[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.
---------------------------------------------------------------------------

    \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.
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    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.
---------------------------------------------------------------------------

    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.
---------------------------------------------------------------------------

    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.
---------------------------------------------------------------------------

    \38\ 81 FR 74517.
---------------------------------------------------------------------------

    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.
---------------------------------------------------------------------------

    \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.
---------------------------------------------------------------------------

    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.
---------------------------------------------------------------------------

    \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.
---------------------------------------------------------------------------

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.
---------------------------------------------------------------------------

    \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.
---------------------------------------------------------------------------

    \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.
---------------------------------------------------------------------------

    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.
---------------------------------------------------------------------------

    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↦=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.
---------------------------------------------------------------------------

    \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/.
---------------------------------------------------------------------------

    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


