[Federal Register Volume 83, Number 194 (Friday, October 5, 2018)]
[Notices]
[Pages 50444-50473]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-20854]



[[Page 50443]]

Vol. 83

Friday,

No. 194

October 5, 2018

Part II





 Environmental Protection Agency





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Response to Clean Air Act Section 126(b) Petitions From Delaware and 
Maryland; Notice

  Federal Register / Vol. 83 , No. 194 / Friday, October 5, 2018 / 
Notices  

[[Page 50444]]


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ENVIRONMENTAL PROTECTION AGENCY

[EPA-HQ-OAR-2018-0295; FRL-9984-32-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 final action on petition.

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SUMMARY: The Environmental Protection Agency (EPA) is denying 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 is denying the petitions based on the best 
information available to the agency at this time, and particularly in 
light of an existing regulation already addressing emissions from these 
facilities: The Cross-State Air Pollution Rule Update for the 2008 
ozone NAAQS (CSAPR Update). The EPA's denial finds that Delaware has 
not demonstrated that the named sources emit or would emit in violation 
of the CAA's ``good neighbor'' provision. Further, the agency's 
independent analysis indicates that the identified sources in 
Delaware's and Maryland's petitions 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: This final action is effective on October 5, 2018.

ADDRESSES: The EPA has established a docket for this action under 
Docket ID No. EPA-HQ-OAR-2018-0295. All documents in the docket are 
listed and publicly available at http://www.regulations.gov. Although 
listed in the index, some information is not publicly available, i.e., 
Confidential Business Information or other information whose disclosure 
is restricted by statute. Certain other material, such as copyrighted 
material, is not placed on the internet and will be publicly available 
only in hard copy form. Publicly available docket materials are 
available either electronically in the docket or in hard copy at the 
EPA Docket Center, William Jefferson Clinton (WJC) West Building, Room 
3334, 1301 Constitution Avenue NW, Washington, DC. The Public Reading 
Room is open from 8:30 a.m. to 4:30 p.m., Monday through Friday, 
excluding legal holidays. The telephone number for the Public Reading 
Room is (202) 566-1744, and the telephone number for the Office of Air 
and Radiation Docket and Information Center is (202) 566-1742.

FOR FURTHER INFORMATION CONTACT: Questions concerning this final action 
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. Executive Summary of the EPA's Decision on CAA Section 126(b) 
Petitions From Delaware and Maryland
II. Background
    A. Ozone and Public Health
    B. The CAA Section 126(b) Petitions From Delaware
    C. The CAA Section 126(b) Petition From Maryland
    D. Summary of the EPA's May 31, 2018, Proposal
    E. Historical Regional Analyses of Good Neighbor Obligations 
Related to Ozone
III. CAA Sections 126 and 110 and Standard of Review for This Action
    A. Statutory Authority Under CAA Sections 126 and 
110(a)(2)(D)(i)(I)
    B. Reasonableness of Applying the Four-Step Transport Framework 
for This Action
IV. The EPA's Final Response to Delaware's and Maryland's CAA 
Section 126(b) Petitions
    A. The EPA's Evaluation of Whether the Petitions Are Sufficient 
To Support a CAA Section 126(b) Finding
    B. The EPA's Independent Analysis of the Petitions Consistent 
With the CSAPR Update
V. Determinations Under CAA Section 307(b)(1)
VI. Statutory Authority

I. 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 by individual sources located in Pennsylvania or West 
Virginia with respect to the 2008 and 2015 ozone NAAQS. Maryland 
submitted a single petition alleging good neighbor violations by 36 
electric generating units (EGUs) in five states with respect to the 
2008 ozone NAAQS. On May 31, 2018, the EPA issued a proposal to deny 
all five CAA section 126(b) petitions. 83 FR 26666 (June 8, 2018). The 
agency solicited comments on the proposal and hosted a public hearing 
on June 22, 2018, where nine speakers testified. The EPA also received 
117 written comments submitted to the docket on the proposed denial. 
This Federal Register notice addresses certain significant comments the 
agency received. The remaining comments are addressed in the Response 
to Comments (RTC) document available in the docket for this action.
    As described in further detail in this notice, the EPA is 
finalizing the denial of the CAA section 126(b) petitions submitted by 
the states of Delaware and Maryland. Generally, the Delaware and 
Maryland petitions (and commenters who were supportive of the EPA's 
granting these petitions) suggest that Delaware and Maryland residents 
are exposed to unhealthy levels of ground-level ozone pollution. They 
identify certain EGUs in upwind states, most with post-combustion 
nitrogen oxides (NOX) controls,\1\ that historically were 
not optimally operating for pollution abatement. The petitions ask EPA 
to impose federally enforceable short-term, rate-based emissions limits 
on these EGUs to ensure that the NOX controls are optimally 
operated. The EPA proposed to deny these petitions in May of 2018, and 
has considered public

[[Page 50445]]

comments on that proposal in crafting this final action.
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    \1\ In the case of one facility, Brunner Island Steam Generating 
Station in Pennsylvania, Delaware cites, the facility's ability to 
combust natural gas in electricity generation and thereby reduce 
NOX relative to combusting coal at the facility.
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    Consistent with the EPA's proposal and based on the best data 
available to the agency at this time, the agency is finalizing its 
denial of these petitions. The EPA's denial for Delaware is based on 
its findings that air quality modeling of ozone levels in 2017 from the 
Cross-State Air Pollution Rule Update for the 2008 Ozone NAAQS \2\ 
(CSAPR Update) and more recent air quality modeling of ozone levels in 
2023 show no air quality problems in the state with regard to the 2008 
and 2015 ozone NAAQS, respectively. For both the Delaware and Maryland 
petitions, the EPA's denial is also based on the fact that the agency 
has already evaluated the ozone transport issues and NOX 
control strategies raised in the petitions and finalized the CSAPR 
Update to implement the NOX control strategies achievable in 
states upwind of Delaware and Maryland, including at the specific EGUs 
named in both Delaware's and Maryland's petitions. 81 FR 74504. 
Although the CSAPR Update only explicitly addressed the 2008 ozone 
NAAQS, the EPA's conclusion in that action as to the control strategies 
available at the named sources is relevant to its analysis of 
Delaware's and Maryland's petitions with regard to both the 2008 ozone 
NAAQS (addressed in all five 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 
at the named sources in the context of the CSAPR allowance trading 
program applies regardless of which NAAQS is being addressed, as 
explained below.
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    \2\ 81 FR 74504 (October 26, 2016).
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    Because the CSAPR Update is a final rule in which the EPA has 
evaluated substantially the same environmental issues and concerns as 
those that Delaware and Maryland raise in their CAA section 126(b) 
petitions, the agency has reviewed those petitions in light of, among 
other factors, the CSAPR Update record analysis and the findings made 
therein. In doing so, the EPA found that the named EGUs do not have 
further cost-effective \3\ NOX reduction potential beyond 
the level of NOX control stringency already finalized in the 
CSAPR Update emissions budgets. In other words, the agency determines 
that the CSAPR Update appropriately quantified the cost-effective 
NOX reduction potential from the EGUs named in the CAA 
section 126(b) petitions and the EPA does not find any further 
NOX reductions that may be available from these EGUs at more 
stringent levels of NOX control to be cost effective 
considering additional relevant factors such as NOX 
reduction potential and air quality impacts.
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    \3\ In the CSAPR Update, the EPA evaluated several levels of EGU 
NOX control stringency and represented those levels using 
an estimated marginal cost per ton of NOX reduced. The 
final CSAPR Update action selected the level of control stringency 
that included operating and optimizing existing SCR post-combustion 
controls, installing state-of-the-art NOX combustion 
controls, and shifting generation to existing units with lower 
NOX emission rates within the same state. This level of 
NOX control stringency was represented by a marginal cost 
of $1,400 per ton. In other words, the agency considered these 
NOX reduction strategies to be cost effective at marginal 
cost of $1,400 per ton. The EPA selected this level of control 
stringency by applying a multi-factor test, which indicated that 
this level of control stringency maximized NOX reductions 
and air quality improvement relative to cost, as compared to the 
other control levels evaluated.
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    Further, the EPA finds that the CSAPR Update is, in fact, 
controlling emissions from the named EGUs specifically and from all 
EGUs collectively in the named upwind states that impact ozone 
concentrations in Delaware and Maryland. Based on the 2017 ozone season 
emissions data, the CSAPR Update reduced regional ozone season 
NOX emissions by approximately 77,000 tons (21 percent) from 
2016 levels. Additionally, the average 2017 ozone season NOX 
emissions rate across the EGUs named in the Delaware or Maryland 
petitions was 0.116 pounds/one million British thermal units (lbs/
mmBtu) compared with average rates of 0.257 and 0.208 lbs/mmBtu in 2015 
and 2016, respectively. Thus, the best data that the agency has 
available at this time--2017 emissions data--indicate that the CSAPR 
Update ozone season allowance trading program is reducing summer-time 
NOX emissions and these data suggest that the units named in 
the CAA section 126(b) petitions are collectively controlling their 
NOX emissions consistent with the NOX control 
strategies identified in the petitions.
    The agency does not at this time find adequate technical or legal 
grounds for granting the Delaware or Maryland CAA section 126(b) 
petitions in light of the existing and effective CSAPR Update 
regulation. The agency, therefore, denies these petitions due to the 
lack of further cost-effective controls relative to the emissions 
reductions already required by the CSAPR Update and based on the best 
available information--2017 emissions data--indicating that the CSAPR 
Update is being appropriately implemented to reduce NOX 
emissions regionally and from the named EGUs. The EPA also notes 
several technical deficiencies in the Delaware analyses. As further 
described in this notice, the EPA is, therefore, denying Delaware's 
petitions based on the petitioner's failure to meet its burden under 
CAA section 126(b) to establish a basis for the finding requested. The 
EPA additionally is denying both Delaware's and Maryland's petitions 
based on the agency's own independent analysis of the interstate 
transport of ozone pollution conducted for the CSAPR Update, which 
rebuts several assertions in these petitions, as well as additional 
technical analysis regarding current unit operations. Finally, the EPA 
is also denying Delaware's petitions for the 2015 ozone NAAQS based on 
its own recent analyses projecting emissions levels to a relevant 
future year, which found no expected nonattainment or maintenance 
problems in Delaware for that NAAQS. In making this final decision, the 
EPA reviewed the incoming petitions, the public comments received, the 
relevant statutory authorities, and other relevant materials. 
Accordingly, the EPA denies the CAA section 126(b) petitions from 
Delaware and Maryland.
    The remainder of this notice is organized as follows: Section II of 
this notice provides background information, a summary of the relevant 
issues raised in Delaware's and Maryland's CAA section 126(b) 
petitions, and a summary of the EPA's May 31, 2018, proposed action; 
Section III of this notice provides information regarding the EPA's 
approach to addressing the interstate transport of ozone and the 
statutory authority under CAA sections 110(a)(2)(D)(i) and 126(b); and 
Section IV of this notice details the basis for the EPA's final action 
to deny these petitions, including responses to significant comments 
received on the proposal.

II. Background

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 
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, the regional nature of interstate 
transport of ozone pollution, and health effects, see the CSAPR Update, 
81 FR 74513-14.

[[Page 50446]]

    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).\4\ On October 1, 2015, the EPA further revised the 
ground-level ozone NAAQS to 70 ppb.\5\
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    \4\ See National Ambient Air Quality Standards for Ozone, Final 
Rule, 73 FR 16436 (March 27, 2008).
    \5\ See National Ambient Air Quality Standards for Ozone, Final 
Rule, 80 FR 65292 (October 26, 2015).
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B. 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 alleging that emissions from the Conemaugh Generating Station 
(Conemaugh), the Homer City Generating Station (Homer City), and the 
Brunner Island Steam Generating Station (Brunner Island) in 
Pennsylvania, and the Harrison Power Station (Harrison) in West 
Virginia, significantly contribute to exceedances of the 2008 and 2015 
8-hour ozone NAAQS in the state of Delaware.\6\
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    \6\ See Petitions from the state of Delaware under CAA section 
126(b) requesting that the EPA find that Conemaugh, Homer City, 
Brunner Island, and Harrison 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.
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    The petitions identify a total of 59 exceedance days in Delaware 
for the 2008 ozone NAAQS 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. As 
discussed in Section III.D of the proposal, 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 to 
support these same claims. The Brunner Island and Harrison petitions 
cite an August 6, 2015 technical memorandum from Sonoma Technology, 
Inc. (STI), which describes contribution modeling results. The 
Conemaugh and Homer City petitions cite to October 24, 2016 modeling 
documentation from the Comprehensive Air Quality Model with Extensions 
(CAMx), but Delaware did not submit this documentation with its 
petitions or otherwise provide it to the EPA. Based on the August 6, 
2015 technical memorandum from STI and the October 24, 2016 CAMx 
modeling documentation, the petitions claim that all four named 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.\7\
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    \7\ See 83 FR 26670.
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    All four petitions contend that the absence of short-term 
NOX emissions limits cause the named sources to 
significantly contribute to Delaware's nonattainment of the 2008 and 
2015 ozone NAAQS. The petitions ask the EPA to implement short-term 
NOX emissions limits as a remedy under CAA section 126(c) to 
ensure optimal operation at these units. 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 regulations 
addressing the reasonable available control technology (RACT) 
requirements for NOX \8\ include a 30-day averaging period 
for determining compliance with 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 their petitions have been subject 
to several NOX emissions allowance trading 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, therefore, been 
able to comply with the allowance trading program requirements without 
having to make any significant reductions in their ozone season average 
NOX emissions rates.
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    \8\ Additional RACT Requirements for Major Sources of NOX and 
VOC; 25 Pa Code 129.96-100 (also known as the ``RACT II rule'').
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    Notably, each of the facilities is equipped with combustion and/or 
post-combustion controls. Harrison is equipped with low NOX 
burners (LNBs), overfire air (OFA), and selective catalytic reduction 
(SCR) for control of NOX emissions at all three coal-fired 
units. Homer City is equipped with LNBs, OFA, and SCR for control of 
NOX emissions at all three coal-fired units. Conemaugh is 
equipped with LNBs, close-coupled and separated overfire air (CC/SOFA), 
and SCR for control of NOX emissions at both coal-fired 
units. Brunner Island is equipped with LNBs and combustion air controls 
and has the ability to burn coal, gas, or both to provide steam to its 
generators. Delaware 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, these EGUs all have SCR to control 
NOX emissions. Delaware argues that a review of emissions 
rates since the SCRs were installed indicates that the SCRs were at 
times 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 implement effective and 
consistent NOX control operation. For more information on 
the sources identified in the petitions, see Sections III.D and III.E 
of the proposal.
    Subsequent to receiving the petitions, the EPA published notices 
extending the statutory deadline for the agency to take final action on 
all four of Delaware's CAA section 126(b) petitions. CAA 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). CAA section 307(d) 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,

[[Page 50447]]

under certain circumstances, for rulemakings subject to the CAA 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. In 2016, the EPA published notices extending the deadlines to 
act on all four of Delaware's petitions by 6 months. The notices 
extending these deadlines can be found in the docket for this 
rulemaking.

C. 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, 
significantly contribute to nonattainment and interfere with 
maintenance of the NAAQS.\9\ 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 
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 be reduced if these EGUs were to 
optimize running their SCR and SNCR controls. 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. Maryland also provides 
the results of 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.
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    \9\ 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.
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    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.
    Maryland alleges that, although the 36 named 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.\10\ 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 achieved either after 2005 or after the unit 
installed SCR or SNCR, whichever is later. Maryland further alleges 
that NOX emissions rates at the 36 EGUs 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.
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    \10\ Maryland Petition, Appendix A, Part 2, available in the 
docket for this action.
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    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 that each named EGU to 
minimize emissions by optimizing existing control technologies, 
enforced through use of a 30-day rolling average rate.\11\
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    \11\ See id.
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    Maryland also submitted the following documents: A review of its 
own NOX regulations for coal fired EGUs; \12\ a study 
conducted by Maryland and the University of Maryland regarding regional 
ozone transport research and analysis efforts in Maryland; \13\ 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; \14\ a list of recommended language for the EPA to 
include in federal orders related to the named EGUs to remedy 
significant contribution; \15\ 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.\16\
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    \12\ Id. Appendix B.
    \13\ Id. Appendix C.
    \14\ Id. Appendix D.
    \15\ Id. Appendix E.
    \16\ Id. Appendix F.
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    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; \17\ an analysis comparing 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; \18\ an 
analysis comparing 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; \19\ and 
additional photochemical modeling conducted by the University of 
Maryland regarding the impact of the 36 named EGUs in the five upwind 
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.\20\
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    \17\ Id. Supplemental Appendix A.
    \18\ Id. Supplemental Appendix B.
    \19\ Id. Supplemental Appendix C.
    \20\ Id. Supplemental Appendix D.
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    Maryland's petition requests a remedy that will compel the named 
EGUs to

[[Page 50448]]

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 
compliance periods, 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 
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 EGUs had simply run their 
controls efficiently. Therefore, Maryland states that, based on the 
EPA's past approaches to establishing significant contributions based 
on 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 named EGUs can be 
reduced at reasonable cost, or with potentially no actual new costs to 
the EGUs at all,\21\ 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 area 
designations in the state for the 2015 ozone NAAQS.
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    \21\ 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 $1,000, 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.
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    Consistent with CAA section 307(d), as discussed in Section III.D 
of the proposal, 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 notice extending the deadline for 
acting on Maryland's CAA section 126(b) petition to July 15, 2017.\22\
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    \22\ 82 FR 22 (January 3, 2017).
---------------------------------------------------------------------------

D. Summary of the EPA's May 31, 2018, Proposal

    In Section IV of the proposal, the EPA explained its bases for 
proposing to deny the CAA section 126(b) petitions from Delaware and 
Maryland. Given that ozone is a regional pollutant and that the EPA had 
recently evaluated regional ozone pollution in the CSAPR Update, the 
EPA proposed to evaluate the petition consistent with the same four-
step regional analytic framework--described in more detail in the 
following section--that the EPA has used in previous regulatory actions 
to evaluate regional interstate ozone transport. Within this framework, 
the EPA also proposed to evaluate whether the sources named in the 
petitions emit or would emit in violation of the good neighbor 
provision based on both current and future anticipated emissions 
levels. The EPA identified multiple bases for the proposed denial.
    The EPA noted that the agency's historical approach to evaluating 
CAA section 126(b) petitions looks first to see whether a petition, 
standing alone, identifies or establishes a technical basis for the 
requested CAA section 126(b) finding. 83 FR 26674. In this regard, the 
agency proposed to find that several aspects of Delaware's analyses are 
insufficient to support Delaware's conclusion that the four sources 
named in the petitions emit or would emit in violation of the good 
neighbor provision. First, the EPA proposed to find that Delaware does 
not provide sufficient information to indicate that there is a current 
or expected future downwind air quality problem in the state with 
respect to either the 2008 and 2015 ozone NAAQS. Id. at 26676. Second, 
the EPA proposed to find that the emissions information Delaware relies 
upon for its air quality modeling is not representative of current or 
future projected emissions levels at the named EGUs. Id. Third, the EPA 
proposed to find that Delaware's analyses regarding ozone contributions 
to modeled and/or measured ozone levels are unclear and, therefore, 
insufficient to support Delaware's position that the named sources are 
significantly contributing to nonattainment or interfering with 
maintenance of the NAAQS on specific days. Id. The EPA also proposed to 
find that material elements of the analysis provided in Maryland's 
petition are technically deficient. Id. at 26677.
    The EPA further proposed to rely on its own independent analysis to 
evaluate the requested CAA section 126(b) findings. Id. First, the EPA 
proposed to find that its independent analysis provides no basis to 
conclude that any of the sources named by Delaware are linked to a 
downwind air quality problem with regard to the 2008 ozone NAAQS in 
steps one and two of the four-step framework. The EPA explained that, 
based on the modeling conducted in support of the CSAPR Update, 
Delaware was not projected to have any nonattainment or maintenance 
receptors in 2017 with respect to the 2008 ozone NAAQS, and, therefore, 
the states named in Delaware's petitions are not linked to a downwind 
air quality problem in the state under that standard. Id. at 26678. 
Furthermore, both to confirm the projections in the CSAPR Update 
modeling and in response to the petition's assertion that current air 
quality data show that Delaware has a downwind problem for the 2008 
ozone NAAQS, the EPA examined Delaware's 2014-2016 design values and 
found that no monitors were violating the 2008 ozone NAAQS. Id. The EPA 
also proposed to find that available future year modeling data do not 
suggest that Delaware will have air quality problems by the relevant 
attainment date for the 2015 ozone NAAQS.
    Second, the EPA evaluated whether there are further cost-effective 
NOX emissions reductions available at the specific sources 
named in the petitions,

[[Page 50449]]

consistent with step three of the four-step framework. For units in the 
Delaware and Maryland petitions already equipped with SCRs, the EPA 
proposed to determine that 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 for the 2008 ozone NAAQS, which is the same control 
strategy identified in the petitions as being both feasible and cost 
effective. Id. at 26679. Therefore, the EPA proposed to determine that 
all identified cost-effective emission reductions have already been 
implemented with respect to these sources, and therefore that those 
sources neither emit nor would emit in violation of the good neighbor 
provision for the 2008 NAAQS. The EPA proposed to determine that this 
conclusion is also appropriate with regard to the 2015 ozone NAAQS for 
those sources addressed in the Delaware petitions because the EPA's 
determination that the cost-effective control strategy is already being 
implemented applies regardless of which NAAQS is being addressed. In 
other words, because the strategy of optimizing existing controls 
relative to the 2008 ozone NAAQS has already been implemented via the 
CSAPR Update for the sources Delaware named for the 2015 NAAQS, the EPA 
proposed there are no additional control strategies available to 
further reduce NOX emissions at these sources to address 
this standard. Id.
    To the extent that the Delaware and Maryland petitions also 
identify sources without SCR, the EPA also proposed to deny the 
petitions. Maryland cited two sources operating selective non-catalytic 
reduction post-combustion controls (SNCR). The EPA proposed to deny 
Maryland's petition with respect to these sources based on its 
conclusion in the CSAPR Update that fully operating with SNCR is not a 
cost-effective NOX emission reduction strategy with respect 
to addressing transport obligations for the 2008 ozone NAAQS. The EPA, 
therefore, proposed to find that these sources do not emit and would 
not emit in violation of the good neighbor provision with respect to 
the 2008 ozone NAAQS. Additionally, one of Delaware's petitions alleges 
significant contribution from the Brunner Island facility, which 
currently has neither SCR nor SNCR installed. The EPA proposed to 
determine that an independent step three analysis still provides a 
basis for denying Delaware's Brunner Island petition. The EPA explained 
that the facility primarily burned natural gas with a low 
NOX emission rate in the 2017 ozone season and that the EPA 
reasonably expects the facility to continue operating primarily by 
burning natural gas in future ozone seasons. Id. at 26680. As such, the 
EPA proposed to deny the Brunner Island petition because the agency 
found that there are no additional feasible and cost-effective 
NOX emission reductions available at Brunner Island.

E. Historical Regional Analyses of Good Neighbor Obligations Related to 
Ozone

    As explained in the proposal, given that formation, atmospheric 
residence, and transport of ozone occur on a regional scale (i.e., 
hundreds of miles) over much of the eastern United States, the states 
and the EPA have 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. These 
rulemakings have included findings 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. Specifically, to support each historical 
action, an evaluation of the extent of the ozone transport problem 
(i.e., the breadth of downwind ozone problems and the contributions 
from upwind states) was performed. Historically, these assessments have 
found interstate ozone transport to be an interconnected system of 
upwind and downwind ozone transport such that a regional trading 
program would be effective at implementing the CAA's good neighbor 
requirements.\23\
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    \23\ The Supreme Court has also concurred with the EPA's 
assessment regarding the complexity and interconnectivity 
underpinning ozone transport. See EPA v. EME Homer City Generation, 
L.P., 134 S. Ct. 1584, 1593-94 (2014).
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1. Description of the Four-Step Transport Framework
    The EPA has promulgated several transport rulemakings that have 
addressed the good neighbor provision, including four addressing 
interstate transport with respect to various ozone NAAQS. Each of these 
rulemakings essentially followed the same four-step transport framework 
to quantify and implement emission 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 
NAAQS. The EPA has identified downwind areas with air quality problems 
(referred to as ``receptors'') considering monitored air quality data, 
where appropriate, and air quality modeling projections to a future 
compliance year. The EPA has focused its analysis on a future year in 
light of the forward-looking nature of the good neighbor obligation in 
CAA section 110(a)(2)(D)(i)(I). Specifically, the statute requires that 
states prohibit emissions that ``will'' significantly contribute to 
nonattainment or interfere with maintenance of the NAAQS in any other 
state. The EPA has reasonably interpreted this language as permitting 
states and the EPA in implementing the good neighbor provision to 
prospectively evaluate downwind air quality problems and the need for 
further upwind emissions reductions. See North Carolina v. EPA, 531 
F.3d 896, 913-14 (D.C. Cir. 2008) (affirming as reasonable the EPA's 
interpretation of ``will'' to refer to future, projected ozone 
concentrations). The agency has thus identified areas expected to be in 
nonattainment with the 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 transport rulemakings for the 2008 ozone NAAQS, the 
agency 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 upwind states linked to downwind air quality problems, 
identifying on a statewide basis emissions (if any) that will 
significantly contribute to nonattainment or interfere with maintenance 
of a standard, based on cost and air quality factors evaluated in a 
multi-factor test. In all four of the EPA's prior rulemakings for 
ozone, the agency apportioned emission reduction responsibility among 
multiple upwind states linked to downwind air quality problems using 
several particular cost- and air quality-based factors to quantify the 
reduction in a linked upwind state's emissions that the rulemaking 
would require 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 emission reductions within the 
state. When the EPA has promulgated federal implementation plans (FIPs) 
addressing the good neighbor provision for the ozone NAAQS in prior 
transport rulemakings, the EPA has typically required affected sources 
in upwind states to participate in allowance trading

[[Page 50450]]

programs to achieve the necessary emission reductions.\24\ In addition, 
the EPA has also offered states the opportunity to participate in 
similar EPA-operated allowance trading programs to achieve the 
necessary emission reductions through state implementation plans 
(SIPs).
---------------------------------------------------------------------------

    \24\ 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, such as the 
enforceable mechanisms that petitioners apparently favor and argue 
for in their petition.
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2. Prior Regional Rulemakings Under the Good Neighbor Provision
    The EPA's first regional rulemaking regarding interstate transport, 
the NOX SIP Call, addressed the 1979 ozone NAAQS. 63 FR 
57356 (October 27, 1998). The NOX SIP Call was the result of 
the analytic work and recommendations of the Ozone Transport Assessment 
Group (OTAG), which was organized by and led by states in consultation 
with the EPA and other stakeholders. The EPA used this collaboratively 
developed analysis to conclude 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 emission 
budgets and required upwind states to adopt SIPs that would decrease 
their NOX emissions by a sufficient amount to meet these 
budgets, thereby prohibiting 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 emission 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. Half of the petitioning states requested that the 
NOX reductions to address regional interstate ozone 
pollution transport be implemented using an allowance trading 
program.\25\ Based on analysis conducted for 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, and the EPA made final CAA section 126(b) findings for 12 states 
named in the petitions 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 CAA 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).
---------------------------------------------------------------------------

    \25\ Connecticut, Maine, New York, and Pennsylvania requested an 
allowance trading program to reduce NOX emissions and 
remedy regional interstate ozone transport. 63 FR 56297.
---------------------------------------------------------------------------

    The EPA next promulgated the Clean Air Interstate Rule (CAIR), 70 
FR 25162 (May 12, 2005) 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. 70 FR 25172. 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 rulemaking to define significant 
contribution (i.e., the emission 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 rulemaking to 
promulgate, where necessary, FIPs imposing emission limitations in the 
event states did not submit SIPs. 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 rulemaking, which promulgated 
backstop 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 
determinations either that the named states were not adversely 
impacting downwind air quality in violation of the good neighbor 
provision, or that such impacts were fully remedied by implementation 
of the emission reductions required by the CAIR FIPs. 71 FR 25328, 
25330 (April 28, 2006).
    The D.C. Circuit found that EPA's approach to CAA 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, 
531 F.3d at 929.

[[Page 50451]]

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 and compliance mechanisms 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 CSAPR to replace CAIR. 76 FR 
48208 (August 8, 2011). CSAPR addressed the same (1997) 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' ability 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 in multiple downwind 
states. 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 emission budgets for affected states, and 
required EGUs in these states to participate in new regional allowance 
trading programs to reduce statewide emission levels.\26\ CSAPR was 
subject to nearly 4 years of litigation. Ultimately, the Supreme Court 
upheld the EPA's approach to calculating emission reduction obligations 
and apportioning upwind state responsibility under the good neighbor 
provision, but also held that the EPA was precluded from requiring more 
emission reductions than necessary to address downwind air quality 
problems, or ``over-controlling'' upwind state emissions. See EPA v. 
EME Homer City Generation, L.P., 134 S. Ct. 1584, 1607-09 (2014) (EME 
Homer City).\27\
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    \26\ The CSAPR trading programs included assurance provisions to 
ensure that emissions are reduced within each individual state, in 
accordance with North Carolina, 531 F.3d at 907-08 (holding the EPA 
must actually require elimination of emissions from sources that 
contribute significantly to nonattainment and interfere with 
maintenance in downwind areas). Those provisions were also included 
in the CSAPR Update and went into effect with the 2017 CSAPR 
compliance periods.
    \27\ 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 may over-control emissions 
beyond what was necessary to address the good neighbor requirements. 
EME Homer City Generation, L.P. v. EPA, 795 F.3d 118 (2015) (EME 
Homer City II). The EPA addressed the remand in several rulemaking 
actions in 2016 and 2017.
---------------------------------------------------------------------------

    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 CSAPR Update built upon previous 
regulatory efforts in order to address the collective contributions of 
ozone pollution from 22 states in the eastern United States to 
widespread downwind air quality problems. As was also the case for the 
previous rulemakings, the EPA evaluated the nature (i.e., breadth and 
interconnectedness) of the ozone problem and NOX reduction 
potential from EGUs, including those sources named in the Delaware and 
Maryland CAA section 126(b) petitions. The CSAPR Update is described in 
more detail in Section IV.B of this final action.
    In finalizing the CSAPR Update, the EPA found that it was at that 
time unable to determine whether the rule fully resolved good neighbor 
obligations for most 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 noted that, based 
on its analysis at that time, the emission reductions required by the 
rule ``may not be all that is needed'' to address transported 
emissions.\28\ 81 FR 74521 through 74522. The EPA noted that the 
information available at that time suggested 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, in the CSAPR 
Update the EPA could not determine whether, in step three of the four-
step framework, the EPA had quantified all emission reductions that may 
be considered 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 were achievable on timeframes extending beyond the 2017 analytic 
year.
---------------------------------------------------------------------------

    \28\ 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 
74551-22.
---------------------------------------------------------------------------

    On July 10, 2018, the EPA proposed to find that, based on the 
latest available emissions inventory and air quality modeling data for 
a 2023 analytic year, the CSAPR Update fully addresses the good 
neighbor provision requirements for the 2008 ozone NAAQS for the 20 
eastern states (among the 22) previously addressed in the CSAPR Update. 
83 FR 31915. The EPA's proposed determination was premised on the 
finding that there would be no remaining nonattainment or maintenance 
receptors for the 2008 ozone NAAQS in the eastern U.S. in 2023. The 
proposed determination applied the four-step CSAPR framework but did 
not progress past step one since no air quality receptors were 
identified. Therefore, with the CSAPR Update fully implemented, the EPA 
has proposed to find that states are not expected to contribute 
significantly to nonattainment in, or interfere with maintenance by, 
any other state with regard to the 2008 ozone NAAQS. EPA is currently 
reviewing comments on the proposed rule and anticipates taking final 
action by December 2018. The remaining two states were determined to 
have no remaining good neighbor obligation for the 2008 ozone NAAQS in 
the CSAPR Update (Tennessee), 81 FR 74540 (October 26, 2016), and in a 
separate SIP approval (Kentucky), 81 FR 33730 (July 17, 2018).

III. CAA Sections 126 and 110 and Standard of Review for This Action

    The following subsections describe both the statutory authority and 
the EPA's standard of review for the final action on Delaware's and 
Maryland's CAA section 126(b) petitions. Section III.A of this notice 
describes the EPA's authority and interpretation of key terms under 
both CAA sections 126 and 110(a)(2)(D)(i)(I), including the 
relationship between the good neighbor provision and CAA section 
126(b). Section III.B of this notice describes the reasonableness of 
applying the four-step framework and certain prior findings under the 
CSAPR Update as the standard of review in evaluating Delaware's and 
Maryland's CAA section 126(b) petitions.

A. Statutory Authority Under CAA Sections 126 and 110(a)(2)(D)(i)(I)

    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 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

[[Page 50452]]

section 110(a)(2)(D)(i).\29\ 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.
---------------------------------------------------------------------------

    \29\ The text of CAA section 126 as codified in the U.S. Code 
cross-references CAA section 110(a)(2)(D)(ii) instead of CAA 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).
---------------------------------------------------------------------------

    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 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 emission 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 than 3 years 
from the date of the finding.
    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 in the prior section, the EPA has developed a number of 
regional rulemakings to address CAA section 110(a)(2)(D)(i)(I) for the 
various ozone NAAQS. Notably, 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 and required 
implementation of specific emission budgets starting in 2017. 81 FR 
74504.
    The EPA's historical approach to evaluating CAA section 126(b) 
petitions evaluates whether a petition establishes a sufficient basis 
for the requested CAA section 126(b) finding. 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 Brunner 
Island). 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.
    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 processes to address the problem of interstate pollution 
transport. See, e.g., 76 FR 69052, 69054 (November 7, 2011). Congress 
provided two separate statutory processes 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, 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.
    While 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, 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. 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. This approach is particularly applicable to the Delaware and 
Maryland petitions because the EPA recently finalized and began 
implementation of the CSAPR Update, which evaluated and addresses 
interstate ozone pollution transport, inclusive of the named states' 
impacts on Delaware and Maryland. As described further in Section II of 
this notice, ozone is a regional air pollutant and previous EPA 
analyses and regulatory actions have evaluated the regional interstate 
ozone transport problem using a four-step analytic framework. The EPA 
most recently applied this four-step framework in promulgating the 
CSAPR Update to address interstate transport with respect to the 2008 
ozone NAAQS under CAA section 110(a)(2)(D)(i)(I) and believes it may be 
generally useful in analyzing the 2015 ozone NAAQS. 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. Therefore, in this 
instance, the EPA's decision whether to grant or deny the CAA section 
126(b) petitions regarding both the 2008 8-hour ozone and 2015 ozone 
NAAQS depends on application of the four-step framework. The 
application of the four-step framework to the EPA's analysis of 
Maryland's and Delaware's CAA section 126(b) petitions regarding the 
2008

[[Page 50453]]

ozone NAAQS is, therefore, legally appropriate given the EPA has 
previously interpreted (and addressed) significant contribution and 
interference with maintenance under CAA section 110(a)(2)(D)(i) under 
this framework via the CSAPR Update.
    Unlike the 2008 ozone NAAQS, the EPA has not to date engaged in a 
rulemaking action regarding the good neighbor provision for the 2015 
ozone NAAQS. However, the EPA has recently released technical 
information intended to assist states' efforts in development of SIPs 
to address this standard.\30\ 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 good neighbor SIPs. 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 for the specific sources named in in 
Delaware's CAA section 126(b) petitions consistent with the EPA's four-
step framework. To the extent that the EPA made determinations in 
either the CSAPR Update or other analytic exercises that are pertinent 
to the evaluation of the 2015 ozone NAAQS under the four-step framework 
for the sources named in the petitions, it is appropriate to consider 
that relevant information as well.\31\
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    \30\ 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 27, 2018), available in the docket for 
this proposed action. By operation of statute, states are required 
to submit to the EPA their SIPs to address the good neighbor 
provision for the 2015 ozone NAAQS in October 2018.
    \31\ As discussed further in Section IV.B.1 of this notice, in 
the CSAPR Update the EPA found that it was not at that time able to 
determine whether the Update fully resolved good neighbor 
obligations for the 2008 ozone NAAQS for most 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 noted that the emission reductions required by 
the rule may not be all that is needed to address transported 
emissions. 81 FR 74521. The EPA is not making a final determination 
regarding any remaining good neighbor obligation for those states as 
part of this action, other than with respect to emissions from the 
sources named in the petition with respect to the particular NAAQS 
at issue. (Any determination made in this final rule is only with 
respect to the sources specifically named in Delaware's and 
Maryland's petitions for the applicable NAAQS.) However, the EPA 
notes that in a separate, pending action, the EPA has proposed to 
determine that the CSAPR Update fully addresses certain states' good 
neighbor obligations regarding the 2008 ozone NAAQS. See 83 FR 31915 
(July 10, 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 CAA section 126(b). The 
EPA also believes, given the more regional, rather than localized, 
impact of NOX emissions on downwind ozone concentrations, it 
is reasonable and appropriate at each step to consider whether the 
facility ``emits or would emit'' in light of the facility's current or 
reasonably anticipated future operating conditions. Therefore, the EPA 
interprets the phrase ``emits or would emit'' in the context of acting 
on Delaware's and Maryland's petitions to mean that a source may 
``emit'' in violation of the good neighbor provision if, based on 
current emission levels, the upwind state in which the source is 
located contributes to downwind air quality problems and the individual 
source may be further controlled as determined through a multi-factor 
test that includes consideration of cost-effective controls, technical 
feasibility, and air quality factors. Similarly, in evaluating the 
sources named under these petitions, a source ``would emit'' in 
violation of the good neighbor provision if, based on reasonably 
anticipated future emission levels (accounting for existing 
conditions), the upwind state in which the source is located 
contributes to downwind air quality problems and the individual source 
could be further controlled as determined through a multi-factor test 
that includes consideration of cost-effective controls, technical 
feasibility, and air quality factors. Consistent with this 
interpretation, the EPA has, therefore, evaluated, in this notice, 
whether the sources cited in the petitions emit or would emit in 
violation of the good neighbor provision based on both current and 
anticipated future emission 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 adequate provisions that eliminate the significant 
contribution to nonattainment or interference with maintenance of the 
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 CAA 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 
EME Homer City, 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 has no basis to find that a source in that state emits or would 
emit 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 it has determined fully eliminates emissions that significantly 
contribute to nonattainment or interfere with maintenance in a downwind 
state, the EPA has no basis to 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, absent new information to the contrary.
    The EPA notes that the approval of a SIP or promulgation of a FIP 
implementing CAA 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 28274 n.15; 71 
FR 25336 n.6; 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.
    Several commenters disagreed with the EPA's interpretation of the

[[Page 50454]]

relationship between the good neighbor provision under CAA section 
110(a)(2)(D)(i)(I) and section 126(b), contending that Congress 
intended CAA section 126(b) petitions to be a legal tool to address 
interstate problems separate and distinct from SIP and FIP actions 
under CAA section 110. Commenters cite to legislative history and the 
D.C. Circuit's opinion in Appalachian Power in support of their 
assertions that CAA section 126 is intended to remedy interstate 
transport problems notwithstanding the existence of CAA section 110. 
Commenters accordingly assert the EPA is incorrect in determining that 
its four-step approach under CAA section 110(a)(2)(D)(i)(I) is 
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 and the 2015 
ozone NAAQS in a petitioning downwind state.
    The EPA has consistently acknowledged in prior actions under CAA 
section 126(b) that Congress created the good neighbor provision and 
CAA section 126 as two independent statutory processes to address one 
problem: Interstate pollution transport. See, e.g., 83 FR 26666, 26675 
(June 8, 2018) (proposal for this final action); 76 FR 69052, 69054 
(November 7, 2011) (proposed action for the EPA's final action on New 
Jersey's CAA section 126(b) petition regarding SO2 emissions 
from Portland Generating Station). As the commenters point out, courts 
have upheld the EPA's position that CAA sections 110(a)(2)(D)(i) and 
126 are two independent statutory processes 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. However, the 
commenters misread the courts' holding regarding the EPA's 
interpretation of the interplay between the two provisions. Both the 
D.C. Circuit and Third Circuit spoke to the question of the timing of 
these processes--specifically, whether the EPA could act on a CAA 
section 126(b) petition in instances where the agency had not yet acted 
on a CAA section 110 SIP addressing interstate transport for the same 
NAAQS. Both courts upheld the EPA's position that it need not wait for 
the CAA section 110 process to conclude in order to act on a CAA 
section 126(b) petition, thus affirming that both statutory provisions 
are independent from one another from a timing perspective. Here, the 
agency has not deferred action on Delaware's petitions regarding the 
2015 ozone NAAQS, for which good neighbor SIPs are not due until 
October 2018, until its action on the good neighbor SIPs (for the named 
upwind states) has concluded. Therefore, by taking action in this 
instance on Delaware's section 126(b) petitions regarding the 2015 
ozone NAAQS before action under section 110 has been concluded, the EPA 
believes it has given CAA section 126(b) independent meaning as 
intended by Congress and the courts.
    The D.C. Circuit's opinion in Appalachian Power, which commenters 
specifically point to, further supports the EPA's interpretation taken 
in this action: That while the agency need not wait for the CAA section 
110 process to conclude before taking action on a CAA section 126(b) 
petition, the EPA reasonably interprets the substantive requirements of 
the two provisions to be closely linked. The court in Appalachian Power 
specifically considered whether it was appropriate for the EPA to rely 
on findings made under the good neighbor provision in the 
NOX SIP Call rulemaking in granting several CAA section 
126(b) petitions raising similar interstate transport concerns with 
regards to the same NAAQS. Petitioners in that case argued that the EPA 
should instead make a finding that ``the specified stationary sources 
within a given state independently met [the statute's] threshold test 
for effect on downwind nonattainment.'' 249 F.3d at 1049. The court 
found that by referring to stationary sources that emit pollutants ``in 
violation of the prohibition of [CAA section 110(a)(2)(D)(i)],'' 
Congress ``clearly hinged the meaning of section 126 on that of section 
110(a)(2)(D)(i).'' Id. at 1050. The court, therefore, concluded that 
given CAA section 126's silence on what it means for a stationary 
source to violate CAA section 110(a)(2)(D)(i), the EPA's approach of 
relying on findings under CAA section 110(a)(2)(D)(i) was reasonable 
and, therefore, entitled to deference under Chevron U.S.A. Inc. v. 
Natural Resources Defense Council, Inc., 467 U.S. 837, 843 (1984). Id. 
The EPA's approach to addressing the CAA section 126(b) petitions 
considered the Appalachian Power case is consistent with the EPA's 
application of the four-step framework and consideration of findings 
made in the CSAPR Update in acting on Maryland's and Delaware's CAA 
section 126(b) petitions.
    Commenters also contend that the EPA is erecting a ``new barrier'' 
to CAA section 126(b) petitions by requiring a petitioner to disprove 
the validity of the SIP or FIP in place for a source. However, the 
commenters mischaracterize the EPA's position. As described, where a 
SIP or FIP is already in place to address the prohibition in CAA 
section 110(a)(2)(D)(i)(I), the EPA has already made a determination 
that sources subject to that SIP or FIP have been adequately addressed 
for purposes of interstate transport. A petitioner need not demonstrate 
that the EPA's original determination underlying the SIP or FIP is 
flawed. Rather, the EPA has recognized that circumstances may change 
after the EPA makes its determination under CAA section 110, in which 
case it is incumbent upon the petitioner in the first instance to 
provide information demonstrating that the named sources is unlawfully 
impacting the petitioning state in spite of the SIP or FIP, in light of 
newly available information. The EPA disagrees that this is a ``new'' 
position the agency is taking regarding the linkage between good 
neighbor SIPs and FIPs and CAA section 126(b) petition. As described 
earlier in this section, the EPA has interpreted CAA section 126(b) to 
impose this burden on petitioners in each section 126(b) petition 
addressed by the agency in the last two decades. See, e.g., 64 FR 28274 
n.15 (action on eight states' petitions for the 1979 ozone NAAQS); 71 
FR 25336 n.6 (action on North Carolina's petition for the 1997 ozone 
NAAQS).

B. Reasonableness of Applying the Four-Step Transport Framework for 
This Action

    As discussed in Section II of this notice, the EPA has consistently 
analyzed ozone transport with the understanding that nonattainment and 
maintenance concerns result from the cumulative air quality impacts of 
contributions from numerous anthropogenic sources across several upwind 
states (as well as from within the downwind state). Consistent with 
this understanding, the EPA has evaluated ozone transport based in part 
on the relative contribution of all anthropogenic sources within a 
state, as measured against to a screening threshold, and then 
identified particular source sectors and units for regulatory 
consideration.\32\ This approach to evaluating ozone transport is 
reasonable because the statute's use of ``significantly'' as a modifier 
to ``contribute'' implies a relationship, e.g.,

[[Page 50455]]

the impact a source or collection of sources has relative to other 
relevant sources of that pollutant. Therefore, although CAA section 
126(b) allows downwind states to petition the EPA regarding specific 
sources or groups of sources that they believe are contributing to the 
downwind air quality problems, the EPA believes it is reasonable and 
appropriate to evaluate the emissions from sources named in a petition 
in the context of all relevant anthropogenic sources of that pollutant 
to determine whether or not emissions from the named sources are in 
violation of the good neighbor provision.
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    \32\ The EPA has used cost as a factor in its multi-factor 
approach for quantifying significant contribution from multiple 
contributing states. Cost is used in a relative (i.e., least-cost 
abatement) approach that also requires examining individual source 
impact and reduction potential in the context of the larger universe 
of contributors.
---------------------------------------------------------------------------

    The EPA notes that the four-step framework provides a logical, 
consistent, and systematic approach for addressing interstate transport 
for a variety of criteria pollutants under a broad array of national, 
regional, and local scenarios. Consequently, the EPA finds it 
reasonable to apply the same four-step transport framework used to 
evaluate regional ozone transport under the good neighbor provision in 
considering a CAA section 126(b) petition addressing the impacts of 
individual sources on downwind attainment and maintenance of the ozone 
NAAQS. As the four-step framework is applied to evaluate a particular 
interstate transport problem, the EPA can determine whether upwind 
sources are actually contributing to a downwind air quality problem; 
whether and which sources can be cost effectively controlled relative 
to that downwind air quality problem; what level of emissions should be 
eliminated to address the downwind air quality problem; and the means 
of implementing corresponding emission limits (i.e., source-specific 
rates, or statewide emission budgets in a limited regional allowance 
trading program). The outcome of this assessment will vary based on the 
scope of the air quality problem, the availably and cost of controls at 
sources in upwind states, and the relative impact of upwind emission 
reductions on downwind ozone concentrations. For a more localized 
pollutant like SO2, the use of the four-step framework could 
result in a finding that emissions from a unit were significantly 
contributing to nonattainment, or interfering with maintenance, under 
the first three steps, which may lead the agency in step four to 
require unit-specific compliance requirements (such as an emission 
rate).\33\
---------------------------------------------------------------------------

    \33\ For an example of such a case, the EPA's action on a prior 
CAA section 126(b) petition regarding SO2 emissions from 
the Portland Generating Station in Pennsylvania analyzed similar 
factors as those outlined the four-step transport framework to 
evaluate whether the identified source was emitting in violation of 
the good neighbor provision. The EPA concluded that the petitioning 
downwind state had an air quality problem (step one) for the 2010 
SO2 NAAQS. The agency determined that emissions from the 
named source in the upwind state alone were sufficient not just to 
contribute to (step two), but to cause a violation of the NAAQS in 
the petitioning state. As such, the agency determined that the 
facility should be regulated because of the magnitude of its 
contribution and the relative lack of other contributing sources 
(step three). To address this impact, the EPA imposed federally 
enforceable source-specific rate limits to eliminate the source's 
significant contribution (step four). See Final Response to Petition 
From New Jersey Regarding SO2 Emissions from the Portland 
Generating Station, 76 FR 69052 (November 7, 2011).
---------------------------------------------------------------------------

    The complexity of atmospheric chemistry and the interconnected, 
long-distance nature of ozone transport also demonstrates the 
appropriateness of the four-step framework. As a result of this 
complexity, including domestic and international as well as 
anthropogenic and background contributions to ozone and its precursors, 
it is less likely that a single source is entirely responsible for 
impacts to a downwind area. For example, several commenters assert that 
the emissions from all of the sources named in the Maryland petition 
contribute 0.656 ppb to the Edgewood receptor in Maryland--an amount 
that is insufficient to itself cause nonattainment. Thus, a 
determination regarding whether this impact is sufficient to 
significantly contribute to nonattainment or interfere with maintenance 
of the NAAQS--in light of other anthropogenic emission sources 
impacting a downwind area--is necessarily more complicated. However, 
the EPA evaluates within step three of the framework whether upwind 
sources have emissions that significantly contribute to nonattainment 
or interfere with maintenance of the ozone NAAQS based on various 
control, cost, and air quality factors, including the magnitude of 
emissions from upwind states, the number of potential emission 
reductions from upwind sources, the cost of those potential emission 
reductions, and the potential air quality impacts of emission 
reductions.\34\ The EPA believes it is reasonable to consider these 
factors whether evaluating ozone transport in the context of a good 
neighbor SIP under CAA section 110 or a section 126(b) petition.
---------------------------------------------------------------------------

    \34\ ``We believe it is important to consider both [cost and air 
quality] factors because circumstances related to different downwind 
receptors can vary and consideration of multiple factors can help 
EPA appropriately identify each state's significant contribution 
under different circumstances. [. . .] Using both air quality and 
cost factors allows EPA to consider the full range of circumstances 
and state-specific factors that affect the relationship between 
upwind emissions and downwind nonattainment and maintenance 
problems. For example, considering cost takes into account the 
extent to which existing plants are already controlled as well as 
the potential for, and relative difficulty of, additional emissions 
reductions. Therefore, EPA believes that it is appropriate to 
consider both cost and air quality metrics when quantifying each 
state's significant contribution.'' Proposed Federal Implementation 
Plans To Reduce Interstate Transport of Fine Particulate Matter and 
Ozone, 75 FR 45210, 45271 (August 2, 2010) (CSAPR proposal) 
(describing potential disparities between upwind and downwind state 
contributions to identified air quality problems and between levels 
of controls between states).
---------------------------------------------------------------------------

    The EPA has already conducted such an analysis for all sources 
named in Delaware and Maryland's petitions via the CSAPR Update. The 
EPA determined that the upwind states named by the petitioners emitted 
in violation of the good neighbor provision with respect to downwind 
states. The EPA, therefore, found that EGUs in these states, including 
the named sources, collectively needed to make reductions at a cost 
level commensurate with operating and optimizing existing SCR controls 
(among other NOX reduction strategies included in the CSAPR 
Update). Based on the nature of ozone formation, the many receptors 
throughout the region, the many source sectors and numerous sources, 
and because EGUs had readily available low-cost and impactful emission 
reductions available, the EPA found that a limited allowance trading 
program would achieve emission reductions commensurate with applying 
these cost-effective controls. As discussed in more detail in Section 
IV of this notice, petitioners and commenters have not demonstrated, 
based on information available at this time, either that the particular 
sources named by petitioners should be required to make further 
emission reductions under the good neighbor provision in light of their 
contributions relative to other sources that are not named in the 
petitions, or that source-specific unit-level emission rates are 
necessary to ensure reductions are being achieved under the CSAPR 
Update. As further described in Section IV.B of this notice, the EPA's 
independent analysis finds that, contrary to the petitioners' and 
commenters' assertions, the CSAPR Update allowance trading program has 
been sufficient and successful in reducing regional emissions of ozone 
and emissions across the named EGUs.
    For any analysis of a CAA section 126(b) petition regarding 
interstate transport of ozone, a regional pollutant with contribution 
from a variety of sources, the EPA reviews whether the particular 
sources identified by the petitioner should be controlled in light of 
the collective impact of emissions on

[[Page 50456]]

air quality in the area, including emissions from other anthropogenic 
sources. Thus, review of the named sources in the Delaware and Maryland 
petitions provides a starting point for the EPA's evaluation, but does 
not--as the commenters suggest--complete the evaluation to determine 
whether the named sources emit or would emit in violation of the good 
neighbor provision.

IV. The EPA's Final Response to Delaware's and Maryland's CAA Section 
126(b) Petitions

    The EPA is finalizing denials of the Maryland petition and all four 
of the Delaware petitions. Section IV.A of this notice describes the 
EPA's determination that Delaware has not demonstrated that the sources 
named in their petitions emit or would emit in violation of the good 
neighbor provision such that they will significantly contribute to 
nonattainment or interfere with maintenance of the 2008 or 2015 ozone 
NAAQS in Delaware. Section IV.B of this notice describes the EPA's 
independent analysis of the sources named in both states' petitions and 
concludes based on such analysis that there is no basis to find that 
the named sources emit or would emit pollution in violation of the good 
neighbor provision with respect to the 2008 ozone NAAQS (Delaware and 
Maryland) or the 2015 ozone NAAQS (Delaware only). In this section, and 
in the RTC document included in the docket for this action, the agency 
explains the rationale supporting its final action and provides its 
response to significant public comments on the proposed action.

A. The EPA's Evaluation of Whether the Petitions Are Sufficient To 
Support a CAA Section 126(b) Finding

1. Delaware's Petition Is Not Sufficient on Its Own Merit To Support a 
CAA Section 126(b) Finding
    The EPA finds that Delaware's conclusions are not supported by the 
petitions' assessments based on several technical deficiencies. First, 
with respect to the 2008 ozone NAAQS, the EPA is finalizing its 
conclusion that Delaware does not provide sufficient information to 
indicate that there is a current or expected future 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 demonstrate that there is a resulting 
nonattainment or maintenance problem. Ozone NAAQS violations, as 
opposed to exceedances, are determined based on the fourth-highest 
daily maximum ozone concentration, averaged across 3 consecutive 
years.\35\ In contrast, exceedances represent, in the case of the 2008 
and 2015 ozone NAAQS, an 8-hour measurement above the level of the 
NAAQS. Violations, rather than exceedances, are the relevant metric for 
identifying nonattainment and maintenance problems. A design value is a 
statistic that describes the air quality status of a given location 
relative to the level of the NAAQS. Thus, individual exceedances at 
monitors do not by themselves indicate that a state is not attaining or 
maintaining the NAAQS. In prior transport rulemakings, the EPA 
identified both nonattainment and maintenance receptors based on air 
quality model projections of measured design values. In the CSAPR 
Update, the EPA identified nonattainment receptors as those with an 
average projected design value above the NAAQS and with current 
measured nonattainment. The EPA identified maintenance receptors as 
those monitors with a ``maximum'' future design value above the NAAQS 
in order to take into account historic variability in air quality at 
the monitor. See 81 FR 74531.
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    \35\ 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.
---------------------------------------------------------------------------

    Several commenters have argued that Delaware is not attaining or 
maintaining the 2008 ozone NAAQS because there are areas in Delaware 
that are designated nonattainment for that standard. However, a 
nonattainment designation, which was first issued for the 2008 ozone 
NAAQS in 2012, does not by itself indicate that a state is currently 
failing to attain or struggling to maintain the NAAQS, or that it will 
have problems attaining or maintaining the standard in the future. The 
courts have confirmed that the EPA's authority to find that a source or 
state is in violation of the good neighbor provision is constrained to 
circumstances where an actual air quality problem has been identified. 
See EME Homer City, 134 S. Ct. at 1608-09 (holding the EPA cannot 
require more emission reductions than necessary to address downwind air 
quality problems); EME Homer City II, 795 F.3d 118 at 129-30 (D.C. Cir. 
2015) (holding state emission budgets invalid where air quality 
modeling projected no downwind air quality problems). Delaware has not 
demonstrated that there is a current or expected future air quality 
problem in the state, nor did any commenters provide evidence of a 
current or anticipated future violation of the 2008 ozone NAAQS. As 
discussed in Section IV.B of this notice, the EPA's review of current 
and projected future air quality in Delaware indicates that the state 
is attaining and will maintain the 2008 ozone NAAQS. Accordingly, 
Delaware's petition provides insufficient evidence of a requisite air 
quality problem with respect to the 2008 ozone NAAQS within the state.
    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, as discussed further in Section II of this notice, 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, based on its interpretation of the term 
``will'' in the good neighbor provision.\36\ The petitions do not 
provide any analysis indicating that Delaware may violate or have 
difficulty maintaining 2015 ozone NAAQS in a year associated with the 
relevant attainment dates for that standard.
---------------------------------------------------------------------------

    \36\ 81 FR 74517.
---------------------------------------------------------------------------

    Several commenters allege that the EPA incorrectly identified 
technical deficiencies in Delaware's petition regarding whether there 
is an air quality problem in Delaware. The commenters also submitted 
additional data that they contend demonstrates current violations in 
the state. However, comments related to the 2008 ozone NAAQS either 
identified violating monitors outside of Delaware or identified further 
individual exceedances in Delaware without demonstrating that they 
contributed to a violating design value. The commenters have not 
submitted information that conclusively shows current or future 
violations of the 2008 ozone NAAQS within the state of Delaware. For 
the 2015 ozone NAAQS, the commenters identified current violating 
monitors in Delaware but did not identify any projected air quality 
violations in a future year associated with the relevant attainment 
dates. Commenters did not correct any of the technical deficiencies the 
EPA identified in Delaware's petitions. Thus, the EPA is concluding, as 
proposed, that the petition does not adequately identify a relevant air 
quality problem related to the 2008 or 2015 ozone NAAQS.
    Second, with respect to step two of the four-step framework, 
material

[[Page 50457]]

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 much higher than, and therefore not 
representative of, current or future projected emissions levels at 
these EGUs and in the rest of the region--levels that the EPA believes 
are most relevant to determining whether a source ``emits or would 
emit'' in violation of the good neighbor provision.\37\ Thus, the 2011 
modeling does not provide representative data regarding contributions 
that would result from either current or future emission levels from 
these EGUs. When evaluating a CAA section 126(b) petition, it is 
important and consistent with the language of the section to rely on 
current and relevant data known at the time the agency takes action. 
Were the EPA to act based on outdated or non-representative information 
solely because it was provided in a petition, that action could be 
arbitrary and unreasonable and could, for example, impose controls or 
emission 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 EME 
Homer City, 134 S. Ct. at 1608-09.
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    \37\ 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. One of the named sources, Brunner Island, is located in 
Pennsylvania and reduced its individual ozone season NOX 
emissions by 88 percent in 2017 relative to 2011 levels. (https://www.epa.gov/ampd). Additional emissions data from 2011 and a recent 
historical year is included in the docket, which also shows that 
2011 emissions are generally higher than emissions in recent years. 
See 2011 to 2017 NOX Comparisons, Ozone Season, available 
in the docket for this action.
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    Further, the analyses provided by Delaware regarding the alleged 
impacts of the four sources on downwind air quality include some 
information on the frequency and magnitude of ozone impacts, but the 
information provided does not account for the form of the 2008 or 2015 
ozone standards--which indicates that a NAAQS violation occurs when the 
fourth highest daily maximum value in a calendar year at a specific 
monitor exceeds the standard--and, thus, is not informative of whether 
there is a nonattainment issue in the state. Specifically, Delaware 
does not identify the numeric modeled and/or measured ozone levels on 
the same days identified in Delaware's petitions with modeled 
impacts.\38\ For example, Delaware's Homer City petition identifies 
modeled contributions from emissions at that 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 that particular day at those sites. 
Delaware's Harrison and Brunner Island petitions identify the days the 
contributions were modeled to occur, but not the specific monitoring 
sites where Delaware claims emissions from these sources impact air 
quality. Moreover, these two petitions do not provide information on 
whether the contributions were to design values that actually exceed 
the ozone NAAQS. Delaware's Conemaugh petition identifies 2011 
contributions on days when some Delaware monitors exceeded the 2008 
NAAQS, but the petition does not specify which monitors were impacted 
on those days. The petition therefore does not provide information to 
show that the modeled contributions occurred at monitoring sites that 
were exceeding either the 2008 or 2015 ozone NAAQS. Commenters did not 
provide additional information clarifying these deficiencies.
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    \38\ Existing EPA analyses of interstate ozone pollution 
transport focus on contributions to high ozone days at the specific 
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). 
Measured ozone values that are far below the level of the NAAQS do 
not cause an exceedance or violation of the NAAQS. For this reason, 
only ozone contributions to days that are among the highest modeled 
ozone days at the receptor are relevant to determining if a state or 
source is linked to downwind nonattainment or maintenance issues.
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    For the reasons described in this section, Delaware's analyses in 
its four petitions do not allow the EPA to conclude that there is a 
current or future nonattainment or maintenance problem in Delaware 
based on violations of the NAAQS, nor that the named sources are 
improperly impacting downwind air quality on days when such violations 
would be expected. Therefore, the EPA does not have a basis to grant 
Delaware's petition with respect to either the 2008 or 2015 ozone NAAQS 
based on data and analyses provided in the petitions.
2. The EPA's Analysis of the Technical Sufficiency of Maryland's 
Petition
    The EPA is not finalizing its proposed finding that Maryland's 
petitions are technically deficient, but is finalizing the denial based 
on the EPA's independent assessment there are no additional cost-
effective reductions relative to the CSAPR Update for the sources named 
in Maryland's petition. This topic is discussed in more detail in 
Section IV.B of this notice.

B. The EPA's Independent Analysis of the Petitions Consistent With the 
CSAPR Update

    As discussed in Section III.A of this notice, the EPA may decide to 
conduct independent analyses when evaluating the basis for a potential 
CAA section 126(b) finding or when developing a remedy if a finding is 
made. Because the CSAPR Update recently evaluated interstate ozone 
pollution transport, including considering the air quality and EGU 
emissions described in the Delaware and Maryland 126(b) petitions, the 
EPA evaluated the petitions and comments received on the proposal in 
light of the agency's existing regulatory program, and the underlying 
analysis on which it is based. This constitutes the EPA's independent 
analysis for certain aspects of the petitions. The agency also 
evaluated additional technical information that became available after 
the CSAPR Update was finalized to independently evaluate other aspects 
of the petitions.
    This section begins by explaining the relationship between the 
CSAPR Update and the EPA's independent analysis of the petitions. The 
subsequent subsections discuss the EPA's rationale for denying the 
petitions with respect to the named sources.
1. CSAPR Update as Context
    The EPA promulgated the CSAPR Update to address the good neighbor 
provision requirements for the 2008 ozone NAAQS. 81 FR 74504. The final 
CSAPR Update built upon previous regulatory efforts in order to address 
the collective contributions of ozone pollution from 22 states in the 
eastern United States to widespread downwind air quality problems. As 
was also the case for the previous rulemakings, the EPA evaluated the 
nature (i.e., breadth and interconnectedness) of the ozone problem and 
NOX reduction potential

[[Page 50458]]

from EGUs, including those sources named in the Delaware and Maryland 
CAA section 126(b) petitions.
    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 in steps one and two of the four-step framework to 
maintenance receptors for the 2008 ozone NAAQS in Maryland based on air 
quality modeling projections to 2017. 81 FR 74538 through 74539. With 
respect to Delaware, the CSAPR Update modeling revealed no monitors in 
the state with a projected average or maximum design value above the 
level of the 2008 ozone NAAQS in 2017.\39\ Thus, the EPA in step one of 
the four-step framework 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 state's four petitions would be linked to Delaware.
---------------------------------------------------------------------------

    \39\ See Air Quality Modeling Technical Support Document for the 
Final Cross-State Air Pollution Rule Update. Available at https://www.epa.gov/airmarkets/air-quality-modeling-technical-support-document-final-cross-state-air-pollution-rule.
---------------------------------------------------------------------------

    For states linked to downwind air quality problems in Maryland, the 
agency identified certain emissions from large EGUs as significantly 
contributing to nonattainment and/or interfering with maintenance of 
the NAAQS based on cost and air-quality factors. Considering these 
factors, the EPA found there were cost-effective emission reductions 
that could be achieved within upwind states at a level of 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 and included the potential for operating and 
optimizing existing SCR post-combustion controls; installing state-of-
the-art NOX combustion controls; and shifting generation to 
existing units with lower NOX emission rates within the same 
state. 81 FR 74551. The CSAPR Update quantified an emission budget for 
each state based on that level of control potential. The EPA found that 
these emission budgets were necessary to achieve the required emission 
reductions and mitigate impacts on downwind states' air quality in time 
for the July 2018 moderate area attainment date for the 2008 ozone 
NAAQS.
    The CSAPR Update finalized enforceable measures necessary to 
achieve the emission reductions in each state by requiring power plants 
in covered states, including the sources identified in Maryland and 
Delaware's petitions, to participate in the CSAPR NOX Ozone 
Season Group 2 allowance trading program, with more detailed assurance 
provisions applying to each covered state to ensure that they will be 
required to collectively limit their emissions, beginning with the 2017 
ozone season. The CSAPR trading programs and the EPA's prior emission 
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 emission 
reductions. 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.
    As discussed in more detail later, the EPA has considered the CSAPR 
Update and related technical information in evaluating the section 
126(b) petitions. This includes a review of the air quality modeling 
conducted for the CSAPR Update to evaluate projected nonattainment and 
maintenance concerns in each petitioning states in steps one and two of 
the four-step framework. The EPA has also considered the control 
strategies evaluated and implemented in the CSAPR Update to conclude, 
in step three, that the EPA has already implemented emission reductions 
associated with operation of existing SCRs at the named sources and 
that the EPA has already concluded that the operation of existing SNCR 
at two other named sources is not a cost-effective control strategy 
under the good neighbor provision.
2. The EPA's Step One and Two Analyses for Delaware and Maryland
    As part of the EPA's independent analysis, the agency considered 
Delaware's and Maryland's petitions in light of recent agency analysis 
which applied steps one and two of the four-step framework. The EPA 
found that the named sources are not contributing to nonattainment or 
interfering with maintenance of Delaware's air quality for either the 
2008 or 2015 ozone NAAQS, and that the sources named in Maryland's 
petition warranted further analysis of significant contribution to 
nonattainment and interference with maintenance for the 2008 ozone 
NAAQS in step three.
a. The EPA's Step One Analyses for Delaware
    While the EPA, as discussed in Section IV.A of this notice, finds 
that Delaware's petitions do not on their own merits 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). As described in the following sections, the EPA finds 
that the named sources in Delaware's petitions are not, and will not 
be, emitting in violation of the good neighbor provision with respect 
to Delaware for either the 2008 or 2015 ozone NAAQS. The EPA also 
conducted a further independent assessment of the sources named in 
Delaware's petitions with respect to step three of the framework, 
discussed later in this notice, which further supports the EPA's denial 
of the Delaware petitions.
(1) The EPA's Independent Analysis Regarding Delaware's Step One Claims 
With Respect to the 2008 Ozone NAAQS
    The EPA first looked to modeling conducted in 2016 that projects 
ozone concentrations at air quality monitoring sites in 2017, which was 
conducted for purposes of evaluating step one of the four-step 
framework for the 2008 ozone NAAQS as part of the CSAPR Update.\40\ 
This modeling indicated that Delaware was not projected to have any 
nonattainment or maintenance receptors in 2017 with respect to the 2008 
ozone NAAQS. See 83 FR 26678. Furthermore, the EPA examined Delaware's 
2014-2016 design values, and found that no areas in Delaware had a 
design value that violated the 2008 ozone NAAQS. See id. An examination 
of the recently released 2015-2017 design values showed the same 
result.\41\ Accordingly, 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 the state with regard to the 2008 ozone NAAQS. 
In the absence of a downwind air quality problem, the EPA has no 
authority to regulate upwind sources to address air quality in Delaware 
with respect to the 2008 ozone NAAQS.
---------------------------------------------------------------------------

    \40\ Air Quality Modeling Technical Support Document for the 
Final Cross-State Air Pollution Rule Update (August 2016). Available 
at https://www.epa.gov/sites/production/files/2017-05/documents/aq_modeling_tsd_final_csapr_update.pdf.
    \41\ See 2017 Design Value Reports, available at https://www.epa.gov/sites/production/files/2018-07/ozone_designvalues_20152017_final_07_24_18.xlsx.

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[[Page 50459]]

(2) The EPA's Independent Analysis Regarding Delaware's Step One Claims 
With Respect to the 2015 Ozone NAAQS
    Additionally, the EPA independently examined whether there will be 
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--with a 
maximum 2017 projected design value (which the EPA has typically used 
to help identify maintenance receptors) above the 2015 ozone NAAQS.\42\ 
Measured data show that two monitors exceeded the 2015 ozone NAAQS 
based on the 2014-2016 design values,\43\ and three monitors show 
exceedances of the 2015 ozone NAAQS based on the 2015-2017 design 
values.\44\ However, as described in Section II.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 EPA selects in consideration of the 
relevant attainment deadlines for the NAAQS. Thus, the 2017 modeling 
data and the recent measured data are not necessarily indicative of a 
downwind air quality problem that would necessitate the control of 
upwind sources to address air quality in Delaware with respect to the 
2015 ozone NAAQS.
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    \42\ In prior transport rulemakings, the EPA identified both 
nonattainment and maintenance receptors based on air quality model 
projections of measured design values. In the CSAPR Update, the EPA 
identified nonattainment receptors as those with an average 
projected design value above the NAAQS and with current measured 
nonattainment. The EPA identified maintenance receptors as those 
monitors with a ``maximum'' future design value above the NAAQS in 
order to take into account historic variability in air quality at 
the monitor. See 81 FR 74531.
    \43\ 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.
    \44\ See 2017 Design Value Reports, available at https://www.epa.gov/sites/production/files/2018-07/ozone_designvalues_20152017_final_07_24_18.xlsx.
---------------------------------------------------------------------------

    Recent analyses projecting emission 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 III of this notice, available future year 
information does not indicate Delaware will have air quality concerns 
by the attainment date for the 2015 ozone NAAQS that EPA has determined 
is relevant for purposes of this analysis. Accordingly, the EPA does 
not have a basis to regulate upwind sources to address air quality in 
Delaware with respect to the 2015 ozone NAAQS.
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    \45\ 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 27, 2017), available in the docket for this proposed action.
---------------------------------------------------------------------------

(3) Responses to Comments Regarding the EPA's Independent Analysis for 
Step One Under the 2008 and 2015 Ozone NAAQS
    Commenters asserted that the EPA's conclusion that Delaware does 
not have current or future nonattainment or maintenance problems for 
the 2008 and 2015 ozone NAAQS is unreasonable in light of technical 
information in the record they claim demonstrates otherwise. Commenters 
further state that New Castle County, Delaware, was designated 
nonattainment as part of the multistate Philadelphia nonattainment area 
under both the 2008 and 2015 ozone NAAQS, and that the most recent 
design values for three monitors in New Castle County exceeded the 70 
ppb 2015 ozone standard.
    As an initial matter, the EPA disagrees with the way the commenters 
characterize an air quality problem in relation to CAA section 126(b). 
The EPA's statutory authority extends to addressing emissions that 
significantly contribute to nonattainment or interfere with maintenance 
of the NAAQS. Commenters' focus on individual high ozone days does not 
account for the form of the 2008 or 2015 ozone standards (under which a 
violation occurs when the fourth-highest reading in a calendar year at 
a specific monitor exceeds the NAAQS) and thus is not informative of 
whether there is a nonattainment or maintenance issue. Thus, the 
petitioners and commenters raise contentions are ultimately misaligned 
with the EPA's logical approach of identifying downwind air quality 
problems for purposes of CAA sections 110(a)(2)(D)(i)(I) and 126(b) in 
a manner that is consistent with the form of the standard.
    As described earlier, the EPA has evaluated air quality monitoring 
and modeling data for the 2008 ozone NAAQS, and found no current or 
anticipated future violations of the 2008 ozone NAAQS (in the form of 
the standard) at receptors within the state of Delaware. While the EPA 
evaluated modeling data for future projections of air quality for both 
the 2008 and 2015 ozone NAAQS consistent with the forward-looking 
nature of the good neighbor provision, monitoring data regarding 
current violations is a relevant analytic tool for the 2008 ozone NAAQS 
considering the attainment date for the standard has already passed. 
However, because the relevant attainment date for the 2015 ozone NAAQS 
has not yet passed, it is appropriate to evaluate future anticipated 
air quality in step one of determining whether sources must be 
controlled under the good neighbor provision. The EPA evaluated air 
quality modeling data for receptors located within the state of 
Delaware and found that, while there are monitors that are currently 
violating the 2015 ozone NAAQS, the data indicate no future air quality 
problem for this NAAQS by the relevant 2024 attainment date for that 
standard. Thus, although commenters state that current ambient 
monitoring data in Delaware for 2018 shows that three of Delaware's 
monitors (all in New Castle County) are exceeding the 2015 ozone NAAQS, 
the commenters have not provided any basis for the EPA to conclude that 
Delaware will have an air quality problem relative to the 2015 ozone 
NAAQS in the future year that it has selected as relevant for this 
analysis.
    Additionally, commenters challenge the EPA's conclusion that 
Delaware does not have an air quality problem for the 2008 ozone NAAQS 
by pointing out that the Bellefonte site in Delaware has recorded 8-
hour daily maximum values which exceed even the 1997 ozone NAAQS. These 
exceedances at the Bellefonte site are not relevant to actual or 
projected nonattainment or maintenance issues. Although there may be 
some exceedances of the 2008 ozone NAAQS at the Bellefonte monitor, the 
EPA does not have information to indicate that the fourth highest daily 
ozone value averaged across 3 consecutive years will exceed the 2008 
ozone NAAQS at this site. The commenter has not provided information 
indicating that the monitor is currently violating the 2008 NAAQS.\46\ 
As noted in this section,

[[Page 50460]]

individual exceedances at monitors do not by themselves indicate that a 
state is not attaining or maintaining the NAAQS. Thus, we have no basis 
to conclude there are any air quality problems with respect to the 2008 
NAAQS in Delaware in a manner relevant for step one of the four-step 
transport framework. Thus, because all monitors were projected to 
attain and maintain the standard in the CSAPR Update modeling and are 
attaining the standard in the most recent monitoring period, the EPA 
has no basis to conclude that the sources in the upwind states emit or 
would emit in violation of the good neighbor provision in Delaware for 
the 2008 NAAQS.
---------------------------------------------------------------------------

    \46\ The most current official design value at this monitor is 
71 ppb. See 2017 Design Value Reports, available at https://www.epa.gov/sites/production/files/2018-07/ozone_designvalues_20152017_final_07_24_18.xlsx.
---------------------------------------------------------------------------

    Commenters point out that monitors in the Philadelphia 
nonattainment area, located outside of the state of Delaware, are 
violating both the 2008 and 2015 ozone NAAQS. The commenters assert 
that because Delaware's New Castle County is included with other 
counties which make up the Philadelphia nonattainment area for both the 
2008 and 2015 ozone NAAQS, Delaware's attainment of the ozone NAAQS is 
tied to the attainment of the other monitors in the nonattainment area.
    The EPA disagrees with commenter's suggestion that non-attaining 
monitoring data for nearby receptors outside the petitioning state 
support a CAA section 126(b) finding for Delaware, even if such 
monitors are located in a multistate nonattainment area that includes 
the petitioning state. The specific language of CAA section 126(b) does 
not say that a state may petition the EPA for a finding that emissions 
from a source, or group of sources, is impacting downwind receptors in 
a state other than the petitioning state. In addition, the legislative 
history for this provision suggests the provision was meant to address 
adverse air impacts only in the petitioning state.\47\ Given the 
broader context of CAA section 126, the EPA reasonably interprets CAA 
section 126(b)'s petition authority to be limited to states and 
political subdivisions seeking to address interstate transport of 
pollution impacting downwind receptors within their geographical 
borders.
---------------------------------------------------------------------------

    \47\ When section 126 was added to the CAA, the Senate's 
amendment implementing the basic prohibition on interstate pollution 
stated that: ``Any State or political subdivision may petition the 
Administrator for a finding that a major stationary source in 
another state emits pollutants which would adversely affect the air 
quality in the petitioning State.'' (emphasis added). Clean Air Act 
Amendments of 1977, H.R. 95-564, 95th Cong. at 526 (1977). The House 
concurred with the Senate's amendment to CAA section 126, with 
changes to other portions of the amendment, but did not indicate 
changes to this sentence. Id. The lack of stated changes to this 
component of the Senate's original amendment suggest that Congress 
did not intend for the scope of the petitioning authority to be 
expanded to parties other than a state or political division in 
which downwind air quality is adversely affected.
---------------------------------------------------------------------------

    Additionally, the context of CAA section 126 as a whole suggests 
these provisions are meant to moderate interstate transport concerns 
between affected states and upwind sources, not between any third party 
(even if such party is another state) and upwind sources. CAA section 
126(a), for example, requires upwind sources to provide notification of 
certain potential air quality impacts to nearby states which may be 
affected by the source, not to all states. Furthermore, CAA section 
126(b) petitions may only be filed by states and political 
subdivisions. By contrast, other provisions that contain petition 
authority under the CAA expressly allow for any person to petition the 
EPA (e.g., CAA section 505(b)(2)'s authority for any person to petition 
the EPA to object to the issuance of a Title V petition). The more 
restrictive text in CAA section 126(b) suggests that Congress intended 
access to the petition process to be narrowly available to states and 
political subdivisions directly affected by upwind pollution.
    While the acknowledgement of multistate nonattainment areas in the 
CAA reflects Congress's understanding that pollution crosses state 
boundaries, that does not indicate that Congress clearly authorized all 
states in a multistate nonattainment area to petition EPA under CAA 
section 126(b) related to violating monitors outside their state. 
Portions of Delaware were included in the Philadelphia nonattainment 
area because the EPA determined that those portions were themselves 
contributing to the air quality problems in Pennsylvania.\48\ Nothing 
in the CAA suggests that section 126(b) was intended to relieve states 
like Delaware of the specific planning obligations associated with its 
inclusion in an area designated nonattainment. To the extent a state 
has concerns about the impacts of upwind pollution on out-of-state 
monitors in a shared multistate nonattainment area, these issues can be 
addressed under other statutory processes. For example, every state has 
an obligation to submit a transport SIP under CAA section 
110(a)(2)(D)(i)(I) that contains provisions adequate to prohibit 
emissions activity that contribute significantly to nonattainment or 
interfere with maintenance of the NAAQS in another state, which may 
also include a multistate nonattainment area if such area is being 
impacted by upwind emissions activity.
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    \48\ See Philadelphia-Wilmington-Atlantic City, PA-NJ-;MD-DE 
Nonattainment Area Final Designations for the 2015 Ozone National 
Ambient Air Quality Standards Technical Support Document. Available 
at https://www.epa.gov/sites/production/files/2018-05/documents/phila_tsd_final.pdf.
---------------------------------------------------------------------------

    Furthermore, the commenters' assertion that monitors in the 
Philadelphia nonattainment area are currently measuring exceedances of 
the 2015 ozone NAAQS does not change the EPA's conclusion that Delaware 
has no air quality problem under the 2015 ozone NAAQS when looking 
toward a relevant future year. As described in Section IV.A 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 emission 
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.\49\ Therefore, consistent 
with the EPA's interpretation of the term ``will'' in the good neighbor 
provision, available future year information does not suggest Delaware 
will have air quality concerns by the relevant attainment date for the 
2015 ozone NAAQS. Under step one of the transport framework, since 
there are no projected nonattainment or maintenance receptors in 
Delaware, the EPA concludes that it does not have sufficient evidence 
to determine that the upwind states and sources are significantly 
contributing to nonattainment or interfering with maintenance of the 
2015 ozone NAAQS in Delaware.\50\
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    \49\ 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.
    \50\ The EPA notes that even if the Philadelphia area monitors 
were relevant to the EPA's analysis of Delaware's petition, EPA's 
analysis also shows that those monitors are not projected to have 
nonattainment or maintenance problems with respect to the 2015 ozone 
NAAQS by 2023.
---------------------------------------------------------------------------

    Several comments challenged the EPA's reliance on air quality 
modeling projections for 2023 to indicate that Delaware will not have 
an air quality problem under the 2015 ozone NAAQS. First, commenters 
asserted that even if attainment of the 2015 ozone NAAQS was assured 
for the Philadelphia nonattainment area by 2023, this

[[Page 50461]]

analytic year is unacceptable because the agency should consider the 
August 2, 2021, marginal area attainment date as informative to the 
selection of an analytic year. The EPA does not agree that it is 
required to analyze air quality in a future year aligned with the 
attainment date for nonattainment areas classified as Marginal for the 
2015 ozone NAAQS. Although the North Carolina decision held that the 
EPA must consider attainment dates in downwind states when establishing 
compliance timeframes for emission reductions in upwind states, the 
decision did not speak to which attainment date should influence the 
EPA's evaluation when there are several potentially relevant attainment 
dates. As the decision explains, the good neighbor provision instructs 
the EPA and states to apply its requirements ``consistent with the 
provisions of'' title I of the CAA. North Carolina, 531 F.3d. at 911-
12. The EPA notes that this consistency instruction follows the 
requirement that plans ``contain adequate provisions prohibiting'' 
certain emissions in the good neighbor provision. The EPA, therefore, 
interprets the requirements of the good neighbor provision to apply in 
a manner consistent with the designation and planning requirements in 
title I that apply in downwind states and, in particular, the timeframe 
within which downwind states are required to implement specific 
emissions control measures in nonattainment areas relative to the 
applicable attainment dates. See id. at 912 (holding that the good 
neighbor provision's reference to title I requires consideration of 
both procedural and substantive provisions in title I).
    Ozone nonattainment areas classified as Marginal are not generally 
required to implement specific emission controls at existing sources. 
See CAA section 182(a).\51\ Existing regulations--either local, state, 
or federal--are typically a part of the reason why ``additional'' local 
controls are not needed to bring the area into attainment. As described 
in the EPA's record for its Classifications and Attainment Deadlines 
rule for the 2015 ozone NAAQS, history has shown that the majority of 
areas classified as Marginal for prior 8-hour ozone standards attained 
the respective standards by the Marginal attainment date (i.e., without 
being re-classified to a Moderate designation). 83 FR 10376. As part of 
an historical lookback, the EPA calculated that by the relevant 
attainment date for areas classified as Marginal, 85 percent of such 
areas attained the 1979 1-hour ozone NAAQS, and 64 percent attained the 
2008 ozone NAAQS. Id. at Response to Comments, section A.2.4.\52\ Based 
on these historical data, the EPA expects that many areas classified 
Marginal for the 2015 ozone NAAQS will attain by the relevant 
attainment date as a result of emission reductions that are already 
expected to occur through implementation of existing local, state, and 
federal emission reduction programs. To the extent states have concerns 
about meeting their attainment deadline for a Marginal area, the CAA 
under section 181(b)(3) provides authority for them to voluntarily 
request a higher classification for individual areas, if needed. Where 
the ozone nonattainment area is classified as Moderate or higher, the 
responsible state is required to develop an attainment plan, which 
generally includes the application of various control measures to 
existing sources of emissions located in the nonattainment area, 
consistent with the requirements in Part D of title I of the Act. See 
generally CAA section 182.
---------------------------------------------------------------------------

    \51\ New source review (NSR) and conformity are still required 
for marginal areas, but their purpose is to ensure that new 
emissions don't interfere with attainment as opposed to reducing 
existing emissions.
    \52\ Available at https://www.regulations.gov/document?D=EPA-HQ-OAR-2016-0202-0122.
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    Thus, given that downwind states are generally not required to 
impose additional controls on existing sources in a Marginal 
nonattainment area, the EPA believes that it would be inconsistent to 
interpret the good neighbor provision as requiring the EPA to evaluate 
the necessity for upwind state emission reductions based on air quality 
modeled in a future year aligned with the Marginal area attainment 
date. Rather, the EPA believes it is more appropriate and consistent 
with the nonattainment planning provisions in title I to evaluate 
downwind air quality and upwind state contributions, and, therefore, 
the necessity for upwind state emission reductions, in a year aligned 
with an area classification in connection with which downwind states 
are also required to implement controls on existing sources--i.e., with 
the Moderate area attainment date, rather than the Marginal one. With 
respect to the 2015 ozone NAAQS, the Moderate area attainment date will 
be in the summer of 2024, and the last full year of monitored ozone-
season data that will inform attainment demonstrations is, therefore, 
2023.
    Even assuming that a year aligned with the Marginal area attainment 
date could be an appropriate analytic year for the EPA to consider in 
evaluating future air quality in Delaware, the commenters have not 
submitted any information that indicates there will be an air quality 
problem under the 2015 ozone NAAQS in Delaware in the Marginal 
attainment-date year of 2021, nor did the petition provide any. As 
discussed in Section III of this notice, the petitioner bears the 
burden of establishing, as an initial matter, a technical basis for the 
specific finding requested and has not done so here.
    The projected ozone design values for 2023 represent the best 
available data regarding expected air quality in Delaware in a future 
attainment year. These data were developed over the course of multiple 
years of analytic work, reflecting extensive stakeholder feedback and 
the latest emission inventory updates. The EPA assembled emissions 
inventory and performed air quality analytics in 2016 and released 
corresponding data and findings in a Notice of Data Availability (NODA) 
in January of 2017. Subsequent to stakeholder feedback on the NODA, the 
EPA was able to further update its inventories and air quality modeling 
and release results for 2023 future analytic year in October 2017. 
There are no comparable data available for earlier analytic years 
between 2017 and 2023 that have been through an equally rigorous 
analytic and stakeholder review process, and, thus, the 2023 data are 
the best data available currently for the EPA to evaluate Delaware's 
claims at this time.
    Commenters additionally contend that the 3-year deadline for 
implementing a remedy under CAA section 126(c) suggests that the use of 
2023, which is 5 years in the future, as an analytic year for purposes 
of evaluating Delaware's CAA section 126(b) petitions is inappropriate. 
The EPA disagrees. The EPA's evaluation of air quality in 2023 is a 
necessary step to determine whether the sources named in Delaware's 
petitions are in violation of the good neighbor provision, and the 
choice of 2023 as an analytic year does not preclude the implementation 
of a remedy in an earlier year if the necessary finding is made. While 
CAA section 126 contemplates that a source or group of sources may be 
found to have interstate transport impacts, it cannot be determined 
whether such source or sources are in violation of the good neighbor 
provision and whether controls are justified without analyzing 
emissions from a range of sources influencing regional-scale ozone 
transport, including sources not named in the petitions. In particular, 
as discussed in Section III of this notice, the EPA evaluates air 
quality in a year

[[Page 50462]]

when emission reductions would be expected to be implemented under the 
good neighbor provision. Analysis of a future year aligned with 
anticipated compliance also ensures that any emission reductions the 
EPA may require under that provision are not in excess of what would be 
necessary to address downwind nonattainment and maintenance problems. 
The 2023 analytic year that the EPA has chosen for evaluating ozone 
transport with respect to the 2015 ozone NAAQS was selected because it 
aligns the downwind attainment dates and ensures that emission 
reductions required by that date will not over-control upwind state 
emissions because it accounts for changes in upwind state emissions and 
downwind state ozone concentrations expected between now and 2023. 
Additionally, even if the EPA were to determine based on 2023 as an 
analytic year that the named sources are projected to be in violation 
of the good neighbor provision, the EPA could still implement a remedy 
that complies with the earlier timeline set out under CAA section 
126(c). Therefore, the EPA's reasonable choice of 2023 as an analytic 
year for evaluating Delaware's petition does not in and of itself 
preclude implementation of a remedy at an earlier date.
    Commenters further assert that since Delaware's and Maryland's 
requested remedies are to require already existing controls to operate 
mean the EPA's justification for selecting the 2023 analytic year is 
incorrect. The EPA disagrees. First, the EPA believes it is appropriate 
for the EPA to consider air quality in 2023 because it is aligned with 
the attainment date for the 2015 ozone NAAQS. As discussed earlier, if 
there is no future air quality problem relative to this NAAQS, it would 
not be appropriate for EPA to require additional upwind emission 
reductions under CAA sections 110 or 126. Moreover, as discussed later 
in this notice, control optimization at the identified sources has 
already been addressed in the CSAPR Update, and emission reductions 
associated with the proposed control technology are already being 
realized. Thus, the EPA does not agree that the timeframe for 
implementation of a control strategy that is already in place should 
guide its selection of a future analytic year for this NAAQS.
    Rather than focusing on optimization, the selection of an 
appropriate year for any additional mitigation measures necessary to 
eliminate upwind contribution would have to accommodate the 
corresponding technologies that could deliver incremental reductions. 
Therefore, the EPA identified an appropriate future analytic year that 
would allow for mitigation measures not yet considered in the CSAPR 
Update for sources across the region. These are technologies that were 
deemed to be infeasible to install for the 2017 ozone season. In 
establishing the CSAPR Update emissions budgets, the EPA identified but 
did not analyze the following two EGU NOX control strategies 
in establishing the CSAPR Update emissions budgets because 
implementation by 2017 was not considered feasible: (1) Installing new 
SCR controls; and (2) installing new SNCR controls. For a variety of 
labor, material, engineering, and grid-related considerations, the EPA 
believes that 2023 would likely be an appropriate year to allow for 
these mitigation measures. See 81 FR 33730 (July 17, 2018); 83 FR 31915 
(July 10, 2018).
    And fourth, commenters assert that the 2023 modeling is flawed 
because it relies on optimistic assumptions that EGU controls would 
operate when there is no enforceable requirement for sources to do so 
under the existing allowance trading program. The commenter states that 
in the 2023 air quality modeling, the EPA incorrectly assumed 
individual units would make emission reductions. The EPA has made both 
a conceptual case as to why those reductions will be achieved through 
the CSAPR Update existing allowance trading program, and an evidence-
based case that reductions based on control optimization already 
achieved in 2017. Not only were the anticipated reductions realized 
generally from EGUs in the upwind states identified by the petitioners, 
but reductions were also made by the fleet of individual sources (on a 
seasonal and daily basis) identified by the commenter. The 
reasonableness and feasibility of the EPA's 2023 EGU emission 
projections regarding the control-optimization reductions under a 
trading program are illustrated by the first year of CSAPR Update 
compliance emission levels in 2017. EGU emissions in 2017 dropped by 21 
percent from 2016 levels and were seven percent below the collective 
CSAPR Update budgets for the 22 affected states. The EPA's 2023 
projections for the 22 states were 10 percent below the collective 
CSAPR Update budgets, meaning in just one year, states have already 
achieved the majority of the EGU reductions anticipated by the EPA for 
2023, suggesting that sources in these states are on pace to actually 
be below that level by 2023. For the five states addressed in the 
petitions, ozone-season NOX EGU emissions dropped from 
136,188 tons in 2016 to 92,189 tons in 2017 for EGUs greater than 25 
MW. This reflects a 32 percent reduction in just one year.\53\
---------------------------------------------------------------------------

    \53\ See Engineering Analysis--Unit File. Available at ftp://ftp.epa.gov/EmisInventory/2011v6/v3platform/reports/2011en_and_2023en/.
---------------------------------------------------------------------------

    Data from 2017, the first year of ozone-season data that would be 
influenced by the CSAPR Update compliance requirements, are consistent 
with the EPA's assumption that the allowance trading program would 
drive SCR operation on a fleet-wide level. The EPA began its 
engineering analysis to project 2023 EGU emissions with 2016 monitored 
and reported data. For the units with existing SCRs that were operating 
below 0.10 lb/mmBtu in 2016, the EPA assumed that their operation would 
remain unchanged in 2023. For the units with existing SCRs that were 
operating above 0.10 lb/mmBtu in 2016 (totaling 82,321 tons of 
emissions in that year), the EPA assumed that SCRs would be optimized 
under a CSAPR Update scenario to 0.10 lb/mmBtu on average for 2023. 
This collective 2023 emissions estimates for these latter units were, 
therefore, adjusted down to 40,590 tons. In 2017, the very first year 
of CSAPR Update implementation, collective emissions from these units 
were 41,706 tons. This 2017 value is already very close to EPA's 2023 
estimated value, and supports the EPA's assumption that these units 
would optimize SCR performance at 0.10 lb/mmBtu on average.
    The EPA observes that this assumption is also reasonable for the 
units identified in the petitions. When examining the group of sources 
named in the petitions, the 2017 average ozone-season NOX 
emission rate for SCR-controlled units was reduced by nearly half 
during the first year of the program relative to 2016 and 2015 levels. 
Moreover, preliminary data for the second quarter of 2018 suggest this 
pattern of lower emission rates at SCR-controlled units under the CSAPR 
Update is continuing.\54\ Many of the analyses provided by commenters 
to suggest the group of named sources were not operating controls are 
based in the 2015-2016 time-period, before the CSAPR Update was 
implemented, when hourly, daily, and seasonal emissions were higher 
because controls were not being consistently run at optimized levels. 
Both CSAPR and the CSAPR

[[Page 50463]]

Update include assurance provisions that ensure that EGUs in each 
covered state will be required to collectively limit their emissions. 
These provisions include an assurance level for each state that serves 
as a statewide emissions cap. This assurance level is the sum of the 
state emission budget plus a variability limit equal to 21 percent of 
the state's ozone-season budget. This means that collectively EGU 
emissions in each state cannot exceed 121 percent of the state budget 
level without incurring penalties. The assurance levels are designed to 
help ensure each covered state in a region-wide trading program still 
reduces emissions--as opposed to purely relying on allowance 
purchases--from historical levels while allowing for the inherent 
variability in generation and emissions from year-to-year given changes 
in power sector market conditions. 76 FR 48212. These assurance levels 
help ensure that the emission reductions associated with the 
optimization of existing controls, on which the CSAPR Update budgets 
were based, or commensurate emission reductions from elsewhere in the 
state continue to be observed going forward. Therefore, even with fleet 
turnover and a growing allowance bank, emissions will continue to be 
limited within the state.
---------------------------------------------------------------------------

    \54\ Preliminary 2018 data reflects first two months of 2018 
ozone season available at the time of finalizing this action. See 
EPA's Clean Air Markets Division data, available at https://ampd.epa.gov/ampd/.
---------------------------------------------------------------------------

    Finally, the EPA also disagrees to the extent the commenter claims 
that EGU emissions will increase, rather than decrease, in future years 
of the CSAPR Update implementation or that the market for allowance 
prices would have to price credits much higher in order to ensure that 
the emission reductions associated with control optimization will 
continue. This claim is not consistent with observed historical 
emission patterns over successive years of an allowance trading 
program's implementation. It is also not consistent with forward 
looking emissions projections in power sector models.\55\ There are a 
variety of policy and market forces at work beyond CSAPR allowance 
prices that are anticipated to continue to drive generation to shift 
from higher emitting to lower emitting sources. These include changes 
such as sustained lower natural gas prices that make lower emitting 
natural gas combined cycle units more economic to build and dispatch, 
state energy policy and technology advancements which have made 
renewable energy (e.g., solar and wind) more competitive compared to 
higher emitting fossil-fuel fired generation, and the aging of the coal 
fleet which is leading many companies to conclude that a significant 
number of higher emitting plants are reaching the end of their useful 
economic life. The EPA's experience implementing prior allowance 
trading programs shows that emissions from covered sources generally 
trend downwards (regardless of allowance price) as time extends further 
from the initial compliance year.\56\ Both the Acid Rain Program and 
CSAPR SO2 allowance banks grew in 2017 from their 2016 
levels, indicating that sources are collectively adding to the bank by 
emitting below state budgets rather than drawing down the bank because 
of the availability of low-cost allowances. This illustrates that the 
EPA's assumptions underlying its projection of 2023 ozone-season 
NOX levels for EGUs are reasonable and appropriate.
---------------------------------------------------------------------------

    \55\ See results from EPA's power sector modeling platform v6. 
Available at https://www.epa.gov/airmarkets/results-using-epas-power-sector-modeling-platform-v6.
    \56\ 2014 Program Progress, Clean Air Interstate Rule, Acid Rain 
Program, and Former NOX Budget Trading Program. EPA. 
Available at https://www.epa.gov/sites/production/files/2017-09/documents/2014_full_report.pdf.
---------------------------------------------------------------------------

b. The EPA's Step One and Two Analysis for Maryland
    With respect to steps one and two of the four-step framework for 
the Maryland petition, as the state noted in its petition and as the 
EPA acknowledged in the proposal, the EPA conducted an analysis in the 
CSAPR Update regarding the air quality impact of anthropogenic 
emissions from the five upwind states named in the state's petition on 
downwind air quality in Maryland with respect to the 2008 ozone NAAQS. 
In the CSAPR Update, the EPA found Maryland has a maintenance receptor 
for the 2008 NAAQS (step one), and that the upwind states that Maryland 
identifies in its petition are ``linked'' above the contribution 
threshold of one percent of the NAAQS (step two).\57\ However, as 
discussed in Section III of this notice, the conclusion that a state's 
emissions met or exceeded this threshold only indicates 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 maintenance (step three). The EPA's 
independent step three analysis of the sources named in Maryland's 
petition is discussed in the following sections.
---------------------------------------------------------------------------

    \57\ See CSAPR Update, 81 FR 74504 (October 26, 2016). The EPA 
notes that based on 2015-2017 data, Maryland's highest ozone design 
value is 75 ppb at monitor ID 240251001, which is currently not 
violating the 2008 ozone NAAQS. See 2017 Design Value Reports, 
available at https://www.epa.gov/sites/production/files/2018-07/ozone_designvalues_20152017_final_07_24_18.xlsx.
---------------------------------------------------------------------------

    The state of Maryland submitted a comment challenging the EPA's 
decision to assess Maryland's petition only for the 2008 ozone NAAQS, 
asserting that the EPA failed to acknowledge that EPA's extended delay 
in acting on the CAA section 126(b) petition has impacted Maryland's 
designation under the 2015 ozone standard. Additionally, the comment 
asserts that since Maryland has a maintenance problem for the 2008 
ozone NAAQS, and the states where the petitioned units are located are 
linked to that maintenance problem, applying the EPA's analysis under 
the 2008 ozone NAAQS to the more stringent 2015 ozone NAAQS necessarily 
demonstrates that the named sources are also linked to the same monitor 
under the 2015 ozone standard.
    Maryland's petition did not allege that a source or group of 
sources emit or would emit in violation of CAA section 
110(a)(2)(D)(i)(I) for the 2015 ozone NAAQS, but rather merely alleged 
that emissions reductions resulting from Maryland's requested remedy 
could influence the 2015 ozone designations. As noted in the EPA's 
proposed action on Maryland's petition, the cover letter of the 
petition specifically requests that the agency 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. Maryland acknowledges that it did not 
submit a 126(b) petition requesting a finding with respect to the 2015 
ozone NAAQS. Furthermore, because the EPA's proposal focused on the 
claims related to the 2008 ozone NAAQS raised in the petition, the 
EPA's proposed action on the petition did not provide notice to the 
public of any proposed conclusions or analysis that the public would 
need to appropriately comment on any determinations with respect to the 
2015 ozone NAAQS, nor did it inform the public that any action might be 
taken with regard to a finding of a good neighbor violation with regard 
to the 2015 ozone NAAQS under Maryland's petition. Accordingly, taking 
final action on the petition in the context of the 2015 ozone NAAQS in 
response to Maryland's comments cannot be construed as a logical 
outgrowth of the proposal.

[[Page 50464]]

    Commenters further assert that it is improper for the agency to 
rely on 2023 ozone modeling projections to claim that Maryland does not 
have attainment problems with respect to the 2008 ozone NAAQS. This 
comment misconstrues the EPA's basis for denying Maryland's petition. 
Maryland's petition only requested a specific finding with respect to 
the 2008 ozone NAAQS. As described earlier in this section, the EPA 
determined that Maryland was projected to have a downwind air quality 
concern with respect to the 2008 ozone NAAQS under step one of the 
framework, and that the named upwind states are linked to Maryland in 
step two based on the 2017 modeling conducted for the CSAPR Update. The 
EPA did not evaluate whether Maryland has an air quality problem in 
2023 in assessing its petition.
    In conclusion, under steps one and two of the transport framework, 
the EPA has modeled a maintenance problem in 2017 at the Harford County 
receptor for the 2008 ozone NAAQS following the implementation of the 
CSAPR Update and the upwind states named in the petition are linked to 
that receptor in EPA's 2017 contribution modeling. See 81 FR 74533. The 
EPA concludes that it is appropriate to assess the additional steps of 
the transport framework for the sources named in Maryland's petition. 
This analysis is further described in this section.
3. The EPA's Step Three Analysis With Respect to EGUs Equipped With 
SCRs Named in Delaware and Maryland's Petitions
    In the previous section, the EPA evaluated the petitions with 
regard to steps one and two of the transport framework, and the agency 
found that Delaware does not and is not expected to have a requisite 
air quality problem under step one for either the 2008 or 2015 ozone 
NAAQS, and, therefore, the EPA does not have a basis to impose 
additional emission limitations on the named upwind sources. While the 
EPA is finalizing a determination that Delaware's petitions should be 
denied based on the EPA's conclusions in step one of the four-step 
framework, the EPA is also evaluating the EGUs named in the Delaware 
petitions in this step three analysis because we believe that 
evaluation provides an additional independent basis for denial. 
Regarding the Maryland petition, application of steps one and two for 
the named upwind states indicated that it is appropriate to assess the 
additional steps of the transport framework for the named sources. 
Accordingly, this section discusses the step three analysis for the 
sources named in both the Delaware petitions (as an additional basis 
for denial) and the Maryland petition (as the sole basis for denial).
    Generally, the EPA's analysis in step three considers cost, 
technical feasibility, and air quality factors in a multi-factor test 
to determine whether any emissions from states linked to downwind air 
quality problems in steps one and two will significantly contribute to 
nonattainment and/or interfere with maintenance of the NAAQS, and, 
therefore, must be eliminated pursuant to the good neighbor provision. 
Because the CSAPR Update was recently finalized to address regional 
interstate ozone pollution transport, the EPA considered its step three 
analysis of the sources named in the section 126(b) petitions in light 
of the existing CSAPR Update analysis and in light of additional 
analysis evaluating the impact of the CSAPR Update implementation.\58\ 
Thus, in this section, the EPA explains how it identified and evaluated 
cost and air quality factors to evaluate the named sources in a 
multifactor test consistent with step three of the framework as applied 
in the CSAPR Update. The crucial factors the EPA considered include 
whether there are further NOX emission reductions beyond 
what was already finalized in the CSAPR Update available at the 
specific sources named in the petitions, the cost of any such 
reductions, and the potential air quality improvements that would 
result from any such reductions. The EPA first analyzes this step with 
respect to those units identified in the Delaware and Maryland 
petitions that are equipped with SCR. The EPA then considers two named 
units that are equipped with SNCR, and finally, the one named unit that 
has neither SCR nor SCNR, but that has the ability to shift its fuel 
combustion to lower-emitting options.
---------------------------------------------------------------------------

    \58\ All of the EGUs named in the petitions 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 emission budgets with limited 
interstate trading.
---------------------------------------------------------------------------

a. Analysis of SCR for NOX Mitigation
    Three of Delaware's petitions identify EGUs (Conemaugh, Harrison, 
and Homer City) that are already equipped with SCRs, and 34 of the 36 
EGUs identified in Maryland's petition are also equipped with SCRs.\59\ 
In establishing each state's CSAPR Update EGU NOX ozone 
season emission budgets, the agency quantified the emission reductions 
achievable from all NOX control strategies that were 
feasible to implement within one year \60\ and cost effective at a 
marginal cost of $1,400 per ton of NOX removed. This level 
of NOX control stringency was established explicitly to 
reflect the ability of sources in regulated states to turn on existing, 
idled SCR--i.e., the operational behavior that the section 126(b) 
petitions generally ask EPA to mandate. In addition to turning on and 
optimizing existing idled SCR controls, this level of NOX 
control stringency encompassed optimizing NOX removal by 
existing, operational SCR controls; installing state-of-the-art 
NOX combustion controls; and shifting generation to existing 
units with lower NOX emission rates within the same state. 
81 FR 74541. Thus, the CSAPR Update emission budgets already reflect 
emission reductions associated with turning on and optimizing existing 
SCR controls across the 22 CSAPR Update states, including at the EGUs 
that are the subject of the Maryland and Delaware petitions. This is 
the same control strategy identified in the petitions as being both 
feasible and cost effective. The EPA is determining that, as a result 
of the CSAPR Update, all identified cost-effective emission reductions 
have already been implemented for the 2008 ozone NAAQS with respect to 
the sources named in the Delaware and Maryland petitions that are 
already equipped with SCR.
---------------------------------------------------------------------------

    \59\ 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).
    \60\ The CSAPR Update was signed on September 7, 2016--
approximately 8 months before the beginning of the 2017 ozone season 
on May 1.
---------------------------------------------------------------------------

    Delaware and Maryland's petitions contend that, based on data 
available at the time the petitions were filed, the named sources are 
operating their 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 
emission rate limits or other requirements to ensure the controls will 
be continually operated. The EPA acknowledges that in years prior to 
implementation of the CSAPR Update in 2017, the named sources may have 
operated as petitioners describe. However, implementation of the 
emission budgets promulgated in the CSAPR Update represents the most 
recent data regarding these EGUs' operations. In the years before 2017, 
the EPA observed

[[Page 50465]]

similar emissions behavior for a substantial number of EGUs across the 
eastern United States (i.e., this was not limited to just the named 
sources here) and suspected that the additional emissions resulting 
from the inefficient operation of controls were detrimentally affecting 
air quality for a substantial number of areas. Consequently, through a 
notice-and-comment rulemaking and after evaluating and responding to 
numerous stakeholder comments, the EPA finalized the CSAPR Update. That 
rulemaking found EGUs in the named states had emissions that could be 
cost effectively eliminated in order to address interstate ozone 
transport under the good neighbor provision. Therefore, the EPA imposed 
limits on statewide EGU emissions commensurate with running optimized 
SCR controls (and certain other control strategies). These emission 
reductions resulted in substantial modeled improvements in air quality 
throughout the region and had substantial benefits for the specific 
downwind areas identified in the petitions.
    The EPA received several comments suggesting that emissions data 
indicate that the EPA's determination that the CSAPR Update would 
address interstate transport from these sources is flawed. Accordingly, 
the EPA has evaluated emissions data across the CSAPR Update region, 
including from the states and sources named in the petitions. As 
further described later, the EPA's analysis of such data demonstrates 
that, following implementation of the CSAPR Update, EGUs in the CSAPR 
Update regional generally and the named EGUs specifically have in fact 
achieved emission reductions commensurate with the operation of 
existing SCRs. Consequently, the EPA finds that CSAPR Update 
implementation is generally achieving the NOX reductions 
identified in the section 126(b) petitions for mitigation at these 
sources. The EPA, therefore, determines that these sources neither emit 
nor would emit in violation of the good neighbor provision.
    The EPA determines that this conclusion is appropriate with regard 
to the claims raised under the 2008 ozone NAAQS in both states' 
petitions. Moreover, because the cost-effective strategy of optimizing 
existing controls relative to the 2008 ozone NAAQS has already been 
implemented via the CSAPR Update for the sources Delaware named for its 
claims regarding the 2015 NAAQS, the EPA also determines there are no 
additional cost-effective control strategies available to further 
reduce NOX emissions at these sources to address that most 
recent standard.
(1) Current Emissions Data Show NOX Reductions Under the 
CSAPR Update
    Based on observed emissions levels and emission rates in 2017, 
implementation of the CSAPR Update has resulted in actual emissions 
reductions at the named sources and/or commensurate reductions at other 
sources in the same state, both seasonally and on a daily basis. In 
other words, because the strategy of optimizing existing controls has 
already been implemented for these sources through the CSAPR Update, 
there is no information suggesting there are additional control 
strategies available to further reduce NOX emissions at 
these sources to address for the 2008 ozone-NAAQS.
(a) Seasonal Reductions Under the CSAPR Update
    The recent historical observed and reported data regarding 
emissions from the sources named in the petitions, and the states they 
are located in, illustrate the effectiveness of the EPA's allowance 
trading approach to reducing NOX emissions. While much of 
the data presented in the petitions focused on emissions and emission 
rates prior to 2017, the 2017 ozone-season data illustrates that, 
during the first year of the CSAPR Update Rule: (1) The average 
emission rate improved nearly 50 percent on average at the 34 units 
identified in the petitions as having SCR controls, (2) EGU emissions 
declined by 46 percent at these 34 units, and (3) EGU emissions 
declined by 32 percent collectively in the states where these 
facilities are located.

                Table 1--Ozone-Season NOX Emission Rates and Emissions Pre- and Post-CSAPR Update
----------------------------------------------------------------------------------------------------------------
                                                                       2015            2016            2017
----------------------------------------------------------------------------------------------------------------
Average Ozone-Season Emission rate from 34 identified units (lb/           0.254           0.200           0.115
 mmBtu).........................................................
Total Emissions from 34 identified units (tons).................          55,443          46,023          24,894
Total Emissions from states named in the petitions (tons)*......         154,413         136,188          92,189
----------------------------------------------------------------------------------------------------------------
* IN, KY, OH, PA, and WV.

    Table 1 shows the average emission rate across the 34 units, the 
total seasonal emissions from these units, and the total seasonal 
emissions from all units greater than 25 MW in the indicated states. 
These data illustrate that, in 2017, the control optimization and the 
emission reductions anticipated from the CSAPR Update are being 
realized from the 34 units with SCR controls. Moreover, the EPA 
examined control operation behavior at these units on a more granular 
basis and determined that these operating patterns prevailed on a 
smaller time scale as well. The EPA looked at the average daily 
emission rate and emissions from this group of 34 sources with SCR 
controls for 2015, 2016, and 2017 ozone seasons. The time-series 
figures in the docket for this action show that 2017 daily ozone values 
were significantly lower on both metrics relative to 2015 and 2016.\61\ 
This finding supports the EPA's contention that no further regulatory 
actions are necessary to ensure emission reductions consistent with 
operation of these controls at this time.
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    \61\ The EPA has examined emission rate and tonnage reduction 
from the petitioner-identified sources with SCR-optimization 
potential prevails on a daily basis in addition to a seasonal basis 
and added them to the docket for this action. See Daily 
NOX Emissions Rates for Identified SCR-Controlled Sources 
for Each Day of the Ozone-Season. Available in the docket for this 
action.
---------------------------------------------------------------------------

    The fact that these particular sources are mitigating emissions 
using the same technology and for the same standard identified in the 
petitions is not the sole fact on which EPA bases its determination 
that the measures adopted in the CSAPR Update have addressed reduction 
potential from these sources. Because the EPA implemented those 
reductions requirements though a limited trading program with state 
emission caps, it is also possible that some of the emission reductions 
corresponding to this identified mitigation measure are realized 
elsewhere in the state and have a similar beneficial impact on downwind 
air quality within the petitioning states. The EPA recognizes that a 
regional trading program with embedded state emission caps provides the 
flexibility to achieve emission reductions either at the sources 
through the identified mitigation measures or at

[[Page 50466]]

sources elsewhere in the state but disagrees with the petitioners' 
notion that this undermines the ability of the program to achieve 
meaningful emissions reductions from particular sources. The latest and 
best available data demonstrate that reductions are occurring at those 
sources. Moreover, even in the event of any single-unit variation in 
performance, the overall reductions are occurring within the same 
airshed due to the fact that state budgets and assurance levels were 
set to ensure those reduction levels statewide and regionwide. Thus, 
the design of the CSAPR Update accommodates emissions reductions based 
on unit-specific control optimization and observed data affirm its 
success at realizing this end.
    In evaluating these petitions, the EPA analyzed ozone-season 
emission 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, 261 of 274 units had 
ozone-season emission rates below 0.20 lb/mmBtu, indicating they were 
likely operating their post-combustion controls through most of the 
ozone season, including every unit with SCR named in Delaware's and 
Maryland's petitions.\62\ On average, the 274 units were operating at 
an average emission rate of approximately 0.088 lb/mmBtu. Nine of the 
13 units with 2017 emission rates above 0.20 lb/mmBtu are not located 
in the states where petitioners identified sources.\63\ Of the 
remaining four, one retired in 2018, and the other three have 
preliminary 2018 ozone season data (for reported months of May and 
June) below 0.20 lb/mmBtu. Consequently, the EPA finds that on average, 
SCR-controlled units are operating their SCRs throughout the season 
when operating conditions make it feasible, and that the petitioner's 
assertion of the likelihood of not operating controls is not borne out 
in the most recently available data.
---------------------------------------------------------------------------

    \62\ 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 0.20 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 0.20 lb/mmBtu are 
likely not significantly utilizing their SCR. The optimized rate for 
any particular unit depends on the unit-specific characteristics, 
such as boiler configuration, burner type and configuration, fuel 
type, capacity factor, and control characteristics such as the age, 
type, and number of layers of catalyst and reagent concentration and 
type.
    \63\ See Discussion of Short-term Emission Limits Final Rule, 
available in the docket for this action.
---------------------------------------------------------------------------

    The CSAPR Update regional trading program has resulted in an 
approximately 50 percent improvement in emission rate performance at 
SCR-controlled units at the sources named in these petitions. The 
statewide EGU emissions limits help make those reductions permanent 
within the state and region. Therefore, the EPA has addressed upwind 
emission reductions commensurate with SCR optimization in the ozone 
season from the named sources.
    Commenters state that the EPA's use of a fleet-wide average to 
demonstrate operation of SCRs at these units inappropriately ignores 
the ability of the named sources to achieve better emission rates. 
However, in the CSAPR Update, the EPA determined that, based on an 
aggregation of unit-level emission rates, an average fleet-wide rate 
emission rate of 0.10 lb/mmbtu would represent the optimized operation 
of SCR controls that were not at that time being operated or optimized. 
81 FR 74543. In concluding that this rate would be appropriate for 
calculating emission reduction potential from implementation of this 
control strategy, the EPA recognized that some units would have 
optimized rates above that level and some below that level (consistent 
with the petitioner's own comments and analysis). Therefore, in using a 
fleet-wide average for setting regional and state emission limits, the 
EPA considered and relied on unit-level data. Nevertheless, the 0.10 
lb/mmBtu emission rate used to reflect control optimization for the 
2008 ozone NAAQS for the identified sources in the CSAPR Update was not 
reopened for comment in this action.
(b) Daily Reductions Under the CSAPR Update
    Commenters disagree with the EPA's conclusion that data 
demonstrating that SCRs are being operated in the upwind states and at 
the named sources seasonally is representative of implementation of 
cost-effective controls. It is the commenter's position that for 
existing controls to be cost effective, they must be maintained and 
operated in accordance with good pollution control practices whenever 
feasible. Commenters assert that if shorter-term NOX 
emission rate data are evaluated, the SCR controls do not appear to 
have been operated in accordance with good pollution control practices 
at all times the units were operating.
    The petitions have alleged that short-term limits are necessary to 
prevent units from turning controls off intermittently on days with 
high ozone in order to harvest additional power that would otherwise be 
used for control operation. As described at proposal, 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 emission control equipment during hours with high 
generation.\64\ SCR-controlled units generally operated with lower 
emission rates during high generation hours, suggesting SCRs generally 
were in better operating condition--not worse, let alone idling--during 
those days/hours. In other words, the EPA compared NOX rates 
for EGUs for hours with high energy demand and compared them with 
seasonal average NOX rates and found very little difference. 
Thus, the data do not support the notion that units are reducing SCR 
operation on high demand days. Moreover, the auxiliary power used for 
control operation is small--typically less than one percent of the 
generation at the facility--and it is, therefore, unlikely that sources 
would cease operation of controls for such a limited energy savings. 
Instead, the data indicate that increases in total emissions on days 
with high generation are generally the result of additional units that 
do not normally operate coming online to satisfy increased energy 
demand and units that do regularly operate increasing hourly 
utilization, rather than reduced functioning of control equipment. The 
EPA notes that if, in fact, the emission reductions expected from the 
operation of control equipment at these facilities were no longer being 
realized in the future, this final action denying Delaware's and 
Maryland's petitions would not preclude either state from submitting 
another CAA section 126(b) petition for these sources raising new 
information not already considered herein. The EPA is not, however, 
pre-determining what action may be appropriate on any such future 
petition.
---------------------------------------------------------------------------

    \64\ Id.
---------------------------------------------------------------------------

    Commenters have observed that individual units equipped with SCR 
have operated in 2017 ozone season with rates higher than 0.2 lb/mmBtu 
on select days, suggesting that their SCR controls have been idled. The 
commenters identified the number of days this occurred at individual 
units (one unit at Homer City had the highest frequency of 15 days out 
of the 153-day ozone season, one unit at Harrison had two days, and 
Conemaugh had no days) and acknowledged that there may be engineering 
reasons for units to decrease or cease operation of controls on 
individual days (e.g., to avoid damaging or plugging of the SCR or 
taking a forced outage where a breakdown leaves the

[[Page 50467]]

unit unavailable to produce power). The EPA also observes that there 
appear to be engineering limitations to operating SCR at low hourly 
utilization rates (e.g., at hourly capacity factors below about 25 
percent, the EPA has observed limited operation of SCRs).\65\ While 
Maryland acknowledges these engineering challenges to SCR performance 
in low capacity factor conditions, it is not clear how the suggested 
monthly unit-specific emission rate would accommodate those challenges. 
In particular, ozone season capacity factors (which reflect the actual 
output relative to potential output) have decreased over time, dropping 
from a heat-input weighted capacity factor of 77 percent in 2006 to a 
value of 67 percent in 2017, suggesting that units may spend fewer 
hours operating at the high hourly utilization factors associated with 
the most-efficient SCR operation and lowest emission rates.\66\ In 
addition, units are now operating more frequently at hourly utilization 
rates at or below 40 percent in 2017 compared to 2006.
---------------------------------------------------------------------------

    \65\ Hourly utilization factor is defined here as the ratio of 
the hourly heat input to the maximum rated hourly heat input rate. 
See Discussion of Short-term Emissions Limits Final Rule, available 
in the docket for this action.
    \66\ The EPA selected 2006 because a commenter identified 2006 
as the best year of operation for a number of units and 2005 did not 
appear to have as comprehensive a data set.
---------------------------------------------------------------------------

    An individual unit may have high emissions from idling an SCR or 
SNCR or for burning coal (rather than natural gas) on a specific hour 
or day in the 2017 ozone season, or that the absence of daily emission 
limits leaves open the possibility that a unit at the facility may have 
high emissions on days that Maryland or Delaware monitors record ozone 
exceedances. However, in the context of regional ozone pollution, the 
EPA has concludes that reducing NOX emissions regionally and 
seasonally while allowing flexibility in compliance is effective at 
reducing downwind peak ozone concentrations. Because of the regional 
nature of interstate ozone transport, in which emissions are 
transported hundreds of miles over the course of hours or days, the EPA 
has focused on reducing aggregate NOX emissions, an approach 
that has successfully led to reductions in ozone concentrations across 
the east coast. As such, an emission event in one hour or on one day at 
a particular unit is not sufficient to suggest that the source is not 
adequately controlled over the course of the ozone season.
    Petitioners and commenters asserted that that additional emission 
reductions are achievable (comparing the methodology and rates put 
forward by with what would be expected and/or realized under the CSAPR 
Update) and that these emission reductions would be cost effective.
    Commenters assert that the maximum 30-day emission rates requested 
in Maryland's petition are (1) representative of well-run controls, (2) 
flexible to allow for multiple operating conditions and even sub-
optimal operation of controls on some days, and (3) consistently 
achievable based on the units' own reported emissions data that 
indicates the units achieved this emission rate 123 times out of 123 
attempts in their past-best ozone season. However, these assertions are 
flawed because the commenters' assessment included historical data 
that, through notice-and-comment rulemaking in the CSAPR Update, EPA 
determined were not representative of current or future operating 
conditions given SCR component degradation and maintenance schedules 
and changes in unit operation (i.e., to lower capacity factors). For 
example, EPA's analysis of historical SCR performance in the CSAPR 
Update evolved through comments on the proposal, ultimately evaluating 
data from 2009 through 2015 because in this time period SCR controls 
were operated year-round starting in the first compliance period for 
the CAIR NOX annual program (and subsequently CSAPR 
NOX annual programs) rather than only seasonally as was done 
in years before 2009.\67\ Further, the petitioners and commenters 
assert that the agency can apply historical SCR operating data to the 
future in a manner that is at odds with the EPA's conclusions reached 
through notice-and-comment in the CSAPR Update. For example, 
petitioners and commenters assert that the agency can consider data 
from the year of each unit's lowest historical average NOX 
rate. In the CSAPR Update, the agency took comment on the 
representativeness of historical data in terms of future ongoing 
achievable NOX rates. Stakeholder comment led the EPA to 
ultimately to focus on the third lowest ozone season rate from 2009 
through 2015 to ensure that its selected rates represented efficient 
but routine SCR operation (i.e., when the performance of the SCR was 
not simply the result of being new, or having a highly aggressive 
catalyst replacement schedule, but was the result of being well-
maintained and well-run). These topics are as described further in the 
CSAPR Update RTC. Thus, the petitioners and commenters rely on 
inadequate arguments, based in part on analyzing unit behaviors over an 
inappropriate time-period and by overstating the potential 
NOX reductions achievable at the sources. Considering the 
information received and EPA's assessment thereof, the EPA has not 
received sufficient information that necessitates updating or otherwise 
changing the agency's position with respect to the EPA's previous 
findings regarding cost-effective reductions at SCRs.
---------------------------------------------------------------------------

    \67\ The EPA's analysis of SCR NOX rates for the 
final CSAPR Update differed from the proposal. The evaluation 
focused on a more recent timeframe for analysis: 2009 through 2015, 
compared to 2003 through 2014. The EPA believed this change was 
reasonable because there were significant shifts in the power sector 
since 2003, particularly with respect to power sector economics 
(e.g., lower natural gas prices in response to shale gas 
development) and environmental regulations (e.g., CAIR and CSAPR). 
Because of these changes, the EPA considers it reasonable to 
evaluate SCR performance focusing on more recent historical data 
that better represent the current landscape of considerations 
affecting the power sector. The EPA chose 2009 because that is the 
first year of CAIR NOX annual compliance. For further 
discussion, see page 522 of EPA's Response to Comments on the CSAPR 
Update available in the docket for that rule at EPA-HQ-OAR-2015-
0500-0572 and EPA's EGU NOX Mitigation Strategies Final 
Rule TSD available in the docket for that rule at EPA-HQ-OAR-2015-
0500-0554.
---------------------------------------------------------------------------

    In addition, to the extent that commenters argue that the emission 
levels assumed for these units in the CSAPR Update (or alternatively as 
measured in 2017) are marginally higher than what commenters claim 
would be readily achievable, the air quality impacts of these 
differences on the design value are likely to be small. Specifically, 
Maryland indicates that the state anticipates an air quality benefit of 
0.656 ppb attributable to the named units going from idled controls to 
Maryland's definition of ``optimized'' control operation. This is 
comparable to the estimated improvement in the CSAPR Update from the 
engineering base case to the control case of $1,400/ton, wherein the 
EPA estimated a 0.6 ppb improvement in air quality at the for Harford, 
Maryland receptor.\68\ Subtracting the improvement estimated by the 
commenter from the value estimated by the EPA yields a marginal 
difference of 0.056 ppb.\69\ Thus, the petitions do not provide system-
wide impacts analysis showing that their requested unit-specific rate 
requirements, which would reduce sources' emissions only slightly below 
already achieved levels, would result in

[[Page 50468]]

regional reductions and air quality improvements as related to the 
EPA's analysis regarding the good neighbor provision.
---------------------------------------------------------------------------

    \68\ See CSAPR Update Final Ozone AQAT ``Summary DVs'' tab, 
comparing cell L12 and O12 (along with cell O28).
    \69\ While there are differences in modeling platforms, emission 
totals, and temporalization of the emissions within the modeling 
platforms that would affect this comparison, this provides some 
estimate of the difference.
---------------------------------------------------------------------------

(2) Reliance on Allowance Trading To Address Section 126(b) Petitions
    One commenter asserts that evaluating Maryland's CAA section 126(b) 
petition for control for a specific source by relying on an average 
fleet-wide rate without any consideration of the emission rate that 
specific source is capable of achieving undermines the intent of 
section 126(b) of the CAA, which gives a state the authority to ask the 
EPA to set emissions limits for specific sources of air pollution.
    As described earlier, while CAA section 126(b) addresses the same 
substantive prohibition as CAA section 110(a)(2)(D)(i), CAA section 
126(b) provides an independent process for downwind states to address 
interstate transport. Commenters state that whether a specific source 
emits or would emit in violation of the good neighbor provision is 
primarily a factual determination based on monitored data and modeling, 
not a legal conclusion based on whether a source is meeting an 
emissions budget under a SIP or FIP.
    The EPA disagrees with those commenters that argue that the EPA can 
only consider unit-level emission rates when evaluating CAA section 
126(b) petitions and must ignore prior actions and reductions 
addressing interstate transport that pertain to the same NAAQS, the 
same mitigation measures, and the same units. If the EPA has already 
identified, mandated, and received commensurate emission reductions 
from those sources (or sources in a shared geographic region determined 
to be equally relevant to the downwind monitor) based on control 
optimization through a trading program, then ignoring that related 
action could lead to miscounting emission reductions from a mitigation 
technology for a given NAAQS. While the EPA does not disagree that 
these types of considerations need to be revisited when evaluating 
potential reductions to meet future updated NAAQS (just as they have 
been revisited in previous updates to the NAAQS) for which SIPs and 
FIPs have yet to be promulgated (e.g., the 2015 ozone NAAQS), the 
agency disagrees that they are irrelevant considerations for other 
actions related to upwind contribution for the 2008 NAAQS for which 
actions have been promulgated.
    According to commenters, evaluating Delaware's and Maryland's 
section 126(b) petitions based on whether the named sources participate 
in a trading program is a strained interpretation of section 126(b) 
because it fails to account for CAA section 126(c)'s reference to 
source-specific remedies, including emissions limitations. The EPA's 
position on why it is appropriate to evaluate a CAA section 126(b) 
under the four-step framework and CSAPR Update is described in Section 
III of this notice. Additionally, the EPA disagrees with commenters 
that taking account of compliance with an emissions budget as part of 
an analysis of a CAA section 126(b) petition is inconsistent with the 
nature of CAA section 126(c)'s specific alternative remedies. Under CAA 
section 302(k), an ``emission limitation'' is ``a requirement that 
limits the quantity, rate, or concentration of emission of air 
pollutants on a continuous basis.'' Under an allowance trading program, 
the Administrator sets an emission limitation for a defined region or 
regions and a compliance schedule for each unit subject to the program 
in that region. The emission limitation for each unit is the federally 
enforceable requirement that the quantity of the unit's emissions 
during a specified period cannot legally exceed the amount authorized 
by the allowances that the unit holds. The compliance schedule is set 
by establishing a deadline by which units must begin to comply with the 
requirement to hold allowances sufficient to cover emissions. Because 
an allowance trading program is a compliance mechanism that enables 
sources to make cost-effective decisions to meet their allowance 
requirements, which are, in essence, emission limits, the EPA believes 
considering compliance with such a program as part of its analysis of a 
CAA section 126(b) petition is in fact consistent with the forms of 
remedy authorized under CAA section 126(c).
    Additionally, the EPA has previously relied on regional allowance 
trading programs intended to implement CAA section 110(a)(2)(D)(i)(I) 
to also address section 126(b) petitions. The EPA first used a regional 
trading program as a section 126(c) remedy for findings in response to 
section 126(b) petitions from eight states requesting upwind sources be 
regulated with respect to the 1979 ozone NAAQS. Based on findings made 
through the NOX SIP call, the EPA established its Federal 
NOX Budget Trading Program in response to these petitions. 
65 FR 2674 (Jan. 18, 2000). The use of the regional analysis of ozone 
transport in the NOX SIP call findings to respond to 
contemporaneous section 126(b) petitions was challenged in the D.C. 
Circuit in Appalachian Power, where Petitioners argued that findings 
based on statewide emissions cannot determine whether specific 
stationary source emissions are in violation of the good neighbor 
provision. Petitioners argued that instead of relying on the 
NOX SIP call findings, the EPA needed first to make the more 
rigorous finding that the specified stationary sources within a given 
state independently met its threshold test for impacts on downwind 
areas. Given the linkage between section 126(b) and the good neighbor 
provision, the court determined it was reasonable for the EPA to tie 
its source-specific findings under section 126(b) to the significance 
of a state's total NOX emissions as determined under section 
110(a)(2)(D)(i). 249 F.3d at 1049-1050. While the court did not 
explicitly speak to the issue of whether an allowance trading program 
is an appropriate remedy under CAA section 126(c), the court's 
conclusion that a regional analysis is appropriate to evaluate ozone 
transport at individual sources also supports the conclusion that a 
regional remedy can effectively address the any air quality problem 
identified through such an analysis. The court ultimately upheld the 
EPA's regulatory action on the section CAA 126(b) petitions, which 
included reliance on the allowance trading program.
    The EPA evaluated whether there is newly available information that 
leads to a determination that these sources are inadequately controlled 
by the CSAPR Update, as commenters assert. The petitioners and 
commenters claim that this is so, based on data that preceded 
implementation of the CSAPR Update that they assert illustrates that 
relatively large sources with existing control equipment were not 
operating at appropriate levels of NOX abatement. The 
petitioners and commenters further assert that these sources are 
inadequately controlled because they do not always operate control 
equipment on high ozone days. They support their argument with an 
analysis of an allegedly achievable NOX rate, which they 
claim is appropriate for regulatory application.
    The EPA does not agree that these assertions support a 
determination that these sources are inadequately controlled by the 
CSAPR Update, and that additional regulatory measures for these sources 
are necessary under the good neighbor provision. Not only was that rule 
specifically designed to achieve the reductions necessary under the 
good neighbor provision, but recent data indicate that it is in fact 
achieving such reductions and that petitioners' assertions are not 
borne out by the

[[Page 50469]]

current or future operations of the named sources. As discussed 
earlier, based on reported 2017 ozone-season emissions under the first 
CSAPR Update compliance period, these sources as a group effectively 
reduced emissions to a degree consistent with the CSAPR Update remedy. 
Commenters provided no compelling additional recent emissions and air 
quality data that suggest controls were broadly underperforming on high 
ozone days.
    The EPA notes that the power sector is a complex and interconnected 
system in which factors affecting one facility can result in effects 
across facilities within the state or dispatch region. Thus, granting 
the petitioners' request for source-specific emission limitations at 
certain EGUs could cause effects at other EGUs. For instance, rate 
requirements could result in generation shifting to higher-emitting 
units that were not named in the petition, potentially creating worse 
downwind air quality impacts on a statewide or regionwide basis. 
Petitioners fail to recognize or account for potential re-balancing 
across the power sector in response to their requested remedy. By only 
examining the impact of a subset of the units subject to the same cap, 
the petitioner does not fully account for the potential air quality 
impact from implementation of the proposed remedy.
    The EPA received comments on the proposed action asserting that an 
allowance trading program, such as that promulgated in the CSAPR 
Update, cannot address significant contribution to nonattainment or 
interference with maintenance from a source or group of sources under 
CAA section 126. Commenters state that an allowance trading program is 
insufficient to constrain NOX emissions where there are 
excess allowances. Commenters state that since ozone is observed on a 
daily basis and the form of the standard is based on daily 
observations, daily NOX limits are necessary to prevent 
units from emitting at high rates on exceedance days and the days 
leading up to the exceedance. The EPA does not agree that an allowance 
trading program is an inadequate means of implementing emission 
reductions for interstate transport purposes and notes it has done so 
in response to CAA section 126(b) petitions previously.\70\ Petitioners 
have not provided compelling new or novel information regarding the 
EPA's technical analysis of NOX control potential or 
observation of CSAPR Update implementation. Implementation mechanisms 
based on 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 United States, in part due to season-long allowance trading 
programs such as the NOX Budget Trading Program, CAIR, and 
the CSAPR NOX ozone-season allowance trading program. As a 
result, current measured air quality in all Eastern areas is below the 
1997 ozone NAAQS. As such, based on the best information available to 
the agency at this time, the EPA believes that its current approach of 
implementing an allowance trading program at step four has proven 
effective at constraining NOX emissions from covered 
sources, including the sources named in the petitions.
---------------------------------------------------------------------------

    \70\ See Rulemaking on Section 126 Petition From North Carolina 
To Reduce Interstate Transport of Fine Particulate Matter and Ozone; 
Federal Implementation Plans to Reduce Interstate Transport of Fine 
Particulate Matter and Ozone; Revisions to the Clean Air Interstate 
Rule; Revisions to the Acid Rain Program, 71 FR 25328 (April 28, 
2006); Findings of Significant Contribution and Rulemaking on 
Section 126 Petitions for Purposes of Reducing Interstate Ozone 
Transport, 65 FR 2674 (January 18, 2000).
---------------------------------------------------------------------------

b. Analysis of SNCR for NOX Mitigation
    In its petition, Maryland also alleges that two facilities 
operating SNCR post-combustion controls--Cambria Cogen in Pennsylvania 
and Grant Town Power Plant in West Virginia--emit or would emit in 
violation of the good neighbor provision with respect to the 2008 ozone 
NAAQS and asks that the agency impose emission limits or other 
requirements to ensure that the facilities operate their SNCR during 
the ozone season. The EPA is finalizing its proposal to deny Maryland's 
petition with respect to sources operating SNCR based on its conclusion 
that fully operating with SNCR is not a cost-effective NOX 
emissions reduction strategy for these sources, considering other 
relevant factors such as NOX reduction potential and 
downwind air quality impact, with respect to addressing transport 
obligations for the 2008 ozone NAAQS. The EPA determined in the CSAPR 
Update that operating existing SNCR would be $3,400 per ton, which 
exceeded the level that the EPA determined would be cost effective for 
the good neighbor provision for the 2008 ozone NAAQS, and, therefore, 
the EPA is determining in this action that these sources do not emit 
and would not emit in violation of the good neighbor provision with 
respect to that NAAQS.
    As discussed in Section IV.C.2 of the proposal, 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, using a multi-factor test 
that considered cost, NOX reduction potential, and downwind 
air quality improvements at various levels of potential NOX 
control stringency. In its evaluation, the EPA examined control 
strategies available at different cost thresholds, including turning on 
existing idled SNCR, which is the remedy proposed by Maryland in its 
petition for these two units. The EPA identified a marginal cost of 
$3,400 per ton as the level of uniform control stringency that 
represents turning on idled SNCR controls.\71\ The EPA identified this 
higher marginal cost of operating SNCR at units in the CSAPR Update 
region, relative to operation of SCR, predominately based on the cost 
and quantity of reagent needed (i.e., SNCRs require substantially more 
reagent compared with SCRs due to the absence of catalyst which greatly 
facilitates the reactions converting the NOX).
---------------------------------------------------------------------------

    \71\ See EGU NOX Mitigation Strategies Final Rule TSD 
(docket ID EPA-HQ-OAR-2015-0500-0554), available at http://www.regulations.gov.
---------------------------------------------------------------------------

    The CSAPR Update finalized emission budgets using $1,400 per ton 
control stringency, finding within step three 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 per ton control cost 
level was appropriate for the 2008 ozone NAAQS, the EPA determined that 
the more stringent emission budget level reflecting $3,400 per ton 
(representing turning on idled SNCR controls) yielded fewer additional 
emission reductions and fewer air quality improvements per additional 
dollar of control costs.
    Based on the information, assumptions, and analysis in the CSAPR 
Update, the EPA determined that establishing emission budgets at $3,400 
per ton and developing associated emissions budgets based on operation 
of idled SNCR controls was not cost effective for addressing good 
neighbor provision obligations for the 2008 ozone NAAQS because this 
level of control yielded fewer additional emission reductions and fewer 
air quality improvements relative to other less-costly control 
strategies. 81 FR 74550. A review of the emission levels at the

[[Page 50470]]

sources named in Maryland's petition before implementation of the CSAPR 
Update, in particular, demonstrates that the two units are relatively 
small in size and have low emission levels, indicating that the units 
have a relatively limited ability to substantially reduce 
NOX emissions and, thereby, improve air quality 
downwind.\72\ Neither Maryland's petition nor public commenters provide 
any contradictory information demonstrating that fully operating SNCR 
is a cost-effective control for the two named sources, considering the 
marginal cost of implementation, the anticipated emission reduction, 
and the potential air quality benefits.\73\ The EPA, thus, denies 
Maryland's petition with respect to these sources based on its 
conclusion that fully operating with SNCR is not a cost-effective 
NOX emission 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.
---------------------------------------------------------------------------

    \72\ Cambria Cogen units one and two emitted 237 tons and 219 
tons of ozone season NOX in 2016, respectively, while 
Grant Town units 1A and 1B emitted 282 tons and 285 tons of ozone 
season NOX in 2016, respectively. Ozone season 
NOX emissions rates from these EGUs under the CSAPR 
Update in 2017 are described later.
    \73\ 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 in the proposal, 
would also apply to Maryland's contentions with respect to SNCRs.
---------------------------------------------------------------------------

    While the EPA determined that fully operating SNCR across the 
region was not 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 emission reductions needed to 
comply with the requirements of the trading program. 81 FR 74561. For 
instance, during the 2017 ozone season, likely 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).\74\
---------------------------------------------------------------------------

    \74\ 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.
---------------------------------------------------------------------------

    One commenter asserts that the EPA incorrectly analyzed Maryland's 
argument related to EGUs equipped with SNCR, as the availability of 
NOX reductions under a 126(b) petition must be evaluated on 
a source-specific basis in order to determine if the proposed 
NOX control is cost effective. The commenter alleges that 
when the EPA conducts cost-effectiveness determinations for RACT, SNCR 
installation is considered cost effective, and, therefore that running 
those installed controls is necessarily also cost effective in the 
context of the good neighbor provision as well. Another commenter 
asserts that the optimization of existing post-combustion controls is 
an immediately available cost-effective NOX reduction 
strategy available in the EGU sector.
    While the operation of SNCR could be implemented relatively 
quickly, as described earlier, the EPA does not have a basis to 
determine that the controls are cost effective at these units when 
considering cost, NOX reduction potential, and downwind air 
quality improvements. Commenters have also not provided information 
demonstrating that, even at the unit level proposed by the commenter, 
operation of SNCR at the two units named in the Maryland petition are 
cost effective relative to NOX reduction potential and 
downwind air quality improvements.
    The EPA also does not agree that any conclusions drawn regarding 
cost effectiveness of controls in other contexts are directly 
applicable here. RACT determinations are evaluating whether 
implementation of certain controls within a nonattainment area will be 
effective at addressing a local air quality problem relative to the 
cost of implementing such controls. However, implementation of the same 
controls at sources that are significantly farther from a particular 
air quality problem may have very different air quality impacts a 
downwind area. As described earlier in this notice, ozone transport is 
the result of the collective contribution of many sources in several 
upwind states. The relative cost effectiveness of emission reductions 
from implementation of controls at a given upwind source, when 
considering NOX reduction potential and downwind impacts, 
will necessarily be different than evaluation of the same controls at a 
more local source. The EPA's approach for assessing cost effectiveness 
in the context of regional interstate ozone pollution transport can, 
therefore, reasonably be considered as addressing a different air 
quality concern and thereby independent from cost-effectiveness 
determinations made under RACT.
    Based on the EPA's conclusion that fully operating with SNCR is not 
a cost-effective NOX emission reduction strategy with 
respect to addressing transport obligations for the 2008 ozone NAAQS 
for these sources, the EPA finds that the petition and the comments 
provide no grounds for the EPA to determine that that the two sources 
identified as operating SNCR emit or would emit in violation of the 
good neighbor provision with respect to the 2008 ozone NAAQS.
c. 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 determined that 
Delaware's petitions should be denied based on the EPA's conclusions 
that there are no downwind air quality impacts in Delaware in steps one 
and two of the four-step framework. Nonetheless, the EPA has evaluated 
Brunner Island with respect to step three because it provides another 
independent basis for EPA's denial of the petition.
    With respect to the question of whether there are feasible and 
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 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 of this notice, 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 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,

[[Page 50471]]

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) 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 Brunner Island will continue to 
primarily use natural gas as fuel during future ozone seasons for 
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.\75\ 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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    \75\ 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 (i.e., between 2009 and 2016), average annual Henry Hub natural 
gas spot prices ranged from $2.52/mmBtu to $4.37/mmBtu.\76\ 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 buildout. 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.\77\ 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.\78\ 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.\79\
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    \76\ 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.
    \77\ 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.
    \78\ AEO short-term energy outlook available at https://www.eia.gov/outlooks/steo/report/natgas.php.
    \79\ The EPA also notes that a proposed consent decree 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. Sierra Club, Talen Energy, and 
Brunner Island jointly moved the Middle District of Pennsylvania to 
enter the proposed the consent decree, and on August 31, 2018, the 
court granted the motion and entered the agreement. See Order 
Granting Joint Motion for Entry of Proposed Consent Decree and 
Stipulation Extending Defendants' Time to Respond to Complaint, 
Sierra Club. v Talen Energy Corp., Case No. 1:18-cv-01042-CCC.
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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.\80\ This overall 
increase results from both an increase in capacity from the 
construction of additional units and an increased gas-fired capacity 
factor at existing sources. The available capacity increased six 
percent while average capacity factor increased from 23 percent to 25 
percent, which reflects an eight percent increase in utilization.
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    \80\ 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.
    Commenters assert that the EPA's interpretation of ``emits'' or 
``would emit'' inappropriately proposes to evaluate only a single 
year's worth of emissions data or anticipated future rates, without 
ensuring that the emission reductions (i.e. evaluated rates) are 
permanent and federally enforceable. The EPA disagrees that it is 
required to impose federally enforceable limitations at Brunner Island 
based on the facts before the agency. The prohibition of CAA section

[[Page 50472]]

110(a)(2)(D)(i)(I) is linked directly to CAA section 126(b), 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 should be construed identically for 
purposes of both provisions where EPA has already given meaning to the 
terms under one provision. 83 FR 7711 through 7722; see also 
Appalachian Power, at 1048-50 (affirming as reasonable the EPA's 
approach to interpreting a violation of CAA section 110(a)(2)(D)(i)(I) 
under CAA section 126 consistent with its approach in the 
NOX SIP Call).
    Given the inextricable link between the substantive requirements of 
the two provisions, the EPA applied the same four-step framework used 
in previous ozone transport rulemakings, including the CSAPR Update, 
for evaluating whether Brunner Island significantly contributes to 
nonattainment, or interferes with maintenance, of the 2008 and 2015 
ozone NAAQS in Delaware. Pursuant to this framework, the EPA first 
determines in steps one and two whether emissions from an upwind state 
impact downwind air quality problems at a level that exceeds an air 
quality threshold, such that the state is linked and, therefore, 
contributes to the air quality problem. In step three, the EPA then 
determines whether the contribution is ``significant'' or interferes 
with maintenance of the NAAQS based on several factors, including the 
availability of cost-effective emission reductions at sources within 
the state. Where the EPA determines that a source does not have cost-
effective emission reductions available, the EPA concludes that the 
source does not significantly contribute to nonattainment or interfere 
with maintenance of the NAAQS, and thus, that there are no emissions at 
the source that must be ``prohibited'' under CAA section 
110(a)(2)(D)(i)(I), and the petition can also be denied on this basis.
    Importantly, the EPA only implements federally enforceable limits 
under step four of the four-step framework for sources that the EPA 
determines have emissions that significantly contribute to 
nonattainment or interfere with maintenance of the ozone NAAQS downwind 
under steps one, two, and three. See 81 FR 74553 (declining to impose 
CSAPR Update FIP obligations for EGUs in District of Columbia and 
Delaware despite linkages to downwind receptors where EPA determined no 
cost-effective emission reductions were available). This is consistent 
with the statutory language of CAA section 110(a)(2)(D)(i)(I), which 
``prohibit[s]'' only those emissions that significantly contribute to 
nonattainment or interfere with maintenance of the NAAQS in another 
state. The EPA has reasonably interpreted this to mean that where there 
is no such impact, the EPA and the states are not required to impose 
emission limitations.\81\ The EPA does not dispute that, were it to 
find that Brunner Island emits or would emit in violation of the 
prohibition under CAA section 110(a)(2)(D)(i)(I), an appropriate remedy 
to mitigate the emission impacts would necessarily have to be federally 
enforceable, both under CAA section 126(c) (requiring compliance by a 
source with EPA-imposed emission limitations and compliance schedules) 
and CAA section 110(a)(2)(D)(ii) (requiring a state implementation plan 
to contain provisions ensuring compliance with the requirements of CAA 
section 126).
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    \81\ This is also consistent with designation requirements 
elsewhere in title I. Downwind areas are initially designated 
attainment or nonattainment for the ozone NAAQS based on actual 
measured ozone concentrations, regardless of whether the level of 
ozone concentrations is due to enforceable emission limits. 
Similarly, the EPA generally evaluates whether sources in nearby 
areas contribute to measured nonattainment in such areas for 
purposes of designations based on actual emission levels, and thus 
sources in those nearby areas are generally subject to nonattainment 
planning requirements only if actual emissions from that area are 
considered to contribute to the air quality problem. Here, where 
``significant contribution'' is necessarily a higher standard than 
the contribution threshold used in designations, it is reasonable 
and consistent to determine that states or EPA need only impose 
emission limitations if it is determined that there is significant 
contribution or interference with maintenance.
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    However, for the reasons described in the proposal and in this 
final action, the EPA has determined at this time that Brunner Island 
does not emit, or would not emit, in violation of CAA section 
110(a)(2)(D)(i)(I) under steps one, two, and three for either the 2008 
or 2015 ozone NAAQS. Therefore, under the four-step framework, the EPA 
does not reach step four's requirement of federally enforceable 
emission reductions. However, the EPA notes that if, in fact, Brunner 
Island's operations change such that the facility is operating 
primarily on coal during future ozone seasons and future emission 
levels increase so as to be in violation of the good neighbor 
provision, then this final action denying Delaware's petition would not 
preclude Delaware from submitting another petition regarding Brunner 
Island's impacts. The EPA is not, however, pre-determining what action 
may be appropriate on any such future petition, which would depend upon 
a variety of factors, including the level of emissions at Brunner 
Island and future ozone concentrations in Delaware.

V. 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 the 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 finds that this final action regarding the pending CAA 
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 CAA 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 final action addresses emissions 
impacts and sources located in seven States, which are located in 
multiple EPA Regions and federal circuits.\82\ This 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 CAA section 126(b) petitions for 
the 2008 and 2015 ozone NAAQS. Courts have found similar actions to be 
nationally applicable.\83\ For these reasons, the Administrator finds 
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 CAA section 307(b)(1).
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    \82\ See H.R. Rep. No. 95-294 at 323, 324, reprinted in 1977 
U.S.C.C.A.N. 1402-03.
    \83\ 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)).
---------------------------------------------------------------------------

    Thus, the EPA finds that pursuant to CAA section 307(b)(1) any 
petitions for review of this final action would be filed in the Court 
of Appeals for the District of Columbia Circuit within 60

[[Page 50473]]

days from the date any final action is published in the Federal 
Register.

VI. Statutory Authority

    42 U.S.C. 7410, 7426, 7601.

    Dated: September 14, 2018.
Andrew R. Wheeler,
Acting Administrator.
[FR Doc. 2018-20854 Filed 10-4-18; 8:45 am]
 BILLING CODE 6560-50-P


