Document ID: EPA-HQ-OAR-2003-0053-2086
Agency: epa
Document Type: Supporting & Related Material
Title: 
Posted Date: 2005-03-10T05:00Z

DRAFT­­
do
not
cite,
quote,
or
distribute
3/
8/
05
6560­
50­
P
ENVIRONMENTAL
PROTECTION
AGENCY
40
CFR
Parts
51
and
96
[
OAR­
2003­
0053;
FRL­
]

[
RIN
2060­
AM95]

Inclusion
of
Delaware
and
New
Jersey
in
the
Clean
Air
Interstate
Rule
AGENCY:
Environmental
Protection
Agency
(
EPA).

ACTION:
Proposed
rule.

SUMMARY:
In
today's
action,
we
are
proposing
to
include
Delaware
and
New
Jersey
in
the
Clean
Air
Interstate
Rule
(
CAIR)
for
fine
particles
(
PM2.5),
based
on
a
preliminary
assessment
that
they
contribute
significantly
to
a
downwind
State's
nonattainment.
In
the
CAIR,
we
determined
that
upwind
States
that
contribute
0.2

g/
m3
or
more
to
a
downwind
fine
particles
(
PM2.5)
nonattainment
area
are
potentially
deemed
to
be
contributing
significantly
to
nonattainment.
We
are
proposing
here
to
combine
Delaware
and
New
Jersey
for
purposes
of
this
test.
We
are
doing
so
to
avoid
the
anomalous
omission
of
these
two
States
from
the
CAIR
due
to
their
relatively
small
size.
We
have
DRAFT­­
do
not
cite,
quote,
or
distribute
3/
8/
05
2
tentatively
determined
that
Delaware
and
New
Jersey
should
be
covered
by
the
CAIR
for
annual
sulfur
dioxide
(
SO2)
and
nitrogen
oxides
(
NOx)
requirements.

In
this
proposal,
we
are
not
reopening
any
of
the
technical
aspects
of
the
CAIR
final
analyses.
Rather,
we
are
proposing
to
augment
the
analytical
approach
used
in
the
CAIR
by
supplementing
the
air
quality
step
of
the
contribution
analysis.

For
a
more
detailed
discussion
of
the
purpose,

background,
and
analytical
approach
of
the
CAIR,
and
for
the
detailed
provisions
of
the
CAIR,
see
the
CAIR
final
rule
which
is
published
in
today's
Federal
Register.

DATES:
Comments
must
be
received
on
or
before
[
insert
date
45
days
from
publication].
A
public
hearing,
if
requested,

will
be
held
in
Washington,
D.
C.
on
__________________,

beginning
at
9:
00
a.
m.

ADDRESSES:
Submit
your
comments,
identified
by
Docket
ID
No.
OAR­
2003­
0053,
by
one
of
the
following
methods:

°
Federal
eRulemaking
Portal:

http://
www.
regulations.
gov.
Follow
the
on­
line
instructions
for
submitting
comments.

°
Agency
Website:
http://
www.
epa.
gov/
edocket.

EDOCKET,
EPA's
electronic
public
docket
and
DRAFT­­
do
not
cite,
quote,
or
distribute
3/
8/
05
3
comment
system,
is
EPA's
preferred
method
for
receiving
comments.
Follow
the
on­
line
instructions
for
submitting
comments.

°
E­
mail:
A­
and­
R­
Docket@
epa.
gov.

°
Fax:
(
202)
566­
1741.

°
Mail:
Air
Docket,
Environmental
Protection
Agency,

Mailcode:
6102T,
1200
Pennsylvania
Ave.,
NW.,

Washington,
DC
20460.
Please
include
a
total
of
two
copies.

°
Hand
Delivery:
EPA
Docket
Center
(
Air
Docket),

U.
S.
Environmental
Protection
Agency,
1301
Constitution
Avenue,
NW.,
Room
B102,
Washington,

DC
20004.
Such
deliveries
are
only
accepted
during
the
Docket's
normal
hours
of
operation,
and
special
arrangements
should
be
made
for
deliveries
of
boxed
information.

Instructions:
Direct
your
comments
to
Docket
ID
No.
OAR­

2003­
0053.
The
EPA's
policy
is
that
all
comments
received
will
be
included
in
the
public
docket
without
change
and
may
be
made
available
online
at
http://
www.
epa.
gov/
edocket,

including
any
personal
information
provided,
unless
the
comment
includes
information
claimed
to
be
Confidential
Business
Information
(
CBI)
or
other
information
whose
DRAFT­­
do
not
cite,
quote,
or
distribute
3/
8/
05
4
disclosure
is
restricted
by
statute.
Do
not
submit
information
that
you
consider
to
be
CBI
or
otherwise
protected
through
EDOCKET,
regulations.
gov,
or
e­
mail.
The
EPA
EDOCKET
and
the
Federal
regulations.
gov
websites
are
"
anonymous
access"
systems,
which
means
EPA
will
not
know
your
identity
or
contact
information
unless
you
provide
it
in
the
body
of
your
comment.
If
you
send
an
e­
mail
comment
directly
to
EPA
without
going
through
EDOCKET
or
regulations.
gov,
your
e­
mail
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,
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
EPA
cannot
read
your
comment
due
to
technical
difficulties
and
cannot
contact
you
for
clarification,
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
EDOCKET
index
at
http://
www.
epa.
gov/
edocket.
Although
listed
in
the
index,
some
information
is
not
publicly
available,
i.
e.,
CBI
or
other
information
whose
disclosure
DRAFT­­
do
not
cite,
quote,
or
distribute
3/
8/
05
5
is
restricted
by
statute.
Certain
other
material,
such
as
copyrighted
material,
is
not
placed
on
the
Internet
and
will
be
publicly
available
only
in
hard
copy
form.
Publicly
available
docket
materials
are
available
either
electronically
in
EDOCKET
or
in
hard
copy
at
the
Air
Docket,

EPA/
DC,
EPA
West,
Room
B102,
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
legal
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.
This
Docket
Facility
is
open
from
8:
00
a.
m.
to
5:
30
p.
m.,
Monday
through
Friday,
excluding
legal
holidays.
The
Docket
telephone
number
is
(
929)
566­

1742,
fax
(
202)
566­
1741.

FOR
FURTHER
INFORMATION
CONTACT:
General
questions
concerning
today's
action
should
be
addressed
to
Jan
King,

U.
S.
EPA,
Office
of
Air
Quality
Planning
and
Standards,
Air
Quality
Strategies
and
Standards
Division,
Mail
Code
C539­

02,
Research
Triangle
Park,
NC,
27711,
telephone
(
919)
541­

5665,
e­
mail
king.
jan@
epa.
gov.
For
legal
questions,
please
contact
Steven
Silverman,
U.
S.
EPA,
Office
of
General
Counsel,
Mail
Code
2344A,
1200
Pennsylvania
Avenue,
NW,

Washington,
DC,
20460,
telephone
(
202)
564­
5523,
e­
mail
at
DRAFT­­
do
not
cite,
quote,
or
distribute
3/
8/
05
6
silverman.
steven@
epa.
gov.
For
questions
regarding
air
quality
analyses,
please
contact
Norm
Possiel,
U.
S.
EPA,

Office
of
Air
Quality
Planning
and
Standards,
Emissions,

Monitoring,
and
Analysis
Division,
Mail
Code
D243­
01,

Research
Triangle
Park,
NC,
27711,
telephone
(
919)
541­
5692,

e­
mail
at
possiel.
norm@
epa.
gov.
For
questions
regarding
the
EGU
cost
analyses,
emissions
inventories,
and
budgets,

please
contact
Roman
Kramarchuk,
U.
S.
EPA,
Office
of
Atmospheric
Programs,
Clean
Air
Markets
Division,
Mail
Code
6204J,
1200
Pennsylvania
Avenue,
NW,
Washington,
DC,
20460,

telephone
(
202)
343­
9089,
e­
mail
at
kramarchuk.
roman@
epa.
gov.
For
questions
regarding
statewide
emissions
inventories,
please
contact
Marc
Houyoux,
U.
S.

EPA,
Office
of
Air
Quality
Planning
and
Standards,

Emissions,
Monitoring,
and
Analysis
Division,
Mail
Code
D205­
01,
Research
Triangle
Park,
NC,
27711,
telephone
(
919)

541­
3649,
e­
mail
at
houyoux.
marc@
epa.
gov.
For
questions
regarding
emissions
reporting
requirements,
please
contact
Bill
Kuykendal,
U.
S.
EPA,
Office
of
Air
Quality
Planning
and
Standards,
Emissions,
Monitoring,
and
Analysis
Division,

Mail
Code
D205­
01,
Research
Triangle
Park,
NC,
27711,

telephone
(
919)
541­
5372,
e­
mail
at
kuykendal.
bill@
epa.
gov.

For
questions
regarding
the
model
cap
and
trade
programs,
DRAFT­­
do
not
cite,
quote,
or
distribute
3/
8/
05
7
please
contact
Sam
Waltzer,
U.
S.
EPA,
Office
of
Atmospheric
Programs,
Clean
Air
Markets
Division,
Mail
Code
6204J,
1200
Pennsylvania
Avenue,
NW,
Washington,
DC,
20460,
telephone
(
202)
343­
9175,
e­
mail
at
waltzer.
sam@
epa.
gov.
For
questions
regarding
analyses
required
by
statutes
and
executive
orders,
please
contact
Linda
Chappell,
U.
S.
EPA,

Office
of
Air
Quality
Planning
and
Standards,
Air
Quality
Strategies
and
Standards
Division,
Mail
Code
C339­
01,

Research
Triangle
Park,
NC,
27711,
telephone
(
919)
541­
2864,

e­
mail
at
chappell.
linda@
epa.
gov.

SUPPLEMENTARY
INFORMATION:

PUBLIC
HEARING
A
public
hearing,
if
requested,
will
be
held
in
Washington
D.
C.
on
____________,
2005
beginning
at
9:
00
a.
m.

If
you
wish
to
request
a
hearing
and
present
testimony
or
attend
the
hearing,
you
should
notify,
on
or
before
__________________,
Jan
King,
U.
S.
EPA,
Office
of
Air
Quality
Planning
and
Standards,
Air
Quality
Strategies
and
Standards
Division,
Mail
Code
C539­
02,
Research
Triangle
Park,
NC
27711,
telephone
(
919)
541­
5665,
e­
mail
king.
jan@
epa.
gov.
Oral
testimony
will
be
limited
to
5
minutes
each.
The
hearing
will
be
strictly
limited
to
the
subject
matter
of
the
proposal,
the
scope
of
which
is
DRAFT­­
do
not
cite,
quote,
or
distribute
3/
8/
05
8
discussed
below.
Any
member
of
the
public
may
file
a
written
statement
by
the
close
of
the
comment
period.

Written
statements
(
duplicate
copies
preferred)
should
be
submitted
to
Docket
OAR­
2003­
0053,
at
the
address
listed
above
for
submitted
comments.
The
hearing
location
and
schedule,
including
lists
of
speakers,
will
be
posted
on
EPA's
webpage
at
http://
www.
epa.
gov/
cleanairinterstaterule.

A
verbatim
transcript
of
the
hearing
and
written
statements
will
be
made
available
for
copying
during
normal
working
hours
at
the
Office
of
Air
and
Radiation
Docket
and
Information
Center
at
the
address
listed
for
inspection
for
documents.

If
no
requests
for
a
public
hearing
are
received
by
close
of
business
on
______________________,
the
hearing
will
be
cancelled.
The
cancellation
will
be
announced
on
the
webpage
at
the
address
shown
above.

Outline
I.
Background
A.
Summary
of
the
Clean
Air
Interstate
Rule
B.
What
Are
the
Central
Requirements
of
Today's
Proposal?

II.
Summary
of
EPA's
Analytical
Approach,
Findings,
and
Final
Actions
in
the
Interstate
Air
Quality
Rule
A.
How
Did
EPA
Interpret
the
CAA's
Pollution
Transport
Provisions?
B.
Which
Air
Pollutants
Did
EPA
Address
In
the
CAIR
and
Why?
C.
Air
Quality
Analysis
of
Ozone
and
PM2.5
Contributions
DRAFT­­
do
not
cite,
quote,
or
distribute
3/
8/
05
9
Among
States
D.
Analysis
of
Highly
Cost­
Effective
Controls
and
Timeframe
For
Emissions
Reductions
III.
Proposed
Inclusion
of
Delaware
and
New
Jersey
in
the
Clean
Air
Interstate
Rule
A.
Why
is
EPA
Reconsidering
the
Status
of
Delaware
and
New
Jersey
in
the
CAIR?
B.
Air
Quality
Modeling
Results
IV.
Proposed
Findings
and
Action
A.
Proposed
Findings
of
Significant
Contribution
for
Delaware
and
New
Jersey
B.
SIP
Approval
Criteria
C.
SIP
Submittal
Deadline
D.
Emissions
Reporting
Requirements
V.
Expected
Effects
of
the
Proposed
Action
A.
Emissions
B.
Air
Quality
VI.
Statutory
and
Executive
Order
Reviews
A.
Executive
Order
12866:
Regulatory
Planning
and
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
and
Safety
Risks
H.
Executive
Order
13211:
Actions
That
Significantly
Affect
Energy
Supply,
Distribution
or
Use
I.
National
Technology
Transfer
Advancement
Act
J.
Executive
Order
12898:
Federal
Actions
to
Address
Environmental
Justice
in
Minority
Populations
and
Low­
Income
Populations
I.
BACKGROUND
A.
Summary
of
the
Clean
Air
Interstate
Rule
In
a
final
rule
published
in
today's
Federal
Register,
DRAFT­­
do
not
cite,
quote,
or
distribute
3/
8/
05
1
"
Rule
to
Reduce
Interstate
Transport
of
Fine
Particulate
Matter
and
Ozone
(
Interstate
Air
Quality
Rule);
Proposed
Rule,"
(
69
FR
4566,
January
30,
2004)
(
NPR
or
January
Proposal);
"
Supplemental
Proposal
for
the
Rule
to
Reduce
Interstate
Transport
of
Fine
Particulate
Matter
and
Ozone
(
Clean
Air
Interstate
Rule);
Proposed
Rule"
(
69
FR
32684,
June
10,
2004)
(
SNPR
or
Supplemental
Proposal).
We
summarize
major
features
of
that
rule
here
as
an
aid
to
the
reader.
The
EPA
is
not
reconsidering
any
aspect
of
the
CAIR
rule
and
not
accepting
comment
in
this
proceeding
on
the
promulgated
CAIR
rule.

10
titled
the
Clean
Air
Interstate
Rule
("
CAIR"),
EPA
found
that
certain
States
must
reduce
emissions
of
SO2
and/
or
NOx
by
certain
amounts
because
those
emissions
contribute
significantly
to
nonattainment
in
downwind
areas
in
other
States
that
are
not
meeting
the
annual
PM2.5
national
ambient
air
quality
standard
(
NAAQS),
or
the
8­
hour
ozone
NAAQS.
1
The
CAIR
establishes
State
implementation
plan
(
SIP)

requirements
for
the
affected
upwind
States
under
Clean
Air
Act
(
CAA)
section
110(
a)(
2).
The
CAA
section
110(
a)(
2)(
D)

requires
SIPs
to
contain
adequate
provisions
prohibiting
air
pollutant
emissions
from
sources
or
activities
in
those
States
that
contribute
significantly
to
nonattainment
in,
or
interfere
with
maintenance
by,
any
other
State
with
respect
to
a
NAAQS.
Based
on
air
quality
modeling
analyses
and
cost
analyses,
EPA
has
concluded
in
the
CAIR
that
SO2
and
NOx
emissions
in
certain
States
in
the
eastern
half
of
the
DRAFT­­
do
not
cite,
quote,
or
distribute
3/
8/
05
2
In
today's
final
rule,
when
we
use
the
term
"
transport"
we
mean
to
include
the
transport
of
both
fine
particles
(
PM2.5)
and
their
precursor
emissions
and/
or
transport
of
both
ozone
and
its
precursor
emissions.

3
We
also
found
that
emissions
of
SO2
and
NOx
from
upwind
States
in
the
PM2.5
and
ozone
CAIR
regions
can
interfere
with
these
same
downwind
receptors'
maintenance
of
each
NAAQS.

11
nation,
through
the
phenomenon
of
air
pollution
transport,
2
contribute
significantly
to
nonattainment
of
the
PM2.5
and
8­
hour
ozone
NAAQS
in
another
State.
3
This
is
because
NOx
and
SO2
are
important
precursors
of
PM2.5,
and
NOx
is
an
important
precursor
of
ozone.
As
a
result
of
the
CAIR,
EPA
is
requiring
SIP
revisions
in
28
States
and
the
District
of
Columbia
to
reduce
SO2
and/
or
NOx
emissions.

The
23
States
along
with
the
District
of
Columbia
that
must
reduce
annual
SO2
and
NOx
emissions
for
the
purposes
of
the
PM2.5
NAAQS
are:
Alabama,
Florida,
Georgia,
Illinois,

Indiana,
Iowa,
Kentucky,
Louisiana,
Maryland,
Michigan,

Minnesota,
Mississippi,
Missouri,
New
York,
North
Carolina,

Ohio,
Pennsylvania,
South
Carolina,
Tennessee,
Texas,

Virginia,
West
Virginia,
and
Wisconsin.
While
we
had
originally
proposed
including
Delaware
and
New
Jersey
in
this
group
based
on
our
initial
air
quality
contribution
assessment,
subsequent
refinement
of
the
emissions
estimates
and
air
quality
modeling
system
resulted
in
their
estimated
DRAFT­­
do
not
cite,
quote,
or
distribute
3/
8/
05
12
contributions
to
PM2.5
nonattainment
being
below
the
threshold
for
inclusion
in
the
PM2.5­
related
requirements.

The
25
States
along
with
the
District
of
Columbia
that
must
reduce
NOx
emissions
for
the
purposes
of
the
8­
hour
ozone
NAAQS
are:
Alabama,
Arkansas,
Connecticut,
Delaware,

Florida,
Illinois,
Indiana,
Iowa,
Kentucky,
Louisiana,

Maryland,
Massachusetts,
Michigan,
Mississippi,
Missouri,

New
Jersey,
New
York,
North
Carolina,
Ohio,
Pennsylvania,

South
Carolina,
Tennessee,
Virginia,
West
Virginia,
and
Wisconsin.

Under
the
CAIR,
each
State
may
determine
independently
which
sources
to
subject
to
controls,
and
which
control
measures
to
adopt.
Our
analysis
indicated
that
emissions
reductions
from
electric
generating
units
(
EGUs)
are
highly
cost
effective,
and,
in
the
CAIR
rule,
we
encouraged
States
to
adopt
these
controls.
States
that
do
so
must
place
an
enforceable
limit,
or
cap,
on
EGU
emissions
(
see
section
VII
of
the
CAIR
for
further
discussion).
We
calculated
the
amount
of
each
State's
EGU
emissions
cap,
or
budget,
based
on
reductions
that
we
have
determined
are
highly
costeffective
States
may
allow
their
EGUs
to
participate
in
an
EPA­
administered
cap
and
trade
program
as
a
way
to
reduce
the
cost
of
compliance,
and
to
provide
compliance
DRAFT­­
do
not
cite,
quote,
or
distribute
3/
8/
05
13
flexibility.
The
cap
and
trade
programs
are
described
in
more
detail
in
section
VIII
of
the
CAIR.

B.
What
Are
the
Central
Requirements
of
Today's
Proposal?

In
today's
action,
we
propose
to
combine
Delaware
and
New
Jersey
for
purposes
of
assessing
whether
that
combination
is
contributing
significantly
to
nonattainment
of
the
PM2.5
NAAQS
by
downwind
receptors
under
section
110(
a)(
2)(
D),
and
to
apply
the
finding
from
that
combined
assessment
to
each
State.
Based
on
presently
available
air
quality
modeling
results,
our
tentative
assessment
is
that
the
combination
of
the
two
states
does
contribute
significantly
to
PM2.5
nonattainment
in
New
York
County,
NY,

and
possibly
to
one
or
more
counties
in
eastern
Pennsylvania.
Accordingly,
we
are
proposing
that
Delaware
and
New
Jersey
adopt
SIP
requirements
for
addressing
annual
emissions
of
the
PM2.5
precursors
NOx
and
SO2.
We
intend
to
conduct
confirmatory
air
quality
modeling
and
make
the
results
available
through
a
Notice
of
Data
Availability
prior
to
finalization
of
this
proposal.

Delaware
and
New
Jersey
are
already
subject
to
the
CAIR
for
purposes
of
ozone,
and
must
reduce
ozone
season
emissions
of
NOx
starting
in
2009.
This
proposal
would
add
requirements
for
control
of
annual
emissions
of
SO2
and
of
DRAFT­­
do
not
cite,
quote,
or
distribute
3/
8/
05
4
We
note
again
that
this
section
is
provided
for
purposes
of
information,
and
not
to
reopen
or
reconsider
any
issues
discussed
in
the
section.

14
NOx.

We
propose
to
require
that
SIPs
to
achieve
the
required
PM2.5
emissions
reductions
be
submitted
as
soon
as
practicable,
but
no
later
than
18
months
after
the
date
of
signature
of
the
CAIR,
i.
e.,
[
insert
date
18
months
after
signature
of
the
CAIR],
the
same
deadline
as
in
the
CAIR
rule.
We
are
doing
so
because
we
believe
this
is
a
reasonable
amount
of
time
for
submission
of
these
States'

SIPs,
and
that
there
are
evident
efficiencies
in
having
these
reductions
occur
at
the
same
time
as
the
reductions
from
other
states
covered
by
the
CAIR
rule
for
NOx
and
SO2.

See
also
section
IV.
D
below.

As
an
option
to
Delaware
and
New
Jersey,
we
propose
to
provide
model
cap
and
trade
programs
for
EGUs.
We
would
also
administer
these
programs,
which
will
be
governed
by
rules
provided
by
EPA
that
Delaware
and
New
Jersey
may
adopt
or
incorporate
by
reference.

II.
SUMMARY
OF
EPA'S
ANALYTICAL
APPROACH,
FINDINGS,
AND
FINAL
ACTIONS
IN
THE
INTERSTATE
AIR
QUALITY
RULE4
A.
How
Did
EPA
Interpret
the
CAA's
Pollution
Transport
DRAFT­­
do
not
cite,
quote,
or
distribute
3/
8/
05
15
Provisions?

The
CAIR
is
based
on
the
"
good
neighbor"
provision
of
CAA
section
110(
a)(
2)(
D),
which
requires
States
to
develop
SIP
provisions
assuring
that
emissions
from
their
sources
do
not
contribute
significantly
to
downwind
nonattainment
or
interfere
with
maintenance
of
the
NAAQS.
We
first
interpreted
this
provision
and
developed
a
detailed
methodology
for
applying
it
in
the
NOx
SIP
Call
rulemaking
(
October
27,
1998),
which
concerned
interstate
transport
of
ozone
precursors.

As
summarized
above,
the
CAIR
requires
upwind
States
to
submit
SIP
revisions
requiring
their
sources
to
eliminate
emissions
of
certain
precursors
for
PM2.5
and
ozone,
to
protect
downwind
nonattainment
areas.
We
developed
the
CAIR
and
this
proposal
relying
heavily
on
the
NOx
SIP
Call
approach.
In
the
NOx
SIP
Call,
we
interpreted
section
110(
a)(
2)(
D)
to
authorize
us
to
determine
the
amount
of
emissions
in
upwind
States
that
"
contribute
significantly"

to
downwind
nonattainment
or
"
interfere
with"
downwind
maintenance,
and
to
require
those
States
to
eliminate
that
amount
of
emissions.
We
recognized
that
States
must
retain
full
authority
to
choose
the
sources
to
control,
and
the
control
mechanisms,
to
achieve
those
reductions.
DRAFT­­
do
not
cite,
quote,
or
distribute
3/
8/
05
5
In
the
NOx
SIP
Call,
because
the
same
criteria
applied,
the
discussion
of
the
"
contribute
significantly
to
nonattainment"
test
generally
also
applied
to
the
"
interfere
with
maintenance"
test.
However,
in
the
NOx
SIP
Call,
EPA
stated
that
the
"
interfere
with
maintenance"
test
applied
with
respect
to
only
the
8­
hour
ozone
NAAQS
(
63
FR
57379­
80).

16
In
the
NOx
SIP
Call,
we
set
out
several
criteria
or
factors
for
the
"
contribute
significantly"
test,
and
further
indicated
that
the
same
criteria
should
apply
to
the
"
interfere
with
maintenance"
provision.
5
The
EPA
determined
the
amount
of
emissions
that
significantly
contribute
to
downwind
nonattainment
from
sources
in
a
particular
upwind
State
primarily
by
(
i)
evaluating,
with
respect
to
each
upwind
State,
several
air
quality
related
factors,
including
determining
that
all
emissions
from
the
State
have
a
sufficiently
great
impact
downwind
(
in
the
context
of
the
collective
contribution
nature
of
the
ozone
problem);
and
(
ii)
determining
the
amount
of
that
State's
emissions
that
can
be
eliminated
through
the
application
of
highly
costeffective
controls.
Before
reaching
a
conclusion,
EPA
evaluated
several
secondary,
and
more
general,

considerations.
These
include:


The
consistency
of
the
regional
reductions
with
the
attainment
needs
of
the
downwind
areas
with
nonattainment
problems;
DRAFT­­
do
not
cite,
quote,
or
distribute
3/
8/
05
17

The
overall
fairness
of
the
control
regimes
required
of
the
downwind
and
upwind
areas,
including
the
extent
of
the
controls
required
or
implemented
by
the
downwind
and
upwind
areas;


General
cost
considerations,
including
the
relative
cost
effectiveness
of
additional
downwind
controls
compared
to
upwind
controls
(
63
FR
57403).

In
the
CAIR
rulemaking,
we
utilized
much
the
same
interpretation
and
application
of
section
110(
a)(
2)(
D)
for
regulating
downwind
transport
of
precursors
of
ozone
and
PM2.5
as
we
adopted
for
the
NOx
SIP
Call.
We
adjusted
some
aspects
of
the
CAIR
analytic
approaches
for
various
reasons,

including
the
need
to
account
for
regulation
of
a
different
pollutant
(
PM2.5)
with
an
additional
precursor
(
SO2).
The
CAIR's
approach
to
the
ozone
issue
is
essentially
the
same
as
in
the
NOx
SIP
Call,
but
applied
to
more
recent
data
on
the
relevant
air
quality
and
cost
factors.

For
a
more
detailed
discussion
of
how
we
interpreted
the
CAA
pollution
transport
provisions,
see
section
II
of
the
CAIR
in
today's
Federal
Register.

B.
Which
Air
Pollutants
Did
EPA
Address
In
the
CAIR
and
Why?

In
section
III
of
the
CAIR
(
add
cite),
EPA
provided
the
DRAFT­­
do
not
cite,
quote,
or
distribute
3/
8/
05
6
Ozone
Transport
Assessment
Group,
OTAG
Final
Report,
1997.

18
following
characterization
of
the
origin
and
distribution
of
8­
hour
ozone
air
quality
problems:
the
ozone
present
at
ground
level
as
a
principal
component
of
photochemical
smog
is
formed
in
sunlit
conditions
through
atmospheric
reactions
of
two
main
classes
of
precursor
compound:
volatile
organic
compounds
(
VOCs)
and
NOx
[
mainly
nitrogen
oxide
(
NO)
and
nitrogen
dioxide
(
NO2)];
and
the
formation
of
ozone
increases
with
temperature
and
sunlight,
which
is
one
reason
ozone
levels
are
higher
during
the
summer.

In
the
CAIR,
EPA
noted
that
we
continue
to
rely
on
the
assessment
of
ozone
transport
made
in
great
depth
by
the
Ozone
Transport
Assessment
Group
(
OTAG)
in
the
mid­
1990s.
6
As
indicated
in
the
NOx
SIP
Call
proposal,
the
OTAG
Regional
and
Urban
Scale
Modeling
and
Air
Quality
Analysis
Work
Groups
reached
the
following
conclusions:


Regional
NOx
emissions
reductions
are
effective
in
producing
ozone
benefits;
the
more
NOx
reduced,
the
greater
the
benefit.


Controls
for
VOC
are
effective
in
reducing
ozone
locally
and
are
most
advantageous
to
urban
nonattainment
areas
(
62
FR
60320,
November
7,
1997).

In
section
III
of
the
CAIR,
we
summarized
key
DRAFT­­
do
not
cite,
quote,
or
distribute
3/
8/
05
19
scientific
and
technical
aspects
of
the
occurrence,

formation,
and
origins
of
PM2.5,
as
well
as
findings
and
observations
relevant
to
formulating
control
approaches
for
reducing
the
contribution
of
transport
to
fine
particle
problems.
For
a
detailed
discussion
of
the
key
concepts
and
provisional
conclusions
drawn
from
the
CAIR,
see
section
III
of
the
CAIR
published
in
today's
Federal
Register.

PM2.5
in
ambient
air
is
a
complex
mixture
of
component
of
different
chemical
compositions
and
origins.
Based
on
the
understanding
of
current
scientific
and
technical
information,
as
well
as
our
air
quality
modeling,
as
summarized
in
the
CAIR
in
today's
Federal
Register,
we
concluded
that
it
was
both
appropriate
and
necessary
to
focus
on
control
of
SO2
and
NOx
emissions
as
the
most
effective
approach
to
reducing
the
contribution
of
interstate
transport
to
PM2.5.
Current
information
relating
to
sources
and
controls
for
other
components
identified
in
transported
PM2.5
(
carbonaceous
particles,
ammonium,
and
crustal
materials)
does
not,
at
this
time,
provide
an
adequate
basis
for
regulating
the
regional
transport
of
emissions
responsible
for
these
PM2.5
components
(
69
FR
4582).
For
all
of
these
components,
the
lack
of
knowledge
of
and
ability
to
quantify
accurately
the
interstate
DRAFT­­
do
not
cite,
quote,
or
distribute
3/
8/
05
20
transport
of
these
components
limited
our
ability
to
include
these
components
in
this
rule.

For
a
more
detailed
discussion
of
how
we
chose
which
pollutants
to
regulate,
see
section
III.
B.
1.
a
of
the
final
CAIR
in
the
rules
section
of
today's
Federal
Register.

C.
Air
Quality
Analysis
of
Ozone
and
PM2.5
Contributions
Among
States
For
the
CAIR,
we
performed
State­
by­
State
zero­
out
modeling
to
quantify
the
contribution
from
emissions
in
each
State
to
future
ozone
and
PM2.5
nonattainment
in
other
States
and
to
determine
whether
that
contribution
meets
requirements
of
the
"
contribute
significantly"
test.
This
zero­
out
modeling
technique
provides
an
estimate
of
downwind
impacts
by
comparing
the
model
predictions
from
the
2010
base
case
to
the
predictions
from
a
run
in
which
all
anthropogenic
NOx
emissions
(
in
the
case
of
ozone)
or
all
anthropogenic
SO2
and
NOx
emissions
(
in
the
case
of
PM2.5)

are
removed
from
specific
States,
one
State
at
a
time.

Counties
presently
exceeding
the
ozone
or
PM2.5
NAAQS
and
forecast
to
be
nonattainment
for
ozone
or
PM2.5
in
the
2010
Base
Case
were
used
as
receptors
for
quantifying
interstate
contributions
of
ozone
and/
or
PM2.5.
For
each
State­
by­

State
zero­
out
run,
we
projected
the
ozone
design
value
or
DRAFT­­
do
not
cite,
quote,
or
distribute
3/
8/
05
21
the
annual
average
PM2.5
concentration
at
each
receptor.

The
contribution
from
an
upwind
State
to
nonattainment
at
a
given
downwind
receptor
was
determined
by
calculating
difference
in
ozone
or
PM2.5
concentration
between
the
2010
Base
Case
and
the
zero­
out
run
at
that
receptor.
We
followed
this
process
for
each
State­
by­
State
zero­
out
run
and
each
receptor,
for
both
ozone
and
PM2.5.
For
each
upwind
State,
we
identified
the
largest
PM2.5
contribution
from
that
State
to
a
downwind
nonattainment
receptor
in
order
to
determine
the
magnitude
of
the
maximum
downwind
contribution
to
PM2.5
nonattainment
from
each
State.
The
maximum
downwind
contribution
was
our
chosen
metric
for
determining
whether
or
not
the
PM2.5
contribution
was
significant.
After
considering
an
updated
analysis
and
public
comments,
we
applied
a
threshold
of
0.2

g/
m3
for
this
determination.
For
ozone,
we
applied
a
multi­
metric
test
of
significant
contribution.
For
ozone,
we
also
used
a
second
method
of
quantifying
State­
to­
State
contributions,
known
as
source
receptor
modeling,
in
addition
to
the
emissions
zeroout
approach
just
described.
This
contribution
analysis
is
more
fully
described
in
section
VI
of
the
preamble
for
the
CAIR.

D.
Analysis
of
Highly
Cost­
Effective
Controls
and
DRAFT­­
do
not
cite,
quote,
or
distribute
3/
8/
05
22
Timeframe
for
Emissions
Reductions
1.
Overall
Criteria
In
the
CAIR
rulemaking,
we
considered
a
variety
of
factors
in
evaluating
the
source
categories
from
which
highly
cost­
effective
reductions
may
be
available
and
the
level
of
reduction
assumed
from
that
sector.
These
include:


The
availability
of
information,


The
identification
of
source
categories
emitting
relatively
large
amounts
of
the
relevant
emissions,


The
performance
and
applicability
of
control
measures,


The
cost
effectiveness
of
control
measures,
and

Engineering
and
financial
factors
that
affect
the
availability
of
control
measures
(
69
FR
4611).

We
further
stated
that
overall,
"
We
are
striving
...
to
set
up
a
reasonable
balance
of
regional
and
local
controls
to
provide
a
cost­
effective
and
equitable
governmental
approach
to
attainment
with
the
NAAQS
for
fine
particles
and
ozone."
(
69
FR
4612).
These
criteria
are
unaffected
by
this
proposal.

2.
Evaluation
of
Cost
Effectiveness
and
Feasibility
Section
IV
in
the
CAIR
Notice
of
Final
Rulemaking
(
NFR)

preamble
describes
EPA's
determination
of
regionwide
SO2
and
NOx
control
levels.
As
described
in
section
IV
in
the
CAIR
DRAFT­­
do
not
cite,
quote,
or
distribute
3/
8/
05
23
NFR
preamble,
EPA
determined
that
highly
cost­
effective
emissions
reductions
may
be
obtained
by
controlling
EGUs.

The
EPA
determined
the
amounts
of
emissions
reductions
that
must
be
eliminated
in
upwind
States
to
help
downwind
States
achieve
attainment
of
the
PM2.5
and
ozone
NOx
NAAQS,
by
assuming
the
application
of
highly
cost­
effective
control
measures
to
EGUs
and
determining
the
emissions
reductions
that
would
result.

For
CAIR,
EPA
determined
highly
cost­
effective
regionwide
amounts
of
emissions
reductions
based
on,
as
in
the
NOx
SIP
Call,
comparison
to
reference
lists
of
the
cost
effectiveness
of
other
regulatory
controls.
We
developed
reference
lists
for
both
average
and
marginal
cost
effectiveness
of
those
other
controls.
By
comparison
to
the
reference
lists,
EPA
determined
that
the
CAIR
final
(
2015)

SO2
and
NOx
regionwide
control
levels
are
highly
cost
effective.
The
EPA
also
developed
marginal
costeffectiveness
curves
for
SO2
and
NOx
abatement
at
varying
levels
of
stringency,
to
corroborate
its
cost­
effectiveness
determinations.

The
EPA
determined
the
interim
control
levels
(
commencing
in
2009
for
NOx
and
in
2010
for
SO2)
based
on
evaluating
the
feasibility
of
installing
the
necessary
DRAFT­­
do
not
cite,
quote,
or
distribute
3/
8/
05
24
emission
control
retrofits.
Although
the
interim
regionwide
control
levels
were
determined
based
on
feasibility
considerations,
EPA
also
evaluated
the
cost
effectiveness
of
the
interim
control
levels
to
ensure
that
they
were
also
highly
cost
effective.

Section
IV.
C
in
the
CAIR
NFR
preamble
describes
EPA's
feasibility
analysis,
and
section
IV.
A
describes
our
evaluation
of
highly
cost­
effective
controls.
Section
V
in
the
CAIR
NFR
preamble
describes
the
method
EPA
used
to
apportion
regionwide
control
levels
to
the
affected
States.

A
technical
support
document
in
the
CAIR
docket
entitled
"
Modeling
of
Control
Costs,
Emissions,
and
Control
Retrofits
for
Cost
Effectiveness
and
Feasibility
Analyses"
describes
EPA's
use
of
the
Integrated
Planning
Model
(
IPM)
for
its
cost­
effectiveness
and
feasibility
analyses.
In
addition,
a
technical
support
document
entitled
"
Boilermaker
Labor
Analysis
for
the
Final
Clean
Air
Interstate
Rule"
provides
further
explanation
of
EPA's
feasibility
analyses.

Documentation
for
IPM,
as
well
as
IPM
output
files,
are
available
in
the
CAIR
docket.

3.
CAIR
Regionwide
SO2
and
NOx
Emission
Reduction
Requirements
The
CAIR
requires
annual
SO2
and
NOx
reductions
in
the
DRAFT­­
do
not
cite,
quote,
or
distribute
3/
8/
05
25
District
of
Columbia
and
the
following
23
States:
Alabama,

Florida,
Georgia,
Illinois,
Indiana,
Iowa,
Kentucky,

Louisiana,
Maryland,
Michigan,
Minnesota,
Mississippi,

Missouri,
New
York,
North
Carolina,
Ohio,
Pennsylvania,

South
Carolina,
Tennessee,
Texas,
Virginia,
West
Virginia,

and
Wisconsin.
If
all
affected
States
choose
to
implement
the
CAIR
annual
SO2
emission
reduction
requirements
by
controlling
EGUs,
the
regionwide
annual
SO2
emissions
caps
that
will
apply
for
EGUs
in
these
23
States
and
the
District
of
Columbia
are
3.6
million
tons
in
2010
and
2.5
million
tons
in
2015.
If
all
affected
States
choose
to
implement
the
CAIR
annual
NOx
emission
reduction
requirements
by
controlling
EGUs,
the
regionwide
annual
NOx
emissions
caps
that
will
apply
for
EGUs
in
these
23
States
and
the
District
of
Columbia
are
1.5
million
tons
in
2009
and
1.3
million
tons
in
2015.

The
CAIR
does
not
require
annual
SO2
or
NOx
emissions
reductions
in
Delaware
or
New
Jersey.
However,
today
EPA
is
proposing
to
require
annual
SO2
and
NOx
reductions
in
these
two
States.
Proposed
annual
SO2
and
NOx
budgets
for
Delaware
and
New
Jersey
are
presented
later
in
this
preamble.
If
EPA
finalizes
these
proposed
annual
SO2
and
NOx
budgets
for
Delaware
and
New
Jersey
 
and
if
those
DRAFT­­
do
not
cite,
quote,
or
distribute
2/
8/
05
26
States
choose
to
implement
their
annual
emission
reduction
requirements
by
controlling
EGUs
 
then
the
CAIR
regionwide
EGU
caps
would
be
revised
to
include
reduction
requirements
for
these
two
States.
The
revised
annual
SO2
caps,

including
Delaware
and
New
Jersey,
would
be
3.7
million
tons
in
2010
and
2.6
million
tons
in
2015.
The
revised
annual
NOx
caps,
including
Delaware
and
New
Jersey,
would
be
1.5
million
tons
in
2009
and
1.3
million
tons
in
2015.

In
addition
to
its
annual
SO2
and
NOx
emission
reduction
requirements,
the
CAIR
requires
ozone
season
NOx
emissions
reductions
in
the
District
of
Columbia
and
the
following
25
States:
Alabama,
Arkansas,
Connecticut,

Delaware,
Florida,
Illinois,
Indiana,
Iowa,
Kentucky,

Louisiana,
Maryland,
Massachusetts,
Michigan,
Mississippi,

Missouri,
New
Jersey,
New
York,
North
Carolina,
Ohio,

Pennsylvania,
South
Carolina,
Tennessee,
Virginia,
West
Virginia,
and
Wisconsin.
If
all
affected
States
choose
to
implement
the
CAIR
ozone
season
NOx
emission
reduction
requirements
by
controlling
EGUs,
the
regionwide
ozone
season
NOx
emissions
caps
that
will
apply
for
EGUs
in
these
25
States
and
the
District
of
Columbia
are
0.6
million
tons
in
2009
and
0.5
million
tons
in
2015.

III.
Proposed
Inclusion
of
Delaware
and
New
Jersey
in
the
DRAFT­­
do
not
cite,
quote,
or
distribute
2/
9/
05
27
Clean
Air
Interstate
Rule
A.
Why
is
EPA
Reconsidering
the
Status
of
Delaware
and
New
Jersey
in
the
CAIR?

As
explained
earlier,
section
110(
a)(
2)(
d)
of
the
CAA
requires
States
to
eliminate
emissions
that
will
contribute
significantly
to
nonattainment
in,
or
interfere
with
maintenance
by,
any
other
State.
The
term
"
contribute
significantly"
is
not
further
defined,
so
in
implementing
this
section
we
have
had
to
develop
an
analytical
approach
to
give
specific
meaning
to
that
term.
The
underlying
logic
of
the
analytical
approach
used
in
both
the
NOx
SIP
Call
and
the
CAIR
is
that
the
emission
reduction
efforts
needed
to
reach
attainment
should
be
reasonably
balanced
between
the
State
containing
a
nonattainment
area
and
upwind
States
contributing
to
the
nonattainment.
In
this
way,
control
efforts
on
one
side
of
a
border
are
not
undermined
(
and
even
rendered
futile)
by
out­
of­
State
emissions,
and
highly
costeffective
emissions
reductions
by
out­
of­
State
sources
which
contribute
significantly
to
downwind
receptors'

nonattainment
are
achieved.
We
believe
this
approach
is
both
efficient
and
equitable,
so
that
overall
costs
are
less
and
costs
are
more
fairly
distributed
than
if
the
burden
of
reaching
attainment
were
entirely
on
the
State
with
the
DRAFT­­
do
not
cite,
quote,
or
distribute
2/
9/
05
28
nonattainment
area.

We
are
proposing
to
retain
this
underlying
analytical
approach,
but
to
treat
Delaware
and
New
Jersey
as
special
cases
due
to
their
small
size
(
and
correspondingly
lower
emissions)
compared
to
other
states,
because
we
believe
we
will
achieve
a
result
that
is
more
in
keeping
with
the
intention
of
section
110(
a)(
2)(
D).
Specifically,
we
propose
to
combine
Delaware
and
New
Jersey
for
purposes
of
assessing
whether
that
combination
is
contributing
significantly
to
nonattainment
of
the
PM2.5
NAAQS
by
downwind
receptors
under
section
110(
a)(
2)(
D),
and
to
apply
the
finding
from
that
combined
assessment
to
each
State.
In
proposing
this
special
treatment
of
these
two
States,
we
note
that
section
110(
a)(
2)(
D)
does
not
mandate
a
single
approach
to
determining
significance
of
contribution,
so
that
we
have
latitude
to
craft
reasonable
tests
to
supplement
the
approaches
adopted
in
the
NOx
SIP
Call
and
the
CAIR.

As
stated
earlier,
the
analytical
approach
used
for
the
CAIR
has
two
parts,
the
first
of
which
is
a
test
of
whether
the
air
quality
contribution
from
one
entire
State
to
nonattainment
in
any
part
of
another
State
is
strong
enough
to
be
considered
significant,
pending
consideration
of
control
costs.
For
ozone,
we
used
a
test
for
this
first
DRAFT­­
do
not
cite,
quote,
or
distribute
2/
9/
05
29
part
which
is
based
on
several
metrics
of
air
quality
contribution,
involving
absolute
magnitude,
relative
magnitude,
and
frequency.
For
PM2.5,
we
used
a
test
with
the
single
criterion
of
whether
the
PM2.5
air
quality
contribution
from
an
upwind
State
to
nonattainment
in
a
downwind
State,
due
to
total
anthropogenic
SO2
and
NOx
emissions
in
the
upwind
State,
was
0.2
µ
g/
m3
or
more.
We
believe
that
this
specific
form
of
the
analytical
approach
used
in
the
final
CAIR
rule
has
very
appropriately
identified
a
set
of
23
States
and
the
District
of
Columbia
that
should
make
certain
reductions
in
annual
emissions
by
2009
for
NOx
and
by
2010
for
SO2,
and
larger
reductions
by
2015
for
NOx
and
SO2,
in
order
to
avoid
contributing
significantly
to
PM2.5
nonattainment
or
interfere
with
maintenance
in
other
States.
Similarly,
we
believe
that
the
original
analytical
approach
has
very
appropriately
identified
a
set
of
25
States
and
the
District
of
Columbia
that
should
make
certain
reductions
in
ozone
season
NOx
emissions
by
2009,
and
larger
reductions
by
2015,
in
order
to
avoid
contributing
significantly
to
ozone
nonattainment
or
interfere
with
maintenance
in
other
States.

In
the
course
of
applying
that
analytical
approach,
we
realized
that
an
upwind
State
may
have
relatively
low
total
emissions
and
thus
have
a
maximum
contribution
on
other
DRAFT­­
do
not
cite,
quote,
or
distribute
2/
9/
05
30
States
that
is
below
the
air
quality
contribution
threshold
used
in
the
CAIR,
simply
because
the
State
is
small
in
geographic
area.
In
particular,
it
was
clear
that
Delaware
and
New
Jersey
each
contribute
to
a
degree
to
PM2.5
nonattainment
in
downwind
States,
because
each
is
located
between
a
known
significantly
contributing
State
and
a
downwind
receptor
State.
Also,
Delaware
and
New
Jersey
each
has
substantial
emissions
for
its
size.
Therefore,

excluding
Delaware
or
New
Jersey
from
emission
reduction
requirements
related
to
PM2.5
might
prevent
the
desired
balancing
of
local
and
upwind
controls.
Excluding
either
State
could
forgo
opportunities
for
highly
cost­
effective
control
that
would
improve
air
quality
in
nearby
States'

nonattainment
areas.
We
believe
that
a
downwind
State
with
a
nonattainment
area
being
affected
by
emissions
from
Delaware
or
New
Jersey
should
not
have
to
implement
more,

and
more
expensive,
local
controls
simply
because
Delaware
or
New
Jersey
is
small
in
geographic
area
and,
hence,
low
in
total
emissions.
Ignoring
the
contributions
of
Delaware
and
New
Jersey
could
result
in
both
air
quality
detriments
and
cost
inefficiencies
and
inequities.

EPA
considered
alternative
approaches
to
addressing
this
issue.
We
do
not
believe
it
would
be
appropriate
to
consider
amending
or
revising
the
significance
critria
set
DRAFT­­
do
not
cite,
quote,
or
distribute
2/
9/
05
31
forth
in
the
final
CAIR
notice.
Nevertheless,
we
believe
that
in
these
two
states,
which
combined
represent
a
significant
source
of
emissions,
fail
to
meet
these
tests
solely
because
of
their
comparatively
small
geographic
size.

We
have
faced
a
similar
issue
with
respect
to
small
geographic
entities
in
the
NOx
SIP
Call,
and
more
recently
in
CAIR.
In
the
NOx
SIP
Call
we
combined
both
Delaware
and
the
District
of
Columbia
with
Maryland
in
the
contribution
analyses,
foreshadowing
the
issues
addressed
by
this
proposal.
Furthermore,
the
final
CAIR
similarly
addressed
the
special
case
of
one
small
political
jurisdiction,
the
District
of
Columbia
and
combined
that
with
Maryland.
In
all
the
analysis
of
air
quality
contributions
for
the
CAIR,

we
combined
the
District
of
Columbia
and
Maryland
into
one
unit
for
purposes
of
analyzing
contributions
to
nonattainment
in
other
States,
because
of
the
small
size
of
the
District
of
Columbia
and,
hence,
its
emissions,
and
its
close
proximity
to
Maryland.
We
applied
the
finding
from
this
combined
analysis
to
each
jurisdiction
separately.
We
did
not
receive
any
adverse
comment
on
this
approach.
Nor
did
we
receive
adverse
comment
in
the
SIP
Call
rule
regarding
combining
Delaware,
Maryland,
and
the
District
of
Columbia
in
the
contribution
analysis.

The
final
CAIR's
exclusion
of
Delaware
and
New
Jersey
DRAFT­­
do
not
cite,
quote,
or
distribute
2/
9/
05
7
By
emissions
density
we
mean
the
total
SO2
and
NOx
emissions
from
each
State
in
tons
per
year,
divided
by
the
geographic
area
of
the
State
in
square
miles.
For
comparing
emissions
densities
for
the
purposes
of
contributions
to
PM2.5
nonattainment,
we
have
compared
the
emissions
density
expressed
in
terms
of
SO2
plus
NOx
emissions
per
square
mile.
Such
a
comparison
is
a
reasonable
measure
of
comparison
that
is
independent
of
the
disparity
in
the
land
area
size
of
the
two
States.

32
for
purposes
of
PM2.5
drew
our
attention
because
of
features
unique
to
Delaware
and
New
Jersey.
Table
III­
1
presents
relevant
facts
regarding
Delaware
and
New
Jersey,
and
Table
III­
2
presents
similar
information
for
Maryland,
New
York,

and
Pennsylvania
for
comparison.
On
balance,
we
believe
the
most
appropriate
way
to
address
the
factual
situation
of
the
issue
here
is
to
consider
Delaware's
and
New
Jersey's
contributions
together,
as
one
unit
of
analysis.
Since
Delaware
and
New
Jersey
are
already
subject
to
CAIR
for
purposes
of
ozone,
the
remainder
of
this
discussion
focuses
on
PM2.5
considerations.

Delaware
and
New
Jersey
are
both
relatively
small
in
land
area;
both
are
smaller
than
any
of
the
23
states
already
subject
to
CAIR
for
purposes
of
PM2.5.
Portions
of
both
States
are
urbanized
and
industrialized,
and
overall
both
have
a
high
emissions
density,
comparable
to
that
of
their
neighbors.
7
Delaware
has
an
emissions
density
of
76.1
tons/
year
per
square
mile,
almost
twice
that
of
neighboring
DRAFT­­
do
not
cite,
quote,
or
distribute
2/
9/
05
8
Because
electricity
generation
costs
in
States
subject
to
the
CAIR
will
in
general
rise
to
some
degree
to
cover
the
cost
of
new
emission
controls,
there
is
the
possibility
that
some
electrical
generation
load
and
the
associated
emissions
may
shift
to
States
that
remain
outside
the
CAIR.
Such
shifting
may
not
always
occur,
because
physical
factors
in
the
electrical
distribution
system,
economic
factors,
or
other
regulatory
requirements
may
prevent
it.
The
IPM
model
predicts
that
increases
will
occur
in
Delaware
and
New
Jersey.
We
believe
that
such
emission
increases
can
be
33
Pennsylvania
and
also
higher
than
that
of
Maryland,
States
already
linked
to
downwind
nonattainment
areas.
New
Jersey
has
an
emissions
density
of
46.6
tons/
year
per
square
mile,

above
that
of
Pennsylvania
although
somewhat
lower
than
that
of
Maryland.

Delaware
and
New
Jersey
are
near
major
cities
where
current
PM2.5
nonattainment
affects
large
populations.

Also,
both
are
relatively
near
to
a
county
or
counties
in
other
States
that
are
projected
to
still
be
nonattainment
for
PM2.5
in
2010
in
the
base
case.
Delaware
and
New
Jersey
are
also
near
large
markets
for
electric
power
in
other
States
subject
to
CAIR
for
PM2.5,
and
thus
have
a
potential
to
become
emissions
havens
if
power
generation
were
to
shift
to
Delaware
and
New
Jersey
to
serve
those
markets.
In
fact,

predictions
from
the
IPM
model
indicate
that
if
Delaware
and
New
Jersey
are
excluded
from
the
CAIR's
requirements
related
to
PM2.5,
emissions
of
SO2
and
NOx
will
increase
in
both
States.
8
DRAFT­­
do
not
cite,
quote,
or
distribute
2/
9/
05
considered
as
a
factor
supporting
a
finding
of
significant
contribution,
since
it
would
be
contrary
to
the
"
emissions
eliminating"
purposes
of
section
110(
a)(
2)(
D)
if
States
subject
to
the
CAIR
reduce
their
emissions
and
a
substantial
portion
of
those
emissions
merely
shift
to
a
non­
covered
State
from
which
they
can
impact
the
same
or
other
downwind
nonattainment
area(
s).
Indeed,
failure
to
consider
this
possibility
could
create
inappropriate
incentives
for
small
States
to
become
"
pollution
havens."

34
Both
Delaware
and
New
Jersey
lie
between
upwind
States
that
are
now
subject
to
the
CAIR
for
both
ozone
and
PM2.5
and
downwind
receptor
PM2.5
nonattainment
areas
that
are
linked
to
one
or
both
of
those
upwind
States.
Maryland
has
already
been
determined
to
contribute
significantly
to
nonattainment
in
both
Philadelphia
and
New
York
City,

Pennsylvania
has
already
been
determined
to
contribute
significantly
to
nonattainment
in
New
York
City,
and
New
York
has
been
determined
to
contribute
to
nonattainment
in
Lancaster
County,
Pennsylvania.
New
Jersey
lies
between
Pennsylvania
and
New
York
City,
and
Delaware
lies
between
Maryland
and
both
Philadelphia
and
New
York
City.
This
means
that
emissions
from
Delaware
and
New
Jersey
are
mixed
with
the
emissions
of
these
other
upwind
States
and
arrive
together
at
the
downwind
nonattainment
areas
in
other
States.
Moreover,
Delaware
and
New
Jersey
are
closer
to
these
receptors.

Given
these
highly
distinctive
facts,
it
is
reasonable
DRAFT­­
do
not
cite,
quote,
or
distribute
2/
9/
05
35
that
Delaware
and
New
Jersey
could
be
viewed
as
contributing
significantly
to
PM2.5
nonattainment.
We
have
therefore
considered
how
to
determine
in
an
objective
way
whether
they
should
be
formally
considered
to
contribute
to
PM2.5
nonattainment
in
specific
other
States.
We
propose
to
do
this
by
treating
the
combination
of
these
two
small
states
as
a
unit,
subjecting
that
combination
to
the
0.2
µ
g/
m3
threshold
for
PM2.5
air
quality
contribution
used
in
the
original
analytical
approach
for
the
CAIR.
As
noted,
this
is
consistent
with
our
approach
in
the
NOx
SIP
call,
where
Maryland,
Delaware,
and
the
District
of
Columbia
were
treated
as
a
combined
unit.
We
note
also
that
Delaware
and
New
Jersey
lie
side­
by­
side
and
together
form
a
compact
geographic
area.
In
addition,
Delaware
and
New
Jersey
are
both
part
of
the
PJM
Interconnection,
which
means
they
are
in
a
coordinated
portion
of
the
electricity
grid.
We
believe
this
further
supports
combining
them
for
purposes
of
this
analysis.
By
combining
these
two
small
States
we
believe
the
underlying
cost­
balancing
and
control
program
efficiency
goals
of
our
original
analytical
approach
can
be
better
met.

Based
on
the
air
quality
modeling
that
was
done
for
the
CAIR,
we
propose
to
find
that
when
treated
as
a
combined
unit,
Delaware
and
New
Jersey
do
in
fact
contribute
0.2
DRAFT­­
do
not
cite,
quote,
or
distribute
2/
9/
05
36
µ
g/
m3
or
more
to
PM2.5
nonattainment
in
New
York
County,
NY
and
may
do
so
in
one
or
more
counties
in
eastern
Pennsylvania.
The
next
section
of
this
preamble
presents
these
modeling
results.
DRAFT­­
do
not
cite,
quote,
or
distribute
2/
9/
05
37
Table
III­
1.
Contribution
Factors
for
States
Under
Review
State
Contribution
Factors
Delaware
Land
Area
of
State
2050
square
miles
Most
Affected
Downwind
Nonattainment
Counties
Philadelphia
Co.,
PA
Delaware
Co.,
PA
Lancaster
Co.,
PA
Berks
Co.,
PA
New
York
Co.,
NY
Geography
The
Wilmington
area,
which
is
the
most
densely
industrialized
and
populated
part
of
Delaware,
lies
on
or
very
close
to
the
lines
of
transport
between
the
Maryland
suburbs
of
the
District
of
Columbia
and
Philadelphia
Co.
and
Delaware
Co.
PA,
and
also
on
or
very
close
to
the
lines
of
transport
between
Baltimore
and
the
Philadelphia
Co.
and
Delaware
Co.,
PA.

The
Wilmington
area
also
lies
on
or
very
close
to
the
line
of
transport
between
these
areas
of
Maryland
and
New
York
Co.,
NY.

2010
Base
Emissions
of
SO2
plus
NOx
156,000
tons/
year
SO2
plus
NOX
Emissions
Density
76.1
tons/
year
per
square
mile
Emission
Changes
IPM
predicts
that
implementing
the
CAIR
without
subjecting
Delaware
to
limits
on
annual
emissions
will
result
in
increases
in
EGU
SO2
emissions
of
5000
tons
and
2000
tons
in
2010
and
2015,
respectively,
and
an
increase
in
NOx
emissions
of
2000
tons
in
2010
with
no
increase
in
2015.

New
Jersey
Land
Area
of
State
7510
square
miles
DRAFT­­
do
not
cite,
quote,
or
distribute
2/
9/
05
38
Most
Affected
Downwind
Nonattainment
Counties
New
York
Co.,
NY
Berks
Co.,
PA
Lancaster
Co.,
PA
Geography:
Some
part
of
New
Jersey
lies
in
the
path
of
transport
connecting
any
source
in
Pennsylvania
to
New
York
Co.,
NY.

2010
Base
Emissions
of
SO2
plus
NOx
350,000
tons/
year
SO2
Plus
NOX
Emissions
Density
46.58
tons/
year
per
square
mile
SO2
plus
NOX
Emission
Changes
IPM
predicts
that
implementing
the
CAIR
without
subjecting
New
Jersey
to
limits
on
annual
emissions
will
result
in
increases
in
EGU
SO2
emissions
of
1,000
and
2,000
tons
in
2010
and
2015,
respectively,
and
an
increase
in
EGU
NOx
emissions
of
1,000
tons
in
2010
and
2015.
DRAFT­­
do
not
cite,
quote,
or
distribute
2/
9/
05
39
Table
III­
2.
Contribution
Factors
for
Neighboring
States
Already
Subject
to
the
CAIR,
For
Purposes
of
Comparison
to
Delaware
and
New
Jersey
State
Contribution
Factors
Maryland
&
DC
Size
of
State
Land
Area
9,740
square
miles
2010
Base
Emissions
of
SO2
plus
NOx
631,000
tons/
year
Nearby
Downwind
Nonattainment
Counties
with
Significant
Contribution
From
This
State
Lancaster
Co.,
PA
Berks
Co.,
PA
Philadelphia
Co.,
PA
Delaware
Co.,
PA
New
York
Co.,
NY
Union
Co.,
NJ
SO2
plus
NOX
Emissions
Density
64.8
tons/
year
per
square
mile
DRAFT­­
do
not
cite,
quote,
or
distribute
2/
9/
05
40
New
York
Size
of
State
Land
Area
48,560
square
miles
2010
Base
Emissions
of
SO2
plus
NOx
902,400
tons/
year
Nearby
Downwind
Nonattainment
Counties
with
Significant
Contribution
From
This
State
New
Haven,
CT
Berks
Co.,
PA
Lancaster
Co.,
PA
Philadelphia
Co.,
PA
Delaware
Co.,
PA
Union
Co.,
NJ
SO2
plus
NOX
Emissions
Density
18.6
tons/
year
per
square
mile
Pennsylvania
Size
of
State
Land
Area
45,360
square
miles
2010
Base
Emissions
of
SO2
plus
NOx
1,818,000
tons/
year
Nearby
Downwind
Nonattainment
Counties
with
Significant
Contribution
From
This
State
New
York
Co.,
NY
Union
Co.,
NJ
SO2
plus
NOX
Emissions
Density
40.1
tons/
year
per
square
mile
B.
Air
Quality
Modeling
Results
As
explained
in
section
II
above,
the
air
quality
modeling
used
to
assess
contributions
to
PM2.5
nonattainment
estimated
the
contribution
by
individual
States
by
selectively
removing
DRAFT­­
do
not
cite,
quote,
or
distribute
2/
9/
05
41
anthropogenic
emissions
of
SO2
and
NOx
from
one
state
at
a
time,

and
observing
how
that
change
in
emissions
affected
PM2.5
concentrations
in
other
States.
This
included
separate
assessments
for
New
Jersey
and
Delaware,
and
did
not
include
any
run
in
which
emissions
in
both
states
were
removed
together.

Consequently,
we
do
not
presently
have
exactly
the
same
type
of
air
quality
modeling
analysis
for
the
combination
of
Delaware
and
New
Jersey
as
we
do
for
the
23
states
already
subject
to
CAIR
for
purposes
of
PM2.5.
We
intend
to
perform
such
modeling
as
soon
as
possible
and
to
make
the
results
available
for
public
comment
through
a
Notice
of
Data
Availability.

However,
a
tentative
assessment
is
currently
possible.

Since
results
are
available
from
the
separate
air
quality
model
runs
that
were
done
for
Delaware
and
New
Jersey,
we
can
add
(
or
superimpose)
the
contributions
from
the
two
states
on
each
individual
receptor
monitor
in
order
to
estimate
the
contribution
that
would
be
calculated
if
the
two
states
were
taken
as
one
unit
of
analysis.
While
there
are
non­
linear
chemical
and
other
atmospheric
processes
which
could
make
the
outcomes
of
these
two
approaches
somewhat
different,
we
believe
the
superimposition
approach
is
sufficiently
persuasive
to
support
proposing
inclusion
of
both
States
as
significantly
contributing
to
downwind
PM2.5
nonattainment
problems.

Table
III­
3
presents
the
superimposition
analysis,
using
DRAFT­­
do
not
cite,
quote,
or
distribute
2/
9/
05
9
The
Air
Quality
Technical
Support
Document
provides
full
details
of
how
the
air
quality
modeling
was
done
and
all
of
the
results.

42
detailed
contribution
results
from
the
air
quality
analysis
for
the
final
CAIR.
9
The
table
shows
that
the
sum
of
Delaware's
and
New
Jersey's
contributions
to
PM2.5
nonattainment
in
New
York
County,
NY
is
0.21
µ
g/
m3
for
one
of
the
monitors
in
that
county.

We
note
that
this
is
the
result
that
obtained
from
using
the
base
case
emissions
from
the
two
States.
In
actuality,
as
previously
stated,
we
estimate,
based
on
the
IPM
model,
that
under
the
final
CAIR,
which
does
not
require
reductions
from
Delaware
and
New
Jersey
for
purposes
of
PM2.5,
emissions
in
Delaware
and
New
Jersey
will
be
higher
than
in
this
base
case.
Thus,
the
actual
contribution
of
Delaware
and
New
Jersey
combined
and
considered
as
a
unit
may
be
higher
than
the
0.21
µ
g/
m3
result
shown
in
the
table.
As
mentioned
above,
non­
linearities
in
the
atmospheric
process
may
also
affect
the
result,
in
either
direction.
Based
on
this
analysis,
we
propose
that
New
Jersey
and
Delaware
taken
together
as
one
unit
contribute
significantly
to
PM2.5
nonattainment
in
New
York
County.

Of
the
several
PM2.5
nonattainment
counties
in
eastern
Pennsylvania
that
are
shown
in
Table
III­
3,
none
have
a
superimposed
contribution
from
Delaware
and
New
Jersey
that
is
as
large
as
0.2
µ
g/
m3.
However,
the
planned
air
quality
modeling
DRAFT­­
do
not
cite,
quote,
or
distribute
2/
9/
05
43
that
treats
Delaware
and
New
Jersey
as
a
combined
unit
and
that
reflects
the
above
mentioned
emissions
increases
as
a
result
of
their
current
exclusion
from
CAIR
may
yield
a
different
result.
DRAFT­­
do
not
cite,
quote,
or
distribute
2/
9/
05
44
Table
III­
3
Assessment
of
Combined
Contribution
by
Delaware
and
New
Jersey
to
PM2.5
Nonattainment
Based
on
Superimposition
of
Results
from
Air
Quality
Modeling
for
CAIR
Receptor
State
Receptor
County
PM2.5
Contribution
from
Delaware
(
µ
g/
m3)
PM2.5
Contribution
from
New
Jersey
(
µ
g/
m3)
Sum
(
µ
g/
m3)

New
York
New
York
0.08
0.13
0.21
Pennsylvania
Berks
0.10
0.06
0.16
Pennsylvania
Dauphin
0.07
0.04
0.11
Pennsylvania
Delaware
0.14
0.04
0.18
Pennsylvania
Lancaster
0.12
0.06
0.18
Pennsylvania
Philadelphia
0.14
0.04
0.18
Pennsylvania
York
0.09
0.04
0.13
DRAFT­­
do
not
cite,
quote,
or
distribute
2/
9/
05
45
IV.
PROPOSED
FINDINGS
AND
ACTION
A.
Proposed
Findings
of
Significant
Contribution
for
Delaware
and
New
Jersey
We
are
proposing
to
find
that
emissions
of
the
PM2.5
precursors
SO2
and
NOx
emitted
by
Delaware
and
New
Jersey
contribute
significantly
to
nonattainment
of
the
PM2.5
NAAQS
in
downwind
States.
Accordingly,
we
are
proposing
SIP
requirements
for
these
States
under
section
110(
a)(
1)
to
meet
the
requirements
of
section
110(
a)(
2)(
D),
namely,
to
contain
adequate
provisions
to
prohibit
SO2
and
NOx
emissions
from
sources
or
activities
within
the
States
from
"
contribut[
ing]
significantly
to
nonattainment"
of
the
PM2.5
NAAQS
in
downwind
States.

B.
SIP
Approval
Criteria
The
CAIR
added
two
new
sections
to
Title
40
of
the
Code
of
Federal
Regulations,
§
§
51.123
and
51.124
containing
requirements
related
to
NOx
and
SO2
respectively,
which
establish
the
requirement
for
submission
of
SIP
revisions
to
comply
with
the
CAIR
and
the
criteria
which
EPA
will
use
to
review
these
revisions
for
approval
or
disapproval.
The
content
of
these
sections
is
presented
in
section
VII
of
the
preamble
to
the
CAIR,

which
appears
in
the
rules
section
of
today's
Federal
Register.

Delaware
and
New
Jersey
are
already
subject
to
the
ozone­
related
DRAFT­­
do
not
cite,
quote,
or
distribute
2/
9/
05
46
provisions
of
these
sections
but
not
to
the
provisions
that
relate
to
PM2.5.
We
propose
to
amend
these
two
sections
to
extend
the
PM2.5­
related
provisions
to
both
States.
The
practical
effect
of
the
proposed
amendments
will
be
to
subject
the
States
to
budgets
for
annual
emissions
of
NOx
and
SO2.

The
proposed
NOx
and
SO2
annual
and
ozone
season
budgets
for
New
Jersey
and
Delaware
are
shown
below
in
Tables
IV­
1
and
IV­
2.

Table
IV­
1.
Proposed
Annual
NOx
Budgets
(
tons)

Year
Delaware
New
Jersey
2009
4,166
12,670
2015
3,472
10,558
Note:
Table
I
NOx
budgets
are
calculated
using
the
highest
year
heat
input
from
1999­
2002.

Table
IV­
2.
Proposed
Annual
SO2
Budgets
(
tons)

Year
Delaware
New
Jersey
2010
22,411
32,392
2015
15,687
22,674
State
annual
SO2
budgets
for
the
years
2010­
2014
(
Phase
I)

are
based
on
a
50
percent
reduction
from
title
IV
allocations
for
all
units
in
the
affected
State.
The
State
annual
budgets
for
2015
and
beyond
(
Phase
II)
are
based
on
a
65
percent
reduction
from
title
IV
allowances
allocated
to
units
in
the
affected
State
for
SO2
control.
DRAFT­­
do
not
cite,
quote,
or
distribute
2/
9/
05
47
To
calculate
annual
State
NOX
budgets,
EPA
calculated
a
total
"
regional"
budget
for
Delaware
and
New
Jersey
using
the
same
methodology
as
in
the
CAIR.
The
EPA
calculates
the
regional
NOx
budget
using
the
highest
heat
input
for
each
State
for
the
years
1999­
2002,
multiplied
by
0.15
lb/
mmBtu
(
for
2009)
and
0.125
lb/
mmBtu
(
for
2015).

The
EPA
is
proposing
to
calculate
State
NOx
budgets
through
a
fuel­
adjusted
heat­
input
basis,
as
is
being
finalized
in
the
CAIR.
State
budgets
would
be
determined
by
multiplying
historic
heat
input
data
(
summed
by
fuel)
by
different
adjustment
factors
for
the
different
fuels.
These
factors
reflect
for
each
fuel
(
coal,
gas
and
oil),
the
1999­
2002
average
emissions
by
State,

summed
for
the
CAIR
region,
divided
by
average
heat
input
by
fuel
by
State,
summed
for
the
CAIR
region.
The
resulting
adjustment
factors
from
this
calculation
are
1.0
for
coal,
0.4
for
gas
and
0.6
for
oil.
The
factors
would
reflect
the
inherently
higher
emissions
rate
of
coal­
fired
plants,
and
consequently
the
greater
burden
on
coal
plants
to
control
emissions.
The
regional
budget
is
then
apportioned
to
States
on
a
pro­
rata
basis,
based
on
each
State's
share
of
total
adjusted
average
heat
input.

The
final
CAIR
annual
NOx
cap
and
trade
rule
will
provide
additional
incentives
for
early
annual
NOx
reductions
by
creating
a
Compliance
Supplement
Pool
(
CSP)
for
CAIR
States
from
which
they
can
distribute
allowances
for
early,
annual
NOx
emissions
DRAFT­­
do
not
cite,
quote,
or
distribute
2/
9/
05
48
reductions
in
the
years
2007
and
2008.
The
CSP
functions
much
like
the
NOx
SIP
Call's
CSP.
The
CSP
would
be
comprised
of
CAIR
annual
NOx
allowances
of
vintage
year
2009.

In
the
final
CAIR,
EPA
apportions
a
200,000
ton
CSP
to
all
States.
The
CSP
was
apportioned
based
on
a
State's
share
of
the
required
emissions
reductions
(
i.
e.,
the
difference
between
their
State
baseline
emissions
and
their
projected
emissions
under
the
CAIR).
States
may
distribute
these
CAIR
NOx
allowances
to
sources
based
upon
either:
(
1)
a
demonstration
to
the
State
of
NOx
emissions
reductions
in
surplus
of
any
existing
NOx
emission
control
requirements;
or
(
2)
a
demonstration
to
the
State
that
the
facility
has
a
"
need"
that
would
affect
electricity
grid
reliability.
Sources
that
wish
to
receive
CAIR
NOx
allowances
based
upon
a
demonstration
of
surplus
emissions
reductions
will
be
awarded
one
CAIR
annual
NOx
allowance
for
every
2
tons
of
NOx
emissions
reductions.
Determination
of
surplus
emissions
must
use
emissions
data
measured
using
part
75
monitoring.
See
sections
VII
and
VIII
of
the
CAIR
preamble
in
today's
Federal
Register
for
details
of
the
CSP.

The
CSP
for
CAIR
States
affected
by
the
CAIR
NFR
has
a
total
of
195,582
CAIR
NOx
allowances
in
addition
to
the
annual
CAIR
NOx
budgets.
If
Delaware
and
New
Jersey
are
part
of
the
final
CAIR
program,
as
we
propose,
they
would
be
allotted
an
additional
1,478
allowances.
Table
IV­
3
shows
the
NOx
CSP
for
New
Jersey
DRAFT­­
do
not
cite,
quote,
or
distribute
2/
9/
05
49
and
Delaware.

Table
IV­
3.
Proposed
NOx
Compliance
Supplement
Pool
(
tons)

Delaware
New
Jersey
667
811
C.
SIP
Submittal
Deadline
We
are
also
proposing
today
to
require
that
PM2.5
transport
SIPs
be
submitted,
under
CAA
section
110(
a)(
1),
as
soon
as
practicable,
but
not
later
than
18
months
from
the
date
of
signature
of
the
CAIR,
i.
e.,
[
insert
date
18
months
after
signature
of
the
CAIR].
Our
expectation
is
that
this
will
be
12
months
from
the
date
of
promulgation
of
the
present
proposal.

We
note
that
this
would
leave
the
two
States
affected
by
this
proposal
less
time
to
submit
transport
SIPs
than
allowed
for
States
covered
by
the
CAIR
rule.
There
are
a
number
of
reasons
this
result
appears
to
be
justifiable.
First,
Delaware
and
New
Jersey
were
covered
by
the
initial
CAIR
proposal
for
PM2.5
precursors,
so
the
States
already
have
been
on
notice
that
they
might
have
to
submit
transport
SIPs
for
PM2.5.
Moreover,
we
are
proposing
here
to
adopt
all
of
the
key
features
of
the
initial
CAIR
proposal,
including
the
same
annual
SO2
and
NOx
reductions
and
budgets
and
the
same
implementation
mechanisms.
Again,
since
these
States
have
been
on
notice
regarding
these
issues,
we
believe
that
less
time
would
be
needed
to
submit
transport
SIPs.
DRAFT­­
do
not
cite,
quote,
or
distribute
2/
9/
05
10
The
EPA
compared
IPM
runs
with
and
without
New
Jersey
and
Delaware
to
make
this
determination.
See
IPM
runs
in
the
docket
for
further
details.

11
The
EPA
compared
IPM
runs
with
and
without
New
Jersey
and
Delaware
to
make
this
determination.
See
IPM
runs
in
the
docket
for
further
details.

50
Moreover,
as
noted,
we
expect
to
finalize
this
proposal
within
6
months.
If
we
do
so,
and
if
we
adopt
the
proposed
SIP
submittal
deadline,
transport
SIPs
would
be
required
within
12
months
of
the
final
action,
the
same
deadline
as
provided
in
the
NOx
SIP
Call
(
69
FR
4585).

According
to
EPA
modeling,
including
New
Jersey
and
Delaware
in
the
annual
CAIR
program
results
in
only
one
additional
flue
gas
desulfurization
(
FGD)
unit
installation,
i.
e.,
one
additional
FGD
in
New
Jersey.
10
The
EPA
modeling
shows
no
additional
selective
catalytic
reduction
(
SCR)
units
would
be
required
in
the
two
States.
11
Assuming
EPA
finalizes
this
proposal
in
6
months
(
by
September
15,
2005)
and
allows
the
two
States
18
months
from
signature
of
the
CAIR
to
submit
their
SIPs
(
i.
e.,
due
by
[
insert
date
18
months
from
signature
date
of
the
CAIR]),

there
would
be
about
40
months
remaining
for
the
installation
of
the
one
additional
FGD
required.
The
EPA
estimates
27
months
are
required
to
install
an
FGD.
Also,
EPA
believes
sufficient
boiler
maker
labor
and
other
resources
exist
to
support
one
additional
FGD
installation
by
January
1,
2010.
Therefore,
EPA
proposes
the
DRAFT­­
do
not
cite,
quote,
or
distribute
2/
9/
05
51
above
schedule
for
finalizing
and
implementing
this
rule.

For
all
these
reasons,
we
think
it
reasonable
to
propose
that
Delaware
and
New
Jersey
submit
PM2.5
transport
SIPs
by
[
insert
date
18
months
from
signature
of
CAIR
final
rule].

D.
Emissions
Reporting
Requirements
In
order
to
provide
emissions
inventory
information
that
will
allow
EPA
to
better
monitor
the
implementation
and
effects
of
the
CAIR's
emissions
reductions,
EPA
incorporated
into
the
CAIR
revisions
to
the
pre­
existing
emission
inventory
reporting
requirements
applicable
to
States
affected
by
the
CAIR.
Those
requirements
were
specific
to
whether
a
State
was
affected
by
the
annual
emission
reduction
requirements
for
SO2
and
NOx
or
only
the
ozone­
season
reduction
requirements
for
NOx.
Because
we
are
proposing
to
apply
the
annual
emissions
reduction
requirements
to
Delaware
and
New
Jersey,
we
are
also
proposing
to
place
these
two
States
under
the
corresponding
provisions
of
the
emissions
reporting
requirements.
The
only
practical
effect
of
this
change
relative
to
existing
requirements
is
that
if
either
State
chooses
to
obtain
some
of
the
required
annual
emissions
reductions
from
a
source
which
emits
less
than
2500
tons/
year
of
both
SO2
and
NOx
and
that
source
is
not
also
made
subject
to
the
EPA­
operated
emissions
trading
programs,
the
State
must
report
the
annual
emissions
of
that
source
to
EPA
annually
in
contrast
to
the
triennial
requirement
that
presently
applies
to
such
sources.
DRAFT­­
do
not
cite,
quote,
or
distribute
2/
9/
05
52
V.
EXPECTED
EFFECTS
OF
THE
PROPOSED
ACTION
A.
Emissions
EPA
has
conducted
power
sector
analysis
of
The
CAIR
using
the
IPM.
The
IPM
is
a
dynamic
linear
programming
model
that
can
be
used
to
examine
air
pollution
control
policies
for
SO2
and
NOx
throughout
the
contiguous
United
States
for
the
entire
power
system.
Documentation
for
IPM
can
be
found
at
www.
epa.
gov/
airmarkets/
epa­
ipm.

Emissions
of
SO2
and
NOx
in
the
CAIR
region
would
be
higher
under
the
final
CAIR
where
Delaware
and
New
Jersey
are
only
included
in
a
summer
season
ozone
cap,
similar
to
Connecticut
and
Massachusetts.
If
these
two
States
are
included
as
part
of
the
annual
SO2
and
NOx
caps
for
the
CAIR
as
proposed
in
this
proposal,
emissions
in
the
region
would
be
reduced
by
another
48,000
tons
of
SO2
and
11,000
tons
of
NOx
from
the
final
CAIR
scenario.

The
inclusion
of
Delaware
and
New
Jersey
in
the
annual
CAIR
requirements
would
result
in
additional
reductions
of
SO2
and
NOx
that
would
help
in
achieving
attainment
for
downwind
States.

Table
V­
1.
Annual
Emissions
from
Affected
Sources
for
DRAFT­­
do
not
cite,
quote,
or
distribute
2/
9/
05
12
The
CAIR
region
for
purposes
of
this
table
includes
the
following
States:
Alabama,
Arkansas,
Connecticut,
Delaware,
District
of
Columbia,
Florida,
Georgia,
Illinois,
Indiana,
Iowa,
Kentucky,
Louisiana,
Maryland,
Massachusetts,
Michigan,
Minnesota,
Mississippi,
Missouri,
New
Jersey,
New
York,
North
Carolina,
Ohio,
Pennsylvania,
South
Carolina,
Tennessee,
Texas,
Virginia,
West
Virginia,
Wisconsin.

53
the
CAIR
Region12
(
thousand
tons)

2010
2015
SO2
NOx
SO2
NOx
Base
Case
8,868
2,826
8,056
2,853
Final
CAIR
(
DE
and
NJ
Included
for
Ozone
Season
NOx
Only)
5,336
1,592
4,216
1,342
CAIR
Modified
By
This
Proposal(
DE
and
NJ
Included
for
Annual
SO2
and
NOx)
5,305
1,582
4,168
1,331
Difference
between
CAIR
Scenarios
32
10
48
11
Note:
Numbers
may
not
add
due
to
rounding.

B.
Air
Quality
Section
VI
of
the
preamble
to
the
CAIR,
which
appears
in
the
rules
section
of
today's
Federal
Register,
describes
the
air
quality
modeling
performed
to
determine
the
projected
impacts
of
the
CAIR
on
PM2.5
and
8­
hour
ozone
of
the
SO2
and
NOx
emissions
reductions
in
the
control
region
modeled.
The
modeling
used
to
estimate
the
air
quality
impact
of
these
reductions
assumed
annual
SO2
and
NOx
controls
for
Arkansas,
Delaware,
and
New
DRAFT­­
do
not
cite,
quote,
or
distribute
2/
9/
05
54
Jersey
(
as
had
been
proposed
before
completion
of
the
final
contribution
analysis)
in
addition
to
the
23­
States
plus
the
District
of
Columbia.
Since
Arkansas,
Delaware,
and
New
Jersey
are
not
included
in
the
final
CAIR
PM2.5
region,
the
modeled
estimated
impacts
are
overstated
for
today's
final
CAIR
which
excludes
all
three
States
from
the
CAIR
region
for
PM.
Because
we
are
now
proposing
that
Delaware
and
New
Jersey
become
subject
to
the
PM2.5­
related
emissions
limits
for
SO2
and
NOx,
the
air
quality
modeling
for
the
final
CAIR
better
approximates
the
net
effects
of
the
CAIR
plus
today's
proposal,
but
still
overestimates
the
air
quality
changes
somewhat
due
to
the
continued
discrepancy
regarding
Arkansas.
The
Regulatory
Impact
Analysis
for
the
CAIR
discusses
these
differences
in
scenarios
in
more
detail.

The
EPA
analyzed
the
impacts
of
the
regional
emissions
reductions
in
both
2010
and
2015.
These
impacts
are
quantified
by
comparing
air
quality
modeling
results
for
the
regional
control
scenario
to
the
modeling
results
for
the
corresponding
2010
and
2015
Base
Case
scenarios.
The
2010
and
2015
emissions
reductions
and
air
quality
improvements
from
the
regional
control
strategy
modeled
are
presented
in
summary
form
in
section
VI
of
the
preamble
to
the
CAIR
and
in
detail
in
the
Emission
Inventory
Technical
Support
Document
and
the
Air
Quality
Modeling
Technical
Support
Document
for
the
CAIR.
DRAFT­­
do
not
cite,
quote,
or
distribute
2/
9/
05
55
The
EPA
estimates,
based
on
the
air
quality
analysis
for
the
CAIR,
that
the
required
SO2
and
NOx
emissions
reductions
would,

by
themselves,
bring
into
attainment
52
of
the
80
counties
that
are
otherwise
expected
to
be
in
nonattainment
for
PM2.5
in
2010,

and
57
of
the
75
counties
that
are
otherwise
expected
to
be
in
nonattainment
for
PM2.5
in
2015.
The
EPA
further
estimates
that
the
required
NOx
emissions
reductions
would,
by
themselves,
bring
into
attainment
3
of
the
40
counties
that
are
otherwise
expected
to
be
in
nonattainment
for
8­
hour
ozone
in
2010,
and
6
of
the
22
counties
that
are
expected
to
be
in
nonattainment
for
8­
hour
ozone
in
2015.
In
addition,
today's
rule
will
improve
PM2.5
and
8­
hour
ozone
air
quality
in
the
areas
that
will
remain
nonattainment
for
those
two
NAAQS
after
implementation
of
today's
rule.
Because
of
today's
rule,
the
States
with
those
remaining
nonattainment
areas
will
find
it
less
burdensome
and
less
expensive
to
reach
attainment
by
adopting
additional
local
controls.
The
CAIR
will
also
reduce
PM2.5
and
8­
hour
ozone
levels
in
attainment
areas.

We
have
not
conducted
an
incremental
analysis
of
the
air
quality
effects
from
the
proposed
extension
of
the
annual
emissions
reductions
requirements
to
New
Jersey
and
Delaware.

However,
IPM
modeling
of
EGU
emissions
indicates
that
assuming
that
all
States
join
the
EPA
trading
programs,
highly
costeffective
emissions
reductions
will
be
distributed
across
the
region
in
addition
to
New
Jersey
and
Delaware
themselves,
and
DRAFT­­
do
not
cite,
quote,
or
distribute
2/
25/
05
56
contribute
to
the
attainment
of
these
two
States'
downwind
neighbors
as
well
as
other
States
with
nonattainment
areas.

VI.
STATUTORY
AND
EXECUTIVE
ORDER
REVIEWS
A.
Executive
Order
12866:
Regulatory
Planning
and
Review
Under
Executive
Order
12866
(
58
FR
51735,
October
4,
1993),

the
Agency
must
determine
whether
a
regulatory
action
is
"
significant"
and
therefore
subject
to
Office
of
Management
and
Budget
(
OMB)
review
and
the
requirements
of
the
Executive
Order.

The
Order
defines
"
significant
regulatory
action"
as
one
that
is
likely
to
result
in
a
rule
that
may:

1.
Have
an
annual
effect
on
the
economy
of
$
100
million
or
more
or
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;

2.
Create
a
serious
inconsistency
or
otherwise
interfere
with
an
action
taken
or
planned
by
another
agency;

3.
Materially
alter
the
budgetary
impact
of
entitlements,

grants,
user
fees,
or
loan
programs
or
the
rights
and
obligations
of
recipients
thereof;
or
4.
Raise
novel
legal
or
policy
issues
arising
out
of
legal
mandates,
the
President's
priorities,
or
the
principles
set
forth
in
the
Executive
Order.

In
view
of
its
important
policy
implications
and
potential
DRAFT­­
do
not
cite,
quote,
or
distribute
2/
25/
05
13
White
House,
National
Energy
Policy
­
Report
of
the
National
Energy
Policy
Development
Group,
May
2001.

57
effect
on
the
economy
of
over
$
100
million,
the
CAIR
program
inclusive
of
this
proposal
has
been
judged
to
be
an
economically
"
significant
regulatory
action"
within
the
meaning
of
the
Executive
Order.
As
a
result,
today's
proposal
was
submitted
to
OMB
for
review,
and
EPA
has
prepared
an
economic
analysis
of
the
CAIR
program
including
this
proposal
entitled
"
Regulatory
Impact
Analysis
of
the
Final
Clean
Air
Interstate
Rule"
(
March
2005).

The
CAIR
and
this
New
Jersey
and
Delaware
proposal
build
upon
the
findings
of
the
National
Energy
Policy
Development
Group;
to
provide
reliable,
affordable,
and
environmentally
sound
energy
for
America's
future13
(
http://
www.
whitehouse.
gov/
energy).

Recognizing
the
need
for
an
integrated
approach
to
environmental,

energy,
and
economic
policy,
the
CAIR
program
is
an
example
of
aggressive
environmental
regulation
that
recognizes
and
balances
the
need
for
energy
diversity,
reliability,
and
affordability.

1.
What
Economic
Analyses
Were
Conducted
for
the
Rulemaking?

The
analyses
conducted
for
the
CAIR
program
(
CAIR
final
rule
plus
this
New
Jersey
and
Delaware
proposal)
provide
several
important
analyses
of
impacts
on
public
welfare.
These
include
an
analysis
of
the
social
benefits,
social
costs,
and
net
benefits
of
the
regulatory
scenario.
The
economic
analyses
also
address
issues
involving
small
business
impacts,
unfunded
DRAFT­­
do
not
cite,
quote,
or
distribute
2/
25/
05
58
mandates
(
including
impacts
for
Tribal
governments),

environmental
justice,
children's
health,
energy
impacts,
and
requirements
of
the
Paperwork
Reduction
Act.

2.
What
Are
the
Benefits
and
Costs
of
the
CAIR
Program?

The
benefit­
cost
analysis
shows
that
substantial
net
economic
benefits
to
society
are
likely
to
be
achieved
due
to
reduction
in
emissions
resulting
from
the
CAIR
program
that
includes
annual
SO2
and
NOx
controls
for
New
Jersey
and
Delaware.

The
results
show
that
the
CAIR
program
would
be
highly
beneficial
to
society,
with
annual
net
benefits
(
benefits
less
costs)
of
approximately
$
71.4
or
$
60.4
billion
in
2010
and
$
98.5
or
$
83.2
billion
in
2015.
These
alternative
net
benefits
estimates
occur
due
to
differing
assumptions
concerning
the
social
discount
rate
used
to
estimate
the
annual
value
of
the
benefits
of
the
rule
with
the
lower
estimates
relating
to
a
discount
rate
of
7
percent
and
the
higher
estimates
a
discount
rate
of
3
percent.
All
amounts
are
reflected
in
1999
dollars.
For
more
information,
see
the
NFR
for
the
CAIR
and
the
Regulatory
Impact
Analysis
for
the
Final
Clean
Air
Interstate
Rule
(
March
2005).

3.
What
are
the
Incremental
Costs
to
the
Electricity­
Generating
Industry
Associated
with
this
New
Jersey
and
Delaware
Proposal?

The
costs
presented
here
represent
the
total
incremental
cost
to
the
electricity­
generating
industry
of
reducing
NOx
and
SO2
emissions
to
meet
the
reduction
requirements
set
forth
in
the
DRAFT­­
do
not
cite,
quote,
or
distribute
2/
25/
05
14
In
2003,
the
electric
power
industry
had
retail
sales
of
259
billion
dollars
(
http://
www.
eia.
doe.
gov/
cneaf/
electricty/
epm/
table5­
2.
html).

59
rule,
assuming
all
States
participate
in
a
regionwide
cap­

andtrade
program.
These
costs
estimates
are
referred
to
as
private
costs,
and
these
estimates
differ
from
the
cost
of
the
program
to
society
or
social
cost
estimates
presented
for
the
CAIR
program
discussed
previously.
As
shown
in
Table
VI­
1,
EPA
estimates
the
annual
private
costs
of
this
proposal
are
approximately
$
30
million
in
2010
and
$
40
million
in
2015.
All
estimates
reflect
1999
dollars.
Overall,
the
impacts
of
the
CAIR
program
are
modest,
particularly
in
light
of
the
large
benefits
we
expect.

This
industry
generates
over
$
250
billion
in
annual
revenues.
14
The
industry
has
the
ability
to
largely
pass
along
the
costs
of
the
rule
to
consumers,
and
this
will
result
in
the
costs
largely
falling
upon
the
consumers
of
electricity.
Retail
electricity
prices
are
projected
to
increase
roughly
2.0
­
2.7
percent
with
the
CAIR
program
(
inclusive
of
this
proposal)
in
the
2010
and
2015
timeframe,
and
then
drop
below
2.0
percent
thereafter.
The
effects
of
the
CAIR
program
on
natural
gas
prices
and
the
power
sector
generation
mix
is
also
small,
with
a
1.6
percent
or
less
increase
in
natural
gas
prices
projected
from
2010
to
2020.

There
will
be
continued
reliance
on
coal­
fired
generation,
which
is
projected
to
remain
at
roughly
50
percent
of
total
electricity
generated.
A
relatively
small
amount
of
coal­
fired
capacity,
DRAFT­­
do
not
cite,
quote,
or
distribute
2/
25/
05
60
about
5.3
GW
(
1.7
percent
of
all
coal­
fired
capacity
and
0.5
percent
of
all
generating
capacity),
is
projected
to
be
uneconomic
to
maintain.
For
the
most
part,
these
units
are
small
and
infrequently
used
generating
units
that
are
dispersed
throughout
the
CAIR
region.
Units
projected
to
be
uneconomic
to
maintain
may
be
'
mothballed,'
retired,
or
kept
in
service
to
ensure
transmission
reliability
in
certain
parts
of
the
grid.

As
demand
grows
in
the
future,
additional
coal­
fired
generation
is
projected
to
be
built
under
the
CAIR
program.
As
a
result,
both
coal­
fired
generation
and
coal
production
for
electricity
generation
are
projected
to
increase
from
2003
levels
by
about
15
percent
in
2010
and
25
percent
by
2020,
and
we
expect
a
small
shift
towards
greater
coal
production
in
Appalachia
and
the
Interior
coal
regions
of
the
country
with
the
CAIR.

For
today's
proposal,
EPA
analyzed
the
costs
using
the
IPM.

The
IPM
is
a
dynamic
linear
programming
model
that
can
be
used
to
examine
the
economic
impacts
of
air
pollution
control
policies
for
SO2
and
NOx
throughout
the
contiguous
U.
S.
for
the
entire
power
system.
Documentation
for
IPM
can
be
found
in
the
docket
for
this
rulemaking
or
at
www.
epa.
gov/
airmarkets/
epa­
ipm.
The
additional
annualized
incremental
cost
of
including
Delaware
and
New
Jersey
in
the
CAIR
program
occur
because
of
the
additional
installation
and
operation
of
a
modest
amount
of
pollution
control
equipment
and
other
relatively
minor
compliance
costs.
DRAFT­­
do
not
cite,
quote,
or
distribute
2/
25/
05
61
Table
VI­
1.
Annualized
Incremental
Private
Costs
for
the
CAIR
Region
(
billions
of
1999
dollars)

Program
Costs
in
2010
Costs
in
2015
Final
CAIR
(
DE
and
NJ:
Ozone
Season
NOx
Only)
$
2.33
$
3.59
Final
CAIR
plus
NJ
and
DE
proposal
(
DE
and
NJ:
Annual
SO2
and
NOx)
$
2.36
$
3.63
Difference
between
CAIR
scenarios
$
0.03
$
0.04
4.
What
Potential
Benefits
May
Be
Associated
With
This
Proposal?

Air
quality
modeling
was
not
conducted
for
the
New
Jersey
and
Delaware
proposal.
For
this
reason,
an
analysis
of
the
potential
benefits
for
the
New
Jersey
and
Delaware
proposal
could
not
be
completed
with
any
degree
of
specificity.
However
based
on
the
air
quality
modeling
results
for
the
CAIR,
we
make
ball
park
estimates
of
the
benefits
and
net
benefits
that
might
occur
with
this
proposal.
Including
New
Jersey
and
Delaware
in
the
CAIR
program
would
result
in
additional
reductions
of
SO2
and
NOx
emissions.
We
estimate
that
approximately
$
630
million
of
the
total
annual
CAIR
program
benefits
previously
discussed
are
attributable
to
annual
SO2
and
NOx
controls
for
New
Jersey
and
Delaware
in
2010.
This
estimate
increases
to
over
$
1.1
billion
in
2015.
The
full
CAIR
analysis
including
New
Jersey
and
DRAFT­­
do
not
cite,
quote,
or
distribute
2/
25/
05
62
Delaware
showed
a
benefit­
cost
ratio
of
around
39:
1
in
2015.

Based
on
the
relatively
low
estimated
private
costs
of
including
New
Jersey
and
Delaware
of
$
30
million
in
2010
and
$
40
million
in
2015,
it
is
highly
unlikely
that
costs
of
including
New
Jersey
and
Delaware
would
exceed
benefits
even
if
benefits
of
controlling
SO2
and
NOx
for
New
Jersey
and
Delaware
were
substantially
lower
than
the
average
benefit
we
used
to
estimate
the
benefits.
It
is
highly
unlikely
that
benefits
are
much
lower
than
average
given
the
urban
nature
of
much
of
New
Jersey,
and
the
proximity
of
New
Jersey
and
Delaware
to
many
heavily
populated
urban
areas.

B.
Paperwork
Reduction
Act
In
compliance
with
the
Paperwork
Reduction
Act
(
44
U.
S.
C.

3501
et
seq.),
EPA
announces
that
it
has
submitted
a
proposed
Information
Collection
Request
(
ICR)
(
EPA
ICR
number
2184.01)
to
OMB
for
review
and
approval.
The
purpose
of
the
ICR
is
to
estimate
the
anticipated
monitoring,
reporting,
and
recordkeeping
burden
estimates
and
associated
costs
for
States,
local
governments,
and
sources
that
are
expected
to
result
from
this
proposal.
This
ICR
describes
the
nature
of
the
information
collection
and
the
estimated
burden
for
this
proposal.
In
cases
where
information
is
already
collected
by
a
related
program,
the
ICR
takes
into
account
only
the
additional
burden.
This
situation
arises
in
States
that
are
also
subject
to
requirements
DRAFT­­
do
not
cite,
quote,
or
distribute
2/
25/
05
63
of
the
Consolidated
Emissions
Reporting
Rule
(
EPA
ICR
number
0916.10;
OMB
control
number
2060­
0088)
or
for
sources
that
are
subject
to
the
Acid
Rain
Program
(
EPA
ICR
2152.01;
EPA
ICR
number
1633.13;
OMB
control
number
2060­
0258)
or
the
NOx
SIP
Call
(
EPA
ICR
number
1857.03;
OMB
number
2060­
0445)
requirements.

The
monitoring,
recordkeeping,
and
reporting
burden
to
sources
resulting
from
New
Jersey
and
Delaware
choosing
to
participate
in
a
regional
cap
and
trade
program
are
expected
to
be
at
the
time
the
monitors
are
implemented.
This
estimate
includes
the
annualized
cost
of
installing
and
operating
appropriate
SO2
and
NOx
emissions
monitoring
equipment
to
measure
and
report
the
total
emissions
of
these
pollutants
from
affected
EGUs
(
serving
generators
greater
than
25
megawatt
capacity)
for
this
proposed
rule.
The
burden
to
State
and
local
air
agencies
includes
any
necessary
SIP
revisions,
performing
monitoring
certification,
and
fulfilling
audit
responsibilities.

C.
Regulatory
Flexibility
Act
The
Regulatory
Flexibility
Act
(
5
U.
S.
C.
§
601
et
seq.)(
RFA),
as
amended
by
the
Small
Business
Regulatory
Enforcement
Fairness
Act
(
Public
Law
No.
104­
121)(
SBREFA),

provides
that
whenever
an
agency
is
required
to
publish
a
general
notice
of
rulemaking,
it
must
prepare
and
make
available
an
initial
regulatory
flexibility
analysis,
unless
it
certifies
that
the
rule,
if
promulgated,
will
not
have
"
a
significant
economic
DRAFT­­
do
not
cite,
quote,
or
distribute
2/
25/
05
64
impact
on
a
substantial
number
of
small
entities."
5
U.
S.
C.
§
605(
b).
Small
entities
include
small
businesses,
small
organizations,
and
small
governmental
jurisdictions.

For
purposes
of
assessing
the
impacts
of
today's
rule
on
small
entities,
small
entity
is
defined
as:
(
1)
a
small
business
that
is
identified
by
the
North
American
Industry
Classification
System
(
NAICS)
Code,
as
defined
by
the
Small
Business
Administration
(
SBA);
(
2)
a
small
governmental
jurisdiction
that
is
a
government
of
a
city,
county,
town,
school
district
or
special
district
with
a
population
of
less
that
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
VI­
2
lists
entities
potentially
impacted
by
this
rule
with
applicable
NAICS
code.

VI­
2.
Potentially
Regulated
Categories
and
Entities
Category
NAICS
code1
Examples
of
potentially
regulated
entities
Industry
221112
Fossil
fuel­
fired
electric
utility
steam
generating
units.

Federal
government
221122
Fossil
fuel­
fired
electric
utility
steam
generating
units
owned
by
the
Federal
government.
DRAFT­­
do
not
cite,
quote,
or
distribute
2/
25/
05
Category
NAICS
code1
Examples
of
potentially
regulated
entities
65
State/
local/
Tribal
government
221122
921150
Fossil
fuel­
fired
electric
utility
steam
generating
units
owned
by
municipalities.

Fossil
fuel­
fired
electric
utility
steam
generating
units
in
Indian
Country.

1
North
American
Industry
Classification
System.

2
Federal,
State,
or
local
government­
owned
and
operated
establishments
are
classified
according
to
the
activity
in
which
they
are
engaged.

According
to
the
SBA
size
standards
for
NAICS
code
221112
Utilities­
Fossil
Fuel
Electric
Power
Generation,
a
firm
is
small
if,
including
its
affiliates,
it
is
primarily
engaged
in
the
generation,
transmission,
and
or
distribution
of
electric
energy
for
sale
and
its
total
electric
output
for
the
preceding
fiscal
year
did
not
exceed
4
million
megawatt
hours.

Courts
have
interpreted
the
RFA
to
require
a
regulatory
flexibility
analysis
only
when
small
entities
will
be
subject
to
the
requirements
of
the
rule.
See
Michigan
v.
EPA,
213
F.
3d
663,

668­
69
(
D.
C.
Cir.,
2000),
cert.
den.
121
S.
Ct.
225,
149
L.
Ed.
2d
135
(
2001).

The
CAIR
final
rule
and
this
proposed
rule
would
not
establish
requirements
applicable
to
small
entities.
Instead,
it
would
require
States
to
develop,
adopt,
and
submit
SIP
revisions
DRAFT­­
do
not
cite,
quote,
or
distribute
2/
25/
05
66
that
would
achieve
the
necessary
SO2
and
NOx
emissions
reductions,
and
would
leave
to
the
States
the
task
of
determining
how
to
obtain
those
reductions,
including
which
entities
to
regulate.
Moreover,
because
affected
States
would
have
discretion
to
choose
the
sources
to
regulate
and
how
much
emissions
reductions
each
selected
source
would
have
to
achieve,

EPA
could
not
predict
the
effect
of
the
rule
on
small
entities.

Although
not
required
by
the
RFA,
the
Agency
has
conducted
a
small
business
analysis
for
the
CAIR
program
inclusive
of
the
New
Jersey
and
Delaware
proposal.

Overall,
about
445
MW
of
total
small
entity
capacity,
or
1.0
percent
of
total
small
entity
capacity
in
the
CAIR
region,
is
projected
to
be
uneconomic
to
maintain
under
the
CAIR
relative
to
the
base
case.
In
practice,
units
projected
to
be
uneconomic
to
maintain
may
be
"
mothballed,"
retired,
or
kept
in
service
to
ensure
transmission
reliability
in
certain
parts
of
the
grid.

Our
IPM
modeling
is
unable
to
distinguish
between
these
potential
outcomes.

The
EPA
modeling
identified
264
small
power­
generating
entities
within
the
entire
CAIR
region
based
upon
the
definition
of
small
entity
outlined
above.
The
EPA
excluded
from
this
analysis
189
small
entities
that
were
not
projected
to
have
at
least
one
unit
with
a
generating
capacity
of
25
MW
or
great
operating
in
the
base
case.
Thus,
we
found
that
75
small
DRAFT­­
do
not
cite,
quote,
or
distribute
2/
25/
05
67
entities
may
potentially
be
affected
by
the
CAIR
program.
Of
these
75
small
entities,
28
may
experience
compliance
costs
in
excess
of
1
percent
of
revenues
in
2010,
and
46
may
in
2015,

based
on
the
Agency's
assumptions
of
how
the
affected
States
implement
control
measures
to
meet
their
emissions
budgets
as
set
forth
in
this
rulemaking.
Potentially
affected
small
entities
experiencing
compliance
costs
in
excess
of
1
percent
of
revenues
have
some
potential
for
significant
impact
resulting
from
implementation
of
the
CAIR.
However,
it
is
the
Agency's
position
that
because
none
of
the
affected
entities
currently
operate
in
a
competitive
market
environment,
they
should
be
able
to
pass
the
costs
of
complying
with
the
CAIR
on
to
rate­
payers.
Moreover,

the
decision
to
include
only
units
greater
than
25
MW
in
size
exempts
185
small
entities
that
would
otherwise
be
potentially
affected
by
the
CAIR.

Two
other
points
should
be
considered
when
evaluating
the
impact
of
the
CAIR
program
(
inclusive
of
the
New
Jersey
and
Delaware
proposal),
specifically,
and
cap
and
trade
programs
more
generally,
on
small
entities.
First,
under
the
CAIR
program,
the
cap­
and­
trade
program
is
designed
such
that
States
determine
how
NOX
allowances
are
to
be
allocated
across
units.
A
State
that
wishes
to
mitigate
the
impact
of
the
rule
on
small
entities
might
choose
to
allocate
NOX
allowances
in
a
manner
that
is
favorable
to
small
entities.
Finally,
the
use
of
cap
and
trade
in
general
DRAFT­­
do
not
cite,
quote,
or
distribute
2/
25/
05
68
will
limit
impacts
on
small
entities
relative
to
a
less
flexible
command­
and­
control
program.

D.
Unfunded
Mandates
Reform
Act
Title
II
of
the
Unfunded
Mandates
Reform
Act
of
1995
(
Public
Law
104­
4)(
UMRA),
establishes
requirements
for
Federal
agencies
to
assess
the
effects
of
their
regulatory
actions
on
State,

local,
and
Tribal
governments
and
the
private
sector.
Under
section
202
of
the
UMRA,
2
U.
S.
C.
1532,
EPA
generally
must
prepare
a
written
statement,
including
a
cost­
benefit
analysis,

for
any
proposed
or
final
rule
that
"
includes
any
Federal
mandate
that
may
result
in
the
expenditure
by
State,
local,
and
Tribal
governments,
in
the
aggregate,
or
by
the
private
sector,
of
$
100,000,000
or
more
...
in
any
one
year."
A
"
Federal
mandate"

is
defined
under
section
421(
6),
2
U.
S.
C.
658(
6),
to
include
a
"
Federal
intergovernmental
mandate"
and
a
"
Federal
private
sector
mandate."
A
"
Federal
intergovernmental
mandate,"
in
turn,
is
defined
to
include
a
regulation
that
"
would
impose
an
enforceable
duty
upon
State,
Local,
or
Tribal
governments,"
section
421(
5)(
A)(
i),
2
U.
S.
C.
658(
5)(
A)(
i),
except
for,
among
other
things,
a
duty
that
is
"
a
condition
of
Federal
assistance,"

section
421(
5)(
A)(
i)(
I).
A
"
Federal
private
sector
mandate"

includes
a
regulation
that
"
would
impose
an
enforceable
duty
upon
the
private
sector,"
with
certain
exceptions,
section
421(
7)(
A),

2
U.
S.
C.
658(
7)(
A).
DRAFT­­
do
not
cite,
quote,
or
distribute
2/
25/
05
69
Before
promulgating
an
EPA
rule
for
which
a
written
statement
is
needed
under
section
202
of
the
UMRA,
section
205,
2
U.
S.
C.
1535,
of
the
UMRA
generally
requires
EPA
to
identify
and
consider
a
reasonable
number
of
regulatory
alternatives
and
adopt
the
least
costly,
most
cost­
effective,
or
least
burdensome
alternative
that
achieves
the
objectives
of
the
rule.

The
EPA
prepared
a
written
statement
for
the
CAIR
final
inclusive
of
this
proposal
consistent
with
the
requirements
of
section
202
of
the
UMRA.
Furthermore,
as
EPA
stated
in
the
rule,

EPA
is
not
directly
establishing
any
regulatory
requirements
that
may
significantly
or
uniquely
affect
small
governments,
including
Tribal
governments.
Thus,
EPA
is
not
obligated
to
develop
under
section
203
of
the
UMRA
a
small
government
agency
plan.

Furthermore,
in
a
manner
consistent
with
the
intergovernmental
consultation
provisions
of
section
204
of
the
UMRA,
EPA
carried
out
consultations
with
the
governmental
entities
affected
by
this
rule.

For
several
reasons,
however,
EPA
is
not
reaching
a
final
conclusion
as
to
the
applicability
of
the
requirements
of
UMRA
to
this
rulemaking
action.
First,
it
is
questionable
whether
a
requirement
to
submit
a
SIP
revision
would
constitute
a
Federal
mandate
in
any
case.
The
obligation
for
a
State
to
revise
its
SIP
that
arises
out
of
section
110(
a)
of
the
CAA
is
not
legally
enforceable
by
a
court
of
law,
and
at
most
is
a
condition
for
DRAFT­­
do
not
cite,
quote,
or
distribute
2/
25/
05
70
continued
receipt
of
highway
funds.
Therefore,
it
is
possible
to
view
an
action
requiring
such
a
submittal
as
not
creating
any
enforceable
duty
within
the
meaning
of
section
421(
5)(
9a)(
I)
of
UMRA
(
2
U.
S.
C.
658
(
a)(
I)).
Even
if
it
did,
the
duty
could
be
viewed
as
falling
within
the
exception
for
a
condition
of
Federal
assistance
under
section
421(
5)(
a)(
i)(
I)
of
UMRA
(
2
U.
S.
C.

658(
5)(
a)(
i)(
I)).

As
noted
earlier,
however,
notwithstanding
these
issues,
EPA
prepared
the
statement
that
would
be
required
by
UMRA
if
its
statutory
provisions
applied
for
the
CAIR
final
rule
and
this
proposal.
The
EPA
also
consulted
with
governmental
entities
as
would
be
required
by
UMRA.
Consequently,
it
is
not
necessary
for
EPA
to
reach
a
conclusion
as
to
the
applicability
of
the
UMRA
requirements.

The
EPA
conducted
an
analysis
of
the
economic
impacts
anticipated
from
the
CAIR
program
inclusive
of
the
New
Jersey
and
Delaware
proposal
for
government­
owned
entities.
The
modeling
conducted
using
the
IPM
projects
that
about
340
MW
of
municipality­
owned
capacity
(
about
0.4
percent
of
all
subdivision,
State
and
municipality
capacity
in
the
CAIR
region)

would
be
uneconomic
to
maintain
under
the
CAIR
program,
beyond
what
is
projected
in
the
base
case.
In
practice,
however,
the
units
projected
to
be
uneconomic
to
maintain
may
be
"
mothballed,"

retired,
or
kept
in
service
to
ensure
transmission
reliability
in
DRAFT­­
do
not
cite,
quote,
or
distribute
2/
25/
05
71
certain
parts
of
the
grid.
For
the
most
part,
these
units
are
small
and
infrequently
used
generating
units
that
are
dispersed
throughout
the
CAIR
region.

The
EPA
modeling
identified
265
State
or
municipally­
owned
entities,
as
well
as
subdivisions,
within
the
entire
CAIR
region.

The
EPA
excluded
from
the
analysis
government­
owned
entities
that
were
not
projected
to
have
at
least
one
unit
with
generating
capacity
of
25
MW
or
greater
in
the
base
case.
Thus,
we
excluded
184
entities
from
the
analysis.
We
found
that
81
government
entities
will
be
potentially
affected
by
the
CAIR.
Of
the
81
government
entities,
20
may
experience
compliance
costs
in
excess
of
1
percent
of
revenues
in
2010,
and
39
may
in
2015,
based
on
our
assumptions
of
how
the
affected
States
implement
control
measures
to
meet
their
emissions
budgets
as
set
forth
in
this
rulemaking.

Government
entities
projected
to
experience
compliance
costs
in
excess
of
1
percent
of
revenues
have
some
potential
for
significant
impact
resulting
from
implementation
of
the
CAIR.

However,
as
noted
above,
it
is
EPA's
position
that
because
these
government
entities
can
pass
on
their
costs
of
compliance
to
rate­
payers,
they
will
not
be
significantly
impacted.

Furthermore,
the
decision
to
include
only
units
greater
than
25
MW
in
size
exempts
179
government
entities
that
would
otherwise
be
potentially
affected
by
the
CAIR
program.
DRAFT­­
do
not
cite,
quote,
or
distribute
2/
25/
05
72
The
above
points
aside,
potentially
adverse
impacts
of
the
CAIR
program
on
State
and
municipality­
owned
entities
could
be
limited
by
the
fact
that
the
cap
and
trade
program
is
designed
such
that
States
determine
how
NOx
allowances
are
to
be
allocated
across
units.
A
State
that
wishes
to
mitigate
the
impact
of
the
rule
on
State
or
municipality­
owned
entities
might
choose
to
allocate
NOX
allowances
in
a
manner
that
is
favorable
to
these
entities.
Finally,
the
use
of
cap
and
trade
in
general
will
limit
impacts
on
entities
owned
by
small
governments
relative
to
a
less
flexible
command­
and­
control
program.

E.
Executive
Order
13132:
Federalism
Executive
Order
13132,
entitled
"
Federalism"
(
64
FR
43255,

August
10,
1999),
requires
EPA
to
develop
an
accountable
process
to
ensure
"
meaningful
and
timely
input
by
State
and
local
officials
in
the
development
of
regulatory
policies
that
have
federalism
implications."
"
Policies
that
have
federalism
implications"
is
defined
in
the
Executive
Order
to
include
regulations
that
have
"
substantial
direct
effects
on
the
States,

on
the
relationship
between
the
national
government
and
the
States,
or
on
the
distribution
of
power
and
responsibilities
among
the
various
levels
of
government."

This
proposal
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
DRAFT­­
do
not
cite,
quote,
or
distribute
2/
25/
05
73
on
the
distribution
of
power
and
responsibilities
among
the
various
levels
of
government,
as
specified
in
Executive
Order
13132.
The
CAA
establishes
the
relationship
between
the
Federal
government
and
the
States,
and
this
proposed
rule
does
not
impact
that
relationship.
Thus,
Executive
Order
13132
does
not
apply
to
this
proposal.
In
the
spirit
of
Executive
Order
13132,
and
consistent
with
EPA
policy
to
promote
communications
between
EPA
and
State
and
local
governments,
EPA
specifically
solicited
comment
on
the
CAIR
from
State
and
local
officials.

F.
Executive
Order
13175:
Consultation
and
Coordination
with
Indian
Tribal
Governments
Executive
Order
13175,
entitled
"
Consultation
and
Coordination
with
Indian
Tribal
Governments"
(
65
FR
67249,

November
9,
2000),
requires
EPA
to
develop
an
accountable
process
to
ensure
"
meaningful
and
timely
input
by
Tribal
officials
in
the
development
of
regulatory
policies
that
have
Tribal
implications."
The
CAIR
program
(
CAIR
final
and
New
Jersey
and
Delaware
proposed
rule)
does
not
have
"
Tribal
implications"
as
specified
in
Executive
Order
13175.

The
CAIR
program
addresses
transport
of
pollution
that
are
precursors
for
ozone
and
PM2.5.
The
CAA
provides
for
States
and
Tribes
to
develop
plans
to
regulate
emissions
of
air
pollutants
within
their
jurisdictions.
The
regulations
clarify
the
statutory
obligations
of
States
and
Tribes
that
develop
plans
to
DRAFT­­
do
not
cite,
quote,
or
distribute
2/
25/
05
74
implement
this
rule.
The
Tribal
Authority
Rule
(
TAR)
give
Tribes
the
opportunity
to
develop
and
implement
CAA
programs,
but
it
leaves
to
the
discretion
of
the
Tribe
whether
to
develop
these
programs
and
which
programs,
or
appropriate
elements
of
a
program,
the
Tribe
will
adopt.

The
CAIR
program
does
not
have
Tribal
implications
as
defined
by
Executive
Order
13175.
It
does
not
have
a
substantial
direct
effect
on
one
or
more
Indian
Tribes,
because
no
Tribe
has
implemented
a
federally
enforceable
air
quality
management
program
under
the
CAA
at
this
time.
Furthermore,
the
CAIR
program
does
not
affect
the
relationship
or
distribution
of
power
and
responsibilities
between
the
Federal
government
and
Indian
Tribes.
The
CAA
and
the
TAR
establish
the
relationship
of
the
Federal
government
and
Tribes
in
developing
plans
to
attain
the
NAAQS,
and
this
rule
does
nothing
to
modify
that
relationship.

Because
the
CAIR
program
does
not
have
Tribal
implications,

Executive
Order
13175
does
not
apply.

If
one
assumes
a
Tribe
is
implementing
a
Tribal
Implementation
Plan,
today's
proposal
could
have
implications
for
that
Tribe,
but
it
would
not
impose
substantial
direct
costs
upon
the
Tribe,
nor
preempt
Tribal
law.
As
provided
above,
EPA
has
estimated
that
the
total
annual
private
costs
for
the
CAIR
program
inclusive
of
the
New
Jersey
and
Delaware
proposal
for
the
CAIR
region
as
implemented
by
State,
Local,
and
Tribal
DRAFT­­
do
not
cite,
quote,
or
distribute
2/
25/
05
75
governments
is
approximately
$
2.4
billion
in
2010
and
$
3.6
billion
in
2015
(
1999
dollars).
There
are
currently
very
few
emissions
sources
in
Indian
country
that
could
be
affected
by
the
CAIR
program
and
the
percentage
of
Tribal
land
that
will
be
impacted
is
very
small.
For
Tribes
that
choose
to
regulate
sources
in
Indian
country,
the
costs
would
be
attributed
to
inspecting
regulated
facilities
and
enforcing
adopted
regulations.

Although
Executive
Order
13175
does
not
apply
to
this
proposal,
EPA
consulted
with
Tribal
officials
in
developing
the
CAIR
program.
The
EPA
has
encouraged
Tribal
input
at
an
early
stage.
Also,
EPA
held
periodic
meetings
with
the
States
and
the
Tribes
during
the
technical
development
of
the
CAIR
program.

Three
meetings
were
held
with
the
Crow
Tribe,
where
the
Tribe
expressed
concerns
about
potential
impacts
of
the
CAIR
on
their
coal
mine
operations.
The
addition
of
Delaware
and
New
Jersey
to
the
CAIR
program
does
not
have
any
bearing
upon
the
concerns
expressed
by
the
Tribes.
In
addition,
EPA
held
three
calls
with
Tribal
environmental
professionals
to
address
concerns
specific
to
the
Tribes.
These
discussions
have
given
EPA
valuable
information
about
Tribal
concerns
regarding
the
development
of
the
CAIR
program.
The
EPA
has
provided
briefings
for
Tribal
representatives
and
the
newly
formed
National
Tribal
Air
Association
(
NTAA),
and
other
national
Tribal
forums.
Input
from
DRAFT­­
do
not
cite,
quote,
or
distribute
2/
25/
05
76
Tribal
representatives
has
been
taken
into
consideration
in
development
of
the
CAIR
program.

G.
Executive
Order
13045:
Protection
of
Children
from
Environmental
Health
and
Safety
Risks
Executive
Order
13045,
"
Protection
of
Children
from
Environmental
Health
and
Safety
Risks"
(
62
FR
19885,
April
23,

1997)
applies
to
any
rule
that
(
1)
is
determined
to
be
"
economically
significant"
as
defined
under
Executive
Order
12866,
and
(
2)
concerns
an
environmental
health
or
safety
risk
that
EPA
has
reason
to
believe
may
have
a
disproportionate
effect
on
children.
If
the
regulatory
action
meets
both
criteria,

Section
5
 
501
of
the
Order
directs
the
Agency
to
evaluate
the
environmental
health
or
safety
effects
of
the
planned
rule
on
children,
and
explain
why
the
planned
regulation
is
preferable
to
other
potentially
effective
and
reasonably
feasible
alternatives
considered
by
the
Agency.

The
CAIR
program
inclusive
of
the
New
Jersey
and
Delaware
proposal
is
not
subject
to
the
Executive
Order,
because
it
does
not
involve
decisions
on
environmental
health
or
safety
risks
that
may
disproportionately
affect
children.
The
EPA
believes
that
the
emissions
reductions
from
the
strategies
in
this
rule
will
further
improve
air
quality
and
will
further
improve
children's
health.

H.
Executive
Order
13211:
Actions
that
Significantly
Affect
DRAFT­­
do
not
cite,
quote,
or
distribute
2/
25/
05
77
Energy
Supply,
Distribution,
or
Use
Executive
Order
13211
(
66
FR
28355,
May
22,
2001)
provides
that
agencies
shall
prepare
and
submit
to
the
Administrator
of
the
Office
of
Regulatory
Affairs,
OMB,
a
Statement
of
Energy
Effects
for
certain
actions
identified
as
"
significant
energy
actions."
Section
4(
b)
of
Executive
Order
13211
defines
"
significant
energy
actions"
as
any
action
by
an
agency
(
normally
published
in
the
Federal
Register)
that
promulgates
or
is
expected
to
lead
to
the
promulgation
of
a
final
rule
or
regulation,
including
notices
of
inquiry,
advance
notices
of
final
rulemaking,
and
notices
of
final
rulemaking
(
1)
(
i)
a
significant
regulatory
action
under
Executive
Order
12866
or
any
successor
order,
and
(
ii)
likely
to
have
a
significant
adverse
effect
on
the
supply,
distribution,
or
use
of
energy;
or
(
2)

designated
by
the
Administrator
of
the
Office
of
Information
and
Regulatory
Affairs
as
a
"
significant
energy
action."
The
CAIR
program
(
the
CAIR
final
and
the
New
Jersey
and
Delaware
proposal)

is
a
significant
regulatory
action
under
Executive
Order
12866,

and
the
CAIR
program
may
have
a
significant
adverse
effect
on
the
supply,
distribution,
or
use
of
energy.

In
May
of
2001,
the
Administration
published
the
National
Energy
Policy
which
contained
key
recommendations
for
improving
energy
policy.
The
CAIR
program
has
the
potential
to
require
installation
of
significant
amounts
of
control
equipment
at
power
DRAFT­­
do
not
cite,
quote,
or
distribute
2/
25/
05
78
plants
that
are
integral
to
the
country's
electric
power
supply,

and
in
light
of
this,
EPA
has
focused
on
minimizing
the
impacts
of
the
CAIR
program
throughout
the
development
of
the
rule
in
keeping
with
the
National
Energy
Policy.
The
program
follows
the
recommendations
of
the
National
Energy
Policy
to
use
costeffectiveness
and
market­
based
mechanisms
while
providing
regulatory
certainty
and
sufficient
time
to
achieve
reductions
of
SO2
and
NOx
from
the
power
sector
in
a
way
that
will
help
the
country
maintain
electric
reliability
and
affordability
while
ensuring
environmental
goals
are
met.
Although
the
stated
recommendation
of
the
Administration's
energy
plan
was
to
adopt
multi­
pollutant
legislation,
like
the
Clear
Skies
Act,
EPA
has
acted
in
accordance
with
the
CAA
to
ensure
substantial
reduction
of
pollution
to
protect
human
health
and
welfare,
consistent
with
the
National
Energy
Policy.

If
States
choose
to
obtain
the
emissions
reductions
required
by
the
CAIR
final
and
this
proposed
rule
by
regulating
EGUs,
EPA
projects
that
approximately
5.3
GWs
of
coal­
fired
generation
may
be
removed
from
operation
by
2010.
In
practice,
however,
the
units
projected
to
be
uneconomic
to
maintain
may
be
"
mothballed,"

retired,
or
kept
in
service
to
ensure
transmission
reliability
in
certain
parts
of
the
grid.
For
the
most
part,
these
units
are
small
and
infrequently
used
generating
units
that
are
dispersed
throughout
the
CAIR
region.
Less
conservative
assumptions
DRAFT­­
do
not
cite,
quote,
or
distribute
2/
25/
05
79
regarding
natural
gas
prices
or
electricity
demand
would
create
a
greater
incentive
to
keep
these
units
operational.
The
EPA
projects
that
the
average
annual
electricity
price
will
increase
by
less
than
2.7
percent
in
the
CAIR
region
for
the
CAIR
program.

The
EPA
does
not
believe
that
the
CAIR
final
and
this
proposed
rule
will
have
any
other
impacts
that
exceed
the
significance
criteria.

The
EPA
believes
that
a
number
of
features
of
today's
rulemaking
serve
to
reduce
its
impact
on
energy
supply.
First,

the
optional
trading
program
provides
considerable
flexibility
to
the
power
sector
and
enables
industry
to
comply
with
the
emission
reduction
requirements
in
the
most
cost­
effective
manner,
thus
minimizing
overall
costs
and
the
ultimate
impact
on
energy
supply.
The
ability
to
use
banked
allowances
from
the
existing
title
IV
SO2
Trading
Program
and
the
NOx
SIP
Call
Trading
Program
also
provide
additional
flexibility.
Second,
the
CAIR
program
caps
are
set
in
two
phases
and
provide
adequate
time
for
EGUs
to
install
pollution
controls.
For
more
details
concerning
energy
impacts,
see
the
Regulatory
Impact
Analysis
for
the
Final
Clean
Air
Interstate
Rule
(
March
2005).

I.
National
Technology
Transfer
Advancement
Act
Section
12(
d)
of
the
National
Technology
Transfer
Advancement
Act
(
NTTAA)
of
1995
(
Public
Law
No.
104­
113;
15
U.
S.
C.
272
note)
directs
EPA
to
use
voluntary
consensus
standards
DRAFT­­
do
not
cite,
quote,
or
distribute
2/
25/
05
80
in
its
regulatory
and
procurement
activities
unless
to
do
so
would
be
inconsistent
with
applicable
law
or
otherwise
impractical.
Voluntary
consensus
standards
are
technical
standards
(
e.
g.,
materials
specifications,
test
methods,
sampling
procedures,
business
practices)
developed
or
adopted
by
one
or
more
voluntary
consensus
bodies.
The
NTTAA
directs
EPA
to
provide
Congress,
through
annual
reports
to
OMB,
with
explanations
when
an
agency
does
not
use
available
and
applicable
voluntary
consensus
standards.

The
CAIR
final
and
this
proposed
rule
would
require
all
sources
that
participate
in
the
trading
program
under
part
96
to
meet
the
applicable
monitoring
requirements
of
part
75.
Part
75
already
incorporates
a
number
of
voluntary
consensus
standards.

Consistent
with
the
Agency's
Performance
Based
Measurement
System
(
PBMS),
part
75
sets
forth
performance
criteria
that
allow
the
use
of
alternative
methods
to
the
ones
set
forth
in
Part
75.
The
PBMS
approach
is
intended
to
be
more
flexible
and
cost
effective
for
the
regulated
community;
it
is
also
intended
to
encourage
innovation
in
analytical
technology
and
improved
data
quality.

At
this
time,
EPA
is
not
recommending
any
revisions
to
part
75;

however,
EPA
periodically
revises
the
test
procedures
set
forth
in
Part
75.
When
EPA
revises
the
test
procedures
set
forth
in
Part
75
in
the
future,
EPA
will
address
the
use
of
any
new
voluntary
consensus
standards
that
are
equivalent.
Currently,
DRAFT­­
do
not
cite,
quote,
or
distribute
2/
25/
05
15
U.
S.
Environmental
Protection
Agency,
1998.
Guidance
for
Incorporating
Environmental
Justice
Concerns
in
EPA's
NEPA
Compliance
Analyses.
Office
of
Federal
Activities,
Washington,
D.
C.,
April,
1998.

81
even
if
a
test
procedure
is
not
set
forth
in
part
75,
EPA
is
not
precluding
the
use
of
any
method,
whether
it
constitutes
a
voluntary
consensus
standard
or
not,
as
long
as
it
meets
the
performance
criteria
specified;
however,
any
alternative
methods
must
be
approved
through
the
petition
process
under
section
75.66
before
they
are
used
under
part
75.

J.
Executive
Order
12898:
Federal
Actions
to
Address
Environmental
Justice
in
Minority
Populations
and
Low­
Income
Populations
Executive
Order
12898,
"
Federal
Actions
to
Address
Environmental
Justice
in
Minority
Populations
and
Low­
Income
Populations,"
requires
Federal
agencies
to
consider
the
impact
of
programs,
policies,
and
activities
on
minority
populations
and
low­
income
populations.
According
to
EPA
guidance,
15
agencies
are
to
assess
whether
minority
or
low­
income
populations
face
risks
or
a
rate
of
exposure
to
hazards
that
are
significant
and
that
"
appreciably
exceed
or
is
likely
to
appreciably
exceed
the
risk
or
rate
to
the
general
population
or
to
the
appropriate
comparison
group."
(
EPA,
1998)

In
accordance
with
Executive
Order
12898,
the
Agency
has
considered
whether
the
CAIR
program
inclusive
of
the
New
Jersey
DRAFT­­
do
not
cite,
quote,
or
distribute
2/
25/
05
82
and
Delaware
proposed
rule
may
have
disproportionate
negative
impacts
on
minority
or
low
income
populations.
The
Agency
expects
the
CAIR
program
to
lead
to
reductions
in
air
pollution
and
exposures
generally.
For
this
reason,
negative
impacts
to
these
sub­
populations
that
appreciably
exceed
similar
impacts
to
the
Inclusion
of
Delaware
and
New
Jersey
in
the
Clean
Air
Interstate
Rule­­
Page
88
of
88
general
population
are
not
expected.

List
of
Subjects
in
40
CFR
Part
51
Administrative
practice
and
procedure,
Air
pollution
control,

Intergovernmental
relations,
Nitrogen
dioxide,
Ozone,
Particulate
matter,
Reporting
and
recordkeeping
requirements,
Sulfur
oxides,

Volatile
organic
compounds.

List
of
Subjects
in
40
CFR
Part
96
Administrative
practice
and
procedure,
Air
pollution
control,

Nitrogen
oxides,
Reporting
and
recordkeeping
requirements
________________________

Dated:

________________________

Stephen
L
Johnson
Acting
Administrator