[Federal Register Volume 82, Number 188 (Friday, September 29, 2017)]
[Rules and Regulations]
[Pages 45481-45497]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-20832]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-HQ-OAR-2016-0598; FRL-9968-46-OAR]
RIN 2060-AT16


Interstate Transport of Fine Particulate Matter: Revision of 
Federal Implementation Plan Requirements for Texas

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: The Environmental Protection Agency (EPA) is finalizing 
withdrawal of the federal implementation plan (FIP) provisions that 
require affected electricity generating units (EGUs) in Texas to 
participate in Phase 2 of the Cross-State Air Pollution Rule (CSAPR) 
trading programs for annual emissions of sulfur dioxide 
(SO<INF>2</INF>) and nitrogen oxides (NO<INF>X</INF>). Withdrawal of 
the FIP requirements is intended to address a decision of the U.S. 
Court of Appeals for the District of Columbia Circuit (D.C. Circuit) 
remanding the CSAPR Phase 2 SO<INF>2</INF> budget for Texas to the EPA 
for reconsideration. With this action, the EPA is also determining 
that, following withdrawal of the FIP requirements, sources in Texas do 
not contribute significantly to nonattainment in, or interfere with 
maintenance by, any other state with regard to the 1997 national 
ambient air quality standard (NAAQS) for fine particulate matter 
(PM<INF>2.5</INF>). Accordingly, we are also determining that the EPA 
has no obligation to issue new FIP requirements for Texas sources to 
address transported PM<INF>2.5</INF> pollution under Clean Air Act 
(CAA) section 110(a)(2)(D)(i)(I) with regard to that NAAQS. Finally, 
the EPA is also affirming the continued validity of the Agency's 2012 
determination that participation in CSAPR meets the Regional Haze 
Rule's criteria for an alternative to the application of source-
specific best available retrofit technology (BART). The EPA has 
determined that changes to CSAPR's geographic scope resulting from the 
actions EPA has taken or expects to take in response to the D.C. 
Circuit's remand do not affect the continued validity of participation 
in CSAPR as a BART alternative, because the changes in geographic scope 
would not have adversely affected the results of the air quality 
modeling analysis upon which the EPA based the 2012 determination.

DATES: This final rule is effective on September 29, 2017.

ADDRESSES: The EPA has established a docket for this action under 
Docket ID No. EPA-HQ-OAR-2016-0598. All documents in the docket are 
listed and publicly available at http://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Questions about the withdrawal of 
CSAPR FIP requirements for Texas EGUs should be directed to David 
Lifland, Clean Air Markets Division, Office of Atmospheric Programs, 
U.S. Environmental Protection Agency, MC 6204M, 1200 Pennsylvania 
Avenue NW., Washington, DC 20460; telephone number: (202) 343-9151; 
email address: <a href="/cdn-cgi/l/email-protection#d5b9bcb3b9b4bbb1fbb1b4a3bcb195b0a5b4fbb2baa3"><span class="__cf_email__" data-cfemail="c2aeaba4aea3aca6eca6a3b4aba682a7b2a3eca5adb4">[email protected]</span></a>. Questions about the sensitivity 
analysis regarding CSAPR participation as a BART alternative should be 
directed to Melinda Beaver, Office of Air Quality Planning and 
Standards, U.S. Environmental Protection Agency, 109 T.W. Alexander 
Drive, Mail Code C539-04, Research Triangle Park, NC 27709; telephone 
number: (919) 541-1062; email address: <a href="/cdn-cgi/l/email-protection#9cfef9fdeaf9eeb2f1f9f0f5f2f8fddcf9ecfdb2fbf3ea"><span class="__cf_email__" data-cfemail="bddfd8dccbd8cf93d0d8d1d4d3d9dcfdd8cddc93dad2cb">[email protected]</span></a>.

SUPPLEMENTARY INFORMATION: Regulated Entities. Entities regulated under 
CSAPR are fossil fuel-fired boilers and stationary combustion turbines 
that serve generators producing electricity for sale, including 
combined cycle units and units operating as part of systems that 
cogenerate electricity and other useful energy output. Regulated 
categories and entities include:

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                                                 Examples of potentially
            Category              NAICS * code     regulated industries
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Industry.......................          221112  Fossil fuel-fired
                                                  electric power
                                                  generation.
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* North American Industry Classification System.

    This table is not intended to be exhaustive, but rather provides a 
guide for readers regarding entities likely to be regulated. To 
determine whether your facility is affected by this action, you should 
carefully examine the applicability provisions in 40 CFR 97.404 and 
97.704. If you have questions regarding the applicability of CSAPR to a 
particular entity, consult the person listed in the FOR FURTHER 
INFORMATION CONTACT section above.

Table of Contents

I. Overview
II. Background
    A. History and Summary of CSAPR
    B. CSAPR Participation as a BART Alternative
III. Withdrawal of CSAPR FIP Requirements Related to Texas' 
Transport Obligations With Regard to the 1997 Annual 
PM<INF>2.5</INF> NAAQS
    A. Summary
    B. Adequacy of Rationale for Finding No Remaining Transport 
Obligation

[[Page 45482]]

    C. Responsiveness to the D.C. Circuit's Remand Instructions
    D. Consistency of Responses To Remand Across States
    E. Consistency of Consideration of D.C. Circuit's Holding Across 
States
    F. Potential Use of Texas FIP Budgets To Address a Different 
PM<INF>2.5</INF> NAAQS
IV. Sensitivity Analysis Regarding CSAPR Participation as a BART 
Alternative
    A. Summary
    B. Continued CSAPR Participation by Georgia and South Carolina
    C. Appropriateness of Continued Reliance on Original CSAPR-
Better-than-BART Analysis
    D. Possible Changes in the Geographic Distribution of Emissions
    E. Validity of 2012 Analytic Demonstration Prior to CSAPR 
Changes
V. Description of Amendments to Regulatory Text
VI. Statutory and Executive Order Reviews
    A. Executive Order 12866: Regulatory Planning and Review, and 
Executive Order 13563: Improving Regulation and Regulatory Review
    B. Executive Order 13771: Reducing Regulations and Controlling 
Regulatory Costs
    C. Paperwork Reduction Act
    D. Regulatory Flexibility Act
    E. Unfunded Mandates Reform Act
    F. Executive Order 13132: Federalism
    G. Executive Order 13175: Consultation and Coordination With 
Indian Tribal Governments
    H. Executive Order 13045: Protection of Children from 
Environmental Health and Safety Risks
    I. Executive Order 13211: Actions That Significantly Affect 
Energy Supply, Distribution, or Use
    J. National Technology Transfer Advancement Act
    K. Executive Order 12898: Federal Actions To Address 
Environmental Justice in Minority Populations and Low-Income 
Populations
    L. Congressional Review Act
    M. Judicial Review and Determinations Under CAA Section 
307(b)(1) and (d)

I. Overview

    The EPA promulgated CSAPR in 2011 in order to address the 
obligations of states--and of the EPA when states have not met their 
obligations--under CAA section 110(a)(2)(D)(i)(I) to prohibit air 
pollution contributing significantly to nonattainment in, or 
interfering with maintenance by, any other state with regard to several 
NAAQS, including the 1997 annual PM<INF>2.5</INF> NAAQS.\1\ To address 
Texas' transport obligation under CAA section 110(a)(2)(D)(i)(I) with 
regard to this NAAQS, CSAPR established FIP requirements for affected 
EGUs in Texas, including statewide emissions budgets that apply to the 
EGUs' collective annual emissions of SO<INF>2</INF> and NO<INF>X</INF>.
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    \1\ Federal Implementation Plans; Interstate Transport of Fine 
Particulate Matter and Ozone and Correction of SIP Approvals, 76 FR 
48208 (August 8, 2011).
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    In 2012, the EPA promulgated an amendment to the Regional Haze Rule 
allowing a state whose EGUs participate in one of the CSAPR trading 
programs for a given pollutant to rely on its sources' participation in 
CSAPR as an alternative to source-specific BART requirements--the so-
called CSAPR-better-than-BART rule, codified at 40 CFR 51.308(e)(4).\2\ 
This rule relied on a regional analytic demonstration that included an 
air quality modeling analysis comparing the projected visibility 
impacts of CSAPR implementation and BART implementation. To project 
emissions under CSAPR, the EPA assumed that the geographic scope and 
state emissions budgets for CSAPR would be implemented as finalized and 
amended in 2011 and 2012.\3\
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    \2\ Regional Haze: Revisions to Provisions Governing 
Alternatives to Source-Specific Best Available Retrofit Technology 
(BART) Determinations, Limited SIP Disapprovals, and Federal 
Implementation Plans, 77 FR 33642 (June 7, 2012).
    \3\ CSAPR was amended three times in 2011 and 2012 to add five 
states to the seasonal NO<INF>X</INF> program and to increase 
certain state budgets. 76 FR 80760 (December 27, 2011); 77 FR 10324 
(February 21, 2012); 77 FR 34830 (June 12, 2012). The CSAPR-better-
than-BART final rule reflected consideration of these changes to 
CSAPR.
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    In July 2015, the D.C. Circuit issued a decision on a range of 
challenges to CSAPR in EME Homer City Generation, L.P. v. EPA (EME 
Homer City II), denying most claims but remanding several CSAPR 
emissions budgets to the EPA for reconsideration, including the Phase 2 
SO<INF>2</INF> budget for Texas.\4\ Because the remand created the 
potential for changes in the geographic scope and stringency of CSAPR 
as evaluated for purposes of the 2012 comparison to BART 
implementation, the EPA recognizes that how the Agency addresses the 
remand could raise questions as to whether states and the EPA should 
continue to rely on the CSAPR-better-than-BART rule.
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    \4\ EME Homer City Generation, L.P. v. EPA (EME Homer City II), 
795 F.3d 118, 138 (D.C. Cir. 2015). The court also remanded the 
Phase 2 SO<INF>2</INF> budgets for three other states and the Phase 
2 seasonal NO<INF>X</INF> budgets for eleven states, including 
Texas. Id.
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    The EPA issued a proposal to address the remand of the Texas Phase 
2 SO<INF>2</INF> budget and to resolve any questions about continued 
reliance on the CSAPR-better-than-BART rule on November 3, 2016, and 
solicited comment on the proposal.\5\ Four commenters provided 
substantive comments, and this final rule takes those comments into 
consideration. The Agency's responses to the principal comments are 
provided below. The remaining comments are addressed in the Response to 
Comments document available in the docket for this action.
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    \5\ Interstate Transport of Fine Particulate Matter: Revision of 
Federal Implementation Plan Requirements for Texas, Proposed Rule, 
81 FR 78954 (November 10, 2016).
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    In this final action, as proposed, the EPA is withdrawing the FIP 
provisions requiring Texas EGUs to participate in the CSAPR 
SO<INF>2</INF> Group 2 Trading Program and the CSAPR NO<INF>X</INF> 
Annual Trading Program during Phase 2 of these programs, which began 
with 2017 emissions.\6\ Removal of Texas EGUs from Phase 2 of these 
CSAPR trading programs renders it necessary to evaluate whether EPA 
should use other means to address any remaining transport obligation 
for Texas under CAA section 110(a)(2)(D)(i)(I) with regard to the 1997 
annual PM<INF>2.5</INF> NAAQS. However, the EPA is finalizing its 
proposed determination that Texas does not have any such remaining 1997 
annual PM<INF>2.5</INF> NAAQS transport obligation as of the beginning 
of Phase 2 of the CSAPR trading programs for SO<INF>2</INF> and annual 
NO<INF>X</INF>. Accordingly, the EPA is also determining that the 
Agency has no obligation to issue new FIP requirements for Texas 
sources to address transported PM<INF>2.5</INF> pollution under CAA 
section 110(a)(2)(D)(i)(I) with regard to this NAAQS.
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    \6\ With regard to each of the other remanded budgets, the EPA 
either has already withdrawn or expects to withdraw the FIP 
provisions requiring the EGUs in the affected states to participate 
in the corresponding CSAPR federal trading programs in Phase 2 
through other actions, as discussed in section III below.
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    Also in this action, the EPA is concluding, based on consideration 
of the sensitivity analysis included in the proposal and additional 
analysis included in this final action, that the 2012 analytic 
demonstration supporting the conclusion that CSAPR participation 
qualifies as a BART alternative is not adversely affected by the 
actions being taken to respond to the D.C. Circuit's remand of CSAPR 
Phase 2 budgets.\7\ As a result, no revisions are needed to the CSAPR-
better-than-BART rule.
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    \7\ In addition to this action, the full set of actions being 
taken to respond to the remand includes the 2016 CSAPR Update 
withdrawing the remanded seasonal NO<INF>X</INF> budgets for eleven 
states and establishing new seasonal NO<INF>X</INF> budgets to 
address a more recent ozone NAAQS for eight of those states, the 
action approving Alabama's SIP revision establishing state CSAPR 
trading programs for SO<INF>2</INF> and annual NO<INF>X</INF> to 
replace the corresponding federal CSAPR trading programs, and the 
expected actions to approve proposed SIP revisions for Georgia and 
South Carolina comparable to Alabama's SIP revision (see notes 14, 
53, and 57 below). These additional actions are described in more 
detail in sections II.A and III.D below.
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    At the same time, however, because Texas EGUs will no longer 
participate in a CSAPR SO<INF>2</INF> trading program, Texas

[[Page 45483]]

will no longer be eligible to rely on CSAPR participation as an 
alternative to the application of source-specific SO<INF>2</INF> BART 
for its BART-eligible EGUs under 40 CFR 51.308(e)(4). That obligation 
and any other remaining regional haze obligations for Texas are not 
addressed in this action and will need to be addressed through other 
actions as appropriate.\8\
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    \8\ The EPA notes that under 40 CFR 51.308(e)(4), CSAPR 
implementation is available as a NO<INF>X</INF> BART alternative for 
a state whose EGUs are subject to CSAPR requirements for either 
annual NO<INF>X</INF> or seasonal NO<INF>X</INF> emissions. See 77 
FR at 33652. Texas EGUs continue to participate in a CSAPR trading 
program for seasonal NO<INF>X.</INF> In a separate proposed action, 
the EPA has proposed to address NO<INF>X</INF> BART for Texas EGUs 
through reliance on participation in CSAPR as a NO<INF>X</INF> BART 
alternative. 82 FR 917 (January 4, 2017).
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    This final rule is effective immediately upon publication in the 
Federal Register. As discussed in section VI.L below, the EPA is 
issuing this rule under CAA section 307(d). While Administrative 
Procedure Act (APA) section 553(d)\9\ generally provides that rules may 
not take effect earlier than 30 days after they are published in the 
Federal Register, CAA section 307(d)(1) clarifies that ``[t]he 
provisions of [APA] section 553 . . . shall not, except as expressly 
provided in this section, apply to actions to which this subsection 
applies.'' Thus, APA section 553(d) does not apply to this rule. 
Nevertheless, in making this rule effective immediately upon 
publication, the EPA has considered the purposes underlying APA section 
553(d). The primary purpose of the prescribed 30-day waiting period is 
to give affected parties a reasonable time to adjust their behavior and 
prepare before a final rule takes effect. This rule does not impose any 
new regulatory requirements and therefore does not necessitate time for 
affected sources to adjust their behavior or otherwise prepare for 
implementation. Further, APA section 553(d) expressly allows an 
effective date less than 30 days after publication for a rule that 
``grants or recognizes an exemption or relieves a restriction.'' This 
rule relieves Texas EGUs of certain FIP requirements that would 
otherwise apply. Consequently, making this rule effective immediately 
upon publication is consistent with the purposes of APA section 553(d).
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    \9\ 5 U.S.C. 553(d).
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II. Background

A. History and Summary of CSAPR

    The EPA initially promulgated CSAPR in 2011 to address the 
obligations of states--and of the EPA when states have not met their 
obligations--under CAA section 110(a)(2)(D)(i)(I), often referred to as 
the ``good neighbor'' provision, to prohibit transported air pollution 
contributing significantly to nonattainment in, or interfering with 
maintenance by, any other state with regard to the 1997 annual 
PM<INF>2.5</INF> NAAQS, the 2006 24-hour PM<INF>2.5</INF> NAAQS, and 
the 1997 8-hour ozone NAAQS.\10\ To reduce transported PM<INF>2.5</INF> 
pollution, CSAPR sets limits on annual emissions of NO<INF>X</INF> and 
SO<INF>2</INF> as precursors to PM<INF>2.5</INF>. To reduce transported 
ozone pollution during the May-September ozone season, CSAPR sets 
limits on seasonal emissions of NO<INF>X</INF> as a precursor to ozone. 
The CSAPR requirements were initially established in FIPs, but states 
can voluntarily replace the CSAPR FIPs with CSAPR state implementation 
plans (SIPs) that include equally stringent budgets.\11\ Upon approval 
of such a CSAPR SIP, the corresponding CSAPR FIP is automatically 
withdrawn.\12\
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    \10\ See generally 76 FR 48208.
    \11\ E.g., 40 CFR 52.39(i).
    \12\ E.g., 40 CFR 52.39(j).
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    As explained in the proposal, a number of petitioners challenged 
CSAPR, and in 2015 the D.C. Circuit issued a decision remanding the 
Phase 2 SO<INF>2</INF> emissions budgets for Alabama, Georgia, South 
Carolina, and Texas and the Phase 2 seasonal NO<INF>X</INF> budgets for 
eleven states to the EPA for reconsideration.\13\ In response to the 
remand of the Phase 2 SO<INF>2</INF> emissions budgets, the EPA has 
engaged the affected states to determine appropriate next steps to 
address the decision with regard to each state. As discussed in the 
proposal and also in section III below, the EPA expects that EGUs in 
Alabama, Georgia, and South Carolina will continue to participate in 
CSAPR trading programs for SO<INF>2</INF> and annual NO<INF>X</INF> 
pursuant to approved SIP revisions (with equally stringent emissions 
budgets), making Texas the only state whose EGUs will no longer 
participate in these programs to reduce transported PM<INF>2.5</INF> 
pollution as a result of actions taken to address the remand.
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    \13\ EME Homer City II, 795 F.3d at 138.
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    Also as explained in the proposal, in the CSAPR Update rule issued 
in 2016, the EPA responded to the remand of eleven states' original 
Phase 2 seasonal NO<INF>X</INF> budgets (which had been established to 
address transport obligations with regard to the 1997 8-hour ozone 
NAAQS) by withdrawing the FIP provisions requiring EGUs to comply with 
those budgets for emissions after 2016.\14\ The EPA determined that 
none of those eleven states has a remaining transport obligation under 
CAA section 110(a)(2)(D)(i)(I) with regard to the 1997 8-hour ozone 
NAAQS, but for eight of those states, including Texas, the CSAPR Update 
rule also established new budgets to address transport obligations with 
regard to the more stringent 2008 8-hour ozone NAAQS.\15\ EGUs in the 
three states with remanded Phase 2 seasonal NO<INF>X</INF> budgets for 
which the EPA did not establish new budgets--Florida, North Carolina, 
and South Carolina--are no longer required to participate in a CSAPR 
trading program for seasonal NO<INF>X</INF> emissions to address ozone 
transport obligations after 2016. However, because EGUs in North 
Carolina and South Carolina\16\ are expected to continue to participate 
in a CSAPR trading program for annual NO<INF>X</INF> emissions in order 
to address PM<INF>2.5</INF>-related transport obligations, Florida is 
expected to be the only state originally covered by CSAPR for 
NO<INF>X</INF> emissions for which all such coverage is ending as a 
result of the EPA's set of actions to address the remand.\17\
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    \14\ Cross-State Air Pollution Rule Update for the 2008 Ozone 
NAAQS (CSAPR Update), 81 FR 74504, 74576 (October 26, 2016).
    \15\ Id. at 74524.
    \16\ North Carolina EGUs remain subject to FIP provisions 
requiring participation in a CSAPR trading program for annual 
NO<INF>X</INF> emissions. The EPA's expectation that South Carolina 
EGUs will continue to participate in a CSAPR program for annual 
NO<INF>X</INF> emissions is based on South Carolina's submission of 
a SIP revision that includes such requirements, as discussed in 
sections III and V below.
    \17\ For discussion of the EPA's response to the remand of the 
Florida seasonal NO<INF>X</INF> budget, and the assessment of the 
implications of that response for the CSAPR-better-than-BART 
analytical demonstration, see 81 FR at 78962.
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    Prior to this action, Texas EGUs have been subject to CSAPR FIP 
provisions requiring participation in the CSAPR SO<INF>2</INF> Group 2 
Trading Program and the CSAPR NO<INF>X</INF> Annual Trading Program. 
With this action, the EPA is withdrawing the FIP provisions requiring 
Texas EGUs to participate in these CSAPR federal trading programs. 
(Although the court's decision specifically remanded only Texas' Phase 
2 SO<INF>2</INF> budget, the court's rationale for remanding that 
budget also implicates Texas' Phase 2 annual NO<INF>X</INF> budget 
because the SO<INF>2</INF> and annual NO<INF>X</INF> budgets were 
developed through an integrated analysis and were promulgated to meet a 
common PM<INF>2.5</INF> transport obligation under CAA section 
110(a)(2)(D)(i)(I).) This action has no effect on the separate CSAPR 
requirements applicable to Texas EGUs relating to seasonal 
NO<INF>X</INF> emissions, which, as discussed in the preceding 
paragraph, were promulgated in the

[[Page 45484]]

CSAPR Update rule and are not subject to the D.C. Circuit's remand.

B. CSAPR Participation as a BART Alternative

    The proposal provides a detailed explanation of the Regional Haze 
Rule requirements for best available retrofit technology (BART) and the 
criteria for demonstrating that an alternative measure achieves greater 
reasonable progress than source-specific BART.\18\
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    \18\ 81 FR at 78957.
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    In 2012, the EPA amended the Regional Haze Rule to provide that 
participation by a state's EGUs in a CSAPR trading program for a given 
pollutant--either a CSAPR federal trading program implemented through a 
CSAPR FIP or a CSAPR state trading program implemented through an 
approved CSAPR SIP revision--qualifies as a BART alternative for those 
EGUs for that pollutant.\19\ In promulgating this CSAPR-better-than-
BART rule, the EPA relied on an analytic demonstration of the 
improvement in visibility from CSAPR implementation relative to BART 
implementation based on an air quality modeling study.\20\ Since the 
EPA promulgated this amendment, numerous states covered by CSAPR have 
come to rely on the provision through either SIPs or FIPs.\21\ 
Additionally, many states have submitted or are planning to submit SIPs 
relying on the CSAPR-better-than-BART rule for BART or visibility 
transport purposes, or to replace regional haze FIPs with SIPs.
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    \19\ 40 CFR 51.308(e)(4); see also generally 77 FR 33642. Legal 
challenges to the CSAPR-better-than-BART rule from conservation 
groups and other petitioners are pending. Utility Air Regulatory 
Group v. EPA, No. 12-1342 (D.C. Cir. filed August 6, 2012).
    \20\ See Technical Support Document for Demonstration of the 
Transport Rule as a BART Alternative, Docket ID No. EPA-HQ-OAR-2011-
0729-0014 (December 2011) (2011 CSAPR/BART Technical Support 
Document), and memo entitled ``Sensitivity Analysis Accounting for 
Increases in Texas and Georgia Transport Rule State Emissions 
Budgets,'' Docket ID No. EPA-HQ-OAR-2011-0729-0323 (May 29, 2012), 
both available in the docket for this action.
    \21\ The EPA has promulgated FIPs relying on CSAPR participation 
for BART purposes for Georgia, Indiana, Iowa, Kentucky, Michigan, 
Missouri, Ohio, Pennsylvania, South Carolina, Tennessee, Virginia, 
and West Virginia, 77 FR at 33654, and Nebraska, 77 FR 40150, 40151 
(July 6, 2012). The EPA has approved SIPs relying on CSAPR 
participation for BART purposes for Minnesota, 77 FR 34801, 34806 
(June 12, 2012), and Wisconsin, 77 FR 46952, 46959 (August 7, 2012).
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    As explained in the proposal, the 2012 analytic demonstration that 
CSAPR provides for greater reasonable progress than BART included Texas 
EGUs as subject to CSAPR for SO<INF>2</INF> and annual NO<INF>X</INF> 
(as well as seasonal NO<INF>X</INF>) and included Florida EGUs as 
subject to CSAPR for seasonal NO<INF>X</INF>. The EPA recognizes that 
the treatment of these EGUs in the analysis would have been different 
if the Florida FIP withdrawal finalized in the CSAPR Update rule and 
the Texas FIP withdrawal finalized in this action had been known at the 
time of the demonstration. In order to address any potential concern 
about continuing to rely on CSAPR participation as a BART alternative 
for EGUs in the remaining CSAPR states, in the proposal for this action 
the EPA provided a sensitivity analysis explicitly addressing the 
potential effect on that demonstration of the removal of Texas and 
Florida EGUs from the relevant CSAPR trading programs in response to 
the D.C. Circuit's remand. As discussed in section IV, the sensitivity 
analysis indicates clearly that the demonstration remains valid despite 
these changes in CSAPR's geographic scope, supporting the continued 
validity of EPA's 2012 conclusion that CSAPR participation meets the 
Regional Haze Rule's criteria for a BART alternative.\22\ Consequently, 
in this action the EPA is affirming the current Regional Haze Rule 
provision at 40 CFR 51.308(e)(4) authorizing the use of CSAPR 
participation as a BART alternative for BART-eligible EGUs for a given 
pollutant in states whose EGUs continue to participate in a CSAPR 
trading program for that pollutant.
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    \22\ With respect to each of the remanded budgets, the EPA has 
responded or expects to respond to the remand by withdrawing the FIP 
provisions requiring compliance with the remanded budget. Thus, all 
changes to CSAPR arising directly from the Agency's response to the 
remand are changes in CSAPR's geographic scope rather than changes 
in the stringency of state budgets. Although the EPA has also 
promulgated new CSAPR seasonal NO<INF>X</INF> budgets for 22 states 
(including eight states with remanded seasonal NO<INF>X</INF> 
budgets) in order to address a more stringent NAAQS, see generally 
81 FR 74504, for purposes of the sensitivity analysis the EPA has 
conservatively not considered the generally increased stringency of 
the new seasonal NO<INF>X</INF> budgets, but the EPA did consider 
the changes in CSAPR's geographic scope--that is, the fact that the 
remaining three states with remanded seasonal NO<INF>X</INF> budgets 
will no longer participate in CSAPR for seasonal NO<INF>X.</INF>
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III. Withdrawal of CSAPR FIP Requirements Related to Texas' Transport 
Obligations With Regard to the 1997 Annual PM<INF>2.5</INF> NAAQS

A. Summary

    In this action, as proposed, the EPA is responding to the remand of 
the CSAPR Phase 2 SO<INF>2</INF> budget for Texas by withdrawing the 
FIP provisions requiring Texas EGUs to participate in the CSAPR 
SO<INF>2</INF> Group 2 Trading Program and the CSAPR NO<INF>X</INF> 
Annual Trading Program with regard to emissions during Phase 2 of those 
programs, which began in 2017. In EME Homer City II, the court remanded 
the CSAPR Phase 2 SO<INF>2</INF> budget for Texas to the EPA for 
reconsideration on the grounds that the budget may be more stringent 
than necessary to address the state's obligation under CAA section 
110(a)(2)(D)(i)(I) to reduce transported pollution with respect to the 
1997 annual PM<INF>2.5</INF> NAAQS.\23\ Upon review of options for 
responding to the remand, the EPA has determined, for the reasons 
discussed in this section, that withdrawal of the FIP provisions 
identified above, rather than issuance of revised FIP provisions for 
Texas with a higher (i.e., less stringent) Phase 2 SO<INF>2</INF> 
budget as advocated by some commenters, is the appropriate response. 
Withdrawal of the FIP provisions related to the CSAPR SO<INF>2</INF> 
trading program encompasses withdrawal of the requirement for Texas 
EGUs to comply with the remanded Phase 2 SO<INF>2</INF> budget, thereby 
addressing the specific rule provision remanded by the court. The EPA 
is withdrawing the FIP provisions related to annual NO<INF>X</INF> (in 
addition to the requirements related to SO<INF>2</INF>) because the 
CSAPR FIP requirements for SO<INF>2</INF> and annual NO<INF>X</INF> 
were determined through an integrated analysis and were promulgated in 
combination to remedy covered states' PM<INF>2.5</INF> transport 
obligations; the court's finding that CSAPR's Phase 2 requirements may 
be more stringent than necessary to address Texas' PM<INF>2.5</INF> 
transport obligation therefore implicates the state's Phase 2 budgets 
for both SO<INF>2</INF> and annual NO<INF>X</INF>.
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    \23\ 795 F.3d at 128-29. A more detailed discussion of how the 
EPA established the CSAPR Phase 2 SO<INF>2</INF> budget for Texas 
and why the court found the budget invalid is included in the 
proposal for this action. 81 FR at 78958.
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    Withdrawal of the previous CSAPR FIP requirements revives the need 
to consider Texas' transport obligation under CAA section 
110(a)(2)(D)(i)(I) with regard to the 1997 annual PM<INF>2.5</INF> 
NAAQS and to address any remaining obligation through other means. 
However, as proposed, the Agency is further determining that Texas has 
no remaining transport obligation under this CAA provision with regard 
to this NAAQS following withdrawal of the previous FIP requirements, 
and consequently is also determining that the EPA has no obligation to 
issue new FIP requirements as to Texas's transport obligation under CAA 
section 110(a)(2)(D)(i)(I) with regard to the 1997 annual 
PM<INF>2.5</INF> NAAQS.
    In the CSAPR final rule, the EPA determined that 23 states, 
including Texas, had transport obligations with regard to the 1997 
annual PM<INF>2.5</INF>

[[Page 45485]]

NAAQS, the 2006 24-hour PM<INF>2.5</INF> NAAQS, or both, and 
established SO<INF>2</INF> and annual NO<INF>X</INF> emissions budgets 
for each of the states.\24\ The budgets were implemented through FIP 
provisions requiring the affected EGUs in each covered state to 
participate in CSAPR allowance trading programs. In the case of Texas, 
the PM<INF>2.5</INF>-related FIP requirements were imposed based solely 
on the state's transport obligations with regard to the 1997 annual 
PM<INF>2.5</INF> NAAQS.\25\
---------------------------------------------------------------------------

    \24\ The EPA also determined in CSAPR and a related supplemental 
rule that 25 states, including Texas, had transport obligations with 
regard to the 1997 8-hour ozone NAAQS. In all, 28 states were 
determined to have transport obligations related to either 
PM<INF>2.5</INF>, ozone, or both. The EPA's process for determining 
states' emissions limitations under CSAPR and the associated CSAPR 
FIP requirements is described at length in the preamble to the CSAPR 
final rule. See generally 77 FR at 48222-71.
    \25\ As noted in the proposal and further discussed below, the 
modeling for the CSAPR final rule also linked Texas to a downwind 
air quality problem with regard to the 2006 24-hour PM<INF>2.5</INF> 
NAAQS, but the EPA did not rely on the linkage with regard to that 
NAAQS as a basis for establishing CSAPR FIP requirements for Texas 
EGUs. 81 FR at 78960 n.42; see also 76 FR at 48243, 48214.
---------------------------------------------------------------------------

    Following issuance of the D.C. Circuit's decision in EME Homer City 
II remanding the CSAPR Phase 2 SO<INF>2</INF> budget for Texas, the EPA 
reevaluated its earlier conclusions regarding Texas' PM<INF>2.5</INF> 
transport obligations by reexamining the data in the final CSAPR record 
in light of the D.C. Circuit's holdings in the decision, including the 
holdings regarding the CSAPR Phase 2 seasonal NO<INF>X</INF> budgets 
for several states, as explained in the proposal.\26\ The final CSAPR 
record contained ``base case'' modeling projections of air quality at 
monitoring locations throughout the country both for 2012, the intended 
start year of Phase 1 of the CSAPR trading programs, and for 2014, the 
intended start year of Phase 2 of the programs. The base case 
projections were designed to represent projected air quality at these 
monitoring locations without any emission reductions from CSAPR. In the 
CSAPR rulemaking, the EPA used the 2012 base case air quality 
projections for purposes of identifying ozone receptors projected to 
have air quality problems and determining states that were linked to 
those receptors and that therefore might have transport obligations 
under both Phase 1 and Phase 2 of the CSAPR trading programs. However, 
in EME Homer City II, the D.C. Circuit agreed with petitioners\27\ that 
the EPA should also have considered the 2014 base case air quality 
projections for these purposes, and that in instances of receptors 
where the 2014 base case projections did not show air quality problems, 
the EPA lacked authority to require any emission reductions in Phase 2 
of the CSAPR trading programs based on linkages to those receptors only 
occurring in Phase 1 of the programs. On these grounds, the court found 
that EPA lacked authority to establish Phase 2 seasonal NO<INF>X</INF> 
emission limitations for EGUs in ten states linked solely to ozone 
receptors whose 2014 air quality projections did not show air quality 
problems.\28\
---------------------------------------------------------------------------

    \26\ 81 FR at 78960.
    \27\ See Opening Brief of Industry and Labor Petitioners on 
Remand 8, 14, EME Homer City Generation, L.P. v. EPA, No. 11-1302 
(D.C. Cir. filed December 10, 2014).
    \28\ EME Homer City II, 795 F.3d at 129-30. The court also 
remanded the Phase 2 seasonal NO<INF>X</INF> budget for an eleventh 
state (Texas), but on different grounds.
---------------------------------------------------------------------------

    While not discussed in the court's decision, the projections of 
2014 air quality for a PM<INF>2.5</INF> receptor in Madison County, 
Illinois (the only PM<INF>2.5</INF> receptor with projected air quality 
problems to which Texas was linked) in the final CSAPR record are 
analogous to the 2014 air quality projections for the ozone receptors 
described above, in that the air quality problems at the Madison County 
receptor were projected to be resolved in 2014 before any emission 
reductions from CSAPR. In light of the court's holding as to the legal 
import of the 2014 base case air quality projections for the ozone 
receptors described above, the EPA considered the legal import of the 
analogous 2014 base case air quality projections for the Madison County 
PM<INF>2.5</INF> receptor with respect to Texas' PM<INF>2.5</INF>-
related obligations under CSAPR. There are three relevant record data 
elements. First, the record indicates that the only PM<INF>2.5</INF> 
receptor to which Texas is linked for purposes of determining possible 
obligations under the good neighbor provision is the receptor in 
Madison County, Illinois.\29\ Second, the projected maximum design 
value \30\ for annual PM<INF>2.5</INF> at the Madison County receptor 
is 15.02 micrograms per cubic meter ([micro]g/m\3\) in the 2014 base 
case.\31\ Finally, the value that the EPA used to determine whether a 
particular PM<INF>2.5</INF> receptor should be identified as having air 
quality problems that may trigger transport obligations with regard to 
the 1997 annual PM<INF>2.5</INF> NAAQS is 15.05 [micro]g/m\3\, which is 
higher than the Madison County maximum design value in the 2014 base 
case.\32\ Thus, the reevaluation of the final CSAPR record in light of 
the D.C. Circuit's holding indicates that the record does not support a 
finding of a transport obligation for Texas under CAA section 
110(a)(2)(D)(i)(I) with regard to this NAAQS as of the beginning of 
Phase 2 of the CSAPR trading programs for SO<INF>2</INF> and annual 
NO<INF>X</INF>, and the Agency accordingly finds that the state's 
obligation is resolved without a need for further emission reductions, 
including the emission reductions from CSAPR. The finding that Texas's 
transport obligation with regard to this NAAQS is resolved as of the 
start of Phase 2 of the CSAPR trading programs without the need for any 
emission reductions from CSAPR removes the EPA's authority to issue new 
FIP requirements for purposes of responding to the court's remand of 
the state's CSAPR Phase 2 SO<INF>2</INF> budget. The finding likewise 
eliminates any obligation of the EPA to issue new FIP requirements 
addressing a remaining transport obligation of the state with regard to 
this NAAQS following withdrawal of the existing CSAPR FIP requirements, 
because the state has no such remaining transport obligation following 
the withdrawal.
---------------------------------------------------------------------------

    \29\ See 76 FR at 48241, tables V.D-2 and V.D-3.
    \30\ The EPA independently considered linkages to 
``nonattainment'' and ``maintenance'' receptors. If both the 
projected average design value and the projected maximum design 
values for a receptor were above the triggering threshold, the 
receptor was considered a nonattainment receptor. If the projected 
maximum design value was above the triggering threshold but the 
projected average design value was not, the receptor was considered 
a maintenance receptor. Thus, if the projected maximum design value 
was not above the triggering threshold, the receptor was not 
considered either a nonattainment receptor or a maintenance 
receptor. See 76 FR at 48233.
    \31\ See projected 2014 base case maximum annual 
PM<INF>2.5</INF> design value for Madison County, Illinois receptor 
171191007 at B-41 of the Air Quality Modeling Final Rule Technical 
Support Document, Docket ID No. EPA-HQ-OAR-2009-0491-4140 (June 
2011) (CSAPR Final Rule Technical Support Document), available in 
the docket for this action.
    \32\ 76 FR at 48233.
---------------------------------------------------------------------------

    As noted in the proposal, the modeling for the CSAPR final rule 
also linked Texas to a downwind air quality problem with regard to the 
2006 24-hour PM<INF>2.5</INF> NAAQS, but the EPA did not rely on the 
linkage with regard to this NAAQS as a basis for establishing CSAPR FIP 
requirements for Texas EGUs. In the proposal, the EPA indicated that 
data in the final CSAPR record, reevaluated in light of EME Homer City 
II, would show that Texas no longer has a transport obligation with 
regard to the 2006 24-hour PM<INF>2.5</INF> NAAQS as of the beginning 
of Phase 2 of the CSAPR trading programs for SO<INF>2</INF> and annual 
NO<INF>X</INF>, but that because Texas was not subject to CSAPR 
requirements with regard to this NAAQS, the EPA was not proposing to 
make a determination in this action as to any obligation of Texas with 
regard to this NAAQS. Nevertheless, because commenters raise the 2006 
24-hour PM<INF>2.5</INF> NAAQS in their comments, the EPA will explain 
how the court's reasoning would apply with respect to

[[Page 45486]]

the data for this NAAQS. The analysis for the 2006 24-hour 
PM<INF>2.5</INF> NAAQS is essentially identical to the analysis 
described above with regard to the 1997 annual PM<INF>2.5</INF> NAAQS. 
Specifically, the Madison County receptor is the only PM<INF>2.5</INF> 
receptor to which Texas was linked for this NAAQS; \33\ the projected 
maximum design value for 24-hour PM<INF>2.5</INF> at the Madison County 
receptor is 35.3 [micro]g/m\3\ in the 2014 base case; \34\ and the 
value that the EPA used to determine whether a particular 
PM<INF>2.5</INF> receptor should be identified as having air quality 
problems that may trigger transport obligations with regard to the 2006 
24-hour PM<INF>2.5</INF> NAAQS is 35.5 [micro]g/m\3\, which is higher 
than the Madison County maximum design value in the 2014 base case.\35\ 
Thus, the reevaluation of the final CSAPR record in light of the D.C. 
Circuit's holding also indicates that the record would not support a 
finding of a transport obligation for Texas with regard to the 2006 24-
hour PM<INF>2.5</INF> NAAQS as of the beginning of Phase 2 of the CSAPR 
trading programs for SO<INF>2</INF> and annual NO<INF>X</INF>.
---------------------------------------------------------------------------

    \33\ See 76 FR at 48242-44, tables V.D-5 and V.D-6.
    \34\ See projected 2014 base case maximum 24-hour 
PM<INF>2.5</INF> design value for Madison County, Illinois receptor 
171191007 at B-70 of the CSAPR Final Rule Technical Support 
Document, available in the docket for this action.
    \35\ 76 FR at 48234-35.
---------------------------------------------------------------------------

    Overall, on the subject of the proposed withdrawal of the FIP 
provisions and the proposed finding that Texas will no longer have a 
transport obligation following withdrawal of the FIP provisions, the 
EPA received substantive comments from two parties.\36\ The remainder 
of this section summarizes these commenters' principal comments on this 
topic and provides the Agency's response.
---------------------------------------------------------------------------

    \36\ A third commenter states without further elaboration that 
it does not oppose the FIP withdrawal.
---------------------------------------------------------------------------

B. Adequacy of Rationale for Finding No Remaining Transport Obligation

    The commenters state that the Agency's explanation for the proposed 
finding that Texas no longer has a transport obligation under CAA 
section 110(a)(2)(D)(i)(I) with regard to the 1997 annual 
PM<INF>2.5</INF> NAAQS as of the beginning of Phase 2 of the CSAPR 
trading programs for SO<INF>2</INF> and annual NO<INF>X</INF> is 
inadequate or confusing, and that the Agency must provide additional 
explanation for changing its position on the continued existence of a 
Texas transport obligation from the contrary position taken by the 
Agency when promulgating the CSAPR final rule.
    The EPA disagrees with these comments. The proposal contained a 
complete explanation of the Agency's basis for this finding, including 
all necessary supporting data and documentation.\37\ As fully explained 
in the proposal and reiterated above, the Agency's change in position 
as to Texas' transport obligation between the CSAPR final rule and this 
action is readily attributable to the D.C. Circuit's holding in EME 
Homer City II with regard to the legal import of the 2014 base case air 
quality projections in the final CSAPR record. The court's holding 
clarifies the legal standard the Agency should have used when 
considering the information in the final CSAPR record, which includes 
those air quality projections.
---------------------------------------------------------------------------

    \37\ 81 FR at 78960.
---------------------------------------------------------------------------

C. Responsiveness to the D.C. Circuit's Remand Instructions

    The commenters assert that withdrawal of the remanded Texas 
SO<INF>2</INF> budget without issuance of a presumably less stringent 
replacement budget is not responsive to the D.C. Circuit's remand 
instructions. According to the commenters, the court directed the EPA 
to develop a revised CSAPR FIP SO<INF>2</INF> budget for Texas EGUs 
that does not over-control, and the EPA must either do so or, 
alternatively, must allow Texas to submit a CSAPR SIP with a higher 
SO<INF>2</INF> budget. The commenters' argument is intended to provide 
a continued basis for reliance on CSAPR participation as an 
SO<INF>2</INF> BART alternative for Texas EGUs. Underlying the 
commenters' arguments is an apparent belief that a revised, higher 
CSAPR budget, whether issued through a FIP or approved through a SIP, 
would automatically enable Texas to rely on CSAPR participation as an 
alternative to source-specific SO<INF>2</INF> BART requirements for the 
State's EGUs under 40 CFR 51.308(e)(4).
    The EPA disagrees with these comments. As an initial matter, the 
D.C. Circuit in fact did not direct the Agency to develop replacement 
budgets for the Texas SO<INF>2</INF> budget or any of the other 
remanded CSAPR Phase 2 budgets. Rather, the court found that certain 
budgets were invalid and remanded to the EPA to ``reconsider'' 
them,\38\ a general instruction that encompasses a range of possible 
Agency actions upon reconsideration. The commenters cite no statement 
from the court's opinion that requires the establishment of replacement 
budgets, but assert that such a requirement must be inferred from the 
court's other statements or determinations. For example, the commenters 
suggest that because the court remanded the budgets without vacatur 
instead of vacating the budgets outright, the court must have intended 
for the Agency to replace rather than simply withdraw the budgets. 
However, the court actually provided a different rationale for 
remanding without vacatur, including the statement that ``some good 
neighbor obligations may be appropriate for some of the relevant 
states.'' \39\ The reference to ``some'' of the states indicates that 
the court considered it likely that replacement budgets would not be 
established in every instance, and the use of the word ``may'' 
indicates that the court considered it possible that replacement 
budgets would not be established in any instance. Thus, contrary to the 
commenters' claims, the court's opinion clearly affords the Agency the 
discretion to determine the appropriate response to the remand and does 
not prevent the Agency from determining upon reconsideration that the 
program is no longer needed for a particular state with respect to a 
particular pollutant and consequently not establishing a replacement 
budget.
---------------------------------------------------------------------------

    \38\ EME Homer City II, 795 F.3d at 124, 138.
    \39\ Id. at 132 (emphasis added).
---------------------------------------------------------------------------

    The commenters make several additional arguments in support of 
their contention that the FIP withdrawal is not responsive to the D.C. 
Circuit's instructions. One commenter asserts that because the court 
stated that the Agency could consider new information in responding to 
the remand, the court must have intended for the Agency's response to 
involve the establishment of replacement budgets. This claim is a non 
sequitur--the court's acknowledgement that additional information may 
be considered says nothing about what the Agency may or must conclude 
from consideration of that information. The same commenter also asserts 
that the Agency may not rely on lack of FIP authority as the basis for 
not establishing a revised budget because lack of FIP authority was not 
the basis cited by the court for remanding the budget. This claim is 
also a non sequitur--the Agency lacks authority to issue a revised 
budget and therefore may not do so, regardless of what additional 
defects the court may have cited in ordering the remand.
    The other commenter asserts that the FIP withdrawal would disrupt 
allowance markets, contrary to the concern expressed by the D.C. 
Circuit that outright vacatur, rather than remand without vacatur, 
could have that impact. While the EPA agrees with the concern expressed 
by the court and the commenter regarding the potentially disruptive 
effects of outright vacatur on

[[Page 45487]]

allowance markets, the Agency does not agree that the court's concern 
regarding unintended consequences of a judicial vacatur provides a 
basis for not taking final action at this time to withdraw the Texas 
FIP requirements, for two reasons. First, the EPA believes that the 
court did not intend for its expression of concern to constrain the 
Agency's range of possible responses to the remand. As discussed above, 
it is clear from the opinion that the court anticipated the possibility 
that upon reconsideration the EPA would determine that some, or even 
all, of the remanded budgets should be withdrawn and not replaced. 
Second, in this instance, emissions data reported by the EGUs covered 
by the CSAPR trading programs for SO<INF>2</INF> and annual 
NO<INF>X</INF> demonstrate that withdrawal of the FIP provisions 
requiring Texas EGUs to participate in these programs will not cause 
allowance market disruption for the programs' remaining participants. 
Under both programs, the totals of the emissions reported by 
participating EGUs for both 2015 and 2016 in states other than Texas 
were less than the sums of the Phase 2 emissions budgets for these 
other states.\40\ Likewise, under both programs the totals of the 
emissions reported by Texas EGUs for both 2015 and 2016 were less than 
the Texas Phase 2 budgets.\41\ The elimination from the programs of 
Texas EGUs and the allowances allocated to Texas EGUs is therefore not 
expected to cause either shortages of allowances available for purchase 
by EGUs in the other states or the loss of an important market for sale 
of surplus allowances by EGUs in the other states. In these 
circumstances, the EPA anticipates that the FIP withdrawal will have 
little impact on the allowance market in either trading program.
---------------------------------------------------------------------------

    \40\ See ``2015-2016 Compliance Summary for CSAPR SO<INF>2</INF> 
Group 2 and NO<INF>X</INF> Annual Trading Programs,'' available in 
the docket for this action.
    \41\ Id.
---------------------------------------------------------------------------

    With regard to the two commenters' preferred response to the 
remand--that the EPA establish a revised, less stringent SO<INF>2</INF> 
budget for Texas EGUs and implement that budget through a revised FIP--
such an action is infeasible because the Agency lacks the necessary 
legal authority. In this action, the EPA is finalizing the proposed 
finding that Texas no longer has a transport obligation under CAA 
section 110(a)(2)(D)(i)(I) for the 1997 annual PM<INF>2.5</INF> NAAQS. 
That finding addresses the deficiency in the Texas SIP that was the 
basis for issuance of the withdrawn FIP requirements and, therefore, 
because there is no longer a deficiency, the Agency no longer has 
authority to issue revised FIP requirements.\42\ The reasons for the 
finding are discussed above and were discussed at length in the 
proposal.\43\
---------------------------------------------------------------------------

    \42\ See CAA section 110(c).
    \43\ 81 FR at 78960.
---------------------------------------------------------------------------

    With regard to the commenters' suggested alternative response to 
the remand--that the EPA allow Texas to submit a CSAPR SIP with a 
higher SO<INF>2</INF> budget in order to allow the state to rely on 
CSAPR participation as an SO<INF>2</INF> BART alternative even if the 
state's EGUs are no longer subject to a CSAPR FIP SO<INF>2</INF> 
budget--the comment is not properly directed to the EPA, because Texas 
has not expressed interest in submitting a CSAPR SIP.\44\ Moreover, 
even if consideration of Texas' BART obligations were relevant for our 
action on remand, reliance on CSAPR participation with a higher budget 
would not automatically qualify as an SO<INF>2</INF> BART alternative 
under the terms of the CSAPR-better-than-BART rule. That rule allows a 
state to rely on its EGUs' participation in a CSAPR SIP trading program 
only if the EPA approves the SIP as ``meeting the requirements of'' the 
CSAPR regulations at 40 CFR 52.38 and 52.39.\45\ As relevant here, the 
CSAPR regulations at Sec.  52.39 expressly preclude a state's 
SO<INF>2</INF> emissions budget from exceeding the SO<INF>2</INF> 
emissions budget established under the CSAPR FIP trading program that 
the CSAPR SIP trading program would replace.\46\ Thus, even if the D.C. 
Circuit's remand could serve as a basis for the EPA to approve a SIP 
revision that does not satisfy Sec.  52.39 on the grounds that the 
state's transport obligations can be addressed by a less stringent 
budget, the CSAPR-better-than-BART rule at 40 CFR 51.308(e)(4) would 
not be satisfied. A SIP approved on such a basis could in theory 
provide a mechanism for Texas EGUs to participate in CSAPR with a 
higher SO<INF>2</INF> budget than the remanded FIP budget despite the 
Agency's lack of authority to set a revised SO<INF>2</INF> budget 
through a revised FIP. However, because of the increased SO<INF>2</INF> 
budget, such a SIP would not ``meet[] the requirements of . . . Sec.  
52.39'' and therefore would not allow the state to rely on its EGUs' 
participation in the CSAPR SIP trading program as an alternative to 
source-specific BART for SO<INF>2</INF>.\47\
---------------------------------------------------------------------------

    \44\ Texas did not submit comments on the proposal for this 
action.
    \45\ 40 CFR 51.308(e)(4).
    \46\ 40 CFR 52.39(i)(1)(i).
    \47\ To the extent the commenters are suggesting that the D.C. 
Circuit's holdings in EME Homer City II require the Agency to find 
that a SIP with a revised, higher SO<INF>2</INF> budget would 
somehow satisfy the CSAPR-better-than-BART rule despite its plain 
language, the Agency disagrees. The court held that the remanded 
budgets may over-control relative to the states' transport 
obligations, but did not determine that the budgets are more 
stringent than necessary to serve as an alternative to source-
specific BART. Further, the CSAPR-better-than-BART rule rests on an 
evaluation of the projected visibility impacts from CSAPR 
implementation assuming the final CSAPR Phase 2 budget stringencies 
(including the 2012 CSAPR budget revisions, which were accounted for 
in the analysis for the final CSAPR-better-than-BART rule). Given 
this, continuing to enforce the CSAPR-better-than-BART rule's 
requirement that a state's participation in CSAPR through a SIP must 
``meet[] the requirements of . . . Sec.  52.39''--including the 
requirement for a state budget no less stringent than was analyzed 
for purposes of promulgating the rule--is entirely reasonable.
---------------------------------------------------------------------------

D. Consistency of Responses to Remand Across States

    One commenter states that by withdrawing the FIP requirements the 
EPA is arbitrarily singling Texas out as the only state with a remanded 
CSAPR budget whose EGUs will lose the ability to rely on CSAPR 
participation as a BART alternative. The commenter further asserts that 
the Agency's ``sole purpose'' in withdrawing the FIP requirements is to 
facilitate the imposition of source-specific SO<INF>2</INF> BART 
requirements on Texas EGUs through a different action.
    The EPA disagrees with these comments, which are entirely contrary 
to the record. First, on the question of uniform application of the 
CSAPR-better-than-BART regulations, no state whose EGUs do not 
participate in a CSAPR trading program for a given pollutant can rely 
on CSAPR participation as a BART alternative for that pollutant. In 
response to the D.C. Circuit's remand of CSAPR Phase 2 budgets, the EPA 
has withdrawn or expects to withdraw all fifteen remanded budgets. As 
explained in the proposal, in thirteen instances, the state will retain 
eligibility to rely on the CSAPR-better-than-BART rule for the 
pollutant in question through either the EPA's establishment of a new 
CSAPR budget to address a more stringent NAAQS (eight seasonal 
NO<INF>X</INF> budgets), the state's sources' continued participation 
in a different CSAPR trading program for the same pollutant (two 
seasonal NO<INF>X</INF> budgets), or the state's voluntary adoption in 
a SIP revision of a CSAPR state budget as stringent as the remanded 
CSAPR FIP budget (three SO<INF>2</INF> budgets).\48\ In the remaining 
two instances where a remanded budget is being withdrawn and none of 
the three options for preserving eligibility to rely on CSAPR-better-
than-BART applies--Texas' SO<INF>2</INF> budget and Florida's seasonal 
NO<INF>X</INF> budget--the state is losing the

[[Page 45488]]

opportunity to rely on CSAPR participation as a BART alternative for 
that pollutant.\49\ Thus, Texas is being treated the same as every 
other state with respect to use of the CSAPR-better-than-BART rule.\50\
---------------------------------------------------------------------------

    \48\ 71 FR at 78956-57.
    \49\ As noted in the proposal, 81 FR at 78962, n.55, the EPA has 
already approved the incorporation into Florida's SIP of 
determinations regarding source-specific NO<INF>X</INF> BART. 77 FR 
71111, 71113-14 (November 29, 2012); 78 FR 53250, 53267 (August 29, 
2013).
    \50\ As a further example of the consistent treatment of Texas, 
the EPA notes that, despite the withdrawal of the Texas FIP 
requirements relating to annual NO<INF>X</INF> emissions, the state 
will be able to continue to rely on the CSAPR-better-than-BART rule 
for NO<INF>X</INF> as long as the state's EGUs continue to 
participate in a CSAPR trading program for seasonal NO<INF>X</INF> 
emissions. See 81 FR at 78955 n.4 and 78956 n.7.
---------------------------------------------------------------------------

    Second, on the question of the EPA's purpose in withdrawing the FIP 
requirements, that purpose is to address the court's remand. As 
explained in the proposal, before initiating this action, the EPA 
communicated with officials in all four states with remanded 
SO<INF>2</INF> budgets--Alabama, Georgia, South Carolina, and Texas--
regarding the EPA's intent to respond to the remand of the Phase 2 
SO<INF>2</INF> budgets by withdrawing the FIP provisions requiring the 
states' EGUs to participate in the CSAPR federal trading programs for 
SO<INF>2</INF> and annual NO<INF>X</INF>.\51\ The EPA explained that 
each state would lose its ability to rely on CSAPR participation as a 
BART alternative for SO<INF>2</INF> and/or NO<INF>X</INF> if its EGUs 
no longer participated in the CSAPR trading programs, but that the 
state could preserve that ability, if desired, by submitting a CSAPR 
SIP revision replacing the CSAPR federal trading programs with CSAPR 
state trading programs applying state-established budgets no less 
stringent than the remanded federally-established budgets (i.e., 
budgets consistent with the 2012 CSAPR-better-than-BART analytic 
demonstration).\52\ Alabama, Georgia, and South Carolina indicated 
their preference to pursue the SIP revision option. The EPA approved 
Alabama's CSAPR SIP revision in 2016 and, accordingly, the FIP 
provisions requiring its EGUs to participate in the CSAPR federal 
trading programs for SO<INF>2</INF> and annual NO<INF>X</INF> have been 
automatically withdrawn.\53\ Georgia and South Carolina committed to 
the EPA in 2016 to submit similar CSAPR SIP revisions by deadlines 
falling in September 2017 and August 2017, respectively.\54\ Georgia 
has in fact now submitted its SIP to the EPA for approval,\55\ South 
Carolina has submitted its proposed state CSAPR trading program rules 
and has requested that the EPA begin the SIP approval process under the 
Agency's parallel processing procedure,\56\ and the EPA has proposed to 
approve both SIP revisions.\57\ The CSAPR FIP provisions remain in 
place for the time being for EGUs in Georgia and South Carolina, and 
the EPA is not proposing their withdrawal at this time based on the 
reasonable expectation that such withdrawal will be automatically 
accomplished as a result of the Agency's action on those states' SIP 
submittals, just as with Alabama.\58\ Because Texas has indicated that 
it will not submit a CSAPR SIP revision, the EPA is proceeding with 
this action to withdraw the FIP requirements for Texas EGUs, consistent 
with the intended approach previously communicated to officials for all 
four states. Texas has had the same set of options available to all 
four states with remanded SO<INF>2</INF> budgets and has selected a 
different option than the other three states.
---------------------------------------------------------------------------

    \51\ See memo entitled ``The U.S. Environmental Protection 
Agency's Plan for Responding to the Remand of the Cross-State Air 
Pollution Rule Phase 2 SO<INF>2</INF> Budgets for Alabama, Georgia, 
South Carolina and Texas'' from Janet G. McCabe, EPA Acting 
Assistant Administrator for Air and Radiation, to EPA Regional Air 
Division Directors (June 27, 2016), available in the docket for this 
action. The memo directs the Regional Air Division Directors to 
share the memo with state officials. The EPA also communicated 
orally with officials in Alabama, Georgia, South Carolina, and Texas 
in advance of the memo.
    \52\ Although the D.C. Circuit remanded the states' Phase 2 
SO<INF>2</INF> budgets because it determined that the budgets may be 
more stringent than necessary to address the states' identified 
PM<INF>2.5</INF> transport obligations, nothing in the court's 
decision affects the states' authority to seek incorporation into 
their SIPs of state-established budgets as stringent as the remanded 
federally-established budgets or limits the EPA's authority to 
approve such SIP revisions. See CAA sections 116, 110(k)(3).
    \53\ Air Plan Approval; Alabama; Cross-State Air Pollution Rule, 
81 FR 59869 (August 31, 2016).
    \54\ See letters to Heather McTeer Toney, Regional 
Administrator, EPA Region 4, from Judson H. Turner, Director of the 
Environmental Protection Division, Georgia Department of Natural 
Resources (May 26, 2016) and from Myra C. Reece, Director of 
Environmental Affairs, South Carolina Department of Health and 
Environmental Control (April 19, 2016), available in the docket for 
this action. The EPA has conditionally approved the CAA section 
110(a)(2)(D)(i)(II) prong 4 visibility element for multiple NAAQS in 
the Georgia and South Carolina SIPs based on each state's commitment 
to submit a CSAPR SIP revision. 81 FR 65899, 65900 (September 26, 
2016) (Georgia); 81 FR 56512, 56513 (August 22, 2016) (South 
Carolina). Each state committed to submit its CSAPR SIP revision 
within one year of the date of the Agency's final conditional 
approval of the state's prong 4 SIP revision. Failure of a state to 
meet a commitment serving as the basis for a conditional SIP 
approval results in automatic conversion of the conditional approval 
to a disapproval.
    \55\ See letter to V. Anne Heard, Acting Regional Administrator, 
EPA Region 4, from Richard E. Dunn, Director, Environmental 
Protection Division, Georgia Department of Natural Resources (July 
26, 2017), available in the docket for this action.
    \56\ See letter to V. Anne Heard, Acting Regional Administrator, 
EPA Region 4, from Myra C. Reece, Director of Environmental Affairs, 
South Carolina Department of Health and Environmental Control (May 
26, 2017), available in the docket for this action. Under the 
parallel processing procedure, the EPA works closely with the state 
agency during regulatory development, and the state submits a copy 
of its proposed regulations to the EPA before completion of the 
state's public notice and adoption process. The EPA reviews the 
proposed state action, prepares a notice of proposed EPA action 
(approval or disapproval) for publication in the Federal Register, 
and provides public notice concurrently with the state's process. 
After the state adopts its final regulations and submits its formal 
SIP revision request, the EPA reviews the SIP submission for changes 
from proposal and either prepares a notice of final EPA action or, 
if the state has made significant changes, may re-propose before 
taking final EPA action. The public comment period on South 
Carolina's proposed regulations ended on June 26, 2017, and the 
state expects its final regulations to become effective in August 
2017. Id.
    \57\ Air Plan Approval; Georgia; Cross-State Air Pollution Rule, 
82 FR 38866 (August 16, 2017); Air Plan Approval; South Carolina; 
Cross-State Air Pollution Rule, 82 FR 37389 (August 10, 2017).
    \58\ If the EPA disapproves Georgia's or South Carolina's SIP 
submittal, the EPA will propose to withdraw the FIP provisions 
requiring that state's EGUs to participate in the CSAPR federal 
trading programs for SO<INF>2</INF> and annual NO<INF>X</INF>, 
consistent with the action taken here for Texas EGUs.
---------------------------------------------------------------------------

E. Consistency of Consideration of D.C. Circuit's Holding Across States

    One commenter asserts that the EPA has not analyzed whether other 
states covered by CSAPR are linked only to receptors for which the 2014 
base case projections do not show air quality problems, and that ``[b]y 
not performing that analysis, the EPA is arbitrarily singling Texas out 
for removal from the CSAPR program.''
    The EPA disagrees with these comments. With respect to the budgets 
that were not remanded by the court, the Agency has confirmed for each 
such budget that the state is linked to at least one receptor for which 
the base case 2014 air quality projections showed air quality problems. 
The court's holding as to lack of authority to establish Phase 2 
emission reduction requirements for a state in the absence of any 
linkage to a projected air quality problem in the 2014 base case 
therefore does not extend to these budgets.\59\
---------------------------------------------------------------------------

    \59\ See 76 FR at 48241-44, tables V.D-2, V.D-3, V.D-5, and V.D-
6 (annual and 24-hour PM<INF>2.5</INF> linkages); id. at 48246, 
tables V.D-8 and V.D-9 (ozone linkages); CSAPR Final Rule Technical 
Support Document at B-35 to B-92 (2014 base case maximum design 
values for annual and 24-hour PM<INF>2.5</INF>); id. at B-4 to B-34 
(2014 base case maximum design values for ozone). As discussed 
above, the relevant triggering values for annual and 24-hour 
PM<INF>2.5</INF> are 15.05 [micro]g/m\3\ and 35.5 [micro]g/m\3\, 
respectively. The relevant triggering value for ozone is 85 parts 
per billion (ppb). 76 FR at 48236.
---------------------------------------------------------------------------

    With respect to the remanded budgets, the EPA again rejects the 
suggestion that Texas is being treated differently than any other 
state. As noted in the response above to the comments concerning the 
consistency of the Agency's responses to the remand,

[[Page 45489]]

the FIP requirements to comply with all the remanded budgets, not just 
the remanded Texas SO<INF>2</INF> budget, have been withdrawn or are 
expected to be withdrawn. Further, as discussed above, in the cases of 
ten of the eleven remanded seasonal NO<INF>X</INF> budgets, the absence 
of air quality problems at the relevant receptors in the 2014 base case 
projections was expressly cited by the court as the basis for remanding 
the budgets. The EPA's reliance on the court's holding as applied to 
those states' ozone-related transport obligations with regard to the 
1997 8-hour ozone NAAQS is indistinguishable from the EPA's reliance on 
the same holding as applied to Texas' PM<INF>2.5</INF>-related 
transport obligations with regard to the 1997 annual PM<INF>2.5</INF> 
NAAQS.\60\
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    \60\ In the case of the last remanded seasonal NO<INF>X</INF> 
budget--for Texas--the court remanded the budget on different 
grounds, and the EPA subsequently determined through further 
analysis that the state has no remaining transport obligation under 
CAA section 110(a)(2)(D)(i)(I) with respect to the 1997 8-hour ozone 
NAAQS. See 81 FR at 74524. In the cases of the remanded 
SO<INF>2</INF> budgets for Alabama, Georgia, and South Carolina, the 
states are adopting equally stringent CSAPR SIP budgets to replace 
the withdrawn FIP budgets in order to preserve the states' options 
to rely on the CSAPR-better-than-BART rule, thereby rendering moot 
any questions about the states' remaining transport obligations and 
EPA's authority or obligation to issue revised FIP budgets to 
address such transport obligations.
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F. Potential Use of Texas FIP Budgets To Address a Different PM2.5 
NAAQS

    Finally, the commenters state that the EPA should consider Texas's 
obligations to address interstate transport with respect to the 2006 
24-hour PM<INF>2.5</INF> NAAQS and/or the 2012 annual PM<INF>2.5</INF> 
NAAQS before withdrawing Texas' FIP obligations. As noted in the 
proposal and discussed above, in the case of Texas, CSAPR FIP 
obligations related to PM<INF>2.5</INF> pollution were established with 
respect to the 1997 annual PM<INF>2.5</INF> NAAQS only, even though for 
other states the CSAPR FIPs were based on the states' transport 
obligations with respect to both the 1997 annual PM<INF>2.5</INF> NAAQS 
and the 2006 24-hour PM<INF>2.5</INF> NAAQS.\61\ The commenters assert 
that failure to consider Texas' potential transport obligations with 
respect to the 2006 24-hour PM<INF>2.5</INF> NAAQS now before 
withdrawing the FIP obligations would be inconsistent with the manner 
in which the EPA responded to the D.C. Circuit's remand of seasonal 
NO<INF>X</INF> budgets and inconsistent with data in the CSAPR record 
that links Texas to downwind air quality problems with respect to the 
2006 24-hour PM<INF>2.5</INF> NAAQS.\62\
---------------------------------------------------------------------------

    \61\ See 81 FR at 78960 n.42; see also 76 FR at 48213, table 
III-1.
    \62\ One of the commenters asserts that ``under EPA's own 
theory,'' the existence of this data in the CSAPR final record 
mandates that the EPA consider the state's transport obligations 
with respect to the 2006 24-hour PM<INF>2.5</INF> NAAQS before 
withdrawing the FIP requirements. Wrongly attributing this 
``theory'' to the Agency, the commenter ignores other factors the 
Agency must take into account before promulgating FIP requirements, 
such as whether a statutory condition establishing FIP authority has 
been satisfied. In any event, for this final action the Agency has 
expressly considered (and rejected) the option of leaving the Texas 
FIP requirements in place to address the state's transport 
obligations with respect to this NAAQS, as discussed in this 
section.
---------------------------------------------------------------------------

    The EPA disagrees with this comment for three reasons. First, as 
noted above, the Agency is responding to the court's remand of all 
fifteen CSAPR Phase 2 SO<INF>2</INF> and seasonal NO<INF>X</INF> 
budgets in the same way, namely by withdrawing the FIP provisions 
requiring affected EGUs to comply with the remanded budgets.\63\ The 
differences noted by the commenters are differences only in the actions 
that are being coordinated with the responses, not differences in the 
responses themselves.
---------------------------------------------------------------------------

    \63\ As discussed in the proposal, addressing the remanded 
budgets by withdrawing the FIP requirements is also fully consistent 
with the manner in which EPA has responded to previous judicial 
remands regarding obligations of individual states under other EPA 
rules addressing multiple states' transport obligations. 81 FR at 
78959.
---------------------------------------------------------------------------

    Second, the differences in the coordinated actions are reasonable 
given the differences in other regulatory activities being undertaken 
for the two pollutants. The EPA coordinated the withdrawal of the 
eleven remanded seasonal NO<INF>X</INF> budgets addressing the 1997 8-
hour ozone NAAQS with the establishment of new budgets for eight of 
those states addressing the 2008 8-hour ozone NAAQS because a 
rulemaking to address transported pollution with respect to the 2008 8-
hour ozone NAAQS was actively under development at the time of the 
court's decision.\64\ Under this circumstance, such coordination was 
efficient and fully consistent with the court's expressed intent to 
minimize market disruption and to continue to address statutory 
obligations to reduce transported pollution where appropriate. In 
contrast, no analogous opportunity is available to coordinate 
withdrawal of the remanded SO<INF>2</INF> budgets with another 
rulemaking addressing a more recent PM<INF>2.5</INF> NAAQS because 
states' transport obligations with respect to the 2006 24-hour 
PM<INF>2.5</INF> NAAQS have already been largely addressed through 
either SIPs or the CSAPR rulemaking, and the Agency has not identified 
interstate transport problems with respect to the 2012 annual 
PM<INF>2.5</INF> NAAQS sufficient to justify a new national rulemaking 
at this time.
---------------------------------------------------------------------------

    \64\ As noted in the proposal, for three of the eleven states 
with remanded seasonal NO<INF>X</INF> budgets addressing the 1997 8-
hour ozone NAAQS--Florida, North Carolina, and South Carolina--the 
EPA found no transport obligations with respect to the 2008 8-hour 
ozone NAAQS and did not establish seasonal NO<INF>X</INF> budgets 
addressing that NAAQS. 81 FR at 78959.
---------------------------------------------------------------------------

    Third, the EPA lacks authority to rely on a transport obligation 
for Texas with respect to either the 2006 24-hour PM<INF>2.5</INF> 
NAAQS or the 2012 annual PM<INF>2.5</INF> NAAQS as the legal basis to 
support imposing an SO<INF>2</INF> budget for the state via a FIP. 
Under CAA section 110(c), the Agency's authority to issue a FIP with 
respect to a particular state obligation arises either when the Agency 
finds that a state has failed to submit a required SIP or when the 
Agency disapproves a submitted SIP. Neither of these predicate events 
has occurred with regard to Texas' transport obligations under either 
the 2006 24-hour PM<INF>2.5</INF> NAAQS or the 2012 annual 
PM<INF>2.5</INF> NAAQS.\65\ Commenters are correct that data in the 
final CSAPR record, as evaluated by the Agency when CSAPR was 
promulgated, showed that PM<INF>2.5</INF> pollution transported from 
Texas to downwind states exceeded the minimum threshold level used to 
establish which states might have transport obligations for the 2006 
24-hour PM<INF>2.5</INF> NAAQS. However, as noted in the proposal \66\ 
and discussed above, the 2014 base case air quality projections in the 
final CSAPR record, when reevaluated in light of the D.C. Circuit's 
holdings in EME Homer City II, would support a finding that as of the 
beginning of Phase 2 of the CSAPR trading programs for SO<INF>2</INF> 
and annual NO<INF>X</INF>, Texas does not have an ongoing transport 
obligation with respect to the 2006 24-hour PM<INF>2.5</INF> NAAQS. 
Thus, even if the EPA had taken final action disapproving Texas' 
outstanding SIP submission addressing transported pollution with regard 
to the 2006 24-hour PM<INF>2.5</INF> NAAQS, such a disapproval would no 
longer provide a basis for the Agency to issue a FIP in this instance, 
because without any remaining transport obligation, there is no 
remaining SIP deficiency to address through a FIP.
---------------------------------------------------------------------------

    \65\ Texas has submitted SIPs intended to address its transport 
obligations under each of these NAAQS. In the case of the 2006 24-
hour PM<INF>2.5</INF> NAAQS, the EPA has proposed to disapprove the 
state's transport SIP submittal, 76 FR 20602 (April 13, 2011), but 
has yet not taken final action. In the case of the 2012 annual 
PM<INF>2.5</INF> NAAQS, the EPA has not yet taken any action on the 
state's transport SIP submittal.
    \66\ 81 FR at 78955 n.5.

---------------------------------------------------------------------------

[[Page 45490]]

IV. Sensitivity Analysis Regarding CSAPR Participation as a BART 
Alternative

A. Summary

    As explained in the proposal and summarized in section II.B, the 
EPA amended the Regional Haze Rule in 2012 to authorize states whose 
EGUs participate in CSAPR trading programs for a given pollutant to 
rely on CSAPR participation as a BART alternative for that pollutant. 
The CSAPR-better-than-BART rule rests on an analytic demonstration that 
implementation of CSAPR as expected to take effect at that time would 
achieve greater reasonable progress than BART toward the national goal 
of natural visibility conditions in Class I areas. As part of the 
proposal for this action, the EPA included a sensitivity analysis to 
the 2012 analytic demonstration showing that the 2012 analysis would 
have supported the same conclusion if the actions being taken in 
response to the D.C. Circuit's remand of various CSAPR Phase 2 budgets 
\67\ had been reflected in the 2012 analysis. In this action, upon 
consideration of comments received, the EPA is affirming the 
sensitivity analysis from the proposal that concluded that the 2012 
analytic demonstration is still valid and is consequently affirming 
that there is no need for revision of the CSAPR-better-than-BART rule 
as a result of the changes in CSAPR's geographic scope resulting from 
the Agency's set of responses to the EME Homer City II decision.
---------------------------------------------------------------------------

    \67\ As described in sections II.A and III.D above, in addition 
to this action, the full set of actions being taken to respond to 
the remand includes the 2016 CSAPR Update (see note 14 above) 
withdrawing the remanded seasonal NO<INF>X</INF> budgets for eleven 
states and establishing new seasonal NO<INF>X</INF> budgets to 
address a more recent ozone NAAQS for eight of those states, the 
action approving Alabama's SIP revision establishing state CSAPR 
trading programs for SO<INF>2</INF> and annual NO<INF>X</INF> to 
replace the corresponding federal CSAPR trading programs (see note 
53 above), and expected actions to approve proposed SIP revisions 
for Georgia and South Carolina comparable to Alabama's SIP revision 
(see note 57 above).
---------------------------------------------------------------------------

    The original 2012 analytic demonstration supporting participation 
in CSAPR as a BART alternative was based on an air quality modeling 
analysis comparing projected visibility conditions at relevant 
locations (referred to in the proposal and here simply as ``Class I 
areas'') under three scenarios.\68\ The first scenario reflected no 
implementation of either CSAPR or BART, the second scenario reflected 
implementation of presumptive source-specific BART for both 
SO<INF>2</INF> and NO<INF>X</INF> at BART-eligible EGUs nationwide, and 
the third scenario reflected implementation of CSAPR in covered states 
and presumptive source-specific BART for each pollutant in states where 
CSAPR did not apply for that pollutant (the three scenarios are 
referred to here as the base case scenario, the BART scenario, and the 
original CSAPR scenario, respectively). The EPA used the results of the 
three scenarios to compare the projected visibility impacts of CSAPR 
and BART under a two-pronged ``better-than-BART'' test.\69\ The first 
prong--a requirement that visibility must not decline in any Class I 
area under the proposed BART alternative--was evaluated by comparing 
the projected visibility conditions under the original CSAPR scenario 
and the base case scenario. The second prong--a requirement that there 
must be an overall visibility improvement on average across all 
affected Class I areas under the proposed BART alternative relative to 
source-specific BART--was evaluated by comparing the projected 
visibility conditions under the original CSAPR scenario and the BART 
scenario. Based on these comparisons, and also taking account of 
revisions made to CSAPR after the 2011 modeling but before or 
contemporaneous with the 2012 CSAPR-better-than-BART rule, the EPA 
concluded that the original CSAPR scenario satisfied both prongs of the 
test.
---------------------------------------------------------------------------

    \68\ This background is set forth in greater detail in the 
proposal. See 81 FR at 78961-62.
    \69\ As described in the proposal, satisfaction of the two-
pronged test based on an air quality modeling analysis is one of 
three ways that an alternative measure may be demonstrated to be 
``better than BART'' under the Regional Haze Rule. 81 FR at 78957.
---------------------------------------------------------------------------

    The EPA's proposed sensitivity analysis is set forth in detail in 
the proposal for this action.\70\ To reiterate briefly, for the 
sensitivity analysis, the Agency identified a total of five changes in 
CSAPR's geographic scope expected to occur as a result of actions 
responding to the D.C. Circuit's remand: The removal of Florida, North 
Carolina, and South Carolina from CSAPR for seasonal NO<INF>X</INF>; 
the removal of Texas from CSAPR for annual NO<INF>X</INF>; and the 
removal of Texas from CSAPR for SO<INF>2</INF>.\71\ With respect to 
each of the four changes related to NO<INF>X</INF>, the EPA explained 
that the change would not have caused a sufficiently large change in 
the modeled NO<INF>X</INF> emissions in the original CSAPR scenario to 
materially alter the visibility impacts comparison. For North Carolina 
and South Carolina, this assessment was based on the fact that the 
states' EGUs would, or were expected to, remain subject to CSAPR for 
annual NO<INF>X</INF> after the end of their CSAPR obligations for 
seasonal NO<INF>X</INF>.\72\ For Florida and Texas, this assessment was 
based on the small magnitudes of the differences in projected total 
NO<INF>X</INF> emissions from the EGUs in each of those states between 
the original CSAPR scenario and the relevant other modeled scenarios, 
combined with the dominance of sulfate impacts compared to nitrate 
impacts on visibility (especially in the South).\73\ With respect to 
the removal of Texas from CSAPR for SO<INF>2</INF>, the EPA explained 
that the change would have caused a large reduction in the Texas 
SO<INF>2</INF> emissions as modeled in the original CSAPR scenario,\74\ 
thereby causing the visibility impacts comparison to support the 
Agency's determination that CSAPR participation met the criteria for a 
BART alternative even more strongly than the comparison as originally 
performed in 2012. Thus, because the only material change from the 
original 2012 analytic demonstration would be the relative visibility 
improvement in a revised CSAPR scenario resulting from the removal of 
Texas from CSAPR for SO<INF>2</INF>, the sensitivity analysis as 
proposed indicated that the 2012 analytic demonstration remains valid.
---------------------------------------------------------------------------

    \70\ 81 FR at 78961-64.
    \71\ For purposes of the sensitivity analysis, the EPA 
conservatively did not consider the increased stringency of the 
CSAPR seasonal NO<INF>X</INF> budgets established in the CSAPR 
Update. See generally 81 FR 74504.
    \72\ 81 FR at 78962.
    \73\ Id. at 78962 (Florida), 78963 (Texas).
    \74\ As noted above and discussed in the proposal, the original 
CSAPR scenario reflected projected implementation of CSAPR in 
covered states and presumptive source-specific BART in states where 
CSAPR did not apply for a pollutant. If Texas had not been expected 
to be covered by CSAPR for SO<INF>2</INF>, the CSAPR scenario would 
therefore have reflected SO<INF>2</INF> emissions from Texas EGUs 
consistent with the implementation of presumptive source-specific 
SO<INF>2</INF> BART instead of participation in CSAPR. While EPA 
projected that the CSAPR region overall would have substantially 
lower SO<INF>2</INF> emissions under CSAPR than under source-
specific BART, for some individual states, including Texas, 
SO<INF>2</INF> emissions under source-specific BART were projected 
to be lower than under CSAPR. Thus, removing Texas from CSAPR for 
SO<INF>2</INF> in the CSAPR-better-than-BART analytic demonstration 
would have resulted in a decrease in projected SO<INF>2</INF> 
emissions in the CSAPR scenario as modeled for the demonstration. 
See 81 FR at 78962-63. In the proposal, the EPA identified the 
minimum amount of the projected decrease in Texas SO<INF>2</INF> 
emissions as 127,300 tons, based on the difference between projected 
Texas SO<INF>2</INF> emissions under the original CSAPR and BART 
scenarios. Id.; see also ``Projected Changes in Texas Emissions, 
Fossil Generation, and Fuel Usage Between the Base Case, BART, and 
Original CSAPR Scenarios,'' available in the docket for this action.
---------------------------------------------------------------------------

    The EPA received substantive comments from two parties with respect 
to the proposed sensitivity analysis. One commenter agrees with the 
EPA's conclusion and with all but one detail of the EPA's methodology 
(which, if changed as suggested by the commenter, would strengthen the 
Agency's conclusion). The other commenter does not agree with either 
the conclusion or

[[Page 45491]]

the methodology, providing several reasons. The remainder of this 
section summarizes the opposing commenter's principal comments on this 
topic and provides the Agency's response.

B. Continued CSAPR Participation by Georgia and South Carolina

    The commenter states that in order to analyze the impacts on the 
CSAPR-better-than-BART analytic demonstration from changes caused by 
the remand, in addition to any other changes evaluated, the EPA must 
also evaluate the removal of Georgia and South Carolina from CSAPR's 
SO<INF>2</INF> programs, both because the D.C. Circuit remanded their 
SO<INF>2</INF> budgets as invalid and because in the commenter's view 
it is impermissible to rely in such a sensitivity analysis on mere 
commitments from those states to submit CSAPR SIPs in the future. 
Further, according to the commenter, allowing these states to continue 
to participate in CSAPR and then rely on such participation as a BART 
alternative after their SO<INF>2</INF> budgets have been remanded would 
be inconsistent with the EPA's previous determinations that states 
could no longer indefinitely rely on participation in the former Clean 
Air Interstate Rule (CAIR) trading programs as a BART alternative after 
the D.C. Circuit found CAIR to be an invalid rule that must be 
replaced.\75\
---------------------------------------------------------------------------

    \75\ In 2005, the EPA promulgated the Clean Air Interstate Rule 
(CAIR) addressing certain interstate air pollution reduction 
obligations, 70 FR 25162 (May 12, 2005), and amended the Regional 
Haze Rule to allow participation in CAIR to be relied on as a BART 
alternative (the CAIR-better-than-BART rule), 70 FR 39104 (July 6, 
2005). The D.C. Circuit upheld the CAIR-better-than-BART rule, 
Utility Air Regulatory Group v. EPA, 471 F.3d 1333 (D.C. Cir. 2006), 
but later found CAIR invalid and remanded that rule to the Agency 
for replacement, North Carolina v. EPA, 531 F.3d 896 (D.C. Cir. 
2008), modified on rehearing, 550 F.3d 1176 (D.C. Cir. 2008). The 
Agency then replaced CAIR with CSAPR, 76 FR 48208, and replaced the 
CAIR-better-than-BART rule with the CSAPR-better-than-BART rule, 77 
FR 33642. In addition, following the remand of CAIR, the Agency 
disapproved SIP submissions for several states seeking to rely on 
CAIR as a BART alternative, e.g., 77 FR at 33647.
---------------------------------------------------------------------------

    The EPA disagrees with the comment that the Agency must consider 
Georgia and South Carolina ineligible to continue to participate in 
CSAPR's SO<INF>2</INF> programs as a consequence of the remand of their 
FIP budgets. The CSAPR regulations expressly provide for approval of 
CSAPR SIPs that meet certain conditions as replacements for CSAPR FIPs, 
and Georgia and South Carolina (as well as Alabama) have elected to 
submit such SIPs. The comparison that the commenter draws to the EPA's 
previous findings that states may no longer rely on participation in 
CAIR as a BART alternative is inapt, because the basis for such 
previous findings was that CAIR itself (including its trading programs) 
would not exist, not that particular CAIR budgets were invalid. Here, 
the CSAPR trading program will still exist, making it possible for the 
states to continue to participate in CSAPR through voluntary SIPs 
notwithstanding the invalidation of the EPA's authority to require 
compliance with the remanded budgets through FIPs addressing the 
states' transport obligations.
    The EPA considers the comment about reliance on mere commitments to 
submit SIPs to be largely moot because in the interval between 
submission of the comment and finalization of this action, Georgia has 
submitted its SIP revision and South Carolina has submitted its 
proposed state regulations and has requested that EPA begin the SIP 
approval process under the Agency's parallel processing procedure.\76\ 
Each of the state trading program rules includes a state budget for 
SO<INF>2</INF> or annual NO<INF>X</INF> emissions equal to that state's 
current FIP budget. To the extent the commenter believes that for 
purposes of a sensitivity analysis the Agency may rely only on a SIP 
that has been approved and not on a SIP or proposed state rule that has 
been submitted for EPA approval but not yet approved, the Agency 
disagrees. Both states' rules take the approach of incorporating by 
reference the federal CSAPR trading program rules, including the 
relevant budget amounts, so there are no substantive differences 
between the state trading program rules being adopted by the states for 
inclusion in their SIPs and the federal trading program rules that are 
being replaced. The Agency has proposed to approve both states' SIP 
revisions \77\ and at this time is unaware of any reason why the 
proposed approvals should not be finalized. In these circumstances, the 
EPA believes it is reasonable to rely on the SIP submittals for 
purposes of supporting an analytic assumption that Georgia and South 
Carolina will continue to participate in CSAPR's SO<INF>2</INF> and 
annual NO<INF>X</INF> programs at the states' current budget 
levels.\78\
---------------------------------------------------------------------------

    \76\ See supra notes 55 and 56.
    \77\ See supra note 57.
    \78\ As discussed in section III.D above, both states continue 
to participate in the CSAPR SO<INF>2</INF> and annual NO<INF>X</INF> 
programs through FIPs while Agency action on their SIP submittals is 
pending.
---------------------------------------------------------------------------

C. Appropriateness of Continued Reliance on Original CSAPR-Better-Than-
BART Analysis

    The commenter states that the sensitivity analysis is arbitrary 
because it is based on outdated material, and that instead of 
evaluating whether the 2012 analytic demonstration remains valid, the 
EPA must perform an entirely new analytic demonstration based on a new 
air quality modeling analysis using more current data.
    The EPA disagrees with this comment. While criticizing aspects of 
the Agency's analytic methodology, the commenter does not dispute that 
the sensitivity analysis as conducted by the EPA using that methodology 
shows that the 2012 analytic demonstration would have been strengthened 
rather than weakened by the changes in CSAPR's geographic scope that 
are occurring as a result of the D.C. Circuit's remand. (The 
methodological criticisms are addressed as the next comment below.) 
Further, the commenter offers no compelling support for the suggestion 
that, in the absence of any reason to doubt the conclusion from the 
2012 analytic demonstration, the EPA must nevertheless conduct an 
entirely new demonstration. As an asserted legal rationale for the need 
for a new analysis, the commenter cites the Regional Haze Rule 
provisions for approval of BART alternatives, noting that the provision 
that the EPA followed in approving the CSAPR-better-than-BART rule 
requires a demonstration based on an air quality modeling analysis.\79\ 
The EPA has performed one such air quality modeling analysis and in 
this action has shown that the analysis already performed would 
continue to support a conclusion that CSAPR meets the criteria for a 
BART alternative notwithstanding changes in CSAPR's geographic scope. 
Contrary to the commenter's suggestion, the regulations do not say that 
the EPA must perform an entirely new analysis. Similarly, the 
commenter's assertion that changes in industry data since 2011 
necessitate a new analytic demonstration amounts to a call for 
recurring demonstrations that a BART alternative results in greater 
reasonable progress than BART as the industry evolves, rather than a 
one-time demonstration when the alternative is approved. The 
regulations include no such requirement for recurring demonstrations.
---------------------------------------------------------------------------

    \79\ See 40 CFR 51.308(e)(3).
---------------------------------------------------------------------------

D. Possible Changes in the Geographic Distribution of Emissions

    The commenter states that the EPA's methodology for conducting the 
sensitivity analysis as set forth in the proposal failed to adequately 
consider whether changes in a revised CSAPR scenario regarding the 
geographic distribution of emissions across states or

[[Page 45492]]

within individual states might lead to violations of the analytic 
criteria that the EPA relied on to find that CSAPR qualifies as a BART 
alternative. In particular, the commenter raises the theoretical 
possibility that, in a revised CSAPR scenario where Texas EGUs no 
longer participate in CSAPR for SO<INF>2</INF>, some individual sources 
in other CSAPR states could buy additional allowances and increase 
their emissions, and that such increases in emissions in turn could 
cause adverse visibility impacts in some individual Class I areas 
(thereby violating the first prong of the two-pronged test described 
above). More generally, the commenter asserts that without new modeling 
the EPA ``has no data'' and has ``simply assume[d]'' that the two 
prongs of the test would be satisfied under such a revised scenario.
    As an initial matter, the EPA disagrees with the commenter's 
summary characterization of the proposed sensitivity analysis as not 
being grounded in data. To the contrary, the Agency's proposed 
conclusions explicitly rely on data drawn from the modeling results in 
the record for the CSAPR-better-than-BART rule. The EPA explained in 
the proposal, first, how the data from the earlier rulemaking record 
showed that a revised CSAPR scenario would reflect a projected 
reduction in Texas SO<INF>2</INF> emissions of 127,300 tons (or more) 
\80\ along with projected increases in Florida and Texas NO<INF>X</INF> 
emissions of at most a few thousand tons and, second, why it was 
logical to conclude from these projected emissions changes that, 
relative to the modeled BART and base case scenarios, the revised CSAPR 
scenario would have shown even larger visibility improvements than the 
original CSAPR scenario.\81\ The commenter provides no data of any 
kind, let alone data that might challenge the data presented in the 
proposal.
---------------------------------------------------------------------------

    \80\ The 127,300-ton amount was described in the proposal as the 
minimum reduction in projected Texas SO<INF>2</INF> emissions 
because it did not reflect a 50,500-ton increase in the Texas 
SO<INF>2</INF> budget that occurred after the original CSAPR 
scenario was modeled. If that budget increase had been reflected in 
the original CSAPR scenario, modeled Texas EGU SO<INF>2</INF> 
emissions in that scenario would likely have been higher, 
potentially by the full 50,500-ton amount. The CSAPR budget increase 
would have had no effect on Texas EGUs' modeled SO<INF>2</INF> 
emissions under BART. As a consequence, the 127,300-ton minimum 
estimate of the reduction in projected Texas SO<INF>2</INF> 
emissions caused by removing Texas EGUs from CSAPR for 
SO<INF>2</INF>, which are computed as the difference between Texas 
EGUs' collective emissions in the original CSAPR scenario and the 
BART scenario, may be understated by as much as 50,500 tons.
    \81\ 81 FR at 78962-64.
---------------------------------------------------------------------------

    Turning to the commenter's more specific methodological criticism--
that the Agency has not sufficiently considered whether shifts in the 
geographic distribution of emissions might lead to violations of the 
two-pronged test--the EPA agrees that the potential for such shifts was 
not expressly addressed in the sensitivity analysis as proposed. For 
the final action, the EPA has therefore performed further analysis to 
address this comment, focusing on the specific circumstance identified 
by the commenter--shifts associated with the removal of Texas EGUs from 
CSAPR for SO<INF>2</INF>--because the Agency agrees that this is the 
most significant change to CSAPR among the actions that have been or 
are expected to be taken in response to the D.C. Circuit's remand.\82\ 
The further analysis is based on state- and unit-level data 
disaggregated from the projections of electricity generation, fuel 
usage, and emissions developed for the base case, BART, and original 
CSAPR scenarios that were compared in the 2012 analytic 
demonstration.\83\
---------------------------------------------------------------------------

    \82\ As summarized above, the Agency explained in the proposal 
that the removal of Florida, North Carolina, South Carolina, and 
Texas EGUs from CSAPR for either seasonal or annual NO<INF>X</INF>, 
as applicable, would not have caused sufficient changes in modeled 
NO<INF>X</INF> emissions in a revised CSAPR scenario to materially 
alter the visibility impacts comparison, in some instances because 
the EGUs would remain subject to another CSAPR NO<INF>X</INF> 
program and in some instances because of the small magnitudes of the 
differences in projected total NO<INF>X</INF> emissions from the 
EGUs in each of those states between the original CSAPR scenario and 
the relevant other modeled scenarios, combined with the dominance of 
sulfate impacts compared to nitrate impacts on visibility 
(especially in the South). The EPA believes these same factors 
likewise indicate that the visibility impacts of any potential 
shifts in the geographic distribution of NO<INF>X</INF> emissions 
related to removal of these states from the CSAPR NO<INF>X</INF> 
programs would not be material to either prong of the two-pronged 
visibility impacts comparison.
    \83\ The state- and plant-level data are derived from the unit-
level data in three spreadsheets included in the final CSAPR-better-
than-BART rulemaking record and available in the docket for this 
action: IPM Parsed File for CSAPR Base Case Scenario 2014 (EPA-HQ-
OAR-2011-0729-0004), IPM Parsed File for National BART Scenario 2014 
(EPA-HQ-OAR-2011-0729-0008), and IPM Parsed File for CSAPR-BART 
Scenario 2014 (EPA-HQ-OAR-2011-0729-0006).
---------------------------------------------------------------------------

    Based on this additional analysis, the EPA finds that, in addition 
to the projected SO<INF>2</INF> emissions reduction of at least 127,300 
tons in Texas identified in the proposal,\84\ a revised CSAPR scenario 
without Texas in CSAPR for SO<INF>2</INF> could also reflect a 
projected aggregated increase in SO<INF>2</INF> emissions of 
approximately 22,300 tons in the six other states in the CSAPR 
SO<INF>2</INF> Group 2 trading program (Alabama, Georgia, Kansas, 
Minnesota, Nebraska, and South Carolina). The reason for this 
adjustment is that in the original CSAPR scenario, Texas EGUs were 
projected to emit 22,300 tons of SO<INF>2</INF> in excess of the 
state's SO<INF>2</INF> budget.\85\ This would have been possible 
through the use of allowances purchased from EGUs in other 
SO<INF>2</INF> Group 2 states. Under a revised CSAPR scenario where 
Texas EGUs are no longer part of the CSAPR trading program, Texas EGUs 
would no longer purchase the 22,300 allowances from the other states, 
and the EGUs in those other states could potentially use those 
allowances to increase their own collective SO<INF>2</INF> emissions. 
Much or all of the total potential increase in emissions in the other 
states would be projected to occur in Alabama and Georgia, because in 
the original CSAPR scenario the collective emissions from Kansas EGUs 
were projected to already be at the state's ``assurance level''--the 
emissions level above which EGUs trigger a CSAPR provision requiring 
the surrender of three allowances instead of one allowance per ton of 
emissions--and the collective emissions from Minnesota, Nebraska, and 
South Carolina EGUs were projected to already be close to their states' 
respective assurance levels.\86\ After accounting for the potential 
22,300-ton offsetting adjustment, the net regional SO<INF>2</INF> 
reduction under the revised CSAPR scenario relative to the original 
CSAPR scenario would be projected to be approximately 105,000 tons (or 
more) instead of 127,300 tons (or more) as described in the proposed 
sensitivity analysis.\87\ For the reasons below, the EPA has considered 
both the projected decrease in Texas SO<INF>2</INF> emissions and the 
projected aggregated increase in SO<INF>2</INF>

[[Page 45493]]

emissions in the other states and has concluded that the two-pronged 
CSAPR-better-than-BART test described above would continue to be 
satisfied.
---------------------------------------------------------------------------

    \84\ See supra note 74.
    \85\ See ``Projected Interstate Trading of CSAPR SO<INF>2</INF> 
Group 2 Allowances in the Original CSAPR Scenario,'' available in 
the docket for this action.
    \86\ Id.
    \87\ It is possible that if the original CSAPR scenario that 
includes Texas in CSAPR for SO<INF>2</INF> had been remodeled to 
include the 50,500 increase in the Texas SO<INF>2</INF> budget 
described in the proposal and in footnote 80, Texas EGUs would have 
been projected to purchase either more or less than 22,300 
allowances from EGUs in other CSAPR SO<INF>2</INF> Group 2 states, 
and that a revised CSAPR scenario in which Texas was removed from 
CSAPR for SO<INF>2</INF> would therefore have shown the other Group 
2 states increasing their SO<INF>2</INF> emissions by this different 
amount. Regardless of the amount or direction of any modeled change 
in Texas EGUs' CSAPR allowance purchases, that change would 
generally have been matched by an equal and opposite change in Texas 
EGUs' projected emissions under CSAPR, with the result that the 
overall net projected reduction in emissions caused by removing 
Texas from CSAPR for SO<INF>2</INF> would continue to be at least 
105,000 tons. The maximum amount of CSAPR SO<INF>2</INF> allowances 
that Texas could purchase from other states and use in a given year 
without incurring 3-for-1 allowance surrender requirements is 
approximately 53,000 tons, which is the amount of Texas' 
SO<INF>2</INF> variability limit--the difference between the state's 
budget and its assurance level--under the CSAPR regulations. See 40 
CFR 97.710(b)(7).
---------------------------------------------------------------------------

    As summarized above, the first prong of the two-pronged test 
requires that visibility conditions must not decline in any Class I 
area. In the 2012 analytic demonstration, the EPA evaluated this prong 
by comparing visibility impacts at each affected Class I area under the 
original CSAPR scenario and the base case scenario. The situation 
identified by the commenter in which emissions under a revised CSAPR 
scenario might rise at some individual EGUs sufficiently to cause a 
decline in visibility at some individual Class I area relative to 
visibility conditions in the base case scenario--that is, without 
either CSAPR or BART--would be a very unusual event and likely can be 
ruled out as impossible, or nearly so, in a scenario such as the 
revised CSAPR scenario being considered. Under the base case scenario, 
EGUs incur no cost at all under CSAPR for emitting a ton of 
SO<INF>2</INF>. In contrast, under either the original CSAPR scenario 
or a revised CSAPR scenario, EGUs would incur some cost per ton of 
SO<INF>2</INF> emissions under CSAPR, and where that new cost is the 
principal change from the base case scenario, EGUs that emit 
SO<INF>2</INF> would generally be projected to either decrease or 
maintain their emissions relative to the base case scenario where that 
cost was not present. If in a revised CSAPR scenario, allowances are 
more plentiful and the cost incurred per ton of SO<INF>2</INF> 
emissions therefore is less than the cost per ton under the original 
CSAPR scenario, some EGUs that emit SO<INF>2</INF> would be projected 
to reduce their SO<INF>2</INF> emissions by a smaller amount than in 
the original CSAPR scenario, but they generally would not be projected 
to significantly increase their emissions relative to the base case 
scenario. An exception to this general principle could occur if some 
other factor influencing EGUs' operating decisions, such as electricity 
demand or relative fuel prices, also changed. The EPA therefore 
considered whether the removal of Texas from CSAPR could have been 
projected to result in any material change in demand for generation 
from other states or relative fuel prices in other states in a revised 
CSAPR scenario compared to the original CSAPR scenario.\88\
---------------------------------------------------------------------------

    \88\ Although the analysis focuses on other CSAPR states, 
consistent with the concerns raised by the commenter, the EPA notes 
that absent changes in generation demand or relative fuel prices, 
removal of Texas from CSAPR would also be expected not to affect the 
operating decisions of EGUs in non-CSAPR states.
---------------------------------------------------------------------------

    With respect to the possibility of changes in electricity demand in 
other states, record data show that, relative to the original CSAPR 
scenario, aggregated 2014 generation from fossil-fired Texas EGUs was 
projected to increase by 0.2% in the BART scenario (which is used here 
as a proxy representing the operating behavior of Texas EGUs in a 
revised CSAPR scenario), indicating that removal of Texas EGUs from 
CSAPR for SO<INF>2</INF> and implementation of SO<INF>2</INF> BART 
would not be projected to result in an increase in emissions outside 
Texas caused by a shift in generation from Texas to other states.\89\
---------------------------------------------------------------------------

    \89\ See ``Projected Changes in Texas Emissions, Fossil 
Generation, and Fuel Usage Between the Base Case, BART, and Original 
CSAPR Scenarios,'' available in the docket for this action. Because 
there is little difference in NO<INF>X</INF> emissions from Texas 
EGUs between the original CSAPR scenario, the BART scenario, and the 
base case scenario, id., the EPA considers the BART scenario a 
reasonable emissions proxy for a revised CSAPR scenario in which 
Texas EGUs would be subject to BART for SO<INF>2</INF> but not for 
NO<INF>X</INF>.
---------------------------------------------------------------------------

    With respect to changes in relative fuel prices in other states, 
record data show that, relative to the original CSAPR scenario, in the 
BART scenario Texas EGUs were projected to decrease their use of 
subbituminous coal by 68 trillion Btus (TBtu), increase their use of 
lignite by 66 TBtu, and increase their use of other fossil fuels 
(predominantly natural gas) by 11 TBtu.\90\ The changes in projected 
Texas usage of subbituminous coal and natural gas are less than 1% of 
the projected total industry usage of those fuels nationwide under the 
original CSAPR scenario, indicating that there is no reason to expect 
material impacts on prices or usage of those fuels in other states. 
Unlike subbituminous coal and natural gas, lignite is an inherently 
local fuel that is consumed near the point of extraction because the 
fuel's low energy content per unit of weight makes shipment over long 
distances uneconomic. Thus, although the increase in Texas EGUs' 
projected usage of lignite is fairly large (8.2% of projected national 
usage of lignite under the original CSAPR scenario), any resulting 
increase in the local prices of lignite would not be expected to affect 
the mix of fuels used in other states.
---------------------------------------------------------------------------

    \90\ See id.
---------------------------------------------------------------------------

    For further confirmation of the applicability here of the general 
principle discussed above--namely, that in a modeled CSAPR scenario, 
EGUs that emit SO<INF>2</INF> would generally be projected to either 
decrease or maintain their emissions and not to increase their 
emissions relative to the base case scenario--the EPA compared the 
projected unit-level SO<INF>2</INF> emissions in the original CSAPR and 
base case scenarios for all coal-fired EGUs in the seven states in the 
CSAPR SO<INF>2</INF> Group 2 trading program. The results of the 
comparison clearly indicate that the general principle applies in this 
instance: 77 Units were projected to reduce their SO<INF>2</INF> 
emissions by 1,000 tons or more (in amounts up to 57,000 tons), 106 
units were projected to essentially maintain their SO<INF>2</INF> 
emissions (increasing or decreasing by between 0 and 1,000 tons), and 2 
units were projected to increase their SO<INF>2</INF> emissions by 
approximately 1,100 tons each.\91\ A similar comparison at the state 
level shows that collective SO<INF>2</INF> emissions from the sets of 
EGUs in each of the seven states were also projected to decrease from 
the base case scenario to the original CSAPR scenario (in amounts 
ranging from 1,900 tons for Nebraska to 248,800 tons for Alabama).\92\ 
In combination with the data above showing that removal of Texas from 
CSAPR for SO<INF>2</INF> would not be expected to cause changes in 
demand for generation or relative fuel prices in other states, the EPA 
believes that these data on how EGUs were projected to comply with 
CSAPR in the original CSAPR scenario indicate that in a revised CSAPR 
scenario where Texas is removed from CSAPR for SO<INF>2</INF> and 
22,300 additional allowances (or up to 53,000 allowances, as noted 
earlier \93\) therefore become available to the EGUs in the other 
SO<INF>2</INF> Group 2 states, few if any EGUs would respond to the 
availability of the additional allowances by increasing their emissions 
materially above their emissions in the base case scenario. Further, 
even if some EGUs did increase their emissions above their emissions in 
the base case scenario, because of the regional nature of sulfate 
formation from SO<INF>2</INF> emissions and the very large decreases in 
SO<INF>2</INF> emissions across the broader region, the EPA believes 
that any such local increase would be unlikely to cause localized 
visibility degradation in any Class I area near a CSAPR state affected 
by the removal of Texas from CSAPR for SO<INF>2</INF>. In consequence, 
the Agency finds it reasonable to conclude that in such a revised CSAPR 
scenario, no such Class I areas would experience declines in visibility 
conditions relative to the base case scenario.
---------------------------------------------------------------------------

    \91\ See ``Projected Changes in Unit-Level Emissions Between the 
Base Case and Original CSAPR Scenarios,'' available in the docket 
for this action.
    \92\ See id.
    \93\ See supra note 87.
---------------------------------------------------------------------------

    The second prong of the two-pronged test requires the average 
projected

[[Page 45494]]

visibility improvement across all affected Class I areas to be greater 
under the BART alternative than under BART. In the proposal, the EPA 
proposed to conclude that this prong would be easily satisfied under 
the revised CSAPR scenario because Texas EGUs would be modeled in the 
revised CSAPR scenario as subject to SO<INF>2</INF> BART instead of 
being subject to CSAPR for SO<INF>2</INF>, and the record data showed 
that Texas EGUs' projected SO<INF>2</INF> emissions would be at least 
127,300 tons lower under BART than under CSAPR. As discussed above, 
based on further analysis the EPA concludes that the decrease in 
projected Texas SO<INF>2</INF> emissions could potentially be partially 
offset by an increase in projected SO<INF>2</INF> emissions in other 
CSAPR SO<INF>2</INF> Group 2 states, most likely Alabama or Georgia. 
The EPA believes that such a revised CSAPR scenario would continue to 
show greater average visibility improvement than the BART scenario (and 
greater than the original CSAPR scenario), again easily passing the 
second prong of the two-pronged test. Any reduction in visibility 
improvement in Class I areas near Alabama, Georgia, or the other Group 
2 states relative to the original CSAPR scenario would be more than 
offset by greater visibility improvement in Class I areas near 
Texas.\94\ Due to the regional nature of sulfate particulate matter 
formation, it is highly likely that, like the original CSAPR scenario, 
the revised CSAPR scenario would show greater visibility improvement on 
average across all Class I areas than the BART scenario. The commenters 
did not present any information to indicate otherwise, and the EPA is 
not aware of any such information.
---------------------------------------------------------------------------

    \94\ The CSAPR-better-than-BART record shows that the Class I 
areas most impacted by Texas were projected to have greater modeled 
visibility improvement in the BART scenario (on the 20% best days) 
than in the CSAPR scenario. This indicates that there would have 
been additional visibility improvement in a revised CSAPR scenario 
in which Texas is not in CSAPR for SO<INF>2</INF> and is therefore 
modeled at BART SO<INF>2</INF> levels. Note that the average 
visibility improvements across all affected Class I areas as 
computed in the original CSAPR and BART scenarios are much closer on 
the 20% best days than on the 20% worst days. Therefore, in 
determining whether the second prong of the two-pronged test will be 
passed under a revised CSAPR scenario, the modeled results on the 
20% best days are particularly important.
---------------------------------------------------------------------------

E. Validity of 2012 Analytic Demonstration Prior to CSAPR Changes

    Finally, the commenter asserts that regardless of the character of 
the sensitivity analysis itself, the original 2012 CSAPR-better-than-
BART analytic demonstration was arbitrary, rendering any sensitivity 
analysis performed regarding the original demonstration arbitrary. In 
support of this claim, the commenter incorporates by reference all 
criticisms of the original analytic demonstration contained in the 
comments submitted by the commenter in the original CSAPR-better-than-
BART rulemaking as well as all criticisms contained in the commenter's 
brief in the pending litigation challenging the CSAPR-better-than-BART 
rule.
    The EPA rejects these comments as both improperly raised and 
outside the scope of this proceeding. The EPA appreciates the value of 
public input in the rulemaking process and seeks to fulfill its legal 
obligation to consider and respond to all substantive comments that are 
``raised with reasonable specificity,'' \95\ but catch-all references 
to whatever statements may have been made in another proceeding do not 
meet this standard. Moreover, even if they had been properly raised, 
comments concerning the legal validity of the original 2012 analytic 
demonstration are beyond the scope of this rulemaking, which concerns 
only the sensitivity analysis addressing the effect on the 2012 
analytic demonstration of changes in CSAPR's geographic scope resulting 
from the D.C. Circuit's remand (as well as the withdrawal of Texas 
CSAPR FIP requirements for SO<INF>2</INF> and annual NO<INF>X</INF> and 
the finding as to Texas' remaining transport obligation under CAA 
section 110(a)(2)(D)(i)(I) regarding the 1997 annual PM<INF>2.5</INF> 
NAAQS). Arguments concerning the original 2012 analytic demonstration 
should be, and have been, raised in the original CSAPR-better-than-BART 
rulemaking and in the pending litigation over that rule.
---------------------------------------------------------------------------

    \95\ CAA section 307(d)(7)(B).
---------------------------------------------------------------------------

V. Description of Amendments to Regulatory Text

    In order to implement the withdrawal of the FIP provisions 
requiring Texas EGUs to participate in the CSAPR NO<INF>X</INF> Annual 
Trading Program and the CSAPR SO<INF>2</INF> Group 2 Trading Program 
with regard to emissions occurring in Phase 2 of those programs, the 
EPA is amending the regulatory text at 40 CFR 52.38(a)(2), 52.39(c), 
52.2283(c), and 52.2284(c) to provide that Texas EGUs are subject to 
requirements under these two programs with regard to emissions 
occurring in 2015 and 2016 only. Conforming amendments to cross-
references are being made at Sec.  52.38(a)(3), (a)(4), (a)(5), (a)(6), 
and (a)(8)(iii) and Sec.  52.39(g), (h), (i), (j), and (m)(3).
    The EPA is also clarifying the CSAPR regulations by adding the 
introductory headings ``Annual emissions'' and ``Ozone season 
emissions'' to Sec.  52.38(a) and (b), respectively, and by amending 
the wording of the regulatory text at Sec. Sec.  52.38(b)(2)(i) and 
52.39(b) to parallel the wording of the newly amended regulatory text 
at Sec. Sec.  52.38(a)(2)(i) and 52.39(c)(1). These editorial 
clarifications do not alter any existing regulatory requirements.
    Finally, the EPA is correcting the CSAPR regulations applicable to 
South Carolina EGUs by amending the regulatory text at Sec.  52.2141(b) 
to reference CSAPR SO<INF>2</INF> Group 2 allowances and 40 CFR part 
97, subpart DDDDD instead of CSAPR SO<INF>2</INF> Group 1 allowances 
and 40 CFR part 97, subpart CCCCC. The corrections make the text at 
Sec.  52.2141(b) consistent with the existing text at Sec.  52.2141(a), 
and the two paragraphs together now correctly reflect the existing 
regulatory requirements applicable to South Carolina EGUs as already 
set forth at Sec.  52.39(c) and (k).

VI. Statutory and Executive Order Reviews

    Additional information about these statutes and Executive Orders 
can be found at http://www2.epa.gov/laws-regulations/laws-and-executive-orders.

A. Executive Order 12866: Regulatory Planning and Review, and Executive 
Order 13563: Improving Regulation and Regulatory Review

    This action is not a significant regulatory action and therefore 
was not submitted to the Office of Management and Budget (OMB) for 
review.

B. Executive Order 13771: Reducing Regulations and Controlling 
Regulatory Costs

    This action is not expected to be an Executive Order 13771 
regulatory action because this action is not significant under 
Executive Order 12866.

C. Paperwork Reduction Act

    This action does not impose any new information collection burden 
under the Paperwork Reduction Act. The OMB has previously approved the 
information collection activities contained in the existing regulations 
and has assigned OMB control number 2060-0667. The withdrawal of the 
FIP provisions in this action will eliminate the obligations of Texas 
sources to comply with the existing monitoring, recordkeeping, and 
reporting requirements under the CSAPR SO<INF>2</INF> Group 2 Trading 
Program and the CSAPR NO<INF>X</INF> Annual Trading Program.

[[Page 45495]]

D. Regulatory Flexibility Act

    I certify that this action will not have a significant economic 
impact on a substantial number of small entities under the Regulatory 
Flexibility Act. In making this determination, the impact of concern is 
any significant adverse economic impact on small entities. An agency 
may certify that a rule will not have a significant economic impact on 
a substantial number of small entities if the rule relieves regulatory 
burden, has no net burden, or otherwise has a positive economic effect 
on the small entities subject to the rule. This action withdraws 
existing regulatory requirements for some entities and does not impose 
new requirements on any entity. We have therefore concluded that this 
action will either relieve or have no net regulatory burden for all 
directly regulated small entities.

E. Unfunded Mandates Reform Act

    This action does not contain any unfunded mandate as described in 
the Unfunded Mandates Reform Act, 2 U.S.C. 1531-1538, and does not 
significantly or uniquely affect small governments. The action imposes 
no enforceable duty on any state, local, or tribal governments or the 
private sector. This action simply eliminates certain federal 
regulatory requirements that the D.C. Circuit has held invalid.

F. Executive Order 13132: Federalism

    This action does not have federalism implications. It will not have 
substantial direct effects on the states, on the relationship between 
the national government and the states, or on the distribution of power 
and responsibilities among the various levels of government. This 
action simply eliminates certain federal regulatory requirements that 
the D.C. Circuit has held invalid.

G. Executive Order 13175: Consultation and Coordination With Indian 
Tribal Governments

    This action does not have tribal implications as specified in 
Executive Order 13175. It will not have substantial direct effects on 
tribal governments, on the relationship between the federal government 
and Indian tribes, or on the distribution of power and responsibilities 
between the federal government and Indian tribes. This action simply 
eliminates certain federal regulatory requirements that the D.C. 
Circuit has held invalid. Thus, Executive Order 13175 does not apply to 
this action. Consistent with the EPA Policy on Consultation and 
Coordination with Indian Tribes, the EPA consulted with tribal 
officials while developing CSAPR. A summary of that consultation is 
provided in the preamble for CSAPR, 76 FR 48208, 48346 (August 8, 
2011).

H. Executive Order 13045: Protection of Children From Environmental 
Health and Safety Risks

    The EPA interprets Executive Order 13045 as applying only to those 
regulatory actions that concern environmental health or safety risks 
that the EPA has reason to believe may disproportionately affect 
children, per the definition of ``covered regulatory action'' in 
section 2-202 of the Executive Order. This action is not subject to 
Executive Order 13045 because it simply eliminates certain federal 
regulatory requirements that the D.C. Circuit has held invalid.

I. Executive Order 13211: Actions That Significantly Affect Energy 
Supply, Distribution, or Use

    This action is not subject to Executive Order 13211, because it is 
not a significant regulatory action under Executive Order 12866.

J. National Technology Transfer Advancement Act

    This rulemaking does not involve technical standards.

K. Executive Order 12898: Federal Actions To Address Environmental 
Justice in Minority Populations and Low-Income Populations

    The EPA believes that this action is not subject to Executive Order 
12898 because it does not establish an environmental health or safety 
standard. This action simply eliminates certain federal regulatory 
requirements that the D.C. Circuit has held invalid. Consistent with 
Executive Order 12898 and the EPA's environmental justice policies, the 
EPA considered effects on low-income populations, minority populations, 
and indigenous peoples while developing CSAPR. The process and results 
of that consideration are described in the preamble for CSAPR, 76 FR 
48208, 48347-52 (August 8, 2011).

L. Congressional Review Act

    This action is subject to the Congressional Review Act, and the EPA 
will submit a rule report to each House of the Congress and to the 
Comptroller General of the United States. This action is not a ``major 
rule'' as defined by 5 U.S.C. 804(2).

M. Judicial Review and Determinations Under CAA Section 307(b)(1) and 
(d)

    CAA section 307(b)(1) indicates which federal appellate courts have 
venue for petitions of review of final actions by the EPA. This section 
provides, in part, that petitions for review must be filed in the D.C. 
Circuit Court of Appeals if (i) the agency action consists of 
``nationally applicable regulations promulgated, or final action taken, 
by the Administrator,'' or (ii) such action is locally or regionally 
applicable, if ``such action is based on a determination of nationwide 
scope or effect and if in taking such action the Administrator finds 
and publishes that such action is based on such a determination.'' This 
final action is ``nationally applicable.'' In addition, the EPA finds 
that all aspects of this action are based on a determination of 
``nationwide scope and effect'' within the meaning of section 
307(b)(1).
    First, the EPA's withdrawal of FIP requirements under the CSAPR 
program for Texas is being undertaken in response to a remand by the 
D.C. Circuit in litigation that challenged numerous aspects of CSAPR 
with implications for multiple states and resulted in the remand of 
fifteen budgets for thirteen states. Retaining review in the D.C. 
Circuit is appropriate and avoids the potential that another court is 
forced to interpret the remand order of a sister circuit. Also, the 
finding that, after the FIP withdrawal, Texas has no remaining 
obligation to address interstate transport with respect to the 1997 
annual PM<INF>2.5</INF> NAAQS is based on a common core of factual 
findings and analyses concerning the transport of pollutants between 
the different states subject to CSAPR, which is a nationally applicable 
program. Further, this action is based on a determination that modifies 
the scope and effect of CSAPR; thus, any judicial review of this action 
will necessarily implicate the national-level policies, technical 
analyses, or interpretations that undergird this nationwide program.
    Second, in express consideration of the effect of the withdrawal of 
Texas FIP requirements accomplished through this final action, the EPA 
is affirming the continued validity of 40 CFR 51.308(e)(4), a 
regulatory provision available to each of the 27 States whose sources 
currently participate in one or more CSAPR trading programs. This 
determination affects the rights and interests of regulated parties and 
other stakeholders throughout the eastern United States relying on or 
otherwise affected by that regulatory provision.
    For these reasons, this final action is nationally applicable and, 
in addition,

[[Page 45496]]

the Administrator finds that this final action is based on a 
determination of nationwide scope and effect for purposes of section 
307(b)(1). Thus, pursuant to section 307(b) any petitions for review of 
this action must be filed in the D.C. Circuit within 60 days from the 
date of publication of this action in the Federal Register.
    In addition, pursuant to CAA sections 307(d)(1)(B), 307(d)(1)(J), 
and 307(d)(1)(V), the Administrator determines that this action is 
subject to the provisions of section 307(d). CAA section 307(d)(1)(B) 
provides that section 307(d) applies to, among other things, ``the 
promulgation or revision of an implementation plan by the Administrator 
under [CAA section 110(c)].'' 42 U.S.C. 7607(d)(1)(B). Under section 
307(d)(1)(J), the provisions of section 307(d) apply to the 
``promulgation or revision of regulations . . . relating to . . . 
protection of visibility.'' 42 U.S.C. 7607(d)(1)(J). Under section 
307(d)(1)(V), the provisions of section 307(d) also apply to ``such 
other actions as the Administrator may determine.'' 42 U.S.C. 
7607(d)(1)(V). The agency has complied with the procedural requirements 
of CAA section 307(d) during the course of this rulemaking.
    CAA section 307(b)(1) also provides that filing a petition for 
reconsideration by the Administrator of this rule does not affect the 
finality of the rule for the purposes of judicial review, does not 
extend the time within which a petition for judicial review may be 
filed, and does not postpone the effectiveness of the rule. Under CAA 
section 307(b)(2), the requirements established by this rule may not be 
challenged separately in any civil or criminal proceedings brought by 
the EPA to enforce these requirements.

List of Subjects in 40 CFR Part 52

    Environmental protection, Administrative practice and procedure, 
Air pollution control, Incorporation by reference, Intergovernmental 
relations, Nitrogen oxides, Ozone, Particulate matter, Regional haze, 
Reporting and recordkeeping requirements, Sulfur dioxide.

    Dated: September 21, 2017.
E. Scott Pruitt,
Administrator.

    For the reasons stated in the preamble, part 52 of chapter I of 
title 40 of the Code of Federal Regulations is amended as follows:

PART 52--APPROVAL AND PROMULGATION OF IMPLEMENTATION PLANS

0
1. The authority citation for part 52 continues to read as follows:

    Authority: 42 U.S.C. 7401 et seq.

Subpart A--General Provisions

0
2. Section 52.38 is amended by:
0
a. Adding a paragraph (a) heading;
0
b. Revising paragraph (a)(2);
0
c. In paragraph (a)(3) introductory text, removing the text ``(a)(2)'' 
and in its place adding the text ``(a)(2)(i) or (ii)'';
0
d. In paragraph (a)(4) introductory text, removing the text ``(a)(2)'' 
and in its place adding the text ``(a)(2)(i)'';
0
e. In paragraphs (a)(5) introductory text and (a)(6), removing the text 
``(a)(2)'' and in its place adding the text ``(a)(2)(i)'', and removing 
the text ``(a)(1) through (4)'' and in its place adding the text 
``(a)(1), (a)(2)(i), and (a)(3) and (4)'';
0
f. In paragraph (a)(8)(iii), removing the text ``(a)(1) through (4)'' 
and in its place adding the text ``(a)(1), (a)(2)(i), and (a)(3) and 
(4)'';
0
g. Adding a paragraph (b) heading; and
0
h. In paragraph (b)(2)(i), after the word ``emissions'' adding the word 
``occurring''.
    The additions and revisions read as follows:


Sec.  52.38  What are the requirements of the Federal Implementation 
Plans (FIPs) for the Cross-State Air Pollution Rule (CSAPR) relating to 
emissions of nitrogen oxides?

    (a) Annual emissions. * * *
    (2)(i) The provisions of subpart AAAAA of part 97 of this chapter 
apply to sources in each of the following States and Indian country 
located within the borders of such States with regard to emissions 
occurring in 2015 and each subsequent year: Alabama, Georgia, Illinois, 
Indiana, Iowa, Kansas, Kentucky, Maryland, Michigan, Minnesota, 
Missouri, Nebraska, New Jersey, New York, North Carolina, Ohio, 
Pennsylvania, South Carolina, Tennessee, Virginia, West Virginia, and 
Wisconsin.
    (ii) The provisions of subpart AAAAA of part 97 of this chapter 
apply to sources in each of the following States and Indian country 
located within the borders of such States with regard to emissions 
occurring in 2015 and 2016 only: Texas.
* * * * *
    (b) Ozone season emissions. * * *

0
3. Section 52.39 is amended by:
0
a. In paragraph (b), before the colon, adding the text ``with regard to 
emissions occurring in 2015 and each subsequent year'';
0
b. Revising paragraph (c);
0
c. In paragraph (g) introductory text, removing the text ``(c)'' and in 
its place adding the text ``(c)(1) or (2)'';
0
d. In paragraph (h) introductory text, removing the text ``(c)'' and in 
its place adding the text ``(c)(1)'';
0
e. In paragraphs (i) introductory text and (j), removing the text 
``(c)'' two times and in its place adding the text ``(c)(1)''; and
0
f. In paragraph (m)(3), removing the text ``(c)'' and in its place 
adding the text ``(c)(1)''.
    The revision reads as follows:


Sec.  52.39  What are the requirements of the Federal Implementation 
Plans (FIPs) for the Cross-State Air Pollution Rule (CSAPR) relating to 
emissions of sulfur dioxide?

* * * * *
    (c)(1) The provisions of subpart DDDDD of part 97 of this chapter 
apply to sources in each of the following States and Indian country 
located within the borders of such States with regard to emissions 
occurring in 2015 and each subsequent year: Alabama, Georgia, Kansas, 
Minnesota, Nebraska, and South Carolina.
    (2) The provisions of subpart DDDDD of part 97 of this chapter 
apply to sources in each of the following States and Indian country 
located within the borders of such States with regard to emissions 
occurring in 2015 and 2016 only: Texas.
* * * * *

Subpart PP--South Carolina


Sec.  52.2141  [Amended]

0
4. Section 52.2141, paragraph (b) is amended by removing the text 
``Group 1'' two times and in its place adding the text ``Group 2'', and 
removing the text ``CCCCC'' two times and in its place adding the text 
``DDDDD''.

Subpart SS--Texas

0
5. Section 52.2283 is amended by revising paragraph (c)(1) and removing 
and reserving paragraph (c)(2).
    The revision reads as follows:


Sec.  52.2283  Interstate pollutant transport provisions; What are the 
FIP requirements for decreases in emissions of nitrogen oxides?

* * * * *
    (c)(1) The owner and operator of each source and each unit located 
in the State of Texas and Indian country within the borders of the 
State and for which requirements are set forth under the CSAPR 
NO<INF>X</INF> Annual Trading Program in subpart AAAAA of part 97 of 
this

[[Page 45497]]

chapter must comply with such requirements with regard to emissions 
occurring in 2015 and 2016.
* * * * *

0
6. Section 52.2284 is amended by revising paragraph (c)(1) and removing 
and reserving paragraph (c)(2).
    The revision reads as follows:


Sec.  52.2284  Interstate pollutant transport provisions; What are the 
FIP requirements for decreases in emissions of sulfur dioxide?

* * * * *
    (c)(1) The owner and operator of each source and each unit located 
in the State of Texas and Indian country within the borders of the 
State and for which requirements are set forth under the CSAPR 
SO<INF>2</INF> Group 2 Trading Program in subpart DDDDD of part 97 of 
this chapter must comply with such requirements with regard to 
emissions occurring in 2015 and 2016.
* * * * *
[FR Doc. 2017-20832 Filed 9-28-17; 8:45 am]
 BILLING CODE 6560-50-P


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