[Federal Register Volume 83, Number 111 (Friday, June 8, 2018)]
[Notices]
[Pages 26666-26682]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-12374]
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ENVIRONMENTAL PROTECTION AGENCY
[EPA-HQ-OAR-2018-0295; FRL-9979-20-OAR]
RIN 2060-AT40, 2060-AT39, 2060-AT38, 2060-AT37, 2060-AT36
Response to Clean Air Act Section 126(b) Petitions From Delaware
and Maryland
AGENCY: Environmental Protection Agency (EPA).
ACTION: Notice of proposed action on petitions.
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SUMMARY: The Environmental Protection Agency (EPA) is proposing to deny
four petitions submitted by the state of Delaware and one petition
submitted by the state of Maryland under Clean Air Act (CAA or Act)
section 126(b). The petitions were submitted between July and November
2016. Each of Delaware's four petitions requested that the EPA make a
finding that emissions from individual sources in Pennsylvania or West
Virginia are significantly contributing to Delaware's nonattainment of
the 2008 and 2015 8-hour ozone national ambient air quality standards
(NAAQS). Maryland's petition requested that the EPA make a finding that
emissions from 36 electric generating units in Indiana, Kentucky, Ohio,
Pennsylvania, and West Virginia are significantly contributing to ozone
levels that exceed the 2008 8-hour ozone NAAQS in Maryland, and,
therefore, are interfering with nonattainment and maintenance of the
2008 ozone NAAQS. The EPA proposes to deny all five petitions because
Delaware and Maryland have not met their burden to demonstrate that the
sources emit or would emit in violation of the CAA's ``good neighbor''
provision (i.e., the petitions have not demonstrated that the sources
will significantly contribute to nonattainment or interfere with
maintenance of the 2008 or 2015 ozone NAAQS in the petitioning states).
The EPA is further proposing to deny the petitions based on the
agency's independent analysis that the identified sources do not
currently emit and are not expected to emit pollution in violation of
the good neighbor provision for either the 2008 or 2015 ozone NAAQS.
DATES: Comments. Comments must be received on or before July 23, 2018.
Public Hearing. The EPA will hold a public hearing on the proposed
action. Details will be announced in a separate Federal Register
document.
ADDRESSES: Submit your comments, identified by Docket ID No. EPA-HQ-
OAR-2018-0295, at http://www.regulations.gov. Follow the online
instructions for submitting comments. Once submitted, comments cannot
be edited or removed from Regulations.gov. The EPA may publish any
comment received to its public docket. Do not submit electronically any
information you consider to be Confidential Business Information (CBI)
or other information whose disclosure is restricted by statute.
Multimedia submissions (audio, video, etc.) must be accompanied by a
written comment. The written comment is considered the official comment
and should include discussion of all points you wish to make. The EPA
will generally not consider comments or comment contents located
outside of the primary submission (e.g., on the Web, Cloud, or other
file sharing system). For additional submission methods, the full EPA
public comment policy, information about CBI or multimedia submissions,
and general guidance on making effective comments, please visit http://www2.epa.gov/dockets/commenting-epa-dockets.
FOR FURTHER INFORMATION CONTACT: Questions concerning this proposed
notice should be directed to Mr. Lev Gabrilovich, U.S. Environmental
Protection Agency, Office of Air Quality Planning and Standards, Air
Quality Policy Division, Mail Code C539-01, Research Triangle Park, NC
27711, telephone (919) 541-1496; email at [email protected].
SUPPLEMENTARY INFORMATION: The information in this document is
organized as follows:
I. General Information
II. Executive Summary of the EPA's Decision on CAA Section 126(b)
Petitions From Delaware and Maryland
III. Background and Legal Authority
A. Ozone and Public Health
B. Clean Air Act Sections 110 and 126
C. The EPA's Historical Approach to Addressing Interstate
Transport of Ozone Under the Good Neighbor Provision
D. The CAA Section 126(b) Petitions From Delaware
E. The CAA Section 126(b) Petition From Maryland
IV. The EPA's Proposed Decision on
[[Page 26667]]
Delaware's and Maryland's CAA Section 126(b) Petitions
A. The EPA's Approach for Granting or Denying CAA Section 126(b)
Petitions Regarding the 2008 and 2015 8-Hour Ozone NAAQS
B. The EPA's Evaluation of Whether the Petitions Are Sufficient
To Support a Section 126(b) Finding
C. The EPA's Independent Analysis of the CAA Section 126(b)
Petitions
D. The EPA's Independent Analysis of Sources Without Selective
Catalytic Reduction Post Combustion Controls
V. Conclusion
VI. Determinations Under Section 307(b)(1)
VII. Statutory Authority
I. General Information
Throughout this document, wherever ``we,'' ``us,'' or ``our'' is
used, we mean the United States (U.S.) EPA.
Where can I get a copy of this document and other related information?
The EPA has established a docket for this action under Docket ID
No. EPA-HQ-OAR-2018-0295 (available at http://www.regulations.gov). The
EPA has made available information related to the proposed action and
the public hearing at website: https://www.epa.gov/ozone-pollution/ozone-national-ambient-air-quality-standards-naaqs-section-126-petitions.
II. Executive Summary of the EPA's Decision on CAA Section 126(b)
Petitions From Delaware and Maryland
In 2016, the states of Delaware and Maryland submitted a total of
five petitions requesting that the EPA make findings pursuant to CAA
section 126(b) that emissions from numerous upwind sources
significantly contribute to nonattainment and/or interfere with
maintenance of the ozone NAAQS in violation of CAA section
110(a)(2)(D)(i)(I), otherwise known as the good neighbor provision.
Delaware submitted four petitions, each alleging good neighbor
violations related to the 2008 and 2015 ozone NAAQS by individual
sources located in Pennsylvania or West Virginia. Maryland submitted a
single petition alleging good neighbor violations related to the 2008
ozone NAAQS by 36 electric generating units (EGUs) in five states.
The EPA is evaluating the petitions consistent with the same four-
step regional analytic framework that the EPA has used in previous
regulatory actions addressing regional interstate ozone transport
problems. The EPA is therefore using this framework to evaluate whether
the petitions meet the standard to demonstrate under CAA section 126(b)
that the sources emit or would emit in violation of the good neighbor
provision based on both current and anticipated future emissions
levels. The EPA identifies two bases for denying the petitions. First,
the agency's historical approach to evaluating CAA section 126(b)
petitions looks to see whether a petition, standing alone, identifies
or establishes an analytic basis for the requested CAA section 126(b)
finding, and the agency identified several elements of the states'
analysis that are considered insufficient to support the states'
conclusions. Second, the EPA also can rely on its own independent
analyses to evaluate the potential basis for the requested CAA section
126(b) finding. The EPA is, therefore, proposing to find, based on its
own analysis, that there are no additional highly cost-effective
emissions reductions available at the sources, and, thus, that none of
the named sources currently emit or would emit in violation of the good
neighbor provision with respect to the relevant ozone NAAQS.
Section III of this notice provides background information
regarding the EPA's approach to addressing the interstate transport of
ozone under CAA sections 110(a)(2)(D)(i) and 126(b), and provides a
summary of the relevant issues raised in Delaware's and Maryland's CAA
section 126(b) petitions. Section IV of this notice details the EPA's
proposed action to deny these petitions, including explaining the EPA's
approach for granting or denying CAA section 126(b) petitions regarding
the 2008 and 2015 8-hour ozone NAAQS, identifying technical
insufficiencies in the petitions, and explaining the EPA's own analysis
evaluating whether the sources named in the petitions emit or would
emit in violation of the good neighbor provision for the pertinent
NAAQS.
III. Background and Legal Authority
A. Ozone and Public Health
Ground-level ozone is not emitted directly into the air, but is a
secondary air pollutant created by chemical reactions between nitrogen
oxides (NOX) and volatile organic compounds (VOCs) in the
presence of sunlight. These precursor emissions can be transported
downwind directly or, after transformation in the atmosphere, as ozone.
As a result, ozone formation, atmospheric residence, and transport can
occur on a regional scale (i.e., hundreds of miles). For further
discussion of ozone-formation chemistry, interstate transport issues,
and health effects, see the Cross-State Air Pollution Rule Update for
the 2008 Ozone NAAQS (CSAPR Update), 81 FR 74504, 74513-14 (October 26,
2016).
On March 12, 2008, the EPA promulgated a revision to the ozone
NAAQS, lowering both the primary and secondary standards to 75 parts
per billion (ppb).\1\ On October 1, 2015, the EPA revised the ground-
level ozone NAAQS to 70 ppb.\2\
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\1\ See National Ambient Air Quality Standards for Ozone, Final
Rule, 73 FR 16436 (March 27, 2008).
\2\ See National Ambient Air Quality Standards for Ozone, Final
Rule, 80 FR 65292 (October 26, 2015).
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B. Clean Air Act Sections 110 and 126
The statutory authority for this action is provided by CAA sections
126 and 110(a)(2)(D)(i). Section 126(b) of the CAA provides, among
other things, that any state or political subdivision may petition the
Administrator of the EPA to find that any major source or group of
stationary sources in an upwind state emits or would emit any air
pollutant in violation of the prohibition of CAA section
110(a)(2)(D)(i).\3\ Petitions submitted pursuant to this section are
commonly referred to as CAA section 126(b) petitions. Similarly,
findings by the Administrator, pursuant to this section, that a source
or group of sources emits air pollutants in violation of the CAA
section 110(a)(2)(D)(i) prohibition are commonly referred to as CAA
section 126(b) findings.
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\3\ The text of CAA section 126 as codified in the U.S. Code
cross-references section 110(a)(2)(D)(ii) instead of section
110(a)(2)(D)(i). The courts have confirmed that this is a
scrivener's error and the correct cross-reference is to CAA section
110(a)(2)(D)(i). See Appalachian Power Co. v. EPA, 249 F.3d 1032,
1040-44 (D.C. Cir. 2001).
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CAA section 126(c) explains the effect of a CAA section 126(b)
finding and establishes the conditions under which continued operation
of a source subject to such a finding may be permitted. Specifically,
CAA section 126(c) provides that it is a violation of section 126 of
the Act and of the applicable state implementation plan (SIP): (1) For
any major proposed new or modified source subject to a CAA section
126(b) finding to be constructed or operate in violation of the
prohibition of CAA section 110(a)(2)(D)(i); or (2) for any major
existing source for which such a finding has been made to stay in
operation more than 3 months after the date of the finding. The
statute, however, also gives the Administrator discretion to permit the
continued operation of a source beyond 3 months if the source complies
with emissions limitations and compliance schedules provided by the EPA
to bring about compliance with the requirements contained in CAA
sections 110(a)(2)(D)(i) and 126 as expeditiously as practicable, but
in any event no later
[[Page 26668]]
than 3 years from the date of the finding. Id.
Section 110(a)(2)(D)(i) of the CAA, referred to as the good
neighbor provision of the Act, requires states to prohibit certain
emissions from in-state sources if such emissions impact the air
quality in downwind states. Specifically, CAA sections 110(a)(1) and
110(a)(2)(D)(i)(I) require all states, within 3 years of promulgation
of a new or revised NAAQS, to submit SIPs that contain adequate
provisions prohibiting any source or other type of emissions activity
within the state from emitting any air pollutant in amounts which will
contribute significantly to nonattainment in, or interfere with
maintenance by, any other state with respect to that NAAQS. As
described further in Section III.C, the EPA has developed a number of
regional rulemakings to address CAA section 110(a)(2)(D)(i)(I) for the
various ozone NAAQS. The EPA's most recent rulemaking, the CSAPR
Update, was promulgated to address interstate transport under section
110(a)(2)(D)(i)(I) for the 2008 ozone NAAQS. 81 FR 74504 (October 26,
2016). The EPA notes that the petitions from both states were submitted
before the implementation of the emissions budgets promulgated in the
CSAPR Update.
C. The EPA's Historical Approach To Addressing Interstate Transport of
Ozone Under the Good Neighbor Provision
Given that formation, atmospheric residence, and transport of ozone
occur on a regional scale (i.e., hundreds of miles) over much of the
eastern U.S., the EPA has historically addressed interstate transport
of ozone pursuant to the good neighbor provision through a series of
regional rulemakings focused on the reduction of NOX
emissions. In developing these rulemakings, the EPA has typically found
that downwind states' problems attaining and maintaining the ozone
NAAQS result, in part, from the contribution of pollution from multiple
upwind sources located in different upwind states.
The EPA has promulgated four regional interstate transport
rulemakings that have addressed the good neighbor provision with
respect to various ozone NAAQS considering the regional nature of ozone
transport. Each of these rulemakings essentially followed the same
four-step framework to quantify and implement emissions reductions
necessary to address the interstate transport requirements of the good
neighbor provision. These steps are:
(1) Identifying downwind air quality problems relative to the ozone
NAAQS. The EPA has identified downwind areas with air quality problems
(referred to as ``receptors'') considering monitored ozone data where
appropriate and air quality modeling projections to a future compliance
year. Pursuant to the opinion in North Carolina v. EPA, 531 F.3d 896,
908-911 (D.C. Cir. 2008), the agency identified areas expected to be in
nonattainment with the ozone NAAQS and those areas that may struggle to
maintain the NAAQS;
(2) determining which upwind states are linked to these identified
downwind air quality problems and warrant further analysis to determine
whether their emissions violate the good neighbor provision. In the
EPA's most recent rulemakings, the EPA identified such upwind states to
be those modeled to contribute at or above a threshold equivalent to
one percent of the applicable NAAQS.
(3) for states linked to downwind air quality problems, identifying
upwind emissions on a statewide basis that will significantly
contribute to nonattainment or interfere with maintenance of a
standard. In all four of the EPA's prior rulemakings, the EPA
apportioned emissions reduction responsibility among multiple upwind
states linked to downwind air quality problems using cost- and air
quality-based criteria to quantify the amount of a linked upwind
state's emissions that must be prohibited pursuant to the good neighbor
provision; and
(4) for states that are found to have emissions that significantly
contribute to nonattainment or interfere with maintenance of the NAAQS
downwind, implementing the necessary emissions reductions within the
state. The EPA has done this for its federal implementation plans
(FIPs) addressing the good neighbor provision for the ozone NAAQS by
requiring affected sources in upwind states to participate in allowance
trading programs to achieve the necessary emissions reductions.\4\
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\4\ While the EPA has chosen to implement emission reductions
through allowance trading programs for states found to have a
downwind impact, upwind states can choose to submit a SIP that
implements such reductions through other enforceable mechanisms that
meets the requirements of the good neighbor provision.
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The EPA's first such rulemaking, the NOX SIP Call,
addressed interstate transport with respect to the 1979 ozone NAAQS. 63
FR 57356 (October 27, 1998). The EPA concluded in the NOX
SIP Call that ``[t]he fact that virtually every nonattainment problem
is caused by numerous sources over a wide geographic area is a factor
suggesting that the solution to the problem is the implementation over
a wide area of controls on many sources, each of which may have a small
or unmeasurable ambient impact by itself.'' 63 FR 57356, 57377 (October
27, 1998). The NOX SIP Call promulgated statewide emissions
budgets and required upwind states to adopt SIPs that would decrease
NOX emissions by amounts that would meet these budgets,
thereby eliminating the emissions that significantly contribute to
nonattainment or interfere with maintenance of the ozone NAAQS in
downwind states. The EPA also promulgated a model rule for a regional
allowance trading program called the NOX Budget Trading
Program that states could adopt in their SIPs as a mechanism to achieve
some or all of the required emissions reductions. All of the
jurisdictions covered by the NOX SIP Call ultimately chose
to adopt the NOX Budget Trading Program into their SIPs. The
NOX SIP Call was upheld by the U.S. Court of Appeals for the
District of Columbia Circuit (D.C. Circuit) in all pertinent respects.
See Michigan v. EPA, 213 F.3d 663 (2000).
In coordination with the NOX SIP Call rulemaking under
CAA section 110(a)(2)(D)(i)(I), the EPA also addressed several pending
CAA section 126(b) petitions submitted by eight northeastern states
regarding the same air quality issues addressed by the NOX
SIP Call (i.e., interstate ozone transport for the 1979 ozone NAAQS).
These CAA section 126(b) petitions asked the EPA to find that ozone
emissions from numerous sources located in 22 states and the District
of Columbia had adverse air quality impacts on the petitioning downwind
states. Based on technical determinations made in the NOX
SIP Call regarding upwind state impacts on downwind air quality, the
EPA in May 1999 made technical determinations regarding the claims in
the petitions, but did not at that time make the CAA section 126(b)
findings requested by the petitions. 64 FR 28250 (May 25, 1999). In
making these technical determinations, the EPA concluded that the
NOX SIP Call would fully address and remediate the claims
raised in these petitions, and that the EPA would therefore not need to
take separate action to remedy any potential violations of the CAA
section 110(a)(2)(D)(i) prohibition. 64 FR 28252. However, subsequent
litigation over the NOX SIP Call led the EPA to ``de-link''
the CAA section 126(b) petition response from the NOX SIP
Call; the EPA made final CAA section 126(b)
[[Page 26669]]
findings for 12 states and the District of Columbia. The EPA found that
sources in these states emitted in violation of the prohibition in the
good neighbor provision with respect to the 1979 ozone NAAQS based on
the affirmative technical determinations made in the May 1999
rulemaking. In order to remedy the violation under CAA section 126(c),
the EPA required affected sources in the upwind states to participate
in a regional allowance trading program whose requirements were
designed to be interchangeable with the requirements of the optional
NOX Budget Trading Program model rule provided under the
NOX SIP Call. 65 FR 2674 (January 18, 2000). The EPA's
action on these section 126(b) petitions was upheld by the D.C.
Circuit. See Appalachian Power Co. v. EPA, 249 F.3d 1032 (D.C. Cir.
2001).
The EPA next promulgated the Clean Air Interstate Rule (CAIR) to
address interstate transport under the good neighbor provision with
respect to the 1997 ozone NAAQS, as well as the 1997 fine particulate
matter (PM2.5) NAAQS. The EPA adopted the same framework for
quantifying the level of states' significant contribution to downwind
nonattainment in CAIR as it used in the NOX SIP Call, based
on the determination in the NOX SIP Call that downwind ozone
nonattainment is due to the impact of emissions from numerous upwind
sources and states. 70 FR 25162, 25172 (May 12, 2005). The EPA
explained that ``[t]ypically, two or more States contribute transported
pollution to a single downwind area, so that the `collective
contribution' is much larger than the contribution of any single
State.'' 70 FR 25186. CAIR included two distinct regulatory processes:
(1) A regulation to define significant contribution (i.e., the
emissions reduction obligation) under the good neighbor provision and
provide for submission of SIPs eliminating that contribution, 70 FR
25162 (May 12, 2005); and (2) a regulation to promulgate, where
necessary, FIPs imposing emissions limitations, 71 FR 25328 (April 28,
2006). The FIPs required EGUs in affected states to participate in
regional allowance trading programs, which replaced the previous
NOX Budget Trading Program.
In conjunction with the second CAIR regulation promulgating FIPs,
the EPA acted on a CAA section 126(b) petition received from the state
of North Carolina on March 19, 2004, seeking a finding that large EGUs
located in 13 states were significantly contributing to nonattainment
and/or interfering with maintenance of the 1997 ozone NAAQS and the
1997 PM2.5 NAAQS in North Carolina. Citing the analyses
conducted to support the promulgation of CAIR, the EPA denied North
Carolina's CAA section 126(b) petition in full based on a determination
that either the named states were not adversely impacting downwind air
quality in violation of the good neighbor provision or such impacts
were fully remedied by implementation of the emissions reductions
required by the CAIR FIPs. 71 FR 25328, 25330 (April 28, 2006).
The D.C. Circuit found that EPA's approach to section
110(a)(2)(D)(i)(I) in CAIR was ``fundamentally flawed'' in several
respects, and the rule was remanded in July 2008 with the instruction
that the EPA replace the rule ``from the ground up.'' North Carolina v.
EPA, 531 F.3d at 929. The decision did not find fault with the EPA's
general multi-step framework for addressing interstate ozone transport,
but rather concluded the EPA's analysis did not address all elements
required by the statute. The EPA's separate action denying North
Carolina's CAA section 126(b) petition was not challenged.
On August 8, 2011, the EPA promulgated the Cross-State Air
Pollution Rule (CSAPR) to replace CAIR. 76 FR 48208 (August 8, 2011).
CSAPR addressed the same ozone and PM2.5 NAAQS as CAIR and,
in addition, addressed interstate transport for the 2006
PM2.5 NAAQS by requiring 28 states to reduce sulfur dioxide
(SO2) emissions, annual NOX emissions, and/or
ozone season NOX emissions that would significantly
contribute to other states' nonattainment or interfere with other
states' abilities to maintain these air quality standards. Consistent
with prior determinations made in the NOX SIP Call and CAIR,
the EPA again found that multiple upwind states contributed to downwind
ozone nonattainment. Specifically, the EPA found ``that the total
`collective contribution' from upwind sources represents a large
portion of PM2.5 and ozone at downwind locations and that
the total amount of transport is composed of the individual
contribution from numerous upwind states.'' 76 FR 48237. Accordingly,
the EPA conducted a regional analysis, calculated emissions budgets for
affected states, and required EGUs in these states to participate in
new regional allowance trading programs to reduce statewide emissions
levels. CSAPR was subject to nearly 4 years of litigation. Ultimately,
the Supreme Court upheld the EPA's approach to calculating emissions
reduction obligations and apportioning upwind state responsibility
under the good neighbor provision, but also held that the EPA was
precluded from requiring more emissions reductions than necessary to
address downwind air quality problems, or ``over-controlling.'' See EPA
v. EME Homer City Generation, L.P., 134 S. Ct. 1584, 1607-09 (2014).\5\
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\5\ On remand from the Supreme Court, the D.C. Circuit further
affirmed various aspects of the CSAPR, while remanding the rule
without vacatur for reconsideration of certain states' emissions
budgets, where it found those budgets ``over-controlled'' emissions
beyond what was necessary to address the good neighbor requirement.
EME Homer City Generation, L.P. v. EPA, 795 F.3d 118 (2015). The EPA
addressed the remand in several rulemaking actions in 2016 and 2017.
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Most recently, the EPA promulgated the CSAPR Update to address the
good neighbor provision requirements for the 2008 ozone NAAQS. 81 FR
74504 (October 26, 2016). The final CSAPR Update built upon previous
efforts to address the collective contributions of ozone pollution from
22 states in the eastern U.S. to widespread downwind air quality
problems, including the NOX SIP Call, CAIR, and the original
CSAPR. As was also the case for the previous rulemakings, the EPA
identified emissions from large EGUs as significantly contributing and/
or interfering with maintenance based on cost and air quality factors.
The CSAPR Update finalized EGU NOX ozone season emissions
budgets for affected states that were developed using uniform control
stringency available at a marginal cost of $1,400 per ton of
NOX reduced. This level of control stringency represented
ozone season NOX reductions that could be achieved in the
2017 analytic year, which was relevant to the upcoming 2018 attainment
date for moderate ozone nonattainment areas, and included the potential
for operating and optimizing existing selective catalytic reduction
(SCR) post-combustion controls; installing state-of-the-art
NOX combustion controls; and shifting generation to existing
units with lower NOX emissions rates within the same state.
The CSAPR Update finalized enforceable measures necessary to
achieve the emission reductions in each state by requiring power plants
in covered states to participate in the CSAPR NOX Ozone
Season Group 2 allowance trading program. The CSAPR trading programs
and the EPA's prior emissions trading programs (e.g., the
NOX Budget Trading Program associated with the
NOX SIP Call) have provided a proven, cost-effective
implementation framework for achieving emissions reductions. In
addition to providing environmental certainty (i.e., a cap on regional
and statewide emissions), these programs have also provided regulated
sources with flexibility when choosing
[[Page 26670]]
compliance strategies. This implementation approach was shaped by
previous rulemakings and reflects the evolution of these programs in
response to court decisions and practical experience gained by states,
industry, and the EPA.
In finalizing the CSAPR Update, the EPA determined the rule may
only be a partial resolution of the good neighbor obligation for all
but one of the states subject to that action, including those addressed
in Delaware's and Maryland's petitions (Indiana, Kentucky, Ohio,
Pennsylvania, and West Virginia), and that the emissions reductions
required by the rule ``may not be all that is needed'' to address
transported emissions.\6\ 81 FR 74521-22 (October 26, 2016). The EPA
noted that the information available at that time indicated that
downwind air quality problems would remain in 2017 after implementation
of the CSAPR Update, and that upwind states continued to be linked to
those downwind problems at or above the one-percent threshold. However,
the EPA could not determine whether, at step three of the four-step
framework, the EPA had quantified all emissions reductions that may be
considered highly cost effective because the rule did not evaluate non-
EGU ozone season NOX reductions and further EGU control
strategies (i.e., the implementation of new post-combustion controls)
that are achievable on timeframes extending beyond 2017 analytic year.
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\6\ The EPA determined that the emission reductions required by
the CSAPR Update satisfied the full scope of the good neighbor
obligation for Tennessee with respect to the 2008 ozone NAAQS. 81 FR
74551-52.
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Of particular relevance to this action, the EPA determined in the
CSAPR Update that emissions from the states identified in Maryland's
petition were linked to maintenance concerns for the 2008 ozone NAAQS
in Maryland based on air quality modeling projections to 2017. 81 FR
74538-39. With respect to Delaware, the EPA in the CSAPR Update did not
identify any downwind air quality problems in Delaware with respect to
the 2008 ozone NAAQS, and, therefore, did not determine that emissions
from any of the states identified in the four petitions would be linked
to Delaware. The CSAPR Update modeling indicated no monitors in
Delaware with a projected average or maximum design value above the
level of the 2008 ozone NAAQS in 2017.\7\
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\7\ See modeling conducted for purposes of the proposed CSAPR
Update in 2015. 80 FR 75706, 75725-726 (December 3, 2015).
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For states linked to downwind air quality problems, the EPA in the
CSAPR Update found there were cost-effective emissions reductions that
could be achieved within upwind states at a marginal cost of $1,400 per
ton, quantified an emissions budget for each state based on that level
of control potential, and required EGUs located within the state,
including the sources identified in Maryland and Delaware's petitions,
to comply with the EPA's allowance trading program under the CSAPR
Update beginning with the 2017 ozone season. The EPA found that these
emissions budgets were necessary to achieve the required emissions
reductions and mitigate impacts on downwind states' air quality in time
for the July 2018 moderate area attainment date for the 2008 ozone
NAAQS.
D. The CAA Section 126(b) Petitions From Delaware
In 2016, the state of Delaware, through the Delaware Department of
Natural Resources and Environmental Control (Delaware), submitted four
petitions claiming that four individual sources in Pennsylvania and
West Virginia significantly contribute to Delaware's nonattainment of
the 2008 and 2015 8-hour ozone NAAQS. In particular, Delaware's
petitions allege that emissions from the Harrison Power Station
(Harrison), the Homer City Generating Station (Homer City), and the
Brunner Island Steam Generating Station (Brunner Island) in
Pennsylvania, and the Conemaugh Generating Station (Conemaugh) in West
Virginia, significantly contribute to exceedances of the 2008 8-hour
ozone NAAQS in the state of Delaware. The petitions identify a total of
59 exceedance days in the six ozone seasons between 2010 and 2015.
Furthermore, Delaware contends that if the 2015 8-hour ozone NAAQS had
been in effect during this period, Delaware would have experienced a
total of 113 exceedance days in those ozone seasons. Notably, Harrison
is equipped with low NOX burners (LNBs), overfire air (OFA),
and SCR for control of NOX emissions at all three units.
Homer City is equipped with LNBs, OFA, and SCR for control of
NOX emissions at all three units. Conemaugh is equipped with
LNBs, close-coupled and separated overfire air (CC/SOFA), and SCR for
control of NOX emissions at both units. Brunner Island is
equipped with LNBs and combustion air controls.
1. Common Arguments in Delaware Petitions
Each of the Delaware petitions alleges that an individual source
significantly contributes to nonattainment of the 2008 and 2015 8-hour
ozone NAAQS in Delaware based on two common arguments. First, all four
petitions allege that the EPA's modeling conducted in support of the
CSAPR Update shows that the states in which these sources are located
contribute one percent or more of the 2008 8-hour ozone NAAQS to ozone
concentrations in Delaware. Second, all four petitions point to
additional modeling for support. The Brunner Island and Harrison
petitions cite an August 6, 2015, technical memorandum from Sonoma
Technology, Inc. (STI), which describes contribution modeling conducted
with respect to Brunner Island. The Conemaugh and Homer City petitions
cite October 24, 2016, CAMx modeling documentation. Delaware did not
provide the EPA with this documentation. Based on this modeling, the
petitions claim that all four sources had modeled contributions above
one percent of the 2008 8-hour ozone NAAQS to locations in Delaware on
select days during the 2011 ozone season.
All four petitions also contend that the absence of short-term
NOX emissions limits causes the named sources to
significantly contribute to Delaware's nonattainment of the 2008 and
2015 ozone NAAQS. The petitions, therefore, ask the EPA to implement
short-term NOX emissions limits as a remedy under CAA
section 126(c). The petitions identify existing regulatory programs
aimed at limiting NOX emissions at the sources, but argue
that these programs are not effective at preventing emissions from
significantly contributing to downwind air quality problems in
Delaware. In the case of Brunner Island, Homer City, and Conemaugh,
Delaware argues that the Pennsylvania NOX reasonable
available control technology (RACT) regulation includes a 30-day
averaging period for determining emissions rates, which will allow the
facilities to emit above the rate limit on specific days while still
meeting the 30-day average limit. Furthermore, the state argues that
although all four facilities named in Delaware's petitions have been
subject to several NOX emissions cap-and-trade programs that
effectively put a seasonal NOX emissions mass cap on the
fleet of subject units, the subject units are not required to limit
their NOX emissions over any particular portion of the ozone
season as long as they are able to obtain sufficient NOX
allowances to cover each unit's actual ozone season NOX mass
emissions. The state alleges that the sources have been able to attain
compliance without having to make any
[[Page 26671]]
significant reductions in their ozone season average NOX
emissions rates. Delaware also acknowledges that Brunner Island can use
natural gas as fuel at all three units, lowering the units'
NOX emissions, but argues that Brunner Island's ability to
also use coal indicates that, without a short-term NOX
emissions limit, the units will continue to significantly contribute to
nonattainment or interfere with maintenance of the ozone NAAQS in
Delaware. In the case of Conemaugh, Harrison, and Homer City, Delaware
similarly contends that current NOX emissions regulations
applicable to sources in Pennsylvania and West Virginia do not prevent
significant contribution to Delaware's nonattainment of the ozone
NAAQS. As indicated in this notice, unlike Brunner Island, these
sources all have SCR to control NOX emissions. Delaware
argues that a review of emissions rates since the SCRs were installed
indicates that the SCRs are being turned off or operated at reduced
levels of effectiveness in the ozone season. Thus, in Delaware's view,
these sources also need a short-term NOX emissions limit to
incentivize effective and consistent NOX control operation.
The following sections describe additional information Delaware
provided in each specific petition.
2. Delaware's Petition Regarding the Harrison Power Station
Delaware's August 8, 2016 CAA section 126(b) petition addresses the
Harrison Power Station,\8\ identified as a 2,052-megawatt facility
located near Haywood, Harrison County, West Virginia, with three coal-
fired steam EGUs. To support its petition, Delaware states that, based
on the STI modeling, the Harrison Power Station had a modeled impact
above one percent of the NAAQS on August 10, 2011. Delaware further
states that a review of emissions data indicates that the facility
emitted 61.588 tons of NOX on that day. Delaware concludes
that emissions data indicate that daily ozone season NOX
emissions from the Harrison Power Station frequently exceed the 61.588
tons/day value that the petition estimated had a significant impact on
Delaware's monitors.
---------------------------------------------------------------------------
\8\ See Petition from the state of Delaware under CAA section
126(b) requesting that the EPA find that Harrison Power Station's
EGUs are emitting air pollutants in violation of the provisions of
CAA section 110(a)(2)(D)(i) of the CAA with respect to the 2008 and
the 2015 ozone NAAQS, available in the docket for this action.
---------------------------------------------------------------------------
Delaware indicates that the Harrison Power Station is subject to
operating permit NOX emissions rate limits and has been
subject to various NOX emissions allowance trading programs,
which Delaware asserts put a seasonal NOX emissions mass cap
on the fleet of subject units. Delaware asserts, however, that these
programs do not require the subject units to limit their NOX
emissions over any particular portion of the ozone season as long as
each EGU is able to obtain sufficient NOX allowances to
balance that unit's actual ozone season NOX mass emissions.
Delaware further indicates that the Harrison Power Station's owner has
submitted a permit amendment to install and operate a refined coal
facility to produce lower-emitting coal as fuel for combustion in the
Harrison Power Station's coal-fired EGU steam generators. The amendment
includes ozone season NOX emissions rate limits of 0.20 lb/
MMBTU, 30-day average, for each of the three coal-fired EGUs.\9\
---------------------------------------------------------------------------
\9\ Delaware states that as of the preparation of this petition,
this permit amendment has not been approved and is therefore not yet
in force.
---------------------------------------------------------------------------
According to Delaware, from the 2010 ozone season and beyond, the
ozone season average NOX emissions rates for each of the
three Harrison Power Station coal-fired EGUs were well above what might
be expected from coal-fired EGUs with operating SCRs. Delaware contends
these existing NOX emissions rate limits and seasonal
NOX mass emissions regulatory requirements have not been
sufficient to result in consistently low NOX emissions rates
from the Harrison Power Station EGUs. Moreover, Delaware claims that
emissions data indicate that decisions to operate the SCR
NOX controls at the Harrison Power Station at reduced levels
of effectiveness are made on both a seasonal and daily basis as a
result of other EGU operating influences.
3. Delaware's Petition Regarding the Homer City Generating Station
Delaware's November 10, 2016, CAA section 126(b) petition cites the
Homer City Generating Station,\10\ identified as a 2,012-megawatt
facility located in Indiana County, Pennsylvania, with three coal-fired
steam generators. To support their petition, Delaware states that,
based on the STI modeling, the Homer City Generating station had a
modeled impact above one percent of the NAAQS on July 18, 2011.
Delaware further states that a review of the Homer City Generating
Station's emissions data indicates that, on that day, the facility
emitted 38.153 tons of NOX. Delaware claims that between
2011 and 2016 the facility exceeded emissions of 38.153 tons/day on
multiple days. Thus, Delaware claims that, while weather patterns
affect the frequency and magnitude of the impacts that the Homer City
Generating Station's NOX emissions have on Delaware's air
quality, the data provide an indication that the NOX
emissions from the Homer City Generating Station have historically been
at levels sufficient to have a significant impact.
---------------------------------------------------------------------------
\10\ See Petition from the state of Delaware under CAA section
126(b) requesting that the EPA find that Homer City Generating
Station's EGUs are emitting air pollutants in violation of the
provisions of CAA section 110(a)(2)(D)(i) of the CAA with respect to
the 2008 and the 2015 ozone NAAQS, available in the docket for this
action.
---------------------------------------------------------------------------
4. Delaware's Petition Regarding the Conemaugh Generating Station
Delaware's November 28, 2016, CAA section 126(b) petition cites the
Conemaugh Generating Station,\11\ identified as a 1,872-megawatt
facility located in Indiana County, Pennsylvania, with two coal-fired
steam electric generating units. To support its petition, Delaware
states that, based on the STI modeling, the Conemaugh Generating
Station had a modeled impact above one percent on ten separate days in
2011, which coincided with daily NOX mass emissions from
Conemaugh ranging between 54.516 and 67.173 tons. Furthermore, Delaware
indicated that Delaware monitors were exceeding the 2008 ozone NAAQS on
eight of the days in 2011 with alleged significant impacts. Delaware
analyzed air parcel trajectories modeled with the Hybrid Single
Particle Lagrangian Integrated Trajectory (HYSPLIT) on selected days on
which the state alleged it experienced significant impacts from the
source. According to Delaware, these trajectories indicating
contribution from Conemaugh's NOX emissions, which coincided
with the STI model's estimated ozone impact events, show that emissions
from Conemaugh are significantly contributing to ozone concentrations
in Delaware.
---------------------------------------------------------------------------
\11\ See Petition from the state of Delaware under CAA section
126(b) requesting that the EPA find that Conemaugh Generating
Station's EGUs are emitting air pollutants in violation of the
provisions of CAA section 110(a)(2)(D)(i) of the CAA with respect to
the 2008 and the 2015 ozone NAAQS, available in the docket for this
action.
---------------------------------------------------------------------------
5. Delaware's Petition Regarding the Brunner Island Electric Steam
Station
Delaware's July 7, 2016, CAA section 126(b) petition cites
emissions from the Brunner Island Electric Steam Station,\12\ a 1,411-
megawatt facility located in
[[Page 26672]]
York County, Pennsylvania with three tangentially-fired steam boiler
EGUs, each equipped with low NOX burner technology with
closed-coupled/separated over fire air (LNC3) combustion controls.\13\
---------------------------------------------------------------------------
\12\ See Petition from the state of Delaware under CAA section
126(b) requesting that the EPA find that Brunner Island Facility's
EGUs are emitting air pollutants in violation of the provisions of
section 110(a)(2)(D)(i) of the CAA with respect to the 2008 and the
2015 ozone NAAQS, available in the docket for this action.
\13\ For tangentially-fired boiler types, LNC3 is state of the
art control technology. See sections 3.9.2 and 5.2.1 on pages 3-25
and 5-5 of the Integrated Planning Model (IPM) 5.13 documentation
for details about combustion controls. The IPM documentation is
available at https://www.epa.gov/airmarkets/power-sector-modeling-platform-v513.
---------------------------------------------------------------------------
According to Delaware, a modeling analysis conducted by STI
estimated that during the 2011 ozone season the Brunner Island
facility's NOX emissions had a significant impact on
Delaware's ambient ozone on 43 separate days relative to the 2015 8-
hour ozone NAAQS of 70 ppb and on 41 separate days relative to the 2008
8-hour ozone NAAQS of 75 ppb. The highest estimated impact was
predicted on June 8, 2011, with a modeled impact value of 4.83 ppb.
Delaware states that the data also indicate that Brunner Island
facility NOX emissions contributed at significant levels to
ozone NAAQS exceedances in Delaware on 9 of the 15 days in 2011.
However, Delaware does not identify which of the identified days were
exceedance days or the specific ozone NAAQS exceeded. Delaware also
notes that the STI modeling information and Air Markets Program Data
(AMPD) emissions data indicate that on September 13, 2011, Brunner
Island had a modeled impact on Delaware ozone approximately twice the
value identified as the threshold for significant impact (1.41 ppb
estimated impact compared to 0.70 ppb for significant impact).
According to the petition, this impact was caused by emissions
amounting to about half of the facility's recorded peak daily
NOX, and is an indication that even lower amounts of Brunner
Island facility NOX mass emissions (compared to the 27.4
tons/day value documented in the EPA's AMPD) may still have significant
impact on Delaware's measured ozone levels under certain atmospheric
conditions. However, the petition does not identify whether September
13, 2011, was a day that exceeded the 2008 ozone NAAQS.
6. Subsequent Actions and Correspondence Regarding the Delaware
Petitions
Subsequent to receiving the petitions, the EPA published final
rules extending the statutory deadline for the agency to take final
action on all four of Delaware's section 126(b) petitions. Section
126(b) of the Act requires the EPA to either make a finding or deny a
petition within 60 days of receipt of the petition and after holding a
public hearing. However, any action taken by the EPA under CAA section
126(b) is subject to the procedural requirements of CAA section 307(d).
See CAA section 307(d)(1)(N). This section of the CAA requires the EPA
to conduct notice-and-comment rulemaking, including issuance of a
notice of proposed action, a period for public comment, and a public
hearing before making a final determination whether to make the
requested finding. In light of the time required for notice-and-comment
rulemaking, CAA section 307(d)(10) provides for a time extension, under
certain circumstances, for rulemakings subject to the section 307(d)
procedural requirements. In accordance with CAA section 307(d)(10), the
EPA determined that the 60-day period for action on Delaware's
petitions would be insufficient for the EPA to complete the necessary
technical review, develop an adequate proposal, and allow time for
notice and comment, including an opportunity for public hearing.
Therefore, on August 23, 2016, the EPA published a notice extending the
deadline to act on Delaware's Brunner Island petition to March 5,
2017.\14\ On September 27, 2016, the EPA published a notice extending
the deadline to act on Delaware's Harrison Power Station petition to
April 7, 2017.\15\ On December 29, 2016, the EPA published a notice
extending the deadline to act on Delaware's Homer City petition to July
9, 2017.\16\ On January 23, 2017, the EPA published a notice extending
the deadline to act on Delaware's Conemaugh petition to August 3,
2017.\17\ The notices extending these deadlines can be found in the
docket for this rulemaking.
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\14\ 81 FR 57461 (August 23, 2016).
\15\ 81 FR 66189 (September 27, 2016).
\16\ 81 FR 95884 (December 29, 2016).
\17\ 82 FR 7595 (January 23, 2017).
---------------------------------------------------------------------------
On March 5, 2017, the Chesapeake Bay Foundation (CBF) submitted a
letter in support of Delaware's petition regarding Brunner Island. The
CBF supports Delaware's argument that emissions from the named coal-
fired EGUs significantly contribute to nonattainment and interfere with
maintenance of the ozone NAAQS in Delaware. On April 11, 2017, the CBF
sent a second letter in support of Delaware's petition regarding
Harrison. The CBF supports Delaware's argument that emissions data
since 2011 demonstrate that Harrison's operators have either ceased to
operate the SCR systems regularly or have chosen to operate them in a
sub-optimal manner. In both letters, the CBF argued that the EPA should
implement an emissions rate limit at both facilities based on short
averaging periods and indicated that Delaware's proposed remedy would
help reduce nitrogen deposition to the Chesapeake Bay watershed, with
beneficial effects upon the health of the Bay.
On June 20, 2017, the Midwest Ozone Group (MOG) submitted a letter
urging the EPA to deny the Conemaugh petition and asserted that
Delaware does not have ozone nonattainment or maintenance problems upon
which to base a CAA section 126(b) petition. The MOG contends that
Delaware air quality currently meets the 2008 8-hour ozone NAAQS, was
projected to attain the standard in 2017 \18\, and will continue to
improve with the implementation of existing regulatory programs. The
MOG also suggests that the EPA cannot grant a CAA section 126(b)
petition for the 2015 ozone NAAQS until after the EPA has issued
designations for that standard.
---------------------------------------------------------------------------
\18\ Note that the EPA designated certain areas of Delaware
nonattainment for the 2008 ozone NAAQS. 77 FR 30088 (May 21, 2012).
---------------------------------------------------------------------------
The EPA acknowledges receipt of these letters and has made them
available in the docket for this action. However, the EPA is not in
this action responding directly to these letters. Rather, the EPA
encourages interested parties to review this proposal and then submit
relevant comments during the public comment period.
E. The CAA Section 126(b) Petition From Maryland
On November 16, 2016, the state of Maryland, through the Maryland
Department of the Environment, submitted a CAA section 126(b) petition
alleging that emissions from 36 EGUs significantly contribute to ozone
levels that exceed the 2008 ozone NAAQS in Maryland and therefore
interfere with both attainment and maintenance of the NAAQS.\19\ These
sources are coal-fired EGUs located in Indiana, Kentucky, Ohio,
Pennsylvania, and West Virginia, which Maryland notes are states that
EPA has already determined are significantly contributing to
nonattainment in Maryland under the 2008 ozone NAAQS. Maryland
indicates that all of these sources have SCR or
[[Page 26673]]
Selective Non-Catalytic Reduction (SNCR) to control NOX
emissions. In addition, Maryland's technical support document discusses
modeling conducted by the University of Maryland, which claims to show
that ozone concentrations would reduce if these EGUs were to optimize
running their SCR and SNCR controls, and provides control optimization
modeling scenarios which project the ozone impacts of optimizing
emissions controls in 2018. Maryland suggests, by way of using its own
state regulation as an example, that optimizing controls means
operating controls consistent with technological limitations,
manufacturers' specifications, good engineering and maintenance
practices, and good air pollution control practices for minimizing
emissions.
---------------------------------------------------------------------------
\19\ See Petition to the United States Environmental Protection
Agency Pursuant to Section 126 of the Clean Air Act for Abatement of
Emissions from 36 Coal-Fired Electric Generating Units at 19 Plants
in Five States that Significantly Contribute to Nonattainment of,
and Interfere with Maintenance of, the 2008 Ozone National Ambient
Air Quality Standard in the State of Maryland, available in the
docket for this action.
---------------------------------------------------------------------------
The petition further alleges that Maryland's proposed remedy--
discussed further below--will influence how areas in Maryland and other
Mid-Atlantic states are designated under the new 2015 ozone NAAQS.
According to Maryland, the proposed remedy, if implemented in 2017,
would most likely allow the Baltimore area and the Washington, DC,
multi-state area, which includes portions of Maryland, to both be
designated attainment for the 2015 ozone NAAQS. The EPA notes that the
cover letter of Maryland's petition specifically requests that EPA make
a finding ``that the 36 electric generating units (EGUs) . . . are
emitting pollutants in violation of the provisions of Section
110(a)(2)(D)(i)(I) of the CAA with respect to the 2008 ozone National
Ambient Air Quality Standards,'' and the petition throughout refers
only to the 2008 ozone NAAQS when identifying alleged air quality
problems in Maryland and the impacts from upwind sources. Accordingly,
while Maryland suggests that its requested remedy for 2008 ozone will
assist in achieving attainment of the 2015 ozone NAAQS, the state has
not specifically requested that EPA make a finding with respect to the
2015 ozone NAAQS, and, therefore, the EPA is not evaluating the
petition for this standard.
Maryland alleges that, although the 36 EGUs have existing post-
combustion control mechanisms that should prevent significant
contribution, the facilities have either ceased to operate the controls
regularly during the ozone season or have chosen to operate them in a
sub-optimal manner. Maryland presents an analysis based on 2005-2015
ozone season data to support this contention.\20\ Maryland argues that
whether controls are optimally run can be determined by comparing
current ozone season average emissions rates to the lowest ozone season
average emissions rate after 2005 or after the unit installed SCR or
SNCR. Maryland alleges that NOX emissions rates at the 36
facilities have increased significantly since the SCR and SNCR
installation and initial testing, indicating that these EGUs are not
operating their post-combustion controls efficiently on each day of the
ozone season.
---------------------------------------------------------------------------
\20\ Maryland Petition, Appendix A, Part 2, available in the
docket for this action.
---------------------------------------------------------------------------
Maryland also submitted a number of technical memoranda to support
its argument. Maryland submitted analyses of control technology
optimization for coal-fired EGUs in eastern states, which they contend
demonstrate that NOX emissions rates at specific EGUs are
well above what is considered representative of an EGU running post-
combustion controls efficiently; that 2015 and 2016 EPA data show that
many EGUs have not been running their post combustion controls as
efficiently as they have in the past during the ozone season; and that
the EPA should therefore ensure these controls are operating during the
2017 ozone season by including requirements or permit conditions
requiring each named EGU to minimize emissions by optimizing existing
control technologies, enforced through use of a 30-day rolling average
rate.\21\
---------------------------------------------------------------------------
\21\ See id.
---------------------------------------------------------------------------
Maryland also submitted the following documents: A review of its
own NOX regulations for coal fired EGUs; \22\ a detailed
study conducted by Maryland and the University of Maryland regarding
regional ozone transport research and analysis efforts in Maryland;
\23\ an August 6, 2015, STI report alleging that source apportionment
modeling indicates that emissions from Brunner Island (a source not
specifically addressed in Maryland's petition) contribute significantly
to ozone formation in Pennsylvania and neighboring states during the
modeled ozone season; \24\ a list of recommended language for the EPA
to include in federal orders related to the named EGUs to remedy
significant contribution; \25\ and an evaluation of cost savings
Maryland alleges the units have incurred in 2014 by not fully running
their controls compared with the cost of running their controls at full
efficiency.\26\ As discussed previously, Maryland also submitted a
memorandum detailing modeling analyses conducted by the University of
Maryland, which presents projected reductions in ozone concentrations
in Maryland that would occur as a result of optimized SCR and SNCR
operations at the 36 sources named in Maryland's petition.\27\ Maryland
argues that these projected reductions in ozone concentrations at
Maryland monitors demonstrate that optimizing the post-combustion
controls at the 36 units with SCR or SNCR would allow Maryland to
attain, or come very close to attaining, the 2008 8-hour ozone NAAQS.
---------------------------------------------------------------------------
\22\ Id. Appendix B.
\23\ Id. Appendix C.
\24\ Id. Appendix D.
\25\ Id. Appendix E.
\26\ Id. Appendix F.
\27\ Id. Appendix D.
---------------------------------------------------------------------------
Additionally, Maryland supplemented its petition with several
further appendices submitted in 2017. Maryland submitted an additional
optimization analysis comparing NOX emissions rates in 2006,
2015, and 2016 for EGUs listed in its petition; \28\ a comparison of
2016 ozone season average emissions rates to the lowest demonstrated
ozone season average emissions rates between 2005 and 2015 at 369 coal-
fired EGUs in 29 states identified as the Eastern Modeling Domain; \29\
a comparison of average emissions data at 21 units in Pennsylvania in
the first quarter of 2017 to the lowest demonstrated ozone season
average emissions rate between 2005-2016; \30\ and additional
photochemical modeling conducted by the University of Maryland of the
impact of the 36 EGUs in the five states on ozone concentrations in
Maryland, which concludes that emissions from these units significantly
contribute to ozone concentrations in Maryland and therefore contribute
to nonattainment and interfere with the maintenance of the 8-hour ozone
NAAQS.\31\
---------------------------------------------------------------------------
\28\ Id. Supplemental Appendix A.
\29\ Id. Supplemental Appendix B.
\30\ Id. Supplemental Appendix C.
\31\ Id. Supplemental Appendix D.
---------------------------------------------------------------------------
Maryland's petition also requests a remedy that will compel the
named units to optimize their SCR and SNCR. Maryland indicates that its
petition is focused on ensuring controls are run at the units every day
of the ozone season. According to Maryland, the CSAPR Update, earlier
federal allowance trading programs, and many state regulations allow
for longer term averaging, which means that controls do not necessarily
need to be run effectively every day to comply with these requirements.
Maryland claims that this has resulted in situations where sources in
the five upwind states have not run their controls efficiently on many
days with high ozone, and, therefore, these sources are impacting
[[Page 26674]]
Maryland in violation of CAA section 110(a)(2)(D)(i)(I). Maryland also
claims that, on some of those days, the 36 EGUs in these states emitted
in the aggregate over 300 more tons of NOX than they would
have if they had run their control technologies efficiently.
Additionally, Maryland states that these days are often the same days
where downwind ozone levels are likely to be highest because of hot,
ozone-conducive weather. Maryland supports its claim by alleging that
over the entire ozone season, the relief requested in its petition
could result in very large reductions. Maryland contends that in 2015,
approximately 39,000 tons of NOX reductions could have been
achieved in the ozone season if the 36 targeted EGUs had simply run
their controls efficiently. Therefore, Maryland states that, based on
the EPA's past approaches in establishing significant contributions
based on highly cost-effective controls, the NOX emissions
from these 36 EGUs must be abated on each day of the ozone season
starting in May of 2017.
Maryland contends that emissions at the 36 EGUs can be reduced at
reasonable cost, or with potentially no actual new costs to the EGUs at
all,\32\ because this requested remedy rests on the use of existing
control equipment. Maryland suggests two methods to ensure optimized
use of controls at these sources. First, Maryland requests that the EPA
include language in federal and state regulations or operating permits
requiring the owners or operators of the relevant EGUs to use all
installed pollution control technology consistent with technological
limitations, manufacturers' specifications, good engineering and
maintenance practices, and good air pollution control practices.
Second, Maryland requests that the EPA enforce this requirement by
comparing each unit's maximum 30-day rolling average emissions rate to
the unit's lowest reported ozone emissions rate. Maryland also requests
that this remedy be implemented by 2017 to help areas in Maryland
achieve attainment in time to inform the 2015 ozone NAAQS area
designations
---------------------------------------------------------------------------
\32\ Although Maryland suggests emissions could potentially be
reduced with no actual new costs to the EGUs, Maryland does not
provide further information supporting its suggestion that zero-cost
reductions may be available. To the contrary, Maryland states that
the cost per ton range would be from $670 to $1000, depending on
whether the SCR systems are in partial operation or totally idled.
See Maryland Petition Appendix F, available in the docket for this
action.
---------------------------------------------------------------------------
1. Subsequent Actions and Correspondence Regarding the Maryland
Petition
Consistent with CAA section 307(d), as discussed in Section III.D
of this notice, the EPA determined that the 60-day period for
responding to Maryland's petition is insufficient for the EPA to
complete the necessary technical review, develop an adequate proposal,
and allow time for notice and comment, including an opportunity for
public hearing, on a proposed finding regarding whether the 36 EGUs
identified in the petition significantly contribute to nonattainment or
interfere with maintenance of the 2008 ozone NAAQS in Maryland. On
January 3, 2017, the EPA published a final rule extending the deadline
for acting on Maryland's section 126(b) petition to July 15, 2017.\33\
---------------------------------------------------------------------------
\33\ 82 FR 22 (January 3, 2017).
---------------------------------------------------------------------------
On May 17, 2017, the MOG submitted a letter asking the EPA to deny
Maryland's section 126(b) petition. The MOG argues that all monitors in
Maryland are either attaining the 2008 8-hour ozone NAAQS or are very
close to attaining the standard, and that modeling indicates that all
Maryland monitors will attain the 2008 8-hour ozone NAAQS in 2025.
Furthermore, the MOG argues that the CSAPR Update moots Maryland's
petition. Finally, the MOG argues that the EPA must assess the impact
of international emissions when reviewing a section 126(b) petition. On
May 18, 2017, the Indiana Energy Association submitted a letter making
similar assertions, and urged the EPA to deny Maryland's section 126(b)
petition.
The EPA acknowledges receipt of these letters, and has made them
available in the docket for this action. However, the EPA is not
responding directly to these letters in this action. Rather, the EPA
encourages interested parties to review this proposal and then submit
relevant comments during the public comment period.
IV. The EPA's Proposed Decision on Delaware's and Maryland's CAA
Section 126(b) Petitions
A. The EPA's Approach for Granting or Denying CAA Section 126(b)
Petitions Regarding the 2008 and 2015 8-Hour Ozone NAAQS
As discussed in Section III.B of this notice, section 126(b) of the
CAA provides a mechanism for states and other political subdivisions to
seek abatement of pollution in other states that may affect their air
quality. However, it does not identify specific criteria or a specific
methodology for the Administrator to apply when deciding whether to
make a CAA section 126(b) finding or deny a petition. Therefore, the
EPA has discretion to identify relevant criteria and develop a
reasonable methodology for determining whether a CAA section 126(b)
finding should be made. See, e.g., Appalachian Power, 249 F. 3d at 1050
(finding that given section 126(b)'s silence on what it means for a
source to violate section 110(a)(2)(D)(i), EPA's approach, if
reasonable, is entitled to deference under Chevron); Chevron, U.S.A.,
Inc. v. NRDC, 467 U.S. 837, 842-43 (1984); Smiley v. Citibank, 517 U.S.
735, 744-45 (1996).
As an initial matter, the EPA's historical approach to evaluating
CAA section 126(b) petitions looks first to see whether a petition
establishes a sufficient basis for the requested CAA section 126(b)
finding. The EPA first evaluates the technical analysis in the petition
to see if that analysis, standing alone, is sufficient to support a CAA
section 126(b) finding. The EPA focuses on the analysis in the petition
because the statute does not require the EPA to conduct an independent
technical analysis to evaluate claims made in CAA section 126(b)
petitions. The petitioner, thus, bears the burden of establishing, as
an initial matter, a technical basis for the specific finding
requested. The EPA has no obligation to prepare an analysis to
supplement a petition that fails, on its face, to include an initial
technical demonstration. Such a petition, or a petition that fails to
identify the specific finding requested, can be denied as insufficient.
Nonetheless, the EPA has the discretion to conduct independent analyses
when helpful in evaluating the basis for a potential CAA section 126(b)
finding or developing a remedy if a finding is made. See e.g., 76 FR
19662, 19666 (April 7, 2011) (proposed response to petition from New
Jersey regarding SO2 emissions from the Portland Generating
Station); 83 FR 16064, 16070 (April 13, 2018) (final response to
petition from Connecticut regarding ozone emissions from the Brunner
Island Steam Electric Station). As explained in the following sections,
in this instance, given the EPA's concerns with the adequacy of the
information submitted as part of the CAA section 126(b) petitions, and
the fact that the EPA has previously issued a rulemaking defining and
at least partially addressing the same environmental concern that the
petitions seek to address, the EPA determined that it was appropriate
to conduct an independent analysis to
[[Page 26675]]
determine whether it should grant or deny the petitions. Such an
analysis, however, is not required by the statute and may not be
necessary or appropriate in other circumstances.
With respect to the statutory requirements of both section
110(a)(2)(D)(i) and section 126 of the CAA, the EPA has consistently
acknowledged that Congress created these provisions as two independent
statutory tools to address the problem of interstate pollution
transport. See, e.g., 76 FR 69052, 69054 (November 7, 2011).\34\
Congress provided two separate statutory processes to address
interstate transport without indicating any preference for one over the
other, suggesting it viewed either approach as a legitimate means to
produce the desired result. While either provision may be applied to
address interstate transport, they are also closely linked in that a
violation of the prohibition in CAA section 110(a)(2)(D)(i) is a
condition precedent for action under CAA section 126(b) and,
critically, that significant contribution to nonattainment and
interference with maintenance are construed identically for purposes of
both provisions (since the identical terms are naturally interpreted as
meaning the same thing in the two linked provisions). See Appalachian
Power, 249 F. 3d at 1049-50.
---------------------------------------------------------------------------
\34\ Courts have also upheld the EPA's position that CAA
sections 110(a)(2)(D)(i) and section 126 are two independent
statutory tools to address the same problem of interstate transport.
See GenOn REMA, LLC v. EPA, 722 F.3d 513, 520-23 (3d Cir. 2013);
Appalachian Power, 249 F.3d at 1047.
---------------------------------------------------------------------------
Thus, in addressing a CAA section 126(b) petition that addresses
ozone transport, the EPA believes it is appropriate to interpret these
ambiguous terms consistent with the EPA's historical approach to
evaluating interstate ozone pollution transport under the good neighbor
provision, and its interpretation and application of that related
provision of the statute. As described in Sections III.A and III.C of
this notice, ozone is a regional pollutant and previous EPA analyses
and regulatory actions have evaluated the regional interstate ozone
transport problem using a four-step regional analytic framework. The
EPA most recently applied this four-step framework in the promulgation
of the CSAPR Update to address interstate transport with respect to the
2008 ozone NAAQS under CAA section 110(a)(2)(D)(i)(I). Given the
specific cross-reference in CAA section 126(b) to the substantive
prohibition in CAA section 110(a)(2)(D)(i), the EPA believes any prior
findings made under the good neighbor provision are informative--if not
determinative--for a CAA section 126(b) action, and thus the EPA's
four-step approach under CAA section 110(a)(2)(D)(i)(I) is also
appropriate for evaluating under CAA section 126(b) whether an upwind
source or group of sources will significantly contribute to
nonattainment or interfere with maintenance of the 2008 8-hour ozone
NAAQS in a petitioning downwind state. Because the EPA interprets the
statutory phrases ``significantly contribute to nonattainment'' and
``interfere with maintenance,'' which appear in both statutory
provisions, to mean the same thing in both those contexts, the EPA's
decision whether to grant or deny a CAA section 126(b) petition
regarding both the 2008 8-hour ozone and 2015 ozone NAAQS depends on:
(1) Whether there is a downwind air quality problem in the petitioning
state (i.e., step one of the four-step framework); (2) whether the
upwind state where the source subject to the petition is located is
linked to the downwind air quality problem (i.e., step two); and, (3)
if such a linkage exists, whether there are additional highly cost-
effective controls achievable at the source(s) named in the CAA section
126(b) petition (i.e., step three).\35\ The application of the four-
step framework to EPA's analysis of a CAA section 126(b) petition
regarding the 2008 ozone NAAQS is appropriate given the EPA has
previously interpreted significant contribution and interference with
maintenance under CAA section 110(a)(2)(D)(i) under this framework via
the CSAPR Update.
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\35\ As previously discussed, step four comprises of
implementing the necessary emission reductions for states that are
found to have emissions that significantly contribute to
nonattainment or interfere with maintenance of the NAAQS downwind
under steps one, two, and three of the framework. If a state is not
found to have downwind impacts through the first three steps, step
four is simply not reached under the EPA's analysis.
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Unlike the 2008 ozone NAAQS, the EPA has not to date engaged in a
rulemaking action to apply the good neighbor provision for the 2015
ozone NAAQS. However, the EPA has recently released technical
information intended to inform states' development of SIPs to address
this standard.\36\ As part of the memo releasing the technical
information, the EPA acknowledged that states have flexibility to
pursue approaches that may differ from the EPA's historical approach to
evaluating interstate transport in developing their SIPs, which are due
in October 2018. Nonetheless, the EPA's technical analysis and the
potential flexibilities identified in the memo generally followed the
basic elements of the EPA's historical four-step framework. Thus, in
light of the EPA's discretion to identify relevant criteria and develop
a reasonable methodology for determining whether a CAA section 126(b)
finding should be made, the EPA continues to evaluate the claims
regarding the 2015 ozone NAAQS in Delaware's section 126(b) petitions
consistent with the EPA's four-step framework.
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\36\ See Information on the Interstate Transport State
Implementation Plan Submissions for the 2015 Ozone National Ambient
Air Quality Standards under Clean Air Act Section 110(a)(2)(D)(i)(I)
(March 2018), available in the docket for this proposed action. By
operation of statute, SIPs to address the good neighbor provision
for the 2015 ozone NAAQS are due in October 2018.
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The EPA notes that Congress did not specify how the EPA should
determine that a major source or group of stationary sources ``emits or
would emit'' any air pollutant in violation of the prohibition of CAA
section 110(a)(2)(D)(i)(I) under the terms of section 126(b). Thus, the
EPA also believes it is reasonable and appropriate at each step to
consider whether the facility ``emits or would emit'' in light of the
facility's current operating conditions. Therefore, the EPA interprets
the phrase ``emits or would emit'' in the context of acting on
Delaware's and Maryland's petitions regarding the 2008 and 2015 ozone
NAAQS to mean that a source may ``emit'' in violation of the good
neighbor provision if, based on current emissions levels, the upwind
state contributes to downwind air quality problems (i.e., steps one and
two), and the source may be further controlled through implementation
of highly cost-effective controls (i.e., step 3). Similarly, a source
``would emit'' in violation of the good neighbor provision if, based on
reasonably anticipated future emissions levels (accounting for existing
conditions), the upwind state contributes to downwind air quality
problems (i.e., steps one and two) and the source could be further
controlled through implementation of highly cost-effective controls
(i.e., step 3). Consistent with this interpretation, the EPA has
therefore evaluated, in the following sections, whether the sources
cited in the petitions emit or would emit in violation of the good
neighbor provision based on both current and future anticipated
emissions levels.
In interpreting the phrase ``emits or would emit in violation of
the prohibition of section [110(a)(2)(D)(i)],'' if the EPA or a state
has already adopted provisions that eliminate the significant
contribution to nonattainment or interference with maintenance of the
[[Page 26676]]
NAAQS in downwind states, then there simply is no violation of the CAA
section 110(a)(2)(D)(i)(I) prohibition, and hence no grounds to grant a
section 126(b) petition. Put another way, requiring additional
reductions would result in eliminating emissions that do not contribute
significantly to nonattainment or interfere with maintenance of the
NAAQS, an action beyond the scope of the prohibition in CAA section
110(a)(2)(D)(i)(I) and therefore beyond the scope of the EPA's
authority to make the requested finding under CAA section 126(b). See
EPA v. EME Homer City Generation, L.P., 134 S. Ct. at 1604 n.18, 1608-
09 (holding the EPA may not over-control by requiring sources in upwind
states to reduce emissions by more than necessary to eliminate
significant contribution to nonattainment or interference with
maintenance of the NAAQS in downwind states under the good neighbor
provision).
Thus, for example, if the EPA has already approved a state's SIP as
adequate to meet the requirements of CAA section 110(a)(2)(D)(i)(I),
the EPA will not find that a source in that state was emitting in
violation of the prohibition of CAA section 110(a)(2)(D)(i)(I) absent
new information demonstrating that the SIP is now insufficient to
address the prohibition. Similarly, if the EPA has promulgated a FIP
that fully addressed the deficiency, the FIP would eliminate emissions
that significantly contribute to nonattainment or interfere with
maintenance in a downwind state, and, hence, absent new information to
the contrary, EPA will not find that sources in the upwind state are
emitting or would emit in violation of the CAA section
110(a)(2)(D)(i)(I) prohibition.
The EPA notes that the approval of a SIP or promulgation of a FIP
implementing section 110(a)(2)(D)(i)(I) means that a state's emissions
are adequately prohibited for the particular set of facts analyzed
under approval of a SIP or promulgation of a FIP. If a petitioner
produces new data or information showing a different level of
contribution or other facts not considered when the SIP or FIP was
promulgated, compliance with a SIP or FIP may not be determinative
regarding whether the upwind sources would emit in violation of the
prohibition of CAA section 110(a)(2)(D)(i)(I). See 64 FR 28250, 28274
n.15 (May 25, 1999); 71 FR 25328, 25336 n.6 (April 28, 2006);
Appalachian Power, 249 F.3d at 1067 (later developments can provide the
basis for another CAA section 126(b) petition). Thus, in circumstances
where a SIP or FIP addressing CAA section 110(a)(2)(D)(i)(I) is being
implemented, the EPA will evaluate the CAA section 126(b) petition to
determine if it raises new information that merits further
consideration.
B. The EPA's Evaluation of Whether the Petitions Are Sufficient To
Support a Section 126(b) Finding
As an initial matter in reviewing a CAA section 126(b) petition,
the EPA evaluates the technical analysis in the petition to see if that
analysis, standing alone, is sufficient to support the requested CAA
section 126(b) findings. In this regard, the EPA has determined that
material elements of the analysis provided in Delaware's and Maryland's
petitions are technically deficient and, thereby, proposes to deny the
petitions, in part, on the basis that the conclusions that the
petitions draw are not supported by the petitions' technical
assessments.
1. Petitions From Delaware
As discussed in Section IV.A, the EPA interprets the good neighbor
provision for purposes of the pending CAA section 126(b) petitions
consistent with the EPA's historical four-step framework. With respect
to step one of the four-step framework, the EPA began by evaluating
Delaware's four petitions to determine if the state identified a
downwind air quality problem (nonattainment or maintenance) that may be
impacted by ozone transport from other states. EPA conducted this
evaluation with regard to both the 2008 and 2015 ozone NAAQS.
First, with respect to the 2008 ozone NAAQS, Delaware does not
provide sufficient information to indicate that there is a current or
expected future downwind air quality problem in the state. While the
Delaware petitions identify individual exceedances of the ozone
standard in the state between the 2000 and 2016 ozone seasons, this
does not necessarily demonstrate that there is a resulting
nonattainment or maintenance problem. Ozone NAAQS violations are
determined based on the fourth-highest daily maximum ozone
concentration, averaged across 3 consecutive years.\37\ Thus,
individual exceedances at monitors do not by themselves indicate that a
state is not attaining or maintaining the NAAQS.
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\37\ See 80 FR 65296 (October 26, 2015) for a detailed
explanation of the calculation of the 3-year 8-hour average and the
methodology set forth in 40 CFR part 50, appendix U.
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Second, with respect to the 2015 ozone NAAQS, Delaware argues that
if that NAAQS had been in effect from 2011 through 2016, Delaware
monitors would have recorded more exceedances than they did under the
2008 ozone NAAQS. However, again, the identification of individual
exceedances does not speak to whether there are current violations of
the standard. Additionally, the EPA evaluates downwind ozone air
quality problems for purposes of step one of the four-step framework
using modeled future air quality concentrations for a year that
considers the relevant attainment deadlines for the NAAQS.\38\ This
approach is based on the EPA's interpretation of the language in the
good neighbor provision indicating that states should prohibit
emissions that ``will'' significantly contribute to nonattainment or
interfere with maintenance of the NAAQS. See North Carolina, 531 F.3d
at 913-914 (affirming as reasonable the EPA's interpretation of
``will'' to refer to future, projected ozone concentrations). However,
the petitions do not provide any analysis indicating that Delaware may
be violating or have difficulty maintaining the 2008 or 2015 ozone
NAAQS in a future year associated with the relevant attainment dates.
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\38\ 81 FR 74517.
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Next, with respect to step two of the four-step framework, material
elements of Delaware's analysis regarding the contributions from the
Brunner Island, Harrison, Homer City, and Conemaugh EGUs to air quality
in Delaware are deficient and, therefore, the conclusions that the
petitions draw are not supported by the technical assessment. As noted
earlier, all four petitions rely upon air quality modeling that uses
2011 emissions to quantify the contribution from each of the four named
sources to locations in Delaware on individual days in 2011. However,
2011 emissions are generally higher than, and therefore not
representative of, current or future projected emissions levels at
these EGUs and in the rest of the region, which the EPA believes is
most relevant to determining whether a source ``emits or would emit''
in violation of the good neighbor provision.\39\ Thus, the 2011
modeling does not provide representative data regarding current or
future contributions
[[Page 26677]]
from these EGUs. When evaluating a CAA section 126(b) petition, EPA
believes it is important to rely on current and relevant data known at
the time the agency takes action. Were the EPA to act based on non-
representative information solely because it was provided in a
petition, that result could be an arbitrary and unreasonable decision
by the EPA, and could, for example, impose controls or emissions
limitations that are not appropriately tailored to the nature of the
problem at the time of the EPA's final action or at the time when such
controls or limitations would actually be implemented. This could
result in unnecessary over-control (or under-control) of emissions,
beyond (or short of) what is required to address the good neighbor
provision, in violation of the Supreme Court's holding in EPA v. EME
Homer City Generation, L.P., 134 S. Ct. at 1608-09.
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\39\ As an example of how emissions have changed between 2011
and a recent historical year, the EPA notes that Pennsylvania's 2017
EGU NOX ozone season emissions were 79 percent below 2011
levels. Brunner Island is located in Pennsylvania, and reduced its
individual ozone season NOX emissions by 88 percent in
2017 relative to 2011 levels. (https://www.epa.gov/ampd). Additional
emissions data from 2011 and a recent historical year is included in
the docket, which also shows that 2011 emissions are generally
higher than emissions in recent years. See 2011 to 2017
NOX Comparisons, Ozone Season, available in the docket
for this action.
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Further, the analyses provided by Delaware regarding the alleged
impacts of the four sources on downwind air quality includes some
information on the frequency and magnitude of ozone impacts, but the
information is unclear as to the modeled and/or measured ozone levels
on those days.\40\ Delaware's Homer City petition identifies modeled
contributions from emissions at that upwind source to three downwind
monitoring sites in Delaware on July 18, 2011. However, the petition
fails to identify whether there were measured and/or modeled
exceedances of the ozone NAAQS on this day at those sites. Delaware's
Harrison and Brunner Island petitions identify the days, but not the
monitoring sites where Delaware claims emissions from these sources
contributed above the threshold. Moreover, these two petitions do not
provide information on whether the contributions were to ozone values
that exceed the ozone NAAQS. Delaware's Conemaugh petition identifies
2011 contributions on days in Delaware that exceeded the 2008 NAAQS,
but the petition does not provide information to show that the
contributions above the threshold were predicted at monitoring sites
that were exceeding the 2008 or 2015 ozone NAAQS. Accordingly, for the
reasons described in this section, Delaware's analysis in its four
petitions does not allow the EPA to conclude that there is a current or
future nonattainment or maintenance problem in Delaware, and therefore,
the EPA cannot determine that emissions from the four sources cited in
the petitions are significantly contributing to nonattainment or
interfering with maintenance in Delaware with respect to either the
2008 or 2015 ozone NAAQS.
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\40\ Existing EPA analyses of interstate ozone pollution
transport focus on contributions to high ozone days at the downwind
receptor in order to evaluate the impact on nonattainment and
maintenance at the receptor. For example, in the CSAPR Update
modeling, ozone contributions were calculated using data for the
days with the highest future year modeled ozone concentrations. For
the 2008 ozone NAAQS, only the highest measured ozone days from each
year are considered for the calculation of ozone design values (the
values that determine whether there is a measured NAAQS violation).
Therefore, measured ozone values that are far below the level of the
NAAQS do not cause an exceedance or violation of the NAAQS. For this
reason, only ozone contributions to days that are among the highest
modeled ozone days at the receptor are relevant to determining if a
state or source is linked to downwind nonattainment or maintenance
issues.
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2. Petition From Maryland
The EPA has also evaluated and determined that material elements of
the analysis provided in Maryland's petition are technically deficient,
and, thereby, proposes to deny the petition, in part based on the fact
the conclusions that the petition draws are not supported by the
technical assessment. As discussed in Section III.E of this notice,
Maryland alleges that 36 named sources are operating their post-
combustion controls sub-optimally based on a comparison of their lowest
observed NOX emissions rates between 2005 and 2008, which
Maryland describes as the ``best'' observed emissions rates, to
emissions rates from the 2015 and 2016 ozone seasons. Maryland contends
that these sources are, therefore, emitting in violation of the
prohibition CAA section 110(a)(2)(D)(i)(I) in the absence of a short-
term limit that requires that the controls be optimized.
The EPA believes that the petition's assumption about achievable
operating rates presents a technical weakness because the lowest
historical rate at any particular unit may not be a rate that can be
consistently achieved on a continual operating basis for technical
reasons. In the CSAPR Update, the EPA analyzed EGU NOX
reduction potential and corresponding NOX ozone season
emissions budgets based on NOX emissions rates that can be
consistently achieved for EGUs with SCRs that were not currently being
optimized or which were currently idled at the time of the EPA's
analysis.\41\ To determine the rate that could be consistently
achieved, the EPA evaluated coal-fired EGU NOX ozone season
emission data from 2009 through 2015 and calculated an average
NOX ozone season emissions rate across the fleet of coal-
fired EGUs with SCR for each of these 7 years. The EPA considered and
rejected the lowest or second lowest ozone season NOX rates,
because the EPA determined that these rates may reflect new SCR systems
and SCR systems all of whose components are new (e.g., due to
simultaneous replacement of multiple layers of catalyst rather than
routine replacement of a single layer). Data from these new systems are
not representative of ongoing achievable NOX rates
considering that some SCR systems may have some broken-in components
and routine maintenance schedules entailing replacement of individual
components. Thus, in the CSAPR Update, the EPA determined that the
third lowest fleet-wide average coal-fired EGU NOX rate for
EGUs with operating SCRs is most representative of ongoing, achievable
emission rates. The EPA observed in that rule that the third lowest
fleet-wide average coal-fired EGU NOX rate for EGUs with SCR
is 0.10 lbs/mmBtu. 81 FR 74543. Reliance on the lowest historical
emissions rate to evaluate the feasibility and cost effectiveness of
controls would likely overestimate the emissions reductions and,
consequently, underestimate the costs to restart idled or unoptimized
controls.\42\ Therefore, EPA does not agree with Maryland's conclusion
that it is appropriate to identify whether controls are optimized at
the EGUs addressed in the petition, and, thus, whether a short-term
limit would be necessary, based on the units' lowest observed emissions
rates. Thus, the EPA cannot conclude based on Maryland's petition that
these sources emit or would emit in violation of CAA section
110(a)(2)(D)(i)(I) for the 2008 ozone NAAQS.
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\41\ 81 FR 74543.
\42\ Similarly, the method used by Maryland to estimate the
input NOX emissions rate--i.e., setting the estimated
uncontrolled NOx rate as a factor of 1 divided by 0.08--is not well
supported. In its modeling with IPM, the EPA has used a value of 90
percent reduction in NOx emissions to estimate the effect of adding
an SCR up to a floor rate limit of 0.07 lb/mmBtu or 0.05 lb/mmBtu
depending on coal type (see Table 5-5 in IPM 5.13 documentation
available at https://www.epa.gov/sites/production/files/2015-/documents/chapter_5_emission_control_technologies_0.pdf). The
reductions results from a combination of simultaneously upgrading
combustion controls as well as adding post-combustion controls.
Furthermore, Maryland does not provide any supporting argument for
its assertion regarding the factor of 0.7 (i.e., 30 percent
reduction) to account for low NOX burners and other
emissions control reductions.
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C. The EPA's Independent Analysis of the CAA Section 126(b) Petitions
As discussed in Section IV.A of this notice, the EPA may decide to
conduct independent analyses when helpful in evaluating the basis for a
potential CAA section 126(b) finding or developing a remedy if a
finding is made. In this
[[Page 26678]]
instance, in conducting the independent analyses that it has decided to
undertake to evaluate the petitions at issue, the EPA determined that,
consistent with the EPA's four-step framework for implementing CAA
section 110(a)(2)(D)(i)(I) for the ozone NAAQS, the EPA's decision
whether to grant or deny a CAA section 126(b) petition based on the
2008 and 2015 ozone NAAQS depends on whether there is a downwind air
quality problem in the petitioning state (i.e., step one of the four-
step framework); whether the upwind state where the source subject to
the petition is located is linked to the downwind air quality problem
(i.e., step two); and, if such a linkage exists, whether, among other
factors, there are additional highly cost-effective emissions
reductions achievable at the source(s) named in the CAA section 126(b)
petition (i.e., step three).
1. The EPA's Step One and Two Analyses for Delaware and Maryland
With regard to the Delaware petitions, while the EPA as discussed
in Section IV.B believes that they do not adequately establish the
presence of a current or future nonattainment or maintenance problem in
Delaware,, the EPA also independently examined whether there is an air
quality problem under the 2008 and 2015 ozone NAAQS (step one), and
whether the states containing the named sources are linked to such a
problem in Delaware (step two).
The EPA first looked to air quality modeling projecting ozone
concentrations at air quality monitoring sites to 2017, which was
conducted for purposes of evaluating the first and second steps of the
four-step framework to interstate transport for the 2008 ozone NAAQS as
part of the CSAPR Update.\43\ The EPA used these projections for air
quality monitoring sites and current ozone monitoring data at these
sites to identify receptors that were anticipated to have problems
attaining or maintaining the 2008 ozone NAAQS in 2017. As noted in
Section III.D, all four petitions allege that the EPA's modeling
conducted in support of the CSAPR Update shows that the states in which
these sources are located contribute one percent or more of the 2008 8-
hour ozone NAAQS to ozone concentrations in Delaware and, therefore,
that those states' sources are significantly impacting air quality
within the state. However, this modeling indicated that Delaware was
not projected to have any nonattainment or maintenance receptors in
2017 with respect to the 2008 ozone NAAQS. Therefore, the modeling in
support of the CSAPR Update did not establish that the named states are
linked to a downwind air quality problem regarding the 2008 ozone
NAAQS. Furthermore, the EPA examined Delaware's 2014-2016 design
values, and found that no monitors were violating the 2008 ozone NAAQS.
Accordingly, contrary to Delaware's characterization of the EPA's
modeling, the EPA did not determine that any states, including those
(Pennsylvania and West Virginia) where the sources named in Delaware's
petitions are located, will significantly contribute to nonattainment
or interfere with maintenance of the 2008 ozone NAAQS in Delaware.
Thus, the EPA has no basis to conclude that any of the sources named by
Delaware in its petitions are linked to a downwind air quality problem
in Delaware with regard to the 2008 ozone NAAQS.
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\43\ Air Quality Modeling Technical Support Document for the
Final Cross-State Air Pollution Rule Update, 17 (August 2016).
Available at https://www.epa.gov/sites/production/files/2017-05/documents/aq_modeling_tsd_final_csapr_update.pdf.
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Additionally, the EPA independently examined whether there is a
downwind air quality problem in Delaware with regard to the 2015 ozone
NAAQS. The modeling conducted in support of the CSAPR Update shows one
monitor--monitor ID 100051003 in Sussex County--having a maximum 2017
projected design value above the 2015 ozone NAAQS, and the EPA further
notes information indicating that two monitors may exceed the 2015
ozone NAAQS based on the 2014-2016 design values.\44\ However, as
described in Section IV.B of this notice, the EPA evaluates downwind
ozone air quality problems for the purposes of step one of the four-
step framework using modeled future air quality concentrations for a
year that considers the relevant attainment deadlines for the NAAQS.
Recent analyses projecting emissions levels to a future year indicate
that no air quality monitors in Delaware are projected to have
nonattainment or maintenance problems with respect to the 2015 ozone
NAAQS by 2023, which is the last year of ozone season data that will be
considered in order to determine whether downwind nonattainment areas
classified as moderate have attained the standard by the relevant 2024
attainment date.\45\ Therefore, consistent with the EPA's
interpretation of the term ``will'' in the good neighbor provision
discussed in Section IV.B.I., available future year information does
not suggest Delaware will have air quality problems by the relevant
attainment date for the 2015 ozone NAAQS. The EPA is proposing to
determine that the named sources in all four of Delaware's petitions
are not in violation of the good neighbor provision with respect to
Delaware for the 2008 and 2015 NAAQS based, in part, on the EPA's
independent analyses of steps one, two, and three of the four-step
framework.
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\44\ See 2016 Design Value Reports, available at https://www.epa.gov/air-trends/air-quality-design-values#report. The
official designations for these areas and information relied upon
for those designations are contained in the EPA's designation
actions for the 2015 ozone NAAQS. See 82 FR 54232 (November 16,
2017) and the docket for Additional Air Quality Designations for the
2015 Ozone National Ambient Air Quality Standards, EPA-HQ-OAR-2017-
0548, and accompanying technical support documents.
\45\ See Supplemental Information on the Interstate Transport
State Implementation Plan Submissions for the 2008 Ozone National
Ambient Air Quality Standards under Clean Air Act Section
110(a)(2)(D)(i)(I) (October 2017), available in the docket for this
proposed action.
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With respect to the Maryland petition, as the state noted in its
petition, the EPA already conducted an analysis in the CSAPR Update
regarding the impact of the five upwind states named in the state's
petition on downwind air quality in Maryland with respect to the 2008
ozone NAAQS. In addition to using modeling to identify downwind air
quality problems, the EPA also used air quality modeling to assess
contributions from upwind states to these downwind receptors and
evaluated these contributions relative to a screening threshold of one
percent of the NAAQS. States with contributions that equal or exceed
one percent of the NAAQS were identified as warranting further analysis
to determine whether they significantly contribute to nonattainment or
interfere with maintenance at the downwind receptors. States with
contributions below one percent of the NAAQS were considered to not
significantly contribute to nonattainment or interfere with maintenance
of the NAAQS in downwind states. The EPA determined in the final CSAPR
Update that, based on its 2017 modeling projections, statewide
emissions from sources in Indiana, Kentucky, Ohio, Pennsylvania, and
West Virginia were linked to monitor ID 240251001 in Harford County,
Maryland; that monitor was expected to have nonattainment and
maintenance problems for the 2008 NAAQS. However, as discussed in
Section III.C of this notice, the conclusion that a state's emissions
met or exceeded this threshold only indicate that further analysis is
appropriate to determine whether any of the upwind state's emissions
meet the statutory criteria of significantly contributing to
nonattainment or interfering with
[[Page 26679]]
maintenance. The EPA's independent step three analysis of the sources
named in Maryland's petition will be discussed in the following
sections.
2. The EPA's Step Three Analysis With Respect to EGUs Equipped With
SCRs Named in Delaware and Maryland's Petitions
The EPA next evaluated whether there are further highly cost-
effective NOX emissions reductions available at the specific
sources named in the petitions, consistent with step three of the
framework. As discussed in more detail in Section III.C of this notice,
further analysis in step three considers cost, technical feasibility,
and air quality factors in a multifactor test to determine whether any
emissions deemed to contribute to the downwind air quality factor must
be controlled pursuant to the good neighbor provision. The EPA notes
that we have already proposed to determine that Delaware's petitions
should be denied based on the EPA's conclusions at steps one and two of
the four-step framework. Nonetheless, the EPA is also evaluating the
EGUs named in the Delaware petitions in this step three analysis
because we believe it provides another independent basis for the
proposed denial. The EPA is first analyzing this step with respect to
those units identified in the Delaware and Maryland petitions equipped
with SCR. The EPA will separately address units that are not equipped
with SCR later in this section.
Three of Delaware's petitions identify EGUs (Conemaugh, Harrison,
and Homer City) that are already equipped with SCRs. Similarly, 32 of
the 36 EGUs identified in Maryland's petition are also equipped with
SCRs.\46\ All of the states in which these EGUs are located are subject
to FIPs promulgated as part of the CSAPR Update that require EGUs in
each state, including the EGUs named in the petitions, to participate
in the CSAPR NOX Ozone Season Group 2 allowance trading
program, subject to statewide emissions budgets. In establishing the
CSAPR Update EGU NOX ozone season emissions budgets, the
agency quantified the emissions reductions achievable from all
NOX control strategies that were feasible to implement
within one year \47\ and cost-effective at a marginal cost of $1,400
per ton of NOX removed. These EGU NOX control
strategies were: Optimizing NOX removal by existing,
operational SCR controls; turning on and optimizing existing idled SCR
controls; installing state-of-the-art NOX combustion
controls; and shifting generation to existing units with lower
NOX emissions rates within the same state. 81 FR 74541.
Thus, the CSAPR Update emissions budgets already reflect emissions
reductions associated with the turning on and optimizing of existing
SCR controls at the EGUs that are the subject of the petitions, which
is the same control strategy identified in the petitions as being both
feasible and cost effective. At step three of the four-step framework,
therefore, the EPA is proposing to determine that all identified highly
cost-effective emissions reductions have already been implemented with
respect to these sources, and that they therefore neither emit nor
would emit in violation of the good neighbor provision. The EPA
proposes to determine that this conclusion is appropriate with regard
to both the 2008 ozone NAAQS (addressed in both states' petitions) and
the 2015 ozone NAAQS (addressed in the Delaware petitions) because the
EPA's determination that the cost-effective control strategy is already
being implemented in the context of the allowance trading program.
applies regardless of which NAAQS is being addressed. In other words,
because the strategy of optimizing existing controls has already been
implemented for these sources via the CSAPR Update, there are no
additional control strategies identified to further reduce
NOX emissions at these sources to address the more stringent
standard.
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\46\ These facilities are located in Indiana (Alcoa Allowance
Management Inc., Clifty Creek, Gibson, IPL--Petersburg Generating
Station), Kentucky (East Bend Station, Elmer Smith Station,
Tennessee Valley Authority Paradise Fossil Plant), Ohio (Killen
Station, Kyger Creek, W. H. Zimmer Generating Station), Pennsylvania
(Bruce Mansfield, Cheswick, Homer City, Keystone, Montour), and West
Virginia (Harrison Power Station, Pleasants Power Station).
\47\ The CSAPR Update was signed on September 7, 2016--
approximately 8 months before the beginning of the 2017 ozone season
on May 1.
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Both Delaware and Maryland contend that, based on data available at
the time the petitions were filed, the sources are operating their SCR
NOX emissions controls at low efficiency levels, or are not
operating them at all at certain times. Delaware and Maryland therefore
ask the EPA to impose unit-specific 30-day emissions rate limits or
other requirements to ensure the controls will be continually operated.
The EPA notes that the petitions from both states were submitted before
the implementation of the emissions budgets promulgated in the CSAPR
Update, and the information in the petitions therefore does not
represent the most recent data regarding these EGUs' operations. The
EPA analyzed ozone-season emissions rates from all coal-fired units in
the contiguous U.S. equipped with SCR and found that, based on 2017
emissions data reflecting implementation of the CSAPR Update, 260 of
274 units had ozone-season emissions rates below 0.2 lb/mmBtu,
indicating they were likely operating their post-combustion controls
throughout the ozone season, including every unit with SCR named in
Delaware's and Maryland's petitions.\48\ Five of the 14 units with
emissions rates above 0.2 lb/mmBtu are not located in the CSAPR Update
region.\49\ Consequently, the EPA finds that the named units are
consistently operating their SCRs throughout the season.
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\48\ As described in the CSAPR Update, optimized operation of
combustion controls and SCR typically results in NOX
emission rates of 0.10 lb/mmBtu or below. Combustion controls alone
typically result in rates down to 0.2 lb/mmBtu but can at times
achieve results in the range of 0.14 lb/mmBtu. Therefore, units
equipped with SCR that have emission rates above 0.2 lb/mmBtu are
likely not significantly utilizing their SCR.
\49\ See Discussion of Short-term Emission Limits, available in
the docket for this action.
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To the extent the petitions have alleged that short-term limits are
necessary to prevent units from turning controls off intermittently on
days with high ozone, the EPA examined the hourly NOX
emissions data reported to the EPA and did not observe many instances
of units selectively turning down or turning off their emissions
control equipment during hours with high generation.\50\ SCR-controlled
units generally operated with lower emissions rates on high generation
hours, suggesting SCRs generally were in better operating condition--
not worse, let alone idling--on those days/hours. In other words, the
EPA compared NOX rates on hours with high demand and
compared them with seasonal average NOX rates and found very
little difference. The data do not support the notion that units are
reducing SCR operation on high demand days to harvest additional power
that would otherwise be exhausted on control operation. Moreover, the
auxiliary power used for the control operation is small--typically less
than one percent of the generation at the facility. The EPA, therefore,
concludes that increases in total emissions on days with high
generation are a result of additional units coming online and units
increasing hourly utilization, rather than units decreasing the
functioning of control equipment. The petitions have not presented
information that would contradict this conclusion.
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\50\ Id.
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Moreover, to the extent that the petitions contend that the
allowance
[[Page 26680]]
trading program is an insufficient means of implementing the emissions
reductions associated with the optimized operation of the SCRs at these
units, seasonal NOX requirements have demonstrated success
at reducing peak ozone concentrations. For example, over the past
decade, there has been significant improvement in ozone across the
eastern U.S., in part due to season[hyphen]long allowance trading
programs.\51\ As a result, areas are now attaining the 1997 ozone
NAAQS. Further, the EPA notes that the standard is a 3[hyphen]year
average value of three individual seasonal values. Thus, a seasonal
program is harmonious with the form of the standard.
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\51\ See 81 FR 74521. For further information on national trends
in ozone levels, see the EPA ozone trends website, available at
https://www.epa.gov/air-trends/ozone-trends.
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3. The EPA's Step Three Analysis With Respect to the Named EGUs
Equipped With SNCR
Maryland also alleges that two facilities operating SNCR post-
combustion controls (SNCR)--Cambria Cogen in Pennsylvania and Grant
Town Power Plant in West Virginia--emit or would emit in violation of
the good neighbor provision and asks that the agency impose emissions
limits or other requirements to ensure that the facilities operate
their SNCR during the ozone season.
As discussed earlier in Section IV.C.2 of this notice, the EPA
evaluated control strategies in the CSAPR Update that were considered
feasible to implement by the 2017 ozone season and determined that EGU
control strategies available at a marginal cost of $1,400 per ton of
NOX reduced were cost effective. In evaluating and selecting
this cost threshold, the EPA also examined other control strategies
available at different cost thresholds, including turning on existing
idled SNCR, which is the remedy proposed by Maryland in its petition.
The EPA identified a marginal cost of $3,400 per ton as the level of
uniform control stringency that represents turning on and fully
operating idled SNCR controls.\52\ However, the CSAPR Update finalized
emissions budgets using $1,400 per ton control stringency, finding
within step 3 of the transport framework that this level of stringency
represented the control level at which incremental EGU NOX
reductions and corresponding downwind ozone air quality improvements
were maximized with respect to marginal cost. In finding that use of
the $1,400 control cost level was appropriate for the 2008 ozone NAAQS,
the EPA established that the more stringent emissions budget level
reflecting $3,400 per ton (representing turning on idled SNCR controls)
yielded fewer additional emissions reductions and fewer air quality
improvements per additional dollar of control costs. In other words,
based on the information, assumptions, and analysis in the CSAPR
Update, establishing emissions budgets at $3,400 per ton, and therefore
developing budgets based on operation of idled SNCR controls, was not
determined to be cost effective for addressing good neighbor provision
obligations for the 2008 ozone NAAQS. 81 FR 74550. Maryland has not
provided any contradictory information demonstrating that fully
operating SNCR is a cost-effective control for these units considering
the marginal cost of implementation, the anticipated emissions
reduction, the air quality benefits, and the increasing likelihood that
other sectors might have more reductions as the cost threshold
increases.\53\ The EPA is proposing to deny Maryland's petition with
respect to these sources based on its conclusion that fully operating
with SNCR is not a cost-effective NOX emissions reduction
strategy with respect to addressing transport obligations for the 2008
ozone NAAQS for these sources, and, therefore, that these sources do
not emit and would not emit in violation of the good neighbor provision
with respect to the 2008 ozone NAAQS.
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\52\ See EGU NOX Mitigation Strategies Final Rule TSD
(docket ID EPA-HQ-OAR-2015-0500-0554, available at http://www.regulations.gov).
\53\ Since the EPA does not agree, and Maryland has not
demonstrated in the first instance, that the operation of SNCR at
these units is cost effective, the EPA need not address Maryland's
claim that short-term emission limits may be appropriate. In any
event, the EPA notes that the same concerns with relying on the
lowest historical emission rate for purposes of determining what is
achievable for SCRs, discussed in Section IV.B.2, would also apply
to Maryland's contentions with respect to SNCRs.
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While the EPA did not determine that fully operating SNCR across
the region was cost effective with respect to addressing transport
obligations for the 2008 ozone NAAQS, individual sources may
nonetheless choose how to comply with the CSAPR ozone season
NOX allowance trading program. The operation of existing
SNCR controls is one method to achieve emissions reductions needed to
comply with the requirements of the trading program. 81 FR 74561. For
instance, during the 2017 ozone season, in part as the result of
economic incentives under the CSAPR Update, the two Cambria units with
SNCR appear to have operated their controls, resulting in average
NOX emissions rates of 0.15 and 0.16 lbs/mmBtu, respectively
(a drop from the 2016 rates of 0.23 and 0.24 lbs/mmBtu,
respectively).\54\
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\54\ See 2015, 2016, and 2017 Ozone-Season NOX rates
(lbs/mmBtu) for 41 units named in the petitions, available in the
docket for this action.
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4. The EPA's Step Three Analysis With Respect to Brunner Island
The remaining facility addressed in one of Delaware's petitions is
the Brunner Island facility, which currently has neither SCR nor SNCR
installed. As noted earlier, the EPA has already proposed to determine
that Delaware's petitions should be denied based on the EPA's
conclusions at steps one and two of the four-step framework.
Nonetheless, the EPA has evaluated Brunner Island in this step three
analysis because we believe it provides another independent basis for
the proposed denial.
With respect to the question of whether there are feasible and
highly cost-effective NOX emissions reductions available at
Brunner Island, the facility primarily burned natural gas with a low
NOX emissions rate in the 2017 ozone season, and the EPA
expects the facility to continue operating primarily by burning natural
gas in future ozone seasons. As such, and as described in more detail
in the following paragraphs, the EPA at this time finds that no
additional feasible and highly cost-effective NOX emissions
reductions available at Brunner Island have been identified. The EPA,
therefore, has no basis to determine, consistent with the standard of
review outlined in Section IV.A, that Brunner Island emits or would
emit in violation of the good neighbor provision with respect to the
2008 or 2015 ozone NAAQS.
Delaware's CAA section 126(b) petition first proposes that the
operation of natural gas is an available highly cost-effective
emissions reduction measure that could be implemented at Brunner
Island. Brunner Island completed construction of a natural gas pipeline
connection prior to the beginning of the 2017 ozone season (i.e., by
May 1, 2017) and operated primarily using natural gas as fuel for the
2017 ozone season. As a result, Brunner Island's actual ozone season
NOX emissions declined from 3,765 tons in 2016 to 877 tons
in 2017, and the facility's ozone season NOX emissions rate
declined from 0.370 lbs/mmBtu in 2016 to 0.090 lbs/mmBtu in 2017. Thus,
Brunner Island has already implemented the emissions reductions
consistent with what Delaware asserted would qualify as a cost-
effective strategy for reducing NOX emissions. Accordingly,
the EPA has determined that Delaware's CAA section 126(b)
[[Page 26681]]
petition does not demonstrate that, at this current level of emissions,
Brunner Island emits in violation of the good neighbor provision.
Similarly, the EPA concludes that Delaware's petition does not
demonstrate that Brunner Island would emit in violation of the good
neighbor provision. The EPA believes that Brunner Island will continue
to primarily use natural gas as fuel during future ozone seasons for
several economic reasons. First, compliance with the CSAPR Update
provides an economic incentive to cost-effectively reduce
NOX emissions. Specifically, Brunner Island's participation
in the CSAPR NOX Ozone Season Group 2 allowance trading
program provides an economic incentive to produce electricity in ways
that lower ozone-season NOX, such as by burning natural gas
relative to burning coal at this particular power plant. Under the
CSAPR Update, each ton of NOX emitted by a covered EGU has
an economic value--either a direct cost in the case that a power plant
must purchase an allowance to cover that ton of emissions for CSAPR
Update compliance or an opportunity cost in the case that a power plant
must use an allowance in its account for compliance and, thereby,
foregoes the opportunity to sell that allowance on the market. The EPA
notes that Brunner Island's 2017 emissions would have been
approximately 2,714 tons more than its actual 2017 emissions if it had
operated as a coal-fired generator, as it did in 2016.\55\ This
reduction in NOX emissions that is attributable to primarily
burning natural gas has an economic value in the CSAPR allowance
trading market.
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\55\ This estimated emissions difference was calculated as the
difference between 2017 reported NOX emissions of 877
tons and a counterfactual 2017 NOX emissions estimate of
3,591 tons created using 2017 operations (i.e., heat input of
19,406,872 mmBtu) multiplied by the 2016 NOX emission
rate of 0.37 lb/mmBtu reflecting coal-fired generation. These data
are publicly available at https://www.epa.gov/ampd.
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Second, there are continuing fuel-market based economic incentives
suggesting that Brunner Island will continue to primarily burn natural
gas during the ozone season. Brunner Island elected to add the
capability to primarily utilize natural gas by way of a large capital
investment in a new natural gas pipeline capacity connection. Brunner
Island's operators would have planned for and constructed this project
during the recent period of relatively low natural gas prices. In the
years preceding the completion of this natural gas pipeline connection
project, average annual Henry Hub natural gas spot prices ranged from
$2.52/mmBtu to $4.37/mmBtu (i.e., between 2009 and 2016).\56\ The
capital expenditure to construct a natural gas pipeline connection
suggests that natural gas prices within this range make it economic
(i.e., cheaper) for Brunner Island to burn natural gas to generate
electricity relative to burning coal. As such, future natural gas
prices in this same range suggest that Brunner Island will continue to
primarily burn natural gas during future ozone seasons. The EPA and
other independent analysts expect future natural gas prices to remain
low and within this price range exhibited from 2009 to 2016 due both to
supply and distribution pipeline build-out. For example, the Energy
Information Administration's (EIA) 2018 Annual Energy Outlook (AEO)
natural gas price projections for the Henry Hub spot price range from
$3.06/mmBtu in 2018 to $3.83/mmBtu in 2023.\57\ Moreover, the AEO
short-term energy outlook and New York Mercantile Exchange futures
further support the estimates of a continued low-cost natural gas
supply.\58\ These independent analyses of fuel price data and
projections lead to the EPA's expectation that fuel-market economics
will continue to support Brunner Island's primarily burning natural gas
during future ozone seasons through at least 2023.\59\
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\56\ Henry Hub is a significant distribution hub located on the
natural gas pipeline system located in Louisiana. Due to the
significant volume of trades at this location, it is seen as the
primary benchmark for the North American natural gas market. These
data are publicly available at https://www.eia.gov/dnav/ng/hist/rngwhhdA.htm.
\57\ In the 2018 reference case Annual Energy Outlook (AEO)
released February 6, 2018, created by the U.S. Energy Information
Administration (EIA), natural gas prices for the power sector for
2018 through 2023. Available at https://www.eia.gov/outlooks/aeo/data/browser/#/?id=13-AEO2018&cases=ref2018&sourcekey=0. Projected
delivered natural gas prices for the electric power sector in the
Middle Atlantic region, where Brunner Island is located, ranged
between $3.56 in 2018 and $4.08/mmBtu in 2023. The projected
delivered coal prices for the electric power sector in the Middle
Atlantic region remain relatively constant, ranging from $2.51 to
$2.56/mmBtu. These data are publicly available at https://www.eia.gov/outlooks/aeo/data/browser/#/?id=3-AEO2018®ion=1-2&cases=ref2018&start=2016&end=2023&f=A&linechart=ref2018-d121317a.3-3AEO2018.1-2&map=ref2018-d121317a.4-3-AEO2018.1-2&sourcekey=0.
\58\ AEO short-term energy outlook available at https://www.eia.gov/outlooks/steo/report/natgas.php.
\59\ The EPA also notes that a proposed settlement agreement
between Sierra Club and Talen Energy may further ensure that Brunner
Island will operate by burning gas in the ozone season in 2023 and
future years. Under the settlement, Brunner Island agrees to operate
only on natural gas during the ozone season (May 1-September 30)
starting on January 1, 2023, (subjected to limited exceptions) and
cease coal operations after December 31, 2028. See a joint statement
regarding this agreement, available at http://talenenergy.investorroom.com/2018-02-14-Joint-Statement-Talen-Energy-and-the-Sierra-Club-Reach-Agreement-on-the-Future-Operation-of-the-Brunner-Island-Power-Plant. As of the date of this final
action, that settlement agreement has not yet been finalized.
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The context in which Brunner Island installed natural gas-firing
capability and burned natural gas is consistent with observed recent
trends in natural gas utilization within the power sector, suggesting
that Brunner Island's economic situation in which it primarily burns
gas as fuel during the ozone season is not unique or limited. Comparing
total heat input from 2014 with 2017 for all units that utilize natural
gas and report to the EPA's Clean Air Markets Division, historical data
showed an increased use of natural gas of 14 percent.\60\ This overall
increase results from both an increase in capacity from the
construction of additional units and an increased gas-fired utilization
capacity factor. The available capacity increased six percent while
average capacity factor increased from 23 percent to 25 percent, which
reflects an eight percent increase in utilization.
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\60\ From 8.4 billion mmBtu to 9.6 billion mmBtu. See EPA's
Clean Air Markets Division data available at https://ampd.epa.gov/ampd/.
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Considering the projected continued broader downward trends in
NOX emissions resulting in improved air quality in Delaware,
the EPA anticipates that Brunner Island will likely continue to
primarily burn natural gas during the ozone season as air quality in
Delaware continues to improve. Accordingly, the EPA has no basis to
conclude that the facility would emit in violation of the good neighbor
provision with respect to either the 2008 or 2015 ozone NAAQS.
V. Conclusion
Based on the information discussed in this notice, the EPA is
proposing to deny all four of Delaware's CAA section 126(b) petitions,
as well as Maryland's CAA section 126(b) petition, on two bases.\61\
First, the EPA has described a number of technical deficiencies with
these petitions and, therefore, proposes to deny them on the basis that
Delaware and Maryland have not met their burden to demonstrate that the
named sources emit or would emit in violation of the good neighbor
provision with respect to the 2008 ozone NAAQS (in the case of both
Delaware and Maryland) or the 2015 ozone NAAQS (with respect to
[[Page 26682]]
Delaware's petitions). Second, the EPA proposes to determine, based on
its own analysis, that all of the petitions fail at one or more steps
of the four-step framework. For Delaware under step one, the EPA has
determined there are no air quality problems in Delaware in the
relevant years for both the 2008 and 2015 ozone NAAQS. The EPA has
further evaluated the named sources under step three, finding: (1) That
the EPA has already implemented the control strategy identified in the
petitions as cost-effective for three facilities (Conemaugh, Harrison,
and Homer City) in the CSAPR Update, and (2) that Brunner Island is
already operating and is expected to continue operating with natural
gas such that the facility has no additional cost-effective and
feasible controls available. The EPA is also proposing to deny the
Maryland petition because: (1) For those facilities with SCR, the EPA
has already implemented the control strategy identified in the
petitions as cost-effective, and (2) for the facilities with SNCR, the
EPA has already determined that operation of SNCR is not cost-effective
with respect to addressing transport obligations for the 2008 ozone
NAAQS and therefore is not required by the good neighbor provision with
respect to this NAAQS. The EPA requests comment on its proposed denial
of Maryland's and Delaware's CAA section 126(b) petitions, including
the bases for the decision described herein.
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\61\ In this action, note however the EPA is not proposing to
determine whether the upwind states identified in any of the CAA
section 126(b) petitions have fully addressed their obligation to
prohibit emissions activity that contributes significantly to
nonattainment in or interference with maintenance by any other state
with respect to the 2008 and 2015 ozone NAAQS.
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VI. Determinations Under Section 307(b)(1)
Section 307(b)(1) of the CAA indicates which Federal Courts of
Appeal have venue for petitions of review of final actions by EPA. This
section provides, in part, that petitions for review must be filed in
the Court of Appeals for the District of Columbia Circuit if (i) the
agency action consists of ``nationally applicable regulations
promulgated, or final action taken, by the Administrator,'' or (ii)
such action is locally or regionally applicable, if ``such action is
based on a determination of nationwide scope or effect and if in taking
such action the Administrator finds and publishes that such action is
based on such a determination.''
The EPA proposes to find that any final action regarding these
pending section 126(b) petitions is ``nationally applicable'' or, in
the alternative, is based on a determination of ``nationwide scope and
effect'' within the meaning of section 307(b)(1). Through this
rulemaking action, the EPA interprets sections 110 and 126 of the CAA,
statutory provisions which apply to all states and territories in the
United States. In addition, the proposed action addresses emissions
impacts and sources located in seven States, which are located in
multiple EPA Regions and federal circuits. The proposed action is also
based on a common core of factual findings and analyses concerning the
transport of pollutants between the different states. Furthermore, the
EPA intends this interpretation and approach to be consistently
implemented nationwide with respect to section 126(b) petitions for the
2008 and 2015 ozone NAAQS. Courts have found similar actions to be
nationally applicable.\62\ Additionally, in the report on the 1977
Amendments that revised section 307(b)(1) of the CAA, Congress noted
that the Administrator's determination that an action is of
``nationwide scope or effect'' would be appropriate for any action that
has a scope or effect beyond a single judicial circuit. H.R. Rep. No.
95-294 at 323, 324, reprinted in 1977 U.S.C.C.A.N. 1402-03. For these
reasons, the Administrator proposes to determine that any final action
related to this proposal is nationally applicable or, in the
alternative, is based on a determination of nationwide scope and effect
for purposes of section 307(b)(1).
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\62\ See, e.g., Texas v. EPA, 2011 U.S. App. LEXIS 5654 (5th
Cir. 2011) (finding SIP call to 13 states to be nationally
applicable and thus transferring the case to the U.S. Court of
Appeals for the D.C. Circuit in accordance with CAA section
307(b)(1)).
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Thus, the EPA proposes that pursuant to section 307(b)(1) any
petitions for review of any final actions regarding the rulemaking
would be filed in the Court of Appeals for the District of Columbia
Circuit within 60 days from the date any final action is published in
the Federal Register.
VII. Statutory Authority
42 U.S.C. 7410, 7426, 7601.
Dated: May 31, 2018.
E. Scott Pruitt,
Administrator.
[FR Doc. 2018-12374 Filed 6-7-18; 8:45 am]
BILLING CODE 6560-50-P