Approval and Promulgation of Implementation Plans; New Mexico; Regional Haze and Interstate Transport Affecting Visibility State Implementation Plan Revisions; Withdrawal of Federal Implementation Plan for the San Juan Generating Station, 60978-60985 [2014-23905]

Agencies

• ENVIRONMENTAL PROTECTION AGENCY

[Federal Register Volume 79, Number 196 (Thursday, October 9, 2014)]
[Rules and Regulations]
[Pages 60978-60985]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-23905]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R06-OAR-2014-0214; FRL-9917-43-Region 6]


Approval and Promulgation of Implementation Plans; New Mexico; 
Regional Haze and Interstate Transport Affecting Visibility State 
Implementation Plan Revisions; Withdrawal of Federal Implementation 
Plan for the San Juan Generating Station

AGENCY: Environmental Protection Agency.

ACTION: Final rule.

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SUMMARY: The Environmental Protection Agency (EPA) is taking final 
action to withdraw a Federal Implementation Plan (FIP) for New Mexico 
that became effective on September 21, 2011, that applies to the San 
Juan Generating Station (SJGS) in San Juan County, New Mexico, which is 
operated by the Public Service Company of New Mexico (PNM). We are 
removing the FIP requirements because we are taking final action today 
in a separate document in the Federal Register to approve revisions to 
the New Mexico State Implementation Plan (SIP), submitted by the New 
Mexico Environmental Department (NMED) to EPA, which address revised 
Best Available Retrofit Technology (BART) requirements for oxides of 
nitrogen (NOX) and the requirements of the Clean Air Act 
(CAA) concerning non-interference with programs in other states to 
protect visibility.

DATES: This final rule is effective November 10, 2014.

ADDRESSES: EPA has established a docket for this action under Docket ID 
No. EPA-R06-OAR-2014-0214. All documents in the docket are listed in 
the https://www.regulations.gov index. Although listed in the index, 
some information is not publicly available, e.g., Confidential Business 
Information or other information the disclosure of which is restricted 
by statute. Certain other material, such as copyrighted material, will 
be publicly available only in hard copy. Publicly available docket 
materials are available either electronically in https://www.regulations.gov or in hard copy at the Air Planning Section (6PD-
L), Environmental Protection Agency, 1445 Ross Avenue, Suite 700, 
Dallas, Texas 75202-2733. The file will be made available by 
appointment for public inspection in the Region 6 FOIA Review Room 
between the hours of 8:30 a.m. and 4:30 p.m. weekdays except for legal 
holidays. Contact the person listed in the FOR FURTHER INFORMATION 
CONTACT paragraph below or Mr. Bill Deese at 214-665-7253 to make an 
appointment. If possible, please make the appointment at least two 
working days in advance of your visit. A 15 cent per page fee will be 
charged for making photocopies of documents. On the day of the visit, 
please check in at the EPA Region 6 reception area on the seventh floor 
at 1445 Ross Avenue, Suite 700, Dallas, Texas 75202-2733.

FOR FURTHER INFORMATION CONTACT: Mr. Michael Feldman (6PD-L), Air 
Planning Section, Environmental Protection Agency, Region 6, 1445 Ross 
Avenue (6PD-L), Suite 1200, Dallas, TX 75202-2733. The telephone number 
is (214) 665-9793. Mr. Feldman can also be reached via electronic mail 
at feldman.michael@epa.gov.

SUPPLEMENTARY INFORMATION: Throughout this document whenever ``we,'' 
``us,'' or ``our'' is used, we mean EPA.

Table of Contents

I. What is the background for this action?
II. What final action is EPA taking?
III. Responses to comments received
IV. Statutory and Executive Order Reviews

I. What is the background for this action?

    The State of New Mexico adopted and transmitted an Interstate 
Transport SIP revision on September 17, 2007 for the purpose of 
addressing the ``good neighbor'' provisions of the CAA section 
110(a)(2)(D)(i) for the 1997 8-hour ozone NAAQS and the 
PM2.5 NAAQS. EPA disapproved a portion of that SIP submittal 
addressing the requirements with respect to visibility transport and 
concurrently promulgated a FIP establishing enforceable NOX 
and SO2 emission limits for the SJGS on August 22, 2011. EPA 
found that New Mexico sources, except the San Juan Generating Station, 
were sufficiently controlled to eliminate interference with the 
visibility programs of other states (see 76 FR 52388). EPA set 
SO2 emission limits of 0.15 pounds per million British 
Thermal Units (lb/MMBtu) for the four units of the SJGS. EPA set 
enforceable NOX emission limits of 0.05 lbs/MMBtu

[[Page 60979]]

based upon EPA's NOX BART determination for SJGS, to ensure 
that its emissions would meet the ``good neighbor'' requirement for 
visibility protection, as well as the requirement for NOX 
BART. (76 FR 52388, August 22, 2011). EPA's NOX BART 
emission limits can be met by the installation of selective catalytic 
reduction (SCR) at all four units of SJGS. Among other things, the FIP 
also included a sulfuric acid (H2SO4) emission 
limit to minimize the contribution of this pollutant to visibility 
impairment, since emissions of this pollutant can potentially increase 
due to operation of SCR.
    The background for today's final rule withdrawing that FIP and 
today's separate action approving the New Mexico SIP revisions is 
discussed in detail in our May 12, 2014 notice (see 79 FR 26909). The 
comment period on the proposed action was open for thirty days, and 
several comments were received.

II. What final action is EPA taking?

    We are withdrawing the New Mexico Regional Haze (RH) and Interstate 
Transport (IT) FIP at 40 CFR 52.1628, which applies to Units 1, 2, 3, 
and 4 of PNM's San Juan Generating Station. As explained in our May 12, 
2014 proposal (see 79 FR 26909), this action is possible because of our 
separate action to approve the New Mexico SIP revisions, which update 
the New Mexico RH and Visibility Transport SIP to include a revised 
BART determination for the units at the PNM's San Juan Generating 
Station, as well as enforceable SO2 and NOX 
emission limits for the SJGS that sufficiently prevent emissions from 
sources in New Mexico from interfering with the visibility programs of 
other states. New Mexico's revised SIP includes a control scenario 
proposed by PNM that incorporates the shutdown of two of the four units 
at the SJGS by December 31, 2017--a new control scenario that had not 
been evaluated as part of the FIP. EPA has determined that when cost, 
energy and non-air quality environmental impacts, and anticipated 
visibility benefits are taken into consideration, New Mexico's revised 
determination of NOX BART for the SJGS is reasonable. The 
revised BART determination in the New Mexico RH SIP revision results in 
substantial visibility benefits and energy and non-air quality 
environmental benefits, and is highly cost-effective. The incremental 
visibility benefit of the four-SCR scenario of the FIP over the State's 
revised BART determination is small at most Class I areas, and New 
Mexico reasonably concluded that this small additional visibility 
benefit did not justify the increase in costs associated with 
installation of SCR on all four units. EPA's review of the New Mexico 
SIP revisions is discussed in detail in our May 12, 2014 document (see 
79 FR 26909).
    EPA has made the determination that the New Mexico RH and 
Visibility Transport SIP revisions are approvable because the plan's 
provisions meet all applicable requirements of the CAA and EPA 
implementing regulations. EPA is finalizing this action under section 
110 and part C of the Act. The action to approve the SIP is in a 
separate action contained in today's Federal Register. Upon the 
effective date of the Federal Register documents, the requirements in 
the approved SIP apply and the FIP requirements for the SJGS are 
withdrawn.

III. Responses to Comments Received

    We received several comments on our proposed approval of the 2013 
RH SIP revisions. Copies of the comments are available in the docket 
for this rulemaking. A summary of the issues raised in the comment 
letters and our responses to these comments is included in our notice 
of final rulemaking concerning the approval of the New Mexico SIP 
revisions and is reproduced below. (Please see Docket No. EPA-R06-OAR-
2014-0214 in the regulations.gov Web site).
    Comment: A commenter, identified as a part owner of SJGS Unit 4, 
requested a 12-month extension of the SIP's compliance period for 
meeting the new NOX limits. The commenter referred to the 
EPA proposal, ``Carbon Pollution Emission Guidelines for Existing 
Stationary Sources: Electric Utility Generating Units,'' subsequently 
published at 79 FR 34829 (June 18, 2014), and asserted that an 
extension would allow for adequate consideration of the impacts of the 
proposal relative to the investment considerations of installing SNCRs 
at the SJGS. The commenter stated that ownership of SJGS presently 
includes utilities from five Western states, and the interstate nature 
of ownership and emissions complicates a coordinated compliance 
planning process. Another commenter, identified as a part owner of SJGS 
Units 1 and 2, supported the costs, anticipated haze reduction, and 
other environmental benefits associated with the 2013 RH SIP revision, 
but similarly requested that EPA amend its approval and provide 
additional time for installation of SNCR on the basis that more time is 
needed to study the proposed standards for reducing carbon pollution at 
existing EGUs.
    Response: EPA believes that CAA section 111(d) efforts and actions 
will tend to contribute to overall air quality improvements and thus 
should be complementary to criteria pollutant and regional haze SIP 
efforts but do not provide a basis for delaying implementation of these 
efforts. See 79 FR at 34931. The 111(d) proposal specifically mentions 
the next 10-year SIP revision for regional haze that is due by July 
2018 and covers the time period through 2028, explaining that the 
timeframes proposed for submittal of the CAA section 111(d) state plans 
will allow considerable time for coordination by states in the 
development of their respective plans. The proposal does not suggest 
that further delays are warranted for implementing the regional haze 
requirements that were first due in December 2007. Indeed, states and 
affected sources will be able to take into account requirements of 
programs such as Regional Haze in considering the development of state 
plans under section 111(d).
    More importantly here, EPA cannot alter an otherwise approvable SIP 
revision to extend a compliance date. The 2013 RH SIP revision 
submitted by New Mexico provides the compliance date. Moreover, the 
compliance dates that New Mexico set are as ``expeditious as 
practicable,'' as required by the CAA. See CAA section 169A(b)(2)(A), 
(g)(2). Because the compliance dates meet CAA requirements, EPA cannot 
establish different compliance dates when taking action on the SIP 
revision. See CAA section 110(k)(3), (l).
    Comment: A commenter stated that unit retirements and 
NOX controls at SJGS would reduce regional haze and provide 
other significant environmental, economic, and health benefits, and 
states that ``these additional benefits must be recognized.'' The 
commenter requested, however, that EPA's approval contain a statement 
reflecting EPA's willingness to consider eliminating the NOX 
emission control requirements on Units 1 and 4 if, by December 31, 
2016, there is a commitment to permanently retire Unit 1 and/or 4 
within a reasonably short time-frame. PNM responded to this request in 
its own comment (although it mistakenly cited the date of December 31, 
2015 when paraphrasing the comment). PNM's comment stated that EPA 
should reject the request for an EPA statement regarding the retirement 
of additional capacity because the Agency lacks any analysis or basis 
upon which to evaluate the efficacy or legality of the request.
    Response: We decline to endorse a proposal not before us, as 
suggested by

[[Page 60980]]

the commenter. Because the 2013 RH SIP revision meets CAA requirements, 
we are required to approve it. See CAA section 110(k)(3), (l).
    Comment: PNM submitted a comment supporting the proposed rule, 
agreeing that the 2013 RH SIP revision is reasonable, even when EPA's 
estimated SCR costs are used. PNM asserted, however, that its own 
estimated SCR capital costs were confirmed by detailed bids from 
engineering, procurement, and construction contractors, and that none 
of the bids were in the range of EPA's estimated SCR costs. PNM 
believed that these bids should satisfy any requirement for enhanced 
documentation to support higher SCR costs, but acknowledged that their 
cost estimates provide different treatment to items such as sorbent 
injection, apportionment of balanced draft costs, and fees and 
contingencies.
    Response: We appreciate PMN's comment supporting approval. As 
identified by the comment, EPA's cost analysis for SCR was based on a 
different design (e.g., no costs for sorbent injection) than the design 
PNM used when soliciting bids from vendors. PNM's bids were not 
submitted with the comment and, based on the available documentation, 
we remain unable to conclude that certain line items in PNM's SCR cost 
estimates are well supported. While the BART Guidelines explain that 
data from vendor bids may be used in developing equipment cost 
estimates, this does not mean that bottom-line figures can serve as a 
substitute for a full cost analysis or that all costs included therein 
would be appropriate for making an assessment of cost-effectiveness. 
The expectation remains that the cost analysis maintain and improve 
consistency through adherence to the OAQPS Control Cost Manual, where 
possible. Moreover, the BART Guidelines state that documentation is 
expected, and indeed especially important, where a state believes that 
costs will be unreasonable even though other recent retrofits have 
cost-effectiveness values that are within what has been considered a 
reasonable range. As we established in our FIP, recent SCR retrofits at 
coal-fired power plants have been found to be cost-effective, and this 
cost effectiveness is generally validated by large emission reductions 
even when there are large capital costs.
    Comment: NMED provided comments in support of approval and stated 
that they generally concur with our description and evaluation of the 
State Alternative for NOX BART.
    Response: We appreciate this comment.
    Comment: NMED commented that states cannot be required to take a 
unit-specific (or unit-by-unit) approach to assessing the BART factors. 
In American Corn Growers v. EPA, 291 F.3d 1, 8 (D.C. Cir. 2002), a 
reviewing court held that it was invalid to consider visibility impacts 
on a multiple-source basis while employing a source-specific approach 
to the other four BART factors. The commenter stated that requiring 
states to assess visibility on a facility-wide basis while considering 
the other factors on a unit-by-unit basis would be similarly 
unsupported by the statute and would impermissibly constrain state 
authority.
    Response: We disagree with this comment. In American Corn Growers, 
the D.C. Circuit held that EPA could not adopt a ``group-BART 
approach'' to the visibility factor because it could force states to 
require BART controls at some sources without any empirical evidence of 
a particular source's contribution to visibility impairment in a Class 
I area. As a result, the Regional Haze Rule and BART Guidelines require 
states to analyze the five statutory factors for each BART-eligible 
source without reference to the benefits that BART will achieve at 
other sources. Beyond this, however, the court did not opine on how the 
BART factors should be analyzed or weighed by states, let alone 
proscribe a unit-specific or prescribe a facility-wide approach to 
BART.
    As we recently explained in our action on the Wyoming regional haze 
SIP, see 79 FR 5031 (Jan. 30, 2014), the BART Guidelines prescribe that 
states ``must conduct a visibility improvement determination for the 
source(s) as part of the BART determination,'' \1\ and we interpret 
this language as requiring states to consider the visibility 
improvement from BART applied to the BART-eligible source as a whole. 
We do not believe that either the CAA or the BART Guidelines mandate 
either a unit-specific or a facility-wide approach to analyzing or 
weighing the remaining BART factors. In most circumstances, however, we 
believe that states should use a unit-specific approach to assessing 
the technical feasibility and costs of controls options, as well as the 
existing controls and remaining useful life of BART-eligible units. 
This approach is clearly contemplated by the BART Guidelines and has 
been used for decades in other CAA contexts, such as the evaluation of 
Best Available Control Technology (BACT) for new and modified major 
stationary sources.\2\ A unit-specific approach to these factors is 
appropriate because the age, type, size, location, and emission 
characteristics of the various emission units at a source can differ 
greatly, and many control options by design apply to a single unit. 
However, in unique circumstances, such as in situations where a control 
strategy can be implemented facility-wide or where the benefits of unit 
shutdowns must be taken into account, then we believe that the CAA and 
BART Guidelines provide states with the flexibility to analyze and 
weigh the BART factors for the source as a whole, rather than for its 
constituent emission units.
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    \1\ 40 CFR part 51, app. Y, section IV.D.5.
    \2\ See New Source Review Workshop Manual (Oct. 1990), available 
at https://www.epa.gov/ttn/nsr/gen/wkshpman.pdf.
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    Comment: NMED responded to a statement in the proposal that 
expressed some concern with the appropriateness of including 
SO2 reductions from units 1 and 4 in one of the 
NOX BART control options analyzed, rather than as part of 
the facility's baseline emissions, by explaining that the 
SO2 limit of 0.10 lbs/MMBtu is required by the 2013 RH SIP 
revision alone and would not be required if the FIP continues to remain 
in force.
    Response: While the inclusion of the SO2 reductions in 
the SIP helps to further demonstrate non-interference with the 
visibility protection programs of other states, in keeping with the 
visibility transport requirements of CAA section 110(a)(2)(D)(i)(I), 
and helps in showing the overall visibility benefits of the 2013 RH SIP 
revision, we had noted that those reductions do not specifically lend 
support to a visibility improvement determination for NOX 
BART through the application of NOX controls. However, no 
commenters took issue with the inclusion of SO2 reductions 
in the studied scenarios or insisted that refinements were necessary on 
this point, and it remains our view that the inclusion of the 
reductions did not meaningfully impact the evaluation of visibility 
benefits due to NOX reductions at the facility.
    Comment: The Navajo Nation submitted a comment supporting the 
proposal as the best scenario for meeting BART, endorsing it for having 
reasonable costs of compliance and a realistic timeframe. The comment 
also stated that the 2013 RH SIP revision addressed concerns regarding 
potential job losses faced by Navajo work forces at the SJGS and San 
Juan mine more effectively than EPA's FIP.
    Response: We appreciate this comment supporting approval.

[[Page 60981]]

    Comment: One commenter stated that the 2013 RH SIP revision appears 
to be an alternative consistent with the intent of 40 CFR 51.308(e)(2) 
and therefore needs to demonstrate greater reasonable progress than 
EPA's BART determination. The fact that the 2013 RH SIP revision does 
not demonstrate greater reasonable progress than EPA's BART 
determination gave the commenter concern because the commenter 
considered it a departure from rules and guidance. The commenter also 
asserted that previous EPA decisions have required a source to 
demonstrate its proposed alternative is better than EPA's BART 
determination, citing actions for Idaho and the Four Corners Power 
Plant.\3\
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    \3\ The comment provided a citation to 79 FR 23273 (April 28, 
2014) relating to the Tasco facility in Idaho, and one to ``78 FR 
24112,'' which we interpret as having intended to refer to 78 FR 
60700 (October 2, 2013) (bearing ``FR Doc. 2013-24112'').
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    Response: We disagree that the 2013 RH SIP revision appears to be a 
BART alternative under Sec.  51.308(e)(2). New Mexico explicitly stated 
that it was not evaluating a BART alternative when responding to 
comments during the state process and again when submitting comments to 
support our proposed approval. Therefore, New Mexico was not required 
to make a demonstration of greater reasonable progress. Instead, New 
Mexico evaluated a new, source-specific BART determination under Sec.  
51.308(e)(1). To fully account for the source owner's proposed unit 
shutdowns, New Mexico chose to weigh the BART factors in light of 
source-wide considerations. As explained in our proposal and elsewhere 
in our responses to comments, we believe that this approach is 
permissible under the CAA and the BART Guidelines. The prior EPA 
actions cited by the commenter are not relevant to our action on New 
Mexico's NOX BART determination for SJGS. While both the 
Four Corners and Idaho actions contained BART alternatives that 
demonstrated greater reasonable progress, we are not evaluating a BART 
alternative here. Moreover, while the Idaho action also involved two 
new BART determinations that happened to be more stringent than the 
state's original BART determinations, neither the CAA nor our 
regulations require a new BART determination to be more stringent in 
every instance in order to supersede a prior BART determination.
    Comment: One commenter argued that the CAA requires that any 
alternative regional haze strategy must outperform the visibility gains 
of the existing strategy or, in other words, be ``better than BART,'' 
and the 2013 RH SIP revision fails to accomplish this. Citing to CAA 
section 7410(a) and (l), the commenter argued that the characterization 
of the 2013 RH SIP revision as including a new BART determination is 
plainly unlawful because the State has not undertaken the BART analysis 
required by the CAA and BART Guidelines, and EPA did not provide any 
explanation for why the SIP revision is approvable when the FIP had a 
more stringent BART determination.
    Response: As explained above, the 2013 RH SIP revision was not 
submitted to meet Sec.  51.308(e)(2) requirements, so it is not 
required to be better than BART. As we stated in the proposal, the 2013 
RH SIP revision contains a new, source-specific BART analysis that is 
based on different underlying facts than those that were present when 
we evaluated our FIP. Thus, the commenter's assertion that the state 
failed to undertake a BART analysis is clearly incorrect. Finally, 
contrary to the commenter's assertion, CAA section 110(l) does not 
prohibit a state from submitting a SIP that is less stringent than a 
FIP. Our proposal provided an analysis conducted under section 110(l), 
which showed that the 2013 RH SIP revision would not interfere with the 
attainment or maintenance of any NAAQS or any other CAA requirement. 
See 79 FR at 26920. Because New Mexico complied with the CAA's 
visibility protection provisions, the Regional Haze Rule, and the BART 
Guidelines, and made a reasonable control determination based on the 
weighing of the five factors, EPA is required to approve the 2013 RH 
SIP revision.
    Comment: One commenter stated that the 2013 RH SIP revision does 
not comply with the mandatory unit-specific analytical approach 
required by the CAA. The commenter argued that the BART Guidelines 
require BART to be determined on a unit-specific basis because a BART 
emission limit must be established for each affected emission unit. The 
commenter also pointed out that the BART Guidelines provide an example 
of a unit-specific approach where they state that ``control options 
must be analyzed for Units B through H as well as Unit A.'' 
Consequently, the commenter concluded that New Mexico and EPA are 
required to follow the unit-specific approach.
    Response: We disagree with this comment. The portion of the BART 
Guidelines cited by the commenter explains how all BART units at the 
subject to BART source must be included in the BART analysis. The 2013 
SIP revision implements BART at each BART-subject unit by requiring 
either shutdowns or controls. Also, while the BART Guidelines clearly 
contemplate that states will analyze technical feasibility and cost-
effectiveness on a unit-specific basis, they do not explicitly require 
such an approach, nor do they provide guidance for situations in which 
a source proposes unit shutdowns as an emission-reduction strategy. 
Moreover, contrary to the commenter's assertion, the CAA does not 
mandate any specific analytical approach. Consequently, in situations 
where a state is contemplating a novel control scenario not 
contemplated by the BART Guidelines, such as one that involves unit 
shutdowns, we believe that states have the flexibility to tailor their 
BART analyses by evaluating and weighing the BART factors on a 
facility-wide (i.e., ``source'') basis rather than on a unit-specific 
basis in order to account for the emission reductions and benefits that 
would directly result from the shutdowns. Moreover, while BART emission 
limits are also typically established for each unit that comprises the 
BART-eligible source, as New Mexico chose to do here, nothing in the 
CAA or BART Guidelines prevents a state from setting an emission limit 
that averages emissions across multiple units, so long as that limit is 
``based on the degree of reduction achievable through the best system 
of continuous emission reduction for each pollutant.'' See 40 CFR 
51.301.
    Comment: One commenter stated that a facility-wide BART 
determination is inconsistent with other EPA actions. The commenter 
cited to EPA actions in Indiana and Montana to support this 
contention.\4\ The commenter also pointed out that EPA used a unit-
specific approach to analyzing the first four factors when promulgating 
its FIP for SJGS. The commenter called EPA's proposal an unexplained 
departure from EPA's past practice in implementing its binding 
guidelines.
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    \4\ Specifically, the commenter cited our Indiana regional haze 
SIP action (77 FR 3975, 3982 (Jan. 26, 2012)) for its statement that 
a source needs to ``implement BART at each BART-subject unit,'' and 
the Montana regional haze FIP (77 FR 57864, Sept. 18, 2012) for 
discussing statutory BART factors for units at a BART source.
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    Response: We disagree with this comment for the same reasons 
explained above. EPA's actions in Indiana, Montana, and our FIP for 
SJGS did not involve unit shutdowns and therefore are not determinative 
of how the BART statutory factors should be considered and weighed in 
this context. Also, contrary to the commenter's assertion, we explained 
in our proposal why New Mexico's approach was

[[Page 60982]]

reasonable in light of the unique circumstances presented and, on that 
basis, cannot validly be seen as any departure from past actions. As 
was stated, the state's approach reasonably takes into account the 
visibility, energy, and non-air quality environmental benefits 
associated with unit shutdowns. See 79 FR 26918. Furthermore, the 2013 
SIP revision implements BART at each BART-subject unit by requiring 
either shutdowns or controls.
    Comment: A commenter stated that EPA's proposal arbitrarily 
rejected SCR in favor of less effective pollution controls even though 
EPA found that an emission limitation based on SCR was BART in the FIP. 
The commenter explained that SCR provides the best visibility outcomes 
and is cost-effective.
    Response: Under different factual circumstances, we determined that 
SCR for the four SJGS units had reasonable average cost-effectiveness 
values and would promote significant visibility improvements, thereby 
supporting the basis for the emission limits set forth in the FIP. In 
the 2013 RH SIP revision, New Mexico demonstrated that SNCR in tandem 
with shutdowns has visibility benefits on par with those anticipated 
from the FIP at much lower overall costs, while also reducing overall 
energy and non-air quality environmental impacts. Although we continue 
to believe that SCR is a cost-effective control and are not abandoning 
the legal and technical basis for our FIP, we believe that when cost, 
energy and non-air quality environmental impacts, and anticipated 
visibility benefits are all taken into consideration, New Mexico's 
determination that the State Alternative is BART is reasonable. While 
SCR remains cost-effective on a $/ton basis, the incremental visibility 
benefit of the four-SCR scenario of the FIP over the State Alternative 
is small at most Class I areas, and New Mexico reasonably concluded 
that this small additional visibility benefit, when considered with the 
difference in the energy and non-air quality environmental impacts, did 
not justify the large increase in costs associated with the 
installation of SCR on all four units.
    Comment: One commenter stated that the visibility impacts of the 
State Alternative are significantly worse than the four-SCR scenario in 
the FIP. The commenter explained that the difference in visibility 
impacts between the two scenarios will be 0.47 dv at Mesa Verde, 0.24 
dv at Canyonlands, and 0.13 dv at Weminuche. The sum of these 
visibility differences is 0.84 dv, which is above the 0.5 dv threshold 
that is used to determine ``significance.'' Also, the State Alternative 
will result in five more days with impacts over 1 dv at Mesa Verde, 
three more days at Arches, and two more days at both Canyonlands and La 
Garita when compared to the four-SCR scenario in the FIP.
    Response: As we stated in the proposal when comparing the two 
scenarios, while we have some concern with the modeled visibility 
differences between the two control scenarios for Mesa Verde and 
Canyonlands, we find that the State's decision to select the State 
Alternative was ultimately reasonable, especially considering the costs 
of compliance and the energy and non-air quality environmental impacts 
of the two scenarios. We noted that the difference in visibility 
impacts between the two scenarios are negligible at most of the Class I 
areas examined. The average difference at the 13 other Class I areas 
(other than Mesa Verde, Canyonlands, and Weminuche) is less than 0.1 dv 
between the two control scenarios. In considering the number of days 
impacted, eleven Class I areas show no difference in the number of days 
with impacts over 1 dv. We also note that the typical application of 
0.5 dv as a contribution threshold comes in the context of assessing 
impacts at a single Class I area, not cumulative impacts across 
multiple Class I areas.
    Comment: One commenter stated that the CAA requires EPA to either 
improve the State Alternative or reject it altogether.
    Response: We disagree with this comment. As we explained earlier, 
EPA is required to approve any SIP revision that meets CAA 
requirements. See CAA section 110(k)(3), (l). EPA does not have 
authority to improve a SIP revision that is otherwise approvable, and 
the commenter has provided no basis for EPA to disapprove the 2013 RH 
SIP revision.
    Comment: One commenter stated that EPA based its proposed approval 
on a fundamentally flawed cost-benefit analysis that artificially 
inflated the cost and artificially reduced the benefits of SCR. The 
commenter also thought that New Mexico underestimated the costs of 
SNCR. The commenter argued that EPA had no rational basis for 
concluding that cost refinements would not change the result. The 
commenter cited to Center for Biological Diversity v. National Highway 
Traffic Safety Administration, 538 F.3d 1172, 1201-03 (9th Cir. 2008), 
for the proposition that EPA must re-calculate a cost value that would 
significantly alter the analysis. With cost corrections, the commenter 
believed that New Mexico's capital cost assumptions for SCR would be 
cut in half, demonstrating that SCR remains cost-effective at Units 1 
and 4. The commenter provided an attachment that highlighted how New 
Mexico's cost range for SCR at SJGS was well above the cost per 
kilowatt for SCR demonstrated by other cost studies for comparable 
retrofits.
    Response: We maintain our view that SCR has favorable and 
reasonable average cost-effectiveness values at SJGS under the 
technical record developed for the FIP, and we agree with the comment 
that New Mexico's cost range for SCR is still high compared to other 
cost studies. Even so, as discussed in response to comments from PNM 
concerning cost, the state's BART selection in this case is reasonable. 
New Mexico was advantaged with the full technical record that we 
developed to promulgate the FIP, and the state declared that it would 
favor the 2013 RH SIP revision even if it were to adopt and utilize the 
lower costs for SCR that we had relied on in promulgating the FIP. In 
addition, in our proposed action, we recalculated the annual cost and 
incremental cost-effectiveness of the four-SCR option using the cost 
estimates presented in the FIP. Thus, there is a significant record 
basis for our finding that lower SCR costs would not change the result 
of our action.
    As to the state's alleged underestimation of SNCR costs, the 
comment does not provide any details to enable us to provide a 
response. We also considered the Ninth Circuit's decision in Center for 
Biological Diversity v. National Highway Traffic Safety Administration 
and do not see how it has any bearing on the issue of costs in this 
case. In that case, the Ninth Circuit faulted NHTSA for its failure to 
monetize the value of carbon emissions in setting fuel economy 
standards. In addition to the fact that the case did not concern BART 
determinations, the comment does not identify any particular line item 
in the state's analysis of SCR costs that has not been monetized.
    Comment: One commenter stated that our proposal failed to consider 
the prospect of installing SCR on Units 1 and 4, while still shutting 
down Units 2 and 3. The commenter noted that such a scenario would lead 
to even greater visibility benefits. The commenter provided modeled 
visibility results and estimates of the level of emission reductions 
that would result from this scenario and concluded that the State 
Alternative was inferior.
    Response: While we acknowledge that a scenario at SJGS involving 
two shutdowns and two SCRs would result in superior visibility benefits 
than the State Alternative or even the FIP, the

[[Page 60983]]

state did not present this scenario to us in the 2013 RH SIP revision. 
As we explained above, we are required to evaluate the SIP revision 
that is before us. Moreover, in situations that involve the voluntary 
retirement of units, states need the flexibility to analyze control 
scenarios that have the support of the source owner. There is no 
evidence in the record indicating that PNM would have volunteered to 
retire two of its units if SCR were required on the remaining units.
    Comment: One commenter stated that the NMED's BART analysis 
contains a flawed visibility analysis. The commenter argued that NMED 
arbitrarily ignored fourteen Class I areas between 300 km and 440 km 
from SJGS in its cumulative visibility analysis, which was an arbitrary 
and unexplained departure from EPA's analytical approach that was 
followed in analyzing the Big Stone and Colstrip power plants. The 
commenter concluded that the failure to assess impacts at more distant 
Class I areas masked the full visibility benefit of SCR. Finally, the 
commenter referred to comments submitted by the National Park Service 
to New Mexico on their proposed SIP revision, which stated that the 
visibility modeling was not done according to the BART Guidelines.
    Response: We disagree with this comment. In regard to selecting a 
model and developing a modeling protocol, the BART Guidelines refer to 
our Guideline on Air Quality Models \5\ and the Interagency Workgroup 
on Air Quality Modeling (IWAQM) Phase 2 report.\6\ The IWAQM report 
reviewed model-performance evaluations of CALPUFF as a function of 
distance from the source and recommended the use of CALPUFF for 
transport distances of order 200 km and less. The report also 
recommended that the use of CALPUFF for characterizing transport beyond 
200 to 300 km should be done cautiously with an awareness of the likely 
problems involved. Consistent with this recommendation, we believe that 
it is reasonable to use CALPUFF to evaluate visibility impacts up to 
300 km. While we agree with the commenter that emissions from SJGS may 
impact Class I areas at distances greater than 300 km, the IWAQM report 
cautions that CALPUFF results are less reliable at distances greater 
than 300 km. Therefore, we do not think that it is arbitrary to exclude 
more distant receptors from a visibility analysis or to base the 
visibility assessment for a BART determination on visibility impacts 
within 300 km from the source.
---------------------------------------------------------------------------

    \5\ Appendix W to 40 CFR part 51 ``Guideline to Air Quality 
Models'' states: ``It was concluded from these case studies that the 
CALPUFF dispersion model had performed in a reasonable manner, and 
had no apparent bias toward over or under prediction, so long as the 
transport distance was limited to less than 300 km.''
    \6\ Environmental Protection Agency, 1998. Interagency Workgroup 
on Air Quality Modeling (IWAQM) Phase 2 Summary Report and 
Recommendations for Modeling Long-Range Transport Impacts. 
Publication No. EPA-454/R-98-019. Office of Air Quality Planning & 
Standards, Research Triangle Park, NC. (NTIS No. PB 99-121089)
---------------------------------------------------------------------------

    Contrary to the commenter's suggestion, this was the same approach 
followed when modeling the visibility benefits associated with various 
control scenarios at the Colstrip power plant. See 77 FR 57867-68. In 
regard to the Big Stone power plant, South Dakota performed modeling 
for Class I areas beyond 300 km only because there were no Class I 
areas within 300 km of the source. As a result, South Dakota worked 
with EPA to develop a special modeling protocol that incorporated 
CALPUFF's puff-splitting option despite the IWAQM report's conceptual 
concerns with that feature. Moreover, South Dakota expressly 
acknowledged that it was departing from EPA's guidance. Consequently, 
we believe that Big Stone presented an exception to the general rule 
that CALPUFF be applied to assess visibility impacts only on those 
Class I areas within 300 km of the source. Finally, in regard to NPS's 
comments concerning the visibility analysis during the state process, 
we agree with the response provided at the time by NMED \7\ and note 
that NPS did not raise these concerns again in their comments on our 
proposed action.
---------------------------------------------------------------------------

    \7\ Available as NMED Ex. 14 of the 2013 RH SIP revision.
---------------------------------------------------------------------------

    Comment: A commenter stated that the proposed 0.23 lb/MMBtu limit 
does not apply to each unit due to a cross-unit averaging provision, so 
the emissions from a given unit could be higher than 0.23 lb/MMbtu.
    Response: In this case, it is appropriate for the 2013 RH SIP 
revision to allow SJGS to average emissions across its BART-eligible 
emission units within the fence line. The BART Guidelines allow this 
approach when, as here, the reductions would be equal to those 
reductions that would be obtained by simply controlling each of the 
BART-eligible units that constitute the BART source. Because SJGS is 
required to demonstrate continuous compliance over a reasonable 
averaging time, the reductions associated with the assigned limit are 
assured. As part of its five-factor analysis, New Mexico evaluated the 
control effectiveness of SNCR and determined that SNCR could achieve an 
emission rate of 0.23 lb/MMBtu on each unit based on tests and an 
updated performance guarantee from the vendor.\8\ Consistent with the 
BART Guidelines, the permit conditions at A112C specify the averaging 
time and calculation methodology for the enforceable emission limit, 
which must be calculated on a 30-boiler-operating-day basis, averaged 
across the two units. While we agree with the commenter that emissions 
from either unit may exceed 0.23 lb/MMBtu on a given day, the combined 
emissions from both units cannot exceed 0.23 lb/MMBtu over the course 
of the averaging period, so total emission reductions will be equal to 
those that would be obtained under two separate limits.
---------------------------------------------------------------------------

    \8\ Public Service Company of New Mexico, San Juan Generating 
Station, Revised SNCR Analysis, February 11, 2011 (2011 NM RH SIP, 
NMED Ex. 7t)
---------------------------------------------------------------------------

    Comment: One commenter alleged that our proposal implied that PNM's 
decision to retire Units 2 and 3 was solely taken for the purpose of 
meeting BART. The commenter suggested that EPA should explicitly state 
whether this was the case for the record or discuss whether independent 
reasons would require or motivate the shutdown of the units.
    Response: We fail to see how this comment is relevant to our 
evaluation of the 2013 RH SIP revision. Nevertheless, we note that, 
when developing the FIP, we assumed that the remaining useful life of 
all four units at SJGS exceeded 30 years, and the 2013 RH SIP revision 
provides no information that would change that assumption. Nor does the 
SIP revision provide any information to suggest that PNM had 
motivations other than creating a more cost-effective BART-compliance 
scenario when volunteering to shut down Units 2 and 3.
    Comment: A commenter stated that, while our proposal implied that 
there will be no capacity increase elsewhere or at the SJGS to replace 
the lost capacity from Units 2 and 3, the final rule should make this 
explicit to properly give weight to the benefits from their retirement.
    Response: We disagree with this comment. As an initial matter, our 
proposal did not imply that the retirement of Units 2 and 3 could be 
undertaken without the possible need to address lost capacity. Most 
likely, the lost capacity will be replaced through some combination of 
conservation, efficiency, and new capacity. More importantly, however, 
the CAA does not require an analysis of the statutory factors to 
include the consideration of hypothetical emissions increases at

[[Page 60984]]

other facilities or even at the same facility due to lost capacity. We 
also note that any emissions units that might be constructed at SJGS in 
the future would likely be subject to both BACT and any applicable new 
source performance standards. Moreover, all emission units would be 
subject to analysis under the regional haze requirements for reasonable 
progress in future planning periods.
    Comment: One commenter asserted that our proposal failed to explain 
how New Mexico could permissibly reach a conclusion that directly 
opposes EPA's conclusion in the FIP. The commenter stated that the 
voluntary retirement of Units 2 and 3 did not change the fact that SCR 
remains cost-effective at the Units 1 and 4.
    Response: We disagree that the 2013 RH SIP reached a conclusion 
that directly opposes the conclusion we made in promulgating the FIP. 
Under different factual circumstances, we determined that SCR for the 
four SJGS units had reasonable average cost-effectiveness values and 
would promote significant visibility improvements, thereby supporting 
the basis for the emission limits set forth in the FIP. As we stated in 
the proposal, the 2013 RH SIP revision contains a new, source-specific 
BART analysis that is based on different underlying facts than those 
that were present when we evaluated our FIP. We were not presented with 
the retirement of Units 2 and 3 when we promulgated the FIP. With this 
information in hand, New Mexico permissibly conducted a new BART 
analysis using a facility-wide approach that allowed the full range of 
visibility, energy, and non-air quality environmental benefits 
associated with the shutdowns to be taken into account. While the 
average cost-effectiveness of SCR on Units 1 and 4 remains reasonable, 
New Mexico demonstrated that the incremental cost-effectiveness of the 
four-SCR scenario in our FIP over the State Alternative was high when 
compared against the additional visibility improvements from the 
former, while also considering the energy, and non-air quality 
environmental benefits associated with the State Alternative.
    Comment: One commenter thought that the timeline for the 
installation of SNCR was too long because SNCR is a simpler technology 
to install than SCR.
    Response: We agree that SNCR is a simpler technology to install 
than SCR and requires less time for installation. New Mexico 
determined, and we agree, that the compliance timeframe in the 2013 RH 
SIP revision is as expeditious as practicable, as required under 40 CFR 
51.308(e)(1)(iv).
    Comment: One commenter thought that the 0.05 lb/MMBtu rate used for 
the study of SCR as a BART control option was likely too high. The 
commenter suggested that many units, such as those in Dry Fork, WY and 
Morgantown, MD, are routinely achieving emission rates in the range of 
0.02-0.04 lb/MMBtu. Reducing the studied emission limit for SCR to 0.04 
lb/MMBtu would show the option to be even more cost-effective.
    Response: We disagree that lower control rates needed to be 
evaluated for SCR. We evaluated the monthly emission data from these 
two facilities for the past several years (available at EPA's Air 
Market Program data Web site: www.epa.gov/ampd). All three units have 
monthly emission rates that sometimes exceed 0.04 lb/MMBtu. Indeed, the 
Morgantown units have months where the monthly emission rate is 0.05 
lb/MMBtu or higher. In promulgating the FIP, we evaluated the 
performance of both new and retrofit SCRs and determined that 0.05 lb/
MMBtu on a 30-boiler-operating-day average was the appropriate emission 
limit for SCR at the SJGS units. See 76 FR 491 and 76 FR 52388. New 
Mexico appropriately used this same rate in their cost and visibility 
analyses for the four-SCR scenario as part of its BART evaluation.

IV. Statutory and Executive Order Reviews

A. Executive Order 12866--Regulatory Planning and Review and Executive 
Order 13563: Improving Regulation and Regulatory Review

    This type of action is exempt from review under Executive Orders 
12866 (58 FR 51735, October 4, 1993) and 13563 (76 FR 3821, January 21, 
2011).

B. Paperwork Reduction Act

    This FIP withdrawal action does not impose an information 
collection burden under the provisions of the Paperwork Reduction Act, 
44 U.S.C. 3501 et seq. because this FIP amendment under section 110 and 
part C of the Clean Air Act will not in-and-of itself create any new 
information collection burdens. Because this final action does not 
impose an information collection burden, the Paperwork Reduction Act 
does not apply.

C. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) generally requires an agency 
to conduct a regulatory flexibility analysis of any rule subject to 
notice and comment rulemaking requirements 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 not-for-profit enterprises, 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 as defined 
by the Small Business Administration's (SBA) regulations at 13 CFR 
121.201; (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-for-profit enterprise which is independently owned and operated 
and is not dominant in its field.
    This rule withdraws the FIP for PNM's San Juan Generating Station, 
which is not a small entity, and does not create any new requirements. 
After considering the economic impact of this 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.

D. Unfunded Mandates Reform Act

    This FIP withdrawal action contains no Federal mandates under the 
provisions of Title II of the Unfunded Mandates Reform Act of 1995 
(UMRA), 2 U.S.C. 1531-1538 for State, local, or tribal governments or 
the private sector. This action imposes no enforceable duty on any 
State, local or tribal governments or the private sector. Therefore, 
this action is not subject to the requirements of sections 202 or 205 
of the UMRA.
    This FIP withdrawal action is also not subject to the requirements 
of section 203 of UMRA because it contains no regulatory requirements 
that might significantly or uniquely affect small governments. This 
action removes a Federal plan for PNM's San Juan Generating Station. 
Small governments are not impacted.

E. Executive Order 13132--Federalism

    This FIP withdrawal action 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 responsibilities among the various levels of 
government, as specified in Executive Order 13132. The CAA establishes 
the scheme whereby states take the lead in developing SIPs including 
SIPs to attain the NAAQS and to meet other applicable CAA requirements 
including the Best

[[Page 60985]]

Available Retrofit requirements in CAA section 169(b)(2)(A) and the 
Visibility Impairment requirements in CAA section 110(a)(2)(D)(i)(II). 
This action will not modify this relationship. Thus, Executive Order 
13132 does not apply to this action.

F. Executive Order 13175--Consultation and Coordination With Indian 
Tribal Governments

    This FIP withdrawal action does not have tribal implications, as 
specified in Executive Order 13175 (65 FR 67249, November 9, 2000). In 
this action, EPA is not addressing any Tribal Implementation Plans. 
This action is limited to the withdrawal of the New Mexico RH and IT 
FIP for PNM's San Juan Generating Station. Thus, Executive Order 13175 
does not apply to this action. Consistent with EPA policy, EPA offered 
consultation to tribes regarding this rulemaking action.

G. Executive Order 13045--Protection of Children From Environmental 
Health Risks and Safety Risks

    EPA interprets Executive Order 13045 (62 FR 19885, April 23, 1997) 
as applying only to those regulatory actions that concern health or 
safety risks, such that the analysis required under section 5-501 of 
the executive order has the potential to influence the regulation. This 
action is not subject to EO 13045 because EPA in withdrawing the New 
Mexico RH and IT FIP for PNM's San Juan Generating Station, as 
authorized by the CAA, EPA considers visibility and not health or 
safety risks.

H. Executive Order 13211--Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use

    This FIP withdrawal action is not subject to Executive Order 13211 
(66 FR 28355, May 22, 2001) because it is exempt from review under 
Executive Order 12866.

I. National Technology Transfer and Advancement Act

    Section 12(d) of the National Technology Transfer and Advancement 
Act of 1995 (NTTAA), Public Law 104--113, 12(d) (15 U.S.C. 272 note) 
directs EPA to use voluntary consensus standards in its regulatory 
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, and business practices) that are developed or adopted by 
voluntary consensus standards bodies. NTTAA directs EPA to provide 
Congress, through OMB, explanations when the Agency decides not to use 
available and applicable voluntary consensus standards. This FIP 
withdrawal action for PNM's San Juan Generating Station does not 
involve technical standards. Therefore, EPA did not consider the use of 
any voluntary consensus standards.

J. Executive Order 12898--Federal Actions To Address Environmental 
Justice in Minority Populations and Low-Income Populations

    This final rule does not provide EPA with the discretionary 
authority to address, as appropriate, disproportionate human health or 
environmental effects, using practicable and legally permissible 
methods, under Executive Order 12898 (59 FR 7629, February 16, 1994).

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. EPA will submit a report containing this action 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 not a ``major rule'' as defined by 5 U.S.C. 
804(2).

L. Petitions for Judicial Review

    Under section 307(b)(1) of the Clean Air Act, petitions for 
judicial review of this action must be filed in the United States Court 
of Appeals for the appropriate circuit by December 8, 2014. Filing a 
petition for reconsideration by the Administrator of this final rule 
does not affect the finality of this action for the purposes of 
judicial review nor does it extend the time within which a petition for 
judicial review may be filed, and shall not postpone the effectiveness 
of such rule or action. This action may not be challenged later in 
proceedings to enforce its requirements. (See section 307(b)(2).)

List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Incorporation by 
reference, Intergovernmental relations, Nitrogen dioxide, Particulate 
matter, Regional haze, Reporting and recordkeeping requirements, Sulfur 
dioxide, and Visibility.

    Dated: September 26, 2014.
Gina McCarthy,
Administrator.
    For the reasons stated in the preamble, Title 40, chapter I, of the 
Code of Federal Regulations is amended as follows:

PART 52--APPROVAL AND PROMULGATION OF IMPLEMENTATION PLANS

0
1. The authority citation for part 52 continues to read as follows:

    Authority: 42 U.S.C. 7401 et seq.


Sec.  52.1628  [Removed and Reserved]

0
2. Section 52.1628 is removed and reserved.

[FR Doc. 2014-23905 Filed 10-8-14; 8:45 am]
BILLING CODE 6560-50-P