Document ID: EPA-HQ-OAR-2013-0495-11825
Agency: epa
Document Type: Supporting & Related Material
Title: 
Posted Date: 2015-10-23T04:00Z

Chapter 11
Statutory and Executive Order Reviews

Contents
11.1	Executive Order 12866: Regulatory Planning and Review, and Executive Order 13563: Improving Regulation and Regulatory Review	2
11.2	Paperwork Reduction Act	3
11.3	Regulatory Flexibility Act	3
11.4	Unfunded Mandates Reform Act	3
11.5	Executive Order 13132: Federalism	3
11.6	Executive Order 13175: Consultation and Coordination With Indian Tribal Governments	5
11.7	Executive Order 13045: Protection of Children From Environmental Health Risks and Safety Risks	5
11.8	Executive Order 13211: Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use	5
11.9	National Technology Transfer and Advancement Act	6
11.10	Executive Order 12898: Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations	6

Executive Order 12866: Regulatory Planning and Review, and Executive Order 13563: Improving Regulation and Regulatory Review
Commenters 0192 and 0222 believe that this legislation is unnecessary under Executive Order 13563. Commenter 0192 says that that the legislation is arbitrary, capricious, and not in accordance with the law because the rule "does not promote coordination, simplification, and harmonizing of rulemakings to avoid redundant, unnecessary, inconsistent, or overlapping regulation."  Commenter 0222 states that the regulation's costs do not outweigh its benefits.
The EPA disagrees with the commenter. This final action establishes the first uniform national limits on the amount of carbon pollution that modified and reconstructed EGUs will be allowed to emit and, thus, there is no overlap with other regulations. In addition, the EPA took deliberate efforts to promote coordination, simplification and harmonization of rulemakings and avoid redundancies and inconsistencies. Where possible, rule requirements are in accordance with 40 CFR part 75 requirements for monitoring, recordkeeping and reporting. Because the EPA has historically been notified of few units taking action under the NSPS modification or reconstruction provisions, the EPA does not anticipate significant costs associated with this standard.
Commenter 0186 believes that the EPA needs to perform a comprehensive cost-benefit analysis before it claims that the proposed rule will result in higher benefits than costs. The commenter also states that this ruling cannot be viewed "in a vacuum" and must be considered alongside the NSPS and the EPA Power Plan rulings as a whole.
The EPA points out that it does not claim that the rule will result in higher benefits than costs. In fact, the EPA expects that the standards for modified and reconstructed EGUs will not result in any significant emission reductions, costs, or quantified benefits in the period of analysis. For the reasons summarized below and explained more fully in the RIA for the final rule, the EPA disagrees with the commenter that a comprehensive cost-benefit analysis must be performed.
With regard to reconstructions, the EPA is only aware of one EGU that has notified the EPA that it has reconstructed under the reconstruction provision of section 111(b). As a result, the EPA anticipates that few EGUs will undertake reconstruction in the period of analysis. For this reason, the standards will not result in any significant emission reductions, costs, or quantified benefits in the period of analysis. Likewise, the agency does not anticipate any impacts on the price of electricity or energy supply. The rule is not expected to raise any resource adequacy concerns since reserve margins will not be impacted and the rule does not impose any additional requirements on existing facilities not triggering the reconstruction provision. There are no macroeconomic or employment impacts expected as a result of the standards. Due to the extremely limited data available on reconstructions, it is not possible to conduct a representative illustrative analysis of what costs and benefits might result from this rule in the unlikely case that a unit were to reconstruct.
With regard to modifications, the EPA anticipates that few EGUs will take actions that would be considered modifications and subject to the final standards of performance during the period of analysis. For this reason, the standards will result in minimal emission reductions, costs, or quantified benefits in the period of analysis. Likewise, the agency does not anticipate any impacts on the price of electricity or energy supplies. The rule is not expected to raise any resource adequacy concerns, since reserve margins will not be impacted and the rule does not impose any additional requirements on existing facilities not triggering the modification provision. There are no macroeconomic or employment impacts expected as a result of the standards. Due to the limited data available on past modifications and the diversity of existing units that could potentially modify, it is not possible to conduct a representative illustrative analysis of what costs and benefits might result from this rule in the unlikely case that a unit were to take an action that would be classified as a modification. 
With regard to new construction, the EPA expects that that the standards will result in negligible CO2 emission changes, benefits or costs for new units constructed by 2020. U.S. DOE, EPA and industry projections indicate that, due to the economics of coal and natural gas, among other factors, new power plants that are built over the next decade or more would be expected to meet the standards even in the absence of the rule. Specifically, no new, unplanned conventional coal-fired capacity is projected to be built in the analysis period, and, absent this rule, any new NGCC that may be built is expected to have an annual emission rate in compliance with the standard.

Overall, the EPA anticipates that the NSPS for newly constructed, modified, and reconstructed EGUs will result in minimal costs or quantified benefits in the period of analysis. A separate cost-benefit analysis was appropriately conducted for the CAA section 111(d) carbon pollution emission guidelines for existing EGUs.
Paperwork Reduction Act
No comments received.
Regulatory Flexibility Act
No comments received.
Unfunded Mandates Reform Act
No comments received.
Executive Order 13132: Federalism
Commenter 0186 believes that the EPA's position on dual applicability under 111(b) and 111(d) is an "illegitimate rewriting of the Clean Air Act definitions." The commenter claims that this viewpoint is also a display of federalism, and "by holding a modified source to both federal standards under Section 111(b) and a state plan under Section 111(d), the EPA illegitimately co-opts a traditional area of state authority." According to the commenter, "the definitions for "new"/"modified" and "existing" sources that Congress wrote into the CAA defined not only different applicable statutory provisions but also marked a division of authority between state and federal governments. Authority over existing sources remained with the states and their police power, but new and modified sources were subject to federal regulation by EPA. See United States v. City of Painesville, 431 F. Supp. 496, 501 n.9 (N.D. Ohio 1977), aff'd 644 F.2d 1186 (6th Cir. 1981), cert. denied 454 U.S. 894 (1981)."
The commenter goes on to say that "The division of labor is reinforced by CAA Section 111(c), which permits a state to enforce federal new source performance standards (NSPS) only after the state submits a plan and the Administrator 'delegate[s] to such State any authority he has under this chapter to implement and enforce such standards.' The requirement of an explicit delegation indicates that states are generally to stay out of regulating new sources. Correspondingly, Congress explicitly left to the states the matter of regulating existing sources by directing the EPA Administrator to formulate a process through which states can do so, rather than directing the Administrator to regulate them directly. EPA can regulate existing sources directly only when the states fail to submit an acceptable state implementation plan. The symmetry between Sections 111(b)/111(c) and Section 111(d) describes the division of state and federal power." 
The commenter fears that even if the legislation doesn't take away the state authority over existing sources, it will at least give the federal government the power to override the state action plan with stricter legislation. They state: "Although EPA does not immediately diminish state authority in so doing, it does expand its purview into an area that Congress deliberately left to the states, thereby disrupting the careful balance Congress struck. And where influence extends, preemption soon follows: should EPA and state regulations conflict, there is little doubt EPA would seek to wield its Supremacy Clause cudgel. See Nat'l-Southwire Aluminum Co. v. EPA, 838 F.2d 835, 841 (6th Cir. 1988) (holding facility to federal NSPS instead of state 111(d) plan after state relaxed its regulations). By subjecting EGUs to both federal (Section 111(b)) and state (Section 111(d)) regulation, EPA gains a ratcheted power to hold EGUs to whichever regulation is stricter, which in turn gives EPA a directive control over state environmental policy: as EPA moves its standard, states must follow (and become even stricter) or lose control over their policy. This is the antithesis of the symmetrical division of power Congress wrote into Sections 111(b)/111(c) and Section 111(d). EPA's counter-textual reading of Section 111 disrupts the balance of authority Congress wrote into the Clean Air Act."  
The concern raised by the commenter with regard to the EPA's position in the proposed CAA section 111(d) carbon pollution emission guidelines for existing EGUs regarding applicability under CAA sections 111(b) and (d) is addressed in the CAA section 111(d) action that the EPA is finalizing simultaneously with the CAA section 111(b) action. Specifically, in the proposed CAA section 111(d) rulemaking, the EPA proposed the interpretation that if an existing source is subject to a section 111(d) state plan, and then undertakes a modification or reconstruction, the source remains subject to the state plan, while also becoming subject to the modification or reconstruction requirements (79 FR 34830, 34903 - 4, June 18, 2014). As discussed in section VIII.D.2 of the preamble to the final carbon pollution emission guidelines for existing EGUs, the EPA is not finalizing a position on the issue, and is re-proposing and taking comment on the issue through the federal plan rulemaking being proposed concurrently with the 111(b) and (d) final actions. The EPA will propose and finalize its position on the issue through the federal plan rulemaking, which will be well in advance of the plan performance period beginning in 2022, at which point state plan obligations on existing sources are effectuated.
Commenter 0186 feels that the proposed ruling "violates principles of federalism because it hides political choices and prevents accountability. It forces states to adopt policies that will raise energy costs and prove deeply unpopular, while cloaking those policies in the garb of state "choice" - even though in fact the polices are compelled by the federal government. The Supreme Court has condemned such arrangements, because "where the Federal Government directs the States to regulate, it may be state officials who will bear the brunt of public disapproval, while the federal officials who devised the regulatory program may remain insulated from the electoral ramifications of their decision." New York v. United States, 505 U.S. 144, 169 (1992); see also Printz v. United States, 521 U.S. 898, 923 (1997) (citing need for "accountability" as a reason to prohibit federal government from forcing state officials to implement federal policy). The EPA Power Plan thumbs its nose at democratic principles by confusing the chain of decision-making between federal and state regulators to avoid political transparency and accountability."
This comment appears to regard the CAA section 111(d) carbon pollution emission guidelines for existing EGUs in that the commenter refers to states adopting policies compelled by the federal government and to decision-making between federal and state regulators. Thus, a response is not provided here because the comment is outside the scope of the CAA section 111(b) standards of performance for GHG emissions from modified and reconstructed EGUs. Nevertheless, the EPA points out that CAA section 111(b) requirements that the EPA establishes apply directly to new, modified, or reconstructed EGUs and do not require states to submit implementation plans to regulate those EGUs as states will do with regard to existing EGUs under CAA section 111(d).
Executive Order 13175: Consultation and Coordination With Indian Tribal Governments
No comments received.
Executive Order 13045: Protection of Children From Environmental Health Risks and Safety Risks
No comments received.
Executive Order 13211: Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use
Commenter 0186 believes that the EPA's approach to estimating rate increases is flawed. The commenter states that "Because EPA commingles rates for coal-dependent states with those for coal-independent states, the overall mean rate figure is not an accurate portrayal of what will occur in either type of state." The commenter believes that the estimated rate increases are underestimated, and could rise by as much as 30%. According to the commenter, "A 30% percent increase matters to low-income ratepayers. Such a spike could be the difference between having heat and not having heat to warm a home during winter." The commenter feels that "EPA has no basis for assuming that the conjectural "benefits" of the EPA Power Plan will outweigh its certain costs on low-income ratepayers" because the EPA has not considered the social costs of unaffordable electricity on low-income households. 
This comment appears to regard the CAA section 111(d) carbon pollution emission guidelines for existing EGUs in that the commenter refers to electricity rate increases in states as a result of the EPA's Clean Power Plan. Thus, a response is not provided here because the comment is outside the scope of the CAA section 111(b) standards of performance for GHG emissions from modified and reconstructed EGUs. Nevertheless, the EPA does not anticipate any impacts on the price of electricity or energy supplies as a result of the standards of performance for modified and reconstructed EGUs.
National Technology Transfer and Advancement Act
No comments received.
Executive Order 12898: Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations
No comments received.