Response to June 1, 2016 Clean Air Act Section 126(b) Petition From Connecticut, 16064-16076 [2018-07752]

Agencies

• ENVIRONMENTAL PROTECTION AGENCY

[Federal Register Volume 83, Number 72 (Friday, April 13, 2018)]
[Notices]
[Pages 16064-16076]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-07752]


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ENVIRONMENTAL PROTECTION AGENCY

[EPA-HQ-OAR-2016-0347; FRL-9976-79-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 final action on petition.

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SUMMARY: The Environmental Protection Agency (EPA) is denying 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 
the EPA make a finding that emissions from Brunner Island Steam 
Electric Station (Brunner Island), located in York County, 
Pennsylvania, significantly contribute to nonattainment and interfere 
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 is denying the petition based on the 
conclusion that Connecticut has not demonstrated and the EPA has not 
determined that the Brunner Island facility emits or would emit 
pollution in violation of the good neighbor provision with respect to 
the 2008 ozone NAAQS.

DATES: This final action is effective on April 13, 2018.

ADDRESSES: The EPA has established a docket for this action under 
Docket ID No. EPA-HQ-OAR-2016-0347. All documents in the docket are 
listed and publicly available at https://www.regulations.gov. Although 
listed in the index, some information is not publicly available, i.e., 
Confidential Business Information or other information whose disclosure 
is restricted by statute. Certain other material, such as copyrighted 
material, is not placed on the internet and will be publicly available 
only in hard copy form. Publicly available docket materials are 
available either electronically in the docket or in hard copy at the 
EPA Docket Center, William Jefferson Clinton (WJC) West Building, Room 
3334, 1301 Constitution Avenue NW, Washington, DC. The Public Reading 
Room is open from 8:30 a.m. to 4:30 p.m., Monday through Friday, 
excluding legal holidays. The telephone number for the Public Reading 
Room is (202) 566-1744, and the telephone number for the Office of Air 
and Radiation Docket and Information Center is (202) 566-1742.

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

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

I. Executive Summary of the EPA's Decision on Connecticut's CAA 
Section 126(b) Petition
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 
and Related Actions
III. The EPA's Decision on Connecticut's CAA Section 126(b) Petition
    A. Summary of the EPA's Proposed Action
    B. The EPA's Standard for Reviewing Connecticut's CAA Section 
126(b) Petition Regarding the 2008 8-hour Ozone NAAQS
    C. The EPA's Analysis of Connecticut's CAA Section 126(b) 
Petition
    D. Public Comments
IV. Final Action To Deny Connecticut's 126(b) Petition
V. Judicial Review

I. Executive Summary of the EPA's Decision on Connecticut's CAA Section 
126(b) Petition

    In June 2016, the state of Connecticut, through the Connecticut 
Department of Energy and Environmental Protection (Connecticut), 
submitted a petition requesting that the EPA make a finding pursuant to 
CAA section 126(b) that emissions from Brunner Island Steam Electric 
Station (Brunner Island), located in York County, Pennsylvania, 
significantly contribute to nonattainment and/or interfere with 
maintenance of the 2008 ozone NAAQS in Connecticut in violation of CAA 
section 110(a)(2)(D)(i)(I), otherwise known as the good neighbor 
provision. The petition further requests that the EPA order Brunner 
Island to reduce its oxides of nitrogen (NOX) emissions. On 
February 22, 2018, the EPA issued a proposal to deny the CAA section 
126(b) petition. 83 FR 7710. The Agency solicited comments on the 
proposal. In response, the EPA received oral testimony from four 
speakers at a public hearing on the proposal on February 23, 2018. The 
EPA also received 27 comments submitted to the docket on the proposed 
denial. This Federal Register notice finalizes EPA's action on 
Connecticut's CAA section 126(b) petition and addresses major comments 
the Agency received. The remaining comments are addressed in the 
Response to Comment (RTC) document available in the docket for this 
action.
    In this final action, the EPA is denying the petition requesting 
that the EPA make a finding that emissions from Brunner Island 
significantly contribute to nonattainment and interfere with 
maintenance of the 2008 ozone NAAQS in Connecticut in violation of the 
good neighbor provision. In making this final decision, the EPA 
reviewed the incoming petition, the public comments received, the 
relevant statutory authorities, and other relevant materials.

[[Page 16065]]

The EPA evaluated Connecticut's petition and determined that the state 
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. As discussed in further detail in section III, 
the state's analysis of Brunner Island's impact on air quality in 
Connecticut provides insufficient information regarding the source's 
impact on Connecticut air quality on high ozone days and it does not 
reflect the facility's current operations. Moreover, the petition does 
not evaluate the potential costs and air quality benefits that would 
inform the EPA's evaluation of whether additional emission reductions 
are cost effective, consistent with the EPA's interpretation of the 
good neighbor provision. The EPA also finds, based on its own 
supplemental analysis, that there are no additional highly cost-
effective controls available at the source and thus no basis to 
determine that Brunner Island emits or would emit in violation of the 
good neighbor provision with respect to the 2008 ozone NAAQS. As 
discussed in section III, Brunner Island recently installed a natural 
gas connection pipeline that allows natural gas to be combusted to 
serve Brunner Island's electric generators. Combusting gas at Brunner 
Island has significantly reduced the facility's NOX 
emissions. Accordingly, the EPA denies Connecticut's CAA section 126(b) 
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 
NOX and volatile organic compounds (VOCs) in the presence of 
sunlight. These precursor emissions can be transported downwind 
directly or, after transformation in the atmosphere, as ozone. As a 
result, ozone formation, atmospheric residence, and transport can occur 
on a regional scale (i.e., hundreds of miles). For 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 (CSAPR Update). 81 FR 74504, 74513-4 (October 26, 2016).

B. Clean Air Act Sections 110 and 126

    The statutory authority for this action is provided by CAA sections 
126 and 110(a)(2)(D)(i). Section 126(b) of the CAA provides, among 
other things, that any state or political subdivision may petition the 
Administrator of the EPA to find that any major source or group of 
stationary sources in an upwind state emits or would emit any air 
pollutant in violation of the prohibition of CAA section 
110(a)(2)(D)(i).\1\ Petitions submitted pursuant to this section are 
commonly referred to as CAA section 126(b) petitions. Similarly, 
findings by the Administrator, pursuant to this section, that a source 
or group of sources emits air pollutants in violation of the CAA 
section 110(a)(2)(D)(i) prohibition are commonly referred to as CAA 
section 126(b) findings.
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    \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 (D.C. 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 three 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 three years from the date of the finding. Id.
    Section 110(a)(2)(D)(i) of the CAA, often referred to as the ``good 
neighbor'' provision of the Act, requires states to prohibit certain 
emissions from in-state sources if such emissions impact the air 
quality in downwind states. Specifically, CAA sections 110(a)(1) and 
110(a)(2)(D)(i)(I) require all states, within three 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 various ozone NAAQS. 
The EPA's most recent rulemaking, the CSAPR Update, was promulgated to 
address interstate transport under section 110(a)(2)(D)(i)(I) for the 
2008 ozone NAAQS. 81 FR 74504 (October 26, 2016).

C. The EPA's Historical Approach to Addressing Interstate Transport of 
Ozone Under the Good Neighbor Provision

    Given that formation, atmospheric residence, and transport of ozone 
occur on a regional scale (i.e., hundreds of miles) over much of the 
eastern U.S., the EPA has historically addressed interstate transport 
of ozone pursuant to the good neighbor provision through a series of 
regional rulemakings focused on the reduction of NOX 
emissions. In developing these rulemakings, the EPA has typically found 
that downwind states' problems attaining and maintaining the ozone 
NAAQS result, in part, from the contribution of pollution from multiple 
upwind sources located in different upwind states.
    The EPA has promulgated four regional interstate transport 
rulemakings that have addressed the good neighbor provision with 
respect to various ozone NAAQS considering the regional nature of ozone 
transport. Each of these rulemakings essentially followed the same 
four-step framework to quantify and implement 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 
(referred to as ``receptors'') considering monitored ozone data where 
appropriate and air quality modeling projections to a future compliance 
year. Pursuant to the opinion in North Carolina v. EPA, 531 F.3d 896, 
908-911 (D.C. Cir. 2008), the Agency identified areas expected to be in 
nonattainment with the ozone NAAQS and those areas that may struggle to 
maintain the NAAQS;
    (2) determining which upwind states are linked to these identified 
downwind air quality problems and warrant further analysis to determine 
whether their emissions violate the good neighbor provision. In the 
EPA's most recent rulemakings, the EPA identified such upwind states to 
be those modeled to contribute at or above a threshold equivalent to 
one percent of the applicable NAAQS.

[[Page 16066]]

    (3) for states linked to downwind air quality problems, identifying 
upwind emissions on a statewide basis that will significantly 
contribute to nonattainment or interfere with maintenance of a 
standard. In all four of the EPA's prior rulemakings, the EPA 
apportioned emission reduction responsibility among multiple upwind 
states linked to downwind air quality problems using cost- and air 
quality-based criteria to quantify the amount of a linked upwind 
state's emissions that must be prohibited pursuant to the good neighbor 
provision; and
    (4) for states that are found to have emissions that significantly 
contribute to nonattainment or interfere with maintenance of the NAAQS 
downwind, implementing the necessary 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.
    The EPA's first such rulemaking, the NOX SIP Call, 
addressed interstate transport with respect to the 1979 ozone NAAQS. 63 
FR 57356 (October 27, 1998). The EPA concluded in the NOX 
SIP Call that ``[t]he fact that virtually every nonattainment problem 
is caused by numerous sources over a wide geographic area is a factor 
suggesting that the solution to the problem is the implementation over 
a wide area of controls on many sources, each of which may have a small 
or unmeasurable ambient impact by itself.'' 63 FR 57356, 57377 (October 
27, 1998). The NOX SIP Call promulgated statewide emission 
budgets and required upwind states to adopt SIPs that would decrease 
NOX emissions by amounts that would meet these budgets, 
thereby eliminating the emissions that significantly contribute to 
nonattainment or interfere with maintenance of the ozone NAAQS in 
downwind states. The EPA also promulgated a model rule for a regional 
allowance trading program called the NOX Budget Trading 
Program that states could adopt in their SIPs as a mechanism to achieve 
some or all of the required emission reductions. All of the 
jurisdictions covered by the NOX SIP Call ultimately chose 
to adopt the NOX Budget Trading Program into their SIPs. The 
NOX SIP Call was upheld by the U.S. Court of Appeals for the 
District of Columbia Circuit (D.C. Circuit) in all pertinent respects. 
See Michigan v. EPA, 213 F.3d 663 (2000).
    In coordination with the NOX SIP Call rulemaking under 
CAA section 110(a)(2)(D)(i)(I), the EPA also addressed several pending 
CAA section 126(b) petitions submitted by eight northeastern states 
regarding the same air quality issues addressed by the NOX 
SIP Call (i.e., interstate ozone transport for the 1979 ozone NAAQS). 
These CAA section 126(b) petitions asked the EPA to find that ozone 
emissions from numerous sources located in 22 states and the District 
of Columbia had adverse air quality impacts on the petitioning downwind 
states. Based on technical determinations made in the NOX 
SIP Call regarding upwind state impacts on downwind air quality, the 
EPA in May 1999 made technical determinations regarding the claims in 
the petitions, but did not at that time make the CAA section 126(b) 
findings requested by the petitions. 64 FR 28250 (May 25, 1999). In 
making these technical determinations, the EPA concluded that the 
NOX SIP Call would 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. However, 
subsequent litigation over the NOX SIP Call led the EPA to 
``de-link'' the CAA section 126(b) petition response from the 
NOX SIP Call, and the EPA made final CAA section 126(b) 
findings for 12 states and the District of Columbia. The EPA found that 
sources in these states emitted in violation of the prohibition in the 
good neighbor provision with respect to the 1979 ozone NAAQS based on 
the affirmative technical determinations made in the May 1999 
rulemaking. In order to remedy the violation under CAA section 126(c), 
the EPA required affected sources in the upwind states to participate 
in a regional allowance trading program whose requirements were 
designed to be interchangeable with the requirements of the optional 
NOX Budget Trading Program model rule provided under the 
NOX SIP Call. 65 FR 2674 (January 18, 2000). The EPA's 
action on these section 126(b) petitions was upheld by the D.C. 
Circuit. See Appalachian Power, 249 F.3d 1032.
    The EPA next promulgated the Clean Air Interstate Rule (CAIR) to 
address interstate transport under the good neighbor provision with 
respect to the 1997 ozone NAAQS, as well as the 1997 fine particulate 
matter (PM2.5) NAAQS. The EPA adopted the same framework for 
quantifying the level of states' significant contribution to downwind 
nonattainment in CAIR as it used in the NOX SIP Call, based 
on the determination in the NOX SIP Call that downwind ozone 
nonattainment is due to the impact of emissions from numerous upwind 
sources and states. 70 FR 25162, 25172 (May 12, 2005). The EPA 
explained that ``[t]ypically, two or more States contribute transported 
pollution to a single downwind area, so that the `collective 
contribution' is much larger than the contribution of any single 
State.'' 70 FR 25186. CAIR included two distinct regulatory processes--
(1) a regulation to define significant contribution (i.e., the emission 
reduction obligation) under the good neighbor provision and provide for 
submission of SIPs eliminating that contribution, 70 FR 25162, and (2) 
a regulation to promulgate, where necessary, federal implementation 
plans (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 NAAQS and the 
1997 PM2.5 NAAQS in North Carolina. Citing the analyses 
conducted to support the promulgation of CAIR, the EPA denied North 
Carolina's CAA section 126(b) petition in full based on a determination 
that either the named states were not adversely impacting downwind air 
quality in violation of the good neighbor provision or such impacts 
were fully remedied by implementation of the emission reductions 
required by the CAIR FIPs. 71 FR 25328, 25330.
    The D.C. Circuit found that EPA's approach to section 
110(a)(2)(D)(i)(I) in CAIR was ``fundamentally flawed'' in several 
respects, and the rule was remanded in July 2008 with the instruction 
that the EPA replace the rule ``from the ground up.'' North Carolina v. 
EPA, 531 F.3d at 929. The decision did not find fault with the EPA's 
general multi-step framework for addressing interstate ozone transport, 
but rather concluded EPA's analysis did not address all elements 
required by the statute. The EPA's separate action denying North 
Carolina's CAA section 126(b) petition was not challenged.
    On August 8, 2011, the EPA promulgated the Cross-State Air 
Pollution Rule (CSAPR) to replace CAIR. 76 FR 48208 (August 8, 2011). 
CSAPR addressed the same ozone and

[[Page 16067]]

PM2.5 NAAQS as CAIR and, in addition, addressed interstate 
transport for the 2006 PM2.5 NAAQS by requiring 28 states to 
reduce sulfur dioxide (SO2) emissions, annual NOX 
emissions, and/or ozone season NOX emissions that would 
significantly contribute to other states' nonattainment or interfere 
with other states' abilities to maintain these air quality standards. 
Consistent with prior determinations made in the NOX SIP 
Call and CAIR, the EPA 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.'' 76 FR 48237. 
Accordingly, the EPA conducted a regional analysis, calculated emission 
budgets for affected states, and required EGUs in these states to 
participate in new regional allowance trading programs to reduce 
statewide emission levels. CSAPR was subject to nearly four years of 
litigation in which the Supreme Court upheld the EPA's approach to 
calculating emission reduction obligations and apportioning upwind 
state responsibility under the good neighbor provision, but also held 
that the EPA was precluded from requiring more emission reductions than 
necessary to address downwind air quality problems. See EPA v. EME 
Homer City Generation, L.P., 134 S. Ct. 1584, 1607-1609 (2014).\2\
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    \2\ On remand from the Supreme Court, the D.C. Circuit further 
affirmed various aspects of the CSAPR, and also remanded the rule 
without vacatur for reconsideration of certain states' emissions 
budgets. EME Homer City Generation, L.P. v. EPA, 795 F.3d 118 
(2015). The EPA addressed the remand in several rulemaking actions 
in 2016 and 2017.
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    Most recently, the EPA promulgated the CSAPR Update to address the 
good neighbor provision requirements for the 2008 ozone NAAQS, the same 
NAAQS at issue in the Connecticut section 126(b) petition. 81 FR 74504 
(October 26, 2016). The final CSAPR Update built upon previous efforts 
to address the collective contributions of ozone pollution from 22 
states in the eastern U.S. to widespread downwind air quality problems, 
including the NOX SIP Call, CAIR, and the original CSAPR. As 
was also the case for the previous rulemakings, the EPA identified 
emissions from large EGUs as significantly contributing and/or 
interfering with maintenance based on cost and air quality factors. The 
CSAPR Update finalized EGU NOX ozone season 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 
ozone season NOX reductions that could be achieved in the 
2017 analytic year, which was relevant to the upcoming 2018 attainment 
date for moderate ozone nonattainment areas, and included the potential 
for operating and optimizing existing selective catalytic reduction 
(SCRs) post-combustion controls; installing state-of-the-art 
NOX combustion controls; and shifting generation to existing 
units with lower NOX emission rates within the same state.
    The CSAPR Update finalized enforceable measures necessary to 
achieve the emission reductions in each state by requiring power plants 
in covered states to participate in the CSAPR NOX Ozone 
Season Group 2 allowance trading program. The CSAPR trading programs 
and the EPA's prior emission trading programs (e.g., the NOX 
Budget Trading Program associated with the NOX SIP Call) 
have provided a proven, cost-effective implementation framework for 
achieving emission reductions. In addition to providing environmental 
certainty (i.e., a cap on regional and statewide emissions), these 
programs have also provided regulated sources with flexibility when 
choosing compliance strategies. This implementation approach was shaped 
by previous rulemakings and reflects the evolution of these programs in 
response to court decisions and practical experience gained by states, 
industry, and the EPA.
    In finalizing the CSAPR Update, the EPA determined the rule may 
only be a partial resolution of the good neighbor obligation for many 
states, including Pennsylvania, and that the emission reductions 
required by the rule ``may not be all that is needed'' to address 
transported emissions.\3\ 81 FR 74521-522 (October 26, 2016). The EPA 
noted that the information available at that time indicated that 
downwind air quality problems would remain in 2017 after implementation 
of the CSAPR Update 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 (i.e., the 
implementation of new post-combustion controls) that are achievable on 
longer timeframes after the 2017 analytic year.
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    \3\ The EPA determined that the emission reductions required by 
the CSAPR Update were the full scope of the good neighbor obligation 
for Tennessee with respect to the 2008 ozone NAAQS. 81 FR 74551-522.
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    Of particular relevance to this action, 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 air quality modeling projections to 2017. 81 FR 
74538-539. The EPA found there were cost-effective emission reductions 
that could be achieved within Pennsylvania at a marginal cost of $1,400 
per ton, 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 the EPA's trading program under 
the CSAPR Update beginning with the 2017 ozone season. This emission 
budget was imposed to achieve necessary emission reductions and 
mitigate Pennsylvania's impact on downwind states' air quality in time 
for the July 2018 moderate area attainment date for the 2008 ozone 
NAAQS.

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

    On March 12, 2008, the EPA promulgated a revision to the ozone 
NAAQS, lowering both the primary and secondary standards to 75 parts 
per billion (ppb).\4\ Subsequently, on June 1, 2016, 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.\5\ 
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.\6\ The units were constructed starting in 1961 through 
1969. For over 50 years, all three units at Brunner Island have

[[Page 16068]]

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.\7\ Following installation of this 
pipeline, Brunner Island primarily combusted natural gas as fuel during 
the 2017 ozone season.\8\ 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.\9\
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    \4\ See National Ambient Air Quality Standards for Ozone, Final 
Rule, 73 FR 16436 (March 27, 2008).
    \5\ 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.
    \6\ For tangentially-fired boiler types, LNC3 is state of the 
art control technology. See sections 3.9.2 and 5.2.1 on pages 3-25 
and 5-5 of the Integrated Planning Model (IPM) 5.13 documentation 
for details about combustion controls. The IPM documentation is 
available at https://www.epa.gov/airmarkets/power-sector-modeling-platform-v513.
    \7\ 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. The Connecticut CAA 
section 126(b) petition and an 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. Talen Energy Corp. comments on this action, submitted 
on March 26, 2018, confirm that this natural gas conversion project 
was completed in 2017. These documents are available in the docket 
for this action.
    \8\ Hourly emission rates reported to the EPA and fuel usage 
reported to the U.S. Energy Information Administration (EIA) 
demonstrate Brunner Island predominately used natural gas during the 
ozone season. The emission 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/.
    \9\ These data are publicly available at https://www.epa.gov/ampd. See Air Markets Program Data in the docket for this proposal.
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    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 
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.
    The petition cites several sources of data for its contention that 
Brunner Island 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.\10\ 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.\11\
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    \10\ Of the twelve monitors in Connecticut, seven 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.
    \11\ 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.
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    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 that Brunner Island 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. 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. In particular, the petition contends 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 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; \12\ and (2) the proposed rule would not require Brunner 
Island to reduce its emissions below the threshold of one percent of 
the NAAQS. The petition notes that the modeling to support the proposed 
rule shows that the four Connecticut monitors will continue to have 
nonattainment and maintenance problems after implementation of the 
proposed emission budgets. Finally, the petition suggests that, because 
EGUs may trade allowances within and between states, this could result 
in emission levels in excess of the state's budget, and thus the 
petition suggests 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 
electricity demand days or days with the highest ozone levels.
---------------------------------------------------------------------------

    \12\ The final CSAPR Update was promulgated a few months later. 
81 FR 74504 (October 26, 2016).
---------------------------------------------------------------------------

    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 emission limitations and 
compliance schedules to eliminate its significant contribution to 
nonattainment and interference with maintenance in Connecticut.
    Subsequent to receiving Connecticut's petition, the EPA published a 
final rule extending the statutory deadline for the Agency to take 
final action. 81 FR 48348 (July 25, 2016). 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). This section requires 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

[[Page 16069]]

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. The notice extending the deadline can 
also be found in the docket for this rulemaking.
    When the EPA had not acted by that date, 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.\13\ 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, 
Connecticut v. EPA, No. 3:17-cv-00796 (D. Conn. February 7, 2018). 
Consistent with the court's order, the EPA held a public hearing on the 
proposed action on February 23, 2018. 83 FR 6490 (February 14, 2018).
---------------------------------------------------------------------------

    \13\ Two citizen groups, Sierra Club and Connecticut Fund for 
the Environment, intervened in this case on behalf of Connecticut.
---------------------------------------------------------------------------

    On April 25, 2017, a coalition of public health, conservation, and 
environmental organizations submitted a letter urging the EPA to 
immediately grant several CAA section 126(b) petitions pending before 
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.\14\ 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, rather than respond directly to the letters in the proposed 
action on the petition, the EPA encouraged interested parties to submit 
relevant comments during the public comment period.
---------------------------------------------------------------------------

    \14\ The EPA had received five additional CAA section 126(b) 
petitions at the time of the proposal 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. The EPA notes that this action only addresses 
Connecticut's CAA section 126(b) petition regarding Brunner Island. 
The EPA has not yet proposed action on the other five petitions.
---------------------------------------------------------------------------

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

A. Summary of the EPA's Proposed Action

    In section III of the February 22, 2018, proposed action, the EPA 
explained its proposed basis for denial of Connecticut's CAA section 
126(b) petition. Given that ozone is a regional pollutant, the EPA 
proposed to evaluate the petition consistent with the same four-step 
regional analytic framework that the EPA has used in previous 
regulatory actions evaluating regional interstate ozone transport 
problems. Within this framework, the EPA also proposed to evaluate 
whether Brunner Island emits or would emit in violation of the good 
neighbor provision based on both current and future anticipated 
emission levels. The EPA identified two bases for denial.
    First, the EPA noted that the Agency's historical approach to 
evaluating CAA section 126(b) petitions looks first to see whether a 
petition, standing alone, identifies or establishes a technical basis 
for the requested section 126(b) finding. 83 FR 7715. In this regard, 
the Agency identified several elements of the state's analysis that 
were considered insufficient to support Connecticut's conclusion. In 
particular, the EPA proposed to find that the state's analysis of 
Brunner Island's impact on air quality in Connecticut provides 
insufficient information regarding the source's impact on high ozone 
days and it does not reflect the facility's current operations. Id. 
Moreover, the EPA proposed to find that the petition does not evaluate 
the potential costs and air quality benefits that would inform the 
EPA's evaluation of whether additional emission reductions are cost 
effective, consistent with the EPA's interpretation of the good 
neighbor provision. Id. at 7718.
    Second, the EPA also proposed to rely on its own independent 
analyses to evaluate the potential basis for the requested CAA section 
126(b) finding. Id. at 7716. The EPA noted that Brunner Island 
completed construction of a natural gas pipeline connection prior to 
the beginning of the 2017 ozone season (i.e., by May 1, 2017), and 
primarily burned natural gas with a low NOX emission rate in 
the 2017 ozone season, which indicates that Brunner Island has already 
implemented the emission reductions requested by Connecticut's 
petition. Id. at 7717. The EPA also explained that it expects the 
facility to continue operating primarily by burning natural gas in 
future ozone seasons. Id. To support this determination, the EPA relied 
on its finding that economic factors, including compliance with the 
CSAPR Update and fuel-market economics, would provide an incentive for 
Brunner Island to cost-effectively reduce NOX emissions. Id. 
at 7718. The EPA therefore proposed to find, based on its own analysis, 
that there are no additional highly cost-effective controls available 
at the source, and thus Brunner Island does not currently emit and 
would not emit in violation of the good neighbor provision with respect 
to the 2008 ozone NAAQS. Id.
    The EPA's basis for this final action denying the petition has not 
fundamentally changed from the proposal. We continue to believe that 
Connecticut has not demonstrated that Brunner Island 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. Moreover, the EPA's own 
analysis provides no basis to conclude that the Brunner Island facility 
either currently emits or would emit pollution in violation of the good 
neighbor provision for the 2008 ozone NAAQS. In section III of this 
notice, and in the RTC document included in the docket for this action, 
the agency explains the rationale supporting its conclusion in light of 
the public comments.

B. The EPA's Standard for Reviewing Connecticut's CAA Section 126(b) 
Petition Regarding the 2008 8-Hour Ozone NAAQS

    As discussed in section II.B of this notice, section 126(b) of the 
CAA provides a mechanism for states and other political subdivisions to 
seek abatement of pollution in other states that may 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 historical approach to evaluating 
CAA

[[Page 16070]]

section 126(b) petitions looks first to see whether a petition 
identifies or establishes a sufficient 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 in 
the following sections, given the EPA's concerns with the 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 an 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.
    With respect to the statutory requirements of 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).\15\ Congress provided two 
separate statutory processes to address interstate transport without 
indicating any preference for one over the other, suggesting it viewed 
either approach as a legitimate means to produce the desired result. 
While either provision may be applied to address interstate transport, 
they are also closely linked in that a violation of the prohibition in 
CAA section 110(a)(2)(D)(i) is a condition precedent for action under 
CAA section 126(b) and, critically, that significant contribution to 
nonattainment and interference with maintenance are construed 
identically for purposes of both provisions (since the identical terms 
are naturally interpreted as meaning the same thing in the two linked 
provisions). See Appalachian Power, 249 F. 3d at 1049-50.
---------------------------------------------------------------------------

    \15\ Courts have also upheld the EPA's position that CAA 
sections 110(a)(2)(D)(i) and section 126 are two independent 
statutory tools to address the same problem of interstate transport. 
See GenOn REMA, LLC v. EPA, 722 F.3d 513, 520-23 (3d Cir. 2013); 
Appalachian Power, 249 F.3d at 1047.
---------------------------------------------------------------------------

    Thus, in addressing a section 126(b) petition that addresses ozone 
transport, the EPA believes it is appropriate to interpret these 
ambiguous terms consistent with the EPA's historical approach to 
evaluating interstate ozone pollution transport under the good neighbor 
provision. 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 most recently 
applied this four-step framework in the promulgation of the CSAPR 
Update to at least partially address interstate transport with respect 
to the 2008 ozone NAAQS under CAA section 110(a)(2)(D)(i)(I). Given the 
specific cross-reference in CAA section 126(b) to the substantive 
prohibition in CAA section 110(a)(2)(D)(i), the EPA believes any prior 
findings made under the good neighbor provision are informative--if not 
determinative--for a CAA section 126(b) action, and thus the EPA's 
four-step approach under CAA section 110(a)(2)(D)(i)(I) is also 
appropriate for evaluating under CAA section 126(b) whether 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 highly cost-
effective controls achievable at the source(s) named in the CAA section 
126(b) petition (i.e., step three).
    The EPA notes that Congress did not otherwise specify how the EPA 
should determine that a major source or group of stationary sources 
``emits or would emit'' any air pollutant in violation of the 
prohibition of CAA section 110(a)(2)(D)(i)(I) under the terms of 
section 126(b). Thus, the EPA also believes it is reasonable and 
appropriate at each step to consider whether the facility ``emits or 
would emit'' in light of the facility's current operating conditions. 
Therefore, the EPA interprets the phrase ``emits or would emit'' in 
this context to mean 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 (i.e., steps 
one and two), and the source may be further controlled through 
implementation of highly cost-effective controls (i.e., step 3). 
Similarly, a source ``would emit'' in violation of the good neighbor 
provision if, based on reasonably anticipated future emission levels 
(accounting for existing conditions), the upwind state contributes to 
downwind air quality problems (i.e., steps one and two) and the source 
could be further controlled through implementation of highly cost-
effective controls (i.e., step 3). Consistent with this interpretation, 
the EPA has therefore evaluated, in the following section, whether 
Brunner Island emits or would emit in violation of the good neighbor 
provision based on both current and future anticipated emission levels.
    In interpreting the phrase ``emits or would emit in violation of 
the prohibition of section [110(a)(2)(D)(i)],'' if the EPA or a state 
has already adopted provisions that eliminate the significant 
contribution to nonattainment or interference with maintenance of the 
NAAQS in downwind states, then there simply is no violation of the CAA 
section 110(a)(2)(D)(i)(I) prohibition. Put another way, requiring 
additional reductions would result in eliminating emissions that do not 
contribute significantly to nonattainment or interfere with maintenance 
of the NAAQS, an action beyond the scope of the prohibition in CAA 
section 110(a)(2)(D)(i)(I) and therefore beyond the scope of the EPA's 
authority to make the requested finding under CAA section 126(b). See 
EPA v. EME Homer City Generation, L.P., 134 S. Ct. at 1604 n.18, 1608-
09 (holding the EPA may not require sources in upwind states to reduce 
emissions by more than necessary to eliminate significant contribution 
to nonattainment or interference with maintenance of the

[[Page 16071]]

NAAQS in downwind states under the good neighbor provision).
    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 the EPA has 
promulgated a FIP that fully addressed the deficiency, the FIP would 
eliminate emissions that significantly contribute to nonattainment or 
interfere with maintenance in a downwind state, and, hence, absent new 
information to the contrary, sources in the upwind state would not emit 
in violation of the section 110(a)(2)(D)(i)(I) prohibition.
    The EPA notes that 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. 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). Thus, in circumstances where a SIP or FIP addressing section 
110(a)(2)(D)(i)(I) is being implemented, the EPA will evaluate the 
section 126(b) petition to determine if it raises new information that 
merits further consideration.

C. The EPA's Analysis of 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; Appalachian 
Power, 249 F. 3d at 1049-50.
    The EPA has already conducted such an analysis for the 2008 ozone 
NAAQS with respect to Pennsylvania's impact on receptors in Connecticut 
in the CSAPR Update. The EPA determined that, based on 2017 modeling 
projections, statewide emissions from sources in Pennsylvania were 
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 threshold of 
contributing levels equal to or greater than one percent of the 2008 
ozone NAAQS to downwind nonattainment and maintenance receptors 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. This further analysis in 
step three of the EPA's four-step framework considers cost, technical 
feasibility and air quality factors to determine whether any emissions 
deemed to contribute to the downwind air quality problem must be 
controlled pursuant to the good neighbor provision. Thus, while the 
EPA's modeling conducted for the CSAPR Update did link statewide 
emissions from Pennsylvania to nonattainment and maintenance receptors 
in Connecticut in 2017, this does not conclude the determination, made 
at step three, as to whether Brunner Island's emissions ``contribute 
significantly'' to nonattainment or ``interfere with maintenance'' of 
the 2008 ozone NAAQS.
    In light of the EPA's conclusions that Pennsylvania emissions are 
linked to Connecticut's air quality based on the CSAPR Update modeling, 
the Agency need not take a position regarding whether it is appropriate 
or consistent with the EPA's historical four-step framework for 
addressing ozone transport to evaluate the impact of a single source on 
downwind air quality versus the impact of statewide emissions.\16\ 
Nonetheless, the EPA notes that, for the same reasons that the modeled 
impact of a state is insufficient to conclude the EPA's analysis, the 
impact of a single source on downwind air quality would also not 
necessarily be 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 the EPA could 
determine that this facility emits or would emit in violation of the 
good neighbor provision.
---------------------------------------------------------------------------

    \16\ The EPA notes, however, that the DC Circuit has affirmed 
the EPA's decision in a prior section 126(b) action to evaluate the 
impacts of statewide, rather than source-specific, impacts on 
downwind ozone nonattainment. Appalachian Power, 249 F. 3d at 1049-
50.
---------------------------------------------------------------------------

    The agency also notes that Connecticut's analysis appears to 
provide insufficient information for the EPA to make a determination 
under CAA section 126(b) because the conclusions that the petition 
draws regarding Brunner Island's particular impacts on Connecticut are 
not sufficiently supported by the state's technical assessment. In 
particular, existing EPA analyses of interstate ozone pollution 
transport focus on contributions to high ozone days at the downwind 
receptor in order to evaluate the impact on nonattainment and 
maintenance at the receptor. For example, in the CSAPR Update modeling, 
ozone contributions were calculated using data for the days with the 
highest future year modeled ozone concentrations.\17\ For the 2008 
ozone NAAQS, only the highest measured ozone days from each year are 
considered for the calculation of ozone design values \18\ (the values 
that determine whether there is a measured NAAQS violation). Therefore, 
measured ozone values that are far below the level of the NAAQS do not 
cause an exceedance or violation of the NAAQS. For this reason, only 
ozone contributions to days that are among the highest modeled ozone 
days at the receptor are relevant to determining if a state or source 
is linked to downwind nonattainment or maintenance issues. The analysis 
and metrics provided by the petitioner provide some information on the 
frequency and magnitude of ozone impacts. However, the information is 
unclear as to whether the modeled and/or measured ozone levels

[[Page 16072]]

in Connecticut on the days when emissions from Brunner Island have the 
largest impact at Connecticut receptors are among the highest modeled 
ozone days at those receptors. Thus, the petition does not provide 
sufficient information to evaluate the contribution of Brunner Island's 
emissions to nonattainment and maintenance receptors in 
Connecticut.\19\
---------------------------------------------------------------------------

    \17\ Air Quality Modeling Technical Support Document for the 
Final Cross-State Air Pollution Rule Update, 17 (August 2016). 
Available at https://www.epa.gov/sites/production/files/2017-05/documents/aq_modeling_tsd_final_csapr_update.pdf.
    \18\ Ozone design values are calculated as the three-year 
average of the annual fourth-highest daily maximum 8-hour average 
measured ozone concentration at each monitor. See 80 FR 65296 
(October 26, 2015) for a detailed explanation of the calculation of 
the 3-year 8-hour average and 40 CFR part 50, appendix U.
    \19\ 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, but the table does not 
indicate whether those days were high measured and/or modeled ozone 
days.
---------------------------------------------------------------------------

    We also note that the petition's evaluation of Brunner Island's 
impact on Connecticut relied on emission data from 2011 which, as 
discussed in more detail in the following paragraphs, is not likely to 
be representative of current and/or future NOX emissions and 
ozone levels in Connecticut, Pennsylvania, and the rest of the 
region.\20\ Therefore, the modeled impacts identified in the petition 
are likely also not representative of the impacts of Brunner Island's 
current emission levels on ozone concentrations in Connecticut.
---------------------------------------------------------------------------

    \20\ The Connecticut petition relies on air quality modeling 
that uses 2011 emission 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. These data are publicly available at https://www.epa.gov/ampd.
---------------------------------------------------------------------------

    With respect to the question of whether there are feasible and 
highly cost-effective NOX emission reductions available at 
Brunner Island (step three of the four step framework), 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, and as described in more detail in the following paragraphs, 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 therefore has no basis to determine, consistent 
with the standard of review outlined in section III.B, that Brunner 
Island 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. 
Accordingly, the EPA has determined that 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.
    Similarly, the EPA concludes that Connecticut's petition does not 
demonstrate that Brunner Island would emit in violation of the good 
neighbor provision. The EPA also believes that Brunner Island will 
continue to primarily use natural gas as fuel during future ozone 
seasons for several economic reasons. First, compliance with the CSAPR 
Update provides an economic incentive to cost-effectively reduce 
NOX emissions. Specifically, Brunner Island's participation 
in the CSAPR NOX Ozone Season Group 2 allowance trading 
program provides an economic incentive to produce electricity in ways 
that lower ozone-season NOX, such as by burning natural gas 
relative to burning coal at this particular power plant. Under the 
CSAPR Update, each ton of NOX emitted by a covered EGU has 
an economic value--either a direct cost in the case that a power plant 
must purchase an allowance to cover that ton of emissions for CSAPR 
Update compliance or an opportunity cost in the case that a power plant 
must use an allowance in its account for compliance and thereby 
foregoes the opportunity to sell that allowance on the market. The EPA 
notes that Brunner Island's 2017 emissions would have been 
approximately 2,714 tons more than its actual 2017 emissions if it had 
operated as a coal-fired generator, as it did in 2016.\21\ This 
reduction in NOX emissions that is attributable to primarily 
burning natural gas has an economic value in the CSAPR allowance 
trading market.
---------------------------------------------------------------------------

    \21\ This estimated emissions difference was calculated as the 
difference between 2017 reported NOX emissions of 877 
tons and a counterfactual 2017 NOX emissions estimate of 
3,591 tons created using 2017 operations (i.e., heat input of 
19,406,872 mmBtu) multiplied by the 2016 NOX emission 
rate of 0.37 lb/mmBtu reflecting coal-fired generation. These data 
are publicly available at https://www.epa.gov/ampd.
---------------------------------------------------------------------------

    Second, there are continuing fuel-market based economic incentives 
suggesting that Brunner Island will continue to primarily burn natural 
gas during the ozone season. Brunner Island elected to add the 
capability to primarily utilize natural gas by way of a large capital 
investment in a new natural gas pipeline capacity connection. Brunner 
Island's operators would have planned for and constructed this project 
during the recent period of relatively low natural gas prices. In the 
years preceding the completion of this natural gas pipeline connection 
project, average annual Henry Hub natural gas spot prices ranged from 
$2.52/mmBtu to $4.37/mmBtu (i.e., between 2009 and 2016).\22\ The 
capital expenditure to construct a natural gas pipeline connection 
suggests that natural gas prices within this range make it economic 
(i.e., cheaper) for Brunner Island to burn natural gas to generate 
electricity relative to burning coal. As such, future natural gas 
prices in this same range suggest that Brunner Island will continue to 
primarily burn natural gas during future ozone seasons. The EPA and 
other independent analysts expect future natural gas prices to remain 
low and within this price range exhibited from 2009 to 2016 due both to 
supply and distribution pipeline build-out. For example, the Energy 
Information Administration's (EIA) 2018 Annual Energy Outlook (AEO) 
natural gas price projections for Henry Hub spot price range from 
$3.06/mmBtu in 2018 to $3.83/mmBtu in 2023.\23\ Moreover, the AEO 
short-term energy outlook and New York Mercantile Exchange futures 
further support the estimates of a

[[Page 16073]]

continued low-cost natural gas supply.\24\ 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. The EPA further notes that recent analyses projecting 
emission levels to a future year indicate 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, it 
does suggest that, by 2023, air quality in Connecticut may be 
significantly improved compared to present monitored values and it may 
no longer be necessary to further reduce emissions from any state to 
ensure attainment of the 2008 ozone NAAQS in Connecticut.\26\
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    \22\ Henry Hub is a significant distribution hub located on the 
natural gas pipeline system located in Louisiana. Due to the 
significant volume of trades at this location, it is seen as the 
primary benchmark for the North American natural gas market. These 
data are publicly available at https://www.eia.gov/dnav/ng/hist/rngwhhdA.htm.
    \23\ In the 2018 reference case Annual Energy Outlook (AEO) 
released February 6, 2018, created by the U.S. Energy Information 
Administration (EIA), natural gas prices for the power sector for 
2018 through 2023. Available at https://www.eia.gov/outlooks/aeo/data/browser/#/?id=13-AEO2018&cases=ref2018&sourcekey=0. Projected 
delivered natural gas prices for the electric power sector in the 
Middle Atlantic region, where Brunner Island is located, ranged 
between $3.56 in 2018 and $4.08/mmBtu in 2023. The projected 
delivered coal prices for the electric power sector in the Middle 
Atlantic region remain relatively constant, ranging from $2.51 to 
$2.56/mmBtu. These data are publicly available at https://www.eia.gov/outlooks/aeo/data/browser/#/?id=3-AEO2018®ion=1-2&cases=ref2018&start=2016&end=2023&f=A&linechart=ref2018-d121317a.3-3-AEO2018.1-2&map=ref2018-d121317a.4-3-AEO2018.1-2&sourcekey=0.
    \24\ AEO short-term energy outlook available at https://www.eia.gov/outlooks/steo/report/natgas.php.
    \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.
    \26\ The EPA also notes that a proposed settlement agreement 
between Sierra Club and Talen Energy may further ensure that Brunner 
Island will operate by burning gas in the ozone season in 2023 and 
future years. Under the settlement, Brunner Island agrees to operate 
only on natural gas during the ozone season (May 1-September 30) 
starting on January 1, 2023, (subjected to limited exceptions) and 
cease coal operations after December 31, 2028. See a joint statement 
regarding this agreement, available at https://talenenergy.investorroom.com/2018-02-14-Joint-Statement-Talen-Energy-and-the-Sierra-Club-Reach-Agreement-on-the-Future-Operation-of-the-Brunner-Island-Power-Plant. As of the date of this final 
action, that settlement agreement has not yet been finalized.
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    The context in which Brunner Island installed natural gas-firing 
capability and burned natural gas is consistent with observed recent 
trends in natural gas utilization within the power sector, suggesting 
that Brunner Island's economic situation in which it primarily burns 
gas as fuel during the ozone season is not unique or limited. Comparing 
total heat input from 2014 with 2017 for all units that utilize natural 
gas and report to the EPA's Clean Air Markets Division, historical data 
showed an increased use of natural gas of 14 percent.\27\ This overall 
increase results from both an increase in capacity from the 
construction of additional units and an increased gas-fired utilization 
capacity factor. The available capacity increased six percent while 
average capacity factor increased from 23 percent to 25 percent, which 
reflects an eight percent increase in utilization.
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    \27\ From 8.4 billion mmBtu to 9.6 billion mmBtu. See EPA's 
Clean Air Markets Division data available at https://ampd.epa.gov/ampd/.
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    Considering the projected continued broader downward trends in 
NOX emissions resulting in improved air quality in 
Connecticut, the EPA anticipates that Brunner Island will likely 
continue to primarily burn natural gas during the ozone season as air 
quality in Connecticut continues to improve. Accordingly, the EPA has 
no basis to conclude that the facility would emit in violation of the 
good neighbor provision with respect to the 2008 ozone NAAQS.
    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. As an initial matter, 
Connecticut fails to support its contention that the CSAPR Update does 
not incentivize sources to reduce emissions and thus does not meet the 
demonstration burden imposed on petitioners under CAA section 126(b). 
Moreover, Brunner Island's 2017 emission levels demonstrate that, 
contrary to Connecticut's assertions, Brunner Island reduced emissions 
while operating under the economic incentives of the CSAPR Update 
allowance trading program. This is also true for EGUs in Pennsylvania 
more broadly, which had collective NOX emissions of 13,646 
tons, well below the Pennsylvania NOX emissions 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 the highest ozone 
levels or days with high electricity demand. Throughout the 2017 ozone 
season, Brunner Island's hourly NOX rate averaged 0.09 lb/
mmBtu and was higher than 0.30 lb/mmBtu in only 16 hours, or 0.4% of 
the time.\28\ Based on historical emission rate data for Brunner Island 
before the completion of the natural gas pipeline, a rate above 0.30 
lb/mmBtu indicates the facility is predominately burning coal (e.g., 
their average ozone-season NOX emission rate in 2016 was 
0.37 lb/mmBtu). Conversely, based on historical emission rate data for 
Brunner Island after the completion of the natural gas pipeline, a rate 
below 0.15 indicates the facility is predominately burning natural gas 
(e.g., their average ozone-season emission rate in 2017 was 0.10 lb/
mmBtu). During the highest 10 percent of ozone season electricity 
demand hours based on total hourly gross generation reported to EPA for 
the region around Pennsylvania (Connecticut, Delaware, Maryland, 
Pennsylvania, New Jersey and New York), Brunner Island's average 
emission rate was just below 0.10 lb/mmBtu and was higher than 0.15 lb/
mmBtu in only 28 of the 367 hours, or 7.6% of those hours. Brunner 
Island's emissions were never above 0.30 lb/mmBtu during these hours. 
Thus, based on 2017 ozone season operations, EPA finds no evidence to 
suggest that Brunner Island's participation in the allowance trading 
program would incentivize Brunner Island to increase its emissions 
generally or result in increased emissions on days with high 
electricity demand.
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    \28\ See Brunner Island 2017 Hourly Emissions Spreadsheet, 
available in the docket for this action.
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    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 and it does not 
demonstrate that such controls are highly cost-effective considering 
potential emission reductions or 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. The 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.\29\ 
The cost of such new post-combustion controls at Brunner Island would 
likely be even more expensive considering current and anticipated 
emission rates.
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    \29\ 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.
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    Under the EPA's approach to quantifying those amounts of emissions 
that significantly contribute to nonattainment or interfere with 
maintenance in the CSAPR Update, the cost to implement a particular 
control strategy is balanced against air quality factors, such as the 
amount of NOX emission reductions available using the 
control strategy and the downwind reductions in ozone at identified 
receptors that would result from the

[[Page 16074]]

emission reductions. Connecticut has not attempted to evaluate what 
NOX emission reductions or improvements in ozone 
concentrations 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 air quality 
considerations.\30\ This element is not only key to the EPA's 
interpretation of the good neighbor provision as it applies step three 
to ozone pollution transport, but is also 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. Thus, the petition does not demonstrate that potential emission 
reductions achievable at Brunner Island through installation of such 
controls would necessarily constitute the state's good neighbor 
obligation with respect to the 2008 ozone NAAQS.
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    \30\ Although Brunner Island has already reduced emissions via 
installation and operation of the natural gas pipeline, the EPA 
notes that Connecticut's petition also did not evaluate either the 
costs or anticipated air quality benefits of this control strategy, 
and thus did not demonstrate that emission reductions achieved 
through the operation of natural gas are necessarily required under 
the good neighbor provision with respect to the 2008 ozone NAAQS.
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    Based on the information discussed in this notice, the EPA is 
denying Connecticut's section 126(b) petition on two bases. First, the 
EPA has identified a number of reasons noted in this section as to why 
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. Second, the EPA finds, based on its 
own analysis, that Brunner Island combusted primarily natural gas in 
the 2017 ozone season, resulting in a low NOX emission rate 
for this facility, and it is expected that future operation will be 
consistent with 2017 operations. In light of this determination, the 
EPA finds that there are no additional highly cost-effective controls 
available at the source, and thus there is no basis at this time for 
the EPA to find that Brunner Island emits or would emit in violation of 
the good neighbor provision with respect to the 2008 ozone NAAQS.\31\
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    \31\ 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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D. Public Comments

    The EPA solicited comment on the proposed denial of Connecticut's 
section 126(b) petition. This section addresses significant comments 
received on the February 22, 2018 proposed denial. Remaining comments 
are addressed in a separate RTC document found in the docket for this 
action.
    Several commenters asserted that the EPA should base its decision 
to grant or deny Connecticut's section 126(b) petition on the technical 
support included in the petition. The commenters contend that the 
petition was based on the most recent data available when the petition 
was submitted and allege that the proposed denial fails to meaningfully 
engage with the data and evidence provided in the petition.
    The commenters are incorrect in asserting that the EPA must base 
its decision to grant or deny a petition based only on the technical 
support included in the petition. Were the EPA to act solely on the 
information available in the petition, that information may result in 
an arbitrary and unreasonable decision by the EPA, and could, for 
example, impose controls or emission limitations that are not 
appropriately tailored to the problem as it exists at the time of EPA's 
final action or at the time when such controls or limitations would 
actually be implemented. This could result in unnecessary over-control 
(or under-control) of emissions, in potential violation of the Supreme 
Court's holding in EPA v. EME Homer City Generation, L.P., 134 S. Ct. 
1584, 1608-09 (2014). Therefore, the EPA does not agree that it would 
be appropriate to solely rely on the information in the petition to 
evaluate Brunner Island's impact on Connecticut in light of the recent 
operational changes at the facility.
    Moreover, as discussed in section III.B of the notice of final 
action, 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. In this instance, Brunner 
Island's recent installation of a natural gas connection pipeline 
allowing natural gas to be combusted to serve Brunner Island's electric 
generators, which has significantly reduced the facility's 
NOX emissions, resulted in changed circumstances at the 
facility such that the 2011 emissions analyzed in the petition are not 
an accurate indicator of Brunner Island's future ozone seasons 
emissions. To inform its rationale, the EPA examined emissions from the 
2017 ozone season and expected future emission levels, which reflect 
the recent changes at Brunner Island.
    Although the EPA determined that it was appropriate to conduct an 
independent analysis to determine whether it should grant or deny the 
petition, the commenter is incorrect in asserting that the EPA failed 
to meaningfully engage with the data and evidence provided in the 
petition. As described in section III.B, the petitioner bears the 
burden of establishing, as an initial matter, a technical basis for the 
specific finding requested. The EPA evaluated the information provided 
by the petitioner, and found that there was insufficient support for 
the EPA to grant the petition on its face. For example, the EPA 
examined the relevance of the 2011 emissions data provided in the 
petition, finding that the state's analysis no longer reflects the 
facility's current operations due to changed conditions at Brunner 
Island. The EPA also noted the lack of information regarding ozone 
impacts on high ozone days at specific downwind receptors in 
Connecticut and the state's failure to evaluate costs or air quality 
benefits of proposed control measures. Thus, the EPA did evaluate the 
data and evidence provided in the petition and found it lacking.
    Several commenters asserted that while Brunner Island has installed 
the capability to use natural gas as fuel, the facility can switch back 
to coal at any time and increase its NOX emissions. These 
commenters contend that the EPA must therefore place a federally 
enforceable requirement on Brunner Island pursuant to section 126 to 
ensure the facility continues to operate on natural gas. The commenters 
suggest that the use of the term ``prohibit'' in section 
110(a)(2)(D)(i)(I) means that the EPA must include a legally 
enforceable emission limit requiring Brunner Island to operate with gas 
for electricity generation.
    The commenters assertion that the EPA's expectations regarding 
Brunner Island's future operations do not satisfy the strict emission 
prohibition of CAA section 110(a)(2)(D)(i)(I) implicitly assumes that 
Brunner Island is in fact operating in violation of section 
110(a)(2)(D)(i)(I). The EPA agrees with the commenter that the 
prohibition of section 110(a)(2)(D)(i)(I) is linked directly to section 
126(b), in that a violation of the prohibition in CAA section 
110(a)(2)(D)(i) is a condition precedent for action under CAA section

[[Page 16075]]

126(b) and, critically, that significant contribution to nonattainment 
and interference with maintenance should be construed identically for 
purposes of both provisions where EPA has already given meaning to the 
terms under one provision. 83 FR 7711 through 7722; see also 
Appalachian Power Co. v. EPA, 249 F.3d 1032, 1048-50 (D.C. Cir. 2001) 
(affirming as reasonable the EPA's approach to interpreting a violation 
of section 110(a)(2)(D)(i)(I) under section 126 consistent with its 
approach in the NOX SIP Call).
    Given the inextricable link between the substantive requirements of 
the two provisions, the EPA applied the same four-step framework used 
in previous ozone transport rulemakings, including the CSAPR Update, to 
evaluate whether Brunner Island significantly contributes to 
nonattainment or interferes with maintenance of the 2008 ozone NAAQS in 
Connecticut. Pursuant to this framework, the EPA first determines at 
steps one and two whether emissions from an upwind state impact 
downwind air quality problems at a level that exceeds an air quality 
threshold, such that the state is linked and therefore contributes to 
the air quality problem. At step three, the EPA then determines whether 
the contribution is ``significant'' or interferes with maintenance of 
the NAAQS based on several factors, including the availability of cost-
effective emission reductions at sources within the state. Where the 
EPA determines that sources in a state do not have cost-effective 
emission reductions available, the EPA concludes that the state does 
not significantly contribute to nonattainment or interfere with 
maintenance of the NAAQS, and thus, that there are no emissions at the 
source that must be ``prohibited'' under section 110(a)(2)(D)(i)(I).
    As described in section III.C, the EPA adopted the same framework 
with respect to Connecticut's section 126(b) petition by evaluating the 
linkage between Pennsylvania and Connecticut, and the availability of 
emission reductions at Brunner Island. The EPA determined that while 
emissions from the state of Pennsylvania are impacting Connecticut 
under steps one and two of the framework, Brunner Island does not emit 
and would not emit in violation of this provision because there are no 
further cost-effective emission reductions available at the source 
under step three of the framework. The EPA's application of the same 
framework that the agency has used to evaluate impacts under section 
110(a)(2)(D)(i)(I) to the evaluation of Brunner Island's impacts on 
Connecticut under section 126(b) is therefore consistent with the 
commenters' suggestion that the two statutory provisions are directly 
linked.
    Importantly, the EPA only implements federally enforceable limits 
under step four of the four-step framework for sources that the EPA 
determines have emissions that significantly contribute to 
nonattainment or interfere with maintenance of the ozone NAAQS downwind 
under steps one, two, and three. See 81 FR 74553 (declining to impose 
CSAPR Update FIP obligations for EGUs in District of Columbia and 
Delaware despite linkages to downwind receptors where EPA determined no 
cost-effective emission reductions were available). This is consistent 
with the statutory language of section 110(a)(2)(D)(i)(I), which 
``prohibit[s]'' only those emissions that significantly contribute to 
nonattainment or interfere with maintenance of the NAAQS in another 
state. The EPA has reasonably interpreted this to mean that where there 
is no such impact, the EPA and the states are not required to impose 
emission limitations.\32\ The EPA does not dispute that, were it to 
find that Brunner Island emits or would emit in violation of the 
prohibition under section 110(a)(2)(D)(i)(I), an appropriate remedy to 
mitigate the emission impacts would necessarily have to be federally 
enforceable, both under section 126(c) (requiring compliance by a 
source with EPA-imposed emission limitations and compliance schedules) 
and section 110(a)(2)(D)(ii) (requiring a state implementation plan to 
contain provisions ensuring compliance with the requirements of section 
126). Because the EPA has determined that there are no further cost-
effective emission reductions available at Brunner Island at step 
three, the EPA does not reach step four's requirement to impose 
federally enforceable emission reductions.
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    \32\ This is also consistent with designation requirements 
elsewhere in title I. Downwind areas are initially designated 
attainment or nonattainment for the ozone NAAQS based on actual 
measured ozone concentrations, regardless of whether the level of 
ozone concentrations is due to enforceable emission limits. 
Similarly, the EPA generally evaluates whether sources in nearby 
areas contribute to measured nonattainment in such areas for 
purposes of designations based on actual emission levels, and thus 
sources in those nearby areas are generally subject to nonattainment 
planning requirements only if actual emissions from that area are 
considered to contribute to the air quality problem. Here, where 
``significant contribution'' is necessarily a higher standard than 
the contribution threshold used in designations, it is reasonable 
and consistent to determine that states or EPA need only impose 
emission limitations if it is determined that there is significant 
contribution or interference with maintenance.
---------------------------------------------------------------------------

    Several commenters challenge the EPA's determination that Brunner 
Island will primarily operate on natural gas in future ozone seasons as 
``speculative'' and ``conjecture.'' These commenters suggest that 
factors such as natural gas prices could change in the future that 
would make it more economic to burn coal and buy allowances in the 
CSAPR Update regional trading program. Thus, the commenters contend 
that the EPA cannot rely on Brunner Island's recent ozone season 
operation on gas to determine that there are no further cost-effective 
emission reductions available at the source. The commenters also 
suggest that a proposed settlement agreement between Sierra Club and 
Talen Energy indicates Brunner Island's intention to continue firing 
significant amounts of coal between now and 2023, when the first 
emission limitations would take effect requiring Brunner Island to 
operate on gas during the ozone season.
    As discussed in section III.C, the EPA has ample evidence to expect 
that Brunner Island will continue operating primarily by burning 
natural gas in future ozone seasons. The EPA does not claim, as the 
commenter suggests, that one year of changed operations provides 
assurances of Brunner Island's future activity. Brunner Island's recent 
installation of a natural gas pipeline and subsequent use of natural 
gas as fuel is not the only piece of evidence indicating that Brunner 
Island will likely burn primarily natural gas in future ozone seasons. 
Rather, as described in this notice and in the RTC, the EPA has also 
relied on its finding that economic factors, including compliance with 
the CSAPR Update and fuel-market economics, would provide an incentive 
for Brunner Island to combust primarily natural gas. Thus, the EPA's 
analysis of Brunner Island's anticipated future operations is based on 
reasonable and rigorous assessments of the best data available 
regarding the electricity generating markets, rather than speculation.
    The EPA does not believe the fluctuating nature of market forces 
asserted by the commenter outweighs the EPA's analysis of market 
trends, forces, and likely behaviors. The commenters themselves 
speculate, without analysis or evidence, that market forces may be such 
in the future that Brunner Island would likely not use primarily 
natural gas. The EPA also does not believe it is appropriate to 
speculate on the underlying motivations behind the proposed settlement 
agreement between Talen Energy and Sierra Club, or what such 
motivations

[[Page 16076]]

might mean for operation during years not covered by the agreement. 
Rather, the EPA's analysis is based on economic incentives and market 
conditions, which support that Brunner Island will primarily combust 
natural gas, consistent with trends in the electric generating 
industry. The commenter has not provided any information challenging 
this analysis, and merely speculates on potentially fluctuating market 
forces and potential motivations behind Brunner Island's agreements. 
This speculation does not outweigh the EPA's reasoned evidence-based 
analysis of Brunner Island's likely behavior during the ozone season. 
Thus, without specific evidence or analysis to the contrary, the EPA 
has no reason to believe that the evidence provided in either the 
proposed or final action is inaccurate. The EPA notes that if in fact 
Brunner Island's operations change such that the facility is operating 
primarily on coal during future ozone seasons and future emission 
levels increase significantly, then today's final action denying 
Connecticut's section 126 petition would not preclude the State from 
submitting another petition regarding Brunner Island's impacts. The EPA 
is not, however, pre-determining what action may be appropriate on any 
such future petition, which would depend upon a variety of factors, 
including the level of emissions at Brunner Island and future ozone 
concentrations in Connecticut.

IV. Final Action To Deny Connecticut's Section 126(b) Petition

    Based on the considerations outlined at proposal, after considering 
all comments, and for the reasons described in this notice, the EPA is 
denying the Connecticut's section 126(b) petition regarding the Brunner 
Island facility in York County, Pennsylvania. The EPA finds that 
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. The EPA also finds, based on its own 
analysis, that there are no additional highly cost-effective controls 
available at the source and thus no basis at this time to determine 
that Brunner Island emits or would emit in violation of the good 
neighbor provision with respect to the 2008 ozone NAAQS.

V. Judicial Review

    Under section 307(b)(1) of the CAA, petitions for judicial review 
of this action must be filed in the United States Court of Appeals for 
the appropriate regional circuit June 12, 2018. 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 CAA section 307(b)(2).

    Dated: April 6, 2018.
E. Scott Pruitt,
Administrator.
[FR Doc. 2018-07752 Filed 4-12-18; 8:45 am]
 BILLING CODE 6560-50-P