Response to June 1, 2016 Clean Air Act Section 126(b) Petition From Connecticut, 7710-7719 [2018-03679]

Agencies

• ENVIRONMENTAL PROTECTION AGENCY

[Federal Register Volume 83, Number 36 (Thursday, February 22, 2018)]
[Notices]
[Pages 7710-7719]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-03679]


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ENVIRONMENTAL PROTECTION AGENCY

[EPA-HQ-OAR-2016-0347; FRL-9974-80-OAR]
RIN 2060-AT35


Response to June 1, 2016 Clean Air Act Section 126(b) Petition 
From Connecticut

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice of proposed action on petition.

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SUMMARY: The Environmental Protection Agency (EPA) is proposing to deny 
a section 126(b) petition submitted by the state of Connecticut 
pursuant to the Clean Air Act (CAA or Act) on June 1, 2016. The 
petition requested that EPA make a finding that emissions from Brunner 
Island Steam Electric Station (Brunner Island), located in York County, 
Pennsylvania, are significantly contributing to nonattainment and 
interfering with maintenance of the 2008 ozone national ambient air 
quality standards (NAAQS) in Connecticut in violation of the good 
neighbor provision under the CAA. The EPA proposes to deny the petition 
because Connecticut has not met its burden to demonstrate that the 
source emits or would emit in violation of the good neighbor provision 
such that it will significantly contribute to nonattainment or 
interfere with maintenance of the 2008 ozone NAAQS in Connecticut. The 
EPA is further proposing to deny the petition based on the conclusion 
that the Brunner Island facility does not currently emit nor is it 
expected to emit pollution in violation of the good neighbor provision 
for the 2008 ozone NAAQS.

DATES: Comments. Comments must be received on or before March 26, 2018. 
Public Hearing. The EPA is holding a public hearing on the EPA's 
response to the June 1, 2016, CAA section 126(b) petition from 
Connecticut on Friday, February 23, 2018. Additional information for 
this public hearing is available in a separate Federal Register notice 
published on February 14, 2018 (83 FR 6490).

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-HQ-
OAR-2016-0347, at https://www.regulations.gov. Follow the online 
instructions for submitting comments. Once submitted, comments cannot 
be edited or removed from Regulations.gov. The EPA may publish any 
comment received to its public docket. Do not submit electronically any 
information you consider to be Confidential Business Information (CBI) 
or other information whose disclosure is restricted by statute. 
Multimedia submissions (audio, video, etc.) must be accompanied by a 
written comment. The written comment is considered the official comment 
and should include discussion of all points you wish to make. The EPA 
will generally not consider comments or comment contents located 
outside of the primary submission (i.e., on the Web, Cloud, or other 
file sharing system). For additional submission methods, the full EPA 
public comment policy, information about CBI or multimedia submissions, 
and general guidance on making effective comments, please visit https://www2.epa.gov/dockets/commenting-epa-dockets.

FOR FURTHER INFORMATION CONTACT: Questions concerning this proposed 
notice should be directed to Mr. Lev Gabrilovich, U.S. Environmental 
Protection Agency, Office of Air Quality Planning and Standards, Air 
Quality Policy Division, Mail Code C539-01, Research Triangle Park, NC 
27711, telephone (919) 541-1496; email at [email protected].

SUPPLEMENTARY INFORMATION: 
    The information in this document is organized as follows:

I. General Information
II. Background and Legal Authority
    A. Ozone and Public Health
    B. Clean Air Act Sections 110 and 126
    C. The EPA's Historical Approach to Addressing Interstate 
Transport of Ozone under the Good Neighbor Provision
    D. The June 2016 CAA Section 126(b) Petition from Connecticut
    E. The Brunner Island Facility
III. The EPA's Proposed Decision on Connecticut's CAA Section 126(b) 
Petition
    A. The EPA's Approach for Granting or Denying CAA Section 126(b) 
Petitions Regarding the 2008 8-hour Ozone NAAQS
    B. The EPA's Proposal to Deny Connecticut's CAA Section 126(b) 
Petition
IV. Statutory Authority

[[Page 7711]]

I. General Information

    Throughout this document wherever ``we,'' ``us,'' or ``our'' is 
used, we mean the U.S. EPA. Where can I get a copy of this document and 
other related information?
    The EPA has established a docket for this action under Docket ID 
No. EPA-HQ-OAR-2016-0347 (available at https://www.regulations.gov). The 
EPA has made available information related to the proposed action and 
the public hearing at website: https://www.epa.gov/ozone-pollution/connecticut-126-petition.

II. Background and Legal Authority

A. Ozone and Public Health

    Ground-level ozone is not emitted directly into the air, but is a 
secondary air pollutant created by chemical reactions between oxides of 
nitrogen (NOX) and volatile organic compounds (VOCs) in the 
presence of sunlight. For a discussion of ozone-formation chemistry, 
interstate transport issues, and health effects, see the Cross-State 
Air Pollution Rule Update for the 2008 Ozone NAAQS. 81 FR 74504, 74513-
4.

B. Clean Air Act Sections 110 and 126

    The statutory authority for this action is provided by the CAA 
sections 126 and 110(a)(2)(D)(i). Section 126(b) of the CAA provides, 
among other things, that any state or political subdivision may 
petition the Administrator of the EPA to find that any major source or 
group of stationary sources in an upwind state emits or would emit any 
air pollutant in violation of the prohibition of CAA section 
110(a)(2)(D)(i),\1\ which we describe later in detail. Findings by the 
Administrator, pursuant to this section, that a source or group of 
sources emits air pollutants in violation of the CAA section 
110(a)(2)(D)(i) prohibition are commonly referred to as section CAA 
126(b) findings. Similarly, petitions submitted pursuant to this 
section are commonly referred to as CAA section 126(b) petitions.
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    \1\ The text of CAA section 126 codified in the U.S. Code cross-
references section 110(a)(2)(D)(ii) instead of section 
110(a)(2)(D)(i). The courts have confirmed that this is a 
scrivener's error and the correct cross-reference is to CAA section 
110(a)(2)(D)(i), See Appalachian Power Co. v. EPA, 249 F.3d 1032, 
1040-44 (DC Cir. 2001).
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    CAA section 126(c) explains the impact of a CAA section 126(b) 
finding and establishes the conditions under which continued operation 
of a source subject to such a finding may be permitted. Specifically, 
CAA section 126(c) provides that it would be a violation of section 126 
of the Act and of the applicable state implementation plan (SIP): (1) 
For any major proposed new or modified source subject to a CAA section 
126(b) finding to be constructed or operate in violation of the 
prohibition of CAA section 110(a)(2)(D)(i); or (2) for any major 
existing source for which such a finding has been made to operate more 
than three months after the date of the finding. The statute, however, 
also gives the Administrator discretion to permit the continued 
operation of a source beyond 3 months if the source complies with 
emission limitations and compliance schedules provided by the EPA to 
bring about compliance with the requirements contained in CAA sections 
110(a)(2)(D)(i) and 126 as expeditiously as practicable but no later 
than 3 years from the date of the finding. Id.
    Section 126(b) of the CAA provides a mechanism for states and other 
political subdivisions to seek abatement of pollution in other states 
that may be affecting their air quality; however, it does not identify 
specific criteria or a specific methodology for the Administrator to 
apply when deciding whether to make a section 126(b) finding or deny a 
petition. Therefore, the EPA has discretion to identify relevant 
criteria and develop a reasonable methodology for determining whether a 
section 126(b) finding should be made. See, e.g., Chevron, U.S.A., Inc. 
v. NRDC, 467 U.S. 837, 842-43 (1984); Smiley v. Citibank, 517 U.S. 735, 
744-45 (1996). As an initial matter, the EPA's historic approach to 
evaluating CAA section 126(b) petitions looks first to see whether a 
petition identifies or establishes a technical basis for the requested 
section 126(b) finding. The EPA first evaluates the technical analysis 
in the petition to see if that analysis, standing alone, is sufficient 
to support a section 126(b) finding. The EPA focuses on the analysis in 
the petition because the statute does not require the EPA to conduct an 
independent technical analysis to evaluate claims made in section 
126(b) petitions. The petitioner thus bears the burden of establishing, 
as an initial matter, a technical basis for the specific finding 
requested. The EPA has no obligation to prepare an analysis to 
supplement a petition that fails, on its face, to include an initial 
technical demonstration. Such a petition, or a petition that fails to 
identify the specific finding requested, could be found insufficient.
    Nonetheless, the EPA may decide to conduct independent analyses 
when helpful in evaluating the basis for a potential section 126(b) 
finding or developing a remedy if a finding is made. As explained 
later, given the EPA's concerns with the technical information 
submitted as part of Connecticut's CAA section 126(b) petition, and the 
fact that the EPA has previously issued a rulemaking defining and at 
least partially addressing the same environmental concern that the 
petition seeks to address, the EPA determined that it was appropriate 
to conduct independent analysis to determine whether it should grant or 
deny the petition. Such analysis, however, is not required by the 
statute and may not be necessary or appropriate in other circumstances.
    Section 110(a)(2)(D)(i) of the CAA, often referred to as the ``good 
neighbor'' or ``interstate transport'' provision of the Act, requires 
states to prohibit certain emissions from in-state sources if such 
emissions impact the air quality in downwind states. Specifically, CAA 
sections 110(a)(1) and 110(a)(2)(D)(i)(I) requires all states, within 3 
years of promulgation of a new or revised NAAQS, to submit SIPs that 
contain adequate provisions prohibiting any source or other type of 
emissions activity within the state from emitting any air pollutant in 
amounts which will contribute significantly to nonattainment in, or 
interfere with maintenance by, any other state with respect to any such 
national primary or secondary ambient air quality standard. As 
described further in section II.C, the EPA has developed a number of 
regional rulemakings to address CAA section 110(a)(2)(D)(i)(I) for the 
ozone NAAQS. The EPA's most recent rulemaking, the Cross-State Air 
Pollution Rule Update (CSAPR Update), was promulgated to address 
interstate transport under section 110(a)(2)(D)(i)(I) for the 2008 
ozone NAAQS. 81 FR 74504 (October 26, 2016).
    Considering both section 110(a)(2)(D)(i) and section 126, the EPA 
has consistently acknowledged that Congress created these provisions as 
two independent statutory tools to address the problem of interstate 
pollution transport. See, e.g., 76 FR 69052, 69054 (November 7, 
2011).\2\ Congress provided both provisions without indicating any 
preference for one over the other, suggesting it viewed either approach 
as a legitimate means to produce the desired result. While the two 
provisions unquestionably may be applied independently, they are also 
closely linked in that a violation of the prohibition in CAA section

[[Page 7712]]

110(a)(2)(D)(i) is a condition precedent for action under CAA section 
126(b) and, critically, that significant contribution and interference 
with maintenance are construed identically for purposes of both 
provisions (since the identical terms are naturally interpreted as 
meaning the same thing in the two linked provisions). See Appalachian 
Power Co. v EPA, 249 F. 3d at 1049-50. Thus, in interpreting the phrase 
``emits or would emit in violation of the prohibition of section 
[110(a)(2)(D)(i)],'' if the EPA or a state has adopted provisions that 
eliminate the significant contribution to nonattainment or interference 
with maintenance in downwind states, then there simply is no violation 
of the CAA section 110(a)(2)(D)(i)(I) prohibition. Put another way, 
requiring additional reductions would result in eliminating emissions 
that do not contribute significantly to nonattainment or interfere with 
maintenance of the NAAQS, an action beyond the scope of the prohibition 
in CAA section 110(a)(2)(D)(i)(I) and therefore beyond the scope of 
EPA's authority to make the requested finding under CAA section 126(b). 
See EPA v. EME Homer City Generation, L.P., 134 S. Ct. 1584, 1604 n.18, 
1608-09 (2014) (holding the EPA may not require sources in upwind 
states to reduce emissions by more than necessary to eliminate 
significant contribution to nonattainment or interference with 
maintenance of the NAAQS in downwind states under the good neighbor 
provision).
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    \2\ Courts have also upheld the EPA's position that CAA sections 
110(a)(2)(D)(i) and section 126 are two independent statutory tools 
to address the same problem of interstate transport. See GenOn REMA, 
LLC v. EPA, 722 F.3d 513, 520-23 (3d Cir. 2013); Appalachian Power 
Co. v. EPA, 249 F.3d at 1047.
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    Thus, it follows that if a state already has a SIP that the EPA 
approved as adequate to meet the requirements of CAA section 
110(a)(2)(D)(i)(I), the EPA would not find that a source in that state 
was emitting in violation of the prohibition of CAA section 
110(a)(2)(D)(i)(I) absent new information demonstrating that the SIP is 
now insufficient to address the prohibition. Similarly, if a state had 
failed to adopt an approvable SIP meeting the requirements of CAA 
section 110(a)(2)(D)(i)(I) and the EPA consequently promulgated a 
federal implementation plan (FIP) that fully addressed the deficiency, 
the FIP would eliminate emissions that significantly contribute to 
nonattainment or interfere with maintenance in a downwind state, and, 
hence, absent new information to the contrary, sources in the upwind 
state would not emit in violation of the section 110(a)(2)(D)(i)(I) 
prohibition.\3\
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    \3\ Note however, a SIP or FIP implementing section 
110(a)(2)(D)(i)(I) only means that a state's emissions are 
adequately prohibited for the particular set of facts analyzed under 
approval of a SIP or promulgation of a FIP. For example, if a 
petitioner produces new data or information showing a different 
level of contribution or other facts not considered when the SIP or 
FIP was promulgated, compliance with a SIP or FIP may not be 
determinative regarding whether the upwind sources would emit in 
violation of the prohibition of section 110(a)(2)(D)(i)(I). See 64 
FR 28250, 28274 n.15 (May 25, 1999); 71 FR 25328, 25336 n.6 (April 
28, 2006); Appalachian Power, 249 F.3d at 1067 (later developments 
can be the basis for another CAA section 126 petition).
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C. The EPA's Historical Approach To Addressing Interstate Transport of 
Ozone Under the Good Neighbor Provision

    Given that ozone formation, atmospheric residence, and transport 
occur on a regional scale (i.e., hundreds of miles) over much of the 
eastern U.S., the EPA has historically addressed interstate transport 
of ozone pursuant to the good neighbor provision through a series of 
regional rulemakings focused on the reduction of NOX 
emissions, routinely finding that downwind states' problems attaining 
and maintaining the ozone NAAQS result in part from the contribution of 
pollution from multiple upwind sources located in different upwind 
states. For example, the EPA noted in the NOX SIP Call that 
``[t]he fact that virtually every nonattainment problem is caused by 
numerous sources over a wide geographic area is a factor suggesting 
that the solution to the problem is the implementation over a wide area 
of controls on many sources, each of which may have a small or 
unmeasurable ambient impact by itself.'' 63 FR 57356, 57377 (October 
27, 1998).
    The EPA has promulgated four regional interstate transport 
rulemakings that have addressed the good neighbor provision with 
respect to various ozone NAAQS. The EPA's first such rulemaking, the 
NOX SIP Call, addressed interstate transport with respect to 
the 1979 ozone NAAQS and was finalized on October 27, 1998. 63 FR 
57356. The NOX SIP Call promulgated statewide emission 
budgets and required upwind states to adopt SIPs which would decrease 
NOX emissions by amounts that would significantly contribute 
to nonattainment of the ozone NAAQS in downwind states. The EPA also 
promulgated a model rule for a regional allowance trading program 
called the NOX Budget Trading Program that states could 
adopt in their SIPs as a mechanism to achieve some or all of the 
required emission reductions. Id. All of the jurisdictions covered by 
the NOX SIP Call ultimately chose to adopt the 
NOX Budget Trading Program into their SIPs.\4\
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    \4\ The NOX Budget Trading Program operated from 2003 
through 2008. Beginning in 2009, it was effectively replaced by the 
ozone season NOX Budget Trading program under the Clean 
Air Interstate Rule (CAIR).
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    In coordination with the NOX SIP Call rulemaking under 
CAA section 110(a)(2)(D)(i)(I), the EPA also addressed several pending 
CAA section 126(b) petitions submitted by eight northeastern states 
regarding the same air quality issues (i.e., interstate ozone transport 
for the 1979 ozone NAAQS) addressed by the NOX SIP Call. 
These CAA section 126(b) petitions asked the EPA to find that ozone 
emissions from numerous sources located in 22 states, and the District 
of Columbia, had adverse air quality impacts on the petitioning 
downwind states. Based on technical determinations made in the 
NOX SIP Call regarding upwind state impacts on downwind air 
quality, the EPA in May 1999 made technical determinations regarding 
the claims in the petitions, but did not at that time make the CAA 
section 126(b) findings requested by the petitions. 64 FR 28250. In 
making these technical determinations, the EPA concluded that the 
NOX SIP Call would itself fully address and remediate the 
claims raised in these petitions, and that the EPA would therefore not 
need to take separate action to remedy any potential violations of the 
CAA section 110(a)(2)(D)(i) prohibition. 64 FR 28252 (May 25, 1999). 
However, more than 2 years after the petitions were submitted, 
subsequent litigation over the NOX SIP Call led the EPA to 
``de-link'' the CAA section 126(b) petition response from the 
NOX SIP Call, and the EPA made final CAA section 126(b) 
findings for 12 states and the District of Columbia, finding sources in 
the states emitted in violation of the prohibition in the good neighbor 
provision with respect to the 1979 ozone NAAQS based on the affirmative 
technical determinations made in the May 1999 rulemaking. In order to 
remedy the violation under CAA section 126(c), the EPA promulgated 
requirements for affected sources in the upwind states to participate 
in a regional allowance trading program whose requirements were 
designed to be interchangeable with the requirements of the optional 
NOX Budget Trading Program model rule provided under the 
NOX SIP Call. 65 FR 2674 (January 18, 2000).
    The EPA next promulgated the Clean Air Interstate Rule (CAIR) to 
address interstate transport under the good neighbor provision with 
respect to the 1997 ozone NAAQS, as well as the 1997 PM2.5 
NAAQS. The EPA adopted the same framework to quantifying the level of 
states' significant contribution to

[[Page 7713]]

downwind nonattainment in CAIR as it used in the NOX SIP 
Call, based on the determination in the NOX SIP Call that 
downwind ozone nonattainment is due to the impact of emissions from 
numerous upwind sources and states. 70 FR 25162, 25172 (May 12, 2005). 
Regarding the contribution to downwind pollution from upwind states, 
the EPA explained that ``[t]ypically, two or more States contribute 
transported pollution to a single downwind area, so that the 
`collective contribution' is much larger than the contribution of any 
single State.'' Id. at 25186. CAIR included two distinct regulatory 
processes--a regulation to define significant contribution (i.e., the 
emission reduction obligation) under the good neighbor provision and 
provide for submission of SIPs eliminating that contribution, 70 FR 
25162 (May 12, 2005), and a regulation to promulgate, where necessary, 
FIPs imposing emission limitations, 71 FR 25328 (April 28, 2006). The 
FIPs required electric generating units (EGUs) in affected states to 
participate in regional allowance trading programs, which replaced the 
previous NOX Budget Trading Program.
    In conjunction with the second CAIR regulation promulgating FIPs, 
the EPA acted on a CAA section 126(b) petition received from the state 
of North Carolina on March 19, 2004, seeking a finding that large EGUs 
located in 13 states were significantly contributing to nonattainment 
and/or interfering with maintenance of the 1997 ozone and 1997 
PM2.5 NAAQS in North Carolina. Citing the analyses conducted 
to support the promulgation of CAIR, the EPA denied the CAA section 
126(b) petition in full based on a determination either that the named 
states were not adversely impacting downwind air quality in violation 
of the good neighbor provision, or that such impacts were fully 
remedied by implementation of the emission reductions required by the 
CAIR FIPs. 71 FR 25328, 25330 (April 28, 2006) (discussing the EPA's 
basis for denial in part because the EPA promulgated FIPs concurrently 
with the CAA section 126(b) response requiring elimination of the 
interstate transport problems within petitioning states).
    CAIR was remanded to the EPA by the D.C. Circuit in July 2008 with 
the instruction that the EPA replace the rule ``from the ground up.'' 
North Carolina v. EPA, 531 F.3d 896, 929 (D.C. Cir. 2008). Accordingly, 
the EPA was required to redo its analysis and ensure that 
implementation of the good neighbor provision would be consistent with 
the D.C. Circuit's instructions in North Carolina.
    On August 8, 2011, the EPA promulgated the Cross-State Air 
Pollution Rule (CSAPR) to replace CAIR. 76 FR 48208 (August 8, 2011). 
CSAPR addressed the same ozone and PM2.5 NAAQS as CAIR and, 
in addition, addressed interstate transport for the 2006 
PM2.5 NAAQS by requiring 28 states to reduce SO2 
emissions, annual NOX emissions, and/or ozone season 
NOX emissions that would significantly contribute to other 
states' nonattainment or interfere with other states' abilities to 
maintain these air quality standards. Consistent with prior 
determinations made in the NOX SIP Call and CAIR, the EPA 
continued to find that multiple upwind states contributed to downwind 
ozone nonattainment. Specifically, the EPA found ``that the total 
`collective contribution' from upwind sources represents a large 
portion of PM2.5 and ozone at downwind locations and that 
the total amount of transport is composed of the individual 
contribution from numerous upwind states.'' Id. at 48237. Accordingly, 
the EPA conducted a regional analysis, calculated emission budgets for 
affected states, and required EGUs in these states to participate in 
new regional allowance trading programs in order to reduce statewide 
emission levels. CSAPR was subject to nearly 4 years of litigation in 
which the Supreme Court upheld EPA's approach to calculating emission 
reduction obligations and apportioning upwind state responsibility 
under the good neighbor provision, but also held that the EPA was 
precluded from requiring more emission reductions than necessary to 
address downwind air quality problems. EPA v. EME Homer City 
Generation, L.P., 134 S. Ct. at 1607-1609.
    Most recently, the EPA promulgated the CSAPR Update to address the 
good neighbor provision requirements for the 2008 ozone NAAQS. 81 FR 
74504 (October 26, 2016). The final CSAPR Update built upon previous 
efforts to address the collective contributions of ozone pollution from 
states in the eastern U.S. to downwind air quality problems, including 
the NOX SIP Call, CAIR, and the original CSAPR. The CSAPR 
Update finalized EGU NOX ozone season emission budgets for 
affected states that were developed using uniform control stringency 
available at a marginal cost of $1,400 per ton of NOX 
reduced. This level of control stringency represented the potential for 
operating and optimizing existing selective catalytic reduction (SCRs) 
controls; installing state-of-the-art NOX combustion 
controls; and shifting generation to existing units with lower 
NOX emission rates within the same state.
    The CSAPR Update finalized enforceable measures necessary to 
achieve the emission reductions in each state by requiring power plants 
in covered states to participate in the CSAPR NOX Ozone 
Season Group 2 allowance trading program. The CSAPR Update's trading 
programs and the EPA's prior emission trading programs (e.g., the 
NOX Budget Trading Program associated with the 
NOX SIP Call) provide a proven, cost-effective 
implementation framework for achieving emission reductions. In addition 
to providing environmental certainty (i.e., a cap on regional and 
statewide emissions), these programs also provide regulated sources 
with flexibility when choosing compliance strategies. This 
implementation approach was shaped by previous rulemakings and reflects 
the evolution of these programs in response to court decisions and 
practical experience gained by states, industry, and the EPA.
    While some aspects of these rulemakings have been challenged in 
court--and some aspects of these challenges have been upheld--each of 
these rulemakings essentially followed the same four-step framework to 
quantify and implement emission reductions necessary to address the 
interstate transport requirements of the good neighbor provision. These 
steps are:
    (1) Identifying downwind air quality problems relative to the ozone 
NAAQS. The EPA has identified downwind areas with air quality problems 
considering monitored ozone data where appropriate and air quality 
modeling projections to a future compliance year. In CSAPR and the 
CSAPR Update, the agency identified not only those areas expected to be 
in nonattainment with the ozone NAAQS, but also those areas that may 
struggle to maintain the NAAQS, despite clean monitored data or 
projected attainment;
    (2) determining which upwind states are ``linked'' to these 
identified downwind air quality problems and warrant further analysis 
to determine whether their emissions violate the good neighbor 
provision. In CSAPR and the CSAPR Update, the EPA identified such 
upwind states as those modeled to contribute at or above a threshold 
equivalent to one percent of the applicable NAAQS. Upwind states linked 
to one of these downwind nonattainment or maintenance areas were then 
evaluated to determine what level of emissions reductions, if any, 
should be required of each state;

[[Page 7714]]

    (3) for states linked to downwind air quality problems, identifying 
upwind emissions on a statewide basis that significantly contribute to 
nonattainment or interfere with maintenance of a standard. In all four 
of the EPA's prior rulemakings, the EPA apportioned emission reduction 
responsibility among multiple upwind states linked to downwind air 
quality problems using cost-based and air quality-based criteria to 
quantify the amount of a linked upwind state's emissions that 
significantly contribute to nonattainment or interfere with maintenance 
in another state; and
    (4) for states that are found to have emissions that significantly 
contribute to nonattainment or interfere with maintenance of the NAAQS 
downwind, implementing the necessary emission reductions within the 
state. The EPA has done this by requiring affected sources in upwind 
states to participate in allowance trading programs to achieve the 
necessary emission reductions.
    In finalizing the CSAPR Update, the EPA determined the rule may 
only be a partial resolution of the good neighbor obligation and that 
the emission reductions required by the rule ``may not be all that is 
needed'' to address transported emissions. 81 FR 74521-522 (October 26, 
2016). The EPA noted that the information available at that time 
indicated that downwind air quality problems remained after 
implementation of the CSAPR Update to which upwind states continued to 
be linked at or above the one percent threshold. However, the EPA could 
not determine whether, at step three of the four-step framework, the 
EPA had quantified all emission reductions that may be considered 
highly cost effective because the rule did not evaluate non-EGU ozone 
season NOX reductions and further EGU control strategies 
that are achievable on longer timeframes after 2017 (e.g., the 
implementation of new post-combustion controls).
    Of particular relevance to this proposal, the EPA determined in the 
CSAPR Update that emissions from Pennsylvania were linked to both 
nonattainment and maintenance concerns for the 2008 ozone NAAQS in 
Connecticut based on projections to 2017. 81 FR 74538, 74539. The EPA 
found there were cost-effective emission reductions that could be 
achieved within Pennsylvania, quantified an emission budget for the 
state, and required EGUs located within the state, including the source 
identified in Connecticut's petition, to comply with EPA's trading 
program under the CSAPR Update. These emission budgets were imposed in 
order to achieve necessary emission reductions and mitigate upwind 
states', including Pennsylvania's, impact on downwind states' air 
quality.

D. The June 2016 CAA Section 126(b) Petition From Connecticut

    On March 12, 2008, the EPA promulgated a revision to the ozone 
NAAQS, lowering both the primary and secondary standards to 75 ppb.\5\ 
Subsequently, on June 1, 2016, the state of Connecticut, through the 
Connecticut Department of Energy and Environmental Protection 
(Connecticut), submitted a CAA section 126(b) petition alleging that 
emissions from Brunner Island significantly contribute to nonattainment 
and/or interfere with maintenance of the 2008 ozone NAAQS in 
Connecticut.\6\ In particular, the petition contends that emissions 
from Brunner Island significantly contribute to nonattainment and 
interfere with maintenance of the 2008 ozone NAAQS at six out of 12 
ozone monitors in Connecticut. In support of this assertion, the 
petition contends that emissions from Brunner Island contribute levels 
equal to or greater than one percent of the 2008 ozone NAAQS to 
downwind nonattainment and maintenance receptors. The petition further 
contends that Brunner Island is able to reduce emissions at a 
reasonable cost using readily available control options. The petition 
therefore concludes that, consistent with EPA's past approaches to 
addressing interstate transport of ozone, NOX emissions from 
Brunner Island significantly contribute to nonattainment and interfere 
with maintenance of the 2008 ozone NAAQS in Connecticut. The petition 
requests that the EPA direct the operators of Brunner Island to reduce 
NOX emissions to eliminate this impact.
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    \5\ See National Ambient Air Quality Standards for Ozone, Final 
Rule, 73 FR 16436 (March 27, 2008).
    \6\ Petition of the State of Connecticut Pursuant to Section 126 
of the Clean Air Act, submitted June 1, 2016. The petition is 
available in the docket for this action.
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    The petition cites several sources of data for its contention that 
Brunner is impacting air quality in Connecticut. First, the petition 
notes that 10 out of 12 air quality monitors in Connecticut were 
violating the 2008 ozone NAAQS based on 2012-2014 data and preliminary 
2013-2015 data available at the time the petition was submitted.\7\ The 
petition further cites to modeling conducted by the EPA to support 
development of the CSAPR Update to claim that four ozone monitors in 
Connecticut were projected to have nonattainment or maintenance 
concerns in 2017.\8\
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    \7\ Of the 12 monitors in Connecticut, 7 are violating the 2008 
ozone NAAQS based on 2014-2016 data. See ozone design value table 
available at https://www.epa.gov/air-trends/air-quality-design-values#report.
    \8\ The petition referred to modeling conducted for purposes of 
the proposed CSAPR Update in 2015. See 80 FR 75706, 75725-726 
(December 3, 2015). The EPA conducted updated modeling to support 
the final rulemaking, which also identified four projected 
nonattainment and maintenance receptors in 2017. 81 FR 74533.
---------------------------------------------------------------------------

    To support the conclusion that Brunner Island impacts air quality 
at some of these monitoring sites, Connecticut provides a technical 
memorandum from Sonoma Technologies, Inc., outlining the results of 
modeling that analyzed the impact of NOX emissions from 
Brunner Island on Connecticut. According to the petition, this modeling 
shows that emissions from Brunner Island contributed an amount greater 
than one percent of the 2008 ozone NAAQS at six monitoring sites in 
Connecticut based on emissions from the facility during the 2011 ozone 
season, and is therefore linked to Connecticut's air quality problems.
    Connecticut further alleges that Brunner Island has cost-effective 
and readily available control technologies that can reduce its 
NOX emissions. The petition first notes that Brunner Island 
currently has no NOX post-combustion controls installed at 
any of the units but that the facility was planning to add the 
capability to use natural gas fuel at all three of its units by the 
summer of 2017, and argues that a federally enforceable mechanism to 
ensure Brunner Island uses natural gas fuel would eliminate Brunner 
Island's significant contribution to ozone levels in Connecticut. The 
petition states that current federal and state rules will not require 
Brunner Island to operate on natural gas, install post-combustion 
controls, or otherwise limit NOX emissions beyond previously 
allowable permit levels. The petition summarizes four potential ways by 
which Brunner Island could reduce its NOX emissions: 
Replacing coal combustion with natural gas fuel, modifying its boiler 
furnace burners and combustion systems to operate at lower flame 
temperatures, installing selective noncatalytic reduction (SNCR) 
controls, and installing SCR controls.
    The petition further discusses the EPA's then-proposed CSAPR 
Update. Connecticut suggests that the then-proposed CSAPR Update could 
not be relied upon to control emissions from Brunner Island because: 
(1) It was not final at the time the petition was submitted and was 
therefore uncertain; and (2) the proposed rule would not require 
Brunner Island to reduce its

[[Page 7715]]

emissions below the threshold of one percent of the NAAQS. The petition 
notes that the modeling to support the proposed rule shows four 
Connecticut monitors with nonattainment and maintenance problems after 
implementation of the proposed emission budgets. Finally, the petition 
suggests that the fact that EGUs may trade allowances within and 
between states could result in emission levels in excess of the state's 
budget, and thus suggest the rule will likely not affect Brunner 
Island's emissions. In particular, the petition suggests that this 
aspect of the CSAPR Update will not reduce emissions from Brunner 
Island on high electric demand days or days with the highest ozone 
levels.
    Based on the technical support provided in its petition, 
Connecticut requests that the EPA make a CAA section 126(b) finding and 
require that Brunner Island comply with emissions limitations and 
compliance schedules to eliminate its significant contribution to 
nonattainment and interference with maintenance in Connecticut.
    Section 126(b) of the Act requires the EPA to either make a finding 
or deny a petition within 60 days of receipt of the petition and after 
holding a public hearing. However, any action taken by the EPA under 
CAA section 126(b) is also subject to the procedural requirements of 
CAA section 307(d). See CAA section 307(d)(1)(N). One of these 
requirements is that the EPA conduct notice-and-comment rulemaking, 
including issuance of a notice of proposed action, a period for public 
comment, and a public hearing before making a final determination 
whether to make the requested finding. In light of the time required 
for notice-and-comment rulemaking, CAA section 307(d)(10) provides for 
a time extension, under certain circumstances, for rulemakings subject 
to the section 307(d) procedural requirements. In accordance with 
section 307(d)(10), the EPA determined that the 60-day period for 
action on Connecticut's petition would be insufficient for the EPA to 
complete the necessary technical review, develop an adequate proposal, 
and allow time for notice and comment, including an opportunity for 
public hearing. Therefore, on July 25, 2016, the EPA published a final 
rule extending the deadline for the EPA to take final action on 
Connecticut's CAA section 126(b) petition to January 25, 2017.\9\
---------------------------------------------------------------------------

    \9\ 81 FR 48348 (July 25, 2016).
---------------------------------------------------------------------------

    On April 25, 2017, a coalition of public health, conservation, and 
environmental organizations submitted letters urging the EPA to 
immediately grant the pending CAA section 126(b) petitions in front of 
the agency, including Connecticut's, arguing that the petitions' 
proposed remedies would also provide critical air quality benefits to 
the communities surrounding the affected power plants in Indiana, 
Kentucky, Ohio, Pennsylvania, and West Virginia, as well as other 
downwind states, including New Jersey, New York, Maine, Massachusetts, 
and Rhode Island.\10\ On April 28, 2017, Talen Energy Corp., the owner 
and operator of Brunner Island, submitted a letter urging the EPA to 
deny Connecticut's CAA section 126(b) petition due to alleged 
deficiencies in the petition. The EPA acknowledges receipt of these 
letters, and has made them available in the docket for this action. 
However, the EPA is not in this action responding directly to these 
letters. Rather, the EPA encourages interested parties to review this 
proposal and then submit relevant comments during the public comment 
period.
---------------------------------------------------------------------------

    \10\ The EPA has received five CAA section 126(b) petitions from 
two other states (Delaware and Maryland) regarding the 2008 and 2015 
ozone NAAQS, each claiming that one or more specific power plant 
EGUs in upwind states emit or would emit in violation of the good 
neighbor provision. However, the EPA notes that this rulemaking only 
addresses Connecticut's CAA section 126 petition regarding Brunner 
Island in Pennsylvania and the EPA is not requesting proposing 
action or requesting comment on the other five petitions.
---------------------------------------------------------------------------

    On May 16, 2017, the state of Connecticut filed suit in the U.S. 
District Court for the District of Connecticut alleging that the EPA 
failed to take timely action on Connecticut's CAA section 126(b) 
petition.\11\ On February 7, 2018, the court issued an order requiring 
the EPA to hold a public hearing on the petition within 30 days and to 
take final action within 60 days of the court's order. See Ruling on 
Motions for Summary Judgment and Motion Concerning Remedy, State of 
Connecticut v. EPA, No. 3:17-cv-00796 (D. Conn. February 7, 2018).
---------------------------------------------------------------------------

    \11\ Two citizen groups, Sierra Club and Connecticut Fund for 
the Environment, intervened in this case on behalf of the state of 
Connecticut.
---------------------------------------------------------------------------

E. The Brunner Island Facility

    Brunner Island is a 1,411 megawatt facility with three 
tangentially-fired steam boiler EGUs, each equipped with low 
NOX burner technology with closed-coupled/separated over 
fire air (LNC3) combustion controls, located in York County in 
southeastern Pennsylvania.\12\ The units were constructed starting in 
1961 through 1969. For over 50 years, all three units at Brunner Island 
have historically burned coal. Brunner Island recently installed a 
natural gas connection pipeline allowing natural gas to be combusted to 
serve Brunner Island's electric generators.\13\ Following installation 
of this pipeline, Brunner Island primarily combusted natural gas as 
fuel during the 2017 ozone season.\14\ Using primarily natural gas as 
fuel during the 2017 ozone season reduced Brunner Island's actual ozone 
season NOX emissions to 877 tons in 2017 from 3,765 tons in 
2016 and reduced the facility's ozone season NOX emission 
rate to 0.090 pounds per millions of British thermal units (lbs/mmBtu) 
in 2017 from 0.370 lbs/mmBtu in 2016.\15\
---------------------------------------------------------------------------

    \12\ For tangentially-fired boiler types, LNC3 is state of the 
art (See sections 3.9.2 and 5.2.1 on pages 3-25 and 5-5 of the 
Integrated Planning Model (IPM) 5.13 documentation for details about 
combustion controls. The IPM documentation is available at https://www.epa.gov/airmarkets/power-sector-modeling-platform-v513.
    \13\ The Connecticut CAA section 126(b) petition and the April 
28, 2017, letter from Talen Energy Corp. indicate that Brunner 
Island has taken necessary steps to construct a natural gas pipeline 
and enable the combustion of natural gas. On June 7, 2016, an 
article by S&P Global indicated that Talen Energy Corp. is in the 
process of converting the Brunner Island plant to co-fire with 
natural gas. These documents are available in the docket for this 
action.
    \14\ Hourly emission rates reported to the EPA and fuel usage 
reported to Environmental Impact Assessment demonstrate Brunner 
Island predominately used natural gas during the ozone season. The 
emissions data for 2017 are publicly available at https://www.epa.gov/ampd and the fuel usage data are available at https://www.eia.gov/electricity/data/eia923/.
    \15\ These data are publicly available at https://www.epa.gov/ampd. See Air Markets Program Data in the docket for this proposal.
---------------------------------------------------------------------------

III. The EPA's Proposed Decision on Connecticut's CAA Section 126(b) 
Petition

A. The EPA's Approach for Granting or Denying CAA Section 126(b) 
Petitions Regarding the 2008 8-Hour Ozone NAAQS

    As described in section II.B of this notice, as an initial matter 
in reviewing CAA section 126(b) petitions, the EPA evaluates the 
technical analysis in the petition to see if that analysis, standing 
alone, is sufficient to support a CAA section 126(b) finding. In this 
regard, the agency notes that certain elements of the analysis provided 
in the petition appear to be deficient and thereby the conclusions that 
the petition draws are not fully supported by Connecticut's technical 
assessment. For example, in the context of interstate pollution 
transport, in existing EPA analyses, the agency focuses its analysis on 
contributions to high ozone days at the downwind receptor. The analysis 
and metrics provided by the petitioner provide some information on the

[[Page 7716]]

frequency and magnitude of ozone impacts. However, the information is 
unclear as to the modeled and/or measured ozone levels on those 
days.\16\ We also note that, the Connecticut petition relied on 
emissions data from 2011, which may not be representative of current 
and/or future NOX emissions and ozone levels in Connecticut, 
Pennsylvania, and the rest of the region.\17\
---------------------------------------------------------------------------

    \16\ Table two in the Sonoma Technologies, Inc. technical 
memorandum that supports Connecticut's petition indicates that the 
``maximum number of days any one monitor [in Connecticut] had a 
significant ozone contribution'' was two.
    \17\ The Connecticut petition relies on air quality modeling 
that uses 2011 emissions data. As an example of how emissions have 
changed between 2011 and a recent historical year, the EPA notes 
that Pennsylvania's 2017 EGU NOX ozone season emissions 
were 79 percent below 2011 levels. Brunner Island is located in 
Pennsylvania, which as a facility reduced its ozone season 
NOX emissions by 88 percent in 2017 relative to 2011 
levels (https://www.epa.gov/ampd).
---------------------------------------------------------------------------

    Nonetheless, the EPA's primary approach for reviewing the petition 
involves EPA's independent technical analyses to help evaluate the 
basis for a potential CAA section 126(b) finding. As described in 
sections II.A and II.C of this notice, ozone is a regional pollutant 
and previous EPA analyses and regulatory actions have evaluated the 
regional interstate ozone transport problem using a four-step regional 
analytic framework.
    The EPA applied this four-step framework in the promulgation of the 
CSAPR Update under CAA section 110(a)(2)(D)(i)(I) to at least partially 
address interstate transport with respect to the 2008 ozone NAAQS. The 
CSAPR Update was promulgated in 2016 and finalized EGU NOX 
ozone season emission budgets to address the good neighbor provision 
for the 2008 ozone NAAQS. While CAA section 126(b) differs from CAA 
section 110(a)(2)(D)(i)(I) in that CAA section 126(b) gives states the 
ability to petition the EPA regarding compliance with the good neighbor 
provision by a single source or group of sources, CAA section 126(b) 
specifically cross-references the substantive prohibitions of the good 
neighbor provision. To that end, CAA sections 110(a)(2)(D)(i)(I) and 
126(b) both represent mechanisms to address the same functional 
prohibition of emissions activity from upwind states that will 
contribute significantly to nonattainment or interfere with maintenance 
of the NAAQS in a downwind state.
    Given the specific cross-reference in CAA section 126(b) to the 
substantive prohibition in CAA section 110(a)(2)(D)(i)(I), as discussed 
in section II.B of this notice in more detail, the EPA believes any 
prior findings made under the good neighbor provision are informative--
if not determinative--for a CAA section 126(b) action, and thus the 
EPA's four-step approach under CAA section 110(a)(2)(D)(i)(I) is also 
appropriate for evaluating under CAA section 126(b) whether a source or 
group of sources will significantly contribute to nonattainment or 
interfere with maintenance of the 2008 8-hour ozone NAAQS in a 
petitioning state. Because the EPA interprets significant contribution 
to nonattainment and interference with maintenance to mean the same 
thing under both provisions, the EPA's decision whether to grant or 
deny a CAA section 126(b) petition regarding the 2008 8-hour ozone 
NAAQS depends on whether there is a downwind air quality problem in the 
petitioning state (i.e., step one of the four-step framework); whether 
the upwind state where the source subject to the petition is located is 
linked to the downwind air quality problem (i.e., step two); and, if 
such a linkage exists, whether there are additional feasible and cost-
effective emission reductions achievable at the source(s) named in the 
CAA section 126(b) petition (i.e., step three).

B. The EPA's Proposal To Deny Connecticut's CAA Section 126(b) Petition

    As described earlier in section II.C of this notice, the EPA has 
determined that a state may contribute significantly to nonattainment 
or interfere with maintenance of the 2008 ozone NAAQS where emissions 
from the state impact a downwind air quality problem (nonattainment or 
maintenance receptor) at a level exceeding a one percent contribution 
threshold, and where the sources in the state can implement emission 
reductions through highly cost-effective control measures. See EPA v. 
EME Homer City Generation, L.P., 134 S. Ct. at 1606-07.
    The EPA has already conducted such an analysis for the 2008 ozone 
NAAQS with respect to Pennsylvania's impact on receptors in 
Connecticut. As the petitioners note, the EPA determined that, based on 
2017 modeling projections, Pennsylvania was linked to four air quality 
monitors in Connecticut expected to have nonattainment or maintenance 
concerns. However, contrary to the assertions made in Connecticut's 
petition, the one percent threshold used in step two in the CSAPR 
Update did not alone represent emissions that were considered to 
``contribute significantly'' or ``interfere with maintenance'' of the 
NAAQS. The conclusion that a state's emissions met or exceeded this 
threshold only indicated that further analysis was appropriate to 
determine whether any of the upwind state's emissions met the statutory 
criteria of significantly contributing to nonattainment or interfering 
with maintenance. As discussed in more detail in section II.C, this 
further analysis in step three considers cost, technical feasibility 
and air quality factors to determine whether any emissions deemed to 
contribute to the downwind air quality factor must be controlled 
pursuant to the good neighbor provision. Thus, while the EPA's modeling 
conducted for the CSAPR Update did link emissions from Pennsylvania to 
nonattainment and maintenance receptors in Connecticut in 2017, this 
does not conclude the determination as to whether Brunner Island is 
operating in violation of the good neighbor provision with respect to 
the 2008 ozone NAAQS.
    Similarly, and for the same reasons, the impact of a single source 
on downwind air quality is not necessarily determinative of whether 
that source emits or would emit in violation of the good neighbor 
provision. Thus, the modeling summary provided by Connecticut regarding 
Brunner Island's potential impact on Connecticut monitors does not 
indicate whether in step three of the EPA's framework there are 
feasible and highly cost-effective emission reductions available at 
Brunner Island such that EPA could determine that this facility emits 
or would emit in violation of the good neighbor provision.
    With respect to the question of whether there are feasible and 
highly cost-effective NOX emission reductions available at 
Brunner Island, CAA section 126(b) indicates that a petitioner must 
demonstrate that a major source or group of stationary sources ``emits 
or would emit'' any air pollutant in violation of the prohibition of 
CAA section 110(a)(2)(D)(i)(I). Congress did not specify the intended 
meaning for these terms in either CAA section 126(b) itself or the 
legislative history for this provision. Therefore, in the context of 
this response to Connecticut's CAA section 126(b) petition regarding 
Brunner Island for the 2008 ozone NAAQS, the EPA reasonably and 
appropriately proposes to interpret these ambiguous terms in a 
particular way given the facility's existing operating conditions, as 
further described later in this section, and consistent with EPA's 
historical approach to evaluating interstate ozone pollution transport 
under the good neighbor provision. Specifically, the

[[Page 7717]]

EPA is proposing to interpret the phrase ``emits or would emit'' in 
this context to mean, first, that a source may ``emit'' in violation of 
the good neighbor provision if, based on current emission levels, the 
upwind state contributes to downwind air quality problems and the 
source may be further controlled through implementation of highly cost-
effective controls; and, second, that a source ``would emit'' in 
violation of the good neighbor provision if, based on reasonably 
anticipated future emission levels (accounting for existing 
conditions), the upwind state contributes to downwind air quality 
problems and the source could be further controlled through 
implementation of highly cost-effective controls. This interpretation 
is consistent with EPA's historic approach to addressing ozone 
transport under the good neighbor provision wherein EPA's ozone 
transport air quality and NOX reduction potential analyses 
have used future emission projections that were derived considering 
recent and projected emission levels. Accordingly, the EPA believes it 
is reasonable to interpret the CAA section 126(b) requirements for 
ozone transport in a consistent manner. Consistent with this 
interpretation, the EPA has therefore evaluated whether Brunner Island 
emits or would emit in violation of the good neighbor provision based 
on both current and future anticipated emission levels.
    As described in more detail later in this section, Brunner Island 
primarily burned natural gas with a low NOX emission rate in 
the 2017 ozone season and the EPA expects the facility to continue 
operating primarily by burning natural gas in future ozone seasons. As 
such, the EPA does not find at this time that there are additional 
feasible and highly cost-effective NOX emission reductions 
available at Brunner Island. The EPA is therefore proposing to 
determine, based on this context, that Brunner Island does not and 
would not ``emit'' in violation of the good neighbor provision with 
respect to the 2008 ozone NAAQS.
    Connecticut's CAA section 126(b) petition first proposes that the 
operation of natural gas is an available cost-effective emission 
reduction measure that could be implemented at Brunner Island. As noted 
previously, Brunner Island completed construction of a natural gas 
pipeline connection prior to the beginning of the 2017 ozone season 
(i.e., by May 1, 2017). Brunner Island operated primarily using natural 
gas as fuel for the 2017 ozone season. As a result, Brunner Island's 
actual ozone season NOX emissions declined from 3,765 tons 
in 2016 to 877 tons in 2017, and the facility's ozone season 
NOX emission rate declined from 0.370 lbs/mmBtu in 2016 to 
0.090 lbs/mmBtu in 2017. Thus, Brunner Island has already implemented 
the emission reductions consistent with what Connecticut asserted would 
qualify as a cost-effective strategy for reducing NOX 
emissions. Connecticut's section 126(b) petition does not demonstrate 
that, at this current level of emissions, Brunner Island ``emits'' in 
violation of the good neighbor provision.
    The EPA also believes that Brunner Island will likely continue to 
primarily use natural gas as fuel during future ozone seasons for 
several reasons. First, compliance with the CSAPR Update provides an 
economic incentive to cost-effectively reduce NOX emissions. 
Specifically, Brunner Island's participation in the CSAPR 
NOX ozone season Group 2 allowance trading program provides 
an economic incentive to produce electricity in ways that lower ozone-
season NOX, such as by burning natural gas relative to 
burning coal at this particular power plant. Under the CSAPR Update, 
each ton of NOX emitted by a covered EGU has an economic 
value--a direct cost in the case that a power plant must purchase an 
allowance to cover that ton of emissions for CSAPR Update compliance or 
an opportunity cost in the case that a power plant must use an 
allowance that is in its account for compliance and thereby foregoes 
the opportunity to sell that allowance on the market. The EPA notes 
that Brunner Island's 2017 emissions would have been approximately 
2,714 tons more than its actual 2017 emissions if it had operated as a 
coal-fired generator, as it did in 2016.\18\ This reduction in 
NOX emissions that is attributable to primarily burning 
natural gas has an economic value in the CSAPR allowance trading 
market.
---------------------------------------------------------------------------

    \18\ This estimated emissions difference was calculated as the 
difference between 2017 reported NOX emissions and a 
counterfactual 2017 NOX emissions estimate using 2017 
operations (i.e., heat input), multiplied by the 2016 NOX 
emission rate reflecting coal-fired generation.
---------------------------------------------------------------------------

    Second, there are continuing fuel-market based economic incentives 
suggesting that Brunner Island will primarily burn natural gas during 
the ozone season. Brunner Island elected to add the capability to 
primarily utilize natural gas by way of a large capital investment in a 
new natural gas pipeline capacity connection. Brunner Island's 
operators would have planned for and constructed this project during 
the recent period of relatively low natural gas prices. In the years 
preceding the completion of this natural gas pipeline connection 
project, average annual natural gas prices ranged from $2.52/mmBtu to 
$4.37/mmBtu (i.e., between 2009 and 2016).\19\ The capital expenditure 
to construct a natural gas pipeline connection suggests that natural 
gas prices within this range make it economic (i.e., cheaper) for 
Brunner Island to burn natural gas to generate electricity relative to 
burning coal. As such, future natural gas prices in this same range 
suggest that Brunner Island will continue to primarily burn natural gas 
during future ozone seasons. The EPA and other independent analysts 
expect future natural gas prices to remain low and within this 2009 to 
2016 range due both to supply and distribution pipeline build-out. For 
example, the Energy Information Administration's (EIA) 2018 Annual 
Energy Outlook (AEO) natural gas price projections for Henry Hub spot 
price range from $3.06/mmBtu in 2018 to $3.83/mmBtu in 2023.\20\ 
Moreover, the AEO short-term energy outlook and New York Mercantile 
Exchange futures further support the estimates of a continued low-cost 
natural gas supply.\21\ These independent analyses of fuel price data 
and projections lead to the EPA's expectation that fuel-market 
economics will continue to support Brunner Island's primarily burning 
natural gas during future ozone seasons through at least 2023. Taken 
together with projected continued broader downward trends in 
NOX emissions resulting in improved air quality in 
Connecticut, the EPA expects that Connecticut's ozone nonattainment and 
maintenance problems will be resolved in the future and that Brunner 
Island will likely continue to primarily burn natural gas during the 
ozone season until that time.
---------------------------------------------------------------------------

    \19\ In the 2018 reference case Annual Energy Outlook (AEO) 
released February 6, 2018, created by the U.S. Energy Information 
Administration (EIA), natural gas prices for the power sector for 
2018 through 2023. Available at https://www.eia.gov/outlooks/aeo/data/browser/#/?id=13-AEO2018&cases=ref2018&sourcekey=0.
    \20\ Projected delivered natural gas prices for the power sector 
in the Middle Atlantic region, where Brunner Island is located, 
ranged between $3.56 in 2018 and $3.99/mmBtu in 2023. The projected 
delivered coal prices for the Middle Atlantic remain relatively 
constant, ranging from $2.51 to $2.56/mmBtu. https://www.eia.gov/outlooks/aeo/data/browser/#/?id=3-AEO2018®ion=1-2&cases=ref2018&start=2016&end=2023&f=A&linechart=ref2018-d121317a.3-3-AEO2018.1-2&map=ref2018-d121317a.4-3-AEO2018.1-2&sourcekey=0 and https://tonto.eia.gov/dnav/ng/hist/rngwhhda.htm.
    \21\ AEO short-term energy outlook available at https://www.eia.gov/outlooks/steo/report/natgas.php.
---------------------------------------------------------------------------

    The context in which Brunner Island installed natural gas-firing 
capability and burned natural gas is consistent

[[Page 7718]]

with observed recent trends in natural gas utilization within the power 
sector, suggesting that Brunner Island's economic situation in which it 
primarily burns gas as fuel during the ozone season is not unique or 
limited. Comparing total heat input from 2014 with 2017 for all units 
that utilize natural gas and report to the EPA's Clean Air Markets 
Division, historical data showed an increased use of natural gas of 14 
percent.\22\ This overall increase results from both an increase in 
capacity from the construction of additional units and an increased 
gas-fired utilization capacity factor. The available heat input 
capacity increased six percent while average capacity factor based on 
heat input increased by eight percent (23 percent to 25 percent).
---------------------------------------------------------------------------

    \22\ From 8.4 billion mmBtu to 9.6 billion mmBtu. See EPA's 
Clean Air Markets Division data at https://ampd.epa.gov/ampd/.
---------------------------------------------------------------------------

    Accordingly, based on this information demonstrating that Brunner 
Island can be expected to continue to primarily operate using natural 
gas fuel in the future, the EPA cannot conclude that the facility 
``would emit'' in violation of the good neighbor provision with respect 
to the 2008 ozone NAAQS. The EPA notes that Connecticut's petition 
relied on emission data from 2011 to attempt to demonstrate that 
Brunner Island is significantly contributing to nonattainment or 
interfering with maintenance. In light of recent changes in Brunner 
Island's operations, the EPA does not believe this information provides 
a current, reasonable estimate of how much NOX pollution 
Brunner Island emits or would emit currently or in the future.\23\
---------------------------------------------------------------------------

    \23\ As noted above, Pennsylvania's 2017 EGU NOX 
ozone season emissions were 79 percent below 2011 levels. Brunner 
Island is located in Pennsylvania, which as a facility reduced its 
ozone season NOX emissions by 88 percent in 2017 relative 
to 2011 levels. Data regarding Brunner Island emissions available at 
https://www.epa.gov/ampd.
---------------------------------------------------------------------------

    We do not agree with the petition to the extent that it asserts 
that the ability to buy and bank allowances in the CSAPR Update's ozone 
season NOX allowance trading program will incentivize 
Brunner Island to increase its emissions. Connecticut fails to support 
its contention and thus does not meet the demonstration burden imposed 
on CAA section 126(b) petition. Moreover, Brunner Island's 2017 
emission levels demonstrate that, contrary to Connecticut's assertions, 
Brunner Island reduced emissions while operating in the context of the 
CSAPR Update allowance trading program. This is also true for EGUs in 
Pennsylvania more broadly, which had collective emissions of 13,646 
tons, well below the Pennsylvania budget of 17,952 tons. The petition 
also fails to support its contention that Brunner Island's 
participation in the allowance trading program will result in increased 
emissions on days with either high electricity demand or days with the 
highest ozone levels.
    Finally, to the extent that Connecticut identifies other control 
strategies that could potentially be implemented at Brunner Island in 
order to reduce NOX emissions, including modifications to 
combustion controls or implementation of post-combustion controls like 
SCRs and SNCRs, the petition does not include any information or 
analysis regarding the costs of such controls nor does it demonstrate 
that such controls are highly cost effective considering potential 
downwind air quality impacts. As noted previously, in the CSAPR Update, 
the EPA quantified upwind states' obligations under the good neighbor 
provision based on emission reductions available at a marginal cost of 
$1,400/ton of NOX reduced. EPA's analysis showed that 
additional NOX reductions at EGUs, including installation of 
new SCRs and SNCRs at EGUs that lacked post-combustion controls, would 
be more expensive.\24\ The cost of such new post-combustion controls at 
Brunner Island would likely be even more expensive considering current 
and anticipated emissions rates.
---------------------------------------------------------------------------

    \24\ See EGU NOX Mitigation Strategies Final Rule 
Technical Support Document available at https://www.regulations.gov, 
Docket ID No. EPA-HQ-OAR-2015-0500-0554.
---------------------------------------------------------------------------

    Under the EPA's approach to quantifying those amounts of emissions 
that significantly contribute to nonattainment or interfere with 
maintenance, the dollar-per-ton cost of reducing emissions is balanced 
against two air quality factors: The amount of NOX emission 
reductions available using a particular control strategy and the 
downwind reductions in ozone at identified receptors that would result 
from the emission reductions. Connecticut has not attempted to evaluate 
what reductions in ozone would accrue from these additional control 
strategies and thus has not demonstrated that the additional costs 
associated with these controls would be justified by the downwind 
reductions in ozone. Indeed, the petition includes no analysis of how 
downwind air quality would be impacted by the emission reductions it 
contends are necessary under the good neighbor provision. This element 
is not only key to EPA's interpretation of the good neighbor provision 
as it applies step three to ozone pollution transport, but necessary to 
ensure that upwind emissions are not reduced by more than necessary to 
improve downwind air quality, consistent with the Supreme Court's 
holding in EPA v. EME Homer City Generation, L.P., 134 S. Ct. at 1604 
n.18, 1608-09. Recent EPA analyses that projects emission levels to a 
future year indicates that no air quality monitors in Connecticut are 
projected to have nonattainment or maintenance problems with respect to 
the 2008 ozone NAAQS by 2023.\25\ While this modeling is not 
necessarily determinative of whether Brunner Island emits or would emit 
in violation of the good neighbor provision before 2023, it does 
suggest that, by that date, it may no longer be necessary to further 
reduce emissions from any state to ensure attainment of the 2008 ozone 
NAAQS in Connecticut.
---------------------------------------------------------------------------

    \25\ See Supplemental Information on the Interstate Transport 
State Implementation Plan Submissions for the 2008 Ozone National 
Ambient Air Quality Standards under Clean Air Act Section 
110(a)(2)(D)(i)(I) (October 2017), available in the docket for this 
proposed action. The EPA is not making any final determination 
regarding future downwind air quality in this action, and is 
therefore not requesting comment on the air quality modeling 
presented in the October 2017 memorandum.
---------------------------------------------------------------------------

    Based on the information discussed in this notice, the EPA proposes 
to deny the petition because Connecticut has not met its burden to 
demonstrate that Brunner Island emits or would emit in violation of the 
good neighbor provision with respect to the 2008 ozone NAAQS.\26\ The 
EPA also proposes to find, based on its own analysis, that there are no 
additional cost-effective measures available at the source, and thus 
Brunner Island does not emit nor would it emit in violation of the good 
neighbor provision with respect to the 2008 ozone NAAQS. These proposed 
determinations are based on the fact that Brunner Island combusted 
primarily natural gas in the 2017 ozone season, resulting in a low 
NOX emission rate for this facility, as well as the 
expectation that future operation will be consistent with 2017 
operations. The EPA requests comment on its proposed denial of 
Connecticut's section 126(b) petition, including the bases for the 
decision described herein.
---------------------------------------------------------------------------

    \26\ As previously discussed, the petition correctly identifies 
that Pennsylvania is linked to downwind air quality problems in 
Connecticut, and has been included in the CSAPR Update with respect 
to its downwind impacts on Connecticut's attainment of the 2008 
ozone NAAQS. While this action proposes to determine that no further 
controls are necessary to ensure that Brunner Island does not and 
would not ``emit'' in violation of the good neighbor provision for 
the 2008 ozone NAAQS with respect to Connecticut, this proposal does 
not make any broader determination as to the good neighbor 
obligation for Pennsylvania.

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[[Page 7719]]

IV. Statutory Authority

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

    Dated: February 15, 2018.
E. Scott Pruitt,
Administrator.
[FR Doc. 2018-03679 Filed 2-21-18; 8:45 am]
 BILLING CODE 6560-50-P