Inclusion of Delaware and New Jersey in the Clean Air Interstate Rule, 25288-25302 [06-2750]
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FOR FURTHER INFORMATION CONTACT:
ENVIRONMENTAL PROTECTION
AGENCY
40 CFR Parts 51 and 96
[EPA–HQ–OAR–2003–0053; FRL–8048–1]
RIN 2060–AM95
Inclusion of Delaware and New Jersey
in the Clean Air Interstate Rule
Environmental Protection
Agency (EPA).
ACTION: Final rule.
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AGENCY:
SUMMARY: In today’s action, we are
finalizing regulations to include
Delaware and New Jersey in the Clean
Air Interstate Rule (CAIR) for fine
particles (PM2.5), based on our
assessment that they contribute
significantly to a downwind State’s
nonattainment. In the CAIR, we
determined that upwind States that
contribute 0.2 µg/m3 or more to a
downwind PM2.5 nonattainment area are
potentially deemed to be contributing
significantly to nonattainment in the
downwind State. The EPA proposed to
augment the analytical approach used in
the CAIR by supplementing the air
quality step of the contribution analysis.
Based on the results of this augmented
analytical approach, we proposed that
Delaware and New Jersey should be
covered by the CAIR for annual sulfur
dioxide (SO2) and nitrogen oxides (NOX)
requirements and are finalizing the
regulation to include these States in the
CAIR for PM2.5.
DATES: This final rule is effective on
June 27, 2006.
ADDRESSES: The EPA has established a
docket for this action under Docket ID
No. EPA–HQ–OAR–2003–0053. All
documents in the docket are listed on
the https://www.regulations.gov Web
site. Although listed in the index, some
information is not publicly available,
e.g., Confidential Business Information
(CBI) 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 through
https://www.regulations.gov or in hard
copy at the Air Docket, EPA/DC, EPA
West, Room B102, 1301 Constitution
Ave., NW., Washington, DC. The Public
Reading Room is open from 8:30 a.m. to
4:30 p.m., Monday through Friday,
excluding legal holidays. The telephone
number for the Public Reading Room is
(202) 566–1744. The Air Docket
telephone number is (202) 566–1742.
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General questions concerning today’s
action should be addressed to Jan King,
U.S. EPA, Office of Air Quality Planning
and Standards, Air Quality Strategies
and Standards Division, Mail Code
C539–02, Research Triangle Park, NC
27711, telephone (919) 541–5665, e-mail
king.jan@epa.gov. For legal questions,
please contact Steven Silverman, U.S.
EPA, Office of General Counsel, Mail
Code 2344A, 1200 Pennsylvania
Avenue, NW., Washington, DC 20460,
telephone (202) 564–5523, e-mail at
silverman.steven@epa.gov. For
questions regarding air quality analyses,
please contact Norm Possiel, U.S. EPA,
Office of Air Quality Assessment
Division, Mail Code C439–01, Research
Triangle Park, NC 27711, telephone
(919) 541–5692, e-mail at
possiel.norm@epa.gov. For questions
regarding the electric generating units
(EGUs) cost analyses, emissions
inventories, and budgets, and also for
questions regarding the model cap and
trade programs, please contact Sam
Waltzer, U.S. EPA, Office of
Atmospheric Programs, Clean Air
Markets Division, Mail Code 6204J,
1200 Pennsylvania Avenue, NW.,
Washington, DC 20460, telephone (202)
343–9175, e-mail at
waltzer.sam@epa.gov. For questions
regarding statewide emissions
inventories, please contact Marc
Houyoux, U.S. EPA, Office of Air
Quality Assessment Division, Mail Code
C339–02, Research Triangle Park, NC
27711, telephone (919) 541–3649, e-mail
at houyoux.marc@epa.gov. For
questions regarding emissions reporting
requirements, please contact Bill
Kuykendal, U.S. EPA, Office of Air
Quality Planning and Standards,
Emissions, Monitoring, and Analysis
Division, Mail Code D205–01, Research
Triangle Park, NC 27711, telephone
(919) 541–5372, e-mail at
kuykendal.bill@epa.gov. For questions
regarding analyses required by statutes
and executive orders, please contact
Linda Chappell, U.S. EPA, Office of Air
Quality Planning and Standards, Air
Quality Strategies and Standards
Division, Mail Code C339–01, Research
Triangle Park, NC 27711, telephone
(919) 541–2864, e-mail at
chappell.linda@epa.gov.
SUPPLEMENTARY INFORMATION:
Web Site for Rulemaking Information
The EPA has established a Web site
for this rulemaking at https://
www.epa.gov/cleanairinterstaterule/ or
https://www.epa.gov/cair/ which
includes the rulemaking actions and
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certain other related information that
the public may find useful.
Judicial Review
Section 307(b)(1) of the CAA indicates
which Federal Courts of Appeal have
venue for petitions of review of final
actions by EPA. This section provides,
in part, that petitions for review must be
filed in the Court of Appeals for the
District of Columbia Circuit if (i) the
agency action consists of ‘‘nationally
applicable regulations promulgated, or
final action taken, by the
Administrator,’’ or (ii) such action is
locally or regionally applicable, if ‘‘such
action is based on a determination of
nationwide scope or effect and if in
taking such action the Administrator
finds and publishes that such action is
based on such a determination.’’
Any final action related to the CAIR
is ‘‘nationally applicable’’ within the
meaning of section 307(b)(1). As an
initial matter, through this rule, EPA
interprets section 110(a)(2)(D)(i) of the
Clean Air Act (CAA), a provision which
has nationwide applicability. In
addition, the CAIR applies to 28 States
and the District of Columbia. The CAIR
is also based on a common core of
factual findings and analyses
concerning the transport of pollutants
between the different States subject to it.
Finally, EPA has established uniform
approvability criteria that would be
applied to all States subject to the CAIR.
For these reasons, the Administrator
also is determining that any final action
regarding the CAIR is of nationwide
scope and effect for purposes of section
307(d)(1). Thus, any petitions for review
of final actions regarding the CAIR must
be filed in the Court of Appeals for the
District of Columbia Circuit within 60
days from the date final action is
published in the Federal Register.
Outline
I. Overview
A. What Are the Central Requirements of
This Rule?
B. Why Are We Taking This Action?
II. Air Quality Analysis of Ozone and PM2.5
Contributions in the CAIR
A. Analysis of Highly Cost-Effective
Controls and Timeframe for Emissions
Reductions
1. Overall Criteria
2. Evaluation of Cost Effectiveness and
Feasibility
3. CAIR Regionwide SO2 and NOX
Emissions Reductions Requirements
III. Inclusion of Delaware and New Jersey in
the CAIR for PM2.5
A. Why EPA Is Revising the Status of
Delaware and New Jersey in the CAIR
B. Results of Updated Air Quality
Modeling for Delaware and New Jersey
IV. Findings and Action
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A. Findings of Significant Contribution for
Delaware and New Jersey
B. SIP Approval Criteria
C. SIP Submittal Deadline
D. Emissions Reporting Requirements
V. Expected Effects of This Action
A. Emissions
B. Air Quality
VI. Statutory and Executive Order Reviews
A. Executive Order 12866: Regulatory
Planning and Review
B. Paperwork Reduction Act
C. Regulatory Flexibility Act
D. Unfunded Mandates Reform Act
E. Executive Order 13132: Federalism
F. Executive Order 13175: Consultation
and Coordination With Indian Tribal
Governments
G. Executive Order 13045: Protection of
Children From Environmental Health
and Safety Risks
H. Executive Order 13211: Actions That
Significantly Affect Energy Supply,
Distribution or Use
I. National Technology Transfer
Advancement Act
J. Executive Order 12898: Federal Actions
To Address Environmental Justice in
Minority Populations and Low-Income
Populations
K. Congressional Review Act
I. Overview
By notice of proposed rulemaking
dated May 12, 2005, EPA proposed to
include Delaware and New Jersey in the
CAIR, which was published on the same
date (70 FR 25162). We are finalizing
that proposal here. The final rule
requires Delaware and New Jersey to
adopt and submit State implementation
plans (SIPs), under the requirements of
CAA section 110(a)(2)(D), that would
eliminate emissions of specified
amounts of SO2 and NOX which
contribute significantly to
nonattainment of the PM2.5 National
Ambient Air Quality Standard (NAAQS)
in a downwind State. Although
Delaware and New Jersey are now
combined to determine significant
contribution, these States may
independently determine which sources
to subject to controls, and which control
measures to adopt. The EPA’s analysis
indicates that emissions reductions from
EGUs are highly cost effective, and EPA
encourages Delaware and New Jersey to
adopt controls for EGUs. To do so, they
must place an enforceable limit, or cap,
on EGU emissions (see section VII of the
CAIR for a more detailed discussion).
The EPA has calculated the amount of
each State’s EGU emissions cap, or
budget, based on reductions that EPA
has determined are highly cost effective
(see section IV of this rule). Delaware
and New Jersey may also allow their
EGUs to participate in an EPAadministered cap and trade program as
a way to reduce the cost of compliance.
The cap and trade programs are
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described in more detail in section VIII
of the preamble to the final CAIR.
A. What Are the Central Requirements
of This Rule?
In today’s action, we establish SIP
requirements for the affected upwind
States of Delaware and New Jersey
under CAA section 110(a)(2)(D)(i).
Section 110(a)(2)(D)(i) of the CAA
requires SIPs to contain adequate
provisions prohibiting air pollutant
emissions from sources or activities in
those States which emissions contribute
significantly to nonattainment in, or
interfere with maintenance by, any
other State with respect to a NAAQS.
Based on air quality modeling analyses
and cost analyses, EPA has concluded
that SO2 and NOX emissions in
Delaware and New Jersey, through the
phenomenon of air pollution transport,1
contribute significantly to downwind
nonattainment of the PM2.5 NAAQS.2 In
addition to making the findings of
significant contribution to
nonattainment, EPA is requiring
Delaware and New Jersey to make
specified amounts of SO2 and NOX
emissions reductions to eliminate their
significant contribution to downwind
States. Delaware and New Jersey are
required to adopt and submit SIP
revisions with the necessary control
measures by September 11, 2006.
B. Why Are We Taking This Action?
On May 12, 2005, we proposed to
include Delaware and New Jersey in the
CAIR for PM2.5. Our assessment was that
the combination of the two States does
contribute significantly to PM2.5
nonattainment in New York County,
NY, and to one or more counties in
eastern Pennsylvania. In that action, we
proposed the following:
• Combining Delaware and New
Jersey for purposes of assessing whether
that combination contributes
significantly to nonattainment of the
PM2.5 NAAQS by downwind receptors
under section 110(a)(2)(D);
• Requiring Delaware and New
Jersey, under CAA section 110(a)(2)(D),
to adopt SIP requirements for
addressing annual emissions of the
PM2.5 precursors NOX and SO2;
1 In today’s final rule, when we use the term
‘‘transport’’ we mean to include the transport of
both fine particles (PM2.5) and their precursor
emissions.
2 In the CAIR, the 23 States along with the District
of Columbia that must reduce SO2 and NOX
emissions for the purposes of the PM2.5 NAAQS are:
Alabama, Florida, Georgia, Illinois, Indiana, Iowa,
Kentucky, Louisiana, Maryland, Michigan,
Minnesota, Mississippi, Missouri, New York, North
Carolina, Ohio, Pennsylvania, South Carolina,
Tennessee, Texas, Virginia, West Virginia, and
Wisconsin.
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• Adding requirements for control of
annual emissions of SO2 and NOX;
• Requiring that SIPs to achieve the
required PM2.5 emissions reductions be
submitted as soon as practicable, but no
later than 18 months after the date of
signature of the CAIR, i.e., September
11, 2006, the same deadline as in the
CAIR; and
• Providing model cap and trade
programs for EGUs in the CAIR and
administering these programs.
Delaware and New Jersey are already
subject to the CAIR for purposes of
ozone, and must reduce ozone season
emissions of NOX starting in 2009. We
proposed to add requirements for
control of annual emissions of NOX by
2009 and SO2 by 2010 for purposes of
PM2.5. We also proposed larger
reductions by 2015 for NOX and SO2 in
order to avoid contributing significantly
to PM2.5 nonattainment, or interfere
with maintenance, in other States.
We performed air quality modeling to
determine the contribution from
projected 2010 SO2 and NOX emissions
in Delaware and New Jersey combined
to PM2.5 nonattainment in downwind
States. The results of this modeling were
provided in a Notice of Data Availability
(NODA) (70 FR 37068, June 28, 2005).
The results show that the largest
contribution from Delaware and New
Jersey was 0.23 µg/m3 to PM2.5
nonattainment in New York County,
New York. This amount exceeds EPA’s
PM2.5 significance criterion of 0.2 µg/m3.
Based on a comment we received
from the State of Delaware on the
proposed rule, we have updated our
2010 emissions projections for Delaware
and re-ran the model for Delaware and
New Jersey. Materials relevant to this
have been placed in the docket. See
section III.B of this rule for further
discussion of this comment and our
response. The revised modeling
confirms that the combination of
Delaware and New Jersey make a
significant contribution to PM2.5
nonattainment in at least one downwind
State thus necessitating SIP revisions
under section 110(a)(2)(D) to eliminate
the significant contribution. Therefore,
we are finalizing the requirement for
Delaware and New Jersey that they
adopt SIP requirements for addressing
annual emissions of the PM2.5
precursors NOX and SO2.
II. Air Quality Analysis of Ozone and
PM2.5 Contributions in the CAIR 3
For the CAIR, we performed State-byState zero-out modeling to quantify the
3 This discussion is for readers’ convenience. The
EPA did not reconsider or otherwise reopen any
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contribution from emissions in each
State to future ozone and PM2.5
nonattainment in other States and to
determine whether that contribution
meets requirements of the ‘‘contribute
significantly’’ test. This zero-out
modeling technique provides an
estimate of downwind impacts by
comparing the model predictions from
the 2010 base case to the predictions
from a run in which all anthropogenic
NOX emissions (in the case of ozone) or
all anthropogenic SO2 and NOX
emissions (in the case of PM2.5) are
removed from specific States, one State
at a time. After considering an updated
analysis and public comments, we
applied a threshold of 0.2 µg/m3 for
PM2.5 for this determination.
For more detailed discussions of
EPA’s analytical approach, findings, and
final actions in the CAIR, see 70 FR
25162, May 12, 2005.
A. Analysis of Highly Cost-Effective
Controls and Timeframe for Emissions
Reductions
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1. Overall Criteria
In the CAIR rulemaking, we
considered a variety of factors in
evaluating the source categories from
which highly cost-effective reductions
may be available and the level of
reduction assumed from that sector.
These include:
• The availability of information,
• The identification of source
categories emitting relatively large
amounts of the relevant emissions,
• The performance and applicability
of control measures,
• The cost effectiveness of control
measures, and
• Engineering and financial factors
that affect the availability of control
measures.
We further stated that overall, ‘‘We
are striving * * * to set up a reasonable
balance of regional and local controls to
provide a cost-effective and equitable
governmental approach to attainment
with the NAAQS for fine particles and
ozone.’’ These criteria are unaffected by
this rule.
2. Evaluation of Cost Effectiveness and
Feasibility
The CAIR preamble (70 FR 25195–
25229) describes EPA’s determination of
regionwide SO2 and NOX control levels.
As described in section IV in the CAIR
preamble, EPA determined that highly
cost-effective emissions reductions may
be obtained by controlling EGUs. The
EPA determined the amounts of
emissions reductions that must be
aspect of the CAIR in this rulemaking, except for
the matter specifically proposed.
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eliminated in upwind States to help
downwind States achieve attainment of
the PM2.5 and ozone NOX NAAQS, by
assuming the application of highly costeffective control measures to EGUs and
determining the emissions reductions
that would result.
For the CAIR, EPA determined highly
cost-effective regionwide amounts of
emissions reductions based on
comparison to reference lists of the cost
effectiveness of other regulatory
controls. We developed reference lists
for both average and marginal cost
effectiveness of those other controls. By
comparison to the reference lists, EPA
determined that the CAIR final (2015)
SO2 and NOX regionwide control levels
are highly cost effective. The EPA also
developed marginal cost-effectiveness
curves for SO2 and NOX abatement at
varying levels of stringency, to
corroborate its cost-effectiveness
determinations.
The EPA determined the interim
control levels (commencing in 2009 for
NOX and in 2010 for SO2) based on
evaluating the feasibility of installing
the necessary emission control retrofits.
Although the interim regionwide
control levels were determined based on
feasibility considerations, EPA also
evaluated the cost effectiveness of the
interim control levels to ensure that
they were also highly cost effective.
Section IV.A describes our evaluation
of highly cost-effective controls and
section IV.C in the CAIR notice of final
rulemaking (NFR) preamble describes
EPA’s feasibility analysis. Section V in
the CAIR NFR preamble describes the
method EPA used to apportion
regionwide control levels to the affected
States. A technical support document in
the CAIR docket entitled ‘‘Modeling of
Control Costs, Emissions, and Control
Retrofits for Cost Effectiveness and
Feasibility Analyses’’ describes EPA’s
use of the Integrated Planning Model
(IPM) for its cost-effectiveness and
feasibility analyses. In addition, a
technical support document entitled
‘‘Boilermaker Labor Analysis for the
Final Clean Air Interstate Rule’’
provides further explanation of EPA’s
feasibility analyses. Documentation for
IPM, as well as IPM output files, are
available in the CAIR docket listed in
the ADDRESSES section of this rule.
3. CAIR Regionwide SO2 and NOX
Emissions Reductions Requirements
The CAIR NFR requires annual SO2
and NOX reductions in the District of
Columbia and the 23 States listed in
section I.A above. If all affected States
choose to implement the CAIR annual
SO2 emission reduction requirements by
controlling EGUs, the regionwide
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annual SO2 emissions caps that will
apply in these 23 States and the District
of Columbia are 3.6 million tons in 2010
and 2.5 million tons in 2015. If all
affected States choose to implement the
CAIR annual NOX emission reduction
requirements by controlling EGUs, the
regionwide annual NOX emissions caps
that will apply for EGUs in these 23
States and the District of Columbia are
1.5 million tons in 2009 and 1.3 million
tons in 2015.
The CAIR does not require annual
SO2 or NOX emissions reductions in
Delaware or New Jersey for purposes of
the PM2.5 NAAQS.4 However, today,
EPA is requiring annual SO2 and NOX
reductions in these two States for that
purpose. Annual SO2 and NOX budgets
for Delaware and New Jersey are
presented in section IV.B of this
preamble. Since EPA is finalizing
annual SO2 and NOX budgets for
Delaware and New Jersey, the States
may choose to implement their annual
emission reduction requirements by
controlling EGUs. If the States choose to
control EGUs, the CAIR regionwide EGU
caps will include reduction
requirements for these two States. The
updated annual SO2 caps, including
Delaware and New Jersey, would be 3.7
million tons in 2010 and 2.6 million
tons in 2015. The updated annual NOX
caps, including Delaware and New
Jersey, would be 1.5 million tons in
2009 and 1.3 million tons in 2015.
III. Inclusion of Delaware and New
Jersey in the CAIR for PM2.5
A. Why EPA Is Revising the Status of
Delaware and New Jersey in the CAIR
Section 110(a)(2)(D)(i) of the CAA
requires States to include in their SIPs
adequate provisions prohibiting
emissions that will contribute
significantly to nonattainment in, or
interfere with maintenance by, any
other State. The term ‘‘contribute
significantly’’ is not further defined, so
in implementing this section we have
had to develop an analytical approach
to give the term specific meaning. The
underlying logic of the analytical
approach used in both the NOX SIP Call
and the CAIR is that the emission
reduction efforts needed to reach
attainment should be reasonably
balanced between the State containing a
nonattainment area and upwind States
significantly contributing to the
nonattainment. In this way, control
efforts on one side of a border are not
undermined (and even rendered futile)
by out-of-State emissions, and highly
4 The CAIR does require ozone season NO
X
emissions reductions in Delaware and New Jersey
for ozone.
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cost-effective emissions reductions by
out-of-State sources which contribute
significantly to downwind receptors’
nonattainment are achieved. We believe
this approach is both efficient and
equitable, so that overall costs are less
and costs are more fairly distributed
than if the burden of reaching
attainment were entirely on the State
with the nonattainment area. Congress
had the same purpose when it enacted
section 110(a)(2)(D). See 64 FR 29260–
61, May 25, 1999 (summarizing
Legislative History of section
110(a)(2)(D) predecessor provision).
We are retaining this underlying
analytical approach, but treating
Delaware and New Jersey as special
cases and as a single geographic area for
PM2.5. Specifically, we are combining
Delaware and New Jersey for purposes
of assessing significant contribution to
nonattainment of the PM2.5 NAAQS by
downwind receptors under section
110(a)(2)(D), and applying the finding
from that combined assessment to each
State.
The analytical approach used for the
CAIR has two parts, the first of which
is a test of whether the air quality
contribution from one entire State to
nonattainment in any part of another
State is substantial enough to be
considered significant, pending
consideration of control costs. For
ozone, we used a test for this first part
which is based on several metrics of air
quality contribution, involving absolute
magnitude, relative magnitude, and
frequency. For PM2.5, we used a test
with the single criterion of whether the
PM2.5 air quality contribution from an
upwind State to nonattainment in a
downwind State, due to total
anthropogenic SO2 and NOX emissions
in the upwind State, was 0.2 µg/m3 or
more. We believe that this specific form
of the analytical approach used in the
final CAIR rule has very appropriately
identified a set of 23 States and the
District of Columbia that should make
certain reductions in annual emissions
by 2009 for NOX and by 2010 for SO2,
and larger reductions by 2015 for NOX
and SO2, in order to avoid contributing
significantly to PM2.5 nonattainment in
other States.
In the course of applying that
analytical approach, we realized that a
geographically small upwind State may
have a maximum contribution on other
States that is below the air quality
contribution threshold used in the CAIR
simply because of its size. Nevertheless,
it may clearly contribute to PM2.5
nonattainment in a downwind State(s).
Delaware and New Jersey are examples
of this geographic phenomenon. In this
instance they are embedded in the much
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larger NE Corridor nonattainment area
that covers the area from Virginia to
Massachussetts. Upon further
examination, EPA found that Delaware
and New Jersey each has substantial
emissions for its size with emission
densities that are greater than some of
the neighboring States included in the
CAIR. Therefore, excluding Delaware or
New Jersey from emission reduction
requirements related to PM2.5 would not
achieve the desired balancing of local
and upwind controls. Excluding either
State could forgo opportunities for
highly cost-effective control that would
improve air quality in nearby States’
PM2.5 nonattainment areas. Ignoring the
contributions of Delaware and New
Jersey could result in both air quality
detriments and cost inefficiencies and
inequities.
The EPA considered alternative
approaches to addressing this issue. We
do not believe it would be appropriate
to consider amending or revising the
contribution significance criteria set
forth in the final CAIR notice.
Nevertheless, we believe that these two
States, which combined represent a
significant source of PM2.5 precursor
emissions, should not be considered to
be below the air quality contribution
threshold, in the unique circumstances
presented here, solely because of their
comparatively small geographic size.
We have faced a similar issue with
respect to small geographic entities in
the NOX SIP Call, where we combined
emissions of Delaware, Maryland, and
the District of Columbia, and more
recently in the CAIR, where we
combined emissions of the District of
Columbia and Maryland.
The final CAIR’s exclusion of
Delaware and New Jersey for purposes
of PM2.5 drew our attention because of
features unique to Delaware and New
Jersey. Table III–1 and Table III–2 in the
proposal to include Delaware and New
Jersey in the CAIR PM2.5 region (70 FR
25414 and 25415, respectively) present
relevant facts regarding Delaware and
New Jersey. We believe the following
specific conditions with respect to
Delaware and New Jersey justify the
departure from the CAIR significance
criteria because both States:
• Are contiguous;
• Have relatively small land area;
• Have high emissions densities;
• Are near major cities where PM2.5
nonattainment affects large populations;
and
• Are located between upwind States
and at least one downwind area linked
to an upwind State.
On balance, we believe the most
appropriate way to address the factual
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situation presented here is to consider
Delaware’s and New Jersey’s
contributions together, as one unit of
analysis. We also note that both States
assented to this approach. Since
Delaware and New Jersey are already
subject to the CAIR for purposes of
ozone, the remainder of this discussion
focuses on PM2.5 considerations.
Delaware and New Jersey are both
relatively small in land area; both are
smaller than any of the 23 States already
subject to the CAIR for purposes of
PM2.5. Portions of both States are
urbanized and industrialized, and
overall both have a high emissions
density, comparable to that of their
neighbors.5 Delaware has an emissions
density of 76.1 tons/year per square
mile, almost twice that of neighboring
Pennsylvania and also higher than that
of Maryland, States already linked to
downwind PM2.5 nonattainment areas.
New Jersey has an emissions density of
46.6 tons/year per square mile, above
that of Pennsylvania although somewhat
lower than that of Maryland.
Delaware and New Jersey are near
major cities where current PM2.5
nonattainment affects large populations.
Also, both are relatively near a county
or counties in other States that are
projected to still be in nonattainment for
PM2.5 in 2010 in the base modeling case.
Delaware and New Jersey are also near
large markets for electric power in other
States subject to the CAIR for PM2.5, and
both are part of the PJM Interconnect
electric generation. As a result, there is
a potential for emissions shifting from
States subject to the PM2.5 requirements
of the CAIR to States not subject to those
requirements, e.g., Delaware and New
Jersey.
Both Delaware and New Jersey lie
between upwind States that are now
subject to the CAIR for both ozone and
PM2.5 and downwind receptor PM2.5
nonattainment areas that are linked to
one or both of those upwind States.
Maryland has already been determined
to contribute significantly to
nonattainment in both Philadelphia and
New York City. Pennsylvania has
already been determined to contribute
significantly to nonattainment in New
York City, and New York has been
determined to contribute to
nonattainment in Lancaster County,
5 By emissions density we mean the total SO and
2
NOX emissions from each State in tons per year,
divided by the geographic area of the State in
square miles. For comparing emissions densities for
the purposes of contributions to PM2.5
nonattainment, we have compared the emissions
density expressed in terms of SO2 plus NOX
emissions per square mile. Such a comparison is a
reasonable measure of comparison that is
independent of the disparity in the land area size
of the two States.
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Pennsylvania. New Jersey lies between
Pennsylvania and New York City, and
Delaware lies between part of Maryland
and both Philadelphia and New York
City. This means that emissions from
Delaware and New Jersey are mixed
with the emissions of these other
upwind States and arrive together at the
downwind nonattainment areas in other
States. Moreover, Delaware and New
Jersey are closer to these receptors.
Given these highly distinctive facts,
considered in conjunction with the data
concerning the downwind emissions
contributions from Delaware and New
Jersey, it is reasonable that Delaware
and New Jersey be viewed as an entity
for assessing significance of PM2.5
nonattainment in downwind States. We
did this by treating the combination of
these two small States as a unit, and
then evaluating the combined emissions
with the 0.2 µg/m3 threshold for PM2.5
air quality contribution used in the
CAIR. As noted, this is consistent with
our approach in the NOX SIP Call and
other aspects of the CAIR in which we
also aggregated certain States in
assessing significant contribution. We
note also that Delaware and New Jersey
lie side-by-side and together form a
compact geographic area. We believe
this further supports combining them
for purposes of this analysis. By
combining these two small States, we
believe the underlying cost-balancing
and control program efficiency goals of
our original analytical approach can be
better met.
Virtually every commenter (including
New Jersey and Delaware) agreed with
this approach. The only negative
comment termed the proposed approach
‘‘arbitrary’’ (without further analysis),
and requested that EPA adhere to
existing approaches for assessing
significant contribution. The EPA
disagrees that aggregating Delaware and
New Jersey emissions is arbitrary, for
the reasons just set forward. Indeed,
given the facts here (especially the
emission density and geographic
location of the two States), it could be
argued that it is arbitrary not to combine
the emissions for those two States in
assessing significance of contribution.
Moreover, past EPA practice in both the
CAIR and the NOX SIP Call has
aggregated emissions across State
boundaries in similar circumstances, as
explained above.
B. Results of Updated Air Quality
Modeling for Delaware and New Jersey
The proposed rule for including
Delaware and New Jersey in the CAIR
included an analysis of the contribution
of anthropogenic SO2 and NOX
emissions in these two States to PM2.5
nonattainment in other States. This
analysis was based upon the sum of the
contributions from Delaware and from
New Jersey to each downwind
nonattainment receptor. The
contribution from each of these two
States was determined based on air
quality modeling of each State
individually. Details on EPA’s PM2.5
contribution modeling approach can be
found in the Air Quality Modeling
Technical Support Document for the
final CAIR.6 In brief, the modeling
approach involves ‘‘zero-out’’ model
simulations in which the SO2 and NOX
emissions from sources in a given State
or multi-State area are removed from a
2010 base case scenario.7 The
predictions from this 2010 ‘‘zero-out’’
run are compared to predictions from
the corresponding 2010 Base Case
simulation to quantify the contributions
to downwind ‘‘modeled plus
monitored’’ PM2.5 nonattainment
receptors. In the proposal, we stated that
we would reassess the contribution from
Delaware and New Jersey combined by
performing ‘‘zero-out’’ modeling in
which SO2 and NOX emissions are
removed from both States in a single
model run. We conducted the combined
Delaware/New Jersey zero-out modeling
and the results were provided in the
NODA (70 FR 37068; June 28, 2005).
The EPA did not receive any
significant comment challenging the
proposal to combine Delaware and New
Jersey emissions to assess significance
of contribution to downwind States’
PM2.5 NAAQS nonattainment. However,
one commenter stated that EPA’s
modeling of Delaware and New Jersey
failed to account for the effect on SO2
emissions in Delaware of an
enforcement action against the Motiva
refinery. The commenter said that not
accounting for the 27,000 tons per year
reduction in SO2 at this facility, as
required by a Consent Decree, inflates
Delaware’s 2010 base case emissions.
In response to this comment, EPA
adjusted downward the projected 2010
emissions at the Motiva refinery to
reflect the required reductions and
remodeled the combined contributions
from Delaware and New Jersey. As a
result, 2010 emissions from Delaware in
the revised modeling were lower than in
the NODA modeling by over 29,000 tons
per year for SO2 and over 500 tons per
year for NOX. In remodeling Delaware
and New Jersey, EPA used the same
PM2.5 modeling platform as was used for
the CAIR PM2.5 contribution modeling.
The contributions from Delaware and
New Jersey to PM2.5 nonattainment in
other States based on the revised
modeling are provided in Table III–1.
These results show that the maximum
downwind contribution from Delaware
and New Jersey combined is 0.21 µg/m3
which exceeds EPA’s PM2.5 contribution
significance criterion of 0.20 g/m3.
Thus, the revised modeling for Delaware
and New Jersey combined confirms that
these States make a significant
contribution to PM2.5 nonattainment in
a downwind State (namely New York
County, New York, which includes New
York City).
TABLE III–1.—PM2.5 CONTRIBUTIONS (µG/M3) FROM DELAWARE AND NEW JERSEY COMBINED TO PM2.5 NONATTAINMENT
PM2.5
contribution
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State
County
Alabama .....................................................................................
Alabama .....................................................................................
Delaware ....................................................................................
District of Columbia ....................................................................
Georgia ......................................................................................
Georgia ......................................................................................
Georgia ......................................................................................
Georgia ......................................................................................
Georgia ......................................................................................
Georgia ......................................................................................
Georgia ......................................................................................
Jefferson Co ..............................................................................
Russell Co .................................................................................
New Castle Co ..........................................................................
District of Columbia ...................................................................
Bibb Co .....................................................................................
Clarke Co ..................................................................................
Clayton Co ................................................................................
Cobb Co ....................................................................................
DeKalb Co .................................................................................
Floyd Co ....................................................................................
Fulton Co ...................................................................................
6 Docket
No. EPA–HQ–OAR–2003–0053–2151.
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7 2010 base case does not include emissions
reductions expected to result from implementation
of the CAIR.
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TABLE III–1.—PM2.5 CONTRIBUTIONS (µG/M3) FROM DELAWARE AND NEW JERSEY COMBINED TO PM2.5
NONATTAINMENT—Continued
PM2.5
contribution
State
County
Georgia ......................................................................................
Illinois .........................................................................................
Illinois .........................................................................................
Illinois .........................................................................................
Indiana .......................................................................................
Indiana .......................................................................................
Indiana .......................................................................................
Indiana .......................................................................................
Indiana .......................................................................................
Kentucky ....................................................................................
Kentucky ....................................................................................
Maryland ....................................................................................
Maryland ....................................................................................
Michigan .....................................................................................
New York ...................................................................................
North Carolina ............................................................................
North Carolina ............................................................................
Ohio ............................................................................................
Ohio ............................................................................................
Ohio ............................................................................................
Ohio ............................................................................................
Ohio ............................................................................................
Ohio ............................................................................................
Ohio ............................................................................................
Ohio ............................................................................................
Ohio ............................................................................................
Ohio ............................................................................................
Ohio ............................................................................................
Pennsylvania ..............................................................................
Pennsylvania ..............................................................................
Pennsylvania ..............................................................................
Pennsylvania ..............................................................................
Pennsylvania ..............................................................................
Pennsylvania ..............................................................................
Pennsylvania ..............................................................................
Pennsylvania ..............................................................................
Pennsylvania ..............................................................................
Pennsylvania ..............................................................................
Pennsylvania ..............................................................................
Tennessee .................................................................................
Tennessee .................................................................................
West Virginia ..............................................................................
West Virginia ..............................................................................
West Virginia ..............................................................................
West Virginia ..............................................................................
West Virginia ..............................................................................
West Virginia ..............................................................................
West Virginia ..............................................................................
West Virginia ..............................................................................
West Virginia ..............................................................................
Walker Co .................................................................................
Cook Co ....................................................................................
Madison Co ...............................................................................
St. Clair Co ................................................................................
Clark Co ....................................................................................
Dubois Co .................................................................................
Lake Co .....................................................................................
Marion Co ..................................................................................
Vanderburgh Co ........................................................................
Fayette Co .................................................................................
Jefferson Co ..............................................................................
Anne Arundel Co .......................................................................
Baltimore City ............................................................................
Wayne Co .................................................................................
New York Co .............................................................................
Catawba Co ..............................................................................
Davidson Co ..............................................................................
Butler Co ...................................................................................
Cuyahoga Co ............................................................................
Franklin Co ................................................................................
Hamilton Co ..............................................................................
Jefferson Co ..............................................................................
Lawrence Co .............................................................................
Mahoning Co .............................................................................
Montgomery Co .........................................................................
Scioto Co ...................................................................................
Stark Co ....................................................................................
Summit Co ................................................................................
Allegheny Co .............................................................................
Beaver Co .................................................................................
Berks Co ...................................................................................
Cambria Co ...............................................................................
Dauphin Co ...............................................................................
Delaware Co .............................................................................
Lancaster Co .............................................................................
Philadelphia Co .........................................................................
Washington Co ..........................................................................
Westmoreland Co .....................................................................
York Co .....................................................................................
Hamilton Co ..............................................................................
Knox Co ....................................................................................
Berkeley Co ...............................................................................
Brooke Co .................................................................................
Cabell Co ..................................................................................
Hancock Co ...............................................................................
Kanawha Co ..............................................................................
Marion Co ..................................................................................
Marshall Co ...............................................................................
Ohio Co .....................................................................................
Wood Co ...................................................................................
IV. Findings and Action
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A. Findings of Significant Contribution
for Delaware and New Jersey
We find that emissions of the PM2.5
precursors SO2 and NOX emitted by
Delaware and New Jersey contribute
significantly to nonattainment of the
PM2.5 NAAQS in New York.
Accordingly, we are finalizing SIP
requirements for Delaware and New
Jersey under section 110(a)(1) to meet
the requirements of section
110(a)(2)(D)(i), namely, to contain
adequate provisions to prohibit SO2 and
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NOX emissions from sources or
activities within the States from
‘‘contribut[ing] significantly to
nonattainment’’ of the PM2.5 NAAQS in
downwind States.
B. SIP Approval Criteria
The CAIR added two new sections to
title 40 of the Code of Federal
Regulations, §§ 51.123 and 51.124
containing requirements related to NOX
and SO2 respectively, which establish
the requirement for submission of SIP
revisions to comply with the CAIR and
the criteria which EPA will use to
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review these revisions for approval or
disapproval. The content of these
sections is presented in section VII of
the preamble to the CAIR. Delaware and
New Jersey are already subject to the
ozone-related provisions of these
sections but not to the provisions that
relate to PM2.5. We are amending these
two sections to extend the PM2.5-related
provisions to both States. The practical
effect of the amendments will be to
subject the States to budgets (if they
choose to control large EGUs) for annual
emission reduction requirements of
NOX and SO2.
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allowances for early, annual NOX
emissions reductions in the years 2007
and 2008. The CSP functions much like
The NOX and SO2 annual and ozone
the NOX SIP Call’s CSP. The CSP is
season budgets for New Jersey and
comprised of CAIR annual NOX
Delaware are shown below in Tables
allowances of vintage year 2009.
IV–1 and IV–2.
In the final CAIR, EPA apportions a
200,000 ton CSP to all States in the
TABLE IV–1.—ANNUAL NOX BUDGETS
CAIR region. The CSP was apportioned
[Tons]
based on a State’s share of the required
emissions reductions (i.e., the difference
Year
Delaware
New Jersey
between their State baseline emissions
2009 ..................
4,166
12,670 and their projected emissions under the
2015 ..................
3,472
10,558 CAIR). States may distribute these CAIR
NOX allowances to sources based upon
either: (1) A demonstration to the State
TABLE IV–2.—ANNUAL SO2 BUDGETS of NOX emissions reductions in surplus
[Tons]
of any existing NOX emission control
requirements; or (2) a demonstration to
Year
Delaware
New Jersey the State that the facility has a ‘‘need’’
that would affect electricity grid
2010 ..................
22,411
32,392
reliability; or, another method chosen
2015 ..................
15,687
22,674
by the State. Sources that wish to
State annual SO2 budgets for the years receive CAIR CSP allowances can be
awarded one CAIR annual NOX
2010–2014 (Phase I) are based on a 50
allowance for every ton of NOX
percent reduction from title IV
emissions reductions. (Should a State
allocations for all units in the affected
State. The State annual budgets for 2015 receive more requests for allowances
than their share of the CAIR CSP, the
and beyond (Phase II) are based on a 65
State would pro-rate the allowance
percent reduction from title IV
distribution). Determination of surplus
allowances allocated to units in the
emissions must use emissions data
affected State for SO2 control.
measured using part 75 monitoring.
The EPA calculated State NOX
The CSP for CAIR States affected by
budgets through a fuel-adjusted heatthe CAIR NFR has a total of 198,494
input basis, as in the CAIR. State
CAIR NOX allowances in addition to the
budgets were determined by
annual CAIR NOX budgets. With
multiplying historic heat input data
Delaware and New Jersey as part of the
(summed by fuel) by different
final CAIR program, they will be
adjustment factors for the different
allotted an additional 1,503 allowances.
fuels. These factors reflect the relative
Table IV–3 shows the NOX CSP for New
differences in the average NOX
Jersey and Delaware.
emissions rates for each fuel type. The
average NOX emissions rates were
TABLE IV–3.—NOX COMPLIANCE
derived by totaling 1999 through 2001
SUPPLEMENT POOL
heat input and emissions for each fuel
[Tons]
type (i.e., coal, natural gas, and oil), in
each State. The resulting adjustment
Delaware
New Jersey
factors from this calculation are 1.0 for
coal, 0.4 for gas and 0.6 for oil. The
843
660
factors reflect the inherently higher
emissions rate of coal-fired plants, and
consequently the greater burden on coal C. SIP Submittal Deadline
We are also finalizing the requirement
plants to control emissions. The
regional budget was then apportioned to that PM2.5 transport SIPs be submitted,
States on a pro-rata basis, based on each under CAA section 110(a)(1), as soon as
practicable, but not later than 18 months
State’s share of total adjusted average
from the date of signature of the CAIR,
heat input. For a more detailed
i.e., September 11, 2006. While EPA did
discussion of how the budgets were
not receive public comment regarding
calculated, see the proposal (70 FR
the proposed Delaware and New Jersey
25416).
CAIR SIP revision for PM2.5, EPA notes
Compliance Supplement Pool (CSP)
that this deadline will be less than 18
Allowances and the Statewide Budgets
months from today’s final action and
The final CAIR annual NOX cap and
less than the 12-month timeline EPA
trade rule provides additional
had expected at the time of the
incentives for early annual NOX
publication of the Delaware and New
reductions by creating a CSP for CAIR
Jersey CAIR proposal. However, we
States from which they can distribute
continue to believe that Delaware and
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Delaware and New Jersey Statewide
Annual Emissions Budgets
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New Jersey have sufficient time to
develop and submit CAIR SIP revisions
for the following reasons.
First, Delaware and New Jersey were
included in the initial CAIR finding of
significant contribution for PM2.5
precursors, so Delaware and New Jersey
have been aware that they might have to
submit transport SIPs for PM2.5 since the
CAIR proposal was published on
January 30, 2004. Moreover, we are
adopting all of the key features of the
initial CAIR proposal, including the
same annual SO2 and NOX reductions
and budgets and the same
implementation mechanisms. In
addition, Delaware and New Jersey have
been aware of the CAIR model trading
rules, which they may choose to adopt
as a highly cost-effective control
remedy, for the same length of time as
the other CAIR States. Again, since
these States have been on notice
regarding these issues, we believe that it
is reasonable to require Delaware and
New Jersey to submit their CAIR SIP
revisions for PM2.5 on the same timeline
as other CAIR PM2.5 States.
The EPA modeling projects that,
when Delaware and New Jersey are
included in the CAIR SO2 and NOX
annual trading programs, these States
would achieve the required emissions
reductions with limited installation of
advanced emissions controls.
Specifically, EPA modeling projected
the installation of one flue gas
desulfurization (FGD) control device in
New Jersey.8 By requiring the Delaware
and New Jersey CAIR SIP revisions by
September 11, 2006, sources will have
40 months to plan and install the one
additional FGD device EPA predicts
will be installed. This exceeds the 27
months EPA estimates it takes for the
installation of a FGD device. Also, we
believe sufficient boiler maker labor and
other resources exist to support one
additional FGD device installation by
January 1, 2010.
For all these reasons, also put forth in
the Delaware and New Jersey NPR, we
think it reasonable that Delaware and
New Jersey submit PM2.5 transport SIPs
by September 11, 2006.
D. Emissions Reporting Requirements
In order to provide emissions
inventory information that will allow
EPA to better monitor the
implementation and effects of the
8 The EPA modeling shows that no additional
selective catalytic reduction (SCR) units would be
required in the two States. Analysis is based upon
comparisons of projected emissions control
equipment retrofits in IPM runs with and without
Delaware and New Jersey. See IPM runs (‘‘CAIR
2004 Final DE and NJ’’) in the docket for further
details.
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CAIR’s emissions reductions, EPA
incorporated into the CAIR the preexisting emission inventory reporting
requirements applicable to States
affected by the CAIR. Those CAIR
requirements were specific to whether a
State was affected by the annual
emissions reductions requirements for
SO2 and NOX or only the ozone-season
reduction requirements for NOX.
Because we are applying the annual
emissions reductions requirements to
Delaware and New Jersey, we are also
placing these two States under the
corresponding provisions of the
emissions reporting requirements. The
only practical effect of this change
relative to existing requirements is that
if either State chooses to obtain some of
the required annual emissions
reductions from a source which emits
less than 2,500 tons/year of both SO2
and NOX and that source is not also
made subject to the EPA-operated
emissions trading programs, the State
must report the annual emissions of that
source to EPA annually in contrast to
the triennial requirement that presently
applies to such sources.
V. Expected Effects of This Action
A. Emissions
The EPA has conducted power sector
analysis of the CAIR using the IPM. The
IPM is a dynamic linear programming
model that can be used to examine air
pollution control policies for SO2 and
NOX throughout the contiguous United
States for the entire power system.
Documentation for IPM can be found at
https://www.epa.gov/airmarkets/epaipm.
Emissions of SO2 and NOX in the
CAIR region would be higher under the
final CAIR where Delaware and New
Jersey are only included in a summer
season ozone cap, similar to
Connecticut and Massachusetts. Since
these two States are being included as
part of the annual SO2 and NOX caps for
the CAIR, emissions in the region will
be reduced by another 48,000 tons of
SO2 and 11,000 tons of NOX from the
final CAIR scenario by 2015.
The inclusion of Delaware and New
Jersey in the annual CAIR requirements
will result in additional reductions of
SO2 and NOX that will help achieve
attainment in downwind States. These
additional reductions are shown in
Table V–1.
TABLE V–1.—ANNUAL EMISSIONS FROM AFFECTED SOURCES FOR THE CAIR REGION 9
[Thousand tons]
2010
SO2
Base Case .......................................................................................................................
Final CAIR (DE and NJ Included for Ozone Season NOX Only) ....................................
CAIR Modified By This Rule (DE and NJ Included for Annual SO2 and NOX) ..............
Difference between CAIR Scenarios ...............................................................................
2015
NOX
8,868
5,336
5,305
32
2,826
1,592
1,582
10
SO2
8,056
4,216
4,168
48
NOX
2,853
1,342
1,331
11
Note: Numbers may not add due to rounding.
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B. Air Quality
Section VI of the preamble to the
CAIR describes the air quality modeling
performed to determine the projected
impacts of the CAIR on PM2.5 and 8hour ozone of the SO2 and NOX
emissions reductions in the control
region modeled. The modeling used to
estimate the air quality impact of these
reductions assumed annual SO2 and
NOX controls for Arkansas, Delaware,
and New Jersey (as had been proposed
before completion of the final
contribution analysis) in addition to the
23 States plus the District of Columbia.
Since Arkansas, Delaware, and New
Jersey are not included in the final CAIR
PM2.5 region, the modeled estimated
impacts are overstated for the final CAIR
which excludes all three States from the
CAIR region for PM2.5. Because
Delaware and New Jersey now are
subject to the PM2.5-related emissions
limits for SO2 and NOX, the air quality
modeling for the final CAIR better
approximates the net effects of the CAIR
plus today’s rule, but still overestimates
the air quality changes somewhat due to
the continued discrepancy regarding
9 The CAIR region for purposes of this table
includes the following States: Alabama, Arkansas,
Connecticut, Delaware, District of Columbia,
Florida, Georgia, Illinois, Indiana, Iowa, Kentucky,
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Arkansas. The Regulatory Impact
Analysis for the CAIR discusses these
differences in scenarios in more detail.
The EPA analyzed the impacts of the
regional emissions reductions in both
2010 and 2015. These impacts are
quantified by comparing air quality
modeling results for the regional control
scenario to the modeling results for the
corresponding 2010 and 2015 base case
scenarios. The 2010 and 2015 emissions
reductions and air quality
improvements from the regional control
strategy modeled are presented in
summary form in section VI of the
preamble to the CAIR and in detail in
the Emission Inventory Technical
Support Document and the Air Quality
Modeling Technical Support Document
for the CAIR.
The EPA estimates, based on the air
quality analysis for the CAIR, that the
required SO2 and NOX emissions
reductions would, by themselves, bring
into attainment 52 of the 80 counties
that are otherwise expected to be in
nonattainment for PM2.5 in 2010, and 57
of the 75 counties that are otherwise
expected to be in nonattainment for
PM2.5 in 2015. The EPA further
estimates that the required NOX
emissions reductions would, by
themselves, bring into attainment 3 of
the 40 counties that are otherwise
expected to be in nonattainment for 8hour ozone in 2010, and 6 of the 22
counties that are expected to be in
nonattainment for 8-hour ozone in 2015.
In addition, today’s rule will improve
PM2.5 and 8-hour ozone air quality in
the areas that will remain
nonattainment for those two NAAQS
after implementation of today’s rule.
Because of today’s rule, the States with
those remaining nonattainment areas
will find it less burdensome and less
expensive to reach attainment by
adopting additional local controls. The
CAIR will also reduce PM2.5 and 8-hour
ozone levels in attainment areas.
We have not conducted an
incremental analysis of the air quality
effects from the proposed extension of
the annual emissions reductions
requirements to New Jersey and
Delaware. However, IPM modeling of
EGU emissions indicates that assuming
that all States join the EPA trading
Louisiana, Maryland, Massachusetts, Michigan,
Minnesota, Mississippi, Missouri, New Jersey, New
York, North Caorlina, Ohio, Pennsylvania, South
Carolina, Tennessee, Texas, Virginia, West Virginia,
Wisconsin.
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programs, highly cost-effective
emissions reductions will be distributed
across the region in addition to
Delaware and New Jersey themselves,
and contribute to the attainment of these
two States’ downwind neighbors as well
as other States with nonattainment
areas.
VI. Statutory and Executive Order
Reviews
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A. Executive Order 12866: Regulatory
Planning and Review
Under Executive Order 12866 (58 FR
51735, October 4, 1993), the Agency
must determine whether a regulatory
action is ‘‘significant’’ and therefore
subject to Office of Management and
Budget (OMB) review and the
requirements of the Executive Order.
The Order defines ‘‘significant
regulatory action’’ as one that is likely
to result in a rule that may:
1. Have an annual effect on the
economy of $100 million or more or
adversely affect in a material way the
economy, a sector of the economy,
productivity, competition, jobs, the
environment, public health or safety, or
State, local, or Tribal governments or
communities;
2. Create a serious inconsistency or
otherwise interfere with an action taken
or planned by another agency;
3. Materially alter the budgetary
impact of entitlements, grants, user fees,
or loan programs or the rights and
obligations of recipients thereof; or
4. Raise novel legal or policy issues
arising out of legal mandates, the
President’s priorities, or the principles
set forth in the Executive Order.
In view of its important policy
implications and potential effect on the
economy of over $100 million, this rule
and the CAIR program inclusive of this
rule has been judged to be an
economically ‘‘significant regulatory
action’’ within the meaning of the
Executive Order. As a result, today’s
rule was submitted to OMB for review,
and EPA prepared an economic analysis
of the CAIR program including this rule
entitled ‘‘Regulatory Impact Analysis of
the Final Clean Air Interstate Rule’’
(March 2005).
1. What Economic Analyses Were
Conducted for the Rulemaking?
The analyses conducted for the CAIR
program (CAIR final rule plus this New
Jersey and Delaware rule) provide
several important analyses of impacts
on public welfare. These include an
analysis of the social benefits, social
costs, and net benefits of the regulatory
scenario. The economic analyses also
address issues involving small business
impacts, unfunded mandates (including
impacts for Tribal governments),
environmental justice, children’s health,
energy impacts, and requirements of the
Paperwork Reduction Act.
2. What Are the Benefits and Costs of
the CAIR Program?
The benefit-cost analysis shows that
substantial net economic benefits to
society are likely to be achieved due to
reduction in emissions resulting from
the CAIR program that includes annual
SO2 and NOX controls for New Jersey
and Delaware. The results show that the
CAIR program would be highly
beneficial to society, with annual net
benefits (benefits less costs) of
approximately $71.4 or $60.4 billion in
2010 and $98.5 or $83.2 billion in 2015.
These alternative net benefits estimates
occur due to differing assumptions
concerning the social discount rate used
to estimate the annual value of the
benefits of the rule with the lower
estimates relating to a discount rate of
7 percent and the higher estimates a
discount rate of 3 percent. All amounts
are reflected in 1999 dollars. For more
information, see the NFR for the CAIR
published in the Federal Register (70
FR 25162; May 12, 2005) and the
Regulatory Impact Analysis for the Final
Clean Air Interstate Rule (March 2005).
3. What Are the Incremental Costs to the
Power Industry Associated With This
New Jersey and Delaware Rule?
The costs presented here represent the
total incremental cost to the electric
power industry of reducing NOX and
SO2 emissions to meet the reduction
requirements set forth in the rule,
assuming all States participate in a
regionwide cap and trade program.
These costs estimates are referred to as
private costs, and these estimates differ
from the cost of the program to society
or social cost estimates presented for the
CAIR program discussed previously. As
shown in Table VI–1, EPA estimates the
annual private costs of this rule to
include Delaware and New Jersey in the
CAIR are approximately $30 million in
2010 and $40 million in 2015. All
estimates reflect 1999 dollars. Overall,
the impacts of the CAIR program are
modest, particularly in light of the large
benefits we expect. Delaware and New
Jersey are part of the PJM electricity
region, which is an extremely large
regional transmission organization that
manages electricity movement through
several Mid-Atlantic and Mid-Western
States. The PJM ensures that plants are
operated efficiently and power is
supplied reliably and safely. Other
States already in the CAIR are also part
of the PJM, and EPA does not anticipate
that retail electricity prices will be
greatly affected by the CAIR, inclusive
of this rule to include Delaware and
New Jersey. Retail electricity prices are
projected to increase roughly 2.0–2.6
percent with the CAIR program
(inclusive of this rule) in the 2010 and
2015 timeframe, and then drop below
2.0 percent thereafter. For the MAAAC
Power Region, which includes Delaware
and New Jersey, retail electricity prices
are projected to increase roughly 3.2 to
3.4 percent with the CAIR program
(inclusive of this rule) in the 2010 and
2015 timeframe, and then drop below
1.0 percent, thereafter. The effects of the
CAIR program on natural gas prices and
the electric power industry generation
mix are also small, with a 1.6 percent
or less increase in natural gas prices
projected from 2010 to 2020.
With the Delaware and New Jersey
rule and the CAIR, we estimate there
will be continued reliance on coal-fired
generation. Coal-fired generation is
projected to remain at roughly 50
percent of total electricity generated. A
relatively small amount of coal-fired
capacity, about 5.2 GW 10 (1.7 percent of
all coal-fired capacity and 0.5 percent of
all generating capacity), is projected to
be uneconomic to maintain. For the
most part, these units are small and
infrequently used generating units that
are dispersed throughout the CAIR
region. Units projected to be
uneconomic to maintain may be
‘‘mothballed,’’ retired, or kept in service
to ensure transmission reliability in
certain parts of the grid.
As demand grows in the future,
additional coal-fired generation is
projected to be built under the CAIR
program. As a result, both coal-fired
generation and coal production for
electricity generation are projected to
increase from 2003 levels by about 15
percent in 2010 and 25 percent by 2020,
and we expect a small shift towards
greater coal production in Appalachia
and the interior coal regions of the
country with the CAIR.
For today’s rule, EPA analyzed the
costs and other economic inputs using
the IPM described earlier and the EPA
Retail Pricing Model (RPM). The
additional annualized incremental costs
of including Delaware and New Jersey
in the CAIR program primarily occur
because of the additional installation
10 0.5 GW of this capacity occurs as a result of the
inclusion of Delaware and New Jersey in the CAIR.
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25297
and operation of a modest amount of
pollution control equipment.
TABLE VI–1.—ANNUALIZED INCREMENTAL PRIVATE COSTS FOR THE CAIR REGION WITH AND WITHOUT DELAWARE AND
NEW JERSEY
[Billions of 1999 dollars]
Program
Costs in 2010
Final CAIR (DE and NJ: Ozone Season NOX Only) ...............................................................................................
Final CAIR Plus NJ and DE Proposal (DE and NJ: Annual SO2 and NOX ............................................................
Difference Between CAIR Scenarios ......................................................................................................................
Costs in 2015
$2.53
2.56
0.03
$3.85
3.89
0.04
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Source: EPA 2004–2005, Integrated Planning Model. Results differ from those reported in the CAIR RIA reflecting more recent modeling results for the CAIR.
4. What Potential Benefits May Be
Associated With This Rule?
Air quality modeling was not
conducted for the New Jersey and
Delaware rule. For this reason, an
analysis of the potential benefits for the
New Jersey and Delaware rule cannot be
determined with any degree of
specificity. However, based on the air
quality modeling results for the CAIR,
we can make ‘‘ball park’’ estimates of
the benefits and net benefits that might
occur with this rule. Including New
Jersey and Delaware in the CAIR
program would result in additional
reductions of SO2 and NOX emissions.
This ‘‘ball park’’ estimate approach
assumes the benefits-per-ton for
reductions of SO2 and NOX emissions
for Delaware and New Jersey will equate
to the average benefits-per-ton resulting
from the CAIR program. Using this
approach, we estimate that
approximately $630 million of the total
annual CAIR program benefits
previously discussed are attributable to
annual SO2 and NOX controls for New
Jersey and Delaware in 2010. This
estimate increases to over $1.1 billion in
2015. The full CAIR analysis including
New Jersey and Delaware showed a
benefit-cost ratio of as high as 39:1 in
2015. Based on the relatively low
estimated private costs of including
New Jersey and Delaware of $30 million
in 2010 and $40 million in 2015, it is
highly likely that benefits would exceed
the costs of including Delaware and
New Jersey in the CAIR even if benefits
of controlling SO2 and NOX for New
Jersey and Delaware are substantially
lower than the average benefit estimates
for the CAIR in general. It is highly
unlikely that benefits are much lower
than the average given the urban nature
of much of New Jersey, and the
proximity of New Jersey and Delaware
to many heavily populated urban areas.
B. Paperwork Reduction Act
The information collection
requirements in this rule have been
submitted for approval to the OMB
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under the Paperwork Reduction Act, 44
U.S.C. 3501 et seq. The Information
Collection Request (ICR) document
prepared by EPA has been assigned EPA
ICR number 2184.02.
The purpose of the ICR is to estimate
the anticipated monitoring, reporting,
and recordkeeping burden estimates and
associated costs for States, local
governments, and sources that are
expected to result from this final rule.
This ICR describes the nature of the
information collection and the
estimated burden for this rule. In cases
where information is already collected
by a related program, the ICR takes into
account only the additional burden.
This situation arises in States that are
also subject to requirements of the
Consolidated Emissions Reporting Rule
(EPA ICR number 0916.10; OMB control
number 2060–0088) or for sources that
are subject to the Acid Rain Program
(EPA ICR 2152.01; EPA ICR number
1633.13; OMB control number 2060–
0258) or NOX SIP Call (EPA ICR number
1857.03; OMB control number 2060–
0445) requirements.
The total monitoring, recordkeeping,
and reporting burden to sources
resulting from Delaware and New Jersey
choosing to participate in a regional cap
and trade program are expected to be
approximately $263,000 at the time the
monitors are initially used. This
estimate includes the annualized cost of
installing and operating appropriate SO2
and NOX emissions monitoring
equipment to measure and report the
total emissions of these pollutants from
affected EGUs (serving generators
greater than 25 megawatt capacity) for
this rule. The burden to State and local
air agencies includes any necessary SIP
revisions, performing monitoring
certification, and fulfilling audit
responsibilities.
Burden means the total time, effort, or
financial resources expended by persons
to generate, maintain, retain, or disclose
or provide information to or for a
Federal agency. This includes the time
needed to review instructions; develop,
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acquire, install, and utilize technology
and systems for the purposes of
collecting, validating, and verifying
information, processing and
maintaining information, and disclosing
and providing information; adjust the
existing ways to comply with any
previously applicable instructions and
requirements; train personnel to be able
to respond to a collection of
information; search data sources;
complete and review the collection of
information; and transmit or otherwise
disclose the information.
An agency may not conduct or
sponsor, and a person is not required to
respond to a collection of information
unless it displays a currently valid OMB
control number. The OMB control
numbers for EPA’s regulations in 40
CFR are listed in 40 CFR part 9.
C. Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA)
generally requires an agency to prepare
a regulatory flexibility analysis of any
rule subject to notice and comment
rulemaking requirements under the
Administrative Procedure Act or any
other statute unless the agency certifies
that the rule will not have a significant
economic impact on a substantial
number of small entities. Small entities
include small businesses, small
organizations, and small governmental
jurisdictions.
For purposes of assessing the impacts
of today’s rule on small entities, small
entity is defined as: (1) A small business
that is identified by the North American
Industry Classification System (NAICS)
Code, as defined by the Small Business
Administration (SBA); (2) a small
governmental jurisdiction that is a
government of a city, county, town,
school district or special district with a
population of less than 50,000; and (3)
a small organization that is any not-forprofit enterprise which is independently
owned and operated and is not
dominant in its field. Table VI–2 lists
entities potentially impacted by this
rule with applicable NAICS codes.
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VI–2.—POTENTIALLY REGULATED CATEGORIES AND ENTITIES
NAICS code 1
Category
Industry .....................................................
Federal Government .................................
221112
2211122
State/local/Tribal Government ..................
2 221112
921150
1 North
Examples of potentially regulated entities
Fossil fuel-fired
Fossil fuel-fired
ment.
Fossil fuel-fired
Fossil fuel-fired
electric utility steam generating units.
electric utility steam generating units owned by the Federal governelectric utility steam generating units owned by municipalities.
electric utility steam generating units in Indian Country.
American Industry Classification System.
State, or local government-owned and operated establishments are classified according to the activity in which they are engaged.
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2 Federal,
According to the SBA size standards
for NAICS code 221112 Utilities-Fossil
Fuel Electric Power Generation, a firm
is small if, including its affiliates, it is
primarily engaged in the generation,
transmission, and or distribution of
electric energy for sale and its total
electric output for the preceding fiscal
year did not exceed 4 million megawatt
hours.
After considering the economic
impacts of today’s final rule on small
entities, I certify that this action will not
have a significant economic impact on
a substantial number of small entities.
This final rule will not impose any
requirements on small entities. Courts
have interpreted the RFA to require a
regulatory flexibility analysis only when
small entities will be subject to the
requirements of the rule. See Michigan
v. EPA, 213 F.3d 663, 668–69 (D.C. Cir.,
2000), cert. den. 121 S.Ct. 225, 149
L.Ed.2d 135 (2001).
This rule would not establish
requirements applicable to small
entities. Instead, this rule requires New
Jersey and Delaware to develop, adopt,
and submit SIP revisions that would
achieve the necessary SO2 and NOX
emissions reductions, and would leave
to the States the task of determining
how to obtain those reductions,
including which entities to regulate.
Moreover, because these States would
have discretion to choose the sources to
regulate and how much emissions
reductions each selected source would
have to achieve, EPA could not predict
the effect of the rule on small entities.
Although not required by the RFA, the
Agency has conducted a small business
analysis for the CAIR program inclusive
of the New Jersey and Delaware
proposal.
Overall, about 445 MW of total small
entity capacity, or 1.0 percent of total
small entity capacity in the CAIR region,
is projected to be uneconomic to
maintain under the CAIR relative to the
base case. In practice, units projected to
be uneconomic to maintain may be
‘‘mothballed,’’ retired, or kept in service
to ensure transmission reliability in
certain parts of the grid. Our IPM
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modeling is unable to distinguish
between these potential outcomes.
The EPA modeling identified 264
small power-generating entities within
the entire CAIR region based upon the
definition of small entity outlined
above. The EPA excluded from this
analysis 189 small entities that were not
projected to have at least one unit with
a generating capacity of 25 MW or great
operating in the base case. Thus, we
found that 75 small entities may
potentially be affected by the CAIR
program. Of these 75 small entities, 28
may experience compliance costs in
excess of 1 percent of revenues in 2010,
and 46 may in 2015, based on the
Agency’s assumptions of how the
affected States implement control
measures to meet their emissions
budgets as set forth in this rulemaking.
Potentially affected small entities
experiencing compliance costs in excess
of 1 percent of revenues have some
potential for significant impact resulting
from implementation of the CAIR.
However, it is the Agency’s position that
because none of the affected entities
currently operate in a competitive
market environment, they should be
able to pass the costs of complying with
the CAIR on to rate-payers. Moreover,
the decision to include only units
greater than 25 MW in size exempts 185
small entities that would otherwise be
potentially affected by the CAIR.
Two other points should be
considered when evaluating the impact
of the CAIR program (inclusive of the
New Jersey and Delaware rule),
specifically, and cap and trade programs
more generally, on small entities. First,
under the CAIR program, the cap and
trade program is designed such that
States determine how NOX allowances
are to be allocated across units. A State
that wishes to mitigate the impact of the
rule on small entities might choose to
allocate NOX allowances in a manner
that is favorable to small entities.
Finally, the use of cap and trade in
general will limit impacts on small
entities relative to a less flexible
command-and-control program.
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D. Unfunded Mandates Reform Act
Title II of the Unfunded Mandates
Reform Act of 1995 (Pub. L. 104–4)
(UMRA), establishes requirements for
Federal agencies to assess the effects of
their regulatory actions on State, local,
and Tribal governments and the private
sector. Under section 202 of the UMRA,
2 U.S.C. 1532, EPA generally must
prepare a written statement, including a
cost-benefit analysis, for any proposed
or final rule that ‘‘includes any Federal
mandate that may result in the
expenditure by State, local, and Tribal
governments, in the aggregate, or by the
private sector, of $100,000,000 or more
* * * in any one year.’’ A ‘‘Federal
mandate’’ is defined under section
421(6), 2 U.S.C. 658(6), to include a
‘‘Federal intergovernmental mandate’’
and a ‘‘Federal private sector mandate.’’
A ‘‘Federal intergovernmental
mandate,’’ in turn, is defined to include
a regulation that ‘‘would impose an
enforceable duty upon State, Local, or
Tribal governments,’’ section
421(5)(A)(i), 2 U.S.C. 658(5)(A)(i),
except for, among other things, a duty
that is ‘‘a condition of Federal
assistance,’’ section 421(5)(A)(i)(I). A
‘‘Federal private sector mandate’’
includes a regulation that ‘‘would
impose an enforceable duty upon the
private sector,’’ with certain exceptions,
section 421(7)(A), 2 U.S.C. 658(7)(A).
Before promulgating an EPA rule for
which a written statement is needed
under section 202 of the UMRA, section
205, 2 U.S.C. 1535, of the UMRA
generally requires EPA to identify and
consider a reasonable number of
regulatory alternatives and adopt the
least costly, most cost-effective, or least
burdensome alternative that achieves
the objectives of the rule.
The EPA prepared a written statement
for the CAIR final inclusive of this rule
consistent with the requirements of
section 202 of the UMRA. Furthermore,
as EPA stated in the rule, EPA is not
directly establishing any regulatory
requirements that may significantly or
uniquely affect small governments,
including Tribal governments. Thus,
EPA is not obligated to develop under
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section 203 of the UMRA a small
government agency plan. Furthermore,
in a manner consistent with the
intergovernmental consultation
provisions of section 204 of the UMRA,
EPA carried out consultations with the
governmental entities affected by this
rule.
For several reasons, however, EPA is
not reaching a final conclusion as to the
applicability of the requirements of
UMRA to this rulemaking action. First,
it is questionable whether a requirement
to submit a SIP revision would
constitute a Federal mandate in any
case. The obligation for a State to revise
its SIP that arises out of section 110(a)
of the CAA is not legally enforceable by
a court of law, and at most is a
condition for continued receipt of
highway funds. Therefore, it is possible
to view an action requiring such a
submittal as not creating any
enforceable duty within the meaning of
section 421(5)(9a)(I) of UMRA (2 U.S.C.
658 (a)(I)). Even if it did, the duty could
be viewed as falling within the
exception for a condition of Federal
assistance under section 421(5)(a)(i)(I) of
UMRA (2 U.S.C. 658(5)(a)(i)(I)).
As noted earlier, however,
notwithstanding these issues, EPA
prepared the statement that would be
required by UMRA if its statutory
provisions applied for the CAIR final
rule and this rule. The EPA also
consulted with governmental entities as
would be required by UMRA.
Consequently, it is not necessary for
EPA to reach a conclusion as to the
applicability of the UMRA
requirements.
The EPA conducted an analysis of the
economic impacts anticipated from the
CAIR program inclusive of the New
Jersey and Delaware proposal for
government-owned entities. The
modeling conducted using the IPM
projects that about 340 MW of
municipality-owned capacity (about 0.4
percent of all subdivision, State and
municipality capacity in the CAIR
region) would be uneconomic to
maintain under the CAIR program,
beyond what is projected in the base
case. In practice, however, the units
projected to be uneconomic to maintain
may be ‘‘mothballed,’’ retired, or kept in
service to ensure transmission reliability
in certain parts of the grid. For the most
part, these units are small and
infrequently used generating units that
are dispersed throughout the CAIR
region.
The EPA modeling identified 265
State or municipally-owned entities, as
well as subdivisions, within the entire
CAIR region. The EPA excluded from
the analysis government-owned entities
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that were not projected to have at least
one unit with generating capacity of 25
MW or greater in the base case. Thus,
we excluded 184 entities from the
analysis. We found that 81 government
entities will be potentially affected by
the CAIR. Of the 81 government entities,
20 may experience compliance costs in
excess of 1 percent of revenues in 2010,
and 39 may in 2015, based on our
assumptions of how the affected States
implement control measures to meet
their emissions budgets as set forth in
this rulemaking.
Government entities projected to
experience compliance costs in excess
of 1 percent of revenues have some
potential for significant impact resulting
from implementation of the CAIR.
However, as noted above, it is EPA’s
position that because these government
entities can pass on their costs of
compliance to rate-payers, they will not
be significantly impacted. Furthermore,
the decision to include only units
greater than 25 MW in size exempts 179
government entities that would
otherwise be potentially affected by the
CAIR program.
The above points aside, potentially
adverse impacts of the CAIR program on
State and municipality-owned entities
could be limited by the fact that the cap
and trade program is designed such that
States determine how NOX allowances
are to be allocated across units. A State
that wishes to mitigate the impact of the
rule on State or municipality-owned
entities might choose to allocate NOX
allowances in a manner that is favorable
to these entities. Finally, the use of cap
and trade in general will limit impacts
on entities owned by small governments
relative to a less flexible command-andcontrol program.
E. Executive Order 13132: Federalism
Executive Order 13132, entitled
‘‘Federalism’’ (64 FR 43255, August 10,
1999), requires EPA to develop an
accountable process to ensure
‘‘meaningful and timely input by State
and local officials in the development of
regulatory policies that have federalism
implications.’’ ‘‘Policies that have
federalism implications’’ is defined in
the Executive Order to include
regulations that have ‘‘substantial direct
effects on the States, on the relationship
between the national government and
the States, or on the distribution of
power and responsibilities among the
various levels of government.’’
This rule does not have federalism
implications. It will not have substantial
direct effects on the States, on the
relationship between the national
government and the States, or on the
distribution of power and
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responsibilities among the various
levels of government, as specified in
Executive Order 13132. The CAA
establishes the relationship between the
Federal government and the States, and
this rule does not impact that
relationship. Thus, Executive Order
13132 does not apply to this rule. In the
spirit of Executive Order 13132, and
consistent with EPA policy to promote
communications between EPA and State
and local governments, EPA specifically
solicited comment on the CAIR from
State and local officials.
F. Executive Order 13175: Consultation
and Coordination With Indian Tribal
Governments
Executive Order 13175, entitled
‘‘Consultation and Coordination with
Indian Tribal Governments’’ (65 FR
67249, November 9, 2000), requires EPA
to develop an accountable process to
ensure ‘‘meaningful and timely input by
Tribal officials in the development of
regulatory policies that have Tribal
implications.’’ The CAIR program (CAIR
final and New Jersey and Delaware rule)
does not have Tribal implications as
specified in Executive Order 13175.
The CAIR program addresses
transport of pollutants that are
precursors for ozone and PM2.5. The
CAA provides for States and Tribes to
develop plans to regulate emissions of
air pollutants within their jurisdictions.
The regulations clarify the statutory
obligations of States and Tribes that
develop plans to implement this rule.
The Tribal Authority Rule (TAR) give
Tribes the opportunity to develop and
implement CAA programs, but it leaves
to the discretion of the Tribe whether to
develop these programs and which
programs, or appropriate elements of a
program, the Tribe will adopt.
The CAIR program does not have
Tribal implications as defined by
Executive Order 13175. It does not have
a substantial direct effect on one or
more Indian Tribes, because no Tribe
has implemented a federally enforceable
air quality management program under
the CAA at this time. Furthermore, the
CAIR program does not affect the
relationship or distribution of power
and responsibilities between the Federal
government and Indian Tribes. The
CAA and the TAR establish the
relationship of the Federal government
and Tribes in developing plans to attain
the NAAQS, and this rule does nothing
to modify that relationship. Because the
CAIR program does not have Tribal
implications, Executive Order 13175
does not apply.
If one assumes a Tribe is
implementing a Tribal Implementation
Plan, today’s rule could have
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implications for that Tribe, but it would
not impose substantial direct costs upon
the Tribe, nor preempt Tribal law. As
provided above, EPA has estimated that
the total annual private costs for the
CAIR program inclusive of the New
Jersey and Delaware rule for the CAIR
region as implemented by State, local,
and Tribal governments is
approximately $2.4 billion in 2010 and
$3.6 billion in 2015 (1999 dollars).
There are currently very few emissions
sources in Indian country that could be
affected by the CAIR program and the
percentage of Tribal land that will be
impacted is very small. For Tribes that
choose to regulate sources in Indian
country, the costs would be attributed to
inspecting regulated facilities and
enforcing adopted regulations.
Although Executive Order 13175 does
not apply to this rule, EPA consulted
with Tribal officials in developing the
CAIR program. The EPA encouraged
Tribal input at an early stage. Also, EPA
held periodic meetings with the States
and the Tribes during the technical
development of the CAIR program.
Three meetings were held with the
Crow Tribe, where the Tribe expressed
concerns about potential impacts of the
CAIR on their coal mine operations. The
addition of Delaware and New Jersey to
the CAIR program does not have any
bearing upon the concerns expressed by
the Tribes. In addition, EPA held three
calls with Tribal environmental
professionals to address concerns
specific to the Tribes. These discussions
have given EPA valuable information
about Tribal concerns regarding the
development of the CAIR program. The
EPA has provided briefings for Tribal
representatives and the newly formed
National Tribal Air Association (NTAA),
and other national Tribal forums. Input
from Tribal representatives was taken
into consideration in development of
the CAIR program.
G. Executive Order 13045: Protection of
Children From Environmental Health
and Safety Risks
Executive Order 13045, ‘‘Protection of
Children from Environmental Health
and Safety Risks’’ (62 FR 19885, April
23, 1997) applies to any rule that (1) is
determined to be ‘‘economically
significant’’ as defined under Executive
Order 12866, and (2) concerns an
environmental health or safety risk that
EPA has reason to believe may have a
disproportionate effect on children. If
the regulatory action meets both criteria,
Section 5–501 of the Order directs the
Agency to evaluate the environmental
health or safety effects of the planned
rule on children, and explain why the
planned regulation is preferable to other
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18:05 Apr 27, 2006
Jkt 208001
potentially effective and reasonably
feasible alternatives considered by the
Agency.
The CAIR program inclusive of the
Delaware and New Jersey rule is not
subject to the Executive Order, because
it does not involve decisions on
environmental health or safety risks that
may disproportionately affect children.
The EPA believes that the emissions
reductions from the strategies in this
rule will further improve air quality and
will further improve children’s health.
H. Executive Order 13211: Actions That
Significantly Affect Energy Supply,
Distribution, or Use
Executive Order 13211 (66 FR 28355,
May 22, 2001) provides that agencies
shall prepare and submit to the
Administrator of the Office of
Regulatory Affairs, OMB, a Statement of
Energy Effects for certain actions
identified as ‘‘significant energy
actions.’’ Section 4(b) of Executive
Order 13211 defines ‘‘significant energy
actions’’ as any action by an agency
(normally published in the Federal
Register) that promulgates or is
expected to lead to the promulgation of
a final rule or regulation, including
notices of inquiry, advance notices of
final rulemaking, and notices of final
rulemaking: (1)(i) That is a significant
regulatory action under Executive Order
12866 or any successor order, and (ii) is
likely to have a significant adverse effect
on the supply, distribution, or use of
energy; or (2) that is designated by the
Administrator of the Office of
Information and Regulatory Affairs as a
‘‘significant energy action.’’ The CAIR
program (the CAIR final and the New
Jersey and Delaware rule) is a significant
regulatory action under Executive Order
12866, and the CAIR program may have
a significant adverse effect on the
supply, distribution, or use of energy.
If States choose to obtain the
emissions reductions required by the
CAIR final and this rule by regulating
EGUs, EPA projects that approximately
5.3 GW of coal-fired generation (0.5 GW
due to the inclusion of Delaware and
New Jersey) may be removed from
operation by 2010. In practice, however,
the units projected to be uneconomic to
maintain may be ‘‘mothballed,’’ retired,
or kept in service to ensure transmission
reliability in certain parts of the grid.
For the most part, these units are small
and infrequently used generating units
that are dispersed throughout the CAIR
region. Less conservative assumptions
regarding natural gas prices or
electricity demand would create a
greater incentive to keep these units
operational. The EPA projects that the
average annual electricity price will
PO 00000
Frm 00014
Fmt 4701
Sfmt 4700
increase by less than 2.7 percent in the
CAIR region (and less than 3.5 percent
in the MAAC Power Region, which
includes Delaware and New Jersey) for
the CAIR program. The EPA does not
believe that the CAIR final and this rule
will have any other impacts that exceed
the significance criteria.
The EPA believes that a number of
features of today’s rulemaking serve to
reduce its impact on energy supply.
First, the optional trading program
provides considerable flexibility to the
power sector and enables industry to
comply with the emission reduction
requirements in the most cost-effective
manner, thus minimizing overall costs
and the ultimate impact on energy
supply. The ability to use banked
allowances from the existing title IV SO2
Trading Program and the NOX SIP Call
Trading Program also provide additional
flexibility. Second, the CAIR program
caps are set in two phases and provide
adequate time for EGUs to install
pollution controls. For more details
concerning energy impacts, see the
Regulatory Impact Analysis for the Final
Clean Air Interstate Rule (March 2005).
I. National Technology Transfer
Advancement Act
Section 12(d) of the National
Technology Transfer Advancement Act
(NTTAA) of 1995 (Pub. L. 104–113; 15
U.S.C. 272 note) directs EPA to use
voluntary consensus standards in its
regulatory and procurement activities
unless to do so would be inconsistent
with applicable law or otherwise
impractical. Voluntary consensus
standards are technical standards (e.g.,
materials specifications, test methods,
sampling procedures, business
practices) developed or adopted by one
or more voluntary consensus bodies.
The NTTAA directs EPA to provide
Congress, through annual reports to
OMB, with explanations when an
agency does not use available and
applicable voluntary consensus
standards.
The CAIR final and this rule would
require all sources that participate in the
trading program under part 96 to meet
the applicable monitoring requirements
of part 75. Part 75 already incorporates
a number of voluntary consensus
standards. Consistent with the Agency’s
Performance Based Measurement
System (PBMS), part 75 sets forth
performance criteria that allow the use
of alternative methods to the ones set
forth in part 75. The PBMS approach is
intended to be more flexible and cost
effective for the regulated community; it
is also intended to encourage innovation
in analytical technology and improved
data quality. At this time, EPA is not
E:\FR\FM\28APR2.SGM
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Federal Register / Vol. 71, No. 82 / Friday, April 28, 2006 / Rules and Regulations
recommending any revisions to part 75;
however, EPA periodically revises the
test procedures set forth in part 75.
When EPA revises the test procedures
set forth in part 75 in the future, EPA
will address the use of any new
voluntary consensus standards that are
equivalent. Currently, even if a test
procedure is not set forth in part 75,
EPA is not precluding the use of any
method, whether it constitutes a
voluntary consensus standard or not, as
long as it meets the performance criteria
specified; however, any alternative
methods must be approved through the
petition process under section 75.66
before they are used under part 75.
cchase on PROD1PC60 with RULES2
J. Executive Order 12898: Federal
Actions to Address Environmental
Justice in Minority Populations and
Low-Income Populations
Executive Order 12898, ‘‘Federal
Actions to Address Environmental
Justice in Minority Populations and
Low-Income Populations,’’ requires
Federal agencies to consider the impact
of programs, policies, and activities on
minority populations and low-income
populations. According to EPA
guidance,11 agencies are to assess
whether minority or low-income
populations face risks or a rate of
exposure to hazards that are significant
and that ‘‘appreciably exceed or is likely
to appreciably exceed the risk or rate to
the general population or to the
appropriate comparison group.’’ (EPA,
1998)
In accordance with Executive Order
12898, the Agency has considered
whether the CAIR program inclusive of
the New Jersey and Delaware rule may
have disproportionate negative impacts
on minority or low income populations.
The Agency expects the CAIR program
to lead to reductions in air pollution
and exposures generally. For this
reason, negative impacts to these subpopulations that appreciably exceed
similar impacts to the general
population are not expected.
K. Congressional Review Act
The Congressional Review Act, 5
U.S.C. 801 et seq., as added by the Small
Business Regulatory Enforcement
Fairness Act of 1996, generally provides
that before a rule may take effect, the
agency promulgating the rule must
submit a rule report, which includes a
copy of the rule, to each House of the
Congress and to the Comptroller General
of the United States. The EPA will
11 U.S. Environmental Protection Agency, 1998.
Guidance for Incorporating Environmental Justice
Concerns in EPA’s NEPA Compliance Analyses.
Office of Federal Activities, Washington, DC, April,
1998.
VerDate Aug<31>2005
18:05 Apr 27, 2006
Jkt 208001
submit a report containing this rule and
other required information to the U.S.
Senate, the U.S. House of
Representatives, and the Comptroller
General of the United States prior to
publication of the rule in the Federal
Register. A major rule cannot take effect
until 60 days after it is published in the
Federal Register. This action is a ‘‘major
rule’’ as defined by 5 U.S.C. 804(2). This
rule will be effective June 27, 2006.
L. Judicial Review
Section 307(b)(1) of the CAA indicates
which Federal Courts of Appeal have
venue for petitions of review of final
actions by EPA. This section provides,
in part, that petitions for review must be
filed in the Court of Appeals for the
District of Columbia Circuit if (i) the
agency action consists of ‘‘nationally
applicable regulations promulgated, or
final action taken, by the
Administrator,’’ or (ii) such action is
locally or regionally applicable, if ‘‘such
action is based on a determination of
nationwide scope or effect and if in
taking such action the Administrator
finds and publishes that such action is
based on such a determination.’’
Any final action related to the CAIR
is ‘‘nationally applicable’’ within the
meaning of section 307(b)(1). As an
initial matter, through this rule, EPA
interprets section 110(a)(2)(D)(i) of the
CAA, a provision which has nationwide
applicability. In addition, the CAIR
applies to 28 States and the District of
Columbia. The CAIR is also based on a
common core of factual findings and
analyses concerning the transport of
pollutants between the different States
subject to it. Finally, EPA has
established uniform approvability
criteria that would be applied to all
States subject to the CAIR. For these
reasons, the Administrator also is
determining that any final action
regarding the CAIR is of nationwide
scope and effect for purposes of section
307(d)(1). Thus, any petitions for review
of final actions regarding the CAIR must
be filed in the Court of Appeals for the
District of Columbia Circuit within 60
days from the date final action is
published in the Federal Register.
40 CFR Part 96
Administrative practice and
procedure, Air pollution control,
Nitrogen oxides, Reporting and
recordkeeping requirements.
Dated: March 15, 2006.
Stephen L. Johnson,
Administrator.
Title 40, Chapter I, of the Code of
Federal Regulations is amended as
follows:
I
PART 51—[AMENDED]
1. The authority citation for part 51
continues to read as follows:
I
Authority: 23 U.S.C. 101; 42 U.S.C. 7401–
7671q.
Subpart G—[Amended]
2. Section 51.123 is amended as
follows:
I a. By revising paragraphs (c)(1) and
(c)(3).
I b. In the table to paragraph (e)(2) by
adding entries for ‘‘Delaware’’ and
‘‘New Jersey’’ in alphabetical order.
I c. In the table to paragraph (e)(4)(ii) by
adding entries for ‘‘Delaware’’ and
‘‘New Jersey’’ in alphabetical order.
I
§ 51.123 Findings and requirements for
submission of State implementation plan
revisions relating to emissions of oxides of
nitrogen pursuant to the Clean Air Interstate
Rule.
*
*
*
*
*
(c) * * *
(1) Alabama, Delaware, Florida,
Illinois, Indiana, Iowa, Kentucky,
Louisiana, Maryland, Michigan,
Mississippi, Missouri, New Jersey, New
York, North Carolina, Ohio,
Pennsylvania, South Carolina,
Tennessee, Virginia, West Virginia,
Wisconsin, and the District of Columbia
shall be subject to the requirements
contained in paragraphs (e) through (cc)
of this section;
*
*
*
*
*
(3) Arkansas, Connecticut, and
Massachusetts shall be subject to the
requirements contained in paragraphs
(q) through (cc) of this section.
*
*
*
*
*
(e) * * *
(2) * * *
List of Subjects
40 CFR Part 51
State
Administrative practice and
procedure, Air pollution control,
Intergovernmental relations, Nitrogen
dioxide, Ozone, Particulate matter,
Reporting and recordkeeping
requirements, Sulfur oxides, Volatile
organic compounds.
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Fmt 4701
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Annual EGU
NOX budget
for 2009–2014
(tons)
*
*
Delaware ...
*
*
*
New Jersey
*
12,670
E:\FR\FM\28APR2.SGM
28APR2
Annual EGU
NOX budget
for 2015 and
thereafter
(tons)
*
*
3,472
*
*
10,558
4,166
25302
Federal Register / Vol. 71, No. 82 / Friday, April 28, 2006 / Rules and Regulations
Annual EGU
NOX budget
for 2009–2014
(tons)
State
*
*
*
*
*
*
(4)(i) * * *
(ii) * * *
*
Annual EGU
NOX budget
for 2015 and
thereafter
(tons)
*
*
Tennessee, Texas, Virginia, West
Virginia, Wisconsin, and the District of
Columbia.
*
*
*
*
*
(e) * * *
(2) * * *
State
Compliance
supplement
pool
State
*
*
*
Delaware ...............................
*
*
843
*
*
*
New Jersey ...........................
*
*
*
*
*
*
§ 51.124
*
*
*
*
State trading
budget for
2009–2014
(tons)
*
*
New Jersey
*
32,392
*
*
22,674
*
*
Delaware ...
*
*
*
*
*
*
New Jersey
*
*
§ 51.124 Findings and requirements for
submission of State implementation plan
revisions relating to emissions of sulfur
dioxide pursuant to the Clean Air Interstate
Rule.
cchase on PROD1PC60 with RULES2
*
*
15,687
§ 51.125 Emissions reporting
requirements for SIP revisions relating to
budgets for SO2 and NOX emissions.
(a) * * *
(1) Alabama, Delaware, Florida,
Georgia, Illinois, Indiana, Iowa,
Kentucky, Louisiana, Maryland,
Michigan, Minnesota, Mississippi,
Missouri, New Jersey, New York, North
Carolina, Ohio, Pennsylvania, South
Carolina, Tennessee, Texas, Virginia,
West Virginia, Wisconsin, and the
District of Columbia.
*
*
*
*
*
(a) * * *
*
*
*
*
*
(c) The following States are subject to
the requirements of this section:
Alabama, Delaware, Florida, Georgia,
Illinois, Indiana, Iowa, Kentucky,
Louisiana, Maryland, Michigan,
Minnesota, Mississippi, Missouri, New
Jersey, New York, North Carolina, Ohio,
Pennsylvania, South Carolina,
*
*
*
*
*
*
4. Section 51.125 is amended by
revising paragraph (a)(1) to read as
follows:
[Amended]
State trading budgets.
*
*
22,411
*
I
3. Section 51.124 is amended by
revising paragraph (c) and by adding
entries for ‘‘Delaware’’ and ‘‘New
Jersey’’ in the table in paragraph (e)(2)
to read as follows:
Jkt 208001
*
*
*
18:05 Apr 27, 2006
§ 96.140
*
*
Delaware ...
I
VerDate Aug<31>2005
6. In § 96.140 the table is amended by
adding entries for ‘‘Delaware’’ and
‘‘New Jersey’’ in alphabetical order to
read as follows:
I
State
*
660
*
Annual EGU
SO2 budget
for 2015 and
thereafter
(tons)
Annual EGU
SO2 budget
for 2010–2014
(tons)
*
Subpart EE—[Amended]
State trading
budget for
2015 and
thereafter
(tons)
*
*
3,472
*
12,670
*
*
10,558
*
*
*
4,166
*
7. In § 96.143 the table is amended, in
paragraph (a), by adding entries for
‘‘Delaware’’ and ‘‘New Jersey’’ in
alphabetical order to read as follows:
I
§ 96.143
Compliance supplement pool.
(a) * * *
Compliance
supplement
pool
(tons)
State
*
*
*
Delaware ...............................
*
*
843
*
*
*
New Jersey ...........................
*
*
660
*
*
PART 96—[AMENDED]
*
5. The authority citation for part 96
continues to read as follows:
*
*
I
Authority: 42 U.S.C. 7401, 7403, 7410,
7601, and 7651, et seq.
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*
*
*
*
*
[FR Doc. 06–2750 Filed 4–27–06; 8:45 am]
BILLING CODE 6560–50–P
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]]>Agencies
[Federal Register Volume 71, Number 82 (Friday, April 28, 2006)]
[Rules and Regulations]
[Pages 25288-25302]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 06-2750]
[[Page 25287]]
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Part II
Environmental Protection Agency
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40 CFR Parts 51 and 96
Inclusion of Delaware and New Jersey in the Clean Air Interstate Rule;
Final Rule
Federal Register / Vol. 71, No. 82 / Friday, April 28, 2006 / Rules
and Regulations
[[Page 25288]]
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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Parts 51 and 96
[EPA-HQ-OAR-2003-0053; FRL-8048-1]
RIN 2060-AM95
Inclusion of Delaware and New Jersey in the Clean Air Interstate
Rule
AGENCY: Environmental Protection Agency (EPA).
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: In today's action, we are finalizing regulations to include
Delaware and New Jersey in the Clean Air Interstate Rule (CAIR) for
fine particles (PM2.5), based on our assessment that they
contribute significantly to a downwind State's nonattainment. In the
CAIR, we determined that upwind States that contribute 0.2 [mu]g/
m3 or more to a downwind PM2.5 nonattainment area
are potentially deemed to be contributing significantly to
nonattainment in the downwind State. The EPA proposed to augment the
analytical approach used in the CAIR by supplementing the air quality
step of the contribution analysis. Based on the results of this
augmented analytical approach, we proposed that Delaware and New Jersey
should be covered by the CAIR for annual sulfur dioxide
(SO2) and nitrogen oxides (NOX) requirements and
are finalizing the regulation to include these States in the CAIR for
PM2.5.
DATES: This final rule is effective on June 27, 2006.
ADDRESSES: The EPA has established a docket for this action under
Docket ID No. EPA-HQ-OAR-2003-0053. All documents in the docket are
listed on the https://www.regulations.gov Web site. Although listed in
the index, some information is not publicly available, e.g.,
Confidential Business Information (CBI) 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 through https://
www.regulations.gov or in hard copy at the Air Docket, EPA/DC, EPA
West, Room B102, 1301 Constitution Ave., NW., Washington, DC. The
Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday through
Friday, excluding legal holidays. The telephone number for the Public
Reading Room is (202) 566-1744. The Air Docket telephone number is
(202) 566-1742.
FOR FURTHER INFORMATION CONTACT: General questions concerning today's
action should be addressed to Jan King, U.S. EPA, Office of Air Quality
Planning and Standards, Air Quality Strategies and Standards Division,
Mail Code C539-02, Research Triangle Park, NC 27711, telephone (919)
541-5665, e-mail king.jan@epa.gov. For legal questions, please contact
Steven Silverman, U.S. EPA, Office of General Counsel, Mail Code 2344A,
1200 Pennsylvania Avenue, NW., Washington, DC 20460, telephone (202)
564-5523, e-mail at silverman.steven@epa.gov. For questions regarding
air quality analyses, please contact Norm Possiel, U.S. EPA, Office of
Air Quality Assessment Division, Mail Code C439-01, Research Triangle
Park, NC 27711, telephone (919) 541-5692, e-mail at
possiel.norm@epa.gov. For questions regarding the electric generating
units (EGUs) cost analyses, emissions inventories, and budgets, and
also for questions regarding the model cap and trade programs, please
contact Sam Waltzer, U.S. EPA, Office of Atmospheric Programs, Clean
Air Markets Division, Mail Code 6204J, 1200 Pennsylvania Avenue, NW.,
Washington, DC 20460, telephone (202) 343-9175, e-mail at
waltzer.sam@epa.gov. For questions regarding statewide emissions
inventories, please contact Marc Houyoux, U.S. EPA, Office of Air
Quality Assessment Division, Mail Code C339-02, Research Triangle Park,
NC 27711, telephone (919) 541-3649, e-mail at houyoux.marc@epa.gov. For
questions regarding emissions reporting requirements, please contact
Bill Kuykendal, U.S. EPA, Office of Air Quality Planning and Standards,
Emissions, Monitoring, and Analysis Division, Mail Code D205-01,
Research Triangle Park, NC 27711, telephone (919) 541-5372, e-mail at
kuykendal.bill@epa.gov. For questions regarding analyses required by
statutes and executive orders, please contact Linda Chappell, U.S. EPA,
Office of Air Quality Planning and Standards, Air Quality Strategies
and Standards Division, Mail Code C339-01, Research Triangle Park, NC
27711, telephone (919) 541-2864, e-mail at chappell.linda@epa.gov.
SUPPLEMENTARY INFORMATION:
Web Site for Rulemaking Information
The EPA has established a Web site for this rulemaking at https://
www.epa.gov/cleanairinterstaterule/ or https://www.epa.gov/cair/ which
includes the rulemaking actions and certain other related information
that the public may find useful.
Judicial Review
Section 307(b)(1) of the CAA indicates which Federal Courts of
Appeal have venue for petitions of review of final actions by EPA. This
section provides, in part, that petitions for review must be filed in
the Court of Appeals for the District of Columbia Circuit if (i) the
agency action consists of ``nationally applicable regulations
promulgated, or final action taken, by the Administrator,'' or (ii)
such action is locally or regionally applicable, if ``such action is
based on a determination of nationwide scope or effect and if in taking
such action the Administrator finds and publishes that such action is
based on such a determination.''
Any final action related to the CAIR is ``nationally applicable''
within the meaning of section 307(b)(1). As an initial matter, through
this rule, EPA interprets section 110(a)(2)(D)(i) of the Clean Air Act
(CAA), a provision which has nationwide applicability. In addition, the
CAIR applies to 28 States and the District of Columbia. The CAIR is
also based on a common core of factual findings and analyses concerning
the transport of pollutants between the different States subject to it.
Finally, EPA has established uniform approvability criteria that would
be applied to all States subject to the CAIR. For these reasons, the
Administrator also is determining that any final action regarding the
CAIR is of nationwide scope and effect for purposes of section
307(d)(1). Thus, any petitions for review of final actions regarding
the CAIR must be filed in the Court of Appeals for the District of
Columbia Circuit within 60 days from the date final action is published
in the Federal Register.
Outline
I. Overview
A. What Are the Central Requirements of This Rule?
B. Why Are We Taking This Action?
II. Air Quality Analysis of Ozone and PM2.5 Contributions
in the CAIR
A. Analysis of Highly Cost-Effective Controls and Timeframe for
Emissions Reductions
1. Overall Criteria
2. Evaluation of Cost Effectiveness and Feasibility
3. CAIR Regionwide SO2 and NOX Emissions
Reductions Requirements
III. Inclusion of Delaware and New Jersey in the CAIR for
PM2.5
A. Why EPA Is Revising the Status of Delaware and New Jersey in
the CAIR
B. Results of Updated Air Quality Modeling for Delaware and New
Jersey
IV. Findings and Action
[[Page 25289]]
A. Findings of Significant Contribution for Delaware and New
Jersey
B. SIP Approval Criteria
C. SIP Submittal Deadline
D. Emissions Reporting Requirements
V. Expected Effects of This Action
A. Emissions
B. Air Quality
VI. Statutory and Executive Order Reviews
A. Executive Order 12866: Regulatory Planning and Review
B. Paperwork Reduction Act
C. Regulatory Flexibility Act
D. Unfunded Mandates Reform Act
E. Executive Order 13132: Federalism
F. Executive Order 13175: Consultation and Coordination With
Indian Tribal Governments
G. Executive Order 13045: Protection of Children From
Environmental Health and Safety Risks
H. Executive Order 13211: Actions That Significantly Affect
Energy Supply, Distribution or Use
I. National Technology Transfer Advancement Act
J. Executive Order 12898: Federal Actions To Address
Environmental Justice in Minority Populations and Low-Income
Populations
K. Congressional Review Act
I. Overview
By notice of proposed rulemaking dated May 12, 2005, EPA proposed
to include Delaware and New Jersey in the CAIR, which was published on
the same date (70 FR 25162). We are finalizing that proposal here. The
final rule requires Delaware and New Jersey to adopt and submit State
implementation plans (SIPs), under the requirements of CAA section
110(a)(2)(D), that would eliminate emissions of specified amounts of
SO2 and NOX which contribute significantly to
nonattainment of the PM2.5 National Ambient Air Quality
Standard (NAAQS) in a downwind State. Although Delaware and New Jersey
are now combined to determine significant contribution, these States
may independently determine which sources to subject to controls, and
which control measures to adopt. The EPA's analysis indicates that
emissions reductions from EGUs are highly cost effective, and EPA
encourages Delaware and New Jersey to adopt controls for EGUs. To do
so, they must place an enforceable limit, or cap, on EGU emissions (see
section VII of the CAIR for a more detailed discussion). The EPA has
calculated the amount of each State's EGU emissions cap, or budget,
based on reductions that EPA has determined are highly cost effective
(see section IV of this rule). Delaware and New Jersey may also allow
their EGUs to participate in an EPA-administered cap and trade program
as a way to reduce the cost of compliance. The cap and trade programs
are described in more detail in section VIII of the preamble to the
final CAIR.
A. What Are the Central Requirements of This Rule?
In today's action, we establish SIP requirements for the affected
upwind States of Delaware and New Jersey under CAA section
110(a)(2)(D)(i). Section 110(a)(2)(D)(i) of the CAA requires SIPs to
contain adequate provisions prohibiting air pollutant emissions from
sources or activities in those States which emissions contribute
significantly to nonattainment in, or interfere with maintenance by,
any other State with respect to a NAAQS. Based on air quality modeling
analyses and cost analyses, EPA has concluded that SO2 and
NOX emissions in Delaware and New Jersey, through the
phenomenon of air pollution transport,\1\ contribute significantly to
downwind nonattainment of the PM2.5 NAAQS.\2\ In addition to
making the findings of significant contribution to nonattainment, EPA
is requiring Delaware and New Jersey to make specified amounts of
SO2 and NOX emissions reductions to eliminate
their significant contribution to downwind States. Delaware and New
Jersey are required to adopt and submit SIP revisions with the
necessary control measures by September 11, 2006.
---------------------------------------------------------------------------
\1\ In today's final rule, when we use the term ``transport'' we
mean to include the transport of both fine particles
(PM2.5) and their precursor emissions.
\2\ In the CAIR, the 23 States along with the District of
Columbia that must reduce SO2 and NOX
emissions for the purposes of the PM2.5 NAAQS are:
Alabama, Florida, Georgia, Illinois, Indiana, Iowa, Kentucky,
Louisiana, Maryland, Michigan, Minnesota, Mississippi, Missouri, New
York, North Carolina, Ohio, Pennsylvania, South Carolina, Tennessee,
Texas, Virginia, West Virginia, and Wisconsin.
---------------------------------------------------------------------------
B. Why Are We Taking This Action?
On May 12, 2005, we proposed to include Delaware and New Jersey in
the CAIR for PM2.5. Our assessment was that the combination
of the two States does contribute significantly to PM2.5
nonattainment in New York County, NY, and to one or more counties in
eastern Pennsylvania. In that action, we proposed the following:
Combining Delaware and New Jersey for purposes of
assessing whether that combination contributes significantly to
nonattainment of the PM2.5 NAAQS by downwind receptors under
section 110(a)(2)(D);
Requiring Delaware and New Jersey, under CAA section
110(a)(2)(D), to adopt SIP requirements for addressing annual emissions
of the PM2.5 precursors NOX and SO2;
Adding requirements for control of annual emissions of
SO2 and NOX;
Requiring that SIPs to achieve the required
PM2.5 emissions reductions be submitted as soon as
practicable, but no later than 18 months after the date of signature of
the CAIR, i.e., September 11, 2006, the same deadline as in the CAIR;
and
Providing model cap and trade programs for EGUs in the
CAIR and administering these programs.
Delaware and New Jersey are already subject to the CAIR for
purposes of ozone, and must reduce ozone season emissions of
NOX starting in 2009. We proposed to add requirements for
control of annual emissions of NOX by 2009 and
SO2 by 2010 for purposes of PM2.5. We also
proposed larger reductions by 2015 for NOX and
SO2 in order to avoid contributing significantly to
PM2.5 nonattainment, or interfere with maintenance, in other
States.
We performed air quality modeling to determine the contribution
from projected 2010 SO2 and NOX emissions in
Delaware and New Jersey combined to PM2.5 nonattainment in
downwind States. The results of this modeling were provided in a Notice
of Data Availability (NODA) (70 FR 37068, June 28, 2005). The results
show that the largest contribution from Delaware and New Jersey was
0.23 [mu]g/m3 to PM2.5 nonattainment in New York
County, New York. This amount exceeds EPA's PM2.5
significance criterion of 0.2 [mu]g/m3.
Based on a comment we received from the State of Delaware on the
proposed rule, we have updated our 2010 emissions projections for
Delaware and re-ran the model for Delaware and New Jersey. Materials
relevant to this have been placed in the docket. See section III.B of
this rule for further discussion of this comment and our response. The
revised modeling confirms that the combination of Delaware and New
Jersey make a significant contribution to PM2.5
nonattainment in at least one downwind State thus necessitating SIP
revisions under section 110(a)(2)(D) to eliminate the significant
contribution. Therefore, we are finalizing the requirement for Delaware
and New Jersey that they adopt SIP requirements for addressing annual
emissions of the PM2.5 precursors NOX and
SO2.
II. Air Quality Analysis of Ozone and PM2.5 Contributions in
the CAIR \3\
---------------------------------------------------------------------------
\3\ This discussion is for readers' convenience. The EPA did not
reconsider or otherwise reopen any aspect of the CAIR in this
rulemaking, except for the matter specifically proposed.
---------------------------------------------------------------------------
For the CAIR, we performed State-by-State zero-out modeling to
quantify the
[[Page 25290]]
contribution from emissions in each State to future ozone and
PM2.5 nonattainment in other States and to determine whether
that contribution meets requirements of the ``contribute
significantly'' test. This zero-out modeling technique provides an
estimate of downwind impacts by comparing the model predictions from
the 2010 base case to the predictions from a run in which all
anthropogenic NOX emissions (in the case of ozone) or all
anthropogenic SO2 and NOX emissions (in the case
of PM2.5) are removed from specific States, one State at a
time. After considering an updated analysis and public comments, we
applied a threshold of 0.2 [mu]g/m3 for PM2.5 for
this determination.
For more detailed discussions of EPA's analytical approach,
findings, and final actions in the CAIR, see 70 FR 25162, May 12, 2005.
A. Analysis of Highly Cost-Effective Controls and Timeframe for
Emissions Reductions
1. Overall Criteria
In the CAIR rulemaking, we considered a variety of factors in
evaluating the source categories from which highly cost-effective
reductions may be available and the level of reduction assumed from
that sector. These include:
The availability of information,
The identification of source categories emitting
relatively large amounts of the relevant emissions,
The performance and applicability of control measures,
The cost effectiveness of control measures, and
Engineering and financial factors that affect the
availability of control measures.
We further stated that overall, ``We are striving * * * to set up a
reasonable balance of regional and local controls to provide a cost-
effective and equitable governmental approach to attainment with the
NAAQS for fine particles and ozone.'' These criteria are unaffected by
this rule.
2. Evaluation of Cost Effectiveness and Feasibility
The CAIR preamble (70 FR 25195-25229) describes EPA's determination
of regionwide SO2 and NOX control levels. As
described in section IV in the CAIR preamble, EPA determined that
highly cost-effective emissions reductions may be obtained by
controlling EGUs. The EPA determined the amounts of emissions
reductions that must be eliminated in upwind States to help downwind
States achieve attainment of the PM2.5 and ozone
NOX NAAQS, by assuming the application of highly cost-
effective control measures to EGUs and determining the emissions
reductions that would result.
For the CAIR, EPA determined highly cost-effective regionwide
amounts of emissions reductions based on comparison to reference lists
of the cost effectiveness of other regulatory controls. We developed
reference lists for both average and marginal cost effectiveness of
those other controls. By comparison to the reference lists, EPA
determined that the CAIR final (2015) SO2 and NOX
regionwide control levels are highly cost effective. The EPA also
developed marginal cost-effectiveness curves for SO2 and
NOX abatement at varying levels of stringency, to
corroborate its cost-effectiveness determinations.
The EPA determined the interim control levels (commencing in 2009
for NOX and in 2010 for SO2) based on evaluating
the feasibility of installing the necessary emission control retrofits.
Although the interim regionwide control levels were determined based on
feasibility considerations, EPA also evaluated the cost effectiveness
of the interim control levels to ensure that they were also highly cost
effective.
Section IV.A describes our evaluation of highly cost-effective
controls and section IV.C in the CAIR notice of final rulemaking (NFR)
preamble describes EPA's feasibility analysis. Section V in the CAIR
NFR preamble describes the method EPA used to apportion regionwide
control levels to the affected States. A technical support document in
the CAIR docket entitled ``Modeling of Control Costs, Emissions, and
Control Retrofits for Cost Effectiveness and Feasibility Analyses''
describes EPA's use of the Integrated Planning Model (IPM) for its
cost-effectiveness and feasibility analyses. In addition, a technical
support document entitled ``Boilermaker Labor Analysis for the Final
Clean Air Interstate Rule'' provides further explanation of EPA's
feasibility analyses. Documentation for IPM, as well as IPM output
files, are available in the CAIR docket listed in the ADDRESSES section
of this rule.
3. CAIR Regionwide SO2 and NOX Emissions
Reductions Requirements
The CAIR NFR requires annual SO2 and NOX
reductions in the District of Columbia and the 23 States listed in
section I.A above. If all affected States choose to implement the CAIR
annual SO2 emission reduction requirements by controlling
EGUs, the regionwide annual SO2 emissions caps that will
apply in these 23 States and the District of Columbia are 3.6 million
tons in 2010 and 2.5 million tons in 2015. If all affected States
choose to implement the CAIR annual NOX emission reduction
requirements by controlling EGUs, the regionwide annual NOX
emissions caps that will apply for EGUs in these 23 States and the
District of Columbia are 1.5 million tons in 2009 and 1.3 million tons
in 2015.
The CAIR does not require annual SO2 or NOX
emissions reductions in Delaware or New Jersey for purposes of the
PM2.5 NAAQS.\4\ However, today, EPA is requiring annual
SO2 and NOX reductions in these two States for
that purpose. Annual SO2 and NOX budgets for
Delaware and New Jersey are presented in section IV.B of this preamble.
Since EPA is finalizing annual SO2 and NOX
budgets for Delaware and New Jersey, the States may choose to implement
their annual emission reduction requirements by controlling EGUs. If
the States choose to control EGUs, the CAIR regionwide EGU caps will
include reduction requirements for these two States. The updated annual
SO2 caps, including Delaware and New Jersey, would be 3.7
million tons in 2010 and 2.6 million tons in 2015. The updated annual
NOX caps, including Delaware and New Jersey, would be 1.5
million tons in 2009 and 1.3 million tons in 2015.
---------------------------------------------------------------------------
\4\ The CAIR does require ozone season NOX emissions
reductions in Delaware and New Jersey for ozone.
---------------------------------------------------------------------------
III. Inclusion of Delaware and New Jersey in the CAIR for
PM2.5
A. Why EPA Is Revising the Status of Delaware and New Jersey in the
CAIR
Section 110(a)(2)(D)(i) of the CAA requires States to include in
their SIPs adequate provisions prohibiting emissions that will
contribute significantly to nonattainment in, or interfere with
maintenance by, any other State. The term ``contribute significantly''
is not further defined, so in implementing this section we have had to
develop an analytical approach to give the term specific meaning. The
underlying logic of the analytical approach used in both the
NOX SIP Call and the CAIR is that the emission reduction
efforts needed to reach attainment should be reasonably balanced
between the State containing a nonattainment area and upwind States
significantly contributing to the nonattainment. In this way, control
efforts on one side of a border are not undermined (and even rendered
futile) by out-of-State emissions, and highly
[[Page 25291]]
cost-effective emissions reductions by out-of-State sources which
contribute significantly to downwind receptors' nonattainment are
achieved. We believe this approach is both efficient and equitable, so
that overall costs are less and costs are more fairly distributed than
if the burden of reaching attainment were entirely on the State with
the nonattainment area. Congress had the same purpose when it enacted
section 110(a)(2)(D). See 64 FR 29260-61, May 25, 1999 (summarizing
Legislative History of section 110(a)(2)(D) predecessor provision).
We are retaining this underlying analytical approach, but treating
Delaware and New Jersey as special cases and as a single geographic
area for PM2.5. Specifically, we are combining Delaware and
New Jersey for purposes of assessing significant contribution to
nonattainment of the PM2.5 NAAQS by downwind receptors under
section 110(a)(2)(D), and applying the finding from that combined
assessment to each State.
The analytical approach used for the CAIR has two parts, the first
of which is a test of whether the air quality contribution from one
entire State to nonattainment in any part of another State is
substantial enough to be considered significant, pending consideration
of control costs. For ozone, we used a test for this first part which
is based on several metrics of air quality contribution, involving
absolute magnitude, relative magnitude, and frequency. For
PM2.5, we used a test with the single criterion of whether
the PM2.5 air quality contribution from an upwind State to
nonattainment in a downwind State, due to total anthropogenic
SO2 and NOX emissions in the upwind State, was
0.2 [mu]g/m\3\ or more. We believe that this specific form of the
analytical approach used in the final CAIR rule has very appropriately
identified a set of 23 States and the District of Columbia that should
make certain reductions in annual emissions by 2009 for NOX
and by 2010 for SO2, and larger reductions by 2015 for
NOX and SO2, in order to avoid contributing
significantly to PM2.5 nonattainment in other States.
In the course of applying that analytical approach, we realized
that a geographically small upwind State may have a maximum
contribution on other States that is below the air quality contribution
threshold used in the CAIR simply because of its size. Nevertheless, it
may clearly contribute to PM2.5 nonattainment in a downwind
State(s). Delaware and New Jersey are examples of this geographic
phenomenon. In this instance they are embedded in the much larger NE
Corridor nonattainment area that covers the area from Virginia to
Massachussetts. Upon further examination, EPA found that Delaware and
New Jersey each has substantial emissions for its size with emission
densities that are greater than some of the neighboring States included
in the CAIR. Therefore, excluding Delaware or New Jersey from emission
reduction requirements related to PM2.5 would not achieve
the desired balancing of local and upwind controls. Excluding either
State could forgo opportunities for highly cost-effective control that
would improve air quality in nearby States' PM2.5
nonattainment areas. Ignoring the contributions of Delaware and New
Jersey could result in both air quality detriments and cost
inefficiencies and inequities.
The EPA considered alternative approaches to addressing this issue.
We do not believe it would be appropriate to consider amending or
revising the contribution significance criteria set forth in the final
CAIR notice. Nevertheless, we believe that these two States, which
combined represent a significant source of PM2.5 precursor
emissions, should not be considered to be below the air quality
contribution threshold, in the unique circumstances presented here,
solely because of their comparatively small geographic size. We have
faced a similar issue with respect to small geographic entities in the
NOX SIP Call, where we combined emissions of Delaware,
Maryland, and the District of Columbia, and more recently in the CAIR,
where we combined emissions of the District of Columbia and Maryland.
The final CAIR's exclusion of Delaware and New Jersey for purposes
of PM2.5 drew our attention because of features unique to
Delaware and New Jersey. Table III-1 and Table III-2 in the proposal to
include Delaware and New Jersey in the CAIR PM2.5 region (70
FR 25414 and 25415, respectively) present relevant facts regarding
Delaware and New Jersey. We believe the following specific conditions
with respect to Delaware and New Jersey justify the departure from the
CAIR significance criteria because both States:
Are contiguous;
Have relatively small land area;
Have high emissions densities;
Are near major cities where PM2.5 nonattainment
affects large populations; and
Are located between upwind States and at least one
downwind area linked to an upwind State.
On balance, we believe the most appropriate way to address the factual
situation presented here is to consider Delaware's and New Jersey's
contributions together, as one unit of analysis. We also note that both
States assented to this approach. Since Delaware and New Jersey are
already subject to the CAIR for purposes of ozone, the remainder of
this discussion focuses on PM2.5 considerations.
Delaware and New Jersey are both relatively small in land area;
both are smaller than any of the 23 States already subject to the CAIR
for purposes of PM2.5. Portions of both States are urbanized
and industrialized, and overall both have a high emissions density,
comparable to that of their neighbors.\5\ Delaware has an emissions
density of 76.1 tons/year per square mile, almost twice that of
neighboring Pennsylvania and also higher than that of Maryland, States
already linked to downwind PM2.5 nonattainment areas. New
Jersey has an emissions density of 46.6 tons/year per square mile,
above that of Pennsylvania although somewhat lower than that of
Maryland.
---------------------------------------------------------------------------
\5\ By emissions density we mean the total SO2 and
NOX emissions from each State in tons per year, divided
by the geographic area of the State in square miles. For comparing
emissions densities for the purposes of contributions to
PM2.5 nonattainment, we have compared the emissions
density expressed in terms of SO2 plus NOX
emissions per square mile. Such a comparison is a reasonable measure
of comparison that is independent of the disparity in the land area
size of the two States.
---------------------------------------------------------------------------
Delaware and New Jersey are near major cities where current
PM2.5 nonattainment affects large populations. Also, both
are relatively near a county or counties in other States that are
projected to still be in nonattainment for PM2.5 in 2010 in
the base modeling case. Delaware and New Jersey are also near large
markets for electric power in other States subject to the CAIR for
PM2.5, and both are part of the PJM Interconnect electric
generation. As a result, there is a potential for emissions shifting
from States subject to the PM2.5 requirements of the CAIR to
States not subject to those requirements, e.g., Delaware and New
Jersey.
Both Delaware and New Jersey lie between upwind States that are now
subject to the CAIR for both ozone and PM2.5 and downwind
receptor PM2.5 nonattainment areas that are linked to one or
both of those upwind States. Maryland has already been determined to
contribute significantly to nonattainment in both Philadelphia and New
York City. Pennsylvania has already been determined to contribute
significantly to nonattainment in New York City, and New York has been
determined to contribute to nonattainment in Lancaster County,
[[Page 25292]]
Pennsylvania. New Jersey lies between Pennsylvania and New York City,
and Delaware lies between part of Maryland and both Philadelphia and
New York City. This means that emissions from Delaware and New Jersey
are mixed with the emissions of these other upwind States and arrive
together at the downwind nonattainment areas in other States. Moreover,
Delaware and New Jersey are closer to these receptors.
Given these highly distinctive facts, considered in conjunction
with the data concerning the downwind emissions contributions from
Delaware and New Jersey, it is reasonable that Delaware and New Jersey
be viewed as an entity for assessing significance of PM2.5
nonattainment in downwind States. We did this by treating the
combination of these two small States as a unit, and then evaluating
the combined emissions with the 0.2 [mu]g/m\3\ threshold for
PM2.5 air quality contribution used in the CAIR. As noted,
this is consistent with our approach in the NOX SIP Call and
other aspects of the CAIR in which we also aggregated certain States in
assessing significant contribution. We note also that Delaware and New
Jersey lie side-by-side and together form a compact geographic area. We
believe this further supports combining them for purposes of this
analysis. By combining these two small States, we believe the
underlying cost-balancing and control program efficiency goals of our
original analytical approach can be better met.
Virtually every commenter (including New Jersey and Delaware)
agreed with this approach. The only negative comment termed the
proposed approach ``arbitrary'' (without further analysis), and
requested that EPA adhere to existing approaches for assessing
significant contribution. The EPA disagrees that aggregating Delaware
and New Jersey emissions is arbitrary, for the reasons just set
forward. Indeed, given the facts here (especially the emission density
and geographic location of the two States), it could be argued that it
is arbitrary not to combine the emissions for those two States in
assessing significance of contribution. Moreover, past EPA practice in
both the CAIR and the NOX SIP Call has aggregated emissions
across State boundaries in similar circumstances, as explained above.
B. Results of Updated Air Quality Modeling for Delaware and New Jersey
The proposed rule for including Delaware and New Jersey in the CAIR
included an analysis of the contribution of anthropogenic
SO2 and NOX emissions in these two States to
PM2.5 nonattainment in other States. This analysis was based
upon the sum of the contributions from Delaware and from New Jersey to
each downwind nonattainment receptor. The contribution from each of
these two States was determined based on air quality modeling of each
State individually. Details on EPA's PM2.5 contribution
modeling approach can be found in the Air Quality Modeling Technical
Support Document for the final CAIR.\6\ In brief, the modeling approach
involves ``zero-out'' model simulations in which the SO2 and
NOX emissions from sources in a given State or multi-State
area are removed from a 2010 base case scenario.\7\ The predictions
from this 2010 ``zero-out'' run are compared to predictions from the
corresponding 2010 Base Case simulation to quantify the contributions
to downwind ``modeled plus monitored'' PM2.5 nonattainment
receptors. In the proposal, we stated that we would reassess the
contribution from Delaware and New Jersey combined by performing
``zero-out'' modeling in which SO2 and NOX
emissions are removed from both States in a single model run. We
conducted the combined Delaware/New Jersey zero-out modeling and the
results were provided in the NODA (70 FR 37068; June 28, 2005).
---------------------------------------------------------------------------
\6\ Docket No. EPA-HQ-OAR-2003-0053-2151.
\7\ 2010 base case does not include emissions reductions
expected to result from implementation of the CAIR.
---------------------------------------------------------------------------
The EPA did not receive any significant comment challenging the
proposal to combine Delaware and New Jersey emissions to assess
significance of contribution to downwind States' PM2.5 NAAQS
nonattainment. However, one commenter stated that EPA's modeling of
Delaware and New Jersey failed to account for the effect on
SO2 emissions in Delaware of an enforcement action against
the Motiva refinery. The commenter said that not accounting for the
27,000 tons per year reduction in SO2 at this facility, as
required by a Consent Decree, inflates Delaware's 2010 base case
emissions.
In response to this comment, EPA adjusted downward the projected
2010 emissions at the Motiva refinery to reflect the required
reductions and remodeled the combined contributions from Delaware and
New Jersey. As a result, 2010 emissions from Delaware in the revised
modeling were lower than in the NODA modeling by over 29,000 tons per
year for SO2 and over 500 tons per year for NOX.
In remodeling Delaware and New Jersey, EPA used the same
PM2.5 modeling platform as was used for the CAIR
PM2.5 contribution modeling. The contributions from Delaware
and New Jersey to PM2.5 nonattainment in other States based
on the revised modeling are provided in Table III-1. These results show
that the maximum downwind contribution from Delaware and New Jersey
combined is 0.21 [mu]g/m\3\ which exceeds EPA's PM2.5
contribution significance criterion of 0.20 g/m\3\. Thus, the revised
modeling for Delaware and New Jersey combined confirms that these
States make a significant contribution to PM2.5
nonattainment in a downwind State (namely New York County, New York,
which includes New York City).
Table III-1.--PM2.5 Contributions ([mu]g/m\3\) From Delaware and New
Jersey Combined to PM2.5 Nonattainment
------------------------------------------------------------------------
PM2.5
State County contribution
------------------------------------------------------------------------
Alabama........................ Jefferson Co.......... < 0.05
Alabama........................ Russell Co............ < 0.05
Delaware....................... New Castle Co......... 0.15
District of Columbia........... District of Columbia.. 0.08
Georgia........................ Bibb Co............... < 0.05
Georgia........................ Clarke Co............. < 0.05
Georgia........................ Clayton Co............ < 0.05
Georgia........................ Cobb Co............... < 0.05
Georgia........................ DeKalb Co............. < 0.05
Georgia........................ Floyd Co.............. < 0.05
Georgia........................ Fulton Co............. < 0.05
[[Page 25293]]
Georgia........................ Walker Co............. < 0.05
Illinois....................... Cook Co............... < 0.05
Illinois....................... Madison Co............ < 0.05
Illinois....................... St. Clair Co.......... < 0.05
Indiana........................ Clark Co.............. < 0.05
Indiana........................ Dubois Co............. < 0.05
Indiana........................ Lake Co............... < 0.05
Indiana........................ Marion Co............. < 0.05
Indiana........................ Vanderburgh Co........ < 0.05
Kentucky....................... Fayette Co............ < 0.05
Kentucky....................... Jefferson Co.......... < 0.05
Maryland....................... Anne Arundel Co....... 0.11
Maryland....................... Baltimore City........ 0.10
Michigan....................... Wayne Co.............. < 0.05
New York....................... New York Co........... 0.21
North Carolina................. Catawba Co............ < 0.05
North Carolina................. Davidson Co........... < 0.05
Ohio........................... Butler Co............. < 0.05
Ohio........................... Cuyahoga Co........... < 0.05
Ohio........................... Franklin Co........... < 0.05
Ohio........................... Hamilton Co........... < 0.05
Ohio........................... Jefferson Co.......... < 0.05
Ohio........................... Lawrence Co........... < 0.05
Ohio........................... Mahoning Co........... < 0.05
Ohio........................... Montgomery Co......... < 0.05
Ohio........................... Scioto Co............. < 0.05
Ohio........................... Stark Co.............. < 0.05
Ohio........................... Summit Co............. < 0.05
Pennsylvania................... Allegheny Co.......... < 0.05
Pennsylvania................... Beaver Co............. < 0.05
Pennsylvania................... Berks Co.............. 0.13
Pennsylvania................... Cambria Co............ < 0.05
Pennsylvania................... Dauphin Co............ 0.09
Pennsylvania................... Delaware Co........... 0.15
Pennsylvania................... Lancaster Co.......... 0.15
Pennsylvania................... Philadelphia Co....... 0.15
Pennsylvania................... Washington Co......... < 0.05
Pennsylvania................... Westmoreland Co....... < 0.05
Pennsylvania................... York Co............... 0.12
Tennessee...................... Hamilton Co........... < 0.05
Tennessee...................... Knox Co............... < 0.05
West Virginia.................. Berkeley Co........... < 0.05
West Virginia.................. Brooke Co............. < 0.05
West Virginia.................. Cabell Co............. < 0.05
West Virginia.................. Hancock Co............ < 0.05
West Virginia.................. Kanawha Co............ < 0.05
West Virginia.................. Marion Co............. < 0.05
West Virginia.................. Marshall Co........... < 0.05
West Virginia.................. Ohio Co............... < 0.05
West Virginia.................. Wood Co............... < 0.05
------------------------------------------------------------------------
IV. Findings and Action
A. Findings of Significant Contribution for Delaware and New Jersey
We find that emissions of the PM2.5 precursors
SO2 and NOX emitted by Delaware and New Jersey
contribute significantly to nonattainment of the PM2.5 NAAQS
in New York. Accordingly, we are finalizing SIP requirements for
Delaware and New Jersey under section 110(a)(1) to meet the
requirements of section 110(a)(2)(D)(i), namely, to contain adequate
provisions to prohibit SO2 and NOX emissions from
sources or activities within the States from ``contribut[ing]
significantly to nonattainment'' of the PM2.5 NAAQS in
downwind States.
B. SIP Approval Criteria
The CAIR added two new sections to title 40 of the Code of Federal
Regulations, Sec. Sec. 51.123 and 51.124 containing requirements
related to NOX and SO2 respectively, which
establish the requirement for submission of SIP revisions to comply
with the CAIR and the criteria which EPA will use to review these
revisions for approval or disapproval. The content of these sections is
presented in section VII of the preamble to the CAIR. Delaware and New
Jersey are already subject to the ozone-related provisions of these
sections but not to the provisions that relate to PM2.5. We
are amending these two sections to extend the PM2.5-related
provisions to both States. The practical effect of the amendments will
be to subject the States to budgets (if they choose to control large
EGUs) for annual emission reduction requirements of NOX and
SO2.
[[Page 25294]]
Delaware and New Jersey Statewide Annual Emissions Budgets
The NOX and SO2 annual and ozone season
budgets for New Jersey and Delaware are shown below in Tables IV-1 and
IV-2.
Table IV-1.--Annual NOX Budgets
[Tons]
------------------------------------------------------------------------
Year Delaware New Jersey
------------------------------------------------------------------------
2009.......................................... 4,166 12,670
2015.......................................... 3,472 10,558
------------------------------------------------------------------------
Table IV-2.--Annual SO2 Budgets
[Tons]
------------------------------------------------------------------------
Year Delaware New Jersey
------------------------------------------------------------------------
2010.......................................... 22,411 32,392
2015.......................................... 15,687 22,674
------------------------------------------------------------------------
State annual SO2 budgets for the years 2010-2014 (Phase
I) are based on a 50 percent reduction from title IV allocations for
all units in the affected State. The State annual budgets for 2015 and
beyond (Phase II) are based on a 65 percent reduction from title IV
allowances allocated to units in the affected State for SO2
control.
The EPA calculated State NOX budgets through a fuel-
adjusted heat-input basis, as in the CAIR. State budgets were
determined by multiplying historic heat input data (summed by fuel) by
different adjustment factors for the different fuels. These factors
reflect the relative differences in the average NOX
emissions rates for each fuel type. The average NOX
emissions rates were derived by totaling 1999 through 2001 heat input
and emissions for each fuel type (i.e., coal, natural gas, and oil), in
each State. The resulting adjustment factors from this calculation are
1.0 for coal, 0.4 for gas and 0.6 for oil. The factors reflect the
inherently higher emissions rate of coal-fired plants, and consequently
the greater burden on coal plants to control emissions. The regional
budget was then apportioned to States on a pro-rata basis, based on
each State's share of total adjusted average heat input. For a more
detailed discussion of how the budgets were calculated, see the
proposal (70 FR 25416).
Compliance Supplement Pool (CSP) Allowances and the Statewide Budgets
The final CAIR annual NOX cap and trade rule provides
additional incentives for early annual NOX reductions by
creating a CSP for CAIR States from which they can distribute
allowances for early, annual NOX emissions reductions in the
years 2007 and 2008. The CSP functions much like the NOX SIP
Call's CSP. The CSP is comprised of CAIR annual NOX
allowances of vintage year 2009.
In the final CAIR, EPA apportions a 200,000 ton CSP to all States
in the CAIR region. The CSP was apportioned based on a State's share of
the required emissions reductions (i.e., the difference between their
State baseline emissions and their projected emissions under the CAIR).
States may distribute these CAIR NOX allowances to sources
based upon either: (1) A demonstration to the State of NOX
emissions reductions in surplus of any existing NOX emission
control requirements; or (2) a demonstration to the State that the
facility has a ``need'' that would affect electricity grid reliability;
or, another method chosen by the State. Sources that wish to receive
CAIR CSP allowances can be awarded one CAIR annual NOX
allowance for every ton of NOX emissions reductions. (Should
a State receive more requests for allowances than their share of the
CAIR CSP, the State would pro-rate the allowance distribution).
Determination of surplus emissions must use emissions data measured
using part 75 monitoring.
The CSP for CAIR States affected by the CAIR NFR has a total of
198,494 CAIR NOX allowances in addition to the annual CAIR
NOX budgets. With Delaware and New Jersey as part of the
final CAIR program, they will be allotted an additional 1,503
allowances. Table IV-3 shows the NOX CSP for New Jersey and
Delaware.
Table IV-3.--NOX Compliance Supplement Pool
[Tons]
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Delaware New Jersey
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843 660
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C. SIP Submittal Deadline
We are also finalizing the requirement that PM2.5
transport SIPs be submitted, under CAA section 110(a)(1), as soon as
practicable, but not later than 18 months from the date of signature of
the CAIR, i.e., September 11, 2006. While EPA did not receive public
comment regarding the proposed Delaware and New Jersey CAIR SIP
revision for PM2.5, EPA notes that this deadline will be
less than 18 months from today's final action and less than the 12-
month timeline EPA had expected at the time of the publication of the
Delaware and New Jersey CAIR proposal. However, we continue to believe
that Delaware and New Jersey have sufficient time to develop and submit
CAIR SIP revisions for the following reasons.
First, Delaware and New Jersey were included in the initial CAIR
finding of significant contribution for PM2.5 precursors, so
Delaware and New Jersey have been aware that they might have to submit
transport SIPs for PM2.5 since the CAIR proposal was
published on January 30, 2004. Moreover, we are adopting all of the key
features of the initial CAIR proposal, including the same annual
SO2 and NOX reductions and budgets and the same
implementation mechanisms. In addition, Delaware and New Jersey have
been aware of the CAIR model trading rules, which they may choose to
adopt as a highly cost-effective control remedy, for the same length of
time as the other CAIR States. Again, since these States have been on
notice regarding these issues, we believe that it is reasonable to
require Delaware and New Jersey to submit their CAIR SIP revisions for
PM2.5 on the same timeline as other CAIR PM2.5
States.
The EPA modeling projects that, when Delaware and New Jersey are
included in the CAIR SO2 and NOX annual trading
programs, these States would achieve the required emissions reductions
with limited installation of advanced emissions controls. Specifically,
EPA modeling projected the installation of one flue gas desulfurization
(FGD) control device in New Jersey.\8\ By requiring the Delaware and
New Jersey CAIR SIP revisions by September 11, 2006, sources will have
40 months to plan and install the one additional FGD device EPA
predicts will be installed. This exceeds the 27 months EPA estimates it
takes for the installation of a FGD device. Also, we believe sufficient
boiler maker labor and other resources exist to support one additional
FGD device installation by January 1, 2010.
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\8\ The EPA modeling shows that no additional selective
catalytic reduction (SCR) units would be required in the two States.
Analysis is based upon comparisons of projected emissions control
equipment retrofits in IPM runs with and without Delaware and New
Jersey. See IPM runs (``CAIR 2004 Final DE and NJ'') in the docket
for further details.
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For all these reasons, also put forth in the Delaware and New
Jersey NPR, we think it reasonable that Delaware and New Jersey submit
PM2.5 transport SIPs by September 11, 2006.
D. Emissions Reporting Requirements
In order to provide emissions inventory information that will allow
EPA to better monitor the implementation and effects of the
[[Page 25295]]
CAIR's emissions reductions, EPA incorporated into the CAIR the pre-
existing emission inventory reporting requirements applicable to States
affected by the CAIR. Those CAIR requirements were specific to whether
a State was affected by the annual emissions reductions requirements
for SO2 and NOX or only the ozone-season
reduction requirements for NOX. Because we are applying the
annual emissions reductions requirements to Delaware and New Jersey, we
are also placing these two States under the corresponding provisions of
the emissions reporting requirements. The only practical effect of this
change relative to existing requirements is that if either State
chooses to obtain some of the required annual emissions reductions from
a source which emits less than 2,500 tons/year of both SO2
and NOX and that source is not also made subject to the EPA-
operated emissions trading programs, the State must report the annual
emissions of that source to EPA annually in contrast to the triennial
requirement that presently applies to such sources.
V. Expected Effects of This Action
A. Emissions
The EPA has conducted power sector analysis of the CAIR using the
IPM. The IPM is a dynamic linear programming model that can be used to
examine air pollution control policies for SO2 and
NOX throughout the contiguous United States for the entire
power system. Documentation for IPM can be found at https://
www.epa.gov/airmarkets/epa-ipm.
Emissions of SO2 and NOX in the CAIR region
would be higher under the final CAIR where Delaware and New Jersey are
only included in a summer season ozone cap, similar to Connecticut and
Massachusetts. Since these two States are being included as part of the
annual SO2 and NOX caps for the CAIR, emissions
in the region will be reduced by another 48,000 tons of SO2
and 11,000 tons of NOX from the final CAIR scenario by 2015.
The inclusion of Delaware and New Jersey in the annual CAIR
requirements will result in additional reductions of SO2 and
NOX that will help achieve attainment in downwind States.
These additional reductions are shown in Table V-1.
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\9\ The CAIR region for purposes of this table includes the
following States: Alabama, Arkansas, Connecticut, Delaware, District
of Columbia, Florida, Georgia, Illinois, Indiana, Iowa, Kentucky,
Louisiana, Maryland, Massachusetts, Michigan, Minnesota,
Mississippi, Missouri, New Jersey, New York, North Caorlina, Ohio,
Pennsylvania, South Carolina, Tennessee, Texas, Virginia, West
Virginia, Wisconsin.
Table V-1.--Annual Emissions From Affected Sources for the CAIR Region \9\
[Thousand tons]
----------------------------------------------------------------------------------------------------------------
2010 2015
---------------------------------------------------
SO2 NOX SO2 NOX
----------------------------------------------------------------------------------------------------------------
Base Case................................................... 8,868 2,826 8,056 2,853
Final CAIR (DE and NJ Included for Ozone Season NOX Only)... 5,336 1,592 4,216 1,342
CAIR Modified By This Rule (DE and NJ Included for Annual 5,305 1,582 4,168 1,331
SO2 and NOX)...............................................
Difference between CAIR Scenarios........................... 32 10 48 11
----------------------------------------------------------------------------------------------------------------
Note: Numbers may not add due to rounding.
B. Air Quality
Section VI of the preamble to the CAIR describes the air quality
modeling performed to determine the projected impacts of the CAIR on
PM2.5 and 8-hour ozone of the SO2 and
NOX emissions reductions in the control region modeled. The
modeling used to estimate the air quality impact of these reductions
assumed annual SO2 and NOX controls for Arkansas,
Delaware, and New Jersey (as had been proposed before completion of the
final contribution analysis) in addition to the 23 States plus the
District of Columbia. Since Arkansas, Delaware, and New Jersey are not
included in the final CAIR PM2.5 region, the modeled
estimated impacts are overstated for the final CAIR which excludes all
three States from the CAIR region for PM2.5. Because
Delaware and New Jersey now are subject to the PM2.5-related
emissions limits for SO2 and NOX, the air quality
modeling for the final CAIR better approximates the net effects of the
CAIR plus today's rule, but still overestimates the air quality changes
somewhat due to the continued discrepancy regarding Arkansas. The
Regulatory Impact Analysis for the CAIR discusses these differences in
scenarios in more detail.
The EPA analyzed the impacts of the regional emissions reductions
in both 2010 and 2015. These impacts are quantified by comparing air
quality modeling results for the regional control scenario to the
modeling results for the corresponding 2010 and 2015 base case
scenarios. The 2010 and 2015 emissions reductions and air quality
improvements from the regional control strategy modeled are presented
in summary form in section VI of the preamble to the CAIR and in detail
in the Emission Inventory Technical Support Document and the Air
Quality Modeling Technical Support Document for the CAIR.
The EPA estimates, based on the air quality analysis for the CAIR,
that the required SO2 and NOX emissions
reductions would, by themselves, bring into attainment 52 of the 80
counties that are otherwise expected to be in nonattainment for
PM2.5 in 2010, and 57 of the 75 counties that are otherwise
expected to be in nonattainment for PM2.5 in 2015. The EPA
further estimates that the required NOX emissions reductions
would, by themselves, bring into attainment 3 of the 40 counties that
are otherwise expected to be in nonattainment for 8-hour ozone in 2010,
and 6 of the 22 counties that are expected to be in nonattainment for
8-hour ozone in 2015. In addition, today's rule will improve
PM2.5 and 8-hour ozone air quality in the areas that will
remain nonattainment for those two NAAQS after implementation of
today's rule. Because of today's rule, the States with those remaining
nonattainment areas will find it less burdensome and less expensive to
reach attainment by adopting additional local controls. The CAIR will
also reduce PM2.5 and 8-hour ozone levels in attainment
areas.
We have not conducted an incremental analysis of the air quality
effects from the proposed extension of the annual emissions reductions
requirements to New Jersey and Delaware. However, IPM modeling of EGU
emissions indicates that assuming that all States join the EPA trading
[[Page 25296]]
programs, highly cost-effective emissions reductions will be
distributed across the region in addition to Delaware and New Jersey
themselves, and contribute to the attainment of these two States'
downwind neighbors as well as other States with nonattainment areas.
VI. Statutory and Executive Order Reviews
A. Executive Order 12866: Regulatory Planning and Review
Under Executive Order 12866 (58 FR 51735, October 4, 1993), the
Agency must determine whether a regulatory action is ``significant''
and therefore subject to Office of Management and Budget (OMB) review
and the requirements of the Executive Order. The Order defines
``significant regulatory action'' as one that is likely to result in a
rule that may:
1. Have an annual effect on the economy of $100 million or more or
adversely affect in a material way the economy, a sector of the
economy, productivity, competition, jobs, the environment, public
health or safety, or State, local, or Tribal governments or
communities;
2. Create a serious inconsistency or otherwise interfere with an
action taken or planned by another agency;
3. Materially alter the budgetary impact of entitlements, grants,
user fees, or loan programs or the rights and obligations of recipients
thereof; or
4. Raise novel legal or policy issues arising out of legal
mandates, the President's priorities, or the principles set forth in
the Executive Order.
In view of its important policy implications and potential effect
on the economy of over $100 million, this rule and the CAIR program
inclusive of this rule has been judged to be an economically
``significant regulatory action'' within the meaning of the Executive
Order. As a result, today's rule was submitted to OMB for review, and
EPA prepared an economic analysis of the CAIR program including this
rule entitled ``Regulatory Impact Analysis of the Final Clean Air
Interstate Rule'' (March 2005).
1. What Economic Analyses Were Conducted for the Rulemaking?
The analyses conducted for the CAIR program (CAIR final rule plus
this New Jersey and Delaware rule) provide several important analyses
of impacts on public welfare. These include an analysis of the social
benefits, social costs, and net benefits of the regulatory scenario.
The economic analyses also address issues involving small business
impacts, unfunded mandates (including impacts for Tribal governments),
environmental justice, children's health, energy impacts, and
requirements of the Paperwork Reduction Act.
2. What Are the Benefits and Costs of the CAIR Program?
The benefit-cost analysis shows that substantial net economic
benefits to society are likely to be achieved due to reduction in
emissions resulting from the CAIR program that includes annual
SO2 and NOX controls for New Jersey and Delaware.
The results show that the CAIR program would be highly beneficial to
society, with annual net benefits (benefits less costs) of
approximately $71.4 or $60.4 billion in 2010 and $98.5 or $83.2 billion
in 2015. These alternative net benefits estimates occur due to
differing assumptions concerning the social discount rate used to
estimate the annual value of the benefits of the rule with the lower
estimates relating to a discount rate of 7 percent and the higher
estimates a discount rate of 3 percent. All amounts are reflected in
1999 dollars. For more information, see the NFR for the CAIR published
in the Federal Register (70 FR 25162; May 12, 2005) and the Regulatory
Impact Analysis for the Final Clean Air Interstate Rule (March 2005).
3. What Are the Incremental Costs to the Power Industry Associated
