter s noted that should a state decide to enter into a multi

- state implementation plan with a regional trading program, that plan would be required to be submitted to EPA by June 30, 2018, un der the proposed rules. Further, the commenter s noted159 that the first compliance year under the proposed rules is 2020. The commenter s stated that EPA's proposed rules thus leaves 18 months for the states that are party to the multi

- state plan to develop a regional trading program. However, the commenter s noted that it took states operating under RGGI six years (from 2003 to 2009) to form the program, pass legislation, and start trading. Based on this, the commenter s stated that EPA's timeline for compliance under a regional trading approach is unrealistic. The commenter s recommended that EPA build additional flexibility in the compliance timeline embedded within the final rules in order to allow for states to establish a regional trading program should they determine that is the most cost effective compliance option.

Comment 7 3 : Comments noting that the development, refinement, and review process of a regional plan across state lines will be difficult and require additional time beyond what is allowed under the proposed rule.

Response 7 3 : The EPA does not agree that multi

- state plans should receive additional time beyond the three years allowed in the final rule. The EPA clarifies that requirements of the initial plan submittal are designed to be readily ac hievable by states that intend to submit an approvable final plan thus relieving pressure on states to have fully developed plan elements in place within the first 13 months of the full three year planning period. The final rule also provides an additiona l 2 years (from 2020 to 2022) for all state plan types before the compliance period begins. The final rule includes this additional time and flexibility to manage complexities such as reliability, permitting, planning cycles, infrastructure addition and mo difications, legislative changes, etc. In addition, Concurrent with this final rule EPA is also proposing model rules for state plans which, when finalized, states may wish to use to facilitate the development of their state rules, including multi

- state pl an. See section VIII on state plans in the CPP final rule preamble. Specifically, subsection VIII.D describes state plan components and approvability criteria while subsection VIII. E addresses state plan submittals and timing. EPA has aligned the submittal dates for single and multi

- state plans.

The following are summaries of the specific public comments under this comment:

Commenter s disagreed that the time frames proposed in the rule do not allow adequate time to devise, evaluate and, deploy a regional pr ogram given the extreme complexities of the rule and how permanent and enforceable control measures will be developed and implemented across state lines. The commenter s stated that the difficulties encountered under a state only plan will also be present i n the regional planning process. Additionally, the commenter s stated that there are added difficulties in dealing with multiple sets of state governmental agencies, as well as multiple state rules. The commenter s noted that the development, refinement, and review process of a regional plan across state lines will be difficult and require additional time beyond what is allowed under the proposed rule.160 Comment 7 4 : Comment stating that there are major policy, regulatory and resource planning choices that stat es will need to make in order to implement the CPP

-- and some of these choices are constrained by the timeline the EPA currently proposes for implementation of the CPP.

Response 7 4 : In response to this and similar comments regarding timing and planning co ncerns such as the commenters mention, the EPA has extended the time allowed for states and regional planning groups to finalize their plans and meet the first interim goal. The final rule includes this additional time and flexibility to manage complexitie s such as reliability, permitting, planning cycles, infrastructure addition and modifications, legislative changes, etc. The EPA also clarified that requirements of the initial plan submittal are designed to be readily achievable by states that intend to s ubmit an approvable final plan. To help facilitate the timely development of approvable plans, the EPA will continue its extensive outreach to states and work closely with them on the need for additional tools and guidance.

EPA addresses the commenter s ’ concerns in section VIII of the CPP final rule preamble. Specifically, subsections VIII. C and VIII. G lay out the state plan approaches and additional considerations for state plan approaches; subsection VIII. D describes state plan components and approvabil ity criteria; subsection VIII. E addresses state plan submittals and timing, as well as the approval process; subsection VIII. F looks at performance demonstrations and compliance, and subsection VIII.H offers resources for states to consider in developing p lans.

The following are summaries of the specific public comments under this comment:

Commenter s stated that there are major policy, regulatory and resource planning choices that states will need to make in order to implement the CPP

-- and some of these cho ices are constrained by the timeline EPA currently proposes for implementation of the CPP. The

commenter s noted that EPA proposed a deadline of June 30, 2016 for submittal of a state plan

-- 13 months following promulgation of the final rule. The commenter s also noted that states submitting individual plans may request a 1

- year extension, while those participating in a multistate plan may request an extension of two years (provided they submit an update after 1 year). The commenter s pointed out that, in this period, EPA's CPP as proposed requires states to engage in a major resource planning exercise in order to determine how best to meet state targets at least cost and risk to their customers. According to the commenter s , in the Western U.S. this is a substan tial undertaking. The commenter s also noted that multistate arrangements would require considerable time and resources to develop. The commenter s stated that there is no existing institutional infrastructure (i.e., an organized market and system operator) in the WECC region. The commenter s indicated that states must make these decisions either alone under a single state plan, or in collaboration with other states or regional entities. The commenter s listed a few of the key questions that states would have t o consider during this period:

• Whether to use a rate or mass based limit?

• How will relevant agencies within a state coordinate efforts (e.g., state utility regulators, environmental quality regulators, Department of Energy officials and potentially others )?161 • What additional authority is needed to develop and implement a plan? Will state legislation be required?

• What are the state administrative processes and the timing of those processes (especially DEQ process for SIP adoption; utility commission planning and approvals)?

• Whether to file a single state or multistate plan?

• If a multistate plan, what process will lead to its formation and what forms will it take? Will there be time for states with different process requirements and timetables to meet these dea dlines?

Comment 75 : Comment stating that implementation of EPA's proposed CPP for existing EGUs is problematic

- so much so that it will be literally impossible for states to execute, and noting that there are many fundamental issues and questions to be a ddressed (e.g., multi

- state plans require interstate compacts, which require legislative approval and possibly Congressional approval to comply with the Compact Clause of the U.S. Constitution).

Response 75 : In response to this and similar comments regar ding timing and planning concerns such as the commenters mention, the EPA has extended the time allowed for states and regional planning groups to finalize their plans and meet the first interim goal. The EPA also clarified that requirements of the initial plan submittal are designed to be readily achievable by states that intend to submit an approvable final plan. The final rule includes this additional time and flexibility to manage complexities such as reliability, permitting, planning cycles, infrastruc ture addition and modifications, legislative changes, etc. EPA has finalized a compliance start date of 2022 for the final CPP instead of 2020 as proposed. Information regarding the state plans may be found in section VIII of the CPP final rule preamble. S ubsection VIII.D of the final rule preamble includes state plan components and approvability criteria. Information on timing and state plan submittals is found in subsection VIII.E of the final rule preamble. Section VIII of the final rule preamble also co vers multi

- state plans and multistate coordination as well as legal issues regarding multi

- state plans.

The following are summaries of the specific public comments under this comment:

Commenter s stated that implementation of EPA's proposed Clean Power Plan for existing EGUs is problematic

- so much so that it will be literally impossible for states to execute. The
commenter s stated that the agency has set unrealistic interim and final goals for most states and allowed entirely insufficient timelines for sta tes to analyze the final rule: evaluate potential compliance strategies; coordinate actions of affected entities; enact state laws and implementing regulations; and provide for meaningful public participation. The commenter s noted that EPA's plan submittal timelines may give the appearance of adequacy, but states are expected to develop and submit a plan that is substantively complete within 1 year after the final rule is published. The commenter s stated that the possibility of 1

- and 2

- year extensions (for single and multiple

state plans, respectively) do not alter the fact that the State must submit this initial plan and it162 must meet all of the agency's requirements for approvability (e.g., EPA describes a dozen required state plan components). 79 FR 34911

- 14. The commenter s noted that West Virginia would face tremendous obstacles if required to implement a state plan as EPA has proposed.

Commenter s stated that the proposed rule provides woefully inadequate time for states to make crucial decisions and tak e actions of historic proportions. The commenter s noted that the submission deadline for a state plan is such that states do not have adequate time to amend state laws and to promulgate implementing state rules. The commenter s stated that section 111(d) im plementation will require state legislatures to enact legislation that establishes the institutional framework that allows state agencies to develop an integrated resource plan for CO2. The
commenter s noted that there are many fundamental issues and questi ons to be addressed, for example:

• What state agency or agencies will have authority over integrated resource planning for CO2, the WVPSC, the WVDOE or the WVDEP?

• In regulated states, like West Virginia, with vertically integrated electric utilities, non

generating distributors (co

- operatives and municipal utilities) will have to be included in the process.

• What part, if any, will the regional transmission organizations (RTOs) play in the plan?

• Will the state participate in a multi

- state program? Which s tates should be included in a multi

- state plan?

• Multi

- state plans require interstate compacts, which require legislative approval and possibly Congressional approval to comply with the Compact Clause of the U.S. Constitution.

• What institutional framework is necessary among the regulatory agencies (WVPSC, WVDOE and WVDEP) in both a state statutory context and an administrative context? What regulatory structures must be in place to enforce CO2 reductions?

• Is EPA casting its jurisdictional net even more br oadly to assume an oversight role over functions a federally enforceable state plan would assign to the WVPSC or the WVDOE?

The commenter s noted that these issues and questions need to be decided and answered by the states to determine what legislation mu st be enacted to provide the necessary framework to allow for the development of approvable state or regional plans. The commenter s noted that this will require resolution of complex issues that are technical, political, logistical and jurisdictional in

na ture which will be extraordinarily difficult, if not impossible in the structure and timeframe that EPA has proposed.

The commenter s explained that states are understandably reluctant, or unable, to enact legislation in the absence of final EPA action. Th erefore, the commenter s stated that enabling legislation would not be expected until after EPA finalizes the regulation, which EPA expects to do by June 2015. The commenter s explained that most state legislative sessions (including West Virginia's)163 are con ducted in the first half of the year. The commenter s stated that the first time enabling legislation could be realistically considered by the West Virginia Legislature would be in January 2016, and such legislation could not be expected to be adopted until April of 2016, if at all. The commenter s noted that often legislation that is adopted differs significantly from that proposed, and similar to Congressional actions, state legislative actions take place on their own time schedule. The commenter s stated th at they have no control over how, when or even if, the Legislature will vote on changes to the West Virginia Code.

The commenter s stated that EPA's June 30, 2016 deadline for initial plan submittal would not allow time for any administrative rules necessar y to implement legislation to even be written, much less be proposed and adopted in West Virginia. To be effective by June 30, 2017, the
commenter s stated that any rules necessary to adopt a state plan must be initially proposed by May 2016. According to t he commenter s , this would effectively require legislative rules to be written in the 1 month timeframe between adoption of enabling legislation in April 2016, and the state's codified deadline for proposing administrative rules in May 2016. The commenter s stated that this is extremely unlikely to happen, especially since it would require the manifold rulemaking efforts of WVDEP, WVDOE, and/or WVPSC to be closely coordinated. The
commenter s noted that The West Virginia Legislature would also have to adopt le gislation approving these rules during its 2017 legislative session, and assuming gubernatorial approval, the earliest that coordinated agency rules could be finalized would be June 2017. The
commenter s stated that after the June 2017 final promulgation of the agencies' rules, a state plan would then have to be assembled. The commenter s stated that a proposed state plan would then require a 30

- day public comment period and adequate time for response to comments before a final plan could be submitted to EPA for approval. The commenter s stated that the 30 day public notice is necessary because there are certain components of a state plan that would not be incorporated in an administrative rule.

The commenter s stated that because of West Virginia's rulemaking r equirements, WVDEP's best

- case timeline for submittal of a state plan is at least a year and a half beyond the June 2016 deadline EPA has proposed. Furthermore, the commenter s stated that WVDEP would not be able to submit a committing plan of action by Jun e 2016 (or a state plan by the June 2017 extension deadline) because the state agency cannot obligate the Legislature or Governor to future action.

The commenter s stated that West Virginia's best

- case (but rather precarious) state plan development scenari o demonstrates that the submittal timeline in EPA's proposed rule is unworkably short, especially when compared to other submittal timelines under CAA sections 111(d) and 129. The commenter s provided for example that the "procedure similar to that provided by section 7410" in section 111(d) refers to the submittal of State Implementation Plans (SIP), for which the CAA allows 3 full years. Because of the unprecedented complexity of EPA's proposed rule, the commenter s stated that development of an approvable state plan under section 111(d) would be an order of magnitude more difficult than development of a SIP.

Comment 76 : Comment stating that the Agency must extend the deadline for the submission of state plans under CAA section 111(d) to three years, so as to parallel the requirements for SIPs under CAA section 110.164 Response 76 : In response to this and similar comments regarding timing and planning concerns such as the commenters mention, the EPA has extended the time allowed for states and regional plannin g groups to finalize their plans and meet the first interim goal. With an approvable extension request, states have a full three years to submit a complete plan. The final rule includes this additional time and flexibility to manage complexities such as re liability, permitting, planning cycles, infrastructure addition and modifications, legislative changes, etc. See subsection VIII.E of the final rule preamble addressing state plan submittals, the approval process, and timing.

The following are summaries of the specific public comments under this comment:

If EPA expects states to develop satisfactory state plans, commenter s stated that the Agency must extend the deadline for the submission of state plans under CAA section 111(d) to three years, so as to para llel the requirements for SIPs under CAA section 110. The commenter s noted that the plans of the former are likely to be much more difficult to develop than the latter. The
commenter s stated that the regulation of CO2 from the fleet of existing EGUs is a m onumental endeavor and that EPA, therefore, should provide states and the regulated community adequate time to consider, comment on and develop state plans. The commenter s said that the requirement to submit a state plan within 12 months of issuance of the finalized guidelines does not provide adequate time for states to develop a viable plan, and complete the state adoption procedures. The commenter s noted that the rule making process in West Virginia can take from 12 to 18 months to complete, not includin g the time necessary for plan development. The commenter s also pointed out that CAA section 111(d) does not specify any specific time line, and noted that 40 CFR 60.27(a) states: The Administrator may, whenever he determines necessary, extend the period fo r submission of any plan or plan revision or portion thereof.

Comment 77 : Comment recommending (once legal review is completed) that the EPA re

- write its state plan submittal requirements to allow more time to analyze the various options that the EPA is p roposing prior to developing both an initial plan and a complete plan.

Response 77 : The EPA intends to continue extensive outreach to states and work closely with them on the need for additional tools and guidance to facilitate the development of approvabl e state plans. As guidance documents, tools, templates and other resources become available, the EPA, in consultation with the U.S. Department of Energy and other federal agencies, will continue to make these resources available via a dedicated website. Co ncurrent with this final rule EPA is also proposing model rules for state plans which, when finalized, states may wish to use to facilitate the development of their state rule See section VIII of the CPP final rule preamble on state plans. Specifically, subsection VIII.E addresses state plan submittals and timing.

The following are summaries of the specific public comments under this comment:

Commenter s recommended (once legal review is completed) that EPA re

- write its state plan submittal requirements to allow more time to analyze the various options that EPA is proposing prior to developing both an initial plan and a complete plan. The commenter s argued that state165 air quality agencies are overwhelmed by the number of options and methods being presented i n the proposed rule. While EPA presents some simple scenarios and approaches, the commenter s do not believe it is appropriate to limit their approach to these simple scenarios given the importance and magnitude of the rule. The commenter s argued that no st ate can be expected to analyze and complete these challenging tasks within one year of the proposed rule being finalized (two years if a one

- year extension is granted for an individual state plan), especially given the time it takes to formulate, debate, a nd enact on policies and rules that would allow states to make best technical and economic decisions for the benefit of all of its citizens.

Comment 78 : Comment stating that the EPA's proposed schedule for the rulemaking, state plan submittals, and compli ance with the state goals is unreasonable and unworkable, and that states need additional time for plan submittal and compliance.

Response 78 : The EPA does not agree that the rulemaking should be withdrawn. However, i n response to this and similar comment s regarding timing and planning concerns such as the commenters mention, the EPA has extended the time allowed for states and regional planning groups to finalize their plans and meet the first interim goal. The final rule clarified that requirements of th e initial plan submittal are designed to be readily achievable by states that intend to submit an approvable final plan

. The final rule includes this additional time and flexibility to manage complexities such as reliability, permitting, planning cycles, i nfrastructure addition and modifications, legislative changes, etc. See section VIII.E of the CPP final rule preamble, which addresses state plan submittal and timing.

The following are summaries of the specific public comments under this comment:

Commente r s stated that the EPA's proposed schedule for the rulemaking, state plan submittals, and compliance with the state goals is unreasonable and unworkable. The proposed rule's impact to state government is unique, even among EPA's prior utility sector rules and states need additional time for plan submittal and compliance.

The commenter s stated that although the President (in a memorandum dated June 25, 2013) directed the EPA to require that states submit state plans no later than June 1, 2016, the schedule proposed by the EPA is unreasonable and unworkable for states. The commenter s stated that EPA is not legally bound to comply with this directive, especially in light of the complex schema proposed by EPA. The commenter s contended that the Presidential Memo randum was not an executive order, and even if it was, it would not have the full force of law in this instance, particularly since authority to develop standards of performance was granted to the EPA under the CAA, which controls in this instance. Further more, the commenter s noted that proposed rule has a unique impact to state governments. While prior EPA rules targeting the electric utility sector may have had impacts to a state's electrical grid and reliability, the commenter s stated that EPA's proposed CO2 emission guidelines for existing power plants effectively establishes an emission performance standard for the state's entire electrical grid. The commenter s stated that multiple state agencies must review the proposed rule and then assess the feasibi lity and impact of the proposed rule on the state's electrical grid as a whole in order to provide adequate comment to EPA. The commenter s stated that the proposed rule also raises significant and novel166 legal issues involving both state and EPA authority. The commenter s stated that the amount and complexity of planning involved in the development of state plans under the proposed rule is more similar to the SIP process and significantly more complicated than prior CAA section 111(d) rules and the EPA is not allowing adequate time for the states to develop and submit plans. According to the commenter s , the EPA's proposed provisions for granting extensions make it impossible for Texas and likely most other states to qualify for an extension.

Regarding the prop osed implementation schedule, the commenter s charged that EPA has not adequately considered the time for state legislative changes and subsequent rulemaking needed to implement many of the aspects of a state plan that would fundamentally change the states' energy policies. The commenter s explained that legislatures in many states are not on

- going bodies and only meet periodically and Texas is such a state (e.g., the Texas legislature only meets biennially unless a special session is called by the governor). The commenter s stated that Texas' upcoming 2015 legislative session will effectively be over before the EPA finalizes this proposed rule in June 2015 and is not scheduled to meet again until 2017. The commenter s stated that neither did the EPA adequately consider the amount of coordination required between state executive agencies with independent authority over the different aspects of the electric market being regulated by the EPA through its assessment and application of BSER in the proposed rule. The c ommenter s expressed concern about the EPA's interim goal for Texas which is heavily affected by the EPA's arbitrary assumption that a radical re

- dispatching of the state's coal and natural gas combined cycle (NGCC) fleet can occur within a few years. While the commenter s recommended the EPA withdraw the proposed rule, the commenter s stated that if the EPA decides to proceed with the rule then significantly more time needs to be provided to states for state plan development and implementation. At a minimum, the commenter s recommended that the interim goals be removed from the final rule, compliance with the final goals is no earlier than 2030, and that states have until 2020 to submit state plans.

Comment 79 : Comment a ddress ing complications in developing ne w enabling legislation as prerequisites for SIP submittal and rule implementation.

Response 79 : I n response to this and similar comments regarding timing and planning concerns such as the commenters mention, the EPA has extended the time allowed for stat es and regional planning groups to finalize their plans and meet the first interim goal. The final rule includes this additional time and flexibility to manage complexities such as reliability, permitting, planning cycles, infrastructure addition and modif ications, legislative changes, etc. EPA has moved the compliance date from 2020 to 2022 in the CPP final rule. See section VIII of the CPP final rule preamble for information on state plans, including components and approvability criteria in subsection VII I. D and state plan submittals and timing in subsection VIII. E.

The following are summaries of the specific public comments under this comment:

Commenter s addressed complications in developing new enabling legislation as prerequisites for SIP submittal and rule implementation.167 Commenter s stated that never before has a Rule Proposal contemplated such a broad, market

wide system of control. The commenter s stated that many agencies simply do not have the authority to control electric generation or create progr ams that will drive the resource choices assumed by EPA in establishing the state emission budgets. Therefore, the commenter s stated that in order to develop key components of a SIP and begin implementing the Rule Proposal's components by the 2020 interim emissions target date, states will be required to take legislative action.

The commenter s stated that Texas would be uniquely prejudiced by the tight timelines contemplated in the Rule Proposal. The commenter s noted that Texas' legislature meets in every

o dd year, from roughly Mid

- January until the end of May. The commenter s noted that the next legislative session will span from January

- May 2015, with the next session spanning January

May 2017. The commenter s stated that under EPA's current proposed timelin e for finalization, this means that the Texas legislature will be provided no opportunity to meet, discuss, and/or promulgate legislation between finalization of the Rule Proposal and the date of the initial SIP submission deadline. The commenter s stated t hat even with a 1

- year extension, Texas will only have been able to complete one legislative session (Spring 2017) before the SIP submission due date.

The commenter s stated that once legislation is drafted and passed, state agencies will still be required to draft and implement regulations to implement the new rules and develop SIPs; this is a time consuming process under even the best of circumstances, but will be particularly complex given the design and scope of the Rule Proposal. Using Texas as an examp le, the commenter s stated that the Texas Commission on Environmental Quality (TCEQ)

-- the state agency overseeing implementation of environmental rules

-- has historically taken the lead role in submitting SIPs and responding to EPA rulemaking. The commen ter s noted that while other agencies are consulted, the vast majority of the work and burden falls on this one agency. In this "simple" context, the commenter s noted that it often takes years to develop a SIP with this limited external

- agency consultation. The commenter s stated that however, since this Rule Proposal targets the entire electricity industry, numerous other agencies and non

- agencies would have to take lead roles in this development. The commenter s stated that this includes the Public Utility C ommission of Texas (PUCT), the Railroad Commission of Texas (RCT) (which oversees oil and gas development in the state), the relevant RTOs and ISOs, such as the Southwest Power Pool (SPP) and Electric Reliability Council of Texas (ERCOT), among others. The commenter s stated that each of these agencies are distinct, but the Rule Proposal generates significant overlap of issues between these agencies, and potentially others. The commenter s stated that this many cooks in the kitchen will slow down an already a rduous task. The
commenter s stated that it will extend far longer than one or two years after the legislature acts to navigate this rulemaking process, which mandates significant public participation. Therefore, the
commenter s noted that the earliest the S tate of Texas could be ready to implement the type of SIP that the Rule Proposal seems to contemplate would be the Summer of 2019, a full 3 years after EPA has mandated initial state plans must be submitted.

Comment 8 0 : Comment discussing complications pr esented by deregulated electricity markets, as part of their request for more time to develop SIPs.168 Response 8 0 : In response to this and similar comments regarding timing and planning concerns such as the commenters mention, the EPA has extended the time allowed for states and regional planning groups to finalize their plans and meet the first interim goal. The final rule includes this additional time and flexibility to manage complexities such as reliability, permitting, planning cycles, infrastructure a ddition and modifications, legislative changes, etc. See section V of the CPP final rule preamble on the ability of EGUs to implement the best system of emission reduction and associated building blocks.

The following are summaries of the specific public c omments under this comment:

As part of their request for more time to develop SIPs, commenter s discussed complications presented by deregulated electricity markets.

Commenter s noted that every state will confront significant challenges in implementing the provisions of the Rule Proposal, and that that many (if not all) states will have to pass some form of enabling legislation. The commenter s noted that states will have to develop new arrangements between the various regulators that oversee the electricity market (as this rule goes far beyond the traditional domain of state environmental agencies), develop means to expand and concentrate jurisdiction over various parts of the industry, and institute new means to address resource planning and dispatch consid ering carbon emissions. The commenter s noted that states will also potentially attempt to work with neighboring states in developing cooperative agreements or interstate compacts. The commenter s stated that these challenges will only be magnified in states like Texas, which possess deregulated electricity markets.

The commenter s stated that Texas has a highly diversified and large deregulated electricity market. The commenter s stated that Texas at one time had a traditional, vertically

- integrated regulated electricity industry. The commenter s stated the legislators of Texas, however, moved away from this structure and deregulated the electricity market; the purpose was to assist in diversifying the electricity market and introducing market controls as a mean s to control electricity prices. The commenter s stated that so far, this market design has been able to sustain and absorb EPA's previous regulations, including NAAQS and other rules. The commenter s stated that this Rule Proposal is novel and imposes a mas sive, market

- wide, regulatory structure on the entire state. The commenter s stated its complexity and scope require the reintroduction of centralized planning to a state that has, under its authority and ability under the separation of powers, chosen to pr oceed without. The commenter s stated that emissions portfolios would have to be created and emissions from facilities would have to be overseen and balanced

-- not with affordability and competitive prices in mind

-- but with the purpose of reducing CO2 em issions.

Comment 8 1 : Comments stating that the EPA proposes to give itself 12 months to review and either approve or disapprove a state plan, a default extension from the standard 4 months allowed under 40 CFR 60.27 and almost as much time as the states a re given to develop and submit state plans, and suggesting that states should have until at least 2020 to submit state plans.

Response 8 1 : EPA disagrees as the commenters appear to suggest that a full plan must be submitted in June of 2016. A final plan is due on September 6, 2016. However, t he final rule169 provides states with a full three years to develop a final plan if a state chooses to submit an Initial Plan requesting an extension by September 6, 2016

. In the final rule EPA clarified that requirements of the initial plan submittal are designed to be readily achievable by states that intend to submit an approvable final plan

. See subsection s VIII. B and VIII. E on state plan submittal, approval process, and timing in the CPP final rule preamble.

The follow ing are summaries of the specific public comments under this comment:

Commenter s stated that given the immense complexity of issues and cross

- agency state authority needed to implement the rule as proposed, the 13 months that EPA proposes to allow states t o submit a state plan is grossly inadequate. The commenter s stated that the EPA is attempting to force states to make concessions and surrender state authority to the EPA in exchange for the EPA granting an extension, making it impossible for some states t o qualify for extensions. Yet, the commenter s stated that the EPA proposes to give itself 12 months to review and either approve or disapprove a state plan, a default extension from the standard 4 months allowed under 40 CFR 60.27 and almost as much time a s the states are given to develop and submit state plans. The commenter s noted that the vast majority of work involved in the CAA section 111(d) process falls to the states. The commenter s stated that if the EPA considers itself to need additional time to perform its smaller role in the process, then the EPA should acknowledge the burden it is imposing on the states and revise the schedule for state plans submittal. The
commenter s stated that EPA has no justification for holding states to an unreasonable sc hedule to submit state plans, and suggested that states should have until at least 2020 to submit state plans. Additionally, the commenter s asserted that the EPA routinely fails to meet its regulatory deadlines for acting on state submittals.

Comment 8 2 : Comment applauding the EPA's effort to structure the state plan submittal timeline to allow states additional time if needed to develop state plans, while still ensuring progress toward a complete plan

Response 8 2 : The EPA appreciates the commenter s suppo rt of the proposed extension to the submittal deadline. Based on significant comments requesting additional time to manage complexities such as reliability, permitting, planning cycles, infrastructure addition and modifications, legislative changes, etc

. , the EPA has extended the time allowed for states and regional planning groups to finalize their plans and meet the first interim goal. This additional time will help facilitate the development of approvable plans. Concurren t with this final rule EPA is als o proposing a federal rule with the intent to have a final rule promulgated in time to implement a federal rule in those circumstances warranting its application. See subsection VIII.D of the CPP final rule preamble on state plan components and approvabili ty criteria and subsection VIII.E of the CPP final rule preamble on state plan submittal and timing.

The following are summaries of the specific public comments under this comment:

Commenter s applauded EPA's effort to structure the state plan submittal tim eline to allow states additional time if needed to develop state plans, while still ensuring progress toward a complete plan. Specifically, the commenter s supported EPAs proposal to provide a 1

- year extension to170 June 30, 2017, for states to submit a comple te individual state plan if the state documents the need for additional time, and a 2

- year extension to June 30, 2018, if the state plan includes a multi

- state approach.

Commenter s also supported EPA's proposal of an initial plan due by all states on June 30, 2016, to meet the timeline established in President Obama's June 2013 Presidential Memorandum on Power Sector Carbon Pollution Standards. The commenter s stated that these initial plans appropriately require states to demonstrate commitment to creating an individual state program or participation in a multi

- state planning process, as well as progress toward the development of a complete state plan or multi

- state plan. The commenter s stated that initial plans also appropriately require initial quantifica tion of the level of emission performance that will be achieved in the plan. The commenter s supported this requirement but noted that this quantification ought not require complex methodology or modeling.

The commenter s noted that some states may need more time beyond the provided extensions to develop state plans, due to time

- intensive stakeholder processes, regulatory requirements, and the need in many states for legislative approval or other action. The commenter s suggested that EPA consider allowing sta tes an additional 1

- year extension for the final plan under certain circumstances. The commenter s stated that such a request should be granted only upon a showing of good cause (e.g., where a state plan requires legislative approval and a state legislature meets only every other year).

Commenter s also noted that development of state plans will require significant staffing and resources, and urged the federal government to provide additional funds to support state plan development. The commenter s stated tha t in addition, that their states have extensive experience developing state and regional clean energy and carbon emission reduction programs and are willing to work with other states to share information, analysis, and lessons learned from our
programs as all states begin to consider compliance options and develop state plans.

Comment 8 3 : Comment stating that the EPA should partner with states to ensure timely submittal of state plans and allow extensions beyond those provided for in the proposal where

warranted, and requesting that the EPA issue clear guidelines on the state plans in or with the final rule.

Response 8 3 : The EPA is committed to continue extensive outreach to states and stakeholders and work closely with them to provide timely assistance and support in form of additional tools, training and guidance to facilitate the development of approvable state plans within the timeframe specified in the rule. As guidance documents, tools, templates and other resources become available, the EPA, in con sultation with the U.S. Department of Energy and other federal agencies, will continue to make these resources available via a dedicated website. Concurrent with this final rule EPA is also proposing model rules for state plans which, when finalized,
state s may wish to use to facilitate the development of their state rule. EPA is concurrent with this final rule proposing a federal rule with the intent to have a final rule promulgated in time to implement a federal rule in those circumstances warranting its application. See section VIII of the CPP final rule preamble on state plans. Subsection VIII. C addresses state plan approaches171 while subsections VIII. G and VIII.I include additional considerations for state plans. In subsection VIII.D, state plan component s and approvability criteria are laid out. Subsection VIII.E covers state plan submittals and timing while subsection VIII. F addresses performance demonstrations and compliance. Resources for states to consider in developing plans are found in subsection V III. H

. The following are summaries of the specific public comments under this comment:

Commenter s stated that EPA should partner with states to ensure timely submittal of state plans, and allow extensions beyond those provided for in the proposal where wa rranted. The
commenter s expressed appreciation for the tremendous outreach effort undertook in the development of this proposal. The commenter s noted that they expect to continue to work in a strong partnership with EPA to meet the very ambitious timeline laid out in the proposal. The
commenter s stated that this is a significant new regulatory program which in many states will likely require additional authority under state law, rulemaking, and coordination among several state, local, and federal agencies. Depending on the type of plan developed, there may also be negotiation with other states on coordination and implementation of multi

- state measures. The
commenter s supported aggressive and quick action to address carbon pollution, however, they understand that the planning process is complex and will take time. The commenter s suggested that EPA consider allowing additional extensions where warranted to put the necessary laws and rules in place and finalize the state plan. The commenter s recommended that EPA set up rule language that clearly does not allow for unlimited extensions by states as a means to delay developing state plans to meet the rule. Conversely, the commenter s stated that EPA needs to be developing its federal plan to implement the final rule so it can be quickly implemented in states which have failed or chosen to not develop and implement a state plan. The commenter s requested that EPA issue clear guidelines on the state plans in or with the final rule. These guidelines would form the basis for states to develop plans and for EPA regions to review and approve them. The commenter s stated that any additional guidance issued by EPA should be discretionary and available as soon as possible in advance of the deadline for initial plan submittal.

Comment 8 4 : Comment proposing that the EPA should require the states to submit by December 1, 2015 a notice as to what they intend to do: submit a state plan by the due date, request an extension for a specified reason or decline to comply (i.e. accept a federal plan), because the EPA will need to promulgate a federal plan for the state if it fails to do either.

Response 8 4 : The EPA does not agree with the commenter s . EPA is

, con current with this final rule

, proposing a federal rule with the intent to hav e a final rule promulgated in time to implement a federal rule in those circumstances warranting its application. See subsection s VIII. B and VIII. E of the CPP final rule preamble for information on state plan submittals and timing.

The following are summar ies of the specific public comments under this comment:172 Commenter s noted that EPA set a date of July 1, 2016 for the submittal of state plans or an application for a delay. Because EPA will need to promulgate a federal plan for the state if it fails to do either, the commenter s proposed that EPA should require the states to submit by December 1, 2015 a notice as to what they intend to do: submit a state plan by the due date, request an extension for a specified reason or decline to comply (i.e. accept a fed eral plan). If a state submits such a notice, the commenter s said it should be allowed to count the effect of any measure implemented after the notice rather than after the submittal of the state or multi

- state plan.

Comment 85 : Comment stating that the E PA's proposed rule would require states to begin implementing their plans before they have even received the Agency's approval.

Response 85 : In response to this and similar comments regarding timing and planning concerns such as the commenters mention, the EPA has extended the time allowed for states and regional planning groups to finalize their plans and meet the first interim goal. . The date EPA finalized for the start of the first compliance period is 2022, providing state s with two additional years. S ee subsection s VIII. B and VIII. E of the CPP final rule preamble on state plan submittal and timing. Building block 3 is discussed under section V .E of the CPP final rule preamble. Subsection VIII.F of the CPP final rule preamble covers state plan performan ce demonstrations and compliance, including information on renewable energy.

The following are summaries of the specific public comments under this comment:

Commenter s stated that EPA's methodology is flawed because it requires states to begin increasing r enewable energy generation by 2017, three years before the compliance period begins for the Proposed Guidelines. The commenter s stated that to put this timeline in perspective, initial state plan submissions are not due to EPA until June 30, 2016, and EPA is allowing itself until June 30, 2017, to take final action approving or disapproving these plans. 79 FR 34915

- 16. The commenter s stated thus, EPA's proposed rule would require states to begin implementing their plans before they have even received the Ag ency's approval. The

commenter s stated that the disconnect is even greater in light of the fact that states may delay plan submission until June 30, 2017 (for various reasons), or June 30, 2018 (for multi

- state plans), pushing final EPA approval of these p lans to mid

- 2018 or

- 2019. Id. at 34915. The

commenter s stated that in addition, building new renewable energy generation capacity requires several years to allow for planning, obtaining funding, seeking regulatory approval, and construction. The commenter s stated that increasing Renewable Energy capacity will also require new transmission infrastructure, which can require 8

- 10 years to complete. The commenter s stated that in effect, states would have needed to begin efforts to implement Building Block 3

se veral years ago.173 Comment 86 : Comments stating that the need to evaluate and respond to reliability issues creates significant unknowns regarding the process and time required for completing such analyses.

Response 86 : In response to this and similar comm ents regarding timing and planning concerns

, such as the commenters mention, the EPA has extended the time allowed for states and regional planning groups to finalize their plans and meet the first interim milestone . The final rule includes this additional time and flexibility to manage complexities such as reliability, permitting, planning cycles, infrastructure addition and modifications, legislative changes, etc. See subsection s VIII. B and VIII. E of the CPP final rule preamble for a discussion of reliabi lity and the reliability safety valve mechanism . See also the technical support document called, Resource Adequacy and Reliability Analysis TSD for the CPP Final Rule, in the docket to this final rule.

The following are summaries of the specific public com ments under this comment:

Commenter s stated that uncertainties affect plan development due to reliability issues. The
commenter s noted that EPA projects that implementation of the proposed rule will result in significant changes in how and where electricit y is generated. The commenter s noted that the agency estimates that as a result of implementing the proposed rule up to 49 GW of existing coal

- based generation will retire by 2020, that existing NGCC units will be utilized more, and that new renewable ener gy development and energy efficiency programs will be implemented. The commenter s stated that each of these outcomes must be evaluated by utilities, state utility commissions, and regional transmission organizations in order to assess and to mitigate poten tial reliability issues. The commenter s stated that the process for performing such evaluations for an individual state alone could be extensive. The commenter s stated that given the fact that the transmission grid crosses state boundaries, and that multip le entities may be responsible for regional grid operations within a single state, the process of evaluating reliability concerns in context with proposed implementation strategies from multiple states, which may or may not be collaborating together, becom es significantly more complex and time consuming. As a result, the
commenter s stated that the need to evaluate and respond to reliability issues creates significant unknowns regarding the process and time required for completing such analyses.

Comment 87 : Comment stating that the 111(d) rule provides insufficient time for coordination with partners in multi

- state power grids, and noting that states need to understand how EE and

re

- dispatch in other states affect each state's ability to meet its goal.

Respo nse 87 : In response to this and similar comments regarding timing and planning concerns such as the commenters mention, the EPA has extended the time allowed for states and regional planning groups to finalize their plans and meet the first interim miles tone . The final rule includes this additional time and flexibility to manage complexities such as reliability, permitting, planning cycles, infrastructure addition and modifications, legislative changes, etc. See subsection s VIII. B and VIII. E on timing and on state plan submittals

– both single and multi

state

-- in the CPP final rule preamble. See section VIII.G of the CPP final rule preamble on the electric reliability and the reliability safety valve. Additional discussions on reliability may be174 found in the docket to this final rule. See the technical support document entitled, Resource Adequacy and Reliability Analysis TSD for the CPP Final Rule. Renewable energy credit trading is discussed throughout section V of the CPP final rule preamble. RE credits and trading are also addressed in VIII. I . Section V also discusses the ability of EGUs to implement the best system of emission reduction. EPA decided not to include building block 4 on demand side energy efficiency in the best system of emission reductio n and associated building blocks in the final CPP. See section V of the final rule preamble for more information on BSER. However, states may use EE as a non

- BSER compliance measure.

The following are summaries of the specific public comments under this co mment:

C ommenters stated that the time should be allowed for multi

- state coordination.

Commenter s stated that the 111(d) rule provides insufficient time for coordination with partners in multi

- state power grids. The commenter s stated that Texas's singular ly unique composition of fully

- competitive service territories, with wholesale and retail markets within Electric Reliability Council of Texas (ERCOT) that are overseen by the Public Utility Commission of Texas (PUCT), and the non

- ERCOT traditional integra ted utilities subject to the traditional retail cost of service ratemaking jurisdiction of the PUCT, adds an additional layer of complexity and difficulty for Texas in determining how to comply with the already dizzyingly complex 111(d) rule. The commenter s stated that particularly with respect to Texas utilities not in ERCOT, consideration of a compliance plan will necessarily involve the PUCT consulting with all states in the Midcontinent Independent System Operator (MISO), Southwest Power Pool (SPP), and Western Electricity Coordinating Council (WECC), along with the respective grid operators. The
commenter s noted that this consultation will need to occur even if Texas ultimately decides to file a Texas

- only state plan. The commented stated that this is b ecause Texas, as well as all of the other states in the power grids, along with FERC and NERC, will need to understand every other state's plan in order to properly assess the reliability impacts. The commenter s stated that this process will likely need to be iterative, and the projected 1 year between the final promulgation of the 111(d) rule and the current June 2016 state plan deadline is wholly inadequate for this purpose. The commenter s stated that 111(d) rule also provides no clarity as to the permiss ions given the RTOs, especially with respect to renewable energy credit trading, evincing the lack of forethought contemplated in Rule 111(d). Finally, the commenter s stated that the proposed rule does not recognize the complex level of interaction require d between the PUCT and Texas Commission on Environmental Quality (TCEQ), as well as possibly other state agencies, that would be required

-- not only among four distinct RTOs, but also all the states within the footprints of those RTOs, which would result in Texas having to coordinate with almost half of the states in the country.

Commenter s stated that the timing in the Proposed Rule is unrealistic. The commenter s stated that every plan (single or multi

- state) could potentially be a multi

- state effort. Th e commenter s noted that states need to understand how EE and re

- dispatch in other states affect each state's ability to meet its goal. The commenter s argued that the timeframe outlined in the proposal does not account for this state interaction, and must b e factored into the timelines by EPA to allow states to work together to create viable plans.175 Comment 88 : Comment stating that a one

- year time period that states have to develop and submit a plan is unreasonable and that the two

- year time period for multi

- state plans is equally irrational given the breadth of this proposal and the significant interstate conflicts it sets up.

Response 88 : In response to this and similar comment, t he final rule allows a full 3 years for both individual and multi

- states to d evelop a complete plan contingent upon a n initial showing that the state is making progress towards an approva b l e plan. The final rule clarifies that requirements of the initial plan submittal are designed to be readily achievable by states that intend to submit an approvable final plan

. The timeframe for mandatory reductions in the final Clean Power Plan begins in 2022 instead of 2020, which gives states more time to get programs in place and gives utilities more time to plan. The final rule includes this additional time and flexibility to manage complexities such as reliability, permitting, planning cycles, infrastructure addition and modifications, legislative changes, etc. EPA aligned the single and multi

- state plan submittal deadlines. See section s VIII

. B and VIII. E on state plan submittals and timing in the CPP final rule preamble. Reliability and the reliability safety valve also are addressed in section VIII.G of the CPP final rule preamble . Additionally, see the technical support document entitled, Resource Adequacy and Reliability Analysis TSD for the CPP Final Rule, in the docket to the final CPP rule.

The following are summaries of the specific public comments under this comment:

Commenter s argued that the timelines are unrealistic for state plan or collaborative plan development. While it might be desirable to achieve major CO2 emissions reductions, and to do so in an expeditious manner, the commenter s said the reality is that it will take significant time to achieve if it is to be accomplished i n a deliberate manner without threatening the reliability of the electric system and creating economic havoc. Although the rapid one

- year schedule for this unprecedented rulemaking is excessively fast, the commenter s said it pales in comparison to the incr edibly unreasonable one

- year time period that states have to develop and submit a plan, which utilities must then react to in as little as one year. Likewise, the commenter s said the two

year time period for multi

- state plans is equally irrational given th e breadth of this proposal and the significant interstate conflicts it sets up.

Comment 89 : Commenter s stating that the two

- year time frame for developing and submitting multi

- state plans is inadequate.

Response 89 : EPA agrees and has extended by an add itional year the time allowed for states to finalize their plans and has extended by two year s the time to meet the first interim goal

. See section VIII on state plans, both single and multi

- state, in the CPP final rule preamble. Specifically see subsecti on s VIII. B and VIII. E on state plan submittals, the approval process, and timing.

The following are summaries of the specific public comments under this comment:

Commenter s stated that within its proposed rule, EPA allows states to pursue a regional compli ance approach through the development of multi

- state plans. The commenter s noted that176 EPA acknowledged that the additional complexity of developing multi

- state plans might require additional time to complete. As such, the commenter s noted that EPA set a du e date of June 30, 2018, for submission of multi

- state plans. The commenter s believe d that the two

- year time frame for developing and submitting multi

- state plans is inadequate.

The commenter s stated that the main reasoning for this is the large number of stakeholders involved and the complexity of issues to be resolved while forming state plans. Moreover, the
commenter s stated that South Dakota will need to assess the possibility of participating in three different regional/multi

- state plans. The commente r s noted that this is due to the fact that a portion of South Dakota is in the MISO market, a portion of South Dakota will be in the SPP market (assuming the successful integration of the Integrated System into SPP), and a portion of South Dakota is in the Western Interconnection. The commenter s stated that negotiating and developing a single multi

- state plan will be a daunting task and heavy time burden alone. The
commenter s stated that attempting to negotiate and develop three different multi

- state plans will be even more onerous on South Dakota's resources. The commenter s recommended that EPA allow enough flexibility within the compliance timeline of its final rules to allow for robust discussion amongst states and thorough analysis of potential multi

- sta te plans.

Comment 9 0: Comment noting that even if each state prepares its own separate state plan, states will still need to cooperate and come to understandings on how to address jurisdictional issues, enforcement issues and cross

- border issues

. Respon se 9 0 : The EPA agrees that some individual state plans may need to address the issues raised by the commenter s during plan development. In response to this and similar comments regarding timing and planning concerns such as the commenters mention, the EP A has extended the time allowed for states and regional planning groups to finalize their plans and meet the first interim goal. The final rule includes this additional time and flexibility to address the complexities raised by the commenter s

. See section VIII of the CPP final rule preamble on state plans, including treatment of inter

- state effects. Section VIII.C discusses multi

- state plans including coordination among states and legal issues. S e ction s VIII. B and VIII. E of the CPP final rule preamble cover s state plan submittal and timing.

The following are summaries of the specific public comments under this comment:

Commenter s noted that, even if each state prepares its own separate state plan, states will still need to cooperate and come to understanding s on how to address jurisdictional issues, enforcement issues and cross

- border issues. The commenter s noted that electric customers in a single state often are served by generation, both renewable and fossil fuel

- fired, that is located
out

- of

- state. Likewi se, the commenter s noted that electric power serving those customers involves transmission that may cross several states. Before state plans may be finalized, the
commenter s argued that states must have ample time during the state plan development process to address cross

- border and jurisdictional issues which will have an impact on transmission, generation, enforcement and compliance. The commenter s stated that interstate cooperation is key to the successful operation of state plans because those plans wil l have potentially varying impacts on utilities that operate in multiple states. The commenter s further stated that, if multi

-177 state plans are to be crafted among several states, it demands a significant planning period, and the commenter s stated that the p roposed rule failed to give sufficient time to fully address state cooperation in their plan development.

As part of their request for more time, commenters discussed interstate emissions credit accounting issues and multistate plans. The commenters argued that the state plan deadline does not provide states with sufficient time to engage with neighboring states and resolve issues that may affect the development of their state plans. The commenters stated that many states will need to coordinate on the allo cation of credit for renewable generation when RE credits have been sold out

- of

- state. The commenters noted that states also will need to coordinate on the re

dispatch of generation from power plants that have existing agreements with out

- of state distribu tion utilities. The commenters stated that while EPA acknowledges that the electric industry is the perfect example of interstate economy, EPA does little to recognize the difficulty in addressing the incredibly complex interstate implications of the CPP.

The commenters argued that the emission implementation timeline is simply for stated to engage neighboring states in multi

- state emissions trading programs given the myriad of complex issues required for such plans. For example, the commenters noted state s will need to coordinate on which state receives credit for renewable generation when renewable energy credits have been sold out

- of

- state, how to deal with new generation, whether and how to deal with "leakage" under Section 111(d), etc. The commenters n oted that states also need to determine how to deal with re

- dispatch decisions between power plants in different states and how to deal with generators that export their generation under existing agreements with out

- of

- state distribution utilities.

Comme nt 9 1 : Comment noting that each state may have to approve legislation giving the attorney general or other agency personnel the authority to enter into negotiations on behalf of the state to enter into a Memorandum of Understanding or an Interstate Compact

. Response 9 1 : In response to this and similar comments regarding timing and planning concerns such as the commenters mention, the EPA has extended the time allowed for states to finalize their plans and meet the first interim goal. The final rule includ es this additional time and flexibility to manage complexities such as legislative changes, reliability, permitting, planning cycles, infrastructure addition and modifications, etc. See subsection s VIII. B and VIII. E in the CPP final rule preamble for a dis cussion of state plan submittal and timing.

The following are summaries of the specific public comments under this comment:

Commenter s noted that each state may have to approve legislation giving the attorney general or other agency personnel the authority to enter into negotiations on behalf of the state to enter into a Memorandum of Understanding or an Interstate Compact. The commenter s noted that if the EPA's proposed rule is finalized in mid

- 2015 as planned, the next state legislative sessions are
not u ntil January or February of 2016 or even not until January of 2017, in the case of North Dakota. Unless the legislature calls for a special session, at tax

- payer expense, the commenter s said the authority to enter into a multi

- state agreement may not be gi ven by the legislature(s)178 until well into the limited period given by the proposed rule for state plan development. The
commenter s further noted that, given the potential conflicts and complexity of such authorization, it might not pass in the first sessio n in which it is introduced, further delaying the ability of states to execute a multi

- state plan.

Commenters stated that Indiana lacks the regulatory authority to implement and enforce a plan that relies on the use of all four building blocks, based upon which the state goal was established. The commenters stated that the proposed time frames do not allow sufficient time for Indiana to seek legislative action in order to be able to implement this rule. The commenters stated that Indiana has a part time leg islature that meets from January through early spring. The commenters requested that the time frames for plan development and implementation of the rule be extended by a minimum of five full years.

Comment 9 2 : Comment stating that the EPA's proposed compl iance schedules are unreasonable, and recommending that the EPA offer all States at least 4 years to submit an implementation plan, regardless of whether they intend to submit a single

- or multi

- State plan and provide States with the opportunity to extend these deadlines, provided they can show continued progress toward development of a satisfactory State plan. Also, comment recommending that the EPA eliminate entirely the interim compliance period.
Response 9 2 : In response to this and similar comments reg arding timing and planning concerns such as the commenters mention, the EPA has extended the time allowed for states to finalize their plans and meet the first interim goal. The final rule includes this additional time and flexibility to manage complexitie s such as reliability, permitting, planning cycles, infrastructure addition and modifications, legislative changes, etc. In addition, the EPA is committed to continue extensive outreach to states and stakeholders and work closely with them to provide timel y assistance and support in form of additional tools, training and guidance to facilitate the development of approvable state plans within the timeframe specified in the rule. As guidance documents, tools, templates and other resources become available, th e EPA, in consultation with the U.S. Department of Energy and other federal agencies, will continue to make these resources available via a dedicated website. Concurrent with this final rule EPA is also proposing model rules for state plans which, when fin alized, states may wish to use to facilitate the development of their state rule. In addition, the glide path approach taken in the final rule allows measures such as the construction of new transmission lines to be phased in over time. Section VIII of th e CPP final rule preamble acknowledges the timing and planning concerns of many state commenters and the necessary coordination among different state and regional bodies. See the Executive Summary in section I .A of the CPP final rule preamble. Also see the Overview in section VIII.A of the final rule preamble for discussions on coordination and timing. Section VIII of the CPP final rule preamble also addresses extensions, initial plan submittals, and multi

- state plan coordination. Note that EPA has not fina lized EE and demand side EE as part of the best system of emission reduction and associated building blocks. See section V of the CPP final rule preamble for more details on BSER. The ability of EGUs to implement BSER is also discussed in section V. The C PP does not force states to restructure the way electricity is generated,179 transmitted, consumed, and regulated as commenter s suggest. Section V addresses generation shifts among affected EGUs. Section III of the CPP final rule preamble describes the rule requirements and legal basis. A TSD on resource adequacy and reliability is available in the docket for this final CPP rule. Section s VIII. B and VIII. E of the CPP final rule preamble addresses state plan submittals and timing. State plan approaches are add ressed in section VIII.C of the CPP final rule preamble . Single

- and multi

- state plan submittal deadlines have been aligned and multi

- state plans as well as multi

- state plan coordination is covered in section VIII.C. EPA has moved the start date from 202 0 to 2022.

The following are summaries of the specific public comments under this comment:

Commenter s stated that EPA's proposed compliance schedules are unreasonable. The
commenter s stated that by expanding the scope of the Section 111(d) program beyond t he fence line of affected EGUs and focusing instead on emission reductions that can be achieved throughout the entire electricity sector, EPA is proposing a regulatory scheme that will force States to fundamentally restructure the way in which electricity is generated, transmitted, consumed, and regulated. While the commenter s supported EPA's proposal to provide States with additional time to prepare implementation plans (see 79 FR 34915), the commenter s stated that the brief 1 or 2

- year extensions proposed by EPA will not provide sufficient time for States to develop and finalize plans to implement the proposed rule. Moreover, the commenter s stated that the initial compliance deadlines, which could begin as little as 2 years after the States submit implemen tation plans (and much less than 2 years after EPA approves them) provide far too little time for the States to develop regulatory programs to administer the programs and for regulated entities to develop the additional infrastructure needed to reorganize electricity generation and transmission systems. To ensure that States and regulated entities have sufficient time to develop implementation plans and install the necessary infrastructure to achieve EPA's emission reduction targets, the commenter s urged EP A to extend the deadline for submitting State implementation plans until at least 4 years after EPA issues a final Section 111(d) rule and to eliminate entirely the interim compliance period.

The commenter s stated that EPA should provide all States with t he same opportunities to extend the deadline for submitting implementation plans. The commenter s stated that the time needed to develop satisfactory State plans are largely the same, regardless of whether States elect to participate in a multi

- State plan. The commenter s stated that by offering multi

- State plan participants an extension that is twice as long as States that submit individual plans, EPA is creating a powerful incentive for States to adopt multi

- State plans. The commenter s stated that this is p articularly true because the 2

- year deadline for individual plans will, in most cases, be unachievable, and States that pursue individual implementation plans will be at risk of EPA establishing a federal implementation plan if the deadline is missed. The commenter s stated that EPA should not use different compliance deadlines to direct States toward the Agency's preferred implementation approach. The commenter s stated that if EPA is truly committed to giving States the flexibility and autonomy contemplated under Section 111(d), it must take a neutral position with respect to the various compliance options and allow the States to select an implementation approach based solely on the merits of the approach.180 The commenter s stated that by proposing deadlines fo r State implementation plans that are only 2 or 3 years after EPA finalizes this rulemaking, the Agency greatly underestimates the challenges faced by the States. The commenter s noted that unlike prior Section 111(d) rules that required States to develop i mplementation plans for affected facilities, the proposed rule would require States to fundamentally restructure the entire electricity sector. The commenter s stated that even under optimal political and regulatory conditions, it will take years for States to complete all of the legislative and regulatory actions that are necessary to develop satisfactory implementation plans, and many States operate under less than optimal conditions, which will only add to the time constraints that those States face. Thus , at a minimum, the commenter s suggested that EPA must give the States at least 4 full years after finalizing the rule to submit implementation plans. The commenter s noted that in many States, regulatory agencies currently lack the authority to develop imp lementation plans that would be capable of achieving EPA's proposed emission reduction targets, and legislative action would be needed to achieve EPA's emission reduction goals. The commenter s stated that State legislatures would be required to establish o r revise RPS and energy efficiency resources standards (EERS) programs to meet EPA's targets for each State (as opposed to existing targets which may fall short of EPA's goals). For many States, the commenter s noted that even more legislative changes will be required (e.g., legislation may be needed to give State public utilities commissions (PUCs) or other comparable agencies regulatory authority over municipally owned EGUs). Likewise, the commenter s noted that States may need to fundamentally change curre nt dispatching requirements based on least

cost bidding to allow PUCs to dispatch higher

- cost forms of generation over lower cost forms of generation. Further, the commenter s noted that for States that participate in RTOs, additional steps may be required to modify RTO dispatching priorities and obtain approval from FERC. See 16 U.S.C. section 824d, 824e. Taken together, the commenter s asserted that these legislative changes may well amount to a wholesale restructuring of a State's electricity generation an d transmission sectors which cannot take place overnight. The commenter s stated that history shows that legislative changes of this order takes months, if not several years, and can frequently require action over multiple legislative sessions. The commente r s stated that developing the necessary regulatory structure once appropriate legislation is passed can take several years, particularly when comprehensive public participation requirements must be met. The

commenter s stated that even under optimal conditi ons, EPA's 2

- year deadline to submit a State implementation plan is unduly aggressive and unlikely to be met by more than a handful of States with legislation already in place to allow implementation plans to be developed solely through regulatory efforts.

The commenter s stated that the time constraints associated with completing the necessary legislative and regulatory action to prepare a satisfactory implementation plan are exacerbated in States with part

- time legislatures that have limited time to consid er and enact the sweeping legislation that will, in many cases, be needed to implement the proposed rule. The commenter s provided Texas as an instructive example representative of other States. The commenter s stated that Texas has a part

- time legislature t hat meets every other year for 6 months. According to the

commenter s , Texas' next legislative session is scheduled to begin on January 13, 2015 and end on June 1, 2015, and under the current schedule, the legislative session will end on the day that EPA is scheduled to finalize the ESPS rule and the legislature is not scheduled to meet again181 until January of 2017. Thus, the commenter s stated that even if the legislature were able to overhaul its existing energy laws by revising its competitive market struct ure and enacting RPS and EERS programs during the 2017 legislative session, the State regulatory agencies would only have, at most, a few months to develop, propose, and finalize a State implementation plan. The commenter s stated that this is virtually imp ossible, given the procedural requirements that accompany such regulatory initiatives. Putting aside the substantive requirements that must accompany any proposed rule (see Tex. Gov't Code section 2001.024), the commenter s stated that an agency must give t he public 30 days to comment on any proposed rule, (see id. sections 2001.023, .029), and must respond to substantive comments (see id. Section 2001.033). The

commenter s argued that such a complicated undertaking cannot be completed in a matter of months.

The commenter s noted that, given the sweeping scope of the proposed rule, a satisfactory implementation plan may require the coordination of multiple State agencies. The commenter s noted that the State agencies responsible for managing and dispatching elec tricity generation may be different than the agencies responsible for implementing renewable energy programs or energy efficiency initiatives. Thus, the commenter s stated that even after appropriate legislative programs are in place, determining which agen cies are responsible for developing implementation plans and successfully coordinating between them will take additional time. The

commenter s stated that in Montana, for example, developing an implementation plan "would require coordination between the Pub lic Service Commission, the Department of Environmental Quality, the self

- governing electric cooperatives, and public power entities of the State of Montana," the Governor's Office, [and] the Department of Commerce. The commenter s stated that the interagen cy coordination that may be needed to develop an implementation plan may add months, if not years, to the overall regulatory process.

The commenter s stated that EPA's proposal to add one additional year for States seeking to establish multi

- State implemen tation plans falls far short. In addition to the State

- specific challenges described above, the commenter s explained that the intrastate negotiations needed to establish and authorize a memorandum of understanding, a final agreement on a multi

- State plan

a nd, in all likelihood, a new intrastate organization to implement the program will take far more than one additional year. The commenter s noted that depending on the structure of the multi

State agreement, Congressional approval may also be required under the Interstate Compact Clause. See U.S. Const. Art I, Sec. 10, cl. 3. The commenter s provided California's linkage of AB32 with Quebec as an instructive example. The commenter s stated that the Western Climate Initiative, which included California and Quebe c, along with other States and Provinces, was initiated in February 2007. The commenter s stated that although California adopted AB32 in 2006, it took the California Air Resources Board (CARB) 5 years (until October 2011) to adopt
cap

- and

- trade regulations to implement AB32. The commenter s stated that the CARB did not propose regulations to link California's cap and trade program with Quebec for another seven months, and then took nearly a year and a half to finalize the linkage and hold the first joint

auc tion in November 2014. In light of California's 6

- year process for establishing a multi

- State program to reduce GHG emissions, the commenter s stated that it is unreasonable for EPA to set a 3

- year deadline for States to reach similar agreements under the p roposed rule.182 Rather than providing unmanageably short deadlines for submittal of State plans, the

commenter s suggested that the EPA should take a flexible approach with deadlines that will ensure that States have the time necessary to complete the legisla tive and regulatory actions needed to prepare a satisfactory implementation plan. At a minimum, the commenter s recommended that EPA offer all States at least 4 years to submit an implementation plan, regardless of whether they intend to submit a single

- or multi

- State plan and provide States with the opportunity to extend these deadlines, provided they can show continued progress toward development of a satisfactory State plan.

Comment 9 3 : Comment stating that the time proposed for States' submissions is t oo short, and recommending that EPA grant States at least 5 years to submit single state emission guidelines SIPs, and at least 7 years to submit multi

- state SIPs.
Response 9 3 : In response to this and similar comments regarding timing and planning concern s , such as those the commenters mention, the EPA has extended the time allowed for states to finalize their plans and meet the first interim milestone . The final rule includes this additional time and flexibility to manage complexities such as reliability, permitting, planning cycles, infrastructure addition and modifications, legislative changes, etc. In addition, the EPA is committed to continue extensive outreach to states and stakeholders and work closely with them to provide timely assistance and suppo rt in form of additional tools, training and guidance to facilitate the development of approvable state plans within the timeframe specified in the rule. As guidance documents, tools, templates and other resources become available, the EPA, in consultation with the U.S. Department of Energy and other federal agencies, will continue to make these resources available via a dedicated website. Concurrent with this final rule EPA is also proposing model rules for state plans which, when finalized, states may wis h to use to facilitate the development of their state rule. Submittal deadlines for single and multi

- state plans have been aligned. See section s VIII. B and VIII. E of the CPP final rule preamble on state plan submittals, the approval process, and timing. T he compliance start date for the program has changed from 2020 to 2022, which is effectively 7 years after the final rule’s promulgation. EPA has decided not to finalize building block 4 as part of the best system of emission reduction (BSER). However, sta tes may use demand side energy efficiency as a non

- BSER compliance measure in state plans. For federalism issues see section XII.E of executive order 13132 in the CPP final rule preamble. Additionally, see section III.A and III.B summarizing the rule requi rements and legal basis for the rule, and section IV for EPA’s legal authority in the CPP final rule preamble. There is also a Legal Memorandum for the Final CPP Rule in the docket for this final rule. There is also a TSD on resource adequacy and reliabili ty in the docket for this final rule. Multi

- state plans and multi

- state implementation are addressed in section VIII of the CPP final rule preamble. Section VIII.F addresses performance demonstrations and compliance. Information on approvability criteria is found in section VIII.D along with state plan components. The approval process and timing is described in section VIII.E. The Federal Plan will be proposed coincident with this final rule. For information on building block 2 and generation shifts among affected EGUs, see section V.D in the CPP final rule preamble. Section183 V of the final rule preamble also discusses the ability of EGUs to implement BSER. For information on building block 3, see section V.E in the CPP final rule preamble.
The following a re summaries of the specific public comments under this comment:

Commenter s stated that the time proposed for States' submissions is too short, and the final compliance date should be extended. The commenter s noted that EPA proposes to allow States roughly 1 year from the finalization of the emission guidelines to submit their state implementation plans (SIPs). The commenter s stated that although EPA proposes to allow extensions of up to a year for States proposing plans alone, and up to 2 years for States proposing plans in conjunction with other States, even these extended periods are impermissibly short given the complexity of the task at hand. The commenter s stated that section 111(d) specifically refers to Section 110 as a model for the adoption of SIPs addressing emissions from existing sources in a category, and section 110 allows States up to 3 years after promulgation of a NAAQS to submit SIPs. The commenter s argued that even this period of time does not appropriately reflect the complexity of determ ining how to obtain the required emission reductions and the time necessary to adopt the laws and regulations necessary to achieve them given this rulemaking's unprecedented scale and scope.

The commenter s recommended that EPA grant States at least 5 year s to submit single state emission guidelines SIPs, and at least 7 years to submit multi

- state SIPs. The commenter s argued that extensions should be liberally granted when a State can demonstrate that it is making good faith efforts to develop its plan or w hen it is working with other States to develop a multi

- state or regional plan. The commenter s stated that the Proposed Rule would require States to take unprecedented steps to regulate the generation, transmission, and use of electricity within their borde rs and, in many instances, beyond them. According to the commenter s , these efforts are likely to require the passage of new legislation authorizing such actions, the development of regulations to implement those statutory authorities, and detailed assessme nts on a utility

- by

utility, source

- by

- source basis of what reductions can be obtained while still ensuring a reliable and affordable electric supply for the States' citizens.

Commenter s stated that the proposed rule's tight implementation deadlines ignore 44 years of Clean Air Act history. The commenter s described historical SIP submittal timelines under the NAAQS. The commenter s stated that collective experiences of States and EPA working to attain air quality standards, and Congress' statutory recognitio n of the difficulties in each successive set of Clean Air Act legislation, highlights the folly of the extremely short timelines in the Proposed Rule. The commenter s noted that under the statute, an "extreme" ozone area is authorized 20 years to attain a s tandard that it had already been working to reach for 20 previous years. By contrast, the commenter s noted that under the Proposed Rule all States have essentially the same very short timelines with no more than 3 years to meet unrealistic Interim Goals an d less than 15 years to meet the Final Goals for reduction of CO2 emissions, a pollutant that few States have any experience controlling. The commenter s argued that the history of the Clean Air Act clearly demonstrates how unrealistic the deadlines in the proposal are.

The commenter s stated that a fundamental principle of cooperative Federalism under the Act is that state air pollution agencies are not acting as delegates of EPA authority or directly implementing the Federal Clean Air Act in establishing t heir programs and requirements under184 Sections 110 and 111(d). Instead, the commenter s noted state agencies are acting and implementing EPA

- mandated requirements derived from the Clean Air Act through organic state statutes. The commenter s noted that state agencies are governed by the statutory and constitutional principles of each State, subject to the limitations in such authorities as exist in each State. The commenter s noted that some States may have no statutory authority to regulate CO2 as a greenhouse gas, especially in the broad manner EPA dictates in its Proposed Rule.

Consequently, the commenter s stated that the extremely tight time schedules and deadlines in the Proposal

- final rules by June 2015, with SIPs to be submitted by June 2016 (with limit ed opportunities for 1

- and 2

- year extensions), and interim reduction goals to be met by 2020

- will be impossible for most, if not all, States to meet. In most States, the commenter s noted that state legislatures meet for limited time periods during each year (if they meet annually) while other state legislatures meet every other year, further delaying those States' ability to meet EPA's unrealistic timelines.

Consistent with CAA Section 110, the commenter s recommended that EPA provide at least 5 years for individual States to develop implementation plans under 111(d) and 7 years for States that choose to adopt multi

- state plans. According to the commenter s , these time periods are necessary for States to fully evaluate compliance approaches, including model ing and additional technical analyses, obtain necessary statutory authority, draft and finalize implementation plans that are subject to notice, comment, and hearing administrative procedures. The commenter s stated that the additional recommended time will account for the significant coordination needed for state agencies to develop plans with other agencies with jurisdiction over aspects of the requirements under the Proposed Rule, and especially for the coordination needed among multiple agencies in State s participating in multi

- state plans.

The commenter s also recommended that EPA provide a sufficient time period for state legislatures to enact necessary legislation. The commenter s stated that the time allocated under the Proposed Rule is unrealistically short and will not provide the time necessary to enact the legislative authority needed to implement at least three of EPA's building blocks. At a minimum, the commenter s recommended that EPA include at least 2 to 3 years for state legislatures to act, and extend that part of the implementation process to 2019.

The commenter s explained that following enactment of state legislation, state regulatory agencies, both environmental agencies and public utility regulators, will require, at a minimum, 18 months to 2 years to adopt implementing regulations and draft plans, even on an expedited basis. The commenter s stated that coordinating regulations among several state agencies under a multi

- state plan will require additional time, at least 2 to 3 years.

The commen ter s provided for example that EPA frequently cites the Northeast States' formation of the Regional Greenhouse Gas Initiative (RGGI) as an example of how States can band together for collective action to comply with the Proposed Rule. The commenter s stated that RGGI was not created overnight

- as EPA would have States try to do under its proposal

- but required many years to plan and implement. The commenter s explained that the initial effort began in 2003, with 2 years needed to craft a CO2 emissions reduc tion plan for submission to participating States for review, and an additional 3 years needed to establish the first auction of CO2 credits in 2008. In this instance, with all participants voluntarily working towards a shared,185 and much more limited, goal t han EPA imposed in its proposal, the commenter s state d that the project took 5 years to accomplish. Under EPA's proposal, the commenter s stated that even the RGGI program would not have had sufficient time to be launched.

Moreover, the commenter s stated th at the outside

- the

- fence

- line options and requirements in the proposal will, at a minimum, require direct participation by each State's public utility regulatory body. The commenter s stated that this results from EPA's inclusion of requirements for increas ed use of renewable energy and non

- emitting electricity sources, dispatch of generating units based on CO2 emission rates rather than traditional least

- cost dispatch, and energy efficiency measures such as demand management. The commenter s stated that thes e measures are well beyond the jurisdiction and statutory authority of state air pollution agencies. The commenter s noted that in many States, these agencies have not worked together previously and under EPA's proposal will be imposing its own oversight ov er their respective roles and jurisdiction.

The commenter s stated that implementation of the Proposal, or anything like it, will require new legislation to authorize involved state agencies, both air pollution and public utility regulators, to devise and i mplement the types of measures in the proposal. The commenter s stated that in cases where electric generating companies subject to the proposal operate in more than one State or a State's electric generating system is part of a multi

- state system, the comp lexity and types of regulatory structures needed to implement the requirements in the proposal increase exponentially. Consequently, the commenter s stated that serious questions arise as to whether multi

- state implementation plans as prescribed in the prop osal will prove practical or feasible.

The commenter s stated that even if an individual State can surmount these statutory and legislative hurdles in the very limited time provided under the Proposal, unless EPA grants an extension each State would need to complete its plan for submittal within a year following issuance of final rules by EPA. The commenter s asserted that this time period is woefully inadequate for a State to create a plan approvable under the proposal. The commenter s stated that the complex ity of the measures in each of the building blocks means that each State will have to extensively evaluate all electric generating units within the State: (1) for opportunities to meet the 6% heat rate improvement required under building block 1; (2) to de termine whether or not all natural gas

- fired units are capable of being dispatched on a 70% basis; (3) for means and opportunities to add to the State's renewable energy unit portfolio; (4) to determine whether or not nuclear generating units are capable o f operating on an increased usage basis; and (5) what options are available to decrease electricity usage through demand

- side management or other energy efficiency measures.

The commenter s noted that EPA then has a year to review and either approve each pl an, seek changes to it, or disapprove the plan and issue a Federal Implementation Plan in its place. During this period, the commenter s noted that the relevant state agencies and the state legislature will not know whether their plan will be judged accepta ble. The commenter s stated that even if EPA reviews and acts expeditiously to approve state plans, the earliest approvals cannot likely occur until at least late 2016. The commenter s stated that this places state agencies in the position of being unable to begin implementing an approved plan until well into 2017, with interim compliance required barely 3 years later in 2020.186 The commenter s stated that a significant additional complication is that many additional sources and entities beyond traditionally reg ulated electric utility companies would likely be subject to requirements under building blocks 2, 3 and 4 of the proposal. In particular, the commenter s stated that independent power producers and other electricity suppliers that are generally not subject to public utility regulation by States would have to be brought into the regulatory scheme. The commenter s stated that statutory and regulatory means to include these sources, and coordinate their activities under a state plan will have to be devised and the legislative authority to implement them enacted.

The commenter s stated that meeting the 70% goal of building block 2 could require significant participation by entities, such as independent power producers and others that are not owners or operators of the coal

- fired power plants that are the primary targets of the proposal. The
commenter s stated that for the most part, they are not regulated by state public utility regulatory agencies and may not subject to state statutory requirements for traditionall y regulated utility companies. In such cases, the commenter s stated that integration of additional electricity providers into a state 111(d) SIP will require new legislative authority and evaluation of the significant practical and legal issues involved.

S imilarly, the commenter s stated that increasing renewable energy sources and generating under building block 3 involves many other types of companies that design, build, and operate these sources of electricity which are even more diverse and not currently under any sort of state regulation. The commenter s stated that careful evaluation will be needed to determine how and whether to incorporate them into a state 111(d) SIP to effectuate this building block. Inclusion of such sources would require new legisl ative authority for state agencies.

The commenter s stated that a significant aspect of adding renewable, nuclear and other non

GHG emitting sources of electricity is the need for added transmission capacity to deliver electricity generated by the sources t o end users. The commenter s stated that without adequate electric transmission capacity, any additional output from these sources would be unavailable to reduce the use of GHG

- emitting generation sources.

The commenter s stated that with very limited except ions, authorization and regulation of electric transmission lines is by state public utility regulatory bodies under each State's organic statutes, rather than the Federal Energy Regulatory Commission (FERC), which generally has regulatory jurisdiction ove r natural gas pipelines as discussed below. The commenter s stated that any new electric transmission would be subject to the limitations and variations of state laws. As an initial matter, the commenter s stated that the need for any new transmission line m ust be established to the satisfaction of public utility regulators, along with approval of a route for the line, cost, and other legal requirements. The commenter s noted that frequent and often vociferous opposition in recent years to siting electric tran smission lines means regulatory approval is often difficult to obtain and time

- consuming. On average, the commenter s stated that transmission lines require at a minimum 5 to 7 years from conception to construction and operation. The commenter s provided for example that Utah permitting guidance estimates a seven year process for a routine siting, permitting and construction of a new, 100 mile power line that crosses federal lands. Similarly, the commenter s noted that the Southwest Power Pool, in comments to EPA states that an average of 6 years is needed for new transmission lines and often can exceed 8.5 years from design to construction.187 Finally, the commenter s stated that increasing efficiency of electricity usage under building block 4 will require an in tegrated structure that includes all electricity suppliers in a State to be effective. Once again, the commenter s stated that other, non

- public utility electricity suppliers will have to be brought into and integrated into each State's plan. The commenter s stated that this is especially the case with this building block since goal of 1.5% reduction in electricity usage continues into the future on an annual basis, and is not simply a one

- time requirement like the 6% heat rate reduction. The commenter s state d that including all electricity providers in a demand

- side energy efficiency program to meet this goal will require complex integration of each of these entities and new state legislative authority to do so.

For the reasons discussed herein and consistent with CAA Section 110, the commenter s recommended that at least 5 years be provided for individual States to develop implementation plans under 111(d), and 7 years for States that choosing to participate in multi

- State plans. The
commenter s contended these extended deadlines will provide additional time for the significant coordination needed for multiple agencies in several States to develop plan and for the necessary legislative authority to implement at least three of EPA's building blocks to be enacted. EPA should adjust State's final compliance goals accordingly.

Commenters argued that states need more time to prepare, submit and obtain EPA approval for their plans. The commenters asserted that the Proposed Rule does not allow states sufficient time
to prepare compliance plans and submit them to EPA for approval. The commenters noted that Proposal essentially provides states 1 year to develop an intrastate plan and 2 years to develop multi

- state plans, with the ability to request a one

- year extension. Th e commenters stated that, given the complexity and pervasiveness of what is required, this is simply not enough time.

The commenters noted that states will need to consult with policy makers, stakeholders, utilities, and other entities with a potential di rect compliance obligation to begin determining the critical elements of the program, including enforceability. The commenters stated that this could be contentious and thus time consuming. Moreover, the commenters noted that a state's compliance plan is l ikely to require a variety of changes in state law to be implemented. The commenters noted that even if agreement for such legislative proposals is achieved in concept, the actual legislative process itself can be very time consuming and uncertain. The com menters noted that timing issues are only exacerbated in efforts to develop multi

- state plans. The commenters referred to the comments of the National Conference of State Legislatures (NCSL), which state:

"However, NCSL believes the 13 months between the e xpected finalization of the rule (June 2015) and the deadline for states to submit implementation plans (June 2016) is not enough time for states to make any legislative changes that may be needed in order to submit a complete SIP, given the incompatibilit y of EPA's proposed timeframe with state legislative calendars."

The commenters noted that the NCSL goes on to point out that some state legislatures will have already adjourned for the year at the time the final rule is issued, and that four states only h old regular sessions every other year "putting them at an even further disadvantage." The commenters noted that the NCSL letter acknowledges the possibility of special legislative sessions to address the state's compliance plan, but notes that in 16 states , only the governor can call a special session, and that there are often significant costs to the state to convene such special sessions. The commenters stated that the NCSL concludes: "Therefore, the June 2016188 timeframe for states to submit an implementat ion plan or meet the requirements for an extension poses significant challenges."

The commenters provided an example of such a challenge in Minnesota, where the existing Integrated Resource Planning Statute would have to be re

- written and passed by the le gislature, to make the changes necessary for the state to meet its reduction goals under the Proposal. Likewise, the commenters stated the Minnesota renewable energy mandate and state energy efficiency goal would also have to be revised to reflect the stat e plan assuming there is sufficient political support in the legislature to do so.

The commenters stated that even if a state has authority to adopt a state plan under its administrative procedures act and delegated authority, it still must go through a l engthy public process to enact any such rules, again adding to the delay in the process of even presenting a plan to EPA for approval. The commenters stated that Missouri's environmental agency, the Department of Natural Resources, which has no legal autho rity over the operation of electric utilities, has a statutory timetable that requires as much as two full years for the implementation of a single rule.

The commenters explained that APPA notes that the east coast's Regional Greenhouse Gas Initiative (RGG I) began with formal discussions among various states in 2003 where the states then announced a memorandum of understanding in December 2005 and published a model rule in August 2006 setting forth the recommended regulatory framework for developing regulat ory and statutory proposals for the various state members. The commenters explained that States then began their own in

- state rulemaking processes to adopt a framework for each state to participate in a regional cap and trade program. The commenters stated that they considered and adopted regulatory rules or statutes governing a trading program, parameters for acceptable emission offset projects, and authorizing and regulating language for the auctioning of allowances. Commenters said s tates completed their regulatory and statutory work at the end of 2008 and began a regional trading program in January 2009. The commenters provided a figure showing the RGGI timeline, which includes dates/actions from 2005 to 2014.

Thus, the commenters stated that it took a total of 5 to 6 years to go from formal planning to actual trading in RGGI, which is a much simpler program than the regional plans envisioned under EPA's Proposed Rule. Similarly, the commenters stated that California took several years to develop and ado pt its cap and trade program. The commenters stated that the Proposed Rule should be revised to give additional time to the state planning process. The commenters recommended that it should provide states a full 5 years from the date the rule is finalized to submit their state plans, and EPA should also revise the final compliance deadlines by a corresponding length of time.

Commenters recommended that states be allowed a period of five years to develop a state plan to implement the rule once it is finalize d (and extend the compliance deadlines an equivalent amount of time). The commenters pointed out that other major regulations under the Clean Air Act provide a similar amount of time for a state to develop an initial compliance plan, and the scope and brea dth of this rule is far more complex than rules governing Regional Haze or SO2, for example. The commenters noted that, under the proposed Clean Power Plan, states are given one year for the planning and implementation of not just a rule, but of an entire program189 touching on many aspects of the utility industry including, but not limited to integrated resource planning, transmission and distribution upgrades and planning, dispatch of power in regional markets, resource development and financing, reliability , power quality, load following, peak shaving, and influencing consumer behaviors (energy efficiency).

Comment 9 4 : Comment stating that the SIP submission timeline must be extended, recommending no less than 5 years from rule finalization until initial S IPs submissions are due, with states pursuing multistate SIPs provided at least 7 years, and suggesting that these timelines should only start to run once the Rule has been fully litigated and a final decision on the Rule has been reached by the courts.

Re sponse 9 4 : In response to this and similar comments regarding timing and planning concerns such as the commenters mention, the EPA has extended the time allowed for states to finalize their plans and meet the first interim goal. The final rule includes thi s additional time and flexibility to manage complexities such as reliability, permitting, planning cycles, infrastructure addition and modifications, legislative changes, etc. In addition, the EPA is committed to continue extensive outreach to states and s takeholders and work closely with them to provide timely assistance and support in form of additional tools, training and guidance to facilitate the development of approvable state plans within the timeframe specified in the rule. As guidance documents, to ols, templates and other resources become available, the EPA, in consultation with the U.S. Department of Energy and other federal agencies, will continue to make these resources available via a dedicated website. Concurrent with this final rule EPA is als o proposing model rules for state plans which, when finalized, states may wish to use to facilitate the development of their state rule. See section s VIII. B and VIII. E on state plan submittal, the approval process, and timing in the CPP final rule preamble . See section VIII.D on state plan components and approvability criteria in the CPP final rule preamble.

The following are summaries of the specific public comments under this comment:

Commenter s stated that the SIP submission timeline must be extended. Th e commenter s noted that EPA has proposed that states submit SIPs slightly more than 1 year after the finalization of the Rule Proposal

-- by June 30, 2016. The commenter s noted that states submitting individual state plans may qualify for a 1

- year extensio n (June 30, 2017); states pursuing multi

- state plans may qualify for a 2

- year extension (June 30, 2018). As a prerequisite for extension, the
commenter s noted that the state must submit an "initial plan" that includes a description of the plan approach, pr ogress dates, initial quantification of levels of emissions performance, a comprehensive roadmap for completing the plan, and various other criteria. As a result, the
commenter s stated that EPA's proposed SIP submittal extensions provide little relief to t he states. The commenter s stated that in order to comply with the initial plan requirements due by June 30, 2016, the bulk of preparation and planning must be completed. Further, the commenter s stated that there is no certainty that EPA will approve the in itial plan upon submittal, introducing uncertainty into the process.

The commenter s stated that Section 111(d) specifically refers to Section 110 as a model for adopting SIPs. The commenter s stated that Section 110 allows up to 3 years for states to submi t SIPs after the promulgation of new or revised NAAQS. The commenter s noted that while190 NAAQS are certainly complicated rulemakings that require at least 3 years to implement, a traditional NAAQS SIP is far less complicated than a SIP required under this Ru le Proposal; the Rule Proposal SIP must address various components of the electricity market, spanning numerous industries, and even reaching into the homes of electricity end

- users. The commenter s stated that while EPA uses the NAAQS SIP rules as model, t he scope of this Rule Proposal requires EPA to provide additional time to submit a SIP. The commenter s recommended no less than 5 years from rule finalization until initial SIPs submissions are due, with states pursuing multistate SIPs provided at least 7 years. The commenter s stated that these timelines should only start to run once the Rule has been fully litigated and a final decision on the Rule has been reached by the courts.

Comment 9 5 : Comment arguing that the timeframes the EPA proposed are very sh ort and recommended that EPA give the states at least five years to develop a state plan for a single state and seven years to develop a multi

- state plan, rather than the maximum of two and three years, respectively, that EPA has proposed.

Response 9 5 : In response to this and similar comments regarding timing and planning concerns such as the commenters mention, the EPA has extended the time allowed for states to finalize their plans and meet the first interim goal. The final rule includes this additional time and flexibility to manage complexities such as reliability, permitting, planning cycles, infrastructure addition and modifications, legislative changes, etc. In addition, the EPA is committed to continue extensive outreach to states and stakeholders a nd work closely with them to provide timely assistance and support in form of additional tools, training and guidance to facilitate the development of approvable state plans within the timeframe specified in the rule. As guidance documents, tools, template s and other resources become available, the EPA, in consultation with the U.S. Department of Energy and other federal agencies, will continue to make these resources available via a dedicated website. Concurrent with this final rule EPA is also proposing m odel rules for state plans which, when finalized, states may wish to use to facilitate the deve lopment of their state rule. EPA has aligned the single and multi

- state plan submittal deadlines. See section s VIII. B and VIII. E on state plan submittal, the ap proval process, and timing in the CPP final rule preamble.

The following are summaries of the specific public comments under this comment:
Given the complexity of the tasks that EPA has assigned the states, commenter s argued that the timeframes EPA propose d are very short and recommended that EPA give the states at least five years to develop a state plan for a single state and seven years to develop a multi

- state plan, rather than the maximum of two and three years, respectively, that EPA has proposed. The
commenter s also recommended that the Agency provide an extra three years for developing any state plan upon a demonstration of reasonable progress toward development of a plan.191 Comment 9 6 : Comment proposing that the EPA allow each state at least five yea rs to develop an individual state plan and up to seven years for a multi

- state plan, and that the interim goals be eliminated.

Response 9 6 : In response to this and similar comments regarding timing and planning concerns such as the commenters mention, th e EPA has extended the time allowed for states to finalize their plans

. The final rule includes this additional time and flexibility to manage complexities such as reliability, permitting, planning cycles, infrastructure addition and modifications, legisla tive changes, etc. In addition, the EPA is committed to continue extensive outreach to states and stakeholders and work closely with them to provide timely assistance and support in form of additional tools, training and guidance to facilitate the developm ent of approvable state plans within the timeframe specified in the rule. As guidance documents, tools, templates and other resources become available, the EPA, in consultation with the U.S. Department of Energy and other federal agencies, will continue to make these resources available via a dedicated website. Concurrent with this final rule EPA is also proposing model rules for state plans which, when finalized, states may wish to use to facilitate the deve lopment of their state rule. EPA has aligned the single and multi

- state plan submittal deadlines. See section VIII.E on state plan submittal, the approval process, and timing in the CPP final rule preamble. EPA has moved the compliance start date from 2020 to 2022. See section VII on statewide performan ce goals in the CPP final rule preamble. See the technical support document

, Resource Adequacy and Reliability Analysis TSD for CPP Final Rule

, in the docket for this final rule. Reliability and the reliability safety valve are also discussed in section VI II. G of the CPP final rule preamble.

The following are summaries of the specific public comments under this comment:

Commenter s proposed that EPA allow each state at least five years to develop an individual state plan and up to seven years for a multi

- sta te plan

. The commenter s noted that EPA proposed to require states to submit their state plans within one year of any final rule. Though EPA proposed to allow extensions of one year for states proposing to submit plans alone and two years for states proposi ng to submit plans as part of a regional group, the commenter s contended that these timeframes are woefully inadequate given the complexity of the rule.

The commenter s also proposed that EPA eliminate the interim goals that are to take effect in 2020. Acc ording to the commenter s , not only do states need more time to develop their state plans, they need more time to meet the various building block requirements (e.g., heat rate improvements, new transmission lines, pipelines and storage), all of which take y ears to complete. The commenter s argued that the 2020 compliance goal provides no reasonable time for states, and the regulated utilities to complete these tasks and meet what is often 70

- 80% of their 2030 reduction goals. The commenter s noted that, in it s November 2014 report, the North American Electric Reliability Corporation concluded that, "The proposed timeline does not provide enough time to develop sufficient resources to ensure continued reliable operation of the grid by 2020. To attempt to do so would increase the use of controlled load shedding and potential for wide

- scale, uncontrolled outages." For these reasons, the commenter s recommended that the interim goals be removed. Furthermore, given the extensive legal, regulatory and physical changes that must occur first, the commenter s recommended that EPA give states until 2035 to achieve compliance with any emission reduction targets.192 Comment 9 7 : In response to this and similar comments regarding timing and planning concerns such as the commenter s mention, the EPA has extended the time allowed for states to finalize their plans

. The timeframe for mandatory reductions in the final Clean Power Plan begins in 2022 instead of 2020 . The final rule includes this additional time and flexibility to manage complexities such as reliability, permitting, planning cycles, infrastructure addition and modifications, legislative changes, etc. In addition, the EPA is committed to continue extensive outreach to states and stakeholders and work closely with them to p rovide timely assistance and support in form of additional tools, training and guidance to facilitate the development of approvable state plans within the timeframe specified in the rule. As guidance documents, tools, templates and other resources become a vailable, the EPA, in consultation with the U.S. Department of Energy and other federal agencies, will continue to make these resources available via a dedicated website. Concurrent with this final rule EPA is also proposing model rules for state plans whi ch, when finalized, states may wish to use to facilitate the deve lopment of their state rule

. Comment stating that the timeframes the EPA proposes for state plan submissions are unnecessarily short, particularly given the complexity of the tasks EPA has a ssigned to each state or group of states, and recommending alternative compliance dates.

Response 9 7 : See section s VIII. B and VIII. E on state plan submittal, the approval process, and timing in the CPP final rule preamble. See section VIII. G of the CPP fi nal rule preamble for a discussion on remaining useful life. EPA has changed the compliance start date from 2020 to 2022. Interim targets are discussed in section VII on statewide performance goals and in section VIII.B on state plan performance periods of the CPP final rule preamble

. The following are summaries of the specific public comments under this comment:

C ommenters argued that the rule is unworkable given the timeframes that EPA has set for compliance. First, and for a variety of reasons, the comme nters stated that the timeframes EPA proposes for state plan submissions are unnecessarily short, particularly given the complexity of the tasks EPA has assigned to each state or group of states. The commenters stated that EPA must recognize the difficulty of any state to bring such a complex rulemaking and most stringent objective to a satisfactory conclusion, and should give the states at least five years to develop a
state plan for a single state and seven years to develop a multi

- state plan, rather than the maximum of two and three years, respectively, that EPA has proposed. The commenters said the Agency should also provide an extra three years for developing any state plan upon a demonstration of reasonable progress toward development of a plan. Furthe r, and in accordance with their own regulations, the commenters said EPA should allow the states to adopt compliance deadlines that are based on the remaining useful lives of each of the designated existing facilities. Finally, given the extensive legal, r egulatory, and physical changes that must occur, the commenters said EPA must relax the individual state compliance date until 2035 and EPA must abandon the interim targets it has proposed as completely unworkable.193 Comment 9 8 : Comment arguing that the tas ks that a state must undertake to develop an approvable plan are immense and cannot be completed within the time frames proposed by EPA, and requesting five years to submit an individual state plan and seven years for a multi

- state plan, with an extension of the final compliance deadline to at least 2035.

Response 9 8 : In response to this and similar comments regarding timing and planning concerns such as the commenters mention, the EPA has extended the time allowed for states to finalize their plans

. The timeframe for mandatory reductions in the final Clean Power Plan begins in 2022 instead of 2020 . The final rule includes this additional time and flexibility to manage complexities such as reliability, permitting, planning cycles, infrastructure addition a nd modifications, legislative changes, etc. In addition, the EPA is committed to continue extensive outreach to states and stakeholders and work closely with them to provide timely assistance and support in form of additional tools, training and guidance t o facilitate the development of approvable state plans within the timeframe specified in the rule. As guidance documents, tools, templates and other resources become available, the EPA, in consultation with the U.S. Department of Energy and other federal a gencies, will continue to make these resources available via a dedicated website. Concurrent with this final rule EPA is also proposing model rules for state plans which, when finalized, states may wish to use to facilitate the deve lopment of their state r ule. See section s VIII. B and VIII. E of the CPP final rule preamble on state plan submittal, approval process, and timing. EPA has aligned the single and multi

- state plan submittal dates. The timeframe for mandatory reductions in the final Clean Power Plan begins in 2022 instead of 2020.

The following are summaries of the specific public comments under this comment:

Commenter s argued that the proposed rule is extremely complicated and the tasks that a state must undertake to develop an approvable plan are i mmense and cannot be completed within the time frames proposed by EPA. Given the fact that the task EPA has handed the states exceeds the efforts to develop and submit a state plan, the commenter s joined the National Rural Electric Cooperative Association' s request for five years to submit an individual state plan and seven years for a multi

- state plan, with an extension of the final compliance deadline to at least 2035. According to the commenter s , the short one

- year time frame to develop a complete plan

- o r even an initial plan to qualify for an extension

- places significant challenges for the public and stakeholders to have meaningful input into the development of the state plans. The commenter s contended that EPA had seriously underestimated the effort its proposed rule will require. The
commenter s noted that companies will not be able to provide feedback to state plans until they are proposed, but states will need information from companies in order to develop plans. The
commenter s stated that the proposed rule thus creates a "chicken and egg" problem, as EPA is effectively requiring the electric power industry to be reorganized by state environmental regulators without sufficient detail to direct the planning process. In order for EPA's proposed rule to ha ve the possibility to function as designed, the commenter s said states will need input and cooperation from a wide range and large number of stakeholders. The commenter s indicated that this is necessarily going to be an iterative process. The commenter s no ted that stakeholder involvement is a timely and costly process for the states and for the stakeholders themselves. The
commenter s said these hurdles are especially high for entities such as the commenter s that have operations in more than one state. The c ommenter s stated that their knowledge of their own194 systems and their expertise is vital to the development of the state plans. The commenter s said it will take significant involvement and resources to participate in the development of one state plan, let a lone many.

Commenter s also argued that, without additional time, stakeholders such as the commenter s will not be able fully participate in the development of the state plans and states will not get the full benefit of the knowledge and experience of the s takeholders. The commenter s said one year for an individual plan or two years for a multi

- state plan is not enough. According to the

commenter s , the EPA, like it has done elsewhere in the proposed rule, should recognize that the unique nature and complexit y of the proposed rule requires a greater deviation from the implementing regulations and should allow additional time for states to develop and submit state plans. Yet, with respect to timing, the commenter s stated that EPA barely flexes its right to disc retion under the regulation to extend the timing of submitting a state plan. Unlike the other instances where EPA has issued emission guidelines for existing sources under CAA section 111(d), the commenter s stated that the reach of the proposed rule goes f ar beyond the scope and even the boundaries of the previous guidelines

- the proposed rule requires the entire electric energy industry to be reconstructed, reorganized, and rebuilt.

Commenter s further argued that EPA cannot expect the states to complete the many complicated steps within one or even two years, including the new regulatory or statutory authorities that states may be required to develop and pass through its various legislatures and administrative bodies. According to the commenter s , Congress an d EPA have recognized that additional time is necessary to complete tasks as complicated as a SIP. The commenter s noted that, in the 1990 Clean Air Act Amendments, Congress amended section 110(a ) ( 1) to increase the time for submission of a state implement ation plan from nine months to three years. See Pub. L. No. 101

- 952, 104 Stat. 2399, Conf. Rep., at 1462 (Oct. 29, 1990). The commenter s also noted that EPA subsequently amended the PSD regulations to reflect this extension from nine months to three
years for submittal of a revised SIP upon revision of the PSD and NSR rules. 67 FR 80186, 80241 (Dec. 31, 2002); 40 CFR 51.166(a ) ( 6 ) ( i).

Comment 99 : Comment stating that the time frames the EPA proposes are absurdly short, particularly given the complexity of the tasks EPA has assigned the States, and recommending that the EPA give the states at least five years to develop a state plan for a single state and seven years to develop a multi

- state plan, and provide an extra three years for developing any state pl an upon a demonstration of reasonable progress toward development of a plan.

Response 99 : In response to this and similar comments regarding timing and planning concerns such as the commenters mention, the EPA has extended the time allowed for states to f inalize their plans

. The timeframe for mandatory reductions in the final Clean Power Plan begins in 2022 instead of 2020. The final rule includes this additional time and flexibility to manage complexities such as reliability, permitting, planning cycles, infrastructure addition and modifications, legislative changes, etc. In addition, the EPA is committed to continue extensive outreach to states and stakeholders and work closely with them to provide timely assistance and support in form of additional tools , training and guidance to facilitate the development of195 approvable state plans within the timeframe specified in the rule. As guidance documents, tools, templates and other resources become available, the EPA, in consultation with the U.S. Department of E nergy and other federal agencies, will continue to make these resources available via a dedicated website. Concurrent with this final rule EPA is also proposing model rules for state plans which, when finalized, states may wish to use to facilitate the dev e lopment of their state rule. See section VIII.E of the CPP final rule preamble on state plan submittal, approval process, and timing. EPA has aligned the single and multi

- state plan submittal dates. Section VIII.E also discusses state plan extensions

.
Th e following are summaries of the specific public comments under this comment:

Commenter s argued that the time frames EPA proposes are absurdly short, particularly given the complexity of the tasks EPA has assigned the States . Recognizing this complexity, t he
commenter s recommended that EPA give the states at least five years to develop a state plan for

a single state and seven years to develop a multi

- state plan , rather than the maximum of two and three years, respectively, that EPA has proposed. The commen ter s recommended that the Agency also provide an extra three years for developing any state plan upon a demonstration of reasonable progress toward development of a plan

.

Comment 1 0 0: Comment arguing that states should be allowed more time to develop thei r state plans

- at least five years to submit single state plans and at least seven years to submit multi

state plans with extensions liberally granted when a state can demonstrate that it is making good faith efforts to develop its plan or when it is work ing with other states to develop a multi

- state or regional plan.

Response 1 0 0 : In response to this and similar comments regarding timing and planning concerns such as the commenters mention, the EPA has extended the time allowed for states to finalize the ir plans and meet the first interim goal. The final rule includes this additional time and flexibility to manage complexities such as reliability, permitting, planning cycles, infrastructure addition and modifications, legislative changes, etc. In addition , the EPA is committed to continue extensive outreach to states and stakeholders and work closely with them to provide timely assistance and support in form of additional tools, training and guidance to facilitate the development of approvable state plans within the timeframe specified in the rule. As guidance documents, tools, templates and other resources become available, the EPA, in consultation with the U.S. Department of Energy and other federal agencies, will continue to make these resources availabl e via a dedicated website. Concurrent with this final rule EPA is also proposing model rules for state plans which, when finalized, states may wish to use to facilitate the deve lopment of their state rule. See section VIII.E of the CPP final rule preamble on state plan submittal, approval process, and timing. EPA has aligned the single and multi

- state plan submittal dates. Section VIII.E also discusses state plan extensions.

The following are summaries of the specific public comments under this comment:196 Co mmenter s argued that states should be allowed more time to develop their state plans. The

commenter s recommended that EPA grant states at least five years to submit single state plans and at least seven years to submit multi

- state plans. The commenter s als o recommended that extensions be liberally granted when a state can demonstrate that it is making good faith efforts to develop its plan or when it is working with other states to develop a multi

- state or regional plan.

The commenter s disagreed with EPA's proposal to allow the states about one year from the date the emission guidelines are adopted to submit their state plans establishing and applying standards of performance to affected facilities within their states. Although extensions of up to a year fo r states proposing plans alone and up to two years for states proposing plans in conjunction with other States are possible, the commenter s argued that even these extended periods are too short given the complexity of the guidelines and the goals to be ach ieved.

The commenter s noted that section 110 of the Act, "State implementation plans for national primary and secondary ambient air quality standards," affords states three years after the promulgation of a NAAQS to submit SIPs addressing those standards w hich are often complex in their own right. However, the commenter s contended that even three years does not adequately account for the enormity of the task of determining the amount and the methodology for reducing emissions and the time and political chal lenges the states face in adopting any laws and regulations needed to achieve each state's goals given this rulemaking's unprecedented scale and scope.

Comment 1 0 1 : Comment arguing that the timeframes under the proposed rule are far too short, unrealistic , and unworkable and that EPA should give the states at least five years to develop a state plan for a single state and seven years to develop a multi

- state plan, as well as more flexibility in establishing a compliance date.

Response 1 0 1 : In response to t his and similar comments regarding timing and planning concerns such as the commenters mention, the EPA has extended the time allowed for states to finalize their plans and meet the first interim goal. The final rule includes this additional time and flexi bility to manage complexities such as reliability, permitting, planning cycles, infrastructure addition and modifications, legislative changes, etc. In addition, the EPA is committed to continue extensive outreach to states and stakeholders and work closel y with them to provide timely assistance and support in form of additional tools, training and guidance to facilitate the development of approvable state plans within the timeframe specified in the rule. As guidance documents, tools, templates and other re sources become available, the EPA, in consultation with the U.S. Department of Energy and other federal agencies, will continue to make these resources available via a dedicated website. Concurrent with this final rule EPA is also proposing model rules for state plans which, when finalized, states may wish to use to facilitate the deve lopment of their state rule. See section VIII.E of the CPP final rule preamble for a discussion of state plan submittals and timing. See section VIII.B of the CPP final rule p reamble regarding state plan197 performance periods. See section XI of the CPP final rule preamble regarding the impacts of this action including energy, economic, and employments impacts.

The following are summaries of the specific public comments under thi s comment:

Commenter s argued that the timeframes under the proposed rule are far too short, unrealistic, and unworkable, given the complexity of the tasks EPA has assigned the states and the need for states to coordinate with their neighbors, FERC and the RTOs and ISOs where electricity is dispatched. The commenter s noted that EPA proposed to require states to submit their implementation plans within one year of any final emission guideline, with possible extensions of up to one year for states proposing in dividual implementation plans and two years for states proposing regional plans.

The commenter s asked EPA to consider the potential political landmines alone that must be navigated for states to craft a workable regional plan. According to the commenter s , not only will the plans need to be vetted and agreed to by various interested stakeholders, but policymakers will also have to find agreement from diverse group of legislators, administrations and regulatory groups. The commenter s said that finding consen sus even within state boundaries is going to be difficult enough.

The commenter s agreed with NRECA that EPA should give the states at least five years to develop a state plan for a single state and seven years to develop a multi

- state plan , rather than the maximum of two and three years, respectively, that EPA has proposed. The commenter s said this delay in implementation would also allow EPA and its stakeholders more time to sort through the practical implications and what the commenter s see as some of the mistaken assumptions that went into the making of the rule.

In addition, the commenter s also urged the EPA to provide more flexibility in establishing a compliance date , allowing states and regions to take into consideration things such as current and
pr ojected market demand, the useful life of the various facilities within the Region, debt loads and the ability of utilities to borrow for transitional expenses. The commenter s said this would help soften the potentially devastating financial impact of the proposed rule on some utility customers or electric cooperative members and ensure that regional markets retain reliable energy supplies.

Comment 1 0 2 : Comment stating that a schedule analogous to most other rules and SIP calls, five to seven years, is muc h more appropriate given the complexity of potential compliance options and the lack of precedent for regulating CO2 emissions

. Response 1 0 2 : In response to this and similar comments regarding timing and planning concerns such as the commenters mention, t he EPA has extended the time allowed for states to finalize their plans and meet the first interim goal. The final rule includes this additional time and flexibility to manage complexities such as reliability, permitting, planning cycles, infrastructure ad dition and modifications, legislative changes, etc. In addition, the EPA is committed to continue extensive outreach to states and stakeholders and work closely with them to provide198 timely assistance and support in form of additional tools, training and gu idance to facilitate the development of approvable state plans within the timeframe specified in the rule. As guidance documents, tools, templates and other resources become available, the EPA, in consultation with the U.S. Department of Energy and other f ederal agencies, will continue to make these resources available via a dedicated website. Concurrent with this final rule EPA is also proposing model rules for state plans which, when finalized, states may wish to use to facilitate the deve lopment of their state rule. See section VIII.E of the CPP final rule preamble for a discussion of state plan submittals and timing. Note that EPA has changed the CPP compliance start date from 2020 to 2022 in the final rule.

The following are summaries of the specific pu blic comments under this comment:
Commenters argued that states need a much more realistic schedule for development, submissions approval and implementation of standards of performance and state compliance plans. The commenters noted that the CPP allows on e to two years for most states. The commenters stated that a schedule analogous to most other rules and SIP calls, five to seven years, is much more appropriate given the complexity of potential compliance options and the lack of precedent for regulating C O2 emissions.

Comment 1 0 3 : Comment stating that it is reasonable that states be allowed five years to prepare their compliance plans, given the experiences of the RGGI states and the MGA which demonstrate that an eight

- year time period is reasonable in wh ich to craft a collaborative approach.

Response 1 0 3 : The EPA disagrees with the comments. In response to comments, the EPA is providing for up to three years for the submittal of final single

- state and multi

- state plans. The state plan submittal deadlines for initial and final plans are described in section VIII.E.2. of the preamble to the final rule. The examples provided by the commenters for why additional time is needed to submit a final state plan all speak to existing groundwork that has been done by states to develop viable approaches that could be used to meet the emission guidelines and existing models that could be drawn from in developing a state plan. Moreover, the EPA is aware of multiple dialogs across the country, among multiple states and sta keholders, which began in anticipation of the proposed emission guidelines and have continued to the present. The EPA believes that these past state efforts and continuing dialogs well

- position states to be able to submit approvable final state plans withi n three years of the finalization of the emission guidelines. In addition, in response to comments, the EPA has extended the beginning of the first plan performance period to 2022. The EPA notes that this provides states with more than six years from the p ublication of final emission guidelines to the beginning of the first plan performance period, a period of time equivalent to that required to develop and implement the Regional Greenhouse Gas Initiative.

Finally, concurrent with this rule, EPA is proposin g a Federal Plan with model rules for state plans which, when finalized, states may wish to use to facilitate the development of their state rules. EPA remains committed to continue our extensive outreach to states and stakeholders and work closely with th em to provide timely assistance and support in form of additional tools,199 training and guidance to facilitate the development of approvable state plans within the timeframe specified in the rule. As guidance documents, tools, templates and other resources b ecome available, the EPA, in consultation with the U.S. Department of Energy and other federal agencies, will continue to make these resources available via a dedicated website.

The following are summaries of the specific public comments under this comment :

Commenter s noted that, when regulating other pollutants under the Clean Air Act, states are given much more than 12 months to develop their plans, and the commenter s stated that it is only reasonable that they be allowed five years to prepare their compl iance plans for this unprecedented regulation. The commenter s said this will also enable regulators to get through the legislative and administrative rule

- making processes, where required. The commenter s said there remains a myriad of issues for them to wo rk through in a thoughtful and methodical manner if they are to create a plan (whether self

- correcting or not) that they will not be able to modify once it has been approved.

If states are to be encouraged to collaborate on a multi

- state approach, the com menter s stated that even more time is necessary to bring together a diverse group of states with widely varying CO2 reduction goals, resource fleets, and renewable energy and energy efficiency potential. The
commenter s stated that the experiences of the RG GI states and the MGA demonstrate that an eight

- year time period is reasonable in which to craft a collaborative approach that can gain the support of multiple states. According to the commenter s , these extensions of time for plan development (and correspo nding extensions of compliance deadlines) are critical if meaningful and effective state plans are to be crafted and adopted by the states

Comment 1 0 4 : Comment stating that the proposed rule is extremely complex with an aggressive timeline for planning an d compliance that will make both developing and implementing a plan difficult and that a request for a 1

- or 2

- year extension is highly probable for Georgia.

Response 1 0 4 : In response to this and similar comments regarding timing and planning

concerns su ch as the commenters mention, the EPA has extended the time allowed for states and regional planning groups to finalize their plans and meet the first interim goal. The final rule includes this additional time and flexibility to manage complexities such as reliability, permitting, planning cycles, infrastructure addition and modifications, legislative changes, etc. See section VIII.E of the CPP final rule preamble regarding state plan submittal and timing. For compliance

, see section VIII.B concerning state plan performance periods and VIII.F concerning state plan demonstrations and compliance. Section VIII.E of the CPP final rule preamble addresses extensions. Note that EPA has changed the CPP compliance start date from 2020 to 2022 in the final rule.

The f ollowing are summaries of the specific public comments under this comment:

Commenter s stated that the proposed rule is extremely complex with an aggressive timeline for planning and compliance that will make both developing and implementing a plan difficul t. The
commenter s noted that the Georgia Department of Natural Resources Environmental Protection200 Division is expected to craft the plan but will need significant input from the Commission, the Georgia Environmental Finance Authority (the State Energy offi ce), the Municipal Electric Authority of Georgia (representing municipal electricity providers), Oglethorpe Power Corporation (representing electric membership corporation providers), as well as the City of Dalton. The commenter s stated that plan developme nt is further complicated due to power transmission crossing state lines as several plants in Georgia are co

- owned by entities in neighboring states. The commenter s stated that planning for changes to the state's energy infrastructure requires substantial lead time to develop the required studies and to undergo the Georgia Public Service Commission's public hearing, review, and approval process, in addition to the time required for actual development and construction of the necessary infrastructure. The

com menter s stated that a 1

- year period to completely formulate the best plan is not realistic and will lead to mistakes and unintended long

- term consequences. As such, the commenter s stated that a request for a 1

- or 2

- year extension is highly probable for Ge orgia . The commenter s noted that under a multistate plan, if a 2

- year extension is requested and granted, the plan will not be finalized until June 2018 leaving only 18 months until the first benchmark will need to be realized. Given this scenario, the com menter s stated that there is not enough time to properly prepare for all of the investments that will be needed to comply with the rules.

Comment 1 0 5 : Comment stating that EPA's proposal does not provide adequate time for development of state plans, that EPA's model underestimates the time required for Florida to develop and implement its SIP, and that additional coordination and time will also be required if a multi

- state plan is to be considered.

Response 1 0 5 : EPA disagrees as the commenters appear to suggest that a final plan must be submitted in June of 2016. The final rule provides states with a full three years to develop a final plan. In the final rule EPA clarified that requirements of the initial plan submittal are designed to be readily achieva ble by states that intend to submit an approvable final plan See section VIII.E of the CPP final rule preamble on state plan submittal and timing. For compliance

, see sections VIII.B regarding state plan performance periods and VIII.F regarding state plan demonstrations

, in the final rule preamble . Section VIII.E of the final rule preamble also addresses extensions. Note that EPA has changed the CPP compliance start date from 2020 to 2022 in the final rule.

The following are summaries of the specific public comments under this comment:

Commenters stated that EPA's proposal does not provide adequate time for development of state plans . The commenters noted that EPA proposes to finalize the rule by June 1, 2015, and to require states to submit state plans by J une 30, 2016. According to the commenters, while EPA has acknowledged that the complexity of the proposal warrants greater time for state plan development than the 9 months typically provided under the section 111(d) rules, state plan development will take significantly longer than the additional 4 months EPA proposes to provide. The commenters stated that EPA's proposed goals would require most states to fundamentally reconfigure their electric generation industries and power supply markets which will like ly require passing state legislation, developing and modifying agency implementing regulations, and agency planning and modeling of necessary infrastructure improvements, such as new natural gas pipelines, transmission lines, and EGUs. The commenters asser ted that states201 cannot accomplish all of this in 13 months, and it is patently unreasonable, arbitrary, and capricious for EPA to require states to do so.

Commenter s stated that the EPA's model underestimates the time required for Florida to develop and i mplement its SIP. The commenter s noted that EPA's model shows a significant amount of Florida's coal

- and oil

- fired capacity retiring as early as 2016 and being replaced by natural gas

fired combined

- cycle capacity as early as 2018. The commenter s stated t hat these projections are unachievable due to the time required for Florida to develop its SIP and to subsequently site, permit, and construct these new units. Quite simply, the commenter s stated that these projected new units cannot come online as quickly as EPA's model assumes they can.

Commenters noted, in Florida for example, the state Legislature will almost certainly have to take some action in relation to Florida's state plan, either in passing specific statutory directives or authority, or ratifying rules that the FDEP promulgates. The commenters noted that Florida's Legislature meets for 2 months every year in March and April, and most bills have to be filed many months in advance. The commenters noted, assuming optimistically, that EPA's final guid elines have an effective date of June 30, 2015, Florida will have approximately 6 months to determine what legislative actions may be needed in the 2016 and 2017 Sessions. The commenters stated that this can only occur after it undertakes the enormous task of (1) understanding what the final guidelines require, (2) interacting with stakeholders, (3) identifying measures that it can implement without legislative action, (4) deciding which measures could achieve the state goal, (5) determining the costs of ea ch of these measures on the affected parties and Florida's economy so as to minimize the impacts, and (6) coordinating with the FPSC on measures that it may be able to implement or must oversee (while ensuring that there are no adverse impacts on reliabili ty). The commenters stated that the promulgation of any new rules to implement these measures, which will almost certainly require legislative ratification pursuant to Florida law, must also be timed to fit the Legislature's schedule. The commenters stated that any legal gaps in existing state agency authority to implement the final rule will require the Florida Legislature to enact new laws, a process that may not be completed, if at all, by EPA's compliance deadlines. Accordingly, the commenters stated th at Florida would not have time to develop a complete state plan by June 30, 2016. Commenter s added that even if Florida does somehow develop a complete SIP by June 30, 2016, new natural gas

- fired combined

- cycle units still cannot be sited, permitted, and c onstructed quickly enough to come online by 2018, as the compliance model so optimistically assumes. The commenter s stated that realistically, Florida's SIP might not be ratified by the Legislature and submitted to EPA until mid

- 2017, which would render si ting, permitting, and constructing new units by 2018 impossible.

Commenter s stated that even if Florida does somehow develop a complete SIP by June 30, 2016, new natural gas

- fired combined

- cycle units still cannot be sited, permitted, and constructed quick ly enough to come online by 2018, as the compliance model so optimistically assumes. The
commenter s stated that realistically, Florida's SIP might not be ratified by the Legislature and submitted to EPA until mid

- 2017, which would render siting, permitting , and constructing new units by 2018 impossible.

Commenters stated that additional coordination and time will also be required if a multi

- state plan is to be considered . The commenters provided for example that in 2003, nine northeastern states began to de velop a regional cap

- and

- trade program for CO2 emissions from power plants.202 The commenters stated that in December 2005, seven of those states agreed to implement RGGI, and by August 2006, published a model rule. The commenters stated that it was not until the end of 2008, however, that each of the states completed their individual rulemaking processes and began participating in RGGI, nearly 6 years after the process began. The commenters stated that the history of RGGI illustrates the time required for sta tes to negotiate and develop a multi

- state plan. The commenters asserted that EPA proposes to provide states only 2 years, which is clearly insufficient.

The commenters stated that EPA proposes allowing states to seek an additional year for development of single

- state plans or an additional 2 years for multi

- state plans. The commenters stated that even if granted by EPA, these extensions provide minimal relief due to the burdensome requirements for state plans. The commenters noted that an extension request by a state must be submitted by June 30, 2016, and must contain very detailed information , such as a description of the intended approach and progress made on each element of the plan, as well as "a comprehensive roadmap for completing the plan." The comm enters stated that even if seeking an extension, each state still must decide by June 30, 2016 what its state plan will be and if an extension is granted, it further exacerbates compliance timeframe issues because each state's interim compliance period wou ld still begin in 2020. Accordingly, the commenters argued that the state plan development schedule in EPA's proposal is arbitrary and capricious, and EPA must provide states more time to develop state plans for such a complex and impactful rule

.

Comment 1 0 6 : Comment stating that EPA should allow states more time to develop plans because states will need time to coordinate between environmental regulators, electricity regulators, electric utilities, and other entities that may be affected by the plan and t hat the proposed 1

- year extension for state plans is insufficient to resolve issues.

Response 1 0 6 : In response to this and similar comments regarding timing and planning concerns such as the commenters mention, the EPA has extended the time allowed for states to finalize their plans and meet the first interim goal. The final rule includes this additional time and flexibility to manage complexities such as reliability, permitting, planning cycles, infrastructure addition and modifications, legislative ch anges, etc. See section VIII.E of the CPP final rule preamble on state plan submittal and timing, as well as the approval process. For compliance

, see sections VIII.B regarding state plan performance periods and VIII.F regarding state plan demonstrations

, in the final rule preamble . Section VIII.E of the CPP final rule preamble also addresses extensions. Note that EPA has changed the compliance start date from 2020 to 2022 in the final rule. Section V of the CPP final rule preamble discusses the best system of emission reduction including generation shifts among affected EGUs and the ability of EGUs to implement BSER.

The following are summaries of the specific public comments under this comment:

Commenter s stated that EPA should allow states more time to de velop plans. The commenter s reiterated the proposed timeframe (final plans by June 30, 2016 with the option to extend 1 year for individual state plans or 2 years for multistate plans). The commenter s suggested that EPA203 set the same extended submittal dead line for individual state plans and multi

- state plans to encourage states to coordinate on multi

- state plans; otherwise, states may submit individual plans due to concerns that the multi

- state plan deadline may not allow them to resolve the many issues tha t must be addressed when multiple states are coordinating on a single plan.

The commenter s explained, assuming that EPA finalizes the Proposal by June 1, 2015, states would have only 13 months to submit their plans which is simply not a sufficient amount of time for a state to develop a plan in light of the breadth and complexity of the Proposed Rule, which is expected to cover not only existing fossil fuel

- fired EGUs but all aspects of the electricity sector. The commenter s stated that additional time is needed to allow states to (1) change regulations, policies, and even state laws to authorize the implementation of their plans; (2) coordinate among various state agencies; and (3) engage neighboring states.

According to the commenter s , because of the stri ngency of the proposed goals, states will be required to enact broad initiatives to achieve the necessary CO2 emissions reductions, efforts that extend far beyond affected EGUs. The commenter s contended that states will have to amend existing regulations a nd policies, or issue new regulations and policies, to ensure that state programs yield the CO2 emissions reductions necessary to demonstrate compliance. The
commenter s provided for example, states may need to revise integrated resource planning programs t o account for redispatch to NGCCs; states with existing RPSs may need to revise their programs to guarantee achievement of the projected amount of avoided fossil generation; and states also may need to revise their existing EM&V standards for their EE prog rams so that the state can take credit for their EE measures. According to the commenter s , such broad changes to existing state regulations and policies will take time to develop, and additional time will be needed to allow state agencies to comply with EP A's requirements for a public hearing, as well as with any state requirements for public comments, hearings and other administrative processes.

The commenter s noted that it will be extremely difficult for states to model all of the changes to the bulk powe r electric system, in the order that they need to occur, that would be required for states to comply with the Proposed Rule. The commenter s noted that this is further complicated by the fact that the electric system is regularly tested by the commodities m arkets (due to events like Hurricane Rita and the polar vortex) as well as weather events (like floods, ice storms, and extreme heat).

The commenter s explained that, in many states, changes to regulations and policies will be insufficient to guarantee EPA approval of state programs, and many states will need to enact new legislation to empower state agencies to implement and enforce CO2 emission reduction programs. The commenter s noted for example, state environmental agencies do not have authority to requi re redispatch to NGCCs; some states do not have legal authority to mandate redispatch at all. As a result, the commenter s noted that states will need to pass legislation to authorize, for example, an environmental dispatch approach that takes CO2 emission rates into account in the dispatch protocol used to schedule generation. See State Plan Considerations Technical Support Document at 11 (June 2014), Docket ID EPA

- HQ

- OAR

- 2013

- 0602

- 0463. The commenter s noted that states also will need to pass legislation to provide credits or adjustments to an EGU's CO2 emissions rate to take into account the effect of RE and EE measures. See Id . at 21. The commenter s noted that many state plans will have to be approved by204 the state legislature, which in many states meet onl y for a few months during the year, or meet only every other year, making EPA's proposed timeline impossible to meet. The commenter s noted that the state legislatures of Arkansas, Montana, Nevada, North Dakota and Texas meet biennially, in odd

- numbered yea rs.

The commenter s explained that passing state legislation is a lengthy process (e.g., non

controversial legislation in Wisconsin takes 27 months to pass, over twice as long as EPA's proposed 13

- month period for the development and submittal of state plan s). The commenter s stated that the time necessary to pass legislation associated with state plans that mandate CO2 reductions probably will be even longer, since it likely will be controversial (e.g., because any legislation involving climate change will f ace political opposition). The commenter s stated that EPA's proposed timeline for state plans is unworkable because it does not provide enough time for state legislatures to pass the legislation necessary to authorize state agencies to implement the action s that will need to be included in the state plan, nor does it provide sufficient time for legislatures to approve plans in states where such approval is required, particularly plans that will need to be so broad in scope and have such significant impacts on the electricity sector and the economy. As of November 19, 2014, the commenter s noted that two states (Florida and South Carolina) have enacted laws to require legislative approval of state compliance plans under certain circumstances and additional sta tes are considering action to require such approval.

The commenter s noted that states also will need time to coordinate between environmental regulators, electricity regulators, electric utilities, and other entities that may be affected by the plan. Accor ding to the commenter s , complicating this process is the fact that many states have ongoing integrated resource planning (IRP) requirements for the electricity sector, which do not align with the planning processes for state environmental agencies or EPA's proposed timeline for state plan submissions. The commenter s stated that the IRP process has the potential to greatly impact the development of state plans under the Proposal because states may need to rely upon IRPs to make their plan measures enforceabl e. Finally, the commenter s asserted that states will need more than 13 months to engage with neighboring states to address issues that may affect the development of individual state plans (e.g., states will need to coordinate about the redispatch of genera tion from power plants that have existing agreements with out

- of state distribution utilities). The commenter s noted that states also may wish to explore the possibility of developing a multi

- state plan, even if they ultimately decide to submit an individu al state plan.

The commenter s stated that the proposed 1

- year extension for state plans is insufficient to resolve the issues outlined above. The commenter s noted that the Proposed Rule would still require states to make an "initial submittal" by the June 30, 2016 deadline that is nearly as substantial and detailed as a final plan, which offers no practical relief for states that need additional time to develop their plans. The commenter s noted that the initial submittal "must address all components of a co mplete plan, including identifying which components are not complete," and include a "comprehensive roadmap outlining the path to completion, including milestones and dates." 79 FR 34915. The commenter s noted that states also must hold a public hearing on an initial submittal, just as they would for a final plan, 79 FR 34900, 34915, and the205 initial submittal must be approved by EPA. 79 FR 34916. The commenter s recommended that EPA should make the initial submittal requirements less stringent

.

Comment 1 0 7 : Comment stating that a regional or multi

- state approach requires extensive modeling and more planning time and that there should be additional opportunities for public comment as stakeholders gain experience with the Clean Power Plan.

Response 1 0 7 : The EP A agrees that continued stakeholder input during the state plan development process is beneficial and encourages states to provide for a robust stakeholder involvement beyond the basic requirements set forth in the rule. The EPA will also continue extensiv e outreach to states and stakeholders and work closely with them on the need for additional tools and guidance to facilitate the development of approvable state plans

. The following are summaries of the specific public comments under this comment:

Comment er s stated that a regional or multi

- state approach requires extensive modeling and more planning time . The commenter s noted that states are undertaking modeling and projection efforts in order to prepare comments on the Clean Power Plan and anticipate a re latively short time frame in which to prepare these plans with no additional opportunity to comment after EPA releases a final rule. The commenter s noted that any plan for Mississippi will have to take into consideration any MISO action or planning in resp onse to the Clean Power Plan, as well as the multi

- state operations of utilities that serve in Mississippi. The commenter s stated that plan development will require stakeholder input and feedback, as well as coordination between state agencies.

The commen ter s recognized that there are many unknowns and uncertainties regarding the Clean Power Plan. The commenter s stated that the appropriate way to address these issues is to allow more time for developing plans, to make clear that EPA is committed to being r esponsive to state concerns after this comment period is over, and to welcome the input of other entities with expertise in areas such as fuel diversity, reliability, and rate

- setting. The commenter s urged EPA to recognize that there should be additional o pportunities for public comment as stakeholders gain experience with the Clean Power Plan. While pre

- proposal meetings were a good step, the
commenter s stated that they are not a substitute for continuing to be responsive to feedback as the plans are devel oped and implemented.

Comment 1 0 8 : Comment stating that the rulemaking requires an additional comment period.

. Response 1 0 8 : The EPA does not agree that the rulemaking requires an additional comment period. The final rule is the product of one of the most extensive and long

- running public engagement processes the EPA has ever conducted. See section I I. K Stakeholder Outreach and Consulta t ion of the final rule preamble

. The following are summaries of the specific public comments under this comment:206 Com menter s stated that additional time for more public comment on the rule must be factored into state plan submission deadlines. The commenter s stated that EPA hides behind a false cloak of "flexibility" in not providing the critical details and information necessary for power providers and states to actually understand how the rule will operate and impact their operations. While EPA asks for comment on a myriad of issues, the commenter s said this, too, masks the alarming lack of any information on the actual scope and impact on individual sources, the states, and the electric power grid of the proposed rule. The commenter s said this makes it virtually inevitable that any final rule issued as a result of the proposal will differ materially and significantly fr om the proposed rule. According to the commenter s , such a final rule could not be seen as a logical outgrowth of the proposed rule, and would thereby require an additional comment period on the revised approach to implementing CAA section 111(d).

Comment 1 09 : Comment stating that it will likely take more than 6 months for plan development and 9

- 12 months for rulemaking with an additional comment supporting the inclusion of the optional two

- phased submittal process for states to seek an extension of time f or preparing and submitting plans to EPA.

Response 1 09 : I n response to this and similar comments regarding timing and planning concerns such as the commenters mention, the EPA has extended the time allowed for states to finalize their plans and meet the f irst interim goal. The final rule includes this additional time and flexibility to manage complexities such as legislative changes, reliability, permitting, planning cycles, infrastructure addition and modifications, etc. See section VIII.E of the CPP fina l rule preamble for information on state plan submittals, the approval process, and timing. This section also addresses extensions. Also see section VIII.D regarding state plan components and approvability criteria and section VIII.F regarding state plan p erformance demonstrations , in the final rule preamble . Note that EPA has moved the program compliance start date from 2020 to 2022.

The following are summaries of the specific public comments under this comment:

Commenter s stated it will likely take more t han 6 months for plan development and 9

- 12 months for rulemaking; therefore many states, will be forced to utilize the initial plan submittal and request an extension until June 30, 2017 for complete plan submittal.

Commenter s anticipated needing 6 months or more, depending on plan components and complexity, to evaluate, design, and develop a state plan following EPA's release of the final guidelines. The commenter s stated that adoption of EGU emission limits with no other measures, such as EE or RE requir ements, would be the simplest approach, but could be overly restrictive; therefore, the commenter s would like the opportunity, and time, to evaluate a wide range of options for the state plan once EPA finalizes the guidelines. The commenter s noted Tennesse e's uniqueness and lack of an EE or RE program infrastructure state

- wide which is anticipated to make this evaluation time

- consuming. The commenter s stated that based on the proposed components of an approvable state plan, items integral to this work inclu de:207 • Determination of the appropriate approach (utility

- driven or state

- driven) and geographic scope and identification of affected entities.

• Identification of state emission performance level as rate

- based or mass

- based level of emission performance that m ust be met through the plan. Additionally, TDEC would need to determine if in

- state emission trading will be permitted, and if so, how to implement such a program. A multi

- state emission trading program would require additional work and program development

.

• Determination of whether to adopt EE/RE measures as part of its state plan, as well as whether TDEC has the authority to require the implementation of EE/RE measures and/or request the appropriate authority from the legislature. TDEC will need to determi ne the specific EE/RE measures that should be implemented in the plan, the schedule for implementing those measures, and the appropriate EM& V to demonstrate EE compliance.

• Determination of the appropriate consequences of a failure to meet the emission
per formance goals for inclusion in the plan. TDEC would need to ensure the plan is self

correcting or develop periodic programmatic milestones to show progress in program implementation. If the plan is not self

- correcting, TDEC will need to develop correctiv e measures to be implemented if progress falls short of the plan projections, as well as a process and schedule for implementing any such measures.

• Demonstration that the actions taken pursuant to the plan are, when taken together, projected to achieve the initial (2020

- 2029) and final (2030) emission performance levels.

• Development of monitoring, reporting, and recordkeeping requirements which demonstrate implementation and progress, including the actions taken by TDEC, affected EGUs, and any other affecte d entities under the plan.

• Development of supporting material and technical documentation related to applicable components of the plan

.

• If adopted via rulemaking, a draft rule would need to be developed and must identify the affected entities and explain t he legal and economic effects of the rule.

The commenter s noted that all of the actions indicated above would need to be completed prior to the submittal to the Commissioner and Governor (in the case of a rulemaking) for review and approval. The commenter s noted that if a rulemaking is required for state plan adoption then the time frame required is generally 9

- 12 months for the rule to become effective. The commenter s noted that there are circumstances, with relatively straightforward rulemakings that do n ot involve fees where the commenter s have been able to finalize an effective rule in 6

- 9 months; however, the commenter s are skeptical that this timeframe is feasible for this particular regulation.

Commenter s supported the inclusion of the optional two

- ph ased submittal process for states to seek an extension of time for preparing and submitting plans to EPA. The commenter s believe208 that Tennessee will need to request this extension . The commenter s further supported the proposed option of giving EPA a 1

- year extended period for review of state plans (instead of the typical 4

- month review period).

Comment 1 1 0 : Comment noting that many states will require legislation to implement the renewable resource and demand

- side management measures that EPA is depending on to replace the coal that EPA's proposal will phase out and that there is little prospect that these measures could be adopted, along with all of the other requirements that EPA has mandated, within one
year

. Response 1 1 0 : In response to this and simi lar comments regarding timing and planning concerns such as the commenters mention, the EPA has extended the time allowed for states and regional planning groups to finalize their plans and meet the first interim goal. The final rule includes this addition al time and flexibility to manage complexities such as legislative changes. EPA decided not to finalize demand

- side energy efficiency as part of the best system of emission reduction in building block 4. See section VIII.E of the CPP final rule preamble fo r a discussion of state plan submittals and timing. EPA has aligned both the single and multi

- state submittal deadlines. Note also that EPA has moved the program compliance start date from 2020 to 2022.

The following are summaries of the specific public co mments under this comment:

Commenter s noted that, while a limited number of states may require legislative approval of NAAQS SIPs, a much larger group of states (including North Dakota) will require legislation to implement the renewable resource and deman d

- side management measures that EPA is depending on to replace the coal that EPA's proposal will phase out. The commenter s noted that virtually every state that has an RPS has one because of a legislative enactment. Thus, the

commenter s concluded that stat es that do not currently have an RPS (like North Dakota) will need legislation to enact one, and states with existing RPSs that EPA is requiring to be strengthened will need legislation for that purpose. The commenter s indicated the same is the case for de mand

- side management standards. The commenter s noted that many state legislatures (like North Dakota) do not meet every year, and many that do meet have relatively short sessions. Thus, the commenter s indicated there is little prospect that these measures could be adopted, along with all of the other requirements that EPA has mandated, within one year.

Comment 1 1 1 : Comment noting that state air regulating agencies have limited resources, and may be unfamiliar with important components of the proposal, suc h as renewable energy and energy efficiency.

Response 1 1 1 : The EPA is committed to work closely with state during the plan development process to provide training and tools to assist state in developing approval plans. As guid ance documents, tools, and ot her resources become available, the EPA, in consultation with the U.S. Department of Energy and other federal agencies, will continue to make these resources209 available via a dedicated website. T he final rule includes additional time and flexibility to

man age complexities such as legislative process and the adoption of new rules. See section VIII.E of the CPP final rule preamble for a discussion of state plan submittals and timing. EPA has aligned both the single and multi

- state submittal deadlines. Note a lso that EPA has moved the program compliance start date from 2020 to 2022.

The following are summaries of the specific public comments under this comment:

Commenter s noted that state air regulating agencies have limited resources, and may be unfamiliar wi th important components of the proposal, such as renewable energy and energy efficiency. The commenter s pointed out that they are accustomed to regulating sources of pollution, and that is where their expertise lies. The commenter s argued that imposing on air regulators the obligation of developing plans that regulate beyond the fence line demands that they be provided adequate time to marshal needed financial and human resources, hone their expertise in such areas and consult with their colleagues in other state agencies, including energy agencies and utility commissions. Just as it is essential for EPA to understand the operation of the electric industry and the economic and reliability impacts of its proposal, the commenter s said that state air agencies m ust be provided ample time to develop a working knowledge of the additional subject matter beyond the fence line which they are now expected to regulate. In addition, the commenter s noted that states may need to request legislative authority to implement

a nd secure funding for key portions of the Clean Power Plan, which may take several years to achieve. Likewise, the commenter s noted that states may in turn be required to adopt administrative rules to govern the process of state plan development or compone nts of it, which can easily consume an entire year or more. The commenter s argued that it is essential to provide state air regulators adequate time to develop plans regarding CO2 in the same way that they were provided years to develop plans for the regul ation of criteria pollutants.

Comment 1 1 2 : Comment noting that some states' agencies do not have the current authority to mandate energy efficiency programs or renewable energy construction by the utilities and that these states would have to pass some so rt of authorizing language for the agency or a mandate to implement the state plan.

Response 1 1 2 : EPA agrees that some states may need to pass additional legislation to authorize certain state measures. The final rule includes additional time and flexib ility to manage complexities such as legislative authorization

. See section VIII.E of the CPP final rule preamble for a discussion of state plan submittals and timing. EPA has aligned both the single and multi

state submittal deadlines. Note also that EPA has moved the program compliance start date from 2020 to 2022.

The following are summaries of the specific public comments under this comment:

Commenter s noted that some states' agencies (like Iowa) do not have the current authority to mandate energy effic iency programs or renewable energy construction by the utilities. The

commenter s noted that these states would have to pass some sort of authorizing language for the agency or a mandate to implement the state plan (approaches that the commenter s believe ar e210 unnecessary). According to the commenter s , each state must have sufficient time for the political process to develop and debate appropriate bills that would implement any proposed state plan. The commenter s stated that the proposed EPA rule does not acco unt for the legislative action that would be necessary for the development and eventual implementation of a state plan. The

commenter s recommended that the proposed rule be revised to give additional time to the planning process

.

Comment 1 1 3 : Comment requ esting that EPA add in more flexibility when various components of the plan are submitted to allow a gradual development of the more complicated building blocks and state agreements.

Response 1 1 3 : In response to this and similar comments regarding timing a nd planning concerns such as the commenters mention, the EPA has extended the time allowed for states and regional planning groups to finalize their plans and meet the first interim goal. The final rule includes this additional time and flexibility to mana ge complexities such as reliability, permitting, planning cycles, infrastructure addition and modifications, legislative changes, etc. In addition, the glide path approach taken in the final rule allows measures such as the building blocks to be phased in over time. EPA decided not to finalize demand

- side energy efficiency as part of the best system of emission reduction in building block 4. See section VIII.E of the CPP final rule preamble for a discussion of state plan submittals and timing. Note also th at EPA has moved the program compliance start date from 2020 to 2022. Section VIII.D of the CPP final rule preamble addresses state plan components and approvability criteria

. The following are summaries of the specific public comments under this comment:

NCDENR would like EPA to add in more flexibility when various components of the plan are submitted to allow a gradual development of the more complicated building blocks and state agreements. This might include additional one or two year extension to incor porate Building Block 3 and 4 and "other measures" if they are found to be legal options and a state chooses to consider them as BSER.

Comment 1 1 4 : Comment stating that compliance plans are not viable without a regional transmission analysis and that the time required to determine the generation scenarios, perform the assessments, and determine solutions must be factored into the time line for development, submission, and approval of state plans and that new transmission needs, engineering, siting and

cons truction will take anywhere from 5 to 10 years following development of the compliance plans.

Response 1 1 4 : In response to this and similar comments regarding timing and planning concerns such as the commenters mention, the EPA has extended the time allow ed for states and regional planning groups to finalize their plans and meet the first interim goal. The final rule includes this additional time and flexibility to manage complexities such as reliability,211 permitting, planning cycles, infrastructure additio n and modifications, legislative changes, etc. In addition, the glide path approach taken in the final rule allows measures such as the construction of new transmission lines to be phased in over time. Regional analysis and reliability are addressed in se ction VIII. G of the CPP final rule preamble. See also the resource adequacy and reliability TSD in the docket to the CPP final rule. Compliance is addressed in section VIII.F of the CPP final rule preamble . Section VIII.E of the final rule preamble address es state plan submittals and timing. Commenters can find discussion on the best system of emission reduction in section V of the CPP final rule preamble. Based on that

, EPA has established CO2 performance rates in section VI and statewide CO2 emission goa ls in section VII of the CPP final rule preamble. The flexibility states have in developing and submitting state plans is summarized at the beginning of the final rule, in section I., and also detailed in section VIII of the CPP final rule preamble on stat e plans. Note that EPA has moved the start date from 2020 to 2022 and also provided a more gradual glide path to the 2030 goals as explained in section VIII of the CPP final rule preamble

. The following are summaries of the specific public comments under t his comment:

Commenter s stated that CPP compliance plans are not viable without a regional transmission analysis. Additionally, the commenter s stated that the time required to determine the generation scenarios, perform the assessments, and determine solut ions must be factored into the time line for development, submission, and approval of state plans. The commenter s noted that accommodations must then be made that will allow time to construct necessary transmission projects before reliability is threatened . The commenter s stated that only by performing a comprehensive transmission assessment prior to approval of state plans will it be possible to identify potential reliability threats, and the measures necessary to address them. However, the
commenter s stat ed, EPA must then provide the time necessary to develop the infrastructure that will be required to support the transformation envisioned by the proposed CPP.

Commenter s stated that the reality of the situation is that the combination of targets and timel ines removes any level of flexibility EPA purports to have included in the plan. The commenter s stated that given EPA's assumptions on the retirements that would occur by 2020, it would be impossible to plan, engineer, site and construct transmission is th is time frame that would provide for reliable operation of the grid . The commenter s stated that time lines currently contemplated for compliance are simply misaligned with transmission realities. The commenter s stated that implementation of approved state plans will take time, as will potential mitigation measures to address unacceptable system conditions to accommodate retirements. The
commenter s stated that the identification of new transmission needs, engineering, siting and construction will take anywhe re from 5 to 10 years following development of the compliance plans

.

Commenter s stated that the magnitude of the necessary transmission grid enhancements is expected to be substantial. The commenter s stated that these grid enhancements cannot all be
constr ucted at the same time. The commenter s stated that the new transmission infrastructure will need to be staged and constructed in a manner that allows the grid operators to schedule necessary facility outages while continuing to maintain reliable operations and keep the lights on.212 The commenter s stated that the need to stage the construction activities will increase the time frame required to fully implement the CPP.

Commenter s stated that if enacted, the following recommendation should be considered as part of the minimum steps necessary to facilitate the evolution of the transmission system to accommodate these complex regulations. The commenter s stated that the time required to determine the generation scenarios, perform the detailed analytical assessments , and identify the required grid enhancements and construct the necessary transmission infrastructure must be factored into the time line for compliance to ensure reliability is not threatened.

Comment 1 1 5 : Comment stating that utilities will likely requi re additional time to prepare for compliance and that the time frames in the proposed rule are woefully inadequate to implement the sort of infrastructure, resource, and planning projects that would be required by the Clean Power Plan.

Response 1 1 5 : In re sponse to this and similar comments regarding timing and planning concerns such as the commenters mention, the EPA has extended the time allowed for states and regional planning groups to finalize their plans and meet the first interim goal. The final rule includes this additional time and flexibility to manage complexities such as reliability, permitting, planning cycles, infrastructure addition and modifications, legislative changes, etc. In addition, the glide path approach taken in the final rule allows measures such as the construction of new transmission lines to be phased in over time. See section VIII.E of the CPP final rule preamble on state plan submittals and timing. See section VIII.B regarding state plan performance periods and VIII. F regarding state plan performance demonstrations

– which together address compliance. Reliability and the reliability safety valve are also discussed in section VIII of the CPP final rule preamble . Note that EPA has moved the program compliance start date from 2020 t o 2022.

The following are summaries of the specific public comments under this comment:

Commenter s stated that utilities will likely require additional time to prepare for compliance. The
commenter s noted that under the timeline in the proposed rule, all s tates must submit initial emissions plans by June 30, 2016 or seek an extension to June 30, 2017 for individual plans or to June 30, 2018 for multi

- state plans. However, the commenter s noted that the January 1, 2020 start date for affected sources would no t be extended under the proposed rule. The commenter s stated that if EPA has 1 year to review a submitted state plan, then the earliest a final plan would be approved would be June 2018 (2.5 years before compliance begins), but if granted an extension a pl an might not be finalized and approved until June 2019

- only 6 months before the start date.

The commenter s stated that the re

- dispatch required by Building Block 2 will require extensive construction in multiple areas of the country. The commenter s stat ed that it takes 3 to 5 years to build additional pipeline capacity , which entails planning, permitting, financing, and construction while planning and constructing replacement capacity is yet another undertaking.213 The commenter s stated that construction of new high

- voltage transmission can take 5 to15 years, depending on the voltage class, location, and availability of necessary crews. The commenter s stated that any such new transmission required to implement the Clean Power Plan would not be available for compliance with the interim goal. Additionally, the commenter s noted the transmission planning process will need to take into account resource retirement projections in state plans.

The commenter s contended that the time frames in the proposed rule are wo efully inadequate to implement the sort of infrastructure, resource, and planning projects that would be required by the Clean Power Plan. The commenter s expressed concern about the cost and reliability impacts of being forced to choose a compliance path b ased on time constraints, rather than what will actually accomplish the goals of reducing CO2 from power plants while maintaining system reliability, protecting ratepayers, and promoting smart development.

Comment 1 1 6 : Comment stating that the long timefr ames associated with transmission development should be considered by the states as they develop their compliance plans and that the approval process for generation retirements is not linked to the transmission planning process with respect to resource ade quacy, which can cause a gap between generation information disclosure and transmission planning to support resource adequacy.

Response 1 1 6 : In response to this and similar comments regarding timing and planning concerns such as the commenters mention, t he EPA has extended the time allowed for states and regional planning groups to finalize their plans and meet the first interim goal. The final rule includes this additional time and flexibility to manage complexities such as reliability, permitting, plann ing cycles, infrastructure addition and modifications, legislative changes, etc. In addition, the glide path approach taken in the final rule allows measures such as the construction of new transmission lines to be phased in over time. See section VIII. G o f the CPP final rule preamble on issues regarding reliability, final rule flexibility, planning, and state plan modifications. Section VIII. G also discusses a reliability safety mechanism. Additionally, there is a TSD addressing resource adequacy and reli ability in the docket to this CPP final rule. See section VIII.E of the CPP final rule preamble for information on state plan submittals, timing, and the approval process. Compliance deadlines are discussed in section VIII.F of the CPP final rule preamble

. The following are summaries of the specific public comments under this comment:

Commenter s stated that the long timeframes associated with transmission development should be considered by the states as they develop their compliance plans . The commenter s noted that, due to the aggressive timeframes stated in the rule, there is potential that states will develop their plans and begin working on implementation prior to receiving approval from the EPA. If the EPA then rejects a state's plan, the commenter s s aid there is potential that the resources will be wasted or fail to achieve the required emission reduction goals prescribed by the rule. The
commenter s stated that, even though the rule focuses on changes to generation resources, transmission will be crit ical to ensuring implementation of the rule. However, according to the214 commenter s , transmission development generally takes longer than generation development. The
commenter s noted that transmission projects must be approved through various regional and

mu lti

- regional planning processes, approvals must be obtained from numerous regulatory agencies, land must be acquired, materials with substantial lead times must be procured, and finally, the facilities must be constructed and placed into service. As the st ates develop their plans, the commenter s said early consideration and commencement of transmission planning is critical.

In addition, the commenter s pointed out that the approval process for generation retirements is not linked to the transmission plannin g process with respect to resource adequacy, which can cause a gap between generation information disclosure and transmission planning to support resource adequacy. According to the commenter s , proper and timely transmission planning will require knowledge of where generation resource retirements and additions will occur, and where inter

- regional transfers will source and sink. Without a coordinated effort between the generation retirement and transmission planning processes, both regionally and inter

- regio nally, the
commenter s indicated that reliability issues for the bulk power system will be exacerbated.

To address some of these challenges, the commenter s said there must be efforts undertaken to bridge the gap between generation information disclosure and the transmission planning process, either through scenario planning or other means to ensure early inputs into the lengthy transmission planning process. The commenter s noted that such scenario planning often results in an identification of "no regrets" i nfrastructure that is common to all modeled scenarios; expanding the transmission grid in this fashion will facilitate the reliable transfer of electricity. According to the commenter s , incentives to encourage early action, including information disclosure for transmission planning purposes, should also be considered. In addition, the
commenter s indicated that any mechanism designed to allow a change in compliance deadlines or to allow other flexibility in reaching state emission targets for reliability rea sons should include a requirement that projects that will address that reliability concern be identified before the state emission targets are exceeded. The commenter s stated that Regional Transmission Organizations ("RTOs") should also, where applicable, have the responsibility for optimizing proposed projects from generators to address reliability concerns.

Comment 11 7 : Comment stating that ISOs would need to know years in advance of the 2020 compliance period if additional generation is needed to suppor t new customers, and that submittal of the state implementation plans may not come in time to satisfy that need.

Response 1 1 7 : The final rule includes additional time and flexibility to manage complexities such as reliability, permitting, planning cycles, infrastructure addition and modifications, legislative changes, etc. Specifically, the EPA has extended the time allowed for states and regional planning groups to finalize their plans and meet the first interim goal. See section VIII. G of the CPP final r ule preamble for a discussion of reliability and issues surrounding reliability. In addition, see the resource adequacy and reliability TSD in the docket to this final rule. Note that EPA has moved the start date from 2020 to 2022. Section VIII.E of the CP P final rule preamble addresses state plan submittals, the approval process, and timing.21 5 The following are summaries of the specific public comments under this comment:

Commenter s w ere concerned whether, in abandoning their status as a generator of electri city, there would be sufficient energy from other sources to meet their load and that of all the others who make the transition from generation to network customer at the same time. If additional generation is needed to support new customers, the commenter s said Independent System Operators would need to know years in advance of the 2020 compliance period . According to the
commenter s , submittal of the state implementation plans may not come in time to satisfy that need.

Co mment 1 1 8 : Comment stating that th e proposed rule effective requirement that North Dakota redesign its electric grids has such far

- reaching impacts that North Dakota will not be able to develop a plan within one year

. Response 1 1 8 : The EPA does not agree, t he CPP final rule does not requi re a state to redesign its electric grid. See section III of the CPP final rule preamble for a summary of rule requirements. In response to this and similar comments regarding timing and planning concerns such as the commenters mention, the EPA has extende d the time allowed for states and regional planning groups to finalize their plans and meet the first interim goal. The final rule includes this additional time and flexibility to manage complexities such as reliability, permitting, planning cycles, infras tructure addition and modifications, legislative changes, etc. Note also that EPA has moved the start date from 2020 to 2022. See section VIII.C of the CPP final rule preamble regarding state plans approaches. See section VIII.D of the CPP final rule pream ble regarding state plan components and approvability criteria. See section VIII.E of the CPP final rule preamble regarding state plan submittals, the approvability process, and timing. Section VIII. H of the CPP final rule preamble offers resources for sta tes to consider in developing state plans.

The following are summaries of the specific public comments under this comment:

Commenter s stated that the proposed rule effective requirement that North Dakota redesign its electric grids has such far

- reaching im pacts that North Dakota will not be able to develop a plan within one year . According to the commenter s , EPA has analogized the required state plan to a state's NAAQS SIP, yet under CAA section 110(a)(1) of the CAA, states are given up to three years to su bmit a NAAQS SIP. The commenter s stated that the three

- year period recognizes the complexity involved in developing a SIP, both in terms of the substantive analysis required and the need to at least hold public hearings and, in some states, for legislation . The commenter s further stated that the CAA section 111(d) state plan that EPA is requiring here is much more complex than a typical NAAQS SIP. The commenter s contended that reengineering the electric grid over the long term, as EPA is demanding, will be a highly complicated, highly contentious process, with effects rippling throughout North Dakota's growing economy. As a result, the
commenter s indicated a much broader group of government agencies and stakeholders must be involved in developing EPA's manda ted CAA section 111(d) state plan than are involved in developing a NAAQS SIP. While the Department is generally the sole state agency involved in developing a NAAQS SIP, the commenter s indicated that developing the type of CAA section 111(d) state plan th at EPA has mandated will require the direct involvement of, at least, the216 Governor, the North Dakota Public Service Commission, and a large number of affected stakeholders, including, commercial and industrial retail ratepayer groups, renewable resource

co mpanies, demand

- side management companies and a diverse host of others who are not typically involved in developing a NAAQS SIP.

Comment 1 19 : Comment stating that the EPA should extend the proposed rule's plan submission period, which would relieve some r eliability concerns, and recommending that the plan submission deadline be extending just based on the number of parties involved

. Response 1 19 : The EPA agrees that states should have more time to develop plans and has extended the time allowed for States to finalize their plans and meet the first interim goal. See section VIII on state plans in the CPP final rule preamble. Section VIII.E of the CPP final rule preamble discusses state plan submittals and timing as well as extensions and modifications. See section VIII. G of the CPP final rule preamble regarding reliability, workforce considerations, and employment/economic development. There is also a resource adequacy and reliability TSD in the docket to this final rule. Section V of the CPP final rule pre amble addresses the ability of EGUs, including those that comprise municipally

- owned utilities, to implement the BSER.

The following are summaries of the specific public comments under this comment:

Commenter s had serious concerns about EPA's plan submissi on deadline, which the commenter s said were unrealistic and not achievable as presently set . The commenter s noted that, under 40 CFR 60.27(a), EPA has the ability to extend the period for submission of any plan when it finds it necessary. The commenter s sa id EPA should extend the proposed rule's plan submission period, which would relieve some reliability concerns.

The commenter s stated that, under EPA's own admission, the proposed rule is unlike any prior section 111(d) regulation, as its effects span bey ond the affected source, requiring every party from the production of to the consumption of electricity, to come together in unparalleled ways. According to the commenter s :

• Generators must analyze the implementation of potential heat rate improvements at t he unit, work with states to develop implementation plans, and strategize with RTOs on new dispatch methods;

• Transmission operators must analyze where new infrastructure is needed and upend its dispatch protocol from economic to environmental, all while co mplying with FERC and NERC's reliability requirements;

• Distributors must analyze the proposed rule's impact on rates and work with states on developing energy efficiency programs, as well as the potential of renewable portfolio standards.

The commenter s no ted that the interrelation between these three parties is further complicated when an entity falls into more than one category. Such a fate is the commenter s ' municipal power agency, which both generates and transmits electricity. The commenter s further no ted that their217 agency does not just sell its electricity to its 60 distribution members, but also represents their public power interests.

The commenter s pointed out that states must then corral these parties to develop a plan or even expand the network of interrelated entities by creating a multi

- state plan. The commenter s indicated the plans will then likely require new state legislation, budgeted funds, and bolstered environmental enforcement, amongst others. Just based on the number of parties involved, the
commenter s recommended that EPA extend the plan submission deadline.

Comment 1 2 0 : Comment arguing that the time allowed between the final rule and state plan approval does not allow for adequate time to build new transmission lines to accommodate

ren ewables and changes in generation mix

. Response 1 2 0 : In response to this and similar comments regarding timing and planning concerns such as the commenters mention, the EPA has extended the time allowed for states and regional planning groups to finalize their plans and meet the first interim goal. The final rule includes this additional time and flexibility to manage complexities such as reliability, permitting, planning cycles, infrastructure addition and modifications, legislative changes, etc. In addit ion, the glide path approach taken in the final rule allows measures such as the construction of new transmission lines to be phased in over time. See section VIII. G in the CPP final rule preamble addressing electric reliability. Also see the resource ade quacy and reliability TSD in the docket for this CPP final rule. Note that EPA has moved the compliance start date from 2020 to 2022.

The following are summaries of the specific public comments under this comment:

Commenter s argued that the time allowed be tween the final rule and state plan approval does not allow for adequate time to build new transmission lines to accommodate renewables and changes in generation mix. Under the proposed CPP, the commenter s anticipated the requirement to construct additiona l high voltage transmission to accommodate renewable energy sources and expanded use of NGCC generation. Using their latest transmission projects as the basis, the
commenter s reasonably expected between six to ten years to construct and energize a new line following approval. The commenter s noted that the Blackberry Line in Oklahoma, Kansas and Missouri required seven years to construct following board approval.

Comment 1 2 1 : Comment stating that the compliance timeline does not allow adequate time for the needed reliability assessments and system changes to be accomplished before 2020.

Response 1 2 1 : In response to this and similar comments regarding timing and planning concerns such as the commenters mention, the EPA has extended the time allowed for state s and regional planning groups to finalize their plans and meet the first interim goal. The final rule includes this additional time and flexibility to manage complexities such as reliability, permitting, planning cycles, infrastructure addition and modifi cations, legislative changes, etc. See section VIII.F of the final rule preamble on compliance. See section VIII. G of the final rule218 preamble for a discussion on reliability. Also see the resource adequacy and reliability TSD in the docket for this CPP fin al rule. Note that EPA has moved the compliance start date from 2020 to 2022.

The following are summaries of the specific public comments under this comment:

Commenter s stated that the compliance timeline does not allow adequate time for the needed reliabi lity assessments and system changes to be accomplished before 2020.

Comment 1 2 2 : Comments contending that the CPP does not allow enough time for states to plan and prepare for such significant changes to their electricity generating portfolio, let alone

a ddress "beyond

- the

- fence" energy efficiency programs

. Response 1 2 2 : In response to this and similar comments regarding timing and planning concerns such as the commenters mention, the EPA has extended the time allowed for states and regional planning grou ps to finalize their plans and meet the first interim goal. The final rule includes this additional time and flexibility to manage complexities such as reliability, permitting, planning cycles, infrastructure addition and modifications, legislative changes , etc. See section VIII.E of the CPP final rule preamble on state plan submittals and timing. Note that EPA has aligned the submittal deadlines for both single

- and multi

- state plans. EPA moved the start date from 2020 to 2022. EPA decided not to finalize EE and building block 4 as part of the Best System of Emission Reductions. See section V in the CPP final rule preamble for a discussion of this change from the proposal. Section VIII. G of the CPP final rule preamble addresses reliability. Additionally a TSD on resource adequacy and reliability is found in the docket for the CPP final rule.

The following are summaries of the specific public comments under this comment:

Commenter s contended that states have very little time to prepare and submit implementat ion plans

-- 13 months from the time EPA issues a final rule, with a possibility of a one

- year extension for individual state plans or two

- year extension for multi

- state plans. The commenter s indicated this is simply not enough time for states to plan and pr epare for such significant changes to their electricity generating portfolio, let alone address "beyond

- the

- fence" energy efficiency programs. The commenter s also stated that regional transmission operators must have time to evaluate and provide feedback o n the state plans to address impacts on regional markets and ensure power reliability. The commenter s referred to the 2014 Initial Reliability Review of EPA's Proposed Clean Power Plan, in which the North American Electric Reliability Corporation indicated it also needs time to assess resource adequacy and long

- term reliability of the North American bulk power system

.

Comment 1 2 3 : Comment contending that due to required planning, studies, construction schedules, outage schedules, and other constraints (e.g ., evaluations for PSD and NSR), the schedule in the proposed section 111(d) rule is not attainable

.219 Response 1 2 3 : In response to this and similar comments regarding timing and planning concerns such as the commenters mention, the EPA has extended the tim e allowed for states and regional planning groups to finalize their plans and meet the first interim goal. The final rule includes this additional time and flexibility to manage complexities such as reliability, permitting, planning cycles, infrastructure addition and modifications, legislative changes, etc. See section s VIII. B and VIII. E of the CPP final rule preamble regarding state plan timing and submittal. Section VIII.E of the CPP final rule preamble also covers initial state plans. Section X of the C PP final rule preamble addresses interactions with other EPA programs and rules, such as NSR and Title V (permitting).

The following are summaries of the specific public comments under this comment:

Commenter s had concerns that the time allowed to develop the initial state plan is not feasible, or reasonable. Due to required planning, studies, construction schedules, outage schedules, and other constraints, the commenter s contended that the schedule in the proposed section 111(d) rule is not attainable. The commenter s stated that resources and vendors are being stretched thin with numerous projects being undertaken to comply with other CAA rules (MATS, CSAPR

, etc.). The commenter s also noted that additional permitting work would be needed, such as evaluation s for PSD and NSR, and modified or new permits would be needed for any projects to reduce GHG emissions. The commenter s said these real world constraints make the currently proposed timing impossible to meet.

Comment 1 2 4 : Comment stating that it is impor tant for the EPA to allow the time needed for planning and permitting new energy and transmission projects on federal land

. Response 1 2 4 : In response to this and similar comments regarding timing and planning concerns such as the commenters mention, the E PA has extended the time allowed for states and regional planning groups to finalize their plans and meet the first interim goal. The final rule includes this additional time and flexibility to manage complexities such as reliability, permitting, planning cycles, infrastructure addition and modifications, legislative changes, etc.

The following are summaries of the specific public comments under this comment:

Commenter s agreed with the perspective provided in recent comments on the CPP filed by 13
western s tates in concert with the Center for the New Energy Economy (CNEE) that federal lands are one key to future clean energy generation and transmission that will enable Western states and companies to achieve the goals of EPA's Clean Power Plan. Therefore, th e commenter s stated that it is important for the EPA to allow the time needed for planning and permitting new energy and transmission projects on federal land

.

Comment 1 2 5 : Comment stating that it is costly for states to develop SIPs, and that those cost s will be passed onto the consumer, and urging the EPA to not require states to develop their SIPs until there is regulatory clarity.220 Response 1 2 5 : EPA disagree s with the comments that the prospect of the final rule being litigated should be factored in t o the timeframe for state plan development and submittal and rule compliance. In the final rule preamble and other parts of the record for this rulemaking, we explain that this rule’s impacts on electricity consumers are limited, the benefits of this rule in reducing the adverse impacts on climate change of CO2 emissions, and the legal authority for this rule. State plan submittal and timing requirements are described in section s VIII. B and VIII. E of the CPP final rule preamble . Section III of the CPP fina l rule preamble discusses the rule requirements and the legal basis for the rule. Section VIII. G of the CPP final rule preamble discusses reliability. Also see the resource adequacy and reliability TSD in the docket for this final rule. The RIA in the doc ket for the CPP final rule addresses affordability and cost of electric power.

The following are summaries of the specific public comments under this comment:

Commenter s noted that it is well understood that the CPP will likely become the most litigated
pr oposed rule in history. The commenter s stated that given that it is costly for states to develop SIPs, and that those costs will be passed onto the consumer, the commenter s urged EPA to not require states to develop their SIPs until there is regulatory cla rity.

Co mment 1 2 6 : Commenters recommending that the EPA extend the timelines for state plan submission and for beginning the compliance calculation period to provide an adequate window for judicial review of any final emission guidelines before states inv est significant resources to develop their plans.

Response 1 2 6 : EPA disagree s with the comments that the prospect of the final rule being litigated should be factored in to the timeframe for state plan development, submittal and rule compliance. In the fi nal rule preamble and other parts of the record for this rulemaking, we explain that this rule’s impacts on electricity consumers are limited, the benefits of this rule in reducing the adverse impacts on climate change of CO2 emissions, and the legal autho rity for this rule. State plan submittal and timing requirements are described in section s VIII. B and VIII. E of the CPP final rule preamble . Section III of the CPP final rule preamble discusses the rule requirements and the legal basis for the rule. Sectio n VIII. G of the CPP final rule preamble discusses reliability. Also see the resource adequacy and reliability TSD in the docket for this final rule. The RIA in the docket for the CPP final rule addresses affordability and cost of electric power.

The follo wing are summaries of the specific public comments under this comment:

Commenter s stated that if EPA insists on pursuing the Proposal in its current form, it will undoubtedly face legal challenges on numerous fundamental issues to the program. The
commente r s noted that these challenges will create significant legal uncertainty for states attempting to implement any final emission guidelines through state plans under section 111(d), and as a practical matter, this uncertainty will likely make it impossible f or states to meet the compliance timelines proposed in this rulemaking. Regardless of what measures a state includes in its state plan, the commenter s argued that regulated entities are unlikely to invest in measures221 to implement a plan until the validity of the Proposal itself has been confirmed and the applicable state plan has received final federal approval from EPA. The commenter s recommended that EPA extend the timelines for state plan submission and for beginning the compliance calculation period to provide an adequate window for judicial review of any final emission guidelines before states invest significant resources to develop their plans.

The commenter s stated that if EPA's final emission guidelines differ significantly from the Proposal, then t he timelines for submission of state plans and for the beginning of the compliance period should be adjusted accordingly. The commenter s noted that states will need extra time to analyze the differences in the guidelines and determine how those changes aff ect its state plan.

Comment 1 2 7 : Comment stating that the EPA has failed to provide the states the necessary time to promulgate SIPs and/or take legal and regulatory actions to allow utilities to comply with the interim emissions rate targets, that the R ule Proposal's SIP submittal deadlines and ultimate implementation timelines must only begin to run once the Rule has been fully litigated and all appeals have been heard, and that the SIP submittal deadlines and implementation timelines should also be len gthened to provide adequate time for compliance, after the close of litigation.

Response 1 2 7 : EPA disagree s with the comments that the prospect of the final rule being litigated should be factored in to the timeframe for state plan development, submittal and rule compliance. In the final rule preamble and other parts of the record for this rulemaking, we explain that this rule’s impacts on electricity consumers are limited, the benefits of this rule in reducing the adverse impacts on climate change of CO2 emissions, and the legal authority for this rule. State plan submittal and timing requirements are described in section s VIII. B and VIII.E of the CPP final rule preamble . Section III of the CPP final rule preamble discusses the rule requirements and the l egal basis for the rule. Section VIII. G of the CPP final rule preamble discusses reliability. Also see the resource adequacy and reliability TSD in the docket for this final rule. The RIA in the docket for the CPP final rule addresses affordability and co st of electric power.

The following are summaries of the specific public comments under this comment:

Commenter s stated EPA has failed to provide the states the necessary time to promulgate State Implementation Plans and/or take legal and regulatory action s to allow utilities to comply with the interim emissions rate targets. The commenter s stated that the rule proposal is incurably flawed and should be withdrawn. The commenter s noted that even if the substantive elements of the Rule Proposal were viable, w hich they are not, the timelines for states and utilities to comply with the Rule Proposal are irresponsibly short. The commenter s asserted that it is impossible for states, particularly those with large deregulated electricity markets (such as Texas), to develop and submit SIPs in the timelines proposed by EPA and that EPA's proposed extensions provide no practical relief. The commenter s stated that by proposing draconian emissions limitations beginning in 2020, even if a state was able to complete and sub mit a SIP by the compliance timeline, there will not be time to implement the substantive provisions of the SIP.222 The commenter s stated that this Rule Proposal is laden with legal and technical faults. The
commenter s stated that it will be subject to signi ficant litigation that will affect the timing and scope of implementation of the Rule, ultimately leading the courts to vacate the rule. The
commenter s noted that if states are compelled to submit SIPs and generators begin undertaking compliance actions pr ior to the completion of litigation, states may be forced to develop SIPs that are ultimately worthless and will require regulated entities to take unnecessary economically harmful actions.

The commenter s stated that given the unprecedented burden and scop e of the Rule Proposal, and the long period of time to undertake actions necessary to implement the Rule (if it survives legal challenge), the timelines contemplated in the Rule Proposal should be changed in two significant ways. First, the commenter s stat ed that the Rule Proposal's SIP submittal deadlines and ultimate implementation timelines must only begin to run once the Rule has been fully litigated and all appeals have been heard. Second, the commenter s stated that the SIP submittal deadlines and impl ementation timelines should also be lengthened to provide adequate time for compliance, after the close of litigation.

Comment 1 2 8 : Comment arguing that the EPA should delay the submission deadline for state plans until the legality of the rule has been determined by the courts.

Response 1 2 8 : The EPA disagree s with the comments that the prospect of the final rule being litigated should be factored in to the timeframe for state plan development, submittal and rule compliance. In the final rule preamble a nd other parts of the record for this rulemaking, we explain that this rule’s impacts on electricity consumers are limited, the benefits of this rule in reducing the adverse impacts on climate change of CO2 emissions, and the legal authority for this rule. State plan submittal and timing requirements are described in section s VIII. B and VIII.E of the CPP final rule preamble . Section III of the CPP final rule preamble discusses the rule requirements and the legal basis for the rule. Section VIII. G of the CPP final rule preamble discusses reliability. Also see the resource adequacy and reliability TSD in the docket for this final rule. The RIA in the docket for the CPP final rule addresses affordability and cost of electric power. The DC Circuit in the case t hat commenters ’ reference dismissed the challenges to the proposal.

The following are summaries of the specific public comments under this comment:

Commenter s argued that EPA should delay the submission deadline for state plans until the legality of the ru le has been determined by the courts. The commenter s stated that the proposed rule will be challenged in court if adopted in substantially the form now proposed, and EPA is already defending challenges to the proposed rule in the District of Columbia Circu it Court of Appeals. According to the commenter s , to implement the building blocks, many states will have to enact enabling legislation, including such things as imposing requirements that companies construct new renewable generation sources, new transmiss ion facilities, etc. The commenter s stated that this is a dramatic step for the agency to mandate, as it forces states to decide whether to engage their sovereign political processes under circumstances where profound uncertainty exists over the legality o f EPA's dramatic undertaking and Congress' intent with the Clean Air223 Act to preempt state authority over retail electrical generation and sales. The commenter s concluded that EPA should therefore delay the deadline for submission of state plans until EPA's proposed rule is upheld after judicial review or the time for such review has expired.

Comment 1 29 : Comment argued that concerns with the EPA's legal authority to issue the rule at all will put the states at jeopardy if they are required to spend the ti me and resources to develop a state plan during the time that the rule's legality is at issue in the inevitable appeal of the rule.

Response 1 29 : EPA disagree s with the comments that the prospect of the final rule being litigated should be factored in to t he timeframe for state plan development and submittal and rule compliance. In the final rule preamble and other parts of the record for this rulemaking, we explain that this rule’s impacts on electricity consumers are limited, the benefits of this rule in reducing the adverse impacts on climate change of CO2 emissions, and the legal authority for this rule. State plan submittal and timing requirements are described in section s VIII. B and VIII.E of the CPP final rule preamble . Section III of the CPP final r ule preamble discusses the rule requirements and the legal basis for the rule. Section VIII. G of the CPP final rule preamble discusses reliability. Also see the resource adequacy and reliability TSD in the docket for this final rule. The RIA in the docket for the CPP final rule addresses affordability and cost of electric power.

The following are summaries of the specific public comments under this comment:

Commenter s argued that the serious and significant concerns with EPA's legal authority to issue the rule at all will put the states at jeopardy if they are required to spend the time and resources to develop a state plan during the time that the rule's legality is at issue in the inevitable appeal of the rule. The commenter s noted that state resources ar e not unlimited and, given the unprecedented expansive approach EPA has taken in interpreting CAA section 111(d), EPA's rule should not require submission of state plans until the legality of the rule is ultimately determined by the courts. According to th e commenter s , this will also ensure that any serious and significant changes that might be made to electric power operations in anticipation of state plans are not prematurely undertaken to the detriment of the reliability and affordability of electric
pow er, when the very premise of EPA's legal authority is in question.

Comment 1 3 0 : Comment advocating for the amendment of the plan submittal deadlines contained in the subpart B regulations (the section 111(d) procedural regulations), that could either be a basic extension of the submittal deadlines or implementation of a "legal trigger" approach, given that litigation associated with the rulemaking is inevitable.

Response 1 3 0 : EPA disagree s with the comments that the prospect of the final rule being litiga ted should be factored in to the timeframe for state plan development and submittal and rule compliance. In the final rule preamble and other parts of the record for this rulemaking, we explain that this rule’s impacts on electricity consumers are limited , the benefits of this rule in reducing the adverse impacts on climate change of CO2 emissions, and the legal authority for224 this rule. State plan submittal and timing requirements are described in section s VIII. B and VIII.E of the CPP final rule preamble

. Section III of the CPP final rule preamble discusses the rule requirements and the legal basis for the rule. Section VIII. G of the CPP final rule preamble discusses reliability. Also see the resource adequacy and reliability TSD in the docket for this fin al rule. The RIA in the docket for the CPP final rule addresses affordability and cost of electric power.

The following are summaries of the specific public comments under this comment:

Commenter s indicated that, given that litigation associated with the r ulemaking is inevitable, states and the regulated industry are at risk in moving forward with developing and enacting section 111(d) plans prior to the resolution of litigation. For that reason, the commenter s advocated for the amendment of the plan submit tal deadlines contained in the subpart B regulations (the section 111(d) procedural regulations). The amendment could either be a basic extension of the submittal deadlines or implementation of a "legal trigger" approach.

Comment 1 3 1 : Comment stating tha t this final rule, whatever form it ultimately takes, should not require states to begin taking action until the completion of the judicial review

. Response 1 3 1 : EPA disagree s with the comments that the prospect of the final rule being litigated should be factored in to the timeframe for state plan development and submittal and rule compliance. In the final rule preamble and other parts of the record for this rulemaking, we explain that this rule’s impacts on electricity consumers are limited, the benefit s of this rule in reducing the adverse impacts on climate change of CO2 emissions, and the legal authority for this rule. State plan submittal and timing requirements are described in section s VIII. B and VIII.E of the CPP final rule preamble . Section III o f the CPP final rule preamble discusses the rule requirements and the legal basis for the rule. Section VIII. G of the CPP final rule preamble discusses reliability. Also see the resource adequacy and reliability TSD in the docket for this final rule. The RIA in the docket for the CPP final rule addresses affordability and cost of electric power.

The following are summaries of the specific public comments under this comment:

Commenter s stated that if this rule is finalized in its current form, states will b e immediately required to amend not only their state air programs but will be required to fundamentally restructure their State's entire energy generation and delivery system. The commenter s noted that this significant undertaking will run parallel with th e judicial review of the rulemaking.

The commenter s noted that states have been through several exercises where EPA's legal interpretations have resulted in states taking actions to satisfy a federal rule that is later determined by the Courts to be illeg al.

The commenter s stated that this final rule, whatever form it ultimately takes, should not require states to begin taking action until the completion of the judicial review. The commenter s noted that this is to preserve the state's limited resources an d ensure that actions taken in response to225 the EPA rule will not be for naught. The commenter s urged the EPA to respect their state partners and include this provision in any final rule.

Comment 1 3 2 : Comment recommending that the EPA extend the submitta l deadline for state plans under section 111(d) due to the complex nature of this regulatory initiative and the almost certain litigation that will ensue

. Response 1 3 2 : EPA disagree s with the comments that the prospect of the final rule being litigated sho uld be factored in to the timeframe for state plan development and submittal and rule compliance . In the final rule preamble and other parts of the record for this rulemaking, we explain that this rule’s impacts on electricity consumers are limited, the b enefits of this rule in reducing the adverse impacts on climate change of CO2 emissions, and the legal authority for this rule. State plan submittal and timing requirements are described in section s VIII. B and VIII.E of the CPP final rule preamble . Section III of the CPP final rule preamble discusses the rule requirements and the legal basis for the rule. Section VIII. G of the CPP final rule preamble discusses reliability. Also see the resource adequacy and reliability TSD in the docket for this final rule . The RIA in the docket for the CPP final rule addresses affordability and cost of electric power.

The following are summaries of the specific public comments under this comment:

Due to the complex nature of this regulatory initiative and the almost certai n litigation that will ensue, commenter s recommended that EPA extend the submittal deadline for state plans under section 111(d). The commenter s noted that section 111(d) does not specify rulemaking schedules or deadlines for EPA or the states. At a minimu m, the commenter s recommended that EPA extend the deadline to three years following final rulemaking in parallel with the requirements for state implementation plans (SIPs) submitted under CAA section 110. Ideally, the commenter s suggested that EPA extend the submittal deadline to three years following the conclusion of the judicial review process. The commenter s stated that EPA could include such a timing provision in the emissions guidelines to help states and affected sources avoid spending resources, ti me, and money on plans and rulemakings until the legal path forward is certain. In addition, the commenter s noted that an extended timeline would be helpful to states that may require statutory changes before proceeding with a state plan to regulate CO2 em issions from existing EGUs.

Comment 1 3 3 : Comment urging the EPA to allow states to file their state plans once the litigation is resolved.

Response 1 3 3 : EPA disagree s with the comments that the prospect of the final rule being litigated should be factore d in to the timeframe for state plan development and submittal and rule compliance . In the final rule preamble and other parts of the record for this rulemaking, we explain that this rule’s impacts on electricity consumers are limited, the benefits of thi s rule in reducing the adverse impacts on climate change of CO 2 emissions, and the legal authority for this rule. State plan submittal and timing requirements are described in section s VIII. B and VIII.E of226 the CPP final rule preamble . Section III of the CP P final rule preamble discusses the rule requirements and the legal basis for the rule. Section VIII. G of the CPP final rule preamble discusses reliability. Also see the resource adequacy and reliability TSD in the docket for this final rule. The RIA in t he docket for the CPP final rule addresses affordability and cost of electric power.

The following are summaries of the specific public comments under this comment:

Commenter s expect ed that there will be extraordinary challenges within states to coordinate an acceptable state plan in a timely fashion and said it is widely understood that the proposed rule will be heavily litigated. Because of this certainty, the commenter s urged the EPA to allow states to file their state plans once the litigation is resolv ed. By so doing, the commenter s said unnecessary costs would be avoided, which are costs consumers would not incur.

Comment 1 3 4 : Comment agreeing with the EPA that the compliance methodology must avoid double

- counting.

Response 1 3 4 : EPA appreciates the c omment recognizing that double counting must be avoided and agrees that individual state should have more time to develop a plan. The final rule extends by a year the date by which an individual state plan is due. See section VIII.E of the CPP final rule preamble concerning state plan submittals and timing. See section V of the CPP final rule preamble for a comprehensive discussion of RE. See section VIII.G of the CPP final rule preamble regarding RE credits and monitoring and verification criteria for R E to avoid double

counting.

The following are summaries of the specific public comments under this comment:

Commenter s agreed with the USEPA that the compliance methodology must avoid double

counting. The commenter s stated however, if states must negotiat e and reach agreement regarding the attribution of RE credits to avoid double

- counting, a single year for plan submission is not realistic, and the USEPA must give more time to states to submit implementation plans.

Comment 1 3 5 : Comment recommending that any enlargement of time for state plan submittal beyond the extension of time from 9 months to 13 months that EPA has proposed for all states be based on documented exigencies stemming from state laws that preceded the proposed Clean Power Plan, and that a ny initial plan submittal that requests an enlargement of time meet certain recommended criteria.

Response 1 3 5 : E PA does not agree that there may be circumstances that would warrant an extension to the 13 month initial plan submittal deadline and has not provided for such an extension in the final rule. In the final rule

, EPA clarified that requirements of the initial plan submittal are designed to be readily achievable by states that intend to submit an approvable final plan.227 Section VIII.E of the CPP fi nal rule preamble addresses state plan submittals, the approval process, and timing. Conditions for state plan extensions are also discussed in section VIII.E. Deadlines for both single

- and multi

- state plans have been aligned. See section VIII.C of the CP P final rule preamble on state plan approaches, including a comprehensive discussion of multi

- state plans. Section VIII.D of the CPP final rule preamble covers state plan components and approvability criteria, including performance demonstrations. Permitti ng is described in section X of the CPP final rule preamble on interactions with Title V.

The following are summaries of the specific public comments under this comment:

Commenter s noted that EPA has proposed allowing states to apply for a 1

- year extension beyond the state plan submission deadline if it is not possible to complete a state plan in 1 year and for a 2

- year extension if the state is pursuing a multi

- state approach. The commenter s stated that this goes well beyond general EPA requirements, and t hat EPA's long

- standing regulations implementing section 111(d) generally require state plan submittal within 9 months of EPA's final Emissions Guidelines. 40 CFR 60.23(a ) ( 1). The commenter s stated that with only one exception (the Clean Air Mercury Rule) , EPA has set the deadline for submitting state plans within 12 months of its final guidelines.

While the commenter s expressed appreciation for EPA's efforts to balance the importance of timely state plan submittal with other considerations, the commenter s expressed concern about delays in carrying out these important emission reductions. The commenter s argued that states have ample authority to carry out the Emission Guidelines through long established emission reduction measures that apply to the regulat ed sources, such as Title V operating permits implementing, for example, intrastate emissions averaging across regulated sources.

The commenter s stated that they recognize the dual environmental and economic benefits of regional collaboration, and stated t hat these benefits can be fully realized through timely submittal of state plans developed under existing authority that rely on informal MOUs or agreed upon consistencies across state plans to harness efficiencies in existing cross state markets and platf orms within the plan development period provided. The commenter s provided for example that states can adopt state programs under existing law and effectuate MOUs for crediting the emission reductions associated with RECs or energy efficiency "white tags" a cross states to smooth compliance across jurisdictions. Further, the commenter s suggested that states could develop stand

- alone state plans initially and subsequently submit revised plans to enable multi

state collaboration

.

The commenter s stated that EPA seems to erroneously presuppose that well designed and efficient regional collaboration must necessarily take the form of formalistic and complex regional programs that impose new burdens on long established, time tested state authorities and prerogatives. The commenter s stated that this is not the case because there are an extensive suite of opportunities and approaches that states can deploy to mobilize and optimize the synergies of cross border coordination that are thoroughly anchored in existing law an d states can always develop more formal inter

- state frameworks over time.

The commenter s recommended that any enlargement of time for state plan submittal beyond the extension of time from 9 months to 13 months that EPA has proposed for all states be based on228 documented exigencies stemming from state laws that preceded the proposed Clean Power Plan

. The commenter s suggested that those exigencies should be limited to democratic process requirements

- a legislative calendar that is demonstrably not within the s tate plan development window in a state where legislative action is required for state plan submittal, or a regulatory process that must, by its express terms, take more than 13 months to complete.

The commenter s stated that there is no justification for p roviding extensions for actions or steps beyond those in a state's plan development process that make the extension necessary. As such, the commenter s suggested that EPA require all steps that can be completed during the provided time period to be complete d.

To effectuate these central principles, the commenter s recommended the following minimum criteria for any initial plan submittal that requests an enlargement of time for plan submittal beyond 13 months:

• A complete regulatory framework (with regulatory t ext) and a demonstration that the plan will meet the state targets, understanding that the plan might change while undergoing
pre

- existing mandated regulatory or legislative processes that would manifestly take longer than a year. As suggested by EPA, it i s also reasonable to require that a state must document that it has at least proposed any necessary regulations and introduced any necessary legislation within the first 13 months to qualify for additional time to complete a state plan

.

• A demonstration tha t completion of the plan during one year is, in fact, not possible given preexisting regulatory requirements or legislative processes that cannot be completed within one year. If legislative processes are cited, the submittal must also demonstrate that the plan cannot be put in place through regulatory processes standing alone. Neither technical work nor coordination with third parties should be a sufficient predicate for a

one

- year extension

.

• Documentation of notification provided to the owners and operato rs of all regulated sources that their operating permits will come up for review at a specified date to enable eventual state plan requirements to be incorporated (sufficiently prior to 2020 to enable compliance with the interim targets to be achieved). Th is is important as some states may not have an existing framework in place to ensure that state plan requirements can be incorporated into regulated source operating permits in a timely fashion

.

• For all operating permits of regulated sources, a requirement that the source not increase its CO2 emissions, measured on an annual basis, to be in place until replaced by requirements incorporated in the final state plan

.

• A comprehensive roadmap for completing the plan expeditiously with clear and concrete mileston es and timetables that would become the basis for plan disapproval if not achieved

.

• For formal, joint multi

- state plans, a demonstration that the specific extension requested is necessary and documentation that all plan development steps that can be comple ted229 without formal multi

- state agreements have been carried out. For multi

- state plans that could function initially as state

- only plans (e.g. plans that establish intra

- state trading mechanisms but allow for inter

- state trading of credits or allowances), complete state plans should be submitted by the deadline with the multi

- state components to follow within the extension period. States seeking an extension for development of a multi

- state plan should also be required to develop a "backup" stand

- alone, com pliant state plan by the June 2016 deadline to be put in place should the multi

- state process not be completed in the allotted time

.

Comment 1 3 6 : Comment supporting the proposed timeline s for states to develop their state plans.

Response 1 3 6 : EPA does no t agree. Based on concerns voiced by other commenters, the final align s the single

- state and multi

- state plan submittal deadlines rule and has moves the initial rule compliance date from 2020 to 2022. S tate plan submittal and approval process and timing requirements a re described in section VIII.E of the CPP final rule. Initial submittals are also addressed in section VIII.E of the CPP final rule preamble.

The following are summaries of the specific public comments under this comment:

Commenters supported the timeline for states to develop their state plans.

Commenter s appreciated that when EPA delayed the public comment period to Dec. 1, it did not likewise change future timetables for release of the final rule and for states' development of their
respec tive plans by June 30, 2016. The commenter s stated that EPA should adhere to its intended date for issuance of the final rule, as well as its timeline for states to develop their compliance, or "state implementation" plans , for EPA to approve them, and ult imately to ensure states are on track to meet their compliance targets. The commenter s said this is especially important because any slippage of meeting those targets means GHG emissions are continuing at rates above the stated targets, which in turn delay s state development and implementation of the components of their plans, which in turn erodes the intent of this Clean Air Act rule and the Act itself.

Commenter s noted that the EPA has proposed an optional two

- phase process for state compliance plans, whi ch the commenter s supported. The commenter s stated that this approach allows for the requisite amount of certainty that states are making progress on their plans, while allowing for the time it may take for completing detailed analytic work to inform state plans, to pass or update legislation in support of state goals, and to coordinate with the diverse stakeholders needed to achieve a successful outcome. The commenter s agreed with the requirement that states must file an initial plan by June 30, 2016, "tha t documents the reasons the state needs more time and includes commitments to concrete steps that will ensure that the state will submit a complete plan by June 30, 2017 or 2018, as appropriate." The commenter s noted that a final state plan would then be d ue by June 30, 2017, or by June 30, 2018, in the case of a multi

- state plan. The commenter s agreed that providing more time for multi

- state compliance plans is reasonable. According to the commenter s , multi

- state approaches create greater230 flexibility and c an help achieve emission reductions at a lower cost. Giving states additional time to coordinate could encourage more states to take this approach, driving greater benefits to all.

Comment 1 3 7 : Comment contending that there will be sufficient flexibility to allow the Nevada legislature to act and comply with the final rule.

Response 1 3 7 : EPA agrees that the timeframes in the final rule are sufficient for states to submit and implement complete plans. See section VIII.E of the CPP final rule preamble on st ate plan submittal and approval process and timing. EPA has moved the start date from 2020 to 2022. State plan compliance is found in section VIII.F of the CPP final rule preamble . Section VIII.D of the CPP final rule preamble describes interim period pe rformance rates or state goals.

The following are summaries of the specific public comments under this comment:

C ommenter s contended that there will be sufficient flexibility to allow the Nevada legislature to
act and comply with the final rule since the r ule will allow states to phase in the various elements of the plan over approximately 9 years.

Comment 1 3 8 : Comment stating that only those states actively working on a state plan should be allowed an extension in the deadline to submit the plan for EPA a pproval.

Response 1 3 8 : EPA agrees that an initial submittal reflect s a state actively working on a plan and has defined in the final rule what circumstances constitute an acceptable appropriate explanation for an extension. Section VIII.E of the CPP final rule preamble addresses state plan submittal, timing, and the approval process, including the components of an initial state plans. Section VIII.E also discusses the legal issues regarding the state plan process including extensions and failures to submit a state plan.

The following are summaries of the specific public comments under this comment:

Commenter s indicated that only those states actively working on a state plan should be allowed an extension in the deadline to submit the plan for EPA approval

. The commenter s noted that the EPA solicited comment in the proposed emission guidelines on whether there are other elements that a state must include in its initial submittal to qualify for a date extension. According to the
commenter s , the EPA specificall y requested comment on whether the guidelines should require a state to have taken significant, concrete steps toward adopting a complete plan for the initial plan to be approvable.

The commenter s agreed that the EPA should grant a one

- year extension to those states working on a regional plan. However, the commenter s argued that those states must prove that they are working in good faith by providing a draft or interim plan at the end of the first planning year. The commenter s believe that the State of Lou isiana plans to sue the EPA and not engage in developing a plan, in the hopes that the courts will side with industry. From the commenter s ' legal analysis, the commenter s asserted that it would take up to 2 years after the rule is finalized231 for the DC cour t to issue a decision. Hence, the commenter s concluded that only those states actively working on a plan should be allowed an extension. Otherwise, the commenter s stated, the State of Louisiana will use the extra year to wait out the courts.

Comment 1 39 : Comment stating that more timing flexibility for developing multistate arrangements would help other states that file their state plans and then wish to consider multistate opportunities.

Response 1 39 : EPA agrees with the comment and the final rule provi des states with an additional year to consider the possibility for multistate arrangements in their plan development
process. Section VIII.E of the CPP final rule preamble addresses state plan submittals, the approval process and timing. Section VIII.C of the CPP final rule preamble covers state plan approaches, including multi

- state plans, in detail.

The following are summaries of the specific public comments under this comment:

Commenter s believe d the current timelines in the draft rule are ample for sta tes to develop and submit their individual state compliance plans, and the extra year allowed for submitting a multistate plan will help states with already aligned policies or states that intend to join an existing regional framework (RGGI). However, the commenter s also believe d more timing flexibility for developing multistate arrangements would help other states that file their state plans and then wish to consider multistate opportunities. The commenter s indicated this is especially so given that import ant elements of EPA's final rule will remain uncertain until mid

2015. According to the commenter s , it appears most states are likely to focus first on their own compliance plans, looking later to multistate options.

Comment 1 4 0 : Comment stating that the EPA should adjust the time frames for submitting state plans and compliance periods in consideration of the forthcoming revised ozone standards

. Response 1 4 0 : EPA disagree s . As the 2015 ozone NAAQS has not been finalized, it is premature to speculate abo ut it. Section X of the CPP final rule preamble discusses the 2015 proposed ozone NAAQS in light of commenter s ’ concerns.

The following are summaries of the specific public comments under this comment:

Commenter s stated that EPA should adjust the time fr ames for submitting state plans and compliance periods in consideration of the forthcoming revised ozone standards. According to the commenter s , many EGUs, including those affected by the proposed Clean Power Plan (CPP), will have new compliance burdens fo r ozone precursors (NOx and VOCs) once the revised NAAQS for ozone are final. The commenter s indicated that integrated planning for the CPP and state implementation plans (SIPs) for new ozone standards will be very difficult. The
commenter s noted that stra tegies that work for ozone may conflict with those that work for the CPP (and vice versa). The commenter s stated that the revised ozone standards and the CPP will lead to increased regulatory costs and additional permitting burdens for industry, as well as232 increasing the resources required by air agencies for planning. The commenter s recommended that EPA consider parallel rulemaking to allow states to integrate requirements for affected facilities in both state plans under CAA section 111(d) and SIPs for oz one nonattainment areas.

Comment 1 4 1 : Comment stating that public participation is an implementation barrier that states must resolve, and that the EPA needs to provide states the time to fully engage stakeholders on their state plans.

Response 1 4 1 : E PA is strongly committed to a public process that engage s all stakeholders. This commitment is discussed in section II .K of the CPP final rule preamble regarding how the EPA requires that states engage with all members of the public, including low

- income

c ommunities, minority communities, and tribal communities. In addition, the requirements regarding engagement with communities and some of the recommendations that the EPA has for states as they engage meaningfully with communities is described in sections IX of the CPP final rule preamble.

The following are summaries of the specific public comments under this comment:

As part of their request for more time, commenter s stated that public participation is an implementation barrier that states must resolve. Th e commenter s noted that States will need to engage the public on the significant impacts of the CPP. The commenter s noted that the CPP will have far reaching impacts, not just on the power plants that are directly regulated under the CPP, but electricity c ustomers could see their electricity bills increase as a result of the CPP. The
commenter s stated that workers at power plants could lose their jobs because the CPP forces the retirement of the plant. The commenter s noted that the CPP requires that states hold a public hearing on the plan to address issues such as these. 79 FR 34838. The commenter s noted that many states will go beyond a single public hearing and engage interested stakeholders to ensure that state plans are fully informed and responsive to stakeholder's concerns. The commenter s stated that EPA needs to provide states the time to fully engage stakeholders on their state plans.

Comment 1 4 2 : Comments stating that the CPP will require changes to state laws and statutes for which time is not al lowed under the current schedule for implementation.

Response 1 4 2 : EPA agrees that some states may need to pass additional legislation to authorize certain state measures. The final rule includes additional time and flexibility to manage complexities such as legislative authorization. The final rule provides considerable discretion to the states in setting emission standards and related plan requirements . As explained in section VIII .C.6.d of the CPP final rule preamble , the EPA is not finalizing the propo sed portfolio approach , so comments specific to this proposed approach to 111(d) state plan design are moot

. Instead, the EPA is finalizing an option to submit either an “emission standards” plan type, which includes only federally enforceable measures on affected EGUs, or a “state measures” plan type. A state measures plan type would require only measures applicable to affected EGUs to be federally enforceable. EE, RE, and other measures applicable to entities other than affected233 EGUs would not be federa lly enforceable under this plan type but must meet requirements for state enforceability. A state measures plan must also include a backstop of federally enforceable standards on affected EGUs that fully meet the emission guidelines and that would be trig gered if the plan failed to achieve on schedule the required emission reductions. See Section VIII.C.3 and VIII.C.4 of the final rule preamble of the CPP. For the mechanisms in the final emission guidelines that ensure that states keep pace with their emis sions reductions trajectories, see Section VIII.F.3 of the final rule preamble of the CPP.

We are also concurrently proposing a federal plan and model rules that states can use to develop their state plans.

The following are summaries of the specific publi c comments under this comment:

Commenters stated t he state plan development preferred by the CPP requires state environmental agencies to regulate in areas outside of their normal jurisdiction. Commenters said the CPP will require the Missouri Department o f Natural Resources, Oklahoma Department of Environmental Quality and Arkansas Department of Environmental Quality to establish enforceable limits for renewable energy and energy efficiency. Commenters stated the environmental agencies do not have the staf fing, funding or legal authority to perform those functions in their state. Commenters stated the CPP will require changes to state laws and statutes for which time is not allowed under the current schedule for implementation. Commenters said some states m ay not elect to provide the authority to the environmental agencies making the state plan unenforceable. Commenters stated the CPP has by its structure established a program that may not be achievable.

6.4.2 Components of an initial state plan submittal and approvability criteria

This section discusses the limits on EPA’s discretion to approve or disapprove initial state plans and the information needed in those initial plans. The EPA proposed that states would submit plans 1 year after promulgation of th e guidelines, with the opportunity to qualify for a 2

- year extension through the submittal of an initial state plan. The EPA also proposed the requirements for an initial state plan and for public participation in the development of the initial state plan. The comments in this section address the timing and content of the initial state plan and the approvability criteria for initial state plans.

We agree with the following specific comments made under this subsection:

• The EPA must defer to states' determin ation of a satisfactory compliance plan in the review and approval of state plans.

• The proposed June 30, 2016, deadline to submit an initial plan is not sufficient and has extended the deadline to September 6 , 2016.234 • States may not be far enough long in th e decision

- making process for an initial plan to be able to quantify emission performance levels achieved through the complete plan, and this is not a requirement in the final rule.

• States may need a total of 3 years to complete final plans (assuming they submit an initial plan after 1

- year), instead of the total 2 years that was proposed.

States should not be required to submit proposed rules and legislation as part of the initial plan submittal.

Commenters have raised a number of issues related to this su bsection which are organized by topics (comments) below. Responses are also provided for these topics

.

Comment 1: The EPA must defer to states' determination of a satisfactory compliance plan in the review and approval of state plans

. Response 1: The EP A agrees with the commenter s that States are in the best position to develop their own plans, taking into account state

- specific economic, energy, and environmental considerations, but disagrees with the commenter s ’ statement that the EPA must approve stat e plans unless they are arbitrary or capricious.

The commenter s suggest that, to be consistent with the delegation of authorities under the CAA, the EPA must provide states with broad discretion to consider the unique characteristics of the states and sour ces in each state in developing their plans. Section 111(c) of the CAA provides that, if a state develops and submits “adequate procedures” for “implementing and enforcing” 111(b) standards of performance for new sources in that state, the Administrator sh all delegate to the state the Administrator’s authority to “implement and enforce” those standards. The EPA has interpreted this ambiguous provision in the EPA’s “Good Practices Manual for Delegation of NSPS and NESHAPS.” The manual notes that section 111( c) places no explicit conditions (other than that the state’s procedures be adequate) on the delegation of authority.

The commenter s further suggest that the EPA proposed to impose state

- wide emission rate limitations that have wide ranging energy and eco nomic implications, which could result in significant loss of employment and could force significant reallocation of resources, and that the States are in the best position to develop their own plans, taking into account state

- specific economic, energy, an d environmental considerations. The EPA agrees with this statement, and is finalizing a “state measures approach” which, unlike the proposed portfolio approach, does not require federally enforceable measures against entities other than affected EGUs. In t his approach, state enforceable measures against entities other than affected EGUs would need to be included in the state plan documentation.

The EPA disagrees with the commenter s ’ statement that the EPA must approve state plans unless they are arbitrary o r capricious. The EPA will not approve a plan that does not contain the state plan components discussed in section VII.D.2 of the CPP final rule preamble . The EPA does agree with the commenter s ’ statement that the “EPA cannot second

- guess state decisions o n how to reduce CO2 emissions.” States have discretion in deciding on the measure they will use to235 reduce CO2 emissions provided those measures meet the criteria for acceptability in the emissions guidelines.

The commenter s also stated that the EPA must h ave a reasoned basis for disapproving a state plan in whole or in part and that the EPA should not be able to disapprove a state plan simply because EPA would have chosen different measures or applied the building blocks in a different way. The EPA agrees with this statement and will provide comment to the state regarding why a state plan was disapproved through a notice

- and

- comment rulemaking process, similar to the process used for approving state implementation plan submittals under section 110 of the CA A.

The following are summaries of the specific public comments under this comment:

Commenter s stated that EPA must defer to states' determination of a satisfactory compliance plan in the review and approval of state plans . The commenter s stated that under Section 111 of the Clean Air Act EPA is obligated to establish a procedure under which states are to develop and submit plans that establish performance standards for existing sources of air pollutants. The
commenter s stated that the Administrator has the same authority if a state fails to submit a satisfactory plan, but, it is clear that the state is given the primary authority to establish performance standards for the existing sources and that EPA can step in and dictate only if the state fails in its ob ligation. Consequently, to be consistent with the delegation of authorities under the Clean Air Act, the commenter s stated that EPA must provide states with broad discretion to consider the unique characteristics of the states and sources within each state in developing their plans. According to the commenter s , this is particularly the case where, as here, EPA proposes to impose state

- wide emission rate limitations that have wide ranging energy and economic implications, which could result in significant lo ss of employment and could force significant reallocation of resources. The commenter s argued that States are in the best position to develop their own plans, taking into account state

- specific economic, energy, and environmental considerations. The commen ter s asserted that only by giving the states such discretion will the CPP rule be consistent with the congressional direction under Section 111(d).

The commenter s stated that EPA must approve state plans unless they are arbitrary or capricious. Section 11 1(d) of the CAA directs EPA to approve a state plan if it is "satisfactory." 79 FR 34830; EPA, Clean Power Plan Proposed Legal Memorandum at 3

- 4. The commenter s stated that EPA cannot second

- guess state decisions on how to reduce CO2 emissions. See 40 FR 5 3340, 53343 (Nov. 17, 1975). The commenter s stated that a lthough courts have not yet addressed EPA's review of state plans under CAA Section 111(d), because Section 111(d) calls for EPA to review state plans in a manner similar to Section 110 SIPs, court r ulings on EPA's approval of Section 110 SIPs provide insight into the limits of EPA's discretion in determining whether a Section 111(d) state plan is "satisfactory." The commenter s stated that EPA's role in approving state plans is "confine[d]" to the min isterial function of reviewing [state plans] for consistency with the Act's requirements."

Thus, with respect to Section 111(d) plans, the commenter s stated that EPA's determination of whether a state plan is "satisfactory" should be limited to determining whether the state plan is consistent with the criteria enumerated in the statute and with the objectives of the final rule. Further, the commenter s stated that EPA must have a reasoned basis for disapproving a state plan in whole or in part. The commenter s argued that EPA should not be able to disapprove a state236 plan simply because EPA would have chosen different measures or applied the building blocks in a different way.

Comment 2: C ommenter s argued that the requirements for an initial plan should be mor e flexible and should have fewer requirements than proposed.

Response 2: The EPA disagrees with the commenter s and does not believe the initial submittal requirements are too prescriptive and burdensome. The EPA is finalizing that a state must make an ini tial plan submittal by September 6 , 2016 if it is unable to prepare and submit a final plan by that date. In respon se to the commenter s ’ concern that in i tial submittal requirements are too prescriptive or burdensome, the EPA clarified these requirements in the preamble to the final rule in section VIII.E.3.

– The initial submittal components are necessary to ensure that a state is able to submit a final state plan by 2018.

The following are summaries of the specific public comments under this comment:

Comm enter s argued that the requirements in section 60.5760 (Can I include existing requirements, programs, and measures in my state plan?) for an initial submittal in lieu of a complete plan are too prescriptive and burdensome. The commenter s noted that the pr oposed rule currently requires ten components for an initial plan versus twelve components for a complete state plan. The commenter s contended that many of the ten components are items for which the state will need an extension of time to develop. The comm enter s said this is an area where states should be given more flexibility, and the commenter s proposed that the initial plan be limited to the following four components:

• A description of the plan approach and progress made to date in developing each of th e plan elements in section 60.5750.

• A commitment by the state to maintain existing programs and measures that limit or avoid CO2 emissions from affected entities.

• Justification of why additional time is needed to submit a complete plan.

• A commitment to sub mit a complete plan by the due date.

Comment 3: C ommenter s asked for clarification on what is required in an initial plan, and noted that the proposal implied that the initial plan may require some demonstrations that may not be feasible by the proposed d eadline for initial plans.

Response 3: The EPA has finalized that the initial plan must be submitted by September 6 , 2016, not the proposed June 30, 2016, if a state is unable to prepare and submit a final plan by that date. See section VIII.E in the fina l rule preamble for a discussion on initial plan submittal requirements237 The following are summaries of the specific public comments under this comment:

Commenter s noted that if a state needs additional time, then it must still submit an initial plan by Jun e 30, 2016. The commenter s stated that the proposal says that

"To be approvable, the initial plan must include specific components, including a description of the plan approach, initial quantification of the level of emission performance that will be achi eved in the plan, a commitment to maintain existing measures that limit CO2 emissions, an explanation of the path to completion, and a summary of the state's response to any significant public comment on the approvability of the initial plan."

The commente r s asked if this requires a demonstration that the plan will meet the required reductions and be enforceable, and means that any legislation or state agency determinations must be complete in order to receive approval for the initial plan and an extension

.

Comment 4: The commenter s w ere concerned with the proposed requirements for initial plans that (1) states must maintain existing measures to limit or avoid CO2 emissions at least until the complete plan is approved, (2) the initial plan must include a co mprehensive roadmap for completing the plan, including process, analytical methods, and schedule (with milestones) specifying when all necessary plan components will be complete, and (3) the initial plan must include an initial quantification of the level of emission performance that will be achieved, but the EPA does not specify the parameter to use or the accuracy expected.

Response 4: In response to the commenters concern that the rule would require a state’s existing measures to be maintained in order to be granted an extension, the final rule makes clear that a state may choose to address the requirements of the initial submittal by including a commitment to maintain any existing measures applies to those measures the state intends to rely upon for its final plan in order to achieve the necessary reductions once the performance period begins, it does not require a state to maintain all existing measures.

The commenter s argued there should be flexibility in the comprehensive roadmap for completing the plan that states must provide in an initial plan submittal. The proposed roadmap included a schedule (with milestones) specifying when all necessary plan components will be complete (e.g., demonstration of projected plan performance; implementing legislat ion, regulations and agreements; any necessary approvals). The commenter s also stated that the EPA’s proposed requirement that an initial plan submittal must contain an initial quantification of the level of emission performance that will be achieved thro ugh the plan, but there is not enough information provided to know what this entails.

In order to address these concerns, the EPA acknowledges that a state may not be far enough long in the decision

- making process to be able to accurately quantify the exac t emission performance levels achieved through the complete plan and the final rule does not contain this requirement. Also, while the EPA is keeping the requirement that an initial plan submittal must contain a comprehensive roadmap for completing the pla n, this roadmap must only include a238 schedule with milestones and dates. The milestones should outline the state’s path to submitting a final plan by the 2018 final plan submittal deadline.

The following are summaries of the specific public comments under this comment:

Commenter s expressed concern with three of the requirements U.S. EPA is proposing must be in an initial plan in order for it and an extension to be approved

. First, the commenter s noted that the EPA will require a commitment to maintain exist ing measures that limit or avoid CO2 emissions (e.g., RE standards, unit

- specific limits on operation or fuel utilization), at least until the complete plan is approved. The commenter s stated that there are practical concerns with this requirement. The com menter s explained that currently Ohio EPA has no regulatory requirements to address CO2 emissions in the state of Ohio, except for a few permits issued under the PSD program. The commenter s asserted that the U.S. EPA cannot require Ohio EPA to maintain pro grams out of their regulatory control. In actuality, the
commenter s stated that they would already be out of compliance with this provision because Ohio's RPS under SB221 (the very plan that U.S. EPA used to inform RE goals for the states in our region und er this proposal) is already frozen by the legislature. The commenter s stated that the Ohio EPA has no authority to require implementation of those reductions to continue into the future. Therefore, the commenter s noted that Ohio EPA would already not qual ify for an extension on this basis alone. The commenter s contended that the U.S. EPA cannot create an extension process to address the needs of the states by limiting their ability with criteria such as this.

Second, the commenter s stated that the EPA wil l require a comprehensive roadmap for completing the plan, including process, analytical methods, and schedule (with milestones) specifying when all necessary plan components will be complete (e.g., demonstration of projected plan performance; implementing legislation, regulations and agreements; any necessary approvals). The commenter s argued there should be flexibility in such a provision and that there should not be consequences associated with timelines, milestones, strategies or analytical methods fore casted that don't come to fruition, legislative action, or any other long

term consideration over which the Ohio EPA has no authority.

Third, the commenter s stated that the EPA is requiring initial quantification of the level of emission performance that w ill be achieved through the plan but there is not enough information provided to know what this entails. The commenter s questioned what quantification could U.S. EPA expect in an initial plan other than the fact that states will develop a final plan with t he intention of meeting U.S. EPA's interim and final goals? The commenter s asked if the EPA is suggesting states commit to meeting their interim and rate based goals, or is the EPA expecting states commit to a glide path or identify specifics regarding con trol strategies and how those strategies will achieve the goals? The commenter s argued that this provision is un

- necessary for an initial plan submittal and extension request, and any detailed quantification at that stage would be virtually impossible or s o inaccurate that it is effectively worthless.

Comment 5: C ommenter s objected the amount of information and analysis required in an initial plan to obtain a 1

- year extension for submitting a final plan.239 Response 5: See response to comment 4 and section VI II.E.3

- Components of an initial state plan submittal and 2017 update and approvability criteria , in the preamble to the final rule

. The following are summaries of the specific public comments under this comment:

Regarding extension timing, commenter s obj ected to the EPA's proposal that states must provide the following information as part of an initial plan in order to be eligible for a 1

- year extension :

1. A description of the plan approach and progress made to date in developing each of the plan elements in Section 60.5740;

2. An initial projection of the level of emission performance that will be achieved under the complete plan:

3. A commitment by the state to maintain existing state programs and measures that limit or avoid CO2 emissions from affected entitie s (e.g., renewable energy standards, unit

specific limits on operation or fuel utilization), which must at a minimum apply during the interim period prior to state submission and EPA approval of a complete plan, and must continue to apply in lieu of a comp lete plan if one is ultimately not submitted and approved.

4. Justification of why additional time is needed to submit a complete plan:

5. A comprehensive roadmap for completing the plan, including process, analytical methods and schedule (including milestones) specifying when all necessary plan components will be complete (e.g., projection of emission performance implementing legislation, regulations and agreements; necessary approvals);

6. Identification of existing and future programs, requirements, and measures the state intends to include in the plan:

7. If a multi

- state plan is being developed, an executed agreement(s) with other states (e.g., MOU) participating in the development of the multistate plan; and

8. A commitment to submit a complete plan by June 30, 2017, for a single

- state plan, or June 30, 2018, for a multi

- state plan, and actions the state will take to show progress in addressing incomplete plan components prior to submittal of the complete plan.

9. A description of all steps the state has already taken in furtherance of actions needed to finalize a complete plan.

10. Evidence of an opportunity for public comment and a response to any significant comments received on issues relating to the approvability of the initial plan.

The commenter s stated that the EPA ag ain fails to recognize the effort that is needed to even obtain an extension for 1 year. The commenter s noted that a state would have to have completed a draft plan with emission targets under the EPA's proposal. The commenter s argued that EPA fails to gra sp that some of the elements of this required plan are not within the purview of the240 state air quality agency. The commenter s stated that the Ohio EPA would not be able to even submit a request for 1

- year extension without legislative approval and Ohio EPA cannot dictate the timeframe of operation of the Ohio General Assembly to pass authority on the wide ranging commitments demanded by the U.S. EPA.

Commenters said, the commitment requirement in proposed section 60.5760(a)(3) makes it impossible for a stat e to qualify for an extension if the state has renewable energy standards, energy efficiency standards, or any other measure in state law that might somehow limit or avoid CO2 emissions from EGUs. Commenter said, proposed section 60.5760(a)(3) should be re moved from the rule.

Comment 6: The 1

- year time period to develop a state plan, or two years if a state first submits an interim plan, is not sufficient and is less than the time given to states to develop plans under other CAA programs (e.g., state imp lementation plans under the NAAQS).

Response 6: The EPA in this final rule is not requiring that a state must submit a complete plan within one year. If a state cannot meet the 2016 deadline, the EPA is finalizing that a state may submit an initial plan s ubmittal to the EPA that, if approved, would give the state two additional years to develop a final plan submittal to the EPA in 2018. This gives a state receiving an extension a total of three years to pass any necessary legislation, coordinate with other agencies, states, industry, and stakeholders. This three years is the same timeframe the commenter s cite as being given to states under CAA Section 110 to develop and submit a complex NAAQS SIP.

The commenter s noted that virtually state that has an RPS h as one because of a legislative enactment, and that states needing an RPS or needed an existing RPS strengthened will need legislation for that purpose. The commenter s also stated that submitting an interim plan within one year provides little help because the interim plan must reflect final decisions on the critical plan elements. In order to respond to the comment that one year is not enough time for states to have made final decisions in the initial plan, the EPA is clarifying in this final rule that it is not necessary for a state to have legislation passed, or have made final decisions on what their final state plan submittal will look like. A state may pursue more than one option (e

. g., individual or multi

- state plan, rate or mass

- based approach) in the initial submittal without committing to an approach. This is discussed in section VIII.E.3 of the final rule preamble.

The commenter s also contended that the interim plan approach doesn’t work because it is dependent on EPA taking final approval/disapp roval action. The commenter s asserted that it is likely that the EPA will cause the interim plan approval process to be unworkable, as the EPA will be unable to timely process the necessary approvals. The EPA disagrees with the
commenter s . The proposal o utlined an approach where the initial plan submittal would be deemed complete if the EPA did not notify a state by letter of its disapproval. The EPA is finalizing this approach in the final rule.

The commenter s asserted that legislation will also be need ed for states to join multi

- state plans, and that a state will not be able to commit to a regional approach in an initial plan submittal. The
commenter s opined that it is seriously doubtful that multiple legislatures can be counted on to241 approve those pla ns within the EPA’s three

- year window for final plans, much less the EPA’s 1

- year window for interim plans. In this final rule the EPA is not requiring that a state commit itself to any one type of approach. A state may pursue multiple options at the same time. While ultimately legislation may be needed for states committing to a multi

- state approach, it is not a required element of an approvable initial plan submittal.

The following are summaries of the specific public comments under this comment:

Comm enter s argued that States cannot adopt the plans EPA is demanding within 1 year, not even "interim" plans. The commenter s noted that EPA proposes to give states 1 year to submit a plan or 2 years if states submit an interim plan in 1 year; and EPA also pro poses that states that commit to a regional plan in their interim plan will have 3 years to submit the regional plan. The
commenter s argued that the EPA's plan

- submittal timeline, however, is unworkable because, as the Kansas Corporation Commission has com mented, the EPA's requirement that states redesign their electric grids has such far

- reaching impacts on states that they will be unable to develop a plan within 1 year.

The commenter s stated that EPA has analogized the state plan that it is requiring her e to a NAAQS SIP, yet under Section 110(a)(1) of the CAA, states are given up to 3 years to submit a NAAQS SIP . The commenter s stated that the 3

- year period recognizes the complexity involved in developing a SIP, both in terms of the substantive analysis r equired and the need to at least hold public hearings and, in some states, for legislation.

The commenter s contended that the section 111(d) SIP that EPA is requiring here is much more complex than a typical NAAQS SIP because reengineering the electric gr id over the long term, as EPA is demanding, will be a highly complicated, highly contentious process, with effects rippling throughout the state's economy. As a result, the commenter s noted that a much broader group of government agencies and stakeholders must be involved in developing EPA's mandated Section 110(d) state plan than are involved in developing a NAAQS SIP. The commenter s noted that while the state environmental regulator is generally the sole state agency involved in developing a NAAQS SIP, de veloping the type of Section 111(d) that EPA has mandated will require the direct involvement of, at least, the Governor, the state energy office, the state public service commission, and a large number of affected stakeholders, including, commercial and i ndustrial retail ratepayer groups, renewable resource companies, demand

- side management companies and a host of others who are not typically involved in developing a NAAQS SIP.

Additionally, the commenter s stated that while a limited number of states may r equire legislative approval of NAAQS SIPs, a much larger group of states will require legislation to implement the renewable resource and demand

- side management measures that EPA is depending on to replace the coal that EPA's proposal will phase out. The c ommenter s stated that virtually every state that has an RPS has one because of a legislative enactment

. Thus, the commenter s noted that the states that don't currently have an RPS will need legislation to enact one, and states with existing RPSs that EPA i s requiring to be strengthened will need legislation for that purpose. The
commenter s argued that the same is likely the case for demand

- side management standards. The
commenter s noted that many state legislatures do not meet every year; many that do meet for relatively short sessions so there is little prospect that these measures could be adopted, along242 with all of the other requirements that EPA has mandated, within 1 year. The commenter s reiterated, as Arkansas has informed EPA, assuming, the rule is fi nalized in June 2015,

"the General Assembly will not even meet in regular session again to consider any necessary legislation until January of 2017, when the state is scheduled to meet some of the renewable goals" and after the state's plan was due. "

The commenter s stated that EPA's proffered mechanism under which states would have 2 years to submit a final plan if they submit an interim plan within 1 year provides little help because the interim plan must reflect final decisions on the critical plan elem ents. For instance, the

commenter s noted that the interim plan must include "the plan approach" per 40 CFR 60.5760(a ) ( 1), presumably meaning such fundamental elements as whether the final plan will use a mass

based or rate

- based approach, whether the fina l plan will use "portfolio" measures or will rely solely on draconian reductions in operations of coal EGUs, and whether the plan will be enforceable against third parties or just the regulated facilities. Similarly, the commenter s noted per 40 CFR 60.5760 (a ) ( 2) the interim plan must include "an initial projection of emission performance that will be achieved under the complete plan." The commenter s noted that in order to estimate emission reductions, the interim plan must include a full compilation of mea sures, perhaps subject to change, from which to estimate the reductions. The commenter s noted the state must also include a "comprehensive roadmap" for completing the plan, including milestones such as anticipated dates for required legislative action per 40 CFR 60.5760(a)(3).

The commenter s contended the state, however, is highly unlikely to know any of this information at the end of 1 year. (e.g., a state will not know whether it can adopt an RPS of any particular amount until the state legislature adopts authorizing legislation). The commenter s noted without such legislation, the state cannot even submit an interim plan including an assumption that the legislature will adopt the RPS, because no state agency can know in advance what the legislature will do . The commenter s asserted that states may need to develop an RPS as a compliance strategy in order to replace the large amount of coal generation that must be eliminated for states to meet their goals. As a result, the commenter s stated that if the legisla ture has not acted on an RPS within 1 year, the state will be left unable to formulate even an interim plan that sets forth what the state's overall approach will be, what emission reductions the state will make, and what the milestones for final completio n of the plan will be. The commenter s asserted that the notion that a state agency can represent to a federal agency when the state legislature will take action on any particular provision is absurd

.

The commenter s contended that the interim plan approach also doesn't work because it is dependent on EPA taking final approval/disapproval action . The commenter s stated that having submitted an interim plan, a state will need to know quickly whether EPA will approve the plan, in which case the state can develop a final plan, or whether EPA will disapprove the plan, in which case the state is liable to become subject to a federal plan. However, the commenter s noted that the EPA's history of acting within statutory or regulatory deadlines on SIP approvals or indee d for any other CAA actions is spotty, to say the least. Based on past experience, the
commenter s asserted that the likelihood is that EPA itself will cause the interim plan approval process to be unworkable, as the EPA will be unable to timely process the necessary approvals.243 The commenter s stated that the EPA's proposal to allow states 3 years to submit regional plans is even more unworkable. The commenter s noted that states wishing to participate in regional plans must nevertheless submit interim plans c ontaining the same information as is required for states wishing a 1

- year extension to submit a standalone state plan per 40 CFR 60.5755(c). The
commenter s stated that a regional plan is even more complex than a standalone state plan given that developing a regional plan requires layering interstate negotiations on top of the already complicated intrastate processes that must take place for a state to determine how it wishes to comply with EPA's Section 111(d) requirements. Moreover, the commenter s asserted that each state will require legislative approval to enter into a regional plan and to adopt specific state elements of that plan (e.g., an RPS). Thus, the commenter s contended that states will not be able to commit to a regional approach in an interim pl an absent legislation in multiple states. Given the time it will take to work out a regional approach, the commenter s argued that it is seriously doubtful that multiple legislatures can be counted on to approve those plans within EPA's 3

- year window for fi nal plans, much less EPA's 1

- year window for interim plans

.

Comment 7: The EPA has no need or legal basis for requiring states to submit proposed rules and legislation as a condition for the EPA to grant an extension to submit a state plan. Such a require ment is unreasonable and places state agencies in the untenable position of being forced to propose rules based on draft legislation before they have the legal authority to do so

. Response 7 : In response to this and similar comments regarding the proposed requirement that to be granted an extension the initial submittal must contain proposed rules and legislation, t he EPA is not requiring that states submit proposed rules and legislation as part of the initial plan submittal in the final rule

.
The followi ng are summaries of the specific public comments under this comment:

Commenter s stated that the EPA has no need or legal basis for requiring states to submit proposed rules and legislation as a condition for the EPA to grant an extension to submit a state plan. According to the commenter s , such a requirement is unreasonable and places state agencies in the untenable position of being forced to propose rules based on draft legislation. The
commenter s stated that they cannot propose a rule that the agency doe s not have legal authority to propose.

The commenter s noted that the EPA is taking comment on whether states should be required to submit proposed rules and legislation to EPA as part of initial plan (79 FR 34916). Specifically, the commenter s noted that the EPA states that "it may be reasonable to require that a state must document that it has at least proposed any necessary regulations and introduced any necessary legislation within the first thirteen months to qualify for additional time to submit a com plete plan." Then commenter s stated that not only is such a requirement unreasonable and unnecessary micromanagement of the states, the EPA would be placing the states in the untenable position of attempting to propose rules based on draft legislation. The commenter s argued that the EPA's assumption that a state agency could propose a rule to implement legislation based solely on the introduced legislation is flawed. The commenter s explained that a state agency would not have the legal authority to propose a rule to implement legislation necessary for the state plan until244 that legislation has been passed and signed into law. According to the commenter s , the state's legal authority notwithstanding, to propose a rule prior to finalization of the law would like ly force a state agency to re

- propose the rule if the legislation changed from the introduced version of the bill, which happens frequently in the legislative process. Furthermore, the commenter s stated that legislation is beyond the control of the adminis trator of the state air program, to whom the proposed rule applies. As an agency of the executive branch of state government, the
commente rs explained that their agency is prohibited from lobbying the legislature.

Comment 8: S t ates must have the ability a nd a formal process to appeal decisions by the EPA that initial plans do not meet the EPA’s minimum requirements and that extension requests have been denied.

Response 8: See section VIII.E of the final rule preamble of the CPP for EPA’s response to this

c omment. THIS RESPONE IS NOT ADEQUATE

The following are summaries of the specific public comments under this comment:

Commenter s stated that the EPA is proposing states with initial plans and extension requests must provide an opportunity for public comment on a substantial draft but this public comment opportunity will not be governed by the procedural requirements of the framework regulations that apply to the state's adoption of a complete plan. The commenter s stated that the EPA would use the comment per iod to determine if the initial plan submittal meets the minimum requirements and to advise the state whether it is on track to submit an approvable initial plan. The commenter s noted that if the state's request meets the requirements it "will be deemed
gr anted." The commenter s expressed concern that states will have no mechanism to appeal a decision by the EPA that initial plans do not meet the EPA's minimum requirements. The

commenter s stated that the EPA is requiring a very formal initial plan submittal but appears to be very informal about the approval or disapproval of that submittal. The commenter s stated that more time is necessary for plan submittals, and that providing sufficient time would eliminate the need for extension requests. However, the com menter s stated that if the EPA intends to keep this unreasonable implementation schedule, the EPA must provide a mechanism for states to appeal decisions by the EPA regarding initial plan submittals. The commenter s noted that states will spend significant time developing an initial plan, time that will take resources away from working on a final plan submittal. The commenter s stated that potentially unjustifiable denials of extension requests due to concerns with initial plan submittals could place states i n a position of being unable to meet a final plan submittal deadline. The commenter s stated that the EPA is imposing a massive regulatory program on the state without adequate implementation time, even for an extension request. The commenter s stated that t o deny the extension request without due process is a violation of the Administrative Procedure Act. The commenter s noted that states must have recourse to appeal arbitrary actions by the federal government.245 Comment 9: If the EPA determines that the initi al plan does not meet the guidelines (identified in the rule language), EPA will notify the state by letter, within 60 days, that the agency cannot approve the state's initial plan as submitted. The commenter s questioned whether the 60

- day letter would ser ve as some sort of extension of the period for submission of the initial plan, or if it would serve as EPA's official proposal for disapproval, thereby triggering EPA's obligations to propose its own plan for a State.

Response 9 : If a state submits an acce ptable initial plan submittal by September 6 , 2016, as specified in the plan guidelines, then the deadline extension for submitting a final plan submittal that the state requested will be deemed granted. If the EPA determines that the initial plan submitta l does not meet the guidelines, the EPA will notify the state by letter, within 90 days, that the agency cannot approve the extension request based the state’s initial plan submittal as submitted. The EPA will notify a state by letter only if the initial p lan submittal does not meet the guidelines. An extension for submitting a final plan submittal will be deemed granted if the EPA does not deny the extension request based on the initial plan submittal. The EPA has determined this approach is authorized by, and consistent with, 40 CFR 60.27(a) of the implementing regulations. EPA has clarified the requirements for approvable initial plan submittals and 2017 updates in the final rule preamble section VIII.E. If the state does not submit an acceptable 2017 upd ate by September 6 , 2017, the state will have failed to meet the conditions for the 2

- year extension and the EPA will develop a federal plan unless the state submits a final plan during this time.

The following are summaries of the specific public comments under this comment:

Commenter s requested clarification regarding the EPA's proposal (70 FR 34915) that, if EPA determines that the initial plan does not meet the guidelines (identified in the rule language), EPA will notify the state by letter, within 60 days, that the agency cannot approve the state's initial plan as submitted. The commenter s stated that EPA believes this approach is authorized by, and consistent with, 40 CFR 60.27(a) of the implementing regulations.

The commenter s stated that EPA's inte nt for the initial plan approval/disapproval process is unclear. The commenter s stated that under 40 CFR 60.27(a), EPA may extend the period for submission of any plan or plan revision. The commenter s questioned if EPA is suggesting that the 60

- day letter will serve as some sort of extension of the period for submission of the initial plan, or if it would serve as EPA's official proposal for disapproval, thereby triggering EPA's obligations to propose its own plan for a State (section 60.27(c)). The comment er s stated that EPA's proposed rule language 40 CFR 60.5760(b) suggests that EPA's 60

- day letter will find that the initial submittal does not meet the plan requirements, which would suggest EPA considers the letter as a disapproval. However, the commenter s stated that 40 CFR 60.27(b) indicates that EPA will propose a plan for approval or disapproval, suggesting a formal notice and comment period. The commenter s requested clarification of EPA's procedure for disapproved initial plan submittals , and indicati on where States will be afforded the opportunity for formal notice and comment of such disapprovals, prior to EPA's promulgation of its own plan for a State.246 Comment 10: Each state's development of implementation plans must allow for equity

- based input from all stakeholders, particularly from communities that are most impacted by coal pollution directly and indirectly through climate change.

Response 10: The EPA agrees with the comment. In this state plan development process for this rule, there are var ious requirements and opportunities for public input prior to initial plan submittal, prior to complete plan submittal, and when the EPA proposes to act on a state plan and publishes a notice in the Federal Register . Additionally, one of the appropriate e xplanations for seeking an extension is for states who wish to actively engage with communities, including vulnerable communities , throughout the state plan development process beyond the public participation requirements of 40 CFR 60.27. More detail is p rovided in section VIII.E.2

– State plan submittal and timing

- of the preamble.

The following is a summar y of the specific public comment under this comment:

Commenter s stated that each state's development of implementation plans must be done inclusively so that equity

- based input is heeded and all stakeholders are heard, particularly communities that are most impacted by coal pollution directly as well as indirectly through climate change.

Comment 11: The EPA's requirement that a state hearing must be ce rtified should be stronger to guard against misleading claims during the plan approval process. Given the complexity of state plans and the complexity of the planning process, third parties should be allowed as interveners to formally protest misinformed a nd deceptive claims about 111(d) plans

. A ctual protests could be screened for significance by outside planning experts

, to prevent frivolous cases

, before being turned over to EPA for a response.

Response 11: The EPA does not agree with that commenter s ’ cl aim that the requirement that a state hearing must be certified should be stronger to guard against misleading claims during the plan approval process. A standard part of the federal rulemaking process is public participation, and a state plan will go thro ugh multiple rounds of public input at the state and federal level. This final rule contains a requirement for public participation prior to the initial state plan submittal to the EPA, another round prior to submitting a final plan to the EPA, and finall y, the public will be able to submit comments to the EPA on the Notice of Proposed Rulemaking when the EPA takes formal action on a state plan. If a member of the public wants more information on or has information that contradicts a claim made in a state plan, the three rounds of public input are the public’s opportunity to have these concerns addressed. The state is required to make the EPA aware of any significant comments on the initial plan submittal and final plan, and any comments received on the No tice of Proposed Rulemaking will be addressed in the response to comments document of the Final Rule.

The following are summaries of the specific public comments under this comment:

Commenter s stated that since self

- reporting by states can be misleading, t he EPA's requirement that a state hearing must be certified should be stronger to guard against misleading claims247 during the plan approval process. The commenter s noted that section VIII.E.3 of the EPA's proposal preamble states the following in regard to comments states receive during hearings:

"The EPA can use this comment opportunity to advise the state whether it is on track to submit an approvable initial plan. When the state submits its initial plan, it must provide the EPA with a response to any sig nificant comments it received on issues relating to the approvability of the initial plan so that the EPA can fully assess whether it is approvable."

The commenter s stated that formal reviews of state energy plans and state legal requirements (e.g., sunsh ine laws) are failing to reveal some misleading claims by state officials about what their plans will accomplish. The commenter s stated that a contributing factor is that some state officials are newcomers to energy planning and the regulatory environment. Given the complexity of state plans and the complexity of the planning process, the commenter s stated that misinformed and deceptive claims about 111(d) plans might continue unchallenged for years unless the EPA allows third parties (interveners) to prote st the validity of misleading state claims. The commenter s suggested that EPA permit a limited range of protests when the integrity of a plan is at stake . The commenter s stated that any actual protests could be screened for significance by outside planning experts (to prevent frivolous cases) before being turned over to EPA for a response.

The commenter s provided an example involving an individual state's EE program, where the
commenter s asserted that the public disclosure process failed due to reliance on self

- reporting by state officials. The commenter s stated that while EPA's proposal requires milestones and backstop measures that could be used in 111(d) plans, by the time backstop measures would take effect, a new administration would be responsible for state planning. The commenter s noted that the prior administration would have "kicked the can down the road," and saddled successors with the plan's shortcomings (a real problem in some states).

The commenter s stated that the EPA's challenge in scrutiniz ing state plans is complicated by the watered down feedback states receive on their EE planning. The commenter s stated that plan reviews from EE experts tend to be long, technical exercises with a narrow focus, where reviewers are often reluctant to correc t misconceptions, believing it might hurt their business interests. Consequently, the commenter s stated that many EE experts do not alert their audience to big picture concerns, and provide criticisms on plans in technical jargon that the average
person ca n't understand. The commenter s stated that this type of feedback on EE planning needs to change in order for EE to achieve its potential to fulfill 111(d) planning needs at the lowest cost, and to provide valuable co

- benefits.

6.4.3 Process for EPA review of state plans

This section discusses the process that EPA will use to review and approve state plans. The EPA proposed that, because of the diverse approaches states were expected to take to meet the emission performance goals in the emission guidelines, the EPA proposed a 12

- month period for EPA to review and approve or disapprove state plans. The comments in this section addressed248 the relative timing of developing the process for submitting and reviewing state plans and the requirements for those plans, the time

- frame for reviewing and approving plans, and possibility of including partial or conditional approvals

. Commenters have raised a number of issues related to this subsection which are organized by topics (comments) below. Responses are also provid ed for these topics.

We agree with the following specific comments made under this subsection:

• The procedures for submitting and reviewing state plans should be in place in time for the states to submit their plans under this guideline and for EPA’s revie w of those submissions.

• The CPP, like other EPA air programs, is more complicated than the programs that resulted immediately after Congress established the CAA in 1970 and established the 4

- month SIP review and approval period.

• Additional consideration sh ould be given to adopting partial or conditional approval mechanisms into the 111(d) procedures.

• Implementing the CPP EPA will be a major undertaking and a challenge to both state and federal environmental agencies. State agencies and EPA must work togethe r to build on the lessons learned under section 110 in the SIP program, and adopt relevant best practices, such as the NACAA

- ECOS

- EPA SIP reform workgroup.

• The EPA needs to establish and adopt uniform criteria for evaluating the completeness of state plans and to quantify the effectiveness of RE and EE measures in plans , and to establish procedures for EPA feedback and technical support of plans early in their development

.

• The EPA should provide states with objective information on the relative cost of diff erent emission reduction strategies to help states make sound choices in structuring their state plans under this guideline.

Commenters have raised a number of issues related to this subsection which are organized by topics (comments) below. Responses are also provided for these topics

.

Comment 1: An appropriate process governing submission and approval of Section 111(d) plans should be finalized before rules governing substantive content of the plans are promulgated. The EPA has not sufficiently establis hed procedures that will adequately and appropriately govern this process considering the inter

- relatedness of the different aspects likely to be contained in a Section 111(d) plan. The EPA cannot substitute the process under Section 110 for a process
spec ific for plans under Section 111(d). The fact that the approval process has not been finalized249 makes it difficult for states to comment on other parts of the proposal , so an additional comment period on the proposed rule should be provided

. Response 1: EPA agrees that the procedures for submitting and reviewing state plans should be in place in time for the states to submit their plans under this guideline and for EPA’s review of those submissions. EPA disagrees with the idea that every detail of the proce dures the states and EPA must use has to be finally settled before EPA can finalize the rules governing the substantive content of the state plans. With the promulgation of this guideline, EPA is finalizing the substantive requirements for state plans and also the great majority of the procedures for submitting and reviewing state plans. But there are some procedural elements that may be promulgated in a subsequent action, such as partial and conditional approvals on which EPA has decided to take further c omment of proposed rule language. EPA does not believe a state or interested parties are substantially constrained or prejudiced in the initial development of a state plan because they may not know which different approval options EPA will have available w hen the Agency finally acts on the state’s plan. As long as the necessary section 111(d) procedures are finalized in time for the states to use them to submit plans and EPA to use them to review plans, the agency has complied with the Act’s requirement to “prescribe regulations which shall establish a procedure.”

EPA agrees that section 111(d) provides for EPA to establish specific procedures to implement that section. The Agency is not simply substituting section 110 procedures rather than developing proc edures specifically designed to implement section 111(d). For example, EPA understands that developing state plans under this guideline may be complicated and could require careful coordination across state agencies, or even across governments of differen t states. Therefore, EPA has developed a process for state plan development that could give the state up to three years to submit a complete plan. This submittal process is just one example of the way EPA has adapted the general outline of section 110 pro cedures to create a similar process under section 111 that is nevertheless tailored to the particular needs of states responding to this guideline.

EPA notes that it will be taking further comment on whether to incorporate the partial approval/partial disa pproval mechanism into the section 111(d) framework procedures. EPA is not taking final action on that issue today. With that said, EPA agrees with the commenter s ’

concern s that the agency must be careful when partially approving a state plan that the el ements EPA approves must be truly severable from the elements EPA disapproves. As with state implementation plan submittals under section 110, EPA cannot pick and choose elements of a state submission and approve them in a way that yields a program the sta te did not intend to implement. Nevertheless, EPA wishes to take further comment on the possibility that there may be reasonably free

- standing elements of a state plan that EPA could approve, even if the entire plan does not meet all the guideline’s requi rements. The goal would be to empower the state to implement as much of the guideline as possible.

The following are summaries of the specific public comments under this comment:250 Commenter s stated that an appropriate process governing submission and approv al of Section 111(d) plans should be finalized before rules governing substantive content of the plans are promulgated.

The commenter s stated that section 111(d ) ( 1) of the Clean Air Act provides that EPA "shall establish a procedure similar to that provi ded by section 7410 of this title under which each State shall subm it to the Administrator a plan? " The commenter s stated that the Act appears to require that EPA shall establish a specific procedure "similar to that provided by section 7410," and does not appear to allow EPA to merely substitute the Section 7410 process instead of establishing a specific process governing the submission of Section 111(d) plans.

The commenter s argued that the EPA has not sufficiently established procedures that will adequat ely and appropriately govern this process considering the inter

- relatedness of the different aspects likely to be contained in a Section 111(d) plan. The commenter s noted that the EPA has requested comment on the appropriate mechanism for approval of state plans, proposing two different options. According to the commenter s , many aspects of the proposed process may be appropriate for certain state implementation plan submittals; however, they are not applicable to Section 111(d) plans of this nature, because of the manner in which these plans are likely to be woven and developed. The commenter s provided, as one example, partial approvals/partial disapprovals may not be appropriate even though certain approvable portions of a plan may be considered severable b y EPA. The commenter s stated that development of these plans will likely take much negotiation at the state level, and although a portion may be considered severable by EPA standards it may have been a key consideration in the state

- level process that resu lted in the plan being submitted.

Also, the commenter s stated that the mere fact that the approval process has not been finalized provides challenges to the states' efforts to comment on other parts of the proposal. The
commenter s stated that the EPA has proposed two processes for the submittal and approval of state plans, which makes it difficult to provide meaningful comments without knowing the specific process that will apply. Further, the commenter s stated that EPA must bear in mind when choosing a pl an approval mechanism that preparing and compiling this plan will require the cooperation and negotiation of several different government agencies and, therefore, subsequent plan modifications will similarly require a challenging process that includes
nego tiations amongst different state agencies. The commenter s stated that unlike many state implementation plans, this plan will not be easily severable if parts are disapproved, and the alteration of one part could have a negative impact on the viability of a nother portion of the plan. The commenter s stated that assuring that there are no unintended consequences and coordinating the various interests will be an arduous process; thus, EPA's approval process will need to be accommodating.

The commenter s stated t hat since there is uncertainty related to the appropriateness of the procedure that states are required to follow in submitting the mandated plan, states are being denied the opportunity to consider that process as they develop substantive comments on the Proposed Rule. The commenter s stated that the EPA should finalize the requisite procedure for submission and approval of a Section 111(d) plan in sufficient detail to allow for the meaningful evaluation of the process while the states and the public have a n opportunity to comment on the251 Proposed Rule. In other words, the commenter s stated that an additional comment period on the Proposed Rule may be necessary once the submittal and approval process is finalized.

Commenters stated that EPA should clearly spe cify the state plan approval and provide a dispute process available to states to address differences regarding plan approval and reported energy savings and avoided emissions.

Comment 2: The EPA has not allowed enough time for the EPA process to review s tate plan s , including review of multistate plans, and additional time will be needed given that states will be required to achieve emission reductions as early as 2020 to meet interim goals.

Response 2: EPA acknowledges that acting on state plans under thi s guideline within the 12

- month period the agency is establishing today will be a significant challenge. EPA disagrees that the only way for the agency to meet that deadline is to disregard its other obligations under the Act. It is important to remember that in the cooperative federalism framework the Act creates, EPA works with states as they develop CAA plans, whether they be SIPs under section 110 or state plans under section 111(d). EPA very commonly works with states as they draft plans, often shar ing drafts and ideas back and forth even before the state puts its plan out to broader public notice. The section 111(d) procedures require that the state provide public notice of its plan before submitting it to EPA, as with SIPs under section 110. Where there are remaining questions that could not be resolved prior to the state’s public notice, the agency typically participates in the state’s public process to register any remaining comments and create a basis for working with the state to resolve those questions in the state’s final plan. So when the state submits a state plan to EPA, the agency ordinarily is not seeing it for the first time. This cooperative work together should help EPA act on state plans under this guideline within the 12 month perio d.

The following are summaries of the specific public comments under this comment:

C ommenters expressed concern that EPA has not allowed enough time for its plan review
process.

Commenter s expressed concern that EPA will be unable to review all of the pla ns in the 12

- month timeframe without completely disregarding its other obligations under the Clean Air Act. The commenter s stated that the timeframe in the Proposed Rule is impracticable because states need additional time to negotiate and draft effective multi

- state plans, and EPA needs sufficient time to perform thorough reviews of all submitted plans.

Commenter s noted that EPA proposes that states submit plans to EPA in the 2016

- 2018 timeframe. The commenter s stated that since emissions reductions would be required as early as 2020 to meet the proposed interim goal, EPA has allowed insufficient time for its own regulatory approval process.

Commenter s expressed skepticism that the 1

- year EPA plan review and approval timeframe is adequate based on EPA's pas t practices for approving Regional Haze and other CAA implementation plans.252 Comment 3: Given that states are allowed only one

- year (with the potential for a 12

- month extension under certain conditions) to develop a plan, the EPA will be flooded with stat e plan approval applications, and the process for approval that will create a federally

- enforceable plan is going to take time for EPA regional offices to process. The fact EPA deviated from its standard 4

- month review period to allow a full year for revie w suggests that the proposed regulatory structure is excessively complex.

Response 3: To the extent this comment is raising concerns about EPA’s ability to meet the 12 month time frame for acting on state plan submittals, please see the response to Comment 2 immediately above.

To the extent this comment is arguing that the 12 month time frame for EPA action is evidence that the guideline is “excessively complex,” EPA disputes that assertion. EPA does not deny that state plans under this guideline could tak e advantage of many options the agency has designed into the guideline to give states flexibility. Some of those options or combinations of them will be more complex than others. But the decision to extend EPA’s review period to 12 months is no acknowled gement of “excessive” complexity in this particular guideline.

Rather, it is an acknowledgement that developments since 1970 make a four month time period for acting on state plans of all sorts unrealistic. The 1970 Clean Air Act amendments provided EPA f our months to act on initial SIP submittals. It was long argued that this four month period also applied to SIP revisions, until the Supreme Court held it did not in the General Motors case. So EPA’s section 111(d) framework regulations picked up this fou r month time period for agency action, and it has not been revisited since.

In the meantime, Congress and EPA have clearly acknowledged that a variety of factors make the four month time period for agency action unrealistic. Under both sections 110 and 11 1, EPA does informal rulemaking when acting on state submissions. That process is not as informal as it used to be in the early 1970’s. The number of statutory requirements and executive directives EPA must address in that process has swollen considerably since then.

In addition

, programs of all sorts have grown more complicated since Congress provided four months for actions on initial SIPs. Shortly after passing the 1970 amendments, the states had lots of low

- hanging regulatory fruit to harvest, and it was a major accomplishment to simply get a power plant to limit is emissions. Programs under the Act have matured, embraced principles of economic incentives and markets, and developed flexibilities unheard of in the 1970’s. Reviewing these sorts of progr ams requires more than four months, not because they are “excessively” complex, but because modern air pollution control programs often have multiple components to assess compared with the quite simple emission limits first designed into SIPs. In recogniti on of all of these factors, Congress provided in the 1990 amendments that EPA should act on SIP revisions within 12 months. EPA has concluded it is reasonable to apply this timeframe to EPA’s action on plans under this guideline as well for essentially the same reasons Congress revised section 110.

The following are summaries of the specific public comments under this comment:253 Given that states are allowed only one

- year (with the potential for a 12

- month extension under certain conditions) to develop a plan , commenter s noted that the EPA will be flooded with state plan approval applications. The commenter s stated that the process for approval that will create a federally

- enforceable plan is going to take time for EPA regional offices to process in this first

of

- its

- kind regulatory scheme. The commenter s stated that the fact that the EPA deviates from its standard 4

- month review period to allow EPA review to take a full year is a tacit acknowledgement that this unprecedented regulatory structure is excessively complex . 79 FR 34838.

Comment 4: R ecognizing that plan disapprovals should be rare

, given EPA's limited review authority under s ection 111(d), the EPA should use hybrid approval mechanisms (similar to those under section 110) to assist the states in imp lementing the section 111(d) program by providing partial or conditional approval of state plans

. Response 4: In today’s action, EPA will not be taking final action on adopting partial or conditional approval mechanisms into the s ection 111(d) procedures. EPA will be taking further comment on a proposal to amend the s ection 111(d) framework regulations to include those mechanisms. EPA is making that proposal because the agency agrees with the commenter s that the flexibility those provisions introduce into the approval process may help states begin to administer as much of a program under this guideline as possible. EPA also hopes that disapprovals under this guideline will be rare, because the agency looks forward to states submitting robust and approvable plans. But EPA disagrees that the agency’s review authority is “limited,” at least to the extent that the commenter s might be suggesting EPA lacks authority to ensure that state plans are consistent with the requirements of the guideline.

The following ar e summaries of the specific public comments under this comment:

Commenters noted that EPA requests comment on whether it should authorize itself to use the hybrid approval mechanisms it has developed under section 110

- the "partial approval/partial disapp roval" and the "conditional approval." Id. at 34916. The commenters stated that recognizing that disapprovals should be rare given EPA's limited review authority under section 111(d), the commenters suggested that EPA should make use of its section 110 hyb rid approval mechanisms where use of such mechanisms will assist the states in implementing the section 111(d) program

.

Comment 5: The EPA should have the ability to conditionally or partially approve state plans and remand the noncompliant portions of t he plan back to the state for further revision and subsequent review by the EPA. These options would allow states to move forward with emission reductions while developing final plans.

Response 5: In today’s action, EPA will not be taking final action on adopting partial or conditional approval mechanisms into the section 111(d) procedures. EPA will be taking further comment on a proposal to amend the section 111(d) framework regulations to include those mechanisms. EPA is making that proposal because the agency agrees with the commenters that254 the flexibility those provisions introduce into the approval process may help states begin to administer as much of a program under this guideline as possible.

The following are summaries of the specific public commen ts under this comment:

C ommenters supported EPA's ability to conditionally approve state plans. Commenter s stated that EPA should have authority to conditionally approve the state plan while remanding the noncompliant components of the plan back to the sta te for further revision and subsequent review and approval by EPA.

Commenter s stated that EPA should include in the procedures for acting on complete state plans the range of options Congress included in CAA Section 110, including partial approval/partial disapproval and conditional approval. The commenter s stated that since the overall goal is to have approvable state plans which will reduce greenhouse gas emissions, limiting options for approval is counterproductive.

Commenter s stated that it has been th e policy over the years of partially approving section 110 plans that were not entirely approvable, asking the state to make specified revisions. The
commenter s suggested that this practice should also be extended to these 111(d) state plans because it is always better to be moving forward from a specific base that trying to start all over.

Commenter s noted that EPA is taking comment on whether the agency may use two state plan approval mechanisms provided for in CAA sections 110(k)(3) and (4). The comment er s noted the first mechanism is partial approval/partial disapproval, and the second mechanism is a conditional approval. The commenter s stated that both partial approval and the conditional approval options for state plans are legally permissible and sho uld be part of the mechanisms for eventual plan approval. The commenter s supported the broadest possible mechanisms for allowing full or partial plan approval.

Commenter s stated that the EPA should include in the procedures for acting on complete state pla ns the range of op tions Congress included in CAA s ection 110, including partial approval/partial disapproval and conditional approval. The commenter s stated that limiting options for approval is counterproductive since the overall goal is to have approvabl e state plans which will reduce greenhouse gas emissions.

Comment 6: The EPA’s suggestion for incorporating partial or conditional plan approval mechanisms is inconsistent with the language of section 111(d ) ( 2) which gives EPA authority to prescribe a pl an to establish standards of performance when a state fails to submit or enforce a plan. The EPA’s attempting to fit this proposal into a proposal similar to a section 110 SIP would be an expansion of the EPA's authority that is counter to section 111(d).

Res ponse 6: In today’s action, EPA will not be taking final action on adopting partial or conditional approval mechanisms into the section 111(d) procedures. EPA will be taking further comment on a proposal to amend the section 111(d) framework regulation s to include those mechanisms. Nevertheless, it may be appropriate here to explain the basis on which EPA expects255 to make such a proposal and why EPA invited comment on the question of including partial and conditional approvals in the section 111(d) proce dures.

The commenter s suggest that EPA has no authority to include these mechanisms in the section 111(d) process because section 111(d) refers to section 110 in the context of procedures “under which each State shall submit to the Administrator a plan.” T he suggestion appears to be that EPA can look to section 110 for guidance on processes for state submission of plans but not for EPA’s action on those submissions. First, a plain reading of the statute shows this interpretation is implausible. Congress doe s not direct states to submit plans to EPA under either sections 110 or 111(d) so that EPA may put those plans on a shelf. The whole purpose of plan submission is so that EPA can review and act on the plans. So in referring EPA to section 110 to develop
pr ocedures for states to “submit” plans to EPA, it is reasonably clear that Congress was envisioning that those procedures would govern both the state giving EPA a plan and EPA acting on it. Second, even if one were to concede that a plain reading of the sta tute did not compel EPA to develop procedures to review state plans, it is at least ambiguous whether Congress was forbidding EPA to look to section 110 in devising procedures for acting on state plans. EPA’s interpretation of that ambiguity should get def erence. Accordingly, EPA expects to propose that it has the authority to adopt section 110 procedures for acting on state implementation plans into section 111(d).

The commenter s also suggest that section 111(d)(2) controls when EPA can prescribe a federal plan for a state and, therefore, somehow limits the types of actions EPA can take when acting on a state plan under 111(d) more narrowly than Congress provided for in section 110. EPA does not see any such limitation in section 111(d ) ( 2). If anything, a plain reading of the provision leads to the opposite conclusion. Section 111(d ) ( 2 ) ( A) describes EPA’s authority to issue a federal plan by reference to section 110:

“The Administrator shall have the same authority to prescribe a plan for a State in ca ses where the State fails to submit a satisfactory plan as he would have under section [110(c)] in the case of failure to submit an implementation plan .”

42 U.S.C. §111(d)(2)(A)(emphasis added). Under section 110(c), EPA’s authority to issue a FIP in a sta te is defined by the scope of EPA’s approvals and disapprovals under sections 110(k), including the scope of any partial or conditional approvals under sections 110(k)(3) and (4). There is no obvious reason why EPA’s authority to issue a federal plan under section 111(d) could not be similarly defined. Again, EPA expects to propose that it has authority to adopt section 110 procedures for acting on state implementation plans into section 111(d).

The following are summaries of the specific public comments un der this comment:

Commenter s stated that the EPA's regulations do not explicitly provide for different forms of approval similar to the Section 110 SIP program.

The commenter s noted that the EPA is requesting comment on incorporating the partial and condi tional approval mechanisms provided for in CAA sections 110(k)(3) and (4). The
commenter s stated that the basis the EPA cites is found in Section 111(d)(1) which provides that the EPA "shall prescribe regulations which shall establish a procedure similar t o that provided256 under Section 110 under which each state shall submit..." The commenter s argued that the provisions regarding the EPA's requirement to "establish a procedure similar to that provided under Section 110" is with respect to providing procedure s for each state to "submit...a plan which establishes standards of performance." The commenter s noted that s ection 111(d ) ( 2) is clear on the EPA's authority to prescribe a plan when a state fails to submit or to enforce a plan. The commenter s stated that unlike Section 110, the EPA is given no explicit authority to provide for different types of approvals. The commenter s stated that once again U.S. EPA is attempting to fit this proposal into a Section 110 SIP type proposal due to its overly complex nature , which is not the intent of a Section 111(d) requirement. The commenter s disagreed with this expansion of the EPA's authority.

C omment 7: The EPA should reject the option of granting conditional approval of state plans because this would reward states t hat fail to submit plans meeting all requirements by the applicable deadline. Moreover, the extended 1

- year timeframe for states to correct their conditionally approved plans would exceed the 6 months that EPA provides in current regulations for states to address deficiencies in plans that are disapproved by the EPA.

Response 7: In today’s action, EPA will not be taking final action on adopting the conditional approval mechanism into the section 111(d) procedures. EPA will be taking further comment on
a pr oposal to amend the section 111(d) framework regulations to include that mechanism. Nevertheless, it may be appropriate here to explain the basis on which EPA expects to make such a proposal and why EPA invited comment on the question of including conditio nal approvals in the section 111(d) procedures.

The commenter s suggest that it is inappropriate for EPA to allow for conditional approvals of state plans under this guideline when EPA is also providing the states up to one year to submit an initial plan, w hich if approved, will provide the state with one or two additional years to submit a final plan. EPA does not see any inconsistency between the final plan submission framework the agency is developing and the use of the conditional plan approval mechanism . The initial plan process gives a state the chance to take an additional year or two to develop a complete plan. When EPA reviews and acts on that complete plan, the agency can only use the conditional approval mechanism if it concludes that the state has submitted a substantially complete plan that can be successfully implemented for up to a year while the state cures any remaining defects. EPA would not be giving the state yet another year to submit a complete plan, but rather more time to fix elements o f a plan EPA has determined is substantially complete enough to be implemented.

The alternative that the commenter s ’ position would require is not reasonable. Without conditional approval authority, EPA would be forced to disapprove a state plan that the a gency has concluded is substantial enough to implement and where the state has made a written commitment to cure any remaining defects within a year. It is much more consistent with the cooperative federalism structure of the Act in that circumstance to e mpower the state to move forward with its plan, rather than disapproving the state and having EPA take over implementation.257 The commenter s suggest that the conditional approval mechanism is inconsistent with section 60.27(d) of the section 111(d) framewor k regulations because that provision only gives states up to six months to respond to an EPA disapproval before EPA imposes a federal plan, whereas the conditional approval mechanism allows up to a year for a state to cure any program deficiencies. EPA doe s not see these timing requirements as inconsistent when one bears in mind the different posture of the state plan under each provision. If EPA has disapproved a plan, the agency has concluded that there is no prospect that the state plan in its current fo rm can potentially meet the requirements of the guideline. In that case, it is important to ensure that a plan of some type be in place to control carbon emissions from affected sources. While section 60.27(d) provides for up to six months before EPA prom ulgates a federal plan, that is an outside date, and it is available to EPA to issue a federal plan sooner than six months following disapproval. When EPA makes a conditional approval of a state plan, the agency has concluded that the state plan is substan tially complete enough to control emissions consistent with the guideline and only needs minor revision to be fully approvable. If the goal is to have a plan controlling carbon emissions from affected sources, it would best advance that goal to give EPA th e flexibility to authorize a state that is willing to fix a substantially complete plan to implement the program rather than forcing EPA to disapprove it due to flaws that the state has committed to cure.

The following are summaries of the specific public comments under this comment:

Commenter s stated that EPA should reject the option of granting conditional approval of state plans. The commenter s stated that EPA seeks comment on using the CAA 110(k ) ( 4) conditional approval mechanism for state plans. As de scribed in the proposed rule, the commenter s stated that this would allow EPA to approve state plans that fail to meet all requirements, so long as the state commits to curing the deficiencies within one year. See FR 34,916

- 17. The commenter s stated that b ecause EPA is proposing to require states to submit their initial plans in June 2016, there should be no need to apply the Act's conditional approval process to the state plans proposed to meet the Clean Power Plan's emission goals. The commenter s stated t hat EPA will have an opportunity to review the state's initial plan to identify issues that may foreclose approval if adopted into the plan. The commenter s stated that making conditional approvals available would only reward states that fail to submit plan s meeting all requirements by the applicable deadline. Moreover, the commenter s stated that the extended 1

- year timeframe for states to correct their conditionally approved plans would conflict with the 6 months EPA's current regulations provide for states to address the presumably more wide

- ranging plan deficiencies that result in disapproval of the plan by EPA.

Comment 8: The implementation of this program will require a substantial allocation of EPA and state resources that could cause other air program s to fall behind schedule. The EPA should review and adopt best practices developed by the NACAA

- ECOS

- EPA SIP reform workgroup and incorporate them in to the section 111(d) planning and approval process.

Response 8: EPA agrees that sta rt ing up state progr ams under this guideline will be a major undertaking and a challenge to both state and federal environmental agencies. EPA also agrees that state agencies and EPA must work together to build on the lessons learned under section 110 in the SIP program, and adopt relevant best practices by the NACAA

- ECOS

- EPA SIP reform258 workgroup for processing state plans under section 111(d). While there will be some important difference between the SIP and section 111(d) processes, as directed by section 111(d)(1), the
sect ion 111(d) process that EPA has developed for this guideline is broadly similar to the SIP process under section 110. Therefore, the ideas and reforms that the states and EPA have developed for processing SIPs more efficiently should find ready application in the section 111(d) process. EPA is committed to supporting states in developing state plans to implement this guideline. The President’s budget for FY2016 includes $25 million to help States develop their state plans under this guideline. https://www.w hitehouse.gov/sites/default/files/omb/budget/fy2016/assets/investing.pdf (p. 20, visited on May 8, 2015).

The following are summaries of the specific public comments under this comment:

C ommenters expressed concern that EPA review of section 111(d) state p lans could cause EPA to fall behind on approval of other state air quality plans, and urged EPA to employ best practices in its review of the state plans.

Commenter s noted that in experience with SIP approvals under section 110 of the Clean Air Act, EPA r eview of state programs is a slow process which could lead to significant delays in implementing new program elements and compliance demonstrations under the finally approved state plan. The commenter s expressed concern that the 111(d) process could become unnecessarily complicated, diverting other EPA staff from important SIP reviews and approvals, and causing EPA to fall behind on approval of other state air quality plans. The commenter s urged EPA to review the best practices developed by the NACAA

- ECOS

- E PA SIP reform workgroup and incorporate them in to the 111(d) planning and approval process.

Commenter s stated that the 111(d) planning process will place a significant administrative burden on both state agency and EPA staff. The commenter s stated theref ore, it is critical that EPA and the states work efficiently together and that EPA exercise as much flexibility as possible when reviewing and approving state 111(d) plans. The commenter s noted that Western states have air quality programs whose resources are already committed to implementing other federal and state programs. The commenter s noted that the Administration is seeking reallocation of funds from the United States Congress for state air quality planning in the FY2015 budget, and that it is import ant for EPA to provide states with additional assistance wherever possible to help state air agencies meet deadlines under 111(d). The commenter s stated that it is also important that the 111(d) process does not cause EPA to fall behind on its approval of other state air quality plans. The commenter s stated that the best practices section of the "Commitments and Best Practices for Addressing the SIP Backlog" developed by the NACAA

- ECOS

- EPA SIP Reform Workgroup provides a good model for how states and EPA s hould approach the 111(d) planning and approval process.

Commenter s stated that EPA must ensure that it dedicates sufficient resources to review state 111(d) plans and to continue approving other state air quality plans. The commenter s noted that EPA and the states recently agreed on an approach to reduce the backlog of State Implementation Plan approvals. The commenter s recommended that EPA apply these principles to the process for approving 111(d) plans.259 Comment 9: The EPA should ensure consistent evalu ation and quantification of state plans, even while the EPA is also trying to provide flexibility. To accommodate a range of state and regional program designs, the EPA should provide program evaluation metrics along with the draft guidelines. These metric s should offer a transparent, nationally consistent, and readily usable way for states to evaluate their existing programs to determine whether they are sufficient to comply with the guideline's emissions level, or if additional reductions will be required

. Recommended guidance included "Roadmap for Incorporating Energy Efficiency/Renewable Energy Policies and Programs into State and Tribal Implementation Plans" or the 2012 State and Local Energy Efficiency Action Network's "Energy Efficiency Program Impact Evaluation Guide" available at www1.eere.energy.gov/seeaction/impactguide.

Response 9: Regarding the comment that the EPA should build on current program evaluation guidance such as the " Roadmap for Incorporating Energy Efficiency/Renewable Energy Policie s and Programs into State and Tribal Implementation Plans " or the 2012 State and Local Energy Efficiency Action Network's " Energy Efficiency Program Impact Evaluation Guide, " we note that in the proposed Clean Power Plan, the EPA sought comment on the appr opriateness of existing EPA guidance on enforceability in the context of state plans under CAA section 111(d). We also referred to the Roadmap guidance as an example of guidance that states are already adopting for addressing energy efficiency/renewable en ergy in their State Implementation Plans. Comments received regarding the appropriateness of using existing guidance for section 111(d) have been considered in developing the final rule.

The Department of Energy is an important Federal Partner for evaluat ing energy efficiency/renewable energy as it relates to section 111(d) compliance. Regarding the comment pertaining to the need for consistent quantification methodologies for evaluating energy use, we note that the Department of Energy, in the Uniform Met hods Project, has developed protocols to evaluate gross energy savings for each of the most common residential and commercial measures and programs offered by ratepayer

- funded energy efficiency programs in the United States. Using a single measurement and verification protocol to calculate the energy savings from a particular measure or program will increase the credibility of the reported savings.

The EPA understands the concerns raised by commenters regarding the need to ensure national consistency in EP A’s review and approval decisions for section 111(d) plans. Pursuant to 40 CFR Part 56, the EPA is currently developing systems and processes to foster communications among Regional and Headquarters offices and to ensure consistency in EPA actions. Throug h various workgroups and regularly held conference calls, the EPA is keeping the communications lines open between Headquarters and Regional Offices.

One example of a system that the EPA is developing to foster communications and ensure consistency is the State Plan Electronic Collection System (SPeCS). Through SPeCS, states will be able to submit their plans electronically and track EPA actions pertaining to their plans. They will also be able to track EPA actions pertaining to other state plans. This tra nsparent system will help ensure that the EPA Regional Offices and Headquarters are apprised of plan decision

making in real

- time. In addition to the development and use of SPeCS, the EPA is evaluating the extent to which our past practices for review and approval of State Implementation Plans (SIPs) under Clean Air Act (CAA) section 110 can serve as a model for ensuring consistency for CAA section 111(d).260 Regarding the concern raised about the need for detailed central guidance and direction regarding appr ovable plan elements, we note that the final rule describes in detail each of the components of the state plan submittal. The EPA has determined that a satisfactory state plan that meets the required plan components discussed in the preamble will characte ristically meet the June 2014 proposed approvability criteria. The EPA, therefore, has incorporated the proposed approvability criteria into the final preamble section titled “Components of a state plan submittal” (section VIII.D.2)

To ensure consistency i n processing state plan submittals, the EPA also intends to promulgate completeness criteria that will allow the EPA to determine whether a final state plan submission contains the components necessary to enable the EPA to determine through notice and comm ent rulemaking whether such submission complies with the requirements of section 111(d). Establishment of completeness criteria is a procedural requirement under CAA section 110(k)(1), and the EPA believes this requirement is appropriate to establish under section 111(d)’s direction of the EPA to prescribe through regulations a procedure similar to that provided by section 110. However, because the EPA did not propose such regulations as part of the proposal for this action, the EPA intends to do so as part of the upcoming Federal Plan proposal for section 111(d). The upcoming completeness criteria will not add to or change the required components of the state plan submittal, but will allow the EPA to identify whether there are absent or insufficient compone nts in the plan submission that would render the EPA unable to act on such submission because it is incomplete. The EPA believes these completeness criteria will enhance consistency in processing state plan submittals.

The following are summaries of the s pecific public comments under this comment:

C ommenters requested that EPA ensure consistent evaluation of state plans across EPA regions

.

Commenter s stated that EPA should ensure consistent evaluation and quantification of state plans . The commenter s stat ed that accommodating a range of state and regional program designs will require EPA to provide program evaluation metrics along with the draft guidelines. The
commenter s stated that those metrics should offer a transparent, nationally consistent, and read ily usable way for states to evaluate their existing programs to determine whether they suffice to comply with the guideline's emissions level, or if additional reductions will be required. The
commenter s stated that by setting out these goal posts early, EPA will make it easier for states to quickly advance strong programs through the Section 111(d) process, and to identify ways to improve weaker ones.

The commenter s recommended that EPA build on current program evaluation guidance such as the "Roadmap fo r Incorporating Energy Efficiency/Renewable Energy Policies and Programs into State and Tribal Implementation Plans" or the 2012 State and Local Energy Efficiency Action Network's "Energy Efficiency Program Impact Evaluation Guide" available at www1.eere.e nergy.gov/seeaction/impactguide. According to the commenter s , these guides describe the terminology, structures, and approaches used for evaluating energy and demand savings as well as methods for calculating avoided emissions and other non

- energy benefits resulting from energy efficiency programs that are implemented by local governments, states, utilities, private companies, and nonprofits. The commenter s stated that these guides provide context, planning guidance, and discussion of issues that help illus trate appropriate evaluation261 objectives and approaches for different efficiency portfolios. By promoting the use of standard evaluation terminology and structures and approaches, the commenter s stated that evaluations can support the adoption, continuation , and expansion of effective efficiency actions for consistent inclusion in State Plans. The commenter s suggested that EPA and DOE should continue to work with state and local energy and environmental agencies to ensure that renewable energy and energy eff iciency programs are evaluated transparently and consistently so that appropriate credit is provided for these programs.

The commenter s noted that energy efficiency evaluation methodologies are particularly important for programs ranging from LED lighting replacement to combined heat and power projects. The commenter s stated that consistent quantification methodologies are needed for projecting reductions in energy use as part of a baseline energy use forecast and for calculating reductions documented after

- the

- fact as part of a compliance effort.

Commenter s applauded the flexibility in choosing compliance strategies provided by EPA's proposal; however, the very same flexibility can potentially result in significant uncertainty, and even disparate treatment, for regulated entities, including states and affected facilities. Plan approvals and disapprovals will, presumably, occur at EPA regional office level. The
commenter s stated that without detailed central guidance and direction regarding approvable plan el ements, similar compliance strategies could be viewed differently amongst different EPA regional offices. The commenter s stated that EPA must ensure consistent plan review across all regions in order to provide regulatory certainty to all stakeholders.

Co mmenter s recommended that review of state 111(d) plans be conducted in a consistent manner that minimizes the differences in interpretation across EPA regions. Historically, the commenter s noted that EPA has not consistently implemented regulations across its regions. However, the
commenter s stated that given the new and novel approaches inherit to this proposal, EPA needs processes in place to ensure consistent, reliable interpretations and standards when implementing this rule. The commenter s stated that given both the complexity of the proposed rule and the multitude of compliance pathways potentially available, state plans need to be evaluated consistently by the different EPA regional offices. The commenter s stated that EPA needs to ensure that a partic ular compliance approach, rate

- to

- mass conversation methodology, or other regulatory interpretation found by an EPA regional office to be acceptable for one state should be acceptable for all others.

Comment 10: The EPA needs to provide sufficient guidanc e to Regional Administrators to ensure that all state plans are evaluated and approved consistently across different regions. The final rule should allow for partial or conditional approval of state plans, provided EPA develops a specified procedure for th e state to cure the deficiencies identified in a partially or conditionally approved plan before EPA imposes a federal plan.

Response 10: For the comment on EPA making consistent decisions across Regional offices on state plan approvals and disapprovals, p lease see the response to Comment 9, immediately above.262 For the comment on EPA’s consideration of adding partial or conditional approval mechanisms to the procedures for section 111(d) state plans, please see the responses to comments 5 through 7 in this s ection above.

The following are summaries of the specific public comments under this comment:

Commenter s stated that just as consistency and rigor are key criteria for EM&V methodology, consistent evaluation and approval of individual state plans will help ensure a well

- functioning national program and equitable treatment among states. The commenter s stated that this consistency will be especially important given the flexibility provided to states to develop unique state plans to suit individual state situa tions. The commenter s stated that they generally supported the required plan components and evaluation criteria as proposed; however, they requested that EPA provide sufficient guidance to Regional Administrators to ensure that all state plans are evaluate d and approved consistently across different regions.

The commenter s stated that in response to EPA's request for comment on the option of partial or conditional approval, they encouraged EPA to finalize a rule that allows for partial or conditional
appro val of state plans, provided EPA develops a specified procedure for the state to cure the deficiencies identified in a partially or conditionally approved plan before EPA imposes a federal plan. Additionally, the commenter s supported EPA's proposal to allo w states to modify approved state plans so long as the state demonstrates that the revision will not reduce the plan's emission performance.

Comment 11: The EPA should provide guidance on reporting, such as including interim reporting, and should offer to review and comment on state EM&V plans prior to submission to give states greater assurance that their plans will be accepted by EPA.

Response 11: EPA will be providing guidance to states on how to report their progress under approved section 111(d) plan s. EPA has provided states with substantial flexibility to design a state plan under this guideline, and EPA is encouraging states to engage creatively in the process of designing their plans. The agency has consistently worked with states to advise them i nformally about the design of state programs that might be submitted for EPA’s review and approval under the CAA, and will enthusiastically engage in that practice under this guideline as well. In the SIP process, for example, it is routine for states to share with EPA drafts of proposed SIP regulations before the state goes out to public notice on its rule so that the state can factor in EPA’s advice in advance of asking the public for comment. Such informal exchanges between the states and EPA Regions ha ppen all the time, and the agency would encourage the states to continue that practice when developing state plans under this guideline.

The following are summaries of the specific public comments under this comment:

Commenter s stated that EPA should provi de guidance on reporting, such as including interim reporting, and should offer to review state EM&V plans prior to submission and provide interim comments to give states greater assurance that their plans will be accepted by EPA.263 Commenters stated that E PA should work with states to develop clear paths to evaluate and approve state 111(d) plans, as well as clear and transparent reporting protocols to determine whether carbon reductions are occurring as planned. Commenters stated EPA and states should

cons ider interim reporting and periodic updating of state 111(d) plans.

Comment 12: The EPA should allow states to seek early EPA feedback and technical support on the approvability of the state’s draft plan to encourage creativity and to utilize the flexibil ity provided in EPA’s approach.

Response 12: See response to comment 11, immediately above.

The following are summaries of the specific public comments under this comment:

Commenter s stated that EPA has appropriately and commendably provided states with ne arly unprecedented levels of flexibility to tailor state plans to the specific needs and conditions found in each state. The commenter s stated that this flexibility has the potential to lead to confusion by state air administrators as to what constitutes a n approvable state plan. The commenter s stated that while many stakeholders have asked EPA to provide clarifying guidance on key topics, residual confusion may exist. The commenter s stated that rather than creating a scenario where states are afraid to exe rcise creativity in developing a state plan for fear that it may be rejected, the commenter s encouraged EPA to allow states to seek an informal "pre

- check

, " in which EPA provides technical support to states with respect to the approvability of a draft stat e plan.

Comment 13: To avoid overreliance on gas

- fueled generation at a national level as a compliance option, the EPA should provide easily understood and objective plan feedback on the relative costs of new fossil fuel generation (including NGCC and oth er natural gas options) and untapped EE resources for each state, and pertinent economic and environmental benefits of energy efficiency, so that these two can be easily compared in the plan development process.

Response 13: The agency does not understand the commenter s to be advocating that EPA impose any requirement on states to use energy efficiency measures rather than gas

- fueled generation. EPA is providing the states substantial flexibility in designing their plans, and as long as the state’s plan mee ts the emission reduction targets required under the guideline, EPA will not second

- guess state’s decisions about how those reductions are accomplished.

With that said, however, EPA agrees that providing states with as much information as possible about the relative cost of different emission reduction strategies will help states make sound choices about how to structure their state plans under this guideline. EPA is glad to work with state and federal agencies, ISOs and RTOs, and any other party with rel iable information about the cost of energy efficiency programs and how they compare with other emission reduction strategies. Making such information available as states develop plans provides the best hope that states can make environmentally and economic ally wise decisions in designing their plans.264 The commenter s also suggest that there might be a productive feedback loop possible as states gain experience implementing their plans over the ten

- year compliance period the guideline provides. EPA agrees that such information could be valuable not only in designing a state plan, but also developing refinements or mid

- course corrections.

The following are summaries of the specific public comments under this comment:

Commenter s stated that the EPA should provide feedback on approved state plans when a state opts for new NGCC capacity or similar new fossil fuel capacity.

The commenter s stated that, when developing 111(d) plans, many influences will lead states to rely heavily on new NGCC units and similar new gas

- fueled generation, while underutilizing EE
programs. To avoid overreliance on gas

- fueled generation at a national level, the commenter s suggested that the EPA should provide plan feedback on the relative costs of new fossil fuel generation and untapped EE resources for each state, and pertinent economic and environmental benefits of energy efficiency . The commenter s stated that the push for states to choose gas will be powerful for many reasons. The commenter s noted that since its early days, the electric power industry has favored large, fossil fuel EGUs. Secondly, the commenter s noted that consultants who forecast costs for 111(d) plans will use power system optimization models that model EGUs with great care while failing to model demand

- side energy effi ciency adequately. The
commenter s noted an example would be the Integrated Planning Model (IPM) used by EPA. Third, the commenter s stated that partisans and partisan attitudes try to stereotype new energy sources like solar as government waste, regardless of the actual costs and benefits.

The commenter s stated that cost

- effective energy efficiency and demand

- side management, acquired through well

- designed programs, remain the lowest cost ways for a state to meet its energy needs while avoiding environmental harm and power system infrastructure costs associated with new generation. Nevertheless, the commenter s stated that these advantages will not keep states from building more wasteful and polluting EGUs. The commenter s asserted that states and the residents of those states can be reminded that they pay a price for wasteful, shortsighted energy use. According to the commenter s , it is up to individual states and their residents to realize the potential benefits. For simplicity, the commenter s recommended that when EPA reports on the cost of new generation and overlooked EE resources, EPA can use representative levelized cost data. The commenter s stated that this relieves EPA of the burden of additional data collection, and EPA would avoid unnecessary debates ab out what specific, new EGUs will cost.

The commenter s stated that they favor simplified, easily understood analysis to provide feedback on state plans at the time a 111(d) plan is approved. The commenter s noted that if EPA disapproves of a state's plan, su ch feedback may be unnecessary and unwelcome. Therefore, the
commenter s suggested reporting the expected amount of new gas

- fueled generation under an approved plan and comparing that quantity of new generation with the same amount of energy savings acquire d through a conventional utility EE program(s). The commenter s noted that it may also be helpful to report this information when a state requests an extension due to an incomplete plan, and periodically if a state welcomes the feedback.265 The commenter s stat ed that the EPA can offer rough estimates of economic consequences from pursuing energy savings instead of the new gas

- fueled generation. The commenter s stated that reports need to include average bill savings (monthly, annual and long

- term) for the reside ntial sector and projected state employment. Since energy efficiency projects are more labor intensive than the oil and gas sector and the power production sector, the commenter s stated that they expect a shift to EE to result in a net increase in state em ployment with some exceptions. Additional simple metrics are needed for environmental benefits. The commenter s stated that the aim is to provide clear, easy to understand feedback on clean, cheap resources that the state plan has not targeted. The commente r s stated that potential benefits of pursuing EE should be described unambiguously in simple English in order to keep misinterpretations to a minimum.

The commenter s did not propose any particular report format. However, the commenter s explained that the s tates and state residents deserve feedback on their approved plans, pointing out what resources they can pursue over the long

- term to help their environmental and economic well

- being.

Comment 14 : EPA should adopt as part of its final rule a "reliability s afety valve" (RSV) process to provide states with the flexibility to modify their implementation plans to resolve or mitigate reliability

- related issues. The EPA has previously recognized that additional flexibility may be necessary to manage unforeseen is sues as state plans are being implemented. The commenters described several scenarios in which state plans may need to be modified to address reliability issues, especially with respect to multi

- state dispatch regions

. Response 14: Many of these comments concerning reliability and ideas about a reliability safety valve are addressed in the discussion in section VIII. G .2 of the preamble to the final rule, and the reader is encouraged to review that section.

To briefly summarize, EPA agrees that a state shou ld consider reliability in designing its plan. The final rule requires states to document how they have considered reliability, and recommends that states do so by consulting with the relevant ISO/RTO’s. The guideline requires that the state demonstrate i t has gone through a process to consider reliability in developing its plan, but EPA is not imposing a substantive reliability standard as a condition for approving a state plan.

Given the enormous flexibility states have in designing their plans, EPA anti cipates that plans will be flexible enough to adjust to incidents that might affect reliability. But as described in the preamble, EPA has agreed to include a reliability safety valve mechanism that states can use to authorize a short term modification of otherwise applicable limits in the state plan and provide alternate compliance requirements for up to 90 days.

Again, as discussed in the preamble, EPA has structured the state plan development process so that reliability will be a consideration the state must address when promulgating its plan. When EPA reviews plans, it will use the notice and comment informal rulemaking process to act on state plan submittals. If there are reliability concerns about a state’s plan that interested parties have even aft er the state’s consideration of this issue at the state level, those parties or agencies can always comment to EPA during the agency’s review. At that stage in the process, the Clean266 Air Act requires EPA to focus on whether the state’s plan meets the emis sions reduction goal set for the state under this guideline. But in the unlikely event that a state’s plan creates such a substantial reliability issue that it draws into question the practicality or reality of the state’s emissions reduction projections under its plan, EPA would consider those comments in its review of the state plan. EPA is currently developing on

- going arrangements with DOE and FERC to work with EPA and consult on reliability issues should they arise during EPA’s review of a state plan.

The following are summaries of the specific public comments under this comment:

Multiple commenters discussed implementation of a reliability safety valve (RSV) approach through the state plan submittal and review process.

Commenter s suggested that the A gency establish criteria in the final rule for EPA to use in reviewing the State Plan component that describes the evaluation and consideration of impacts to state, multi

- state, and/or regional grid reliability from the implementation of the proposed State Plan.

Commenter s stated that EPA should adopt as part of its final rule a "reliability safety valve" (RSV) process to provide states with the flexibility to modify their implementation plans to resolve or mitigate reliability

- related issues. The commente r s noted that the EPA has previously recognized that additional flexibility may be necessary to manage unforeseen issues as state plans are being implemented. The commenter s appreciated the EPA's perspective on ensuring sufficient flexibility for states to respond to unexpected circumstances. However, the
commenter s stated that a formal process is required to ensure that actions can be taken, without the initiation of an enforcement process, if implementing the state plan would result in negative impacts to state or regional grid reliability. The commenter s stated that maintaining electric reliability, on which the public health and safety depend, must be the top priority in implementing this proposed rule.

Commenter s recommended that the EPA adopt the RSV process set forth in the IRC comments. Co mmenter s stated that the RSV provides appropriate flexibility in the implementation of state plans to allow for the development and execution of solutions necessary to resolve or mitigate identified reliability issu es. The commenter s recommended that the EPA adopt the IRC's recommendations, as it did when it adopted a reliability safety valve in its final Mercury and Air Toxics rule.

Commenter s noted that a RSV is appropriate when examining the specifics of a State P lan submitted in conformance with the Final Rule. Consistent with Section 111(b), the Proposed Rule grants the Administrator discretion to "review plan submittals for approvability" but does not specifically outline how the approval determination will be m ade. C ommenter s stated that section 111(b) as well as the Proposed Rule both indicate that submitted State Plans must meet "energy requirements," an otherwise undefined ter m. C ommenter s stated that as the EPA has proposed that the "system" for purposes of defining the "Best System of Emission Reduction" can include improvements to virtually all aspects of the production, delivery and consumption of electricity, then "energy requirements" must correspondingly be read to include system needs as opposed to req uirements of a particular unit o r emissions control device. C ommenter s stated that267 although the Proposed Rule sets forth procedurally what needs to be included in a submitted State Plan, it says little about the criteria the Administrator will use in "appr oving" a submitted State Plan or how she will determine if the submitted State Plan meets "energy requirements" as required under Section 111(d). C ommenter s stated that although the Proposed Rule provides some explanation of what constitutes an "approvable " State Plan relative to the emissions requirements of the submitted State Plan, it notably omits any mention of review of the reliability impacts of a proposed State Plan as one of the essential criteria of an "approvable" State Plan.

According to the co mmenter s , it is possible that compliance approaches in one State Plan can create a regional reliability issue affecting another state and/or region. The commenter s stated that for example, a State Plan could include a restriction on the output (or equivale ntly, the run

time) of a generator located within the state's borders, but when that limitation is reflected in a regional dispatch, it could create a transmission constraint or operational issue in another state(s) within the region or even within a neigh boring region that leads to a NERC reliability criteria violation when considered in the transmission planning process and, thus, requiring the need for transmission upgrades to cure the reliability problem. Co mmenter s stated that for example, there

are a number of instances where an EGU is owned by a utility in one state but is physically located in another. C ommenter s stated that moreover, region

- wide security constrained economic dispatch dispatches plants across the entirety of the region and co

- optimiz es the dispatch of energy and ancillary services across the larger region. C ommenter s stated that as a result, actions in one state affecting a particular unit almost, by definition, have interstate impacts within the region. C ommenter s stated that moreove r, an output restriction does not automatically place a cost/price on that constraint in dispatch, and absent such a cost/price in the units' offers, could result in using up all output or hours leaving the company without sufficient resources to meet

summ er and winter peak conditions.

C ommenter s stated that another example of possible reliability impacts occurs when two states adopt very different plans. C ommenter s stated consider two states, on with a rate

- based target that does not include 111(b) resourc es and another with a mass

- based target that does not include 111(b) resources. C ommenter s stated that in the absence of these differences, new units would want to site in the mass

- based state that would help alleviate transmission constraints. C ommenter s stated however, given the posited differences, the incentives for new combined cycle units is to site in the rate

- based state and for existing combined cycle resources in the rate

based state to want to run more than in the mass

- based state. C ommenter s sta ted that such a situation could lead to exacerbating already existing congestion in moving power from the rate based state to the mass

- based state creating transmission reliability issues requiring upgrades due to increased transfer from existing resources in the rate

- based state and lack of new resources in the mass

- based state.

For these reasons, the commenter s suggested that an appropriate RSV can be used to address potential conflicts that could arise between State Plans and RSV reliability assessments and proposed solutions in multi

- state regional dispatch areas, with a goal to ensure reliability reviews encompass a regional and even interregional analysis during the State Plan development process. C ommenter s stated that they are committed and have alre ady taken steps towards working with the states within their region so that the reliability impacts of any considered State Plans are thoroughly reviewed and understood by the relevant state officials. C ommenter s stated nevertheless, the transmission grid is highly interconnected and effects triggered in one region or268 state can have far reaching implications for other regions and states. C ommenter s stated that yet, because of some of the targets and timelines required under the Proposed Rule, and the state

centric design of Section 111(d) in the first instance, the sort of regional review proposed by the
commenter s , both in the formulation of a plan at the individual state level and its review at the federal level, is a critical element of ensuring grid reli ability.

C ommenter s stated that given the importance of electric system reliability, the Final Rule should make clear that a well

- supported state plan would be one that includes an analysis of any electric system reliability impacts of the proposed State P lan on the RTO/ISO region as a whole as well as neighboring regions if applicable. (Pursuant to FERC Orders 890 and 1000, the borders of regions and protocols for interregional planning analyses have been submitted by Planning Authorities to the FERC throu gh their compliance filings.) C ommenter s stated that the analysis would identify the nature of any reliability violations which could occur and provide a projection of the potential timing and cost of mitigation of same in order for the state to meet the i nterim and final compliance targets.

C ommenter s stated that moreover, there should be an option for neighboring states or grid operators to be able to seek additional review of those submitted plans if the proposed plan will have an adverse reliability im pact on that state or a neighboring group of states in the region.

C ommenter s stated that accordingly, the Final Rule should require that a State Plan include a reliability analysis which includes:

• A n analysis by the RTO/ISO (or NERC Reliability Authority in non

- RTO regions) of any regional or interregional reliability impacts;

• S teps which are planned to address any such reliability impacts during the compliance period; and

• A ppropriate means for monitoring and addressing any future reliability impacts thro ugh potential State Plan modification or other means.

C ommenter s stated that the submittal should be placed for public comment before acceptance by the Administrator and subjected to FERC and DOE consultation as part of the review process.

Comment 15: Will there be an in

- state comment

- review process or federal level comment

review process once a state submits their plan for the 12

- month EPA review?

Response 15: As described in Section VIII.D.2.a.6 of the preamble to the final guideline, a state is requi red to hold a public hearing on its state plan before submitting it to EPA, taking comment on that plan, and addressing those comments. At the federal level, as described in Section VIII.E.4 of the final rule preamble , EPA will provide the public an oppor tunity to comment on its proposed action on a state’s plan, and EPA will address those comments before finalizing its action on the plan. So at both the state and federal level, the public can be involved in the development and review of state plans.269 The f ollowing are summaries of the specific public comments under this comment:

Commenter s asked if there will be an in

- state comment

- review process or federal level
comment

- review process once a state submits their plan for the 12

- month EPA review.

6.4.4 Fail ure to submit a complete plan

This section addresses comments on the possibility that states do not develop an approvable state plan , particularly development of a Federal Plan

. For the proposal , the EPA specified that if a state did not submit an approvab le state plan the EPA would develop a Federal P lan for the state to implement the emission guidelines. Implementation of a Federal Plan would be an interim action and would be automatically withdrawn if/ when a state plan is approved. The comments in this s ection address the need for a proposed Federal Plan and the timing of Federal Plan development and implementation.

Commenters have raised a number of issues related to this subsection which are organized by topics (comments) below. Responses are also provi ded for these topics.

We agree with the following specific comments made under this subsection:

• It is necessary for the EPA to promulgate a federal plan for states that do not submit an approvable state plan.

• The EPA should provide model rule for states to use for developing emission standards under a state plan.

• The EPA should defer to the states to design the most cost

- effective and equitable pathways to achieve reductions ; the EPA generally views states as the preferred implementers of Clean Air Act prog rams and should work closely with states to develop approvable state plans.

• The deadline for promulgation of a Federal Plan needs to be clarified in terms of which provisions within 40 CFR 60.27 would actually determine the deadline.

Commenters have raise d a number of issues related to this subsection which are organized by topics (comments) below. Responses are also provided for these topics.

Comment 1: In light of the possibility that states do not develop and submit approvable state plans, the EPA nee ds to clearly establish the timing and process for developing and enforcing federal plans, and the EPA should specify what the federal plan will entail , including the legal basis for imposing legal obligations on third

- parties in the absence of a state pla n

. Response 1: The EPA agrees with the commenters that it is necessary for the EPA to promulgate a federal plan for states that do not submit an approvable state plan. The EPA is proposing a270 federal plan concurrent with the finalization of the emission gui delines. In proposing a federal plan concurrent with the finalization of the emission guidelines, the EPA is moving expeditiously to respond to commenters’ desire to see the contents of a federal plan or model rule

. The contents, rationale, and basis of a uthority for a section 111(d) federal plan to implement the Clean Power Plan Emission Guidelines will be set out in that rulemaking and are beyond the scope of the Emission Guidelines themselves.

The following are summaries of the specific public comments under this comment:

Multiple commenters mentioned the need for EPA to develop federal plans in the event that states do not submit an approvable state plan and requested clarification and guidance.

Commenter s expressed concern that EPA may miss deadlines or that some states where elected officials dispute established scientific evidence may postpone implementation. C ommenter s stated that EPA has the authority and needs to develop federal plans in cases where states decline to develop their own.

Commenters urged the EPA to quickly and clearly spell out the timing and process for how to enforce federal plan for states that fail to meet the requirements.

Commenter s stated that EPA needs to be developing its federal plan to implement the final rule so it can b e quickly implemented in states which have failed or chosen to not develop and implement a state plan.

Commenter s stated that EPA should clarify the ability and intent to impose a Federal plan or Federal Implementation Plan (FIP) on states in the event it does not have an approvable state plan by the required deadline and what such a Federal plan or FIP would contain.

Commenter s warned EPA to prepare for recalcitrant states that are resistant to implementing state plans.

Commenters said the EPA must be wi lling to reject inadequate state plans and swiftly establish meaningful rules for utilities in states that fail to comply. Commenters said whether or not a state's plan meets the EPA's approval, the federal agency must be prepared and willing to take enfor cement action on its own.

Commenter s stated that there may be states that significantly miss the compliance plan deadline or are not able to gain regulatory authority to implement this rule. In these circumstances,
commenter s stated that the EPA needs to provide assistance to these states. Additionally, the
commenter s noted that states may submit compliance plans that are ultimately not approved by the EPA. In these cases, the commenter s noted that a federal plan is inevitable. In lieu of a state complianc e plan, commenter s stated that it is crucial that EPA indicate the specifics of a federal plan in the final rule.

Commenter s agreed that EPA should provide more clarity to states regarding what a federal plan will entail if a state fails to produce a stat e plan that complies with the final rule, or fails to produce any state plan. C ommenter s stated that they anticipate significant political opposition271 from states, and in the event that this opposition leads to a failure of those states producing an accepta ble state plan, a federal plan will be needed to ensure that the public health and welfare will be adequately protected. The commenter s suggested that the EPA should issue guidance on what a federal plan may look like, including the legal basis for imposin g legal obligations on third

- parties in the absence of a state plan.

Commenters recommended the EPA prepare the federal implementation plan sooner rather than later. Commenters urged the EPA to initiate the development of the FIP now so that the FIP is in place, ready for those states that fail to submit their state plan.

Comment 2: Because it is necessary for the EPA to promulgate a federal plan for states that do not submit an approvable state plan, the EPA should have proposed a model rule or Federal Plan

, or should include one in a Notice of Data Availability (NODA). The Federal Plan could also be used by states for comparison in developing their state plans . Proposed 40 CFR 60.5725 should be revised to specifically allow states the option to not subm it a state plan because it is a choice given states by Congress under CAA section 111(d). The lack of a proposed Federal Plan stems from the fact that the EPA lacks authority to regulate non

- emitting entities and activities.

Response 2: The EPA agrees with the commenters that it is necessary for the EPA to promulgate a federal plan for states that do not submit an approvable state plan. The EPA is proposing a federal plan and model rules concurrent with the finalization of the emission guidelines

.

The EPA disagrees that the emission guidelines should be revised to specifically allow states the option to not submit a state plan. The guidelines provide states with the initial opportunity to submit a satisfactory state plan, and provide states flexibility in d eveloping that plan. If a state declines to take advantage of that opportunity, affected EGUs in that state will instead be subject to a federal plan implemented by the EPA for the state. There will be no penalty for states that do not submit an approvable state plan. See Section VIII. E

. 6 of the final rule preamble

. The EPA disagrees that it did not propose a federal plan or model rule because it lacks authority to implement the Emission Guidelines. Nothing in the Clean Air Act or Part 60 requires the Agenc y to provide a federal plan or model rule concurrently with Emissions Guidelines. In proposing a federal plan concurrently with the finalization of the Emission Guidelines, the EPA is moving expeditiously to respond to commenters’ desire to see the content s of a federal plan or model plan.

The following are summaries of the specific public comments under this comment:

Multiple commenters argued that EPA should have proposed a model rule or Federal Plan for
states to use for comparison.

Commenter s stated t hat proposed 40 CFR 60.5725 should be revised to specifically allow states the option to not submit a state plan. The commenter s noted that unlike prior CAA section 111(d) rulemakings, the EPA has not proposed a federal plan with the proposed emission guid elines. The commenter s noted that proposed 40 CFR 60.5725 requires a state to either submit a state plan or submit a negative declaration and makes no allowance for a state to choose272 not to submit a state plan. The commenter s noted that states have elected to not submit state plans in the past for prior CAA section 111(d) regulatory actions. The commenter s noted that if a state chooses to not submit a state plan under this proposed rule, the state might be considered in violation of 40 CFR 60.5725. The comm enter s argued that this provision is in direct opposition to the choice given states by Congress under section 111(d) to not submit state plans. C ommenter s stated that EPA should revise 40 CFR 60.5725 to reflect Congress' intent and the actual practice of how the EPA has implemented section 111(d) in the past. The commenter s noted that in prior CAA section 111(d) rulemakings, the EPA has included a model rule to serve as the federal plan should a state not submit a state plan. The commenter s noted that with the current proposal, not only has the EPA not provided a draft of the federal plan that would take the place of a state plan, the EPA has refused to answer questions regarding what a federal plan would entail.

Commenter s stated that it is appropriate to include language in a subsequent Notice of Data Availability (NODA) regarding how a Federal Implementation Plan (FIP) might be structured and implemented so that states can take this into consideration in evaluating alternative scenarios for states to com ply with the final rule.

Commenter s stated that EPA needs to describe what a 111(d) Federal Implementation Plan would include. The commenter s noted that under EPA's proposal, states that fail to submit a plan implementing EPA's rule by the applicable dead line are subject to EPA imposing a Federal Implementation Plan (FIP). C ommenter s stated that neither EPA's proposal, nor any subsequent public explanation, has elucidated what the contents of a FIP would or might contain. Concurrent with finalizing this ru le, the commenter s stated that EPA needs to describe its understanding of what a FIP would include, so that this information can be considered in state planning processes

.

Commenter s also expressed concern that, to date, no federal implementation plan (FI P) has been put forth, which is necessary for states to assess whether to propose their own SIPs, or rely on the FIP. In order to remedy this void, the commenter s stated that EPA is obligated to develop a FIP and the final rule should include a FIP for com parison and consideration.

Commenter s acknowledged the EPA's authority to implement a federal compliance plan for states that either do not submit a 111(d) state compliance plan or fail to submit a compliance plan that will achieve that state's designated emission rate goal. C ommenter s stated that the EPA should include framework or guidance on what a federal compliance plan and enforcement would work when it releases the final CPP

.

Commenter s stated that in order to facilitate state plan development, EPA should clearly specify as soon as possible, but no later than a month after the release of the final guideline, the framework of a federal plan that would be implemented in the event a state does not file an adequate state plan.

Similarly, commenter s note d that EPA determined the Best System of Emission Reduction (BSER) to be the application of four building blocks and the EPA applied these building blocks to set a goal for each state, although the EPA is not requiring each state to implement the building blocks in the particular manner that the EPA did as it developed the state goals. C ommenter s stated that EPA has not provided a model rule or plan for implementation of the273 Clean Power Plan by each state. The commenter s expected to face difficulty in devel oping any future state plan because of the decision not to issue a model rule

- on which any Federal Implementation Plan (FIP) might be based

- that would allow states to assess how their own plans compare. The commenter s surmised that this lack of a model rule stems in part from the fact that EPA lacks statutory authority to impose the building blocks (beyond building block one) on sources (and especially on non

- sources), and that it would therefore not be possible for EPA to implement a FIP based on all f our building blocks.

Comment 3 : If EPA were to impose a federal plan, EPA does not have jurisdiction to directly implement RE and EE measures because regulation of such non

- emitting activities and entities is beyond EPA's authority under the CAA.

Respons e 3: The contents, rationale, and basis of authority for a section 111(d) federal plan to implement the Clean Power Plan Emission Guidelines will be set out in that rulemaking and are beyond the scope of the Emission Guidelines themselves.

The following ar e summaries of the specific public comments under this comment:

Commenter s stated that EPA cannot enforce emissions reductions from non

- affected entities. The commenter s argued that, if EPA were to impose a federal plan, EPA does not have jurisdiction to d irectly implement RE and EE measures because regulation of such non

- emitting activities is beyond EPA's authority under the CAA . The commenter s stated that EPA also does not have jurisdiction over non

- EGU entities or over retail sales of electricity. Conse quently, the
commenter s stated that EPA cannot include RE and EE measures in a federal plan because it would require coopting the authority of state energy regulators that have jurisdiction over non

EGU activities and retail electricity sales. C ommenter s stated that when EPA attempted to require state regulators to implement federal transportation control plans in the 1970s, courts held that EPA could not require state officials to affirmatively implement vehicle inspection and maintenance programs because it commandeered state agencies in violation of the Tenth Amendment.

Commenter s contended that EPA could not promulgate a federal plan that includes measures over which EPA does not have jurisdiction, which raises the question of whether a federal plan th at could not be as comprehensive as a state plan would be of any utility in remedying the failure of a state to achieve its emissions goals. The commenter s suggested that EPA address how it would handle such situations

.
Comment 4 : The EPA needs to provid e guidance on how renewable energy would be considered under a Federal Plan.

Response 4: The contents, rationale, and basis of authority for a section 111(d) federal plan to implement the Clean Power Plan Emission Guidelines will be set out in that rulemak ing and are beyond the scope of the Emission Guidelines themselves.274 The following are summaries of the specific public comments under this comment:

Commenter s stated that the proposed rule does not provide any guidance as to how renewable energy would be c onsidered under a Federal Implementation Plan (FIP) for those states which are unable or unwilling to submit a satisfactory State Implementation Plan (SIP). C ommenter s stated that a FIP should significantly rely on renewable energy given renewable energy's demonstrated cost

- competitiveness with other types of generation and renewable energy's ability to dramatically lower carbon emissions, create jobs, foster private investment, and drive technological innovation.

Comment 5 : The EPA should ensure that Fede ral Plans do not disrupt the reliability of the electric system within a state by taking into account such factors as the remaining useful life of a

source.
Response 5: The contents, rationale, and basis of authority for a section 111(d) federal plan to im plement the Clean Power Plan Emission Guidelines will be set out in that rulemaking and are beyond the scope of the Emission Guidelines themselves.

The following are summaries of the specific public comments under this comment:

According to commenter s , whe re a state fails to submit an approvable plan, a federal plan should be based on plant

- specific targets for jurisdictional units, taking into account energy, economic, and environmental factors and the remaining useful life of the source. In exercising thi s authority, the commenter s stated that the EPA should ensure that its plan would not disrupt the reliability of the electric system within the state.

Comment 6 : In a Federal Plan, the EPA can only require measures that it has the authority to impose, and the EPA does not have the authority to force the re

- dispatch of power plants subject to FERC/RTO reliability, cost, and contractual constraints, nor to force the merchant owners of power plants to purchase RPS credits or fund demand

- side EE projects.

Respo nse 6: The contents, rationale, and basis of authority for a section 111(d) federal plan to implement the Clean Power Plan Emission Guidelines will be set out in that rulemaking and are beyond the scope of the Emission Guidelines themselves.

The following are summaries of the specific public comments under this comment:

C ommenter s stated that the EPA must also take into account real world realities and challenges when devising a federal plan in the event a state fails to submit a plan or the EPA disapproves a state plan. C ommenter s stated that the EPA can only require measures that it has the authority to impose. C ommenter s stated that the EPA does not have the authority to force the re

- dispatch of power plants subject to FERC/RTO reliability, cost, and cont ractual constraints. C ommenter s stated that the EPA does not have the authority to force the merchant owners of power plants to purchase RPS credits or fund demand

- side EE projects, placing them at a competitive disadvantage in the electricity market.275 Co mment 7 : Due to legal uncertainty with certain compliance options, the EPA needs to consider the impacts of a Federal Plan that relies only on actions taken at affected power plants, including heat rate improvements and dispatch changes.

Response 7: The co ntents, rationale, and basis of authority for a section 111(d) federal plan to implement the Clean Power Plan Emission Guidelines will be set out in that rulemaking and are beyond the scope of the Emission Guidelines themselves.

The following are summarie s of the specific public comments under this comment:

Commenter s stated that the Agency fails to consider significant legal problems with assumed compliance options. C ommenter s stated that there is considerable uncertainty as to whether states will embrace EPA's proposal and implement it through a SIP like process. Consequently, the commenter s stated that if the Agency forcibly imposes a Federal implementation plan on states, EPA's options may be limited to regulating the power plants themselves . Accordingl y, the
commenter s stated that an alternative policy analysis should assess the impact of the guidelines under a scenario limited to heat rate improvements and dispatch changes among affected power plants.

The commenter s noted that in the event North Dakot a does not submit a "satisfactory" Section 111(d) plan, it is unclear at this time how EPA will mandate the required reductions through a federal implementation plan. C ommenter s stated that the North Dakota emission rate goal is based on measures that are beyond the scope of EPA's authority to implement in a federal plan under the Act. C ommenter s stated that if EPA were to promulgate a federal implementation plan requiring all reductions be made by affected sources, even though the emission reduction goals are not based on actions that may be taken at affected sources, such a plan would be arbitrary and capricious. The commenter s noted that it would require wide

- spread shutdown of coal

- fired units and cripple the electric generating industry.

Commenters tho ught that although the EPA has not defined what measures would constitute a federal implementation plan, the EPA’s regulatory purview is limited to existing sources only. Commenters stated in order to achieve the reductions needed, the EPA would need to im pose limits or mandates in the FIP that would result in plant shutdowns. Commenter s asked whether the EPA believe that it has the administrative authority, under the guise of disapproving a state compliance plan to limit CO2 emissions at EGUs by shuttering operations through implementation of the FIP

.

Comment 8 : If the EPA develops a Federal Plan, it will not have the statutory authority to mandate non

- economic dispatch, impose a renewable portfolio standard, or otherwise infringe on the regulatory jurisd iction of the states, especially those with deregulated generation. Similarly, many state environmental regulatory agencies will be unable to comply with the emission guidelines except by those measures that may be feasible under Building Block 1.

Response 8: The contents, rationale, and basis of authority for a section 111(d) federal plan to implement the Clean Power Plan Emission Guidelines will be set out in that rulemaking and are beyond the scope of the Emission Guidelines themselves. The EPA disagrees that the emission276 guidelines restrict state environmental regulatory agencies’ ability to comply with the emission guidelines other than under Building Block 1. The guidelines provide states with the initial opportunity to submit a satisfactory state plan , and provide states great flexibility in developing that plan. If a state declines to take advantage of that opportunity, affected EGUs in the state will instead be subject to a federal plan implemented by the EPA for the state. See Section VIII.E. 6 of th e final rule preamble of the CPP.

The following are summaries of the specific public comments under this comment:

Commenter s stated that Section 111(d) provides that in cases where a state fails to submit a satisfactory 111(d) Plan the "Administrator shall have the same authority to prescribe a plan for a state ... and to enforce the provisions of such a plan." However, the commenter s noted that if a state fails to submit a satisfactory 111(d) plan , it is unclear what legal and statutory authority EPA has t o issue an enforceable Federal Implementation Plan (FIP) . For example, the
commenter s stated that the EPA does not have the statutory authority to mandate non

- economic dispatch, impose a renewable portfolio standard, or otherwise infringe on the regulatory jurisdiction of the states

- particularly a state like Ohio that has deregulated its generation. Likewise, the commenter s stated that the Agency has placed the state environmental regulatory agencies in an untenable situation where they are also unable to p romulgate rules that force compliance with any SIP requirements other than those that may be feasible under Building Block 1 of the proposed CPP.

Comment 9 : The EPA should identify in this rulemaking both the nature and the scope of the federal implementa tion plans the EPA would prescribe if a State fails to submit a satisfactory plan, and a model state plan that would be deemed minimally acceptable for approval. Similarly, the EPA should provide guidance to states on how to consider “the remaining useful life of the sources” and other factors in developing their state plans. This lack of guidance is a conspicuous failure of the proposed rule that should be corrected by including a model federal plan in a supplemental notice of proposed rulemaking on which the EPA accepts public comment.

Response 9: The EPA agrees with the commenter s that it is necessary for the EPA to promulgate a federal plan for states that do not submit an approvable state plan. The EPA is proposing a federal plan and model rules concurrent with the finalization of the emission guidelines

The EPA disagrees that the absence of discussion of a federal plan in the proposed guidelines is a “conspicuous failure.” Nothing in the Clean Air Act or Part 60 requires the Agency to provide a federal plan or model rule concurrently with Emissions Guidelines. In proposing a federal plan and model rules concurrently with the finalization of the Emission Guidelines, the EPA is moving expeditiously to respond to commenters’ desire to see the contents of a federal plan or model rules

. For consideration of remaining useful life and other factors, see Section VIII. G .1 of the final rule preamble of the CPP. The EPA is also providing a toolbox of decision support resources at: http://www2.epa.gov/ www2.epa.gov /cleanpowerplantoolbox. The state plan decision support section of the toolbox includes information to help states evaluate different approaches and277 measures they might consider as they initiate plan development. See Section VIII. H of the final rule preamb le of the CPP.

The following are summaries of the specific public comments under this comment:

Multiple commenters requested state plan templates and a model federal implementation plan. Commenter s stated that EPA should identify in this rulemaking both th e nature and the scope of the federal implementation plans it would prescribe where a State fails to submit a satisfactory plan. The commenter s noted that section 111(d)(2) of the Clean Air Act gives the EPA Administrator the authority to issue a "federal implementation plan" (FIP) if a State

- submitted SIP is unsatisfactory and to enforce the FIP provisions if a State fails to do so. The commenter s noted that in crafting a FIP, the EPA must consider the same factors Section 111 permits States to consider wh en crafting their SIPs, including "the remaining useful lives of the sources in the category of sources to which such standard applies. C ommenter s stated that one of the problems States will encounter in crafting their SIPs is the lack of clarity in the Pr oposed Rule concerning how and to what extent States are to consider the "remaining useful lives of the sources" and "other factors" while crafting SIPs that have a chance of being approved. C ommenter s stated that it would be helpful for the EPA to promulg ate in the Final Rule a model plan that will be deemed minimally acceptable for approval. C ommenter s stated that specification of the general terms of a FIP that it would issue to replace an unsubmitted or unsatisfactory SIP would provide much

needed guida nce on the minimum elements of state plans that must be included for such a plan to be approved. C ommenter s stated that the Proposed Rule contains no model state plan and not even the broadest outline of what EPA believes it could lawfully prescribe in lie u of a submitted or acceptable state plan. C ommenter s stated that this glaring absence is a conspicuous failure of the rule as it has been proposed because it leaves States guessing as to what aspects of the proposed existing source emission guidelines EPA believes it could prescribe under the Act if it were acting in the shoes of a State. The commenter s recommended that EPA should therefore provide the States and regulated community with its views on the nature and scope of such a plan so that the States m ay be guided by the EPA's assessment of what the law Clean Air Act allows with respect to considering the "remaining useful life" of sources and "other factors."

The commenter s requested that EPA issue a supplemental notice of proposed rulemaking in which it specifies, and invites public comment on, the common elements of the federal plan it would prescribe if a State failed to submit a satisfactory plan. C ommenter s stated that this should include, among other things, identification of each of the four Buil ding Blocks EPA would expect to include in a federal plan and the legal rationale for them, discussion of how EPA would calculate a State's emission reduction goal under a FIP, and how EPA would, in crafting such a plan, take into consideration the various factors, including the remaining useful life of the regulated sources, the Act requires it to consider.

In order to support states in their efforts to design plans to meet their carbon emission reduction targets commenter s recommended that EPA provide te mplates for different plan designs (e.g. a

mass

- based trading framework, a rate

- based trading framework, multi

- state compliance, and a utility

- based portfolio approach) and for specific plan components (e.g. how to incorporate a state renewable energy sta ndard and an energy efficiency program into a state plan; how to assess the emission reductions delivered by renewable energy and energy efficiency). C ommenter s stated that one or more of the state plan templates could take the form278 of the federal implemen tation plan that will become the default framework for any states that choose not to submit a compliant implementation plan.

Similarly, commenter s noted that states must be required to show that they have adequate resources and authority to implement and verify actual reductions and enforce their plans. To aid states and ease implementation, the commenter s requested that the EPA establish model federal plans that are published and confirmed in the final rule. The commenter s explained that states that propo se implementation plans generally consistent with the model federal plans should have a fair level of confidence that their plans would be approved.

Comment 1 0 : The EPA should provide a model Federal Implementation Plan for states to adopt if they so choo se that takes the mass based target and establishes a tradable allowance program with an EPA

- administered allowance registry, allowance tracking system, and compliance systems. By establishing a ready

- made optional Federal Implementation Plan, the EPA will significantly lower the regulatory and legal burden for states and doing so will significantly increase the odds of regional collaboration within regional electricity markets. The EPA cannot compel states to adopt any particular compliance strategy under the CPP, but the EPA has almost always offered model Federal Implementation Plans for past s ection 111 rules.

Response 10: The EPA agrees with the commenter s that it is necessary and important for the EPA to promulgate a federal plan for states that do not submit an approvable state plan. The EPA is proposing model rules for both rate

- and mass

- based programs in conjunction with the proposed Federal Plan. These effectively can serve as a template for states when preparing their state plan submittals. We als o agree that the EPA cannot compel states to adopt any particular compliance strategy under the CPP.

The following are summaries of the specific public comments under this comment:

Commenter s stated that the EPA should provide a model Federal Implementatio n Plan for states to adopt if they so choose that takes the mass based target supplied and sets rules for a tradable allowance program. Further, the commenter s stated that the EPA should facilitate adoption of the Federal Implementation Plan by developing an EPA administered allowance registry, allowance tracking system, and compliance systems. According to the commenter s , by establishing a ready

made Federal Implementation Plan that states could opt into if they so choose, the EPA will significantly lower the regulatory and legal burden for states that choose a compliance strategy that avoids many of the pitfalls we describe above. Also, the commenter s stated that doing so will significantly increase the odds of regional collaboration within regional electr icity markets.

C ommenter s stated that the EPA should leave to states that opt into the Federal Implementation Plan the decision about how to allocate allowances and/or allowance revenue under their mass

based compliance state power to allocate allowances might serve to deter participation in a Federal Implementation Plan.

According to the commenter s , longstanding legal precedent indicates that the EPA cannot compel states to adopt any particular compliance strategy under the CPP. However, the

commenter s st ated that the EPA has almost always offered model Federal Implementation Plans279 for past Section 111 rules and for rules applying the Good Neighbor Provision of Section 110, which cover the sources at issue in the Plan. C ommenter s stated that the EPA should not deviate from this precedent because this approach has resulted in widespread adoption of the EPA proposed compliance strategies. The commenter s noted that states face high administrative burdens in developing their own compliance strategies and are ha ppy to adopt EPA

- approved approaches that help them avoid those costs. The commenter s suggested that the EPA should take similar action for the CPP to minimize disruption of economic dispatch in wholesale electricity markets

.

Comment 1 1 : The EPA should id entify the nature and the scope of the federal implementation plan that it would prescribe where a state fails to submit a satisfactory plan.

Response 11: The contents, rationale, and basis of authority for a section 111(d) federal plan to implement the Cl ean Power Plan Emission Guidelines will be set out in that rulemaking and are beyond the scope of the Emission Guidelines themselves.

The following are summaries of the specific public comments under this comment:

Commenter s requested that EPA identify the nature and the scope of the federal implementation plan that it would prescribe where a state fails to submit a satisfactory plan.

Comment 1 2 : In developing a Federal Plan, the EPA has no experience in the management of the electricity grid.

Response 12: The contents, rationale, and basis of authority for a section 111(d) federal plan to implement the Clean Power Plan Emission Guidelines will be set out in that rulemaking and are beyond the scope of the Emission Guidelines themselves.

The following are su mmaries of the specific public comments under this comment:

Commenter s stated that should Indiana or Ohio fail to submit a 111(d) Plan, EPA will be forced to promulgate a Federal 111(d) Plan. Questions of legality aside, the commenter s stated that the EPA is ill

- equipped to make the specific technical decisions about Ohio's deregulated power sector or Indiana's regulated power sector that a Federal Plan would require

. C ommenter s stated that the EPA has no experience overseeing reliability, conducting local cost analysis, verifying demand response or any myriad of other decisions that are critical for maintaining the integrity of the electricity grid.

Comment 1 3 : The EPA should prepare a Federal Plan only if, after good faith effort and opportunity to modify an initial plan , the Agency concludes that the state will not submit a satisfactory plan. C onsistent with the EPA’s authority under Section 111(d) and its expertise, the EPA should not attempt to create state clean energy programs to reduce emissions , and instead,280 the EPA should design the plan based only on plant

- specific targets for jurisdictional units, taking into account the factors identified in Section 111, including energy, economic, and environmental factors and the remaining useful life of the so urce. The EPA can help states by including in the 111(d) guidelines specifics on what constitutes an approvable state plan.

Response 13: The EPA generally views states as the preferred implementers of Clean Air Act programs and intends to work closely with states to develop approvable state plans. We agree with the commenter s that the EPA should defer to the states' to design the most cost

- effective and equitable pathways to achieve reductions. The EPA is providing states with great flexibility in developin g approvable plans under CAA section 111(d), including the ability to impose

source

- by

- source limitations reflecting the BSER performance rates to each affected EGU or to adopt rate

- based or mass

- based emission performance goals, and to rely on a wide rang e of CO 2 emission reduction measures, including measures that are not part of the BSER.

We agree with the commenter s that the final guidelines must contain specifics on what constitutes an approvable state plan. See Section VIII.D.2 of the final rule prea mble of the CPP.

We agree with the commenter s that a state should have an opportunity to modify a state plan submittal that is not approvable. In the concurrent federal plan proposal, the EPA is proposing an amendment to the section 111(d) implementing reg ulations that would add partial approval/disapproval and conditional approval mechanisms. See Section VIII.E. 5 of the final rule preamble of the CPP.

The following are summaries of the specific public comments under this comment:

In a March 2014 comment re submitted following proposal, commenter s explained that although states under this program would have a powerful incentive to design their own flexible state plans to fulfill their Section 111(d) obligations, a few states may not submit a plan or may submi t a plan that does not comply with the statute. C ommenter s stated that this scenario is specifically addressed in Section 111(d), which provides that EPA may create its own federal plan if a state plan is not "satisfactory." The commenter s suggested that E PA can help states by including in the 111(d) guidelines specifics on what constitutes an approvable state plan and by deferring to the states' to design the most cost

- effective and equitable pathways to achieve reductions.

The commenter s argued that EPA should not jump immediately to a federal plan if a state submits a plan that, without adequate justification, does not meet the required targets. The

commenter s argued that it should first provide the state with an opportunity for revision and re

submittal

. C ommenter s stated that the EPA should prepare its own plan only if, after good faith effort, the Agency concludes that the state will not submit a satisfactory plan. At that point, consistent with its authority under Section 111(d) and its expertise, the commenter s stated that the EPA should not attempt to create state clean energy programs to reduce emissions. C ommenter s stated that it should design the plan based on plant

- specific targets for jurisdictional units, taking into account the factors identif ied in Section 111, including energy, economic, and environmental factors and the remaining useful life of the source.281 Comment 1 4 : In those states that refuse to implement a state plan, or to take other actions consistent with the implementation of the Fe deral Plan, the eventual implementation of the Federal Plan will result in a catastrophic loss of electricity for state residents. The EPA is ultimately threatening the health and safety of residents of states that refuse to adopt its vision of state regul ation of matters entirely outside its statutory authority, and a more clear

- cut, and more dangerous, example of coercion is difficult to imagine.

Response 14: Though the contents, rationale, and basis of authority for a section 111(d) federal plan to impl ement the Clean Power Plan Emission Guidelines will be set out in that rulemaking and are beyond the scope of the Emission Guidelines themselves, the EPA strongly disagrees that implementation of the Federal Plan would “result in a catastrophic loss of ele ctricity.”

We also strongly disagree that states may be “coerced” into taking certain actions in order to avoid the prospect of a federal 111(d) plan applying to sources in the state. The final guidelines provide states with the initial opportunity to subm it a satisfactory state plan, and provides states flexibility in developing that plan. If a state declines to take advantage of that opportunity, affected EGUs in that state will instead be subject to a federal plan that satisfies statutory requirements. S ee Section s VIII. E.6 and VIII.G.5 of the final rule preamble of the CPP.

The following are summaries of the specific public comments under this comment:

Commenter s stated that the timing of Federal Plan imposition is a concern that impacts health and safet y of state residents. The commenter s noted that states that intend to challenge the Proposed Rule will presumably refuse to submit State Plans. C ommenter s stated that when the Federal Plan is imposed, those states may still be holding hope that one of the challenges will succeed, or that new political leaders will pull the EPA back from fully implementing the Proposed Rule. The commenter s noted that such states will have no desire to adjust their regulations and invest in new electrical generating capacity prospectively, on the timetable that would be necessary to make up for the forced retirement of EGUs that exceed the performance standards specified in the Federal Plan. The commenter s noted that in those states, eventual implementation of the Federal Plan will simply result in a catastrophic loss of electricity for state residents, a harrowing prospect that endangers their very lives. C ommenter s stated that the "gun to the head" in this case is therefore something more than purely figurative: EPA is ultima tely threatening the health and safety of residents of states that refuse to adopt its vision of state regulation of matters entirely outside its statutory authority. C ommenter s stated that a more clear

- cut, and more dangerous, example of coercion is diffi cult to imagine.

Comment 1 5 : The deadline for promulgation of a Federal Plan needs to be clarified in terms of which provisions within 40 CFR 60.27 would actually determine the deadline.

Response 15: EPA agrees with the commenter s that the deadline for p romulgation of a Federal Plan in 60.27 is in need of modification. EPA is proposing changes accordingly in the concurrent Federal Plan proposal.

The following are summaries of the specific public comments under this comment:282 Commenter s stated that EPA shou ld confirm what actions it must and will take if a state plan or portion thereof is not submitted or cannot be approved. The commenter s stated that EPA has proposed that in the absence of an approvable state plan, the agency will develop a federal plan "ac cording to [40 CFR 60.27.]" 79 FR 34951 (proposed 40 CFR 60.5720). C ommenter s stated that although the proposed rule therefore appears to apply the deadlines for a federal plan codified in section 60.27, EPA should clarify in the final rule that is the cas e. The commenter s noted that Section 60.27(d) provides that EPA must promulgate a federal plan " within six months after the date required for submission of a plan or plan revision " if the agency determines that a state has failed to submit a plan or plan r evision, or if it disapproves any portion of a state plan or revision. C ommenter s stated that because the proposed rule only supersedes the requirements of subpart B of 40 CFR Part 60 to the extent they are inconsistent with the proposed rule, see 79 FR 34 951 (proposed 40 CFR 60.5700), the federal plan deadline in 40 CFR 60.27(d) appears to govern any federal plan needed under the CPP. C ommenter s stated that this 6

- month deadline also appears to provide the timetable for state action to correct any plans th at EPA has disapproved, in whole or in part. C ommenter s stated that EPA should clarify that the deadline also governs state action to amend any plans determined by EPA to be inadequate subsequent to their initial approval by the agency.

Comment 1 6 : The E PA's supplemental proposed tribal lands rule issued on November 4, 2014 (79 FR 65481) fails to include several deadlines, including for the submission of a tribal implementation plan, a deadline for EPA to make a "necessary or appropriate" finding that a f

ederal plan should be developed, and a deadline by which EPA will issue a federal plan after the agency finds such a plan is necessary or appropriate . The proposed supplemental tribal rule should also include a provision that requires EPA to determine whet her it is "necessary or appropriate" to issue a federal implementation plan if a tribe does not adopt a tribal plan.

Response 16: The EPA appreciates the commenter s ’ suggestion s to clarify the deadlines for action. In the concurrent federal plan proposal, we are proposing some changes to the process for action on state plans and implementation of a federal plan, including adjusting the timeline for EPA action to promulgate a federal plan. Those changes are beyond the scope of this rulemaking.

Regarding t he comment that the CPP should be revised to include a requirement that EPA issue a federal plan within 180 days of any EPA finding that a state did not submit a plan, or submitted an inadequate plan , the agency intends to propose several changes to the su bpart B framework regulations for section 111(d) as a part of the federal plan rulemaking. The timelines for agency action on state plans and promulgation of a federal plan will be included in that proposal.

The comment that EPA should have a mandatory dea dline for making a necessary or appropriate finding is beyond the scope of this action as it relates to the Tribal Authority Rule in 40 CFR Part 49, which the agency did not and is not proposing to change. In the federal plan rulemaking, the EPA intends to take action on whether to propose a finding that it is necessary or appropriate to regulate the affected EGUs in Indian country. The comments that the proposed supplemental283 tribal rule should include a provision that requires EPA to determine whether it i s "necessary or appropriate" to issue a federal implementation plan in light of tribal inaction and that the supplemental proposed tribal rule should be revised to include a commitment that EPA will issue a federal implementation plan without unreasonable delay also relate to the Tribal Authority Rule in 40 CFR Part 49, which the agency did not and is not proposing to change, and are therefore outside the scope of this action.

The following are summaries of the specific public comments under this comment:

C ommenter s s tated that the EPA's supplemental proposed tribal lands rule issued on November 4, 2014 (79 FR 65481) is fundamentally flawed and unenforceable. The commenter s noted that the proposed tribal rule fails to include a deadline for the submission of a tribal implementation plan, fails to include a deadline for EPA to make a "necessary or appropriate" finding that a federal plan should be developed, and fails to set forth a deadline by which EPA will issue a federal plan after the agency finds such a plan is necessary or appropriate.

C ommenter s stated that the EPA should establish the same deadline for tribes to submit a plan as EPA has for states and territories: June 30, 2016. Adopting EPA's language, the commenter s noted that tribes would have the "opportunity, but not the obligation" to submit a plan by that date.

With respect to the failure of any state to submit a complete or initial state plan by June 30, 2016, the commenter s proposed that the CPP include a provision that requires EPA to make a Section 110(c)(1)(A) finding of non

- submission within 30 days of June 30, 2016. With respect to the submission of state plans that fail to satisfy the minimum requirements of either a complete or initial plan, the commenter s proposed that the CPP include a provision that requires EPA to make a Section 110(c)(1)(A) finding of inadequate submission within 90 days of June 30, 2016. The commenter s suggested that failures to meet the 2017 and 2018 deadlines would be treated similarly.

The commenter s noted that the CPP also should be revised to include a requirement that EPA issue a federal plan within 180 days of any EPA finding that a state did not submit a plan, or submitted an inadequate plan , that includes federally

- enforceable measures sufficient to ensure the attainment of the 2030 CO2 reduction target for that state.

If any tribe decides not to embrace this "opportunity" by June 30, 2016, in whole or in part, the
commenter s suggested that the proposed supplemental tribal rule should include a provision th at requires EPA to determine whether it is "necessary or appropriate" to issue a federal implementation plan in light of such tribal inaction. 40 CFR 49.11; CAA Section 301(d). The
commenter s suggested that the EPA should impose a 30

- day deadline

- July 30 , 2016

- by which the agency commits by rule to making this determination.

Co mmenter s stated that the supplemental proposed tribal rule should be revised to include a commitment that EPA will issue a federal implementation plan without unreasonable delay, after the agency makes a "necessary or appropriate" finding pursuant to 40 CFR. 49.11. To be specific, the commenter s suggested the revision should include a statement that if EPA takes284 longer than 180 days to issue a federal implementation plan after mak ing a "necessary or appropriate" finding, such delay shall be presumed to be unreasonable.

Comment 17 : Commenters support the EPA’s proposal to include emission targets for existing power plants as part of FIP and exclude RE and EE measures for other enti ties.

Response 17 : The contents, rationale, and basis of authority for a section 111(d) federal plan to implement the Clean Power Plan Emission Guidelines will be set out in that rulemaking and are beyond the scope of the Emission Guidelines themselves.

The following are summaries of the specific public comments under this comment:

Commenter s noted that others have raised concern that EPA would impose a renewable portfolio standard and/or energy efficiency requirements as part the FIP ; however, the commen ter s noted that nothing in section 111 of the Clean Air Act or the Proposed Rule requires EPA to do so (s ee 42 U.S.C. 7411(d)(2)(A) ) . Commenter s said the language in the Proposed Rule rebuts the notion of a federal takeover of state energy plans, and speci fically, if EPA implements a federal implementation plan because a state has failed to meet its 111(d) obligations, EPA would implement the emission targets through regulation of power plants, not other entities. Commenter s said compare 40 C.F.R. 60.5790 ( "If a state does not submit an approvable Plan...EPA will implement and enforce a Federal plan...to ensure that each affected EGU within the state that commenced construction on or before January 8, 2014 reaches compliance") with 40 C.F.R. 5740(a) (requiri ng state plans to include "emission standards for each affected entity," a term defined to include EGUs or other entities with compliance obligations). Commenter s concluded for example, EPA could choose to impose a cap on steam and natural gas power plants , with or without provisions for trading among the capped entities, and such a plan would not include renewable energy or energy efficiency measures, although it could incentivize power plants and/or states to adopt such measures to reduce the cost of comp liance.

Comment 18: Comments claiming the EPA’s lack of authority to implement a federal plan if the states declines to act or does not submit an approvable state plan.

Response 18: The contents, rationale, and basis of authority for a section 111(d) fede ral plan to implement the Clean Power Plan Emission Guidelines will be set out in that rulemaking and are beyond the scope of the Emission Guidelines themselves.

The following are summaries of the specific public comments under this comment:

Commenters sta ted the flaws in EPA's BSER determination come into sharp relief if a state declines to act or does not submit an approvable state plan, and, in that case, EPA declares that it will develop and impose a federal plan. Commenters said EPA does not have the a uthority to impose dispatch decisions in states (meaning that it cannot implement Building Block 2), require the installation and operation of new renewable or replacement generation, regardless of fuel type (meaning that it cannot implement Building Block 3), or impose end

- user restrictions on the285 amount of electricity consumed or other DSM measures (meaning that it cannot implement Building Block 4). Commenters said the only Building Block that EPA could even arguably claim authority to implement is Build ing Block 1, but a six percent heat rate improvement is unreasonable, unachievable for every unit in the state, and unsustainable even at percentages less than six. Commenters said enforcing the mandatory state goals entirely through Building Block 1 would require even more aggressive (and impossible) heat rate improvements. Commenter s said EPA lacks authority to develop a federal plan in the event a state cannot (or decides not to) enact the laws and regulations that the Agency attempts to mandate though t he various Building Blocks.

Commenters asked if the EPA rejects a State Plan (or if a state fails to submit one), will the EPA then attempt to force an RPS and/or EERS on a state via a Federal Plan, despite the EPA's admission that it lacks the authority t o do so? If so, commenters questioned how the EPA will reconcile this action with having conceded to an absence of such authority?

Comment 19: Comment s stating that the EPA cannot identify in the CAA any provision that authorizes it to establish and enfor ce R PS, to make dispatch decisions, to provide rebates for programmable thermostats, or to undertake any of the other notions that i t has for Blocks 2

- 4 of its BSER.

Response 19: The contents, rationale, and basis of authority for a section 111(d) federal plan to implement the Clean Power Plan Emission Guidelines will be set out in that rulemaking and are beyond the scope of the Emission Guidelines themselves.

The following are summaries of the specific public comments under this comment:

Commenters stated section 111(d )( 2 )( A) requires the EPA to impose a federal ESPS plan when a state fails to adopt its own EPA

- approved plan. Commenters said by clear implication, the EPA may only require ESPS that it can administer if a state can't or won't submit a satisfa ctory plan. Commenters stated the EPA has no authority to enact state renewable energy mandates, fleet dispatch policies, or demand

- reduction incentives. Commenters said hence ordering states to revise their energy policies is beyond the EPA's authority as well.

Commenters continued that while the EPA certainly could adopt and impose emission limitations on "existing sources," it has no authority whatsoever to prescribe state

- wide energy policy, as it is directing the states to do for themselves. Commenter s stated the EPA cannot identify in the CAA any provision that authorizes it to establish and enforce renewable portfolio standards (RPS), to make dispatch decisions, to provide rebates for programmable thermostats, or to undertake any of the other notions that it has for Blocks 2

- 4 of its "best system of emission reduction." Commenters said and so those blocks must be outside of the options delegated to the EPA by Congress under section 111.286 6.4.5 Modification of an approved state plan

This section dis cusses comments on the process for modifying or revising approved state plans. In the proposed rule, state plans could only be revised with approval by the Administrator. If one or more of the elements of the state plan required revision to reach the estab lished emission performance goal, a state could submit a request to the Administrator indicating the proposed corrections to the state plan needed to meet the emission performance goal. We proposed that revisions “should not result in reducing the required emission performance for affected EGUs specified in the original approved plan. In other words, no ‘backsliding’ on overall plan emission performance through a plan modification would be allowed. The comments in this section addressed the process for revi sing a state plan , and the types of changes that could be needed, and the circumstances that could warrant a change to an approved state plan.

Commenters have raised a number of issues related to this subsection which are organized by topics (comments) bel ow. Responses are also provided for these topics

.

Comment 1: In recognition that a state plan benefits from course correction as circumstances (e.g., available technologies) states should be permitted to submit modified plans at any time during the compl iance period so long as reasonable progress toward targets is not compromised. If the modified plan continues to be "satisfactory" under section 111(d) then state modification of the plan should be permissible, and should not be subject to a limitation tha t it cannot result in reducing the required emission performance for affected EGUs (i.e., “backsliding”) specified in the original approved plan , because EPA has no authority to impose this limitation

. EPA should consider a mechanism for periodic review an d "reset" of the program to adjust for unanticipated events, such as increased electric load growth.
Response 1: The EPA agrees with the commenters ’ suggestion that states should be permitted to submit modified plans at any time during the compliance perio d, however, we note that the modifications must meet all the administrative and procedural aspects outlined in the final rule. The EPA is not placing any restrictions on the frequency that a state may submit modifications, but this will be inherently limi ted by the length of the state rulemaking process. Modifications to state plans are discussed in sections VIII.E. 7 and VIII.E. 7 .b of the preamble to the final rule

.

For a discussion on “anti

- backsliding provisions, see section VIII.E. 9 .b. of the final rule preamble

– State plan modifications. We proposed that revisions “should not result in reducing the required emission performance for affected EGUs specified in the original approved plan. In other words, no ‘backsliding’ on overall plan emission performan ce through a plan modification would be allowed.” We received adverse comments that this standard did not have a basis in section 111(d). According to commenters, since the standard for EPA approval of a section 111(d) plan is whether the plan is satisfact ory in establishing and providing for implementation and enforcement of standards of performance that achieve the performance emission rates or goal, the same standard should apply to revisions. In other words, the standard for revisions should be whether the plan as revised is satisfactory. We believe that our proposal was unclear as to this point and we agree that the same standard for revisions should be the same as for submittals. We have finalized this position.287 For a discussion on mechanisms for perio dic review and “reset” of the program to adjust for unanticipated events, such as increased load growth, see section VIII.E. 7 .b of the final rule preamble

– Modifications to interim and final CO2 emissions goals and the discussion on the reliability safety valve in section VIII. G .2 of the final rule preamble.

T he following are summaries of the specific public comments under this comment:

Multiple commenters supported allowing states to modify their state plans.

In recognition that a state plan benefits fro m course correction as circumstances (e.g., available technologies) change, commenter s suggested that states should be permitted to submit modified plans at any time during the compliance period (but not more often than every X years) so long as reasonable progress toward targets is not compromised.

Commenters stated that the Proposed Rule also notes that states may need to modify their plans over time, and EPA proposes that modification will generally be allowed provided the revision "does not result in re ducing the required emission performance for affected EGUs specified in the original approved plan." 79 FR 34917. C ommenters stated that EPA cites no authority for imposing this limitation. The commenters argued that if the modified plan continues to be "s atisfactory" under section 111(d) then state modification of the plan should be permissible.

Commenter s argued that to promote maximum state flexibility in the design of approvable compliance plans and to enable states to take into account changed circumst ances (e.g., improvements in clean energy and other technologies), the final guidelines should clarify that states can modify plans, subject to EPA approval. The commenter s stated that the final guidelines also should affirm that EPA will approve complianc e plans that satisfy the requirements for such plans. Finally, the commenter s stated that the guidelines should recognize a range of potentially approvable options for defining state emission glide paths that would be unique to the specific circumstances w ithin a state or multi

- state program and, in particular, should support the use of existing programs and market mechanisms.

Commenters stated that the EPA should allow states the flexibility to amend plans as needed to reflect new developments and changin g conditions in the electricity market. Commenters said the states and their affected electric power industry face significant uncertainties in planning for future generation, transmission, and distribution needs over the next 15 year time period. Comment er s stated these forecasts will not necessarily predict the economic and reliability impacts of the Proposed Rule and the impacts that the Proposed Rule will have on electric generation and transmission. Commenter s said the EPA should allow states maximum flexibility to adjust their state plans to account for major changes in the assumptions underlying state plans or the costs or impacts of those plans.

Commenter s stated that EPA should provide a mechanism for states to modify their plans

. C ommenter s stated that this may be necessitated by technology changes, or by states entering or leaving multi

- state arrangements

. C ommenter s stated that with respect to regional plans, without an ability to adjust plans due to participants entering or leaving, it could be foreseen that states would be more reluctant to enter into multi

- state arrangements.288 Commenter s stated that the EPA should allow states to determine when their plans need to be updated . Given the accelerated timeline for developing state plans, in additio n to the length of the period the plan will cover and changing nature of the power sector, the commenter s noted that state plans will likely need to be updated during the plan's lifetime. The commenter s argued that states should have the flexibility to det ermine when plan updates are needed, with the expectation that EPA will review submittals for adequacy.

Commenter s asserted that states should have the flexibility to modify their overall plan and glide path based on technology developments that may occur before 2030. The commenter s explained that, by 2030, it is inevitable that technology will evolve in ways that cannot be anticipated. The
commenter s noted that development of energy storage mechanisms, flue gas carbon removal systems, new or improved ener gy generation and distribution systems, advances in energy efficiency and countless other developments could have significant impact on our energy infrastructure. Historically, the commenter s noted that environmental rules have focused on regulating existi ng systems based on current understanding of pollution control systems and are not very effective at anticipating technology developments. C ommenter s stated that the Clean Power Plan will be implemented over a 15 year or longer period in which significant changes in generation technology and energy consumption are likely to occur. The commenter s recommended that the final rule should have mechanisms to allow states to adapt the requirements to these inevitable developments and avoid locking EPA, states, and the regulated entities into an ineffective or wasteful set of actions.

Commenter s urged EPA to consider the potential electric load growth that may result from increased utilization of electric vehicles (EV). C ommenter s stated that given that increased EV utilization will reduce GHG emissions overall, the commenter s urged the EPA to work with states to evaluate how to encourage this reductions through section 111(d) compliance plans. The
commenter s agreed with other stakeholder comments that recommend that the EPA consider a mechanism for periodic review and "reset" of the program to adjust for unanticipated events, such as increased electric load growth.

Commenter s stated that the EPA should allow states the flexibility to amend plans as needed to reflect new developments and changing conditions in the electricity market.

Commenter s asked if EPA will revise Subpart B to allow for corrections in the estimated 2030 generation rates and mass rate limit.

Commenter s stated that the final rule should clarify that states can modify plans, subject to EPA approval, to address changing circumstances, thereby giving states the flexibility to incorporate changing and improved technologies that benefit all customers.

Comment 2: EPA should clearly allow states and entit ies the flexibility to modify plans with minimal difficulty and as many times as needed.

Response 2: See response to comment #1 in this section

T he following are summaries of the specific public comments under this comment:289 Commenter s stated that EPA shoul d clearly allow states and entities the flexibility to modify plans with minimal difficulty and as many times as needed . The commenter s noted that it is impossible to predict the circumstances that may cause a state to need to modify its plan, but examples of when a modification may be necessary include:

• Entities may plan to contract for the purchase of renewable energy, but they may not be able to come to terms with a counter party.

• Gas prices may fall or rise, making fuel switching a more or less attract ive option.

• When transmission upgrades are needed to install a utility's new renewable energy, the timing may be outside of the utility's control due to requirements of the regional transmission organization (RTO), and may need to be modified. New technolo gy may emerge that was not envisioned when the plan was initially filed.

Comment 3: The proposed Clean Power Plan does not allow enough flexibility for states to amend their state plans once they are enacted, and the EPA should establish a process that wo uld allow states to revisit and revise their state plans to address unforeseen circumstances.

Response 3: See response to comment #1 in this section and sections VIII.E. 7 and VIII.E. 7 .b of the final rule preamble of the CPP

.
T he following are summaries of the specific public comments under this comment:

Commenter s stated that the proposed Clean Power Plan does not allow enough flexibility for states to amend their state plans once they are enacted. The commenter s requested that EPA establish a process that would allow states to revisit and revise their state plans to address unforeseen circumstances.

C ommenter s stated that the compliance period of the proposed Clean Power Plan spans 10 years, and will require state actions and planning both before and after this period in order to achieve and maintain compliance. As such, the commenter s noted that states will need the ability to amend their state plan in response to various technical, environmental, and economic changes within and beyond the utility power se ctor. The commenter s noted that States may find that investments in certain types of generation or emission controls prove more or less effective than originally estimated, and will need the flexibility to respond accordingly. The commenter s asserted that locking states into their original state plans for the duration of the compliance period may result in a Clean Power Plan that is more costly and less effective at reducing emissions.

The commenter s contended that this same state plan flexibility would als o be vital in addressing any unexpected power plant shutdowns resulting from natural or man

- made disasters, equipment failures or safety hazards beyond anyone's control, and other force majeure events. C ommenter s stated that, for example, flooding on the M issouri River in 2011 forced an extended shutdown of the Omaha Public Power District's Fort Calhoun Nuclear Power Plant Station and threatened290 other facilities in Nebraska, significantly altering the state's generation portfolio and carbon intensity. The c ommenter s stated that without the flexibility to respond to such occurrences, states may be forced into impossible situations if their original state plan depends on certain generation assets that suddenly become unavailable. The commenter s therefore reque sted that the EPA allow states to revisit and revise their state plans as appropriate. The commenter s concluded that by establishing a clear and timely process now, EPA can assure consistency in plan adjustments.

Comment 4: States should be allowed an opp ortunity to adjust their final 2030 reduction goals, the year that the goals are to be achieved, and/or the glide path based on materially changed circumstances , to account for either late discovery of errors in EPA assumptions or new information that beco mes available to the state after the close of comment period for the proposed CPP , and other factors including changes in population, industry, or in transmission or generating facilities

. Response 4: Modifications to interim and final CO2 emission goals a re discussed in section VIII.E. 7 .b of the preamble to the final rule

.

T he following are summaries of the specific public comments under this comment:

Commenter s recommended that states should be allowed an opportunity to adjust their final reduction goals, the year that the goals are to be achieved, and/or the glide path based on materially changed circumstances. C ommenter s stated that the Proposed Rule should be modified to expressly permit a state to seek an adjustment of its 2030 emission reduction goal at any time to account for either late discovery of errors in EPA assumptions or new information that becomes available to the state after the close of this comment period. C ommenter s stated that the Proposed Rule relies on a number of highly questionable assumptions including assumptions related to the price and availability of natural gas, reliability, economics and availability of renewable energy, long

- term performance of energy efficiency programs, functioning of wholesale electricity markets, and the time required to develop state compliance plans. C ommenter s stated that the Proposal also does not properly recognize or account for other relevant factors, such as shifts in population, growth in the manufacturing sector, impediments to the development of new transmission facilities, or the risk associated with relicensing existing nuclear and hydro generating units. C ommenter s stated that unanticipated events can and will occur that adversely affect a state's ability to meet its required reductions. C omme nter s stated that states should be afforded an opportunity at any time to submit to EPA an amendment to their state compliance plan that adjusts elements of that plan to equitably account for materially changed circumstances. C ommenter s stated that this sh ould include the ability to adjust the level of the final reduction goal, the year in which that reduction is to be achieved, and the glide path to reach that goal. The commenter s noted that states bear the burden to adequately support, document, or otherw ise justify any proposed changes to state plans. However, when that justification is adequately provided, the commenter s recommended that EPA approve the changes requested by the state.291 Comment 5: EPA should withdraw its "anti

- backsliding" prohibition imp osed on plan modifications because it is unnecessary and not required by the CAA as long the modified plan meets the state’s the final emission guideline as either the minimum rate goal or reduction goal

. This approach would be consistent with the process for developing state implementation plans for attaining national ambient air quality standards under section 110 of the CAA. Congress did not include ant

- backsliding provisions in section 111, but did in other sections.

Response 5: For a discussion on “ant i

- backsliding provisions, see section VIII.E. 9 .b.

– State plan modifications , in the preamble to the final rule . We proposed that revisions “should not result in reducing the required emission performance for affected EGUs specified in the original
approve d plan. In other words, no ‘backsliding’ on overall plan emission performance through a plan modification would be allowed.” We received adverse comments that this standard did not have a basis in section 111(d). According to commenters, since the standard for EPA approval of a section 111(d) plan is whether the plan is satisfactory in establishing and providing for implementation and enforcement of standards of performance that achieve the performance emission rates or goal, the same standard should apply to revisions. In other words, the standard for revisions should be whether the plan as revised is satisfactory. We believe that our proposal was unclear as to this point and we agree that the same standard for revisions should be the same as for submittals . We have finalized this position.

T he following are summaries of the specific public comments under this comment:

C ommenters opposed EPA's proposed "anti

- backsliding" provision as unnecessary and not required by the CAA . Rather, the commenters asserted th at states should have broad discretion to make any changes to their plans so long as they achieve the minimum applicable state emission rate goal

- the minimum federal requirement.

Commenter s stated that the EPA should withdraw its "anti

- backsliding" proh ibition imposed on plan modifications . The commenter s stated that the Proposed Rule places an unnecessary limitation on a state's authority to revise or modify its approved final section 111(d) plan for implementing its CO2 emission rate goal. The commente r s noted that for EPA to grant a modification request, the particular state must show that the revised set of measures would result in emission performance equal to or better than that of the original plan. In other words, the
commenter s stated that the EP A is proposing to prohibit states from "backsliding" after the initial approval of a state plan

- even if the revised state plan would still allow the state to meet the state's interim or final emission guideline. The commenter s stated that for any substan tive changes, or for substitution of new measures for old ones, the EPA would apparently require the state to demonstrate that the plan would continue to perform as well as or better than the original plan by submitting additional projections that model th e expected emission performance impacts of the revised plan.

According to the commenter s , allowing states broad discretion to make changes (that meet the minimum rate goal) is consistent with the process for developing state implementation plans for attain ing national ambient air quality standards under section 110 of the CAA. Section 111(d)292 requires that EPA "establish a procedure similar to that provided by section 110" for the development of state implementation plans.

The commenter s stated that further evidence that this proposed anti

- backsliding proposal is not legally authorized is the fact that Congress has included various anti

- backsliding provisions in other sections of the CAA, providing no such requirement in section 111, either expressly or impli ed. According to the commenter s , the fact that Congress specifically included anti

backsliding provisions in certain section of the Act, while failing to include such a provision anywhere in section 111 strongly suggests that Congress did not intend for st ate plans under section 111(d) to be subject to anti

- backsliding requirements. Moreover, the commenter s stated that the EPA cites no authority to support its proposal to require revised plans to require EGUs to meet the same emission performance levels the y would have had to meet under previously approved plans.

Finally, the commenter s stated that it makes no sense from a policy perspective to impose the proposed anti

- backsliding requirements on states. The commenter s noted that States and their affected el ectric power industry face significant uncertainties over the economic and reliability impacts of the Proposed Rule and the impacts that the Proposed Rule will have on electric generation and transmission. The commenter s stated that this uncertainty can be st be addressed and managed by according states maximum flexibility to adjust their state plans to account for major changes in the assumptions underlying state plans or the costs or impacts of those plans.

Similarly, commenter s noted that states should h ave broad flexibility in the development of programs that implement the EPA emission guidelines. Accordingly, the commenter s stated the EPA should not include the proposed "anti

- backsliding" restriction in the final rule. According to the commenter s , this limitation is not required by the CAA, and reduces states' flexibility by placing an unnecessary constraint on states' broad authority to implement the federal emissions guidelines.

The commenter s noted that while Congress included anti

- backsliding provisi ons in other sections of the CAA, section 111 does not contain an anti

- backsliding requirement. The commenter s stated that the absence of such a provision in section 111, while it is included in other sections, indicates that Congress specifically did not intend for state plans under section 111(d) to be subject to anti

- backsliding requirements. Further, the commenter s stated that the EPA provides no support for its inclusion of an anti

- backsliding requirement for revised state plans.

The commenter s stated that the EPA's inclusion of an anti

- backsliding requirement places an unnecessary constraint on states' broad authority to implement the federal emission guidelines. The commenter s stated that section 111(d) of the CAA gives states the authority to establi sh performance standards and the standards may be based on consideration of the remaining useful life of existing sources and other factors. In addition, the commenter s asserted that states and their affected units face significant uncertainties regarding the impacts of the Proposed Rule on the electricity system. According to the commenter s , providing states with flexibility to adjust their compliance plans to respond to these uncertainties as long as the amended plan still meets the state's target, will a llow states to respond to future constraints while minimizing cost and reliability impacts to electric customers.293 Comment 6: The anti

- backsliding provision could prevent two or more states that initially submitted separate state

- specific plans from submit ting a revised multi

- state plan, because such a plan could be politically or economically workable only if it would result in a reduction in the requirements for some EGUs. Similarly, the EPA's anti

- backsliding provision could prevent a state from changing its state plan from one that is based on a rate

- based approach to one that is based on a mass

- based approach (or vice versa). The EPA should at least clarify that the "no backsliding" provision in the proposal does not apply to states that enter into a mu lti

- state plan or modular agreement after submittal of an individual state plan, as long as the states meet the state plan requirements overall.

Response 6: For a discussion on “anti

- backsliding provisions, see section VIII.E. 9 .b.

– State plan modification s in the preamble to the final rule . We proposed that revisions “should not result in reducing the required emission performance for affected EGUs specified in the original approved plan. In other words, no ‘backsliding’ on overall plan emission performanc e through a plan modification would be allowed.” We received adverse comments that this standard did not have a basis in section 111(d). According to commenters, since the standard for EPA approval of a section 111(d) plan is whether the plan is satisfacto ry in establishing and providing for implementation and enforcement of standards of performance that achieve the performance emission rates or goal, the same standard should apply to revisions. In other words, the standard for revisions should be whether t he plan as revised is satisfactory. We believe that our proposal was unclear as to this point and we agree that the same standard for revisions should be the same as for submittals. We have finalized this position.

T he following are summaries of the specif ic public comments under this comment:

Commenter s stated that EPA's proposed anti

- backsliding requirement could interfere with states' abilities to form regional plans ; a preference for which EPA has reiterated on numerous occasions. In particular, the com menter s stated that the anti

- backsliding provision could prevent two or more states that initially submitted separate state

- specific plans from submitting a revised multi

- state plan, because such a plan could be politically or economically workable only if it would result in a reduction in the requirements for some EGUs. Similarly, the commenter s stated that EPA's anti

- backsliding provision could prevent a state from changing its state plan from one that is based on a rate

- based approach to one that is base d on a mass

- based approach (or vice versa). Thus, the commenter s stated that the anti

- backsliding proposal could significantly reduce states' flexibility to implement the federal guideline while maximizing the economic and regulatory efficiency of complian ce with the Proposed Rule. The commenter s stated that as long as revised state plans continue to meet EPA's basic requirements for approvability, it would be both unnecessary and unwise to prohibit state plans from reducing the required emission performanc e of their EGUs, if such a reduction is necessary to better implement the federal guideline.

Other commenters noted that EPA proposes that a state with an approved plan may revise its plan "provided that the revision does not result in reducing the requir ed emission performance for affected EGUs specified in the original approved plan. In other words, no 'backsliding' on294 overall plan emission performance through a plan modification would be allowed." The commenters stated that as EPA recognizes, a multi

- st ate collaboration would likely offer lower

cost

- effective approaches to achieving CO2 reduction goals amongst the states versus an individual state. Thus, the commenters recommended that EPA at least clarify that the "no backsliding" provision in the propo sal does not apply to states that enter into a multi

- state plan or modular agreement after submittal of an individual state plan as long as the states meet the state plan requirements overall. Given the different timelines that states may have in developin g and implementing their plans, the commenter s recommend ed that the final CPP include the ability for a state to join a multi

- state plan or agreement after the compliance period start date.

Comment 7: The Section 110 "backsliding" provisions do not apply to Section 111(d) and the EPA has no legal authority to apply these provisions, and they should be removed. The EPA must provide a mechanism to adjust goals and overall plan emission performance when warranted, when the projection methods, tools, and assum ptions used reflect the latest data and assumptions, such as assumptions for current and future economic conditions and technology cost and performance.

Response 7: For a discussion on “anti

- backsliding provisions, see section VIII.E. 9 .b.

– State plan modi fications in the preamble to the final rule . We proposed that revisions “should not result in reducing the required emission performance for affected EGUs specified in the original approved plan. In other words, no ‘backsliding’ on overall plan emission pe rformance through a plan modification would be allowed.” We received adverse comments that this standard did not have a basis in section 111(d). According to commenters, since the standard for EPA approval of a section 111(d) plan is whether the plan is sa tisfactory in establishing and providing for implementation and enforcement of standards of performance that achieve the performance emission rates or goal, the same standard should apply to revisions. In other words, the standard for revisions should be w hether the plan as revised is satisfactory. We believe that our proposal was unclear as to this point and we agree that the same standard for revisions should be the same as for submittals. We have finalized this position.

The EPA is allowing for adjustmen ts to state goals in certain circumstances which are discussed in section VIII.E. 7 .b of the final rule preamble

.

T he following are summaries of the specific public comments under this comment:

Commenter s stated that the EPA is proposing to provide a mechan ism for states to make adjustments to the enforceable measures in their plans but affords no ability to make necessary adjustments to the goals. The commenter s stated that the EPA is proposing that the state may revise its state plan provided that the revi sion does not result in reducing the required emission performance for affected EGUs specified in the original approved plan. The commenter s stated that "in other words, no ‘ backsliding ’ on overall plan emission performance through a plan modification woul d be allowed." The commenter s stated that the EPA is taking comment on whether, for such new projections of emission performance, the projection methods, tools, and assumptions used should match those used for the projection in the original demonstration o f plan performance, or should be updated to reflect the latest data and assumptions, such as295 assumptions for current and future economic conditions and technology cost and performance. The commenter s stated that under this type of proposal, the EPA must pr ovide a mechanism to adjust goals and overall plan emission performance when warranted . Furthermore, the
commenter s stated that flexibility should be provided when making changes to plans. The
commenter s stated that it should be left to the states to deter mine whether the original data and assumptions or updated data and assumptions are appropriate given the specifics of the change proposed by the state. The commenter s stated that the EPA should not be placing regulatory or policy restrictions on the abilit y for states, in working with the EPA, to determine the best method of analysis and use of data . The commenter s stated that the Section 110 "backsliding" provisions do not apply to Section 111(d) and the EPA has no legal authority to apply these provisions

.

Comment 8: EPA's proposed timing for submittal and updating 111(d) compliance plans is inconsistent with resource planning principles, where resource plans are updated on a routine basis to accommodate changing conditions. State plans would be required to achieve emission rate goals on a timeframe up to 12 years after being submitted to EPA. Rather than requiring plan modifications and corrective actions at an arbitrary fixed 10

- percent variation from the glide path, EPA should clearly allow states the a bility to determine the appropriate triggering events that necessitate plan modifications. EPA should also include mechanisms for states to modify their approved 111(d) compliance plans without the need to submit revised plans for approval if they still ac hieve the overall 2030 reduction goal.

Response 8: The commenters stated that the proposed timeline for state plan submittal is contrary to resource planning processes that are updated on a routine basis. In order to rectify this, the commenter s recommende d that EPA’s regulatory approach should reflect the “most basic” of all resource planning principles, which is to update the plan as conditions change. The EPA is finalizing that for new projections of emission performance, the projection methods, tools, a nd assumptions do not have to match those used for the projection in the original demonstration of plan performance; they can be updated to reflect the latest data and assumptions, such as assumptions for current and future economic conditions and technolo gy cost and performance. This is discussed in section VII I .E. 7 .a

– Modifications to an approved state plan , in the preamble to the final rule

. EPA disagrees with commenter s ’ statement that a 10 percent trigger for corrective measures is not appropriate and that states should decide define the triggering mechanism. We have decided to finalize the trigger at 10 percent exceedance because we view 10 percent as both low enough to ensure that states that need corrective measures implement them before they exceed their specified level of emission performance to a degree that might be irreversible, and high enough that corrective measures are not triggered by fluctuations in emissions that do not indicate that a state may not be able to achieve its projected goal. In response to comments concerning modifying plans without EPA approval, States may rely upon state only measures such as energy efficiency policies and programs as a matter of state law through the state measures approach. For a discussion of requirements regarding the state measures approach, please see section VIII of the CPP final rule preamble

.296 [NEED RESPONSE FOR LAST TWO PARAGRAPHS]

T he following are summaries of the specific public comments under this comment:

C ommenters stated that EPA should grant states the flexibility to easily update their plans based on changing economic and other resource related conditions

. Commenters stated that EPA's proposed timing for submittal and updating 111(d) compliance plans is also inconsistent with resource plann ing principles. The commenters noted that the proposed rule requires states to submit a 111(d) compliance plan to EPA in the 2016 to 2018 timeframe, and subject to EPA approval of these plans, states will be required to submit interim reports to EPA beginn ing in 2022 to demonstrate interim goals are being met before achieving full compliance by 2030. In effect, commenter s stated that this regulatory mechanism could require states to commit to future resource plans no later than 2018. The commenter s stated t hat these plans would be required to achieve emission rate goals over the 2020 to 2029 timeframe on a path that achieves compliance in 2030

- up to 12 years after state plans are submitted to EPA. Commenter s stated that this is contrary to resource plannin g processes where resource plans are updated on a routine basis to accommodate changing conditions and in accordance with regulatory requirements.

Commenter s stated that they regularly update its resource plans to reflect changes in the planning environme nt, which can include changes to load forecasts, cost and performance characteristics of existing resources, cost and performance characteristics of new resource technologies, permitting requirements for new generation and transmission infrastructure, proc urement requirements, commodity price forecasts, other market conditions, cost and timing of major transmission projects, and other regulatory obligations. To address this issue, the commenter s stated that EPA's proposed regulatory approach should reflect to a greater extent the most basic of all resource planning principles, which is to update the plan as conditions change.

Commenters noted that the 111(d) proposal also contemplates a process whereby states would be required to submit a modified compliance plan which includes corrective actions when there is a ten percent variation from the state compliance plan. The commenters stated that rather than requiring plan modifications and corrective actions at an arbitrary fixed ten percent variation from the gl ide path, EPA should clearly allow states the ability to determine the appropriate triggering events that necessitate plan modifications

. Accordingly, in its final rule, the commenters stated that EPA should include mechanisms for states to modify their ap proved 111(d) compliance plans, which, while still achieving the overall 2030 reduction goal, may be modified without the need to submit revised plans for approval. The commenters stated that EPA should consider such modified state plans as presumptively

a pproved so long as the overall goal will still be met.

Commenter s stated that allowing states to plan for compliance according to their own individual resource mix and energy planning constraints would preserve the principles of federalism that underlie th e Clean Air Act.297 Comment 9: Provisions that allow states to correct deficiencies in state plans should also include definitive deadlines and consequences for both EPA and states for not meeting those deadlines. The rule should be revised to specify that a state plan is approved by default if the EPA fails to either act on the state plan submittal or fails to notify the state of a deficiency in the state plan.

Response 9: The EPA does not agree with the commenters ’ assertion that definitive deadlines and co nsequences for the EPA and states need to be added in the final rule. Set timelines for action as well as consequences for not adhering to deadlines are already part of the 111(d) program, including this rule. Under CAA section 111(d )( 2), the Administrator has the authority to prescribe and enforce a federal plan if a state fails to submit a satisfactory plan. The EPA is also subject to litigation for failing to act on a state plan within statutory or regulatory deadlines. The EPA also does not agree with t he commenters ’ suggestion that a state plan should be approved by default if the EPA fails to act on the state plan submittal for notify the state of a deficiency in the state plan. Default approvals for state plans would be contrary to EPA’s rulemaking pr ocess and would deny outside parties from having the ability to comment on the rule and have meaningful involvement.

T he following are summaries of the specific public comments under this comment:

Commenter s agreed with the EPA's proposal to allow states time to correct deficiencies in state plans. The commenter s stated that such a provision would be consistent with the SIP development process and is particularly important given the aggressive schedule that the EPA is proposing. However, in the interest of providing clarity for the states and all interested parties, the commenter s recommended that such a provision include definitive deadlines as well as consequences for both the EPA and states. The commenter s noted that, as the EPA has pointed out, there ar e consequences to a state failing to submit plan by the required deadline (i.e., the EPA may issue a federal plan). Similarly, the commenter s stated that EPA should face consequences for not acting by its required deadline. The commenter s suggested that th e rule be revised to specify that a state plan is approved by default should the EPA fail to either act on the state plan submittal or notify the state of a deficiency in the state plan. Rather than excuse itself from its regulatory obligations, the commen ter s asserted that the EPA should hold itself to the same standard it imposes on states.

Comment 10: States are not required to request approval to submit a revised SIP and should not be required to request approval to submit revisions to a Section 111(d) plan. This should be clarified.

Response 10: See response to comment #1 of this section. The EPA is not requiring a state to request approval prior to submitting a state plan revision to the EPA ; however, a state plan revision must go through the EPA rule making process, including notice and comment, prior to becoming a federally enforceable part of the state plan.

T he following are summaries of the specific public comments under this comment:

Commenter s recommended that EPA clarify the proposed provisions requiring states to obtain approval from EPA prior to submitting revisions of their own plans , found at Section 60.5785298 (79 FR 34954). The commenter s noted that States are not required to request approval to submit a revised SIP and should not be required to request approval to submit revisions to a Section 111(d) plan. The commenter s stated that EPA proposes in multiple places that the Section 111(d) state plans be treated similarly to SIPs. The commenter s stated that SIPs may be revised at any time by a s tate, without having to require prior approval from EPA, and are subsequently submitted to EPA for review. The commenter s stated that since EPA proposes similar treatment to SIPs and to preserve the spirit of cooperative federalism found in the CAA, states should not have to receive approval from EPA to revise their Section 111(d) plans.

Comment 11: The EPA should outline a process for states to submit revised implementation plans for EPA approval so that states can continue to optimize their implementati on plans to account for technology and market changes that occur over time. State compliance should be determined by whether states have achieved the carbon emission targets outlined in their approved implementation plans, not whether states have achieved their carbon emission targets in the manner originally set out in their implementation plans.

Response 11: The EPA agrees that there should be a process to revise state plans. The final rule provides that new projections of emission performance, the proj ection methods, tools, and assumptions do not have to match those used for the projection in the original demonstration of plan performance; they can be updated to reflect the latest data and assumptions, such as assumptions for current and future economic conditions and technology cost and performance. The EPA is not finalizing any circumstances under which a state may or may not revise its state plan, with the exception that a state may not revise its state plan in a way that results in the affected EGU ’s not meeting the requisite CO 2 emission performance levels. See section VIII.E of the CPP final rule preamble.

T he following are summaries of the specific public comments under this comment:

Commenter s stated that EPA needs to outline a formal process for states to revise their state implementation plans once they have been approved by EPA . The commenter s stated that between 2017 and 2030, many things will change within the electricity sector. The commenter s stated that technologies for reducing a state 's carbon emission rate that are not currently cost

effective may, by 2030, become not only competitive with existing technologies but may become the least cost options for reducing carbon emissions. The commenter s stated that market developments may signi ficantly change the makeup of a state's electricity generating sector in unpredictable ways before 2030. The commenter s suggested that EPA outline a process for states to submit revised implementation plans for EPA approval so that states can continue to o ptimize their implementation plans to account for technology and market changes that occur over time. The commenter s also suggested that state compliance should be determined by whether states have achieved the carbon emission targets outlined in their app roved implementation plans, not whether states have achieved their carbon emission targets in the manner originally set out in their implementation plans.299 Comment 12: Implementation of the rule would be improved if EPA offered each state the option to ha ve a mid

- course correction to their state plans in order to adjust plans half way between the years 2016 and 2030. The EPA should allow the reset process used by RGGI as a means of possible midcourse corrections to ensure mass

- based targets remain comparab le to the
rate

- based alternative.

Response 12: The EPA agrees with the commenter s that mid

- course corrections (i.e. modifications) to state plans may be beneficial for states to include additional technology and programs that are not available at the time of original state plan approval, and we are allowing for modifications in this final rule. The process for states to modify their state plans is discussed in VIII.E. 7

– State plan modifications , in the preamble to the final rule

.
T he following are summarie s of the specific public comments under this comment:

Commenters suggested EPA allow for mid

- course corrections to state plans.

Commenter s stated that implementation of the rule would be improved if EPA offered each state the option to have a mid

- course c orrection to their state plans in order to adjust plans half way between the years 2016 and 2030 to allow for inclusion of additional technology and programs that may become available during the 2015

- 2023 timeframe. The commenter s stated that this would pr ovide State agencies the option to modify and optimize their program in this timeframe.

Commenter s stated that one lesson EPA and other states should learn from RGGI is that a periodic review and "reset" of the program may be desirable to adjust for unant icipated events. The commenter s stated that in its program review carried out in 2012 and 2013, for example, RGGI made several adjustments to its program, including a significant reduction in capped emissions levels. The commenter s stated that EPA should r ecognize and allow the currently established reset process used by RGGI as a means of possible midcourse corrections for the existing source performance standards to ensure mass

- based targets remain comparable to the
rate

- based alternative. The commenter s stated that moreover, as long as the new mass

- based targets agreed upon in the RGGI reset process remain comparable to the rate

- based targets assigned in the final 111(d) guideline, the reset should not require a new SIP. The commenter s anticipated that th e RGGI plan(s) would include this reset process.

Comment 13: States should have an opportunity to reassess and recalibrate their state plans over the multi

- year timeframe to implement their state plans. State plans developed under the CAA section 111(d) s hould not be subject to the same resource

- intensive process for changing State Implementation Plans, and in fact should allow for changes that reflect current information and data.

Response 13: The EPA agrees with the commenter s that states may want the ab ility to reassess and recalibrate their state plans after submitting their final state plan to EPA. The EPA is finalizing that for new projections of emission performance, the projection methods, tools, and assumptions do not have to match those used for t he projection in the original demonstration of plan performance; they can be updated to reflect the latest data and assumptions, such as300 assumptions for current and future economic conditions and technology cost and performance. This is discussed in sectio n VII I .E. 7 .a

– Modifications to an approved state plan , in the preamble to the final rule

.

T he following are summaries of the specific public comments under this comment:

Commenter s stated that it is important that states have an opportunity to reassess an d recalibrate their state plans over the multi

- year timeframe set forth in the proposal. The commenter s noted that the state plans envisioned by EPA's proposal represent uncharted territory for both EPA and the states. The commenter s stated that EPA admits that while the Integrated Planning Model is the model of choice to project carbon reductions, there are limitations in applying this model to project reductions more than 15 years into the future. The commenter s stated that many state air regulators have not traditionally had direct involvement in RES programs (which may include tradable allowances and allow for cost off

- ramps) and in DSM evaluation, measurement and verification. According to the commenter s , these responsibilities are outside the jurisdict ion of the CDPHE. The commenter s explained that state plans will hinge upon many variables and assumptions, with very real limitations. Further, the commenter s previously mentioned issues in meeting individual building blocks that illustrate the potential for creating unintended consequences between the building blocks, adding to the inherent uncertainty in projecting compliance with the state goal. As a result, the commenter s recommended that state plans developed under the CAA section 111(d) should not be subject to the same resource

- intensive process for changing more standard State Implementation Plans, and in fact should allow for changes that reflect current information and data.

Comment 14: The EPA's position on anti

- backsliding for the purposes of C AA section 111(d) appears to be more stringent than CAA section 110(l) regarding SIP revisions, and goes beyond just ensuring that the revised state plan still demonstrates compliance with the state goals, the actual enforceable component the states are re quired to meet.

Response 14: For a discussion on “anti

- backsliding provisions, see section VIII.E. 9 .b.

– State plan modifications , in the preamble to the final rule . We proposed that revisions “should not result in reducing the required emission performan ce for affected EGUs specified in the original approved plan. In other words, no ‘backsliding’ on overall plan emission performance through a plan modification would be allowed.” We received adverse comments that this standard did not have a basis in secti on 111(d). According to commenters, since the standard for EPA approval of a section 111(d) plan is whether the plan is satisfactory in establishing and providing for implementation and enforcement of standards of performance that achieve the performance

e mission rates or goal, the same standard should apply to revisions. In other words, the standard for revisions should be whether the plan as revised is satisfactory. We believe that our proposal was unclear as to this point and we agree that the same stand ard for revisions should be the same as for submittals. We have finalized this position.

T he following are summaries of the specific public comments under this comment:301 Commenter s stated that the EPA's discussion in the proposal preamble regarding modifica tion of an approved state plan and anti

- backsliding is unclear but appears to be more stringent than CAA section 110(l) regarding SIP revisions. Regarding modification of approved state plans, the

commenter s referred to the preamble statement that

"the st ate may revise its state plan provided that the revision does not result in reducing the required emission performance for affected EGUs specified in the original approved plan." The commenter s note that the EPA goes on to state that the state must "demons trate that the revised set of enforceable measures in the modified plan will result in the emission performance at affected EGUs that is equivalent or better than the level of the emission performance required by the original state plan."

The commenter s a sserted that EPA's anti

- backsliding discussion appears to go beyond just ensuring that the revised state plan still demonstrates compliance with the state goals, the actual enforceable component of this proposed rule that the states are required to meet. T he

commenter s stated that the EPA's position on anti

- backsliding for the purposes of CAA section 111(d) appears to be more stringent than CAA section 110(l) regarding SIP revisions. The

commenter s noted that while section 110(l) is not directly applicable to section 111(d), section 110(l) only states that the Administrator shall not approve a revision to a SIP if the revision would interfere with any applicable requirement concerning attainment and reasonable further progress or any other applicable require ment of the CAA. The commenter s asserted that any anti

- backsliding requirement regarding the proposed rule under section 111(d) should be based solely on whether the revised plan will interfere with meeting the state goals.

Comment 15: Under the EPA's pro posed “anti

- backsliding” provisions, the state would not be able to modify its plan to make it less stringent that its initial approved plan, and potentially less costly, even if the modified plan would still meet or exceed the state's goal. States must ha ve the flexibility to modify their approved plans, including the required emission performance for affected EGUs, in response to changing conditions, and have the performance of the modified plan judged solely against the state's goal and not a previously approved state plan.

Response 15: For a discussion on “anti

- backsliding provisions, see section VIII.E. 9 .b. of the final rule preamble

– State plan modifications. We proposed that revisions “should not result in reducing the required emission performance f or affected EGUs specified in the original approved plan. In other words, no ‘backsliding’ on overall plan emission performance through a plan modification would be allowed.” We received adverse comments that this standard did not have a basis in section 1 11(d). According to commenters, since the standard for EPA approval of a section 111(d) plan is whether the plan is satisfactory in establishing and providing for implementation and enforcement of standards of performance that achieve the performance emiss ion rates or goal, the same standard should apply to revisions. In other words, the standard for revisions should be whether the plan as revised is satisfactory. We believe that our proposal was unclear as to this point and we agree that the same standard for revisions should be the same as for submittals. We have finalized this position.302 T he following are summaries of the specific public comments under this comment:

Commenter s stated that the EPA's proposal for modifying a state plans is inappropriate and must be revised; the commenter s also stated that the modified plan should only be judged against the state's goal.

The commenter s stated that the EPA proposes that a state may revise an approved plan provided the revision does not result in reducing the r equired emission performance for affected EGUs specified in that state's original approved plan. The commenter s stated that for the EPA to grant a modification request, the state must show that the revised set of measures would result in emission performan ce equal to or better than that of the original approved plan. In other words, the commenter s stated that the EPA is proposing to prohibit states from "backsliding" after the initial approval of a state plan

- even if the revised state plan would still mee t the state's interim or final goals. The commenter s stated that such a provision is not required by the CAA and the EPA cites no authority to support it. The commenter s noted that the only test that should be applied to a state plan modification is whethe r on the whole it meets or exceeds a state's goal; which is the minimum federal requirement. The commenter s noted that the provisions in a previously approved state plan that might be more stringent than a proposed plan modification must not disqualify the modification if the modified plan as a whole would meet or exceed the state's goals.

The commenter s stated that the number of highly uncertain variables that will need to be considered by the states as they develop plans to meet the requirements of the P roposed Guidelines years into the future is significant, and it is highly unlikely that a state would be able to get a plan "right" the first time. The commenter s noted that regulated utilities are required to prepare and submit IRPs as frequently as every year, and development of a state compliance plan would be more challenging than developing an IRP. The commenter s stated that it would be unreasonable to expect that a state would be able to develop a compliance plan that looks out many years and that pla n would not need to be revised periodically to reflect changing conditions. The commenter s stated that one could envision a situation where after several years of implementation, a state plan is shown to result in emissions that are far below where they we re needed to be due to the fact that assumptions used in the development of the initial plan proved to be inaccurate or simply have changed with time, and the high level of plan performance is expected to continue into the future. Under such a scenario, th e commenter s stated that it would be reasonable for the state to want to modify its plan to bring it more in line with the state's goals and in the process lower the cost of compliance.

The commenter s stated that under the EPA's proposal, however, the stat e would not be able to modify its plan to make it less stringent that its initial approved plan, and potentially less costly, even if the modified plan would still meet or exceed the state's goal

. The commenter s stated that this would inappropriately force higher compliance costs on the state than necessary. The
commenter s noted that meeting the state goals should be the only measure of plan acceptability. The commenter s noted that states must therefore have the flexibility to modify their approved plans, i ncluding the required emission performance for affected EGUs, in response to changing conditions, and have the performance of the modified plan judged solely against the state's goal and not a previously approved state plan

. The commenter s stated that this would not be backsliding because the state plan would still meet or exceed the goals set for the state. As303 proposed, the commenter s stated that EPA's limit on a state's ability to make such changes violates the cooperative federalism on the CAA and specif ically violates Virginia v. EPA.

Comment 16: The EPA's proposed “anti

- backsliding” provisions are not required by section 111 and the EPA has not authority for this provision. States must have the flexibility to modify their approved plans, including the required emission performance for affected EGUs, considering the uncertainty in the underlying assumptions and in response to changing conditions. The performance of the modified plan should be judged solely against the state's goal.

Response 16: For a dis cussion on “anti

- backsliding provisions, see section VIII.E. 9 .b.

– State plan modifications , in the preamble to the final rule . We proposed that revisions “should not result in reducing the required emission performance for affected EGUs specified in the o riginal approved plan. In other words, no ‘backsliding’ on overall plan emission performance through a plan modification would be allowed.” We received adverse comments that this standard did not have a basis in section 111(d). According to commenters, sin ce the standard for EPA approval of a section 111(d) plan is whether the plan is satisfactory in establishing and providing for implementation and enforcement of standards of performance that achieve the performance emission rates or goal, the same standar d should apply to revisions. In other words, the standard for revisions should be whether the plan as revised is satisfactory. We believe that our proposal was unclear as to this point and we agree that the same standard for revisions should be the same

as for submittals. We have finalized this position.

T he following are summaries of the specific public comments under this comment:

Commenter s stated that EPA's proposal to prohibit back

- sliding in state plans is not required by section 111 and would unneces sarily constrain states' broad authority to implement federal emission guidelines. The commenter s noted that under EPA's proposal, states would be prohibited from revising state plans in the future if the revision would "result in reducing the required emi ssion performance for affected EGUs." The commenter s stated that this anti

- "backsliding" proposal is neither required by section 111 nor is it necessary or appropriate in the context of EPA's proposed structure for regulating existing EGUs under section 11 1(d). According to the commenter s , although Congress included various anti

- backsliding provisions in sections of the CAA, section 111 contains no such requirement, either express or implied. The
commenter s stated that the fact that Congress specifically in cluded anti

- backsliding provisions in certain sections of the Act, while failing to include such a provision anywhere in section 111 strongly implies that Congress did not intend for state plans under section 111(d) to be subject to anti

- backsliding requir ements. Moreover, the commenter s noted that the EPA cites no authority to support its proposal to require revised plans to require EGUs to meet the same emission performance levels they would have had to meet under previously approved plans.

The commenter s stated that the EPA's proposal would also place an unnecessary constraint on states' broad authority to implement the federal emission guidelines. The commenter s stated that section 111(d) clearly gives states authority to establish performance standards and to craft those standards based on consideration of the remaining useful life of existing sources and other304 factors. Moreover, the commenter s noted that states and their EGUs face significant uncertainties over the economic and reliability impacts of t he Proposed Rule and the impacts that the Proposed Rule will have on electric generation and transmission. The commenter s noted that this uncertainty can best be addressed and managed by according states maximum flexibility to adjust their state plans to a ccount for major changes in the assumptions underlying state plans or the costs or impacts of those plans.

Comment 17: Florida's ratepayers could be adversely affected if, once the state incorporates the final goals into an EPA approved state plan, the re sulting targets, and their corresponding costs, became inflexible.

Response 17: The EPA agrees that states may want the ability to reassess and recalibrate their state plans after submitting their final state plan to EPA. The EPA is finalizing that for new projections of emission performance, the projection methods, tools, and assumptions do not have to match those used for the projection in the original demonstration of plan performance; they can be updated to reflect the latest data and assumptions, such as assumptions for current and future economic conditions and technology cost and performance. This is discussed in section VII I .E. 7 .a

– Modifications to an approved state plan, in the preamble to the final rule.

T he following are summaries of the specific public comments under this comment:

Commenter s stated that although the Proposed GHG Rule is clear in that the EPA is not mandating the method an individual state must use to reach the proposed CO2 goals, it is clear that the proposed State target of a 38 % reduction in CO2 emissions (regardless of the method or combination of methods chosen by Florida) will impact cost recovery/rate impact, thereby impacting Florida's citizens. The commenter s expressed particular concern for Florida's ratepayers over comme nts by EPA officials during press conferences indicating that, once a State incorporates the Final Goals into an EPA approved State Plan, the resulting targets, and their corresponding costs, will be inflexible.

Comment 18: Because some states are uncerta in about the amount of energy efficiency and renewable energy that can be deployed for compliance, the EPA should incorporate an update mechanism, allowing states to revise/update their Plans, based on performance, as they go forward.

Response 18: The EPA agrees with the commenter s that allowing states to revise/update their state plans may be beneficial for states to include additional technology and programs that are not available at the time of original state plan approval, and we are allowing for modifi cations in this final rule. The process for states to modify their state plans is discussed in VIII.E. 7

– State plan modifications , in the final rule preamble

.
T he following are summaries of the specific public comments under this comment:305 Commenter s noted that some states are uncertain about the amount of energy efficiency and renewable energy that can be deployed for compliance, which creates reluctance for some states to rely on energy efficiency and renewable energy strategies in their compliance Plans. To overcome this barrier, the commenter s recommended that EPA incorporate an update mechanism, allowing states to revise/update their Plans, based on performance, as they go forward . The commenter s stated that this will give states more flexibility and co mfort to think outside the box as they develop their Plans, knowing that if a given strategy does not deliver, their Plan can be adjusted to deliver the required emission reductions.

Comment 19: States should not be limited to modifying plans only to add ress the failure of a plan element to perform as projected. States need the flexibility to modify compliance plans and emission glide paths to address uncertainty and changing technology and the needs of the interconnected power sector. States should be ab le to propose modifications as long as the modified plan is designed to achieve the 2030 goals.

Response 19: The EPA agrees with the commenter s that modifications to state plans may be beneficial for states to update or alter existing enforceable measures or add new enforceable measures, and we are allowing for modifications in this final rule and not limiting revisions to plan elements that require revision with respect to reaching the emission performance goal. The EPA is finalizing that new projections o f emission performance, the projection methods, tools, and assumptions do not have to match those used for the projection in the original demonstration of plan performance; they can be updated to reflect the latest data and assumptions, such as assumptions for current and future economic conditions and technology cost and performance. As discussed in more detail in section VIII.G.2 of the CPP final rule preamble , the final rule has several measures to ensure that it does not interfere with the industry’s ab ility to maintain reliability. One such measure is that if a state cannot address a reliability issue in accordance with an approved state plan , the state can submit a request to the EPA to modify the state plan. See section VIII.G.2 for a more detailed di scussion of this issue. The EPA is not finalizing any circumstances under which a state may or may not revise its state plan, with the exception that a state may not revise its state plan in a way that results in the affected EGU’s not meeting the requisit e CO 2 emission performance levels.

The process for states to modify their state plans is discussed in VIII.E. 7

– State plan modifications.

T he following are summaries of the specific public comments under this comment:

Commenter s expressed concern that the proposed guidelines potentially limit states' flexibility to propose modifications to approved plans to update or alter existing enforceable measures or add new enforceable measures. See 79 FR 34917.

The commenter s noted that the ability to modify state plans is an important state flexibility as it allows states to address changing circumstances over the long life of compliance. The
commenter s stated that it is unlikely that plans developed in 2016 would reflect the emission reduction options available in 2025, nor could they. The commented noted that plans developed306 in 2016 also may not be able to appropriately address the requirements of the interconnected power system in the future. The commenter s noted that implementation of the Building Blocks simulta neously will require fundamental changes in how the power system is operated and planned

- many of these changes cannot be anticipated at the time state plans are submitted and before implementation has begun. The commenter s stated that allowing states to revisit plans to adjust glide paths or enforceable reductions actions and measures is both reasonable and necessary to ensure the continued reliable provision of electricity to customers and to reflect unanticipated circumstances. The commenter s stated tha t the EPA's proposed approach to state plans appropriately requires that revised state plans continue to demonstrate that the 2030 goals will be met to prevent backsliding. See I d.

However, the commenter s noted that the proposed regulations potentially li mit states' flexibility to propose amendments to their compliance plans and are inconsistent with the preamble's clear statement that states can seek EPA approval for modified plans. Specifically, the commenter s stated that the proposed regulations could b e read to limit states' ability to propose modifications to plans by requiring that modification be limited to plan elements that "require revision with respect to reaching the emission performance goal." See proposed 40 CFR 60.5785, 79 FR 34954.

The comme nter s asserted that states should not be limited to modifying plans only to address the failure of a plan element to perform as projected. The commenter s explained that states need the flexibility to modify compliance plans and emission glide paths to addr ess changing technology and the needs of the interconnected power sector. The commenter s reiterated that as long as states can continue to demonstrate that plans are designed to achieve the 2030 goals, states should be able to propose modifications and the EPA should clarify the proposed regulation accordingly.

Comment 20: States that wish to modify their plans must do so in a manner that provides for public notice and comment.

Response 20: The EPA agrees with the commenter s that public notice and comment should be required for modifications to state plans. Existing regulations in 40 CFR 60, subpart B (40 CFR 60.23 and 60.28) provide for public notice and comment, including a public hearing, for state plans and state plan modifications.

T he following are s ummaries of the specific public comments under this comment:

Commenter s asserted that states that wish to modify their plans must do so in a manner that provides for public notice and comment.

Comment 21: States should be allowed to modify the energy effi ciency policies and programs contained in state plans during the implementation phase, without seeking or obtaining approval from the EPA. Because some state energy efficiency policies such as energy efficiency resource standards, appliance efficiency stan dards, building energy codes or financing initiatives require307 legislative approval in most states, the EPA should allow states to include such policies in their plans with the understanding that the policy will go forward only if legislative approval is ob tained, and a state will modify its plan with other measures to meet the CO2 emissions rate targets if this approval is not obtained.

Response 21: States may rely upon energy efficiency policies and programs as a matter of state law through the state measu res approach. For a discussion of requirements regarding the state measures approach, please see section VIII of the final rule preamble.

T he following are summaries of the specific public comments under this comment:

Commenter s explained that states sh ould be allowed to modify the energy efficiency policies and programs contained in state plans during the implementation phase, without seeking or obtaining approval from the EPA. The commenter s stated that this helps to ensure that new technologies can be incorporated into energy efficiency programs as they become available, results from EM&V work can be acted upon, and otherwise supports best energy efficiency practices as they evolve over time. The commenter s stated that this flexibility would also allow states to make adjustments in order to make up for any emissions reduction shortfall if energy efficiency policies and programs are not as effective as expected, and allows for other adjustments if energy efficiency policies and programs turn out to be mo re effective than expected in the initial state plans.

According to the commenter s , a related issue is the fact that some state energy efficiency policies such as energy efficiency resource standards, appliance efficiency standards, building energy codes or financing initiatives require legislative approval in most states. The commenter s suggested that the EPA should allow states to include such policies in their Section 111(d) implementation plans with the understanding that the policy will go forward onl y if legislative approval is obtained, and that a state will modify its plan and implement other measures in order meet the CO2 emissions rate targets if this approval is not obtained. As long as a state is meeting its targets, the commenter s stated that t he EPA should make it clear it will not micro

- manage the details as to how it is being achieved.

Comment 22: The EPA should allow and define mechanisms for states to modify state plans at any time subject to EPA approval. The EPA should develop clear guid elines and procedures for modification of state plans beyond what is described in 40 CFR part 60 subpart B.

The rule should include an option for a state in a multi

- state plan to change its compliance approach in later years to a single state plan.

The pro cedures in 40 CFR 60.5785 should be revised to clarify whether the Administrator must give a state permission before the state can make revisions to its plan, as it is in 40 CFR 60.27 and 60.28. If EPA does not choose to explicitly allow a state to submit a completely revised plan, the final rule may not need to include 40 CFR 60.5785 and instead could rely on the procedures in 40 CFR 60.27, 60.28, and 60.29 for revisions to a state plan.308 Response 22 : The EPA agrees with the commenters ’ suggestion that stat es should be allowed to modify state plans at any time subject to EPA approval. With respect to the commenter s assertion that modifications can only be to “strengthen” the state plan, in section VIII.E. 9 .b.

– State plan modifications, in the preamble to th e final rule, the EPA clarified our discussion on “anti

- backsliding” provisions that were in the proposal. We proposed that revisions “should not result in reducing the required emission performance for affected EGUs specified in the original approved plan . In other words, no ‘backsliding’ on overall plan emission performance through a plan modification would be allowed.” We received adverse comments that this standard did not have a basis in section 111(d). According to commenters, since the standard for E PA approval of a section 111(d) plan is whether the plan is satisfactory in establishing and providing for implementation and enforcement of standards of performance that achieve the performance emission rates or goal, the same standard should apply to rev isions. In other words, the standard for revisions should be whether the plan as revised is satisfactory. We believe that our proposal was unclear as to this point and we agree that the same standard for revisions should be the same as for submittals. We h ave finalized this position.

The commenter s also suggested that a state should have the ability to switch compliance approaches from a multi

- state to a single state plan. The EPA is not prohibiting a state from changing compliance approaches from the one c ontained in the initial plan in this final rule, however, the state must still make a demonstration that it is meeting the interim and final state goals as well as submit all necessary components of a state plan revision.

The commenter s also requested clar ification on the language contained in the proposal at 40 CFR 60.5785, which the commenter s interpreted to be ambiguous. The EPA is clarifying that only the Administrator or her designee may approve a state plan revision. A state does not need to receive
p ermission from the Administrator in order to submit a state plan revision to EPA.

T he following are summaries of the specific public comments under this comment:

Commenter s suggested that EPA a llow and define mechanisms for states to modify state plans at any time subject to EPA approval. The commenter s suggested that E PA develop clear guidelines and procedures for modification of state plans beyond what is described in 40 CFR part 60 subpart B. The commenter s stated that when undertaking modifications to s tate plans, states should be required to use the latest data, methods and assumptions, but not be held to the criterion in 60.26 that the revision must be to strengthen the plan. The commenter s stated that the revision may simply be to better reflect a cha nge in state laws and the power supply system or development of a multi

- state plan that cannot be envisioned at the time the plan is originally submitted.

The commenter s also recommended providing the option for a state in a multi

- state plan to change its compliance approach in later years to a single state plan. The commenter s suggested that EPA consider the appropriate timeline under which states opting to join multi

- state plans should evaluate the efficacy of implementation, and when states or groups of states should adopt changes to the multi

- state implementation approach in the event that evaluation indicates insufficient progress toward interim or final targets. The commenter s stated that this opportunity is important in case several states want to pu rsue a multi

- state plan but are unable to finalize one in the very limited time that EPA is allowing states to come up with such a plan. The309 commenter s stated that similarly for a state that finds participation in a multi

- state plan is not beneficial or th e state's legislature chooses to alter state law to prevent participation in a multistate plan, the commenter s stated that the opportunity is important to allow a state to have a fall

- back position.

Commenter s noted that 40 CFR 60.5785 outlines the procedu re for making revisions to approved state plans. The commenter s stated that the first sentence of this section contains text that is unclear whether the Administrator must give a state permission before the state can make revisions to its plan or, as in 40 CFR 60.27, states that only the Administrator can approve a state's revision to its plan. The commenter s suggested the text be explicit such as it is in 60.27 and 60.28. The commenter s also suggested that if EPA does not choose to explicitly allow a state to submit a completely revised plan, the final rule may not need to include 60.5785 and instead rely on the procedures in 60.27, 60.28, and 60.29 for revisions to a state plan.

Comment 23: The f inal r ule should incorporate the ability of the state or ult imately the Administrator, after notice and comment, to suspend the implementation of a particular aspect of an accepted State Plan if necessary to address any adverse unforeseen reliability impacts that may arise prior to or during the compliance period. These requirements should be clearly identified as limited options that should be exercised pursuant to a State Plan outside of the enforcement context so as to avoid the possibility of citizen lawsuits or findings of non

compliance, if they are followed a nd the relief sought is approved by the Administrator.

Response 23: The EPA agrees with the commenter s and in this final rule we are providing a reliability safety mechanism that provides a path for a state to come to the EPA during an immediate unforeseen , emergency situation that threatens reliability to inform the EPA that an affected EGU or EGUs may need to temporarily comply with modified emission standards to respond to this kind of reliability concern. The reliability safety valve is discussed in sec tion VIII. G .2.e in the preamble to the final rule

.

T he following are summaries of the specific public comments under this comment:

Commenter s discussed implementation of the RSV through the compliance process. The
commenter s stated that the Final Rule sho uld incorporate the ability of the state or ultimately the Administrator, after notice and comment, to suspend the implementation of a particular aspect of an accepted State Plan if necessary to address any adverse unforeseen reliability impacts that
may a rise prior to or during the compliance period. The commenter s stated that such action should, of course, not be taken lightly and should be done in close consultation with reliability authorities and neighboring states in the region. Moreover, the commente r s stated that such action should be undertaken outside of the context of forbearance of use of enforcement authority but instead should be an option written into the Final Rule and individual state plans in the first instance. In this way, the commenter s stated that EGUs or any other entities identified in State Plans with compliance obligations can avoid the "Hobson's Choice" of facing penalties for reliability violations versus penalties for non

- compliance with Section 111(d) of the Clean Air Act.310 The c ommenter s stated that just as grid operations are dynamic and can change as a result of externalities, it is impossible to make a one

- time static determination that reliability can be maintained over the life of a submitted State Plan. The commenter s state d that, accordingly, the RSV process should also be applied during the compliance stages to identify potential reliability issues and, as necessary, to enable entities to petition for a modification to a State Plan to address unforeseen reliability impacts within that state or a neighboring state. The commenter s stated that petitioning entities should be able to seek modification to, or suspension of, the State Plan through a clearly defined and efficient process set forth in the Final Rule

.

The commenter s stated that the length of time during which a suspension or modification is authorized should be driven by the time needed to implement cost effective, timely and efficient "work

- a

- rounds" that address the identified reliability problem. The commenter s sta ted that such solutions could include maintaining a unit otherwise slated for retirement, construction of a new transmission line or the development of targeted and localized demand response and energy efficiency programs. The commenter s stated that it is important that the scope and burden of proof associated with such a petition be clearly identified in the Final Rule so these instances are limited to those situations where a potential reliability violation has been clearly identified and verified, and wo uld include a showing that there are no compliance alternatives (or other alternatives within the ambit of the State Plan) that are sufficient to address the non

- compliance within the remaining time period for compliance. The commenter s stated that verific ation of the reliability challenge and the time for alternative solutions to be implemented can be provided by independent entities, such as the region's RTO/ISO, with further review and comment by the state Public Utility Commissions, NERC, and FERC if so desired.

The commenter s stated that these requirements should be embodied in the Final Rule and clearly identified as limited options which should be exercised pursuant to a State Plan outside of the enforcement context. According to the commenter s , this would avoid the specter of citizen lawsuits or findings of non

- compliance as conditions precedent to the ability of a state or the Administrator to grant the requested relief.

Commenter s stated that although the reliability safety valve (RSV) adopted in th e MATS rule was a successful model of RTO/EPA coordination and cooperation, implementation of the RSV in that instance needed to be accomplished through an awkward process of an EPA "Enforcement Memorandum" outside of the rule itself which suggested enforc ement forbearance in defined circumstances. Moreover, the commenter s noted the MATS RSV process did not remove the specter of citizen lawsuits for extensions beyond April 16, 2016. Rather, the
commenter s stated that it required entities which could not mee t the MATS deadlines of April 16, 2016 to first receive findings of non

- compliance through an EPA Administrative Order which could be used against them in related civil litigation.

The commenter s stated that Section 111(d) provides a great deal more flexi bility than was available to EPA under the MATS rule. Moreover, the commenter s stated that section 111(d) compliance plans will require a greater deal of regional coordination as a reliability compliance issue may affect a neighboring state requiring that state, rather than the original submitting state, to seek a modification. For these reasons, the commenter s stated the traditional "forbearance from enforcement" model utilized in MATS is a poor fit for adjustments to State Plans needed to address demonstr ated reliability challenges arising during the compliance period.311 Accordingly, the commenter s requested that the availability of a limited RSV for demonstrated reliability problems which arise during the compliance period be written into the Final Rule its elf as a permissible means that, if followed and approved by the Administrator, would not trigger a violation of the Rule itself. The commenter s , along with the ISO/RTO Council, proposed specific language in the Attachments included in their comment to add ress this issue.

Comment 24: The "no backsliding" provision in the proposed rule raises concerns because the term "backsliding" is not defined and, for a rule as expansive as the Section 111(d) rule, where one state's actions can have a significant impact on another state, inclusion of this provision may generate litigation and create an inflexible limitation on the Administrator's ability to address legitimate reliability needs through revised state plans as part of the reliability safety valve (RSV)

.

Res ponse 24: For a discussion on “anti

- backsliding ” provisions, see section VIII.E. 9 .b.

– State plan modifications , in the preamble to the final rule . We proposed that revisions “should not result in reducing the required emission performance for affected EGU s specified in the original approved plan. In other words, no ‘backsliding’ on overall plan emission performance through a plan modification would be allowed.” We received adverse comments that this standard did not have a basis in section 111(d). Accordin g to commenters, since the standard for EPA approval of a section 111(d) plan is whether the plan is satisfactory in establishing and providing for implementation and enforcement of standards of performance that achieve the performance emission rates or go al, the same standard should apply to revisions. In other words, the standard for revisions should be whether the plan as revised is satisfactory. We believe that our proposal was unclear as to this point and we agree that the same standard for revisions s hould be the same as for submittals. We have finalized this position.

T he following are summaries of the specific public comments under this comment:

Commenter s stated that the RSV they discuss elsewhere contemplates modifications to a state plan during th e compliance period and possible submission of amended plans to address demonstrated reliability challenges that are identified and verified. However, the commenter s expressed concern about the "no backsliding" provision in the proposed rule. The commenter s stated the Proposed Rule does not define the term "backsliding." The commenter s stated that although this term is commonly used in EPA parlance, for a rule as expansive as the Section 111(d) rule, where one state's actions can have a significant impact o n another state, inclusion of this provision may simply prove grist for litigation and an inflexible limitation on the Administrator's desire to address legitimate reliability needs. For example, the commenter s stated that RTOs have had the authority under their Tariffs to compensate generators for operating beyond their otherwise desired deactivation dates to address temporary needs to provide generation support in load pockets while various transmission fixes or other generation additions were being const ructed. The commenter s stated that technically, retaining generators otherwise slated for retirement through "Reliability Must Run" contracts, although limited and justified only for local reliability needs, could well be deemed "backsliding" and thus in v iolation of the Proposed Rule. The commenter s noted that often RTOs and federal and state regulators need to make quick decisions on whether or not to allow a generator to continue in this manner. The312 commenter s stated it would be unwise for EPA to set up an enforcement "trap" (or the specter of citizen lawsuits) around such agreements by including in the Final Rule an absolute prohibition on "backsliding" governing any revised State Plan provision. The commenter s stated that what one could pejoratively des cribe as "backsliding" another could quite clearly justify as needed to ensure system reliability while alternative measures are being put into place. The commenter s noted that central to the RSV is the ability to modify State Plans when necessary to adapt to demonstrated and verified reliability issues that arise during the compliance period. Commenter s stated that a "no backsliding" provision, although an important goal that should be addressed by RTOs and others seeking such agreements, should not become its own legally enforceable sword to thwart attempts to make needed modifications to address unforeseen reliability issues that cannot be mitigated during the compliance period. As result, the commenter s urged that EPA eliminate the rigidity of this langu age in the Proposed Rule and, at most, require that it be one matter to be considered in the Administrator's review of any modifications to a State Plan filed to address unanticipated reliability issues.

Comment 25: The EPA must give States the opportunit y to adjust their SIPs dynamically in response to changes in the electric grid that at the time of original SIP development were not foreseeable. This ongoing assessment and flexibility is essential because the proposed rule has an unprecedented scope and degree of complexity, and it requires a wide range of entities to take action over a long period of time.

Response 25: The EPA agrees with the commenter s that modifications to state plans may be beneficial for states to adjust their state plans in response to changes in the electric grid that at the time of original state plan development are not foreseeable. In order to account for changes in the electrical grid that were not foreseeable at the time of original state plan development, the EPA is finalizing that for new projections of emission performance, the projection methods, tools, and assumptions do not have to match those used for the projection in the original demonstration of plan performance. The process for states to modify their state plans is di scussed in VIII.E. 7

– State plan modifications , in the preamble to the final rule

. In this final rule we are also providing a reliability safety mechanism that provides a path for a state to come to the EPA during an immediate unforeseen, emergency situati on that threatens reliability to inform the EPA that an affected EGU or EGUs may need to temporarily comply with modified emission standards to respond to this kind of reliability concern. The reliability valve is discussed in section VIII. G .2 of the final rule preamble

.

T he following are summaries of the specific public comments under this comment:

Commenter s stated that EPA must adopt a dynamic reliability safety valve that provides the States the flexibility they need to ensure reliability. The commente r s stated that EPA must also give States the opportunity to adjust their SIPs dynamically in response to changes in the electric grid that at the time of original SIP development are not foreseeable. The commenter s stated that the IRC recognized this in pr oposing that "the final rule should allow for the use of a "rolling" RSV process to assess system reliability on a prospective basis at multiple states both prior to the SIP being finalized and approved and at various steps during its implementation, as ne cessary.313 The commenter s stated that this kind of ongoing assessment and flexibility is essential because the proposed rule has an unprecedented scope and degree of complexity. The commenter s stated that it requires a wide range of entities to take action o ver a long period of time, including but not limited to FERC, the Nuclear Regulatory Commission, federal resource agencies responsible for permitting new electric and gas infrastructure, state legislatures, state regulators, state

- regulated utilities and a wide range of non

- state

- regulated entities including transmission owners and operators, regional transmission entities, gas producers, owners of gas storage, gas pipelines, independent power producers, providers of energy efficiency services, and financia l entities.

The commenter s stated that the States' and EGUs' ability to comply with the Proposed Rule, and to maintain compliance with it, depends on an unusually broad range of conditions that are completely beyond the States' and EGUs' ability to contro l. The commenter s stated that the resources on the grid and their ability to serve consumers' energy needs change dynamically in response to intentional and unintentional changes in grid architecture, changes in market design and market conditions for the different participants, changes in technology, fires, floods, ice storms, and even economic growth and contractions. The commenter s stated that by defining the "best system of emissions reductions" to encompass the whole electric system, the EPA has made c ompliance dependent on all of those changing factors. The commenter s listed eleven examples.

The commenter s noted that the States ought to be considering the availability, dispatchability, and emissions impacts of different emissions control approaches in developing their SIPs. The
commenter s stated that however these factors are interdependent across the electric system and change dynamically. The commenter s stated that if EPA does not permit States to amend their SIPs and their compliance goals dynamicall y as the system changes

-- and thus as the best system of emissions reductions available to the States changes

-- EPA will force the States to choose between compliance and reliability, economic growth, and technological innovation. The
commenter s noted th at States and EGUs could face EPA compliance penalties and citizen suits due to factors entirely beyond their control. EPA cannot permit that result.

Comment 26: The rule should have a periodic process to consider changed circumstances or unanticipated ev ents that require changes to the state implementation plans and schedule.

Response 26: The EPA does not agree with the commenter s that a periodic process to consider changed circumstances or unanticipated events should be required in the final rule. States

, industry, and RTOs are in the best position to assess future needs of the electrical grid. In the event that changed circumstances or unanticipated events do require a change to the state plan, the state may submit a state plan modification to the EPA at any time. Modifications to state plans are discussed in section VIII.E. 7 of the preamble to the final rule

.

T he following are summaries of the specific public comments under this comment:

Commenter s stated that there should be a periodic process to consid er changed circumstances or unanticipated events that require changes to the state implementation plans and schedule. The
commenter s stated that the periodic review process should include participation by FERC and state commissions, for consideration of th e implementation schedule and whether rates continue314 to be just and reasonable. The commenter s stated that impacts of plant closings and the schedule for retirements should continue to be studied at the RTO level, with the study results and time frames inc orporated in the periodic review process.

Comment 27: States must be able to amend or modify plans, including interim milestones and the mix of emission reduction strategies, to account for changes in technology or unforeseen delays within the state in a dopting some of the planned control measures or associated infrastructure (e.g., new transmission lines). This flexibility is needed to maintain a robust transmission/distribution grid while keeping high reliability.

Response 27: The EPA agrees that states may want the ability to reassess and recalibrate their state plans after submitting their final state plan to EPA. The EPA is finalizing that for new projections of emission performance, the projection methods, tools, and assumptions do not have to match those used for the projection in the original demonstration of plan performance; they can be updated to reflect the latest data and assumptions, such as assumptions for current and future economic conditions and technology cost and performance. This is dis cussed in section VII I .E. 7 .a

– Modifications to an approved state plan, in the preamble to the final rule.

T he following are summaries of the specific public comments under this comment:

Commenter s explained that st ates must be able to amend plans, and to provide alternatives, off

ramps, or delays as necessary to assist utilities in meeting the statutory obligations and to comply with the Clean Power Plan while maintaining a robust transmission/distribution grid while keeping high reliability

. However, the commenter s noted that once a state plan is submitted and approved by EPA, it is a federally enforceable plan and may not be altered. The commenter s noted for example, a state may adopt a renewable energy mandate as part of its state plan, but a few years i nto implementation, severe transmission constraints might arise or transmission construction might be delayed by litigation, limiting the amount of renewable power that can be carried. The commenter s explained that a state cannot adjust the interim milesto nes to allow for the time of transmission build

- out ahead of the renewables; their hands are tied because a state cannot change its plan to lower the renewable mandate and to increase natural gas dispatch to meet the unexpected transmission challenge. Like wise, the commenter s stated that technology may develop to the point that a state legislature may abandon its renewable energy mandate in favor of carbon capture technology (assuming its development eventually occurs at a commercial level). According to th e commenter s , if the state ends the renewable energy mandate in favor of another technology

- even one that creates more GHG savings, that state cannot simply change it at the legislature, but rather it is "stuck" until such time as an extraordinary applic ation for modification is made under Clean Air Act section 111(f) and the state plan is re

- written, re

submitted to the EPA, re

- evaluated, re

- opened for comment and hopefully approved by the EPA.

Comment 28: Comment stating that, by allowing states to mo dify their plans, the EPA can ensure that the 2030 goals are achieved while allowing states sufficient flexibility to design their own compliance glide path using the proposed approach to state plans, and recommending that the final guidelines should clari fy that states can modify plans to promote maximum state315 flexibility in the design of compliance plans that would be approved by the EPA and to enable states to take into account changed circumstances, such as improvements in clean energy and other technol ogies.

Response 28: The EPA agrees with the commenter s that allowing modifications is beneficial and allows states more flexibility in designing their own plans and to account for any changed circumstances. Modifications to state plans are allowed in this final rule, and are discussed in section VIII.E. 7 of the final rule preamble

. The following are summaries of the specific public comments under this comment:

Commenters noted that states would be required to demonstrate reasonable and verifiable
progress toward the 2030 goal and could not delay taking action to reduce emissions. The commenters noted that the EPA's proposed guidelines already would require that states submit

- and that EPA approve

- plans that clearly set forth how states would achieve the 2030 goal. The commenters noted that once approved by EPA, a state's plan, including the emission reduction glide path, would become federally enforceable. The commenters noted that states would demonstrate progress towards the 2030 goal consistent with th eir projected emission reduction glide path through the annual reporting of emission performance to EPA, taking corrective measures if needed. The commenters stated that ultimately, if states could not show reasonable progress toward the 2030 goal, EPA wou ld have the authority to call for a state to correct its plan or issue a federal plan of its own. The commenters stated that, by allowing states to modify their plans, EPA can ensure that the 2030 goals are achieved while allowing states sufficient flexibi lity to design their own compliance glide path using the proposed approach to state plans.

The commenters recommended that the final guidelines should clarify that states can modify plans to promote maximum state flexibility in the design of compliance pl ans that would be approved by the EPA and to enable states to take into account changed circumstances, such as improvements in clean energy and other technologies. The commenters recommended that the final guidelines should also affirm that EPA will approv e compliance plans that satisfy the requirements for such plans. Finally, the commenters recommended that the guidelines should recognize a range of potentially approvable options for defining state emission glide paths that reflect "reasonable progress" t hat would be unique to the specific circumstances within a state or multi

- state program and, in particular, should support the use of existing programs and market mechanisms.

Additionally, the commenters supported both ideas described in the NODA Section III.A (The 2020 to 2029 Glide Path) which could modify the state's existing goal glide path. The commenters noted that the first idea related to glide path modification on the basis of needed infrastructure improvements and the second idea related to the p ace at which existing generation assets are shifted to new generation resources, thus avoiding customer excessive costs and stranded assets. The commenters agreed that providing each state this flexibility to modify the overall 2020

- 2029 glide path, based upon source specifics, is a necessary consideration in the final rule.316 6.4.6 Plan templates and electronic submittal

This section discusses the comments received in the need for a state plan template and on the option of submitting state plans electronic ally. For the proposal

, the EPA requested comment on the creation of a template for state use in preparing initial and complete state plan submittals to provide greater certainty of approval in preparing state plans. The EPA also requested comment on wheth er it should provide for, or require, electronic submittal of initial and complete plans. The comments in this section address these two subjects on which EPA requested comment

.
Commenters have raised a number of issues related to this subsection which are organized by topics (comments) below

. Responses are also provided for these topics

.

Comment 1: The EPA should provide state plan templates because they could facilitate the development of state plans. However, it should be clear that these templates are not prescriptive and states are not required to follow the templates.

Response 1: The EPA has determined that the broad range of approaches states may take in preparing individual or multi

- state plans makes the development of specific templates challengi ng and likely not useful to states. However, the EPA is proposing model rules for both
rate

- and mass

- based programs in conjunction with the proposed Federal Plan . These effectively

can serve as a template for states when preparing their state plan submitt als. The EPA will continue extensive outreach to states and stakeholders and work closely with them on the need for additional tools and guidance to facilitate the development of approvable state plans.

T he following are summaries of the specific public co mments under this comment:

C ommenters agreed that state plan templates would be helpful.

Commenter s stated that EPA's suggestion of creating a state plan template would not hurt states and could help streamline EPA's approval process. However, the comment er s stated that the template should not be prescriptive and must ensure that ample flexibility for states is still allowed.

C ommenters supported template plans as long as it is clear that states are not required to follow the template. Similarly, commenter s stated that the twelve state plan components are familiar to states that have been required to prepare state plans for incineration sources under CAA sections 129 and 111(d). The commenter s stated that all of those twelve components are sensible and easy to comprehend in the context of requiring particular sources to meet emissions limitations for identified pollutants. The commenter s noted that EPA's issuance of state plan templates can be a useful means of facilitating timely state plan submission and a ssist states that have had less experience with state plan submissions or state implementation plan submissions under CAA Section 110. Additionally, the commenter s stated that templates may also facilitate consistency across the various EPA regions. Howeve r, the commenter s stated that EPA should not mandate the use of the templates

. The commenter s noted that state plan templates can also serve the purpose of specifying the minimum level of information necessary to secure an extension. The
commenter s stated that EPA must recognize that there will be factors outside the control of state317 environmental agencies (e.g., the schedule of convening state legislative bodies) that may require accommodation and additional time may be necessary to develop multi

- state pla ns.

Comment 2: Model plans are needed so states and affected entities will have a sufficient understanding of what a state plan must look like in order to be approved by EPA. The model plans should specify the level of state jurisdictional authority that must be imbedded into a state plan for each of the building blocks and to what degree the enforcement authority must be clearly transferable to the EPA in order to be approvable. For example, there are no precedents for including activities that are govern ed by state PUCs and these activities should be written in to a state plan.

Response 2: The EPA is proposing model rules for both rate

- and mass

- based programs in conjunction with the proposed Federal Plan. These effectively can serve as a template for sta tes when preparing their state plan submittals. We disagree that not proposing a model plan is cause for the EPA to reissue the proposed guidelines. Nothing in the Clean Air Act or Part 60 requires the Agency to provide a federal plan or model rule concurr ently with Emissions Guidelines. In proposing a federal plan concurrently with the finalization of the Emission Guidelines, the EPA is moving expeditiously to respond to commenters’ desire to see the contents of a federal plan or model plan.

The final ru le provides considerable discretion to the states in setting emission standards and related plan requirements . As explained in section VIII .C.6.d of the preamble, the EPA is not finalizing the proposed portfolio approach

, so comments specific to this prop osed approach to 111(d) state plan design are moot. Instead, the EPA is finalizing an option to submit either an “emission standards” plan type, which includes only federally enforceable measures on affected EGUs, or a “state measures” plan type. Under a state measures plan type

, a mass CO2 emission goal may be partially or entirely achieved through state measures that impose requirements on entities other than affected EGUs , that are only enforceable by the state, and are not included in the federally enf orceable section 111(d) state plan . Therefore, under the commenter s ’ example, a citizen could not sue a building owner under the CAA for failing to comply with building standards that are incorporated into a state plan. If the state opts to submit a stat e measure plan type, it must submit standards of performance for CO2 emissions from affected EGUs in the form of a federally enforceable “backstop” that would be triggered if the state measures fail to achieve the required CO2 emission performance level or the state misses a performance milestone . The backstop emission standards constitute the standards of performance required by section 111(d), and the state plan provides for the implementation and enforcement of such standards of performance by specifying the trigger mechanism and conditions under which the backstop emission standards apply to affected EGUs. Upon EPA approval of a state measures plan under section 111(d), the backstop emission standards become federally enforceable requirements, which EPA and citizens may enforce against affected EGUs under section 113 and section 304 of the Act, respectively, once triggered and implemented to address a shortfall in necessary emission reductions. See section VIII of the CPP final rule preamble

.

The final emission guidelines require that all section 111(d) state plans, including state measures plans, specify CO 2 emission monitoring, reporting and recordkeeping requirements for affected318 EGUs, demonstrate that plan measures are enforceable as a practical matt er, and contain the process, content and schedule for state reporting to the EPA on plan implementation and progress toward meeting the required CO 2 emission performance level. For state measures plans in particular, the final emission guidelines also requ ire states to submit annual reports to the EPA that address periodic programmatic milestones to show progress in program implementation. See section VIII of the final rule preamble . The EPA intends to review each submitted state plan on a

case

- by

- case basi s to determine whether it satisfactorily addresses the Act’s enforceability requirements. Final EPA action on any submitted 111(d) state plan, including a state measures plan, is subject to judicial review under section 307(b) of the Act. For the require d components of a state plan, including components related to federal and/or state enforceability under different plan types and existing guidance documents, see Section VIII.D.2 of the CPP final rule preamble

. The EPA is finalizing the option of a state m easures plan type, which would place federally enforceable measures only on affected EGUs. EE, RE, and other measures that are not on affected EGUs would not be federally enforceable under this plan type and would only be enforceable by the state. See Sec tion VIII.C.4 of the final rule preamble of the CPP.

T he following are summaries of the specific public comments under this comment:

C ommenters stated EPA should develop several model plans for states to evaluate as templates for implementation at the sta te level.

Commenters asserted that states and affected entities currently lack a sufficient understanding of what a state plan must look like in order to be approved by EPA. The commenters stated that the failure of EPA to provide a draft plan or plans is especially troubling given the novelty of the type of plan that must be submitted by states under EPA's new interpretation of the CAA.

The commenters questioned

, for example, what level of state jurisdictional authority must be imbedded into a state plan in order to meet EPA's expectations of a minimal level of federal enforceability to be approved? The commenters stated that there are no precedents for including activities that are governed by state PUCs that could inform how state authorities should wri te these activities into a state plan. The commenters argued that the lack of a model plan for how to accomplish this is both troubling and cause alone for EPA to reissue this rule with additional guidance for comment

. The commenters stated that model pla ns should clearly lay out what authorities EPA expects states to imbed into a state plan under each of the building blocks and to what degree each building block enforcement authority must be clearly transferable to the EPA in order to be approvable. The c ommenters suggested that the EPA more clearly explain in what manner those authorities are to be federally enforceable under the CAA, how EPA might enforce CAA authorities under a state plan if an affected entity failed to meet the interim or final goal, a nd how citizen suits are to interrelate to state and federal enforcement authority. The commenters asked for example, can a citizen sue a building owner under the CAA for failing to comply with building standards that are incorporated into a state plan? If so, the commenters asked what potential CAA enforcement and penalty liability will building owners be accepting with the incorporation of building standards into a state plan. The commenters stated that the EPA's319 failure to provide a model state plan is a n oversight that impairs the ability of states and affected entities to understand how a state plan can be crafted.

Comment 3: To support state plan development, EPA should provide model plan components that include, for example, flexible, source

- permit

- b ased rate

- based programs and mass

- based programs with trading. The model components should also emphasize deployment of renewable energy and demand

- side energy efficiency. The EPA should also provide guidance on the full range of potential multistate appro aches, including joint state plans and allowing emission reduction credits to cross state lines.

Response 3: The EPA is proposing model rules for both rate

- and mass

- based programs in conjunction with the proposed Federal Plan. Renewable energy is discusse d in sections V.E and VIII.G in the preamble to the final rule . Additionally, section VIII. H of the CPP final rule preamble describes resources for states to consider in developing plans. EPA decided not to finalize demand side energy efficiency as part of the best system of emission reduction. However, states may use EE as a non

- BSER compliance measure as discussed in section VIII of the CPP final rule preamble

. State approaches, including multi

- state plans and multi

- state coordination, are addressed in se ction VIII.C of the CPP final rule preamble . Emission reduction credits are found in section V of the CPP final rule preamble

. For the required components of a state plan, including components related to federal and/or state enforceability under different plan types and existing guidance documents, see Section VIII.D.2 of the CPP final rule preamble

.

T he following are summaries of the specific public comments under this comment:

Commenter s stated that in order to support state plan development, EPA should p rovide model plan components that states could utilize (for example flexible, source

- permit

- based rate

- based programs and mass

- based programs with trading). The commenter s stated that EPA should emphasize model components facilitating state deployment of r enewable energy and demand

side energy efficiency. The commenter s stated that EPA should also specify minimum criteria or requirements for each policy approach to ensure enforceability. Further, the commenter s stated that EPA should provide guidance on the full range of potential multistate approaches from agreements about renewable energy and energy efficiency, to frameworks allowing emission reduction credits to cross state lines, to joint state plans.

Comment 4: The EPA should allow but not require ele ctronic submittal of state plans , and the EPA should have this program in place in time for states to take advantage of it at the discretion of each state.

Response 4: The EPA disagrees that electronic submittal should not be required. It is the EPA’s

ex perience that electronic submittal of information has increased the ease and efficiency of data submittal and data accessibility. Requiring electronic submittal is in keeping with current trends320 in data availability and will result in less burden on the r egulated community. Electronic submittal will facilitate two

- way business communication between states and the EPA, will guide states through the submittal process to ensure submission of all required plan components, and will enable states to submit propo sed plans to the EPA electronically for early EPA comments. Electronic submittal will also facilitate, expedite and promote national consistency in the EPA’s review of state plans and promote transparency by providing stakeholder

- specific access to updated information on state plan status and posting of plan requirements for viewing by the public, government regulators and regulated entities. The EPA believes electronic submittal will be enormously beneficial in terms of improving coordination and cooperati on between the EPA and its state partners in developing approvable state plans. The EPA is finalizing the requirement that submissions related to CPP be submitted electronically. Specifically, that includes negative declarations, state plan submittals (in cluding any supporting materials that are part of a state plan submittal), any plan revisions, and all reports required by the state plan. The EPA is developing the State Plan Electronic Collection System (SPeCS), a web accessible electronic system to supp ort this requirement that will be accessed at the EPA’s Central Data Exchange (CDX) ( http://www.epa.gov/cdx/ ). Detailed instructions for accessing CDX and SPeCS will be outlined in the “111(d) SPeCS User Guide: How t o submit state 111(d) plan material to EPA” which will be available on the EPA’s Clean Power Plan Toolbox for States. The EPA will provide SPeCS training for states prior to the state plan submittal due date.

T he following are summaries of the specific pub lic comments under this comment:

C ommenters addressed the EPA's request for comment on whether to provide for, or require, electronic submittal of initial and complete plans (79 FR 34917).

Commenter s stated that the EPA should allow but not require electr onic submittal of state plans

. According to the commenter s , while allowing electronic submittal of state plans may provide some advantages, states should be allowed to decide the most appropriate media to make submittals based on the circumstances. The com menter s suggested that EPA should not consider such a requirement until an electronic submittal system is fully established and vetted by the
states.

As an active participant in EPA's Electronic State Implementation Plan Submission Pilot,
commenter s agreed that the electronic submittal of information increases the ease and efficiency of data submittal and accessibility; and has environmental benefits. The commenter s stated that electronic submittal is entirely suitable for state plans under section 111(d) a s well as for state implementations plans (SIPs) under section 110, and encouraged the EPA to have this program in place in time for states to take advantage of it at the discretion of each state

.

Comment 5: The EPA should prepare a state plan template to provide greater certainty of approval in preparing state plans, and it is imperative that the template be provided concurrent with the final regulation to ensure its use by states. Because of the diverse nature and magnitude of the state plans that are li kely to be submitted, compared to section 110 SIPs (which have been through a pilot project), these plans may not be amendable to electronic submission at this time

.321 Response 5: The EPA has determined that the broad range of approaches states may take in preparing individual or multi

- state plans makes the development of specific templates challenging and likely not useful to states. However, the EPA is proposing model rules for both

rate

- and mass

- based programs in conjunction with the proposed Federal Pla n. These effectively can serve as a template for states when preparing their state plan submittals. As the commenter s mentioned, the recent successful implementation of electronic submittal of state implementation plans, which are comparable in complexity to section 111(d) plans, supports the EPA finalizing the requirement that submissions related to CPP be submitted electronically. The EPA is developing the State Plan Electronic Collection System (SPeCS), a web accessible electronic system to support this requirement that will be accessed at the EPA’s Central Data Exchange (CDX) ( http://www.epa.gov/cdx/ ). The EPA will provide d etailed instructions for accessing CDX and the use of SPeCS will be outlined in the “111(d) SPeCS User Guide: How to submit state 11 1(d) plan material to EPA” which will be available on the EPA’s Clean Power Plan Toolbox for States. The EPA does not agree that section 111(d) state plans are not amenable to electronic submission. It is the EPA’s experience that electronic submittal of i nformation has increased the ease and efficiency of data submittal and data accessibility and is in keeping with current trends in data availability and will result in less burden on the regulated community. Electronic submittal will also facilitate, exped ite and promote national consistency in the EPA’s review of state plans and promote transparency by providing stakeholder

- specific access to updated information on state plan status and posting of plan requirements for viewing by the public, government reg ulators and regulated entities. The EPA believes electronic enormously beneficial in terms of improving coordination and cooperation between the EPA and its state partners in developing approvable state plans. Submittal will be

T he following are summarie s of the specific public comments under this comment:

Commenter s noted that EPA requested comment on the creation of a template for state use in preparing initial and complete state plan submittals and supported preparation of a template by EPA to provide greater certainty of approval in preparing state plans. According to the
commenter s , it is imperative that the template be provided concurrent with the final regulation to ensure its use by states. The commenter s also noted that EPA requested comment on wh ether it should provide for, or require, electronic submittal of initial and complete plans. The
commenter s noted that electronic submittal of SIPs has been through a pilot project, but has not yet been applied across the board. The commenter s indicated th at this particular plan, being a CAA section 111(d) state plan versus a section 110 SIP, may not be the most appropriate one to roll out the project because of the diverse nature and magnitude of the plans that' will be submitted to EPA.

6.4.7 Multi

- state plans

This section discusses the process and time line for the submittal, review, approval , and modification of multi

- state plans. The EPA proposed that state s develop ing a plan that includes a multi

- state approach would have one year after the emission gu idelines are final ized to submit an322 initial plan and three years to submit a final plan. Further, the EPA propos ed that states participating in a multi

- state plan may submit a single joint plan on behalf of all of the participating states , and took comment on other submittal approaches

. The comments in this section also address whether a state could change at a later time from a single

- state plan to a multi

- state plan. The comment s also considered the proposed schedule for developing interim and final multi

- state plans.

Commenters have raised a number of issues related to this subsection, which are organized by topics (comments) below. Responses are also provided for these topics

.

Comment 1: States in a multi

- state plan should have the option of submitti ng individual state plans that separately address the joint and state

- specific plan elements. The EPA should provide more time for the development of multi

- state plans and provide clear guidelines for multi

- state plans.

Response 1: In response to comments, the final emission guidelines allow states to submit multistate plans in different forms, including a single multistate plan submittal, a single multistate plan submittal that addresses common multistate plan elements complemented by single

- state plan sub mittals that address state

- specific elements, and multiple single

- state plan submittals that address common plan elements and state

- specific plan elements. The different submittal forms for multistate plans are discussed in section VIII.E.1 of the preamble to the final rule.

In response to comments, the EPA is providing up to three years for the submittal of a final single

- state or multistate plan. The deadlines for initial and final plan submissions, including the rationale for these deadlines, are describ ed in section VIII.E.2 of the preamble to the final rule.

The following are summaries of the specific public comments under this comment:

The commenters noted that EPA's Proposed Guidelines assert that states participating in multi

state plans should sub mit a single plan signed by authorized officials from each participating state and that all required plan components must be included and address these requirements for the group as a whole. The commenters noted that EPA also requests comment on whether st ates should submit a single joint multi

- state plan along with individual state plans addressing separately joint and state

- specific plan elements. Id. The commenters noted that EPA also asks for comment on whether each state participating in a multi

- state plan should submit its own plan without submitting any joint plan. Id. The commenters recommended that EPA allow states to proceed how they wish because different processes will work more effectively for different parties, and EPA gains nothing by arbitrar ily limiting state discretion.

Commenter s generally supported allowing states to enter into multi

- state plans if they wish. However, the commenter s noted that developing and finalizing multi

- state plans in the timeframe allowed by EPA's Proposed Guideline s would be extremely challenging if not impossible. The
commenter s stated that EPA should provide more time for the development of these plans and provide clear guidelines for multi

- state plans.323 Comment 2: The EPA should provide flexible plan submittal op tions for multi

- state agreements.

Response 2: See response to comment number 1.

The following are summaries of the specific public comments under this comment:

Commenter s supported maintaining flexible plan submittal options for multi

- state agreements
, inc luding individual state compliance plans, a single compliance plan submittal for all states participating in a multi

- state approach, or a single compliance plan for all common components of a multi

- state approach supplemented by individual plans for state

- specific plan components.

Comment 3: States in a multi

- state plan should be given the option of providing a single submittal for their respective state and should have additional time to submit a complete multi

state plan

. The EPA should provide states an avenue to create issue

- specific multi

- state agreements even if they cannot agree on a comprehensive multi

- state compliance plan.

Response 3: See response to comment number 1. In response to comments, the EPA is providing for additional means of interstate collaboration where states do not submit a multistate plan that meets a joint rate

- based or mass

- based state CO2 goal. These approaches allow for states to coordinate in the implementation of rate

- based and mass

- based emission trading programs, through th e interstate transfer of ERCs and emission allowances, respectively. These plan approaches are described in section s VIII.C.5.c and VIII.C.5. d of the preamble to the final rule. These plan approaches functionally provide for a similar type of flexibility a s that addressed by the commenters.

The following are summaries of the specific public comments under this comment:

The commenter s stated that EPA's proposal that only one multi

- state plan could be submitted on behalf of all participating states should he lp encourage the adoption of such approaches. But, states participating in a multi

- state plan should also be given the option of providing a single submittal for their respective state. The commenter s supported the proposal that a state would have addition al time to submit a complete multi

- state plan. The commenter s noted that while compliance timeframes should be as short as possible, giving more time in this respect could serve to incentivize more states to embrace a multi

- state approach.

The commenter s s upported EPA's effort to encourage cooperation and urged EPA to further help states see the benefits of engaging in regional compliance discussions. The commenter s also encouraged EPA to make clear that states need not form full multi

- state compliance plan s to benefit from regional coordination. The commenter s stated that multi

- state agreements on discrete issues

- such as the treatment of interstate renewable energy flows and related accounting and compliance issues

- can help reduce interstate conflict. T he commenter s noted that such plans also simplify compliance obligations and market structures for businesses operating in multiple states and increase market transparency and competition, ultimately leading to lower implementation costs. The commenter s su ggested that the EPA should provide states a324 clearly approvable avenue to realize the benefits of issue

- specific multi

- state agreements even if they cannot come to an agreement on drafting a comprehensive multi

- state compliance plan. For instance, the comm enter s urged the EPA to provide states an avenue to form and join multi

- state compliance plans over time

- potentially as part of the regular Section 111(d) review cycle proposed herein.

Comment 4: The EPA should consider the same approach used for multis tate nonattainment areas for criteria pollutants and should vary from that approach only if EPA believes that administrative and cost efficiency would be achieved by an alternative approach.

Response 4: The EPA received broad support in comments for allow ing states to implement multi

- state plan approaches, and has made multiple changes in the final rule to address many suggestions outlining different approaches states may want to take. These changes are intended to provide streamlined approaches for multi

- state coordination while maintaining transparency and assuring that the CO 2 emission performance rates or state CO 2 emission goals are achieved. See section VIII.C.5 of the final rule preamble for a detailed discussion of multi

- state plans.

The following are summaries of the specific public comments under this comment:

Commenter s stated that with regard to states that may be adopting a multi

- state approach to CPP compliance, the commenter s noted that for multistate nonattainment areas for criteria polluta nts, each state is required to submit an individual attainment plan, although the states must coordinate actions during the planning process and may rely on common inventories and modeling to satisfy the individual state plan requirement. The commenter s no ted that Connecticut has participated in such multistate ozone and particulate matter attainment planning and knows that the process will work to achieve the desired result. The commenter s stated that EPA should consider whether this same approach might be well

- suited to multistate areas under the CPP and whether states and EPA could benefit from the familiarity of that approach. The commenter s stated that EPA should vary from that approach only if EPA believes that administrative and cost efficiency would be achieved by an alternative approach.

Comment 5: The EPA should clarify what is expected for the "initial quantification of the level of emission performance," and indicate whether different levels of analysis are needed based upon whether a state expe cts to participate in a single or multi

- state plan. The commenter s recommended that initial emission performance quantifications be provided on an overall basis for all states participating in a given multi

- state plan, rather than a state

- level basis.

Resp onse 5: The EPA is not finalizing this specific proposed component of an initial submittal. Components of an initial plan submittal are discussed in section VIII.E.3 of the preamble to the final rule. An initial submittal must describe progress toward addr essing all components of a final plan. These final plan components, which are discussed in section VIII.D of the preamble to325 the final rule, includes a demonstration that a plan will achieve the CO2 emission performance rates for affected EGUs or the state rate

- based or mass

- based CO2 goal for affected EGUs in the emission guidelines. Depending on the design of a state plan, this demonstration may not require a projection of future CO2 emission performance by affected EGUs under the state plan. For a multis tate plan, where the plan is designed to achieve the CO2 emission performance rates or a joint state CO2 goal, this demonstration is for all affected EGUs subject to the multistate plan. Put another way, this demonstration is a joint one for all affected E GUs subject to the multistate plan. State

- by

- state demonstrations are not necessary as part of a multistate plan.

The following are summaries of the specific public comments under this comment:

Commenter s also requested clarification on EPA's expectation r egarding the "initial quantification of the level of emission performance," and indication whether EPA expects different levels of analysis based upon whether a state expects to participate in a single or multi

state plan. For a multi

- state plan, the comme nter s noted that state

- level quantifications of emissions performance may be difficult to produce by mid

- 2016 (or ever, depending on whether a region were to create a trading program or other system where performance is dependent upon regional operations t hat may vary throughout the compliance period). The commenter s

r ecommended that initial quantifications of the level of emission performance be provided on an overall (all states participating in a given multi

- state plan) basis, rather than a state

- level b asis

.

Comment 6: The EPA should clarify whether the initial (June 30, 2016) submittal for states in multi

- state plans should be individual preliminary plans or joint plans. One (joint) submittal for both initial and final plan submittals for all states in a multi

- state plan is recommended.

Response 6: As further explained in section VIII.E of the preamble to the final rule, an initial submittal is the vehicle through which states may request an extension for submitting a final plan, and does not itself con tain legal, enforceable obligations. Though states may submit a joint multi

- state plan, states must submit individual initial submittals when requesting an extension. An individual submittal may contain information about multi

- state final plans a state is considering.

The following are summaries of the specific public comments under this comment:

Commenter s noted that EPA's proposal (70 FR 34915) indicates that only one multi

- state plan would need to be submitted on behalf of all participating states. The c ommenter s requested clarification on expected procedures for initial (June 30, 2016) submittals

- specifically will states expecting to participate in multi

- state plans be expected to submit individual preliminary plans, or joint plans? The commenter s reco mmended that EPA require one (joint) submittal on behalf of all states expected to participate in a multi

- state plan, for both initial and final plan submittals

.326 Comment 7: It should be up to the participating states to determine whether one plan would

re present all participating states, or the individual state would submit its own plan.

Response 7: See response to comment number 1.

The following are summaries of the specific public comments under this comment:

Commenter s supported two possible approaches for a multi

- state plan submittal. The
commenter s stated that it should be up to the participating states to determine whether one plan would represent all participating states, or the individual state would submit its own plan. The
commenter s stated that i t is conceivable that states participating in a multi

- state plan may do so through an interstate agreement, and this agreement might be referenced as part of the state plan.

Similarly, commenter s noted that the EPA seeks feedback on whether states partici pating in a multi

- state plan should be given the option of providing a single submittal or allowing individual state submittals that address all elements of a multi

- state plan. (79 FR 34910

- 11). The
commenter s urged the EPA to give the states flexibility to determine the best reporting structure for their particular situation.

Comment 8: When states submit a multi

- state plan they should be allowed to submit a partial plan for the multistate region and supplemental plans from their own state that complete their obligation.

Response 8: See response to comment number 1.

The following are summaries of the specific public comments under this comment:

Commenter s suggested that when states submit a multi

- state plan they should be allowed to submit a partial plan for the multistate region and supplemental plans from their own state that complete their obligation. The commenter s stated that it is difficult for multiple actors to agree on every detail of something so complex. The commenter s stated that some measure of multi

state cooperation is more likely to be achieved if stated are allowed to submit that which they can agree on and separately dispose of that which they could not agree on.

Comment 9 : The EPA should not limit nor precisely dictate the form of a mul ti

- state plan submittal, provided the elements are approvable and appropriate signatures are included.

Response 9: See response to comment number 1. The EPA has determined that it is necessary to prescribe the basic forms of a multistate submittal to prov ide information to states about acceptable forms and to facilitate review of state plan submittals by the EPA.

The following are summaries of the specific public comments under this comment:

The commenter s noted that the EPA is requesting comment on multi

- state plan submittal approaches; specifically, whether states participating in a multi

- state plan should also be given327 the option of providing a single submittal that addresses common plan elements along with individual submittals that provide state

- specif ic elements, or all states participating in a multi

state plan separately make individual submittals that address all elements of the multi

- state plan. The commenter s stated that they expect few, if any, states that have not developed multi

- state plans in the past will be prepared or have sufficient time to plan a multi

- state approach under this proposal. The commenter s stated that there is no reason to limit and precisely dictate the form of a multi

- state plan submittal . The commenter s stated that provided the elements are approvable and appropriate signatures are included there is no reason to prescribe in regulation this level of detail

.

Comment 10: The EPA should determine the process to be followed for states whose initial strategies may change betwee n initial and final plan submittal when a states decides to withdraw from a multi

- state plan or when good faith efforts among states fail and states will need to do a single

- state plan.

Response 10: The EPA is providing for up to three years for the submit tal of both final single

state and multi

- state plans. As a result, the potential problems raised by the commenters are no longer relevant. Moreover, the EPA has clarified in the final emission guidelines that a state may indicate in its initial plan submi ttal that it is evaluating different plan approaches (which may include both single

- state and multi

- state approaches); a state does not need to commit to which of these approaches it will use in its final plan. This is described in section VIII.E.3 of the preamble to the final rule.

The following are summaries of the specific public comments under this comment:

Commenter s requested additional detail regarding EPA's process for States whose initial strategies may change between initial and final plan submitt al. The commenter s provide the example of a failure of a Memorandum of Agreement for a multi

- state plan that results in a State choosing to withdraw and pursue a single

- state plan after the single

- state plan submittal deadline passes. The commenter s questi oned if EPA would automatically consider the State to have failed to submit its plan, would it find the State deficient only after the multi

- state deadline passed, or does EPA intend to provide some mechanism authorizing such a change in strategy in its fi nal rulemaking? The commenter s asked for a State that initially intended to submit a single

- state plan but which, after June 30, 2016, chooses to instead participate in a multi

- state approach, must they complete a formal revision of their initial plan subm ittal to indicate the revised approach?

Similarly, commenter s expressed concern regarding how the EPA may take action when a state receives an extension for multi

- state plan and later finds that collaboration falls through and the state will need to do a state

- only plan. The commenter s stated that the EPA should not take premature action when good faith efforts among states fail.

Comment 11: The EPA should clarify whether states can choose to create multi

- state plans after the June 30, 2018 deadline with advance notice to EPA.328 Response 11: A state or states could enter into an existing approved multistate plan subsequent to the EPA approval of a single

- state plan. This would require a plan modification on the part of the state(s) entering the existing mult istate plan, as well as a plan modification by the states participating in the preexisting multistate plan. States could also enter into linked rate

- based or

mass

- based emission trading approaches under single

- state plans, subsequent to the EPA approval of single

- state plans that did not include such links. This would require a plan modification by all approved single

- state plans subject to the link. Where approved single

- state plans are designated as “trading

- ready” by the EPA, these plans would not need t o be modified when new trading

- ready states enter the linked emission trading system. New states entering such a linked system with preapproved plans that are not designated as trading

- ready would need to modify their plans to meet requirements necessary t o be designated as trading ready. These multistate plan approaches are described in section VIII.C.5.c. of the preamble to the final rule. Treatment of multistate plans as part of the plan modification process is described in section VIII.E. 7 . of the pream ble to the final rule.

The following are summaries of the specific public comments under this comment:

Commenter s stated that EPA should clarify whether an approach to fostering multi

- state collaboration would be to allow states that did not file multi

- sta te plans originally, the ability to negotiate agreements for multi

- state plans subsequent to the June 30, 2018 deadline with advance notice to the EPA. The commenter s stated that this would be consistent with the flexibility provided by the EPA to develop new systems for carbon emission tracking, reporting, and trading.

Comment 12: The EPA and states will need to allow for the entrance and exit of potential collaborating states from multi

- state plans, depending on the outcomes of subsequent individual

stat e decisions.

Response 12: See response to comment number 10 and 11.

The following are summaries of the specific public comments under this comment:

Commenters noted that EPA and states will need to allow for the entrance and exit of potential collaborating states from multi

- state coordination, depending on the outcomes of subsequent individual state decisions.

Comment 13: The EPA should clarify that a state does not lose its extension if a multi

- state plan is ultimately unsuccessful in whole or in part, an d should grant states more time to implement contingencies for states entering or leaving a multi

- state plan.

Response 13: See response to comment number 10.

The following are summaries of the specific public comments under this comment:329 Commenters suggest ed that EPA should clarify that a state does not lose its extension if multi

state coordination is ultimately not successful in whole or in part, and grant states more time to implement contingencies to respond to a state or states dropping out of or joini ng a multi

- state compliance plan.

Comment 14: The EPA should clarify the applicability of a granted extension when a state or group of states pursue a multistate plan and then are un able to finalize a multi

- state plan and instead finalize individual state plans. Could the states be subject to federal enforcement action or be subject to citizen suits?

Response 14: See response to comment number 10.

The following are summaries of the specific public comments under this comment:

Commenter s supported the optio n to pursue multi

- state plans, and providing a longer time frame for multi

- state planning efforts. The commenter s requested clarity regarding the circumstances when a state or group of states may request an extension to pursue a multistate plan and then ar e not able to finalize a multi

- state plan and instead finalize individual state plans. The commenter s noted that in the proposed guidelines, the EPA briefly requests comment on additional options for multi

- state plan submittals and mentions that these opti ons might address contingencies during plan development where a state fails to finalize its participation in a multi

- state plan, but does not provide sufficient information as to how this circumstance would be handled by the EPA and why the EPA believes th e alternative options would avoid or otherwise compensate for this contingency. Given the relatively tight timeframe for plan development and the complexity of negotiating a multi

- state plan (even prior to required legislative or regulatory actions), the

c ommenter s recommended that EPA plan for the reality that states may pursue this option, only to realize that they cannot receive the necessary approvals to actually participate in a multi

- state plan. In this case, the commenters recommended that the EPA sh ould provide more information in the final guidelines as to what action the EPA plans to take should this occur. The commenter s asked:

Will states be subject to federal enforcement in the event one or more states have been granted the multi

- state plan ext ension, but end up pursing individual state plans?

Will states be subject to citizens suits in this case?

Given the complexity and scope of EPA's proposal and the actual amount of time it took to launch the same multi

- state trading programs the EPA relie s on to demonstrate that multi

- state plans can work, the commenter s stated that it seems logical to presume that while some states may earnestly want to engage in multi

- state planning efforts, to do so will likely require legislative or other changes that are not entirely within the environmental agency's control; therefore, may not result in the necessary approvals to follow through and implement a multi

state plan. The commenter s requested clarity here and recommends that EPA provide the information neces sary for states to be able to adequately evaluate the overall risk and benefits that may come with pursing such a plan.330 Comment 15: Before states submit compliance plans, t he EPA should provide clear guidance on how to attribute GHG reductions associated with RE among states in the planning area to avoid double counting reductions. Clear guidance on attribution might encourage states to develop cooperative approaches for addressing the interstate effects of RE generation.

Response 15: The EPA is not final izing the specific approach mentioned by the commenters, as it is not relevant in the context of a multistate plan where states are jointly meeting a single multistate rate

- based or mass

- based CO 2 goal. Such state

- by

- state recognitions of resources used

to meet the emission guidelines are not relevant in a multistate plan context. In addition, states may address such issues by providing for the interstate transfer of ERCs or emission allowances under emission trading programs implemented under a single

- stat e plan. These plan approaches are discussed in section VIII.C.5.c of the preamble to the final rule. Furthermore, the final emission guidelines allow states to tap out

- of

- state resources, such as RE, under a single

- state
rate

- based plan. Geographic eligibi lity for resources that may be used to adjust the reported CO2 emission rate of an affected EGU are addressed in section VIII.K.1.a ( 2)( c ) of the preamble to the final rule.

The following are summaries of the specific public comments under this comment:

Th e commenter s noted that EPA proposes that states participating in multi

- state plans would be allowed to "distribute the CO2 emission reductions associated with renewable energy among states in the planning area, as long as the total CO2 emission reductions claimed are equal to the total of each state's in

- state emission reductions from RE measures." 79 FR 34922. The commenter s noted that multi

- state planning would mitigate some double counting concerns, but states may not be able to design multi

- state plans in the limited amount of time between finalization of the guidelines and the due date for compliance plans.

While EPA should incentivize multi

- state planning, the commenter s stated that it should not punish states that are unable to develop regional compl iance plans by limiting their use of RE reductions for compliance. Instead, the commenter s suggested that the EPA should minimize double counting concerns by providing clear guidance as to how to attribute reductions associated with RE before states submit compliance plans . Indeed, the commenter s stated that clear guidance on attribution might help to incent states to develop cooperative approaches for addressing the interstate effects of RE generation.

The commenter s suggested that the EPA also should ensu re that the final guidelines provide sufficient time for states to attempt regional compliance . The commenter s stated that the EPA proposes to allow states an additional 2 years to submit multi

- state plans. 79 FR 34915. The
commenter s stated that if states are working on multi

- state plans, but require more time to finalize them, then EPA should provide it. The commenter s stated that the benefits of multi

- state plans outweigh reasonable delays in plan submittal. In addition, the commenter s recommended that t he EPA should allow states to revise compliance plans if they are able to develop regional compliance plans after 2020. Furthermore, commenter s stated that the EPA should allow states331 to join a multi

- state plan after the start of the compliance period , whe n the benefits of multi

- state coordination may become more apparent.

Comment 16: States should have the flexibility to change from a stand

- alone state plan to a multi

- state plan at any point during plan implementation because some states have no experienc e with multi

- state programs.

Response 16: A state or states could enter into an existing approved multistate plan subsequent to the EPA approval of a single

- state plan. This would require a plan modification on the part of the state(s) entering the existin g multistate plan, as well as a plan modification by the states participating in the preexisting multistate plan. States could also enter into linked rate

- based or

mass

- based emission trading approaches under single

- state plans, subsequent to the EPA
appro val of single

- state plans that did not include such links. This would require a plan modification by all approved single

- state plans subject to the link. Where approved single

- state plans are designated as “trading

- ready” by the EPA, these plans would not need to be modified when new trading

- ready states enter the linked emission trading system. New states entering such a linked system with preapproved plans that are not designated as trading

- ready would need to modify their plans to meet requirements neces sary to be designated as trading ready. These multistate plan approaches are described in section VIII.C.5.c. of the preamble to the final rule. Treatment of multistate plans as part of the plan modification process is described in section VIII.E.7. of the preamble to the final rule.

A multi

- state plan modification may be submitted to the EPA at any time. However, an approved multi

- state plan modification may only take effect at the beginning of a new interim or final plan performance period. These require ments are further discussed in section VIII.E.7. of the preamble to the final rule.

The following are summaries of the specific public comments under this comment:

The commenter s noted that states that have no experience with multi

- state programs have not been able to evaluate the pros and cons of a multi

- state plan in the short time allotted for CPP comments. The commenter s noted that even if a state determined that a multi

- state approach made sense, the practical challenges of constructing such a program from scratch are considerable. The commenter s suggested that the final rule should provide states flexibility to join an existing or form a new multi

- state program at any point during plan implementation.

Comment 17: States wishing to enter into multi

- sta te arrangements after the current EPA deadline for multistate submissions should be expected to first have an accepted state implementation plan and be in compliance.

Response 17: See response to comment number 1 6.

The following are summaries of the specif ic public comments under this comment:332 Commenter s stated that it appears most states are likely to focus first on their own compliance plans, looking later to multistate options. The commenter s suggested that EPA be flexible with respect to both design and timing of multi

- state transactions, in order to capture the likely lower compliance costs available from a wider pool of reduction options that can be shared across utility and state boundaries. The commenter s suggested that states wishing to enter into m ulti

state arrangements after the current EPA deadline for multistate submissions should be expected to first have an accepted state implementation plan and be in compliance

.

Comment 18: States should be permitted to join a multi

- state plan at a later date and after their individual plans have been approved. However, any multi

- state or regional compliance approach must ensure that the result is no lower than what would have been achieved from individual state compliance plans.

Response 18: See respo nse to comment number 16 . A state plan must meet the emission guidelines, and the emission guidelines prescribe the methods for aggregating single

- state rate

based or mass

- based CO 2 goals into a joint CO 2 goal.

The following are summaries of the specific publi c comments under this comment:

Commenter s suggested that as states decide whether to partner with other states in a regional compliance approach, the additional time to do so should appropriately be allowed. Furthermore, the commenter s indicated that state s should be permitted to join a regional compliance regime if they decide to do so at a later date and after their individual plans have been approved. At a minimum, however, the commenter s stated that any multi

- state or regional compliance approach

must e nsure that the result is no lower than what would have been achieved from individual state compliance plans, ensuring that states do not recognize lower reduction targets as a result of their collaborating with other states.

Comment 19: EPA must provide m ore time than the 1 year allotted under the proposed rule for states to reach agreement to pursue a multi

- state approach. States should receive a total of 3 years from issuance of the final guideline by EPA for submitting a final compliance plan or plans, so long as they demonstrate that they are actively engaged in a process with other jurisdictions to consider multi

- state coordination and that they are developing multi

- state or individual state plans that contemplate such coordination.

Response 19: In res ponse to comments, the EPA is providing for up to three years for the submittal of final single

- state and multi

- state plans. The state plan submittal deadlines for initial and final plans are described in section VIII.E.2 of the preamble to the final rule.

The following are summaries of the specific public comments under this comment:

Commenters noted that each state will need to follow its own established political, legal and regulatory process for making compliance decisions. The commenters stated that EP A's timeline333 for multi

- state coordination does not currently allow for differing decision

- making processes across states. Due to the complex nature of multi

- state coordination, the commenters stated that EPA must provide more time than the 1 year allotted under the proposed rule for states to reach agreement to pursue a multi

- state approach

. Commenters stated that EPA must acknowledge that states will receive a total of 3 years from issuance of the final guideline by EPA for submitting a final compliance p lan or plans, so long as they demonstrate that they are actively engaged in a process with other jurisdictions to consider multi

- state coordination and that they are developing multi

- state or individual state plans that contemplate such coordination.

Comme nter s stated that EPA has not allowed sufficient time for the development of multistate plans.

Comment 20: T he EPA should provide an additional 2 years to submit their proposed Section 111(d) plans for states that will be complying through a regional gro uping of states , instead of the additional 1 year proposed

. Response 20: See response to comment number 19.

The following are summaries of the specific public comments under this comment:

The commenter s explained that compliance on a regional basis is con siderably more complex than complying on an individual state level. The commenter s noted that state officials will have to understand the emissions portfolio of the region, and may need to create new multi

governmental entities. The commenter s stated that this may require state regulations and possibly even legislative action. The commenter s stated that the additional year currently provided under EPA's rule is not a sufficient amount of time for states to coordinate. The commenter s suggested that the EPA p rovide states complying on a regional basis an additional 2 years to submit their proposed Section 111(d) plans.

Comment 21: The EPA should remove the interim performance requirements for multi

- state plans because there will not be enough time to meet the m following EPA’s plan approval.

Response 21: In response to comments, the EPA has extended the beginning of the interim plan performance period to 2022.

The following are summaries of the specific public comments under this comment:

Commenter s noted that EPA has provided states the opportunity to request an extension of time (up to 2 years, or June 30, 2018) to develop and submit multi

- state plans. The commenter s stated that even with this extension of 2 years, it may be very difficult for states to consid er and implement multi

- state and regional approaches. The commenter s suggested that more time may be warranted to allow sufficient opportunities for states to develop the partnerships, programs334 and agreements necessary to support multi

- state and regional i mplementation strategies. The
commenter s stated that this also underscores the need to remove the interim performance requirements, because there simply will not be enough time following EPA's approval of multi

state plans to achieve the initial necessary reductions.

Comment 22: Based on the example of the Regional Greenhouse Gas Initiative (RGGI), and others, states in a multi

- state plan should be provided 5 to 8 years to submit a proposed plan and the compliance date should be extended an equivalent amou nt of time. The recommended extensions would also provide an incentive for genuine cooperation among states to develop multi

- state plans.

Response 22: The EPA disagrees with the comments. In response to comments, the EPA is providing for up to three years for the submittal of final single

- state and multi

- state plans. The state plan submittal deadlines for initial and final plans are described in section VIII.E.2 of the preamble to the final rule. The examples provided by the commenters for why additional ti me is needed to submit a final state plan all speak to existing groundwork that has been done by states to develop viable approaches that could be used to meet the emission guidelines and existing models that could be drawn from in developing a state plan. Moreover, the EPA is aware of multiple dialogs across the country, among multiple states and stakeholders, which began in anticipation of the proposed emission guidelines and have continued to the present. The EPA believes that these past state efforts an d continuing dialog ue s well position states to be able to submit approvable final state plans within three years of the finalization of the emission guidelines. In addition, in response to comments, the EPA has extended the beginning of the first plan perf ormance period to 2022. The EPA notes that this provides states with more than six years from the publication of final emission guidelines to the beginning of the first plan performance period, a period of time equivalent to that required to develop and im plement the Regional Greenhouse Gas Initiative.

The following are summaries of the specific public comments under this comment:

Commenter s asserted that if states wish to collaborate to develop a multi

- state plan, they should be provided 5 to 8 years to su bmit a proposed plan (and the compliance date should be extended an equivalent amount of time.) The commenter s stated that an example of the time truly needed to develop a plan among a group of states is reflected in the Regional Greenhouse Gas Initiative (RGGI) currently operated in the northeastern United States. The commenter s noted that the RGGI development discussions began in 2003, followed by a memorandum of understanding in 2005, model rule framework in 2006, individual state regulations based on th e framework in 2008, and the beginning of the regional trading program in 2009. All totaled, the commenter s stated that it took 5 to 6 years for the RGGI program to go from formal planning to actual trading (which does not account for the time period durin g which informal discussion took place leading up to the first formal meetings in 2003).

The commenter s stated that another example of the lack of sufficient planning time in the proposed rule is the experience of the Midwest Governors Association (MGA). The commenter s335 explained that the MGA is a group of Midwestern states that work on a variety of policy issues that cut across the upper Midwest, including Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Ohio and Wisconsin. The commenter s st ated that beginning in late 2007, members of the MGA along with the Province of Manitoba, created an advisory group to study and to make recommendations for the establishment of regional emissions reductions and for the possible design of a regional cap an d trade program. The commenter s stated that the advisory group had a series of meetings over a year that resulted in recommendations in 2009 that did not conclude with an actual regional or state plan, but rather, the end result was a list of concerns, pri orities and general recommendations as to how a cap and trade program might be designed. The commenter s noted that after more than 2 years of work, the MGA was still a long way from a firm plan for a regional program. The commenter s stated, as the MGA expe rience demonstrates, the 1

- year time period for a state plan and 2 years for a regional plan given in the proposed rule are simply insufficient to contemplate and resolve all of the potential issues that will arise in the development of a workable plan tha t also protects power reliability and quality, as well as the economy. The commenter s noted that the MISO also points to the need for more time to provide a meaningful opportunity for states and regions to work together, an outcome that might help to make implementation more cost

- efficient.

The commenter s explained that any multi

- state plan that is developed will need equitable, efficient, and enforceable rules for governing the multi

- state program that is to be put in place under the plan. Based on an init ial review, the commenter s stated that it appears that the RGGI program would be able to meet the requirements to qualify as a multi

- state program under the Clean Power Plan. However, the commenter s stated that the proposed rule does not provide sufficient time to establish a similar program under a multi

- state plan in other regions.

According to the commenter s , states must be encouraged to work together to find regional solutions because the electric industry does not fall neatly within state borders; most utilities operate in interstate commerce, serving customers in multiple states. The commenter s suggested that the best way that EPA can encourage states to collaborate is to provide them sufficient time to not only work out how their individual state is a ffected by the rule, but how their neighboring states are impacted, as well as utilities and customers throughout the region. The commenter s stated that the EPA will provide the necessary incentive for genuine cooperation by allowing a full 8 years for the development of multi

- state plans

.

Comment 23: The EPA should allow more than 3 years for states submit a regional or multi

state plan. States negotiating in a regional plan cannot be expected to meet the same interim plan deadline as is required for stat es wishing a 1

- year extension to submit a standalone state plan.

Response 23: See response to comment number 22. In addition, in the final emission guidelines, states may indicate that they are exploring the development of different types of state plans, both single

- state and multi

- state.
The following are summaries of the specific public comments under this comment:336 Commenter s stated that EPA's proposal to allow states 3 years to submit regional plans is unworkable. The commenter s noted that states wishin g to participate in regional plans must nevertheless submit interim plans containing the same information as is required for states wishing a 1

- year extension to submit a standalone state plan. See proposed 40 CFR 60.5755(c). Yet the commenter s noted that a regional plan is even more complex than a standalone state plan given that developing a regional plan requires layering interstate negotiations on top of the already complicated intrastate processes that must take place for a state to determine how it wi shes to comply with EPA's CAA section 111(d) requirements. Moreover, the commenter s noted that each state will require legislative approval to enter into a regional plan and to adopt specific state elements of that plan (for instance, an RPS). The commente r s indicated that states will not be able to commit to a regional approach in an interim plan absent legislation in multiple states. Given the time it will take to work out a regional approach, the

commenter s questioned whether multiple legislatures can be counted on to approve those plans within EPA's 3

- year window for final plans, much less EPA's 1

- year window for interim plans.

Comment 24: Given the time needed to develop, plan, and implement complex multi

- state programs for 111(d) compliance, the EPA should give a minimum of 5 years between the dates that EPA approves a multi

- state plan and the start of the first compliance period, and even longer than 5 years should be considered.

Response 24: See response to comment number 22

The following are summar ies of the specific public comments under this comment:

Commenter s stated that if Michigan chooses to enter into a multi

- state compliance program, sufficient time must be allowed for the participating states to discuss, negotiate, and agree on a multi

- stat e plan. The commenter s noted that once a multi

- state plan is agreed upon among participating states, additional time is needed for Michigan to enact legislation and conduct rulemaking to implement Michigan's portion of the multi

- state program. The commente r s noted for example, EPA cites the Regional Greenhouse Gas Initiative (RGGI) in the preamble of the proposed rule as an example of a multi

- state program. RGGI took nearly 6 years from when discussions among the RGGI states first began, to January 2009 whe n ten participating states completed their individual rulemaking processes to formally adopt RGGI. The commenter s noted that this was in an area where most governors and legislatures supported the concept, but much work must occur before Midwest governors and legislatures reach even a partial level of agreement.

Based on the RGGI timeline, the commenter s suggested that states interested in pursuing a similar approach under the 111(d) guidelines would need to begin discussions in 2014 on such a program in o rder to be able to implement the program in time for the beginning of the interim compliance period. The commenter s stated that while they and Michigan have been participating in Midwest Power Sector Collaborative discussions around formulating comments to EPA's proposed section 111(d) rule, there have been no serious discussions among the states in developing a regional compliance program.337 The commenter s noted that the 2 extra years EPA offers states to complete a multistate compliance plan is still not en ough time . The commenter s contended that, given the time needed to develop, plan, and implement complex multi

- state programs for 111(d) compliance, a minimum of 5 years is needed between the dates that EPA approves a multi

- state plan and the start of the f irst compliance period , and it will likely take even longer than 5 years.

Comment 25: The EPA should allow the full 2

- year extension period for circumstances other than working on full regional plans, such as the fact that states do not have full legislat ive sessions each year and the fact that some states may enter into inter

- jurisdictional agreements that do not qualify as full regional plans.

Response 25: In response to comments, the EPA is providing for up to three years for the submittal of final sing le

- state and multi

- state plans. The state plan submittal deadlines for initial and final plans are described in section VIII.E.2 of the preamble to the final rule.

The following are summaries of the specific public comments under this comment:

Commenter s s tated that EPA should consider allowing states the full 2

- year extension for inter

jurisdictional cooperation other than joint regional plans. The commenter s stated that many compliance options will require states to seek legislative authority. The comment er s noted that because many states do not have full legislative sessions each year, this could become problematic if they are not granted an extension beyond the 1

- year extension discussed in the Proposed Rule. The commenter s stated that the EPA should als o consider that some states, such as New Mexico, will be working within a multiple jurisdiction framework, whether working with other states or not. Similarly, the commenter s stated that New Mexico may enter into strategic agreements with other jurisdictio ns which fall short of full regional plans. The commenter s stated that both multi

- jurisdictional and strategic agreements will require significant coordination, for both planning and gaining any needed legislative authority. For these reasons, the commente r s stated that the full 2

- year extension period should be allowed for circumstances other than working on full regional plans.

Comment 26: EPA should adjust the language at 40 CFR 60.5745 and 60.5755 to include multiple jurisdictions and strategic agreeme nts to more fully encompass the range of cooperative possibilities, such as agreements with tribes and with cities and counties that have their own air quality rules and SIPs.

Response 26: The EPA disagrees that such mechanisms are necessary. Under individ ual and multi

- state plans, states are free to enter into agreements with tribes and cities that support the implementation of state plans. In addition, such may utilize resources, such as RE, that occur on tribal lands to meet the emission guidelines. The final emission guidelines allow states to tap out

of

- state resources, such as RE, under a single

- state rate

- based plan. Geographic eligibility for resources that may be used to adjust the reported CO2 emission rate of an affected EGU are addressed in secti on VIII.K.1.a ( 2)( c ) of the preamble to the final rule.338 The following are summaries of the specific public comments under this comment:

Commenter s stated that EPA should adjust the language at section 60.5745 and section 60.5755 to include multiple jurisdic tions and strategic agreements to more fully encompass the range of cooperative possibilities. The commenter s noted that the EPA gave extra consideration to states working with other states, but failed to address multi

- jurisdictional possibilities such as working with tribes or working with intrastate jurisdictions. (The commenter s intend to work closely with the City of Albuquerque and Bernalillo County, which is recognized by EPA as a separate jurisdiction with its own rules and SIP.) Further, the comment er s stated that while not every state will choose to develop full multi

- state plans, many may wish to seek cooperation on such issues

as re

- dispatch, RE, and EE. The commenter s stated that limiting the language to only include full multi

- state plans also limits the incentive for cross

- jurisdictional cooperation, further limiting possibilities for emissions reductions.

Comment 27: The EPA needs to clarify the review and approval process for multistate plans, in particular if the multistate plan crosses EPA regional authorities. Will approval be needed from each affected EPA region or from EPA headquarters?

Response 27: Where multistate plans involve states served by more than one EPA Regional Office, EPA headquarters will coordinate review of the multistate plan in consultation with the relevant Regional Offices.

The following are summaries of the specific public comments under this comment:

Commenter s stated that the EPA needs to clarify the review and approval process for multistate plans, in particular if the multistate plan crosses EPA regional authorities. While the EPA has made clear that states may enter into multistate agreements for showing compliance with the state goals and submit multistate plans, the commenter s argued that EPA has not explained h ow multistate plans will be reviewed and approved by the EPA. As the proposed rule does not appear to restrict which states may participate in a multistate plan, in particular, the commenter s requested clarification regarding how the EPA intends to handle approval of multistate plans that cross EPA regional authorities. The commenter s suggested that the EPA needs to clarify whether approval from all applicable EPA regional offices will be necessary or if EPA headquarters approval will be needed in such situ ations. The commenter s noted that states need to understand how this will work before deciding whether or not to pursue a multistate plan.

Similarly, commenter s requested clarification of the approval authority for multi

- state plans that cross EPA regions . The commenter s stated that though geographic proximity is not a requirement for a multi

- state plan, it is likely that many, if not most, multi

- state plans will include nearby states in similar ISO/RTO systems. The commenter s stated that Minnesota and the four states it borders are a part of MISO, yet cross three EPA regional office boundaries.

Comment 28: In order to achieve the most efficient approach, which is likely multi

- state, the EPA should extend the period prior to compliance to allow sufficient time for states to properly339 evaluate compliance alternatives and develop plans with real flexibility for cost

- effective compliance.

Response 28: See response to comment number 22.

The following are summaries of the specific public comments under this comm ent:

Commenters stated that the proposed rule offers 2 additional years for states to submit plans if they decide to collaborate with other states, but fails to give extra time for compliance for multi

state plans. The commenter s stated that the modeling a nd planning requirements of the Clean Power Plan are quite significant, and modeling different regional scenarios requires additional efforts. The commenter s stated that in order to achieve the most efficient approach, which is likely multi

- state, EPA shou ld allow sufficient time to fully plan, as well as to understand and address concerns with such an approach. The commenter s suggested that EPA extend the period prior to compliance to allow sufficient time for states to properly evaluate compliance alterna tives and develop plans with real flexibility for cost

- effective compliance.

Comment 29: Because of the interstate nature of the grid, t he EPA should outline a process by which states (or multi

- state collaborations) are encouraged or required to consult w ith neighboring jurisdictions, and the latter are allowed to evaluate and provide meaningful comments on the development of state plans that will affect them before the plans are submitted to the EPA for review and approval.

Response 29: The EPA disagrees that such a requirement for states to consult with neighboring jurisdictions is necessary. The EPA is aware of multiple dialog ue s across the country, among multiple states and stakeholders, which began in anticipation of the proposed emission guidelines

an d have continued to the present. In addition, under the emission guidelines, states are required to provide for public comment on their plans prior to submission of a final plan to the EPA. This requirement is discussed in section VIII.D.2.a

. ( 6) of the pre amble to the final rule. In addition, states are also required to seek public input on their initial plans prior to submission to the EPA. This requirement is discussed in section VIII.E.3 of the preamble to the final rule. As a result, in addition to the multiple informal dialogs among states that are already taking place, every state will have the opportunity to provide input and formally comment on the plans of neighboring states prior to the submittal of those plans to the EPA.

The following are summari es of the specific public comments under this comment:

Commenter s stated that there is an important role for neighboring jurisdictions in development and review of state or multi

- jurisdictional plans . The commenter s noted that while states will likely weig h the costs and benefits of the combination of measures included in their plans, they will not necessarily consider the regional effects or opportunities to maximize cost effectiveness. For example, the commenter s stated that the lowest cost approach from a regional perspective may involve leveraging renewable energy generation and demand

- side resources throughout the region, rather than relying solely on an in

- state only approach relying on building blocks one and two. The commenter s stated that they are w illing to pay its fair share of the cost of addressing340 carbon pollution from existing power plants, as the benefits of cleaner air and avoiding the cost of climate change will far outweigh the costs; provided that it has an opportunity to comment and have meaningful input in the state plans that will affect the commenter s . Consequently, the
commenter s requested that EPA outline a process by which neighboring jurisdictions can provide meaningful comments on the development of state plans that will affect the m.

The commenter s noted EPA is proposing that, upon receipt of a complete state plan, the agency will review the plan and approve or disapprove the plan within 12 months. The commenter s noted that this process would involve a notice

- and

- comment rulemaking process similar to that used for approving state implementation plan submittals under section 110 of the CAA. The
commenter s stated that it is not clear what, if any, opportunity for public comment EPA would require prior to the submission of the plan tha t would allow for neighboring jurisdictions to evaluate and respond to plans prior to them being submitted to EPA.

The commenter s proposed that, in the Final Rule, EPA encourage or require states (or multi

- state collaborations) to consult with neighboring jurisdictions likely to be affected by their plan as a result of the interstate nature of the grid prior to submitting the plan to EPA. The commenter s stated that this arrangement could be similar to the coordination required between States/Tribes and Fede ral Land Managers (FLMs) under the Regional Haze Rule (40 C.F.R. section 51.308(i)). The commenter s supported EPA's proposal that the ISOs and the RTOs could effectively play a facilitative role in coordinating development and implementation of region

- wide , multi

- state plans, or coordinated individual state plans. The commenter s stated that the ISOs and RTOs in this role could also facilitate the consultation of affected, neighboring jurisdictions and ensure that costs and benefits are shared.

Comment 30 : Are there any types of multi

- state arrangements that EPA believes would require Congressional consent under the Compact Clause?

Response 3 0 : No. The EPA has determined that all of the state plan approaches described in section VIII.C. of the preamble to th e final rule, including multistate variants of these approaches described in section VIII.C.5, could be implemented by states based on their own individual statutory and regulatory authority.

The following are summaries of the specific public comments unde r this comment:

Commenter s asked if there any types of multi

- state arrangements that EPA believes would require Congressional consent under the Compact Clause.

Comment 3 1 : States exploring and pursing a multi

- state system should be granted up to an additi onal 5

- year period from promulgation of the final section 111(d) rules to form an inter

- state plan, and not be penalized if their good

- faith effort to form a potential inter

- state partnership does not reach fruition.

Response 3 1 : See responses to comments number 10 and 22.341 The following are summaries of the specific public comments under this comment:

Commenters were concerned the EPA has not allowed sufficient time for the development of multistate plans. Commenter s thought that additional time was needed to develop multi

- state plans due to the varied legislative and rule making schedules of different states.

Commenter s request ed that states exploring and pursing a multi

- state system be granted up to an additional 5

- year period from promulgation of the fin al 111(d) rules to form an inter

- state plan, and not be penalized if their good

- faith effort to form a potential inter

- state partnership does not reach fruition. Commenter s argued that an additional five years is needed to craft enabling statutory language in each state, develop common tracking and trading programs, develop unified regulations between state agencies, and establish a joint office to implement the multi

state program.

Commenters noted that the Regional Greenhouse Gas Initiative (RGGI) progra m took five to six years to develop.

Comment 3 2 : In addition to allowing states to submit a single multi

- state plan, the EPA should also allow states the options of: 1) submitting individual plans for state

- specific elements and including a common submitt al that addresses common plan elements, and 2) separate individual submittals that are materially consistent for all common plan elements that apply to all participating states.

Response 3 2 : In response to comments, the final emission guidelines provide fo r these different forms of a multistate plan submittal. See response to comment number 1.

The following are summaries of the specific public comments under this comment:

Commenter s requested that EPA provide states the broadest number of options for how to incorporate multi

- state collaborations into state plans. Specifically, the commenter s requested that in addition to allowing states to submit a single multi

- state plan, EPA also allow states the options of: 1) submitting individual plans for state

- specifi c elements and including a common submittal that addresses common plan elements, and 2) separate individual submittals that are materially consistent for all common plan elements that apply to all participating states. The
commenter s stated that these two options would provide the necessary flexibility for states to develop interstate agreements while keeping autonomy over state

- specific plan elements, and may encourage more states to participate in multi

- state collaborations. The commenter s urged EPA to fi nalize both additional multi

- state plan submittal options on which the Agency takes
comment.

Comment 3 3 : The EPA should consider adding elements to the CPP to provide for additional flexibility in plan submission deadlines. In particular, the EPA should c onsider tolling the start of342 the CPP interim goal compliance period for states that choose either of the extension options provided for state plan submittal.

Response 3 3 : In response to comments, the EPA is providing for up to three years for the submittal of final single

- state and multi

- state plans. The state plan submittal deadlines for initial and final plans are described in section VIII.E.2 of the preamble to the final rule. Also see response to comment number 22.

The following are summaries of the spe cific public comments under this comment:

Commenter s stated that several proposals have been advanced for broad state cooperation and regional solutions based on prior experiences such as RGGI or the California

- Quebec market while other parties and firms have developed proposals for specific RTOs. The
commenter s stated that the design, development and negotiation of such agreements are likely to require more time and resources than the EPA

- proposed deadlines anticipate given the significant challenges asso ciated with developing regional air quality plans. The commenter s stated that there are numerous barriers to establishing multistate plans and compliance options that will take additional time to address. According to the commenter s , there are at least thr ee types of barriers to adopting and implementing regional compliance agreements and organizations in time to meet the proposed CPP emission targets: 1) time constraints; 2) political constraints; and 3) parochialism.

Time constraints : The commenter s note d that in many instances, for legal reasons, states will need to pass enabling legislation in order to join together to form regional approaches. The commenter s provided an appendix (Appendix B to comment 23973) to document the significant legal, statutory and regulatory changes that needed to be adopted prior to final approval to the RGGI emissions compliance program. The
commenter s noted that many state legislatures in the West do not meet each year, or if they do, one year's session is dedicated exclusiv ely to budget issues. Accordingly, the
commenter s noted that there are small windows for the enactment of state laws needed to implement regional approaches.

Political constraints : The commenter s noted that New Jersey was once a member of RGGI, but was lat er pulled out of the program by Governor Chris Christie. The
commenter s noted that a similar experience occurred in the western states with implementation of the Western Climate Initiative (WCI) where significant parts of the original design of the WCI fel l apart when supportive Governors were unable to pass enabling state legislation (see Appendix B to comment 23973 for more information).

Parochialism : The commenter s explained that states will naturally assume a stance of examining opportunities to reduce emissions within its own borders first before linking up with other states. The commenter s provided for example, California state legislation increasing the stringency of its renewable portfolio standard (RPS) in 2011 gave greater preference to renewables constructed within California. The commenter s stated that such parochialism could represent a barrier to other states in the region accessing RPS reductions toward an interstate CPP compliance goal.343 To address these concerns, the commenter s suggested that the EPA consider adding elements to the CPP to provide for additional flexibility in plan submission deadlines. In particular, the
commenter s stated that the EPA should consider tolling the start of the CPP interim goal compliance period for states that c hose the either of the extension options provided for state plan submittal.

Comment 3 4 : The EPA needs to provide state air quality and economic regulators with sufficient time to take advantage of the flexibility in the CPP while reflecting the regional n ature of transmission planning, wholesale energy markets, and transmission cost allocation.

Response 3 4 : In response to comments, the EPA is providing for up to three years for the submittal of final single

- state and multi

- state plans. The state plan submi ttal deadlines for initial and final plans are described in section VIII.E.2 of the preamble to the final rule. Also see response to comment number 22.

The following are summaries of the specific public comments under this comment:

Commenter s stated that w hile the proposed CPP provides states with significant flexibility for compliance, the EPA has not provided state air quality and economic regulators with sufficient time to take advantage of this flexibility. As a consequence, the commenter s anticipated t here will be few, if any, submitted compliance plans that reflect the regional nature of transmission planning, wholesale energy markets or transmission cost allocation. The commenter s stated that none of these issues are currently addressed on a state

- spe cific basis within SPP, but rather are addressed regionally in a transparent environment where state boundaries are not acknowledged since the grid crosses city, county and state boundaries.

Comment 3 5 : In order to pursue a tribal or a regional approach, or both, more time is needed to complete needed negotiations and submittal of a state plan. Therefore, states should be given 3 years to submit plans with the provisions for extensions as proposed.

Response 3 5 : In response to comments, the EPA is providing for up to three years for the submittal of final single

- state and multi

- state plans. The state plan submittal deadlines for initial and final plans are described in section VIII.E.2 of the preamble to the final rule

. The following are summaries of the spe cific public comments under this comment:

In light of the EPA's most recent Supplemental 111(d) proposal issued October 27, 2014,
commenter s stated that if Nevada pursues a tribal or a regional approach, or both, the time frame for completing those negotia tions leaves little room for timely submittal of a state plan. Therefore, the commenter s recommended that states be given 3 years to submit plans with the provisions for extensions as proposed.344 6.4.8 Other

This section discusses other comments related to the process of developing and approving state plans. The comments in this section focused on how the issue of grid reliability should be considered in state plan development and review. For the proposal, the EPA met with independent system operators severa l times to discuss any potential impact of this rule on grid reliability (79 FR 34899). The ISO/RTO Council, a national organization of electric grid operators, offered analytic support to help states design programs that do not compromise the regional bul k power system. They also offered to help states develop regional approaches which may reduce costs and strengthen the reliability of the electricity grid.

Commenters have raised a number of issues related to this subsection which are organized by topics ( comments) below. Responses are also provided for these topics.

Comment 1 : Many states and other stakeholders commend EPA for this significant outreach on the proposal, and this type of engagement represents a model for future engagement on Agency

matters of national significance and import such as this one. Significant engagement and outreach will remain important as EPA prepares to final rule and as states formulate, submit, and implement the resulting plans. The EPA needs to maintain regular forums and contact with states prior to finalization, and then during implementation, of the rule.

Response 1: EPA agrees with the commenter s . See section II. K of the preamble for the CPP final rule on stakeholder outreach and consultation.

T he fol lowing are summarie s of the specific public comments under this comment:

Commenter s noted that states have long supported early, meaningful, and substantial state involvement in the development and implementation of environmental statutes and related rules. The commenter s st ated that EPA must engage states as co

- regulators prior to and during the rulemaking process, and Environmental Council of the States (ECOS) recognizes EPA's extensive efforts to do so for this proposed rule. The commenter s noted that the Agency's time and effort spent on calls, meetings, and outreach to states, individually and through ECOS and other associations, regarding the proposed rule has been almost unprecedented. The commenter s noted that many states and other stakeholders commend EPA for this sig nificant outreach on the proposal, and the commenter s suggested that this type of engagement represents a model for future engagement on Agency matters of national significance and import such as this one.

The commenter s noted that the Agency's efforts ha ve addressed many state inquiries about the proposal, but questions remain. The commenter s stated that significant engagement and outreach will remain as important as EPA prepares to finalize the proposal and as states then formulate, submit, and implement the resulting plans. The commenter s encouraged EPA to maintain regular forums and contact with states prior to finalization, and then during implementation, of the rule.345 Comment 2 : The Final Rule should explicitly: (1) require that State Plans include a component describing the assessment of potential impacts to state, multi

- state, and/or regional grid reliability from the implementation of the State Plan; and (2) incorporate criteria to evaluate this component of each State Plan as part of EPA's process to determine whether a State Plan is "approvable." The EPA itself should not perform a de novo reliability review nor perform a critical analysis of the State Plan reliability assessment. Instead, the State Plan review and approval process should evaluate State Plans to ensure that they describe the reliability assessment performed, the results of such assessment, and how the state considered and/or addressed any potential impacts to state, multi

- state, and/or regional grid reliability in the final developm ent of its State Plan.

Response 2 : See section VIII of the CPP final rule preamble on state plans. Specifically, section VIII.A provides an overview, section VIII.D addresses state plan components and approvability criteria, and section VIII.E covers state plan submittals, timing, and the approval process. Note that EPA addresses reliability in section VIII. G , including a reliability safety mechanism and a requirement to consider reliability in state plan development. Also see the resource adequacy and reli ability TSD in the docket for the final CPP rule. While the CPP does not require regional

assessment
, w e continue to encourage states to cooperate regionally and believe that reliability assessments are an important tool to meeting system needs in the most cost

- effective, efficient and reliable way, as explained in the Executive Summary of the CPP final rule preamble.

T he following are summaries of the specific public comments under this comment:

Commenter s recommended consideration of grid reliability in s tate plan development and review. The commenter s stated that in response to EPA's request for comments on the criteria it intends to utilize to evaluate the "approvability" of State Plans and the components that must comprise each State Plan (79 FR 34911), the commenter s recommended that the Final Rule explicitly: (1) require that State Plans include a component describing the assessment of potential impacts to state, multi

- state, and/or regional grid reliability from the implementation of the State Plan; a nd (2) incorporate criteria to evaluate this component of each State Plan as part of EPA's process to determine whether a State Plan is "approvable." According to the commenter s addressing the interconnected nature of the grid and related operational issue s, such as transmission and generation usage patterns, proactively during the relevant State Plan development and review stages would identify reliability issues and support informed decisions during the development and implementation of the Final Rule to ameliorate potential adverse impacts to grid reliability.

Commenter s stated that s ection 111(d) grants EPA discretion to approve State Plans based on defined criteria, while meeting "energy requirements, and section 111(a) of the Clean Air Act defines "st andard of performance" as a standard for emissions of air pollutants which reflects the degree of emission limitation achievable through the application of the best system of emission reduction which (taking into account the cost of achieving such reductio n and any non

- air quality health and environmental impact and energy requirements) the Administrator determines has been adequately demonstrated. Consistent with this authority and intent, the commenter s stated that the Final Rule should establish State Pl an approval criteria that ensure adequate346 consideration of state, multi

- state, and/or regional grid reliability issues during the implementation of the Final Rule.

The commenter s stated that they are not proposing that EPA itself perform a de novo reliabi lity review or perform a critical analysis of the State Plan reliability assessment. Rather, the
commenter s suggested the State Plan review and approval process should evaluate State Plans to ensure that they describe the reliability assessment performed, the results of such assessment, and how the state considered and/or addressed any potential impacts to state, multi

- state, and/or regional grid reliability in the final development of its State Plan.

The commenter s submitted that applying explicit criteri a when reviewing State Plans will allow EPA to discern whether the State Plan evaluated, identified, and considered/addressed potential impacts to state, multi

- state, and/or regional grid reliability and, where a State Plan submittal does not address the r equired elements of the above

- described component, deem such State Plan inadequate in this respect. The commenter s stated that inclusion of these "approvability" criteria will facilitate a Final Rule and related State Plans that are consistent with grid re liability by providing states and EPA with the opportunity to mitigate potential grid reliability impacts prior to implementation of State Plans. The commenter s provided recommended language for the criteria in Attachment B to their comments (summarized be low). The commenter s stated that the Final Rule should make clear that, if plans are submitted that do not meet these criteria, the plans will be sent back for further consultation and work with the reliability authorities so that state, regional, and inte r

- regional impacts can be adequately addressed.

In Attachment B to their comment, commenter s recommended criteria entitled "Demonstration of Grid Reliability" to be utilized as general "approvability" criteria, requiring that:

"In developing its State Pla n, a state must describe: (1) the assessment to identify the potential impacts of the proposed State Plan to state, multi

- state, and regional grid reliability performed by ISOs/RTOs in market areas and the NERC

registered entities responsible for reliabili ty in the state and/or region, e.g. , reliability coordinator, planning coordinator, etc. with independent review by the NERC or the Regional Entity in non

- market areas prior to submission of the State Plan for review; (2) the results of such assessment inc luding identification of any state, multi

- state, and/or regional grid reliability issues; and (3) how the state considered and/or addressed these issues in its State Plan submittal. To be approvable, in the component entitled "Evaluation and Consideration of Impacts to State, Multi

- State, and/or Regional Grid Reliability," the State Plan shall address:

1) Whether the reliability assessment meets the criteria set forth above ;

2) Whether the results of the reliability assessment indicated near

- or long

- term state, multi

- state, and/or regional grid reliability impacts ;

3) Whether, where multi

- state or regional impacts were identified, those impacts were coordinated with the impacted region or state(s); and347 4) Whether the State Plan was revised to address id entified state, multi

- state, and/or regional impacts to reliability and, if not, how such impacts to reliability were addressed, e.g., revision of impacted state's or region's State Plan."

Commenter s strongly supported the recommendations of commenter s cal ling for a review of state plans by the relevant ISO/RTO or another independent reliability planning organization and outlining criteria for ensuring the adequacy of these reliability reviews. The commenter s stated that together these reviews would ensure that potential reliability issues arising in connection with the Clean Power Plan or from individual state implementation plans are identified and addressed early.

6.5 ADDITIONAL FACTO RS

This chapter discusses biogenic CO 2 accounting, biomass combustion a s a CO 2 mitigation, and expanding RE and EE, while encouraging creation of sustainable jobs.

Commenters have raised a number of issues related to this subsection which are organized by topics (comments) below. Responses are provided for these topics.

Co mment 1: Comments on the Framework for Assessing Biogenic Carbon Dioxide for Stationary Sources

Response 1: Many comments inquired about the status of the framework, and several stated that the EPA should finish the Framework for Assessing Biogenic CO2 Emi ssions from Stationary Sources to clarify how biomass is treated for compliance in state plans. Many comments provided specific recommendations for how the Framework could, and should, be applied to determine the use of biomass in this rule. Examples of re commendations include choice of baseline approach, timescale, spatial scale, leakage, and other variables.

EPA developed the revised draft report, Framework for Assessing Biogenic CO 2 Emissions from Stationary Sources , to continue advancing our understan ding of the role the use of biomass can play in strategies to address greenhouse gas emissions. Specifically, the Framework was developed as a policy

- neutral framework for assessing biogenic CO 2 emissions from stationary

sources

— it was not developed as tec hnical guidance in conjunction with any specific policy or program. The EPA is engaging in a second round of targeted peer review of the revised draft Framework with the SAB in 2015.

A discussion regarding the current status of the development of the revis ed Framework and how information from the revised Framework and the related peer review processes could be used to inform how states and EPA assess biogenic CO2 can be found in Section VIII.I.2.c and Section VIII.K.1 of the final rule preamble of the CPP

. For more information regarding the Framework,

see: http://epa.gov/climatechange/ghgemissions/biogenic

- emissions.html348 Man y commenters stated that the memorandum from Assistant Administrator McCabe on November 14, 2014 did not provide adequate information to allow for biomass in state plans, and that EPA must define the “sustainable land management” and “sustainably

- derived feedstocks” terms mentioned in the memo. A discussion r egarding sustainably

- derived biomass feedstocks can be found in s ection VIII.I.2.c of the final rule preamble.

C ommenter s stated that the memo and Framework provided differing results on waste and forest derived industrial byproduct feedstocks, which shoul d be resolved before they can be regulated and put into state plans. Some c ommenter s asserted that there is no explicit authority under

s ection 111(d) to treat delayed emission reductions as equivalent to real

- time reductions, and other commenter s stat ed t hat the use of biomass will increase in emissions during the year of actual use.

A discussion regarding the use of some biomass feedstocks for compliance purposes can be found in s ection VIII.I.2.c and s ection VIII.K.1 of the final rule preamble.

The follo wing are summaries of the specific public comments under this comment:

Commenter s asked where to find the draft biomass accounting framework in responses to EPA"s statement, "EPA is assessing the use of biomass feedstocks for energy recovery by stationary sources and has developed a draft accounting framework that the EPA's Science Advisory Board (SAB) has reviewed."

Commenters agreed with earlier commenters that the EPA should finalize and publish this biogenic CO2 framework as soon as possible to provide clarity and assurance for how biomass can be used for compliance with the Proposal and to aid in early design of state compliance plans.

Commenter s describe d deficiencies in the Framework including a failure to rank preferences among options and the fact i t is unclear how or if the revised Framework will be of relevance to the ESPS, given that the EPA "has not yet determined how the framework might be applied in any particular regulatory or policy contexts." Commenter s provided several specific recommendati ons for developing biogenic accounting factors (BAFs) that:

• Rely on an anticipated future baseline to model changes in stored carbon. Regulators must compare emissions from increased biomass harvesting added to a "business as usual" baseline to a scenario absent increased biomass demand for bioenergy. This approach will help ensure biomass carbon accounting results reflect what the atmosphere "sees" in terms of emissions from increased biomass harvesting.

• Utilize compact timeframes when analyzing the net e missions associated with the use of biomass. An analytic horizon of 10

- 20 years would align biogenic emissions accounting under the ESPS with other regulatory efforts designed to avoid the worst consequences of climate change; it would reduce modeling unce rtainty, which can increase dramatically over longer time horizons; and it would model BAFs on approximately the same timeframe as industry planning horizons for long

- term contracts and operations.349 • Calculate biogenic emissions and reductions consistently, regardless of the spatial scale or region in which they occur. BAFs should be modeled in a way that is independent of the physical fuel shed area. Instead, data to inform BAFs

- on fuel type, size class for woody biomass feedstocks, land use history, curr ent harvest regime and alternate biomass uses in existing wood products markets

- should be collected at the appropriate scale for each class of data.

• Address leakage by incorporating the following counterbalancing assumptions into the BAF analysis: first , that new biomass harvest displaces demand associated with other industries on a full 1 to1 basis to a new, similar forest stand; second, that leakage is additive and "new" standing trees are cut in forests that are biologically and climatically identical to the original wood source to meet the original non

- biomass needs.

• Categorize biomass feedstocks according to key physical and methodological characteristics. This process includes differentiating between different fuel types (e.g., boles versus branche s/limbs), different size classes (e.g., large diameter versus small diameter), different land use histories (e.g., planted versus naturally regenerating); different harvest regimes (e.g., complete removal versus partial cuts); and different alternative fat es (e.g., short

- term uses versus long

- term structural objects for merchantable and in situ burning versus decay for harvest residues).

• Use simple, precautionary assumptions that reduce the risk of undercounting emissions and ensure modeling uncertainties are resolved conservatively. Commenter s concluded that the Agency must place the burden of proof on the states and the regulated entities to demonstrate that their claims and assumptions underlying the model are in fact true and
accurate.

Given the host o f uncertainties underlying the modeling and the undue discretion afforded to the states in the revised Framework, commenter s said that the Agency must set strict standards for documentation and verification of feedstock use, land use practices, regional sc ales, markets, and "leakage."

Commenter s agreed with the statement in the revised Framework that the selection of the temporal framework "should align with the specific goals of the policy or program that the framework is applied to." In the Clean Power P lan, commenter s said that this policy timeline would be impacts achieved by 2030, and it is clearer that short rotation crops will align with this timeline than it is for longer rotation crops. Commenter s stated that scientists have documented that it is q uite likely that longer rotation feedstocks will produce carbon deficits during this timeline Commenter s said that it would be appropriate for the EPA to differentiate between biomass that is climate beneficial and biomass that increases atmospheric carbon . As EPA clarifies its treatment of biogenic energy under the Clean Power Plan, commenter s recommended that:

• Crediting bioenergy resources with carbon reductions must be grounded in science

• The terms "sustainable land management" and "sustainably

- derive d feedstocks" must be clearly defined.350 • Because of the wide variations in carbon cycling dynamics across bioenergy feedstocks, the EPA's regulations must differentiate among feedstocks, providing guidelines on differentiating between biomass that lowers an d biomass that increases atmospheric carbon.

The EPA must provide clear guidance to states for how to appropriately include bioenergy resources in their compliance plans.

Commenters agreed that the EPA should complete and make available for public commen t the revised accounting framework to give biomass energy adequate recognition for its emission reduction benefits and provide adequate opportunity to comment on the 111(d) proposed rule. Commenter s stated that the EPA's accounting framework should be simp le and based on the best available data; it should reflect data that shows the use of manufacturing residuals for energy generates greenhouse gas reduction benefits. Commenter s were encouraged by the EPA's positive signal regarding their intent to recogniz e the carbon benefits of biomass, but stressed that the biogenic accounting framework should be finalized in a way to be binding and not merely serve as a guidance document as currently proposed. Commenters stated that a binding framework is important to p rovide the necessary certainty to potentially affected parties under the framework as well as to states which use the framework, as the EPA rightly suggests, as a clearly defined path to include biomass

- derived fuels in energy production as a way to help t hem meet the emission reduction requirements of the rule.

Commenter s added that the recently revised framework for accounting for carbon from biopower and a guidance memorandum from Acting Assistant Administrator McCabe that accompanied the revised Framew ork (the "McCabe Memo") do not offer a legally or scientifically valid way to assess the technical and economic potential of low carbon biomass and thus leave the EPA without a way to accurately include biomass in setting state targets. Commenter s stated t hat neither document rectifies the Proposed Rule's arbitrary and capricious approach to biomass generation; indeed, the McCabe Memo in many ways exacerbates the problems identified above.

Commenter s said that if the EPA requires states to account for bioge nic emissions using anticipated future baselines, a compact (and policy

- relevant) timescale for analysis, spatial scales that facilitate meaningful distinctions between biomass types, and mechanisms that address leakage

- the resulting emissions modeling cou ld reasonably simulate the effect that biogenic emissions will have on the atmosphere during the policy

- relevant timeframe. Commenter s stated that this would make it useful for compliance, but it still would not be useful in setting targets. However, comme nter s said, if the EPA adopts other criteria, such as allowing states to analyze biogenic emissions over a protracted timeframe (e.g., 50 years), which the Agency contemplates in Appendix 6B to the revised Framework, affected sources would be free to burn biomass feedstocks that will produce significantly higher GHG emissions over the next several decades, including the time period covered by the ESPS.

Commenter s added that, although the Proposed Rule repeatedly suggests that revisions to the EPA's biomass accounting framework will provide important guidance to the states, the Revised Draft Framework states that it is not a final product and that the EPA has not yet determined how it might be applied in any given regulatory context. Nor does it appear to pr ovide much in the way of prescriptive guidance; rather, commenter s stated, it seems to leave unanswered a number351 of critical questions identified by the Science Advisory Board panel, including the proper "baseline" and time scale for assessing net atmosphe ric impact. Commenter s concluded that the Framework is more like a list of options, choices among which could produce radically different results, than guidance for states on the proper methodology for assessing biomass emissions in their compliance plans. Again, inviting states to pick and choose among contradictory options in order to satisfy their own policy goals may produce arbitrary results.

Commenter s said that the EPA's proposed intent to use the Revised Draft Framework in evaluating biomass CO2 em issions under the Proposed Rule and in other regulatory contexts and to move ahead with regulatory proposals in "in parallel" with ongoing Science Advisory Board panel review and "further work" on the Revised Draft Framework is a complete about

- face from
t he EPA's prior reasoning in this context. For example, commenter s said, when the EPA proposed a 3

- year exemption for biogenic CO2 under the PSD and Title V programs, it did so out of purported reluctance to regulate in the absence of scientific input (part icularly input from the Science Advisory Board panel specially convened for this purpose). Now, commenter s stated, the EPA apparently intends to start making regulatory decisions under both the Proposed Rule and the PSD program without waiting for further scientific input on the Revised Draft Framework, and without even articulating what role, if any, scientific input will play in its regulatory decisions.

Commenters described other deficiencies in the McCabe memo and concluded that it would be arbitrary a nd illegal to designate classes of biomass fuel as "approvable" simply based on a claim of sustainability. Commenter s added that "sustainably

- derived" is an ambiguous standard: it has not been defined in the agency's November 19 memorandum and has not been identified as a means of carbon accounting in the accompanying revised Framework. Commenter s described other concerns with this approach and concluded that the EPA's plan to effectively exempt from ESPS scrutiny those emissions that occur when EGUs combus t "sustainably

- derived feedstocks" could result in a net increase of CO2 emissions for decades. Consequently, commenter s said, the EPA cannot meet its obligations under CAA section 111(d) by solely requiring affected sources to show that they rely on "sust ainably

- derived feedstocks," and must not use this standard when setting state targets.

Commenter s argued that the EPA is relying on out

- of sector carbon sequestration on agricultural or forest lands to offset emissions from covered sources, which is imper missible under the statute. Even where the McCabe Memo appears to rely on the Revised Draft Framework,
commenter s said that it does so in an incomplete fashion. According to commenter s , the McCabe Memo recognizes the biogenic CO2 emissions and climate poli cy benefits of only two of the potential sources of biomass feedstocks discussed in the Revised Draft Framework: "waste

derived and certain forest

- derived industrial byproduct feedstocks." Commenter s noted that the Revised Draft Framework does not unequivo cally conclude that these feedstocks have clear "benefits" when used for bioenergy, but rather, particularly in the case of forest

- derived industrial byproducts, the Revised Draft Framework recognizes that net CO2 emissions depend largely on what would hav e happened to the material if it were not used for bioenergy (for example, whether it would have been used for wood products manufacturing, and thus might sequester carbon for a longer period, as opposed to being disposed in a way that could generate short er

- term emissions from decomposition). Commenter s stated that the Revised Draft Framework also recognizes the potential for "leakage"; using materials that otherwise might have352 gone toward wood products manufacturing for bioenergy may create new demand els ewhere for wood products feedstocks, causing additional emissions. Commenter s stated that the process described in the McCabe Memo for evaluating state compliance plans is arbitrary because it states only that "EPA will evaluate the biogenic feedstock comp onents of proposed state plans . . . as part of the compliance plan review and approval process and will provide clarification as needed on the basis on which it will make such biomass

- related evaluations." According to
commenter s , there is no discernible standard for evaluation of state plans in this statement. Similarly, in light of the lack of definitions of key terms in the McCabe Memo and the Revised Draft Framework, commenter s said that there is also no discernible standard for compliance or enforceme nt. Commenter s concluded that the EPA must explain the rationale and provide a reasoned evidentiary basis for its decisions.

Commenter s stated that the second draft Biogenic Assessment Framework (BAF) is greatly improved over the first but it was released with insufficient time for complete review and analysis before the 111(d) comments were due (e.g., seven business days) . The commenter s noted it was released informally, with no notice in the Federal Register, which does not bode well for giving industry and other stakeholders the clarity they have been seeking for more than 3.5 years. The commenter s stated that it is clear that EPA, by addressing the second draft to the attention of the Science Advisory Board (SAB), views this as a preliminary guidance do cument, not even ready for the early stages of promulgation. The commenter s stated that the BAF equation is complex, incorporating multiple and massive variables and much more time for analysis will be needed to begin to form opinions as to its usefulness in development of State Implementation Plans for 111(d).

The commenter s noted that EPA discusses its in

- progress efforts to develop an "Accounting Framework for Biogenic Emissions" in the preamble to the proposed guidelines, and notes that a draft has been reviewed by EPA's Science Advisory Board (SAB). The commenter s stated that in the draft framework, EPA concluded that "biomass had the potential to reduce the overall level of CO2 emissions" in electricity generation but that the type of biomass used and it’s upstream "life

- cycle assessment" were important considerations. See 79 FR 34924. A revised framework was released on November 19, 2014, but the SAB has yet to review or comment on it.

Commenter s stated the EPA has not provided States with a legally

- and scientifically

- valid framework for analyzing the use of biomass as a CPP compliance measure. The commenter s noted that EPA's 2014 "Framework for Assessing Biogenic CO2 Emissions from Stationary Sources" leaves key issues unresolved. The commenter s stat ed that EPA's "Framework for Assessing Biogenic CO2 Emissions from Stationary Sources" (November 2014) ("revised Framework"), is a substantial revision of the Agency's flawed 2011 draft framework. The
commenter s stated however the revised Framework still l eaves some significant issues unresolved. The commenter s stated for example, it does not compel the use of anticipated baselines, compact timeframes, small spatial scales, or leakage determinations. The commenter s noted that instead, it merely lists them a mong the analytic criteria that regulators might apply. The commenter s stated that under the revised Framework, the biogenic accounting factor ("BAF") may be calculated by comparing the projected emissions in a biomass scenario against an anticipated futur e baseline over the course of an analytic horizon that is compact enough to significantly reduce uncertainty (e.g., 10

- 20 years). The commenter s stated that likewise, a BAF calculation under the new Framework can feature spatial scales small enough to be d irectly353 affected by a regulated facility's biomass consumption, and it "can accommodate calculations of leakage effects," which EPA recognizes "may be a significant factor in determining net biogenic CO2 fluxes." The commenter s stated that none of these ap proaches are required by the revised Framework, however. The commenter s stated that consequently, the revised Framework provides little insight into whether and how EPA will account for biogenic CO2 in the context of the CPP

.

Commenter s stated that the rev ised framework does not adequately prevent States from relying on biomass

- based energy systems that will increase net CO2 emissions . The commenter s stated that the Revised Framework does not adequately prevent States from relying on biomass

- based
energy sy stems that will increase net CO2 emissions. The commenter s stated that it is unclear how or even if the revised Framework will relate to the CPP. The commenter s noted that EPA states at the outset that it "has not yet determined how the framework might be applied in any particular regulatory or policy contexts"

. The commenter s stated that in most instances, the revised Framework catalogs the various options for analyzing biogenic emissions according to the relevant criteria but fails to signal a preference for one approach or another. Commenter s stated that EPA's revised Framework "examines two baseline approaches"

- the reference point baseline and the anticipated baseline

- "although other baselines could be used when applying the framework." The commenter s no ted that EPA writes, "There is no single correct answer for which baseline to choose, because different baselines help answer different questions," thereby avoiding its obligation to explain how reliance on different kinds of baselines comports with the

re quirements of CAA Section 111(d) or how different baseline options might affect states' emissions targets and/or compliance determinations.

Commenter s noted that EPA lists a set of factors "that should be taken into account to help determine the most appr opriate temporal scale ," including feedstock choice, region, data availability, and policy or program application. The commenter s stated that the timeframe for conducting a net emissions analysis "should align with the specific goals of the policy or
progr am that the framework is applied to (e.g., baseline time frames for initial assessment or renewal of requirements under existing programs)" The commenter s stated that although there are key considerations that apply to any regulatory effort designed to red uce GHG emissions in a policy

- relevant timeframe (such as the need to limit the uncertainty associated with long

- delayed emission reductions), the revised Framework does not express even a general preference between short or long timeframes. The commenter s noted that as a result, it provides no indication as to which analytic timeframe EPA thinks would best "align with the specific goals of the" CPP. The
commenter s stated that given that there is no explicit authority under Section 111(d) to treat delayed e mission reductions as the equivalent of real

- time reductions, EPA's failure to require the use of a shorter timeframe particularly problematic with respect to its CPP proposal

.

Commenter s stated that similarly, EPA highlights the revised Framework's flexib ility with respect to spatial scales ("The framework is scalable and can be applied at various spatial scales, from a small scale (plot/entity

- level) to global"), but it fails to explain how the use of a particular spatial scale is (or is not) consistent w ith the requirements of CAA [Section] 111(d) or the objectives of its CPP proposal. The commenter s stated that the revised Framework "can accommodate calculations of leakage effects," but it "does not choose or develop a specific methodology for identifyin g and evaluating these effects," either in general or with respect to a particular regulatory program

-- even though EPA has stated elsewhere that it expects states and354 stakeholders "will look to the second draft of the Framework for indications of how the Agency will treat biogenic CO2 emissions under both the CPP and the PSD program going forward" The
commenter s stated that until EPA explains if it will require the consideration of leakage effects in the context of the CPP (as it must do), and how it will do so, the Agency has not provided adequate opportunity for stakeholders to analyze and comment on the potential role of biomass in CPP compliance

.

Commenter s stated that if EPA chooses correctly among the options it catalogs in the revised Framework (i. e., if the Agency requires states to account for biogenic emissions using anticipated future baselines, spatial scales that facilitate meaningful distinctions between biomass types, and mechanisms that address leakage) the resulting emissions modeling coul d reasonably simulate the effect that biogenic emissions will have on the atmosphere during the policy

relevant timeframe (that is, by 2030). The commenter s stated however if EPA makes the wrong choices with respect to these analytic criteria, or allows st ates to make the wrong choices, the analyses that result will be highly misleading. Commenter s added for example, if EPA allows states to analyze biogenic emissions over a protracted timeframe (e.g., 50 years, which the Agency contemplates in Appendix B to the revised Framework) affected sources would be free to burn biomass feedstocks that will produce significantly higher GHG emissions over the next several decades, including the time period covered by the ESPS.

The commenter s stated that furthermore, reg ardless of the timeframe EPA uses to analyze biogenic emissions, any "netting" or "offsetting" of actual emissions resulting from combustion of biomass at affected sources is inconsistent with the proposed CPP under either an emission
rate

- based system or a mass allowance

- based system . The commenter s stated that in either case the standards are set on an annual basis, and, as previously discussed, CO2 emissions at the affected source (and the rate of emissions) will actually increase during the year of biom ass combustion (the same will likely be true during the entire period leading to final compliance in 2030). The commenter s stated therefore, no credit may be given for biomass combustion under an emission rate

- based approach to CPP compliance, and no allow ances may be issued for such activities either.

Consistent with the recommendations that CATF and other environmental organizations have previously provided to EPA, commenter s urged the Agency to clarify in its final CPP rule that any biogenic emission acc ounting determinations conducted within the context of CAA section 111(d) regulations must include biogenic accounting factors (BAFs) that:

• Rely on an anticipated future baseline to model changes in stored carbon. Regulators must compare emissions from inc reased biomass harvesting under a "business as usual" baseline to a scenario absent increased biomass demand for bioenergy. This approach will help ensure biomass carbon accounting results reflect what the atmosphere "sees" in terms of emissions.

• Utilize c ompact timeframes when analyzing the net emissions associated with the use of biomass. A timeframe of 10

- 20 years would analyze the net emissions impact of biomass during a period in which we must avoid locking in long

- lived emissions, as we try not to

exc eed the nation's total allowable emissions consistent with a 2 degree C threshold, while demand reduction and other mitigation measures have time to take hold more fully.355 It would also align biogenic emissions accounting under the ESPS with other regulator y efforts designed to avoid the worst consequences of climate change; it would reduce modeling uncertainty, which can increase dramatically over longer time horizons; and it would model BAFs on approximately the same timeframe as industry planning horizons for long term

- contracts and operations.

• Make clear that no credit may be given for biomass combustion under an emission rate

based approach to CPP compliance, nor may mass

- based allowances be issued for such activities.

• Calculate biogenic emissions and re ductions consistently, regardless of the spatial scale or region in which they occur. BAFs should be modeled in a way that is independent of the physical fuel shed area. Instead, data to inform BAFs

-- on fuel type, size class for woody biomass feedstocks, land use history, current harvest regime and alternate biomass uses in existing wood products markets

-- should be collected at the appropriate scale for each class of data.

• Address leakage by incorporating the following counterbalancing assumptions into the BAF analysis: First, that new biomass harvest displaces demand associated with other industries on a full 1

- to

- 1 basis to a new, similar forest stand. And second, that leakage is additive and "new" standing trees are cut in forests that are biological ly and climatically identical to the original wood source to meet the original nonbiomass needs.

• Categorize biomass feedstocks according to key physical and methodological characteristics. This process includes differentiating between different fuel types (e.g., boles versus branches/limbs), different size classes (e.g., large diameter versus small diameter), different land use histories (e.g., planted versus naturally regenerating); different harvest regimes (e.g., complete removal versus partial cuts); a nd different alternative fates (e.g., short

- term uses versus long

- term structural objects for merchantable and in situ burning versus decay for harvest residues).

The commenter s stated that EPA plans to submit the revised Framework to "a second round of
ta rgeted peer review through its SAB later this month." The commenter s stated that while they will engage in that process to provide the Agency and the SAB panel with more detailed recommendations about biogenic emissions accounting, they stressed that EPA h as a separate duty with respect to this rulemaking. The commenter s stated that EPA must explain how biogenic emissions will be accounted for under the final CPP and provide the "critical factual material that is used to justify" that approach. The commente r s stated that EPA has not yet fulfilled this responsibility.

C ommenters commended the EPA for communicating how it intends to treat biogenic CO2 emissions from waste and biogas renewable energy projects in the proposed EG and in the Prevention of Signific ant Deterioration program. Commenter s stated that the biogenic accounting framework is an essential document for enabling the development of biogas/biomass energy projects to support compliance under the Existing Source proposal. The commenter s356 noted that had EPA failed to clarify the scientific and policy issues in a revised accounting framework, states would have been reluctant to use bioenergy projects as a tool for emission reductions, and might treat low carbon fuels as equivalent to fossil fuels. The commenter s noted that in the New Source proposal, EPA said: The proposed CO2 emission standards do not apply a different accounting method for biogenic CO2 emissions for the purpose of determining compliance with the standards.

Commenter s stated that the effect of this statement is to count biogenic CO2 emissions co

- fired at an affected EGU under the New Source proposal in the same manner as fossil fuel

- fired emissions. The commenter s stated that this approach is not scientifically justified when applied
t o biogenic emissions associated with municipal solid waste. The commenter s was pleased that EPA intends to adopt an approach to MSW

- derived materials and biogas that is supported by the EPA's Science Advisory Board (SAB). The commenter s noted that EPA prop osed in the 2011 version of the Framework that biogenic CO2 generated by the decomposition of municipal solid waste is essentially carbon neutral, and the SAB agreed. The commenter s stated that EPA's revised framework finds that bioenergy projects that rec over energy from MSW

- derived materials and biogas are not only carbon neutral, but actually result in net CO2 emission reductions. The commenter s agreed with this conclusion and commended the EPA for communicating its intended treatment of biogenic emissio ns from MSW. The commenter s stated that the framework will be an important tool for the development of state plans under the proposed EG.

Similarly, commenter s noted that EPA has been working on the biogenic accounting framework since 2011, and stated tha t the framework is a critical technical document that will enable states to develop biogas/biomass/MSW energy projects to support compliance with CO2 reduction targets under the Existing Source proposal. The commenter s noted that the Agency's accompanying memorandum also describes how bioenergy projects would be treated in planned revisions to the PSD program. The commenter s stated that without a clear understanding of how CO2 emissions associated with bioenergy projects are to be accounted, it is possible that many states will hesitate to rely on these technologies.

Commenter s supported EPA's adoption of an approach to waste

- derived feedstocks and biogas that is anchored in science and the recommendations made by the EPA's Science Advisory Board (SAB). The commenter s stated that, in the September 2011 draft framework (developed for SAB review), EPA proposed to assign different biomass feedstocks with a biogenic accounting factor (BAF) of zero to one, where a BAF of zero would indicate that the feedstock is e ssentially carbon neutral, and a BAF of one would indicate that the feedstock is essentially equivalent to combusting fossil fuels. The commenter s stated that in its September 2012 report on the results of its review, the SAB concluded the following, with respect to feedstocks derived from municipal solid waste (MSW):

"For waste materials (municipal solid waste, manure, wastewater, construction debris, etc.), the Framework assigns a BAF equal to 0 for biogenic CO2 released from waste decay at waste manageme nt systems, waste combustion in incinerators or combustion of capture waste derived CH4. ...The SAB concurs with the Framework that the CO2 released from the decomposition of biogenic357 waste in landfills, compost facilities or anaerobic digesters could reas onably be assigned a BAF of 0."

Put simply, according to the commenter s , EPA proposed in the 2011 version of the Framework that biogenic CO2 generated by the decomposition of MSW is essentially carbon neutral, and the SAB agreed. The commenter s stated that the revised framework finds that bioenergy projects that recover energy from MSW

- derived materials and biogas are not only carbon neutral, but actually result in net CO2 emission reductions. The commenter s noted that had EPA failed to revise and issue the framework, all sources of biogenic CO2 would be lumped together and treated like fossil fuel CO2 emissions. The commenter s stated that for biogenic CO2 emissions from MSW, such an approach would be scientifically incorrect, would stigmatize an environment ally beneficial energy source, and would make it harder to comply with the limits proposed for affected existing EGUs.

Commenter s strongly supported EPA taking the following steps with respect to the treatment of biogenic CO2 emissions:

1. Finalize and releas e the updated Biogenic Accounting Framework as soon as possible, providing BAFs for all feedstocks or, if this is not possible, for the feedstocks that are more easily assessed.

2. Ensure that the final Existing Source rule reflects the findings of the final Framework, and references the BAFs included therein.

3. Ensure that final New Source rule reflects the conclusions of the Framework and references the BAFs included therein. Only feedstocks for which assessment is ongoing or are determined to have a BAF of 1 should be required to count their biogenic CO2 emissions just like fossil fuel

- derived CO2 emissions.

4. Conduct outreach to states to ensure that the information in the Framework is available, clear, and readily implemented.

5. Update the Clean Power Plan T oolbox to provide additional information on how to use the BAF for different feedstocks.

Commenter s also supported steps 1, 2, 4 and 5 above with respect to the existing source proposal. Commenter s added that if EPA finalizes the suite of power plant rule s currently out for proposal without addressing the accounting of biogenic CO2, it will be extremely difficult to develop even the most environmentally sound bioenergy projects. The commenter s stated that such an outcome would have detrimental effects on t heir renewable energy business, and could cause a crisis of confidence at the state level regarding the development of bioenergy plants.

Commenter s stated that the 2014 revised biogenic CO2 accounting framework that EPA issued on November 19, 2014 repeated ly treats as a scientifically sound working assumption that CO2 emissions resulting combustion of annual herbaceous crop

- derived biomass (e.g., corn stover) by existing EGUs are carbon neutral. is in balance ....); Appendix I: Illustrative Forestry and Agr iculture Case Studies Using a Retrospective Reference Point Baseline, at I

- 14 ("GROW is set358 to 0 because the ratio of net growth to removals is 0."); and Appendix L: Illustrative Forestry and Agriculture Case Studies Using a Future Anticipated Baseline, at L

- 17 ("The GROW term defaults to 0 for agricultural biomass sources in this methodology. The assumption is that, with annual crops, biogenic CO2 'growth' in this context equals what is harvested (removed) from the system for energy generation."). See also 2014 Accounting Framework, at 6 n.18, 16 (Section 2.4.1), and 43 (Section 4.4).] Second, the commenter s noted that in the 2014 Accounting Framework, EPA gave hypothetical examples to illustrate how the Framework would operate in the case of corn stover co mbustion. The commenter s agreed with the assumption in the framework examples that the demand from EGUs for corn stover would be insufficient to stimulate land

- use change and that the Biogenic Accounting Factor (BAF) for combustion of corn stover sourced w ithin the corn belt would be zero or tiny

.
Commenters stated the framework should avoid the use of an anticipated baseline based on modeling assumptions because it is inaccurate, unduly complicated, and costly to implement. The commenters said in contrast , a reference point baseline that uses historical and current data more accurately assesses if there are any atmospheric impacts from the use of biomass for energy. The commenters urged EPA to complete its accounting framework, acknowledge these carbon neu trality principles, apply them consistently to its regulations, and provide clear guidance on how the framework should be incorporated into state implementation plans.

The commenters also stated that the biogenic framework needs to be "regulation ready".

Comment 2 : Comments on accounting biogenic CO2 emissions under the CPP and requests for clear accounting methods in the final CPP.

Response 2 : Many commenters stated that, prior to states submitting compliance plans, EPA should clarify if and how biomass emissions are accounted for and clearly define which biomass fuel types are considered carbon neutral. Multiple commenters stated that EPA should clarify that all biomass, or at least certain types of biomass, can be considered to be carbon neutral. C ommen ter s suggested that biomass harvested under state or federal sustainable forestry practices should be considered to be carbon neutral.

A discussion of the use of biomass feedstocks and associated biogenic CO2 assessment can be found in s ection VIII.I.2.c and s ection VIII.K.1 of the preamble.

Several commenters asserted that the revised Framework and the memorandum from Assistant Administrator McCabe on November 19, 2014 did not provide enough clarity for how to treat biomass emissions. Many commenters stat ed that biomass should have consistent treatment as other renewable resources and emissions should be distinguishable from fossil fuels while other
commenter s stated that biomass should be treated like a fossil fuel. Some commenter s asserted that biomass p rovides environmental benefits when it replaces fossil fuel. Several commenters desired clarity on whether or not biomass can be used as an emission reduction measure, while some commenters asserted that biomass should indeed be able to be used as an emiss ion reduction measure. Some c ommenter s noted that any reduction measure must be accompanied by protocols to measure, verify and enforce the emission reductions from use of biomass. Several359 commenters believe that states should be able to determine how biom ass is treated in their state plans. A few commenters commented that if state RPS programs already recognize biomass as renewable energy, then biomass should be treated the same for state plans. A few commenters mentioned that EPA needs to better define wa ste and forest

- derived industrial byproducts and whether they are acceptable or not. Many commenters ask whether biomass should be calculated for state goals or if it is just used as a compliance measure.

A discussion regarding the use of some biomass fee dstocks for compliance purposes can be found in s ection VIII.I.2.c and s ection VIII.K.1 of the preamble.

Some commenters stated that EPA should not regulate biomass until the Framework is complete and available for public comment, while other commenter s w e re concerned that the inclusion of roundwood as a hypothetical example in the revised Framework allows for the use of roundwood for energy production.

EPA developed the revised draft report, Framework for Assessing Biogenic CO 2 Emissions from Stationary S ources , to continue advancing our understanding of the role the use of biomass can play in strategies to address greenhouse gas emissions. Specifically, the Framework was developed as a policy

- neutral framework for assessing biogenic CO 2 emissions from sta tionary

sources

— it was not developed as technical guidance in conjunction with any specific policy or program. The EPA is engaging in a second round of targeted peer review of the revised draft Framework with the SAB in 2015.

A discussion regarding the current status of the development of the revised Framework and how information from the revised Framework and the related peer review processes could be used to inform how states and EPA assess biogenic CO 2 can be found in Section VIII.I.2.c and Section VIII. K.1 of the final rule preamble . For more information regarding the Framework , see: http://epa.gov/climatechange/ghgemissions/biogenic

- emissions.html

C ommenter s inquired how n on

- affected EGUs can be used to affect the state rate for compliance
purposes. This issue is discussed in s ections VIII.K.1 and VIII.K.2 of the preamble.

The following are summaries of the specific public comments under this comment:

Commenter s stated that EPA should provide clarity regarding accounting for emissions from biomass before states are required to submit compliance plans . The commenter s stated that EPA's treatment of biomass units was inconsistent when calculating the state baselines and in esti mating the reductions that could be achieved through the increased deployment of renewable generation. The commenter s stated that additionally, the proposed guidelines are not clear on the extent to which states and affected EGUs will be able to utilize th e emission reduction benefits of biomass combustion for compliance.

The commenter s recommended that, in the final rule, EPA should ensure consistent treatment of biomass for compliance purposes. To do otherwise would be inconsistent with EPA's approach
to how other renewable resources are used to set the state

- specific emission rate goals, which determines their potential role as compliance options that could be included in state plans. The
commenter s stated that as EPA notes, "states likely will consider biomass

- derived fuels in energy production as a way to mitigate the CO2 emissions attributed to the energy sector and include360 them as part of their plans...and...it is important to define a clear path for states to do so." Id. at 34924. Before states are r equired to submit compliance plans, the commenter s encouraged EPA to be clear as to how states and electric utilities should account for biomass emissions in order to enable states to properly utilize these resources as compliance tools.

The commenter s not ed that EPA's recent Biomass Memorandum begins to provide some clarity on the role of biomass in state compliance plans, but indicates that many feedstocks may not be deemed carbon neutral. The commenter s stated that moreover, the Biomass Memorandum
appear s to indicate that EPA will address inclusion of biomass

- based units in compliance plans
on a state

- by

- state basis. To ensure that state can develop plans that EPA can approve, the
commenter s stated that EPA should provide additional clarity on which types of biomass will be deemed carbon neutral before states have to submit plans.

Commenter s stated that if the proposal is finalized using Building Blocks 3 and 4, EPA should allow states to consider the use of biomass

- derived fuel in affected units as an em ission reduction measure. The commenter s noted, however, that in order to do so, EPA must distinguish biogenic CO2 emissions from fossil fuel CO2 emissions and provide a clearer policy that recognizes the carbon neutrality and GHG reduction benefits from b iomass energy. The commenter s stated that the EPA has not provided the information needed to understand how bioenergy emissions will be counted toward reducing CO2 emissions under the rule.

Commenter s encouraged the EPA to provide clarity to states and reg ulated entities that using biomass derived fuels at affected EGUs (or biomass co

- firing) is an accepted mitigation option and can be included in state plans.

Commenter s sought clarification from EPA on how CO2 emissions from the co

- firing of biomass at e lectric generating units should be calculated. The commenter s was aware of the EPA Biogenic framework, but requested that the revisions to it should clearly explain how both the CO2 emissions and generation from the combustion of biomass should be calcula ted and credited in demonstrating compliance with state

- specific emission goals.

Commenter s stated that EPA should provide states with the appropriate clarity to include biomass co

- firing under 111(d).

Commenter s stated that EPA's State goal calculations should not include biomass firing if the industry will not receive full credit for the generation in demonstrating compliance with its state goal. The commenter s would like the EPA to clarify how much of biomass

- fired emissions will be counted towards comp liance, and then adjust the percentage of emissions counted into current state goals accordingly.

Commenter s requested clarification as to whether or not biomass would be treated as a carbon

neutral resource, with regards to compliance. Commenter s believed that EPA implied that biomass would not be treated as a carbon

- neutral resource due to references to the Biomass Accounting Framework for 111(d) plan development where the methodology describes adjusting top

- of

- stack biogenic CO2 emissions based on the pa rticular feedstock and location. It appears that states are penalized in the goal setting formula for having biomass plants.361 Commenter s recommended that EPA, USDA, and other agencies work with industry, NGOs, and land management experts to develop a model "biomass sustainability and emissions accounting framework" that states can use as part of their 111(d) plans. This framework would also help ensure that the US builds a national biomass market, avoiding a state

- by

- state system that would create significan t market barriers.

Commenters stressed that any reduction measures must be accompanied by protocols to measure, verify and enforce these additional compliance measures coupled with implementing appropriate accounting and tracking methodologies. Commenter s added that this would provide potential "inside the fence line" CO2 emissions reduction by co

- firing biomass with fossil fuel. Commenter s suggested that the plans should include any measure that meets the EPA's criteria, i.e., any measure that is quantifia ble, verifiable, non

- duplicative, permanent and enforceable.

Commenter s differentiated between beneficial use of certain fast growing biomass resources, or biomass that would otherwise rapidly decompose, or otherwise be burned without energy recovery, and the use of roundwood, pulpwood, or larger diameter trees is shown in scientific literature as being unhelpful for short term purposes of climate change mitigation. Commenter s said that these long

- lived forest resources take too long to re

- grow and re

- capt ure biogenic carbon. Commenter s added that it is a great concern that roundwood is explicitly included in the second draft BAF as an allowed form of biomass feedstock. According to commenter s , this is clearly bad for the climate and it could be severely di sruptive to existing consumers of pulpwood, chip

- and

- saw, and even some sawtimber.

Commenter s urged the EPA to further define acceptable sources of biomass under the CPP. Commenter s said that Arizona consumes more biomass to produce energy for electricit y than renewable sources including solar and wind and that Arizona consumes far more fossil fuel for electricity production than all types of renewable energy. Commenter s believed that this is an issue which needs further review by the EPA to ensure that e limination of the use of coal for energy production does not result in replacement by the burning of wood or vegetative products to produce energy. Commenter s noted that this alternative would not effectively reduce health complications associated with the burning of fossil fuels. As the CPP recognizes that U.S. forests remove 12% of GHG, commenter s believed that their suggestion is justified and reasonable.

Commenters noted that on November 19, the EPA released a revised Framework for Assessing Biogenic CO 2 Emissions from Stationary Sources ("Framework") and a memorandum from Acting Assistant Administrator Janet McCabe that accompanied the revised Framework (the "McCabe Memo"). Commenters said that these documents offer little specific direction and what di rection they do provide is illegal and ill advised. According to commenter s , two key features of the McCabe Memo are:

• A finding that the "use of waste

- derived feedstocks and certain forest

- derived industrial byproducts are likely to have minimal or no net atmospheric contributions of biogenic CO2 emissions, or even reduce such impacts, when compared with an alternate fate of disposal." Based on this finding, the EPA "expects to recognize the biogenic CO2 emissions and climate policy benefits of waste

- deriv ed and certain forest

- derived industrial byproducts based on the conclusions supported by a variety of technical362 studies, including the revised Framework" when implementing the Clean Power Plan (CPP).

• A statement that the EPA also "expects that states' re liance specifically on sustainably

derived agricultural

- and forest

- derived feedstocks may also be an approvable element of their [CPP] compliance plans." Commenter s said that the EPA should clarify how it is defining "waste

- derived and certain forest

- deri ved industrial byproducts", which EPA appears to be indicating will be the only "categories" of feedstock considered to be low

or no

- emissions. Commenter s said that this clarity is critical for both state policy makers and industry. Commenter s added that the EPA should clarify what framework it will use to "evaluate the biogenic feedstock components of proposed state plans ..."

Commenter s added that the methodology does not have a concrete definition of what technologies are considered renewable energy sou rces for the purposes of the rule. Commenter s

w ere concerned that because the EPA has deferred any decision about how biomass will count for compliance until completion of their draft Biomass Accounting Framework, this delay will create uncertainty that is problematic for the states with significant biomass resources in crafting their emission reduction plans.

Commenter s described Wisconsin's reliance on biomass in its strategy and stated that the states should be able to certify CO2 neutrality for biomass harvested under state or federal sustainable forestry practices, harvested as part of a fire hazard reduction activity or as pre

- commercial thinning, slash or tree residue, collected during clean

- up from natural storms or disasters, or obtained from the d emolition of buildings and removal of invasive trees by municipalities.

If the EPA will not let states determine the carbon neutrality of biomass, commenter s said, the EPA must complete its Biomass Accounting Framework without additional delay and prior to issuance of the final rule so that states know how their biomass power will qualify under the regulation.

Commenter s were encouraged that the EPA's November 14, 2013 memorandum to its regions regarding biomass emissions appears to recognize that biomass i s an important renewable energy pathway for states to reach their targets under 111 (d). Commenter s added that, in terms of sustainably managed forests, carbon stocks are increasing both nationwide and in Maine. Commenter s encouraged the EPA to treat bioma ss as simply and as geographically broadly as possible.

Commenter s said, the EPA should clarify that states should give full compliance value for all electricity generated from renewable energy technologies when determining how to measure compliance with t he Clean Power Plan's goals. For instance, commenter s stated, all states that define WTE as renewable give full credit for each megawatt hour of electricity generated by WTE, as do federal standards. Commenter s added that the EPA should make clear that sta tes have the flexibility and discretion to value the full electrical generation from renewable sources (such as WTE) toward compliance with the Clean Power Plan.

Commenter s noted that a number of existing electrical generators in Florida are not "affected EGUs" because of the type of fuel combusted (i.e., biomass, waste

- to

- energy, and landfill gas),363 but these units do sell power to the grid. Commenter s asked if the EPA will provide clarification as to whether states have the discretion to determine whether to include CO2 emissions from these facilities in calculating the state rate for compliance purposes. Commenter s asked if this could apply to the landfill gas component of affected co

- fire EGUs as well. Commenter s asked if biomass generation be treated lik e a zero

- emitting energy source or will CO2 emissions from biomass generation need to be recorded and included in the compliance determination. Commenter s asked if it depend on the type of biomass generation (i.e. landfill gas, waste to energy, woodchips/s witch grass fuel), as to how the biomass generation and emissions data are treated for compliance purposes. Commenter s also asked if whether the biomass will actually need to be burned/fired at an affected EGU or if all biomass generation be credited so lo ng as it supplies generation to the grid. Commenter s asked how a state might credit the cultivation of anaerobic digestion for purposes of methane recovery. According to commenter s , existing examples of this approach are required to be net metered and sell their power to the grid, and later purchase their needed power back from the utility. Based on the 111(d) proposal,
commenter s said such a system seems similar to a wind turbine or solar array.

Commenter s described how South Carolina makes use of many bio mass resources with multiple landfill gas projects across the state, sawmills that burn wood residue, and biomass plants that utilize woody biomass to produce energy. Commenter s said that the EPA should consider how to provide credits for biomass landfill operations that may not be utility owned. Commenter s also cited a USDA report (Assessing the Potential for Biomass Energy Development in South Carolina, October, 2009) to document the huge potential for biomass energy in South Carolina. Commenter s recomme nded that the EPA ensure that states have maximum flexibility in utilizing biomass as a renewable energy resource by simplifying the process for qualifying biomass and by defining "sustainable biomass" in order for South Carolina to be able to calculate ea sily the use of woody biomass towards carbon emission reductions and inclusion in a state implementation plan.

Commenter s said that due to Wisconsin's recognized history and knowledge of using biomass for energy, the state could play a significant role in helping the EPA determine how to treat biomass in the rules. When properly conducted, commenter s said that there is no doubt that replacing fossil fuels with biomass for electricity generation can have environmental benefits. In formulating comments to the EPA however, commenter s said that it is important to note that the basis of the rules is the endangerment finding for carbon vis

- a

- vis public health and welfare. Commenter s supported comments by the Biomass Power Association on CPP provisions that provide for the use and credit of biomass for energy production.

Commenter s agreed with EPA that biomass energy is a necessary part of the solution to mitigate climate change and supported EPA's proposal to allow States to include biomass energy as a tool to redu ce net CO2 emissions in their implementation plans and noted that is it critical that EPA's and states' evaluation of biomass energy in GHG regulations focus on the objective of reducing net CO2 emissions.

Commenters noted that under the their state's RPS, biomass facilities qualify as renewable and therefore the final rule should likewise provide the opportunity for biomass facilities to qualify as compliance measures in the state's plan. The commenter s asked EPA to complete its accounting364 framework for bi ogenic emissions and recognize, as appropriate, the carbon benefits of biomass fueled generation.

Commenter s stated that EPA's TSDs indicate that biomass qualifies as RE for compliance purposes, but the Proposal does not provide further guidance on the i ssue. The commenter s agreed with EPA's statement that waste

- derived and forest

- derived industrial byproduct feedstocks provide climate benefits and urged EPA to explicitly state in the final rule that states may include the use of biogenic feedstocks as a compliance option in their state plans. The
commenter s noted that this approach will facilitate compliance in areas of the country, such as the southeast, that have few large

- scale RE alternatives other than biomass generation. Biomass generation provides for reliable baseload CO 2 - neutral generation, which is not possible with wind and solar generation. The commenter s additionally noted as an example that the Gainesville Renewable Energy Center uses waste wood known as "slash" from the forestry industry tha t otherwise would have been left to rot in the field, generating methane emissions, or pushed into piles and burned and that the use of this fuel eliminates these emissions and improves fuel diversity in a state very dependent on natural gas. The commenter s stated that use of "slash" at this facility improves reliability due to its availability in close proximity to the generating facility and generates an economic benefit to the community, since the fuel is sourced locally.

Commenter s noted that EPA's Nov ember 19th guidance memorandum on biogenic CO2 emissions appeared to support the treatment of waste

- derived feedstocks and certain forest

derived feedstocks as "having minimal or no net atmospheric contributions of biogenic CO2 emissions, or even reducing such impacts, when compared to the alternate fate of disposal." but stated that this implies the CO2 emissions may be assigned to biomass facilities using other feedstocks. The commenter s noted that the Framework for Assessing Biogenic CO2 Emissions from S tationary Sources remains a draft document subject to revision and stated that the inconsistency between these documents creates a penalty for states with existing biomass plants, since their goal is more stringent because of these plants, but they may be required to assign CO2 emissions to at least some types of biomass used for 111(d) compliance. The commenter s stated that his will create a disincentive to biomass use due to uncertainty and complexity in the Accounting Framework and urged EPA to clarify t hat biomass power and biomass co

- firing in fossil plants are considered carbon

- neutral when used for goal achievement. The commenter s supported EPA's suggestion that sustainably

- derived forest feedstocks may be considered carbon

- neutral, but note that in d efining what constitutes sustainably

- derived forest feedstocks, EPA should not substitute its judgment for that of the responsible state forestry agency charged with setting such standards. The commenter s stated that EPA should also recognize the methane

a voidance associated with waste

- derived feedstocks, such as biogas and landfill gas, which can make such feedstocks better than carbon neutral in these guidelines.

Commenter s also urged EPA to take into account the limited lifespan of certain biomass produc tion when calculating state goals. The commenter s noted that EPA included biomass when accounting for existing RE in its state goal calculations however, the commenter s stated that existing biomass generation is not an accurate predictor of future RE growt h because it includes generation that may be phased out over time and may ultimately overestimate state goals.365 Commenter s recommended that biomass be removed from inclusion in calculation of state goals, yet included as a compliance measure. The commenter s stated that it is inappropriate for EPA to include existing biomass as RE for setting state goals, but provide little direction to states regarding when or how biomass power generation will be credited for compliance purposes. The
commenter s recommended that EPA treat biomass generation consistently as utilized for goal calculation as well as compliance purposes in the final rule. The commenter s noted that this is significant for Tennessee as the majority of Tennessee's RE generation in 2012 is generated from biomass.

Commenters additionally noted that EPA postponed a decision on whether to consider biomass as carbon neutral in a state's compliance plan until the Accounting Framework for Biogenic Emissions is completed, but stated that EPA must provide gui dance to the states on the treatment of biomass well before states are required to submit their compliance plans for approval by EPA.

Commenter s urged EPA to maintain consistency with state RPS rules and enable all RPS

- eligible generation to count towards a state's compliance determination. The commenter s noted that all states with an RPS include biomass as part of tier 1 renewable resources, and for many states, especially those in the Southeast region, biomass constitutes a significant portion of RE
gener ation (EIA, "Electricity Data Browser, Net Generation for All Sources" (2013)). The
commenter s also noted that the proposed RE approach and the Alternate RE Approach(es) also incorporate(s) biomass as a zero

- carbon source and while evaluated slightly diffe rently than other resources, constitutes a significant portion of the RE MWh that would be incorporated in state goals through Building Block 3. However, the commenter s pointed out that the proposed guidelines are not clear on the extent to which states an d affected EGUs will be able to utilize the emission reduction benefits of biomass combustion for compliance. The commenter s urged EPA
to ensure that in any final rule, any biomass included as part of BSER Building Block 3 is accounted for in the calculati on of state goals consistently with how the Agency ultimately allows states to account for that generation as part of compliance.

Commenters stated that biomass energy is recognized in nearly every state that has a Renewable Portfolio Standard (RPS), and f ailure to adequately credit the carbon mitigation attributes of low

carbon sustainable biomass in the final rule could result in state compliance plans that exclude this clean energy technology, cause the potential closure of these facilities and lose an

o pportunity for greater GHG reductions. Commenters said that the EPA should clarify that states should be given full compliance value for all electricity generated from renewable energy technologies units, including the biomass portion of fossil fuel

- fired units that co

- fire with biomass, when determining how to measure compliance with the CPP's goals. Commenter s noted that all states that define waste

- to

- energy (WTE) as renewable give full credit for each megawatt hour of electricity generated by WTE, as d o federal standards. Commenter s added that waste wood and forest residuals should be considered carbon neutral for purposes of setting the state goals and compliance with the state goals of this rule, as well as for any future accounting framework. Comment er s noted that in anticipation of this rule, MPU re

- permitted their CFB units (at a significant cost) to burn up to 100% biomass based on an understanding that the EPA wanted EGUs to move away from fossil fuels. Commenter s were concerned that the EPA is ba ck peddling and is not supporting biomass as a viable alternative. Commenter s recommended that EPA support the program they were suggesting and give credit to biomass generation and to the utilities who have taken action to burn non

- fossil fuels.366 Commenter s did not take a position on the use of biomass

- derived fuels as a number of Indian Tribes use such fuels, but recommended that a cap be placed on the allowable amount of biomass burning allow in a state's plan, at least until the EPA updates its draft acc ounting framework regarding biomass

- derived fuels that should help determine the net atmospheric contribution of CO2 related to the growth, harvest and use of these fuels.

Commenter s requested that when the EPA issues its Final Rule, it explicitly recogniz e for compliance purposes the environmental value of biomass fueled generating facilities by requiring inclusion of energy from such facilities in the same manner as renewables are treated under the Plan.

Commenters described state reforestation programs a nd the potential for significant amounts of CO2 to be sequestered (up to 200 million pounds of CO2 equivalent across southern states at a price of $30 per metric ton10, with another study showing a potential of 500 million metric tons for the U.S. for $30

- $90 per ton11). Commenter s noted that the DOT and FHA have expended significant resources providing states with the tools to estimate their carbon sequestration potential. Commenters recommended that the EPA allow these tools to be used as part of a carb on offset compliance option. Also, commenter s recommended that out

- of

- sector offsets be allowed where the designated pollutant, CO2, is directly mitigated. Commenters said that their reforestation initiative is consistent with this premise and should be al lowed as a compliance option.

While commenter s disagreed that CAA Section 111 allows consideration of outside

- the

- fence control measures as part of a BSER analysis, if the final rule includes outside

- the

- fence measures, commenter s said that the credits ava ilable to states for GHG reductions should be expanded to include CO2 sequestration through planting, maintenance, and management of state forests. According to commenter s ’ analyses on CO2 sequestration through Afforestation and Improved Forest Management (two types of offset methodology) in Indiana indicate this would be an achievable emission

- reduction strategy. Commenter s said that afforestation of 1.2 million

non

- prime, agricultural crop acres could yield 113 MMt CO2e by 2020, and an additional 4.8 mill ion acres of non

- federal timberland in Indiana could be tapped for improved CO2 storage projects to further avoid 38.4 MMt CO2e by 2020. Commenter s said that the final rule should also restrict the use of an "alternative energy source" referred to as a bio

- fuel (the burning of forest residue.) Commenter s stated that the issues surrounding this "alternative energy source" are applicable to other forest residue, bio

- fuel plants nation

- wide.

Commenter s stated that the EPA must not deplete forced carbon storage or rely on tree growth and carbon sequestration that would not occur until 2030 or later if they aim to achieve actual emission reductions. Commenter s also stated that biomass harvesting must not degrade biodiversity and other environmental resources.

Co mmenter s stated that EPA suggests that the biomass energy industry can still be developed by the states as they seek to meet emissions reduction goals but does not specify how states will account for emissions. The commenter s stated that even if EPA had wr itten a permit that actually restricted the facility to use of true waste wood, matters of practical implementation would still remain; existing and proposed biomass plants currently do not just burn waste wood and residues, and there is a real danger that if wood waste is treated as having zero or negligible367 emissions, then everything will be defined as waste. The commenter s stated that even if a facility does truly only burn forestry residues generated during sawlog harvesting, modeling shows that net CO2 emissions from residues can still be significant. The commenter s stated that EPA has still not stated what timeframe is relevant for biogenic carbon accounting and what timeframe is important for reducing net emissions from the power sector; if it is anyt hing less than one to two decades, forestry residues do not qualify as a low carbon fuel.

Commenter s stated that the EPA must distinguish biogenic CO2 emissions from fossil fuel CO2 emissions . The commenter s noted that, in the proposed rule, the EPA recogn ized that " biomass

derived fuels can play an important role in CO2 emission reduction strategies ," and anticipates that states will include biomass energy in their implementation plans. 79 FR 34924. The
commenter s noted that in the November 19, 2014 memora ndum to the EPA Regional Air Division Directors regarding approvable state plan elements, the EPA stated that the information considered in preparing the revised second draft of the Accounting Framework for Biogenic CO2 Emissions From Stationary Sources

" supports the finding that the use of waste

- derived feedstocks and certain forest

derived industrial byproducts feedstocks are likely to have minimal or no net atmospheric contributions of biogenic CO2 emissions, or even reduce such impacts, when compared t o the alternative fate of disposal." The commenter s noted that the EPA also states that other "sustainably

- derived and agricultural

and forest

- derived feedstocks may also be an approvable element" of state compliance plans. "

The commenter s stated that al though this recognition of the climate benefits of certain biomass energy is a step in the right direction, EPA needs to ensure that the states have maximum flexibility in utilizing biomass as a source of renewable energy to meet their targets.

Commenter s stated that the proposal fails to distinguish biogenic CO2 emissions from fossil fuel emissions for compliance purposes. The stated that EPA must clearly distinguish biogenic CO2 emissions from fossil fuel emissions to allow states to use biomass energy as an emissions reductions compliance option. The commenter s stated that it would be arbitrary and capricious for EPA to regulate and treat biogenic CO2 emissions in the same manner as fossil fuel emissions before EPA has made a final scientific determinatio n on whether biogenic CO2 emissions should be regulated as a pollutant under the Clean Air Act. In Motor Vehicle Manufacturers Ass'n v. State Farm Mutual Automobile Insurance Co., 463 U.S. 29 (1983), the Supreme Court held that an agency must satisfy two b asic requirements to avoid violating the arbitrary and capricious standard. First, the agency must engage in "reasoned decision making." Second, "the agency must . . . articulate a satisfactory explanation for its action."

The commenter s stated that the E PA fails to provide adequate justification for treating biogenic CO2 emissions the same as fossil fuel emissions in the Proposal despite EPA's recognition that biomass energy is renewable, "carbon neutral", and can result in "climate benefits" when
compare d to fossil fuels. 79 FR at 34924

- 25. In the Proposal, EPA acknowledges that

"broadly speaking, burning biomass

- derived fuels for energy recovery can yield climate benefits as compared to burning conventional fossil fuels" and that368 "[b] ecause of the posit ive attributes of certain biomass

- derived fuels, the EPA recognizes that biomass

- derived fuels can play an important role in CO2 emission reduction strategies."

Commenter s stated that although EPA recognition of the climate benefits of certain biomass

ene rgy in the November 19, 2014 McCabe memo to EPA Regional Air Division Directors is a step in the right direction, the EPA needs to ensure that the states have complete certainty regarding using biomass as a source of renewable energy to meet their targets. The commenter s stated that EPA also needs to ensure that it does not introduce new roadblocks by shrouding the evaluation of which feedstocks qualify in complexity and case

- by

- case state plan approval by the Agency.

The commenter s argued that if EPA does not approve the use of biomass energy as carbon neutral in state plans, EPA penalizes the states that use biomass energy to meet their emission reduction targets. The commenter s noted that those states' emission rate targets become more stringent because t he biomass energy was included in the total potential renewable energy generation (in the denominator) while biogenic CO2 emissions are not included in the total CO2 emissions (in the numerator) when the EPA set the reduction targets. The commenter s stated that if the biogenic CO2 emissions are not considered carbon neutral, those emissions are counted in the state's total CO2 emissions during the compliance phase. The commenter s stated that all emission reduction measures considered carbon neutral in the t arget

- setting analysis, such as biomass energy, should be included as carbon neutral compliance options for states to include in their implementation plans.

Commenter s stated that the lack of a clear EPA statement on the GHG mitigation benefits of biomass energy makes it impossible for South Carolina to consider how it will comply with its emission reduction targets in the CPP. The commenter s stated that the EPA should not regulate biogenic CO2 emissions from stationary sources until EPA issues a clear and final policy regarding regulation of biogenic CO2 emissions or completes a final rulemaking that establishes an accounting approach.

The commenter s noted that EPA anticipates that "states likely will consider biomass

- derived fuels in energy production as a way to mitigate the CO2 emissions attributed to the energy sector and include them as part of their plans to meet the emission reduction requirements of this rule." Consistent with EPA's supposition, the commenter s noted that biomass represents one of th e most abundant and easily accessible renewable resources that can be relied upon for energy production in Louisiana. The commenter s provided for example, that approximately 96% of the electrical demand of Louisiana's sugarcane mills is met by combusting b agasse, the fibrous residue remaining after sugarcane stalks are crushed to extract their juice.

The commenter s stated that although some EPA resources suggest fuels derived from organic

matter "are subject to the natural carbon cycle and, therefore, do n ot contribute to global warming,'' others indicate that "it is not safe to assume biomass power plants are carbon neutral." In fact, the commenter s noted that EPA's so

- called Deferral Rule acknowledged that the agency "received information supporting the position that ... the use of certain types of biomass as fuel could increase atmospheric CO2 levels." The commenter s stated that the EPA369 also conceded that "the possibility...remains that more detailed examination of the science of biogenic CO2 will demons trate that the utilization of some biomass feedstocks for bioenergy production will have a significant impact on the net carbon cycle."

The commenter s noted that the Deferral Rule was vacated by the U.S. Court of Appeals for the D.C. Circuit on July 12, 2 013. The commenter s stated that in reaching its decision, the court found that the "atmosphere makes no distinction between carbon dioxide emitted by biogenic and fossil

- fuel sources."

The commenter s noted that EPA addresses the present circumstances in t he proposed rule as follows:

" To better understand the impacts of using different types of biomass

- derived fuels, the EPA is assessing the use of biomass feedstocks for energy recovery by stationary sources and has developed a draft accounting framework th at the EPA's Science Advisory Board (SAB) has reviewed. The draft framework concluded that while biomass and other biogenic feedstocks have the potential to reduce the overall level of CO2 emissions resulting from electricity generation, the contribution o f biomass derived fuels to atmospheric CO2 is sensitive to the type of biomass feedstock used, and the way in which the feedstock is grown, processed, and ultimately combusted as a fuel for energy production. The SAB in its review similarly found that ther e are circumstances in which biomass is grown, harvested and combusted in a carbon neutral fashion but commented that additional considerations are warranted. "

" The EPA is in the process of revising the draft framework and considering next steps, taking in to account both the comments provided by the SAB and feedback from stakeholders. The EPA's biogenic CO2 accounting framework is expected to provide important information regarding the scientific basis for assessing these biomass

- derived fuels and their net atmospheric contribution of CO2 related to the growth, harvest and use of these fuels. This information should assist both states and the EPA in assessing the impact of the use of biomass fuels in reaching emission reduction goals in the energy sector und er state plans to comply with the requirements in the emission guidelines "

. Given the uncertainty as to how EPA will ultimately view the combustion of biomass with respect to the carbon cycle, the commenter s stated that they are not able to meaningfully c onsider whether the proposed renewable generation targets are even achievable. Unfortunately, the
commenter s stated that, at present, the possibility remains that EPA will determine that certain RE sources actually increase atmospheric CO2 concentrations. Consequently, until such time as EPA's "draft accounting framework" has been properly vetted and an opportunity for public comment has been provided, the commenter s stated that the renewable component of building block 3 is premature.

Second, the commenter s asserted that the Proposed Rule's attempt to accommodate different states' policy goals by allowing states to determine whether and how biomass energy emissions will be counted invites arbitrary results. The commenter s stated that the Proposed Rule370 ackno wledges that states have developed "a variety of different sustainable forestry policies, renewable energy incentives and standards and greenhouse gas accounting procedures." For example, the commenter s noted that the State of Massachusetts has adopted reg ulations that explicitly consider biomass CO2 emissions in determining renewable portfolio standard eligibility. The commenter s noted that the State of California, in contrast, does not consider CO2 emissions in determining the eligibility of biomass gener ation under the state's Renewables Portfolio Standard; rather, any facility using biomass fuels, as very broadly defined, can qualify. The commenter s stated that California's cap

- and

- trade program for greenhouse gas emissions similarly imposes no complianc e obligations for CO2 emissions from biomass combustion

- effectively treating those emissions as if they do not count toward the state's mandatory emissions reduction goals.

The commenter s noted, according to the Proposed Rule, EPA wishes to provide a "c lear path" for states to use biomass energy generation as a compliance measure in preparing their plans

. The commenter s stated that the path outlined in the Proposed Rule, however, is anything but clear; rather, the rule strongly suggests that states may u se whatever accounting methods best serve their own policy goals, regardless of the actual atmospheric consequences. The
commenter s stated that the memorandum released on November 19, 2014 along with EPA's revised biomass CO2 accounting "framework" seems t o suggest that this may be the "clear path" EPA envisions, although the memorandum fails to provide any reasoned explanation or evidentiary basis for choosing it

.

The commenter s stated that whether or not particular biomass feedstocks and facilities increa se atmospheric CO2 concentrations is a matter of physics, not state policy. The commenter s stated that rather than allowing individual states to make these determinations based on potentially arbitrary and inconsistent policy considerations, the EPA must p rovide clear instruction, supported by sound science and an adequate explanation, to states as to how CO2 emissions from biomass generation must be counted in state plans. The commenter s stated that the EPA has failed to do so, either in the Proposed Rule or in its last

- minute release of an updated draft accounting framework and the accompanying memorandum.

The commenter s suggested that the most legally and scientifically defensible approach at this point would be for EPA simply to count CO2 from biomass co mbustion at the stack in setting state targets and in evaluating compliance plans. The commenter s stated that this could require some adjustments to state targets to reflect that biomass energy generation is not "zero

- carbon." The commenter s noted that emi ssions must be counted in the numerator of the target

- setting equation, just as generation is counted in the denominator. The commenter s stated that in addition, EPA could incorporate all CO2 emissions from biomass generation into a mass

- based standard to ensure that states do not exceed their emissions targets by displacing fossil

- fired generation emissions to biomass facilities.

Alternatively, the commenter s suggested that the EPA could count all stack CO2 emissions from biomass energy generation on an in terim basis until a final, scientifically defensible accounting framework is proposed, circulated for comment, and adopted . (The commenter s cautioned that, in the absence of any final, concrete proposal for an accounting framework, this comment should
not and cannot be taken as an endorsement of any particular approach EPA might adopt.) To371 ensure consistent application among states, the commenter s stated that the EPA should adopt regulations requiring use of this final framework in preparation of compliance plans. The
commenter s noted that the Revised Draft Framework released on November 19, 2014 is not final, has not yet been reviewed by scientists or the public, and does not provide adequate guidance. The commenter s asserted that the facially arbitrary sta te plan approval process envisioned in the McCabe Memo, moreover, lacks any reasoned explanation or justification.

The commenter s noted that these options might or might not result in a legally and scientifically defensible rule. But absent further explana tion and justification, the commenter s stated that the Proposed Rule's approach to emissions from biomass energy generation is arbitrary, capricious, and without any reasoned basis.

Commenter s stated that EPA must count and regulate biomass CO2 emissions f rom electric generation

.

The commenter s noted that biomass produces approximately four times more CO2 per unit of energy than coal and said this is a very serious issue for some states and their CO2 emissions. The commenter s stated that biomass emissions should have been further evaluated as unsustainable production can release more CO2 than is been sequestered in forests. According to the commenter s , the IPCC has said that biomass emissions should be counted for electric generation. Yet, the commenter s no ted that biomass has been considered a renewable source of energy in many states and therefore these CO2 emissions are not counted. The commenter s stated that EPA has been engaged in evaluating the issue of biogenic emissions for many years. The commenter s stated that, unfortunately, the EPA framework for biomass still needs to incorporate the recommendations of the Science Advisory Board and remains incomplete at this time. The commenter s stated that all CO2 emissions from biomass electric generators shoul d be included in state electric generation baselines and should be part of the total universe of emissions regulated under this Carbon rule.

Commenter s expressed concern about the absence of both a carbon accounting framework and enforceable language in t he GHG rule that would enable states to use it

.

The commenter s attached a 2014 technical memorandum titled "Role of Biomass Energy in EPA's Greenhouse Gas Rule," to address the question of whether the GHG rule could increase forest harvesting for biomass energy. In this memorandum, the commenter s stated that the EPA has left the door open for states to propose bioenergy as a means to increase renewable energy capacity. The commenter s stated that the Agency is soliciting comment on deployment of bioenergy a t the state level:

"Beyond the types of state plan measures already discussed in this section of the preamble, the agency has identified a number of other measures that could also lead to CO 2 emission reductions from EGUs. These include, for example, elec tricity transmission and distribution efficiency improvements, retrofitting affected EGUs with partial CCS, the use of biomass

- derived fuels at affected EGUs, and use of new NGCC units. Although the emission reduction methods discussed in this section are not proposed to be part of BSER, the agency anticipates that some states may be interested using these approaches in their372 state plans. The agency solicits comment on whether these measures are appropriate to include in a state plan to achieve CO 2 emission reductions from affected EGUs."

The commenter s asserted, given that the EPA itself is supposed to be coming up with a framework for carbon accounting, and given that EPA solicited, and received, abundant comments on greenhouse gas emissions from bioenerg y when it issued the biogenic C deferral, to say nothing of the extensive input during the US Court of Appeals case on the deferral and the expert input provided by the Science Advisory Board, for EPA to be soliciting additional comment on whether burning biomass can "reduce" greenhouse gas emissions seems somewhat superfluous. The commenter s stated that the Agency should have more than enough information now to produce a science

- based carbon accounting framework

. Further, that commenter s stated that the la ck of enforceable language in the GHG rule suggests that even if EPA does develop a carbon accounting framework for bioenergy, it could be difficult to get states to use it. The commenter s noted that the ESPS suggests it's likely that the states will deplo y bioenergy:

"Because of the positive attributes of certain biomass

- derived fuels, the EPA also recognizes that biomass

- derived fuels can play an important role in CO2 emission reduction strategies. We anticipate that states likely will consider biomass

d erived fuels in energy production as a way to mitigate the CO2 emissions attributed to the energy sector and include them as part of their plans to meet the emission reduction requirements of this rule and we think it is important to define a clear path fo r states to do so."

The commenter s stated that if EPA came out with a strong and decisive carbon accounting framework that acknowledged the true emissions from burning different types of biomass, but especially wood, states that were serious about reducin g emissions would likely eliminate large

scale bioenergy from their list of options, as Massachusetts has done and as Vermont is starting to do. However, the commenter s stated that there is little indication in the rule that EPA has a means of enforcing a science

- based carbon accounting framework at the state level. Indeed, the

commenter s stated that the language around deployment of the carbon accounting framework is notably weak:
"The EPA expects that the framework, when finalized, will be a resource tha t could help inform states in the development of their CAA section 111(d) plans."

The commenter s stated that, unfortunately, some of the states that are now experiencing the highest bioenergy development are also those states that are targeted by the rule to show the greatest reductions in power sector emissions rates. The commenter s stated that, ranked in descending order of the percent reduction required, Washington, South Carolina, Oregon, New Hampshire, and Georgia are all states that have entertained proposals or actually built large, low

efficiency, wood

- burning power plants. The commenter s noted that these states, and the bioenergy developers therein, will no doubt pressure EPA to allow bioenergy as a means of "mitigating" power sector carbon emissio ns. The commenter s explained that there is a real373 possibility that the GHG rule could actually increase forest harvesting for bioenergy, and commensurately, greenhouse gas emissions, unless there is strong implementation of a carbon accounting framework, a nd rigorous oversight to ensure that only fuels with very low lifecycle greenhouse gas emissions are burned (thereby severely limiting development of the biomass industry). The commenter s stated that this is especially true if states displace actual no

- emi ssions renewable energy that would be built with biomass power. Meanwhile, the commenter s stated that the treatment of bioenergy as having zero carbon emissions in the GHG rule goal rate equation continues to promote the erroneous concept that burning biom ass has no greenhouse gas impacts.

Commenter s stated that EPA could improve the GHG rule and responsibly account for net bioenergy emissions. The commenter s stated that w ith regard to states using bioenergy to meet the GHG rule's goals, the McCabe memo sta tes that the Agency will "evaluate the biogenic feedstock components of proposed state plans

- along with all other aspects of each plan

- as part of the compliance plan review and approval process and will provide clarification as needed on the basis on w hich it will make such biomass

- related evaluations."

However, the commenter s noted that the GHG rule still doesn't provide a means of calculating net emissions over time, which is what biogenic carbon accounting requires. According to the
commenter s , ther e is a mismatch between the Framework

- which acknowledges that net emissions change over time

- and the GHG rule equation, which simply counts stack emissions at time zero and expresses those as a ratio against electricity generation. The commenter s state d that nothing in the GHG rule at present permits estimating "net" emissions and how they change over time.

Regarding to climate warming effects over the timeframe of the GHG rule, the commenter s stated that the atmosphere cares about how much CO2 is emit ted, not the rate at which it is emitted. The commenter s stated that a rate is open

- ended and does not constrain total emissions. In contrast, the commenter s stated that a cumulative approach where total emissions (as tons CO2) are capped over a certain pe riod would be more amenable to counting bioenergy net emissions, because net emissions can be calculated as of the target date for the cap. Instead of using the current rate

- based approach, the commenter s suggested that setting a cap for the maximum amount of CO2 that can be emitted by 2020 and 2030 would do more to force states to live within their carbon budgets, and it would permit net carbon accounting for bioenergy. The
commenter s stated that it would better allow states to evaluate the relative impact of various power generation choices, and permit net carbon accounting so that the "value" of one ton of biogenic CO2 emitted now could be calculated for various points in the future.

The commenter s asserted that it is absurd to "reduce" greenhouse gas em issions by increasing them with the use of bioenergy, especially when the total amount of CO2 is unlimited by any cap, and the endorsement of "sustainably harvested" fuel opens the door to forest harvesting. The
commenter s stated that counting biogenic emi ssions as zero in state

- level emissions rate calculations, then selecting fuels where sloppy or non

- existent carbon accounting supports the conclusion of "zero" emissions, encourage more subsidies and incentives for bioenergy, leading to unconstrained dev elopment. The commenter s stated that the GHG rule will be difficult to implement, and it may impose significant costs. The commenter s argued that uncapped and uncounted bioenergy emissions raises the possibility that the rule, despite expense and effort,374 w ill "reduce" emissions on paper only. The commenter s asserted that the EPA must require rigorous and protective science

- based carbon accounting for all bioenergy proposed by states as they seek to meet EPA's targets under the GHG rule.

Relevant to cutting slow growth biomass, commenter s asked if carbon credit standards will include the time dependence of feedstock replenishment and carbon capture/fixation capacity lost even during the time it takes to regain purported (lost biomass) neutrality. The commente r s contended that carbon credits take no account of temporal effects in carbon fixation recovery, and that time

- neutral models of carbon neutrality have no connection to actual GHG atmospheric concentration reductions. The commenter s asserted that burning slow growth biomass (trees) as pellets or biofuels is likely to increase atmospheric GHG concentrations, faster than burning non renewables, simply due to rate effects of carbon capture lost from missing tree carbon fixation capacity over the time of regro wth. The commenter s questioned if burning slow growth biomass is entirely insane and counterproductive to reduction of atmospheric GHG concentrations now and going forward. The commenter s questioned if all tree biomass burning should be stopped immediately for actual gains in GHG fixation capacity instead.

Commenter s requested that EPA withdraw the memorandum issued by Acting Assistant Administrator Janet McCabe titled "Addressing Biogenic Carbon Dioxide Emissions from Stationary Sources" ("McCabe Memo") , w hich outlines EPA's "thinking with respect to [the Clean Power Plan and the Prevention of Significant Deterioration] and their treatment of biogenic CO2 emissions." The commenter s stated that the two key assertions in the McCabe Memo are:

1. That the "use of waste

- derived feedstocks and certain forest

- derived industrial byproducts are likely to have minimal or no net atmospheric contributions of biogenic CO2 emissions, or even reduce such impacts, when compared with an alternate fate of disposal." Based on th is finding, EPA "expects to recognize the biogenic CO2 emissions and climate policy benefits of waste

- derived and certain forest

- derived industrial byproducts" when implementing the CPP.

2. That EPA also "expects that states' reliance specifically on sustai nably

- derived agricultural

- and forest

- derived feedstocks may also be an approval element of their [CPP] compliance plans."

The commenter s stated that the McCabe Memo unlawfully exempts certain facilities and/or their emissions from regulation under the C PP. The commenter s stated that EPA must withdraw the memo, and any future decision to regulate certain type of biomass feedstocks differently from other feedstocks must be accompanied by a full explanation of the legal and scientific bases for doing so

.

T he commenter s argued that if the EPA formalizes this new biogenic emissions framework, and allows all biogenic emissions to be counted as zero in emissions rate calculations, the door will be opened wide for states to encourage the co

- firing of biomass and waste in power plants through various subsidies and incentives that states will implement under the Clean Power Plan.375 According to the commenter s , this will lead to a severe increase in both greenhouse gas and toxic emissions.

The commenter s stated that b y allowing exemptions for pollution control requirements for power plants using waste derived fuels and so

- called "sustainable" forestry and agricultural feedstocks, the EPA is sending a clear signal to a range of combustion energy companies that they can access a free pass for increases in their climate and toxic pollution loads, by burning biomass fuels and substituting a portion of their fossil fuels with such feedstocks. The commenter s asserted that such exemptions would fly in the face of recommendatio ns made by over 90 scientists earlier this year in a July 14th letter, which stated "only when bioenergy results in additional carbon being sequestered above and beyond the anticipated baseline can there be a justification for concluding that such energy u se results in little or no increase in carbon emissions."

The commenter s suggested that EPA should adhere to the Precautionary Principle in ensuring the protection of community health, while applying rigorous science in assessing real greenhouse gas emiss ions reductions. The commented stated that the implementation of the Clean Power Plan should in no way incentivize the combustion of waste, biomass, or any other fuels for energy generation. The commenter s stated that trees are part of an ongoing natural p rocess that recycles atmospheric carbon because trees can remove carbon from the atmosphere as they grow. The commenter s stated that use of trees for energy operates within the carbon cycle in a way that, unlike fossil fuels, does not add new sources of ca rbon to the atmosphere. The commenter s stated that biomass is an essential part of New Hampshire's energy strategy . The commenter s stated that in the November 19, 2014 McCabe memo, EPA affirmed the carbon benefits of biomass energy, and EPA released a revi sed carbon accounting framework for biomass energy. The commenter s stated that they intend to include the use of biogenic feedstocks in New Hampshire's compliance plan and look forward to working with EPA toward successful implementation of this aspect of the CPP.

The commenter s noted that in the proposed rule EPA acknowledges that "broadly speaking, burning biomass

- derived fuels for energy recovery can yield climate benefits as compared to burning conventional fossil fuels" and that "[b]ecause of the posit ive attributes of certain biomass

- derived fuels, the EPA recognizes that biomass

- derived fuels can play an important role in CO2 emission reduction strategies ." 79 FR 34924. The commenter s noted that EPA offers that states can include biomass energy in the ir implementation plans, yet despite this acknowledgement and offer, EPA's draft rule language fails to exempt biogenic CO2 emissions where boiler fossil fuel use is minimal (less than 10% of heat input). The commenter s argued that state section 111(d) pla ns should not be required to address CO2 emissions from any type of EGU that gets 10% or less of its heat input from fossil fuel.

Commenter s recommended that EPA should allow states to consider the use of biomass

- derived fuel in affected units as an emissi on reduction measure. In order to do so, the commenter s stated that EPA must distinguish biogenic CO2 emissions from fossil fuel CO2 emissions and provide a clearer policy that recognizes the carbon neutrality and GHG reduction benefits from biomass
energy . The commenter s stated that EPA's proposal does not give a clear indication how they will treat biomass emissions, leaving that decision upon review of state proposed implementation plans. The commenter s stated that EPA does not provide the information ne eded to understand376 how much of a role biomass energy can provide in reducing fossil CO2 emissions under the rule to guide states' planning efforts. The commenter s referred to the November 2014 McCabe memo and revised draft biogenic CO2 accounting framework and noted that EPA states that information considered in preparing the revised framew o rk "supports the finding that the use of
waste

- derived feedstocks and certain forest

- derived industrial byproducts feedstocks are likely to have minimal or no net atmosp heric contributions of biogenic CO2 emissions, or even reduce such impacts, when compared to the alternative fate of disposal." The commenter s noted that EPA also points to other "sustainably

- derived agricultural

- and forest

- derived feedstocks [which]
may also be an approvable element" of state compliance plans.

Comment 3 : Comment s on the role of biomass energy in mitigating carbon emissions from the electricity sector.

Response 3 : A discussion regarding the use of some biomass feedstocks for compliance
p urposes can be found in s ection VIII.I.2.c and s ection VIII.K.1 of the preamble.

The following are summaries of the specific public comments under this comment:

Commenter s discussed the role of biomass energy in mitigating carbon emissions from the elect ricity sector.

Comment 4 : Comments providing and incorporating by reference previous comments to EPA and to the SAB on the subject of biogenic CO2 emissions

Response 4 : The EPA acknowledges receipt of the se previously submitted comments.
The following are summaries of the specific public comments under this comment:

Commenter s attached and incorporated by reference previous comments to EPA and to the SAB on the subject of biogenic CO2 emissions

Comment 5 : Comments requesting EPA finalize its position on t he impact of biomass combustion on the carbon cycle before includ ing RE goals in final rule.

Response 5 : Biomass is not considered part of the best system of emission reduction in this rule and therefore it is not included in goal

- setting or compliance eva luations. However, similar to other technologies outside of BSER, biomass may be considered as a part of a state’s plan to meet the emission guidelines.

For more information regarding Building Block 3, refer to s ection V.E of the preamble.

A discussion regarding the use of some biomass feedstocks for compliance purposes can be found in s ection VIII.I.2.c and s ection VIII.K.1 of the preamble.377 The following are summaries of the specific public comments under this comment:

Commenter s stated that the EPA mus t finalize its position on the combustion of biomass and its impact on the carbon cycle before including RE goals in the final rule.

Comment 6 : Comment s on the importance of biomass in developing compliance plans under the CPP.

Response 6 : A discussion regarding the use of some biomass feedstocks for compliance purposes can be found in s ection VIII.I.2.c and s ection VIII.K.1 of the preamble.

The following are summaries of the specific public comments under this comment:

Commenter s noted the importance o f biomass in developing compliance plans under the CPP.

Comment 7 : Comments on expansion of RE and EE and creation of jobs.

Response 7 : A discussion regarding employment and economic development can be found in

s ection VIII.G.3 and in s ection XI.E of the preamble.

The following are summaries of the specific public comments under this comment:

Commenter s agreed that states must craft plans that make expanded use of renewable energy and energy efficiency, while prioritizing the creation of good clean energ y jobs

.

The commenter s noted that renewable energy and energy efficiency resources are making up an increasing percentage of America's energy mix. The commenter s stated that in the past few years, renewable energy has experienced great growth and has beco me cost

- competitive with fossil fuels, with wind prices decreasing overall on average by 58 percent and solar photovoltaics by 78 percent over the last five years, primarily due to technological improvements that have enabled projects to operate at higher capacity factors, as well as due to a decline in the prices of inputs in the manufacturing supply chain. The commenter s stated that wind turbine costs, for example, have decreased 30 percent since 2008. The commenter s stated that these trends will contin ue and renewables will increasingly become more cost

- competitive than fossil fuels. In addition, energy efficiency programs have grown at an accelerated rate since the 2000s, from total spending was $1.6 billion in 2006 to $6.3 billion in 2013. The commen ter s stated that these expenditures are yielding significant energy savings and funding for customer energy efficiency programs is expected to continue rising in the future. As a result of this expansion, the
commenter s noted that jobs in these industries are experiencing and will continue to experience great growth

.

The commenter s stated that numerous sources have noted clean energy's potential for job creation. The commenter s stated that a report by the Worldwatch Institute and the Center for American Pr ogress noted that renewable energy creates more jobs per unit of energy produced and per dollar spent than fossil fuel technologies do. The commenter s stated that the378 Metropolitan Policy Program at Brookings has also found that, as far back as 2010, 2.7 m illion people were employed in the clean energy sector whereas only 2.4 million people were employed in the fossil fuel sector. In addition, the commenter s noted that AWEA reported that in 2012 more than 80,000 Americans were already employed full

- time in the wind industry sector. Finally, the commenter s stated that analysis by the Center for American Progress has concluded that twice as any medium and high credentialed jobs are being created in the clean energy industry in comparison to the fossil fuels' industry, and clean energy investments generate about 3.2 times the number of jobs as does investing the same amount of money in the fossil fuel sector. Thus, the commenter s concluded that clean energy jobs pay more overall and those jobs are of better q uality.

The commenter s stated that carbon standards for existing power plants that include significant investments in both renewables and demand

- side energy efficiency also have the potential for robust job growth. The commenter s stated that NRDC's propos al for how the EPA could shape these standards, which includes a significant expansion of energy efficiency, concludes that limits on carbon pollution from power plants have the potential to save Americans $37.4 billion on their electric bills by 2020 whil e creating more than 274,000 jobs. The commenter s stated that because clean energy investments require more employment per unit of activity, others have noted that investments in clean energy will result in a net increase of 2.7 million jobs. The
comment er s stated that in order achieve this goal Pollin and Boyce have called for reducing energy consumption 30 percent by 2030 through efficiency improvements as well as renewable resources. The commenter s stated that other academics have also concluded that hundreds of thousands of jobs can be created by California further expanding energy efficiency programs. The commenter s concluded that renewable energy and energy efficiency contribute to create safer, long

- term jobs while providing power at a lower cost

.

The commenter s stated that the Clean Power Plan can help accelerate the clean energy economy and create good jobs by allowing states to achieve their targets through the implementation of renewable energy generation and energy efficiency . The commenter s stated that the proposal would result in increased clean energy sector jobs and an estimated decrease of about nine percent in electricity bills by 2030. The commenter s stated that the flexibility granted to states to achieve their targets with more renewa ble energy and energy efficiency than EPA has estimated for purposes of its state goals' calculation means a higher potential for new jobs in solar installation, wind infrastructure development, and construction of homes and businesses that are
more energy

- efficient, among other job options. The commenter s stated that median wages are 13 percent higher in clean energy jobs than the median United States wages.

Comment 8 : Comments supporting expansion of RE and EE and local economic development.

Response 8 : A discussion regarding employment and economic development can be found in

s ection VIII.G.3 and in s ection XI.E of the preamble.

The following are summaries of the specific public comments under this comment:379 Commenter s contended that states must take th e driver's seat in crafting compliance plans that expand renewable energy and energy efficiency, while also prioritizing the creation of good, clean energy jobs to promote state and local economic development and improve community and workers' livelihoods.

Referring to a November 2014 report from U.C. Berkeley, commenter s stated that strong federal and state clean energy policies in California have resulted not only in substantial carbon emissions reductions but in stable, family

- sustaining careers. The co mmenter s stated that as a result of these policies, California's use of electricity from renewable sources increased from 11 percent in 2008 to nearly 20 percent in 2013. During the same time period, the commenter s stated that the report finds that more th an 15,000 new jobs have been created by California's solar construction boom, with workers building solar arrays earning on average $78,000 a year plus health and other benefits.

The commenter s stated that California's experience supplies a road map for s tates seeking to develop state plans that combine carbon emissions reductions with the creation of good jobs and economic development. The commenter s stated that the report lists three key ingredients for success: (1) strong federal action, included the Ob ama Administration's American Recovery and Reinvestment Act (ARRA) of 2009, which reserved more funds for clean energy than had been done at any time in our nation's history, loan guarantees that helped solar energy to take off in the depths of the Great R ecession, and the Federal Business Energy Investment Tax Credit, which provides a 30 percent credit to residential, commercial, and utility scale solar systems; (2) California's aggressive climate change policies, includes AB 32, which requires a steep red uction in greenhouse gas emissions, and SB X1

- 2, which expanded California's RPS to an ambitious 33 percent target by 2020; and (3) "high road" job creation and construction policies: utility

- scale solar projects that receive federal subsidies fall under t he Davis

- Bacon Act, which requires that prevailing wages and benefits be paid. The commenter s stated that California is not a right

- to

work state and as a result prevailing wages in construction tend to be the collectively bargained rate that includes good wages with decent benefits and contributions to apprenticeship training. The commenter s noted the report contrasts California's "high road" employment practices with work on some federally

- subsidized solar projects in right

- to

- work states, where nonunion rates prevail.

Comment 9 : Comments suggesting that sources develop comprehensive workers' transition policies.

Response 9 : A discussion regarding employment and economic development can be found in

s ection VIII.G.3 and in s ection XI.E of the preamble.

The following are summaries of the specific public comments under this comment:

Commenter s argued that states should require affected sources to put in place comprehensive workers' transition policies

.380 The commenter s stated that for a number of years, the el ectric sector has been moving away from coal towards natural gas and renewable energy (i.e., in comments to EPA's 111(b) proposal, the commenter s documented that coal generation fell from over 2 billion MWh in 2007 to 1.58 billion MWh in 2013). The comment er s noted that older and less

- efficient power plants continue to retire due to competition with other generation resources and environmental requirements, with approximately 20 GW of coal retired between 2008 and 2013. The commenter s noted that the EIA est imates that, regardless of any impending environmental regulations, there will continue to be a shift away from fossil

- fuel

- fired generation towards a renewable energy economy and that by 2040, renewables will account for almost one third of the growth of generation resources.

The commenter s suggested that in the course of developing their plans to achieve the state goals under the Clean Power Plan, states should continue to move away from coal, which is no longer economical and results in major environmen tal harms. The commenter s stated that in incorporating policies to continue to move away from coal, states must also establish measures to ensure that owners and operators of coal

- fired power plants that will reduce or terminate their operations protect th eir workforce and guarantee that their workers can transition smoothly to the coming clean energy economy. In other words, the commenter s suggested that state plans must require owners and operators of coal

- fired power plants to put in place comprehensive transition policies to minimize the impacts of potential job losses and incentivize their participation in the growing renewable energy economy . To this end, the commenter s stated that owners of power plants that will have to reduce their utilization or cl ose should have policies in place specifically geared to workforce development, family

- sustaining employment, and livelihood guarantees (for example, health care, pensions during some period after job loss, and severance packages). The
commenter s stated th at this may require government financial assistance

.

Comment 10 : Comments addressing support to workers during the implementation of the CPP.

Response 10 : A discussion regarding employment and economic development can be found in

s ection VIII.G.3 and in s ection XI.E of the preamble.

The following are summaries of the specific public comments under this comment:

Commenter s argued that States must continue to turn away from fossil fuels by taking advantage of economic forces and actively engaging in specif ic areas experiencing job losses. The

commenter s argued that states should support the development of plans to help workers and communities in transition, which should include financial assistance. The commenter s provided for example, one of the objectives in Washington State's SB 5769, along with requiring greenhouse gas emissions reductions from large coal

- fired electric power generation facilities, is to provide financial assistance to communities who are affected by the transition away from coal. The co mmenter s stated that the bill fulfils this purpose by mandating that the Community Economic Revitalization Board (CERB) and the Public Works Board each find new projects for redevelopment in the region, and requires qualifying facilities to offer financial aid to the381 affected community that is "equivalent to the amount of tax benefits received from the sales and use tax exemptions on coal."

The commenter s suggested that states should also engage the private sector and civil society to fund initiatives to s upport workers and their communities . The commenter s noted the Solar Community Initiative, administered by the World Wildlife Fund and executed by the solar firm Geostellar, provides useful lessons for the design of such programs. Under that program, the

c ommenter s noted that employees can install rooftop solar on their homes at discounted prices

- 35 percent below the national average for solar

- and pay 50 percent less than the average grid

delivered electricity in their bills. The commenter s stated that this is an example of how renewable energy companies are beginning to offer solar energy as a workers' benefit. The
commenter s argued that states must work with renewable energy industry stakeholders to expand the availability of these programs to workers in affected communities . The commenter s stated that solar panels not only reduce consumers' electricity bills; workers whose job is to install solar panels are also increasingly becoming aware of how cleaner technologies are replacing dirtier forms of elec tricity, with environmental benefits. The commenter s noted that this type of incentive offers a way to attract and retain workers to clean energy jobs, and also helps pre

qualify people in those jobs for the said benefits.

The commenter s noted that energy efficiency can also be channeled towards benefiting affected communities, and states should encourage affected sources to invest in these measures. For example, the commenter s noted that weatherization assistance programs can be utilized in low

income and minority areas to help shrink the energy affordability gap. The commenter s noted, according to the DOE, investments in weatherization generate $2.51 in energy savings while reducing energy bills by $1.80. The commenter s also noted that assessment of Ohio' s Home Weatherization Assistance Program concluded that it has generated jobs, reduced pollution, and lowered consumers' energy bills by more than 20 percent which will not only create jobs in areas burdened by the costs of electric bills (e.g., more than 300,000 Ohio households with incomes at or below the 50 percent federal poverty level pay over 30 percent of their annual income to energy bills), but it will further promote investment in local economies.

6.6 RESOURCES

This section discusses various res ources available to states and requested by commenters, including those available in the Decision Support Toolbox and other resources such as funding and external tools.

6.6.1 Decision Support Toolbox

- The agency requested comment on the types of tools a nd information that would be helpful for states as they develop their compliance plans.

This section discusses the Decision Support Toolbox and addresses comments and suggestions on what types of information and guidance should be provided by EPA to states to aid in the development of state plans.382 Commenters have raised a number of issues related to this subsection which are organized by topics (comments) below. Responses are also provided for these topics.

Comment 1: C ommenters stated that EPA should prov ide guidance to states to enable them to most effectively incorporate CHP and/or WHP into their compliance plans.

Response 1: The EPA believes that information on how to account for CHP and WHP in state plans is clearly spelled out in the final rule (see sections V.A.6 and VIII.G of the final rule preamble of the CPP ) , and that no additional guidance is required. The EPA has also provided information on CHP and WHP on the Clean Power Plan Toolbox.

The following are summaries of the specific public comment s under this comment:

Commenters stated that while EPA has said that states can go beyond the building blocks to achieve their targets, it does not explain how CHP and WHP at unaffected units might fit into a state plan. The commenters recommended that EPA ensure that states are aware that CHP and WHP are valuable compliance tools and provide appropriate guidance for states to include policies that support their deployment in their compliance plans. The commenters stated that in particular, states will need model rules detailing the best way to include CHP and WHP in renewable portfolio and energy efficiency standards and guidance on how to appropriately credit CHP output and emissions impacts. The commenters stated that these written materials can be supple mented with a CHP and WHP conference for states and other stakeholders involved in developing compliance plans.

Commenter s stated that it is critically important that the EPA provides guidance to states that explicitly addresses methodologies for incorpora ting CHP in their compliance strategies. The
commenter s suggested that EPA provide model rules addressing how CHP can be credited in portfolio standards and through other mechanisms. According to the commenter s , one of the most critical findings from a rec ent study for the State of Minnesota is that the economic potential for implementation of CHP is significantly larger than prior studies have concluded if the model shifts from CHP plants owned by customers who have very high Weighted Average Cost of Capit al (WACC), i.e., very short simple payback thresholds, to electric utilities which have significantly lower WACC, as illustrated in Figure 7 of the commenters ’ submittal. The
commenter s suggested that states should be encouraged to change laws, policies an d programs to facilitate access to low

- cost capital for CHP implementation by allowing and encouraging electric utilities to build CHP plants as rate

- base investments and/or through low

- interest loan
programs.

Commenter s suggested the EPA address state reg ulations and policies, including utility tariffs that act as barriers for the deployment of CHP systems. As an example, the commenter s noted that some Midwestern states' "unwarranted demand or standby power charges make CHP systems financially unviable." T he commenter s noted that low avoided cost rates discourage CHP system projects that could be sized to the full thermal load, if they could profitably sell power back to the grid. The commenter s believed that complex, opaque interconnection requirements and discriminatory net

- metering policies were another impediment to CHP and383 recommended the EPA provide guidance on state financing mechanisms and options for utility investments in and/or financing of CHP system projects. The high cost of capital for private investors is a significant market barrier to CHP system projects, the commenter s noted and suggested that state funds, utility financing, and tax credit programs may affective means of promoting CHP. The commenter s suggested the EPA guidance also provide examples of how emission reduction credits trading systems can be structured to create value for private sector CHP system developers.

Comment 2: Commenters suggested that EPA include information on WHP resources in the CPP toolbox for states and clearly identify WHP as a zero

- emitting power source.

Response 2: In the final rule, the EPA has clearly identified the role of WHP as either a lower

emitting GHG reduction measure or a zero

- emitting measure, depending on the type of WHP system. For WHP systems c ommonly referred to as bottoming cycle CHP, EPA recognizes their role as a lower

- emitting measure. For other WHP, EPA recognizes the original power generating unit’s GHG emissions will depend on the type of fuel that is used. However, the incremental
power generated through the WHP process will have no associated GHG emissions, as no additional fuel is used.

The following are summaries of the specific public comments under this comment:

Commenter s suggested that EPA include information on WHP resources in a n appropriate section of the Clean Power Plan toolbox for states. The commenter s suggested that EPA clearly identify WHP as a zero

- emitting power source in EPA resources. The commenter s stated that renewable and nuclear energy are the only zero

- emitting po wer sources mentioned in the proposed rule, preamble and the EPA Fact Sheet: Clean Power Plan.

The commenter s suggested that EPA make WHP information available in a section of the toolbox dedicated to zero

- emitting power resources. The commenter s stated t hat currently, someone searching the toolkit for zero

- emitting power resources would not find WHP. The
commenter s stated that instead, very basic information on WHP can be found under the "Combined Heat and Power Technology Options" which are under the "Te chnical Resources for Reducing CO2 from Power Plants" in the "Clean Power Plan Toolbox for States", not a place people searching for info on WHP and other zero

- emitting power sources would look.

The commenter s suggested that WHP information in the toolkit should include: available resources that describe the technologies employed to capture waste heat and convert it to electricity, the availability of waste heat resources, fact sheets, project profiles that describe successful projects, guidance, templates , the DOE market assessment report to be released later this year, and other tools that will help states develop their plans. The commenter s stated that in addition, the document: " Catalog of States that Include WHP in their Renewable Energy and Energy Eff iciency Policies and Programs " (attached to comment letter ) provides information on states that already include WHP in their state programs, and may be of value to other states pursuing similar inclusion of WHP.384 Comment 3: Commenters requested guidance fr om EPA to provide clarity on a number of issues, including state plan development.

Response 3: The EPA believes that state plan requirements are clearly spelled out in the final rule

. This includes how to treat EGU retirements and new Natural Gas Combine d

- Cycle (NGCC) units; interactions with section 111(b); enforceability considerations related to requirements in a state plan for entities other than affected EGUs; tools and methods for projecting emission performance in state plans; how to treat renewabl e energy; corrective measures; multi

- state plan development and the inclusion of non

- BSER emission reduction methods in state plans.

The EPA plan s to take comment on EM&V approaches as part of the Federal Plan proposal and then to provide guidance on EM&V approaches and how to consider community impacts. The In the event that states continue to have questions about state plan requirements, the EPA will work closely with them to provide necessary information well before final plans are due.

The following a re summaries of the specific public comments under this comment:

Commenter s stated that EPA must provide guidance on plan development at the time the rule is promulgated. The commenter s noted that the planning window for this complex rule is very short and states need to be able to make maximum use of the time available.

Commenter s stated that available options must be clarified. The commenter s stated that it is critical that EPA issue guidance documents or promulgate appropriate regulatory text to provide states with certainty in establishing and implementing applicable requirements under a Section 111(d) plan given that state plans are due June 2016. The commenter s stated that neither the proposed regulatory text nor the preamble address key issues that a re crucial for developing a plan for compliance. For example, the commenter s stated that how the retirement of existing EGUs will be treated is a fundamental issue that needs to be answered before a state can even begin to develop a plan, dialogue with sta keholders, or collaborate with other states.

The commenter s stated that the issues most in need of clarification include the following: (1) EPA should recognize and allow any coal

- fired EGU retirements after the 2012 base year to count toward compliance t o meet a state's goal; (2) The use of new Natural Gas Combined

- Cycle (NGCC), with or without Carbon Capture and Storage (CCS), should be allowed by a state to achieve its goal; (3) Section 111(d) should not be applicable to an existing source that has been modified and/or reconstructed, thereby being subject to Section 111(b) and Subpart TTTT; (4) While the Cabinet disagrees with an interim goal, EPA should promulgate the alternate goals as an available regulatory option to allow maximum flexibility in adop ting either goal and its associated timeline; and (5) The Cabinet recommends that out

- of

- sector offsets be allowed where the designated pollutant, CO2, is directly mitigated. Kentucky's reforestation initiative is consistent with this premise and should be allowed as a compliance option.

Commenter s also called for EPA to issue clear rule and concurrent guidance developed with states. The commenter s stated that any final rule should be clear and comprehensive enough that the need for implementation guidance is minimized. If such guidance is needed, the commenter s385 stated that EPA should develop any guidance with state involvement and publish it concurrently with any final rule, especially given the very short timelines proposed for states to submit plans and b egin implementation.

To maintain a level playing field while achieving meaningful reductions, the commenter s stated that the rule should be written to encourage accountability. The commenter s stated that monitoring, verification, and backstop provisions sh ould be reasonable and clear, developed in consultation with states. The commenter s recommended that EPA work with states to ensure that contingency measures are available, recognizing the importance of states maintaining control over their programs and ad vancing a system of flexible and iterative implementation.

Commenter s noted that EPA requests comment on whether to develop guidance for a number of topics: enforceability considerations related to requirements in a state plan for entities other than affec ted EGUs; evaluation, monitoring, and verification of renewable energy and demand

- side energy efficiency programs and measures incorporated in state plan; tools and methods for projecting emission performance in state plans; and the inclusion of non

- BSER e mission reduction methods (such as electricity transmission efficiency improvements or the use of new NGCC units) in state plans. The commenter s requested that EPA develop guidance for all topics identified, and requested that the guidance be timely, and m ade available for states as they begin to develop their state plans. The commenter s noted that EPA has often delayed guidance related to State Implementation Plan development to shortly before, or even after, the required submittal deadline, leaving States in a position of having to decide between developing and submitting plans that may be inconsistent with pending EPA guidance (and risk disapproval of said plans), or delaying plan development and submittal and risking a finding of failure to submit by EPA

.

Commenter s recommended balancing state policy

- making autonomy with the need for accountability by providing clear tools for states to use in assessing programmatic level compliance using existing monitoring, verification, and reporting system requirement s when possible.

Commenter s welcomed additional guidance in areas EPA deems appropriate. The commenter s stated however, any such guidance should be advisory in nature and not mandatory. The
commenter s stated that EPA should also provide to the States guida nce on multi

- state plan development.

Commenters requested that EPA issue clear guidelines on the state plans in or with the final rule. The commenter s stated that these guidelines would form the basis for states to develop plans and for EPA regions to revi ew and approve them. The commenter s stated that any additional guidance issued by EPA should be discretionary and available as soon as possible in advance of the deadline for initial plan submittal.

Commenter s recommended that EPA provide assistance to sta tes to reduce the amount of time it takes for states to develop and submit their state plans, including:

• Detailed examples of elements of compliance pathways, such as trading programs, EM&V protocols and program, REC trading, corrective measures, and other items identified above in these comments.3 86 • Modeling support for converting rate

- based goals into mass emissions budgets for those states that want to pursue a mass

- based approach.

In light of state's established statutory and regulatory timeframes, the co mmenter s recommended that EPA should clarify what states need to include in a submittal to be in compliance with the rule's deadlines for submitting a plan

.

Comment 4: Commenters state there is a need to provide states with guidance to help them through th e planning process and to include minimum criteria for state plans. Commenters offered a list of minimum criteria to include.

Response 4: The EPA believes that state plan requirements are clearly spelled out in the final rule, and that minimal guidance is required. This includes a flexible emission standards approach, mass

- based approach and a flexible state measures approach. Should a state choose, it could apply a fee or tax for CO2 emissions from affected EGUs, or related excise taxes that directly or indirectly address CO2 emissions from affected EGUs, as a state measure under a state measures type plan. Where a state applies a fee for CO2 emissions from an affected EGU, and the fee paid is for an emission allowance that allows an affected EGU to emit a ton of CO2, such a mechanism would meet the definition of an emission standard in the EPA’s implementing regulations at 40 CFR 60.21. The EPA does not have a position on the design elements of a carbon fee or tax, including the entity to which a fee or tax is applied, the entity administering the fee (the state directly or an agent of the state, such as an ISO or RTO), or any legal issues that might arise, based on how a state chooses to apply a fee or tax, with respect to state or federal statutes outsi de the scope of the CAA.

The following are summaries of the specific public comments under this comment:

While commenter s supported EPA providing states with significant flexibility in the development of state plans, the commenter s indicated there is a cle ar need to provide guidance to states to help them through the planning process and also to describe minimum criteria for state plans to ensure environmental integrity and achievement of the state standards of performance

. The commenter s suggested four cat egories of policies that EPA should consider providing guidance on and must develop minimum criteria:

1. Flexible intensity

- based standards

2. Mass

- based standards

3. Carbon fees

4. Resource standards or portfolio approaches

The commenter s noted that EPA, the states , and other jurisdictions have experience with all of these policy approaches, and recommended that EPA look to those existing programs as guidance and minimum criteria are developed. The commenter s provided Table 9.1387 that describes the four policy approac hes, provides ideas on how EPA could establish minimum criteria, and provides background on how they impact different resource types and stakeholders.

The commenter s provided the following minimum criteria for the policy types they indicated EPA should ref ine and include as further guidance on state plans and emphasized that these suggestions are additional criteria beyond EPA's proposed CPP state plan components.

Flexible intensity

- based standards:

a. Requirement on the regulated fossil generator to meet t he emissions standard on an annual or multi

- year basis, with the opportunity to offset emissions with credits from

non

- and low

- emitting sources;

b. Standard reporting, compliance, and enforcement provisions;

c. Energy efficiency evaluation, monitoring, an d verification requirements in order to certify units of energy savings that can be converted to credits;

d. Renewable energy certificate (REC) tracking system to avoid double

- counting and to allow tracking of units of energy that can be converted to credi ts;

e. System and methodology to convert efficiency and renewable MWhs to emissions credits and a platform to track and trade those credits;

f. Requirement to address emissions leakage or increased emissions associated with expanded fossil generation and e xports;

g. Prohibition on conversion of RECs and efficiency savings to emissions credits from

mass

- based states (the mass based state is already accounting for the emissions reduction; however, RECs from that state could still be used for RPS compliance).

Mass

- based Standards:

a. Requirement on the regulated fossil generator to meet the emissions standard by holding emissions allowances equal to their emissions;

b. Standard reporting, compliance, and enforcement provisions;

c. Note: we do not think a leaka ge requirement is needed in mass

- based or carbon fee states, as the potential for leakage and increased generation exists primarily in the states that adopt a rate

- based approach that allows generation and total emissions to increase.

Carbon Fees:

a. Requi rement on the regulated fossil generator to pay a fee based on their emissions over a given period of time;388 b. Normal reporting, compliance, and enforcement provisions;

c. Backstop requirement to track and regularly adjust fees (with adjustment periods not to exceed annually) if emissions rise above levels allowed by the state standard of performance and have an adjustment made to ensure the standard is being met if emissions rise above allowed levels (this requirement must include an enforcement mechanism on the fossil generators regulated under Sec. 111(d), as previously discussed).

Resource Standards or Portfolio Approaches:

a. Requirement on the regulated load serving entity (LSE) or distribution company providing services to consumers to procure a set amount of efficiency or renewables based on percentages of sales or what is cost

- effective (note: there could be other state policy approaches that regulate other entities beyond fossil generators or the LSE);

b. Standard reporting, compliance, and enforce ment provisions;

c. Energy efficiency evaluation, monitoring, and verification requirements;

d. Renewable energy certificate (REC) tracking s ystem to avoid double counting;

e. Requirement to address emissions leakage or increased emissions associated with expanded fossil generation and exports;

f. Prohibition on claiming an emissions benefit from RECs generated in mass

- based states (the mass based state is already accounting for the emissions reduction; however, RECs from that state could still be used for RPS compliance); and

g. Backstop requirement to track emissions in relation to the state standard of performance and have an immediate adjustment made to ensure the standard is being met if emissions rise above allowed levels (this requirement must include an enforcement mechanism on the fossil generators regulated under section 111(d)), as previously discussed.

Comment 5 : Commenters suggested that EPA develop guidance and provide assistance to states seeking to create mass

- based plans.

Response 5 : The EPA developed mass

- based CO2 goals to help address this concern. ( P lease

see Section VII .C of the final rule preamble of the CPP )

. In addition, the agency is providing comprehensive information on how to develop mass

- based plans in Section VIII .C of the fin al rule preamble of the CPP

. The following are summaries of the specific public comments under this comment:389 Commenter s supported the currently proposed interim compliance period. The commenter s stated that EPA offers the opportunity for states to adopt ma ss based plans and multi

- state plans as compliance vehicles. The commenter s stated that single and multi

- state mass based plans, like RGGI, can provide a means to mitigate the impacts of the perceived "cliff" in the Interim Compliance Period. The commenter s suggested that EPA develop guidance and provide assistance to states seeking to create mass based plans with a particular focus on preserving the stringency of Interim Targets and ensuring compliance with them.

Comment 6 : Commenters state d that EPA shou ld provide guidance and protocols that establish nationally consistent EM&V standards for emissions, allowances, credits, offsets, and other parameters.
Response 6 : The EPA plans to request feedback on EM&V approaches as part of the Federal Plan proposal, and then will issue guidance

. In addition, in the final rule the EPA provides clear information on crediting for EE and RE, and how to track those credits in Section VIII of the final rule preamble of the CPP

. The following are summaries of the specific p ublic comments under this comment:

Commenter s stated that EPA should provide guidance, infrastructure, tracking mechanisms, and protocols that establish nationally consistent evaluation, measurement and verification (EM&V) standards for emissions, allowanc es, credits (e.g., EE and RE), offsets, generation, and other parameters that are used in goal setting and compliance determinations. For example, the
commenter s stated that EPA could host or sponsor a registry for EE measures. The commenter s noted that th is could ensure greater compliance, as well as provide a mechanism for states, utilities, and EE practitioners that could potentially serve as the foundation for an EE trading platform.

Comment 7 : Commenters suggested that EPA provide states with systems and example protocols to facilitate implementation of state plans and multistate approaches, including guidelines for recognition of existing tracking and accounting systems to facilitate state compliance.

Response 7 : The EPA believes that state plan requ irements are clearly spelled out in the final rule, and that minimal additional guidance is required. This includes credit tracking and pathways for compliance. The EPA plans to request feedback on EM&V approaches as part of the Federal Plan proposal, an d then will issue guidance.

The following are summaries of the specific public comments under this comment:

Commenter s suggested that to facilitate development of the architecture for effective implementation of state plans and multistate approaches, EPA s hould provide states with optional:390 • S ystem(s) for tracking emissions, allowances, reduction credits, and/or generation attributes that states may choose to use in their plans;

• E xamples of protocols that provide a minimum acceptable level of EM&V, issued

c oncurrent with the Final Rule, that can be used in connection with crediting of emission reduction measures, such as energy efficiency and/or renewable energy; and

• D etailed examples of elements of compliance pathways, such as trading programs, corrective m easures, crediting mechanisms and other similar items.

The commenter s stated that EPA should also provide guidelines for the recognition of existing state or regional tracking and accounting systems to facilitate state compliance.

Comment 8 : Commenters a rgued that EPA should give more guidance on treatment of Energy Services Companies ( ESCOs ) delivering EE through performance contracting and guidance to states in developing state plans.
Response 8 : The EPA agrees with the commenters that the EPA should p rovide guidance and support to states in developing their state plans, so as to minimize delays and maximize efficacy of compliance. See section VIII.H of the final rule preamble of the CPP for resources that states can use in developing their plans. The E PA has provided information on accounting for energy efficiency in state plans, including what measures can be used, how to account for them, and how to measure them. Please refer to Section VIII.K.3 of the final rule preamble of the CPP

. For details of t he requirements for multi

- state plans, see Section VIII.C.5 of the final rule preamble.

The following are summaries of the specific public comments under this comment:

Commenter s argued that the EPA should give more guidance in the final rule on the treat ment of entities such as ESCOs that will be delivering EE achievement through performance contracting directly with large commercial and industrial customers. The commenter s asserted that the EPA can and should provide guidance and support to states in dev eloping their state plans, so as to minimize delays and maximize efficacy of compliance. The commenter s stated that the EPA can serve an important role in facilitating multi

- state compliance by providing detailed examples of elements of compliance pathways , such as trading programs, EM&V protocols and program, REC trading, corrective measures, and other items.

Comment 9 : Commenters suggested that EPA provide clarity as to the technologies that can be used as compliance options, provide guidance on incorpo rating them into state plans, and factor them into the BSER.

Response 9 : The final guidelines include details on the measures that can be relied on in state plans. Please see Section s V.A.6

, VIII.C, VIII.J, and VIII.K of the final rule preamble of the CP P

. We are also finalizing the option of a state measures plan type, which would allow states to rely on measures besides those on affected EGUs. (State

- only measures would, however, need to391 be enforceable as a practical matter as defined in the emissions g uidelines, and states using the state measures plan would need to include a backstop of federally

- enforceable measures on affected EGUs.) See sections VIII.C.3 and VIII.D.2 of the final rule preamble. See section VIII.K.2 of the final rule preamble of the CPP for a discussion of emission trading programs using credits generated through EE and RE.

The following are summaries of the specific public comments under this comment:

Commenter s supported the Clean Power Plan's inclusion of greater detail on approvab ility criteria, requirements for state plan components, the process and timing for state plan submittal, and the process and timing for demonstrating achievement of the carbon emission performance level in the state plan. The commenter s also supported that the proposal provides for more guidance to states on options for meeting the state

- specific goals established by EPA in a flexible manner that accommodates a diverse range of state approaches.

The commenter s suggested that EPA provide clarity as to the t echnologies that can be used as compliance options , provide guidance on incorporating them into state plans, and factor them into the BSER. While EPA should provide as much specific guidance as possible on approvable measures and policies, the commenter s s uggested EPA should also reiterate and make clear that additional measures and policies can be approved even if not specifically named in the Clean Power Plan. The commenter s recommended that this guidance contain as many default approvable policies as pos sible and criteria on which additional state policies will be evaluated.

The commenter s acknowledged that the Clean Power Plan notes that there is a broad range of compliance options available to states as they develop their implementation plans (e.g., nat ural gas, renewable energy, nuclear, energy efficiency, transmission and distribution improvements, and energy storage are listed as options). The commenter s noted that while EPA has indicated that states can propose options outside of that list, there is a great deal of uncertainty as to what other options EPA might allow. In the final rule, the commenter s recommended that EPA explicitly recognize the technologies that can serve as compliance options and provide guidance to states on the use of these techn ologies in compliance plans. The commenter s stated that to the extent EPA expands the available compliance options, the emissions reductions that can be provided by those resources should also be factored into the BSER in order to ensure symmetry.

Comment 1 0 : EPA should republish guidance concurrent with the Final Rule for incorporating emerging and voluntary measures into state plans, including, but not limited to, energy efficiency and renewable energy.

Response 1 0 : We agree with commenters that the EPA’ s prior guidance on enforceability of EE and RE measures can serve as the foundation for the types of measures that the EPA has found can be enforced as a practical matter, which is required for all federally

- and state

- enforceable measures under the CPP. See Section VIII.D.2 of the final rule preamble of the CPP. The final guidelines detail h ow states can incorporate energy efficiency and renewable energy measures into a state plan , including accounting for emission reductions in state plans, and how to de monstrate that a measure is quantifiable, non

- duplicative, permanent, verifiable and392 enforceable

. Please refer to Section s VIII. D, VIII.E, and VIII. F of the final rule preamble of the CPP.

The following are summaries of the specific public comments under this comment:

Commenter s stated that EPA should republish guidance concurrent with the Final Rule for incorporating emerging and voluntary measures into state plans, including, but not limited to, energy efficiency and renewable energy. The commenter s stat ed that t his guidance may be very similar to the 2004 guidance and the 2012 roadmap intended for SIPs, with minor adjustments for state 111(d) plans. According to the commenter s , it is noteworthy that the guidance and roadmap for SIPs are focused on nonatt ainment areas, where the location of actual emissions reductions is important; however, this is less of a concern for CO2 which is mostly of concern due to climate change effects and is well

- mixed in the atmosphere.

Comment 1 1 : Commenter s asked for comple te and timely guidance on roles of the state and EPA region

. Response 1 1 : The EPA, especially through our regional offices, will be available to work with states as they develop their plans, in order to make review of submitted plans more straightforward and to minimize the chances of unexpected issues that could slow down approval of state plans. Please also see section VIII.H of the final rule preamble of the CPP for a toolbox of resources that states can use in developing their plans.

The following ar e summaries of the specific public comments under this comment:

Commenter s stated that at times the EPA has provided guidance to states after deadlines by which states were expected to submit material to the EPA. The commenter s stated that it will be imper ative to have the EPA's clearest guidance on how to implement the measures in an approvable State Plan in the short time available to comply with the rule. The commenter s strongly urged the EPA to ensure that any guidance on the final 111(d) rule be both c omplete and timely. The commenter s noted that plan development and the need for guidance will begin before EPA issues the final rule. The commenter s stated that using similar state

- EPA region coordination processes for 111(d) as are used for air quality SI Ps would be helpful. The
commenter s stated that the goal of guidance would be to clearly articulate roles and responsibilities in the short time available for Plan development and help facilitate a final State Plan that is both approvable and acceptable to all stakeholders.

Comment 1 2 : Commenters recommended that the EPA provide clear guidance to states in developing their compliance plans and provided several types of suggested guidance.

Response 1 2 : The final rule addresses how to treat new natural gas c ombined cycle plants, out

of

- state renewable energy generation, EM&V, enforceability, multi

- state or regional compliance, market

- based approaches, equivalence of state programs, rate

- to

- mass conversion, penalties for393 non

- compliance, state compliance plan t racking, and plan review. See Section VIII of the final rule preamble of the CPP.

The EPA added a requirement to the final rule that a state’s initial submittal must contain a description of the engagement with stakeholders

, including vulnerable communit ies

, that the state has undertaken already and that it plans for the period of final plan development. Further, states’ final plan submittals must contain similar descriptions. The EPA provides guidance to the states in the final rule on how to engage co mmunities in a meaningful way. The EPA will continue to provide recommendations and tools to states and communities that will help enable meaningful conversations about the concerns of vulnerable communities. The EPA consulted its May 2015 Guidance on Cons idering Environmental Justice During the Development of Regulatory Actions in the creation of this final rulemaking and encourages states to consult this document as they create their state plans. See sections VIII. D

- E and IX.B of the final rule preamble o f the CPP for more details on how EPA has addressed these comments in the rule.

The EPA, especially through our regional offices, will be available to work with states as they develop their plans, in order to make review of submitted plans more straightfor ward and to minimize the chances of unexpected issues that could slow down approval of state plans. Please also see section VIII.H of the final rule preamble of the CPP for a toolbox of resources that states can use in developing their plans. In addition, the agency is coordinating with other federal agencies to provide information and assistance in areas such as worker transition.

As noted in section VIII.F.4 of the final rule preamble of the CPP , the agency is not finalizing a position to periodically re view emission guidelines.

The following are summaries of the specific public comments under this comment:

Commenter s recommended that the EPA provide clear guidance to states in developing their compliance plans to ensure that states are able to develop a nd submit robust plans in a timely way, and that such guidance cover issues such as treatment of certain energy options, best practices, methodologies, non

- compliance penalties, processes, and options for addressing worker transition and environmental just ice concerns.

The commenter s asserted that clear guidance to states from the EPA will help ensure that compliance plans are robust and timely. The commenter s noted that the Clean Power Plan's flexibility provides many cost

- effective options for states to reduce emissions, but there are some complex issues raised by the interaction of these options and a need to ensure states are on track to achieve emissions reduction goals. The commenter s suggested that the EPA should provide clarity on some key issues me ntioned below, many of which were raised in stakeholder comments and the NODA.

The commenter s recommended in particular that the EPA provide guidance on:

Treatment of new natural gas combined cycle (NGCC) plants. The commenter s stated that in the final rul e the EPA should provide clear guidance to states on how to treat new NGCC plants, both in the state emissions rate formula and for compliance purposes. The commenter s recommended that, if new NGCC plants are used for compliance, it will be important to en sure that the resulting emissions are appropriately accounted for.394 Treatment of out

- of

- state renewable energy generation. The commenter s stated that renewable energy will be a key component of state compliance plans and the EPA should provide clear guidanc e on how states should track and account for renewable energy that is traded across state boundaries. The commenter s recommended that the EPA clarify for states how they should treat
out

- of

- state renewable energy generation for compliance plan purposes to encourage development of cost

- effective renewable energy resources nationwide, avoid double

- counting, and ensure synchronization with existing energy trading and tracking systems.

Ev aluation, measurement, and verification (EM&V). The commenter s stated that robust protocols for EM&V for electricity generation, energy efficiency, and other components of state compliance plans must guard against double

- counting to provide for robust emissions accounting across all building blocks. The commenter s recommended th at the EPA provide states "best practices" and sample methodologies for conducting EM&V with regard to these issues, and provide certification protocols for methodologies developed by other parties.

Criteria for enforceability. The commenter s noted that s tate compliance plans that incorporate state programs must contain federally enforceable components to ensure that the emissions reduction goals are met. The commenter s recommended that the EPA provide clear guidance to states on incorporation of such comp onents for demonstrating compliance.

Multi

- state or regional compliance. The commenter s noted that multi

- state or regional strategies may be attractive to states as the least

- cost compliance option. The commenter s recommended that the EPA provide robust m ethodologies for demonstrating compliance under such multi

- state approaches.

Market

- based approaches. The commenter s noted that states may also choose market

- based approaches as a least

- cost compliance option. The commenter s recommended that the EPA provi de robust methodologies for demonstrating compliance under such market

- based approaches.

Equivalence of state/regional programs. The commenter s noted that states may incorporate existing or new state or regional programs into their compliance plans. The c ommenter s recommended that the EPA provide states with clear methodologies for determining the equivalence of the emissions reductions achieved by such programs with the requirements of the CPP.

Rate

- to mass

- based conversions. The commenter s noted that in a November TSD, the EPA provided guidance for states on converting between emission rate

- and mass

- based goals. The

commenter s recommended that the EPA provide further clarification on key considerations for such conversions, especially if the EPA impleme nts any changes to the formula for calculating state emissions rate goals in the draft CPP.

Penalties for non

- compliance. The commenter s noted that penalties for non

- compliance will be an important component of a successful CPP. The commenter s recommended that the EPA provide clear guidance to states about penalties.395 State compliance plan tracking. The commenter s supported the EPA's proposal in the draft rule with regard to state plan compliance tracking, and recommended that the EPA require states to und ertake annual tracking of actual plan performance during implementation, and that the EPA require state compliance plans to include true

- up provisions to ensure that they are on track to meet the interim and final compliance goals

.
Review and updating pr ocess for the CPP

. The commenter s recommended that the EPA provide clear guidance to states about the timing of future updates to the CPP, and ensure that a review and update process takes place by 2025.

Worker transition assistance. The commenter s noted that compliance with the CPP may cause localized negative economic impacts. The commenter s recommended that the EPA offer guidance to states on ways to address concerns about such impacts, require that states assess impacts of their compliance plans on wor kers and communities, and highlight for states a variety of policy mechanisms for worker retraining and economic diversification.

Environmental justice (EJ). The commenter s recommended that the EPA require states to conduct an EJ analysis of the state's proposed compliance plan, offer states data, methodology, and tools to conduct effective EJ analyses; and offer examples of how compliance plans could be used to support EJ communities.

Comment 1 3 : Commenters stated that EPA should release model provisio ns to guide states.

Response 1 3 : The agency is concurrently proposing Federal Plan and model rules for states to use in developing their state plans under the CPP. For the final guidelines’ requirements for EM&V, credit issuance and use, multi

- state plans , and other topics related to state plans, see Section VIII of the final rule preamble of the CPP.

The following are summaries of the specific public comments under this comment:

Commenter s stated that the EPA should release model provisions to guide state s. The
commenter s explained that several states that have already been working to reduce GHG emissions in their power sectors are well positioned to leverage existing programs to implement the Clean Power Plan. However, the commenter s noted that many other states do not have the administrative infrastructure or institutional knowledge to easily develop and implement a state plan. Because of this, the commenter s suggested that additional assistance from EPA, either directly or by encouraging multi

- state foru ms during the implementation process, would make it more likely for many states to establish a plan in the timeframe proposed.

The commenter s stated that they recognize that the EPA is not in a position to release a full model rule. The commenter s noted t hat a one

- size

- fits

- all model plan for states to adopt is precisely what the flexibility in the Proposal was designed to avoid, and the resources necessary for such an endeavor would likely be better put to use elsewhere. However, the commenter s encouraged the EPA to explore the development of certain "model provisions" in lieu of a model396 rule. The commenter s stated that there are several critical issues that states are likely to struggle over, and model provisions targeting these issues could not only ease the burden on state regulators, but encourage consistency, or at least compatibility, across state lines, thereby enabling interstate credit trading and other forms of cooperation while building a network to more easily connect in future congressional act ion. The commenter s stated that they expect such model provisions or recommendations from collaborative processes established or recognized by the EPA to be popular among states. The commenter s stated that the EPA could conduct a faster plan review process when plans are built on these collaborative processes.

In deciding what issues to target through model provisions, the commenter s suggested that the EPA should consider measures for which state models do not already exist, as well as programs that are inc onsistent across state lines and can benefit from collaboration. The commenter s noted for example, a model cap

- and

- trade program may not be helpful for states since models already exist in California and the Regional Greenhouse Gas Initiative (RGGI). Howev er, the
commenter s noted that states could also choose to use direct carbon pricing, such as a carbon tax, to implement the Clean Power Plan. According to the commenter s , since there is no model of a carbon tax at the state level, it would be helpful for E PA to release a model provision to show how such a tax could be designed and implemented. The commenter s suggested that the EPA may wish to consider working with states to establish a methodology any state could use to determine the specific carbon price t hat would be sufficient to achieve compliance. According to the commenter s , this model provision could also show what steps states would need to take to demonstrate to EPA that the necessary cuts are being made.

Additionally, the commenter s noted that stat es are likely to struggle in developing an accounting method to demonstrate when emission cuts are being made through energy efficiency programs, both on an intrastate and interstate basis. The commenter s explained that States currently use varying MR&V pr otocols to assign emission cuts to energy efficiency, and consistency here would ease cooperation among states. The commenter s stated that guidance on this point could also help ensure efficiency programs can only earn credit when they result in real emiss ion reductions, and that such reductions are not double counted. Furthermore, the commenter s noted that states could benefit from assistance in accounting for energy efficiency programs that lead to emission cuts in other states, discussed further below.

T he commenter s stated that renewable energy crediting is another area in which states could use assistance to foster interstate consistency because currently there are several Renewable Energy Credit (REC) markets across the country, with inconsistent rules and protocols. The commenter s acknowledged that EPA should not use the Clean Power Plan to force states into using a certain REC protocol. However, the commenter s stated that suggesting best practices through a model provision would help improve interstat e consistency and the ability to trade RECs across regions, thereby improving the cost effectiveness of the Clean Power Plan. The commenter s stated that additional guidance on this topic could also help prevent the double counting of renewable generation.

The commenter s stated that a patchwork of inconsistent measures designed to achieve the same goal (e.g., a carbon tax in two neighboring states that operate through different mechanisms) will impair state cooperation , will make it more difficult for power companies and other businesses to operate across state lines, and will make a nationally consistent GHG program more difficult to397 establish. The commenter s concluded that th e EPA could help prevent these problems by developing a set of model provisions or collaborative processes in the planning period that states are encouraged to use with the promise of faster plan review . In addition to model provisions, the
commenter s suggested that the EPA could help states develop their plans by holding a series of

wor kshops or webinars on critical topics

.

Comment 1 4 : Commenters asked that EPA explore the issue of energy efficiency program cost

effectiveness in depth, and develop guidance that helps utility commissions and other stakeholders develop and apply appropria te cost

- effectiveness methodologies for 111(d) compliance.

Response 1 4 : The EPA does not have authority over the way utility

- funded energy efficiency programs are developed. That responsibility lies with state Public Utility Commissions, who have many too ls at their disposal to consider the most cost

- effective way to reduce CO2 emissions.

The following are summaries of the specific public comments under this comment:

Commenter s discussed the role of cost

- effectiveness testing in energy efficiency and carbo n reductions and asked EPA to provide utility commissions and other stakeholders with guidance in this area.

The commenter s stated that the Proposed Rule notes with confidence that "The processes by which states develop funding for energy efficiency progr ams typically require the application of cost effectiveness tests to ensure that adopted program portfolios lead to lower costs than the use of generation sources that would otherwise be required to meet the associated electricity service demands." However , the commenter s noted that the role of cost

- effectiveness fundamentally shifts in a 111(d) compliance framework. The commenter s stated that currently, ratepayer

funded programs are subjected to cost

- effectiveness tests that assign benefits based on curren t avoided costs of capacity and energy, typically without externality costs or costs of environmental compliance included. The commenter s noted that in many states, especially those with restructured retail electricity markets, utility commissions are unab le to assign specific values to energy and capacity costs, because such factors are determined in unregulated wholesale markets (e.g., they typically apply generic wholesale price estimates or other indicators as proxies for the true avoided costs that a g iven state may incur for 111(d) compliance).

The commenter s asked that EPA explore the issue of energy efficiency program cost

effectiveness in depth, and develop guidance that helps utility commissions and other stakeholders develop and apply appropriate cost

- effectiveness methodologies for 111(d) compliance . The commenter s stated that such methodologies may not match current approaches, which are widely recognized as being in need of reform. The commenter s provided for example, a state with restructured r etail markets that has been using wholesale

- market proxy values may need to develop specific avoided costs estimates based on the generation resources included in its compliance plan, plus any carbon prices that may be reflected in wholesale markets. The398 c ommenter s stated that in this respect, the focus of cost

- effectiveness shifts from current avoided

- cost methods to a more forward

- looking comparative cost of compliance approach, which is currently a "best practice" in cost

- effectiveness screening, but is rarely applied in practice. The commenter s stated that the EPA's cost

- per

- ton estimates developed in the regulatory impact analysis shows that efficiency costs less per ton of CO2 avoided than average costs for renewables, nuclear, and gas combined

- cycle t echnologies. So the starting assumption should be that efficiency will generally be the least cost compliance resource, and EPA guidance for state cost

- effectiveness methods should reflect this fundamental fact, while also detailing the differences between flawed test methods widely used at present, and the best practice approaches that would be appropriate for 111(d) compliance purposes.

Based on their experience, the commenter s stated that residential retrofit projects are systematically undervalued in m ost current cost

- effectiveness methods. The commenter s stated that this bias inaccurately penalizes energy efficiency in residential settings, where benefits and costs should be viewed a broader basis that nominal energy and dollar savings. The commenter s stated that evaluation research shows that homeowners value non

- energy benefits such as comfort, health, aesthetics, and resale value at or above the nominal monetized benefits that
current cost

- effectiveness tests typically measure. The commenter s are wor king to evolve these methods to more appropriately reflect the ways that benefits and costs are treated in these markets, and asked that EPA consider this evolution in its guidance to states.

The commenter s stated that today, ratepayer funded programs are usually required to pass a cost

effectiveness test (as noted in the draft regulation). The commenter s stated that these tests are based on five tests originally developed in the 1970s California Standards Practice Manual (for a determination if new generat ion assets are cost effective and in the public interest). According to the commenter s , despite more recent updates, these tests are often implemented in ways that are biased against energy efficiency investments because they account for all the costs, but frequently ignore many of the benefits. The commenter s agreed with the Proposed Rule's assertion that there is little consistency in the application of best practices as noted in Part VIII State Plans: " many states with energy efficiency program use diffe rent input values and assumptions in applying these practices (e.g. net versus gross savings, run

- time of equipment, measure lifetime). This can result in significant differences in claimed energy savings values for similar energy efficiency measures betwe en states and utilities, even when the same measure type is installed under otherwise identical circumstances.'' The commenter s stated that these problems could be a serious concern to states that wish to move forward with energy efficiency projects, but h ave tests do not fully value energy efficiency.

The commenter s stated that the evolving practice of cost

- effectiveness testing in residential retrofit markets is reflected in the Resource Value Framework (RVF) developed by the Home Performance Coalition an d numerous stakeholders, including Efficiency First, through the National Efficiency Screening Project (NESP). The commenter s stated that the RVF provides a powerful tool for public utility commissions to ensure that their cost effectiveness tests are bala nced, transparent, and account for public policy goals.

The commenter s recommended that each state use the RVF for developing and implementing efficiency screening tests. According to the commenter s , the Framework is a framework of principles and recommend ations to provide guidance for states to develop and implement tests399 that are consistent with sound principles and best practices. The commenter s stated that it is intentionally designed to provide each state with the flexibility to ensure that the test th ey use meets their state's distinct needs and interests, as provided in relevant energy policies and regulatory orders.

Specifically, the commenter s noted that in "The Resource Value Framework: Reforming Energy Efficiency Cost

- Effectiveness Screening" the NESP advocates that in designing an energy efficiency screening test, each state should adhere to the following principles:

• The Public Interest . The ultimate objective of efficiency screening is to determine whether a particular energy efficiency resource is in the public interest.

• Energy Policy Goals . Efficiency screening practices should account for the energy policy goals of each state, as articulated in legislation, commission orders, regulations, guidelines and other policy directives. These policy goa ls provide guidance with regard to which efficiency programs are in the public interest.

• Symmetry. Efficiency screening practices should ensure that tests are applied symmetrically, where both relevant costs and relevant benefits are included in the

screen ing analysis. For example, a state that chooses to include participant costs in its screening test should also include participant benefits, including low

- income and other participant non

- energy benefits, otherwise the test will be skewed against energy ef

ficiency resources.

• Hard

- to

- Quantify Benefits

. Efficiency screening practices should not exclude relevant benefits on the grounds that they are difficult to quantify and monetize. Several methods are available to approximate the magnitude of relevant benef its, as described below.

• Transparency

. Efficiency program administrators should use a standard template to explicitly identify their state's energy policy goals and to document their assumptions and methodologies.

• Applicability . In general, the Resource Va lue Framework can be used by regulators in any state to determine if customer

- funded energy efficiency resources are cost

- effective. The RVF may also be applicable for evaluating the costs and benefits of other demand

side and supply

- side resources, althou gh application in this context has not yet been fully examined.

The commenter s stated that the RVF has direct implications for the success of states using energy efficiency in their plans for 111(d) compliance, as these tests will help states to develop
pr ograms with the most cost

- effective energy efficiency and best carbon reductions. However, to best utilize the RVF as a compliance tool, the commenter s explained that states need a Standard Practice Manual (SPM) that incorporates 111(d) policy and carbon r eductions in its implementation . According to the commenter s , the current SPMs across the country do not currently incorporate the RVF or the public policy elements that the RVF includes, thus this new policy tool needs to be developed. The commenter s urge d EPA to recommend the use of the RVF to states that wish to test their 111(d) compliance programs for cost

- effectiveness in order400 to encourage deeper energy savings opportunities and carbon reductions, particularly in the residential sector . Furthermore, the commenter s recommended that EPA support the development of a Standard Practice Manual that provides direct guidance to the states on using the RVF to enhance their testing procedures and ensure they are getting the most carbon and energy savings out of their energy efficiency programs.

Comment 1 5 : Commenters suggested that EPA encourage states to take a multi

- faceted approach in their state plans and to use best available tools and guidance in developing their plans.

Response 1 5 : In line with the comm enters’ request , the final guidelines require that state plans require monitoring and verification plans for demand

- side EE that quantify and verify electricity savings on a retrospective (ex

- post) basis using industry best

- practice EM&V protocols and meth ods that yield accurate and reliable measurements of electricity savings. See Sections VIII.D.2 and VIII.K.3 of the final rule preamble of the CPP.

The following are summaries of the specific public comments under this comment:

Commenter s suggested that th e EPA should encourage states to take a multi

- faceted approach in their state plans and carefully evaluate the GHG effects of their approach ex

- ante using appropriate tools and guidance. The commenter s expressed concern that some states may rely on a singl e program, such as RGGI. The commenter s noted that while RGGI provides an excellent model for a multi

- state cap and trade program and it has been correlated with a significant reduction in the carbon intensity of electricity in its member states, its past efficacy in driving those reductions is inconclusive. As another example, the commenter s stated that GHG reductions from demand

- side energy efficiency programs can be diminished to some extent by the rebound effect. To evaluate their approaches, the commen ter s suggested that the EPA should encourage states to use best available tools and guidance, such as The Greenhouse Gas Protocol's Policy and Action Standard, which is the product of a multi

- stakeholder process of businesses, NGOs, governments, academic i nstitutions, and others convened by the World Resources Institute "WRI) and the World Business Council for Sustainable Development (WBCSD). The
commenter s stated that the use of such tools will help ensure that states perform realistic forecasts of GHG red uctions achievable by their programs and will likely lead to a greater diversity of mechanisms employed, resulting in a greater chance of success.

6.6.2 Other Resources

This section includes requests for resources other than guidance and information, suc h as financial assistance and workshops.

Commenters have raised a number of issues related to this subsection which are organized by topics (comments) below. Responses are also provided for these topics.401 Comment 1: Several commenters asked for federal fun ding to aid in state plan development efforts.

Response 1: The President’s FY 2016 Budget includes a $25 million increase to support states as they implement the requirements of the President’s Clean Power Plan. Of this increase, $17.5 million will be pro vided to support states’ Clean Power Plan modeling, technical analysis, and training efforts under CAA Section 103 authority and $7.5 million will be allocated to states for Clean Power Plan activities under CAA Section 105 authority.

The President’s FY 2 016 Budget also includes a $4 billion Clean Power State Incentive Fund to support states that choose to go beyond the minimum requirements established in the Clean Power Plan for the pace and extent of carbon pollution reductions from the power sector.

The following are summaries of the specific public comments under this comment:

Commenter s stated that at a minimum, all state plans should be due no earlier than June 2018, with a mechanism for later submittal if warranted. The commenter s requested that EPA continue to provide a high level of technical assistance through its regional offices and headquarters and work closely with states as they develop and analyze their state plan options. Similar to the process EPA utilizes to develop and analyze regulatory proposals, the commenter s stated that they must first develop and then analyze the potential impacts of multiple compliance approaches on the State and its citizens. The commenter s stated that this requires consultation with experts and use of environmenta l and economic modeling and takes considerable time, money and expenditure of resources. The commenter s stated that consideration should be given
to assisting states with funding for modeling and providing access to economic experts

.

Commenter s stated tha t stakeholders have already expended a large amount of resources to date reviewing and understanding this complex rule. The commenter s stated that this expenditure of staff time has primarily involved understanding the goal computation, the implications fo r the calculation, the interaction of the building blocks (in particular the regulatory aspects), and the science behind the proposal. The commenter s recognized that a larger expenditure of resources will be required once the rule is finalized, a plan is d eveloped, and implementation begins. The
commenter s expressed concern related to resources including: 1) adequate staff to implement this rule; 2) the limited knowledge of the integrated nature of the power grid; 3) the resources needed to effectively coor dinate among other state regulatory agencies to develop new state legislation; 4) the staff and tools to conduct future modeling to ensure compliance and determine consumer rate costs; and 5) resources to analyze and address EJ issues. The commenter s noted that States have been given no indication that the EPA will assist or provide states with the necessary resources to address these issues.

The commenter s stated that EPA should provide leadership in securing resources that would be available to the states to ensure adequate compliance measures are in place at least by the time this rule is finalized. The commenter s stated that if additional resources are secured to support the implementation of this proposed rule, existing funding should not be reduced for implementing other mandatory core programs. In discussions with utility stakeholders pertaining to anticipated modeling needs, the commenter s stated that millions of dollars are currently being spent for their respective model forecasting efforts, which i ncludes costs for hardware, software,402 and staffing. The commenter s stated that even contracting with modeling consultants for this service could require hundreds of thousands of dollars in contractual fees that states do not currently have.

Commenter s sta ted that EPA must provide financial assistance to help states with the development of state or multi

- state compliance plans. The commenter s stated that to facilitate development of the architecture for effective implementation of state plans and multi

- stat e approaches, EPA should also provide states with optional:

systems (or system) for tracking emissions, allowances, reduction credits, and/or generation attributes that states may choose to use in their 111(d) plans;

examples of evaluation, measurement and verification protocols that provide a minimum acceptable level of EM&V, issued concurrent with the final rule, that can be used in connection with crediting of emission reduction measures, such as energy efficiency and/or renewable energy; and detailed ex amples of elements of compliance pathways, such as trading programs, corrective measures, crediting mechanisms and other similar items.

Commenter s also noted that development of state plans will require significant staffing and resources, and urged the fed eral government to provide additional funds to support state plan development . The commenter s stated that in addition, that their states have extensive experience developing state and regional clean energy and carbon emission reduction programs and are wil ling to work with other states to share information, analysis, and lessons learned from our programs as all states begin to consider compliance options and develop state plans.

Commenter s estimated that to create and enforce a State Plan with the certainty required by the EPA, their state will need to hire more Full Time Equivalents (FTEs) at an approximate cost of $100,000 per year per FTE plus operating expenses. The commenter s stated that they do not presently know how many FTEs it will need to create an d enforce a State Plan as this number will depend on the final rule and the flexibility provided. The commenter s noted that relevant agencies must ask the Idaho Legislature for additional funding or spending authority for these positions. The commenter s st ated that the EPA should provide funding to the state in order to do the work that is required by this Proposed Rule.

Commenter s recommended funding be available for research and development into the light

weighting of wind blades and turbines, and of new battery technologies, to increase the reliability of generation resources and increase storage ability.

Commenter s stated that using Federal rule

- making authority to leverage non

- utility resources is essential for the success of the CPP, and the most like ly way this will occur is through financial services. The commenter s explained, based on a study by LBNL, for every dollar used by utilities as incentive for customer energy efficiency investments, another dollar came from other sources, such as from inter governmental revenue and as importantly, from lending programs of various kinds of financial institutions. The commenter s provided examples of potential financial services, including: a request by the Office of the Comptroller of the Currency for comments on explicitly granting credit to entities regulated under the Community Reinvestment Act for commitments they make to investing in energy efficiency in their primary service territories; the403 Federal Housing Finance Authority issued biennial proposals to in crease the goals set for Fannie Mae and Freddie Mac to meet the needs of underserved markets, and the discourse included discussions of how to reduce energy demand, and the need to reduce energy demand through location efficiency, the spatial targeting of credit authority to reduce spatial diffusion and thereby increase the efficiency of energy used for transportation and for buildings; and the release in 2013 by HUD and USDOT of the Location Affordability Portal, which provides geocoded data and calculator s to help planners and households estimate the combined costs of housing and transportation at any location in the US. The commenter s explained that an early version of the information provided by the Location Affordability Portal was used successfully to help underwrite location

- efficient mortgages, and similar tools can be used to boost the demand for and supply of energy

- efficient mortgages too. Commenter s added that evaluation of this type of tool has shown superior loan and energy performance, and such tools deserve attention and Federal support in helping to meet the nation's carbon pollution reduction goals.

Comment 2: C ommenters stated that it is important that there are sufficient resources to carry out the Clean Power Plan.

Response 2: The Presid ent’s FY 2016 Budget includes a $25 million increase to support states as they implement the requirements of the President’s Clean Power Plan. Of this increase, $17.5 million will be provided to support states’ Clean Power Plan modeling, technical analysis , and training efforts under CAA Section 103 authority and $7.5 million will be allocated to states for Clean Power Plan activities under CAA Section 105 authority.
The President’s FY 2016 Budget also includes a $4 billion Clean Power State Incentive Fund to support states that choose to go beyond the minimum requirements established in the Clean Power Plan for the pace and extent of carbon pollution reductions from the power sector.

The following are summaries of the specific public comments under this co mment:

Commenters stated that it is essential that adequate funds and staff are provided at the Federal and State levels to carry out the required processes in the Clean Power Plan: planning, permitting, inspection, verification, data systems and enforceme nt. In a similar comment,
commenter s stated that it is essential that EPA provide state and local agencies with the significant additional resources needed to make the Clean Power Plan a success.

Commenter s stated that the planning and analysis necessary t o meet EPA's targets are substantial and require additional support. The commenter s stated that the President recognized this challenge in his proposed FY 2015 budget when he asked for a nearly $20

- million increase to support Section 111(d) state plan deve lopment. The commenter s reiterated their strong support for these additional resources but cautioned against this funding coming at the expense of state and local air agencies' core programs. Further, the commenter s urged EPA to build upon its strong found ation of pre

- proposal dialogue to develop resources to facilitate states' abilities to conduct their Section 111(d) planning. Commenter s referred to two attachments to their
comment:404 NACAA Principles Letter : In response to EPA's early outreach, the commen ter s developed a set of Section 111(d) Principles in August 2013 to help guide the development of the proposed rule. Though its proposal does not offer everything for everyone, the commenter s expressed appreciation that EPA has included much of what NACAA recommended in its Principles.

NACAA Co

- sponsored 111(d) Webinars

. The commenter s noted that one of the most universal reactions to the Clean Power Plan proposal by state and local agencies was a request for technical assistance to better understand the ru le. To that end, earlier this fall, the commenter s partnered with two other state associations, the Association of Air Pollution Control Agencies (AAPCA) and the Environmental Council of States (ECOS), to host a series of Clean Power Plan webinars on discr ete topics. The commenter s stated that all three organizations collected questions from their members before submitting them to EPA for responses. The commenter s stated that the topics included building blocks two and three, crediting avoided or reduced

em issions, multistate issues, enforceability of state plans and rate

- to

- mass conversion. The
commenter s expressed appreciation for EPA's commitment to staff the calls and provide responses to the questions submitted. The commenter s stated that while many of the questions helped clarify what EPA included in the proposal, others also identified issues that EPA left unresolved. The commenter s attached copies of the questions raised by state and local air pollution control officials and strongly urged that EPA re solve them, especially as they help to identify areas where EPA should provide agencies with more detailed implementation tools and guidance.

Commenter s also asked what additional resources EPA is planning to provide when the final rule is finalized to ens ure the integrity of EE accounting, and also ensure that states have what they need to move forward with creditable EE programs?

Comment 3: Commenter s addressed staff resources for the 111(d) state plan process.

Response 3: This comment is an observation , rather than a request.

The following are summaries of the specific public comments under this comment:

The commenter s noted that they have expended significant resources to analyze and disseminate information in EPA's Clean Power Plan proposal. The comme nter s stated that this includes reading the proposed rule and all supporting documentation, holding meetings with power plant owner/operators, educating managers, and participating in legal work, all of which precedes actually drafting a state plan. The co mmenter s stated that this staff effort represents over nine full

- time equivalents (FTEs) since early 2012. The commenter s stated that this coverage has been provided by existing staff with additional duties but with no additional resources, including labor or funds.

For state plan development, the commenter s stated that Kansas may need both statutory and regulatory changes, which will require effort from senior managers and staff and will include legislative briefings. The commenter s stated that the amount of staff effort in analyzing and commenting on the rule will be replaced by the staff time needed to educate and involve stakeholders and develop a plan. The commenter s stated that they can expect to spend at least405 three FTE's amongst approximately six to eight staff and managers involved in implementing this regulation (including proposing a state plan) over the next several years. The commenter s stated that development of state plans will entail many hours of staff time to develop and coordinate programs for compliance with the rule, as well as time to work with state legislatures as appropriate and develop a plan submittal.

Comment 4: Commenter s suggested that EPA sponsor technical workshops for states

. Response 4: The EPA plans to hold technical impleme ntation workshops for states in the fall of 2015, and will continue to provide assistance and work with states as they develop their plans

. The following are summaries of the specific public comments under this comment:

Commenter s stated that there should be more time in the process for states to understand the complexities of an extremely technical rule that goes beyond traditional environmental regulation and delves into the world of energy generation and distribution. The commenter s suggested that the E PA sponsor technical workshops for the states in order to address their questions about the realities of implementing the proposed rule. The commenter s also recommended that states be given more time to develop and submit their state implementation plans. The commenter s noted that, according to the Environmental Council of States (ECOS), states implement approximately 96 percent of all delegated federal environmental programs. The
commenter s noted that against this backdrop the amount of money awarded to st ates by the Federal Government has been reduced from $5 billion in fiscal year 2010, to $3.6 billion in fiscal year 2013. The commenter s stated that this means that states are being asked to do more and more with fewer and fewer resources when it comes to federal environmental programs like the Clean Power Plan. The commenter s stated that EPA should recognize that states are carrying a huge burden with shrinking resources and at least give states more time to work with key stakeholders like the business com munity and tribes to develop state implementation plans for this proposal.

Comment 5: Commenter s urged EPA to expand educational and consulting efforts with state legislatures.

Response 5: The EPA will work with the National Conference of State Legislatu res to ensure that state legislatures are informed of state plan requirements, and to determine if any additional consultations

, tools or information materials would be helpful as states develop their plans. Additionally, as outlined in sections VIII.E and IX.B of the final rule preamble of the CPP, the EPA is requiring that states engage with all members of the public including vulnerable communities. Please see these sections for more information on the requirements and some suggestions that the agency pr ovides for states to help them engage meaningfully with communities.

The following are summaries of the specific public comments under this comment:406 Commenter s urged the EPA to expand its educational and consulting efforts with state legislatures, both as the agency works to finalize its proposed rule by June 2015 and as states move forward with drafting their state implementation plans (SIPs) that would be due in June 2016. The commenter s encouraged the EPA to work with those state legislatures where new

a uthorization or enabling legislation may be required in order to comply with the carbon emissions standards

.

Comment 6: Commenter s recommended that EPA assist states in developing public education programs aimed at the benefits of energy efficiency

. Respo nse 6: The EPA has many sources of information on the benefits of energy efficiency, especially through ENERGY STAR and the State Climate and Energy program. The agency recognizes that states have better insights into the information needs of their consti tuents, and will work with states and their associations to ensure that they have the information they need to inform their public of the benefits of energy efficiency

. The following are summaries of the specific public comments under this comment:

Comment er s stated that an informed public will greatly increase the effectiveness of the aims of the Clean Power Plan. The commenter s recommended that the EPA assist states in the development of public education programs aimed at the benefits of how and why energ y efficiency will improve both health and wealth.

Comment 7: Commenter s stated that technical assistance programs should be available to assist the water sector (and other sectors) in identifying potential EE/RE opportunities.

Response 7: The EPA’s ENERG Y STAR and Water Sense programs both have information on energy efficiency potential for water utilities. In addition, ENERGY STAR holds regular trainings for water and wastewater utilities. The agency also has an Energy Management Self

Assessment Tool f or Water and Wastewater Utilities, available at http:// www.epa.gov/region9/waterinfrastructure/howto.html and the Energy Use Assessment Tool, which was designed for small

- and mid

- s ized water and wastewater plants

. http://water.epa.gov/infrastructure/sustain/energy_use.cfm

. The following are summaries of the specific public comments under this comment:

Commenter s stated that technical assistance programs should also be available to a ssist the water sector (and other sectors) in identifying potential EE/RE opportunities and making recommendations. The commenter s stated that this is especially important for smaller water and wastewater utilities that may not have the resources or expert ise to participate in incentive programs without assistance but may nevertheless have potential EE/RE projects.407 Comment 8: The commenter s requested that the EPA assist Colorado in finding ways to simplify and expedite the federal permitting processes ass ociated with Clean Power Plan compliance.

Response 8: The federal permitting process for the construction of new generating facilities and transmission lines is a process that involves the coordination and consultation with a number of federal agencies. The Clean Power Plan does not require the development of new generation or transmission facilities but it does provides states with considerable flexibility in developing their compliance plans and the EPA is looking forward to working with states to help them develop those plans. To the extent there is the need for federal permitting as a result of the Clean Power Plan, the EPA will work with its counterparts in other federal agencies to help make the process as efficient as possible.

The following are s ummaries of the specific public comments under this comment:

The commenter s stated that an important consideration for Colorado in complying with the Clean Power Plan is the fact that over 35 percent of the state is a patchwork of public lands . The
comment er s stated that any Colorado emission reduction plan will likely require interaction with these lands for the siting and construction of new generation and transmission facilities. The
commenter s stated that coordination with federal permitting agencies pr esents a very real challenge in terms of developing a statewide emission reduction plan within the timeframes set forth in the Clean Power Plan and asked EPA to acknowledge this challenge and assist Colorado in the federal permitting processes.

Comment 9: Commenter s stated that EPA must provide tribes with financial assistance to encourage tribes to submit implementation plans.

Response 9: The EPA supports the development of tribal air programs to assess, understand and address problems affecting the healt h and environment of federally recognized Indian tribes. While all tribes are eligible for support, the agency’s priorities are to address areas with the highest risks and those where the greatest results are being realized, when funds are unavailable to meet every request. EPA is working closely with tribes with effected EGU’s on implementing the CAA. Navajo Nation currently has TAS for many provisions of the CAA, particularly for implementing Title V, among other provisions. The agency will work with Navajo Nation to determine the best approach for addressing the requirements for the CPP for their area of Indian country. However, the agency neither has the authority nor jurisdiction to encourage Navajo Nation to reconsider their lease agreements.

The following are summaries of the specific public comments under this comment:

Commenter s stated that the EPA must provide tribes with financial assistance to encourage tribes to submit implementation plans

. The commenter s stated that section 301(d ) ( 1 ) ( B) a uthorizes EPA to provide eligible Indian tribes "grant and contract assistance" to implement the statutory programs for which they seek treatment as state (TAS) approval. The commenter s stated that408 under the Tribal Authority Rule (TAR), EPA has interpreted this provision as authorizing the agency to provide funding to tribes in accordance with sections 103 and 105 of the Act. The
commenter s stated that section 103 authorizes EPA to provide funding for research and development costs, and section 105 provides grants to air pollution control agencies. The
commenter s stated that the TAR sets forth a lower matching requirement for tribes applying for grant assistance under section 105. The commenter s stated that a tribe is eligible for up to 95 percent of the cos t of implementation of air quality programs for the first 2 years of a grant award, and up to 90 percent thereafter. The commenter s stated that the EPA Regional Administrator may increase the federal share to 100 percent if the tribe can demonstrate "that fiscal circumstances within the tribe are constrained to such an extent that fulfilling the match would impose undue hardship."

The commenter s stated that the affected sources under the supplemental proposal are located in land leased from Indian tribes. The commenter s asked the EPA to encourage those tribes who elect to apply for TAS approval to develop their own plans to consider negotiating amendments to those leases in order to incorporate specific requirements on those affected sources under the plans

.

Comment 10: Commenter s noted that state energy and clean energy officials requested that EPA support state program competency in EE program design and delivery.

Response 10: The EPA recognizes states ’ competency in EE program design and delivery, which is why it is one of the leading options for GHG compliance as part of this rule. Details on how to include EE in state plans are in Section s VIII. C , VIII.D.2, and VIII.K.3 of the final rule preamble of the CPP

. For resources that states can use in develo ping their plans, including EE measures, see Section VIII.H of the final rule preamble.

The following are summaries of the specific public comments under this comment:

In anticipation of EPA's 111(d) proposal, the commenter s noted that state energy and cle an air officials requested that EPA support state program competency in EE program design and delivery

. The commenter s acknowledged the quality of federal government resources supporting state clean energy programs through DOE, EPA and Regional Energy Effi ciency Organizations. However, the commenter s stated that federal agencies place too much faith in best practices taking root in the states. The commenter s stated that there is a big gap between best practices in energy planning, which are more useful to s tates like California, and common practices in energy planning in most states. The commenter s stated that communicating essential practices rather than an ideal set of best practices, which quickly become obsolete, could provide better support for some sta tes. However, the commenter s noted that states already feel burdened by EPA, so addressing that gap may be best a job best suited for foundations and other nonprofits

.

The commenter s stated that it will be up to the private sector to address some carbon e missions planning needs and backsliding at the state level. The commenter s stated that the EPA and federal agencies can only accomplish so much without more help from foundations and409 nonprofits, clean energy consultants and planners, and from greater civic engagement on global warming.

Comment 11: Commenter s recommended EPA’s final rule should highlight different structures through which EE improvements can be achieved.

Response 11: The EPA highlights a variety of state plan options to incorporate EE into compliance plans, including both the emission standards approach and state measures approach, as well as the option to develop a rate

- based or mass

- based plan. Each pathway includes accounting criteria, eligibility requirements and credit trac king for each pathway

. See section VIII of the final rule preamble of the CPP.

The following are summaries of the specific public comments under this comment:

Commenter s recommended EPA's final rule should highlight different structures through which energy efficiency improvements can be achieved. Commenter s stated EPA's Block 4 BSER can be delivered through state

- run programs or by EGUs working with private energy efficiency services companies. Commenter s indicated an EGU can contract with companies in the energy ef

ficiency program industry, as well as with energy service performance contractors or with large energy users, to design and implement energy efficiency programs, and to estimate savings. Commenter s stated many energy efficiency opportunities can be captur ed by targeting actors "upstream" of the customer, for example, providing incentives to retailers to stock and sell energy efficient products; or the EGU might collaborate with other EGUs in the state to fund and implement programs jointly. Commenter s not ed that EGUs have access to the capital needed to fund energy efficiency improvements.

Comment 12: Suggested EE tools

Response 12: The EPA appreciates the commenters’ suggested “EE Evaluation Tool.” The questions that the commenters suggest generally eit her have answers prescribed as part of the final guidelines (e.g., “ Who validates program results?”) or are indeed required to be answered in state plans/plan submissions (e.g., “What assumptions are made in the energy savings and emission reduction calcul ations?”) See Section VIII of the final rule preamble of the CPP

. The EPA, especially through our regional offices, will be available to work with states as they develop their plans, in order to make review of submitted plans more straightforward and to minimize the chances of unexpected issues that could slow down approval of state plans. Please also see section VIII.H of the final rule preamble of the CPP for a toolbox of resources that states can use in developing their plans.

The following are summa ries of the specific public comments under this comment:410 Commenter s offered a detailed "EE Evaluation Tool" to EPA for consideration. Commenter s stated that States and stakeholders will be able to use the Evaluation Tool to evaluate EE programs for possibl e inclusion in a 111(d) plan, but that the tool is currently a working document. Commenter s noted that the tool places components of the proposed Clean Power Plan in the context of related EPA guidance and actions on EE emission reduction credit. Commenter s believed that this document could assist EPA as it finalizes the Clean Power Plan, because it highlights where additional guidance from the Agency would clarify remaining ambiguities. Commenter s noted that the tool is rooted in the Agency's past guidance and is organized around the four basic requirements for emission reduction credits: quantifiable, enforceable, permanent, and non

- duplicative. Commenter s detailed the questions which guide the evaluation of EE programs in the tool as follows:

Quantificati on Questions:

1. Does a State bundle small/short

- term/emerging EE programs?

2. How does the program calculate energy savings?

1. How does the program convert energy savings to emission reductions?

2. How does the program validate results?

3. Who validates program results ?

4. How often are progress and program results reported?

5. What assumptions are made in the energy savings and emission reduction calculations?

6. Does a State treat "emerging" program measurements differently?

Enforceable Questions:

7. Who is responsible for the em ission reductions or other program outcomes?

8. Does the State have authority to assess penalties or seek relief if program terms are violated?

9. Does the State commit to make up shortfalls and if so, how should it do this?

10. Can private citizens enforce provisio ns of the program?

11. Is the program "practicably enforceable?"

Surplus/Non

- Duplicative Questions:

12. Is the EE program mandated by or already used to comply with Federal law?

13. How does the program ensure it is taking credit only for in

- State emission reductions (or otherwise fairly allocate emission reductions across states)?411 14. Are the EE program energy savings included in the EIA's Annual Energy Outlook Reference Case?

Permanent Questions:

15. How long do energy savings or emission reductions persist?

16. Does a State hav e adequate authority and funding for the program for the compliance period?

Comment 13: Commenter s offered their company’s analytics platform to assist with compliance.

Response 13: EPA appreciates the information provided ; however, the agency’s review of third party compliance tools is outside the scope of this rulemaking

. The following are summaries of the specific public comments under this comment:

Commenter s stated that the C3's smart grid analytics platform and applications offer an enterprise

- wide capability that enables utilities to better plan for, more effectively comply with, and more accurately validate performance under EPA's proposed rule. The commenter s also attached a copy of the company's technology overview.

6.7 OTHER

This section discus ses a variety of other issues raised by c ommenters, including coordinating efforts with other agencies, support for t he approach to state compliance, encouraging cons umer voice and providing criteri a for public participation, and a suggestion for states to adopt intervener funding through PUCs.

Commenters have raised a number of issues related to this subsection which are organized by topics (comments) below. Responses are provided for these topics.

Comment 1: Commenter s stated that EPA should coordinate efforts with other relevant federal and state agencies.

Response 1: The EPA has worked closely with DOE, FERC and other federal agencies in the development of this rule

. In addition, the EPA had several conversations with NARUC and individual state commis sioners about issues of concern to them, and incorporated their feedback into the development of this action.412 The EPA, DOE and FERC have also coordinated to provide education and outreach to states, local governments, tribes and vulnerable communities thro ugh a series of webinars on the electric power system and energy markets. The agencies will continue to coordinate to provide information to these groups as they work to develop and implement their state plans.

The agency will also work through CEQ to coo rdinate with other federal agencies, including the Department of Agriculture, Housing and Urban Development and others to coordinate policies and programs to reduce greenhouse gas emissions. See section II.K of the final rule preamble of the CPP for EPA’s response to this comment.

The following are summaries of the specific public comments under this comment:

The commenter s stated that i mplementing the guidelines will be a collaborative effort between and among numerous federal and regional entities, as we ll as with the states. The commenter s noted that they trust EPA will work particularly closely with federal and state energy regulators, including the Federal Energy Regulatory Commission (FERC), the Department of Energy (DOE), and through the National Ass ociation of Regulatory Utility Commissioners (NARUC), state utility regulators, as well as regional grid operators and reliability coordinators. The
commenter s stated that this work will be critical to developing durable system

- level standards and accessin g state plans employing a variety of policies that may affect the grid. The
commenter s stated that strong collaboration between EPA and the energy regulators will also be important to make sure that these entities provide maximum support to states investin g in emissions controls, by ensuring that energy markets are designed and operated in a way that ensures that clean energy investments are fully valued and able to participate.

Initially, the commenter s urged EPA to work particularly closely with DOE in o rder to develop clear evaluation metrics and modeling tools that EPA and the states can use to assess their various grid

- level programs against the level of the emission guidelines, and to assess compliance pathways. As these programs move forward, the com menter s recommended that EPA also work with FERC and regional grid entities to ensure that reliability

- related issues are addressed early in the process, without delaying Section 111(d)'s implementation, just as EPA has done during other Clean Air Act rule makings.

The commenter s stated that FERC's recent Order 1000, which is helping to integrate public policy mandates into grid planning, should help with this process by enabling measures that complement and support states' emission reduction strategies. The commenter s stated that EPA should work with FERC, the grid operators, and the states to ensure that the effects of Section 111(d) plans are accounted for in planning early and that any necessary costs are allocated equitably to the affected parties. The c ommenter s stated that it will be important for the regional and inter

- regional grid plans to be able to account for changes driven by Section 111, and to properly allocate any resulting costs. The commenter s stated that FERC should also support transmissio n upgrades that facilitate increased reliance on renewable generation.

The commenter s noted that states will also need help from federal energy regulators to properly deploy their plans. The commenter s stated that they trust the energy regulators will help states assess the effects of their policy proposals, and to design effective grid

- related programs, and asked that EPA help to coordinate efforts in this direction. The commenter s stated that it is413 vitally important that federal programs not present unnec essary impediments to state efforts. The
commenter s stated that all members of the federal family should support ambitious carbon pollution reduction efforts. The commenter s expressed concern, for instance, that the Federal Housing Finance Agency continues to complicate financing for the Property Assessed Clean Energy (PACE) program, which the commenter s argued should be providing a ready funding stream to help further clean energy improvements.

The commenter s stated that EPA, working with the White House C ouncil on Environmental Quality and other federal coordinating bodies, should ensure that the states do not face conflicting federal messages as they work to reduce carbon pollution.

Comment 2: Commenter s noted that states generally support EPA's proposed approach to state compliance, which allows states to use and build upon existing programs and successes, employ the most cost

- effective strategies available under either rate

- based or mass

- based compliance frameworks, adapt approaches to their unique situ ations, and consider multi

- state strategies.

Response 2: The EPA agrees with the commenter s , and is finalizing an approach that will allow states to build upon current programs while encouraging continued innovation through the state measures approach, a s detailed in section VIII.C.4 of the final rule preamble of the CPP . The agency also agrees with the commenter s and is extending the deadline to submit state plans, while ensuring that states make progress toward a complete plan. This is detailed in sec tion VIII.E of the final rule preamble. The EPA plans to request feedback on EM&V approaches as part of the Federal Plan proposal , and then will issue guidance

. The following are summaries of the specific public comments under this comment:

The commenter s offered support for specific elements of EPA's proposal, as well as suggestions for refinements that could help ease state implementation of the rule. In particular, the
commenter s supported EPA's efforts to address the enforceability of measures included in state plans. As EPA continues to hone available compliance methods, the commenter s urged the Agency to offer states strategies that appropriately balance accountability for significant emissions reductions with the ability to innovate to secure these re ductions.

The commenter s supported EPA's effort to allow states to extend the deadline to submit plans, but also ensure that they make progress toward a complete plan. Additionally, the commenter s noted that states appreciate EPA's efforts to provide the f lexibility to build upon our existing, proven state programs for compliance. Finally, the commenter s supported that EPA recognizes the importance of evaluation, measurement, and verification (EM&V) for renewable energy and energy efficiency, and provided i nput on EPA's proposal to develop EM&V methodology guidance based on our states' extensive experience operating these programs and accounting for their electricity savings and emissions reductions.414 Comment 3: Commenter s stated that the agency should foste r consumer voice in the development, implementation, and oversight of state plans.

Response 3: The EPA established requirements in the final rule for states to engage with all stakeholders throughout the state plan development process. Please see sections VIII. D

- E and IX. B of this final rule preamble for EPA’s for information on opportunities for consumer input in the development of state plans. In addition, state Public Utility Commissions have the jurisdiction and authority to address consumer considera tions as states develop their plans.

The following are summaries of the specific public comments under this comment:

The commenter s stated that the EPA should foster consumer voice in the 111(d) process. The
commenter s stated that consumer voice is critica l as a matter of fairness. The commenter s stated that consumers will benefit immensely from sound climate policies, and they could be harmed by unsound policies. The commenter s stated that a process without adequate consumer voice risks the possibility tha t states will develop implementation plans that pass the costs of reducing carbon emissions to consumers while leaving too much of the economic benefit in the hands of electricity generators and utilities. The commenter s stated that consumers deserve a voi ce in the process of reshaping the electricity infrastructure on which they rely and for which they pay.

Second, the commenter s stated that strong consumer participation and oversight is sound climate policy. The commenter s stated that there is substantial overlap between the best carbon reducing policies and the most pro

- consumer policies. The commenter s stated that providing consumer representation in the process of crafting compliance plans makes it more likely that states will produce sound, reliable, a nd low

- cost plans. The commenter s stated that consumer oversight and participation will increase the likelihood that the plans are implemented.

The commenter s recommended that the EPA should take two sets of actions to foster consumer voice. First, the com menter s suggested that the agency should advise states that it will scrutinize implementation plans more closely if they were developed without adequate consumer participation or they lack adequate provisions for consumer participation and oversight in the implementation process. The commenter s suggested that the EPA should review state plans not just for consumer voice in general, but also to ensure that low

- income consumers and other disadvantaged groups have adequate representation. In addition to provid ing public notice and the opportunity to comment on their proposed plans, states should hold regional public hearings, convene consumer advisory panels, and conduct other outreach to consumer advocates at earlier stages in the process of crafting their pla ns. The commenter s suggested that a state plan should contain provisions for continuing input and oversight by consumer representatives, likely in the form of consumer decision

- making or advisory panels involved in or overseeing the implementation of the p lan's key elements. The commenter s suggested that the agency should also take in account whether states provide intervener funding in utility proceedings or other forms of funding for consumer representatives in relevant regulatory processes.

Finally, the commenter s suggested that the EPA should directly foster consumer oversight by collecting and making available on its own website extensive information and data about state plans and ongoing state performance

. The commenter s suggested that this data should include costs and benefits of compliance, with a distributional analysis. The commenter s suggested that415 the agency should make these data available in formats that are accessible both to sophisticated researchers and to ordinary members of the public. The commenter s stated that consumers in a given state should be able to find out easily, for example, what goals their state has set regarding energy efficiency or renewables, at what cost and who pays the costs, as well as find information about their state' s ongoing progress toward meeting its goals. The commenter s suggested that they also should be able to compare their state's plans and performance to those of other states. To achieve these ends, the commenter s suggested that the EPA should collect dispara te information from various states and present it in a uniform manner to the extent possible.

C ommenter s stated that the EPA should strive to include consumer input development of state plans. The commenter s stated that the EPA Plan should reflect consumer 's input because consumers will benefit from properly implemented climate policies and shoulder the burden of poorly developed rules. Without consumer input, the commenter s stated that the Plan may result in putting the costs of reducing carbon emissions o n consumers while allowing generators and utilities to benefit unduly. The commenter s stated that consumers deserve to influence any plan that reshapes their own electrical market. Further, the commenter s stated that a strong consumer voice is needed to de velop climate policy, because there is substantial overlap between the most
cost

- effective carbon

- reducing policies and pro

- consumer policies. As a result, the commenter s suggested that the EPA should implement strategies aimed at ensuring consumer partici pation in the process of developing the Plan. (The commenter s noted that in Texas in the past, consumers and consumer

- representative groups have come together to contribute to environmental rule

making. For example, a consumer coalition helped develop Texa s's CAIR Emissions Reduction and Banking program.)

To that end, the commenter s suggested that the EPA should insure that there is adequate notice for public input and that low

- income and other hard

- to

- reach citizens are represented in debate (e.g., through consumer advisory panels, regional public hearings and online provisions for consumer comment). In addition the commenter s suggested that consumer input should be sought as the Plan is put into action, and periodic reviews should be required. Finally, the
commenter s recommended that the EPA should provide space on its website for information and data about states' ongoing performance, including costs and benefits of compliance. The
commenter s suggested that this data should be made available in a form usef ul to researchers as well as the general public. The commenter s stated that it should be possible to compare different state plans and their effectiveness as well as states' goals and progress toward meeting them.

Comment 4: Commenter s expressed concern that there are inadequate criteria for a participatory planning process.

Response 4: The EPA established requirements in the final rule for states to engage with all stakeholders throughout the state plan development process. Please see sections VIII. D

- E and IX.C of this final rule preamble of the CPP. In addition, state Public Utility Commissions have the jurisdiction and authority to address consumer considerations, including for low

- income customers, as states develop their plans.416 In section IX .C of the final rule preamble for this final rulemaking

, the EPA outlines programs that RGGI and the State of Maryland have employed that assist low income communities in increasing their ability to access RE/EE and financial assistance programs. The EPA encoura ges that states in the writing on their state plans use these and other models. Additionally, as stated in the preamble, the EPA in the coming months, will continue to provide information resources for affected communities and states on existing federal, s tate, local, and other financial assistance programs to encourage EE/RE that are already available to communities. The EPA will also provide a catalog of current or recent state and local programs that have successfully helped communities adopt EE/RE measu res. The goal of these resources is to help affected communities gain the benefits of this rulemaking by encouraging that states use these types of tools in their state plans.

The following are summaries of the specific public comments under this comment:

Commenter s expressed concern that there are inadequate criteria for a participatory planning
process.
Under the heading of public participation, the commenter s noted that the EPA requires a public hearing in 2016 or before plan submission. The commenter s stated that this is a certainly a necessary procedural step, and the EPA should commit to careful consideration of the public hearing record. However, the commenter s stated that a public hearing is no substitute for continuous engagement of advocates for a ll key constituencies throughout the process. The
commenter s stated that few changes will be possible once the year

- long planning process has produced a tidy submission. The commenter s stated that strong consumer participation and oversight is both in the national interest and in the interest of sound climate policy. The
commenter s stated that providing low

- income consumer representation in the state implementation process makes it more likely that states will produce sound, reliable and low

- cost plans. How ever, the commenter s stated that their experience advocating on low

- income energy policy has proven that the groups and communities that should be protected by the Environmental Justice policy are least likely to afford the experts needed.

Comment 5: Com menter s stated that EPA could require states to adopt intervener funding programs at the Public Utility Commission.

Response 5: The EPA disagrees with commenter s and does not believe the agency has the authority to require PUCs to fund intervener programs.

The following are summaries of the specific public comments under this comment:

Commenter s stated that EPA could require that states in their implementation plans adopt intervener funding programs at the Public Utility Commission, where the Public Utility Commission (PUCs) compensates public interest groups that have demonstrated that they are operating on behalf of consumers. The commenter s noted that one such program exists in the State of California that compensates groups for attorney and expert witnes s fees.417 The commenter s supported requiring that there be a binding stakeholder process that includes consumer groups, utilities, state officials, and environmental groups. The commenter s noted that these stakeholder programs collaborate on energy efficien cy and renewable energy mandates, and ensure that all stakeholders have an equal seat at the table.

Comment 6: Commenter s applauded EPA’s focus on state flexibility.

Response 6: EPA appreciates the support for state flexibility provided in the final rule. This comment is an observation, rather than a request.

The following are summaries of the specific public comments under this comment:

Commenter s applauded the EPA's focus on state flexibility, which will allow each state to tailor its compliance plan to optimize the development of clean energy resources available within the state and region.