Document ID: EPA-HQ-OAR-2013-0602-21640
Agency: epa
Document Type: Proposed Rule
Title: Carbon Pollution Emission Guidelines: Existing Stationary Sources in Indian Country and U.S. Territories; Multi-jurisdictional Partnerships
Posted Date: 2014-11-04T05:00Z

[Federal Register Volume 79, Number 213 (Tuesday, November 4, 2014)]
[Proposed Rules]
[Pages 65481-65505]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-26112]

[[Page 65481]]

Vol. 79

Tuesday,

No. 213

November 4, 2014

Part II

Environmental Protection Agency

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48 CFR Part 60

Carbon Pollution Emission Guidelines for Existing Stationary Sources: 
EGUs in Indian Country and U.S. Territories; Multi-Jurisdictional 
Partnerships; Proposed Rule

  Federal Register / Vol. 79 , No. 213 / Tuesday, November 4, 2014 / 
Proposed Rules  

[[Page 65482]]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 60

[EPA-HQ-OAR-2013-0602, FRL-9918-54-OAR]
RIN 2060-AR33

Carbon Pollution Emission Guidelines for Existing Stationary 
Sources: EGUs in Indian Country and U.S. Territories; Multi-
Jurisdictional Partnerships

AGENCY: Environmental Protection Agency.

ACTION: Supplemental proposed rulemaking.

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SUMMARY: On June 18, 2014, the Environmental Protection Agency (EPA) 
proposed emission guidelines for states to follow in developing plans 
to address greenhouse gas (GHG) emissions from existing fossil fuel-
fired electric generating units (EGUs). In this supplemental action, 
the EPA is proposing emission guidelines for U.S. territories and areas 
of Indian country with existing fossil fuel-fired EGUs. Specifically, 
the EPA is proposing rate-based goals for carbon dioxide 
(CO2) emissions for U.S. territories and areas of Indian 
country with existing fossil fuel-fired EGUs, as well as guidelines for 
plans to achieve those goals. The EPA is also soliciting comment on 
authorizing jurisdictions (including any states, territories and areas 
of Indian country) without existing fossil fuel-fired EGUs subject to 
the proposed emission guidelines to partner with jurisdictions 
(including any states) that do have existing fossil-fuel fired EGUs 
subject to the proposed emission guidelines in developing multi-
jurisdictional plans. The EPA is also soliciting comment on the 
treatment of renewable energy, demand-side energy efficiency and other 
new low- or non-emitting electricity generation across international 
boundaries in a state plan. This supplemental proposed rule would 
continue progress already underway to reduce CO2 emissions 
from existing fossil fuel-fired power plants in the United States.

DATES: 
    Comments on the supplemental proposed rule. Comments must be 
received on or before December 19, 2014.
    Comments on the information collection request. Under the Paperwork 
Reduction Act (PRA), since the Office of Management and Budget (OMB) is 
required to make a decision concerning the information collection 
request between 30 and 60 days after November 4, 2014, a comment to the 
OMB is best assured of having its full effect if the OMB receives it by 
December 4, 2014.
    Public Hearing. A public hearing will be held to accept oral 
comment on the supplemental proposed rule on November 19, 2014, at the 
Phoenix Convention Center and Venues, 100 N. 3rd St., Phoenix, Arizona. 
The hearing will begin at 9:00 a.m. (Mountain Standard Time) and will 
conclude at 8:00 p.m. (Mountain Standard Time). There will be a lunch 
break from 12:00 p.m. to 1:00 p.m. and a dinner break from 5:00 p.m. to 
6:00 p.m.

ADDRESSES: Comments. Submit your comments, identified by Docket ID No. 
EPA-HQ-OAR-2013-0602, by one of the following methods:
     Federal eRulemaking portal: http://www.regulations.gov. 
Follow the online instructions for submitting comments.
     Email: A-and-R-Docket@epa.gov. Include docket ID No. EPA-
HQ-OAR-2013-0602 in the subject line of the message.
     Facsimile: (202) 566-9744. Include docket ID No. EPA-HQ-
OAR-2013-0602 on the cover page.
     Mail: Environmental Protection Agency, EPA Docket Center 
(EPA/DC), Mail code 28221T, Attn: Docket ID No. EPA-HQ-OAR-2013-0602, 
1200 Pennsylvania Ave. NW., Washington, DC 20460. In addition, please 
mail a copy of your comments on the information collection provisions 
to the Office of Information and Regulatory Affairs, OMB, Attn: Desk 
Officer for the EPA, 725 17th St. NW., Washington, DC 20503.
     Hand/Courier Delivery: EPA Docket Center (EPA/DC), Room 
3334, EPA WJC West Building, 1301 Constitution Ave. NW., Washington, DC 
20004, Attn: Docket ID No. EPA-HQ-OAR-2013-0602. Such deliveries are 
accepted only during the Docket Center's normal hours of operation 
(8:30 a.m. to 4:30 p.m., Monday through Friday, excluding federal 
holidays), and special arrangements should be made for deliveries of 
boxed information.
    Instructions: All submissions must include the agency name and 
Docket ID No. (EPA-HQ-OAR-2013-0602). The EPA's policy is to include 
all comments received without change, including any personal 
information provided, in the public docket, available online at http://www.regulations.gov, unless the comment includes information claimed to 
be Confidential Business Information (CBI) or other information whose 
disclosure is restricted by statute. Do not submit information that you 
consider to be CBI or otherwise protected through http://www.regulations.gov or email. Send or deliver information identified as 
CBI only to the following address: Mr. Roberto Morales, OAQPS Document 
Control Officer (C404-02), Office of Air Quality Planning and 
Standards, U.S. EPA, Research Triangle Park, North Carolina 27711, 
Attention Docket ID No. EPA-HQ-OAR-2013-0602. Clearly mark the part or 
all of the information that you claim to be CBI. For CBI information on 
a disk or CD-ROM that you mail to the EPA, mark the outside of the disk 
or CD-ROM as CBI and then identify electronically within the disk or 
CD-ROM the specific information you claim as CBI. In addition to one 
complete version of the comment that includes information claimed as 
CBI, you must submit a copy of the comment that does not contain the 
information claimed as CBI for inclusion in the public docket. 
Information so marked will not be disclosed except in accordance with 
procedures set forth in 40 CFR part 2.
    The EPA requests that you also submit a separate copy of your 
comments to the contact person identified below (see FOR FURTHER 
INFORMATION CONTACT). If the comment includes information you consider 
to be CBI or otherwise protected, you should send a copy of the comment 
that does not contain the information claimed as CBI or otherwise 
protected.
    The www.regulations.gov Web site is an ``anonymous access'' system, 
which means the EPA will not know your identity or contact information 
unless you provide it in the body of your comment. If you send an email 
comment directly to the EPA without going through http://www.regulations.gov, your email address will be automatically captured 
and included as part of the comment that is placed in the public docket 
and made available on the Internet. If you submit an electronic 
comment, the EPA recommends that you include your name and other 
contact information in the body of your comment and with any disk or 
CD-ROM you submit. If the EPA cannot read your comment due to technical 
difficulties and cannot contact you for clarification, the EPA may not 
be able to consider your comment. Electronic files should avoid the use 
of special characters, any form of encryption and be free of any 
defects or viruses.
    Docket: All documents in the docket are listed in the http://www.regulations.gov index. Although listed in the index, some 
information is not publicly available (e.g., CBI or other information 
whose disclosure is restricted by statute). Certain other

[[Page 65483]]

material, such as copyrighted material, will be publicly available only 
in hard copy. Publicly available docket materials are available either 
electronically in http://www.regulations.gov or in hard copy at the EPA 
Docket Center, EPA WJC West Building, Room 3334, 1301 Constitution Ave. 
NW., Washington, DC. The Public Reading Room is open from 8:30 a.m. to 
4:30 p.m., Monday through Friday, excluding federal holidays. The 
telephone number for the Public Reading Room is (202) 566-1744, and the 
telephone number for the Air Docket is (202) 566-1742. Visit the EPA 
Docket Center homepage at http://www.epa.gov/epahome/dockets.htm for 
additional information about the EPA's public docket.
    In addition to being available in the docket, an electronic copy of 
this proposed rule will be available on the World Wide Web (WWW). 
Following signature, a copy of this proposed rule will be posted at the 
following address: http://www2.epa.gov/cleanpowerplan/.
    Public Hearing: To register for the hearing please use the online 
registration form available at: http://www2.epa.gov/carbon-pollution-standards/clean-power-plan-proposed-rule. For questions regarding 
registration, please contact Ms. Pamela Garrett at (919) 541-7966. The 
last day to pre-register to speak at the hearing will be November 14, 
2014. Additionally, requests to speak will be taken the day of the 
hearing at the hearing registration desk, although preferences on 
speaking times may not be able to be fulfilled. If you require the 
service of a translator or special accommodations such as audio 
description, we ask that you pre-register for the hearing by November 
14, 2014, as we may not be able to arrange such accommodations without 
advance notice. Please note that any updates made to any aspect of the 
hearing will be posted online at: http://www2.epa.gov/carbon-pollution-standards/clean-power-plan-proposed-rule. While the EPA expects the 
hearing to go forward as set forth above, we ask that you monitor our 
Web site or contact Pamela Garrett at (919) 541-7966 to determine if 
there are any updates to the information on the hearing. The EPA does 
not intend to publish a notice in the Federal Register announcing any 
such updates. The hearing will provide interested parties the 
opportunity to present data, views or arguments concerning the proposed 
action. The EPA will make every effort to accommodate all speakers who 
arrive and register. The EPA may ask clarifying questions during the 
oral presentations, but will not respond to the presentations at that 
time. Written statements and supporting information submitted during 
the comment period will be considered with the same weight as oral 
comments and supporting information presented at the public hearing. 
Verbatim transcripts of the hearing and written statements will be 
included in the docket for the rulemaking. The EPA plans for the 
hearing to run on schedule; however, due to onsite schedule 
fluctuations, actual speaking times may shift slightly.

FOR FURTHER INFORMATION CONTACT: Ms. Melanie King, Energy Strategies 
Group, Sector Policies and Programs Division (D243-01), Environmental 
Protection Agency, Research Triangle Park, North Carolina 27711; 
telephone number: (919) 541-2469; facsimile number: (919) 541-5450; 
email address: king.melanie@epa.gov.

SUPPLEMENTARY INFORMATION: Acronyms. A number of acronyms and chemical 
symbols are used in this preamble. While this may not be an exhaustive 
list, to ease the reading of this preamble and for reference purposes, 
the following terms and acronyms are defined as follows:

BART Best Available Retrofit Technology
BSER Best System of Emission Reduction
CAA Clean Air Act
CBI Confidential Business Information
CFR Code of Federal Regulations
CO2 Carbon Dioxide
EGU Electric Generating Unit
EIA Energy Information Administration
EPA Environmental Protection Agency
FR Federal Register
GHG Greenhouse Gas
HAP Hazardous Air Pollutant
HCl Hydrochloric Acid
Hg Mercury
ICR Information Collection Request
LNG Liquefied Natural Gas
MHA Mandan, Hidatsa and Arikara
MW Megawatt
MWh Megawatt-hour
NAAQS National Ambient Air Quality Standards
NAICS North American Industry Classification System
NGCC Natural Gas Combined Cycle
NOX Nitrogen Oxides
OMB Office of Management and Budget
PM Particulate Matter
PM2.5 Fine Particulate Matter
PRA Paperwork Reduction Act
PREPA Puerto Rico Electric Power Authority
RE Renewable Energy
RFA Regulatory Flexibility Act
RIA Regulatory Impact Analysis
SCC Social Cost of Carbon
SO2 Sulfur Dioxide
TAR Tribal Authority Rule
TAS Treatment in the same manner as a State
TSD Technical Support Document
UMRA Unfunded Mandates Reform Act of 1995

    Organization of This Document. The information presented in this 
preamble is organized as follows:

I. General Information
    A. Executive Summary
    B. Organization and Approach for This Supplemental Proposal
II. Background
    A. Carbon Pollution Emission Guidelines Proposal
    B. Implications for U.S. Territories
    C. Implications for Areas of Indian Country
    D. Additional Outreach and Consultation
III. Goals for U.S. Territories and Areas of Indian Country
    A. Overview
    B. Proposed Goals and Computation Procedure
    C. Alternate Goals Offered for Comment and Other Approaches 
Considered
    D. Additional Considerations for U.S. Territories and Indian 
Country
IV. CAA Section 111(d) Plans
    A. U.S. Territories
    B. Areas of Indian Country With Affected EGUs
    C. Applicability of the Proposed Emission Guidelines to U.S. 
Territories and Eligible Indian Tribes
    D. Areas Without Affected EGUs
V. Impacts of the Proposed Action
    A. What are the air impacts?
    B. What are the energy impacts?
    C. What are the compliance costs?
    D. What are the economic and employment impacts?
    E. What are the benefits of the proposed action?
VI. Statutory and Executive Order Reviews
    A. Executive Order 12866: Regulatory Planning and Review, and 
Executive Order 13563: Improving Regulation and Regulatory Review
    B. Paperwork Reduction Act
    C. Regulatory Flexibility Act
    D. Unfunded Mandates Reform Act
    E. Executive Order 13132: Federalism
    F. Executive Order 13175: Consultation and Coordination With 
Indian Tribal Governments
    G. Executive Order 13045: Protection of Children From 
Environmental Health Risks and Safety Risks
    H. Executive Order 13211, Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution or Use
    I. National Technology Transfer and Advancement Act
    J. Executive Order 12898: Federal Actions To Address 
Environmental Justice in Minority Populations and Low-Income 
Populations
VII. Statutory Authority

I. General Information

A. Executive Summary

1. Purpose of the Regulatory Action
    Under the authority of Clean Air Act (CAA) section 111(d), the EPA 
is proposing emission guidelines to

[[Page 65484]]

address GHG emissions from existing fossil fuel-fired EGUs located in 
U.S. territories and areas of Indian country. The EPA is proposing 
rate-based goals for CO2 \1\ emissions in U.S. territories 
and areas of Indian country with existing fossil fuel-fired EGUs that 
meet applicability requirements (``affected EGUs''),\2\ as well as 
guidelines for plans to achieve those goals. This rule, as proposed, 
would continue progress already underway to reduce CO2 
emissions from existing fossil fuel-fired power plants in the United 
States. This action is a supplemental proposal to the June 18, 2014, 
proposed carbon pollution emission guidelines for states to follow in 
developing plans to address GHG emissions from existing fossil fuel-
fired EGUs.\3\ This action is based on the same analytic framework as 
the June 18, 2014, proposal for existing sources, with minor 
adjustments to address data limitations and other circumstances unique 
to Indian country and/or territories.\4\ This preamble presumes 
familiarity with that June 18, 2014, proposal.\5\
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    \1\ In the June 18, 2014, proposal, the EPA noted that the 
primary GHG emitted by fossil fuel-fired EGUs is CO2. 
Therefore, both that proposal and this supplemental proposal focus 
on reductions of CO2 emissions and impose control 
requirements on only CO2 emissions.
    \2\ In this preamble, the terms ``existing fossil fuel-fired 
EGUs,'' ``existing sources,'' ``existing fossil fuel-fired power 
plants,'' ``affected fossil fuel-fired EGUs'' and the like generally 
refer to affected EGUs.
    \3\ 79 FR 34830.
    \4\ As noted below, the EPA issued a second proposal on June 18, 
2014, under CAA section 111, which proposed standards of performance 
for CO2 emissions from modified or reconstructed fossil 
fuel-fired EGUs. 79 FR 34960. Unless otherwise indicated, all 
references in this preamble to the June 18, 2014, proposal refer to 
the proposal for existing sources.
    \5\ The EPA has received numerous comments on the June 18, 2014, 
proposal. This supplemental proposal is consistent with the analytic 
framework used in the June 18, 2014, proposal and does not reflect 
any type of response to the comments that the EPA has received to 
date on that proposal.
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2. Summary of the Major Provisions of the Regulatory Action
    The proposal has two main elements: (1) Emission rate-based 
CO2 goals specific to each U.S. territory and area of Indian 
country that has affected EGUs; and (2) guidelines for the development, 
submission and implementation of plans to achieve the goals. The EPA is 
aware of three areas of Indian country with affected EGUs: Lands of the 
Navajo Nation, lands of the Ute Tribe of the Uintah and Ouray 
Reservation and lands of the Fort Mojave Tribe. The EPA's information 
is that there are two U.S. territories that have affected EGUs: Puerto 
Rico and Guam.
    To set the proposed area-specific CO2 goals, the EPA 
generally applied the same approach to determining the ``Best System of 
Emission Reduction'' as called for in CAA section 111(d) used in the 
June 18, 2014, proposal for establishing CO2 goals for 
states. This approach, which relies on four groups of emission 
reduction measures that the EPA refers to as ``building blocks,'' 
includes improvements in efficiency at carbon-intensive power plants; 
programs that enhance the dispatch priority of, and spur private 
investments in, low emitting and renewable power sources; and programs 
that help homes and businesses use electricity more efficiently. As 
explained in the June 18, 2014, proposal for existing sources, these 
building blocks are based on practical and affordable strategies that 
are already being used to lower carbon pollution from the power sector. 
In addition, in calculating each CO2 goal, the EPA took into 
consideration each area's fuel mix, its electricity market and other 
factors that are relevant to application of the four building blocks. 
Thus, each goal reflects the unique conditions for each U.S. territory 
or area of Indian country.
    For U.S. territories that contain affected EGUs, while this 
proposal lays out jurisdiction-specific CO2 goals, it does 
not prescribe how the territory should meet its goal. CAA section 
111(d) creates a partnership between the EPA and the U.S. territories 
(as well as states) under which the EPA sets these goals and the 
territories take the lead on meeting them by creating plans that are 
consistent with the EPA guidelines. Each territory will have the 
flexibility to design a program to meet its goal in a manner that 
reflects its particular circumstances and energy and environmental 
policy objectives. Each territory can do so alone or can collaborate 
with other jurisdictions, including states, on multi-jurisdictional \6\ 
plans that may provide additional opportunities for cost savings and 
flexibility. To facilitate the planning process, this proposal lays out 
guidelines for the development and implementation of plans.
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    \6\ The discussion of CAA section 111(d) plans in the June 18, 
2014, proposal referred to ``multi-state'' plans. In this 
supplemental proposal, the EPA uses the terminology ``multi-
jurisdictional'' plans to account for situations where plans may 
include tribes in addition to states.
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    For areas of Indian country that contain affected EGUs, this 
proposal also lays out specific CO2 goals, without 
prescribing how each area should meet its goal. A tribe with 
jurisdiction over the affected EGUs in its area has the opportunity, 
but not the obligation, to establish a plan for its area of Indian 
country. Each tribe can do so alone or can collaborate with other 
jurisdictions, including states and territories, on multi-
jurisdictional plans that may provide additional opportunities for cost 
savings and flexibility. If a tribe does not seek and obtain the 
authority to establish a plan, the EPA is responsible for establishing 
a plan if it determines that a plan is necessary or appropriate. At 
this time, the EPA is not including a proposal for whether it is 
necessary or appropriate to establish a plan for any area of Indian 
country, and is not proposing a federal plan for any area of Indian 
country.
3. Costs and Benefits
    Actions taken to comply with the proposed guidelines set out in 
this supplemental proposal will reduce emissions of CO2 and 
other air pollutants, including sulfur dioxide (SO2) and 
nitrogen oxides (NOX), from the electric power industry, 
specifically from affected EGUs in Guam and Puerto Rico. The costs and 
benefits of these compliance actions are discussed below. As discussed 
in more detail in section V of this supplemental proposal, the EPA does 
not expect any additional costs or benefits associated with compliance 
for areas of Indian country with affected EGUs; one area is expected to 
meet its proposed goal through compliance with other regulations, and 
the costs and benefits for the other areas were already accounted for 
in the June 18, 2014, proposal. The U.S. territories of Guam and Puerto 
Rico will make the ultimate determination as to how their proposed 
emission guidelines are implemented in their jurisdictions. Thus, all 
costs and benefits reported for this action are illustrative estimates. 
The illustrative costs and benefits are based upon compliance 
approaches that reflect a range of measures consisting of improved 
operations at EGUs, increased dispatching of lower-emitting EGUs and 
zero-emitting energy sources and increasing levels of end-use energy 
efficiency.
    For Guam and Puerto Rico, the EPA estimates that in 2020, the 
illustrative compliance approach for Option 1--Approach A \7\ will 
yield monetized climate benefits of approximately $73 million (3 
percent model average, 2011$), as shown in Table 1. The illustrative 
annual compliance costs and monitoring and reporting costs are a

[[Page 65485]]

savings of approximately $140 million (2011$) in 2020. The quantified 
2020 net benefits (the difference between monetized benefits and costs) 
are $210 million (2011$) using a 3 percent discount rate. In 2030, as 
shown in Table 1, the illustrative compliance approach for Option 1--
Approach A in Guam and Puerto Rico will yield monetized climate 
benefits of approximately $170 million (3 percent model average, 
2011$). The illustrative annual compliance costs and monitoring and 
reporting costs in 2030 are a savings of $350 million, including 
reduced fuel expenditures from energy efficiency programs and re-
dispatch. The quantified 2030 net benefits are $520 million (2011$, 3 
percent discount rate).
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    \7\ Option 1 represents compliance with the goals calculated 
using the procedure outlined in section III.B of this supplemental 
proposal. As explained in more detail in section III.B, Approach A 
mirrors the proposed methodology from the June 18, 2014, proposal 
for building block 3.
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    For Option 2--Approach A,\8\ the EPA estimates that in 2020, the 
illustrative compliance approach for EGUs in Guam and Puerto Rico will 
yield monetized climate benefits of approximately $68 million (3 
percent model average, 2011$), as shown in Table 2. The illustrative 
annual compliance costs and monitoring and reporting costs are a 
savings of approximately $130 million (2011$) in 2020. The quantified 
2020 net benefits (the difference between monetized benefits and costs) 
are $200 million (2011$) using a 3 percent discount rate. In 2025, as 
shown in Table 2, the illustrative compliance approach for Option 2--
Approach A in Guam and Puerto Rico will yield monetized climate 
benefits of approximately $99 million (3 percent model average, 2011$). 
The illustrative annual compliance costs and monitoring and reporting 
costs in 2025 are a savings of $190 million, including reduced fuel 
expenditures from energy efficiency programs and re-dispatch. The 
quantified 2025 net benefits are $290 million (2011$, 3 percent 
discount rate).
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    \8\ Option 2 represents compliance with the goals calculated 
using the procedure outlined in section III.C of this supplemental 
proposal, reflecting less stringent application of the building 
blocks and a shorter implementation period.
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    For Guam and Puerto Rico, the EPA estimates that in 2020, the 
illustrative compliance approach for Option 1--Approach B \9\ will 
yield monetized climate benefits of approximately $77 million (3 
percent model average, 2011$), as shown in Table 3. The illustrative 
annual compliance costs and monitoring and reporting costs are a 
savings of approximately $140 million (2011$) in 2020. The quantified 
2020 net benefits (the difference between monetized benefits and costs) 
are $220 million (2011$) using a 3 percent discount rate. In 2030, as 
shown in Table 3, the illustrative compliance approach for Option 1--
Approach B in Guam and Puerto Rico will yield monetized climate 
benefits of approximately $180 million (3 percent model average, 
2011$). The illustrative annual compliance costs and monitoring and 
reporting costs in 2030 are a savings of $360 million, including 
reduced fuel expenditures from energy efficiency programs and re-
dispatch. The quantified 2030 net benefits are $540 million (2011$, 3 
percent discount rate).
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    \9\ Option 1 represents compliance with the goals calculated 
using the procedure outlined in section III.B of this supplemental 
proposal. As explained in more detail in section III.B, Approach B 
includes an adjustment to the proposed methodology from the June 18, 
2014, proposal for building block 3.
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    For Option 2--Approach B,\10\ the EPA estimates that in 2020, the 
illustrative compliance approach for Guam and Puerto Rico will yield 
monetized climate benefits of approximately $73 million (3 percent 
model average, 2011$), as shown in Table 4. The illustrative annual 
compliance costs and monitoring and reporting costs are a savings of 
approximately $130 million (2011$) in 2020. The quantified 2020 net 
benefits (the difference between monetized benefits and costs) are $210 
million (2011$) using a 3 percent discount rate. In 2025, as shown in 
Table 4, the illustrative compliance approach for Option 2--Approach B 
in Guam and Puerto Rico will yield monetized climate benefits of 
approximately $110 million (3 percent model average, 2011$). The 
illustrative annual compliance costs and monitoring and reporting costs 
in 2025 are a savings of $200 million, including reduced fuel 
expenditures from energy efficiency programs and re-dispatch. The 
quantified 2025 net benefits are $300 million (2011$, 3 percent 
discount rate).
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    \10\ Option 2 represents compliance with the goals calculated 
using the procedure outlined in section III.C of this supplemental 
proposal, reflecting less stringent application of the building 
blocks and a shorter implementation period.
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    For all options and approaches, the proposed guidelines would 
reduce emissions of precursor pollutants (e.g., SO2, 
NOX and directly emitted particles) in the territories, 
which in turn would lower ambient concentrations of fine particulate 
(PM2.5) and ozone (O3). Apart from the climate 
benefits described above, there will also likely be significant health 
co-benefits association with the projected reductions of SO2 
and NOX emissions in Guam and Puerto Rico. However, the EPA 
is unable to quantify these health co-benefits because the benefit-per-
ton values the EPA typically uses for this purpose are only appropriate 
for areas within the continental United States. As is described in the 
June 18, 2014, proposal, reducing exposure to PM2.5 is 
associated with significant human health benefits, including avoiding 
premature mortality for adults and infants, cardiovascular morbidities 
such as heart attacks, hospital admissions and respiratory morbidities 
such as asthma attacks, acute bronchitis, hospital and emergency 
department visits, work loss days, restricted activity days and 
respiratory symptoms. Reducing exposure to O3 is also 
associated with significant human health benefits, including avoiding 
mortality and respiratory morbidity such as fewer asthma attacks, 
hospital and emergency room visits and school loss days.

  Table 1--Summary of the Monetized Benefits, Compliance Costs and Net
Benefits for the Proposed Guidelines for Guam and Puerto Rico--Option 1--
                             Approach A \a\
                           [Millions of 2011$]
------------------------------------------------------------------------
                                          2020                2030
------------------------------------------------------------------------
          Proposed Guidelines Illustrative Compliance Approach
------------------------------------------------------------------------
Climate Benefits \b\.............  $73...............  $170.
Annualized Capital, Energy         $24...............  $190.
 Efficiency and Monitoring,
 Reporting, & Recordkeeping Costs.
Change in Fuel Expenditure.......  -$160.............  -$540.
Total Compliance Costs \c\.......  -$140.............  -$350.

[[Page 65486]]

 
Net Monetized Benefits \d\.......  $210..............  $520.
                                  --------------------------------------
Non-monetized Benefits...........  Health benefits of reductions in SO2,
                                    NO2, PM2.5 and O3.
                                   Reductions in hazardous air
                                    pollutants (HAP) such as mercury
                                    (Hg) and hydrochloric acid (HCl).
                                   Ecosystem effects.
                                   Visibility impairment.
------------------------------------------------------------------------
\a\ All estimates are rounded to two significant figures, so figures may
  not sum.
\b\ The climate benefit estimate in this summary table reflects global
  impacts from CO2 emission changes and does not account for changes in
  non-CO2 GHG emissions. Also, different discount rates are applied to
  the social cost of carbon (SCC) than to the other estimates because
  CO2 emissions are long-lived and subsequent damages occur over many
  years. The benefit estimates in this table are based on the average
  SCC estimated for a 3 percent discount rate. However, the EPA
  emphasizes the importance and value of considering the full range of
  SCC values. As shown in the regulatory impact analysis (RIA), climate
  benefits are also estimated using the other three SCC estimates (model
  average at 2.5 percent discount rate, 3 percent and 5 percent; 95th
  percentile at 3 percent). The SCC estimates are year-specific and
  increase over time.
\c\ Total costs include capital costs, monitoring, recordkeeping, and
  reporting costs, demand side energy efficiency program and participant
  costs, and changes in fuel expenditures. Capital costs are annualized
  at a capital charge rate of 14.29 percent. Energy efficiency costs are
  calculated at a 3 percent discount rate.
\d\ The estimates of net benefits in this summary table are calculated
  using the global SCC at a 3 percent discount rate (model average). The
  RIA includes combined climate and health estimates based on these
  additional discount rates.

  Table 2--Summary of the Monetized Benefits, Compliance Costs and Net
Benefits for the Proposed Guidelines for Guam and Puerto Rico--Option 2--
                             Approach A \a\
                           [Millions of 2011$]
------------------------------------------------------------------------
                                          2020                2025
------------------------------------------------------------------------
          Proposed Guidelines Illustrative Compliance Approach
------------------------------------------------------------------------
Climate Benefits \b\.............  $68...............  $99.
Annualized Capital, Energy         $19...............  $78.
 Efficiency and Monitoring,
 Reporting, & Recordkeeping Costs.
Change in Fuel Expenditure.......  -$150.............  -270.
Total Compliance Costs \c\.......  -$130.............  -$190.
Net Monetized Benefits \d\.......  $200..............  $290.
                                  --------------------------------------
Non-monetized Benefits...........  Health benefits of reductions in SO2,
                                    NO2, PM2.5 and O3.
                                   Reductions in HAP such as Hg and HCl.
                                   Ecosystem effects.
                                   Visibility impairment.
------------------------------------------------------------------------
\a\ All estimates are rounded to two significant figures, so figures may
  not sum.
\b\ The climate benefit estimate in this summary table reflects global
  impacts from CO2 emission changes and does not account for changes in
  non-CO2 GHG emissions. Also, different discount rates are applied to
  SCC than to the other estimates because CO2 emissions are long-lived
  and subsequent damages occur over many years. The benefit estimates in
  this table are based on the average SCC estimated for a 3 percent
  discount rate. However the EPA emphasizes the importance and value of
  considering the full range of SCC values. As shown in the RIA, climate
  benefits are also estimated using the other three SCC estimates (model
  average at 2.5 percent discount rate, 3 percent and 5 percent; 95th
  percentile at 3 percent). The SCC estimates are year-specific and
  increase over time.
\c\ Total costs include capital costs, monitoring, recordkeeping, and
  reporting costs, demand side energy efficiency program and participant
  costs, and changes in fuel expenditures. Capital costs are annualized
  at a capital charge rate of 14.29 percent. Energy efficiency costs are
  calculated at a 3 percent discount rate.
\d\ The estimates of net benefits in this summary table are calculated
  using the global SCC at a 3 percent discount rate (model average). The
  RIA includes combined climate and health estimates based on these
  additional discount rates.

  Table 3--Summary of the Monetized Benefits, Compliance Costs and Net
Benefits for the Proposed Guidelines for Guam and Puerto Rico--Option 1--
                             Approach B \a\
                           [Millions of 2011$]
------------------------------------------------------------------------
                                          2020                2030
------------------------------------------------------------------------
          Proposed Guidelines Illustrative Compliance Approach
------------------------------------------------------------------------
Climate Benefits \b\.............  $77...............  $180.
Annualized Capital, Energy         $38...............  $220.
 Efficiency and Monitoring,
 Reporting, & Recordkeeping Costs.
Change in Fuel Expenditure.......  -$180.............  -$580.
Total Compliance Costs \c\.......  -$140.............  -$360.
Net Monetized Benefits \d\.......  $220..............  $540.
                                  --------------------------------------
Non-monetized Benefits...........  Health benefits of reductions in SO2,
                                    NO2, PM2.5 and O3.

[[Page 65487]]

 
                                   Reductions in hazardous air
                                    pollutants (HAP) such as mercury
                                    (Hg) and hydrochloric acid (HCl).
                                   Ecosystem effects.
                                   Visibility impairment.
------------------------------------------------------------------------
\a\ All estimates are rounded to two significant figures, so figures may
  not sum.
\b\ The climate benefit estimate in this summary table reflects global
  impacts from CO2 emission changes and does not account for changes in
  non-CO2 GHG emissions. Also, different discount rates are applied to
  the SCC than to the other estimates because CO2 emissions are long-
  lived and subsequent damages occur over many years. The benefit
  estimates in this table are based on the average SCC estimated for a 3
  percent discount rate. However, the EPA emphasizes the importance and
  value of considering the full range of SCC values. As shown in the
  RIA, climate benefits are also estimated using the other three SCC
  estimates (model average at 2.5 percent discount rate, 3 percent and 5
  percent; 95th percentile at 3 percent). The SCC estimates are year-
  specific and increase over time.
\c\ Total costs include capital costs, monitoring, recordkeeping, and
  reporting costs, demand side energy efficiency program and participant
  costs, and changes in fuel expenditures. Capital costs are annualized
  at a capital charge rate of 14.29 percent. Energy efficiency costs are
  calculated at a 3 percent discount rate.
\d\ The estimates of net benefits in this summary table are calculated
  using the global SCC at a 3 percent discount rate (model average). The
  RIA includes combined climate and health estimates based on these
  additional discount rates.

  Table 4--Summary of the Monetized Benefits, Compliance Costs and Net
Benefits for the Proposed Guidelines for Guam and Puerto Rico--Option 2--
                             Approach B \a\
                           [Millions of 2011$]
------------------------------------------------------------------------
                                          2020                2025
------------------------------------------------------------------------
          Proposed Guidelines Illustrative Compliance Approach
------------------------------------------------------------------------
Climate Benefits \b\.............  $73...............  $110.
Annualized Capital, Energy         $33...............  $98.
 Efficiency and Monitoring,
 Reporting, & Recordkeeping Costs.
Change in Fuel Expenditure.......  -$170.............  -$300.
Total Compliance Costs \c\.......  -$130.............  -$200.
Net Monetized Benefits \d\.......  $210..............  $300.
                                  --------------------------------------
Non-monetized Benefits...........  Health benefits of reductions in SO2,
                                    NO2, PM2.5 and O3.
                                   Reductions in HAP such as Hg and HCl.
                                   Ecosystem effects.
                                   Visibility impairment.
------------------------------------------------------------------------
\a\ All estimates are rounded to two significant figures, so figures may
  not sum.
\b\ The climate benefit estimate in this summary table reflects global
  impacts from CO2 emission changes and does not account for changes in
  non-CO2 GHG emissions. Also, different discount rates are applied to
  SCC than to the other estimates because CO2 emissions are long-lived
  and subsequent damages occur over many years. The benefit estimates in
  this table are based on the average SCC estimated for a 3 percent
  discount rate. However the EPA emphasizes the importance and value of
  considering the full range of SCC values. As shown in the RIA, climate
  benefits are also estimated using the other three SCC estimates (model
  average at 2.5 percent discount rate, 3 percent and 5 percent; 95th
  percentile at 3 percent). The SCC estimates are year-specific and
  increase over time.
\c\ Total costs include capital costs, monitoring, recordkeeping, and
  reporting costs, demand side energy efficiency program and participant
  costs, and changes in fuel expenditures. Capital costs are annualized
  at a capital charge rate of 14.29 percent. Energy efficiency costs are
  calculated at a 3 percent discount rate.
\d\ The estimates of net benefits in this summary table are calculated
  using the global SCC at a 3 percent discount rate (model average). The
  RIA includes combined climate and health estimates based on these
  additional discount rates.

    There are additional important benefits that the EPA could not 
monetize. These unquantified benefits include climate benefits from 
reducing emissions of non-CO2 GHGs (e.g., nitrous oxide and 
methane) \11\ and co-benefits from reducing direct exposure to HAP 
(e.g., Hg and HCl), as well as from reducing ecosystem effects and 
visibility impairment.
---------------------------------------------------------------------------

    \11\ Although CO2 is the predominant greenhouse gas 
released by the power sector, EGUs also emit small amounts of 
nitrous oxide and methane. See Chapter 2 of the June 2014 RIA for 
more detail about power sector emissions and the U.S. Greenhouse Gas 
Reporting Program's power sector summary, http://www.epa.gov/ghgreporting/ghgdata/reported/powerplants.html.
---------------------------------------------------------------------------

B. Organization and Approach for This Supplemental Proposal

    This action presents the EPA's proposed emission guidelines for 
developing plans to reduce GHG emissions from the electric power sector 
in U.S. territories and areas of Indian country with affected EGUs. 
This action is based on the analytical approach of the June 18, 2014, 
proposal, and this preamble adopts and relies on all of the information 
in that proposal, including the background information, explanations, 
analyses, alternatives, solicitations of comment, etc.
    Section II of this supplemental proposal provides background, 
implications for U.S. territories and areas of Indian country and a 
summary of the EPA's stakeholder outreach efforts. Section III of this 
supplemental proposal describes how this proposal is based on the 
analytical approach of the June 18, 2014, proposal, including the use 
of the four building blocks, as applied to each U.S. territory or each 
area of Indian country with affected EGUs, for setting goals, and also 
identifies the proposed goals for those areas. Section IV of this 
supplemental

[[Page 65488]]

proposal provides an explanation of the proposed requirements for the 
required jurisdictional plans, which, again, are based on the proposed 
requirements in the June 18, 2014, proposal. Impacts of the proposed 
action are then described in section V of this supplemental proposal, 
followed by a discussion of statutory and executive order reviews in 
section VI and the statutory authority for this action in section VII 
of this supplemental proposal.
    In addition to relying on, and building upon, the June 18, 2014, 
proposal for existing sources, this supplemental proposal is related to 
two other recently proposed rulemakings for CO2 emissions: 
The proposed rulemaking that the EPA published on January 8, 2014, for 
newly constructed affected sources,\12\ and the proposed rulemaking 
that the EPA published on June 18, 2014, for modified and reconstructed 
sources.\13\ Those two rulemakings each have their own rulemaking 
docket, and the comment period for those two rulemakings has closed. 
This action is a supplemental proposal for the June 18, 2014, proposal 
for existing sources, and, as a result, comments on this supplemental 
proposal will be included in the docket for that June 18, 2014, 
proposal. Accordingly, commenters who wish to comment on any aspect of 
this supplemental proposal, including a topic that overlaps an aspect 
of one or both of the other related rulemakings, should make those 
comments on this supplemental proposal. Because this supplemental 
proposed rulemaking (i) adopts and relies on the information in the 
June 18, 2014, proposal, as noted above, as well as generally applies 
the same analytic framework described in the June 18, 2014, proposal, 
and (ii) is in the same docket as that June 18, 2014, proposal, 
commenters should limit their comments on this supplemental proposed 
rulemaking to the issues of the analytic framework that are relevant 
for U.S. territories and areas of Indian country with affected EGUs, as 
well as the question of how areas without affected sources could 
participate in multi-jurisdictional plans, as discussed in the next 
paragraph and in section IV.D.
---------------------------------------------------------------------------

    \12\ 79 FR 1430.
    \13\ 79 FR 34960.
---------------------------------------------------------------------------

    The EPA is also soliciting comment on whether jurisdictions--
including any states, territories and areas of Indian country--without 
existing fossil fuel-fired EGUs subject to this rule can partner with 
jurisdictions that are subject to this rule in developing multi-
jurisdictional plans. An important benefit of these types of 
partnerships may include crediting investments that jurisdictions 
without affected sources may be able to make in renewable energy (RE) 
or demand-side energy efficiency resources for reducing CO2 
emissions from affected sources in other jurisdictions.

II. Background

A. Carbon Pollution Emission Guidelines Proposal

    On June 18, 2014, the EPA proposed emission guidelines for states 
to follow in developing plans to address greenhouse gas emissions from 
existing fossil fuel-fired EGUs under the authority of CAA section 
111(d).\14\ More specifically, the EPA proposed state-specific rate-
based goals for CO2 emissions from affected EGUs, as well as 
guidelines for states to follow in developing plans to achieve the 
state-specific goals. The EPA indicated in the June 18, 2014, proposal 
that it intended to publish a supplemental proposal to establish 
emission performance goals for areas of Indian country and U.S. 
territories with affected EGUs.\15\
---------------------------------------------------------------------------

    \14\ 79 FR 34830.
    \15\ 79 FR 34854.
---------------------------------------------------------------------------

    The June 18, 2014, proposal discussed the climate change impacts 
from GHG emissions, GHG emissions from fossil fuel-fired EGUs, the 
utility power sector, statutory and regulatory requirements, pre-
proposal stakeholder outreach, the applicability requirements, the 
legal basis, the authority to regulate CO2 and EGUs, 
combining the two existing categories for affected EGUs into a single 
category, the best system of emission reduction (BSER) and building 
blocks for setting goals, guidelines for plans, implications for other 
EPA programs and rules, the impacts of the June 18, 2014, proposal and 
other considerations. This supplemental proposal presumes familiarity 
with the June 18, 2014, proposal. Moreover, in this supplemental 
proposal, the EPA relies on the information and analytic framework 
provided in the June 18, 2014, proposal, is not repeating that 
information and analytic framework and adopts that information and 
analytic framework as they pertain to the requirements for U.S. 
territories and areas of Indian country. The EPA specifically solicited 
comment on the issues in the analytic framework in the June 18, 2014, 
proposal.

B. Implications for U.S. Territories

    As discussed previously, the June 18, 2014, proposal for existing 
sources did not propose CO2 goals for U.S. territories with 
affected EGUs. The EPA indicated in the June 18, 2014, proposal that, 
after conducting additional outreach, it intended to issue this 
supplemental proposal to establish territory-specific rate-based goals 
for CO2 emissions and guidelines for U.S. territories to 
follow for the development, submission and implementation of plans to 
achieve their goal. The EPA intends to take final action on this 
supplemental proposal in conjunction with the final action for the June 
18, 2014, proposal.
    The EPA is aware of two U.S. territories with affected EGUs: Puerto 
Rico and Guam. The EPA is not aware of any affected EGUs in American 
Samoa or the Commonwealth of the Northern Mariana Islands. Information 
provided to the EPA indicates that there are two potentially affected 
EGUs in the U.S. Virgin Islands; however, they have not been in 
operation since before 2012. Therefore, in this action, Puerto Rico and 
Guam are the only U.S. territories for which the EPA is proposing to 
set goals. The EPA requests comment on whether there are any other 
affected EGUs located in U.S. territories that were not identified for 
this supplemental proposal.
    The U.S. territories are generally subject to CAA section 111(d) 
requirements in the same manner as states. CAA section 111(d) imposes 
obligations on ``each State,'' and CAA section 302(d) defines the term 
``State'' to include the U.S. territories. As discussed in more detail 
in section IV of this supplemental proposal, the CAA section 111(d) 
state plan requirements for U.S. territories are the same as those 
proposed for states in the June 18, 2014, proposal for existing 
sources.

C. Implications for Areas of Indian Country

    Although affected EGUs located in Indian country operate as part of 
the interconnected system of electricity production and distribution, 
those affected EGUs would not generally be encompassed within any 
state's CAA section 111(d) plan because state plans are generally not 
approved in Indian country. The EPA is aware of four facilities with 
affected EGUs located in Indian country: The South Point Energy Center, 
in Fort Mojave Indian country geographically located within Arizona; 
the Navajo Generating Station, in Navajo Indian country geographically 
located within Arizona; the Four Corners Power Plant, in Navajo Indian 
country geographically located within New Mexico; and the Bonanza Power 
Plant, in Ute Indian country geographically located within Utah. The 
South Point facility is a natural gas combined cycle (NGCC) power 
plant, and the Navajo,

[[Page 65489]]

Four Corners and Bonanza facilities are coal-fired EGUs. The operators 
and co-owners of these four facilities include investor-owned 
utilities, cooperative utilities, public power agencies \16\ and 
independent power producers, most of which also own or co-own affected 
EGUs within states, but outside of areas of Indian country. The EPA 
requests comment on whether there are any other affected EGUs located 
in Indian country beyond the four facilities identified for this 
supplemental proposal.
---------------------------------------------------------------------------

    \16\ One of these public power agencies is the U.S. Bureau of 
Reclamation.
---------------------------------------------------------------------------

    The EPA indicated in the June 18, 2014, proposal that, after 
conducting additional outreach, the agency would issue this 
supplemental proposal to establish rate-based CO2 emission 
performance goals for the three areas of Indian country with affected 
EGUs. As noted above, the EPA intends to take final action on this 
supplemental proposal in conjunction with the final action for the June 
18, 2014, proposal. As discussed in more detail in section IV.B, tribes 
are not required to develop plans to implement the guidelines under CAA 
section 111(d) for affected EGUs in their areas of Indian country. 
Pursuant to the Tribal Authority Rule (TAR),\17\ the EPA must 
promulgate federal plan provisions if it determines that such 
provisions are necessary or appropriate, unless a tribe on whose lands 
an affected source (or sources) is located seeks and obtains authority 
from the EPA to establish a plan itself. If the EPA determines that it 
is necessary or appropriate to promulgate implementation plan 
provisions, it will promulgate such provisions as are necessary or 
appropriate to achieve CO2 emission performance goals 
through a transparent public process and after providing opportunity 
for consultation with the affected tribal government or governments.
---------------------------------------------------------------------------

    \17\ 63 FR 7254, February 12, 1998. See 40 CFR 49.1 to 49.11.
---------------------------------------------------------------------------

D. Additional Outreach and Consultation

    Section III (``Stakeholder Outreach and Conclusions'') of the June 
18, 2014, proposal documents the EPA's extensive outreach efforts prior 
to the proposal, including outreach to officials in the territories and 
tribal officials. Prior to the June 18, 2014, proposal, agency 
officials held meetings with the Governor of Puerto Rico, the Governor 
of the U.S. Virgin Islands, the Puerto Rico Environmental Quality Board 
and the U.S. Virgin Islands Department of Planning and Natural 
Resources. The EPA also met with stakeholders from Puerto Rico on July 
22 and 23, 2014, to provide an overview of the June 18, 2014, proposal 
and ask for input on this supplemental proposal. Issues raised during 
the meetings included concerns regarding the crediting of pre-2012 
building block control strategies as well as resource plans that 
integrate some of the building block control strategies. On September 
8, 2014, the EPA met with Guam Environmental Protection Agency, Guam 
Power Authority and the Consolidated Commission on Utilities to provide 
an overview of the June 18, 2014, proposal and ask for input on this 
supplemental proposal. Issues raised during the meeting included Guam's 
plans to modify certain power plants, including introduction of ultra-
low sulfur diesel fuel and liquefied natural gas (LNG).
    Tribes are not required to, but may, develop or adopt CAA programs. 
Because this supplemental proposal addresses affected sources located 
within Indian country, the EPA offered consultation with tribal 
officials to permit tribes to have meaningful and timely input into its 
development. The EPA held consultations with all three tribes that have 
affected EGUs on their lands, as well as other tribes that requested 
consultation. The EPA held a consultation with the Ute Tribe, the Crow 
Nation, and the Mandan, Hidatsa and Arikara (MHA) Nation (the Three 
Affiliated Tribes of Ft. Berthold) on July 18, 2014, the Fort Mojave 
Tribe on August 22, 2014, and the Navajo Nation on September 15, 2014. 
The Navajo Nation sent a letter to the EPA on September 18, 2014, 
summarizing the information presented at the consultation and the 
Navajo Nation's position on this supplemental proposal. The EPA also 
met with tribal environmental staff with the National Tribal Air 
Association, by teleconference, on June 26, 2014, August 4, 2014, and 
September 5, 2014. In those teleconferences, the EPA provided 
background information on the GHG emission guidelines to be developed 
and a summary of issues being explored by the agency. The tribes 
expressed an interest in the scope of the guidelines being considered 
by the agency (e.g., over what time period, relationship to state and 
multi-state plans) and how tribes will participate in these planning 
activities. Tribes raised concerns about the impacts of the regulations 
on EGUs and the subsequent impact on jobs and revenue for their tribes. 
The Navajo Nation raised concerns about the application of certain 
building blocks to the EGUs on their lands, the impact of the proposed 
rule on renewable energy projects on their lands and the ability of the 
Navajo Nation to control any available carbon credits under a trading 
program. Detail regarding the EPA's outreach to tribes can be found in 
section VI.F of this supplemental proposal.
    The EPA has used information from these meetings to inform this 
supplemental proposal. The EPA expects that a dialogue with tribal 
governments and other stakeholders will continue through the comment 
period and even after the rule is finalized. The EPA recognizes the 
importance of working with all stakeholders to ensure a clear and 
common understanding of the role they will play in addressing carbon 
pollution from power plants.

III. Goals for U.S. Territories and Areas of Indian Country

A. Overview

    In this section, the EPA sets out proposed CO2 emission 
performance goals to guide U.S. territories with affected EGUs in 
developing their plans. The EPA also sets out proposed emission 
performance goals for areas of Indian country with affected EGUs. The 
proposed goals reflect the EPA's quantification of each area's adjusted 
output-weighted average emission rate from affected EGUs that could be 
achieved by 2030 and sustained thereafter. The EPA is also proposing 
interim goals that would apply over a 2020-2029 phase-in period, 
through reasonable implementation, considering the unique circumstances 
of each individual area, of the BSER adequately demonstrated (based on 
all four building blocks as described in the June 18, 2014, proposal). 
See 79 FR 34855. These goals are presented in section III.B and are the 
basis for Option 1 in the discussion of the impacts of this proposed 
action in sections I.A and V. In addition, the EPA is taking comment on 
a second set of area-specific goals for U.S. territories and Indian 
country with affected EGUs that would reflect less stringent 
application of the same BSER, in this case by 2025, with interim goals 
that would apply over a 2020-2024 phase-in period. These goals are 
presented in section III.C and are the basis for Option 2 in the 
discussion of the impacts of this proposed action in sections I.A and 
V. When promulgated in the final rule following consideration of 
comments received, the interim and final goals would be binding 
emission guidelines for plans in each area. See 79 FR 34893 for a 
discussion of the stringency of the building blocks used to calculate 
goals.

[[Page 65490]]

    The proposed goals are expressed in the form of area-specific, 
adjusted \18\ output-weighted-average CO2 emission rates for 
affected EGUs. However, jurisdictions are authorized to translate the 
form of the goal to a mass-based form, as long as the translated goal 
achieves the same degree of emission limitation.\19\
---------------------------------------------------------------------------

    \18\ As described below, the emission rate goals include 
adjustments to incorporate the potential effects of emission 
reduction measures that address power sector CO2 
emissions primarily by reducing the amount of electricity produced 
at an area's affected EGUs (associated with, for example, increasing 
the amount of new low- or zero-carbon generating capacity or 
increasing demand-side energy efficiency) rather than by reducing 
their CO2 emission rates per unit of energy output 
produced.
    \19\ A method for translating from a rate-based goal to a mass-
based goal is discussed in the ``Projecting CO2 Emission 
Performance in State Plans Technical Support Document'' (TSD) issued 
in conjunction with the June 18, 2014, proposal.
---------------------------------------------------------------------------

B. Proposed Goals and Computation Procedure

    The methodology used to compute the proposed interim and final 
CO2 emission performance goals for U.S. territories and 
areas of Indian country with affected EGUs mirrors to the fullest 
extent possible the approach used to calculate goals for states 
discussed in section VII of the preamble to the June 18, 2014, 
proposal. See 79 FR 34892 for a detailed discussion of the methodology. 
That methodology is described in more detail in the ``Goal Computation 
Technical Support Document'' \20\ issued in conjunction with the June 
18, 2014, proposal, which includes a numerical example illustrating the 
full procedure. The development of the data inputs used in the 
computation procedure for the state goals is discussed in section VI of 
the June 18, 2014, proposal (79 FR 34855), and in the ``GHG Abatement 
Measures'' TSD \21\ issued in conjunction with the June 18, 2014, 
proposal. The methodology and data inputs used to compute the proposed 
goals for U.S. territories and areas of Indian country are discussed in 
detail in the ``Technical Support Document for Calculating Carbon 
Pollution Goals for Existing Power Plants in Territories and Areas of 
Indian Country,'' available in the docket for this rulemaking.
---------------------------------------------------------------------------

    \20\ This document is included in the docket with Document ID 
No. EPA-HQ-OAR-2013-0602-0460.
    \21\ This document is included in the docket with Document ID 
No. EPA-HQ-OAR-2013-0602-0437.
---------------------------------------------------------------------------

    The EPA has developed proposed CO2 emission performance 
goals for territories and areas of Indian country with affected EGUs, 
reflecting application of the BSER, based on all four building blocks 
described in the June 18, 2014, proposal, to pertinent data for each 
territory and area of Indian country with affected EGUs. The final goal 
for each area, expressed as a CO2 emission rate on an 
output-weighted-average basis, is intended to represent the emission 
performance level achievable collectively by all of an area's affected 
EGUs by 2030, after a 2020-2029 phase-in period, with certain 
computation adjustments described below, to reflect the potential to 
achieve emission reductions by avoiding fossil fuel-fired generation. 
For each area, in addition to the final goal, the EPA has developed an 
interim goal that would apply during the 2020-2029 period on a 
cumulative or average basis as the area progresses toward the final 
goal. The proposed goals are set forth in Tables 5 and 6 below, 
followed by a discussion of several considerations that should be noted 
regarding the computation methodology. For U.S. territories, as 
detailed in the discussion of the considerations, the EPA is co-
proposing two approaches for the application of building block 3, which 
are shown as approaches A and B in Table 5, and also taking comment on 
an alternative to the proposed approaches for the application of 
building block 3, as shown in Table 7. For areas of Indian country with 
affected EGUs, the EPA is proposing one option, as shown in Table 6, 
and taking comment on alternatives. (The issue of how areas could 
demonstrate emission performance consistent with the interim and final 
goals is addressed in section IV of this supplemental proposal, below, 
which addresses plans.)

                           Table 5--Proposed Goals for Territories With Affected EGUs
      [Adjusted output-weighted-average pounds of CO2 per net MWh from all affected fossil fuel-fired EGUs]
----------------------------------------------------------------------------------------------------------------
                                            Goal using proposed approach A    Goal using proposed approach B for
                                                 for building block 3                  building block 3
                  Area                   -----------------------------------------------------------------------
                                            Interim goal       Final goal       Interim goal       Final goal
----------------------------------------------------------------------------------------------------------------
Guam....................................             1,733             1,586             1,708             1,556
Puerto Rico.............................             1,470             1,413             1,459             1,399
----------------------------------------------------------------------------------------------------------------

 Table 6--Proposed Goals for Areas of Indian Country With Affected EGUs
  [Adjusted output-weighted-average pounds of CO2 per net MWh from all
                    affected fossil fuel-fired EGUs]
------------------------------------------------------------------------
                                      Goal using proposed approach A for
                                               building block 3
                Area                 -----------------------------------
                                        Interim goal       Final goal
------------------------------------------------------------------------
Lands of the Fort Mojave Tribe......               856               855
Lands of the Navajo Nation..........             1,991             1,989
Lands of the Ute Tribe of the Uintah             2,000             1,988
 and Ouray Reservation..............
------------------------------------------------------------------------

    As stated previously, the EPA applied the same four building blocks 
described in the June 18, 2014, proposal to determine the goals. 
However, applying the methodology from the June 18, 2014, proposal for 
building block 1 would not result in any adjustments to the goals for 
Guam or the Fort Mojave Indian country because there are no coal-fired 
affected EGUs in those areas. Applying the methodology for building 
block 2 would not result in any adjustments to the goal for the Fort 
Mojave Indian country for the same reason. Applying the methodology for 
building block 2 also would not result in any adjustments to the goals 
for Guam or any of the other areas of Indian country because there are 
no NGCC units for re-dispatch within those areas. With respect to 
Puerto Rico, the EPA believes that

[[Page 65491]]

existing and planned LNG import capacity in Puerto Rico supports 70 
percent dispatch at the territory's existing NGCC facility in building 
block 2 of goal setting.\22\
---------------------------------------------------------------------------

    \22\ The information supporting the potential for the LNG 
capacity to support 70 percent dispatch is further detailed in the 
``Technical Support Document for Calculating Carbon Pollution Goals 
for Existing Power Plants in U.S. Territories and Areas of Indian 
Country.''
---------------------------------------------------------------------------

    The EPA is co-proposing two options for the application of building 
block 3 for the territories with affected EGUs. The first co-proposal 
option, shown as approach A in Table 5, mirrors the proposed 
methodology from the June 18, 2014, proposal for determining RE, which 
applies, for each jurisdiction, an annual growth factor to the area's 
baseline (that is, the year 2012) amount of RE. This methodology 
applies the annual growth factor for each year from 2017 to the final 
target in 2029. The EPA is also proposing this option for the 
application of building block 3 for areas of Indian country, as shown 
in Table 6. For the territories, the EPA applied Hawaii's 9 percent 
annual growth factor because the territories appear to have relatively 
similar RE resource bases and power system characteristics (e.g., 
independent utility grids and unique fossil fuel generation portfolios 
with high electricity and fuel costs). For areas of Indian country, the 
EPA applied the West region's 6 percent annual average growth factor 
because those areas are geographically located within the West region. 
However, with respect to all of the U.S. territories and areas of 
Indian country for which the EPA is proposing goals in this 
supplemental proposal, the available information indicates that there 
was no generation from utility-scale, non-hydroelectric RE in 2012. 
Because each territory and area of Indian Country has a baseline amount 
of RE equal to zero, the application of the growth factor (that is, 
multiplying the baseline amount of zero by the growth factor) results 
in each of those areas having an RE amount of zero for building block 
3. Therefore, strictly applying the methodology from the June 18, 2014, 
proposal for building block 3 would result in no additional emission 
reductions required, and, therefore, no change to the goals for these 
areas.\23\
---------------------------------------------------------------------------

    \23\ Consistent with the methodology used in the June 18, 2014, 
proposal, the proposed RE target for Puerto Rico does not include 
2012 hydropower generation. The ``Technical Support Document for 
Calculating Carbon Pollution Goals for Existing Power Plants in U.S. 
Territories and Areas of Indian Country'' presents Puerto Rico's RE 
target both with and without the inclusion of 2012 hydropower 
generation.
---------------------------------------------------------------------------

    The second co-proposal option for U.S. territories with affected 
EGUs, shown as approach B in Table 5, reflects a conclusion that there 
is potential for RE development in the territories and includes an 
adjustment to the proposed methodology, which results in a positive 
amount of RE for building block 3 for each of the territories. This 
adjustment is based on the EPA's view that there is in fact potential 
for renewable generation in each of the territories with affected EGUs. 
With this adjustment, the EPA changed the amount of RE in 2017 to be 
0.37 percent of the 2012 total electricity generation, which is 
consistent with the lowest amount among the 50 states in 2012.\24\ 
Proceeding with the methodology, the EPA then applies the annual growth 
factor for each area in the assigned amount (noted above) through 2029. 
Using this approach, RE targets for the U.S. territories grow from 0.37 
percent to 1.0 percent of 2012 total generation by 2030. The goals 
calculated using this approach are presented as proposed approach B for 
building block 3 in Table 5.
---------------------------------------------------------------------------

    \24\ With 0.37 percent, Kentucky had the lowest percentage of 
renewable generation in 2012. See 79 FR 34868 and Table 4-1 in the 
``GHG Abatement Measures'' TSD on page 4-6.
---------------------------------------------------------------------------

    The EPA's view is that there is also potential for RE generation in 
each of the areas of Indian country with affected EGUs. The EPA notes 
that if the methodology described above (changing the amount of RE in 
2017 to be 0.37 percent of the 2012 total electricity generation and 
applying the annual growth factor for each area in the assigned amount 
through 2029) is used for areas of Indian country, the amount of RE 
included under this option would be a significant portion of the area's 
electricity demand. This is due to the fact that, unlike all other 
jurisdictions covered by the June 18, 2014, proposal and this 
supplemental proposal, there are significant differences between the 
electricity generation in each of the areas of Indian country with 
affected EGUs and electricity demand within those same areas. Although 
the basis for including RE in building block 3 as part of the BSER, as 
discussed in the June 18, 2014, proposal, does not depend on the amount 
of electricity demand within state, territory or area of Indian country 
(79 FR 34883-34890), the Navajo Nation stated during its consultation, 
that building block 3 is not appropriate for the Navajo Nation because 
the tribe's use of electricity is small compared to the generation at 
the power plants. The EPA seeks comment on whether the methodology co-
proposed for the territories is appropriate for areas of Indian 
country, or if adjustments to the proposed option or other approaches 
for the application of building block 3 for areas of Indian country are 
more appropriate. For example, an RE target could be established based 
on a percentage of the electric demand within the jurisdiction, where 
the percentage would be consistent with the amounts of RE generation in 
building block 3 in other jurisdictions (e.g. the lowest, average or 
greatest percentage of RE per electric demand in other affected 
jurisdictions).
    In the June 18, 2014, proposal, the EPA solicited comment on an 
alternative RE approach for building block 3 that relied on technical 
potential within states, and in this supplemental proposal, the EPA is 
soliciting comment on that same approach as applied to U.S. territories 
with affected EGUs. The goals calculated using this approach are 
presented in Table 7. The EPA is presenting information on this 
alternative approach for Puerto Rico. The EPA is not presenting 
information on this alternative approach for Guam because the EPA does 
not have technical potential data for Guam. The EPA is seeking comments 
on available technical potential for Guam in order to allow us to 
calculate a RE target based on the alternative approach. The EPA has 
limited technical potential data for Puerto Rico--that is, only solar 
photovoltaic and wind data--and is also seeking comments on available 
technical potential for that jurisdiction. Even without RE market 
potential data to pair with the technical potential data for Puerto 
Rico, the RE target is 1.2 percent of 2012 total generation by 2030, 
which is well below the mandatory renewable portfolio standard target 
of 15 percent by 2020. For areas of Indian country, similar to the 
discussion above regarding the application of approach B for areas of 
Indian country, in light of concerns expressed by the Navajo Nation 
that its use of electricity is small compared to generation at the 
power plants, coupled with the fact that the amount of RE required for 
each area of Indian country under this alternative approach would be in 
excess of the area's electricity demand, the EPA seeks comment on the 
need for, and possible types of, adjustments to the alternative 
approach for the application of building block 3 for areas of Indian 
country.
    The cumulative RE amounts for each territory using the two options 
for the proposed approach and the alternative approach for building 
block 3, represented as percentages of 2012 total generation, are shown 
in Table 8. The EPA is co-proposing the two RE approaches for U.S. 
territories and is

[[Page 65492]]

proposing one option and taking comment on alternatives for areas of 
Indian country with affected EGUs, as well as seeking comment on the 
alternative approach for territories. The EPA is also seeking comment 
on sources of RE data from these areas.

    Table 7--Proposed Goals for Territories With Affected EGUs Using
                Alternative Approach for Building Block 3
  [Adjusted output-weighted-average pounds of CO2 per net MWh from all
                    affected fossil fuel-fired EGUs]
------------------------------------------------------------------------
                                        Goal using alternative approach
                                             for building block 3
                Area                 -----------------------------------
                                        Interim goal       Final goal
------------------------------------------------------------------------
Guam................................             1,733             1,586
Puerto Rico.........................             1,452             1,397
------------------------------------------------------------------------

                                             Table 8--RE Generation Levels for Territories Goal Development
                                                          [Percentage of 2012 total generation]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                          Proposed approach A  for  Proposed approach B  for   Alternative approach  for
                                                                              building block 3          building block 3           building block 3
                                                2012  Non-   2012  Total -------------------------------------------------------------------------------
                     Area                        hydro RE        RE         Interim       Final       Interim       Final        Interim
                                                (percent)     (percent)      level        level        level        level         level     Final  level
                                                                           (percent)    (percent)    (percent)    (percent)     (percent)     (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Guam.........................................            0           0              0            0          0.7          1.0           0             0
Puerto Rico..................................            0           0.7            0            0          0.7          1.0           1.2           1.2
--------------------------------------------------------------------------------------------------------------------------------------------------------

    The proposed goal computation procedure for building block 4, 
demand-side energy efficiency, for U.S. territories and Indian country, 
mirrors the method and data sources used for setting goals for states 
to the fullest extent possible. Data sources the EPA has used for 
purposes of establishing demand-side energy efficiency targets for 
states are generally available for areas of Indian Country with 
identified affected EGUs. These sources include reduced fuel 
expenditures from demand-side energy efficiency programs (Energy 
Information Administration (EIA) Form 861), retail sales (EIA Form 861) 
and projections of future growth of retail sales by region (Annual 
Energy Outlook (AEO)). For the U.S. territories, Guam and Puerto Rico, 
however, projected retail electricity sales growth is not available 
from the 2012 AEO as it was for states.\25\ The EPA is not aware of 
another source for this information and, thus, is using a zero percent 
per year growth rate for the retail sales data. Other values that the 
EPA considered using were the recent historic sales growth value from 
EIA Form 861 of -0.19 percent annually for Puerto Rico and -0.76 
percent annually for Guam, or the projected sales growth rate for the 
continental U.S. from the 2012 AEO of 0.78 percent per year (2012-
2040). The EPA solicits comments identifying alternative approaches 
and/or data sources for projections of retail electricity sales in 
these two territories. For the three areas of Indian country with 
affected EGUs, the EPA was able to employ the exact same method and 
data sources as used for states to compute goals for building block 4. 
For the Ute Tribe of the Uintah and Ouray Reservation, the source for 
retail sales is based on EIA Form 861 data for the Moon Lake Electric 
Association in Utah.
---------------------------------------------------------------------------

    \25\ For states, projected retail sales growth was derived from 
AEO regional results.
---------------------------------------------------------------------------

    One issue raised by the Navajo Nation during consultation was the 
need to increase access to electricity in areas of Indian country where 
electricity access and consumption is significantly below the national 
average. For example, the Navajo Nation indicated that 32 percent of 
the Navajo do not have electricity. The Navajo Nation indicated that 
the goal for their area of Indian country should account for the need 
to increase energy usage on their lands. The proposed goal is not 
intended to limit the ability to increase the availability of 
electricity in unserved portions of Indian country. The EPA notes that 
the methodology for building block 4 applies demand-side energy 
efficiency assuming future growth in sales of electricity, with the 
goal of ensuring future growth is accomplished efficiently. For the 
areas of Indian country, the EPA used the projected retail electricity 
sales growth for the grid region from the 2012 AEO, which is 1.3 
percent per year for the Navajo Nation and the Fort Mojave Tribe, and 1 
percent per year for the Ute Tribe. The EPA requests comment on this 
approach. It should also be noted that sales of electricity in areas of 
Indian country are small compared to the total generation from affected 
EGUs in those areas. As a result, the avoided generation due to demand-
side energy efficiency measures in building block 4 would yield very 
few emission reductions and, therefore, would have a very small impact 
on the overall goal for these areas. Accordingly, the EPA is seeking 
comment on the appropriateness of using, in the alternative, a minimum 
starting value for demand-side energy efficiency in areas of Indian 
country, and what that value should be.
    The EPA invites comment on all aspects of the goal computation 
procedure for U.S. territories and areas of Indian country with 
affected EGUs. The EPA also specifically invites comment on the area-
specific historical data for affected EGUs in U.S. territories and 
Indian country to which the building blocks are applied in order to 
compute the area's goals, as well as the area-specific data for U.S. 
territories and Indian country used to develop the area-specific data 
inputs for building blocks 3 and 4. These data are contained in the 
``Technical Support Document for Calculating Carbon Pollution Goals for 
Existing Power Plants in U.S. Territories and Areas of Indian 
Country.'' Consistent with the June 18, 2014, proposal, the EPA also 
requests comment on whether CO2 emission reductions 
associated with other measures not currently included in any of the 
four proposed building blocks

[[Page 65493]]

should be accounted for in developing the goals for U.S. territories 
and Indian country. Section VI.C.5 of the June 18, 2014, proposal 
discusses such other measures. See 79 FR 34875.

C. Alternate Goals Offered for Comment and Other Approaches Considered

    Consistent with the June 18, 2014, proposal, in addition to the 
proposed area-specific emission rate-based goals described above, the 
EPA has developed for public comment an alternate set of goals 
reflecting less stringent application of the building blocks and a 
shorter implementation period. The alternate final goals represent 
emission performance that would be achievable by 2025, after a 2020-
2024 phase-in period, with interim goals that would apply during the 
2020-2024 period on a cumulative or average basis as areas progress 
toward the final goals. As discussed in section III.B of this 
supplemental proposal, the EPA is co-proposing two approaches for the 
application of building block 3 for U.S. territories.
    The alternate goals are set forth in Tables 9 and 10 below. See 79 
FR 34898 for a discussion of the alternate goals and how the stringency 
of the building blocks used to calculate alternate goals compares to 
the proposed goals.

                           Table 9--Alternate Goals for Territories With Affected EGUs
      [Adjusted output-weighted-average pounds of CO2 per net MWh from all affected fossil fuel-fired EGUs]
----------------------------------------------------------------------------------------------------------------
                                            Goal using proposed approach A      Goal using proposed approach B
                                                 for building block 3                for building block 3
                  Area                   -----------------------------------------------------------------------
                                            Interim goal       Final goal       Interim goal       Final goal
----------------------------------------------------------------------------------------------------------------
Guam....................................             1,854             1,794             1,831             1,768
Puerto Rico.............................             1,542             1,521             1,533             1,510
----------------------------------------------------------------------------------------------------------------

Table 10--Alternate Goals for Areas of Indian Country With Affected EGUs
  [Adjusted output-weighted-average pounds of CO2 per net MWh from all
                    affected fossil fuel-fired EGUs]
------------------------------------------------------------------------
                                      Goal using proposed approach A for
                                               building block 3
                Area                 -----------------------------------
                                        Interim goal       Final goal
------------------------------------------------------------------------
Lands of the Fort Mojave Tribe......               857               857
Lands of the Navajo Nation..........             2,035             2,034
Lands of the Ute Tribe of the Uintah             2,052             2,048
 and Ouray Reservation..............
------------------------------------------------------------------------

    In the June 18, 2014, proposal, the EPA discussed issues related to 
the stringency and timing of these alternative goals. See 79 FR 34898. 
The EPA continues to seek comment on those issues as they relate to 
U.S. territories and areas of Indian country with affected EGUs.

D. Additional Considerations for U.S. Territories and Indian Country

    With respect to U.S. territories, the EPA is aware of affected EGUs 
in only Puerto Rico and Guam. As noted above, although the EPA has 
identified two fossil fuel-fired EGUs in the U.S. Virgin Islands, 
neither of these EGUs has operated recently or is currently operating, 
and, as a result, the EPA is not proposing a goal for the U.S. Virgin 
Islands. The EPA plans to evaluate whether a goal is appropriate for 
the U.S. Virgin Islands if either of its affected EGUs resumes 
operations in the future.
    In the June 18, 2014, proposal, the EPA sought comment on issues 
related to U.S. territories. In particular, the EPA solicited comment 
on appropriate alternatives for those territories that do not have 
access to natural gas.\26\ In addition, the EPA requested comment on 
whether heat rate improvements for non-coal fossil fuel-fired EGUs, 
including oil-fired steam EGUs, should be included in the building 
blocks and, therefore, be part of the basis for determining the BSER, 
with particular reference to the U.S. territories.\27\ The EPA is 
reiterating its request for comments on those issues, including on 
whether heat rate improvements are appropriate for oil-fired steam EGUs 
in territories in light of the fact that these EGUs make up a large 
portion of the EGU fleet in the territories.
---------------------------------------------------------------------------

    \26\ 79 FR 34893.
    \27\ 79 FR 34877.
---------------------------------------------------------------------------

    In addition, U.S. territories have many high utilization oil 
combustion turbines and oil-fired combined cycle units. These units are 
currently not included in the 2012 baseline because they are not 
covered by the proposed CAA section 111(b) rules for CO2 
emissions from newly constructed or modified/reconstructed fossil fuel-
fired EGUs. See 79 FR 1430, 1446 (January 8, 2014) (newly constructed 
EGUs); 79 FR 34960, 34972 (June 18, 2014) (modified/reconstructed 
EGUs). The EPA is requesting comment on the appropriateness of 
including these units in the CAA section 111(d) plans for the 
territories.

IV. CAA Section 111(d) Plans

A. U.S. Territories

    After the EPA establishes the jurisdiction-specific rate-based 
CO2 goals in the emission guidelines, as described in 
section III above, each territory that has a goal must then develop, 
adopt and submit a plan under CAA section 111(d) for achieving its 
goal. In the June 18, 2014, proposal, the EPA discusses at length the 
procedural and substantive requirements for CAA section 111(d) plans 
and solicits comment on numerous issues. Although, as noted above, that 
discussion is incorporated by reference in this proposal, for 
convenience, key aspects of the plan requirements are reiterated here.
    A territory must first determine the emission performance level it 
will include in its plan, which entails deciding whether it will adopt 
the rate-based CO2 goal set by the EPA or translate the 
rate-based goal to a mass-based goal. The territory must then establish 
an emission standard or set of emission standards, and, perhaps, other 
measures, along with implementing and

[[Page 65494]]

enforcing measures, that will achieve a level of emission performance 
that is equal to or better than the level specified in the plan. The 
territory has discretion to choose the measures it will include in its 
plan to achieve its goal as long as it can demonstrate that those 
measures will achieve the goal, and those measures meet and address 
necessary plan approvability criteria and plan components. The 
territory may use the same set of measures as in the EPA's approach to 
setting the goals, or the territory may use other or additional 
measures to achieve the required CO2 reductions. A 
territory's plan may rely on enforceable CO2 emission limits 
that are applied directly to affected EGUs such that those limits are 
sufficient to ensure compliance with the territory's CO2 
performance goal, or, alternatively, the plan may take a portfolio 
approach, which includes enforceable CO2 emission limits 
that apply to specific affected EGUs as well as other enforceable 
measures, such as RE and demand-side energy efficiency measures, which 
avoid EGU CO2 emissions and are implemented by the territory 
or by another entity.
    The EPA is proposing that U.S. territories follow the same 
guidelines for developing their plans that were proposed for states in 
the June 18, 2014, proposal. These guidelines include four general plan 
approvability criteria, 12 required components for a plan to be 
approvable, the process and timing for plan submittal and the process 
and timing for demonstrating achievement of the CO2 emission 
performance level in the plan. These guidelines are summarized briefly 
below, and discussed in more detail in section VIII of the June 18, 
2014, proposal.
    The EPA is proposing to evaluate and approve a territory's plan 
based on four general criteria: (1) Enforceable measures that reduce 
EGU CO2 emissions; (2) projected achievement of emission 
performance equivalent to the goals established by the EPA, on a 
timeline equivalent to that in the emission guidelines; (3) 
quantifiable and verifiable emission reductions; and (4) a process for 
reporting on plan implementation, progress toward achieving 
CO2 goals and implementation of corrective actions, if 
necessary. In addition, each territory's plan must follow the EPA 
framework regulations at 40 CFR 60.23. The proposed components of the 
plans that territories are required to submit under CAA section 111(d) 
are as follows:
     Identification of affected entities.
     Description of plan approach and geographic scope.
     Identification of territory's emission performance level.
     Demonstration that plan is projected to achieve emission 
performance level.
     Identification of programmatic milestones.
     Identification of corrective measures.
     Identification of emission standards and any other 
measures.
     Demonstration that each emission standard is quantifiable, 
non-duplicative, permanent, verifiable and enforceable.
     Identification of monitoring, reporting and recordkeeping 
requirements.
     Description of territory's reporting.
     Certification of hearing on territory's plan.
     Supporting material.
    The plan must also include a process for annual reporting on plan 
implementation, provisions ensuring progress toward achieving 
CO2 goals and provisions requiring implementation of 
corrective actions if necessary. No less frequently than every 2 
rolling calendar years, beginning January 1, 2022, the territory will 
be required to compare CO2 emission performance achieved by 
affected EGUs in the territory with the emissions performance projected 
in the territory's plan, and report that to the EPA.
    The proposed timetable for submission of plans by the territories 
is the same as described in the June 18, 2014, proposal for the states. 
That is, each territory must submit a plan to the EPA by June 30, 2016. 
However, the EPA recognizes that some territories may need more than 1 
year to complete all of the actions needed for their final plans, 
including technical work, legislative and rulemaking activities, 
coordination with third parties and coordination among jurisdictions 
involved in multi-jurisdictional plans. Therefore, the EPA is proposing 
an optional two-phased submittal process for plans. In phase 1, each 
territory needing additional time to submit a complete plan would be 
required to submit an initial plan containing certain required 
components by June 30, 2016. The initial plan would also document the 
reasons the territory needs more time and include commitments to take 
concrete steps that will ensure that the territory will submit a 
complete plan by June 30, 2017 or 2018, as appropriate. To be 
approvable, the initial plan must include specific components, 
including, among others, a description of the plan approach, initial 
quantification of the level of emission performance that will be 
achieved through the plan, a commitment to maintain existing measures 
that limit CO2 emissions, an explanation of the path to 
completion and a summary of the territory's response to any significant 
public comment on the approvability of the initial plan.
    If the EPA does not notify the territory within 60 days that the 
initial plan is deficient because it does not contain one or more of 
the required components, the extension of time to submit a complete 
plan will be deemed granted and a territory would have until June 30, 
2017, to submit a complete plan if the geographic scope of the plan is 
limited to that territory. If the territory develops a plan that 
includes a multi-jurisdictional approach, it would have until June 30, 
2018, to submit a complete plan. Further, the EPA is proposing that 
where a territory is participating in a multi-jurisdictional plan, a 
single joint plan may be submitted on behalf of all of the 
participating jurisdictions, provided it is signed by authorized 
officials for each of the jurisdictions participating in the plan and 
contains the necessary regulations, laws, etc., for each jurisdiction 
in the plan.
    The EPA is proposing the same process for EPA review of the plans 
submitted by the territories as in the June 18, 2014, proposal. 
Following submission of complete plans, the EPA will review plan 
submittals for approvability. Given the diverse approaches territories 
may take to meet the emission performance goals in the emission 
guidelines, the EPA is proposing to extend the period for EPA review 
and approval or disapproval of territories' plans from the 4-month 
period provided in the EPA framework regulations to a 12-month period.
    The EPA is proposing the same timetables for territories to achieve 
their emission performance levels as in the June 18, 2014, proposal for 
states. Under this proposed timetable, a territory would need to meet 
its interim CO2 emission performance level on average over 
the 10-year period from 2020-2029, as well as achieve its final 
CO2 emission performance level by 2030 and maintain that 
level subsequently. For a more detailed discussion of the proposed 
guidelines for plans, see section VIII of the June 18, 2014, proposal. 
In that proposal, the EPA specifically solicited comment on several 
aspects of the guidelines as they relate to state plans, and the EPA 
now solicits comment on the same issues as they relate to U.S. 
territories.

[[Page 65495]]

B. Areas of Indian Country With Affected EGUs

    The TAR identifies CAA provisions for which it is appropriate for 
the EPA to grant Indian tribes treatment in the same manner as states 
(TAS). Pursuant to the TAR, tribes may apply for TAS for purposes of 
CAA section 111(d). As a result, a tribe that has an affected EGU 
located in its area of Indian country has the opportunity, but not the 
obligation, to apply for TAS status and, if granted that status by the 
EPA, to develop a plan that establishes standards of performance for 
CO2 emissions from affected EGUs located in its area of 
Indian country. The EPA is not proposing a determination regarding any 
particular tribe's eligibility for TAS or ability to regulate EGUs 
located in its area of Indian country as part of this supplemental 
proposal. If a tribe has an affected EGU located in its area of Indian 
country, but does not seek and obtain the authority from the EPA to 
establish a CAA section 111(d) plan, then the EPA has the 
responsibility to establish such plans for the areas of Indian country 
where affected sources are located if the EPA determines that such a 
plan is necessary or appropriate. If a tribe with affected EGUs located 
in its area of Indian country obtains the authority to develop and 
submit a plan, the tribe would have the flexibility and authority \28\ 
described in section VIII of the June 18, 2014, proposal for states in 
developing a plan.
---------------------------------------------------------------------------

    \28\ This authority is found in CAA section 301(d) and the TAR.
---------------------------------------------------------------------------

    The EPA asked for comment on a number of specific aspects of plans 
in section VIII of the June 18, 2014, proposal, and the EPA solicits 
comment on those same issues as they relate to areas of Indian country 
with affected EGUs.\29\ In particular, the EPA requested comment on 
whether a tribe wishing to develop and implement a CAA section 111(d) 
plan should have the option of including the EGUs located in its area 
of Indian country in a multi-jurisdictional plan with one or more 
states, territories or tribes. As stated previously in section II.D of 
this supplemental proposal, the Navajo Nation indicated during 
consultation that the Navajo Nation should control, under a trading 
program, any available CO2 allowances from the affected EGUs 
at Navajo Generating Station and Four Corners Power Plant. The EPA also 
requested comment in the June 18, 2014, proposal on whether a federal 
plan for areas of Indian country with affected EGUs, should the EPA 
conclude at a later date that such a plan is necessary or appropriate, 
could be developed on a multi-jurisdictional basis in conjunction with 
nearby (or potentially other) states developing CAA section 111(d) 
state plans.
---------------------------------------------------------------------------

    \29\ For a list of the topics that the EPA is soliciting comment 
on regarding plans please see http://www2.epa.gov/sites/production/files/2014-08/documents/clean-power-plan-comment-categories.pdf 
under the Category heading of ``State Plans.''
---------------------------------------------------------------------------

C. Applicability of the Proposed Emission Guidelines to U.S. 
Territories and Eligible Indian Tribes

    As stated previously, the EPA is proposing the same emission 
guidelines for U.S. territories and tribes that seek and obtain the 
authority to establish a plan that were proposed for states in the June 
18, 2014, proposal. The term ``state'' as used in the emission 
guidelines proposed in the June 18, 2014, proposal would encompass U.S. 
territories with one or more affected EGUs that commenced construction 
on or before January 8, 2014, and any Indian tribe that has been 
approved by the EPA pursuant to 40 CFR 49.9 as eligible to administer 
the emission guidelines, in addition to the 50 states and the District 
of Columbia that have one or more affected EGUs. The EPA believes that 
this is the case without the need for the emission guidelines to 
directly and separately refer to these entities. Section 302(d) of the 
CAA defines the term ``State'' to include the Commonwealth of Puerto 
Rico, the Virgin Islands, Guam, American Samoa and the Commonwealth of 
the Northern Mariana Islands. While 40 CFR part 60 contains a separate 
definition of ``state'' at Sec.  60.2, this definition expands on, 
rather than narrows, the definition in section 302(d) of the CAA. The 
introductory language to 40 CFR 60.2 provides: ``The terms in this part 
are defined in the Act or in this section as follows.'' Section 60.2 
defines ``State'' as ``all non-Federal authorities, including local 
agencies, interstate associations, and State-wide programs that have 
been delegated authority to implement: (1) The provisions of this part 
and/or (2) the permit program established under part 70 of this 
chapter. The term State shall have its conventional meaning where clear 
from the context.'' (Emphasis added.) The EPA believes that the last 
sentence refers to the conventional meaning of ``state'' under the CAA. 
Thus, the EPA believes the term ``state'' as used in the emission 
guidelines is most reasonably interpreted as including the meaning 
ascribed to that term in section 302(d) of the CAA, which expressly 
includes U.S. territories. Further, an Indian tribe with one or more 
affected EGUs in its area of Indian country seeking to obtain approval 
of a plan would need to be approved by the EPA as eligible to 
administer the emission guidelines following the procedure set forth in 
40 CFR part 49. Once a tribe is approved as eligible for that purpose, 
it would be treated in the same manner as a state, and references in 
the emission guidelines to states would refer equally to the tribe. The 
EPA notes that while tribes have the opportunity to apply for 
eligibility to administer CAA programs, they are not required to do so. 
Further, the EPA has established procedures in 40 CFR part 49 (see 
particularly 40 CFR 49.7(c)) that permit eligible tribes to request 
approval of reasonably severable partial program elements. Those 
procedures are applicable here. Although the EPA believes the current 
emission guidelines are sufficiently inclusive, the EPA has decided to 
amend the applicability provision of the emission guidelines slightly 
to avoid any doubt that the guidelines apply to territories with 
affected EGUs and to any Indian tribe that has been approved by the EPA 
as eligible to develop and implement a plan. The revised regulatory 
text can be found in the ``Amended Regulatory Text for Supplemental 
Proposal: Carbon Pollution Emission Guidelines for Existing Power 
Plants in Indian Country and U.S. Territories'' memo in the rulemaking 
docket.

D. Areas Without Affected EGUs \30\
---------------------------------------------------------------------------

    \30\ It should be noted that this subsection applies to all 
types of areas, and not just territories and areas of Indian 
Country.
---------------------------------------------------------------------------

    Certain areas, including the state of Vermont, the District of 
Columbia, certain U.S. territories and most areas of Indian country, do 
not have any affected EGUs. Numerous stakeholders have expressed 
interest in areas that do not have affected EGUs having the opportunity 
to participate in multi-jurisdictional plans with areas that have 
affected EGUs. With this approach, an area without affected EGUs, which 
in many cases consumes energy produced elsewhere, could contribute to 
meeting a multi-jurisdictional CO2 goal with its RE 
resources, demand-side energy efficiency programs and other new low- or 
non-emitting electricity generation.\31\ The Navajo Nation, which does 
have affected EGUs on its lands, also expressed an interest during 
consultation in the ability of RE resources on the Navajo Nation to 
contribute to the achievement of state CO2 goals.
---------------------------------------------------------------------------

    \31\ See the June 18, 2014, proposal at 79 FR 34923 for a more 
robust description of how new NGCC can aid in meeting a 
jurisdiction's goal.

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

[[Page 65496]]

    The EPA requests comment on whether areas without affected EGUs may 
participate in multi-jurisdictional plans. The EPA requests comment on 
whether there are considerations that would specifically pertain to a 
multi-jurisdiction mass-based plan versus a rate-based plan. The EPA 
also requests comment on how CO2 emissions avoided through 
RE generating resources,\32\ demand-side energy efficiency measures, 
and other new low- and non-emitting electricity generation from areas 
without affected EGUs could be used to adjust or credit CO2 
emission rates in states required to develop CAA section 111(d) plans. 
The EPA also requests comment on how RE generating resources, demand-
side energy efficiency measures, and other new low- and non-emitting 
electricity generation in areas of Indian country that do have affected 
EGUs can be included, and if their inclusion is dependent upon whether 
or not the tribe has adopted a CAA section 111(d) plan or EPA has made 
a finding and adopted a federal plan for that area of Indian country.
---------------------------------------------------------------------------

    \32\ Further discussion of applying RE (in particular renewable 
energy certificates) across jurisdiction borders can be found in the 
``State Plan Considerations'' TSD, which is available in the docket 
for this rulemaking.
---------------------------------------------------------------------------

    Some stakeholders are also interested in the treatment of RE across 
international boundaries, particularly in instances where entities in 
another country are providing, or could provide, low- or non-emitting 
electricity generation to serve an area in the United States. In 
particular, stakeholders have asked whether RE resources from Canada 
can be used to contribute to meeting a jurisdiction's goal. The EPA is 
soliciting comment on all aspects of the treatment of RE, demand-side 
energy efficiency, and other new low- or non-emitting electricity 
generation across international boundaries in a CAA section 111(d) 
plan, considering the components for approvable plans described in the 
June 18, 2014, proposal, including any mechanisms that could be used to 
ensure that the low or non-emitting generation was in fact offsetting 
fossil-fuel-fired generation in the jurisdiction that would use it to 
meet its goal.
    It should be noted that multi-jurisdictional plans that include 
areas without affected EGUs must still meet the plan components and 
criteria to determine whether a state's plan is ``satisfactory'' under 
CAA section 111(d)(2)(A) as described in section VIII of the June 18, 
2014, proposal.\33\ The EPA solicits comment on these components and 
criteria for jurisdictions without affected EGUs that wish to be a part 
of a multi-jurisdiction plan.
---------------------------------------------------------------------------

    \33\ For more information on plan components see the June 18, 
2014, proposal at 79 FR 34911.
---------------------------------------------------------------------------

V. Impacts of the Proposed Action

A. What are the air impacts?

    With regard to Guam and Puerto Rico, the EPA estimates 
implementation of Option 1--Approach A \34\ will result in emission 
reductions of roughly 1.6 million metric tons of CO2 in 2020 
and reductions of 3.1 million metric tons of CO2 in 2030. 
The EPA estimates that implementation of Option 2--Approach A \35\ 
would result in emission reductions of roughly 1.5 million metric tons 
of CO2 in 2020 and reductions of 2.0 million metric tons of 
CO2 in 2025.
---------------------------------------------------------------------------

    \34\ Option 1 represents compliance with the goals calculated 
using the procedure outlined in section III.B of this supplemental 
proposal.
    \35\ Option 2 represents compliance with the goals calculated 
using the procedure outlined in section III.C of this supplemental 
proposal, reflecting less stringent application of the building 
blocks and a shorter implementation period.
---------------------------------------------------------------------------

    For Guam and Puerto Rico, the EPA estimates implementation of 
Option 1--Approach B \36\ will result in emission reductions of roughly 
1.7 million metric tons of CO2 in 2020 and reductions of 3.3 
million metric tons of CO2 in 2030. The EPA estimates that 
implementation of Option 2--Approach B \37\ would result in emission 
reductions of roughly 1.6 million metric tons of CO2 in 2020 
and reductions of 2.1 million metric tons of CO2 in 2025.
---------------------------------------------------------------------------

    \36\ Option 1 represents compliance with the goals calculated 
using the procedure outlined in section III.B of this supplemental 
proposal.
    \37\ Option 2 represents compliance with the goals calculated 
using the procedure outlined in section III.C of this supplemental 
proposal, reflecting less stringent application of the building 
blocks and a shorter implementation period.
---------------------------------------------------------------------------

    For all options and approaches, the EPA also expects reductions of 
criteria pollutants including SO2, NOX and 
PM2.5 as a result of actions taken to implement the goals 
proposed in this action. Due to data limitations, the EPA is not able 
to accurately estimate the co-reductions of criteria pollutant that 
would occur as a result of actions to implement the proposed goals.
    The EPA does not expect any additional emission reductions from 
areas of Indian country with affected EGUs. The EGUs in the Navajo 
Nation's area of Indian country are already expected to meet the 
proposed goals through compliance with other regulations. Three EGUs at 
Four Corners Power Plant shut down at the beginning of 2014 to comply 
with requirements for Best Available Retrofit Technology (BART).\38\ At 
Navajo Generating Station, the EPA expects that by 2019, one EGU will 
shut down or generation will be curtailed to comply with requirements 
for BART.\39\ These units represented approximately 30 percent of total 
EGU CO2 emissions in Navajo territory in 2012. As a result, 
substantial CO2 reductions from the shutdowns are expected 
prior to the target date for the goals proposed in this action, which 
would mean the Navajo territory would meet the proposed goal without 
additional actions beyond the shutdowns, if the goal is converted to a 
mass-based goal. The reductions associated with compliance with the 
goals for the lands of the Fort Mojave Tribe and the Ute Tribe of the 
Uintah and Ouray Reservation were already accounted for in the June 18, 
2014, proposal. The impacts analysis for the June 18, 2014, proposal 
did not separate out and exclude electricity demand and reduced fuel 
expenditures associated with energy efficiency from tribal lands from 
the states in which they are located. Thus, the emission reductions 
associated with achieving reduced electricity generation levels of 
building block 4 as part of this supplemental proposal were previously 
accounted for in the June 18, 2014, proposal. There is one affected EGU 
on Ute territory. This EGU was not an affected unit in the June 18, 
2014, proposal, but had the option to implement a heat rate improvement 
in the system-wide modeling conducted for that proposal.\40\ Because 
the modeling reflected this optional heat rate improvement, the 
emission reductions from a heat rate improvement for this EGU were 
accounted for in the June 18, 2014, proposal.
---------------------------------------------------------------------------

    \38\ See 79 FR 46514, August 24, 2012.
    \39\ See 77 FR 51620, August 8, 2014.
    \40\ See Integrated Planning Model results at: http://www.epa.gov/airmarkets/powersectormodeling/cleanpowerplan.html.
---------------------------------------------------------------------------

B. What are the energy impacts?

    As discussed previously, one area of Indian country with affected 
EGUs is expected to meet the proposed goal based on compliance with 
other regulations, and the impacts of compliance with the proposed 
goals for the other two areas were already accounted for in the June 
18, 2014, proposal. In U.S. territories, the EPA anticipates a small 
degree of re-dispatch from coal- and oil-fired generation to natural 
gas-fired generation. It is possible that some portion of this shift 
away from coal- and oil-fired generation may occur in the absence of 
the rule, due primarily to the relatively high cost of petroleum-based 
fuel and electricity in these areas. For example, the Puerto

[[Page 65497]]

Rico Electric Power Authority (PREPA) plans to add natural gas capacity 
at existing petroleum-burning plants. Additionally, both Guam and 
Puerto Rico are implementing Renewable Portfolio Standards programs.
    While the EPA did not perform a full resource adequacy analysis as 
was conducted for the June proposal, the EPA does not expect actions 
taken to implement the proposed goals to raise reliability concerns 
because these actions are likely consistent with planned activities in 
the affected areas. (For example, present and planned actions on Navajo 
territory to implement criteria pollutant reductions and planned 
expansion of natural gas-fired capacity in Puerto Rico.)

C. What are the compliance costs?

    The compliance costs of this proposed action are represented in 
this analysis as the change in electric power generation costs between 
the base case and the proposed rule in which U.S. territories pursue a 
distinct set of strategies beyond the strategies taken in the base case 
to meet the proposed goals. The compliance assumptions and projected 
compliance costs set forth in this analysis are illustrative in nature. 
There is uncertainty about the precise measures that territories will 
adopt to meet the proposed requirements, because there are considerable 
flexibilities afforded to them in developing their state plans. These 
illustrative compliance scenarios are designed to reflect, to the 
extent possible, the scope and the nature of the proposed guidelines.
    For Guam and Puerto Rico, the illustrative annual compliance costs 
and monitoring and reporting costs for Option 1--Approach A are a 
savings of approximately $140 million (2011$) in 2020 and a savings of 
$350 million in 2030, including reduced fuel expenditures from energy 
efficiency programs and re-dispatch. For Option 2--Approach A, the 
illustrative annual compliance costs and monitoring and reporting costs 
for Guam and Puerto Rico are a savings of approximately $130 million 
(2011$) in 2020 and a savings of $190 million in 2025, including 
reduced fuel expenditures from energy efficiency programs and re-
dispatch.
    For Guam and Puerto Rico, the illustrative annual compliance costs 
and monitoring and reporting costs for Option 1--Approach B are a 
savings of approximately $140 million (2011$) in 2020 and a savings of 
$360 million in 2030, including reduced fuel expenditures from energy 
efficiency programs and re-dispatch. For Option 2--Approach B, the 
illustrative annual compliance costs and monitoring and reporting costs 
for Guam and Puerto Rico are a savings of approximately $130 million 
(2011$) in 2020 and a savings of $200 million in 2025, including 
reduced fuel expenditures from energy efficiency programs and re-
dispatch.
    The EPA does not expect any additional compliance costs for areas 
of Indian country with affected EGUs. As discussed in section V.A of 
this supplemental proposal, the EPA expects that the goal for the lands 
of the Navajo Nation will be met without any further action beyond the 
shutdowns that are occurring, if the goal is converted to a mass-based 
goal. The costs for meeting the goal for the lands of the Fort Mojave 
Tribe and the Ute Tribe of the Uintah and Ouray Reservation were 
already included in the June 18, 2014, proposal.

D. What are the economic and employment impacts?

    Changes in supply or demand for electricity, natural gas, oil and 
coal can impact markets for goods and services produced by sectors that 
use these energy inputs in the production process or that supply those 
sectors. Changes in cost of production may result in changes in price 
and/or quantity produced and these market changes may affect the 
profitability of firms and the economic welfare of their consumers. The 
EPA recognizes that these guidelines provide significant flexibilities 
and the territories implementing the guidelines may choose to mitigate 
impacts to some markets outside the EGU sector. Similarly, demand for 
new generation or energy efficiency can result in changes in production 
and profitability for firms that supply those goods and services. The 
guidelines provide flexibility for territories that may want to enhance 
demand for goods and services from those sectors.
    Executive Order 13563 directs federal agencies to consider 
regulatory impacts on job creation and employment. According to the 
Executive Order, ``our regulatory system must protect public health, 
welfare, safety, and our environment while promoting economic growth, 
innovation, competitiveness, and job creation. It must be based on the 
best available science.'' Although standard benefit-cost analyses have 
not typically included a separate analysis of regulation-induced 
employment impacts, during periods of sustained high unemployment, 
employment impacts are of particular concern and questions may arise 
about their existence and magnitude.
    Under all scenarios analyzed for the territories of Guam and Puerto 
Rico, the annualized costs of the illustrative compliance strategies 
are expected to be negative for each year in the analysis as a result 
of reductions in field expenditures. Quantifying any employment impacts 
associated with implementing the proposed goals is difficult, as each 
area has the flexibility to implement a wide range of policies and 
practices for compliance with the proposed goals. The June 18, 2014, 
proposal used the cost projections from the engineering-based 
Integrated Planning Model to help estimate employment impacts in the 
electricity, natural gas and coal sectors, but these projections are 
not available for territories, making quantitative assessment of 
employment impacts for Guam and Puerto Rico more difficult. However, 
because annualized costs for the territories are relatively low or 
negative, the EPA does not expect significant adverse employment 
impacts under the illustrative compliance strategies. A critical 
component of the overall labor impacts of implementing the GHG 
guidelines is the impact of the labor associated with the demand-side 
energy efficiency activities. Like the RIA for the June 18, 2014, 
proposal indicated, the EPA anticipates that this rule may stimulate 
investment in clean energy technologies and services, resulting in 
considerable increases in energy efficiency in particular. The EPA 
expects these increases in energy efficiency, specifically, to support 
a significant number of jobs existing in related industries.
    The EPA does not expect any economic or employment impacts for EGUs 
in Indian country arising from this proposed action, as the costs for 
meeting the proposed goals for the lands of the Fort Mojave Tribe and 
the Ute Tribe of the Uintah and Ouray Reservation were already 
accounted for in the June 18, 2014, proposal, and the goal for the 
lands of the Navajo Nation is expected to be met without any further 
action beyond the shutdowns that are occurring.

E. What are the benefits of the proposed action?

    The EPA has used the SCC estimates presented in the 2013 
``Technical Support Document: Technical Update of the Social Cost of 
Carbon for Regulatory Impact Analysis Under Executive Order 12866'' 
(2013 SCC TSD) to analyze CO2 climate benefits of this 
rulemaking.\41\

[[Page 65498]]

The EPA refers to these estimates, which were developed by the U.S. 
government, as ``SCC estimates.'' The U.S. government first published 
the SCC estimates in 2010 following an interagency process that 
included the EPA and other executive branch entities; the process used 
three integrated assessment models (IAM) to develop SCC estimates and 
selected four global values for use in regulatory analyses. The U.S. 
government recently updated these estimates using new versions of each 
IAM and published them in 2013. The 2013 update did not revisit the 
2010 modeling decisions (e.g., with regard to the discount rate, 
reference case socioeconomic and emission scenarios or equilibrium 
climate sensitivity). Rather, improvements in the way damages are 
modeled are confined to those that have been incorporated into the 
latest versions of the models by the developers themselves and 
published in the peer-reviewed literature. The 2010 SCC TSD provides a 
complete discussion of the methods used to develop these estimates and 
the 2013 SCC TSD presents and discusses the updated estimates.\42\
---------------------------------------------------------------------------

    \41\ Docket ID No. EPA-HQ-OAR-2013-0495, Technical Support 
Document: Technical Update of the Social Cost of Carbon for 
Regulatory Impact Analysis Under Executive Order 12866, Interagency 
Working Group on Social Cost of Carbon, with participation by 
Council of Economic Advisers, Council on Environmental Quality, 
Department of Agriculture, Department of Commerce, Department of 
Energy, Department of Transportation, Environmental Protection 
Agency, National Economic Council, Office of Energy and Climate 
Change, Office of Management and Budget, Office of Science and 
Technology Policy, and Department of Treasury (May 2013, Revised 
November 2013). Available at: http://www.whitehouse.gov/sites/default/files/omb/assets/inforeg/technical-update-social-cost-of-carbon-for-regulator-impactanalysis.pdf.
    \42\ Docket ID No. EPA-HQ-OAR-2009-0472-114577, Technical 
Support Document: Social Cost of Carbon for Regulatory Impact 
Analysis Under Executive Order 12866, Interagency Working Group on 
Social Cost of Carbon, with participation by the Council of Economic 
Advisers, Council on Environmental Quality, Department of 
Agriculture, Department of Commerce, Department of Energy, 
Department of Transportation, Environmental Protection Agency, 
National Economic Council, Office of Energy and Climate Change, 
Office of Management and Budget, Office of Science and Technology 
Policy, and Department of Treasury (February 2010). Also available 
at: http://www.whitehouse.gov/sites/default/files/omb/inforeg/for-agencies/Social-Cost-of-Carbon-for-RIA.pdf.
---------------------------------------------------------------------------

    The EPA and other agencies have sought public comment on the SCC 
estimates as part of various rulemakings. In addition, OMB's Office of 
Information and Regulatory Affairs recently sought public comment on 
the approach used to develop the estimates. The comment period ended on 
February 26, 2014, and OMB is reviewing the comments received.
    The four SCC estimates, updated in 2013, are as follows: $13, $46, 
$68 and $137 per metric ton of CO2 emissions in the year 
2020 (2011 dollars).\43\ The first three values are based on the 
average SCC from the three IAMs, at discount rates of 5, 3 and 2.5 
percent, respectively. SCCs at several discount rates are included 
because the literature shows that the SCC is quite sensitive to 
assumptions about the discount rate, and because no consensus exists on 
the appropriate rate to use in an intergenerational context (where 
costs and benefits are incurred by different generations). The fourth 
value is the 95th percentile of the SCC from all three models at a 3 
percent discount rate. It is included to represent higher-than-expected 
impacts from temperature change further out in the tails of the SCC 
distribution (representing less likely, but potentially catastrophic, 
outcomes).
---------------------------------------------------------------------------

    \43\ The 2010 and 2013 TSDs present SCC in $2007. The estimates 
were adjusted to 2011$ using the GDP Implicit Price Deflator. Also 
available at: http://www.gpo.gov/fdsys/pkg/ECONI-2013-02/pdf/ECONI-2013-02-Pg3.pdf.
---------------------------------------------------------------------------

    The proposed guidelines would reduce emissions of precursor 
pollutants (e.g., SO2, NOX and directly emitted 
particles) in the territories, which in turn would lower ambient 
concentrations of PM2.5 and O3. However, the EPA 
is unable to quantify the health co-benefits of SO2 and 
NOX reductions in the U.S. territories because the benefit-
per-ton values the EPA used in the June 18, 2014, proposal are only 
appropriate for areas within the continental U.S. These benefit-per-ton 
values are not appropriate to use in estimating co-benefits for the 
U.S. territories because those territories were not represented in the 
air quality modeling used to generate the benefit-per-ton estimate.
    As described in the June 18, 2014, proposal, reducing exposure to 
PM2.5 is associated with significant human health benefits, 
including avoiding premature mortality for adults and infants, 
cardiovascular morbidities such as heart attacks, hospital admissions, 
and respiratory morbidities such as asthma attacks, acute bronchitis, 
hospital and emergency department visits, work loss days, restricted 
activity days, and respiratory symptoms. Reducing exposure to 
O3 is also associated with significant human health 
benefits, including avoiding mortality and respiratory morbidity such 
as fewer asthma attacks, hospital and emergency room visits and school 
loss days. In addition, the EPA could not monetize other important 
benefits, including climate benefits from reducing emissions of non-
CO2 GHG and co-benefits from reducing exposure to HAP (e.g., 
Hg and HCl) concentrations, as well as ecosystem and visibility 
benefits.
    For Guam and Puerto Rico, the EPA estimates that in 2020, the 
illustrative compliance approach for Option 1--Approach A will yield 
monetized climate benefits of approximately $73 million with a 3 
percent model average (2011$). The EPA estimates that in 2030, the 
illustrative compliance approach for Option 1--Approach A in Guam and 
Puerto Rico will yield monetized climate benefits of approximately $170 
million with a 3 percent model average (2011$). For Option 2--Approach 
A, the EPA estimates that in 2020, the illustrative compliance approach 
for Guam and Puerto Rico will yield monetized climate benefits of 
approximately $68 million with a 3 percent model average (2011$). The 
EPA estimates that in 2025, the illustrative compliance approach for 
Option 2--Approach A in Guam and Puerto Rico will yield monetized 
climate benefits of approximately $99 million with a 3 percent model 
average (2011$).
    For Guam and Puerto Rico, the EPA estimates that in 2020, the 
illustrative compliance approach for Option 1--Approach B will yield 
monetized climate benefits of approximately $77 million with a 3 
percent model average (2011$). The EPA estimates that in 2030, the 
illustrative compliance approach for Option 1--Approach B in Guam and 
Puerto Rico will yield monetized climate benefits of approximately $180 
million with a 3 percent model average (2011$). For Option 2--Approach 
B, the EPA estimates that in 2020, the illustrative compliance approach 
for Guam and Puerto Rico will yield monetized climate benefits of 
approximately $73 million with a 3 percent model average (2011$). The 
EPA estimates that in 2025, the illustrative compliance approach for 
Option 2--Approach B in Guam and Puerto Rico will yield monetized 
climate benefits of approximately $110 million with a 3 percent model 
average (2011$).
    The EPA does not expect any additional benefits associated with 
compliance for areas of Indian country with affected EGUs, as the 
benefits for meeting the proposed goals for the lands of the Fort 
Mojave Tribe and the Ute Tribe of the Uintah and Ouray Reservation were 
already accounted for in the June 18, 2014, proposal, and the goal for 
the lands of the Navajo Nation is expected to be met without any 
further action beyond the shutdowns that are occurring.

[[Page 65499]]

VI. Statutory and Executive Order Reviews

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

    Under section 3(f)(1) of Executive Order 12866 (58 FR 51735, 
October 4, 1993), this action is an ``economically significant 
regulatory action'' because it is likely to have an annual effect on 
the economy of $100 million or more or to adversely affect in a 
material way the economy, a sector of the economy, productivity, 
competition, jobs, the environment, public health or safety, or state, 
local, or tribal governments or communities. The $100 million threshold 
can be triggered by either costs or benefits, or a combination of them. 
Accordingly, the EPA submitted this action to OMB for review under 
Executive Orders 12866 and 13563 (76 FR 3821, January 21, 2011), and 
any changes made in response to OMB recommendations have been 
documented in the docket for this action. The EPA also prepared an 
analysis of the potential costs and benefits associated with this 
action in the RIA for this supplemental proposal.
    Consistent with Executive Order 12866 and Executive Order 13563, 
the EPA estimated the costs and benefits for illustrative compliance 
approaches of implementing the proposed guidelines. This proposal sets 
goals to reduce CO2 emissions from the electric power 
industry in U.S. territories and in Indian country. Actions taken to 
comply with the proposed guidelines will also reduce the emissions of 
directly emitted PM2.5, SO2 and NOX. 
The benefits associated with these PM, SO2 and 
NOX reductions are referred to as co-benefits, as these 
reductions are not the primary objective of this rule.\44\
---------------------------------------------------------------------------

    \44\ More details about the health benefits associated with 
reductions in PM2.5, SO2 and NOX 
can be found in the RIA for the June 18, 2014, proposal.
---------------------------------------------------------------------------

    The EPA has used the SCC estimates (i.e., the monetary value of 
impacts associated with a marginal change in CO2 emissions 
in a given year) to analyze CO2 climate impacts of this 
rulemaking. The four SCC estimates are associated with different 
discount rates (model average at 2.5 percent discount rate, 3 percent, 
and 5 percent; 95th percentile at 3 percent), and each increases over 
time. In this summary, the EPA provides the estimate of climate 
benefits associated with the SCC value deemed to be central by the U.S. 
government (the model average at 3 percent discount rate). There will 
likely be significant health co-benefits associated with reductions of 
SO2 and NOX. However, the EPA is unable to 
quantify health co-benefits SO2 and NOX 
reductions in the U.S. territories because the benefit-per-ton values 
that the EPA often uses for this purpose are only appropriate for areas 
within the continental U.S. In addition, the EPA could not monetize 
other important benefits, including climate benefits from reducing 
emissions of non-CO2 GHG and co-benefits from reducing 
exposure to HAP (e.g., Hg and HCl) concentrations, as well as ecosystem 
and visibility benefits.
    For Guam and Puerto Rico, the EPA estimates that in 2020, the 
illustrative compliance approach for Option 1--Approach A will yield 
monetized climate benefits of approximately $73 million with a 3 
percent model average (2011$). The annual illustrative compliance costs 
are a savings of approximately $140 million (2011$) in 2020. The EPA 
estimates that in 2030, the illustrative compliance approach for Option 
1--Approach A in Guam and Puerto Rico will yield monetized climate 
benefits of approximately $170 million with a 3 percent model average 
(2011$). The annual illustrative compliance costs are a savings of 
approximately $350 million (2011$) in 2030. For Option 2--Approach A, 
the illustrative compliance approach for Guam and Puerto Rico will 
yield monetized climate benefits of approximately $68 million with a 3 
percent model average (2011$) in 2025. The annual illustrative 
compliance costs are a savings of approximately $130 million (2011$) in 
2020. The EPA estimates that in 2025, the illustrative compliance 
approach for Option 2 in Guam and Puerto Rico will yield monetized 
climate benefits of approximately $99 million with a 3 percent model 
average (2011$). The annual illustrative compliance costs result in a 
net savings of approximately $190 million (2011$) in 2025, including 
reduced fuel expenditures associated with energy efficiency programs 
and re-dispatch.
    For Guam and Puerto Rico, the EPA estimates that in 2020, the 
illustrative compliance approach for Option 1--Approach B will yield 
monetized climate benefits of approximately $77 million with a 3 
percent model average (2011$). The annual illustrative compliance costs 
are a savings of approximately $140 million (2011$) in 2020. The EPA 
estimates that in 2030, the illustrative compliance approach for Option 
1--Approach B in Guam and Puerto Rico will yield monetized climate 
benefits of approximately $180 million with a 3 percent model average 
(2011$). The annual illustrative compliance costs are a savings of 
approximately $360 million (2011$) in 2030. For Option 2--Approach B, 
the illustrative compliance approach for Guam and Puerto Rico will 
yield monetized climate benefits of approximately $73 million with a 3 
percent model average (2011$) in 2020. The annual illustrative 
compliance costs are a savings of approximately $130 million (2011$) in 
2020. The EPA estimates that in 2025, the illustrative compliance 
approach for Option 2 in Guam and Puerto Rico will yield monetized 
climate benefits of approximately $110 million with a 3 percent model 
average (2011$). The annual illustrative compliance costs result in a 
net savings of approximately $200 million (2011$) in 2025, including 
reduced fuel expenditures associated with energy efficiency programs 
and re-dispatch.
    The EPA does not expect any additional benefits associated with 
compliance for areas of Indian country with affected EGUs, as the 
benefits for meeting the proposed goals for the lands of the Fort 
Mojave Tribe and the Ute Tribe of the Uintah and Ouray Reservation were 
already accounted for in the June 18, 2014, proposal, and the goal for 
the lands of the Navajo Nation is expected to be met without any 
further action beyond the shutdowns that are occurring.

B. Paperwork Reduction Act

    The information collection requirements in this proposed rule have 
been submitted for approval to OMB under the PRA, 44 U.S.C. 3501 et 
seq. The Information Collection Request (ICR) document prepared by the 
EPA has been assigned the EPA ICR number 2503.02.
    This proposal does not directly impose specific requirements on EGU 
sources, including those located in U.S. territories and in Indian 
country. The proposal also does not impose specific requirements on 
tribal governments that have affected EGUs located in their area of 
Indian country. For Indian country, the proposal establishes 
CO2 emission performance goals that could be addressed 
through either tribal or federal plans. A tribe would have the 
opportunity under the TAR, but not the obligation, to apply to the EPA 
for TAS for purposes of a CAA section 111(d) plan and, if approved by 
the EPA, to establish a CAA section 111(d) plan for its area of Indian 
country. To date, no tribe has requested or obtained TAS eligibility 
for purposes of a CAA section 111(d) plan. For areas of Indian country

[[Page 65500]]

with affected sources where a tribe has not applied for TAS and 
submitted any needed plan, if the EPA determines that a CAA section 
111(d) plan is necessary or appropriate, the EPA would have the 
responsibility to establish the plans. Because tribes are not required 
to implement section 111(d) plans and because no tribe has yet sought 
TAS eligibility for this purpose, this proposed action is not 
anticipated to impose any information collection burden on tribal 
governments over the 3-year period covered by this ICR.
    This proposal does impose specific requirements on U.S. territory 
governments that have affected EGUs. Their information collection 
requirements are based on the recordkeeping and reporting burden 
associated with the requirement that the two affected U.S. territories 
(i.e., Puerto Rico and Guam) develop, implement and enforce a plan to 
limit CO2 emissions from existing sources in the power 
sector within those U.S. territories. These recordkeeping and reporting 
requirements are specifically authorized by CAA section 114 (42 U.S.C. 
7414). All information submitted to the EPA pursuant to the 
recordkeeping and reporting requirements for which a claim of 
confidentiality is made is safeguarded according to agency policies set 
forth in 40 CFR part 2, subpart B.
    The annual burden for this collection of information for the 
territories (averaged over the first 3 years following promulgation of 
this proposed action) is estimated to be 29,200 hours at a total annual 
labor cost of $2.07 million. The total annual burden for the federal 
government (averaged over the first 3 years following promulgation of 
this proposed action) is estimated to be 2,530 hours at a total annual 
labor cost of $141,000. Burden means the total time, effort or 
financial resources expended by persons to generate, maintain, retain 
or disclose or provide information to or for a federal agency. This 
includes the time needed to review instructions; develop, acquire, 
install and utilize technology and systems for the purposes of 
collecting, validating, and verifying information, processing and 
maintaining information, and disclosing and providing information; 
adjust the existing ways to comply with any previously applicable 
instructions and requirements; train personnel to be able to respond to 
a collection of information; search data sources; complete and review 
the collection of information; and transmit or otherwise disclose the 
information.
    An agency may not conduct or sponsor, and a person is not required 
to respond to a collection of information unless it displays a 
currently valid OMB control number. The OMB control numbers for the 
EPA's regulations in 40 CFR are listed in 40 CFR part 9.
    To comment on the agency's need for this information, the accuracy 
of the provided burden estimates, and any suggested methods for 
minimizing respondent burden, the EPA has established a public docket 
for this rule, which includes this ICR, under Docket ID No. EPA-HQ-OAR-
2013-0602. Submit any comments related to the ICR to the EPA and to 
OMB. See the ADDRESSES section at the beginning of this action for 
where to submit comments to the EPA. Send comments to OMB at the Office 
of Information and Regulatory Affairs, Office of Management and Budget, 
725 17th Street NW., Washington, DC 20503, Attention: Desk Officer for 
the EPA. Since OMB is required to make a decision concerning the ICR 
between 30 and 60 days after November 4, 2014, a comment to OMB is best 
assured of having its full effect if OMB receives it by December 4, 
2014. The final rule will respond to any OMB or public comments on the 
information collection requirements contained in this proposal.

C. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) generally requires an agency 
to prepare a regulatory flexibility analysis of any rule subject to 
notice and comment rulemaking requirements under the Administrative 
Procedure Act or any other statute unless the agency certifies that the 
rule will not have a significant economic impact on a substantial 
number of small entities. Small entities include small businesses, 
small organizations and small governmental jurisdictions.
    For purposes of assessing the impacts of this rule on small 
entities, small entity is defined as: (1) A small business that is 
defined by the Small Business Administration's (SBA's) regulations at 
13 CFR 121.201 (for the electric power generation industry, the small 
business size standard is an ultimate parent entity with less than 750 
employees). The North American Industry Classification System (NAICS) 
codes for the affected industry are in Table 11 below); (2) a small 
governmental jurisdiction that is a government of a city, county, town, 
school district or special district with a population of less than 
50,000; and (3) a small organization that is any not-for-profit 
enterprise which is independently owned and operated and is not 
dominant in its field.

       Table 11--Potentially Regulated Categories and Entities \a\
------------------------------------------------------------------------
                                                 Examples of potentially
             Category               NAICS code     regulated entities
------------------------------------------------------------------------
Industry.........................       221112  Fossil fuel electric
                                                 power generating units.
State/Territorial/Local             \b\ 221112  Fossil fuel electric
 Government.                                     power generating units
                                                 owned by
                                                 municipalities.
------------------------------------------------------------------------
 \a\ Include NAICS categories for source categories that own and operate
  electric power generating units (includes boilers and stationary
  combined cycle combustion turbines).
 \b\ State, territory or local government-owned and operated
  establishments are classified according to the activity in which they
  are engaged.

    After considering the economic impacts of this proposed rule on 
small entities, I certify that this action will not have a significant 
economic impact on a substantial number of small entities.
    The proposed rule will not impose any requirements on small 
entities. Specifically, emission guidelines established under CAA 
section 111(d) do not impose any requirements on regulated entities 
and, thus, will not have a significant economic impact upon a 
substantial number of small entities. After emission guidelines are 
promulgated, each affected U.S. territory establishes standards on 
existing sources, and it is those requirements that could potentially 
impact small entities. Our analysis here is consistent with the 
analysis of the analogous situation arising when the EPA establishes 
national ambient air quality standards (NAAQS), which do not impose any 
requirements on regulated entities. As here with regard to U.S. 
territories, any impact of a NAAQS on small entities would only arise 
when states take subsequent action to maintain and/or achieve the NAAQS 
through their state implementation plans. See American Trucking Assoc. 
v. EPA, 175 F.3d 1029, 1043-45 (D.C. Cir. 1999) (NAAQS do not have 
significant

[[Page 65501]]

impacts upon small entities because NAAQS themselves impose no 
regulations upon small entities).
    Nevertheless, the EPA is aware that there is substantial interest 
in the proposed rule among small entities. As detailed in section II.D 
of this supplemental proposal and section III.A of the preamble to the 
proposed carbon pollution emission guidelines for existing EGUs (79 FR 
34845-34847, June 18, 2014), the EPA has conducted an unprecedented 
amount of stakeholder outreach on setting emission guidelines for 
existing EGUs. While formulating the provisions of the June 18, 2014, 
proposed rule, as well as this proposed rule, the EPA considered the 
input provided over the course of the stakeholder outreach. Sections 
II.D and VI.F of this supplemental proposal and section III.B of the 
preamble to the June 18, 2014, proposal (79 FR 34847) describe the key 
issues and messages from stakeholders. The EPA invites comments on all 
aspects of this proposal and its impacts, including potential impacts 
on small entities.

D. Unfunded Mandates Reform Act

    This proposed action does not contain a federal mandate that may 
result in expenditures of $100 million or more for state,\45\ local and 
tribal governments, in the aggregate, or the private sector in any one 
year. The emission guidelines proposed under CAA section 111(d) do not 
impose any direct compliance requirements on EGU sources. As explained 
in section VI.B above, the proposal also does not impose specific 
requirements on tribal governments that have affected EGUs located in 
their area of Indian country. The proposal does impose specific 
requirements on U.S. territory governments that have affected EGUs. 
Specifically, the U.S. territories are required to develop plans to 
implement the guidelines under CAA section 111(d) for affected EGUs. 
The burden for U.S. territories to develop CAA section 111(d) plans in 
the 3-year period following promulgation of the rule was estimated and 
is listed in section VI.B above, but this burden is estimated to be 
below $100 million in any one year. Thus, this proposed rule is not 
subject to the requirements of section 202 or section 205 of the UMRA.
---------------------------------------------------------------------------

    \45\ ``State'' is defined under the Unfunded Mandates Reform Act 
(UMRA) as ``a State of the United States, the District of Columbia, 
a territory or possession of the United States, and an agency, 
instrumentality, or fiscal agent of a State but does not mean a 
local government of a State.''
---------------------------------------------------------------------------

    This proposed rule is also not subject to the requirements of 
section 203 of UMRA because it contains no regulatory requirements that 
might significantly or uniquely affect small governments. Specifically, 
the governments with affected EGUs for which this action proposes 
specific requirements (i.e., the U.S. territories of Puerto Rico and 
Guam) are not considered small governments.
    In light of the interest among governmental entities, the EPA 
initiated outreach with U.S. territory and tribal governmental entities 
while formulating the provisions of this proposed rule. Section III.A 
of the preamble to the proposed carbon pollution emission guidelines 
for existing EGUs (79 FR 34845-34847, June 18, 2014) describes the 
extensive stakeholder outreach the EPA has conducted on setting 
emission guidelines for existing EGUs. Section II.D of this 
supplemental proposal details the specific outreach that the EPA 
conducted to the U.S. territories with potentially affected EGUs. In 
addition, section VI.F of this supplemental proposal and section XI.F 
of the preamble to the June 18, 2014, proposed rule describe outreach 
to tribes and consultation with tribal officials. The EPA considered 
the input provided over the course of its stakeholder outreach 
developing the provisions of these proposed emission guidelines.

E. 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, as 
specified in Executive Order 13132. Executive Order 13132 applies only 
to states, whereas this action proposes emission performance goals 
covering affected power plants located in the U.S. territories and in 
specified areas of Indian country.\46\ Thus, Executive Order 13132 does 
not apply to this action.
---------------------------------------------------------------------------

    \46\ ``State'' or ``States'' are defined under Executive Order 
13132 as ``the States of the United States of America, individually 
or collectively, and, where relevant, to State governments, 
including units of local government and other political subdivisions 
established by the States.''
---------------------------------------------------------------------------

    Nevertheless, as described in section II.D of this supplemental 
proposal and section III.A of the preamble to the proposed carbon 
pollution emission guidelines for existing EGUs (79 FR 34845-34847, 
June 18, 2014), the EPA has conducted an unprecedented amount of 
stakeholder outreach on setting emission guidelines for existing EGUs. 
Section II.D of this supplemental proposal details the outreach that 
the EPA conducted to the U.S. territories with potentially affected 
EGUs. In addition, section VI.F of this supplemental proposal and 
section XI.F of the preamble to the June 18, 2014, proposed rule 
describe outreach to tribes and consultation with tribal officials.
    In the spirit of Executive Order 13132, and consistent with the 
EPA's policy to promote communications between the EPA and State and 
local governments, the EPA welcomes comment on this proposed action 
from U.S. territory and tribal officials.

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

    Subject to Executive Order 13175 (65 FR 67249, November 9, 2000) 
the EPA may not issue a regulation that has tribal implications, that 
imposes substantial direct compliance costs on tribal governments and 
that is not required by statute, unless the federal government provides 
the funds necessary to pay the direct compliance costs incurred by 
tribal governments, or the EPA consults with tribal officials early in 
the process of developing the proposed regulation and develops a tribal 
summary impact statement.
    The EPA has concluded that this action may have tribal 
implications. However, it will neither impose substantial direct 
compliance costs on tribal governments, nor preempt tribal law. Tribes 
are not required to develop or adopt CAA programs, but they may apply 
to the EPA for TAS and, if approved, do so. Tribes are not required to 
develop plans to implement the guidelines under CAA section 111(d) for 
affected EGUs in their areas of Indian country. To the extent that a 
tribal government seeks and attains TAS status for that purpose, these 
proposed emission guidelines would require that planning requirements 
be met and emission management implementation plans be executed by the 
tribes. The EPA notes that this proposal does not directly impose 
specific requirements on affected EGUs, including those located in 
Indian country, but provides guidance to any tribe approved by the EPA 
to address CO2 emissions from EGU sources found subject to 
section 111(d) of the CAA. The EPA also notes that none of the affected 
EGUs are owned or operated by tribal governments.
    The June 18, 2014, proposed rule and this supplemental proposal 
were developed after extensive and vigorous outreach to stakeholders, 
including tribes. Tribes were invited to participate in the national 
informational webinar, ``Building a Common Understanding:

[[Page 65502]]

Clean Air Act and Upcoming Carbon Pollution Guidelines for Existing 
Power Plants,'' held August 27, 2013. The EPA also held a series of 
listening sessions prior to development of this proposed action. Tribes 
participated in a session on September 9, 2013, together with the state 
agencies, as well as in a separate tribe-only session on September 26, 
2013. In addition, an outreach meeting was held on September 9, 2013, 
with tribal representatives from some of the 566 tribes.
    As part of the outreach to tribes, EPA representatives also met 
with tribal environmental staff with the National Tribal Air 
Association, by teleconference, on July 25, 2013, December 19, 2013, 
June 26, 2014, and webinars on August 4, 2014, and September 5, 2014. 
In those teleconferences and webinars, the EPA provided background 
information on the GHG emission guidelines to be developed and a 
summary of issues being explored by the agency. Tribes have expressed 
varied points of view. Some tribes raised concerns about the impacts of 
the regulations on EGUs and the subsequent impact on jobs and revenue 
for their tribes. Other tribes expressed concern about the impact the 
regulations would have on the cost of water to their communities as a 
result of increased costs to the EGU that provide energy to transport 
the water to the tribes. Other tribes raised concerns about the impacts 
of climate change on their communities, resources, ways of life and 
hunting and treaty rights. The tribes were also interested in the scope 
of the guidelines being considered by the agency (e.g., over what time 
period, relationship to state and multi-state plans) and how tribes 
will participate in these planning activities.
    The EPA conducted outreach to tribal environmental staff and 
offered consultation with tribal officials in developing this action. 
Because this supplemental proposal would affect sources located within 
Indian country, the EPA offered consultation with tribal officials 
early in the process of developing the proposed regulation to permit 
tribes to have meaningful and timely input into its development. The 
EPA sent consultation letters to the leaders of all of the federally 
recognized tribes. The letters provided information regarding the EPA's 
development of emission guidelines for existing power plants and 
offered consultation. The EPA held a consultation with the Ute Tribe, 
the Crow Nation, and the MHA Nation on July 18, 2014. On August 22, 
2014, the EPA held a consultation with the Fort Mojave Tribe. On 
September 15, 2014, the EPA held a consultation with the Navajo Nation. 
The Navajo Nation sent a letter to the EPA on September 18, 2014, 
summarizing the information presented at the consultation and the 
Navajo Nation's position on this supplemental proposal. One issue 
raised by tribal officials was the potential impacts of the June 18, 
2014, proposal and this supplemental proposal on tribes with budgets 
that are dependent on revenue from coal mines and power plants, as well 
as employment at the mines and power plants. The tribes noted the high 
unemployment rates and lack of access to basic services on their lands. 
Tribal officials also asked whether the rules will have any impact on a 
tribe's ability to seek TAS. Tribal officials also expressed interest 
in agency actions with regard to facilitating power plant compliance 
with regulatory requirements. The Navajo Nation made the following 
recommendations in their letter of September 18, 2014: The Navajo 
Nation supports a mass-based CO2 emission standard based on 
the highest historical CO2 emissions since 1996; the Navajo 
Nation requests that the EPA grant the Navajo Nation carbon credits and 
that the Navajo Nation retains ownership and control of such credits; 
building block 2 is not appropriate for the Navajo Nation because there 
are no NGCC plants located on the Navajo Nation; building block 3 is 
not appropriate for the Navajo Nation because the Navajo people already 
receive virtually all of their electricity from carbon-free sources 
(mostly hydroelectric power) and their use of electricity is negligible 
compared to the generation at the power plants; building block 4 is not 
appropriate for the Navajo Nation because of the inadequate access to 
electricity, and the goal should allow for an increase in energy 
consumption on the Navajo Nation; the supplemental proposal should 
consider the useful life of the power plants located on the Navajo 
Nation; and the supplemental proposal should clarify that RE projects 
located within the Navajo Nation that provide electricity outside the 
Navajo Nation should be counted toward meeting the relevant state's RE 
goals under the Clean Power Plan.
    The EPA will continue the ongoing dialogue with tribal officials 
regarding this proposed action. During the public comment period for 
this proposal, the EPA will hold meetings with tribal environmental 
staff to inform them of the content of this proposal, as well as offer 
further consultation with tribal elected officials, where it is 
appropriate. The EPA specifically solicits additional comment on this 
proposed action from tribal officials.

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

    The EPA interprets Executive Order 13045 (62 FR 19885, April 23, 
1997) as applying to those regulatory actions that concern health or 
safety risks, such that the analysis required under section 5-501 of 
the Executive Order has the potential to influence the regulation. This 
action is not subject to Executive Order 13045 because it does not 
involve decisions on environmental health or safety risks that may 
disproportionately affect children. The EPA believes that the 
CO2 emission reductions resulting from implementation of the 
proposed guidelines, as well as substantial O3 and 
PM2.5 emission reductions as a co-benefit, would further 
improve children's health.

H. Executive Order 13211: Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution or Use

    This action is not a ``significant energy action'' as defined in 
Executive Order 13211 (66 FR 28355, May 22, 2001), because it is not 
likely to have a significant adverse effect on the supply, distribution 
or use of energy. Affected EGUs in one area of Indian country are 
expected to meet the proposed goal based on compliance with other 
regulations; the impacts of meeting the proposed goals for the other 
two areas of Indian country were already accounted for in the June 18, 
2014, proposal. In U.S. territories, the EPA anticipates a small degree 
of re-dispatch from coal- and oil-fired generation to natural gas-fired 
generation. It is possible that some portion of this shift away from 
coal- and oil-fired generation may occur in the absence of the rule, 
due primarily to the relatively high cost of petroleum-based fuel and 
electricity in these areas. For example, PREPA plans to add natural gas 
capacity at existing petroleum-burning plants. Additionally, both Guam 
and Puerto Rico are implementing Renewable Portfolio Standards programs 
which may contribute to implementing these goals at a different cost 
than projected in the RIA. The ``Technical Support Document for 
Calculating Carbon Pollution Goals for Existing Power Plants in U.S. 
Territories and Areas of Indian Country'' provides additional 
information about PREPA's planned expansion of natural gas electricity 
generation and the Guam and Puerto Rico Renewable Portfolio Standards 
programs. The EPA does not account for

[[Page 65503]]

these existing trends in this analysis due to data limitations. 
Additionally, since the EPA estimated these impacts without the use of 
an economic dispatch model, the EPA is potentially overstating the 
costs of implementation in these areas.

I. National Technology Transfer and Advancement Act

    Section 12(d) of the National Technology Transfer and Advancement 
Act (NTTAA) of 1995 (Pub. L. 104-113; 15 U.S.C. 272 note) directs the 
EPA to use voluntary consensus standards (VCS) in its regulatory and 
procurement activities unless to do so would be inconsistent with 
applicable law or otherwise impractical. VCS are technical standards 
(e.g., materials specifications, test methods, sampling procedures and 
business practices) that are developed or adopted by one or more VCS 
bodies. The NTTAA directs the EPA to provide Congress, through OMB, 
explanations when the agency does not use available and applicable VCS. 
This proposed rulemaking does not involve technical standards.
    The EPA welcomes comments on this aspect of the proposed rulemaking 
and specifically invites the public to identify potentially-applicable 
VCS and to explain why such standards should be used in this action.

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

    Executive Order 12898 (59 FR 7629, February 16, 1994) establishes 
federal executive policy on environmental justice. Its main provision 
directs federal agencies, to the greatest extent practicable and 
permitted by law, to make environmental justice part of their mission 
by identifying and addressing, as appropriate, disproportionately high 
and adverse human health or environmental effects of their programs, 
policies and activities on minority populations and low-income 
populations in the U.S.
    Section II.A of the preamble to the proposed carbon pollution 
emission guidelines for existing EGUs (79 FR 34841-34843, June 18, 
2014) summarizes the public health and welfare impacts from GHG 
emissions that were detailed in the 2009 Endangerment Finding under CAA 
section 202(a)(1).\47\ As part of the Endangerment Finding, the 
Administrator considered climate change risks to minority or low-income 
populations, finding that certain parts of the population may be 
especially vulnerable based on their circumstances. These include the 
poor, the elderly, the very young, those already in poor health, the 
disabled, those living alone, and/or indigenous populations dependent 
on one or a few resources. The Administrator placed weight on the fact 
that certain groups, including children, the elderly and the poor, are 
most vulnerable to climate-related health effects.
---------------------------------------------------------------------------

    \47\ ``Endangerment and Cause or Contribute Findings for 
Greenhouse Gases Under Section 202(a) of the Clean Air Act,'' 74 FR 
66496 (Dec. 15, 2009) (``Endangerment Finding'').
---------------------------------------------------------------------------

    Strong scientific evidence that the potential impacts of climate 
change raise environmental justice issues is found in the major 
assessment reports by the U.S. Global Change Research Program, the 
Intergovernmental Panel on Climate Change and the National Research 
Council of the National Academies, summarized in the record for the 
Endangerment Finding. Their conclusions include that poor communities 
can be especially vulnerable to climate change impacts because they 
tend to have more limited adaptive capacities and are more dependent on 
climate-sensitive resources such as local water and food supplies. In 
addition, Native American tribal communities possess unique 
vulnerabilities to climate change, particularly those on established 
reservations that are restricted to reservation boundaries and, 
therefore, have limited relocation options. Tribal communities whose 
health, economic well-being and cultural traditions depend upon the 
natural environment will likely be affected by the degradation of 
ecosystem goods and services associated with climate change. Southwest 
native cultures are especially vulnerable to water quality and 
availability impacts. Native Alaskan communities are likely to 
experience disruptive impacts, including shifts in the range or 
abundance of wild species crucial to their livelihoods and well-being. 
The most recent assessments continue to strengthen scientific 
understanding of climate change risks to minority and low-income 
populations.
    This proposed rule would limit GHG emissions by establishing 
CO2 emission guidelines for use in developing CAA section 
111(d) plans to address CO2 emissions from affected EGUs. In 
addition to reducing CO2 emissions, implementing the 
proposed rule through the development of CAA section 111(d) plans would 
reduce other emissions from EGUs that become dispatched less frequently 
due to their relatively low energy efficiency. These emission 
reductions will include SO2 and NOX, which form 
ambient PM2.5 and O3 in the atmosphere, and HAP, 
such as Hg and HCl. In the final rule revising the annual 
PM2.5 NAAQS,\48\ the EPA identified persons with lower 
socioeconomic status as an at-risk population for experiencing adverse 
health effects related to PM exposures. Persons with lower 
socioeconomic status have been generally found to have a higher 
prevalence of pre-existing diseases, limited access to medical 
treatment, and increased nutritional deficiencies, which can increase 
this population's risk to PM-related and O3-related 
effects.\49\ Therefore, in areas where this rulemaking ultimately 
results in reductions in exposure to PM2.5, O3 
and methylmercury, persons with low socioeconomic status would also 
benefit. The RIA for this rulemaking, included in the docket for this 
rulemaking, provides additional information regarding the health and 
ecosystem effects associated with these emission reductions.
---------------------------------------------------------------------------

    \48\ ``National Ambient Air Quality Standards for Particulate 
Matter, Final Rule,'' 78 FR 3086 (Jan. 15, 2013).
    \49\ U.S. Environmental Protection Agency (U.S. EPA). 2009. 
Integrated Science Assessment for Particulate Matter (Final Report). 
EPA-600-R-08-139F. National Center for Environmental Assessment--RTP 
Division. December. Available on the Internet at http://cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=216546.
---------------------------------------------------------------------------

    While there will be many locations with improved air quality for 
PM2.5, O3 and HAP, there may also be EGUs whose 
emissions of one or more of these pollutants or their precursors 
increase as a result of implementation of the proposed emission 
guidelines for existing fossil fuel-fired EGUs. This may occur at EGUs 
that become dispatched more intensively than in the past because they 
become more energy efficient. The EPA has considered the potential for 
such increases and the environmental justice implications of such 
increases.
    As noted in the preamble for the June 18, 2014, proposal, as part 
of a jurisdiction's CAA section 111(d) plan, the jurisdiction may 
require an affected EGU to undertake physical or operational changes to 
improve the EGU's efficiency that result in an increase in the EGU's 
dispatch and an increase in its annual emissions of GHGs and/or other 
regulated pollutants. However, a jurisdiction can take steps to avoid 
increased utilization of particular EGUs and emissions of regulated 
pollutants whose environmental effects would be more localized around 
the affected EGU. To the extent that jurisdictions take this path, 
there would be no new environmental justice concerns in the areas near 
such EGUs.

[[Page 65504]]

In addition, the applicable jurisdiction or federal permitting program 
can adjust its CAA section 111(d) plan to ensure that there are no new 
NAAQS exceedances and that no existing NAAQS exceedances are made 
worse. For those EGUs in a permitting situation for which the EPA is 
the permit reviewing authority, the EPA will consider environmental 
justice issues as required by Executive Order 12898.
    In addition to some EGUs possibly being required by a jurisdiction 
to make modifications for increased energy efficiency, another 
potential effect of the proposed CO2 emission guidelines for 
existing fossil fuel-fired EGUs would be increased utilization of 
other, unmodified EGUs with relatively low GHG emissions per unit of 
electrical output, in particular high efficiency gas-fired EGUs. Such 
plants would have more hours in the year in which they operate and emit 
pollutants, including pollutants whose environmental effects if any 
would be localized rather than global as is the case with GHG 
emissions. Changes in utilization already occur now as demands for and 
sources of electrical energy evolve, but the proposed CO2 
emission guidelines for existing fossil fuel-fired EGUs can be expected 
to cause more such changes. Because gas-fired EGUs emit essentially no 
Hg, increased utilization would not increase methylmercury 
concentrations in their vicinities. Increased utilization generally 
would not cause higher peak concentrations of 
PM2.5, NOX or O3 around 
such EGUs than is already occurring because peak hourly or daily 
emissions generally would not change, but increased utilization may 
make periods of relatively high concentrations more frequent. It should 
be noted that the gas-fired sources that are likely to become 
dispatched more frequently than at present have very low emissions of 
primary PM, SO2 and HAP per unit of electrical output, such 
that local (or regional) air quality for these pollutants is likely to 
be affected very little. For natural gas-fired EGUs, the EPA found that 
regulation of HAP emissions ``is not appropriate or necessary because 
the impacts due to HAP emissions from such EGUs are negligible based on 
the results of the study documented in the utility RTC [response to 
comments].'' \50\ In studies done by the U.S. Department of Energy's 
National Energy Technology Laboratory comparing cost and performance of 
coal- and natural gas-fired generation, they assumed SO2, PM 
(and Hg) emissions to be ``negligible.'' Their studies predict 
NOX emissions from a NGCC unit to be approximately 10 times 
lower than a subcritical or supercritical coal-fired boiler. Many are 
also very well controlled for emission of NOX through the 
application of after combustion controls such as selective catalytic 
reduction, although not all gas-fired sources are so equipped. 
Depending on the specificity of the jurisdiction's CAA section 111(d) 
plan, the jurisdiction may be able to predict which EGUs and 
communities may be in this type of situation and to address any 
concerns about localized NOX concentrations in the design of 
the CAA section 111(d) program, or separately from the CAA section 
111(d) program but before its implementation. In any case, existing 
tracking systems will allow jurisdictions and the EPA to be aware of 
the EGUs whose utilization has increased most significantly, and, thus, 
to be able to prioritize our efforts to assess whether air quality has 
changed in the communities in the vicinity of such EGUs. There are 
multiple mechanisms in the CAA to address situations in which air 
quality has degraded significantly. In conclusion, this proposed rule 
would result in regional and national pollutant reductions; however, 
there likely would also be some locations with more times during the 
year of relatively higher concentrations of pollutants with potential 
for effects on localized communities than would be experienced in the 
absence of the proposed rule. The EPA cannot exactly predict how 
emissions from specific EGUs would change as an outcome of the proposed 
rule due to the jurisdiction-led implementation. Therefore, the EPA has 
concluded that it is not practicable to determine whether there would 
be disproportionately high and adverse human health or environmental 
effects on minority, low income or indigenous populations from this 
proposed rule.
---------------------------------------------------------------------------

    \50\ 65 FR 79831.
---------------------------------------------------------------------------

    In order to provide opportunities for meaningful involvement early 
on in the rule making process, the EPA has hosted webinars and 
conference calls on August 27, 2013, and September 9, 2013, for the 
June 18, 2014, proposal specifically for environmental justice and 
tribal communities and has taken all comments and suggestions into 
consideration in the design of the emission guidelines. Additionally, 
after the June 18, 2014, rule was proposed, the EPA hosted public 
hearings in Denver, Colorado, Atlanta, Georgia, Washington, DC and 
Pittsburgh, Pennsylvania, from July 29-August 1, 2014. Additionally, as 
referenced in the public hearing section of this proposal, the EPA will 
also be holding a public hearing on this supplemental proposal. Also, 
as part of the outreach conducted for the Clean Power Plan, the EPA has 
created interactive maps that provide the locations of fossil fuel 
fired power plants covered by the proposed Clean Power Plan and 
summaries that describe each area's power sector CO2 
emission rates (using 2012 data) and each area's proposed emission rate 
goal. These interactive maps are available at: http://cleanpowerplanmaps.epa.gov/CleanPowerPlan/. Additionally, the public is 
invited to submit comments or identify peer-reviewed studies and data 
that assess effects of exposure to the pollutants addressed by this 
proposal.

VII. Statutory Authority

    The statutory authority for this action is provided by sections 
111, 301, 302, and 307(d)(1)(V) of the CAA, as amended (42 U.S.C. 7411, 
7601, 7602, 7607(d)(1)(V)). This action is also subject to section 
307(d) of the CAA (42 U.S.C. 7607(d)).

Proposed Rule Amendment With Changes

    To facilitate understanding of the amendments to the proposed 
subpart UUUU being proposed in this action, the EPA is providing a 
Technical Support Document in the docket for this rulemaking that shows 
in track changes the proposed amendments to the text of the proposed 
subpart UUUU in the June 18, 2014, Federal Register publication.

List of Subjects in 40 CFR Part 60

    Environmental protection, Administrative practice and procedure, 
Air pollution control, Intergovernmental relations, Reporting and 
recordkeeping requirements.

    Dated: October 28, 2014.
Gina McCarthy,
Administrator.

    For the reasons stated in the preamble, title 40, chapter I, part 
60 of the Code of the Federal Regulations, as proposed to be amended at 
79 FR 34830, June 18, 2014, is proposed to be further amended as 
follows:

PART 60--STANDARDS OF PERFORMANCE FOR NEW STATIONARY SOURCES

0
1. The authority citation for part 60 continues to read as follows:

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

[[Page 65505]]

Subpart UUUU--Emission Guidelines for Greenhouse Gas Emissions and 
Compliance Times for Electric Utility Generating Units

0
2. Revise Sec.  60.5710 to read as follows:

Sec.  60.5710  Am I affected by this subpart?

    If you are the Administrator of an air quality program of a state, 
the Commonwealth of Puerto Rico, Guam and any other United States' 
territory, or an Indian tribe that has been approved by EPA pursuant to 
40 CFR 49.9 as eligible to administer this subsection (hereinafter a 
state) in state with one or more affected EGUs that commenced 
construction on or before January 8, 2014, you must submit a state plan 
to the U.S. Environmental Protection Agency (EPA) that implements the 
emission guidelines contained in this subpart. You must submit a 
negative declaration letter in place of the state plan if there are no 
affected EGUs for which construction commenced on or before January 8, 
2014 in your state.
0
3. Amend Table 1 to Subpart UUUU of Part 60--State Rate-Based 
CO2 Emission Performance Goals (Pounds of CO2 per 
net MWh)by adding entries for Puerto Rico, Guam, Lands of the Navajo 
Nation, Lands of the Ute Tribe of the Uintah and Ouray Reservation, and 
Lands of the Fort Mojave Tribe to the end as follows:

    Table 1 to Subpart UUUU of Part 60--State Rate-Based CO2 Emission
                            Performance Goals
                       [Pounds of CO2 per net MWh]
------------------------------------------------------------------------
                  State                    Interim goal     Final goal
------------------------------------------------------------------------
 
                              * * * * * * *
Puerto Rico.............................           1,470           1,413
Guam....................................           1,733           1,586
Lands of the Navajo Nation..............           1,991           1,989
Lands of the Ute Tribe of the Uintah and           2,000           1,988
 Ouray Reservation......................
Lands of the Fort Mojave Tribe..........             856             855
------------------------------------------------------------------------

[FR Doc. 2014-26112 Filed 10-30-14; 4:15 pm]
BILLING CODE 6560-50-P