```

[Federal Register Volume 89, Number 237 (Tuesday, December 10, 2024)]
[Rules and Regulations]
[Pages 99105-99129]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-28739]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 52, 75, 78, and 97

[EPA-HQ-OAR-2021-0668; FRL-8670.5-02-OAR]
RIN 2060-AW47

Federal ``Good Neighbor Plan'' for the 2015 Ozone National 
Ambient Air Quality Standards; Notice on Remand of the Record of the 
Good Neighbor Plan To Respond to Certain Comments

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice; supplemental response to comments.

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SUMMARY: The Environmental Protection Agency (EPA) is addressing 
certain comments that were submitted on the proposed Good Neighbor Plan 
that the Supreme Court of the United States concluded the EPA had 
likely not sufficiently addressed in the final Good Neighbor Plan. The 
EPA is providing a fuller explanation of its reasoning at the time of 
its action in response to these comments. The Good Neighbor Plan 
addressed 23 states' obligations to eliminate significant contribution 
to nonattainment or interference with maintenance of the 2015 ozone 
national ambient air quality standards (NAAQS), pursuant to the ``good 
neighbor'' provision of the Clean Air Act (CAA or Act). On September 
12, 2024, the D.C. Circuit Court of Appeals remanded the record of the 
Good Neighbor Plan to the EPA to permit the Agency to further respond 
to comments related to the Good Neighbor Plan's operation if one or 
more upwind States were no longer participating. In this document, the 
EPA responds to the comments by more fully explaining why the Good 
Neighbor Plan appropriately defines each state's obligations, 
regardless of the status of the rule in other states, and can be 
implemented without modification in any individual state or combination 
of states covered by the rule.

DATES: December 10, 2024.

ADDRESSES: The EPA has established a docket for this document under 
Docket ID No. EPA-HQ-OAR-2021-0668. All documents in the docket are 
listed on the https://www.regulations.gov website. Although listed in 
the index, some information is not publicly available, e.g., 
Confidential Business Information (CBI) or other information whose 
disclosure is restricted by statute. Certain other material, such as 
copyrighted material, is not placed on the internet and will be 
publicly available only in hard copy form. Publicly available docket 
materials are available electronically through https://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Gwyndolyn Sofka, OAQPS-AQPD (C541-04), 
Environmental Protection Agency, 109 TW Alexander Dr, Research Triangle 
Park, NC 27711; telephone number: (919)-541-5121; email address: 
[email protected].

SUPPLEMENTARY INFORMATION: 
    Throughout this document ``we,'' ``us,'' and ``our'' refer to the 
EPA.

I. General Information

    The EPA is responding to a set of comments that together raise a 
question regarding the method by which the Agency developed the Good 
Neighbor Plan (88 FR 36654; June 5, 2023). Namely: would the 
conclusions the EPA reached regarding states' obligations under CAA 
section 110(a)(2)(D)(i)(I) for the 2015 ozone NAAQS have been 
different, had the rule been promulgated for, or if it covered, a 
smaller or different group of states than the 23 states that were 
included in that the rule? In short, for reasons that are provided in 
the record of the Good Neighbor Plan itself and elaborated upon in this 
document, the answer to that question is no. The EPA applied its 4-step 
interstate transport analytical framework in the Good Neighbor Plan to 
determine each included state's obligations. That framework, which 
accounts for the multistate ``collective contribution'' nature of ozone 
problems throughout the United States, nonetheless defines the amount 
of emissions from each state that constitutes ``significant 
contribution to nonattainment or interference with maintenance'' of the 
NAAQS in other states and implements programs to prohibit those 
emissions through federal implementation plans (FIPs) promulgated for 
each state accordingly. As the Good Neighbor Plan itself indicated, the 
EPA's methodology is designed to be applicable in any state that may 
become subject to a federal plan to address its ``significant 
contribution'' to other states' ozone problems for the 2015 ozone 
NAAQS; it provides an equitable and efficient solution to a ``thorny 
causation problem,'' EME Homer City, 572 U.S. 489, 514 (2014), by 
holding any linked state's largest industrial NOX-emitting 
sources to widely achievable emissions levels, and ensures fairness 
among states by not being dependent on the order in which they are 
addressed.
    By issuing this document, the Agency is addressing a particular 
issue that the

[[Page 99106]]

U.S. Supreme Court preliminarily found had been raised by commenters 
with reasonable specificity, but which the Court considered the Agency 
had likely failed to adequately address when it originally promulgated 
the rule. See Ohio v. EPA, 144 S. Ct. 2040 (2024) (granting 
applications to stay enforcement of the Good Neighbor Plan pending 
judicial review). This document summarizes the relevant comments 
identified by the Supreme Court and, after summarizing our initial 
responses to these comments in section II.B., provides a fuller 
response in section III. of this document concerning how these comments 
relate or could be read as relating to the question of the Good 
Neighbor Plan's application and severability on a state-by-state basis, 
consolidating material and discussions from the existing administrative 
record at the time the EPA issued the action. To provide the most 
complete possible response to the issues identified by the Supreme 
Court, the Agency has considered these comments from all angles, even 
considering arguments that are not evident on the face of the comments 
themselves. For this reason, we do not concede that each of the topics 
discussed in this document was in fact raised with ``reasonable 
specificity'' by the commenters themselves, as required by CAA section 
307(d)(7)(B), but the Agency views it to be appropriate in light of the 
Court's preliminary findings in Ohio to address all of the issues 
commenters potentially could be seen to have raised, to ensure a 
thorough and complete response to the commenters' concerns.
    In responding to these comments, the Agency is relying solely on 
the information and data available in the record at the time the Good 
Neighbor Plan was signed by the EPA Administrator and promulgated on 
March 15, 2023 (88 FR 36654; June 5, 2023). See CAA section 
307(d)(6)(C) (limiting the basis for CAA rules issued under section 
307(d) to ``information [and] data . . . placed in the docket as of the 
date of [ ] promulgation''). The purpose of this document is not to 
supplement the record of the Good Neighbor Plan with new findings, 
information, data, or new record support, but rather only to 
consolidate the existing material in the record to more fully respond 
to the relevant comments received during the public comment period 
following proposal of the Good Neighbor Plan. In this document, we 
provide an ``amplified articulation'' of the methodology underlying the 
design of the Good Neighbor Plan to more fully explain why, at the time 
the EPA issued the Good Neighbor Plan, it understood the Good Neighbor 
Plan's requirements to reasonably function on a state-by-state basis 
and therefore to be severable by state. See Dep't of Homeland Sec. v. 
Regents of the Univ. of Cal., 591 U.S. 1, 20-21 (2020) (quoting 
Alpharma, Inc. v. Leavitt, 460 F. 3d 1, 5-6 (D.C. Cir. 2006)).
    Thus, in this document, we compile and present together discussions 
and components of the analysis that are already in the record and 
explain how they relate to one another and together demonstrate that 
the Good Neighbor Plan fulfills the statutory mandate for each state 
regardless of the number of states included in the rule at any given 
time.
    As described in more detail in section II.A. of this document, 
following the Supreme Court's opinion in Ohio, the EPA sought a 
voluntary partial remand of the Good Neighbor Plan from the D.C. 
Circuit to provide the explanation that the Supreme Court concluded was 
likely lacking in the Good Neighbor Plan. The D.C. Circuit ordered 
``that the record be remanded to permit the Environmental Protection 
Agency to further respond to comments in the record.'' State of Utah et 
al. v. EPA, No. 23-1157 (D.C. Cir. September 12, 2024).
    The statutory authority for the Good Neighbor Plan is provided by 
the CAA as amended (42 U.S.C. 7401 et seq.). The most relevant portions 
of CAA section 110 are subsections 110(a)(1), 110(a)(2) (including 
110(a)(2)(D)(i)(I)), and 110(c)(1). For further information, see 
section II.C. of the preamble for the Good Neighbor Plan, 88 FR 36667-
68.

II. Background

A. Procedural History

    On March 15, 2023, in accordance with CAA sections 
110(a)(2)(D)(i)(I) and 110(c)(1), the EPA promulgated the Good Neighbor 
Plan, a rule determining the good neighbor obligations of 23 states 
with respect to the 2015 ozone NAAQS and establishing for these states 
federal implementation plans (FIPs) for emissions sources in these 
states to address each state's obligations by reducing emissions of 
nitrogen oxides (NOX), an ozone precursor.\1\ Prior to 
promulgating the Good Neighbor Plan, the EPA had disapproved state 
implementation plans for 21 of those states and had found that several 
states had failed to submit complete plans--predicates to EPA's 
authority to promulgate FIPs for those states.\2\ Following the Good 
Neighbor Plan's promulgation, in response to judicial orders partially 
staying the SIP Disapproval as to several states, the EPA issued two 
sets of interim amendments (referred to here as the First and Second 
Interim Final Rules) staying the Good Neighbor Plan's effectiveness for 
emissions sources in those states pending the resolution of judicial 
review of that action and further EPA rulemaking.\3\ As modified by the 
First and Second Interim Final Rules, the Good Neighbor Plan's FIPs 
applied to electric generating units (EGUs) within the borders of 
Illinois, Indiana, Maryland, Michigan, New Jersey, New York, Ohio, 
Pennsylvania, Virginia, and Wisconsin and to non-EGU sources within the 
borders of nine of the same ten states (all except Wisconsin) as well 
as California.\4\
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    \1\ Federal ``Good Neighbor Plan'' for the 2015 Ozone National 
Ambient Air Quality Standards, 88 FR 36654 (June 5, 2023).
    \2\ Air Plan Disapprovals; Interstate Transport of Air Pollution 
for the 2015 8-Hour Ozone National Ambient Air Quality Standards, 88 
FR 9336 (February 13, 2023) (``SIP Disapproval''); Findings of 
Failure to Submit a Clean Air Act Section 110 State Implementation 
Plan for Interstate Transport for the 2015 Ozone National Ambient 
Air Quality Standards (NAAQS), 84 FR 66612 (December 5, 2019) 
(including Pennsylvania, Utah, and Virginia).
    \3\ Federal ``Good Neighbor Plan'' for the 2015 Ozone National 
Ambient Air Quality Standards; Response to Judicial Stays of SIP 
Disapproval Action for Certain States, 88 FR 49295 (July 31, 2023); 
Federal ``Good Neighbor Plan'' for the 2015 Ozone National Ambient 
Air Quality Standards; Response to Additional Judicial Stays of SIP 
Disapproval Action for Certain States, 88 FR 67102 (September 29, 
2023).
    \4\ The Good Neighbor Plan's emissions reduction requirements 
apply to all emissions sources meeting the Good Neighbor Plan's 
applicability criteria within the borders of each covered state, 
including sources in Indian country within the borders of the state. 
See 88 FR 36690.
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    In October 2023, after the United States Court of Appeals for the 
District of Columbia Circuit (D.C. Circuit) denied motions to stay the 
Good Neighbor Plan pending judicial review,\5\ four sets of parties 
submitted emergency applications to the United States Supreme Court 
seeking a stay of some or all of the Good Neighbor Plan's 
requirements.\6\ In an opinion issued on

[[Page 99107]]

June 27, 2024 (referred to here as the Stay Order), the Supreme Court 
granted the emergency applications and ordered that ``[e]nforcement of 
EPA's rule against the applicants shall be stayed'' while judicial 
review of the Good Neighbor Plan on the merits proceeds, first in the 
D.C. Circuit and then potentially in the Supreme Court.\7\
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    \5\ Orders, Utah v. EPA, No. 23-1157 (D.C. Cir. September 25, 
2023, and October 11, 2023); see also Order, Utah v. EPA, No. 23-
1157 (D.C. Cir. December 4, 2023) (denying additional stay motions).
    \6\ Ohio v. EPA, No. 23A349 (U.S. docketed October 18, 2023) 
(other named applicants are Indiana and West Virginia); Kinder 
Morgan, Inc. v. EPA, No. 23A350 (U.S. docketed October 18, 2023) 
(other named applicants are Enbridge (U.S.) Inc., TransCanada 
PipeLine USA Ltd., Interstate Natural Gas Association of America, 
and American Petroleum Institute); American Forest & Paper 
Association v. EPA, No. 23A351 (U.S. docketed October 18, 2023) 
(other named applicants are America's Power, Associated Electric 
Cooperative, Inc., Deseret Power Electric Cooperative, Midwest Ozone 
Group, National Mining Association, National Rural Electric 
Cooperative Association, Ohio Valley Electric Corporation, Portland 
Cement Association, and Wabash Valley Power Alliance); United States 
Steel Corporation v. EPA, No. 23A384 (U.S. docketed October 31, 
2023).
    \7\ Ohio v. EPA, 144 S. Ct. 2040, 2058 (2024).
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    The Court found that, with respect to the ``explanation why the 
number and identity of participating States does not affect what 
measures maximize cost-effective downwind air-quality improvements,'' 
the stay applicants ``are likely to prevail on their argument that 
EPA's final rule was not `reasonably explained,' that the agency failed 
to supply `a satisfactory explanation for its action[,]' and that it 
instead ignored `an important aspect of the problem' before it''. Ohio 
v. EPA, 144 S. Ct. 2040, 2054 (2024) (citations omitted). The Court 
focused in particular on the fact that the Good Neighbor Plan's FIPs 
had been stayed in several states pending judicial review of the EPA's 
disapproval of those states' state implementation plan (SIP) 
submissions. 144 S. Ct. at 2051-52. Stay applicants had argued that the 
``EPA's plan rested on an assumption that all 23 upwind States would 
adopt emissions-reduction tools up to a `uniform' level of `costs' to 
the point of diminishing returns'' and the EPA had not explained how 
the rule was substantiated for a smaller number of states. Id. at 2053 
(citations omitted). The Court preliminarily interpreted several 
comments filed on the proposed Good Neighbor Plan as raising this 
concern, i.e., that if a different number or grouping of states were 
subject to the EPA's FIPs promulgated in the Good Neighbor Plan 
rulemaking, then the EPA's cost-effectiveness analysis would have 
changed, and therefore the obligations would or could be different for 
the remaining states. Id. at 2050-51. The Court did not conclude that 
the EPA's methodology was unlawful, or that petitioners were correct in 
their assessment that the Good Neighbor Plan's obligations could change 
depending on the number or group of states subject to it. Rather, the 
Court preliminarily found that the EPA had failed to adequately respond 
to the relevant comments and thus the rule was likely not ``reasonably 
explained.'' Id. at 2054. The Court noted that the rule's 
``severability'' discussion did not adequately address the issue, since 
that discussion, in itself, contained no supporting analysis. Id. at 
2054-55.
    On March 27, 2024, several months before the Supreme Court issued 
this ruling, the EPA partially denied several petitions for 
reconsideration of the Good Neighbor Plan objecting to the rule on the 
basis that it had been stayed in certain states and was no longer 
lawful or workable in the remaining states, as well as objecting that 
the rule should not have been published at all following judicial stays 
of the SIP Disapproval as to certain states. The EPA's ``basis for 
denial'' addressed both issues and determined that these objections 
were not ``centrally relevant'' because, after examining the objections 
in detail, the EPA concluded they failed to establish that the rule 
should be revised. See 89 FR 23526 (April 4, 2024) (providing notice of 
issuance of the partial denial).\8\ The Supreme Court declined to 
consider the EPA's Denial in evaluating the applications for stay. See 
144 S. Ct. at 2068 n.11.
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    \8\ See also ``Letter Enclosure: The EPA's Basis for Partially 
Denying Petitions for Reconsideration of the Good Neighbor Plan on 
Ground Related to Judicial Stays of the SIP Disapproval Act as to 12 
States,'' available at https://www.epa.gov/Cross-State-Air-Pollution/response-four-petitions-reconsideration and at https://www.regulations.gov/document/EPA-HQ-OAR-2021-0668-1255.
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    Following the Supreme Court's decision granting the applications to 
stay enforcement of the Good Neighbor Plan, the EPA implemented the 
Court's stay of the effectiveness of the Good Neighbor Plan's 
requirements for the sources that would have been subject to the rule 
pursuant to the 23 states' FIPs originally promulgated, pending 
judicial review. See 89 FR 87960 (November 6, 2024). In addition, the 
EPA sought a voluntary partial remand of the Good Neighbor Plan. The 
D.C. Circuit granted a remand of the record of the rule so that the EPA 
might respond to the comments related to the rule's appropriateness for 
each state and operation. State of Utah et al. v. EPA, No. 23-1157 
(D.C. Cir. September 12, 2024). The D.C. Circuit retains jurisdiction 
of the case, has placed the case in abeyance pending further order of 
the court, and has directed the parties to file motions to govern 
future proceedings in the case within 30 days after completion of this 
remand or December 30, 2024, whichever is earlier. Id.
    The following section, II.B. of this document, summarizes the 
comments identified by the Supreme Court as relevant to the issue of 
the Good Neighbor Plan's operation if one or more upwind States were no 
longer participating and provides a summary of the EPA's responses to 
these comments in the Good Neighbor Plan with citations to the 
record.\9\ The EPA does not intend to reopen its prior response to 
those comments through this document by summarizing those prior 
responses. Section III. of this document provides a fuller explanation 
in response to a specific issue identified by the Supreme Court derived 
from these comments: whether the Good Neighbor Plan would lawfully 
define and implement good neighbor obligations for any particular state 
if it were not in effect for some other state or states. As the EPA 
originally concluded based on the information in the record at the time 
of promulgation, the Good Neighbor Plan appropriately defines each 
state's obligations on an individual basis and is severable on a state-
by-state basis. See 88 FR 36693.
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    \9\ We have focused specifically on the comments that the 
Supreme Court identified in Ohio v. EPA. While other commenters 
raised issues similar to these comments, these comments present a 
representative set of perspectives on those issues that the Supreme 
Court viewed as most closely related to the question of the Good 
Neighbor Plan's severability by state.
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B. Summary of Comments Identified by the Supreme Court and Citation to 
Prior Responses to Comments

    Comment category 1 (SIP/FIP sequencing): Multiple commenters (the 
Missouri Department of Natural Resources (MO DNR), the Louisiana 
Department of Environmental Quality (LA DEQ), and the Texas Commission 
on Environmental Quality (TX CEQ)) expressed concern that the EPA had 
proposed FIPs prior to finalization of the SIP disapprovals for states 
included in the FIP rulemaking, without knowing which states would 
ultimately be covered by a FIP. Commenters state that this kept the EPA 
from being able to receive and consider the technical, procedural, and 
legal issues that they identified in their comments. Commenters state 
that the proposed FIPs presume the result of the proposed disapproval 
of SIPs even though the comment period for the SIP Disapproval action 
was ongoing at the time of the proposed FIPs.
    Commenters (LA DEQ and TX CEQ) requested that the EPA withdraw both 
the proposed FIPs for their states and the proposed SIP disapproval so 
that both states could have a further opportunity to show that their 
respective SIPs address their supposed significant contribution to 
nonattainment or interference with maintenance in downwind states. One 
commenter (MO DNR) requested that the EPA withdraw the proposed FIP for

[[Page 99108]]

Missouri and other states so that the EPA can consider and respond to 
all comments received on the SIP Disapproval action. The commenter goes 
on to request that the EPA respond to all comments on the proposed 
disapproval of the Missouri SIP in the final action for the Good 
Neighbor Plan if it does not withdraw the proposed FIP, as the SIP 
Disapproval action and the proposed FIP are ``inextricably linked.'' 
\10\ Relevant portions of the comment are included immediately below.
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    \10\ See the Missouri Department of Natural Resources June 17, 
2022, comment letter Docket Id No. EPA-HQ-OAR-2021-0668-0289, at 4.
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Missouri Department of Natural Resources
    EPA is now proposing good neighbor FIPs, which are the subject 
of this comment letter, before even finalizing the SIP disapprovals 
for Missouri and numerous other states. The Air Program and several 
other entities submitted adverse comments on EPA's proposed SIP 
disapproval for Missouri's 2019 Good Neighbor SIP. Those comments 
were all submitted after the publication of EPA's proposed good 
neighbor FIP in the Federal Register. Therefore, EPA did not even 
give itself a chance to receive, and much less, consider all the 
technical, legal, and procedural issues for the proposed disapproval 
that were identified in those comments before it moved forward with 
the proposed FIP. It follows then, that EPA's proposed FIP is 
extremely premature, and EPA should withdraw the proposal and be 
obligated to consider and respond to all of the comments it received 
on the proposed disapprovals before it can propose FIPs for these 
states.\11\
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    \11\ See id. at 3.
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Louisiana Department of Environmental Quality
    The EPA's proposed FIP presumed the result of its proposed 
disapproval of Louisiana's SIP submission, even though public notice 
and comment were ongoing. EPA must consider comments received on its 
proposed actions. The EPA cannot consider LDEQ's comment on the 
proposed disapproval of the SIP in good faith, when it has already 
proposed a FIP prior to the close of the comment period . . .
    Louisiana requests that this proposed FIP be withdrawn, allowing 
the state to either prove its original SIP submittal through 
modeling or to provide specific enforceable measures to adequately 
prohibit the contribution of pollution to downwind states.\12\
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    \12\ See the Louisiana Department of Environmental Quality June 
21, 2022, comment letter Docket Id No. EPA-HQ-OAR-2021-0668-0365, at 
2.

Texas Commission on Environmental Quality
    Based on the numerous technical and legal errors discussed in 
our comments, the TCEQ respectfully requests that the EPA withdraw 
its proposed FIP, either in whole, or in part as it pertains to 
Texas. In the alternative, the TCEQ respectfully requests that the 
EPA address and remedy the numerous technical and legal errors 
identified by the TCEQ . . .\13\ The inclusion of Texas in the 
proposed FIP is dependent on the EPA finalizing its proposed 
disapproval of the transport SIP that Texas timely submitted for the 
2015 ozone NAAQS.\14\
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    \13\ See the Texas Commission on Environmental Quality June 21, 
2022, comment letter Docket Id No. EPA-HQ-OAR-2021-0668-0505, at 1.
    \14\ Id. at 2.

    Citations to previous responses: The EPA explained that FIPs can be 
proposed before final action is taken on SIP disapprovals, because the 
statute provides that the EPA is required to promulgate a FIP ``at any 
time within 2 years'' of a SIP disapproval or a finding of failure to 
submit. This statutory sequence necessarily permits the proposal of a 
FIP before the finalization of a SIP disapproval. See 88 FR 36689 
(citing CAA section 110(c)(1); EME Homer City, 572 U.S. 489, 509). The 
EPA was clear in both the proposed and final rulemaking documents that 
it was issuing FIPs on a state-by-state basis, with adjustments in the 
scope of states covered by the Good Neighbor Plan's uniform regulatory 
programs occurring from proposal to final based on changes in the 
underlying analytics, similar to changes in state coverage that had 
occurred under prior good neighbor rulemakings.\15\ The EPA explained 
that it had predicate FIP authority for each of the 23 covered states 
at the time of signature and promulgation of the Good Neighbor Plan. 
See 88 FR 36688-89 and the Good Neighbor Plan Response to Comments 
(RTC) Document at 6-8.\16\ The EPA explained the timing of its action 
to promulgate FIPs in relation to the need to address good neighbor 
obligations as expeditiously as practicable, and to the extent possible 
by the 2023 ozone season, 88 FR 36690, and explained why we would not 
delay our action to afford states additional opportunities to develop 
new submissions or instead issue a call for SIP revisions, though we 
noted that states remain free to develop and submit SIP revisions at 
any time. See Good Neighbor Plan RTC at 12-15. The EPA further 
explained its reasoning concerning the sequencing of its actions and 
that this sequencing did not prejudice the Agency's evaluation of 
states' SIP submissions in the separate SIP Disapproval action. See 
Good Neighbor Plan RTC at 149-51. The EPA noted that it was not 
finalizing its proposed FIPs for several states, and the EPA 
acknowledged that several states remained to be addressed for which it 
either lacked predicate authority to issue a FIP or because further 
rulemaking proceedings were appropriate. 88 FR 36658. The EPA explained 
that specific technical or legal objections to the SIP Disapproval were 
addressed in that action and were out of scope of the Good Neighbor 
Plan. Id. at 144-45, 155.
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    \15\ See, e.g., 87 FR 20036, 20038, 20039, 20040 n.8, 20041, 
20044, 20045, 20051 n.39, 20051-2-52, 20058, 20067 n.115, 20073, and 
20140 (April 6, 2022); 88 FR 36654, 36656, 36657, 36658, 36659 n.9, 
36659, 36662, 36664, 36668 n.41 & 44, 36668/3, 36669, 36673/2, 36688 
n.99, and 36689 (June 5, 2023).
    \16\ Available in the docket at https://www.regulations.gov/document/EPA-HQ-OAR-2021-0668-1127.
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    Comment category 2 (potential for new modeling at Steps 1 and 2): 
Comments from the Air Stewardship Coalition (ASC) and the Portland 
Cement Association (PCA) asserted that if the EPA took different action 
on SIPs than contemplated in the FIP rulemaking proposal, the EPA would 
be required to conduct a new assessment and modeling of contribution 
and subject those findings to public comment. In a section titled ``EPA 
Step Two Screening is Premised on the Premature Disapproval of 19 
Upwind States Good Neighbor SIPs'' (sections III.C. and II.C. of their 
respective comments) the ASC and the PCA stated that the EPA's 
screening at Step 2 of the 4-step interstate transport framework for 
the Proposed Good Neighbor Plan included states that already had good 
neighbor SIPs for the 2015 ozone NAAQS. Commenters state the EPA should 
not have included these states in this proposed rule's screening as the 
final disapproval of said SIPs was not issued prior to the proposed 
FIP. The commenters claim that the EPA rushed to take final action on 
its good neighbor SIPs when the EPA proposed to disapprove 19 good 
neighbor SIP submissions and four findings of failure to issue a 
complete SIP on February 22, 2022. Commenters state that in doing so 
the EPA prejudged the outcome of the pending SIP actions in their 
separate FIP action and did not account for the possibility that the 
EPA may take a different course of action at final than what was 
proposed in the SIP Disapproval action.
    Commenters indicate that as a consequence of this prejudgment the 
EPA may need to conduct a new assessment and modeling of contribution 
at Step 2 of the 4-step interstate transport framework if the EPA 
chooses to take a different action on any of the SIPs they have 
proposed to disapprove or found as having failed to issue a complete 
SIP. As such,

[[Page 99109]]

commenters urged the EPA to stay action on the proposals and coordinate 
with states to ensure the appropriate sequence of actions is taken. The 
relevant text of the ASC's comment is included immediately below.\17\
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    \17\ See Portland Cement Association's June 21, 2022, comment 
letter Docket Id No. EPA-HQ-OAR-2021-0668-0516, at 7, for section 
II.C. of the PCA comment as referenced.

    Yet, it appears EPA is rushing to take final action as EPA on 
February 22, 2022, proposed to disapprove 19 Good Neighbor SIP 
submissions. EPA also issued proposed findings of failure to issue a 
complete SIP for NM, PA, UT, and VA. The proposed FIP essentially 
prejudges the outcome of those pending SIP actions and, in the event 
EPA takes a different action on those SIPs than contemplated in this 
proposal, it would be required to conduct a new assessment and 
modeling of contribution and subject those findings to public 
comment.\18\
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    \18\ See Air Stewardship Coalition's June 21, 2022, comment 
letter Docket Id No. EPA-HQ-OAR- 2021-0668-0518, at 13-14.

    Citations to previous responses: The EPA explained that, partially 
in response to comments concerning technical issues with the modeling 
used at proposal for Steps 1 and 2, it conducted a new round of 
modeling and air quality analysis at Steps 1 and 2 in taking final 
action on the SIP Disapproval and the Good Neighbor Plan. 88 FR 36673-
74; 88 FR 9339. The EPA explained that it also reviewed recent ozone 
monitoring data indicating persistent elevated ozone levels at many 
locations throughout the country. Id. at 36704-05. The EPA explained 
that for most states its updated air quality analysis for the final 
rule was confirmatory of its proposed findings concerning which states 
contribute to downwind receptors at Step 2, and even its older 2011-
based modeling. Id. at 36674, 36707. The EPA explained that where its 
updated analysis at Steps 1 and 2 indicated that a state was not 
contributing or that the basis for finding contribution had changed, it 
was not finalizing a FIP for that state in the Good Neighbor Plan; the 
EPA indicated its intent to address these and other states in 
subsequent actions. Id. at 36656, 36658, 36689; see also SIP 
Disapproval, 88 FR 9354.\19\
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    \19\ The EPA has conducted or is in the process of conducting 
additional notice-and-comment rulemaking to address the obligations 
of those states. See 88 FR 87720 (December 19, 2023) (Wyoming); 89 
FR 12666 (February 16, 2024) Supplemental Air Plan Actions: 
Interstate Transport of Air Pollution for the 2015 8-Hour Ozone 
National Ambient Air Quality Standards and Supplemental Federal 
``Good Neighbor Plan'' Requirements for the 2015 8- Hour Ozone 
National Ambient Air Quality Standards (``Supplemental Rulemaking'') 
(proposing action for Arizona, Iowa, Kansas, New Mexico, and 
Tennessee).
---------------------------------------------------------------------------

    Comment category 3 (cost-effectiveness at Step 3): Comments from 
ASC, PCA, the Indiana Municipal Power Agency (IMPA), the Lower Colorado 
River Authority (LCRA), and the Wisconsin Paper Council (WPC) question 
the methodology by which the EPA identified a cost-threshold used to 
establish the cost-effectiveness of the proposed controls.
    Commenters (ASC and PCA) both ask the EPA to reconsider the $7,500/
ton average marginal cost-effectiveness threshold used for non-EGUs 
stating that it is too high and a departure from past practices. Both 
commenters state the EPA has failed to explain why the EPA relied on a 
``knee in the curve'' approach instead of the past ``clear breakpoint'' 
approach to determine the $7,500/ton number. Commenters state that 
there is no noticeable break at that point for Tier 1 industries but 
there is a break at $1,600/ton mark; however, commenters concede there 
is a difference at $7,500/ton in Tier 2 industries and the combined 
Tier 1 and 2 industries line. In addition, commenters question why the 
EPA departed from the cost-effectiveness threshold used in the 2021 
Revised CSAPR Update Rule ($2,000/ton in $2016) as it appears to 
commenters that the EPA had not collected any new information on costs 
or technologies or used different implementation timelines since the 
Revised CSAPR Update Rule. The relevant text of the Air Stewardship 
Coalition's comment is included immediately below.\20\
---------------------------------------------------------------------------

    \20\ The Portland Cement Association's comment on this topic is 
nearly identical and can be found at Docket Id No. EPA-HQ-OAR-2021-
0668-0516, at 22.

    The Agency's sole analysis is that there was a ``knee in the 
curve'' that identified $7,500 per ton, but that is not obvious to a 
reviewer. There is no noticeable difference around $7,500 in the 
plotted line for Tier 1 industries, instead the Tier 1 line reflects 
a break around the $1,600 mark. While the Tier 2 and combined Tier 1 
and 2 lines show some difference around $7,500 mark, there is no 
explanation for EPA's reliance on a ``knee in the curve'' as opposed 
to past transport rules that have relied upon a ``clear break 
point'' at this step. Further, EPA has provided no explanation for 
why the Tier 1 and 2 industries were subject to different 
contribution thresholds, as described above, yet they were combined 
when developing the cost-effective control threshold.
    In addition, EPA fails to explain why the threshold departs from 
prior transport rule cost-effectiveness thresholds for non-EGUs. In 
particular, less than one year before EPA released the Proposed 
Rule, in the 2021 Revised CSAPR Update Rule, EPA said the non-EGU 
data demonstrated ``a clear break point'' (versus a ``knee in the 
curve'') at approximately $2,000 (in $2016) per ton. According to 
EPA, EPA adopted ``that analysis using the best available current 
data,'' including the ``identified available control technologies,'' 
their ``costs and potential emissions reductions,'' and ``the 
information it has regarding control technology implementation 
timeframes, including information on such timeframes provided by 
commenters on the proposed rule.'' Further, to identify levels of 
control for non-EGUs, EPA used the Control Strategy Tool (CoST) and 
the projected 2023 inventory from the 2016v1 modeling platform, just 
as EPA has done in this Proposed Rule. Indeed, there is no 
indication in the Proposed Rule that EPA collected any new 
information on costs or technologies or implementation timelines 
that differed in any material way from the information it analyzed 
in the Revised CSAPR Update Rule.\21\
---------------------------------------------------------------------------

    \21\ See Air Stewardship Coalition's June 21, 2022, comment 
letter Docket Id No. EPA-HQ-OAR-2021-0668-0518, at 27.

    Other commenters (IMPA, LCRA, and the WPC) state that cost-
effectiveness varies based on operational characteristics of the unit 
in question, that installing controls on existing EGUs may not be cost-
effective, and that emissions from certain industries (specifically 
pulp and paper mills) would have a negligible effect on air quality.
    One commenter (IMPA) objected that requiring a specific type of 
emissions control will result in a lack of flexibility. They state that 
the cost-effectiveness of employing selective non-catalytic reduction 
(SNCR) will be highly variable, and that units employed at peak 
timeframes will not see similar emissions reductions to those that are 
used as base load generation. The commenter then states that technology 
specific dictates are not the best means of emissions control but would 
prefer controls that maintain flexibility.
    To support their claim that the EPA's EGU controls are unlawful 
because they are not cost-effective, another commenter (LCRA) states 
that the installation of controls on existing sources (as compared to 
new sources) is not ``per se reasonable or cost-effective.'' \22\ The 
commenter goes on to state that EGUs that have already invested in 
state-of-the-art combustion controls have already undertaken 
significant costs and will have less to gain from additional controls 
such as an selective catalytic reduction (SCR) retrofit.
---------------------------------------------------------------------------

    \22\ See Lower Colorado River Authority's June 21, 2022, comment 
letter Docket Id No. EPA-HQ-OAR-2021-0668-0395, at 21.
---------------------------------------------------------------------------

    Finally, one commenter (WPC) states that the emissions reductions 
coming from adding controls to pulp and paper mills ``would have a 
negligible effect on

[[Page 99110]]

air quality.'' \23\ The commenter states that this, coupled with a 
continued decreasing trend of Wisconsin-based stationary source 
NOX emissions, anticipated mobile source NOX 
reductions, and additional reductions that they assert were not 
accounted for in the EPA's analysis, indicates that inclusion of 
Wisconsin pulp and paper mills are not needed to achieve downwind air 
quality improvement.
---------------------------------------------------------------------------

    \23\ See Wisconsin Paper Council's June 21, 2022, comment letter 
Docket Id No. EPA-HQ-OAR-2021-0668-0338, at 2.
---------------------------------------------------------------------------

    The relevant text of the various commenters is included immediately 
below.
Indiana Municipal Power Agency

    Not every unit can install or activate SNCR in a way that is 
cost effective, relative to the actual emissions reductions that the 
units will experience. Inflated assumptions as to achievable 
emissions reductions, and underestimated implementation costs have 
led EPA to presume that compelling the use of SNCR with no regard 
for the individual circumstances of the EGU in question will be a 
cost effective means of reducing NOX emissions. This is 
not always the case. In IMPA's experience, the effectiveness of SNCR 
system is highly variable depending on the operational 
characteristics of the unit, and the level and consistency of its 
load. Units deployed during peak timeframes, such as IMPA's WWVS 
units, will not see the same emissions reductions as base load 
generation. The cost effectiveness of the requirement to employ SNCR 
will be highly variable, and is unlikely to meet EPA expectations in 
even the most optimistic case.\24\
---------------------------------------------------------------------------

    \24\ See Indiana Municipal Power Agency's June 20, 2022, comment 
letter Docket Id No. EPA-HQ-OAR-2021-0668-0361, at 9.
---------------------------------------------------------------------------

Lower Colorado River Authority
    It is clear that Congress believed existing source standards 
would never exceed new source standards: ``[m]ore stringent 
requirements are imposed on new sources because engineering 
considerations allow for cheaper and more effective pollution 
control when the effort is incorporated in the design and 
construction of the facility.'' In fact, EPA has previously 
recognized that less (not more) stringent standards are appropriate 
for existing units because ``controls cannot be included in the 
design of an existing facility and because physical limitations may 
make installation of particular control systems impossible or 
unreasonably expensive in some cases.'' Controls identified as part 
of a transport plan should take into account the difficulties of 
installing controls at existing facilities, but EPA does not do so 
in this Proposal.
    While installing selective catalytic reduction may be the common 
practice for a new fossil-fueled EGU, that does not mean that it is 
per se reasonable or cost-effective for existing plants, especially 
those that have already invested in other controls to lower their 
NOX emissions. Due to the lower emission rate starting 
point, plants that have already invested in state-of-the-art 
combustion controls, such as low-NOX burners and overfire 
air, have already undertaken significant costs to achieve 
NOX reductions and have less to gain from additional 
control installation, such as SCR and SNCR.\25\
---------------------------------------------------------------------------

    \25\ See Lower Colorado River Authority's June 21, 2022, comment 
letter Docket Id No. EPA-HQ-OAR-2021-0668-0395, at 2 (footnotes 
omitted).
---------------------------------------------------------------------------

Wisconsin Paper Council
    Furthermore, pulp and paper mill boilers contribute a small 
amount of the overall NOX
    emissions from sources in the 23 states identified by EPA for 
emission reductions. Based upon the 2017 National Emissions 
Inventory, point sources in those states emitted approximately 1.5 
million tons of NOX, while pulp and paper mill boilers 
emitted only about 35,000 tons in those states (2% of point source 
emissions). In addition, those states also have mobile source 
emissions of approximately 3.3 million tons per year of 
NOX, and another 1 million tons of NOX 
emissions from biogenic sources, wildfires and prescribed burns.
    It is also important to note that the reduction in emissions 
from pulp and paper mills would have a negligible effect on air 
quality. For example, the maximum estimated improvement at any 
receptor for emission controls on 25 pulp and paper mills is 0.0117 
ppb, which is significantly below the detection limit of ambient air 
quality monitors. Thus, the benefit in air quality is too small to 
even measure.\26\
---------------------------------------------------------------------------

    \26\ See Wisconsin Paper Council's June 21, 2022, comment letter 
Docket Id No. EPA-HQ-OAR-2021-0668-0338, at 2.

    Citations to previous responses: The EPA explained that, as it had 
in all prior good neighbor rulemakings for ozone, it was establishing 
uniform emissions control levels for all covered states, using a 
comparative analysis of the cost-effectiveness of different emissions 
control technologies as a key metric to establish the appropriate 
degree of stringency to define ``significant contribution.'' 88 FR 
36675-77, 36678-79, 36683, 36718-19, 36741. The EPA explained that it 
determined in the final Good Neighbor Plan it would require controls up 
to the $11,000/ton representative cost threshold identified for EGUs 
associated with retrofit of SCR post-combustion control technology and 
that non-EGU costs on a per ton basis were generally commensurate with 
this level of control stringency. 88 FR 36746-47. The EPA explained 
there could be variation in costs for particular units depending on 
their configurations or level of operation but that this variation did 
not impact its selection of the overall appropriate level of 
stringency. Id.; id. at 36740-41. The EPA explained it was not relying 
on the $7,500/ton preliminary threshold identified in the Non-EGU 
Screening Assessment, recognizing costs were more heterogeneous than 
that single figure, and that nonetheless, the Screening Assessment 
adequately served its function of helping the EPA target the most 
impactful non-EGU emissions control strategies in defining 
``significant contribution.'' Id.; Good Neighbor Plan RTC at 113-15. 
The EPA explained that for EGUs, the trading program would allow for 
cost-efficient compliance planning for all sources and adjusted its 
proposed trading program ``enhancements'' to preserve greater 
flexibility for EGUs through the 2020s, id. at 36729-30, 36684, while 
for non-EGUs, the EPA made available flexibilities such as alternative 
emissions limits for any units facing excessively high costs or 
technical infeasibility, id. at 36818-19. The EPA explained that it 
believed its selected level of stringency as compared to prior 
transport rules was appropriate in light of the more protective 2015 
ozone NAAQS and its projections of persistent elevated ozone levels. 
Id. at 36660. It explained how its analysis compared and was consistent 
with the determinations in the Revised CSAPR Update and other previous 
rulemakings taken pursuant to CAA section 110(a)(2)(D)(i)(I). 88 FR 
36660; Good Neighbor Plan RTC at 37-39, 92-93. The EPA explained how it 
had derived its estimates of representative costs for both EGUs and 
non-EGUs, which accounted for a range of costs associated with retrofit 
of controls on existing sources. 88 FR at 36720-31, 36738-40. The EPA 
explained how its selected level of control was also roughly 
commensurate with the level of control required of existing sources in 
downwind states. Good Neighbor Plan RTC at 62-63.
    The EPA explained how it evaluated the air quality factor in its 
Step 3 analysis, viewing it as serving a confirmatory role that an 
appropriate level of emissions control stringency would be achieved 
overall, that (based on available information) no cost-effective 
strategies had been overlooked, and that if the identified cost-
effective level of control stringency were applied uniformly across the 
linked upwind states, there would be, on average and in the aggregate, 
widespread reductions in ozone levels at downwind receptors. Id. at 
36683, 36741, 36748-50.
    The EPA explained that it generally focused on large stationary 
sources of NOX emissions in upwind states, consistent with 
the science of regional-scale ozone transport and all of its prior good 
neighbor rulemakings for ozone. Id. at 36660, 36671, 36719. The EPA 
explained it recognized that air quality improvement from any 
particular source

[[Page 99111]]

or group of sources may appear relatively small, but this is simply an 
expression of the ``collective contribution'' problem that ozone 
presents. Good Neighbor Plan RTC at 98, 103-04. The EPA explained why, 
given this problem and the need to control many sources over a wide 
area, it makes sense to define obligations for each state subject to a 
FIP through the application of a uniform level of emissions control 
across the linked states and to regulate on an industry-by-industry 
basis across those states, as a matter of both efficiency and equity. 
88 FR 36673, 36675-76, 36677, 36680, 36683, 36691, 36719, 36741; Good 
Neighbor Plan RTC at 8, 48, 56-58, 83, 92-93, 118.
    The EPA explained that it considered boilers in several industries 
to be impactful and controllable non-EGU types and that boilers in the 
pulp and paper industry were among those sources with well-
demonstrated, cost-effective NOX-emissions control options. 
88 FR 36681-82, 36736, 36739-40; Good Neighbor Plan RTC at 93, 97, 99-
100, 107, 119-21. The EPA explained that it was nevertheless not 
including non-EGU requirements for Wisconsin in the final rule because 
based on the updated modeling used for the final rule, Wisconsin was no 
longer projected to be linked to downwind receptors in the 2026 
analytic year. Id. at 118.
    The EPA addressed SNCR operating characteristics and effectiveness 
for existing EGUs, both in terms of optimizing SNCR controls that had 
already been installed, and in terms of installing new SNCRs on 
existing EGUs. 88 FR 36725-26. The EPA evaluated comments concerning 
SNCR performance where specifically raised, see, e.g., Good Neighbor 
Plan RTC at 229. The EPA also gave consideration to certain EGUs that 
have widely varying operating levels because they serve a ``peaking'' 
function rather than supplying baseload power to the grid and did not 
include them in setting the stringency of the rule for EGUs at Step 3. 
88 FR 36732.

III. Analysis of Severability in Response to Comments

    In this section, the EPA provides a fuller explanation why the Good 
Neighbor Plan can and should apply on a state-by-state basis for any 
state for which the EPA has a responsibility to promulgate a FIP, 
regardless of the number of states covered at any given time. Drawing 
together the Agency's legal and technical reasoning, based on the 
information and data available at the time, provided in the record when 
the Good Neighbor Plan was signed and promulgated, the EPA provides a 
more thorough response to the relevant comments that together can be 
read to have raised that issue.

A. Summary of Response

    As the EPA stated in the final rule, the Good Neighbor Plan by 
design is severable by state. 88 FR 36693. The rule implements the 
statute's prohibition on ``significant contribution'' under CAA section 
110(a)(2)(D)(i)(I) for the 2015 ozone NAAQS by promulgating state-level 
FIPs that require the industries in each contributing upwind state to 
achieve at least minimum levels of emissions performance deemed to be 
cost-effective. Id. at 36741. So long as they meet that level of 
performance, the industries in any state regulated under the Good 
Neighbor Plan are understood to have lawfully addressed good neighbor 
obligations and eliminated that portion of a state's significant 
contribution to downwind air pollution. While the EPA must necessarily 
account for the multi-state nature of the interstate-ozone problem, 
consistent with the statute and case law, the Good Neighbor Plan 
imposes obligations on sources in each individual state that are 
appropriate for those sources and are achievable.
    Those requirements result from the application of a longstanding 
analytical framework that the EPA has applied when evaluating 
interstate transport obligations for multiple prior ozone NAAQS. 88 FR 
36660, 36668-69. Shaped through the years by input from state air 
agencies \27\ and other stakeholders on the EPA's prior interstate 
transport rulemakings and SIP submission actions,\28\ as well as court 
decisions, the EPA has developed and used a ``4-step interstate 
transport framework'' to evaluate states' obligations to eliminate 
interstate transport emissions under the interstate transport provision 
for each prior ozone NAAQS: (Step 1) identify monitoring sites that are 
projected to have problems attaining and/or maintaining the NAAQS 
(i.e., nonattainment and/or maintenance receptors); (Step 2) identify 
states that impact those air quality problems in other (i.e., downwind) 
states sufficiently such that the states are considered to 
``contribute'' (i.e., are considered ``linked'') to those receptors and 
whose emissions therefore warrant further review and analysis; (Step 3) 
identify the emissions reductions necessary (if any), applying a 
multifactor analysis, to eliminate each linked upwind State's 
significant contribution to nonattainment or interference with 
maintenance of the NAAQS at the locations identified in Step 1; and 
(Step 4) adopt permanent and enforceable measures needed to achieve 
those emissions reductions. The EPA does not require states to use the 
4-step interstate transport framework in good neighbor SIP submissions, 
nor has the EPA ever maintained that this is the only way states could 
satisfy their obligations under CAA section 110(a)(2)(D)(i)(I). 
However, it is a useful organizational tool and evaluation framework 
that comports with the statutory text and structure of the Act. The 
application of uniform levels of emissions control stringency at Step 3 
across all linked states has been upheld by the Supreme Court as 
``permissible, workable, and equitable.'' EPA v. EME Homer City 
Generation, L.P., 572 U.S. 489, 524 (2014). The Supreme Court there 
expressly rejected that the Act mandates a definition of 
``significance'' that is directly proportional to each state's 
contribution, finding that reading ``appears to work neither 
mathematically nor in practical application.'' Id. at 516. As the EPA 
explained in the Good Neighbor Plan, the 4-step interstate transport 
framework, including the application of uniform minimum control 
stringency, remains a particularly fair and equitable approach to apply 
in the case of a multistate pollution problem like ozone, characterized 
by ``collective contribution'' and in which widespread emissions 
reductions of a single precursor pollutant (nitrogen oxides or 
NOX) over a wide geographic area are known to be effective 
in improving ozone levels downwind. 88 FR 36719.
---------------------------------------------------------------------------

    \27\ See 63 FR 57356, 57361 (October 27, 1998).
    \28\ In addition to CSAPR rulemakings, other regional 
rulemakings addressing ozone transport include the ``NOX 
SIP Call,'' 63 FR 57356 (October 27, 1998), and the ``Clean Air 
Interstate Rule'' (CAIR), 70 FR 25162 (May 12, 2005).
---------------------------------------------------------------------------

    Because the methodology for defining those obligations ultimately 
relies on a determination regarding what level of widely available 
emissions performance each type of regulated source can cost-
effectively achieve, the obligations set for sources in each state are 
independent of the number of states included in the Good Neighbor Plan. 
Accordingly, the fact that obligations may be suspended or not yet 
operative with regard to some states does not impact the Good Neighbor 
Plan's conclusions as they apply in other states. Rather, as the EPA 
explained, the framework yields an ``amount'' of pollution for ``each 
State'' that the EPA is authorized to ``prohibit,'' CAA section 
110(a)(2)(D)(i), standing in the shoes of

[[Page 99112]]

a state, CAA section 110(c)(1), based on the amounts of pollution that 
would be avoided in that state by applying the control technologies the 
EPA determined were cost-effective for the covered industries. 88 FR 
36675. The amounts to be prohibited are thus premised on reasonable 
levels of pollution control upwind rather than on a specific, aggregate 
quantum of ozone reduction that must be achieved downwind. Michigan v. 
EPA, 213 F.3d 663, 674-80 (D.C. Cir. 2000).
    Under this framework, while the emissions-control requirements are 
uniform across the same types of sources in each state, the size of 
each state's total incremental emissions-reductions obligation under 
the Good Neighbor Plan, and the resulting improvement in air quality 
downwind, depends on the particular sources present in that state and 
the level of pollution reduction those sources are already achieving. 
88 FR 36683. If a state's sources are already well-controlled, they 
will have less to do to meet the EPA's defined level of control 
stringency; if the state's sources are not already well-controlled, 
they will have to do more. But these state-specific obligations derive 
from the application of common, uniform levels of emissions control 
stringency calculated for each type of source based on the demonstrated 
performance of pollution control technologies that can be replicated in 
any linked upwind state. EME Homer City, 572 U.S. at 519-20. 
Calculating ``significance'' according to source type and concluding 
that the good neighbor provision can be reasonably implemented by 
bringing all covered sources up to a common level of control ensures 
the EPA can fairly administer the program in any state that becomes 
subject to a need for federal regulation, while avoiding inequities 
that could arise if state plans (and relevant sources) were addressed 
seriatim. See 88 FR 36749 (explaining the need to avoid a ``which state 
goes first'' problem). The achievement of that level of performance for 
any particular state is not dependent on the number of states in the 
Good Neighbor Plan, nor on the order in which the states are addressed. 
In this way, the Good Neighbor Plan prohibits each covered state's 
``significant contribution'' to downwind ozone problems in a 
``permissible, workable, and equitable'' manner. 572 U.S. at 524.
    Given this statutory structure and regulatory framework, the Good 
Neighbor Plan is ``modular'' by nature, defining and implementing the 
obligations for each state.
    First, in line with the statutory text, structure, and case law, 
the EPA determines the ``significant contribution'' that must be 
prohibited at the individual state level. See 88 FR 36687 (citing North 
Carolina v. EPA, 531 F.3d 896, 906-08, 921 (D.C. Cir. 2008)). None of 
the steps in the 4-step interstate transport framework differ based on 
the number of states included in the Good Neighbor Plan. For example, 
the control technologies and cost-effectiveness figures the EPA 
considers at Step 3 do not depend on the number of states included. 
Instead, the Good Neighbor Plan regulates certain relatively large 
emitting sources in each included state (including both new and 
existing sources meeting the relevant criteria), up to a uniform level 
of pollution control that is common across sources of that type in all 
potentially contributing states. Once the ``amount'' of pollution for 
each state is determined, whether the 4-step interstate transport 
framework is applied to one state or fifty, it would yield the same 
emissions control obligations for the included states. That means that 
when the number of states whose sources are included in the Good 
Neighbor Plan's regulatory programs for EGUs or non-EGUs changes from 
the number included at promulgation, which is historically common in 
interstate transport rules and consistent with states' authority under 
the Act to replace federal plans with state plans, the emissions 
reduction obligations of the states remaining in the Good Neighbor 
Plan's programs stay the same, and the obligations of states joining 
the Good Neighbor Plan's programs are the same as those that were 
applied to the states already included.
    Second, given the state-specific statutory mandate, for those 
components of the Good Neighbor Plan that necessitate consideration of 
multi-state effects, the EPA is careful to avoid creating any 
interdependency among the particular states included, both in the 
Agency's analytical methodology and in the Good Neighbor Plan's 
regulatory requirements. As the EPA explained in the rule, interstate 
ozone pollution continues to present a ``collective contribution'' 
challenge wherein many sources of emissions over a wide geographic area 
comprise a substantial portion of the ozone problems downwind. 88 FR 
36678, 36712. Where the EPA is called upon to fill a gap in state 
planning efforts, it must therefore develop solutions for the relevant 
state(s) that reasonably account for the efforts other states may 
undertake, even in the face of uncertainty concerning what those states 
may do. Id. at 36695-96. For example, when evaluating the Good Neighbor 
Plan to ensure it did not ``overcontrol'' (i.e., yield more reductions 
than necessary), the EPA did not just look at the states included in 
the original Good Neighbor Plan, but also looked at all of the other 
states the modeling showed were potentially affecting downwind air 
quality above the ``contribution'' threshold (as well as each 
receptor's ``home'' state), even if those states were not included in 
the Good Neighbor Plan.\29\ See infra note 47 supra and accompanying 
text (providing record citations). Taking this broad view, the EPA 
found that even making all cost-effective reductions available in all 
linked upwind states, and assuming equivalent emissions reductions from 
the two downwind states not included in the Good Neighbor Plan, the 
rule would not constitute overcontrol. 88 FR 36749-50. Accordingly, 
because the overcontrol analysis already assumes the emissions 
reductions that can reasonably be anticipated from the implementation 
of the good neighbor provision for a given NAAQS, requiring available 
emissions reductions in any subset of those states does not constitute 
overcontrol of those upwind states. See section III.B.2.c. of this 
document (providing record citations). Finally, the Good Neighbor 
Plan's regulatory requirements, including the emissions trading program 
for power plants, are designed to be fully implementable in each 
individual state and do not depend on participation from a minimum 
number of states. See section III.B.3. of this document (providing 
record citations). In these ways, the EPA's methodological approach to 
devising good neighbor FIPs for ozone ensures against inter-dependency 
among states, through accounting for the effects of emissions 
reductions within a web of ``overlapping and interwoven'' linkages 
among many states, EME Homer City, 572 U.S. at 496-97, while at the 
same time setting technology-based emissions limits and other control 
measures that the sources in each state can meet. 88 FR 36741, 36749.
---------------------------------------------------------------------------

    \29\ These states are now included in a supplemental rulemaking 
to address their obligations. See supra note 19.
---------------------------------------------------------------------------

    Third, while equity and consistency in obligations among states are 
at the core of the statute and the EPA's 4-step interstate transport 
framework, the suspension or removal of the Good Neighbor Plan's 
requirements in some states does not provide a lawful basis to suspend 
them in others. Just as each state has an individual obligation to

[[Page 99113]]

satisfy the good neighbor requirements of CAA section 110(a)(2)(D), 
regardless of whether other states have done so, the EPA has a 
statutory obligation to address the good neighbor obligations of ``each 
State'' where it has a federal responsibility to act. CAA section 
110(c)(1). Indeed, the goals of equity and consistency extend to the 
downwind states for whom the good neighbor provision was enacted. The 
good neighbor provision's requirement of consistency with the rest of 
the CAA, see CAA section 110(a)(2)(D)(i), including the air quality 
attainment schedules that are the ``heart'' of the Act, Train v. NRDC, 
421 U.S. 60, 66 (1975), means that each downwind state with identified 
air quality problems has a statutory right to timely relief from the 
public health and regulatory burdens of upwind pollution. See 88 FR 
36694 (discussing case law). It would be contrary to this statutory 
purpose to revise or suspend the Good Neighbor Plan as to upwind states 
for which the EPA is under a statutory requirement to act because the 
Good Neighbor Plan's requirements were suspended for other states.
    These principles are applicable in a variety of circumstances where 
the EPA may approve a state's SIP as sufficiently meeting its good 
neighbor obligations even if the state's approach is different than the 
EPA's approach, for that state or for other states. The EPA's 
interstate ozone transport actions are typically taken on a national 
basis and with the goal of ensuring consistency, including in terms of 
alignment of the timing of obligations, because doing so ensures 
equitable treatment of all states and is administratively efficient 
given the commonality in analysis and obligations across many states, 
particularly in the case of interstate ozone transport. In addition, 
the establishment of interstate emissions trading programs has allowed 
for more cost-efficient compliance activities, and it is far more 
efficient to establish these programs through a consolidated, 
multistate rulemaking action. Historically, this has also been coupled 
with the EPA's practice of seeking consolidated judicial review of such 
actions in the D.C. Circuit to ensure that a consistent caselaw regime 
applies across the entire country on matters of interstate ozone 
pollution and is not varied by which federal judicial circuit a state 
happens to be located in. 88 FR 36859-60.\30\
---------------------------------------------------------------------------

    \30\ See also, e.g., 86 FR 23054, 23163-64 (April 30, 2021); 84 
FR 56058, 56093 (October 18, 2019); 83 FR 65878, 65923-24 (December 
21, 2018); 83 FR 50444, 50472 (October 5, 2018); 81 FR 74504, 74585-
86 (October 26, 2016); 76 FR 80760, 80773-74 (December 27, 2011); 76 
FR 48208, 48352 (August 8, 2011); 71 FR 25328, 25329 (April 28, 
2006); 70 FR 25162, 25316 (May 12, 2005); 65 FR 2674, 2725 (January 
18, 2000); 63 FR 57356, 57480 (October 27, 1998).
---------------------------------------------------------------------------

    Nonetheless, the EPA acknowledged states' ability to develop 
alternative, potentially approvable approaches to meeting their good 
neighbor obligations. See 88 FR 36838-43. In evaluating alternative 
approaches, the EPA must consider interstate consistency, 88 FR 36839-
40; id. n.405; 87 FR 9338, 9380-81, but it has never been the Agency's 
view that its methodology for defining one state's obligations would 
have to be redone simply because it found an approach in another state 
also approvable.
    Thus, as explained in more detail in section III.B., the comments 
asserting that the EPA should stay, revise, or withdraw the Good 
Neighbor Plan for any particular state depending on the status of 
implementation of good neighbor obligations of other upwind states 
cannot be squared with the state-specific mandate of the Act, nor would 
this be compelled as a result of any element of the EPA's 4-step 
interstate transport framework. For those states where the Good 
Neighbor Plan may be currently suspended, good neighbor obligations 
will ultimately be met, either through an approved state plan or a 
federal plan as necessary. Meanwhile, sources in upwind states 
regulated by the Good Neighbor Plan would be under the same legal 
obligation to control their pollution even if the EPA developed a 
federal plan containing just those states or some subset of them or 
separate federal plans for each state.

B. Step-by-Step Review of the 4-Step Interstate Transport Framework

    A review of the EPA's methodology demonstrates why each upwind 
state would bear the same emissions reduction obligations, regardless 
of how many states were included in a particular rulemaking. The EPA's 
method for defining good neighbor obligations, while applied 
consistently across the nation and respectful of the multistate 
``collective contribution'' nature of the interstate ozone problem, 
produces a definition of ``significant contribution'' \31\ for the 
sources in each individual state, and provides for the prohibition of 
such emissions in a manner that is not dependent on the inclusion of 
any particular number or grouping of states. As tested and refined 
through case law over the past quarter-century, the EPA's methodology 
is consistent with the state-specific structure of the Act and the 
fundamental statutory obligation to define and prohibit each state's 
own significant contribution. See CAA section 110(a)(1) and 
110(a)(2)(D); Wisconsin v. EPA, 938 F.3d 303, 324-25 (D.C. Cir. 2019); 
North Carolina, 531 F.3d at 906-08, 920-21.
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    \31\ ``Significant contribution'' is often used as a shorthand 
to refer to the identification of those amounts of emissions that 
significantly contribute to nonattainment or interfere with 
maintenance of the NAAQS in other states and therefore must be 
prohibited under the good neighbor provision. See CAA section 
110(a)(2)(D)(i)(I).
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    Consistent with the statutory text and structure and judicial 
precedent, the EPA's 4-step interstate transport framework was designed 
to be independent of the number or scope of included states. Because 
the statute allows states to replace a FIP with a SIP--and because as a 
practical matter the EPA does not necessarily receive or act on each 
state's SIP submission at the same time--the Good Neighbor Plan is 
expressly designed to allow states to be added to or removed from the 
federal emissions control program over time, as circumstances require 
(including where a state submits an approvable SIP to replace their 
FIP, see 88 FR 36838-39). The Good Neighbor Plan does so primarily by 
setting good neighbor obligations based on the available, cost-
effective technologies that can be applied to each type of high-
emitting source--a technology-focused definition of ``significant 
contribution'' that the Supreme Court upheld in EME Homer City and that 
can be evenhandedly applied to existing sources and those that may be 
newly located in any contributing State in the future. 88 FR 36675-77, 
36678-79, 36683, 36718-19, 36741. This ensures fairness and consistency 
across all states when the EPA must act pursuant to its FIP authority 
to implement CAA section 110(a)(2)(D)(i)(I), regardless of when any 
particular state is addressed--it avoids the problem of ``which state 
goes first''; that is, it avoids producing unfairly varying levels of 
emissions-control stringency depending on the order in which states' 
obligations are addressed. 88 FR 36749. As the Supreme Court aptly 
illustrated in EME Homer City, where multiple states contribute to 
multiple other states (as remains the case across the contiguous U.S. 
for the 2015 ozone NAAQS), addressing each state's obligations in 
proportion to its contribution to each receptor in seriatim fashion 
becomes mathematically unworkable and economically inefficient. 572 
U.S. at 516. The EPA's approach to developing ozone good neighbor FIPs 
avoids these pitfalls, avoids interdependence, and avoids unfairness--
it works for each state that may need federal regulation of its

[[Page 99114]]

sources. Accordingly, under each step of the 4-step interstate 
transport framework discussed further later, a change in the number of 
states covered does not impact the obligations of the states or sources 
that remain covered.
1. Steps 1 and 2
    The EPA identifies receptors based on nationwide modeling and 
monitoring data and evaluates each state's contribution to receptors in 
downwind states on an individual-state basis to identify upwind-state-
to-downwind-state linkages. The air quality modeling and the monitoring 
data the EPA considered for Steps 1 and 2 cover the contiguous United 
States. See 88 FR 36696.
    At Step 1, the EPA identified downwind receptors that are expected 
to have problems attaining or maintaining the NAAQS. For a detailed 
explanation of what receptors are and how the EPA identified them, see 
88 FR 36703-08. At Step 2, the EPA identified which upwind states 
contribute to the identified receptors in amounts that would be 
sufficient in the EPA's interpretation of ``contribution'' to ``link'' 
the individual upwind states to downwind air quality problems. For a 
detailed explanation of how the EPA identified these linkages, see 88 
FR 36708-12.
    The nationwide identification of receptors expected to have 
problems attaining or maintaining the NAAQS and of states 
``contributing'' to those receptors does not rely upon nor necessarily 
dictate the number of states included in a particular rulemaking. The 
EPA historically has applied a common numerical threshold for 
determining which states ``contribute'' to downwind air quality 
problems, and the contributions from each state are evaluated 
independently with respect to this threshold. 88 FR 36677-78. The 
modeling of baseline conditions did not contain or rely on the 
emissions reductions in the Good Neighbor Plan, and the monitoring data 
were based on measurements during years prior to when the Good Neighbor 
Plan was final and thus these data do not reflect the impacts of 
emissions reductions from the Good Neighbor Plan.\32\ This approach 
creates a level playing field from which to assess each state's level 
of contribution. 88 FR 36713.
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    \32\ Both the EPA and States can use air quality modeling and 
monitoring information on ozone concentrations and contribution 
levels to make individual determinations for each state concerning 
whether it is contributing to any out-of-state receptors. See, e.g., 
88 FR 9365 n.286 (identifying individualized approvals of SIPs using 
modeling at Steps 1 and 2).
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    In addition to promoting national consistency, the EPA has 
explained that using a single contribution threshold avoids creating 
potential inter-dependencies among states. When the EPA had previously 
considered whether to approve individual states' use of a higher 
contribution threshold, it had proposed (for the State of Iowa) to 
consider the effects of other states' efforts to reduce their pollution 
at shared receptors. See 88 FR 36715. On further consideration, 
however, the EPA found this would have introduced an interdependency. 
Id. When the EPA gave consideration to this approach in its SIP 
Disapproval action disapproving 21 state implementation plans (88 FR 
9336; February 13, 2023), in response to comments, it explained that 
this factor would inappropriately introduce an inequity in which some 
states could evade obligations through reliance on the incidental 
effects of other states' efforts.\33\ See also 88 FR at 36713 
(explaining that ``use of alternative thresholds would allow certain 
states to avoid further evaluation of potential emissions controls 
while other states must proceed to a Step 3 analysis. This could create 
significant equity and consistency problems among states.'').
---------------------------------------------------------------------------

    \33\ See 2015 Ozone NAAQS Interstate Transport SIP 
Disapprovals--Response to Comments (RTC) Document at 296, available 
at https://www.regulations.gov/document/EPA-HQ-OAR-2021-0663-0083.
---------------------------------------------------------------------------

    The EPA's analytical methodology at Steps 1 and 2 ensures the EPA 
can impose FIP obligations, where they may be needed, according to a 
common rubric that maintains equity and consistency between the 
potentially subject states. Thus, the analytic methods in both Step 1 
and Step 2 to determine ``contributing'' states rely on emissions and 
air quality data that are independent of which or how many states are 
covered by the Good Neighbor Plan.
    We note that comments from ASC and PCA in Comment Category 2 
summarized in section II.B. of this document contained several 
statements the meaning of which the EPA could not clearly ascertain. 
Those comments said the EPA's Step 2 screening analysis included states 
that ``already had Good Neighbor SIPs for the 2015 ozone NAAQS.'' See 
ASC Comment Letter at 13. The meaning of this statement is unclear. 
States may have made SIP submissions for these obligations, but at the 
time of this comment, the EPA had not approved all of those submissions 
and was in the process of disapproving many of them, and so the 
statement read that way (i.e., to suggest that the States already had 
approved SIPs) is factually incorrect.\34\ The sentence in the ASC 
comment letter goes on to state that the EPA ``prematurely 
disapproved'' these SIPs, but the disapprovals had only been proposed 
at the time the comment was submitted. The commenter did not explain 
what made the EPA's proposed disapprovals ``premature.''
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    \34\ The commenter also asserted that the EPA had ``proposed'' 
findings of failure to submit for four states, New Mexico, 
Pennsylvania, Utah, and Virginia. That statement was incorrect 
insofar as the EPA issued a final finding of failure to submit for 
these states in December of 2019, effective January 6, 2020, had an 
obligation to promulgate FIPs for these states pursuant to CAA 
section 110(c)(1) by January 6, 2022, and was subject to a consent 
decree deadline to promulgate FIPs for these states (excluding New 
Mexico) by March 15, 2023. See 88 FR 36689 n.106.
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    This comment might be read as in relation to the previous approvals 
of SIPs for certain states, and thus an argument that these states' 
emissions should be excluded from modeling analyses. Or the comment 
might be read in relation to a subsequent statement in the comment, 
that states should not be included in the Good Neighbor Plan's 
``screening'' at Step 2 if final action on the SIP submission had not 
yet been taken. In either of these cases, the comment would be 
misplaced, in that our analysis of the Steps 1 and 2 modeling looks at 
the transport of pollution as a factual matter and does not remove from 
consideration the emissions of states based on the procedural status of 
their SIP submissions. In addition, as explained in section III.B.1., 
the EPA's baseline air quality and contribution modeling for Steps 1 
and 2 is conducted for a modeling domain that includes the entire 
contiguous United States and accounts for all emissions sources. 88 FR 
36696. Removing emissions from certain states from this modeling would 
produce erroneous, unrealistic, and counterfactual results.
    These comments also stated that the EPA may need to conduct a new 
analysis at Step 2 in the event the EPA takes a different action on 
those SIPs than contemplated in the proposed Good Neighbor Plan. In 
that case, according to commenter, the EPA ``would need to conduct a 
new assessment and modeling of contribution and subject those findings 
to public comment.'' ASC Comment Letter at 14. On the one hand, the EPA 
agrees with the commenter to the extent they are suggesting that if 
updated modeling the EPA conducted (e.g., the 2016v3 modeling used in 
the final Good Neighbor Plan) showed a state was no longer contributing 
at Step 2, and the

[[Page 99115]]

EPA approved that state's SIP submission or had deferred taking action, 
then the EPA would not promulgate a FIP for that state given that 
disapproval (or a finding of failure to submit) is a necessary 
predicate to FIP authority. This is precisely how the EPA proceeded in 
the final SIP Disapproval and Good Neighbor Plan and in taking 
subsequent rulemaking actions for states where its final analysis at 
Steps 1 and 2 had materially changed from its proposed SIP and FIP 
actions. See 88 FR 36656, 36658, 36689; see also SIP Disapproval, 88 FR 
9354.\35\ On the other hand, the comment might be read to suggest that 
if the EPA's analysis changed for any particular state at Steps 1 or 2, 
then it would have to conduct a whole new analysis of every other state 
at Steps 1 or 2. If so, that comment is in error because the EPA's 
baseline air quality and contribution analysis at Steps 1 and 2 already 
accounts for emissions across all states regardless of their inclusion 
in the rule, and the results of that analysis would not change for one 
state simply because the results indicated that another state had 
fallen below the Step 2 contribution threshold.
---------------------------------------------------------------------------

    \35\ See also supra note 19.
---------------------------------------------------------------------------

    Taken as a whole, this set of comments appears to be primarily 
about the need for the EPA to ensure consistency in how it analyzed 
each state's obligations between the separate SIP and FIP rulemakings 
(a consistency that the EPA agrees is important and abided by). The 
commenter did not state that the EPA's analysis must be redone if for 
reasons beyond the Agency's control the Good Neighbor Plan were stayed 
or not in effect for any particular state; rather, the commenter 
emphasized the need for consistency in the EPA's own, substantive 
analytical determinations. If the commenter intended to argue that a 
change in analysis at Steps 1 or 2 for one state would necessarily 
alter the EPA's substantive assessment for other states and would need 
to be subjected to additional notice and comment, the commenter did not 
state that, nor provide a theory or reasoning as to why that would be 
the case, and for the reasons explained in this section (III.B.1.), 
such an assertion would reflect a misunderstanding of how baseline air 
quality and contribution analysis is conducted at Steps 1 and 2.
2. Step 3
    The Act requires each state to eliminate its ``significant 
contribution'' to downwind nonattainment or interference with 
maintenance of air quality standards. To determine which emissions from 
contributing states are ``significant'' at Step 3, the EPA analyzes 
available emissions control strategies and their costs. Based on that 
analysis, the EPA then identifies a uniform degree of emissions control 
stringency that is reasonable to require from upwind sources, 
calculated based on the emissions performance those sources would 
achieve through the application of the technologies the EPA found were 
most cost-effective. Step 3 is a multi-factor analysis, with its 
primary focus on technology availability and associated cost, the level 
of emissions reductions that are thereby achieved, and the associated 
air quality benefits delivered to downwind receptors. The approach 
applies uniform levels of emissions control stringency across all 
upwind states, with the objective of bringing the covered sources in 
each state up to a minimum level of emissions performance to reduce 
ozone-precursor emissions. See 88 FR 36675-77, 36678-79, 36683, 36718-
19, 36741. This approach is tailored to a pollution problem 
characterized by collective contribution from many similar sources all 
emitting a similar precursor pollutant (NOX) over a wide 
geographic area; it ensures an efficient and equitable solution that 
avoids interdependency. Id. at 36719, 36741, 36749.
    Thus, when the EPA uses the term ``uniform'' in the context of Step 
3, it is not referring to the division of a specific ``pie'' of air 
pollution, total emissions, or total cost divided proportionally among 
the upwind states; rather it is referring to application of a pollution 
technology applied equally across all applicable units of a common size 
and type. 88 FR at 36746-47. One example of a uniform control 
stringency level is the assumption that all EGU units with already-
installed selective catalytic reduction (SCR) technology operate and 
optimize the performance of these controls. Id. at 36720-21. The EPA 
estimated that this would be realized through emissions rates (on 
average across the fleet) of 0.08 pounds per million British thermal 
units at costs of about $1,600 per ton of NOx removed. Id. The 
translation of this technology stringency into the definition of 
significant contribution is specific to each state's unique group of 
sources and the operating characteristics of the affected units at 
those sources. Id. at 36683. In no way is the amount of emissions 
mitigation required of sources in each state interdependent on another 
state's mitigation responsibility. The ``amount'' of pollution that is 
identified for elimination at Step 3 of the 4-step interstate transport 
framework is therefore that amount of emissions that is above the level 
of emissions remaining after the cost-effective emissions control 
strategies are implemented. Id. at 36676. Because it is possible that a 
uniform level of stringency may produce more emissions reductions than 
is necessary to fully resolve a particular upwind state's linkages to 
all downwind receptors, the EPA tests its identified level of 
stringency for ``overcontrol.'' For a detailed explanation of how the 
EPA applies Step 3, see 88 FR 36718-54.
    Acknowledging that some of the factors considered in the Step 3 
analysis are considered at a national scale while certain components of 
that analysis account for state-level or linkage-specific data, the EPA 
here explains in more detail why the selected levels of control 
stringency for particular industries, and therefore the particular 
obligations of individual states, do not vary depending on the number 
of states subject to FIPs under the Good Neighbor Plan.
    The EPA identified potential levels of emissions control stringency 
that could be applied for each industry, and thus for the set of 
sources found in each state, regardless of the number of States covered 
by an approved SIP or a FIP or not yet covered by either. In evaluating 
those potential levels of stringency, the EPA conducted a wide-ranging 
survey of emissions control technologies (and associated cost data) 
used throughout the United States and even internationally. Then, the 
EPA conducted the air-quality-improvement and overcontrol analyses 
considering the effects of the potential uniform stringency levels at 
each identified receptor. The primary way in which the EPA conducts 
that assessment is to apply the potential stringency levels across all 
of the states linked to each particular receptor as well as the 
downwind, ``home'' state for that receptor. The EPA then assesses the 
average resulting improvements across all receptors as well as 
tabulates the aggregate effects. This allowed the EPA to ascertain 
whether a selected level of stringency was effective at achieving 
improvements in the air quality downwind that were reasonable in 
relation to the identified costs, while also ensuring a selected 
stringency level is not more stringent than necessary to bring any 
given receptor into attainment. 88 FR 36741, 36749-50. But given the 
overlapping linkages among multiple upwind and downwind states, as well 
as varying levels of baseline emissions control in each state, further

[[Page 99116]]

complicated by the year-to-year variability in ozone levels due to 
meteorology, id. at 36750, the EPA's methodology, going back to the 
original NOX SIP Call in 1998, has never attempted to 
pinpoint a precise level of emissions control for each state that 
maximizes cost-effectiveness in relation to each specific linkage. See 
88 FR 36748 (finding the aggregate and average air quality effects of 
the combined EGU and non-EGU strategies across all receptors would 
achieve ``meaningful downwind air quality improvements'').
    Expressed in simpler terms, the EPA's long-standing interpretation 
of CAA section 110(a)(2)(D)(i)(I)--an approach that the Supreme Court 
expressly upheld in EME Homer City--is that a state may satisfy its 
good neighbor obligations by ensuring that its emissions do not exceed 
what would result from the application of cost-effective emissions 
controls. The purpose of Step 3 is to identify a set of widely 
available and well-established, cost-effective emissions controls that 
can be applied in any upwind state, while checking to ensure that those 
emissions controls will achieve downwind improvements in air quality 
without overcontrol.
    As described in more detail in sections III.B.2.a.-III.B.2.c., none 
of the determinations that underlie Step 3 are contingent on a 
particular state or set of states being covered by the Good Neighbor 
Plan. Accordingly, the EPA's Step 3 analysis can be extended to states 
not covered by the Good Neighbor Plan either because the state is 
covered by an approved SIP or prior FIP or because the EPA has not yet 
taken action to review a SIP or impose a FIP. By identifying cost-
effective approaches to reducing multi-state ozone pollution in a 
manner that does not depend on the participation of any particular 
state or set of states, the EPA's approach reasonably fulfills 
Congress's direction in CAA section 110(a)(2)(D)(i)(I) to address the 
multi-state ozone problem in a way that defines each state's 
obligations on an individualized basis.\36\
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    \36\ Just as the EPA's analytical approach allows for it to 
develop a good neighbor FIP for any state that may require one that 
reasonably establishes emissions control obligations in the face of 
uncertainty regarding what other states will do, it also allows 
states themselves to conduct a similar analysis of their own 
obligations in the context of developing a SIP without definitive 
knowledge of what other states will do to fulfill their own 
obligations. At Step 3 of the EPA's 4-step interstate transport 
framework, each state found to be contributing to one or more 
receptors can conduct an analysis of emissions control technologies 
or measures that would be cost-effective within the state. If each 
state linked to a given receptor (and the downwind state where that 
receptor is located, to account for that state's own fair share), 
made pollution-control efforts at these levels, a state could 
demonstrate that ozone levels at the downwind receptors would be 
measurably improved (without undertaking more emissions reductions 
than necessary). In the context of a FIP, this approach to 
evaluating air quality improvements at downwind receptors is 
necessary, because to avoid overcontrol, the EPA must consider 
whether applying a given control stringency level to other states 
would achieve more emissions reductions than necessary to bring a 
receptor into attainment.
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    Specifically, the EPA took the following steps in conducting its 
Step 3 analysis in the Good Neighbor Plan:
a. Technology, Cost, and Emissions Reduction Analyses
    The EPA's analysis started by examining emissions control 
technologies (sometimes also referred to as ``strategies'') and their 
associated costs and emissions reductions. The Good Neighbor Plan 
identified conventional, at-the-source, NOX emissions 
control technologies that have been available in the covered industries 
for many years. See, e.g., 88 FR 36738 (identifying control 
technologies for EGUs); id. at 36739 (identifying control technologies 
for non-EGUs). These analyses were not specific to the particular group 
of upwind states whose inclusion the EPA had proposed or finalized in 
the Good Neighbor Plan but looked instead at demonstrated technologies 
and associated estimated costs across each industry and technology type 
as a whole, without any geographic limitation. The EPA reasonably 
considered a wide range of technology and cost information (including 
information from examples and technical literature throughout the U.S. 
or even internationally) rather than just the data available in any 
particular state or regional grouping, since this allows for a more 
comprehensive assessment of the technologies available and associated 
costs for each source type.\37\
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    \37\ In response to comments, the EPA conducted a sensitivity 
analysis for EGUs to see if looking at control costs on a regional 
basis would change the results and found that it would not. EGU 
NOX Mitigation Strategies Final Rule TSD at 49-50. The 
fact that the EPA conducted this as a sensitivity analysis to 
address a comment further illustrates that the primary technology 
and cost analysis the EPA conducted, as described earlier, was not 
limited to a 23-state geography and would not be altered if that 
geography were different.
---------------------------------------------------------------------------

    For EGUs, the EPA conducted an inquiry nearly identical to prior 
good neighbor rules, looking at several widely available and well-
understood NOX control strategies that can be and have been 
applied to EGUs for decades throughout the United States. See 88 FR 
36720. For non-EGUs, the EPA similarly consulted a wide range of 
sources of information, starting with national databases like the 
National Emissions Inventory and the Control Measures Database (CMDB), 
and proceeding from there to additional national and international 
technical literature, as well as a variety of existing state and 
federal NOX control requirements. See id. at 36732-33; see 
generally Non-EGU Sectors Final Rule Technical Support Document (TSD); 
\38\ EGU NOX Mitigation Strategies Final Rule TSD.\39\ These 
included trade association literature; academic studies; multi-state 
regional organization publications; state rules and publications; 
contractor studies; EPA rules, publications, and databases like the 
RACT/BACT/LAER Clearinghouse; European Commission publications; 
operating permits; and data on what emissions limits specific 
facilities or companies were achieving. See, e.g., Non-EGU Sectors 
Final Rule TSD at 9-11 (reciprocating internal combustion engines 
(RICE)), 27-29 (cement kilns), 35-39 (reheat furnaces), 42-43, 45-47 
(glass furnaces), 62-65, 68-84 (boilers), 92-94 (Municipal Waste 
Combustors (MWCs)).
---------------------------------------------------------------------------

    \38\ Available in the docket at https://www.regulations.gov/document/EPA-HQ-OAR-2021-0668-1110.
    \39\ Available in the docket at https://www.regulations.gov/document/EPA-HQ-OAR-2021-0668-1092.
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    The EPA derived estimated ``representative'' costs for particular 
control strategies for EGUs through a wide-ranging analysis of the 
likely costs associated with capital, material, equipment, and labor. 
See generally EGU NOX Mitigation Strategies Final Rule TSD. 
The EPA derived its cost estimates for non-EGUs primarily from the 
CMDB, which contains a compilation of a variety of sources of technical 
literature and examples.\40\ The ``representative'' costs that the EPA 
identified for different levels of control stringency and for different 
industries were derived from this nationwide analysis and were not 
specific to the particular states included in the proposed or final 
Good Neighbor Plan. See 88 FR 36727 (explaining derivation of $11,000/
ton estimate). The EPA reasonably considered a wider range of cost 
information than the data that might be available in any particular 
state since it allows for a more comprehensive assessment of the costs 
each source type might be expected to

[[Page 99117]]

face.\41\ While the EPA provided for more individualized consideration 
of the costs particular facilities might bear and made available 
alternative emissions limits through its implementing regulations that 
could be justified on the basis of excessive cost, see 88 FR 36818-19, 
the EPA explained that cost in the Step 3 analysis ``is not intended to 
represent the maximum cost any facility may need to expend but is 
rather intended to be a representative figure for evaluating 
technologies to allow for a relative comparison between different 
levels of control stringency.'' 88 FR 36740.
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    \40\ See Summary of Final Rule Applicability Criteria and 
Emissions Limits for Non-EGU Emissions Units, Assumed Control 
Technologies for Meeting the Final Emissions Limits, and Estimated 
Emissions Units, Emissions Reductions, and Costs at 5-7 (Non-EGU 
Memorandum), available in the docket at https://www.regulations.gov/document/EPA-HQ-OAR-2021-0668-0956.
    \41\ In response to comments, the EPA conducted a sensitivity 
analysis for EGUs to see if looking at control costs on a regional 
basis would change the results and found that it would not. EGU 
NOX Mitigation Strategies Final Rule TSD at 49-50. The 
fact that the EPA conducted this as a sensitivity analysis to 
address a comment further illustrates that the primary technology 
and cost analysis the EPA conducted, as described in section 
III.B.2.a., was not limited to a 23-state geography and would not be 
altered if that geography were different.
---------------------------------------------------------------------------

    The EPA also used its technology analysis to calculate the 
anticipated emissions reductions that could be achieved if those 
strategies were applied to the population of sources in each state 
potentially contributing to at least one downwind receptor. 88 FR 
36737-40. At this stage of the analysis, the EPA's assessment of the 
emissions reductions expected from particular control strategies under 
consideration again did not depend on the number or identity of the 
states included in the Good Neighbor Plan rulemaking itself. Rather, 
these estimates provided the inputs by which air quality benefits and 
overcontrol could then be assessed in the next stages of the Step 3 
analysis (discussed next).
b. Air Quality Benefits
    After compiling the data on available technologies, their relative 
cost-per-ton, and the expected emissions reductions that would result 
from each state, the EPA's Step 3 methodology then proceeded to 
evaluate the effect those emissions control strategies would have on 
downwind ozone levels. 88 FR 36741-42. This component of the EPA's 
analysis looked at the incremental ozone improvement that would be 
accomplished at each receptor from the reductions accruing from the 
upwind states linked to that particular receptor (whether included in a 
particular rule or not) at each of the assessed stringency levels. The 
analysis of air quality improvement as the EPA has conducted it (in the 
Good Neighbor Plan and in the prior CSAPR rulemakings) displays the 
improvements that are incremental to an uneven baseline in which states 
have imposed differing levels of control stringency. Another way to 
think about the level of air quality benefit achieved would be to 
assume an uncontrolled baseline across all states and then apply the 
different levels of control stringency that were evaluated. This would 
illustrate far higher levels of air quality benefit as the uniform 
stringency levels are increased but would not credit the achievements 
in emissions control that some states have already adopted compared to 
others.
    To calculate air quality change for any given upwind state-receptor 
linkage, the relevant group of states assumed to make comparable 
emissions reductions will vary, and in the EPA's primary method of 
analysis, it does not matter whether the other upwind states or the 
downwind state are in fact subject to the same emissions control 
requirements. Rather the purpose of the analytical exercise is to 
isolate, for comparative purposes, the effects of the potential 
stringency levels just to the states that are linked to a receptor 
while also assuming that the ``home'' state undertakes an equivalent 
level of stringency with respect to its own sources. See 88 FR 36742, 
36748-50. Thus, the total number of states where the EPA has assumed 
emissions control stringencies as part of its Step 3 air quality 
assessment for purposes of the Good Neighbor Plan is 30 states. That 
is, the total of the 23 states included in the Good Neighbor Plan, the 
five other states that the EPA's analysis identified as potentially or 
likely to be linked at Step 2, plus, for their own receptors, Colorado 
and Connecticut as home states, even though they are not linked to 
other states' receptors.
    The EPA's conclusions in the Good Neighbor Plan did not depend on a 
particular improvement at each individual receptor, but rather on an 
assessment that there would be widespread improvement in ozone levels 
across receptors in the aggregate and on average when the selected 
level of control stringency is applied uniformly across upwind states. 
See 88 FR 36742-43, 36747-48. In the Good Neighbor Plan, as relevant 
metrics, the EPA displayed how ozone levels would be expected to change 
at each receptor, what the average effect of the potential stringency 
levels would be across all receptors, and what the aggregated effect of 
the potential stringency levels would be across all receptors. Id. at 
36742-43, 36747-48. This analytical exercise allowed the EPA to 
evaluate what level of stringency was appropriate in terms of 
delivering an acceptable level of air quality benefit to downwind 
receptors considering associated costs.
    The role of the air-quality factor in the Good Neighbor Plan is 
essentially no different than in CSAPR. 88 FR 36678. The CSAPR analysis 
was conducted on a nationwide scale and focused on cost-breakpoints of 
different technologies, while also accounting for multiple factors 
other than a singular ``knee-in-the-curve;'' CSAPR looked holistically 
at both the ``pattern'' of linkages and the ``average'' air quality 
benefits that could be realized at representative cost/ton thresholds 
if those technologies were applied uniformly; CSAPR selected stringency 
levels that appeared to deliver the greatest air quality improvement on 
average, not state- or linkage-specific. See id.; 76 FR 48255-59. 
Likewise, in the Good Neighbor Plan, the Agency focused on mandating 
those NOX reduction strategies across contributing states 
that were found to be relatively widely-adopted and cost-effective on a 
per-ton basis, with the understanding that if these strategies were 
implemented uniformly across the upwind-state region, widespread air 
quality improvement would be achieved--without tethering that 
conclusion to some precise knee-in-the-curve specific to each linkage 
or receptor. See 88 FR 36741.
    Commenters allege that this analysis necessarily depends on the 
specific group of states for which it is conducted, since different 
groups of states would have different sets of sources, with varying 
levels of emissions control already installed, and the application of 
emissions control strategies will have varying effects on downwind air 
quality. Effectively, these commenters seem to assert, for its 
methodology to function on an individual basis for each state, the EPA 
must determine for each state what level of emissions control applied 
only to its own sources would maximize cost-effectiveness relative to 
reducing ozone levels at a given downwind receptor. Under this theory, 
if the EPA conducted such an analysis, the appropriate level of 
stringency would vary for any particular state from what the EPA 
determined was appropriate in the Good Neighbor Plan on a uniform basis 
across states--and perhaps a lesser degree of stringency would be 
warranted for particular states.
    Fundamentally, these comments misapprehend the role of air quality 
improvement in the EPA's Step 3 analysis and are, in effect, at odds 
with the EPA's historical approach that the Supreme Court's opinion in 
EME Homer City upheld, i.e., the use of uniform control stringency 
(using cost as a proxy for technology type and compliance burden) to 
allocate responsibility across

[[Page 99118]]

multiple upwind states despite varying effects of that stringency to 
downwind receptors. 572 U.S. at 518-19. Consistent with the same 
statutory interpretation and methodology the EPA has applied throughout 
each of its prior good neighbor rulemakings for ozone, the Good 
Neighbor Plan is not premised on accomplishing a precise, aggregate air 
quality result at each receptor, such that the omission of some states 
(even if they were legally exempted from obligations rather than simply 
under a temporary stay order or did not yet have their obligations 
addressed through a SIP or FIP) would increase the ``share'' of the 
problem that must be addressed by the remaining states. Rather, the 
Good Neighbor Plan holds the industries in each contributing upwind 
state subject to a federal plan to a uniform, minimum level of 
emissions performance deemed to be cost-effective. So long as they meet 
that level of performance, the industries in any state regulated under 
the Good Neighbor Plan are understood to have lawfully addressed good 
neighbor obligations and eliminated that portion of a state's 
significant contribution to downwind air pollution.
    Even though this methodology does not purport to achieve attainment 
at all downwind receptors, it is consistent with the EPA's and the 
courts' understanding of the good neighbor provision. Under that 
provision, it is not upwind states' responsibility to ensure that 
downwind receptors are brought into attainment; each state must only 
eliminate its own significant contribution to nonattainment or 
interference with maintenance of the NAAQS in other states. CAA section 
110(a)(2)(D)(i)(I). In reviewing the division of responsibility under 
this contribution standard, courts have upheld the EPA's approach as a 
reasonable way to allocate good neighbor obligations among multiple 
states for regional-scale pollutants like ozone, even though the air 
quality benefits resulting from a particular degree of control 
stringency will necessarily vary by state and receptor. This variation 
in effect is the consequence of an approach that respects several well-
understood characteristics of the interstate ozone problem: the 
``overlapping and interwoven linkages between upwind and downwind 
States,'' ``the vagaries of the wind'' (i.e., the variability in 
meteorological conditions that makes precise ozone projections 
impossible), and the wide variation in the degree of baseline levels of 
emissions control that different states have already achieved. EME 
Homer City, 572 U.S. at 496-97, 519-20; see also Wisconsin, 938 F.3d at 
322; Michigan, 213 F.3d at 679-80. Commenters may believe that the EPA 
could at least establish different levels of cost-effective control 
stringency for each group of states linked to a particular receptor, 
rather than considering air quality improvement in the aggregate across 
all receptors--i.e., to pick a knee in the curve that is specific to 
each particular receptor. Setting aside the problem of meteorological 
variability, this still presents the same problem the EPA faced in 
CSAPR, as recognized in EME Homer City: each set of states for one 
receptor has overlap with a different set of states for a different 
receptor.\42\ Thus, for any given state, there cannot mathematically be 
a single, ``correct'' ``knee-in-the-curve'' that defines a maximally 
cost-effective stringency. EME Homer City, 572 U.S. at 514-18. Thus, as 
was the case in CSAPR, an approach that requires high-emitting sources 
in each state to come up to a uniform level of cost-effective emissions 
control, so long as it does not overcontrol, functions as a reasonable 
definition of each covered state's ``significant contribution,'' and 
fulfills those covered upwind states' legal obligations under the good 
neighbor provision. 88 FR 36675-76, 36741.
---------------------------------------------------------------------------

    \42\ See Air Quality Modeling Final Rule TSD, 2015 ozone NAAQS 
Good Neighbor Plan, appendix E, available in the docket at https://www.regulations.gov/document/EPA-HQ-OAR-2021-0668-1157.
---------------------------------------------------------------------------

    Both the Supreme Court and the D.C. Circuit have recognized that 
variation in what a good neighbor rule will achieve at any particular 
receptor is a logical consequence of defining ``significance'' through 
identifying a uniform level of emissions control based on cost-
effectiveness. As the Supreme Court explained in EME Homer City, ``by 
imposing uniform cost thresholds on regulated States, EPA's rule 
subjects to stricter regulation those States that have done relatively 
less in the past to control their pollution'' and ensures that 
``[u]pwind States that have not yet implemented pollution controls of 
the same stringency as their neighbors will be stopped from free riding 
on their neighbors' efforts to reduce pollution.'' EME Homer City, 572 
U.S. at 519. The fact that a particular state may have a very small 
emissions reduction obligation, and so improve downwind air quality by 
a very small amount, does not call the approach into question. The fact 
that a state may have less to do to meet the EPA's selected levels of 
emissions control may reflect that its sources are already well 
controlled. But whether a state's required reductions under a FIP 
applying this methodology are large or small, the approach allows for a 
fair alignment of investments in pollution control across all of the 
contributing states, which is at the heart of the methodological 
construct the Court approved in EME Homer City. See Wisconsin, 938 F.3d 
at 322 (concluding that the EPA reasonably regulated sources in 
Wisconsin, a contributing upwind state whose available cost-effective 
reductions would only benefit downwind air quality ``by just two ten-
thousandths of a part per billion'').
    This is not to say that delivering air quality improvement to the 
downwind receptors is not important--indeed, it is, as the EPA 
described in the Good Neighbor Plan, a ``central component'' of the 
EPA's analysis. 88 FR 36741. If the identified control strategies that 
were cost-effective on a cost-per-ton basis did not have any effect on 
downwind air quality at any receptors, this may call into question 
whether requiring those strategies was worth it.\43\ Thus, the Good 
Neighbor Plan explains that the purpose of the EPA's air quality 
analysis at Step 3 is to check on whether a level of emissions 
reduction that appeared cost-effective on a cost-per-ton basis would in 
fact deliver measurable progress toward attainment of the 2015 ozone 
NAAQS at the downwind receptors. ``These analytical findings cement 
EPA's identification of the selected EGU and non-EGU mitigation 
measures as the appropriate control stringency . . . .'' 88 FR 36741.
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    \43\ Even here, however, caution is in order. A highly cost-
effective strategy may not deliver incremental air quality 
improvement from a given baseline because that strategy has already 
been adopted by sources in a particular state or states. In that 
case, a rule imposing that strategy would not create new emissions 
reduction obligations but would be appropriate to prevent 
backsliding. Cf. EME Homer, 572 U.S. at 519-20 (noting the uniform 
approach appropriately treats states where sources have already 
invested in pollution control). Likewise, the EPA's good neighbor 
rules have always applied to both new and existing sources. See 88 
FR 36685. If a particular industry is not currently present in a 
particular state but could have high uncontrolled emissions if it 
located there, good neighbor rules serve as a backstop to ensure a 
minimum level of emissions performance will be maintained from those 
sources, in those states that have been deemed to contribute to 
another state's nonattainment or maintenance issues. Nonetheless, 
the basic emissions-performance requirements of a good neighbor rule 
in those cases should not be onerous for a new source.
---------------------------------------------------------------------------

    The EPA's analysis in the Good Neighbor Plan demonstrates that with 
each incremental increase in the stringency of the assessed control 
strategies, there is also incremental improvement in air quality at the 
receptors. See, e.g., 88 FR 36743, 36747-

[[Page 99119]]

48 (tables showing air quality improvement at each receptor); Ozone 
Transport Policy Analysis Final Rule TSD at 70 (table C-12) (Ozone 
Policy TSD) (showing reductions in the maximum contribution of each 
upwind State to receptors in 2026).\44\ Further, the Agency explained 
that it could not identify a point of diminishing returns within the 
suite of emissions control strategies that it ultimately selected. 88 
FR 36741. The Agency also cautioned that the purpose of this exercise 
was not to pinpoint a precise ``knee-in-the-curve'' but to serve as ``a 
useful indicator for informing potential stopping points.'' Id. Thus, 
the EPA's review of the effects of different emissions-reduction 
strategies on air quality primarily helps the Agency ensure that no 
impactful emissions reduction strategies have been overlooked and that 
those selected can be anticipated to deliver reductions in ozone at the 
identified receptors if applied consistently across all of the upwind 
states linked to each receptor (including each receptor's home state).
---------------------------------------------------------------------------

    \44\ Available in the docket at https://www.regulations.gov/document/EPA-HQ-OAR-2021-0668-1080.
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    Commenters have not put forward an alternative, more cost-effective 
methodology or set of emissions-control strategies for reducing ozone 
at the downwind receptors; rather, they seek to avoid emissions control 
obligations in one state on the basis that the Good Neighbor Plan may 
not be operative in another. However, the EPA has an ongoing statutory 
obligation to issue FIPs for those states where it has issued a SIP 
disapproval or made a finding of failure to submit. In the absence of 
information detailing that cost-effective emissions reduction 
opportunities have been overlooked that would have an even greater 
benefit on ozone levels at downwind receptors, the EPA reasonably 
concluded that its identification of emissions limitations consistent 
with the cost-effective emissions control technologies that it has 
identified to be widely available at the new and existing EGU and non-
EGU sources in the states covered by the Good Neighbor Plan passed its 
Step 3 air quality check, and these measures would constitute a 
sufficient and appropriate definition of ``significant contribution'' 
for these states.\45\
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    \45\ As always, states remain free to identify different 
emissions control measures through a SIP than the EPA has included 
in a FIP, and it may be possible for a state to demonstrate that it 
can control other sources to obtain equivalent or greater air 
quality results at its receptors. A SIP submission to the EPA 
obtaining those emissions reductions through permanent and 
enforceable measures applied to its in-state emissions sources 
accompanied by the appropriate analytical and technical 
justifications would likely be approvable to replace a good neighbor 
FIP.
---------------------------------------------------------------------------

    Although the air quality benefits to downwind receptors anticipated 
in the Good Neighbor Plan would not be fully realized so long as 
certain states have not yet fulfilled their obligations, this does not 
serve as a justification for allowing these obligations for those 
states where the EPA has a responsibility to act to go unaddressed or 
to be altered. Simply put, the CAA requires each state to address its 
own contributions to downwind air quality problems, regardless of 
whether other states have taken action to do so under a SIP or a FIP. 
That other states contributing to downwind receptors may have their 
good neighbor obligations stayed or not yet addressed does not relieve 
other states covered by the Good Neighbor Plan of their own good 
neighbor obligations under CAA section 110. Given the state-by-state 
procedural framework of the Act and the need for the EPA to develop 
equitable and consistent FIPs, it cannot be the case that the EPA must 
successfully simultaneously resolve all states' good neighbor 
obligations at once or lose the authority to act. Though the EPA has 
done its best to achieve consistent, timely, and concordant 
implementation of these obligations, like the construction of a jigsaw 
puzzle, each individual piece (i.e., each individual state's 
obligations) is necessary to complete the whole picture, and not every 
piece may be connected at once.
    Commenters attempt to fault the EPA for developing a methodology 
that they claim necessarily depends on the inclusion of other states. 
Setting aside that for the reasons explained here the methodology does 
not depend on simultaneous inclusion (or even full inclusion, if states 
address their good neighbor obligations in some other adequate way 
through a SIP), the problem commenters identify is not in the 
particular methodology that the EPA uses but in the science of ozone 
transport as a multistate problem characterized by meteorological 
variability and overlapping linkages, coupled with the state-by-state 
implementation structure of the Act. Under these constraints, any 
methodology would need to take into account the relative contributions 
of and the effects of air pollution control technologies in other 
states.
    To perform the air quality check for any particular receptor, it 
makes sense to consider the effect of emissions reductions from all of 
the states linked to that receptor, not just those covered by a 
particular FIP rulemaking, because all states must ultimately discharge 
their good neighbor obligations whether through an approved SIP or a 
FIP. Thus, the Step 3 air quality analysis is a ``test'' that serves to 
confirm that an appropriate degree of emissions-control stringency has 
been reached for any given state without overcontrolling. It does not 
depend on the actual, simultaneous inclusion of a certain number of 
states in a given rulemaking; however, it appropriately accounts for 
the reality that multiple states are linked to multiple other states 
and that the amount of emissions reduction necessary to achieve 
attainment varies among receptors. This complexity, recognized for 
years by the EPA and by the Supreme Court in EME Homer City, 572 U.S. 
at 514-17, makes it analytically inappropriate if not impossible to 
assign an obligation to each state that is simply proportional to its 
contribution to a particular receptor. See 88 FR 36683.\46\ 
Nonetheless, that does not prevent the EPA (or for that matter an 
individual upwind State) from being able to conduct a Step 3 test 
looking at the effects of uniform control stringencies using a publicly 
available tool such as the Air Quality Assessment Tool (AQAT). Given 
the multistate nature of the interstate ozone pollution problem, 
analysis of the air quality benefit produced by regulating sources in 
any particular upwind state assumes that other states linked to a 
common receptor and the home state of that receptor make emissions 
reductions at a comparable level of emissions control

[[Page 99120]]

regardless of whether they are covered by the Good Neighbor Plan.
---------------------------------------------------------------------------

    \46\ The EPA has previously evaluated Step 3 alternatives to the 
``uniform approach'' taken in the Good Neighbor Plan and prior ozone 
transport rules, including an evaluation of methods such as a 
receptor-specific proportionality approach. The alternative methods, 
as well as potential issues that the Agency identified can be found 
in the ``Alternative Significant Contribution Approaches Evaluated 
TSD'' included in the CSAPR rulemaking docket (Docket ID No. EPA-HQ-
OAR-2009-0491-0077). In responding to comments in that rulemaking 
about ``proportionality'' approaches, the Agency identified concerns 
that included, but were not limited to, requirements of an 
``extremely high level of accuracy in both the emissions modeling . 
. . and the air quality modeling'' and that ``finer-scale emissions 
data from all sectors . . . . and fine-scale air quality modeling 
could be needed to resolve differences in cost per air quality 
impact.'' The EPA explained that ``these data and modeling 
techniques do not exist and/or are too computationally demanding to 
be operationally implemented.'' The EPA continued, ``A second 
challenge for this approach was to identify a single reduction 
requirement for a particular upwind State, since the reduction 
requirements relevant to different downwind receptors would vary 
significantly.'' See CSAPR ``Transport Rule Primary RTC'' document 
743 (Docket ID No. EPA-HQ-OAR-2009-0491-0077).
---------------------------------------------------------------------------

    It is true that the EPA's analysis of air quality change at Step 3 
uses state-specific data and calibration factors. See Ozone Transport 
Policy Analysis Final Rule TSD at 43. Commenters may have had 
uncertainty concerning the respective roles of state-level versus 
national-level analytical determinations within the air quality 
analysis at Step 3, with a potential concern being that if the EPA was 
relying on state-level determinations, then the stringency of the Good 
Neighbor Plan would be dependent on particular state groupings. But 
this would over-interpret the role of these particular datapoints in 
the larger analysis. State-level emissions data and calibration factors 
ensure an accurate representation of the effects of emissions 
reductions across the different States. However, this does not imply 
the Good Neighbor Plan fails to define obligations on a reasonable 
basis for each state. To the contrary, it confirms that the EPA's 
analysis already accounts for the emissions reductions and air quality 
change that can be anticipated from each state individually, rather 
than merely treating them as an undifferentiated regional mass specific 
to the group of states included in a particular rulemaking. More 
importantly, as described above, the regulatory conclusions the EPA 
drew from the AQAT analysis focused not on the individualized outcomes 
of each linkage but rather on the averaged and aggregated data drawn 
from that analysis for the entire country, which ``cemented'' the EPA's 
finding that an overall appropriate level of stringency was obtained, 
without overcontrolling. 88 FR 36741, 36747-48.\47\
---------------------------------------------------------------------------

    \47\ Notably, the EPA highlighted that its forward-looking air 
quality projections are subject to inherent uncertainty given the 
many factors that influence ozone formation. 88 FR 36750. And the 
EPA acknowledged that states in the future may conduct updated air 
quality analysis that may differ from its own analytics in the rule. 
Id. at 36839-40; id. n. 405. Still, in the absence of particularized 
evidence of overcontrol and faced with a concomitant duty to avoid 
under-control, id. at 36684 (citing 572 U.S. at 523), the EPA's 
approach yields a set of emissions reduction obligations that would 
be reasonable in a robust way across all covered large-emitting 
sources in any contributing state that may eventually become subject 
to a good neighbor FIP for the ozone NAAQS.
---------------------------------------------------------------------------

    Illustrating that the Good Neighbor Plan's regulatory conclusions 
were drawn from this nationwide assessment of air quality effects of 
different control stringencies, rather than from the particulars of the 
23-state grouping included in the Good Neighbor Plan, the EPA's primary 
Step 3 air quality and overcontrol analysis in the Good Neighbor Plan 
included any other linked upwind states found at Steps 1 and 2 of the 
EPA's framework, regardless of whether or not they were included in the 
Good Neighbor Plan, on the view that this was the most appropriate way 
to analyze the collective effects of identified stringency levels at 
Step 3. See Ozone Policy TSD at 46, 55 (explaining that the EPA 
included all upwind states modeled to be contributing in this 
assessment, i.e., including states that were not presently included in 
the Good Neighbor Plan but might be through a future rule, such as 
Iowa, New Mexico, and Arizona \48\). Accordingly, the EPA's Step 3 air 
quality analysis did not rely on a 23-state scope of coverage, and 
nowhere in the record for the Good Neighbor Plan did the EPA state or 
imply that its methodology relied on a 23-state scope of coverage.\49\ 
For any particular receptor, the EPA's analysis looked at the group of 
upwind states linked to that receptor in the modeling (the numbers of 
which vary), and also assigned the home state for that receptor a 
``fair share'' (i.e., the same stringency that would be imposed in the 
upwind states for that receptor). 88 FR 36742 n.238. The analysis did 
not depend on the actual inclusion of those particular states in the 
Good Neighbor Plan; it simply looked at what the effect would be if, 
for any given upwind state and any given receptor, the other upwind 
linked states and the downwind state were held to the same stringency 
level.
---------------------------------------------------------------------------

    \48\ Due to data limitations at the time of finalizing the Good 
Neighbor Plan, the analysis did not include an assessment of the 
effects from non-EGUs in Arizona, even though Arizona is linked 
through the 2026 analytic year. Otherwise, in the AQAT analysis of 
the Good Neighbor Plan, data informing the EPA's Step 3 air quality 
evaluation included every monitor in the contiguous United States, 
with contributions adjusted for each state that was either linked 
above 1 percent of the NAAQS in the relevant analytic year or was a 
home state for the receptor.
    \49\ The EPA acknowledges that certain language in the Ozone 
Policy TSD for the Final Good Neighbor Plan may have been inartful 
or unclear on this point. For example, that document stated at page 
3 that it was focused on the ``23 upwind States that were linked'' 
and included in that rule. This was true in a sense, because the TSD 
was done in support of that rule, which covered 23 states. However, 
the underlying data and evaluation of the effects of emissions 
change on air quality encompassed the entire contiguous U.S., and 
the TSD displayed anticipated air quality improvement at identified 
receptors by reference to all upwind states (and ``home'' states) 
and was not limited only to the 23 states included in that rule. 
Results for Kansas and Tennessee were not displayed in the TSD 
because a final determination had not been made to consider these 
states linked based solely on violating-monitor receptors. See 88 FR 
36707. However, the underlying AQAT spreadsheets used for the Ozone 
Policy TSD analysis included the reductions from these states in the 
data made available to understand the effects of the evaluated 
emissions control strategies. See, e.g., Ozone AQAT Results, tab: 
``2023_step3_newSCR_wIRA'', cols. I-BF, available in the docket at 
https://www.regulations.gov/document/EPA-HQ-OAR-2021-0668-1116.
---------------------------------------------------------------------------

    Stated differently, the EPA's analysis identified a total of 28 
states as contributing at Step 2. 88 FR 36709-12. As such, subject to 
the caveats in notes 48 and 49 supra concerning certain limitations in 
the data, the EPA appropriately assessed the effect of applying the 
uniform levels of emissions control stringency across all contributing 
States to any given receptor (i.e., varying combinations of the 28 
states plus home state for each receptor)--regardless of their 
inclusion in the Good Neighbor Plan--in evaluating whether the Good 
Neighbor Plan reasonably addresses the ``significant contribution'' of 
any particular state.
    The emissions control measures identified at Step 3 do not depend 
on which particular states adopt cost-effective controls as part of the 
EPA's analysis of air quality benefits. The role of the air quality 
analysis is simply to verify that the cost-effective controls 
identified by the EPA for any particular state would, in fact, have an 
impact on downwind receptors if they were uniformly adopted in all 
states contributing to that receptor (and the home state), without 
overcontrolling. Whether all of those states ultimately adopt those 
emissions controls, or do so simultaneously, or adopt equivalent 
controls but on different sources, or may otherwise develop an 
alternative approach that is approvable for that particular state, does 
not affect the EPA's determination at Step 3 that those controls, as to 
the state(s) where the EPA applies them through FIP(s), are cost-
effective--and that the sets of sources within any individual state 
must achieve performance consistent with those controls to satisfy the 
state's good neighbor obligations.
    Thus, the EPA's analysis of air quality benefits at Step 3 was not 
limited to the specific set of states expected to be covered by a FIP, 
but appropriately considered the cost-effective emissions reductions 
available from all upwind states linked to each downwind receptor (as 
well as the receptor's home state). Consistent with the Act, that 
methodology functions as an appropriate analytical method to define any 
particular state's good neighbor obligations for ozone and does so 
without requiring, or possessing definitive knowledge, that the same 
methodology would be applied in other states.

[[Page 99121]]

c. Overcontrol Assessment
    Finally, at Step 3, the EPA ``tests'' whether its selected uniform 
emissions-control stringency levels result in any ``overcontrol.'' 88 
FR 36749-50. In EME Homer City, the Supreme Court held that the EPA 
cannot ``require[] an upwind State to reduce emissions by more than the 
amount necessary to achieve attainment in every downwind State to which 
it is linked.'' 572 U.S. at 521. To find overcontrol, the EPA must 
conclude that the uniform control stringencies the EPA selected 
produced more emissions reductions and resulting air quality 
improvements than necessary to resolve all of any state's linkages to 
downwind receptors, or more than necessary to bring receptors into 
attainment. In that case, under the overcontrol holding in EME Homer 
City, the EPA would need to adjust the requirements of the rule to 
avoid overcontrol. This overcontrol assessment is conducted using the 
same air quality effects analysis derived from AQAT, described in 
section III.B.2.b.
    If the Good Neighbor Plan were to be suspended from operation in 
some number of upwind states, this could not result in overcontrol, 
because the analysis (presented in the Ozone Policy TSD) demonstrates 
no overcontrol even when all upwind states found to be contributing are 
included--much less the 23 states included in the originally 
promulgated Good Neighbor Plan itself.\50\ As long as fewer states are 
making fewer emissions reductions, the downwind receptors cannot be 
cleaner than they were under the Good Neighbor Plan's original scope. 
See 88 FR 36749-50.
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    \50\ As explained in section III.B.2.b., the primary air quality 
assessment at Step 3, including for purposes of evaluating 
overcontrol, looks at the effects on ozone levels of different 
levels of emissions control across all upwind states found to be 
contributing to a particular receptor (plus the home state), not 
just the states included in a particular rulemaking. In the Good 
Neighbor Plan, the EPA ran the AQAT analysis for a total of 28 
linked upwind states, not just the 23 states included in the rule. 
See note 49 supra.
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d. Other Elements of the Non-EGU Step 3 Analysis
    To ensure a complete response to the commenters, the EPA has 
reviewed in greater detail all elements of the Step 3 methodology of 
the Good Neighbor Plan to evaluate whether any components of its 
analysis pose a concern that the EPA's analytical findings are not 
severable among the various states. Two elements of the EPA's 
technology and cost analysis for non-EGUs in the Good Neighbor Plan 
incorporate analytical methodologies related to some extent to the 
upwind region covered by the rule and warrant further discussion here. 
These are: (1) the identification of potentially impactful industries 
in the ``Screening Assessment'' used in the Good Neighbor Plan to 
assist the EPA in narrowing the scope of industries to be included in 
its non-EGU regulations; and (2) the ``weighting'' of average costs for 
two non-EGU industries and a specific emissions unit type (boilers) 
where multiple control technologies were identified at Step 3. The EPA 
has reviewed, based on the record for the Good Neighbor Plan, whether 
either of those elements materially influenced the determination of 
each state's ``significant contribution.'' As explained in the ``Use of 
Screening Assessment to Identify Potentially Impactful Industries'' and 
``Weighted Averaging Costs'' below, they did not. Neither of these 
aspects of the analysis suggest that the EPA should reach different 
conclusions as to each covered state's ``significant contribution'' 
while the Good Neighbor Plan applies in a different group of States.
Use of Screening Assessment To Identify Potentially Impactful 
Industries
    For non-EGUs, the EPA elected to screen for industries and 
emissions-unit types appropriate for analysis of cost-effective 
NOX reductions. While power plants have consistently been 
understood to have high levels of controllable NOX emissions 
and have been included in each good neighbor rulemaking, non-EGUs have 
not been consistently addressed. See 88 FR 36720. Certain non-EGU 
industries and emissions units/sources were included in the 1998 
NOX SIP Call, but not in subsequent rules, although the EPA 
had acknowledged that such sources may necessitate regulation to 
prohibit significant contribution and had in the past analyzed such 
sources on a ``parallel track'' to its EGU analysis at Step 3. See 88 
FR 36719. For the 2015 ozone NAAQS, the EPA concluded that it could not 
determine it could eliminate the entirety of the covered states' 
``significant contributions'' to downwind nonattainment by addressing 
power plants alone. 88 FR 36680-82. To that end, the EPA was required 
to look beyond the power sector, and when it did so, the EPA determined 
that certain large industrial sources have substantial amounts of 
ozone-precursor emissions that could be cost-effectively controlled and 
therefore, consistent with its longstanding methodology, should be 
obligated to reduce those emissions, so long as such measures would not 
result in ``overcontrol.'' Id. at 36660-61. Because the potential 
number of industries and source types is large, the EPA used a 
screening methodology to assist in narrowing the scope of industries to 
be potentially regulated to those with potential cost-effective 
NOX reductions.
    To screen for industries and emissions-unit types to further assess 
for cost-effective NOX emissions reductions, the EPA 
prepared a ``Screening Assessment.'' \51\ In the Screening Assessment, 
the EPA used emissions and control technology information to screen for 
industries and emissions unit types where emissions reductions were 
more likely to be cost-effective and to screen out industries where 
emissions reductions were less likely to be cost-effective. As part of 
this analysis, the EPA used air quality criteria to identify how 
emissions reductions from industries and emissions units would likely 
benefit downwind areas. See Screening Assessment at 1-3. This analysis 
used modeled nonattainment and maintenance receptors in 2023 and an 
inventory of sources in those upwind states that were identified using 
the air quality modeling that was available at the time the EPA was 
developing the assessment.\52\ See Screening Assessment, appendix A 
(table A-3). This modeling had identified 27 states as upwind 
contributors to at least one downwind receptor. In conducting its 
screening analysis, the EPA took these states to be broadly 
representative and appropriate for the purpose of screening non-EGU 
NOX sources by industry across a large set of upwind states, 
as identified by the then-available modeling.\53\
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    \51\ Screening Assessment of Potential Emissions Reductions, Air 
Quality Impacts, and Costs from Non-EGU Emissions Units for 2026, 
available in the docket at https://www.regulations.gov/document/EPA-HQ-OAR-2021-0668-0150.
    \52\ We developed the Screening Assessment using inputs from the 
air quality modeling for the Revised CSAPR Update for 2023 (2016v1), 
as well as the projected 2023 annual emissions inventory from the 
2016v2 emissions platform that was used for the air quality modeling 
for the proposed Good Neighbor Plan. Screening Assessment at 1-2.
    \53\ The differences in states identified in the 2016v1 modeling 
compared to the states the EPA identified as linked for the 2023 
analytic year using 2016v3 modeling and the violating-monitor 
receptor identification methodology are as follows: Delaware and 
Wyoming were linked in 2016v1 and Arizona, Kansas, and New Mexico 
were not. The linkages used in the Screening Assessment (for 2023) 
also reflected a slightly different set of states than the EPA 
expected, at the time of proposal, to be linked in 2026. Compare 
Screening Assessment at 2 with 87 FR 20036, 20041 (proposing to 
apply non-EGU measures in 23 states, not including Alabama, 
Delaware, Iowa, or Tennessee).
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    The EPA concluded in finalizing the Good Neighbor Plan that this 
portion of the non-EGU analysis did not need to be redone on the basis 
of changes in the scope of coverage of the rule. See Good

[[Page 99122]]

Neighbor Plan RTC at 104 (``The purpose [of the Screening Assessment] 
is not a precise replication of exactly which sources contributed 
exactly how much to any particular receptor during a particular high-
ozone event. The purpose is to identify those industries with 
relatively large emissions sufficient to have interstate effects on 
ozone levels, and to analyze emissions units within those industries 
further for cost-effective emissions reduction opportunities.''). Thus, 
the EPA was clear in the record of the Good Neighbor Plan that the 
Screening Assessment served an important but limited purpose: to screen 
for industries and emissions-unit types where further analysis was 
likely to identify more impactful and less costly emissions reduction 
opportunities. See also 88 FR 36740; Good Neighbor Plan RTC at 90-92.
    Consistent with the statutory language of the good neighbor 
provision, the EPA could have chosen to forgo this analysis, which 
assisted the Agency in narrowing the set of non-EGU industries and 
emissions source types it considered for inclusion in the Good Neighbor 
Plan, and include more stationary industrial sources of NOX. 
See CAA section 110(a)(2)(D) (authorizing regulation of ``any source or 
other type of emissions activity'' for significant contribution); see 
also 88 FR 36680-81.\54\ However the EPA might have proceeded, in the 
rule the Agency was appropriately informed by a longstanding 
understanding of regional-scale ozone transport, which is that the 
control of any large sources of NOX emissions in linked 
upwind states will generally beneficially affect downwind ozone levels. 
88 FR 36719. While states are afforded discretion under the Act to 
select the control measures they would prefer to use to meet the Act's 
requirements, such discretion devolves to the EPA when it steps into 
the shoes of a state under CAA section 110(c). Id. at 36675 (collecting 
case law). Within the exercise of that discretion, the EPA's method of 
proceeding made sense. The EPA's approach provided a technically 
rigorous method for narrowing the industries in a manner that treated 
each industry similarly. As the EPA explained in rejecting comments 
that its modeling projections in the Screening Assessment were too 
imprecise, the Assessment was done not for the purpose of 
``project[ing] changes in air quality in an absolute sense,'' but 
rather to ``conduct a comparative analysis among different 
industries,'' where the EPA's modeling techniques ``would apply 
consistently and equally to each industry the EPA evaluated.'' Good 
Neighbor Plan RTC at 105.\55\
---------------------------------------------------------------------------

    \54\ Had the EPA approached the identification of ``significant 
contribution'' from non-EGU emissions sources differently, it still 
would have needed to assess overcontrol and would have excluded 
emissions reduction measures falling outside the range of 
technologies deemed cost-effective.
    \55\ Again, illustrating the EPA's consistent understanding of 
this comparative purpose, the Agency rejected other comments calling 
for the Screening Assessment to be redone on the basis of updated 
information concerning specific non-EGU facilities, which various 
commenters attempted to use to argue the EPA's data were out-of-
date. ``Even if some amount of the emissions identified as 
potentially controllable in the Screening Assessment are already 
being achieved, or such potentially controllable emissions cannot be 
feasibly controlled and are not being required in this final rule, 
that does not undermine the Agency's conclusions in the Screening 
Assessment regarding the potential impact of a given industry.'' 
Good Neighbor Plan RTC at 120 (emphasis added).
---------------------------------------------------------------------------

    This approach of identifying uniform emissions control 
opportunities at the industry-level rather than based on a state-by-
state or unit-by-unit impact analysis accords with the way the EPA has 
analyzed emissions control opportunities from both EGUs and non-EGUs 
throughout the history of implementation of the good neighbor 
provision. See id. at 92 (quoting 63 FR 57399 (uniformity at industry 
level ``assure[s] equity among the various source categories and the 
industries they represent'')); 88 FR 36683 (explaining that the EPA's 
analysis of non-EGUs sources ``parallels the analysis previously 
conducted only for EGUs'' and ``relies on evaluation of uniform levels 
of control stringency across all upwind states''). When commenters 
argued that the EPA had not adequately established that their 
particular facilities were sufficiently impactful to be worth 
regulating, the EPA rejected this mode of analysis:

    [I]t was entirely reasonable, and consistent with prior 
transport rulemakings to focus the analysis at the industry-level 
rather than attempt to identify air quality impact thresholds at the 
unit- or source-specific level. To build on the response above, it 
is important to keep in mind that regional interstate ozone 
transport is a ``collective contribution'' problem, in which the 
ozone-precursor emissions of many sources combine to create ozone 
nonattainment and maintenance problems at potentially great 
distances from individual source emissions points. Attribution of 
responsibility for this problem is complicated by varying 
meteorological conditions from year to year and even from day to 
day. The EPA's Step 1 and Step 2 analysis within the 4-step 
interstate transport framework is designed to robustly identify 
where ozone problems are located and which states' anthropogenic 
emissions contribute to those problems. At Step 3, the analysis 
shifts to an evaluation of which emissions reductions from those 
contributing states would be most cost-effective to achieve to 
eliminate that portion of the states' emissions that are deemed 
``significant'' and thus must be eliminated. Focusing on entire 
industries (as the EPA has done in prior rules with its focus on 
EGUs (e.g., CAIR and CSAPR)) and other industry categories in 
addition to EGUs (as we did in the NOX SIP Call) presents 
an efficient and equitable methodology for identifying where the 
most cost-effective emissions reductions can be identified at the 
regional scale.

    Good Neighbor Plan RTC at 98 (citing 63 FR 57386); see also 88 FR 
36685 (similar reasoning supports including new sources of the same 
type as existing sources in good neighbor implementation plans); id. at 
36746-47 (explaining that uniform control by unit type avoids risk of 
production and emissions shifting). In short, when the EPA must devise 
a federal solution to interstate ozone transport for one or more 
states, its objective is to implement measures that are comprehensive, 
durable, and robust, not to engage in a never-ending game of whack-a-
mole at each emissions point.
    The Screening Assessment was one step along the way of focusing the 
Agency's limited resources and narrowing the scope of the regulation of 
NOX emissions ``sources'' and ``activities''; it was not 
intended to dictate final determinations regarding ``significant 
contribution.'' See, e.g., Good Neighbor Plan RTC at 97-99, 101. The 
EPA concluded when finalizing the Good Neighbor Plan that its initial 
Screening Assessment--although based on a slightly different group of 
states than at final (and the use of other data regarding baseline 
emissions levels and air quality conditions that was subject to 
change)--had served its purpose in helping to identify a reasonable 
starting point for further analysis of non-EGU emissions-control 
opportunities and did not need to be redone. See 88 FR 36685, 36719.
    The Screening Assessment served that purpose for each state where 
it had a responsibility to regulate non-EGU emissions, and the Good 
Neighbor Plan's ultimate identification of non-EGU emissions control 
strategies to eliminate ``significant contribution'' is likewise sound 
for any state or grouping of states that may necessitate such federal 
regulation. Nonetheless, as is always the case with regard to meeting 
the CAA's requirements, states remain free to address a different set 
of sources than the EPA identified in the Good Neighbor Plan if they 
prefer to regulate through a SIP in a manner different than the EPA 
proceeded in the FIP. Id. at 36842.

[[Page 99123]]

``Weighted'' Averaging of Costs
    In the EPA's final analysis of non-EGU representative costs in the 
Good Neighbor Plan, for two industries (Pipeline Transportation of 
Natural Gas and Solid Waste Combustors and Incinerators) and a specific 
emissions unit type (boilers), the Agency identified a weighted average 
of costs to address multiple control technologies identified in the 
Step 3 analysis, rather than a single control technology. 88 FR 36739-
40 (table V.C.2-3). For those industries and for boilers, the analysis 
weighted the average cost according to the control technologies that 
certain sources, anticipated to be subject to the Good Neighbor Plan 
across the 20 states with non-EGU requirements, might select as their 
method of compliance. Representative costs for these sources were 
calculated by weighting the average costs derived from national data 
sources by estimated emissions reductions for the applicable control 
technologies. Non-EGU Memorandum at 5-7. For these industries and for 
boilers, looking at different groupings of states could result in a 
different ``representative'' cost (as displayed in the Non-EGU 
Memorandum at 10 (table 6)).
    However, any differences in the identified ``representative'' costs 
for these sources would not affect the outcome of the analysis. For 
each of these types of sources, the record shows that the costs 
associated with each of the different control technologies falls within 
the range of costs that the EPA had concluded were reasonable to 
impose. See 88 FR 36746-47. In other words, even if a different group 
of states produces a higher representative cost when weighted by those 
states' population of sources, the results still fall within the upper 
bound of the cost-per-ton that the EPA found appropriate. The EPA's 
conclusion--that the representative cost was reasonable--would be the 
same.
    For example, for RICE, the following table shows the data sources 
and cost-per-ton estimates the EPA adapted from the CMDB to inform its 
determination of representative cost for these sources. These were the 
figures, adjusted to 2016 dollars, that informed the EPA's average cost 
derived from national data sources used in the weighting to generate a 
representative cost figure of $4,981/ton for RICE.

       Table I--Data Sources and Cost Estimates for RICE Controls
------------------------------------------------------------------------
 Control technology/engine type   Original reference      $/Ton value
------------------------------------------------------------------------
SCR, 4 Stroke Natural Gas         2003, cost          $2,900 (2001
 Engines, Lean Burn 17% (of        information from    dollars).
 engines in analysis population).  CARB 2001 report.
Non-Selective Catalytic           2009/2000 (from     4,538 (2013
 Reduction or Layered              2009 ERLE study     dollars).
 Combustion, for SCCs where the    and 2000 Pechan
 firing technology is not          Phase II NOX SIP
 specified as to Rich Burn or      call report).
 Lean Burn 36%.
Layered Combustion, 2 Stroke      2009 (ERLE study).  4,900 (2010
 Natural Gas, Lean Burn 44%.                           dollars).
Non-Selective Catalytic           2000 (Pechan,       422 (1999
 Reduction, 4 Cycle Natural Gas,   Phase II NOX SIP    dollars).
 Rich Burn 3%.                     call report).
------------------------------------------------------------------------

    Likewise, for MWCs in the Solid Waste Combustors and Incinerators 
industry, the EPA provided the cost assumptions used for the different 
control types in appendix B of the Non-EGU Memorandum.
    For boilers, the EPA explained that its cost estimates were derived 
from the CMDB, and the EPA identified a number of assumptions used in 
developing representative cost figures, which the EPA was clear may not 
be reflective of all sources' circumstances. Non-EGU Memorandum at 7. 
Noting that boilers have the highest representative costs among the 
non-EGU source types, the EPA explained in the Good Neighbor Plan that 
for individual sources, costs on a per-ton basis could well be higher 
than the estimated $14,595/ton representative cost, but still be 
commensurate with the range of costs that informed the identification 
of the most stringent control strategy selected in the Good Neighbor 
Plan for EGUs (for which costs at the 90th percentile ran as high as 
$20,900/ton). 88 FR 36746.
    The EPA also emphasized that cost-per-ton figures are only one 
factor in the Step 3 multi-factor analysis, can vary widely depending 
on the assumptions used, and the conclusions in the Good Neighbor Plan 
regarding appropriate stringency levels were informed by a broader 
review of how widely adopted and proven various control strategies had 
become. Id. at 36746-47. Because of this, the determinations in the 
Good Neighbor Plan regarding the appropriate level of emissions control 
that could be expected of a particular type of source considered not 
just cost-per-ton estimates, but analysis of which technologies were 
already in wide use or on which existing standards had been based. Good 
Neighbor Plan RTC at 62-63. Still, recognizing that individual sources 
may face circumstances of extreme economic hardship or infeasibility, 
the EPA also provided a mechanism for sources to obtain alternative 
emissions limits, among other mechanisms for flexibility in the Good 
Neighbor Plan, to address outlier cases. See 40 CFR 52.40(e). These 
provisions are adequate to cover any potential gap in the Good Neighbor 
Plan's estimate of representative costs.
    Accordingly, recalculating the weighted average representative cost 
for these particular non-EGU sources for any particular state or state 
grouping would not produce a representative cost falling outside the 
acceptable range. Thus, any change in the weighted average used to 
derive ``representative'' costs for these industries and emissions unit 
types resulting from looking at some subset of states would not 
materially affect the analysis.
3. Step 4
    At Step 4, the EPA establishes regulatory requirements to achieve 
the ``prohibition'' of significant contribution identified at Step 3. 
CAA section 110(a)(2)(D)(i). Under the Good Neighbor Plan, 
implementation of these requirements occurs through compliance 
activities at the source level, for both EGUs and for non-EGUs. 
Contrary to commenters' allegations, and as explained in more detail 
here, in section III.B.3., the trading program for EGUs, which is a 
compliance flexibility, does not depend on an interstate trading region 
for viability. Because all of the obligations of the Good Neighbor Plan 
can be met by the sources in each state regardless of the application 
of the Good Neighbor Plan in any other state, the implementation 
framework at Step 4 is severable on a state-by-state basis.
    This can be seen in the structure of the regulations themselves. 
The Good Neighbor Plan determines on a state-by-state basis which of 
the EGU and the non-EGU emissions-control programs (or both) should be 
applied through

[[Page 99124]]

state-specific FIPs. See 40 CFR 52.38(b)(2) (as amended by 88 FR 36862-
63) (identifying states subject to the Good Neighbor Plan's ``Group 3'' 
EGU emissions trading program promulgated at 40 CFR part 97, subpart 
GGGGG); 40 CFR 52.40(c)(2) (as promulgated at 88 FR 36869) (identifying 
states subject to non-EGU emissions control requirements promulgated at 
id. 52.41-46). The regulations at 40 CFR part 97, subpart GGGGG and 40 
CFR 52.41-46 are uniform in nature. But states are ``enrolled'' via 
FIPs into these requirements based on state-specific findings regarding 
the level of their contribution to other states' ozone problems and how 
long that contribution is projected to continue into the future.\56\
---------------------------------------------------------------------------

    \56\ This is identical in structure to how the EPA has 
promulgated federal good neighbor requirements through multiple 
prior rulemakings. See 40 CFR 52.38-39 (identifying the enrollment 
of states into emissions trading programs for ozone season 
NOX, annual NOX, and annual sulfur dioxide 
promulgated as subparts to 40 CFR part 97, as necessary to address 
good neighbor obligations for other ozone and particulate matter 
NAAQS).
---------------------------------------------------------------------------

    It is through the application of those uniform programs, as 
appropriate, in each state, via FIPs, that the Good Neighbor Plan 
eliminates each covered state's significant contribution, as required 
by CAA section 110(a)(2)(D)(i)(I). The state-specific coverage of the 
Good Neighbor Plan (for the 23 states for which originally 
promulgated), by regulatory program, is as follows:
     EGUs in all covered states except California (22 States 
total) are required to participate in the Group 3 EGU emissions trading 
program at the level of stringency associated with near term emissions-
control strategies that the EPA found can be implemented in 2023 and 
2024.
     EGUs in Alabama, Minnesota, and Wisconsin are only subject 
to this ``near-term'' stringency level within the Group 3 Trading 
Program, and no more, because the EPA found these states are no longer 
linked to downwind ozone problems in the 2026 analytic year.
     EGUs in 19 States (excluding the three states listed in 
the preceding bullet) that are covered by the Group 3 trading program, 
are subject to the enhanced stringency in the budgets that takes effect 
over 2026 and 2027 because these states are linked through the 2026 
analytic year.
     The EPA found California has no cost-effective fossil-fuel 
fired EGU emissions reductions available at the stringency levels 
determined in the Good Neighbor Plan and so is not subject to the Group 
3 Trading Program at all.
     Non-EGUs in 20 states are subject to the uniform emissions 
control regulations. Because the EPA found these requirements may take 
up to three years to be implemented (i.e., until 2026), this number 
excludes Alabama, Minnesota, and Wisconsin, for the same reason as 
above: these states are not ``linked'' in 2026.

                        Table II--Coverage of the Good Neighbor Plan Regulatory Programs
----------------------------------------------------------------------------------------------------------------
                                                             EGU program--      EGU program--
                          State                                near term          long term          Non-EGU
                                                               stringency         stringency
----------------------------------------------------------------------------------------------------------------
Alabama..................................................                 X   .................  ...............
Arkansas.................................................                 X                  X                X
California...............................................  .................  .................               X
Illinois.................................................                 X                  X                X
Indiana..................................................                 X                  X                X
Kentucky.................................................                 X                  X                X
Louisiana................................................                 X                  X                X
Maryland.................................................                 X                  X                X
Michigan.................................................                 X                  X                X
Minnesota................................................                 X   .................  ...............
Mississippi..............................................                 X                  X                X
Missouri.................................................                 X                  X                X
Nevada...................................................                 X                  X                X
New Jersey...............................................                 X                  X                X
New York.................................................                 X                  X                X
Ohio.....................................................                 X                  X                X
Oklahoma.................................................                 X                  X                X
Pennsylvania.............................................                 X                  X                X
Texas....................................................                 X                  X                X
Utah.....................................................                 X                  X                X
Virginia.................................................                 X                  X                X
West Virginia............................................                 X                  X                X
Wisconsin................................................                 X   .................  ...............
----------------------------------------------------------------------------------------------------------------

    These state groupings illustrate how the application of each set of 
regulatory requirements promulgated in the Good Neighbor Plan depends 
on the circumstances of each state, as determined through the 
analytical application of the 4-step interstate transport framework on 
a nationwide basis. No particular requirement is applicable in all 23 
states, and the workability of the Good Neighbor Plan is not premised 
on an assumption that it must be applicable in specifically 23 states 
or any particular number of states.
    As a practical matter, compliance is achievable through the at-the-
source control technologies on which the EPA's determination of 
``significant contribution'' at Step 3 rested (or their equivalents, 
because the Good Neighbor Plan does not mandate the use of particular 
control technologies). For non-EGUs, all requirements are established 
at the source-specific level. See 88 FR 36675. The same is true of 
EGUs: the stringency of the Good Neighbor Plan is premised on at-the-
source, conventional control technologies. See 88 FR 36737-39 (tables 
identifying technology types). The EPA also designed a market-based, 
interstate emissions trading program to allow EGU sources to achieve 
their

[[Page 99125]]

required emissions reductions as efficiently and cost-effectively as 
possible, but that trading program is merely a more flexible means of 
implementing the source-specific requirements that otherwise apply 
under the Good Neighbor Plan. Indeed, the enhancements the EPA 
established for the Good Neighbor Plan's trading program (as compared 
to prior good neighbor trading programs) were meant to ensure the 
flexibility of the trading program did not undermine the benefits of 
defining source-specific emissions controls in the first place, which 
helps assure that EGU sources in each state have eliminated their own 
significant contribution and thus provided improvements in air quality 
to the downwind receptors to which their home states are linked. See 88 
FR at 36657, 36684, 36752.\57\
---------------------------------------------------------------------------

    \57\ Even before the Good Neighbor Plan, following North 
Carolina, the EPA took measures to ensure that interstate trading 
does not undermine the obligation to eliminate each state's 
significant contribution. See North Carolina, 531 F.3d at 921, 
modified on reh'g, 550 F.3d 1176. See, e.g., Cross-State Air 
Pollution Rule (CSAPR), 76 FR 48208, 48268-71 (August 8, 2011); 88 
FR 36752-53.
---------------------------------------------------------------------------

    Commenters may be concerned that without the participation of all 
states originally included in the Good Neighbor Plan, market liquidity 
will be affected, allowance prices will increase, and/or there will not 
be sufficient allowances available for compliance. But the record of 
the Good Neighbor Plan shows that these concerns are unjustified.
    While interstate trading--especially among sources in a large group 
of states--would generally increase the size of the allowance trading 
market and thus may increase market liquidity in ways that can improve 
market efficiency, the use of a trading program does not render 
implementation of a good neighbor rule in a smaller group of states, or 
even a single state, unreasonable. That is because, in the first 
instance, the good neighbor provision regulates EGU sources, not 
states. Even within a single state, there would be multiple 
participating sources to populate and benefit from an emissions trading 
program. Moreover, the history of the EPA's good neighbor rulemakings 
shows that these trading programs have continued to provide valuable, 
effective compliance flexibility even where they cover a smaller group 
of states.\58\ Indeed, each state's budget is set in the Good Neighbor 
Plan at levels that provide sufficient allowances for each state, 
assuming EGUs achieve a level of reduction equivalent to what can be 
achieved by the at-the-source technologies identified to eliminate 
significant contribution. 88 FR 36680. And as explained further in 
section III.C., all of the EPA's good neighbor rules, including the 
Good Neighbor Plan, are designed with the understanding that states 
have the option to develop SIPs that remove their sources from a 
trading program, which necessarily changes the number of states subject 
to the FIP, and that the number of states covered by FIPs may otherwise 
change.
---------------------------------------------------------------------------

    \58\ The size of the trading region is not the only determinant 
of liquidity; the relative magnitude of demand for allowances 
compared to supply is an important factor. For example, inclusion in 
the program of states with sources that are not well-controlled for 
NOX would tend to put upward pressure on allowance prices 
(and potentially reduce liquidity). If states with such sources are 
removed from that program (e.g., due to stays), this may put 
downward pressure on allowance prices (and potentially increase 
liquidity).
---------------------------------------------------------------------------

    As a consequence, the size of the trading regions used to implement 
the good neighbor provision has both varied between rules and regularly 
changed within trading programs over time. This has never posed a 
challenge to compliance feasibility, nor does the EPA have any evidence 
of allowance shortages occurring in any of these programs. See 88 FR 
36687 (noting opposite problem of banked-allowance surpluses). For 
example:
     Currently, Georgia is the only state whose EGUs remain in 
the original CSAPR ``Group 1'' ozone season NOX trading 
program, which originally included 25 states.
     In 2021, the Revised CSAPR Update created a 12-state 
trading region to complete the remedy to significant contribution for 
the 2008 ozone NAAQS (i.e., the original ``Group 3'' program).
     With the Revised CSAPR Update in place, the 2016 CSAPR 
Update ``Group 2'' program trading region was reduced from 22 states to 
10 states.
See 88 FR 36668-69 (reviewing regulatory history).
    In light of these successful implementation experiences and given 
the at-the-source technologies on which the Good Neighbor Plan's EGU 
budgets are premised, coupled with other flexibilities, even 
individual-state trading programs would not be expected to unduly 
affect market liquidity or make allowances either scarce or 
unaffordable. To the extent the comments may be read as asserting that 
smaller trading regions would undermine grid reliability, the EPA 
disagrees for the same reasons. These comments did not present any data 
or analysis in support of that contention. The EPA thoroughly explained 
how the Good Neighbor Plan's regulatory program for EGUs is designed to 
avoid interfering with resource adequacy and grid reliability, see 88 
FR 36771-75.
    In short, under the Good Neighbor Plan, the sources in each 
individual state are fully able to comply without regard to what 
sources in other states are doing--and even where cooperative market-
based mechanisms are available to aid in that compliance, those 
mechanisms remain sound for smaller state groupings or even at the 
individual-state level despite a smaller marketplace. 88 FR 36760-61, 
36817.
    Commenters may also be concerned that the application of the Good 
Neighbor Plan in some upwind states if not operative in others may 
create a dynamic of competitive disadvantage. However, even if this 
were the case (and commenters supplied no evidence that it would be), 
this would not be sufficient justification to suspend the operation of 
the rule in states where it lawfully could be in effect. As an initial 
matter, because the good neighbor provision imposes legal obligations 
on each state individually, it does not allow individual states to 
defer compliance with their legal obligations based on circumstances in 
other upwind states. That is consistent with the provision's purpose, 
which is intended to ensure equity and fairness among states by 
prohibiting harmful upwind state emissions that impose regulatory, 
economic, and health burdens on downwind states. See 88 FR 36658, 
36687, 36741; see also 64 FR 28250, 28258-62 (May 25, 1999) (reviewing 
legislative history of the good neighbor provision and related 
statutory provisions, which reflects an intent to ``equalize the 
positions of the States with respect to interstate pollution by making 
a source at least as responsible for polluting another State as it 
would be for polluting its own State''). The inaction of some upwind 
states is not an appropriate justification for further relaxing all 
upwind states' obligations, when it is downwind states who will suffer. 
That burden will fall not just on downwind communities, but on 
industries in downwind states with ozone nonattainment problems, who 
will likely bear greater competitive disadvantages vis-[agrave]-vis 
their competitors in upwind states whose pollution is contributing to 
the enhanced regulatory burdens they already face under the Act. See 
EME Homer City, 489 U.S. at 519; Maryland, 958 F.3d at 1200-01, 1203-
04. This consideration is particularly acute given the August 3, 2024, 
attainment date for compliance with the 2015 ozone NAAQS for Moderate 
nonattainment

[[Page 99126]]

areas located throughout the country, and the Good Neighbor Plan's 
objective of further assisting downwind states in time for the 2027 
Serious area attainment date. 88 FR 36690, 36695.\59\ In any case, in 
light of the unique ability of the power sector to shift generation 
among sources in supplying electricity to the power grid, the EPA 
conducted an analysis in the Good Neighbor Plan of the potential for 
power generators to shift production and emissions from EGUs in states 
covered by the Good Neighbor Plan to states not covered by the Good 
Neighbor Plan and found that the risk, while not zero, was relatively 
small. Good Neighbor Plan RTC at 604-05. Further, that risk is 
attendant and unavoidable at the boundaries of any multistate or 
regional program, regardless of its size and regardless of whether that 
program uses emissions trading or is based on source-specific emissions 
limitations, and so not particular to the circumstances here.
---------------------------------------------------------------------------

    \59\ This is also consistent with the EPA's determination that 
it is necessary and appropriate to extend the Good Neighbor Plan's 
requirements to CAA section 301(d) FIP areas located within the 
borders of states whose sources were found to be significantly 
contributing. The EPA explained in the Good Neighbor Plan that not 
doing so would pose a risk that such areas would then be targeted 
for the siting of polluting facilities to avoid the Good Neighbor 
Plan's requirements, frustrating the purpose of the Good Neighbor 
Plan and the statute. 88 FR 36691. This concern exists at the 
``intra-State'' level. Second, while it is generally appropriate 
that equity and consistency should be maintained across all 
similarly situated jurisdictions, that does not extend to excusing 
one upwind state of its statutory obligations simply on the basis 
that the obligations of another upwind state are still pending or 
unresolved.
---------------------------------------------------------------------------

    In short, the implementation of the regulatory requirements of the 
Good Neighbor Plan, at Step 4, is achievable by the sources in each 
state and is therefore severable by state.

C. Other Features of the Statute and Good Neighbor Plan Supporting 
Severability

    In light of the statutory text and context, the Good Neighbor Plan, 
like prior interstate transport rules, is designed to be modular--i.e., 
to apply on a state-by-state basis and to whichever states are 
presently subject to the EPA's responsibility to issue a FIP. That the 
Good Neighbor Plan functions to appropriately define and prohibit 
significant contribution on a state-by-state basis, regardless of the 
number of states covered, can be seen in a number of other features and 
elements of the Good Neighbor Plan and by reviewing the history of 
implementation of the good neighbor provision for ozone across prior 
rulemakings and case law.
    First, as directed by the statute and relevant precedent, the EPA 
must define significant contribution in such a way that sources in 
``each State'' are held responsible for the elimination of their own 
significant contribution. CAA section 110(a)(2)(D); see 88 FR 36687-88, 
36762. The D.C. Circuit's review of a good neighbor rule invalidated in 
North Carolina v. EPA, and the EPA's subsequent action to address a 
specific holding in North Carolina concerning regional- versus state-
level compliance, helpfully illustrates why, and how, the EPA's current 
approach avoids any inter-dependency among states' obligations.
    In an earlier good neighbor rule, the Clean Air Interstate Rule 
(CAIR), the EPA quantified emissions reduction requirements at the 
regional level based on a regional analysis, and then apportioned the 
responsibility for reducing each pollutant among the contributing 
states based on either the total allowance allocations for the states' 
EGUs under the Acid Rain Program (ARP) (in the case of required sulfur 
dioxide reductions) or the total historical heat input amounts for the 
states' EGUs, adjusted for the types of fuels used (in the case of 
required NOX reductions). See 70 FR 25162, 25176 (May 12, 
2005); see also 88 FR 36668.
    In North Carolina, the D.C. Circuit found that CAIR had unlawfully 
defined ``significant contribution'' at a regional level rather than on 
a state-specific basis. 531 F.3d at 906-08, 919-21. After this ruling, 
the EPA took care to ensure the successor rule to CAIR, CSAPR, defined 
and prohibited significant contribution for each State. See 76 FR 
48271. It did this by evaluating and selecting appropriate uniform 
levels of control stringency for the set of upwind states linked to 
identified downwind receptors and then quantifying and implementing the 
required emissions reductions resulting from the selected control 
stringencies independently for each upwind state. See id. In other 
words, at this point in the analysis, the EPA removed from CSAPR (and 
all subsequent good neighbor rules) the interdependency of a regional 
solution that North Carolina had found in CAIR, as this interdependency 
resulted in a failure to identify each state's own obligations. In 
CSAPR, each receptor and the states linked to that receptor were 
evaluated independently, which led the EPA to establish different 
regional groupings of states with different levels of emissions control 
stringency (e.g., in that case, the Group 1 and Group 2 SO2 
control programs). See 76 FR 48252. The courts reviewing CSAPR in EME 
Homer City further required that the EPA evaluate each state to ensure 
an otherwise permissible uniform emissions control stringency does not 
overcontrol the emissions of any particular upwind state. 572 U.S. 489, 
521. Taken together, these refinements from CAIR opened up the 
potential that individual states could be assigned different cost/
stringency levels based on whether their receptors (or their linkages 
to those receptors) would fully resolve at different cost/stringency 
levels or would fully resolve before additional emissions control 
measures could be implemented. This state-specific treatment can be 
seen in the Good Neighbor Plan's recognition that control strategies 
only available by the 2026 analytic year are not required in Alabama, 
Minnesota, or Wisconsin, given that their specific linkages were 
projected to resolve by that year. For the remaining 20 states in the 
Good Neighbor Plan, no overcontrol was observed in the 2026 analytic 
year and so no adjustments in the program's stringency were needed. 88 
FR 36749.\60\
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    \60\ Likewise, in the Good Neighbor Plan, we observed a receptor 
projected to resolve using an emissions control stringency level not 
requiring non-EGU emissions controls. The Larimer County, Colorado, 
receptor's maximum design value drops below 71 ppb when the highest 
EGU stringency is applied (but before non-EGU controls are applied). 
Thus, if any state were linked only to this receptor, the EGU-only 
level of stringency would have been the stopping point. However, all 
states linked to this receptor were also linked to other receptors 
for which application of both the EGU and non-EGU emissions control 
stringency did not produce overcontrol. See Ozone Policy TSD, 
appendix H, at 115.
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    At Step 4, CSAPR maintained an interstate EGU trading program, but 
the EPA took steps to ensure that this too complied with North Carolina 
and the statutory obligation to define and prohibit each state's 
significant contribution. To ensure that each state would eliminate its 
own significant contribution within the flexible compliance mechanism 
of an interstate trading program for EGUs, the EPA imposed a constraint 
on interstate trading within the trading program, through ``assurance 
provisions'' that imposed a 3-to-1 allowance-surrender ratio for 
emissions in excess of a certain percentage of each state's budget. As 
explained in the Good Neighbor Plan, ``The establishment [in CSAPR] of 
assurance levels with associated extra allowance surrender requirements 
was intended to respond to the D.C. Circuit's holding in North Carolina 
requiring the EPA to ensure within the context of an interstate trading 
program that sources in each State are required to address their good 
neighbor obligations within the State and may not simply shift those 
obligations to other States by failing to reduce their own emissions 
and instead surrendering surplus allowances

[[Page 99127]]

purchased from sources in other States.'' 88 FR 36786.
    The features of CSAPR included to address the North Carolina 
decision have been retained in the Good Neighbor Plan and enhanced to 
further ensure that each state remains responsible for elimination of 
its own significant contribution.\61\ See id. at 36687-88, 36762 
(citing North Carolina, at 906-08, 921; see also Good Neighbor Plan RTC 
at 42 (``[T]he D.C. Circuit has held that the EPA may not implement an 
emissions reduction program under the good neighbor provision that 
fails to ensure that each State has eliminated its own significant 
contribution. North Carolina, 531 F.3d at 921.''); id. at 48 (same).
---------------------------------------------------------------------------

    \61\ For example, by strengthening incentives for individual 
units to optimize operation of their emissions controls, the 
backstop daily NOX emissions rate provisions and the 
secondary emissions limitation provisions also both increase 
assurance that each State's significant contribution will be 
eliminated within that State. See, e.g., 88 FR 36767-68 and 36799-
800.
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    Second, also consistent with the state-by-state structure of CAA 
section 110, as recognized in North Carolina, the EPA made specific 
findings regarding its authority to promulgate a FIP for each 
individual state covered by the Good Neighbor Plan. 88 FR 36689 n.109. 
Notably, the EPA had originally proposed that the Good Neighbor Plan 
rulemaking would promulgate FIPs for 26 states, not 23. See 87 FR 
20036, 20038 (April 6, 2022). The modeling that informed the final rule 
indicated that Delaware and Wyoming were not linked to any out-of-state 
receptors, and that Tennessee would only be linked to a new class of 
``violating monitor'' receptors. Thus, these three states were excluded 
from the final Good Neighbor Plan. Including fewer states in the final 
rule than were included in the proposal did not alter the approach to 
defining each remaining states' significant contribution, nor cause any 
change in each covered state's obligations or the requirements imposed 
on emitting sources in those covered states. The final modeling also 
indicated that several additional states were potentially linked and 
may ``contribute significantly,'' and thus the EPA acknowledged in the 
final Good Neighbor Plan that these states' obligations still needed to 
be addressed. See 88 FR 36658 (identifying Arizona, Iowa, Kansas, New 
Mexico, Tennessee, and Wyoming as needing to be further addressed in a 
subsequent action).\62\ Critically, under the EPA's analytical approach 
to the Good Neighbor Plan, the absence of these states from the final 
Good Neighbor Plan did not, in the Agency's view at the time, pose any 
challenge to finalizing and moving forward with implementing the Good 
Neighbor Plan for the states included.
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    \62\ See supra note 19.
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    Third, the Good Neighbor Plan, consistent with the statute and like 
all prior good neighbor federal rulemakings, recognizes that states may 
choose to replace their FIP with a SIP. See, e.g., 88 FR 36838-42 
(discussing in detail various options states have for developing SIPs). 
When the EPA approves a replacement SIP, that state is withdrawn from 
the FIP, thus changing the number of states subject to Good Neighbor 
Plan FIPs. In developing SIPs, states may opt to leave the interstate 
trading program for EGUs in favor of an adequate, alternative approach 
to addressing their good neighbor obligations. Id. at 36841-42. This 
echoes nearly identical discussions included in prior good neighbor 
rules, see, e.g., CSAPR, 76 FR 48328. Both the proposed and final Good 
Neighbor Plan contained an extended discussion of how states could exit 
the Good Neighbor Plan through several options for submitting 
approvable SIPs. 87 FR 20149-51; see also id. at 20040 (``[T]his 
proposal will provide States with as much information as the EPA can 
supply at this time to support their ability to submit SIP revisions to 
achieve the emissions reductions the EPA believes necessary to 
eliminate significant contribution.''). In the final Good Neighbor 
Plan, the EPA explained that it encouraged states to replace their FIP 
with an approvable SIP, specifically identifying that states could 
choose to exit the trading program, regulate different sources, or 
devise adequate alternative methodologies to defining ``significant 
contribution.'' See 88 FR 36839.
    Fourth, the EPA's experience with prior good neighbor rules informs 
its determinations concerning the ability of the Good Neighbor Plan to 
function sensibly regardless of the number of states included. The EPA 
has removed states from coverage of prior good neighbor rules 
(including from interstate trading programs) in the past without any 
loss of program viability. See 88 FR 36669. In addition, at times the 
EPA has been required to remove specific states from a good neighbor 
program as a result of adverse court decisions. For example, CSAPR was 
remanded as to multiple states based on overcontrol concerns in the 
aftermath of the Supreme Court's decision in EME Homer City, but the 
D.C. Circuit expressly declined to vacate CSAPR, even as to those 
states. See EME Homer City Generation, LP v. EPA, 795 F.3d 118, 132 
(D.C. Cir. 2015). Subsequent rulemakings moved several states out of 
the original CSAPR programs, without any issues concerning the 
feasibility or propriety of the remaining states' obligations. See, 
e.g., 81 FR 74504, 74506-07 (October 26, 2016); see also 86 FR 23056-
57. Similarly, in Michigan, 213 F.3d at 695, the D.C. Circuit vacated 
the NOX SIP Call as to Wisconsin, Missouri, and Georgia, but 
left the rule in place and remanded without vacatur as to certain 
issues as to other states.\63\ The modular nature of past good neighbor 
rules has functioned well and ensured that when the scope of a rule 
might change based on issues specific to particular states, the rule 
can continue to function properly for the states that remain covered by 
the rule.
---------------------------------------------------------------------------

    \63\ The D.C. Circuit has in fact emphasized that the important 
public health benefits of the EPA's interstate transport rules, as 
well as the potential disruption to emissions trading markets, 
counsel against vacatur even when some aspect of the rules may be 
found unlawful or necessitate re-analysis. See North Carolina, 550 
F.3d 1176, 1178 (D.C. Cir. 2008); Wisconsin, 938 F.3d at 336-37; EME 
Homer City, 795 F.3d at 132.
---------------------------------------------------------------------------

    Finally, there are no statements in the record of the Good Neighbor 
Plan that suggest the EPA considered the Good Neighbor Plan 
interdependent among states or dependent on exactly 23 states or any 
other minimum number of states' participation.\64\ To the contrary, the 
severability section in the Good Neighbor Plan preamble indicated the 
Agency's expectation that the Good Neighbor Plan could be implemented 
in individual states as necessary. 88 FR 36693. While in one instance, 
the Good Neighbor Plan did refer to the ``interdependent nature of 
interstate

[[Page 99128]]

pollution transport,'' see 88 FR 36860, this was in reference to the 
nature of the pollution problem, not the nature of the EPA's solution. 
While the variable, interstate nature of ozone transport certainly 
presents a ``thorny causation problem,'' EME Homer City, 489 U.S. at 
514, the EPA's solution to that problem when promulgating FIPs, through 
a consistent application of the 4-step interstate transport framework 
to each state, is expressly designed to avoid the creation of 
unworkable interdependencies.
---------------------------------------------------------------------------

    \64\ To the extent any discussions in the Good Neighbor Plan's 
preamble or its technical support documents suggested that some 
particular substantive component of the methodology was dependent on 
a specific 23-state coverage, the Agency clarifies here that such 
statements were inartful or incorrect. For example, the Agency has 
reviewed the methodology underlying the graphs displayed in appendix 
I of the Ozone Policy TSD. We have confirmed that despite headings 
describing the graphs as being for 22 or for 19 states, 
respectively, in fact Figures 1 and 2 were compiled using the ``Step 
3 Configuration'' in AQAT that compiled the reductions of all linked 
states and the home state for each receptor. Figure 3 likewise 
reflected a compilation of data that was not limited to the states 
subject to the original Good Neighbor Plan. The references to 22 and 
19 states (for 2023 and 2026 EGU stringency, respectively) were 
simply intended to indicate the number of states in the Good 
Neighbor Plan for which the data informed obligations being 
finalized in that rule. See 88 FR 36744-45 (explaining that Figures 
1 and 2 reflected the AQAT data used to inform the Step 3 
determinations concerning EGUs, while Figure 3 was intended to 
illustrate why further EGU emissions-reduction strategies not 
included in that analysis appeared to be well beyond a notable 
breakpoint in cost-effectiveness and thus not worth pursuing in the 
context of defining good neighbor obligations for the 2015 ozone 
NAAQS).
---------------------------------------------------------------------------

    By contrast, commenters' apparent view that the analysis underlying 
the Good Neighbor Plan would change depending on its scope of coverage 
at any given moment misapprehends how the Good Neighbor Plan is 
designed and operates. If commenters were correct that the EPA had 
designed a good neighbor rule that was contingent for any particular 
state on whether the rule covered other states, this would seemingly 
introduce an interdependency problem and render the rule invalid under 
North Carolina. It could also require that the EPA revise a good 
neighbor rule every time a state opted to impose a SIP to exit its FIP 
or was moved into a new FIP for a revised NAAQS or to fully address its 
obligations. The practical problems of such an approach reinforce why 
this would be an unreasonable way to define states' obligations. It 
would render good neighbor obligations an ever-shifting target, 
undermining regulatory certainty for sources and states. The Good 
Neighbor Plan is designed to avoid such complications.

D. Whether Judicial Stays Would Justify Re-Analysis of the Good 
Neighbor Plan

    The comments discussed in section II.B. may be interpreted to argue 
that the Good Neighbor Plan must be re-analyzed where a court stays, as 
to a particular state or states, either the rule itself or an 
antecedent action such as the SIP Disapproval that is a predicate to 
the exercise of FIP authority under CAA section 110(c)(1). Courts may 
enter temporary stays of agency actions pending judicial review to 
preserve the status quo. A stay order is not a final judgment and in 
itself does not alter or force a change in the substantive analysis an 
agency has applied in taking the action under review. Thus, stay orders 
would not alter the analysis of good neighbor obligations for the 2015 
ozone NAAQS for any particular state, and the EPA would come to the 
same result as was already reached, because the analytical 
underpinnings and the implementation of the Good Neighbor Plan do not 
depend on the specific number of states that it covers.
    The comments may also be interpreted as an assertion that the Good 
Neighbor Plan would not function or would be unreasonable because stays 
may be put in place, or because a large amount of the emissions 
reductions that the Good Neighbor Plan calls for would become 
unenforceable pending judicial review. However, this does not serve to 
identify what technical and analytical conclusions the Agency reached 
through its notice-and-comment rulemaking were flawed or must be 
changed. The obligations as defined for each state remain promulgated 
even if they are stayed pending judicial review.
    Similarly, the effects of merits holdings in the SIP Disapproval 
litigation or a vacatur of the SIP Disapproval as to a particular state 
would not necessarily require a change in the way the EPA may lawfully 
define that state's good neighbor obligations in a FIP, much less those 
of other states. To be sure, in general a vacatur of a SIP disapproval 
would at a minimum require that the FIP remain stayed as to that state, 
pending action on remand (if that disapproval had been the only basis 
for the exercise of FIP authority). And the EPA will always comply with 
the final judgments of the courts. However, the degree to which a 
change in analysis for a particular state, with respect to the EPA's 
action on its SIP submission, would be required following any merits 
holdings in the various cases challenging the SIP Disapproval would 
depend on the nature of those holdings, as to that state, which is 
speculative at this time. Whether such holdings would in turn require a 
change in the EPA's analysis or outcomes concerning other states' SIP 
submissions is still more speculative, and whether any such changes 
could then separately impact the EPA's approach to defining the 
obligations of the state in question through a FIP, much less the 
obligations of other states via FIPs, is more speculative still.
    Several commenters urge that the EPA must simply accept their view, 
or the view of commenters on the SIP Disapproval, that either or both 
of the rules are legally or procedurally flawed and will not survive 
judicial review. The EPA has addressed the substantive arguments raised 
in such comments elsewhere in the record of the Good Neighbor Plan, or 
it has indicated that it had addressed those issues in the SIP 
Disapproval and those matters are not within scope of the rule. See 
Good Neighbor Plan RTC at 6-8, 149-51, 155; see also section II.B. 
supra (summarizing responses to comments in the original Good Neighbor 
Plan record). Where the Agency has reviewed such comments and is 
satisfied that it is acting lawfully, mere speculation that a reviewing 
court may disagree cannot supply a reasoned basis for the Agency to 
stay, modify, or withdraw its rule.
    Thus, the methodology and regulatory programs of the Good Neighbor 
Plan are reasonably designed and operate to define the obligations of 
each state, in a manner that is severable on a state-by-state basis. 
While the analytical methods, technical analyses, and policy judgments 
that informed the Good Neighbor Plan were developed and conducted 
consistently across the nation, they ultimately produced a 
determination of significant contribution at the state level. The 
implementation of the measures necessary to eliminate significant 
contribution is achievable by the sources within each state, 
irrespective of other states' participation. It would not matter if 
there were one state or 50 states in the Good Neighbor Plan--the 
methodology and the result for any particular state--i.e., the 
definition of ``significant contribution to nonattainment and 
interference with maintenance'' under CAA section 110(a)(2)(D)(i)(I) 
for the 2015 ozone NAAQS--would remain the same.
    The EPA acknowledges that although the substantive circumstances of 
the states remain constant, the circumstances of the rulemaking and 
litigation are likely to remain in flux in the short-to-near term. 
Courts that may grant stays pending judicial review may later affirm 
the SIP Disapproval or may remand the SIP Disapproval as to particular 
states, with or without vacatur. Indeed, both the NOX SIP 
Call and CSAPR were ultimately implemented despite initial stay orders, 
and notwithstanding that some elements of each rule were remanded 
without vacatur. See, e.g., EME Homer City, 795 F.3d at 138; Michigan, 
213 F.3d at 695. Should there be any remand of the SIP Disapproval, the 
EPA will have to act on that state's SIP submission again, in 
accordance with the court's holdings. See Calcutt v. Federal Deposit 
Ins. Corp., 598 U.S. 623, 629 (2023). And, at any point, any state may 
submit a new SIP to the EPA, and the EPA will review that SIP. 
Ultimately, under the statute, every state will need to be covered by 
either an approved SIP or a FIP that meets the requirements of the good 
neighbor provision--with the number subject to each potentially 
changing at any point.
    Finally, the EPA's conclusion that the Good Neighbor Plan is 
severable also reflected the important public health

[[Page 99129]]

and environmental benefits of the rule in eliminating significant 
contribution and to ensure to the greatest extent possible the ability 
of both upwind states and downwind states and other relevant 
stakeholders to be able to rely on the rule in their planning. 88 FR 
36693. Cf. Wisconsin, 938 F.3d at 336-37 (``As a general rule, we do 
not vacate regulations when doing so would risk significant harm to the 
public health or the environment.''); North Carolina v. EPA, 550 F.3d 
1176, 1178 (D.C. Cir. 2008) (noting the need to preserve public health 
benefits).

IV. Statutory and Executive Orders Reviews

    The EPA's determinations under the relevant statutory and Executive 
Order reviews for the Good Neighbor Plan can be found at 88 FR 36856-
60. This document provides further explanation in response to comments 
concerning a particular aspect of the Good Neighbor Plan and does not 
alter or amend any of the requirements of the rule. Additional 
information about the relevant statutes and Executive Orders can be 
found at https://www.epa.gov/laws-regulations/laws-and-executive-orders.

A. Executive Order 12866: Regulatory Planning and Review and Executive 
Order 14094: Modernizing Regulatory Review

    The Office of Management and Budget (OMB) has determined that this 
document is significant for purposes of review under Executive Order 
12866, as amended by Executive Order 14094. Accordingly, the EPA 
submitted this document to the OMB for Executive Order 12866 review. 
Documentation of any changes made in response to the Executive Order 
12866 review is available in the docket.

B. Judicial Review

    Judicial review of the Good Neighbor Plan is in the United States 
Court of Appeals for the District of Columbia Circuit for the reasons 
stated in the final rulemaking document. See 88 FR 36859-60. Petitions 
for review of the Good Neighbor Plan are currently pending in that 
court, and this document completes proceedings on remand of the record 
as ordered by that court. State of Utah et al. v. EPA, No. 23-1157 
(D.C. Cir. September 12, 2024). The D.C. Circuit retains jurisdiction 
over the case.

Michael S. Regan,
Administrator.
[FR Doc. 2024-28739 Filed 12-9-24; 8:45 am]
BILLING CODE 6560-50-P
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