National Emission Standards for Hazardous Air Pollutants: Coal- and Oil-Fired Electric Utility Steam Generating Units-Reconsideration of Supplemental Finding and Residual Risk and Technology Review, 31286-31320 [2020-08607]

Download as PDF 31286 Federal Register / Vol. 85, No. 100 / Friday, May 22, 2020 / Rules and Regulations ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 63 [EPA–HQ–OAR–2018–0794; FRL–10008–60– OAR] RIN 2060–AT99 National Emission Standards for Hazardous Air Pollutants: Coal- and Oil-Fired Electric Utility Steam Generating Units—Reconsideration of Supplemental Finding and Residual Risk and Technology Review Environmental Protection Agency (EPA). ACTION: Final rule. AGENCY: The U.S. Environmental Protection Agency (EPA) is revising its response to the U.S. Supreme Court decision in Michigan v. EPA, which held that the EPA erred by not considering cost in its determination that regulation under section 112 of the Clean Air Act (CAA) of hazardous air pollutant (HAP) emissions from coaland oil-fired electric utility steam generating units (EGUs) is appropriate and necessary. After primarily comparing the cost of compliance relative to the benefits of HAP emission reduction from regulation, the EPA finds that it is not ‘‘appropriate and necessary’’ to regulate HAP emissions from coal- and oil-fired EGUs, thereby reversing the Agency’s previous conclusion under CAA section 112(n)(1)(A) and correcting flaws in the Agency’s prior response to Michigan v. EPA. We further find that finalizing this new response to Michigan v. EPA will not remove the Coal- and Oil-Fired EGU source category from the CAA section 112(c) list of sources that must be regulated under CAA section 112(d) and will not affect the existing CAA section 112(d) emissions standards that regulate HAP emissions from coal- and oil-fired EGUs. The EPA is also finalizing the residual risk and technology review (RTR) conducted for the Coal- and OilFired EGU source category regulated under national emission standards for hazardous air pollutants (NESHAP), commonly referred to as the Mercury and Air Toxics Standards (MATS). Based on the results of the RTR analyses, the Agency is not promulgating any revisions to the MATS rule. DATES: Effective May 22, 2020. ADDRESSES: The EPA has established a docket for these actions under Docket ID No. EPA–HQ–OAR–2018–0794.1 All SUMMARY: 1 As explained in a memorandum to the docket, the docket for these actions include the documents VerDate Sep<11>2014 18:24 May 21, 2020 Jkt 250001 documents in the docket are listed on the https://www.regulations.gov/ website. Although listed, some information is not publicly available, e.g., 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 through https:// www.regulations.gov/, or in hard copy at the EPA Docket Center, WJC West Building, Room Number 3334, 1301 Constitution Ave. NW, Washington, DC. The Public Reading Room hours of operation are 8:30 a.m. to 4:30 p.m. Eastern Standard Time (EST), Monday through Friday. The telephone number for the Public Reading Room is (202) 566–1744, and the telephone number for the Docket Center is (202) 566–1742. For questions about these final actions, contact Mary Johnson, Sector Policies and Programs Division (D243–01), Office of Air Quality Planning and Standards, U.S. Environmental Protection Agency, Research Triangle Park, North Carolina 27711; telephone number: (919) 541–5025; and email address: johnson.mary@epa.gov. For specific information regarding the risk modeling methodology, contact Mark Morris, Health and Environmental Impacts Division (C539–02), Office of Air Quality Planning and Standards, U.S. Environmental Protection Agency, Research Triangle Park, North Carolina 27711; telephone number: (919) 541– 5416; and email address: morris.mark@ epa.gov. For information about the applicability of the NESHAP to a particular entity, contact your EPA Regional representative as listed in 40 CFR 63.13 (General Provisions). FOR FURTHER INFORMATION CONTACT: SUPPLEMENTARY INFORMATION: Preamble acronyms and abbreviations. We use multiple acronyms and terms in this preamble. While this list may not be exhaustive, to ease the reading of this preamble and for and information, in whatever form, in Docket ID Nos. EPA–HQ–OAR–2009–0234 (National Emission Standards for Hazardous Air Pollutants for Coaland Oil-fired Electric Utility Steam Generating Units), EPA–HQ–OAR–2002–0056 (National Emission Standards for Hazardous Air Pollutants for Utility Air Toxics; Clean Air Mercury Rule (CAMR)), and Legacy Docket ID No. A–92–55 (Electric Utility Hazardous Air Pollutant Emission Study). See memorandum titled Incorporation by reference of Docket Number EPA–HQ–OAR–2009– 0234, Docket Number EPA–HQ–OAR–2002–0056, and Docket Number A–92–55 into Docket Number EPA–HQ–OAR–2018–0794 (Docket ID Item No. EPA–HQ–OAR–2018–0794–0005). PO 00000 Frm 00002 Fmt 4701 Sfmt 4700 reference purposes, the EPA defines the following terms and acronyms here: CAA Clean Air Act CAMR Clean Air Mercury Rule CEMS continuous emissions monitoring systems CFR Code of Federal Regulations CRA Congressional Review Act EGU electric utility steam generating unit EPA Environmental Protection Agency EPRI Electric Power Research Institute HAP hazardous air pollutant(s) HCl hydrochloric acid HF hydrogen fluoride HQ hazard quotient ICR information collection request km kilometer MACT maximum achievable control technology MATS Mercury and Air Toxics Standards MIR maximum individual risk MW megawatt NAAQS National Ambient Air Quality Standards NAICS North American Industry Classification System NEI National Emissions Inventory NESHAP national emission standards for hazardous air pollutants NOAEL no-observed-adverse-effect-level NOX nitrogen oxides NTTAA National Technology Transfer and Advancement Act OAQPS Office of Air Quality Planning and Standards OMB Office of Management and Budget PB–HAP hazardous air pollutants known to be persistent and bio-accumulative in the environment PDF Portable Document Format PM particulate matter PM2.5 fine particulate matter POM polycyclic organic matter PRA Paperwork Reduction Act RDL representative detection level REL reference exposure level RFA Regulatory Flexibility Act RIA regulatory impact analysis RTR residual risk and technology review SO2 sulfur dioxide TOSHI target organ-specific hazard index tpy tons per year UMRA Unfunded Mandates Reform Act Background information. With this action, the EPA is, after review and consideration of public comments, finalizing two aspects of the 2019 Proposal. On February 7, 2019, the EPA proposed to find that it is not ‘‘appropriate and necessary’’ to regulate HAP emissions from coal- and oil-fired EGUs, thereby reversing the Agency’s prior conclusion under CAA section 112(n)(1)(A) and correcting flaws in the Agency’s prior response to Michigan v. EPA, 135 S. Ct. 2699 (2015). 84 FR 2670 (2019 Proposal). We further proposed that finalizing this new response to Michigan v. EPA would not remove the Coal- and Oil-Fired EGU source category from the CAA section 112(c) list of sources that must be regulated under CAA section 112(d) and would not E:\FR\FM\22MYR2.SGM 22MYR2 Federal Register / Vol. 85, No. 100 / Friday, May 22, 2020 / Rules and Regulations affect the existing CAA section 112(d) emissions standards that regulate HAP emissions from coal- and oil-fired EGUs. In the same action, the EPA also proposed the results of the RTR of the NESHAP for Coal- and Oil-Fired EGUs. In this action, we are taking final action with regard to these aspects of the 2019 Proposal.2 We summarize some of the more significant comments regarding the proposed rule and provide our responses in this preamble. A summary of all other significant comments on the 2019 Proposal and the EPA’s responses to those comments is available in the document titled Final Supplemental Finding and Risk and Technology Review for the NESHAP for Coal- and Oil-Fired EGUs Response to Public Comments on February 7, 2019 Proposal (Response-to-Comment (RTC) document), in Docket ID No. EPA–HQ– OAR–2018–0794. Organization of this document. The information in this preamble is organized as follows: I. General Information A. Do these actions apply to me? B. Where can I get a copy of this document and other related information? C. Judicial Review and Administrative Reconsideration II. Appropriate and Necessary Finding A. Overview B. Background C. EPA’s Finding Under CAA Section 112(n)(1)(A) D. Effects of This Reversal of the Supplemental Finding III. Background on the RTR Action A. What is the statutory authority for this action? B. What is the Coal- and Oil-Fired EGU source category and how does the NESHAP regulate HAP emissions from the source category? C. What changes did we propose for the Coal- and Oil-Fired EGU source category in our February 7, 2019, proposed rule? IV. What is included in this final rule based on results of the RTR? A. What are the final rule amendments based on the residual risk review for the Coal- and Oil-Fired EGU source category? B. What are the final rule amendments based on the technology review for the Coal- and Oil-Fired EGU source category? C. What are the effective and compliance dates of the standards? V. What is the rationale for our final decisions regarding the RTR action for the Coal- and Oil-Fired EGU source category? A. Residual Risk Review for the Coal- and Oil-Fired EGU Source Category B. Technology Review for the Coal- and Oil-Fired EGU Source Category VI. Summary of Cost, Environmental, and Economic Impacts and Additional Analyses Conducted A. What are the affected facilities? B. What are the air quality impacts? C. What are the cost impacts? D. What are the economic impacts? E. What are the benefits? F. What analysis of environmental justice did we conduct? 31287 G. What analysis of children’s environmental health did we conduct? VII. Statutory and Executive Order Reviews A. Executive Orders 12866: Regulatory Planning and Review and Executive Order 13563: Improving Regulation and Regulatory Review B. Executive Order 13771: Reducing Regulation and Controlling Regulatory Costs C. Paperwork Reduction Act (PRA) D. Regulatory Flexibility Act (RFA) E. Unfunded Mandates Reform Act (UMRA) F. Executive Order 13132: Federalism G. Executive Order 13175: Consultation and Coordination With Indian Tribal Governments H. Executive Order 13045: Protection of Children From Environmental Health Risks and Safety Risks I. Executive Order 13211: Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use J. National Technology Transfer and Advancement Act (NTTAA) K. Executive Order 12898: Federal Actions To Address Environmental Justice in Minority Populations and Low-Income Populations L. Congressional Review Act (CRA) I. General Information A. Do these actions apply to me? Regulated entities. Categories and entities potentially regulated by these final actions are shown in Table 1 of this preamble. TABLE 1—NESHAP AND INDUSTRIAL SOURCE CATEGORIES AFFECTED BY THESE FINAL ACTIONS NAICS 1 code NESHAP and source category Coal- and Oil-Fired EGUs .............................................................................................................................................. 221112, 221122, 921150. North American Industry Classification System. C. Judicial Review and Administrative Reconsideration B. Where can I get a copy of this document and other related information? In addition to being available in the docket, an electronic copy of this document will also be available on the internet. Following signature by the EPA Administrator, the EPA will post a copy of this document at: https:// www.epa.gov/mats/regulatory-actionsfinal-mercury-and-air-toxics-standardsmats-power-plants. Following publication in the Federal Register, the EPA will post the Federal Register version and key technical documents at this same website. Additional information regarding the RTR action is available on the RTR website at https://www3.epa.gov/ttn/ atw/rrisk/rtrpg.html. This information includes an overview of the RTR program, links to project websites for the RTR source categories, and detailed emissions and other data we used as inputs to the risk assessments. 2 The EPA took final action on the other aspect of the 2019 Proposal (i.e., solicitation of comment on establishing a subcategory of certain existing EGUs firing eastern bituminous coal refuse for emissions of acid gas HAP) on April 15, 2020, in a separate action (85 FR 20838). Table 1 of this preamble is not intended to be exhaustive, but rather to provide a guide for readers regarding entities likely to be affected by these final actions for the source category listed. To determine whether your facility is affected, you should examine the applicability criteria in the appropriate NESHAP. If you have any questions regarding the applicability of any aspect of this NESHAP, please contact the appropriate person listed in the preceding FOR FURTHER INFORMATION CONTACT section of this preamble. VerDate Sep<11>2014 18:24 May 21, 2020 Jkt 250001 PO 00000 Frm 00003 Fmt 4701 Sfmt 4700 Under CAA section 307(b)(1), judicial review of these final actions is available only by filing a petition for review in the United States Court of Appeals for the District of Columbia Circuit (D.C. Circuit) by July 21, 2020. Under CAA section 307(b)(2), the requirements established by this final rule may not be challenged separately in any civil or criminal proceedings brought by the EPA to enforce the requirements. Section 307(d)(7)(B) of the CAA further provides that only an objection to a rule or procedure which was raised with reasonable specificity during the period for public comment (including any public hearing) may be raised E:\FR\FM\22MYR2.SGM 22MYR2 31288 Federal Register / Vol. 85, No. 100 / Friday, May 22, 2020 / Rules and Regulations during judicial review. That section of the CAA also provides a mechanism for the EPA to reconsider the rule if the person raising an objection can demonstrate to the Administrator that it was impracticable to raise such objection within the period for public comment or if the grounds for such objection arose after the period for public comment (but within the time specified for judicial review) and if such objection is of central relevance to the outcome of the rule. Any person seeking to make such a demonstration should submit a Petition for Reconsideration to the Office of the Administrator, U.S. EPA, Room 3000, WJC South Building, 1200 Pennsylvania Ave. NW, Washington, DC 20460, with a copy to both the person(s) listed in the preceding FOR FURTHER INFORMATION CONTACT section, and the Associate General Counsel for the Air and Radiation Law Office, Office of General Counsel (Mail Code 2344A), U.S. EPA, 1200 Pennsylvania Ave. NW, Washington, DC 20460. II. Appropriate and Necessary Finding A. Overview On June 29, 2015, the U.S. Supreme Court ruled in Michigan v. EPA that the Agency had erred when it failed to take cost into account in its previous CAA section 112(n)(1)(A) determination that it is appropriate and necessary to regulate HAP emissions from coal- and oil-fired EGUs. In response to that decision, the EPA finalized a supplemental finding on April 25, 2016, that evaluated cost considerations and concluded that the appropriate and necessary finding was still valid. 81 FR 24420 (2016 Supplemental Finding). On February 7, 2019, the EPA proposed a revised response to the U.S. Supreme Court decision. 84 FR 2670 (2019 Proposal). In the 2019 Proposal, after primarily comparing the cost of compliance relative to the benefits of HAP emission reduction from regulation, the EPA proposed to find that it is not appropriate and necessary to regulate HAP emissions from coaland oil-fired EGUs, thereby reversing the Agency’s conclusion under CAA section 112(n)(1)(A), first made in 2000 and later affirmed in 2012 and 2016. Specifically, the Agency proposed that the 2016 Supplemental Finding considering the cost of MATS was flawed as it did not satisfy the EPA’s obligation under CAA section 112(n)(1)(A), as interpreted by the U.S. Supreme Court in Michigan. Additionally, the EPA proposed that while finalizing the action would reverse the 2016 Supplemental Finding, VerDate Sep<11>2014 18:24 May 21, 2020 Jkt 250001 it would not remove the Coal- and OilFired EGU source category from the CAA section 112(c)(1) list, nor would it affect the existing CAA section 112(d) emissions standards regulating HAP emissions from coal- and oil-fired EGUs that were promulgated on February 16, 2012. 77 FR 9304 (2012 MATS Final Rule). In section II.B of this preamble, which finalizes the reversal of the 2016 Supplemental Finding, the EPA provides background information regarding the previous appropriate and necessary findings, including the affirmations in the preamble of the 2012 MATS Final Rule and in the 2016 Supplemental Finding. Section II.C of this preamble describes why the 2016 Supplemental Finding was flawed, why the EPA has authority to revisit that finding now, and what the EPA is finalizing as the appropriate approach to satisfy the EPA’s obligation under CAA section 112(n)(1)(A) as interpreted by the U.S. Supreme Court in Michigan. Finally, section II.D of this preamble explains that the EPA’s revised determination that regulation of HAP emissions from EGUs under CAA section 112 is not appropriate and necessary will not remove coal- and oilfired EGUs from the CAA section 112(c) list of source categories, and that the previously established CAA section 112(d) standards for HAP emissions from coal- and oil-fired EGUs will remain in place. In this preamble, the EPA provides a summary of certain significant comments received on the 2019 Proposal and the Agency’s response to those comments. The RTC document for this action summarizes and responds to all other significant comments that the EPA received. B. Background The CAA establishes a multi-step process for the EPA to regulate HAP emissions from EGUs. First, section 112(n)(1)(A) of the CAA requires the EPA to perform a study of the hazards to public health reasonably anticipated to occur as a result of HAP emissions from EGUs ‘‘after imposition of the requirements of this chapter.’’ 3 If, after considering the results of this study, the EPA determines that it is ‘‘appropriate and necessary’’ to regulate EGUs under 3 See CAA section 112(n)(1)(A); see also Michigan v. EPA, 135 S. Ct. at 2705 (‘‘Quite apart from the hazardous-air-pollutants program, the Clean Air Act Amendments of 1990 subjected power plants to various regulatory requirements. The parties agree that these requirements were expected to have the collateral effect of reducing power plants’ emissions of hazardous air pollutants, although the extent of the reduction was unclear.’’). PO 00000 Frm 00004 Fmt 4701 Sfmt 4700 CAA section 112, the EPA shall then do so. The required study, which the EPA completed in 1998, contained an analysis of HAP emissions from EGUs, an assessment of the hazards and risks due to inhalation exposures to these emitted pollutants, and a multipathway (inhalation plus non-inhalation exposures) risk assessment for mercury and a subset of other relevant HAP.4 The study indicated that mercury was the HAP of greatest concern to public health from coal- and oil-fired EGUs. Mercury is highly toxic, persistent, and bioaccumulates in food chains. The study also concluded that numerous control strategies, of varying cost and efficiency, were available to reduce HAP emissions from this source category. Based on this study and other available information, the EPA determined in December 2000, pursuant to CAA section 112(n)(1)(A), that it was appropriate and necessary to regulate coal- and oil-fired EGUs under CAA section 112 and added such units to the CAA section 112(c) list of sources that must be regulated under CAA section 112(d). 65 FR 79825 (December 20, 2000) (2000 Finding).5 The 2000 Finding did not consider the cost of regulating EGUs in its finding that it was appropriate and necessary to do so. Id. at 79830. In 2005, the EPA revised the original 2000 Finding and concluded that it was neither appropriate nor necessary to regulate EGUs under CAA section 112. 70 FR 15994 (March 29, 2005) (2005 Revision). This action was taken because, at that time, the EPA concluded that the original 2000 Finding lacked foundation in that it failed to consider: (1) The HAP reductions that could be obtained through implementation of CAA sections 110 and 111; and (2) whether hazards to public health would still exist after imposition of emission reduction rules under those sections. The 2005 Revision also removed coaland oil-fired EGUs from the CAA section 112(c) list of source categories to be regulated under CAA section 112. In a separate but related 2005 action, the EPA also promulgated the Clean Air Mercury Rule (CAMR) which established CAA section 111 standards of performance for mercury emissions from EGUs. 70 FR 28605 (May 18, 2005). 4 U.S. EPA. 1998. Study of Hazardous Air Pollutant Emissions from Electric Utility Steam Generating Units—Final Report to Congress, Volume 1. EPA–453/R–98–004a. 5 In the same 2000 action, the EPA Administrator found that regulation of HAP emissions from natural gas-fired EGUs is not appropriate or necessary. 65 FR 79826. E:\FR\FM\22MYR2.SGM 22MYR2 Federal Register / Vol. 85, No. 100 / Friday, May 22, 2020 / Rules and Regulations Both the 2005 Revision and the CAMR were vacated by the D.C. Circuit in 2008. The Court held that the EPA had failed to comply with the requirements of CAA section 112(c)(9) for delisting source categories, and consequently also vacated the CAA section 111 performance standards promulgated in CAMR, without addressing the merits of those standards. New Jersey v. EPA, 517 F.3d 574 (D.C. Cir. 2008). In response to the New Jersey decision, the EPA conducted additional technical analyses, including peerreviewed risk assessments on human health effects associated with mercury and non-mercury HAP emissions from EGUs, focusing on risks to the most exposed and sensitive individuals in the population. Those analyses found that mercury and non-mercury HAP emissions from EGUs remain a significant public health hazard and that EGUs were the largest U.S. anthropogenic source of mercury emissions to the atmosphere.6 Based on these findings, in 2012, the EPA affirmed the original 2000 Finding that it is appropriate and necessary to regulate EGUs under CAA section 112. 77 FR 9304 (February 16, 2012). In the same 2012 action, the EPA established a NESHAP, commonly called MATS, that required coal- and oil-fired EGUs to meet HAP emission standards reflecting the application of the maximum achievable control technology (MACT) for mercury and other air toxics. After MATS was promulgated, both the rule itself and many aspects of the EPA’s appropriate and necessary finding were challenged in the D.C. Circuit. In White Stallion Energy Center v. EPA, the Court denied all challenges. 748 F.3d 1322 (D.C. Cir. 2014). One judge dissented, expressing the view that the EPA erred by refusing to consider cost in its ‘‘appropriate and necessary’’ determination. Id. at 1258– 59 (Kavanaugh, J., dissenting). The U.S. Supreme Court subsequently granted certiorari, directing the parties to address a single question posed by the Court itself: ‘‘Whether the Environmental Protection Agency unreasonably refused to consider cost in determining whether it is appropriate to regulate hazardous air pollutants emitted by electric utilities.’’ Michigan v. EPA, 135 S. Ct. 702 (Mem.) (2014). In 6 U.S. EPA. 2011. Revised Technical Support Document: National-Scale Assessment of Mercury Risk to Populations with High Consumption of Selfcaught Freshwater Fish in Support of the Appropriate and Necessary Finding for Coal- and Oil-Fired Electric Generating Units. Office of Air Quality Planning and Standards. December. EPA– 452/R–11–009. Docket ID Item No. EPA–HQ–OAR– 2009–0234–19913. VerDate Sep<11>2014 18:24 May 21, 2020 Jkt 250001 2015, the U.S. Supreme Court held that ‘‘EPA interpreted [CAA section 112(n)(1)(A)] unreasonably when it deemed cost irrelevant to the decision to regulate power plants.’’ Michigan v. EPA, 135 S. Ct. 2699, 2712 (2015). In so holding, the U.S. Supreme Court found that the EPA ‘‘must consider cost— including, most importantly, cost of compliance—before deciding whether regulation is appropriate and necessary.’’ Id. at 2711. It is ‘‘up the Agency,’’ the Court added, ‘‘to decide (as always, within the limits of reasonable interpretation) how to account for cost.’’ Id. The rule was ultimately remanded back to the EPA (without vacatur) to complete the required cost analysis. White Stallion Energy Ctr. v. EPA, No. 12–1100, ECF No. 1588459 (D.C. Cir. December 15, 2015). In response to the U.S. Supreme Court’s direction, the EPA in the 2016 Supplemental Finding promulgated two different approaches to incorporate cost into the appropriate and necessary finding. 81 FR 24420. The EPA’s preferred approach (referred to as the ‘‘cost reasonableness’’ approach) compared the estimated cost of compliance in the regulatory impact analysis (RIA) for the 2012 MATS Final Rule (referred to here as 2011 RIA 7) against several cost metrics relevant to the EGU sector (e.g., historical annual revenues, annual capital expenditures, and impacts on retail electricity prices). The ‘‘cost reasonableness’’ approach did not compare costs to benefits. Under this approach, the EPA concluded that the power sector would be able to comply with the MATS requirements while maintaining its ability to generate, transmit, and distribute reliable electricity at reasonable cost to consumers. Using a totality-of-thecircumstances approach, the EPA weighed this analysis that the costs of the rule were reasonable along with its prior findings about the amount of HAP pollution coming from the Coal- and Oil-Fired EGU source category, the scientific studies and modeling assessing the risks to public health and the environment from domestic EGU HAP pollution, and information about the toxicity and persistence of HAP in the environment. In a second, alternative, and independent approach (referred to as the ‘‘cost benefit’’ approach), the EPA considered the benefit-cost analysis in the RIA for the 2012 MATS Final Rule. 7 U.S. EPA. 2011. Regulatory Impact Analysis for the Final Mercury and Air Toxics Standards. EPA– 452/R–11–011. Available at: https://www3.epa.gov/ ttn/ecas/docs/ria/utilities_ria_final-mats_201112.pdf. PO 00000 Frm 00005 Fmt 4701 Sfmt 4700 31289 In that analysis, the EPA estimated that the final MATS rule would yield total annual monetized benefits (in 2007 dollars) of between $37 billion to $90 billion using a 3-percent discount rate and $33 billion to $81 billion using a 7percent discount rate, plus additional benefits that cannot be quantified, in comparison to the projected $9.6 billion in annual compliance costs. That analysis reflects that 99.9 percent of the total annual monetized benefits were attributable not to benefits from HAP reduction, but rather from benefits from co-reduction of non-HAP pollutants. In the 2016 Supplemental Finding, the EPA determined that both the preferred ‘‘cost reasonableness’’ approach and the alternative ‘‘cost benefit’’ approach supported the conclusion that regulation of HAP emissions from EGUs is appropriate and necessary. Several state and industry groups petitioned for review of the 2016 Supplemental Finding in the D.C. Circuit. Murray Energy Corp. v. EPA, No. 16–1127 (D.C. Cir. filed April 25, 2016). In April 2017, the EPA moved the D.C. Circuit to continue oral argument and hold the case in abeyance in order to give the new Administration an opportunity to review the 2016 action. (As further explained below, as of the date of signature, the case remains pending in the D.C. Circuit.) Accordingly, the EPA reviewed the 2016 action and proposed on February 7, 2019, to correct flaws in the prior response to Michigan v. EPA (84 FR 2670). Specifically, the 2019 Proposal proposed to reverse the 2016 action and to conclude that it is not ‘‘appropriate and necessary’’ to regulate HAP emissions from coal- and oil-fired EGUs. The public comment period for the 2019 Proposal ended on April 17, 2019. The remainder of this section of this preamble responds to significant comments received on the appropriate and necessary finding and describes the EPA’s justification for finalizing this reversal of the 2016 Supplemental Finding. C. EPA’s Finding Under CAA Section 112(n)(1)(A) 1. EPA Has the Statutory Authority To Revisit the Appropriate and Necessary Finding a. Summary of 2019 Proposal Section 112(n)(1)(A) of the CAA directs the Administrator of the EPA to determine whether it is ‘‘appropriate and necessary’’ to regulate HAP emissions from fossil fuel-fired EGUs after conducting a study of the hazards to public health reasonably anticipated to occur as a result of emissions of HAP E:\FR\FM\22MYR2.SGM 22MYR2 31290 Federal Register / Vol. 85, No. 100 / Friday, May 22, 2020 / Rules and Regulations from EGUs after imposition of emission controls imposed under other provisions of the CAA. In Michigan v. EPA, the U.S. Supreme Court instructed the Agency that it was required to consider cost as part of its appropriate and necessary determination. The Agency completed a consideration of the cost to regulate HAP emissions from coal- and oil-fired EGUs in the 2016 Supplemental Finding. The EPA’s 2019 action proposed to revisit the 2016 Supplemental Finding’s consideration of cost, on the basis that the 2016 action is flawed. The 2019 Proposal stated that such reexamination was permissible as a basic principle of administrative law and under the CAA. 84 FR 2674 n.3. b. Final Rule The EPA is finalizing this action as proposed in February 2019 on the basis that the CAA and CAA section 112(n)(1)(A) do not prohibit the Administrator from revisiting a prior finding made under that section. c. Comments and Responses Comment: Some commenters asserted that it is unlawful for the EPA to revisit its 2016 Supplemental Finding at all, because the EPA has completed the analytic process Congress set in motion in 1990, and the statute unambiguously prohibits the EPA from revisiting or revising the CAA section 112(n)(1)(A) finding. Commenters asserted that the legislative history, statutory context, and statutory structure support their position that Congress intended the CAA section 112(n)(1)(A) appropriate and necessary finding to be a one-time decision, and that the provision gives the EPA ‘‘limited discretion to activate a one-way switch to ‘turn on’ regulation of power plants.’’ The commenters argued that ‘‘[o]nce EPA turns on that switch, as it did in its 2000 finding . . . it must regulate power plants under section 112.’’ Moreover, those commenters argued that even if CAA section 112 were ambiguous as to the EPA’s authority to revisit the appropriate and necessary finding, the EPA was still bound to follow CAA section 112(c)(9)’s delisting procedure before it could reverse its finding under CAA section 112(n)(1)(A). The commenters claimed that New Jersey confirms that the EPA lacks inherent authority to reconsider the appropriate and necessary finding. Finally, the commenters claimed that it would be ‘‘illogical’’ for the EPA to have authority to revise the appropriate and necessary finding independent of removing power plants from the list of regulated sources under CAA section 112. Commenters argued that a revised VerDate Sep<11>2014 18:24 May 21, 2020 Jkt 250001 finding that has no regulatory effect would be ‘‘inherently irrational,’’ and that the EPA has failed to articulate a reasoned basis for undertaking this action (citing Air Alliance Houston v. EPA, 906 F.3d 1049 (D.C. Cir. 2018), and asserting that in that decision the D.C. Circuit found an EPA rule irrational where the EPA tried to ‘‘have it both ways’’ by claiming that a rule was necessary to prevent harms to regulated industry but also ‘‘does nothing more than maintain the status quo,’’ Id. at 1068). Other commenters said that the EPA has authority to reconsider prior Agency decisions and the 2016 Supplemental Finding in particular. These commenters noted that if the 2016 Supplemental Finding were left unamended, it would establish policy precedents at odds with wellestablished precepts about how benefits and costs should be considered in regulatory decisions. Response: The EPA disagrees with commenters that CAA section 112(n)(1)(A) speaks to the EPA’s authority to revisit its appropriate and necessary finding, and we, therefore, disagree with commenters’ contention that the statute on its face prohibits the EPA from revisiting a determination made under that provision. The provision reads: ‘‘The Administrator shall regulate electric utility steam generating units under this section, if the Administrator finds such regulation is appropriate and necessary after considering the results of the study required by this subparagraph [the ‘‘Utility Study’’ 8].’’ The only clear requirement with regard to timing or sequence found in the text of the provision is that the Administrator may not make the finding prior to considering the results of the Utility Study, which the EPA completed in 1998. The statute does not restrict the Administrator’s ability to revise or reconsider a prior finding made under CAA section 112(n)(1)(A). We also disagree with commenters’ argument that because other statutory provisions in the CAA mandate that the EPA review and revise regulations on a set schedule or continuing basis, it must follow that every other statutory provision lacking such a review-andrevise clause prohibits an agency from 8 CAA section 112(n)(1)(A) directs the EPA to conduct a study to evaluate the hazards to public health reasonably anticipated to occur as the result of HAP emissions from EGUs after the imposition of the requirements of the CAA, and to report the results of such study to Congress by November 15, 1993. See U.S. EPA, Study of Hazardous Air Pollutant Emissions from Electric Utility Steam Generating Units—Final Report to Congress. EPA– 453/R–98–004a, February 1998. PO 00000 Frm 00006 Fmt 4701 Sfmt 4700 rethinking its interpretation of such provision. The EPA’s CAA rulemaking history contains many examples of the Agency’s changing position on a previous interpretation of a provision, even where there is no explicit directive within the provision to review or revise. Absent a specific statutory prohibition, the EPA’s ability to revisit existing decisions is well established. The EPA has inherent authority to reconsider and/or revise past decisions to the extent permitted by law so long as the Agency provides a reasoned explanation. The authority to reconsider exists in part because the EPA’s interpretations of statutes it administers ‘‘[are not] instantly carved in stone,’’ but must be evaluated ‘‘on a continuing basis.’’ Chevron U.S.A. v. Natural Resources Defense Council, 467 U.S. 837, 863–64. This is true when, as is the case here, review is undertaken partly ‘‘in response to . . . a change in administrations.’’ National Cable & Telecommunications Ass’n v. Brand X internet Services, 545 U.S. 967, 981 (2005). Indeed, ‘‘[a]gencies obviously have broad discretion to reconsider a regulation at any time.’’ Clean Air Council v. Pruitt, 862 F.3d 1, 8–9 (D.C. Cir. 2017). Commenters’ assertions that the statutory context and structure of CAA section 112 and the legislative history of that provision support their view that the EPA lacks authority to revisit its CAA section 112(n)(1)(A) determination are marred by the commenters’ assumed premise that the EPA necessarily would find that it is appropriate and necessary to regulate EGUs. The commenters argue that their interpretation of the statute must be correct because it creates a tidy framework: The EPA makes an affirmative appropriate and necessary finding, regulations under CAA section 112 are promulgated, and the only statutory means by which the appropriate and necessary finding could be revisited is to satisfy the delisting criteria under CAA section 112(c)(9). According to commenters, such a framework fits with Congress’ concerns about dangers to public health and welfare due to air pollution and what they broadly characterize as congressional desire to regulate HAP from power plants ‘‘promptly.’’ The problem with the commenters’ statutory interpretation is that it makes sense only if an affirmative appropriate and necessary finding occurs in the first instance. If, as commenters assert, CAA section 112(c)(9) is the only statutory means by which a finding under CAA section 112(n)(1)(A) may be revisited, commenters’ framework provides no pathway by which the EPA could revisit E:\FR\FM\22MYR2.SGM 22MYR2 Federal Register / Vol. 85, No. 100 / Friday, May 22, 2020 / Rules and Regulations a finding that it is not appropriate and necessary to regulate HAP from power plants. Commenters’ ‘‘unambiguous’’ reading of CAA section 112(n)(1)(A) and its assumption that Congress drafted the provision in order to ensure ‘‘prompt’’ reductions of HAP from EGUs treats an affirmative finding under that section as a foregone conclusion rather than a decision left up to the expertise of the Agency and its Administrator. The commenters’ reading of the statute also cannot be squared with the Michigan v. EPA decision. They assert that CAA section 112(n)(1)(A) only allows the EPA ‘‘to activate a one-way switch to ‘turn on’ regulation,’’ and notes that the Agency did so ‘‘in its 2000 finding.’’ Commenters are essentially arguing that the U.S. Supreme Court’s instruction to the EPA that it was required to consider cost as part of a CAA section 112(n)(1)(A) finding could never have had any practical effect, because according to commenters, the ‘‘only . . . statutorily mandated avenue to turn the switch off and reverse course . . . [is] the section 112(c)(9) procedures.’’ Therefore, in petitioners’ view, regardless of what the EPA determined on remand from Michigan, only the satisfaction of the CAA section 112(c)(9) criteria, which contain no consideration of cost, could have altered the EPA’s finding under CAA section 112(n)(1)(A). We do not agree that this is a reasonable reading of the statute or the Michigan decision. Additionally, the EPA notes that the D.C. Circuit in New Jersey held that the EPA’s reversal of a prior determination that it was appropriate and necessary to regulate EGUs under CAA section 112 did not by itself effect a delisting of EGUs from the CAA section 112(c) list of source categories. This holding recognizes that the CAA section 112 appropriate and necessary determination is structurally and functionally separate from the EPA’s ability, conditioned on certain predicate findings, to remove source categories from the CAA section 112(c) list. Commenters are, therefore, wrong to assert that the EPA can reverse an appropriate and necessary determination under CAA section 112(n)(1)(A) only if it has first undertaken CAA section 112(c)(9)’s delisting procedure, and wrong to assert that New Jersey supports their position that the EPA lacks inherent authority to reconsider the appropriate and necessary finding; in fact, that case supports the opposite position. For similar reasons, we also reject the commenters’ contention that CAA section 112(c)(9)’s health protective criteria are substantively incorporated VerDate Sep<11>2014 18:24 May 21, 2020 Jkt 250001 into CAA section 112(n)(1)(A)’s appropriate and necessary determination, such that a failure to consider those criteria in the context of reversing a determination under CAA section 112(n)(1)(A) is arbitrary and renders CAA section 112(c)(9) a nullity. As explained in section II.D of this preamble, we agree that the EPA may not delist EGUs from the CAA section 112(c) list and revoke MACT standards for power plants without meeting the delisting criteria of CAA section 112(c)(9). We do not agree, however, that the delisting provision has any effect on the Agency’s ability to make an affirmative or negative determination under CAA section 112(n)(1)(A) where we are not purporting to alter the CAA section 112(c) list. In particular, we do not agree with the commenters’ reading of New Jersey that the D.C. Circuit’s holding means that the EPA could reverse an affirmative appropriate and necessary finding only if it found that the CAA section 112(c)(9) delisting criteria were met. The Court’s holding in New Jersey plainly states that CAA section 112(c)(9) ‘‘unambiguously limit[s] EPA’s discretion to remove sources, including EGUs, from the section 112(c)(1) list once they have been added to it.’’ 517 F.3d 574, 583 (D.C. Cir. 2008). Commenters’ presumed incorporation of the statutory delisting criteria into the CAA section 112(n)(1)(A) determination also finds no support in the Michigan decision, which said nothing about the EPA’s obligation to consider those criteria in determining whether regulation of power plants is appropriate and necessary. Finally, we disagree with commenters who assert that this final action is ‘‘inherently irrational’’ because the MATS standards would not be reversed as a result of the negative appropriate and necessary finding, due to controlling legal precedent from the D.C. Circuit (New Jersey). In this action the EPA is setting out the Agency’s revised reasoning to respond to a U.S. Supreme Court decision and remand (Michigan), because the EPA concludes that the 2016 Supplemental Finding is not appropriate as a matter of interpretation of the statute or as a matter of policy. As noted by some of the commenters, leaving in place the incorrect interpretation of ‘‘appropriate’’ in CAA section 112(n)(1)(A) could establish policy precedent that could have ‘‘long-term and harmful consequences.’’ Moreover, the EPA disagrees that Air Alliance Houston v. EPA has any bearing on this action. There, in admonishing the Agency that it could not ‘‘have it both ways,’’ the Court was PO 00000 Frm 00007 Fmt 4701 Sfmt 4700 31291 criticizing the EPA for attempting to characterize its rule as relieving ‘‘substantial compliance and implementation burden’’ while also ‘‘maintaining the status quo’’ (such that the rule would have little effect on compliance requirements). See Air Alliance Houston, 906 F.3d at 1068. Here, the Agency believes a different finding and better response to the U.S. Supreme Court’s decision in Michigan v. EPA is warranted given the proper application of that decision and the facts in the EPA’s record. We acknowledge that this change in policy will not affect the CAA section 112 MACT standards for EGUs because the D.C. Circuit’s decision in New Jersey v. EPA prohibits the Agency from removing listed sources from the CAA section 112(c) list without satisfying the CAA section 112(c)(9) delisting criteria (see section II.D of this preamble). But we do not agree that simply because D.C. Circuit precedent establishes that the Agency’s reversing its prior determination will have a particular regulatory consequence, the Agency is, therefore, prohibited from revisiting that prior determination in the first instance. Comment: Some commenters stated that the EPA has no authority to ‘‘revise’’ its response to the U.S. Supreme Court’s decision in Michigan, and its attempt to do so would impermissibly subvert the judicial review process. These commenters argued that the EPA’s response to Michigan is the 2016 Supplemental Finding, and that at this stage, that response cannot be altered or reversed. The commenters contended that the 2016 Supplemental Finding constitutes final Agency action and noted that the Finding is currently subject to petitions for review in the D.C. Circuit. The commenters suggested that seeking to undo the 2016 Supplemental Finding by administrative action would unlawfully circumvent that review. Other commenters asserted that the EPA has an obligation to explain how final action on the 2019 Proposal could impact the government’s position in ongoing litigation of the 2016 Supplemental Finding. Commenters also said the EPA must address the implications of a reversal of that finding, considering the petitioner’s positions in the ongoing litigation where the petitioner has argued that reversal of the appropriate and necessary finding must be followed by vacatur of MATS. Response: The EPA disagrees with the commenters that finalizing this action ‘‘subverts the judicial review process’’ with respect to the 2016 Supplemental Finding. To the extent that commenters are arguing that the EPA lacks statutory E:\FR\FM\22MYR2.SGM 22MYR2 31292 Federal Register / Vol. 85, No. 100 / Friday, May 22, 2020 / Rules and Regulations authority to review the 2016 Supplemental Finding, the EPA has addressed that contention in the response to the comment above. We agree that the 2016 Supplemental Finding constituted final Agency action, and we acknowledge that petitions for review of that action were filed in the D.C. Circuit in Murray Energy Corp. v. EPA, No. 16–1127 (and consolidated cases) (D.C. Cir. filed April 25, 2016). However, we disagree that our final action unlawfully circumvents the judicial process. The EPA filed a motion in the Murray Energy litigation requesting the Court to continue oral argument, which had been scheduled for May 18, 2017, to allow the new Administration adequate time to review the 2016 Supplemental Finding to determine whether it needed to be reconsidered.9 On April 27, 2017, in consideration of the EPA’s motion, the D.C. Circuit ordered that the consolidated challenges to the 2016 Supplemental Finding be held in abeyance.10 That case continues to be held in abeyance, pending further order of the Court. In its order, the Court directed the parties to file motions to govern future proceedings within 30 days of the Agency’s concluding its review of the 2016 Supplemental Finding.11 The EPA disagrees with the commenters that the Agency has an obligation to address in the context of this regulatory action the government’s position in that ongoing litigation. We address in section II.D of this preamble the implications of the reversal of the 2016 Supplemental Finding, including addressing those comments received that argue that a vacatur of MATS is required upon finalization of this action. To the extent that the commenter is suggesting that it would be appropriate or required for the EPA at this point to address potential future arguments petitioners might make in the Murray Energy litigation following this final action, the Agency disagrees. The appropriate venue for addressing such arguments is the judicial review process for that action. Commenters provide no authority to support their assertion that an agency is obliged to discuss in a rulemaking the implications of that rulemaking for pending litigation challenging a previous, related agency action; the EPA is aware of no such authority; and the EPA declines to take 9 Respondent EPA’s Motion to Continue Oral Argument at 6, Murray Energy Corp. v. EPA, No. 16–1127 (D.C. Cir. April 18, 2017), ECF No. 1671687. 10 Order, Murray Energy Corp. v. EPA, No. 16– 1127 (D.C. Cir. April 27, 2017), ECF No. 1672987. 11 Id. VerDate Sep<11>2014 18:24 May 21, 2020 Jkt 250001 such litigation positions in this final action. Treating power plants differently from other sources.’’) (emphasis in original). 2. The Preferred Cost Reasonableness Approach of the 2016 Supplemental Finding Was Deficient c. Comments and Responses a. Summary of 2019 Proposal The EPA proposed to determine that the Agency’s 2016 Supplemental Finding erred in its consideration of cost. Specifically, we proposed to find that what was described in the 2016 Supplemental Finding as the preferred approach, or the ‘‘cost reasonableness test,’’ does not meet the statute’s requirements to fully consider costs and was an unreasonable interpretation of CAA section 112(n)(1)(A)’s mandate, as informed by the U.S. Supreme Court’s opinion in Michigan. A summary of that approach can be found in the 2019 Proposal. 84 FR 2674–75. b. Final Rule After considering comments submitted in response to the EPA’s 2019 Proposal, the EPA is finalizing the proposed approach. The EPA concludes that the ‘‘preferred approach’’ in the 2016 Supplemental Finding did not meaningfully consider cost, which the Michigan Court observed to be a ‘‘centrally relevant factor’’ in making the CAA section 112(n)(1)(A) appropriate and necessary finding. The 2016 Supplemental Finding’s de-emphasis of the importance of the cost consideration in the appropriate and necessary determination was based on an impermissible attempt to ‘‘harmonize’’ CAA section 112(n)(1)(A) with the remainder of CAA section 112,12 and was not consistent with Congress’ intent and the U.S. Supreme Court’s decision in Michigan v. EPA, given that statutory provision’s directive to treat EGUs differently from other sources. See 135 S. Ct. at 2710 (‘‘The Agency claims that it is reasonable to interpret [CAA section 112(n)(1)(A)] in a way that ‘harmonizes’ the program’s treatment of power plants with its treatment of other sources. This line of reasoning overlooks the whole point of having a separate provision about power plants: 12 See Legal Memorandum Accompanying the Proposed Supplemental Finding that it is Appropriate and Necessary to Regulate Hazardous Air Pollutants from Coal- and Oil-Fired Electric Utility Steam Generating Units (EGUs) (2015 Legal Memorandum) (Docket ID Item No. EPA–HQ–OAR– 2009–0234–20519), at 6–15 (describing statutory purpose of 1990 CAA Amendments and CAA section 112, and concluding that ‘‘while cost is certainly an important factor, it is one of several factors that must be considered and section 112(n)(1) does not support a conclusion that cost should be the predominant or overriding factor.’’). PO 00000 Frm 00008 Fmt 4701 Sfmt 4700 Comment: Some commenters asserted that the cost analysis in the 2016 Supplemental Finding was consistent with longstanding cost-effectiveness methodologies used in other CAA programs, such as the CAA section 111 New Source Performance Standards and CAA section 169 Prevention of Significant Deterioration (PSD). These commenters disagreed with what they characterized as the 2019 Proposal’s position that CAA section 111 case law was irrelevant to the CAA section 112(n)(1)(A) appropriate and necessary determination, noting that cost effectiveness is used in CAA section 111 to determine standards for existing sources, much as the EPA is determining whether to regulate existing sources in CAA section 112(n)(1)(A). These commenters further said that the proposed monetized cost-benefit approach is inferior to the longstanding cost-effectiveness test for addressing concerns about standards that impose costs too high for the industry to bear. However, other commenters agreed with the EPA that cases interpreting section 111 of the CAA were not an appropriate guide to considering costs under CAA section 112(n)(1)(A). Response: The broad language of CAA section 112(n)(1)(A) and the holding of the Michigan Court suggest that there is more than one permissible way to interpret the Agency’s obligation to consider cost in the appropriate and necessary finding. The text of that section does not require the Agency to consider cost in a particular fashion. The U.S. Supreme Court, in identifying that the Agency’s obligation to consider cost in some fashion in light of the broad term ‘‘appropriate,’’ recognized the discretion afforded the Administrator, noting, ‘‘[i]t will be up the Agency to decide (as always, within the limits of reasonable interpretation) how to account for cost.’’ 135 S. Ct. at 2711. Even in the final 2016 Supplemental Finding, the EPA acknowledged that the cost reasonableness test was but one way to interpret its CAA section 112(n)(1)(A) obligation to consider cost, and ‘‘that the agency need not demonstrate that [its] decision is the same decision that would be made by another Administrator or a reviewing court.’’ 81 FR 24431. The commenters provide many reasons for why they preferred the EPA’s ‘‘cost reasonableness’’ test, but even they do not attempt to argue that the EPA’s 2016 ‘‘preferred approach’’ is E:\FR\FM\22MYR2.SGM 22MYR2 Federal Register / Vol. 85, No. 100 / Friday, May 22, 2020 / Rules and Regulations the only permissible interpretation of the statute. Comparisons of a regulation’s costs and the relationship of those costs to the benefits the regulation is expected to accrue are a traditional and commonplace way to assess the costs of a regulation and are a permissible way to comply with Congress’ broad directive to the Administrator to determine whether regulation is ‘‘appropriate’’ in CAA section 112(n)(1)(A). The EPA has never taken the position, nor do commenters argue now, that any comparison of costs to benefits would be an impermissible reading of the Agency’s obligation to consider cost in CAA section 112(n)(1)(A); indeed, the Agency’s alternative approach to considering cost in the 2016 Supplemental Finding was a formal cost-benefit analysis based on its 2011 RIA, and many of the commenters who now evince a preference for the 2016 ‘‘cost reasonableness test’’ at the time agreed that the 2011 RIA cost-benefit analysis could independently satisfy the Agency’s obligation to consider cost under CAA section 112(n)(1)(A). U.S. Supreme Court precedent also supports the Agency’s position that, absent an unambiguous prohibition to use costbenefit analysis, the Agency generally may do so as a reasonable way to consider cost.13 In Entergy Corp. v. Riverkeeper, Inc., 556 U.S. 208 (2009), the U.S. Supreme Court struck down a Second Circuit decision prohibiting the EPA from employing benefit-cost analysis where the statute was silent as to how the Agency was to consider cost in adopting standards for cooling water intake standards for power plants. The Second Circuit found that because analogous provisions in the Clean Water Act explicitly instructed the EPA to consider ‘‘the total cost of application of technology in relation to the effluent reduction benefits to be achieved,’’ (33 U.S.C. 1314(b)(4)(B)), Congress’ failure to include such an instruction to the EPA in the provision at issue in the case meant that the EPA was not permitted to compare compliance costs to expected environmental benefits. The U.S. Supreme Court reversed, holding that the EPA’s use of cost-benefit analysis ‘‘governs if it is a reasonable interpretation of the statute—not necessarily the only possible interpretation, nor even the interpretation deemed most reasonable 13 See S. Masur & Eric A. Posner, Cost-Benefit Analysis and the Judicial Role, 85 U. Chi. L. Rev. 935, 981 (2018). VerDate Sep<11>2014 18:24 May 21, 2020 Jkt 250001 by the courts.’’ Id. at 218 (emphasis in original). The EPA’s choice to employ costeffectiveness analyses, rather than costbenefit comparisons, in the context of other statutory provisions such as CAA section 111 or the PSD program in no way binds the Agency to using that method to consider cost in CAA section 112(n)(1)(A). The EPA’s citation in the 2015 Legal Memorandum of our consideration of cost under CAA section 111 and the case law evaluating those instances was only to provide context to explain the genesis of the EPA’s newly minted ‘‘cost reasonableness’’ test in the 2016 Supplemental Finding. Even then the EPA did not take the position that the D.C. Circuit cases reviewing the Agency’s cost considerations under CAA section 111 were binding precedent upon which the Court should review our action under CAA section 112(n)(1)(A). In short, the commenters’ preference that the EPA consider cost in a different way does not preclude the Agency from instead considering cost using an approach that compares costs and benefits, where the statute’s broad directive suggests that it may. See Entergy, 556 U.S. at 226. Comment: Some commenters asserted that the EPA’s proposed approach to considering costs and benefits is inconsistent with what they broadly characterize as congressional intent to err on the side of protecting public health. These commenters argued that Congress recognized the insufficiency of available methods for quantifying costs and benefits when revising CAA section 112 in 1990 and that Congress concluded that the nature and latency of harms posed by HAP are not given sufficient weight in a regulatory process that must balance long-term benefits against present-day costs. Commenters said that the Agency should not construe the Michigan Court’s instruction to ‘‘meaningfully consider cost’’ as a requirement to consider benefits in a way that is inconsistent with Congress’ determination that reductions in HAP emissions have great value to the public. These commenters added that the EPA’s proposed approach is based on an incorrect interpretation of Michigan, which stated only that consideration of cost should play some role in the appropriate and necessary finding, not that cost considerations should dominate that finding. According to these commenters, the studies required in CAA section 112(n) indicate that Congress put public health and environmental concerns at the forefront of CAA section 112, which was enacted explicitly in response to the EPA’s lack of action in addressing PO 00000 Frm 00009 Fmt 4701 Sfmt 4700 31293 the harmful effects of HAP, and, therefore, shares the section’s overall focus on harm prevention. These commenters asserted that the ‘‘preferred approach’’ in the 2016 Supplemental Finding met the requirements of Michigan and were consistent with congressional intent and the CAA’s statutory goals. Other commenters, however, agreed with the 2019 Proposal that the ‘‘cost reasonableness’’ test in the 2016 Supplemental Finding’s ‘‘preferred approach’’ was invalid, harmful, and failed to meet the Michigan Court’s expectation that the Agency should weigh benefits against costs. These commenters characterized the costreasonableness test, which compared costs of MATS compliance with various other costs incurred by the power sector, as an ‘‘affordability test,’’ or an inquiry into whether the power sector could absorb the costs of compliance. These commenters noted that such a test ignores benefits by failing to provide important information on whether society’s investment in additional costs is worth the expected benefits and fails to consider whether costs would be ‘‘prudently incurred’’ as a means to reduce hazards to public health. As one commenter put it, ‘‘Simply because the power sector could absorb costs without affecting current operational performance does not mean that it should absorb those costs.’’ Some commenters objecting to the ‘‘preferred approach’’ in the 2016 Supplemental Finding emphasized that looking at cost in this manner would invite the promulgation of regulations that are poorly designed, with few potential benefits. They voiced concern that using affordability tests could result in agencies focusing public and private sector resources on extinguishing relatively small risks while leaving larger risks unattended. Other commenters noted that such tests also penalize successful industries due to their success, and risk failing to appropriately regulate industries that are less profitable. Response: The EPA agrees with commenters who stated that Congress’ intent with respect to CAA section 112, as a whole, evinces an acknowledgment of the seriousness of toxic air pollutants. We do not agree, however, that general congressional concern about the toxicity of HAP overrides the specific instruction given to the Administrator in CAA section 112(n)(1)(A) to make a determination about whether regulation of EGUs in particular is ‘‘appropriate and necessary.’’ As the U.S. Supreme Court admonished the EPA in Michigan, the text and structure of CAA section E:\FR\FM\22MYR2.SGM 22MYR2 31294 Federal Register / Vol. 85, No. 100 / Friday, May 22, 2020 / Rules and Regulations 112, and 112(n)(1)(A) in particular, evince Congressional design to approach the question whether to regulate EGUs differently than other source categories: Congress crafted narrow standards for EPA to apply when deciding whether to regulate other sources; in general, these standards concern the volume of pollution emitted by the source, [CAA section 112(c)(1)], and the threat posed by the source ‘‘to human health or the environment,’’ [citing CAA section 112(c)(3)]. But Congress wrote the provision before us [CAA section 112(n)(1)(A)] more expansively . . . That congressional election settles this case. [The Agency’s] preference for symmetry cannot trump an asymmetrical statute. 135 S. Ct. at 2710 (internal citations omitted). Moreover, we do not agree with commenters’ suggestion that in the Agency’s comparison of costs and benefits, the EPA is considering benefits in a way that is inconsistent with a congressional determination that reductions in HAP emissions have great value to the public and Congress’ public health and environmental concerns. We disagree that CAA section 112’s general concerns about public health and environmental risks from HAP emissions mandated a particular manner of valuing or weighing the benefits of reducing those risks. As noted in the 2019 Proposal, we do not think the 2016 Supplemental Finding’s analysis of cost satisfied the Agency’s mandate under CAA section 112(n)(1)(A) and Michigan. The ‘‘preferred approach’’ in the 2016 Supplemental Finding considered cost insofar as the Agency at the time analyzed whether the utility industry as a whole could continue to operate, and found that it could (i.e., that costs were ‘‘reasonable’’). 81 FR 24420, 24422, 24424, 24427, 24428, 24429, 24430, 24431. But we do not think the ‘‘preferred approach’’ in the 2016 Finding gave sufficient weight to cost as a ‘‘centrally relevant factor,’’ Michigan, 135 S. Ct. at 2707—that is, we do not think that a cost standard that is satisfied by establishing that regulation will not fundamentally impair the functioning of a major sector of the economy places cost at the center of a regulatory decision—and we are in this action heeding the Michigan Court’s reading of the Administrator’s role under CAA section 112(n)(1)(A), which directed the Agency to meaningfully consider cost within the context of a regulation’s benefits. We agree that Michigan did not hold that the Agency is required to base its decision whether it is appropriate and necessary to regulate EGUs under CAA section 112 VerDate Sep<11>2014 18:24 May 21, 2020 Jkt 250001 on a formal benefit-cost analysis, but neither did it hold that a comparison of costs and benefits is an impermissible approach to considering cost. The U.S. Supreme Court contemplated that a proper consideration of cost would be relative to benefits, and the Court’s decision contains many references comparing the two considerations. In establishing the facts of the case, the Court pointed out that ‘‘EPA refused to consider whether the costs of its decision outweighed the benefits.’’ 135 S. Ct. at 2706. The Court questioned whether a regulation could be considered ‘‘rational’’ where there was a gross imbalance between costs and benefits and stated that ‘‘[n]o regulation is ‘appropriate’ if it does more harm than good.’’ Id. at 2707. The Court also made numerous references to a direct comparison of the costs of MATS with benefits from reducing emissions of HAP. For instance, the Court pointed out that ‘‘[t]he costs [of MATS] to power plants were thus between 1,600 and 2,400 times as great as the quantifiable benefits from reduced emissions of hazardous air pollutants.’’ Id. at 2706. Although the Court’s holding established no brightline rules, the opinion as a whole, thus, repeatedly suggests that CAA section 112(n)(1)(A)’s requisite consideration of cost would not be met if the cost analysis did not ‘‘prevent the imposition of costs far in excess of benefits.’’ Id. at 2710. The 2016 Supplemental Finding’s ‘‘test’’ of whether an industry can bear the cost of regulation, and its subsequent conclusion that such costs are ‘‘reasonable,’’ does not satisfy the statute’s mandate to determine whether such regulation is appropriate and necessary. We agree with commenters who stated that the metrics ‘‘tested’’ by the Agency in the 2016 Supplemental Finding are not an appropriate basis for the determination whether it is ‘‘appropriate and necessary’’ to impose that regulation. Each cost metric the Agency examined compared the cost of MATS to other costs borne by the industry, but never in its ‘‘preferred approach’’ did the Agency make the assessment of whether the benefits garnered by the rule were worth it—i.e., a comparison of costs and benefits. Even if the EPA determined that cost of regulation was, viewed on its own terms, unreasonable after comparing the cost of regulation to other costs borne by the industry, the ‘‘preferred approach’’ could have still resulted in a finding that regulation was ‘‘appropriate’’ because the EPA placed so much weight on hazards to public health and the environment that needed to be PO 00000 Frm 00010 Fmt 4701 Sfmt 4700 prevented. See 81 FR at 24432. In other words, much as it did in 2012 when it read cost consideration entirely out of the CAA section 112(n)(1)(A) determination, the Agency in 2016 was fixated on the term ‘‘necessary,’’ without considering whether any countervailing factors, i.e., cost, might call into question whether regulation was ‘‘appropriate.’’ As many commenters pointed out, the ‘‘cost reasonableness test’’ failed to consider cost relative to benefits, and really focused only on whether costs could be absorbed, rather than on whether they should be absorbed—the inquiry that is specifically required by the word ‘‘appropriate.’’ We, therefore, conclude that the ‘‘cost reasonableness’’ approach did not adequately address the U.S. Supreme Court’s instruction that a reasonable regulation requires an agency to fully consider ‘‘the advantages and the disadvantages’’ of a decision. See Michigan, 135 S. Ct. at 2707 (emphasis in original). Moreover, we take seriously commenters’ concerns that leaving the ‘‘preferred approach’’ in place, with its ‘‘cost reasonableness’’ or affordability test, could have a harmful influence on other agencies interpreting similarly broad congressional directives to consider cost. Statutes that direct agencies to make determinations about whether regulation is ‘‘appropriate’’ are precisely the contexts in which those agencies should retain discretion to select and prioritize public policies which provide the most value for the public good in relation to the cost. Comment: Commenters said that the EPA’s proposed new approach to considering cost in the CAA section 112(n)(1)(A) finding is an impermissible interpretation of that provision because it fails to meaningfully address factors that are ‘‘centrally relevant’’ to the inquiry of whether it is appropriate and necessary to regulate HAP from EGUs. Some commenters noted that the Agency’s alleged failure in the 2019 Proposal to adequately address these factors, upon which the 2016 Supplemental Finding was predicated, runs afoul of the Agency’s obligation to provide a reasoned explanation for abandoning these considerations, citing Motor Vehicle Mfrs. Ass’n of United States, Inc. v. State Farm Mut. Automobile Ins. Co., 463 U.S. 29 (1983) and FCC v. Fox Television Stations, Inc., 556 U.S. 502 (2009). The commenters noted that these cases state the principle that agencies cannot simply ignore prior factual determinations but must provide a ‘‘reasoned explanation’’ for a proposed departure from ‘‘facts and circumstances that underlay or were engendered by the E:\FR\FM\22MYR2.SGM 22MYR2 Federal Register / Vol. 85, No. 100 / Friday, May 22, 2020 / Rules and Regulations prior policy.’’ These commenters specifically faulted the EPA for not giving appropriate weight to the following factors: i. Unquantified Benefits Commenters stated that the 2019 Proposal does not acknowledge that some ‘‘hazards to public health’’ are unquantified and asserted that the 2019 Proposal presents a significant change in position with insufficient justification for revising the EPA’s longstanding interpretation that the phrase ‘‘hazards to public health’’ encompasses risks that have not been monetized because of the limitations of current methods, data, and uncertainty. Commenters said the 2019 Proposal gave no discernable weight to these risks as required by the statutory phrase ‘‘hazards to public health reasonably anticipated to occur.’’ Moreover, the commenters asserted that the monetized, HAP-specific benefits at issue, which quantify avoided IQ loss in children associated with prenatal methylmercury exposure from self-caught fish consumption among recreational anglers, are but a small fraction of the public health benefits attributable to reductions in mercury emissions alone. The commenters cited the statement from the EPA’s Science Advisory Board (SAB), which stated that IQ loss ‘‘is not the most potentially significant health effect associated with mercury exposure as other neurobehavioral effects, such as language, memory, attention, and other developmental indices, are more responsive to mercury exposure.’’ 80 FR 75040. The commenters noted that none of the environmental benefits from reductions in mercury emissions could be quantified, nor any of the health or environmental benefits attributable to reductions in other HAP. ii. Qualitative Benefits Such as Impacts on Tribal Culture and Practices Some commenters stated that the EPA’s proposed approach ignores nonmonetizable benefits. These commenters asserted that methylmercury contamination threatens traditional American Indian lifeways, including longstanding traditions of fishing and fish consumption that are central to many tribes’ cultural identity and that make individual tribes as distinct as different individual people. These commenters stated that for many tribes, fishing and fish consumption are critical social practices, handed down from generation to generation. Where tribal members no longer fish due to health concerns, these fishing traditions are not passed down to new generations of VerDate Sep<11>2014 18:24 May 21, 2020 Jkt 250001 tribal members, leading to permanent cultural loss. Furthermore, these commenters stated that many tribes are connected to particular waters for cultural, spiritual, or other reasons (and others’ fishing rights are limited to certain grounds by treaty), so tribal members cannot simply move their fishing to another location to avoid mercury contamination. The commenters asserted that the preferred approach of the 2016 Supplemental Finding recognized that regulation of HAP from EGUs would benefit American Indians by allowing them to safely engage in, and thereby perpetuate, their culture. These commenters argued that the Agency’s preferred approach in the 2016 Supplemental Finding properly deemed these qualitative benefits to be cognizable and highly significant. In addition, the commenters stated that mercury emissions likewise cause significant harm to Indian subsistence and fishing economies, contaminating food sources that many tribal members depend on for survival. According to these commenters, the EPA’s 2016 preferred approach methodology allowed for a full range of qualitative benefits to be accounted for, whereas the 2019 proposed reversal does not. iii. Latency, Persistence in the Environment, and Toxicity of Regulated Pollutants Some commenters asserted that the EPA’s proposed approach disregarded the physiochemical nature and toxicity of the toxic air pollutants regulated by CAA section 112 and the concern Congress had expressed about these qualities in enacting that section. These commenters pointed out that, in enacting the list of regulated air toxics, Congress deliberately withdrew the EPA’s authority to judge the importance of the harms threatened by the listed pollutants. The commenters noted that Congress itself listed the pollutants, rather than waiting for the EPA to do so, because of a difficulty which commenters argue is particular to air toxics: ‘‘[t]he public health consequences of substances which express their toxic potential only after long periods of chronic exposure will not be given sufficient weight in the regulatory process when they must be balanced against the present-day costs of pollution control and its other economic consequences.’’ Leg. Hist. at 8522 (S. Rep. No. 101–228 at 182). The commenters argued that these identified harms from air toxics occur regardless of the source of the pollutants, and, therefore, there is no reason to believe that Congress might have, by inserting PO 00000 Frm 00011 Fmt 4701 Sfmt 4700 31295 CAA section 112(n)(1)(A), authorized the EPA to reassess the benefits of reducing those harms in the context of EGUs. The commenters stated that no study, including the EPA’s Utility Study, suggests that HAP from EGUs are of any different character or pose less harm by their nature than HAP emitted by any other industrial source category. iv. Distributional Impacts of the Pollutants on the Population Commenters pointed to Congress’ intent to address harms that are concentrated within particular communities or populations, citing CAA section 112(f)(2)(A)’s requirement that the EPA address lifetime excess cancer risks borne by the ‘‘individual most exposed to emissions,’’ CAA section 112(n)(1)(C)’s directive that the EPA consider power plant mercury harms to sensitive fish-consuming populations, and legislative history (‘‘EPA is to consider individuals who are sensitive to a particular chemical’’ in assessing whether a pollutant’s harm warrants regulation) (Leg. Hist. at 8501). The commenters noted that the 2016 Supplemental Finding’s preferred approach identified several populations that were disproportionately at risk of mercury exposure from EGUs, including African-Americans living below the poverty line in the Southeast who rely on the fish they catch for food, and the children and fetuses in those communities in particular whose risk of exposure is amplified; and individuals and communities who live near coaland oil-fired power plants, who are disproportionately members of racial and ethnic minorities. The commenters cited a study that found that of the 8.1 million people living within 3 miles of a coal-fired plant in the year 2000, 39 percent were people of color, a percentage significantly higher than the proportion of people of color in the U.S. population as a whole. The same study found that people living within 3 miles of such power plants had an average annual per capita income of $18,596, significantly lower than the national average. Some commenters pointed to various executive orders that independently direct the EPA to consider some of these factors, including Executive Order 12898 (February 11, 1994), which establishes that ‘‘disproportionately high and adverse human health or environmental effects’’ of EPA decisions ‘‘on minority populations and lowincome populations in the U.S. and its territories and possessions’’ are of central concern to the EPA’s decisionmaking, with specific emphasis upon ‘‘subsistence consumption of fish and E:\FR\FM\22MYR2.SGM 22MYR2 31296 Federal Register / Vol. 85, No. 100 / Friday, May 22, 2020 / Rules and Regulations wildlife.’’ The commenters also pointed to Executive Order 13045 (April 21, 1997),14 which is particularly concerned about ‘‘environmental health risks’’ that may ‘‘disproportionately affect children.’’ Response: Agency decisions, once made, are not forever ‘‘carved in stone.’’ Nat’l Cable & Telecomms. Ass’n v. Brand X Internet Servs., 545 U.S. 967, 981 (2005) (internal quotation marks and citations omitted). We disagree with the commenters’ view that the EPA is not permitted to determine that the ‘‘cost reasonableness’’ approach is not the correct way to consider cost in the CAA section 112(n)(1)(A) appropriate and necessary finding, and their view that the EPA is not permitted to reevaluate the significance of the factual findings underpinning its 2016 Supplemental Finding and come to a different conclusion. D.C. Circuit and U.S. Supreme Court precedent, including those cases cited by the commenters, support the Agency’s position that it is within its authority to do so, provided that the Agency’s new action is based on a permissible interpretation of the statute and is supported by a reasoned explanation. In FCC v. Fox, the U.S. Supreme Court stated an agency’s obligation with respect to changing a prior policy quite plainly: We find no basis . . . for a requirement that all agency change be subjected to more searching review. The [Administrative Procedure] Act mentions no such heightened standard. And our opinion in State Farm neither held nor implied that every agency action representing a policy change must be justified by reasons more substantial than those required to adopt a policy in the first instance.15 In cases where an agency is changing its position, the Court stated that a reasoned explanation for the new policy would ordinarily ‘‘display awareness that it is changing position’’ and ‘‘show that there are good reasons for the new policy.’’ Id. at 515. However, the Court held that the agency ‘‘need not demonstrate . . . that the reasons for the new policy are better than the reasons for the old one; it suffices that the new policy is permissible under the statute, that there are good reasons for it, and that the agency believes it to be better.’’ Id. In cases where a new policy ‘‘rests upon factual findings that contradict those which underlay its prior policy; or when its prior policy has engendered serious reliance interests that must be 14 Commenters cite Executive Order 13035 in their comments, but we believe this was a typographical error. 15 FCC v. Fox, 556 U.S. at 514. VerDate Sep<11>2014 18:24 May 21, 2020 Jkt 250001 taken into account,’’ the Court found that a more detailed justification might be warranted than what would suffice for a new policy. Although commenters assert that the EPA has failed to provide a reasoned basis for its action here, their real complaint with the Agency’s abandonment of the 2016 Supplemental Finding’s ‘‘cost reasonableness test’’ and ‘‘preferred approach’’ is that they favored the way the Agency under that approach weighed certain factors, including unquantified benefits, impacts on tribes and tribal culture, the latency and persistence of air toxics in the environment, and distributional concerns and impacts. That the EPA now weighs these concerns differently— a weighing that is further explained below—does not mean the Agency is ‘‘disregarding’’ or ‘‘dismissing’’ these concerns. In the 2019 Proposal, the EPA clearly stated that the unquantified HAP benefits associated with regulating power plants were ‘‘significant,’’ and enumerated the impacts on human health that have been linked to mercury (including neurologic, cardiovascular, genotoxic, and immunotoxic effects), the adverse health effects associated with non-mercury HAP (including cancer and chronic and acute health disorders that implicate organ systems such as the lungs and kidneys), and other effects on wildlife and ecosystems. 84 FR 2677. Contrary to commenters’ assertions, the EPA did not ignore these concerns but said, ‘‘The EPA acknowledges the importance of these benefits and the limitations on the Agency’s ability to monetize HAPspecific benefits. The EPA agrees that such benefits are relevant to any comparison of the benefits and costs of a regulation.’’ Id. at 2677–78. Moreover, as the Agency pointed out in its proposal, the 2011 RIA, which summarizes the factual findings and scientific studies which form the basis of this action as well as the EPA’s 2016 action, discussed all of the monetized and unquantified benefits of regulating HAP from power plants, including the qualitative impacts on American Indian tribes,16 distributional impacts,17 and latency and persistence of the pollutant.18 Id. at 2678. In the context of this action, in which the lens we use to consider cost is based on a comparison of benefits to cost, we are choosing to weigh these concerns (and particulate matter (PM) co-benefits discussed in more detail in section 16 2011 RIA at 7–40 to –49. RIA at 7–49 to –54. 18 2011 RIA at Chapter 4. 17 2011 PO 00000 Frm 00012 Fmt 4701 Sfmt 4700 II.C.3 of this preamble) differently than the manner in which the EPA evaluated them in the 2016 Supplemental Finding. While it is true that many of the benefits associated with reducing emissions of HAP from power plants have not been quantified, the EPA provided in the 2019 Proposal its reasons for concluding that those unquantified benefits were not likely to overcome the imbalance between the monetized HAP benefits and compliance costs in the record. First, as the EPA pointed out and as discussed below, most of the unquantified benefits of MATS are morbidity effects associated with exposure to mercury and other HAP. Second, to the extent commenters have identified potential mortality outcomes such as potential cardiovascular impacts from mercury exposure and potential cancer risks from exposure to other HAP, the EPA disagrees, for the reasons provided below, with the proposition that significant monetized benefits would be expected from either outcome. As the commenters acknowledged, the SAB noted that IQ loss ‘‘is not the most potentially significant health effect associated with mercury exposure, as other neurobehavioral effects, such as language, memory, attention, and other developmental indices, are more responsive to mercury exposure.’’ 80 FR 75040. The Agency explained in its 2019 Proposal that the neurobehavioral effects of mercury exposure identified by the SAB as more ‘‘potentially significant’’ are morbidity, not mortality, outcomes. In the EPA’s experience, the economic value of avoided morbidity effects (e.g., impaired cognitive development, problems with language, abnormal social development, etc.) per incident is a small fraction of the monetizable value of avoided premature deaths. Further, when estimating the economic value of avoided cases of air pollution-related effects, the Agency has generally found that the aggregate value of the avoided illnesses (e.g., hospital admissions, emergency department visits, cases of aggravated asthma, etc.) is small as compared to the total value of avoided deaths.19 And the EPA does not expect that to the extent the prevention of any premature deaths due to regulation of 19 See U.S. EPA 2010a: Regulatory Impact Analysis for the Nitrogen Oxide National Ambient Air Quality Standards Page 4–8 through 4–10; U.S. EPA. 2010b: Regulatory Impact Analysis for the Sulfur Dioxide National Ambient Air Quality Standards Page 5–26 through 5–28; U.S. EPA. 2012: Regulatory Impact Analysis for the Particulate Matter National Ambient Air Quality Standards pages 5–69; U.S. EPA. 2015: Regulatory Impact Analysis for the Ozone National Ambient Air Quality Standards. Pages 6–57 through 6–60. E:\FR\FM\22MYR2.SGM 22MYR2 Federal Register / Vol. 85, No. 100 / Friday, May 22, 2020 / Rules and Regulations HAP could be associated with the MATS rule, the value of that effect would be significant. With respect to potential premature deaths due to cardiovascular impacts from mercury exposure, as discussed further in section II.C.4 of this preamble, there is inconsistency among available studies as to the degree of association between methylmercury exposure and various cardiovascular system effects, including studies showing no association. As a result, based on the presently available information, the EPA believes available evidence does not support a clear characterization of the potential relationship between mercury exposure and cardiovascular mortality. For that reason, the EPA has not modeled risk (incidence) estimates for this health endpoint and has not included benefits associated with that endpoint in the analysis. With respect to potential premature deaths associated with inhalation exposure to non-mercury HAP, based on existing case-study analyses for EGUs which focus on the assessment of individual risk based on a number of conservative assumptions regarding exposure, the EPA anticipates that the mortality incidence associated with these non-mercury HAP exposures would be low (see section II.C.3 of this preamble for additional detail).20 In sum, while the EPA recognizes the importance of unquantified benefits in a comparison against costs, the evaluation of evidence of unquantified benefits is based on qualitative information that helps understand the likelihood and potential scale of those benefits, relative to the monetized benefits and monetized costs. These qualitative assessments help confirm that unquantified benefits do not alter the underlying conclusion that costs greatly outweigh HAP benefits. This topic is discussed in more detail in section II.C.3 of this preamble. The other factors identified by the commenters concern qualitative concerns such as impacts to tribal cultures and the concentration of public health risks occurring among certain population subgroups or for individuals living proximate to EGUs. The distribution of potential health effects may indicate more risk to some individuals than to others or more impacts to some groups like tribes than others; but in a cost-benefit comparison, the overall amount of the benefits stays the same no matter what the 20 U.S. EPA, Supplement to the Non-Hg Case Study Chronic Inhalation Risk Assessment In Support of the Appropriate and Necessary Finding for Coal- and Oil-Fired Electric Generating Units, November 2011, EPA–452/R–11–013. VerDate Sep<11>2014 18:24 May 21, 2020 Jkt 250001 distribution of those benefits is. The EPA, therefore, believes it is reasonable to conclude that those factors to which the EPA previously gave significant weight—including qualitative benefits, and distributional concerns and impacts on minorities—will not be given the same weight in a comparison of benefits and costs for this action under CAA section 112(n)(1)(A).21 None of the information underlying the EPA’s action here constitutes new factual findings, but rather is a reevaluation of the existing record to arrive at what the Agency believes to be the better policy regarding whether regulation is ‘‘appropriate.’’ In Nat’l Ass’n of Home Builders v. EPA, the D.C. Circuit reviewed challenges brought against the EPA that were similar to those concerns raised by commenters here and found that ‘‘this kind of reevaluation is well within an Agency’s discretion.’’ 682 F.3d 1032, 1038 (D.C. Cir. 2012) (NAHB). There, the EPA reversed course on a prior policy, and petitioners in that case contended that ‘‘EPA has provided no justification for its decision to reverse course . . . that is grounded in any information or experience that was not available to the Agency when it [adopted] the original rule . . . Rather, EPA merely revisited old arguments that had already been addressed as part of the original rulemaking.’’ NAHB, 682 F.3d at 1036. Petitioners insisted in that case that the Agency was required to be held to a higher standard in reversing its prior decision based on the same factual record, but the D.C. Circuit disagreed. The Court held that FCC v. Fox ‘‘foreclosed’’ petitioners’ argument, and that the Agency was permitted to rely on ‘‘a reevaluation of which policy would be better in light of the facts.’’ Id. at 1036–38. It is well settled that such re-weighing or re-balancing is permissible. See State Farm, 463 U.S. at 57 (‘‘An agency’s view of what is in the public interest may change, either with or without a change in circumstances.’’); Am. Trucking Ass’ns v. Atchison, Topeka & Santa Fe Ry. Co., 387 U.S. 21 Nor does the EPA agree with the commenters that Executive Orders 12898 and 13045 require a particular outcome in the EPA’s appropriate and necessary finding. Executive orders recognize that agencies must weigh conflicting goals, priorities, and associated costs as a necessary part of reasoned decision making. Other more recent executive orders, which emphasize the environmentally responsible use and development of domestic natural resources, are also part of the policy calculus to consider. See, e.g., Executive Order No. 13783, 82 FR 16093 (March 28, 2017) (directing the EPA to review for possible reconsideration any rule that could ‘‘potentially burden the development or use of domestically produced energy resources, with particular attention to oil, natural gas, coal, and nuclear energy resources. PO 00000 Frm 00013 Fmt 4701 Sfmt 4700 31297 397, 416 (1967) (declaring that an agency, ‘‘in light of reconsideration of the relevant facts and its mandate, may alter its past interpretation and overturn past administrative rulings’’); Organized Village of Kake v. Dept. of Agriculture, 795 F.3d 956 (9th Cir. 2015) (‘‘We do not question that the Department was entitled in 2003 to give more weight to socioeconomic concerns than it had in 2001, even on precisely the same record.’’). As alluded to in these cases, the ‘‘reasoned basis’’ for an agency’s change of interpretation need not be overly complex. Even Justice Breyer, who dissented from the FCC v. Fox majority, admitted, ‘‘I recognize that sometimes the ultimate explanation for a change may have to be, ‘We now weight the relevant considerations differently.’ ’’ 556 U.S. at 550. Such change can, and often is, fueled by the basic functioning of American democracy—when new presidential administrations come into office—and the courts have recognized this to be a legitimate basis for a reweighing of priorities. See NAHB, 682 F.3d at 1038 (noting the ‘‘inauguration of a new President and the confirmation of a new EPA Administrator’’ largely provided the reasoning for the EPA’s change in policy). Unlike in State Farm, where the administering agency issued a rollback of a regulation requiring passive restraints in automobiles without even mentioning airbags at all, 463 U.S. at 48, 49, 51, here we acknowledge and address those factors to which we are giving less weight than was given in the 2016 Supplemental Finding. Cf. Organized Village of Kake, 795 F.3d at 968 (suggesting that a policy reversal could be premised upon ‘‘merely decid[ing] that [the agency] valued socioeconomic concerns more highly than environmental protection’’). The commenters disagree with the way the Agency has now weighed the facts and circumstances underlying the original appropriate and necessary finding and the Agency’s consideration of cost in 2016. But that does not mean that the Agency has not provided a ‘‘reasoned basis’’ for its action. Comment: Some commenters asserted that a ‘‘more detailed justification’’ of the EPA’s change in policy is required in this case given the ‘‘serious reliance interests’’ of states, the public, and industry in maintaining the appropriate and necessary determination and the MATS rule (citing Fox, 556 U.S. at 515; Encino Motorcars, LLC v. Navarro, 136 S. Ct. 2117 (2016)). With respect to state and public interests, the commenters pointed to the fact that the implementation of MATS has led to a dramatic decrease in HAP emissions E:\FR\FM\22MYR2.SGM 22MYR2 31298 Federal Register / Vol. 85, No. 100 / Friday, May 22, 2020 / Rules and Regulations from power plants, and that the public has an interest in having those controls remain in place and in the continuation of improvements in air quality and the corresponding public health and environmental benefits. Other commenters pointed to the major capital investments that regulated utilities have already made to comply with MATS and asserted that a reversal of the 2016 Supplemental Finding creates uncertainty for the standards themselves. The commenters argued that these reliance interests, which they claim depend on the maintenance of the 2016 Supplemental Finding, therefore, require the EPA to provide the heightened justification required under Fox and Encino Motorcars for its reversal of that finding. Response: The EPA disagrees with the commenters that the Agency is required to provide a ‘‘heightened justification’’ for this action. In Fox, the U.S. Supreme Court stated that as a general matter, no heightened scrutiny or review applies to decisions by agencies to reverse policies, and that policy changes need not be justified by reasons more substantial than those required to adopt a policy in the first instance. See Fox, 556 U.S. at 514–15. But the Court noted that ‘‘in such cases it is not that further justification is demanded by the mere fact of policy change; but that a reasoned explanation is needed for disregarding facts and circumstances that underlay or were engendered by the prior policy, i.e., . . . when its prior policy has engendered serious reliance interests that must be taken into account.’’ Id. at 515. The Court elaborated on this principle in Encino Motorcars v. Navarro, 136 S. Ct. 2117 (2016). There, the Court found that the retail automobile and truck dealership industry had relied for decades on the Department of Labor’s (DOL) position that service advisors are exempt from the Fair Labor Standard Act’s overtime pay requirements. Given this reliance and the impact that the DOL’s change in policy would have on the industry (citing ‘‘systemic, significant changes to the dealerships’ compensation arrangements’’ and the risk that nonconforming dealerships could face ‘‘substantial FLSA liability’’), the Court held that the DOL had not provided good reasons for its change in policy, noting that the agency ‘‘said almost nothing’’ and that it merely stated that exempting such employees from overtime pay was contrary to the statute and it believed its interpretation was reasonable. Encino Motorcars, 136 S. Ct. at 2126–27. The Court stated that ‘‘an agency may justify its policy choice by VerDate Sep<11>2014 18:24 May 21, 2020 Jkt 250001 explaining why that policy is more consistent with statutory language than alternative policies,’’ Id. (internal citations omitted), but chided the DOL for failing to include such a justification in its policy reversal. First, we note that commenters raising serious reliance interests differ in at least one major way from the petitioners in Encino Motorcars. While those petitioners faced very real impacts based on the Agency’s changed position (‘‘systemic, significant’’ changes to employee compensation and potential liabilities from failure to comply with the changed policy), the reliance interests cited by the commenters are not upended by this final action. As we stated in the proposal, the EPA finds that its re-evaluation of the costs and benefits of regulation of HAP emissions from power plants will not rescind or affect the regulatory program upon which the commenters rely, due to binding D.C. Circuit precedent (see section II.D of this preamble). To the contrary, the EPA is finalizing the results of the proposed RTR of MATS in this final action. The EPA determined that after compliance with MATS, the residual risks due to emissions of HAP from the Coal- and Oil-Fired EGU source category are acceptable in accordance with CAA section 112, and that there are no developments in HAP emissions controls to achieve further cost-effective reductions beyond the current standards. Therefore, based on the results of the RTR analyses, the Agency is promulgating this final action that maintains MATS in its current form. Second, unlike the DOL in Encino Motorcars, the EPA has provided its reasons for changing its determination that the regulation of HAP emissions from power plants is not ‘‘appropriate.’’ As explained in the proposal and in this preamble, the EPA believes that a consideration of costs that compares the costs of compliance with the HAPspecific benefits of regulation ‘‘is more consistent with statutory language’’ than the 2016 Supplemental Finding’s ‘‘preferred approach.’’ Further, as discussed in section II.C.3 of this preamble, we do not think the determination that regulation is ‘‘appropriate’’ under CAA section 112(n)(1)(A), an air toxics provision, should primarily hinge on the monetary benefits associated with reductions in emissions of pollutants not regulated under CAA section 112. We believe the explanations provided in this action fully comply with the case law’s requirement to provide a reasoned explanation for our reversal of the 2016 Supplemental Finding. PO 00000 Frm 00014 Fmt 4701 Sfmt 4700 3. The EPA’s Alternative Benefit-Cost Approach Used in the 2016 Supplemental Finding Improperly Considered Co-Benefits From Non-HAP Emissions Reductions The 2016 Supplemental Finding presented an alternative approach under which the EPA made an independent finding under CAA section 112(n)(1)(A) based on a formal benefit-cost analysis 22 that it was appropriate and necessary to regulate EGUs under CAA section 112. See 81 FR 24427. The formal benefit-cost analysis used in the 2016 Supplemental Finding relied on information reported in the RIA developed for the 2012 MATS Final Rule pursuant to Executive Orders 12866 and 13563 and applicable statutes other than the CAA (e.g., the Regulatory Flexibility Act and the Unfunded Mandates Reform Act), as informed by Office of Management and Budget (OMB) guidance 23 and the EPA’s Economic Guidelines.24 The quantified benefits accounted for in the formal benefit-cost analysis in the 2016 Supplemental Finding’s alternative approach included both HAP and non-HAP air quality benefits. Based on the 2011 RIA, the EPA projected the quantifiable benefits of HAP reductions under the rule to be $4 to $6 million in 2015.25 The RIA also identified unquantified benefits associated with reducing HAP emissions from EGUs. 22 We use the term ‘‘formal benefit-cost analysis’’ to refer to an economic analysis that attempts to quantify all significant consequences of an action in monetary terms in order to determine whether an action increases economic efficiency. A benefit-cost analysis evaluates the favorable effects of policy actions and the associated opportunity costs of those actions. The favorable effects are defined as benefits. Opportunities forgone define economic costs. A formal benefit cost analysis seeks to determine whether the willingness to pay for an action by those advantaged by it exceeds the willingness to accept the action by those disadvantaged by it. The key to performing benefitcost analysis is the ability to measure both benefits and costs in monetary terms so that they are comparable. Assuming all consequences can be monetized, actions with positive net benefits (i.e., benefits exceed costs) improve economic efficiency. This usage is consistent with the definition of a benefit-cost analysis used in the economics literature and the EPA’s Guidelines for Preparing Economic Analyses. 23 U.S. OMB. 2003. Circular A–4 Guidance to Federal Agencies on Preparation of Regulatory Analysis. Available at https://www.whitehouse.gov/ sites/whitehouse.gov/files/omb/circulars/A4/a4.pdf. 24 U.S. EPA. 2014. Guidelines for Preparing Economic Analyses. EPA–240–R–10–001. National Center for Environmental Economics, Office of Policy. Washington, DC. December. Available at https://www.epa.gov/environmental-economics/ guidelines-preparing-economic-analyses. Docket ID Item No. EPA–HQ–OAR–2009–0234–20503. 25 Like the 2011 RIA, all benefits and costs in this and subsequent sections of this preamble are reported in 2007 dollars. E:\FR\FM\22MYR2.SGM 22MYR2 Federal Register / Vol. 85, No. 100 / Friday, May 22, 2020 / Rules and Regulations The EPA projected that the co-benefits associated with reducing these non-HAP pollutants would be substantial. Indeed, these projected co-benefits comprised the overwhelming majority (approximately 99.9 percent) of the monetized benefits of MATS ($36 billion to $89 billion in 2015). The compliance costs of the 2012 MATS Final Rule were projected to be $9.6 billion in 2015.26 These compliance costs are an estimate of the increased expenditures in capital, fuel, and other inputs by the entire power sector to comply with MATS emissions requirements, while continuing to meet a given level of electricity demand. a. Summary of 2019 Proposal The EPA proposed to find that it had erred in the 2016 Supplemental Finding’s benefit-cost analysis in giving equal weight to the air quality cobenefits projected to occur as a result of the reductions in HAP. The focus of CAA section 112(n)(1)(A) is HAP emissions reductions. The EPA outlined in detail in the 2019 Proposal that the Agency had erred in concluding in the 2016 Supplemental Finding that the statutory text of CAA section 112(n)(1)(A) and the legislative history of CAA section 112 more generally supported the position that it was reasonable to give equal weight to co-benefits in a CAA section 112(n)(1)(A) appropriate and necessary finding. 81 FR 24439. The EPA explained in the 2019 Proposal that, because the vast majority of the estimated monetized benefits in the 2011 RIA that were estimated to result from MATS are associated with reductions in fine particulate matter (PM2.5) precursor emissions, the EPA had erred in the 2016 Supplemental Finding by giving equal weight to nonHAP co-benefits in making the appropriate and necessary determination. As the 2019 Proposal observed, Congress, in the National Ambient Air Quality Standards (NAAQS) program, established a rigorous system for setting standards of acceptable levels of criteria air pollutants requisite to protect public health with an adequate margin of safety, and by state, regional, and national rulemakings establishing control measures to meet those levels. The EPA did acknowledge the importance of unquantified benefits in the 2019 Proposal, but also pointed out the limitations of the Agency’s ability to monetize HAP-specific benefits. The 26 See Table 3–5 of the RIA: https:// www3.epa.gov/ttn/ecas/docs/ria/utilities_ria_finalmats_2011-12.pdf. VerDate Sep<11>2014 18:24 May 21, 2020 Jkt 250001 EPA explained that unquantified benefits are relevant to any comparison of the benefits and costs of regulation. Because unquantified benefits are, by definition, not considered in monetary terms, the EPA proposed that the Administrator would evaluate the evidence of unquantified benefits and determine the extent to which they alter any appropriate and necessary conclusion based on the comparison of monetized costs and benefits. b. Final Rule The EPA is finalizing the determination outlined in the 2019 Proposal. The EPA believes that the alternative approach to the 2016 Supplemental Finding was fundamentally flawed in applying a formal cost-benefit analysis to the specific decision making standard directed by CAA section 112(n)(1)(A) because, in the context of the appropriate and necessary finding, doing so implied that an equal weight was given to the non-HAP co-benefit emission reductions and the HAPspecific benefits of the regulation. The total cost of compliance with MATS ($9.6 billion in 2015) vastly outweighs— by a factor of 1 thousand, or 3 orders of magnitude—the monetized HAP benefits of the rule ($4 to $6 million in 2015). In these circumstances, to give equal weight to the monetized PM2.5 cobenefits would permit those benefits to become the driver of the regulatory determination, which the EPA believes would not be appropriate for the reasons stated in the proposal and set forth below. c. Comments and Responses Comment: Many commenters argued that the EPA’s proposed approach to considering co-benefits in the CAA section 112(n)(1)(A) appropriate and necessary determination is not consistent with the statute. The commenters believe that basic principles of statutory construction do not allow the EPA to read CAA section 112(n)(1)(A) only in isolation. The commenters asserted that the EPA has not explained why CAA section 112(n)(1)(A)’s reference to regulation of EGUs allows the Agency to disregard a portion of the consequences of its decision. One commenter noted that the language in the Senate Report on the 1990 amendments to CAA section 112, which directs the EPA to consider the co-benefits of HAP regulation, is the closest specific indication of congressional intent for interpreting CAA section 112(n). The commenter also pointed to the portion of CAA section 112(n) that requires the EPA to PO 00000 Frm 00015 Fmt 4701 Sfmt 4700 31299 conduct a study of hazards to health likely to occur from utility HAP emissions after implementation of other non-HAP provisions of the CAA, and suggested that this provision implies that the EPA should evaluate non-HAP benefits of HAP regulations to see if they are sufficient to establish the case for HAP regulation. One commenter noted that the EPA’s approach arbitrarily excludes from consideration a critically important set of the consequences of the EPA’s decision, namely the public health concerns at the heart of the CAA. Response: The EPA agrees with the commenters that it is critical to examine the language in CAA section 112(n)(1)(A), as well as the overall context of CAA section 112, in determining the scope of the cost consideration for the appropriate and necessary determination. In CAA section 112, Congress has a particularized focus on reducing HAP emissions and addressing public health and environmental risks from those emissions. In CAA section 112(n)(1)(A), Congress directs the EPA to decide whether regulation of EGUs is appropriate and necessary under CAA section 112, i.e., whether the deployment of specific CAA provisions targeted at reducing HAP emissions from the EGU sector is warranted. The EPA believes that it cannot answer this question by pointing to benefits that are overwhelmingly attributable to reductions in an entirely different set of pollutants not targeted by CAA section 112. The EPA believes that it is illogical for the Agency to make a determination, informed by a study of what hazards remain after implementation of other CAA programs, that regulation under CAA section 112, which is expressly designed to deal with HAP emissions, is ‘‘appropriate’’ principally on the basis of criteria pollutant impacts. The EPA believes that relying almost exclusively on benefits accredited to reductions in pollutants not targeted by CAA section 112 is particularly inappropriate given that those other pollutants are already comprehensively regulated under other CAA provisions, such as those applying to the NAAQS. As the EPA outlined in the 2019 Proposal, the determination that it is not appropriate to give equal weight to nonHAP co-benefits in making the appropriate and necessary determination is further supported by the fact that Congress established a rigorous system for setting standards of acceptable levels of criteria air pollutants and provided a comprehensive framework directing the implementation of those standards in E:\FR\FM\22MYR2.SGM 22MYR2 31300 Federal Register / Vol. 85, No. 100 / Friday, May 22, 2020 / Rules and Regulations order to address the health and environmental impacts associated with those pollutants. See, e.g., 42 U.S.C. 7409; 7410; 7501; 7502; 7505a; 7506; 7506a; 7507; 7509; 7509a; 7511; 7511a; 7511b; 7511c; 7511d; 7511e; 7511f; 7512; 7512a; 7513; 7513a; 7513b; 7514; and 7515. The vast majority of the monetized benefits in the 2011 RIA that were estimated to result from MATS are associated with reductions in PM2.5 precursor emissions, principally nitrogen oxides (NOX) and sulfur dioxide (SO2). NOX, SO2, and PM2.5 are already addressed by a multitude of statutory provisions governing levels of these pollutants, including the NAAQS provisions that require the EPA to set standards for criteria pollutants requisite to protect public health with an adequate margin of safety, and by state, regional, and national rulemakings establishing control measures to meet those levels. The 2016 Supplemental Finding pointed to CAA section 112(n)(1)(A)’s directive to ‘‘perform a study of the hazards to public health reasonably anticipated to occur as a result of emissions by electric utility steam generating units of [HAP] after imposition of the requirements of [the CAA],’’ and noted that the requirement to consider co-benefit reduction of HAP resulting from other CAA programs highlighted Congress’ understanding that programs targeted at reducing nonHAP pollutants can and do result in the reduction of HAP emissions. Id. The finding also noted that the Senate Report on CAA section 112(d)(2) recognized that MACT standards would have the collateral benefit of controlling criteria pollutants. Id. However, these statements acknowledging that reductions in HAP can have the collateral benefit of reducing non-HAP emissions and vice versa, provides no support for the proposition that any such co-benefits should be considered on equal footing as the HAP-specific benefits when the Agency makes its finding under CAA section 112(n)(1)(A). The study referenced in CAA section 112(n)(1)(A) specifically focuses on the hazards to public health that will reasonably occur as a result of HAP emissions, not harmful emissions in general. (‘‘The Administrator shall perform a study of the hazards to public health reasonably anticipated to occur as a result of emissions by electric utility steam generating units of pollutants listed under subsection (b) of this section after imposition of the requirements of this chapter.’’) According to that section, ‘‘[t]he Administrator shall regulate electric utility steam generating units under this VerDate Sep<11>2014 18:24 May 21, 2020 Jkt 250001 section, if the Administrator finds such regulation is appropriate and necessary after considering the results of the study required by this subparagraph.’’ The text on its face suggests that Congress wanted the Administrator’s appropriate and necessary determination to be focused on the health hazards related to HAP emissions and the potential benefits of avoiding those hazards by reducing HAP emissions. While the provision in one sense does acknowledge the existence of cobenefits—i.e., by referencing the potential for ancillary reductions of HAP emissions by way of CAA provisions targeting other pollutants—it does not follow from this that any ancillary reductions of criteria pollutants that may be projected to result from the regulation of EGU HAP emissions should, therefore, play a part in the Administrator’s consideration under CAA section 112(n)(1)(A) whether the regulation of EGUs is ‘‘appropriate and necessary.’’ To the contrary, the statutory direction to consider whether it is appropriate and necessary to regulate HAP after criteria pollutants have been addressed by the CAA’s other requirements suggests that it is not proper for the co-benefits of further criteria pollutant reductions to provide the dominant justification for an affirmative CAA section 112(n)(1)(A) determination. Certainly, Congress’ instruction to the EPA that it study HAP effects under CAA section 112 after implementation of other CAA provisions cuts against any suggestion that such benefits should be given equal consideration in a CAA section 112(n)(1)(A) determination. Comment: Several commenters argued that the EPA’s proposed approach, of not providing consideration to cobenefits equal to the consideration provided to the benefits specific to HAP reductions, takes a too-narrow approach that conflicts with Michigan. Commenters pointed out that the Court found that CAA section 112(n) tells the EPA to undertake a ‘‘broad and allencompassing’’ review of ‘‘all the relevant factors.’’ 135 S. Ct. at 2707. Commenters argued that if the Court read ‘‘appropriate’’ to be a ‘‘broad and all-encompassing term,’’ then the EPA cannot excise relevant factors from consideration. Commenters also stated that the Court, in instructing the EPA to consider cost, appeared to adopt a broad reading of the word ‘‘cost,’’ including ‘‘more than the expense of complying with regulations; any disadvantage could be termed a cost.’’ 137 S. Ct. at 2707. Response: Nothing in the Michigan decision decides this issue. To the PO 00000 Frm 00016 Fmt 4701 Sfmt 4700 contrary, the Court said that the proper treatment of co-benefits is ‘‘a point we need not address.’’ 135 S.Ct. at 2711. Additionally, commenters seem to mistake the EPA’s position (see, e.g., Environmental Protection Network (EPN) comment at 25 (April 17, 2019) (Docket ID Item No. EPA–HQ–OAR– 2018–0794–2261) (referring to ‘‘EPA’s crabbed claim that it can focus only on reduction of ‘HAP emissions—without even considering reductions in nonHAP pollutants’).’’ See also States and Local Governments comment at 35–36 (April 17, 2019) (Docket ID Item No. EPA–HQ–OAR–2018–0794–1175) (‘‘In proposing to exclude consideration of [co-benefits], EPA misinterprets and misapplies the Supreme Court’s directive in Michigan.’’)). The commenters essentially argue that the language in Michigan requires the EPA to review ‘‘all the relevant factors,’’ including co-benefits. As described at length in the 2019 Proposal and other parts of this section of this preamble, the EPA is considering what significance co-benefits have for its determination under CAA section 112(n)(1)(A)—but we are concluding that the finding must be justified overwhelmingly by the HAP benefits due to the statutory structure. Comment: Some commenters argued that existing case law, beyond the Michigan decision, supports inclusion of indirect benefits into an agency’s benefit-cost analysis. A commenter quoted the D.C. Circuit’s statement in American Trucking Ass’ns v. EPA that the EPA must consider both the direct and indirect effects of pollutants, rather than only ‘‘half of a substance’s health effects.’’ 175 F.3d 1027, 1051–53 (D.C. Cir. 1999), rev’d on other grounds sub nom. Whitman v. Am. Trucking Ass’ns, Inc., 531 U.S. 457 (2001). The commenter also cited a Fifth Circuit case in which the Court held that the EPA had to consider the indirect safety harm that could result from the use of substitute, non-asbestos brakes when attempting to ban asbestos-based brakes under the Toxic Substances Control Act. Corrosion Proof Fittings v. EPA, 947 F.2d 1202, 1225 (5th Cir. 1991). A few commenters also noted the D.C. Circuit’s favorable treatment of the EPA’s consideration of co-benefits in regulating HAP from boilers, process heaters, and incinerators in U.S. Sugar Corp. v. EPA, 830 F.3d 579, 591, 625 (D.C. Cir. 2016). Response: As explained elsewhere in this preamble, the EPA is interpreting and applying the statutory directive to make an appropriate and necessary determination under CAA section 112(n)(1)(A) and determining what role E:\FR\FM\22MYR2.SGM 22MYR2 Federal Register / Vol. 85, No. 100 / Friday, May 22, 2020 / Rules and Regulations consideration of co-benefits should play in making that determination. None of the case law the commenters cite pertains to CAA section 112(n)(1)(A), and, therefore, the case law is not directly relevant to this action. As explained in the 2019 Proposal and in this preamble, the EPA believes that it would be inconsistent with the statute and with case law to base the appropriate and necessary finding on a monetized benefit estimate that is almost exclusively attributable to reductions of non-HAP pollutants. Further, the CAA sets out a specific regulatory scheme for the PM pollutants in question, the NAAQS, and as a first principle the EPA believes those regulations, not CAA section 112, should be the primary method by which the Agency targets those pollutants. Comment: Several commenters argued that the EPA’s approach of giving less weight to co-benefits in the appropriate and necessary determination is fundamentally arbitrary. The commenters pointed out that the PM2.5 emission reductions are a direct result of HAP emissions controls, and that there is no way to reduce the HAP emissions without reducing PM emissions. Some commenters asserted that excluding some benefits from the appropriate and necessary determination creates a biased analysis. One commenter argued that the EPA’s approach is arbitrary and contrary to Michigan and other U.S. Supreme Court precedent because it ‘‘fai[ls] to consider [such] an important aspect of the problem.’’ Michigan, 135 S. Ct. at 2707 (quoting State Farm, 463 U.S. at 53). Response: The EPA acknowledges the existence and importance of these cobenefits. However, when the EPA is comparing benefits to costs as a required prerequisite to regulation, it is critical to examine the particular statutory provision that is being implemented. That statutory provision may limit the relevance of certain costs and benefits— e.g., serve to establish that any benefits attributable to the ancillary reduction of pollutant emissions that are not the focus of the provision at issue are not ‘‘an important aspect of the problem’’ that Congress is seeking to address. As noted in the 2019 Proposal and in earlier responses to comments, in CAA section 112(n)(1)(A), Congress directs the EPA to decide whether regulation of EGUs is appropriate and necessary under CAA section 112; the EPA believes that it is not appropriate to answer this question in the affirmative by pointing to benefits that are overwhelmingly attributable to reductions in an entirely different set of pollutants that CAA section 112 is not VerDate Sep<11>2014 18:24 May 21, 2020 Jkt 250001 designed to address. In fact, the EPA believes that it would be arbitrary and capricious to do so. See Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983) (‘‘Normally, an agency rule would be arbitrary and capricious if the agency has relied on factors which Congress has not intended it to consider.’’). The EPA is not turning a blind eye to the reasonably predictable consequences of MATS. The 2011 RIA appropriately details the magnitude of the PM2.5-related co-benefits in the form of avoided premature deaths, hospital admissions, emergency department visits and asthma attacks, among other endpoints. However, CAA section 112(n)(1)(A) requires a threshold determination of whether any regulation of EGUs under CAA section 112 is ‘‘appropriate and necessary.’’ The EPA believes that this inquiry must be focused primarily on the risks posed by the pollutants targeted by CAA section 112, i.e., HAP emissions. The gross disparity between monetized costs and HAP benefits, which should be the primary focus of the Administrator’s determination in CAA section 112(n)(1)(A), is so great as to make it inappropriate to form the basis of the necessary statutory finding. While the Agency acknowledges that PM cobenefits are substantial, the Agency cannot rely on PM co-benefits to supplant the primary factors Congress directed the Administrator to consider. Comment: Several commenters asserted that the EPA’s approach to considering co-benefits under the CAA section 112(n)(1)(A) analysis was inappropriate because it is unprecedented in the EPA’s regulatory practice and contrary to OMB and EPA policy. Commenters asserted that cobenefits are universally accepted as an important tool in regulatory economics and economic planning. Commenters quoted OMB Circular A–4 as directing agencies in conducting RIAs to ‘‘look beyond the direct benefits and direct costs of your rulemaking and consider any important ancillary benefits and countervailing risks.’’ The commenters also identified the EPA’s ‘‘Guidelines for Preparing Economic Analyses’’ that states: ‘‘An economic analysis of regulatory or policy options should present all identifiable costs and benefits that are incremental to the regulation or policy under consideration. These should include directly intended effects and associated costs, as well as ancillary (or co-) benefits and costs.’’ Commenters also cited to previous clean air rules where the EPA has afforded co-benefits equal weight in cost-benefit analyses. PO 00000 Frm 00017 Fmt 4701 Sfmt 4700 31301 Response: The EPA developed the 2011 RIA for the 2012 MATS Final Rule pursuant to Executive Orders 12866 and 13563, as well as certain other applicable statutes, as informed by OMB guidance and the EPA’s Economic Guidelines. It is true that, in this action, the EPA is drawing on information generated in that RIA in order to make the determination required under CAA section 112(n)(1)(A) concerning whether regulation of EGUs under CAA section 112 is appropriate. How costs are to be considered in making the congressionally-directed CAA section 112(n)(1)(A) determination, however, is not governed independent from statutory requirements, by preexisting OMB or EPA guidelines, nor could it be. Furthermore, for the many reasons explained elsewhere in this preamble and in the 2019 Proposal, the CAA section 112(n)(1)(A) determination is governed by the particular statutory provision at issue, and, therefore, is distinct from any other CAA action. In the context of conducting the CAA section 112(n)(1)(A) determination, the EPA finds it is not only appropriate but indeed, necessary for the EPA to interpret and apply the particular provision of CAA section 112(n)(1)(A), which as mentioned earlier specifically cites to HAP listed under section 112(b) of the CAA. To be valid, the EPA’s analytical approach to that provision must recognize Congress’ particular concern about risks associated with HAP and the benefits that would accrue from reducing those risks. OMB and EPA guidance outline regulatory principles that agencies are encouraged to follow to the extent permissible under law. These guidance documents, and the standard economic principles reflected in them, are not necessarily informative regarding how Congress intended the EPA to make the CAA section 112(n)(1)(A) determination, nor should they be read to override statutory text and structure that, as explained earlier in this preamble, requires a focus on a limited set of costs and benefits. Although an analysis of all reasonably anticipated benefits and costs in accordance with generally recognized benefit-cost analysis practices (including extending analytic efforts to ancillary impacts in a balanced manner across both benefits and costs) is appropriate for informing the public about the potential effects of any regulatory action, as well as for complying with the requirements of Executive Order 12866, it does not follow that equal consideration of all benefits and costs, including cobenefits, is warranted, or even E:\FR\FM\22MYR2.SGM 22MYR2 31302 Federal Register / Vol. 85, No. 100 / Friday, May 22, 2020 / Rules and Regulations permissible, for the specific statutory provision requiring the EPA to make an appropriate and necessary finding called for under CAA section 112(n)(1)(A). Comment: Some commenters asserted that the EPA’s 2019 Proposal erroneously suggests that CAA sections 110 and 112 must be treated as mutually exclusive authorities for reducing the public health impacts of PM emissions. Commenters argued that there is no basis to ignore the benefits of reducing pollutants merely because they are also subject to regulation under state and federal implementation plans approved to implement the NAAQS. One commenter noted that the existence of other CAA provisions that deal with criteria pollutant emissions likely indicates Congress’ deep concern about the health and environmental risks they pose. One commenter argued that there is no legal support for the idea that CAA section 110 or 112 requires exclusivity; the EPA is not required to pick one avenue through which it can impact PM emissions. The commenter noted that many CAA provisions can address PM, such as those for interstate transport and regional haze, and the EPA itself has encouraged states in their implementation planning to consider selecting controls that will minimize emissions of multiple pollutants. Another commenter acknowledged that the EPA does not argue that the other provisions should be the exclusive vehicle for addressing criteria pollutants, but this commenter asserted that the 2019 Proposal did not explain how criteria pollutant reductions could be realized more effectively by some other legal mechanism and did not claim that criteria pollutants have been fully controlled through those other programs. One commenter also argued that the EPA’s proposal is particularly unfounded because many metal HAP are emitted as PM. Response: The EPA disagrees with the commenters. The EPA’s discussion of co-benefits, and the impropriety of giving them equal weight to HAPspecific benefits within the context of the appropriate and necessary determination, is based on an interpretation of CAA section 112(n)(1)(A), a provision enacted by Congress to address the unique situation facing EGUs. We have limited our analysis to the specifically tailored provision of CAA section 112(n)(1)(A), in which Congress recognized that EGUs would face regulation under numerous parts of the CAA and chose to ask the EPA to consider whether further regulation of EGUs under CAA section 112 would be appropriate and VerDate Sep<11>2014 18:24 May 21, 2020 Jkt 250001 necessary. As noted previously in this preamble and the 2019 Proposal, the vast majority of estimated monetized benefits resulting from MATS are associated with reductions in PM2.5 precursor emissions, principally NOX and SO2. Both NOX and SO2 are criteria pollutants in their own right and are already addressed by the numerous statutory provisions governing criteria pollutants. In interpreting and applying CAA section 112(n)(1)(A), we believe it is important to acknowledge that the CAA has established numerous robust avenues for minimizing PM-precursor emissions to a level that is requisite to protect public health with an adequate margin of safety. Because other CAA programs are already in place to ensure reductions in criteria pollutants to the level requisite to protect public health with an adequate margin of safety, the EPA believes that it is not reasonable to point to criteria pollutant co-benefits as the primary benefit to justify regulation of EGUs under a provision of the CAA that authorizes such regulation only where the Administrator determines that it is ‘‘appropriate and necessary’’ to do so.27 With respect to one commenter’s assertion that the EPA’s approach was particularly unfounded given that many metal HAP are emitted as PM, the EPA agrees that most non-mercury metal HAP are emitted as PM. In fact, the EPA established an emission standard for filterable PM in the 2012 MATS Final Rule that serves as a surrogate for the non-mercury metal HAP (recognizing that controls for PM are also effective for the non-mercury metal HAP). However, the fact that the non-mercury metal HAP are emitted in a solid particulate form does not mean that the EPA should give equal weight to the benefits from removal of all PM. As described in the 2011 RIA for the 2012 MATS Final Rule, PM2.5 benefits result from emissions reductions of SO2 (1,330,000 tons), NOX (46,000 tons), carbonaceous PM2.5 (6,100 tons), and crustal PM2.5 (39,000 tons). Control of directly-emitted filterable PM for purposes of controlling non-mercury metal HAP constituted approximately 5 percent of the total PM2.5 health cobenefits of the rule. Based on analysis of available data, the EPA estimates that non-mercury metal HAP represent, at most, 0.8 percent of this directly emitted filterable PM.28 The actual HAP-related 27 A number of commenters raised this same issue and made this same point. See, e.g., Docket ID Item Nos. EPA–HQ–OAR–2018–0794–1135, –1178, –1189, –1190. 28 As mentioned in the Emission Factor Development for RTR Risk Modeling Dataset for Coal- and Oil-fired EGUs memorandum (Docket ID Item No. EPA–HQ–OAR–2018–0794–0010), the PO 00000 Frm 00018 Fmt 4701 Sfmt 4700 benefits of controlling non-mercury metal HAP were unquantified. Again, the vast majority of estimated monetized benefits resulting from MATS are associated with reductions in premature mortality resulting from emissions reductions of PM precursors and not from metal HAP or even direct PM. Comment: Several commenters asserted that the EPA has not explained what weight is given to co-benefits, or how the EPA chose that standard, aside from saying that the weight is less than what is given to HAP-specific benefits. One commenter noted that the EPA essentially claims that co-benefits cannot affect the appropriate and necessary determination unless quantified HAP benefits are ‘‘moderately commensurate’’ with compliance costs, but the EPA does not provide any clarity on the point at which HAP benefits would be ‘‘moderately commensurate’’ to allow the EPA to rely on co-benefits. Response: The Administrator has concluded that the following procedure provides the appropriate method under which the EPA should proceed to determine whether it is appropriate and necessary to regulate EGUs under CAA section 112(n)(1)(A). First, the EPA compares the monetized costs of regulation against the subset of HAP benefits that could be monetized. Here, those costs are disproportionate to the monetized benefits, by three orders of magnitude. That does not demonstrate ‘‘appropriate and necessary.’’ Second, the EPA considers whether unquantified HAP benefits may alter that outcome. For the reasons proposed in February 2019 and further discussed in this final action, the EPA determines they do not. Third, the EPA considers whether it is appropriate, notwithstanding the above, to determine that it is ‘‘appropriate and necessary’’ to regulate EGUs under CAA section 112(n)(1)(A) out of consideration for the PM co-benefits that result from such regulation. For the reasons proposed in February 2019 and set forth in this final action, on the record before the Agency, it is not appropriate to do so. Here, almost the entirety of monetized benefits (about 99.9 percent) of MATS EPA developed ratios of non-mercury metal and filterable PM emissions for use in estimating emissions from coal- and oil-fired EGUs without current non-mercury metal emissions data. These ratios were determined by dividing the fuel-specific averages of the 2010 MATS Information Collection Request (ICR) non-mercury metals data, combined by control technique where possible, by the filterable PM emissions data. The ratios represent the amount of non-mercury metals present in filterable PM. For more detail, see memorandum titled Non-mercury Metals Content of Filterable Particulate Matter in the docket for this action. E:\FR\FM\22MYR2.SGM 22MYR2 Federal Register / Vol. 85, No. 100 / Friday, May 22, 2020 / Rules and Regulations reflected in the RIA were derived from non-HAP co-benefits. Had the HAPspecific benefits of MATS been closer to the costs of regulation, a different question might have arisen as to whether the Administrator could find that co-benefits legally form part of the justification for determination that regulation of EGUs under CAA section 112(d) is appropriate and necessary. The EPA does not need to, and does not, determine whether that additional step would be appropriate in this factual scenario given that the monetized and unquantified HAP-specific benefits do not come close to a level that would support the prior determination. Under the interpretation of CAA section 112(n)(1)(A) that the EPA adopts in this action, HAP benefits, as compared to costs, must be the primary question in making the ‘appropriate and necessary’ determination. While the Administrator could consider air quality benefits other than HAP-specific benefits in the CAA section 112(n)(1)(A) context, consideration of these co-benefits could permissibly play only, at most, a marginal role in that determination, given that the CAA has assigned regulation of criteria pollutants to other provisions in title I of the CAA, specifically the NAAQS regime pursuant to CAA sections 107–110, which requires the EPA to determine what standards for the ambient concentration of PM are necessary to protect human health. Here, to the extent that the alternative approach set forth within the 2016 Supplemental Finding was legally grounded in cobenefits, the massive disparity between co-benefits and HAP benefits on this record would mean that that alternative approach clearly elevated co-benefits beyond their permissible role. If the Administrator were to consider the size of the PM2.5-related co-benefits in deciding whether regulating EGUs under CAA section 112(d) is appropriate and necessary, he should also consider taking into account key assumptions affecting the size and distribution of these co-benefits and potential uncertainty surrounding them. In the past, the EPA has highlighted a number of these assumptions as having particularly significant effect on estimates of PM-related benefits, including assumptions about: The causal relationship between PM exposure and the risk of adverse health effects; the shape of the concentrationresponse relationship for long-term exposure-related PM2.5 and the risk of premature death; the toxicity of individual PM2.5 particle components; the levels of future PM2.5; the validity of VerDate Sep<11>2014 18:24 May 21, 2020 Jkt 250001 the reduced-form technique used to relate PM2.5 emission precursors to the number and value of PM2.5 adverse health effects; and the approach used to assign a dollar value to adverse health effects. The Agency has separately noted that, in general, it is more confident in the size of the risks we estimate from simulated PM2.5 concentrations that coincide with the bulk of the observed PM concentrations in the epidemiological studies that are used to estimate the benefits. Likewise, the Agency is less confident in the risk estimated from simulated PM2.5 concentrations that fall below the bulk of the observed data in these studies.29 Furthermore, when setting the 2012 PM NAAQS, the Administrator acknowledged greater uncertainty in specifying the ‘‘magnitude and significance’’ of PM-related health risks at PM concentrations below the NAAQS. As noted in the preamble to the 2012 PM NAAQS final rule, in the context of selecting an alternative NAAQS, the ‘‘EPA concludes that it is not appropriate to place as much confidence in the magnitude and significance of the associations over the lower percentiles of the distribution in each study as at and around the longterm mean concentration.’’ (78 FR 3154, January 15, 2013). Comment: Some commenters argued that the EPA is inappropriately giving full weight to the consideration of indirect costs of regulating EGUs while simultaneously giving less than equal weight to co-benefits. One commenter argued that comparing direct and indirect costs to only the ‘‘direct’’ benefits associated with HAP reductions is not an apples-to-apples comparison. Some commenters stated that the EPA is including not only compliance costs incurred by the sources regulated under MATS, but also costs incurred by other power plants that are not regulated under MATS due to the effects on the power sector of regulated sources’ investing in pollution abatement technologies or taking other steps to reduce emissions. The commenter argued that the EPA does not explain why it is appropriate to discount or 29 The Federal Register document for the 2012 PM NAAQS indicates that ‘‘[i]n considering this additional population level information, the Administrator recognizes that, in general, the confidence in the magnitude and significance of an association identified in a study is strongest at and around the long-term mean concentration for the air quality distribution, as this represents the part of the distribution in which the data in any given study are generally most concentrated. She also recognizes that the degree of confidence decreases as one moves towards the lower part of the distribution.’’ PO 00000 Frm 00019 Fmt 4701 Sfmt 4700 31303 ignore co-benefits while giving full weight to indirect compliance costs. Response: The EPA disagrees with the commenters that co-benefits and the types of compliance costs that the commenters consider ‘‘indirect’’ must be given comparable treatment within this action. As discussed throughout this section, the EPA believes that it is inappropriate to rely, as did the alternative, benefit-cost approach in the 2016 Supplemental Finding, almost exclusively on benefits accredited to reductions in pollutants not targeted by CAA section 112 when those other pollutants are already extensively regulated under other CAA provisions. Additionally, unlike benefits, which can be disaggregated into benefits attributable to reduction in HAP and cobenefits attributable to reduction in nonHAP pollutants, costs cannot similarly be disaggregated. There is no analogous distinction with respect to compliance costs and, thus, nothing in the statute that directs the EPA to partition compliance costs into direct and indirect (or ancillary) costs, or that supports the view that such a partitioning would be appropriate. From an economic perspective, MATS was a consequential rulemaking that was expected to induce changes in both electricity and fuel markets beyond the impacts on affected coal- and oil-fired EGUs. The policy case examined in the 2011 RIA introduced the requirements of MATS as constraints on affected EGUs, which resulted in new projections of power sector outcomes under MATS. These compliance costs are an estimate of the increased expenditures in capital, fuel, labor, and other inputs by the entire power sector to comply with MATS emissions requirements, while continuing to meet a given level of electricity demand. These costs were summarized in Table 3–16 of the 2011 RIA.30 The commenters do not attempt to present an alternative analysis under which the EPA would assess what they term ‘‘indirect costs.’’ To focus on the projected impact of MATS on only affected entities would produce an incomplete estimate of the entire cost of complying with the rule and, thus, lead to an inappropriate consideration of the costs of the 2012 MATS Final Rule. The costs termed ‘‘indirect costs’’ by commenters are neither ancillary or incidental costs; these costs are an integral part of the compliance costs that are attributable to expected changes 30 The EPA estimated the impacts of MATS on oil-fired units and costs associated with monitoring, recordkeeping, and reporting in separate analyses, which are summarized in Chapter 3 and Appendix 3A of the 2011 RIA. E:\FR\FM\22MYR2.SGM 22MYR2 31304 Federal Register / Vol. 85, No. 100 / Friday, May 22, 2020 / Rules and Regulations to production behavior in the sector in order to minimize the cost of complying with MATS. Furthermore, an evaluation of the costs borne solely by the owners of EGUs subject to MATS would need to account for the ability of owners of these EGUs to recoup their increased expenditures through higher electricity prices; otherwise, an estimate of the costs of MATS borne by the owners of those EGUs (i.e., their economic incidence) would be an overestimate. However, if the EPA was to only account for the economic incidence for owners of EGUs, the costs borne by the consumers of electricity from these higher prices would be ignored, which the EPA finds inappropriate. Therefore, the EPA determined it was appropriate to account for all of the costs that may be incurred as a result of the rule that could be reasonably estimated, recognizing that these expenditures would ultimately be borne either by electricity consumers or electricity producers, rather than limiting our consideration of costs to just those borne by a subset of producers or consumers. Comment: Some commenters asserted that the EPA has failed to explain how it has given any meaningful consideration in its benefit-cost comparison to the numerous health effects of reducing HAP emissions that the EPA has not quantified. A few commenters asserted that the nonmonetized benefits of the rule encompass virtually all the HAP reductions that the rule yields. One commenter argued that the EPA has only given ‘‘lip service’’ to these benefits, but not any discernible weight in reaching the conclusion that regulating EGUs under CAA section 112 is not appropriate and necessary. Further, the commenter asserted that the EPA has offered no support or explanation for the assertion that the unquantified benefits are not sufficient to overcome the difference between the monetized benefits and the costs of MATS. Response: The 2011 RIA attempted to account for all the monetized and unquantified benefits of the rule, and the EPA’s benefit-cost analysis in the RIA does not discount the existence or importance of the unquantified benefits of reducing HAP emissions. However, in this final action, the EPA has determined that it is reasonable to evaluate unquantified benefits separately in the comparison of benefits and costs for this action under CAA section 112(n)(1)(A). The EPA explained in the 2011 RIA that there are significant obstacles to successfully quantifying and monetizing VerDate Sep<11>2014 18:24 May 21, 2020 Jkt 250001 the public health benefits from reducing HAP emissions (see also Gwinn, et al., 2011,31 and Fann, Wesson, and Hubbell, 2016 32 for a detailed discussion of the complexities associated with estimating the benefits of reducing emissions of air toxics). These obstacles include gaps in toxicological data, uncertainties in extrapolating results from high-dose animal experiments and worker studies to estimate human effects at lower doses, limited monitoring data, difficulties in tracking diseases such as cancer that have long latency periods, and insufficient economic research to support the valuation of the health impacts often associated with exposure to individual HAP. The EPA fully acknowledges the existence and importance of the unquantified benefits. The EPA explained in the 2019 Proposal reasons why the EPA has determined that the unquantified benefits are unlikely to overcome the significant difference (which, the EPA notes again, is a difference of three orders of magnitude) between the monetized HAP-specific benefits and compliance costs of the MATS rule. This is also further discussed in section II.C.2 of this preamble. As noted there, many of the HAP-related effects that were unquantified in the 2011 RIA consist of morbidity effects in humans. The EPA’s methods estimating the economic value of avoided health effects values mortality effects significantly more than avoided illnesses (e.g., hospital admissions, emergency department visits, cases of aggravated asthma, etc.).33 Hence, valuing HAP-related morbidity outcomes would not likely result in estimated economic values similar to those attributed to avoiding premature deaths. Commenters raised the possibility that there could be unquantified HAPrelated benefits of mortality effects, based on the comments the EPA believes the most significant are 31 Gwinn, M.R., et al., 2011. Meeting Report: Estimating the Benefits of Reducing Hazardous Air Pollutants—Summary of 2009 Workshop and Future Considerations. Environmental Health Perspectives, 119(1): 125–130. 32 Fann N., Wesson K., and Hubbell B (2016), Characterizing the confluence of air pollution risks in the United States. Air Qual Atmos Health 9:293. Available at https://doi.org/10.1007/s11869-0150340-9. 33 See U.S. EPA. 2010a: Regulatory Impact Analysis for the Nitrogen Oxide National Ambient Air Quality Standards Page 4–8 through 4–10; U.S. EPA. 2010b: Regulatory Impact Analysis for the Sulfur Dioxide National Ambient Air Quality Standards Page 5–26 through 5–28; U.S. EPA. 2012: Regulatory Impact Analysis for the Particulate Matter National Ambient Air Quality Standards pages 5–69; U.S. EPA. 2015: Regulatory Impact Analysis for the Ozone National Ambient Air Quality Standards. Pages 6–57 through 6–60. PO 00000 Frm 00020 Fmt 4701 Sfmt 4700 associated with avoiding premature death, and in particular, potential cancer risks.34 As part of the 2012 MATS Final Rule, the EPA modeled the maximum individual risk (MIR) associated with non-mercury HAP including arsenic, hexavalent chromium, nickel, and hydrogen chloride for a subset of 16 EGUs. MIR is the ‘‘maximum individual risk’’ experienced by the most highly exposed individual living in proximity to the source, presuming continuous exposure for 70 years. The analysis found that the one oil-fired EGU studied had a lifetime cancer risk of 20-in-1 million, and that none of the remaining 15 coal-fired EGU facilities posed a lifetime risk of cancer for the maximally exposed individual exceeding 8-in-1 million, with most facilities posing a risk of equal to, or less than, 1-in-1 million. These risks are significantly below the levels defined by the EPA as being the presumptive upper limit of acceptable risk (i.e., 1-in-10 thousand). While that analysis did not separately estimate the number of new cases of HAP-attributable cancer among each year, the size of the MIR implies that the number of new cases would likely be very small. The EPA’s evaluation of evidence of unquantified benefits is based on qualitative information that helps understand the likelihood and potential scale of those benefits, relative to the monetized benefits and monetized costs. These qualitative assessments help confirm that unquantified benefits do not alter the underlying conclusions that costs greatly outweigh HAP benefits. Comment: Several commenters pointed out that the EPA’s 2019 Proposal relies on undefined terms such as ‘‘moderately commensurate,’’ ‘‘gross disparity,’’ and ‘‘significant difference,’’ which are not statutory terms and do not appear in prior regulatory actions associated with MATS. Without explanation of what these terms mean, the commenters asserted that the public did not receive adequate notice so that they could provide meaningful comments on the proposal. Commenters said the 2019 Proposal leaves the public in the dark as to what data and methodology the EPA relies on to determine that the costs of regulating power plants under CAA section 112 ‘‘grossly outweigh’’ the hazardous air pollution benefits. One commenter asserted that the failure to define these terms and outline the EPA’s analytical 34 See sections II.C.2 and II.C.4 of this preamble for the EPA’s response to commenters’ assertions regarding potential mortality effects due to methylmercury exposure and cardiovascular impacts. E:\FR\FM\22MYR2.SGM 22MYR2 Federal Register / Vol. 85, No. 100 / Friday, May 22, 2020 / Rules and Regulations methodology has rendered this action in violation of CAA section 307(d). Response: The EPA believes that the language used in its 2019 Proposal and final actions is reasonable and understandable and is consistent with legal standards that have been previously upheld in litigation challenges. For example, in the Entergy decision the U.S. Supreme Court upheld the EPA’s use of a ‘‘wholly disproportionate’’ standard. 556 U.S. at 224 (‘‘[I]t is also not reasonable to interpret Section 1326(b) as requiring use of technology whose cost is wholly disproportionate to the environmental benefit to be gains’’) (internal quotation removed). Further, as recognized in the 2016 Supplemental Finding, CAA section 112(n)(1)(A) and the Michigan decision give broad discretion to the Administrator to apply his expert judgment in considering cost in order to determine whether it is appropriate and necessary to regulate HAP emissions from EGUs. See 81 FR 24428. CAA section 112(n)(1)(A) requires that ‘‘the Administrator shall regulate [EGUs] . . . if the Administrator finds such regulation is appropriate and necessary.’’ The Michigan Court explicitly acknowledged the discretion held by the Administrator: ‘‘[i]t will be up to the Agency to decide (as always, within the limits of reasonable interpretation) how to account for cost.’’ 135 S. Ct. at 2711. As explained in the prior response and in other places in this preamble, the EPA has concluded, as a result of our qualitative evaluation of evidence, that unquantified benefits cannot reasonably be expected to be comparable to the cost of regulation or to meaningfully redress the gross disparity between that cost and the monetized HAP benefits. The commenters take issue with some of the terminology used in the 2019 Proposal, but given the discretion afforded to the Administrator by CAA section 112(n)(1)(A), as acknowledged by the U.S. Supreme Court, we believe this preamble outlines a reasonable and fitting approach to Congress’ openended instruction to the Administrator to determine whether a regulation of EGUs is ‘‘appropriate and necessary.’’ The EPA further believes that, in a context where costs outweigh monetized HAP-specific benefits by three orders of magnitude, the meaning and relevance of terms such as ‘‘gross disparity’’ and ‘‘significant difference’’ are self-evident. VerDate Sep<11>2014 18:24 May 21, 2020 Jkt 250001 4. It Is Reasonable To Continue To Rely on the Original 2011 Regulatory CostBenefit Data Comparison as Part of a CAA Section 112(n)(1)(A) Assessment of Costs and Benefits a. Summary of 2019 Proposal As discussed above, in the 2016 Supplemental Finding, the EPA considered an alternative approach to considering cost as part of the appropriate and necessary finding that was based on a benefit-cost analysis originally performed as part of the 2011 RIA for the 2012 MATS Final Rule. This analysis summarized the EPA’s projected estimates of annualized benefits, costs, and net benefits of the MATS rule in 2015. The 2011 RIA considered costs, quantified HAP benefits, unquantified HAP benefits, and non-HAP co-benefits and concluded that aggregated monetized benefits ($37 to $90 billion each year) exceeded the costs of compliance ($9.6 billion) by 3 to 9 times. The EPA, therefore, concluded in the 2016 Supplemental Finding’s alternative approach that the RIA’s benefit-cost analysis supported its affirmation of the prior appropriate and necessary finding under CAA section 112(n)(1)(A). The 2019 Proposal also used the estimates from the 2011 RIA to address costs in the context of a CAA section 112(n)(1)(A) appropriate and necessary finding but concluded that the alternative approach in the 2016 Supplemental Finding had improperly weighed the non-HAP co-benefits estimates reported in the 2011 RIA. Specifically, the EPA concluded that the Agency’s previous equal weighting of the PM2.5 co-benefits projected to occur as a result of the reductions in HAP emissions was inappropriate given that the focus of CAA section 112(n)(1)(A) is on the HAP emissions reductions themselves. Upon reconsideration, the EPA proposed to determine that it would be illogical for the Agency to decide that regulation under CAA section 112, which is expressly designed to deal with HAP, could be justified primarily based on the nonHAP pollutant impacts of these regulations. In the 2019 Proposal, the EPA provided an updated comparison of costs and targeted pollutant benefits (i.e., HAP benefits) in a memorandum to the proposed rulemaking docket.35 The 35 See Compliance Cost, HAP Benefits, and Ancillary Co-Pollutant Benefits for ‘‘National Emission Standards for Hazardous Air Pollutants: Coal-and Oil-Fired Electric Utility Steam Generating Units—Reconsideration of Supplemental Finding and Residual Risk and Technology Review’’ (Docket ID Item No. EPA–HQ– OAR–2018–0794–0007). PO 00000 Frm 00021 Fmt 4701 Sfmt 4700 31305 EPA used the results from the 2011 RIA for the updated comparison, as this RIA contained the best available information on the projected costs, benefits, and impacts of the MATS rule at the time the Agency was making its regulatory decision to establish CAA section 112(d) emissions standards. b. Final Rule The EPA is finalizing the determination outlined in the 2019 Proposal. The EPA believes that the approach to the formal benefit-cost analysis presented in the 2011 RIA contains the best available information on the projected costs, benefits, and impacts of the MATS rule at the time the Agency was making its regulatory decision to establish CAA section 112(d) emissions standards. The EPA maintains that, based upon an evaluation of the information in the record, even if the Agency were to perform new analysis to estimate the benefit and cost impacts of MATS, the results are unlikely to materially alter the general conclusions of the analysis, with small benefits associated with the targeted quantified HAP benefits and compliance costs and would not alter the final determination herein. c. Comments and Responses Comment: Some commenters asserted that the EPA has failed to comply with basic principles of administrative law by failing to develop an adequate factual record in basing its cost-benefit comparison on the data contained in the 2011 RIA, as opposed to gathering the body of information relevant to these issues that has since become available. These commenters asserted that any consideration of the appropriate and necessary finding must consider new information on what the benefits and costs of regulating EGUs would be if the question were revisited in light of current knowledge, not as the facts were thought to be 8 years in the past. Response: The EPA agrees with the commenters that courts have required administrative agencies to address ‘‘newly acquired data in a reasonable fashion,’’ but depending on the circumstances, agencies are not always required to rely on updated data when engaged in decision-making. American Iron & Steel Inst. v. EPA, 115 F.3d 979, 1007 (D.C. Cir. 1997). The EPA maintains that its use of benefit and cost information from the 2011 RIA is reasonable in this context. To determine whether an agency reasonably addressed updated data, courts may look to the statutory mandate to the Agency. NRDC v. Herrington, 786 F.2d 1355 (D.C. Cir. E:\FR\FM\22MYR2.SGM 22MYR2 31306 Federal Register / Vol. 85, No. 100 / Friday, May 22, 2020 / Rules and Regulations 1985). Under the statutory structure of CAA section 112, the CAA section 112(n)(1)(A) finding is a preliminary determination that is made significantly before the CAA section 112(d) standards would be promulgated. The suggestion by some commenters that the EPA is required to conduct a new analysis that attempts to estimate the actual costs incurred through compliance with the final CAA section 112(d) standards is, thus, not consistent with the statute. The 2016 Supplemental Finding similarly declined to conduct new analysis before reaffirming the appropriate and necessary determination, arguing that this was an appropriate approach to the problem because that determination is a threshold question under the statute. 81 FR 24432 (2016 Supplemental Finding). We also note that in 2012, the EPA interpreted CAA section 112(n)(1)(A) as not obligating the Agency to update its data, and we maintain that interpretation here. That interpretation is consistent with the text and structure of CAA section 112(n)(1)(A), which focuses on an expressly required study that evaluates hazards to public health. When the EPA reaffirmed the 2000 appropriate and necessary finding in 2012, it explained that although it was choosing to undertake an updated analysis of the public health risks associated with EGU HAP emissions, doing so was ‘‘not required.’’ 77 FR 9304, 9310 (February 16, 2012). The EPA argued at the time that the continued existence of the appropriate and necessary finding in 2012 was warranted by the analysis undertaken in 1998 and summarized in the 2000 appropriate and necessary finding. Id. Both the statute and the Michigan decision support the EPA’s reliance on the cost estimates from the 2011 RIA. First, any cost analysis included in an ‘‘initial decision to regulate,’’ Michigan, 135 S. Ct. at 2709, must precede any regulations flowing out of that decision. Therefore, in considering the costs of compliance as part of its appropriate and necessary finding, it is reasonable for the EPA to look at what types of cost information, such as the 2011 RIA cost estimates, would be available at this threshold stage. In addition, nothing in the Michigan decision precludes the EPA’s use of the existing cost information in the record in addressing the Agency’s obligation on remand to consider cost as part of the appropriate and necessary finding. In Michigan, the Court rejected arguments that it could conclude that the Agency had properly considered cost based on the Agency’s consideration of costs in other stages of VerDate Sep<11>2014 18:24 May 21, 2020 Jkt 250001 the rulemaking (e.g., in setting the emission standards or in the RIA). The Court emphasized that the Agency itself had not relied upon these rationales at the finding stage. 135 S. Ct. 2710–11 (citing SEC v. Chenery Corp., 318 U.S. 80, 87 (1943)). However, the Court left open the possibility that the economic analyses the Agency had already conducted could suffice to satisfy its obligation to consider costs as part of the appropriate finding. Id. at 2711. There is nothing in the operative statutory language here that is akin to wording that courts have found to require an agency to incorporate updated information. See Sierra Club v. EPA, 671 F.3d 955 (9th Cir. 2012) (directing the EPA to rely on updated data when approving nonattainment state implementation plans (SIPs) because CAA section 172(c)(3) requires SIPs to include ‘‘comprehensive, accurate, current inventory of actual emissions’’); see also City of Las Vegas v. Lujan, 891 F.2d 927 (D.C. Cir. 1989) (holding that the Secretary of the Interior could not disregard available scientific information because the Endangered Species Act required the ‘‘best scientific and commercial data available’’). In addition to looking at the statutory language, courts also often examine the impact any updated data would have had on the agency’s decision. Catawba County v. EPA, 571 F.3d 20, 45 (D.C. Cir. 2009) (upholding the EPA’s designations for the NAAQS because ‘‘EPA dealt with the newly acquired data in a reasonable fashion by explaining why it would not have changed the designations’’); see also Eastern Carolinas Broadcasting v. FCC, 762 F.2d 95, 98 (D.C. Cir. 1985) (upholding FCC’s determination in light of the Commission’s failure to utilize updated data because it was a ‘‘harmless error in light of the ultimate rationale’’). According to the commenters, costs of MATS compliance have been lower than the EPA estimated in 2011 and the EPA has not accounted for more recent studies of quantified HAP benefits. However, even if the EPA updated its analysis, there is no reason to believe that the new data and analysis would change the overall conclusion of the 2011 analysis that costs outweighed the quantified benefit attributed to reduction in HAP emissions. However, while it is challenging to produce rigorous retrospective estimates of the benefits and costs of MATS, it is possible to demonstrate, using publicly available information, that there is no reason to believe that the relative difference between compliance costs and quantified HAP benefits projected PO 00000 Frm 00022 Fmt 4701 Sfmt 4700 in the 2011 RIA ($9.6 billion versus $4 to $6 million annually in 2015) would be materially different under any reanalysis.36 Several commenters pointed to independent analyses that provided three estimates of the actual costs of MATS. While none of these estimates can be precisely compared against the EPA ex ante estimates because they use different cost metrics and dollar years, the independent analyses indicate that, if actual costs were to be estimated in a manner consistent with the EPA’s 2011 RIA estimates, the compliance costs expenditures would still likely be in the billions of dollars. First, a 2015 analysis by Andover Technology Partners referred to by commenters estimated that the actual cost of compliance in the initial years of implementation was approximately $2 billion per year.37 38 The second study referred to by commenters was a study performed by M.J. Bradley & Associates (MJB&A) using information from the U.S. Energy Information Administration.39 MJB&A estimated that MATS-regulated facilities incurred total capital expenditures on environmental retrofits of $4.45 billion, an estimate that does not include ongoing operating and maintenance expenditures. Finally, as documented in a letter to the EPA and cited by several commenters, the Edison Electric Institute estimated that the power sector incurred total compliance costs of more than $18 billion, including both capital and 36 The EPA’s April 15, 2020, finalization of the subcategorization of Eastern Bituminous Coal Refuse-Fired EGUs could alter the benefits and costs of MATS. However, given that such subcategorization will affect only six units, we think it is reasonable to expect that any changes to the 2011 RIA’s projected cost and benefits as a result of the potential subcategorization would not materially affect the EPA’s conclusion that compliance costs of MATS disproportionately outweigh the HAP benefits associated with the standards. 37 Declaration of James E. Staudt, Ph.D., CFA, at 3, White Stallion Energy Center v. EPA, No. 12– 1100 (D.C. Cir., December 24, 2015). Also available at Docket ID Item No. EPA–HQ–OAR–2009–0234– 20549. 38 In addition to the 2015 study, Andover Technology Partners produced two other analyses in 2017 and 2019, respectively, that estimated the ongoing costs of MATS. The 2017 report estimated that the total annual operating cost for MATSrelated environmental controls was about $620 million, an estimate that does not include ongoing payments for installed environmental capital. The 2019 report estimates the total annual ongoing incremental costs of MATS to be about $200 million; again, this estimate does not include ongoing MATS-related capital payment. The 2017 report is available in Docket ID Item No. EPA–HQ– OAR–2018–0794–0794. The 2019 report is available in Docket ID Item No. EPA–HQ–OAR–2018–0794– 1175. 39 Available in Docket ID Item No. EPA–HQ– OAR–2018–0794–1145. E:\FR\FM\22MYR2.SGM 22MYR2 Federal Register / Vol. 85, No. 100 / Friday, May 22, 2020 / Rules and Regulations operations and maintenance costs.40 While these retrospective cost estimates are developed from bases that are dissimilar from one another and, in particular, from how the EPA developed the prospective cost estimates in the 2011 RIA, it is evident that the independent analyses each indicate that the industry costs of MATS are of a similar order of magnitude and in the billions of dollars. At the same time, the quantified mercury-related benefits would still likely be in the millions of dollars and not substantially more than what was estimated when the rule was finalized. Table 3–4 of the 2011 RIA shows that the EPA estimated that MATS would reduce mercury emissions from MATSregulated units about 20 tons in 2015 (from 27 to 7 tons). According to recent EPA estimates, mercury emissions from MATS-regulated units decreased by about 25 tons from 2010 (pre-MATS) to 2017 (from 29 to 4 tons).41 Even if the 25-ton decrease in mercury emissions from 2010 to 2017 is entirely attributed to MATS (which would be a very strong assumption given other economic and regulatory factors that influenced the trajectory of mercury emissions downward during this period), the quantified mercury-related benefits are likely to be not much greater than the estimates in the 2011 RIA, and certainly would continue to be at least an order of magnitude smaller than the actual costs of MATS. Similarly, as discussed in more detail in sections II.C.2 and II.C.3 of this preamble, we would expect that the unquantified HAP-related benefits of MATS would not meaningfully redress the large disparity between monetized costs and monetized HAP benefits estimated in the 2011 RIA. Lastly, whether the co-benefits that MATS achieved are larger or smaller than estimated in the 2011 RIA is not a central consideration in the EPA’s appropriate and necessary finding, as discussed previously in section II.C.3 of this preamble.42 The net result of this inquiry is that we believe that if the EPA were to perform retrospective analysis of the impacts of MATS for the purposes of the appropriate and necessary determination, the results of that analysis would not lead to any material 40 Available in Docket ID Item No. EPA–HQ– OAR–2018–0794–2267. 41 https://www3.epa.gov/airmarkets/progress/ reports/. 42 As previously discussed, section 112(n) of the CAA requires the EPA to make a finding as to whether regulation of EGUs is ‘‘appropriate and necessary’’ following consideration of hazards to public health reasonably anticipated to result from EGU emissions of HAP listed in CAA section 112(b). VerDate Sep<11>2014 18:24 May 21, 2020 Jkt 250001 change in the relative magnitude of costs and HAP-related benefits. In satisfaction of the requirements of OMB’s Circular A–4, Section 3 of the memorandum, Compliance Cost, HAP Benefits, and Ancillary Co-Pollutant Benefits, that accompanies this final action presents all reasonably anticipated costs and benefits arising out of the MATS rule, including those arising out of co-benefits. Comment: Commenters said that the compliance cost estimates underlying the 2019 Proposal are several times higher than actual costs because the projections in the 2011 RIA assumed that MATS would require the installation of additional fabric filters, scrubber upgrades, and electrostatic precipitator upgrades that were subsequently not required. Additionally, the commenters suggested the EPA’s analysis erred because the projected price of natural gas was too low in the 2011 RIA. Commenters said that what they characterized as substantial inaccuracies of the 2011 RIA projections render these projections an inappropriate basis for the proposed comparison of the costs and benefits. Response: The EPA disagrees with the commenters that the entire economic analysis that the EPA performed in the 2011 RIA is invalid simply because of an asserted discrepancy between modeling projections and actual outcomes. See, e.g., EME Homer City Generation, L.P. v. EPA, 795 F.3d 118, 135–36 (D.C. Cir. 2015) (‘‘We will not invalidate EPA’s predictions solely because there might be discrepancies between those predictions and the real world. That possibility is inherent in the enterprise of prediction. The best model might predict that the Nationals will win the World Series in 2015. If that does not happen, you can’t necessarily fault the model.’’). The EPA used the best available data and modeling information, in accordance with Executive Order 12866 and the EPA’s economic guidelines, and provided the public with the opportunity to comment on all aspects of its analysis in developing the 2011 RIA. The independent analyses cited by several commenters find that a variety of control technology costs have shown to be lower than the EPA’s projection from the 2011 RIA. However, the suggestion that important components of the actual compliance cost of MATS are lower than the Agency’s projections does not alter the Agency’s determination that the analysis in the 2011 RIA represents the best and most comprehensive estimate of the cost of compliance with MATS available to the EPA for use in this finding, because it PO 00000 Frm 00023 Fmt 4701 Sfmt 4700 31307 was developed at the time when the Agency reaffirmed the appropriate and necessary finding and established CAA section 112(d) standards for EGUs. Additionally, as discussed in another comment response in this section, even if actual compliance costs are lower than the EPA projected in the 2011 RIA, the costs are still likely to be at least an order of magnitude greater than the monetized HAP benefits. Comment: Other commenters rejected the argument that actual utility sector compliance costs for MATS have been less than predicted in 2011. One commenter said that utilities have spent less on retrofitting power plants by simply closing plants to avoid installing costly controls. However, the commenter also claimed that the utility sector’s avoided MATS compliance costs did not simply disappear; they were translated into costs borne by the former employees of retired coal-fired plants, by coal workers who have lost their jobs, and by the communities of those displaced workers. Commenters said that the 2019 Proposal continues to treat these MATS-driven ‘‘costs’’ as irrelevant when considering the regulatory impacts, but the commenters said that the EPA must add these regulatory costs to its analysis as required by Michigan. The commenter cited data indicating an individual’s job loss has a direct correlation with adverse health outcomes. Response: The 2011 RIA provided estimates of employment changes for the regulated power sector and for the air pollution control sector, including estimates of employment impacts from changes in fuel demand from EGUs. However, examining localized employment impacts that may arise from MATS compliance actions is outside of the scope of this action. The commenter asserts that the cost of the rule will result in lost income or employment that will, in turn, result in negative health impacts. The EPA disagrees that this point is relevant to the appropriate and necessary finding. Comment: Commenters highlighted that the industry has already incurred costs to implement MATS and cannot recover these costs except through rate recovery and similar mechanisms. Commenters argued that finalization of a reconsideration of the appropriate and necessary finding under CAA section 112(n)(1)(A) should be based on an analysis of ongoing and future costs weighed against ongoing and future benefits, as opposed to considering past costs and benefits. If the EPA considers past costs that have already been incurred by the industry to comply with MATS in connection with the proposed E:\FR\FM\22MYR2.SGM 22MYR2 31308 Federal Register / Vol. 85, No. 100 / Friday, May 22, 2020 / Rules and Regulations rule, the Agency must consider whether those past costs might weigh in favor of maintaining or affirming the 2016 Supplemental Finding. Response: A previous response in this section explains why the EPA’s use of the benefit and cost estimates from the 2011 RIA is reasonable. Additionally, with respect to the suggestion that the EPA estimate future costs and benefits flowing from this action, section II.D of this preamble explains that the EPA’s revised determination that regulation of HAP emissions from EGUs under CAA section 112 is not appropriate and necessary will not remove EGUs from the CAA section 112(c) list of sources, and the previously established MATS rule will remain in place. As a result, there will be no changes in future compliance expenditures or emissions under MATS as a result of the revised determination under CAA section 112(n)(1)(A). Comment: Commenters said that many utilities that expended resources to comply with MATS are subject to ongoing rate reviews by public utility commissions regarding recovery of MATS-associated costs. Some utilities expressed concerns that, if MATS or the appropriate and necessary finding is rescinded, whether through EPA action or as a result of judicial review of a reversal of the 2016 Supplemental Finding, stakeholders will intervene in rate cases before public utility commissions, arguing that utilities’ investments in the MATS-required pollution controls were imprudent and should no longer be recoverable through their approved rates. Because of this reasoning, the commenters said the EPA should consider the impacts on recovery of sunk costs jeopardized by a reversal of the appropriate and necessary finding in its benefit-cost analysis. Response: Section II.D of this preamble explains that the EPA’s revised determination that regulation of EGUs under CAA section 112 is not appropriate and necessary will not remove EGUs from the CAA section 112(c) list of sources, and the previously established MATS rule will remain in place. As a result, the EPA does not anticipate that the ability of utilities to recover MATS-related expenditures will be jeopardized as a result of this action. Even if MATS were to be rescinded, a number of states have mercury rules that would continue to mandate the use of mercury controls. The EPA is committed to working with states that are interested in developing their own HAP-specific requirements. The EPA’s proposal noted that, in 2011, the Utility Air Regulatory Group (UARG) submitted a petition pursuant to CAA section VerDate Sep<11>2014 18:24 May 21, 2020 Jkt 250001 112(c)(9) requesting that coal-fired EGUs be removed from the CAA section 112(c) List of Categories of Major and Area Sources, and that the EPA denied this petition on several grounds.43 The EPA’s position on denial of this petition has not changed. Comment: Commenters stated that since the revised consideration of weighing costs and benefits as part of a CAA section 112(n)(1)(A) finding hinges on the estimation of HAP reduction benefits, the EPA must make a better effort to monetize all HAP reduction benefits. These commenters asserted that new research suggests that the EPA underestimated the benefits associated with HAP reductions across several effects. Specific criticisms of the EPA HAP benefit estimation focused primarily on methylmercury 44 and included: (1) Failure to quantify cardiovascular effects; (2) criticism of the approach used in modeling the IQ loss endpoint; (3) failure to consider other neurological endpoints besides IQ loss; (4) failure to consider additional health effects besides neurological and cardiovascular impacts; and (5) failure to model the full range of fish consumption pathways related to mercury emissions from EGUs. Response: After reviewing the additional peer-reviewed studies on health effects attributable to mercury that were submitted in the comments, the EPA concludes that the approach to assessing quantified and unquantified methylmercury benefits in the 2011 RIA, while subject to uncertainty, remains valid. We address the major criticisms across the five major categories of comments below. i. Failure To Quantify Cardiovascular Effects Commenters cited several studies regarding the linkage between methylmercury concentrations in blood and tissue samples and cardiovascular health. Some of the studies cited in the comments were available to the EPA at the time of the 2011 RIA, while others were not. The former category includes Rice et al. (2010) 45 and Roman et al. 43 84 FR 2679–2680. comments also addressed the modeling of non-mercury HAP in the context of the appropriate and necessary risk assessment (as opposed to the benefits analysis), with these comments focusing on claims that EPA had failed to appropriately include adjustment factors addressing individual-variability and limitations in using the census block-centroid approach to capturing risk for the most exposed individual. These comments are addressed in the RTC document. 45 Rice, G.E., et al. (2010). A Probabilistic Characterization of the Health Benefits of Reducing Methyl Mercury Intake in the United States. 44 Additional PO 00000 Frm 00024 Fmt 4701 Sfmt 4700 (2011) 46 which characterize methylmercury-related effects. These two articles concluded that methylmercury is both directly linked to acute myocardial infarction and intermediary impacts that contribute to myocardial infarction risk. They also discussed a host of uncertainties associated with methylmercury cardiovascular effects. Rice et al. (2010) evaluated the benefits of a 10-percent reduction in methylmercury exposure for U.S. populations (reflecting IQ loss and presumed mortality impacts). The study used a probabilistic approach to address confidence in a causal association between methylmercury and heart attacks. Importantly, they state ‘‘we view the evidence for causal interpretation as relatively weak.’’ They use a subjectively defined probability of one-third that the association between methylmercury and cardiovascular effects is causal, acknowledging that the strength of the association was ‘‘modest.’’ The Rice et al. (2010) estimates are also sensitive to assumptions regarding the coefficient linking hair mercury to heart attack and the timing of the exposure-response relationship. The Roman et al. (2011) paper was a workshop report from a panel convened to assess the potential for developing a concentration-response function for the cardiovascular effect from methylmercury exposure. The report recommended that the EPA develop a new dose-response relationship for cardiovascular-related methylmercury effects. However, the study also reports the results of a literature review that yield a very small number of in vitro or animal studies; the review characterized the strength of the epidemiological studies that assessed clinically significant endpoints as being ‘‘moderate.’’ The Roman et al. (2011) review also mentions uncertainty as to which exposure metric (including the timing of exposure and appropriate biomarker) would provide the most robust statistical outcome in modeling cardiovascular effects. In the 2012 MATS Final Rule, the EPA also addressed comments on the linkage between methylmercury exposure and cardiovascular effects. One of the references cited as part of the EPA response was Mozaffarian et al. Environmental Science & Technology, 44(13): 5216–5224. 46 Roman, H.A., et al. (2011). Evaluation of the cardiovascular effects of methylmercury exposures: Current evidence supports development of a doseresponse function for regulatory benefits analysis. Environmental Health Perspectives, 119(5): 607– 614. E:\FR\FM\22MYR2.SGM 22MYR2 Federal Register / Vol. 85, No. 100 / Friday, May 22, 2020 / Rules and Regulations exposure through fish consumption in the midst of the positive cardiovascular impacts associated with fish consumption. However, based on the information available in the existing record and material submitted during the public comment period, the EPA believes available evidence does not support a clear characterization of the potential relationship between mercury exposure and cardiovascular effects at this time. This does not preclude the possibility that later scientific work may provide more clarity as to the existence or absence of an association. Further, current research is also insufficient to support modeling of the cardiovascular mortality endpoint with a sufficient degree of confidence for inclusion in an EPA benefits analysis due to (1) questions regarding overall causality and uncertainty in specifying the dose-response relationship required (including the form and parameterization of the function) and (2) uncertainty in modeling the prospective bio-markers (e.g., hair mercury) required in part due to questions regarding the temporal aspects of the exposureresponse relationship. (2011), which evaluated health outcomes from two large cohorts of men and women in the U.S. and showed no evidence of a relationship between mercury exposure and increased cardiovascular disease risk.47 This study also evaluated multiple coronary heart disease subtypes and concluded that mercury exposure was not associated with the risk of nonfatal myocardial infarction or fatal coronary heart disease. Based on the available scientific literature at the time of the MATS rule, the Agency concluded that there was inconsistency among available studies as to the association between methylmercury exposure and various cardiovascular system effects. In the second category of newer literature, commenters referenced the Genchi et al. (2017) 48 review article that summarizes the methylmercurycardiovascular literature but does not report dose-response parameters. The paper cites studies from 2002–2007 looking at cardiovascular-related effects (e.g., heart rate variability, myocardial infarction, atherosclerosis, hypertension, etc.) for a range of populations, some U.S. and some nonU.S. The article recommends development of a dose-response function for methylmercury exposure and myocardial infarctions for regulatory benefits analysis, but does not provide specific recommendations regarding which studies, effect estimates or functional forms to use. The authors also acknowledge the need ‘‘to improve the characterization of the potential linkage between methylmercury exposure and the risk of cardiovascular disease.’’ Commenters also cited Giang and Selin (2016) 49 as support for their argument that the monetized benefits of reducing mercury is greater than the EPA estimates in the proposal. This study also acknowledges that the relevant literature (through 2016) is relatively small and inconsistent with respect to the association between methylmercury exposure and cardiovascular disease. The study notes that all of the literature discusses the challenges associated with teasing out any adverse effects of methylmercury ii. Criticism of the Approach Used in Modeling the IQ Loss Endpoint The second category of criticism related to the 2011 RIA estimation of benefits involves the approach used in modeling IQ loss, specifically the effect estimate used in modeling this endpoint. Commenters pointed out that in modeling IQ loss, two studies, Bellanger et al. (2013) 50 and Trasande et al. (2005),51 employ effect estimates significantly larger than the effect estimate utilized by the EPA in the 2011 RIA, which was obtained from Axelrad et al. (2007).52 In responding to these comments, the EPA notes that both of these alternate studies (Bellanger et al., 2013 and Trasande et al., 2005) utilized data from one of the three key datasets (Faroes study) in characterizing the relationship between methylmercury exposure and IQ loss. By contrast, Axelrad et al. (2007) uses data from all three key studies (Faroes, Seychelles, and New Zealand) in fitting their 47 Mozaffarian, D.; Shi, P.; Morris, J.S.; Spiegelman, D.; Grandjean, P.; Siscovick, D.S.; Willett, W.C.; Rimm, E.B. Mercury exposure and risk of cardiovascular disease in two U.S. cohorts. N Engl J Med, 2011, 364, 1116–1125. 48 Genchi, G.; Sinicropi, M.S.; Carocci, A.; Lauria, G.; Catalano, A. Mercury Exposure and Heart Diseases. Int. J. Environ. Res. Public Health, 2017, 14, 74. https://doi.org/10.3390/ijerph14010074. 49 Giang, A.; Selin, N. Benefits of mercury controls for the United States. Proceedings of the National Academy of Sciences, Vol 113, No. 2, January 12, 2016. https://doi.org/10.1073/ pnas.1514395113. 50 Bellanger, D., et al. (23 authors), Economic benefits of methylmercury exposure control in Europe: Monetary value of neurotoxicity prevention. Environmental Health, 2013, 12:3. 51 Trasande, L.; Landrigan, P.; Schechter, C. Public Health and Economic Consequences of Methyl Mercury Toxicity to the Developing Brain. Environmental Health Perspectives, Vol 113, No 5, May 2005. https://doi.org/10.1289/ehp.7743. 52 Axelrad, D.; Bellinger, D.; Ryan, L.; Woodruff, T. Dose-Response relationship of Prenatal Mercury Exposure and IQ: An Integrative Analysis of Epidemiologic Data. Environmental Health Perspectives, Vol 115, No 4, April 2007. VerDate Sep<11>2014 18:24 May 21, 2020 Jkt 250001 PO 00000 Frm 00025 Fmt 4701 Sfmt 4700 31309 function. In addition, Axelrad et al. (2007) also obtained a new modeled estimate for IQ loss for the Faroes data from the study authors based on structural equation modeling involving underlying neurological endpoints. And finally, Axelrad et al. (2007) also used a sophisticated hierarchical randomeffects model that can consider study-tostudy and endpoint-to-endpoint variability in modeling the endpoint. When considered in aggregate, these details regarding study design associated with Axelrad et al. (2007) lead the EPA to conclude that the effect estimate obtained from this particular study is well supported by the underlying evidence and continues to be appropriate for modeling IQ loss benefits related to methylmercury exposure. iii. Failure To Consider Other Neurological Endpoints Besides IQ Loss The third broad category of criticism related to the 2011 RIA estimation of benefits was that the EPA failed to consider other neurological endpoints besides IQ loss in modeling benefits. Specifically, commenters asserted that pre-existing literature 53 and more recent data have revealed a suite of more sensitive neurodevelopmental effects than IQ loss. For example, one recent study (Patel et al., 2019) 54 referenced in the comments suggests an association between methylmercury exposure and behavioral problems (specifically anxiety), even at relatively low prenatal exposure levels. Another study, Masley et al. (2012) 55 cited by commenters concludes that cognitive effects of methylmercury on adults are substantial enough to negate beneficial effects of omega-3 fatty acids among adults who consume large amounts of some types of fish. Finally, commenters pointed to new research (Julvez et al., 2013) 56 which suggests that some individuals might be genetically susceptible to the neurological effects of methylmercury and that null groups which do not include these individuals could mask significant impacts among 53 National Research Council, The Toxicological Effects of Methylmercury, 2000. https:// www.nap.edu/catalog/9899/toxicological-effects-ofmethylmercury, p. 310. 54 Patel, N.B.; Xu, Y.; McCandless, L.C.; Chen, A.; Yolton, K.; Braun, J.; . . . Lanphear, B.P. (2019). Very low-level prenatal mercury exposure and behaviors in children: The HOME Study. Environmental health: A global access science source, 18(1), 4. doi:10.1186/s12940-018-0443-5. 55 Masley, S.C.; Masley, L.V.; Gualtieri, T.: Effect of mercury levels & seafood intake on cognitive function in middle-aged adults. Integrative Medicine, 11:32–40, 2012. 56 Julvez, J. and Grandjean, P. Genetic susceptibility to methylmercury developmental neurotoxicity matters. Front Genet, 4: 278, 2013. E:\FR\FM\22MYR2.SGM 22MYR2 31310 Federal Register / Vol. 85, No. 100 / Friday, May 22, 2020 / Rules and Regulations genetically susceptible within the larger study group. Taking these comments in order, regarding the potential for modeling additional neurological endpoints, including behavioral problems (e.g., anxiety), the EPA notes that the cited study (Patel et al., 2019) is equivocal in its findings, with the authors stating that they ‘‘did not find a consistent association between very low-level prenatal mercury exposure and behavior problem scores in children, but [they] did find some evidence of an association between very low-level mercury exposure during early pregnancy and parent-reported anxiety scores in children.’’ The authors note that the association of low-level mercury exposure with behavioral problems, including anxiety, deserves further scrutiny. The EPA concludes that we are not yet at the point where we can reliably model the effects of lowlevel mercury exposure on children’s behavior, including anxiety. Regarding the potential for the beneficial cognitive effects of omega-3 fatty acids in adults (resulting from fish consumption) to be partially negated by coexistent methylmercury exposure, the EPA recognizes conceptually that this could occur. However, it is important to note that the effects of methylmercury on omega-3 fatty acid intake and associated benefits were seen only for the subset of the population with relatively elevated consumption of larger fish (i.e., more than 3–4 servings a month, Masley et al., 2012). Modeling benefits-related changes in fish consumption typically focuses on the general consumer rather than attempting to model benefits for a specific subset of that population which can be challenging to enumerate (i.e., the subgroup of those consuming relatively elevated levels of higher-trophic level fish)—that level of more refined subgroup modeling is often reserved for scenario-based risk assessments, where population enumeration is not the focus. For that reason, data on how methylmercury could obscure the benefits of omega-3 fatty acid intake (for a specific higher large-fish-consuming segment of the population) would have less utility in the context of a benefits analysis aimed at the more generalized fish-consuming population. In addition, the EPA would note potential challenges in modeling this kind of trade-off related to fish consumption, since not only would levels of methylmercury and omega-3 fatty acids need to be characterized for a broad range of fish species; in addition, the specific mix of those types of fish consumed by the high-consuming study VerDate Sep<11>2014 18:24 May 21, 2020 Jkt 250001 population would need to be specified in order to increase overall confidence in modeling cognitive-related benefits at the representative population-level for this subgroup. Regarding the potential that certain individuals could be genetically susceptible to the neurological effects of methylmercury and that, consequently, these individuals may not be fully covered by existing studies characterizing neurodevelopmental effects of methylmercury, the EPA acknowledges this as a possibility. However, the study cited by commenters (Julvez et al., 2013) does not provide effect estimates for these potentially at-risk subgroups, which prevents quantitative analysis of risk and associated dollar-benefits associated with mercury-exposure in these subgroups. iv. Failure To Consider Additional Health Effects Besides Neurological and Cardiovascular Impacts Commenters pointed to the potential for methylmercury exposure to be associated with a range of additional adverse health effects (besides neurological and cardiovascular), including cancer (leukemia and liver) and possible effects on the reproductive, hematological, endocrine (diabetes), and immune systems. The EPA notes the distinction between evidence-based support for specific health effects (potentially even including support for causal associations should it exist) and the ability to reliably model those health endpoints quantitatively. In referencing the above health endpoints, commenters referred to a range of study data which can be used as evidence for an association, including elucidation of potential toxicity pathways. In response to these comments, the EPA notes that in order to model a health effect within a defined population as part of a benefits analysis, high-confidence concentration-response functions linked to clearly defined biometrics (which can themselves be simulated at the population-exposure level) are required. At this time, as noted earlier, with the exception of IQ loss in children, the EPA does not believe research is currently sufficient to support quantitative assessment of any of these additional endpoints in the context of a benefits analysis involving mercury (accessed through a fishconsumption pathway). v. Failure To Model the Full Range of Fish Consumption Pathways Related to Mercury Emissions From EGUs A number of commenters stated that the EPA underestimated IQ-related PO 00000 Frm 00026 Fmt 4701 Sfmt 4700 benefits by focusing the benefits analysis on self-caught (recreational) freshwater fish. Specifically, commenters pointed to Trasande et al. (2005) as an example of an assessment that, while also modeling benefits associated with controlling mercury emissions from U.S. power plants, more fully considers exposure to methylmercury, including the general consumption of commercial fish by the U.S. population. The Trasande et al. (2005) study employs general linear apportionment (based on estimates of U.S. EGU emissions relative to global emissions) to estimate the fraction of methylmercury in U.S. freshwater and coastal fish associated with U.S. EGU emissions. A similar calculation is used to estimate the fraction of methylmercury in non-U.S. sourced commercial fish associated with U.S. EGU emissions. They then apportion their estimate of total IQ loss for children in the U.S. (assumed to come completely from fish consumption) to U.S. EGU-sourced mercury versus other sources. Similarly, commenters have also cited Giang and Selin (2016) as another example of a study that attempts to generate a more complete picture of methylmercury benefits associated with controlling U.S. EGU mercury emissions, including exposures associated with commercial fish consumption. Notably, the Giang et al. (2016) study uses a more sophisticated modeling approach (compared with Trasande et al., 2005), to project potential benefits associated with MATS within the United States out to 2050, including application of global mercury deposition modeling covering specific regions associated with commercial fishing. The authors note that greater than 90 percent of U.S. commercial fish consumption, and the majority of U.S. mercury intake, comes from marine and estuarine sources, particularly from the Pacific and Atlantic Ocean basins. Regarding the assertion that the EPA should have used methodologies similar to those cited in these studies to incorporate consideration of commercial fish consumption (linked to U.S. EGU mercury emissions) in its benefits analysis, the EPA again reiterates the importance of including only those consumption pathways that can be modeled with a reasonable degree of confidence. Both of the studies cited employ broad-scale simplifying assumptions in order to link changes in U.S. EGU mercury emissions to potential changes in the concentration of methylmercury in commercial fish, which Giang et al. (2016) suggest is responsible for the vast majority of fish- E:\FR\FM\22MYR2.SGM 22MYR2 Federal Register / Vol. 85, No. 100 / Friday, May 22, 2020 / Rules and Regulations related methylmercury exposure in the U.S. Specifically, as noted earlier, the Trasande et al. (2005) study links U.S. EGU emissions (as a fraction of total global emissions) to methylmercury concentrations in commercially and recreational fish consumed by the U.S. population. With the Giang et al. (2016) study, the authors utilize U.S. EGU deposition (as a fraction of total) in specific broad fishing regions (e.g., Atlantic) to estimate the fraction of methylmercury in commercially sourced fish caught in those broad regions attributable to U.S. EGUs. Both of these simplifying assumptions mask the potential complexity associated with linking U.S. EGU-sourced mercury to methylmercury concentrations in these commercial fish species. In particular, a larger region such as the Atlantic likely displays smaller-scale variation in critical factors such as fish species habitat/location, patterns of mercury deposition, and factors related to the methylation of mercury and associated bioaccumulation/biomagnification. In developing these kinds of more sophisticated models aimed at factoring commercial fish consumption into a benefits analysis involving U.S. EGU mercury, additional analyses could be needed to understand this critical element of spatial scale and the generalizing assumptions used by these authors in linking mercury emissions and deposition to commercial fish. Note that in the EPA’s benefits analysis completed for MATS, one reason focus was placed on the freshwater angler scenario was increased confidence in modeling this exposure pathway given our ability to link patterns of U.S. EGU mercury deposition (relative to total deposition) over specific watersheds to sampled fish tissue concentrations in those same watersheds. This degree of refined spatial precision in linking U.S. EGU deposition to actual measured fish tissue data increased overall confidence in modeling benefits associated with this pathway, leading us to focus on the recreational angler exposure pathway. D. Effects of This Reversal of the Supplemental Finding 1. Summary of 2019 Proposal In the 2019 Proposal, the EPA proposed to conclude that finalizing a revision to the 2016 Supplemental Finding to determine that it is not appropriate and necessary to regulate HAP emissions from coal- and oil-fired EGUs would not lead to the removal of that source category from the CAA section 112(c)(1) list, nor would it affect the CAA section 112(d) standards established in the MATS rule. VerDate Sep<11>2014 18:24 May 21, 2020 Jkt 250001 As described in section II.B of this preamble, in 2005, the EPA reversed the 2000 determination that regulation of HAP emissions from EGUs under CAA section 112 was appropriate and necessary. At that time, the EPA justified its decision to delist EGUs because it ‘‘reasonably interprets section 112(n)(1)(A) as providing it authority to remove coal- and oil-fired units from the section 112(c) list at any time that it makes a negative appropriate and necessary finding under the section.’’ 70 FR 16032. In the 2005 Delisting Rule, the EPA ‘‘identified errors in the prior [2000] finding and determined that the finding lacked foundation.’’ 70 FR 16032. Because the EPA concluded the 2000 Finding had been in error at the time of listing, the Agency asserted that coal- and oil-fired EGUs ‘‘should never have been listed under section 112(c) and therefore the criteria of section 112(c)(9) do not apply’’ in removing the source category from the list. Id. at 16033. Therefore, the EPA stated that it had ‘‘inherent authority under the CAA to revise [the listing] at any time based on either identified errors in the December 2000 finding or on new information that bears upon that finding.’’ Id. at 16033. The D.C. Circuit rejected the EPA’s interpretations, holding that the Agency did not have authority to remove source categories from the CAA section 112(c) list based only on a revised CAA section 112(n)(1)(A) negative appropriate and necessary finding. The Court held that the CAA unambiguously requires the EPA to demonstrate that the delisting criteria in CAA section 112(c)(9) have been met before ‘‘any’’ source category can be removed from the CAA section 112(c)(1) list. New Jersey, 517 F.3d at 582. The D.C. Circuit specified that, under the plain text of the CAA, ‘‘the only way the EPA could remove EGUs from the section 112(c)(1) list’’ was to satisfy those criteria. Id. The Court expressly rejected the EPA’s argument that, ‘‘[l]ogically, if EPA makes a determination under section 112(n)(1)(A) that power plants should not be regulated at all under section 112 . . . [then] this determination ipso facto must result in removal of power plants from the section 112(c) list.’’ Id. (quoting the EPA’s brief). Instead, the Court maintained that CAA section 112(n)(1) governed only how the Administrator determines whether to list EGUs, and that the EPA’s authority to remove a source category from the list, even for EGUs, must be exercised only in accordance with the requirements of CAA section 112(c)(9). PO 00000 Frm 00027 Fmt 4701 Sfmt 4700 31311 Accordingly, the Court vacated the 2005 Delisting Rule. Based on the D.C. Circuit’s holding in New Jersey, the EPA proposed that finalization of the reversal of the 2016 Supplemental Finding, much like the 2005 Delisting Rule’s reversal of the 2000 appropriate and necessary determination, would not have the effect of removing the Coal- and OilFired EGU source category from the CAA section 112(c)(1) list because the EPA had not met the statutorily required CAA section 112(c)(9) delisting criteria. Because coal- and oil-fired EGUs would remain on the CAA section 112(c)(1) source category list, the EPA proposed to conclude that the CAA section 112(d) standards for that category, as promulgated in the MATS rule, would be unaffected by the proposal if finalized. In the proposal, the EPA requested comment on two alternative interpretations of the New Jersey holding. The first alternative interpretation probed whether the New Jersey decision does not apply because the facts of the current situation are distinguishable from the underlying facts of that case. Specifically, the EPA requested comment on the view that New Jersey would not apply because the proposed reversal of the 2016 Supplemental Finding is a continuation of the Agency’s response to the U.S. Supreme Court’s remand in Michigan. Under this view, the Agency could rescind MATS without demonstrating that the CAA section 112(c)(9) criteria had been met because New Jersey did not address the situation in which the Agency was revising its CAA section 112(n)(1)(A) determination in response to a U.S. Supreme Court decision. The second alternative interpretation solicited comment on whether the EPA would have the authority to rescind the standards regulating HAP emissions under CAA section 112(d) in light of the fact that CAA section 112(n)(1)(A) plainly requires that the Administrator must find that regulation under CAA section 112 is appropriate and necessary as a prerequisite to undertaking such regulation. Under this theory, EGUs would remain on the CAA section 112(c) list, but would not be subject to CAA section 112(d) standards, because New Jersey did not address the question of whether, in the absence of a valid and affirmative appropriate and necessary finding, the EPA must regulate EGUs for HAP. For both alternative interpretations, the EPA solicited comment on whether the Agency had the discretion to follow an alternative or was, in fact, obligated to pursue an alternative interpretation. E:\FR\FM\22MYR2.SGM 22MYR2 31312 Federal Register / Vol. 85, No. 100 / Friday, May 22, 2020 / Rules and Regulations 2. Final Rule After considering comments submitted in response to the EPA’s 2019 Proposal, we are concluding that the current action to reverse the 2016 Supplemental Finding would not affect the CAA section 112(c) listing of EGUs or the CAA section 112(d) regulations. The situation here is essentially indistinguishable to that in the New Jersey case, and, therefore, in the absence of the CAA section 112(c)(9) delisting criteria being satisfied, coaland oil-fired EGUs necessarily remain on the list of regulated sources, and the CAA section 112(d) standards promulgated in the MATS rule necessarily remain in place. The EPA did not propose a delisting analysis, and the EPA does not intend to examine the delisting criteria for the Coal- and OilFired EGU source category. Moreover, as noted in the proposal, the results of the CAA section 112(f)(2) residual risk review conducted as part of this final action indicate that with the MATS rule in place, the estimated inhalation cancer risk to the individual most exposed to actual emissions from the source category is 9-in-1-million, which would not satisfy the requirements for delisting as specified in CAA section 112(c)(9).57 3. Comments and Responses Comment: Some commenters argued that the EPA must rescind MATS if the Agency finalizes a determination that regulation under CAA section 112(n)(1)(A) is not appropriate and necessary. The commenters cited the finding in Michigan which held that ‘‘EPA interpreted [section 112(n)(1)(A)] unreasonably when it deemed cost irrelevant to the decision to regulate power plants’’ and asserted that if the EPA now concludes that, based on a proper evaluation of costs, regulation of EGUs under CAA section 112 is not appropriate and necessary, then either the CAA section 112(c) listing, the MATS rule, or both must be invalidated. The commenters argued that, after the finalization of the proposal, there is no 57 As relevant here, CAA section 112(c)(9) provides that the ‘‘Administrator may delete any category from the list under this subsection . . . whenever the Administrator makes the following determination . . . (i) In the case of hazardous air pollutants emitted by sources in the category that may result in cancer in humans, a determination that no source in the category . . . emits such hazardous air pollutants in quantities which may cause a lifetime risk of cancer greater than one in one million to the individual in the population who is most exposed to emissions of such pollutants from the source . . . .’’ (emphases added). The findings of the EPA’s residual risk review indicate that it is extremely unlikely that any EPA Administrator could (much less would) lawfully exercise his or her discretion to ‘‘de-list’’ the Coaland Oil-Fired EGU source category. VerDate Sep<11>2014 18:24 May 21, 2020 Jkt 250001 valid appropriate and necessary determination, which was the basis for the EPA’s listing of the Coal- and OilFired EGU source category. The commenters also argued that under the plain meaning of the statutory text, Congress’ intention is clear that if the EPA determines that regulation of EGU emissions under CAA section 112 is not ‘‘appropriate and necessary,’’ then the EPA lacks jurisdiction to regulate such emissions. One commenter asserted that the EPA’s proposal to continue to enforce MATS while simultaneously rejecting the factual and statutory basis for the rule, offends the rule of law. The commenters argued that the EPA’s reliance on the New Jersey decision is misplaced because the regulatory landscape presented in this action is fundamentally different than what was assessed by the D.C. Circuit in New Jersey. According to the commenters, the New Jersey decision only addressed the EPA’s authority to delist based on the reversal of an appropriate and necessary finding presumed to be legally valid, which is a fact pattern not present in this action given the Michigan holding. One commenter argued that because the EPA had not yet issued any EGU HAP standards under CAA section 112(d) at the time of New Jersey, the EPA’s interpretation of its regulatory jurisdiction under CAA section 112(n) had not been subject to judicial review and the New Jersey decision, therefore, does not speak to whether the EPA has authority to rescind a CAA section 112(d) standard after reversing the appropriate and necessary finding. One commenter further argued that to the extent the EPA views its legal authority regarding continued enforcement of MATS to be ambiguous, it would be arbitrary and capricious for the EPA to voluntarily leave MATS in place. Conversely, there were many commenters who agreed with the EPA’s proposed approach to leave the MATS rule in place. These commenters agreed that the situation here is identical to what was adjudicated in New Jersey; that is, in both cases (1) the EPA had reversed an earlier final and effective finding that regulating EGUs under CAA section 112(n)(1)(A) was appropriate and necessary, and (2) coal- and oilfired EGUs had been listed pursuant to CAA section 112(c). These commenters concluded that following a final EPA determination that regulation of EGUs under CAA section 112 is not appropriate and necessary, both the CAA and the New Jersey holding are clear that the only way to delist or deregulate EGUs would be through PO 00000 Frm 00028 Fmt 4701 Sfmt 4700 meeting the delisting criteria of CAA section 112(c)(9). Response: As explained in the 2019 Proposal, the EPA believes that the D.C. Circuit’s New Jersey decision governs the effects of the EPA’s final action. More specifically, this final action reversing the 2016 Supplemental Finding does not remove the Coal- and Oil-Fired EGU source category from the CAA section 112(c)(1) list. As the Court stated, ‘‘Congress . . . undoubtedly can limit an agency’s discretion to reverse itself, and in section 112(c)(9) Congress did just that, unambiguously limiting EPA’s discretion to remove sources, including EGUs, from the section 112(c)(1) list once they have been added to it.’’ 517 F.3d at 583. The Court expressly rejected the argument made by the EPA at the time that if the Agency reversed course and determined it was not appropriate and necessary to regulate EGUs under CAA section 112, then that determination ‘‘logically’’ resulted in the removal of EGUs from the CAA section 112(c)(1) list. 517 F.3d at 582. As the D.C. Circuit stated: ‘‘EPA’s disbelief that it would be prevented from correcting its own ‘errors’ except through section 112(c)(9)’s delisting process or courtsanctioned vacatur cannot overcome the plain text enacted by Congress.’’ 517 F.3d at 583. Because coal- and oil-fired EGUs remain on the CAA section 112(c)(1) source category list, the CAA section 112(d) standards for the Coaland Oil-Fired EGU source category, as promulgated in the MATS rule, are unaffected by this action. The EPA does not find persuasive commenters’ argument that New Jersey is distinguishable because this action is not a reversal of a valid prior appropriate and necessary finding. As the commenters acknowledge, the D.C. Circuit in New Jersey did not directly assess the validity of the EPA’s 2000 appropriate and necessary determination. Rather, the EPA in its 2005 action revised the 2000 appropriate and necessary finding because it was flawed. Similarly, here, the EPA has determined that the 2016 Supplemental Finding was erroneous (just as it did in 2005 with respect to the 2000 finding) and is finalizing reversal of the 2016 Supplemental Finding (just as the EPA revised the 2000 finding). We also disagree with the commenters’ argument that New Jersey is distinguishable because it was decided before the EPA had promulgated a NESHAP for EGUs, and, therefore, the D.C. Circuit did not address the EPA’s authority to rescind MATS following a final determination that it is not appropriate and necessary E:\FR\FM\22MYR2.SGM 22MYR2 Federal Register / Vol. 85, No. 100 / Friday, May 22, 2020 / Rules and Regulations to regulate EGUs under CAA section 112. The statute does preclude a challenge to the EPA’s appropriate and necessary finding until standards are in place, see CAA section 112(e)(4); Util. Air Regulatory Grp. v. EPA, D.C. Cir. No. 01–1074, 2001 WL 936363 at *1 (D.C. Cir., July 26, 2001), but nothing in the D.C. Circuit’s reasoning in the New Jersey decision relied on the fact that the earlier appropriate and necessary finding was not yet reviewable. In New Jersey, the 2000 Finding was not yet subject to judicial review and the EPA argued that the inclusion of EGUs on the CAA section 112(c) list was not final Agency action; here, the 2016 Supplemental Finding was final and subject to judicial review. New Jersey is clear that, even following an EPA determination that it is not appropriate and necessary to regulate EGUs under CAA section 112, the EPA cannot delist EGUs without going through the statutory delisting criteria (which the EPA has not done here). As long as EGUs stay on the CAA section 112(c) list of source categories, the EPA is required to promulgate emission standards under CAA section 112(d) regulating such sources. 42 U.S.C. 7412(c)(2) (‘‘For the categories and subcategories the Administrator lists, the Administrator shall establish emissions standards under subsection (d) of this section.’’). Thus, there is no question about it: Under the D.C. Circuit’s holding in New Jersey, in order to rescind regulation under CAA section 112(d), i.e., to rescind MATS, EGUs must first be delisted as a CAA section 112(c) source category. As explained, the EPA believes that it is bound by the D.C. Circuit’s New Jersey decision. The New Jersey decision itself was decided on Chevron step 1 grounds. 517 F.3d at 582 (‘‘EPA’s purported removal of EGUs from the section 112(c)(1) list therefore violated the CAA’s plain text and must be rejected under step one of Chevron.’’). Because the facts of this rulemaking are substantially similar to those before the D.C. Circuit in New Jersey, and because the D.C. Circuit recognized that in such a scenario the Agency has no discretion, the EPA does not believe that it has any discretion under Chevron, as one commenter asserted, to voluntarily rescind MATS following this final action. For these reasons, the EPA rejects commenters’ assertion that it is acting in an arbitrary and capricious manner in this determination of the effect of this final Agency action. The EPA additionally notes that one commenter stated in its comment that if the EPA finalized the proposal ‘‘based on any justification that does not VerDate Sep<11>2014 18:24 May 21, 2020 Jkt 250001 include a full updating, subject to public comment, of the analytical data base on which it rests,’’ EPN ‘‘formally petitions EPA to continue the EGU MACT rule in effect’’ by making a new appropriate and necessary finding ‘‘based on the facts as they stand today,’’ which EPN believes would support a determination that regulation of EGUs under CAA section 112 is appropriate and necessary. EPN comment at 36 (April 17, 2019) (Docket ID Item No. EPA–HQ–OAR–2018–0794–2261). However, as explained above, the EPA determines that this final action has no effect on the MATS for EGUs; the MATS rule remains in effect without any further action by the EPA. To the extent any response is needed, the EPA denies the EPN petition. Comment: Numerous stakeholders claimed a serious reliance interest in the MATS rule that should weigh against delisting or rescission of MATS as a result of the EPA’s reversal of the 2016 Supplemental Finding. These stakeholders cited concerns about how delisting or rescission could lead to negative impacts on cost recovery of significant capital investments, potential disruptions to pre-existing air quality planning efforts at the statelevel, or potentially foregone improvements in public health of the kind that have already resulted from improved air quality due to MATS emissions reductions. Some commenters pointed to these interests as a reason why the EPA should not adopt either of the two alternative interpretations presented by the Agency in the 2019 Proposal regarding the potential effects of this Agency action. Response: The EPA’s revised determination that regulation of EGUs under CAA section 112 is not appropriate and necessary will not remove EGUs from the CAA section 112(c) list of sources, and the previously established EGU MACT standard, as established in MATS, remains in place. As a result, the EPA does not anticipate that any of the reliance interests cited above will be jeopardized as a result of this action. III. Background on the RTR Action A. What is the statutory authority for this action? Section 112 of the CAA establishes a two-stage regulatory process to address emissions of HAP from stationary sources. In the first stage, we must identify categories of sources emitting one or more of the HAP listed in CAA section 112(b) and then promulgate technology-based NESHAP for those sources. ‘‘Major sources’’ are those that PO 00000 Frm 00029 Fmt 4701 Sfmt 4700 31313 emit, or have the potential to emit, any single HAP at a rate of 10 tons per year (tpy) or more, or 25 tpy or more of any combination of HAP. For major sources, these standards are commonly referred to as MACT (maximum achievable control technology) standards and must reflect the maximum degree of emission reductions of HAP achievable after considering cost, energy requirements, and non-air quality health and environmental impacts. CAA section 112(d)(2) directs the EPA, in developing MACT standards, to consider the application of measures, processes, methods, systems, or techniques, including, but not limited to, those that reduce the volume of or eliminate HAP emissions through process changes, substitution of materials, or other modifications; enclose systems or processes to eliminate emissions; collect, capture, or treat HAP when released from a process, stack, storage, or fugitive emissions point; are design, equipment, work practice, or operational standards; or any combination of the above. For these MACT standards, the statute specifies certain minimum stringency requirements, which are referred to as MACT floor requirements, and which may not be based on cost considerations. See CAA section 112(d)(3). For new sources, the MACT floor cannot be less stringent than the emission control achieved in practice by the best-controlled similar source. The MACT standards for existing sources can be less stringent than floors for new sources, but they cannot be less stringent than the average emission limitation achieved by the bestperforming 12 percent of existing sources in the category or subcategory (or the best-performing five sources for categories or subcategories with fewer than 30 sources). In developing MACT standards, we must also consider control options that are more stringent than the floor under CAA section 112(d)(2). We may establish standards more stringent than the floor, based on the consideration of the cost of achieving the emissions reductions, any non-air quality health and environmental impacts, and energy requirements. In the second stage of the regulatory process, the CAA requires the EPA to undertake two different analyses, which we refer to as the technology review and the residual risk review. Under the technology review, we must review the technology-based standards and revise them ‘‘as necessary (taking into account developments in practices, processes, and control technologies)’’ no less frequently than every 8 years, pursuant E:\FR\FM\22MYR2.SGM 22MYR2 31314 Federal Register / Vol. 85, No. 100 / Friday, May 22, 2020 / Rules and Regulations to CAA section 112(d)(6). Under the residual risk review, we must evaluate the risk to public health remaining after application of the technology-based standards and must revise the standards, if necessary, to provide an ample margin of safety to protect public health or to prevent, taking into consideration costs, energy, safety, and other relevant factors, an adverse environmental effect. The residual risk review is required within 8 years after promulgation of the technology-based standards, pursuant to CAA section 112(f). In conducting the residual risk review, if the EPA determines that the current standards provide an ample margin of safety to protect public health, it is not necessary to revise the MACT standards pursuant to CAA section 112(f).58 For more information on the statutory authority for this rule, see 84 FR 2670, February 7, 2019. B. What is the Coal- and Oil-Fired EGU source category and how does the NESHAP regulate HAP emissions from the source category? The EPA promulgated the NESHAP for Coal- and Oil-Fired EGUs (commonly referred to as MATS) on February 16, 2012 (77 FR 9304). The standards are codified at 40 CFR part 63, subpart UUUUU. The MATS rule applies to existing and new coal- and oil-fired EGUs located at both major and area sources of HAP emissions. An EGU is a fossil fuel-fired combustion unit of more than 25 megawatts (MW) that serves a generator that produces electricity for sale. A unit that cogenerates steam and electricity and supplies more than one-third of its potential electric output capacity and more than 25 MW electric output to any utility power distribution system for sale is also an EGU. The source category covered by this MACT standard currently includes an estimated 713 EGUs located at approximately 323 facilities. For coal-fired EGUs, the rule established standards to limit emissions of mercury, acid gas HAP, non-mercury HAP metals (e.g., nickel, lead, chromium), and organic HAP (e.g., formaldehyde, dioxin/furan). Standards for hydrochloric acid (HCl) serve as a surrogate for the acid gas HAP, with an alternate standard for SO2 that may be used as a surrogate for acid gas HAP for those coal-fired EGUs with flue gas 58 The D.C. Circuit has affirmed this approach to implementing CAA section 112(f)(2)(A). See NRDC v. EPA, 529 F.3d 1077, 1083 (D.C. Cir. 2008) (‘‘If EPA determines that the existing technology-based standards provide an ’ample margin of safety,’ then the Agency is free to readopt those standards during the residual risk rulemaking.’’). VerDate Sep<11>2014 18:24 May 21, 2020 Jkt 250001 desulfurization systems and SO2 continuous emissions monitoring systems installed and operational. Standards for filterable PM serve as a surrogate for the non-mercury HAP metals, with standards for total nonmercury HAP metals and individual non-mercury HAP metals provided as alternative equivalent standards. Work practice standards that require periodic combustion process tune-ups limit formation and emissions of the organic HAP. For oil-fired EGUs, the rule establishes standards to limit emissions of HCl and hydrogen fluoride (HF), total HAP metals (e.g., mercury, nickel, lead), and organic HAP (e.g., formaldehyde, dioxin/furan). Standards for filterable PM serve as a surrogate for total HAP metals, with standards for total HAP metals and individual HAP metals provided as alternative equivalent standards. Periodic combustion process tune-up work practice standards limit formation and emissions of the organic HAP. The MATS rule was amended on April 19, 2012 (77 FR 23399), to correct typographical errors and certain preamble text that was inconsistent with regulatory text; on April 24, 2013 (78 FR 24073), to update certain emission limits and monitoring and testing requirements applicable to new sources; on November 19, 2014 (79 FR 68777), to revise definitions for startup and shutdown and to finalize work practice standards and certain monitoring and testing requirements applicable during periods of startup and shutdown; and on April 6, 2016 (81 FR 20172), to correct conflicts between preamble and regulatory text and to clarify regulatory text. In addition, the electronic reporting requirements of the rule were amended on March 24, 2015 (80 FR 15510), to allow for the electronic submission of Portable Document Format (PDF) versions of certain reports until April 16, 2017, to allow for time for the EPA’s Emissions Collection and Monitoring Plan System to be revised to accept all reporting that is required by the rule, and on April 6, 2017 (82 FR 16736), and on July 2, 2018 (83 FR 30879), to extend the interim submission of PDF versions of reports through June 30, 2018, and July 1, 2020, respectively. Additional detail regarding the standards applicable to the seven subcategories of EGUs regulated under the MATS rule can be found in section IV.B of the 2019 Proposal. 84 FR 2670 (February 7, 2019). PO 00000 Frm 00030 Fmt 4701 Sfmt 4700 C. What changes did we propose for the Coal- and Oil-Fired EGU source category in our February 7, 2019, proposed rule? On February 7, 2019, the EPA published a proposed rule in the Federal Register for the NESHAP for Coal- and Oil-Fired EGUs, 40 CFR part 63, subpart UUUUU, that took into consideration the RTR analyses. 84 FR 2670. In the proposed rule, we found that residual risks due to emissions of air toxics from this source category are acceptable and that the current NESHAP provides an ample margin of safety to protect public health, and we identified no new developments in HAP emission controls to achieve further cost-effective emissions reductions under the technology review. Based on the results of these analyses, we proposed no revisions to the MATS rule. IV. What is included in this final rule based on results of the RTR? This action finalizes the EPA’s determinations pursuant to the RTR provisions of CAA section 112 for the Coal- and Oil-Fired EGU source category. A. What are the final rule amendments based on the residual risk review for the Coal- and Oil-Fired EGU source category? We found risk due to emissions of air toxics to be acceptable from this source category and determined that the current NESHAP provides an ample margin of safety to protect public health and prevent an adverse environmental effect. Therefore, we did not propose and are not finalizing any revisions to the NESHAP for Coal- and Oil-Fired EGUs based on our analyses conducted under CAA section 112(f). B. What are the final rule amendments based on the technology review for the Coal- and Oil-Fired EGU source category? We determined that there are no developments in practices, processes, and control technologies that warrant revisions to the MACT standard for this source category. Therefore, we did not propose and are not finalizing revisions to the MACT standard under CAA section 112(d)(6). C. What are the effective and compliance dates of the standards? The final rule is effective on May 22, 2020. No amendments to the MATS rule are being promulgated in this action. Thus, there are no adjustments being made to the compliance dates of the standards. E:\FR\FM\22MYR2.SGM 22MYR2 Federal Register / Vol. 85, No. 100 / Friday, May 22, 2020 / Rules and Regulations V. What is the rationale for our final decisions regarding the RTR action for the Coal- and Oil-Fired EGU source category? This section of this preamble provides a description of what we proposed and what we are finalizing, the EPA’s rationale for the final decisions, and a summary of key comments and responses. For comments not discussed in this preamble, comment summaries and the EPA’s responses can be found in the document titled Final Supplemental Finding and Risk and Technology Review for the NESHAP for Coal- and Oil-Fired EGUs Response to Public Comments on February 7, 2019 Proposal, available in the docket for this action. A. Residual Risk Review for the Coaland Oil-Fired EGU Source Category 1. What did we propose pursuant to CAA section 112(f) for the Coal- and Oil-Fired EGU source category? Pursuant to CAA section 112(f), the EPA conducted a residual risk review and presented the results of this review, 31315 along with our proposed decisions regarding risk acceptability, ample margin of safety, and adverse environmental effects, in the February 7, 2019, proposed rule. 84 FR 2697–2700. The results of the risk assessment are presented briefly in Table 2, and in more detail in the document titled Residual Risk Assessment for the Coaland Oil-Fired EGU Source Category in Support of the 2019 Risk and Technology Review Proposed Rule (risk document for the proposed rule), available in the docket for this action. TABLE 2—COAL- AND OIL-FIRED EGU INHALATION RISK ASSESSMENT RESULTS IN THE FEBRUARY 2019 PROPOSAL [84 FR 2670, February 7, 2019] Maximum individual cancer risk (in 1 million) 2 Number of facilities 1 Population at increased risk of cancer ≥1-in-1 million Based on . . . Actual emissions level 322 ....................... Based on . . . Allowable emissions level 9 Annual cancer incidence (cases per year) Actual emissions level 10 193,000 Maximum chronic noncancer TOSHI 3 Based on . . . Allowable emissions level Actual emissions level 636,000 0.04 Maximum screening acute noncancer HQ 4 Based on . . . Allowable emissions level Actual emissions level 0.1 Allowable emissions level 0.2 0.4 Based on actual emission level HQREL = 0.09 (arsenic). 1 Number of facilities evaluated in the risk analysis. There are an estimated 323 facilities in the Coal- and Oil-Fired EGU source category; however, one facility is located in Guam, which is beyond the geographic range of the model used to estimate risks. Therefore, the Guam facility was not modeled and the emissions for that facility are not included in this assessment. 2 Maximum individual excess lifetime cancer risk due to HAP emissions from the source category. 3 Maximum target organ-specific hazard index (TOSHI). The target organ systems with the highest TOSHI for the source category are neurological and reproductive. 4 The maximum estimated acute exposure concentration was divided by available short-term threshold values to develop an array of hazard quotient (HQ) values. HQ values shown use the lowest available acute threshold value, which in most cases is the reference exposure level (REL). When an HQ exceeds 1, we also show the HQ using the next lowest available acute dose-response value. a. Chronic Inhalation Risk Assessment Results The results of the chronic inhalation cancer risk assessment based on actual emissions, as shown in Table 2 of this preamble, indicate that the estimated maximum individual lifetime cancer risk (cancer MIR) is 9-in-1 million, with nickel emissions from oil-fired EGUs as the major contributor to the risk. The total estimated cancer incidence from this source category is 0.04 excess cancer cases per year, or one excess case in every 25 years. Approximately 193,000 people are estimated to have cancer risks at or above 1-in-1 million from HAP emitted from the facilities in this source category. The estimated maximum chronic noncancer TOSHI for the source category is 0.2 (respiratory), which is driven by emissions of nickel and cobalt from oil-fired EGUs. No one is exposed to TOSHI levels above 1 based on actual emissions from sources regulated under this source category. The EPA also evaluated the cancer risk at the maximum emissions allowed by the MACT standard (i.e., ‘‘allowable emissions’’). As shown in Table 2 of this preamble, based on allowable emissions, the estimated cancer MIR is 10-in-1 million, and, as before, nickel VerDate Sep<11>2014 18:24 May 21, 2020 Jkt 250001 emissions from oil-fired EGUs are the major contributor to the risk. The total estimated cancer incidence from this source category, considering allowable emissions, is 0.1 excess cancer cases per year, or one excess case in every 10 years. Based on allowable emissions, approximately 636,000 people are estimated to have cancer risks at or above 1-in-1 million from HAP emitted from the facilities in this source category. The estimated maximum chronic noncancer TOSHI for the source category is 0.4 (respiratory) based on allowable emissions, driven by emissions of nickel and cobalt from oilfired EGUs. No one is exposed to TOSHI levels above 1 based on allowable emissions. b. Screening Level Acute Risk Assessment Results Table 2 of this preamble provides the worst-case acute HQ (based on the REL) of 0.09, driven by emissions of arsenic. There are no facilities that have acute HQs (based on the REL or any other reference values) greater than 1. For more detailed acute risk results, refer to the risk document for the proposed rule, available in the docket for this action. PO 00000 Frm 00031 Fmt 4701 Sfmt 4700 c. Multipathway Risk Screening and Site-Specific Assessment Results Potential multipathway health risks under a fisher and gardener scenario were identified using a three-tier screening assessment of the HAP known to be persistent and bio-accumulative in the environment (PB–HAP) emitted by facilities in the Coal- and Oil-Fired EGU source category, and a site-specific assessment of mercury using the EPA’s Total Risk Integrated Methodology.Fate, Transport, and Ecological Exposure (TRIM.FaTE) for one location (i.e., three facilities located in North Dakota) as further described below. Of the 322 MATS facilities modeled, 307 facilities have reported emissions of carcinogenic PB–HAP (arsenic, dioxins, and polycyclic organic matter (POM)) that exceed a Tier 1 cancer screening value of 1, and 235 facilities have reported emissions of non-carcinogenic PB–HAP (lead, mercury, and cadmium) that exceed a Tier 1 noncancer screening value of 1. For facilities that exceeded a Tier 1 multipathway screening value of 1, we used additional facility sitespecific information to perform an assessment through Tiers 2 and 3, as necessary, to determine the maximum chronic cancer and noncancer impacts E:\FR\FM\22MYR2.SGM 22MYR2 31316 Federal Register / Vol. 85, No. 100 / Friday, May 22, 2020 / Rules and Regulations for the source category. For cancer, the highest Tier 2 screening value was 200. This screening value was reduced to 50 after the plume rise stage of Tier 3. Because this screening value was much lower than 100-in-1 million, and because we expect the actual risk to be lower than the screening value (sitespecific assessments typically lower estimates by an order of magnitude), we did not perform further assessment for cancer. For noncancer, the highest Tier 2 screening value was 30 (for mercury), with four facilities having screening values greater than 20. These screening values were reduced to 9 or lower after the plume rise stage of Tier 3. Because the final stage of Tier 3 (timeseries) was unlikely to reduce the highest mercury screening values to 1, we conducted a site-specific multipathway assessment of mercury emissions for this source category. Analysis of the facilities with the highest Tier 2 and Tier 3 screening values helped identify the location for the site-specific assessment and the facilities to model with TRIM.FaTE. The assessment took into account the effect that multiple facilities within the source category may have on common lakes. The three facilities selected are located near Underwood, North Dakota. All three facilities had Tier 2 screening values greater than or equal to 20. Two of the facilities are near each other (16 kilometers (km) apart). The third facility is more distant, about 20 to 30 km from the other facilities, but it was included in the analysis because it is within the 50-km modeling domain of the other facilities and because it had an elevated Tier 2 screening value. We expect that the exposure scenarios we assessed for these facilities are among the highest, if not the highest, that might be encountered for other facilities in this source category. The refined multipathway assessment estimated an HQ of 0.06 for mercury for the three facilities assessed. We believe the assessment represents the highest potential for mercury hazards through fish consumption for the source category. In evaluating the potential multipathway risk from emissions of lead compounds, rather than developing a screening threshold emission rate, we compare maximum estimated chronic inhalation exposure concentrations to the level of the current NAAQS for lead (0.15 micrograms per cubic meter). Values below the level of the primary (health-based) lead NAAQS are considered to have a low potential for multipathway risk. We did not estimate any exceedances of the lead NAAQS in this source category. VerDate Sep<11>2014 18:24 May 21, 2020 Jkt 250001 d. Environmental Risk Screening Results An environmental risk screening assessment for the Coal- and Oil-Fired EGU source category was conducted for the following pollutants: Arsenic, cadmium, dioxins/furans, HCl, HF, lead, mercury (methylmercury and mercuric chloride), and POMs. In the Tier 1 screening analysis for PB–HAP (other than lead, which was evaluated differently), POM emissions had no exceedances of any of the ecological benchmarks evaluated. Arsenic and dioxin/furan emissions had Tier 1 exceedances for surface soil benchmarks. Cadmium and methylmercury emissions had Tier 1 exceedances for surface soil and fish benchmarks. Divalent mercury emissions had Tier 1 exceedances for sediment and surface soil benchmarks. A Tier 2 screening analysis was performed for arsenic, cadmium, dioxins/furans, divalent mercury, and methylmercury emissions. In the Tier 2 screening analysis, arsenic, cadmium, and dioxin/furan emissions had no exceedances of any of the ecological benchmarks evaluated. Divalent mercury emissions from two facilities exceeded the Tier 2 screen for a sediment threshold level benchmark by a maximum screening value of 2. Methylmercury emissions from the same two facilities exceeded the Tier 2 screen for a fish (avian/piscivores) noobserved-adverse-effect-level (NOAEL) (merganser) benchmark by a maximum screening value of 2. A Tier 3 screening assessment was performed to verify the existence of the lake associated with these screening values, and it was found to be located on-site and is a man-made industrial pond, and, therefore, was removed from the assessment. Methylmercury emissions from two facilities exceeded the Tier 2 screen for a surface soil NOAEL for avian ground insectivores (woodcock) benchmark by a maximum screening value of 2. Other surface soil benchmarks for methylmercury, such as the NOAEL for mammalian insectivores and the threshold level for the invertebrate community, were not exceeded. Given the low Tier 2 maximum screening value of 2 for methylmercury, and the fact that only the most protective benchmark was exceeded, a Tier 3 environmental risk screen was not conducted for methylmercury. For lead, we did not estimate any exceedances of the secondary lead NAAQS. For HCl and HF, the average modeled concentration around each facility (i.e., the average concentration of all off-site data points in the PO 00000 Frm 00032 Fmt 4701 Sfmt 4700 modeling domain) did not exceed any ecological benchmark. In addition, each individual modeled concentration of HCl and HF (i.e., each off-site data point in the modeling domain) was below the ecological benchmarks for all facilities. Based on the results of the environmental risk screening analysis, we do not expect an adverse environmental effect as a result of HAP emissions from the Coal- and Oil-Fired EGU source category. e. Facility-Wide Risk Results An assessment of risk from facilitywide emissions was performed to provide context for the source category risks. Based on facility-wide emissions estimates developed using the same estimates of actual emissions for emissions sources in the source category, and emissions data from the 2014 National Emissions Inventory (NEI) (version 2) for the sources outside the source category, the estimated cancer MIR is 9-in-1 million, and nickel emissions from oil-fired EGUs are the major contributor to the risk. The total estimated cancer incidence based on facility-wide emissions is 0.04 excess cancer cases per year, or one excess case in every 25 years. Approximately 203,000 people are estimated to have cancer risks at or above 1-in-1 million from HAP emitted from all sources at the facilities in this source category. The estimated maximum chronic noncancer TOSHI posed by facility-wide emissions is 0.2 (respiratory), driven by emissions of nickel and cobalt from oil-fired EGUs. No one is exposed to TOSHI levels above 1 based on facility-wide emissions. These results are very similar to those based on actual emissions from the source category because there is not significant collocation of other sources with EGUs. f. Proposed Decisions Regarding Risk Acceptability, Ample Margin of Safety, and Adverse Environmental Effect In determining whether risks are acceptable for this source category in accordance with CAA section 112, the EPA considered all available health information and risk estimation uncertainty. The risk results indicate that both the actual and allowable inhalation cancer risks to the individual most exposed are well below 100-in-1 million, which is the presumptive limit of acceptability. Also, the highest chronic noncancer TOSHI, and the highest acute noncancer HQ, are well below 1, indicating low likelihood of adverse noncancer effects from inhalation exposures. There are also low risks associated with ingestion, with the highest cancer risk being less than 50- E:\FR\FM\22MYR2.SGM 22MYR2 Federal Register / Vol. 85, No. 100 / Friday, May 22, 2020 / Rules and Regulations in-1 million based on a conservative screening assessment, and the highest noncancer hazard being less than 1 based on a site-specific multipathway assessment. Considering this information, the EPA proposed that the residual risks of HAP emissions from the Coal- and Oil-Fired EGU source category are acceptable. We then considered whether the current standards provide an ample margin of safety to protect public health and whether more stringent standards were necessary to prevent an adverse environmental effect by taking into consideration costs, energy, safety, and other relevant factors. In determining whether the standards provide an ample margin of safety to protect public health, we examined the same risk factors that we investigated for our acceptability determination and also considered the costs, technological feasibility, and other relevant factors related to emissions control options that might reduce risk associated with emissions from the source category. In our analysis, we considered the results of the technology review, risk assessment, and other aspects of our MACT rule review to determine whether there are any cost-effective controls or other measures that would reduce emissions further to provide an ample margin of safety. The risk analysis indicated that the risks from the source category are low for both cancer and noncancer health effects, and, therefore, any risk reductions from further available control options would result in minimal health benefits. Moreover, no additional measures were identified for reducing HAP emissions from affected sources in the Coal- and Oil-Fired EGU source category. Thus, we proposed that the current MATS requirements provide an ample margin of safety to protect public health in accordance with CAA section 112. Based on the results of our environmental risk screening assessment, we also proposed that more stringent standards are not necessary to prevent an adverse environmental effect. 2. How did the residual risk review change for the Coal- and Oil-Fired EGU source category? Since proposal (84 FR 2670, February 7, 2019), neither the risk assessment nor our determinations regarding risk acceptability, ample margin of safety, or adverse environmental effects have changed. VerDate Sep<11>2014 18:24 May 21, 2020 Jkt 250001 3. What key comments did we receive on the residual risk review, and what are our responses? The EPA received comments in opposition to and in support of the proposed residual risk review and our determination that no revisions were warranted under CAA section 112(f)(2) for the Coal- and Oil-Fired EGU source category. Generally, the comments that were not supportive of the proposed determination from the risk review claimed that the risks are understated with the methods used by the EPA to assess inhalation, multipathway, and environmental risks and suggested changes to the underlying risk assessment methodology. For example, some commenters stated that the EPA should lower the acceptability benchmark so that risks below 100-in-1 million are unacceptable, include emissions outside of the source category in question in the risk assessment, and assume that pollutants with noncancer health risks have no safe level of exposure. With regard to the Coal- and Oil-Fired EGU source category risk review, several commenters claimed that the type and quantity of organic HAP emissions modeled were underestimated, disagreeing with the EPA’s determination to model only 16 organic HAP and to base the estimated emissions on EPA-developed representative detection levels (RDLs). Commenters pointed to the difference between the modeled 3.4 tons of total source category organic HAP emissions versus other estimates of total source category organic HAP, such as the EPA’s 2014 NEI estimate of over 3,000 tons of total source category organic HAP emissions from 130 organic HAP. The EPA disputes the comments objecting to the type and quantity of organic HAP modeled under the risk review. As discussed in section IV.B of the proposed rule (84 FR 2670, February 7, 2019), during the 2010 ICR effort for the original MATS rulemaking process, most of the organic HAP emissions data for EGUs were at or below the detection levels of the prescribed test methods, even when long duration test runs (i.e., approximately 8 hours) were required. Under the MATS rule, organic HAP are regulated by a work practice standard that requires periodic combustion process tune-ups. As such, EGUs are not required to meet numeric emission limits for organic HAP or to test and report organic HAP emissions. Because the MATS rule does not require measurements of organic HAP, the EPA reviewed the available organic HAP test results from the 2010 ICR when PO 00000 Frm 00033 Fmt 4701 Sfmt 4700 31317 developing the RTR emissions dataset. For each organic HAP tested, if 40 percent or more of the available test data were above test method detection limits, emissions estimates for that HAP were included in the modeling file. We assert that this approach which modeled each organic HAP where up to 60 percent of its 2010 ICR emissions data were below test method detection limits is a reasonable and conservative means of estimating which organic HAP are emitted from currently operating coaland oil-fired EGUs. We also assert that the use of RDLs, which are based on averages of better-performing unit method detection levels, as well as laboratories using the most sensitive analyses across many source categories, is a reasonable means of estimating organic HAP emissions from currently operating EGUs which, under the MATS rule, are not required to measure organic HAP emissions. With regard to the 2014 NEI organic HAP emissions estimates referred to by commenters, the EPA points out that those estimates are based on pre-MATS compliance information and, thus, do not reflect reductions in organic HAP resulting from periodic tune-ups that have been conducted as required by the MATS rule. In addition, the pre-MATS compliance estimates in instances are likely to be based on, at most, 19 site-specific tests which have an average ‘‘D’’ rating and which were conducted over 25 years ago, as opposed to the MATS ICR data from up to 170 site-specific tests which would have an average A rating and which were conducted just 9 years ago.59 Moreover, the pre-MATS compliance estimates most certainly includes emissions from EGUs that have since shut down. Although some comments were supportive of the EPA’s proposed determination based on results of the risk review, the comments claimed that 59 As discussed in the Introduction to AP–42 (see https://www3.epa.gov/ttn/chief/ap42/c00s00.pdf), the AP–42 emission factor rating is an overall assessment of how good a factor is, based on both the quality of the test(s) or information that is the source of the factor and on how well the factor represents the emission source. A ‘D’ rated emission factor is below average and is developed from test data from a small number of facilities, and there may be reason to suspect that these facilities do not represent a random sample of the industry. In addition, test data from ‘D’ rated emission factors may show evidence of variability within the source population. Emission factors from the MATS ICR have not been developed for AP–42 and the current rating process has been revised from letter grades to descriptors. However, under the previous rating process, emission factors from the MATS ICR data would have received ‘A’ ratings, where an ‘A’ rated emission factor is excellent and is developed from test data taken from many randomly chosen facilities in the industry population. Moreover, for an ‘A’ rated emissions factor, the source category population is sufficiently specific to minimize variability. E:\FR\FM\22MYR2.SGM 22MYR2 31318 Federal Register / Vol. 85, No. 100 / Friday, May 22, 2020 / Rules and Regulations the risks are overstated due to the overly conservative risk assessment methodology used by the EPA. Commenters stated, for example, that the risk assessment makes numerous conservative assumptions regarding emissions and exposures, the exposure assumptions are scientifically outdated, and the assessment used unrealistically high fish consumption rates. With regard to the Coal- and Oil-Fired EGU source category risk review, several commenters suggested data corrections to emissions estimates for particular EGUs that, according to commenters, resulted in overstated emissions being modeled. One commenter also suggested several revisions to the emissions estimation methodology for HAP emissions from EGUs. Several commenters pointed out that the EPA’s risk review for the Coal- and Oil-Fired EGU source category and the June 2018 Electric Power Research Institute (EPRI) risk studies for coal-fired power plants 60—each of which followed somewhat different methodologies— similarly concluded that human health risks associated with HAP emissions are within EPA acceptability thresholds. The EPA acknowledges that the risk assessment results for the Coal- and OilFired EGU source category are dependent on the emission values used in the assessment. If we were to lower emission rates based on more accurate data, we expect lower risk estimates. Because the EPA has determined that the risk is acceptable, and that the existing standards provide an ample margin of safety to protect public health in accordance with CAA section 112, making the data corrections suggested by commenters would potentially reduce risk further but would not change the determinations under the risk review. Accordingly, we conclude that it is reasonable not to update the risk assessment following the proposal, and we have finalized the risk document and re-submitted it to the docket for this action as the Residual Risk Assessment for the Coal- and OilFired EGU Source Category in Support of the 2019 Risk and Technology Review Final Rule. 60 EPRI. June 8, 2018. Hazardous Air Pollutants (HAPs) Emission Estimates and Inhalation Human Health Risk Assessment for U.S. Coal-Fired Electric Generating Units: 2017 Base Year Post-MATS Evaluation. Available at https://www.epri.com/#/ pages/product/3002013577/?lang=en.EPRI. June 22, 2018. Multi-Pathway Human Health Risk Assessment for Coal-Fired Power Plants. Available at https://www.epri.com/#/pages/product/ 3002013523/?lang=en. VerDate Sep<11>2014 18:24 May 21, 2020 Jkt 250001 4. What is the rationale for our final approach and final decisions for the residual risk review? We evaluated all of the comments on the EPA’s proposed residual risk review and determined that no changes to the review are needed. For the reasons explained in the proposed rule, we determined that the risks from the Coaland Oil-Fired EGU source category are acceptable, and that the current standards provide an ample margin of safety to protect public health and prevent an adverse environmental effect. Therefore, pursuant to CAA section 112(f)(2), we are finalizing our residual risk review as proposed. B. Technology Review for the Coal- and Oil-Fired EGU Source Category 1. What did we propose pursuant to CAA section 112(d)(6) for the Coal- and Oil-Fired EGU source category? Pursuant to CAA section 112(d)(6), the EPA conducted a technology review, which focused on identifying and evaluating developments in practices, processes, and control technologies for the emission sources in the source category. After conducting the CAA section 112(d)(6) technology review of the NESHAP for Coal- and Oil-Fired EGUs, we proposed that revisions to the standards are not necessary because we identified no cost-effective developments in practices, processes, or control technologies. More information concerning our technology review is in the memorandum titled Technology Review for the Coal- and Oil-Fired EGU Source Category, available in the docket for this action, and in the February 7, 2019, proposed rule. 84 FR 2700. 2. How did the technology review change for the Coal- and Oil-Fired EGU source category? Since proposal (84 FR 2670, February 7, 2019), the technology review has not changed. 3. What key comments did we receive on the technology review, and what are our responses? The EPA received comments in support of and against the proposed technology review and our determination that no revisions were warranted under CAA section 112(d)(6) for the Coal- and Oil-Fired EGU source category. The comments that agreed with the EPA’s proposed determination that no revisions to the MATS rule are warranted based on results of the technology review also asserted that the reductions required by MATS were not cost-effective at the time they were PO 00000 Frm 00034 Fmt 4701 Sfmt 4700 adopted and forced widespread and unprecedented coal-fired EGU retirements, that the general costs of emission control technologies have not significantly been reduced and have increased in some instances, and that the beyond-the-floor analyses conducted by the EPA in support of the 2012 MATS Final Rule are still valid. Commenters also asserted that the EPA cannot adopt more stringent standards under CAA section 112(d)(6) where there is no appreciable HAP-related benefit from doing so and pointed to the results of the risk assessment for the Coal- and Oil-Fired EGU source category. The comments that were not supportive of the proposed determination from the technology review generally claimed that the review failed to assess whether control technologies deployed for compliance with the 2012 MATS Final Rule were less expensive and more effective than projected and whether technologies deemed economically infeasible in 2012 have since become cheaper. The EPA disagrees with the comments opposing the proposed determination that no revisions were warranted under CAA section 112(d)(6). As explained in section VI.C of the proposed rule (84 FR 2670, February 7, 2019), control technologies typically used to minimize emissions of pollutants that have numeric emission limits under the MATS rule include electrostatic precipitators and fabric filters for control of PM and non-mercury HAP metals; wet scrubbers and dry scrubbers for control of acid gases (SO2, HCl, and HF); and activated carbon injection for control of mercury. These existing air pollution control technologies that are currently in use are well-established and provide the capture efficiencies necessary for compliance with the MATS emission limits. Organic HAP, including emissions of dioxins and furans, are regulated by a work practice standard that requires periodic burner tune-ups to ensure good combustion. This work practice continues to be a practical approach to ensuring that combustion equipment is maintained and optimized to run to reduce formation and emissions of organic HAP and continues to be expected to be more effective than establishing a numeric standard for emissions that, due to current detection levels, cannot reliably be measured or continuously monitored. We received no comments that included specific information on costs or performance for control technologies deployed to comply with the 2012 MATS Final Rule or for other control technology, work practices, operational E:\FR\FM\22MYR2.SGM 22MYR2 Federal Register / Vol. 85, No. 100 / Friday, May 22, 2020 / Rules and Regulations procedures, process changes, or pollution prevention approaches that reduce HAP emissions. Since proposal, no information has been presented to cause us to change the proposed determination that no developments in practices, processes, or control technologies, nor any new technologies or practices were identified for the control of non-mercury HAP metals, acid gas HAP, or mercury, and that no developments in work practices nor any new work practices or operational procedures have been identified for the control of organic HAP. 4. What is the rationale for our final approach for the technology review? We evaluated all of the comments on the EPA’s technology review and determined that no changes to the review are needed. For the reasons explained in the proposed rule, we determined that no cost-effective developments in practices, processes, or control technologies were identified in our technology review to warrant revisions to the standards. Therefore, pursuant to CAA section 112(d)(6), we are finalizing our technology review as proposed. VI. Summary of Cost, Environmental, and Economic Impacts and Additional Analyses Conducted A. What are the affected facilities? The EPA estimates that there are 713 existing coal- and oil-fired EGUs located at 323 facilities that are subject to the MATS rule and will be affected by this final action. B. What are the air quality impacts? Because the EPA is not promulgating any amendments to the MATS rule, there will be no air quality impacts as a result of this final action. C. What are the cost impacts? Because the EPA is not promulgating any amendments to the MATS rule, there will be no cost impacts as a result of this final action. D. What are the economic impacts? Because the EPA is not promulgating any amendments to the MATS rule, there will be no economic impacts as a result of this final action. F. What analysis of environmental justice did we conduct? Executive Order 12898 (59 FR 7629, February 16, 1994) establishes federal executive policy on environmental justice. Its main provision directs federal agencies, to the greatest extent practicable and permitted by law, to make environmental justice part of their mission by identifying and addressing, as appropriate, disproportionately high and adverse human health or environmental effects of their programs, policies, and activities on minority populations and low-income populations in the U.S. As discussed in section VI.A of the proposed rule (84 FR 2670, February 7, 2019), to examine the potential for any environmental justice issues that might be associated with the source category, we performed a demographic analysis, which is an assessment of risk to individual demographic groups of the populations living within 5 km and within 50 km of the facilities.61 In the analysis, we evaluated the distribution of HAP-related cancer and noncancer risks from the Coal- and Oil-Fired EGU source category across different demographic groups within the populations living near facilities. The results of the Coal- and Oil-Fired EGU source category demographic analysis indicate that emissions from the source category expose approximately 193,000 people to a cancer risk at or above 1-in1 million and no people to a chronic noncancer TOSHI greater than 1. There are only four facilities in the source category with cancer risk at or above 1in-1 million, and all of them are located in Puerto Rico. Consequently, all of the percentages of the at-risk population in each demographic group associated with the Puerto Rican population are much higher than their respective nationwide percentages, and those not associated with Puerto Rico are much lower than their respective nationwide percentages. The methodology and the results of the demographic analysis are presented in the technical report titled Risk and Technology Review—Analysis of Demographic Factors for Populations Living Near Coal- and Oil-Fired EGUs Regulated Under the Mercury and Air Toxics Standards (MATS), available in Docket ID No. EPA–HQ–OAR–2018– 0794. E. What are the benefits? Because the EPA is not promulgating any amendments to the MATS rule, there will be no benefits as a result of this final action. VerDate Sep<11>2014 18:24 May 21, 2020 Jkt 250001 61 See technical report titled Risk and Technology Review—Analysis of Demographic Factors for Populations Living Near Coal- and Oil-Fired EGUs Regulated Under the Mercury and Air Toxics Standards (MATS). May 23, 2018; Docket ID Item No. EPA–HQ–OAR–2018–0794–0012. PO 00000 Frm 00035 Fmt 4701 Sfmt 4700 31319 G. What analysis of children’s environmental health did we conduct? This action is not subject to Executive Order 13045 because it is not economically significant as defined in Executive Order 12866, and because the EPA does not believe the environmental health or safety risks addressed by this action present a disproportionate risk to children. This action’s health and risk assessments are summarized in section V.A of this preamble and are further documented in sections V and VI of the proposed rule (84 FR 2670, February 7, 2019), and the risk document for the final rule,62 available in the docket for this action. VII. Statutory and Executive Order Reviews Additional information about these statutes and Executive Orders can be found at https://www.epa.gov/lawsregulations/laws-and-executive-orders. A. Executive Orders 12866: Regulatory Planning and Review and Executive Order 13563: Improving Regulation and Regulatory Review This action is a significant regulatory action that was submitted to OMB for review because it is likely to raise novel legal or policy issues. Any changes made in response to OMB recommendations have been documented in the docket. The EPA does not project any potential costs or benefits associated with this action. B. Executive Order 13771: Reducing Regulations and Controlling Regulatory Costs This action is not considered an Executive Order 13771 regulatory action. There are no quantified cost estimates for this final rule because it will not result in any changes in costs. C. Paperwork Reduction Act (PRA) This action does not impose any new information collection burden under the PRA. OMB has previously approved the information collection activities contained in the existing regulations and has assigned OMB control number 2060–0567. This action does not impose an information collection burden because the EPA is not making any changes to the information collection requirements. D. Regulatory Flexibility Act (RFA) I certify that this action will not have a significant economic impact on a 62 See document titled Residual Risk Assessment for the Coal- and Oil-Fired EGU Source Category in Support of the 2019 Risk and Technology Review Final Rule, available in Docket ID No. EPA–HQ– OAR–2018–0794. E:\FR\FM\22MYR2.SGM 22MYR2 31320 Federal Register / Vol. 85, No. 100 / Friday, May 22, 2020 / Rules and Regulations substantial number of small entities under the RFA. This action will not impose any requirements on small entities. The EPA does not project any potential costs or benefits associated with this action. E. Unfunded Mandates Reform Act (UMRA) This action does not contain any unfunded mandate as described in UMRA, 2 U.S.C. 1531–1538, and does not significantly or uniquely affect small governments. The action imposes no enforceable duty on any state, local, or tribal governments or the private sector. F. Executive Order 13132: Federalism This action does not have federalism implications. It will not have substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government. G. Executive Order 13175: Consultation and Coordination With Indian Tribal Governments This action does not have tribal implications as specified in Executive Order 13175. It would neither impose substantial direct compliance costs on tribal governments, nor preempt Tribal law. Thus, Executive Order 13175 does not apply to this action. Consistent with the EPA Policy on Consultation and Coordination with Indian Tribes, the EPA consulted with tribal officials during the development of this action. A summary of the consultations follows. On April 2, 2019, the EPA held a consultation with the Blue Lake Rancheria. The tribe indicated that they did not support the 2019 Proposal for several reasons. The tribe expressed concern that the EPA’s proposed finding that it is not appropriate and necessary to regulate HAP emissions from coaland oil-fired EGUs under section 112 of the CAA would remove the legal foundation for the MATS rule. The tribe added that the EPA has neither the authority nor the obligation to remove coal- and oil-fired EGUs from the CAA section 112(c) source category list or to rescind MATS. The tribe noted that the costs of compliance for EGUs subject to MATS have already been incurred, and that those investments could be in vain if MATS is rescinded. In addition, the proposed finding will likely lead to litigation which would be a waste of taxpayer dollars, according to the tribe. VerDate Sep<11>2014 18:24 May 21, 2020 Jkt 250001 The Blue Lake Rancheria stated that the EPA’s cost-benefit analysis should not exclude co-benefits, and that the analysis should include healthcare costs and environmental remediation costs. The tribe discussed the health effects of exposure to mercury and noted that the RTR shows that the risks are acceptable with MATS in place; that margin of safety would be eliminated if the rule is rescinded. The tribe also expressed concern that eliminating the MATS rule will prolong the use of coal-fired power plants, which would lead to increased greenhouse gas emissions. The EPA held a consultation with the Fond du Lac Band of Lake Superior Chippewa on April 3, 2019. The tribe also did not support the proposed finding that regulation of HAP emissions from coal- and oil-fired EGUs is not appropriate and necessary. The tribe stated that studies have shown that mercury is harmful and should be controlled, and that the EPA does not have the authority to delist EGUs from regulation under CAA section 112. According to the tribe, co-benefits from reductions of non-HAP pollutants should be considered equally with benefits from reductions of HAP. The tribe asked whether the EPA had considered factors specific to their tribe in the EPA’s analysis, such as their higher consumption of fish due to cultural and subsistence reasons and the prevalence of wetlands and ditches on the reservation, which are mercury sinks. The tribe also questioned whether impacts to wildlife such as otters, loons, and eagles were considered. Responses to these comments and others received are available in the RTC document,63 available in the docket for this action. H. Executive Order 13045: Protection of Children From Environmental Health Risks and Safety Risks This action is not subject to Executive Order 13045 because it is not economically significant as defined in Executive Order 12866, and because the EPA does not believe the environmental health or safety risks addressed by this action present a disproportionate risk to children. This action’s health and risk assessments are contained in sections V and VI of the proposed rule (84 FR 2670, February 7, 2019), and the risk 63 See document titled Final Supplemental Finding and Risk and Technology Review for the NESHAP for Coal- and Oil-Fired EGUs Response to Public Comments on February 7, 2019 Proposal, available in Docket ID No. EPA–HQ–OAR–2018– 0794. PO 00000 Frm 00036 Fmt 4701 Sfmt 9990 document for the final rule, available in the docket for this action (see document titled Residual Risk Assessment for the Coal- and Oil-Fired EGU Source Category in Support of the 2019 Risk and Technology Review Final Rule, available in Docket ID No. EPA–HQ– OAR–2018–0794). I. Executive Order 13211: Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use This action is not a ‘‘significant energy action’’ because it is not likely to have a significant adverse effect on the supply, distribution, or use of energy. This action is not anticipated to have impacts on energy supply decisions for the affected electric utility industry. J. National Technology Transfer and Advancement Act (NTTAA) This action does not involve technical standards. K. Executive Order 12898: Federal Actions To Address Environmental Justice in Minority Populations and Low-Income Populations The EPA believes that this action does not have disproportionately high and adverse human health or environmental effects on minority populations, lowincome populations, and/or indigenous peoples, as specified in Executive Order 12898 (59 FR 7629, February 16, 1994). The documentation for this decision is contained in section VI.F of this preamble, section VI.A of the proposed rule (84 FR 2670, February 7, 2019), and the technical report, Risk and Technology Review—Analysis of Demographic Factors for Populations Living Near Coal- and Oil-Fired EGUs Regulated Under the Mercury and Air Toxics Standards (MATS), available in the docket for this action (see Docket ID Item No. EPA–HQ–OAR–2018–0794– 0012). L. Congressional Review Act (CRA) This action is subject to the CRA, and the EPA will submit a rule report to each House of the Congress and to the Comptroller General of the United States. This action is not a ‘‘major rule’’ as defined by 5 U.S.C. 804(2). Dated: April 16, 2020. Andrew Wheeler, Administrator. [FR Doc. 2020–08607 Filed 5–21–20; 8:45 am] BILLING CODE 6560–50–P E:\FR\FM\22MYR2.SGM 22MYR2

Agencies

ENVIRONMENTAL PROTECTION AGENCY

[Federal Register Volume 85, Number 100 (Friday, May 22, 2020)]
[Rules and Regulations]
[Pages 31286-31320]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-08607]



[[Page 31285]]

Vol. 85

Friday,

No. 100

May 22, 2020

Part II





Environmental Protection Agency





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 National Emission Standards for Hazardous Air Pollutants: Coal- and 
Oil-Fired Electric Utility Steam Generating Units--Reconsideration of 
Supplemental Finding and Residual Risk and Technology Review; Final 
Rule

Federal Register / Vol. 85, No. 100 / Friday, May 22, 2020 / Rules 
and Regulations

[[Page 31286]]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 63

[EPA-HQ-OAR-2018-0794; FRL-10008-60-OAR]
RIN 2060-AT99


National Emission Standards for Hazardous Air Pollutants: Coal- 
and Oil-Fired Electric Utility Steam Generating Units--Reconsideration 
of Supplemental Finding and Residual Risk and Technology Review

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: The U.S. Environmental Protection Agency (EPA) is revising its 
response to the U.S. Supreme Court decision in Michigan v. EPA, which 
held that the EPA erred by not considering cost in its determination 
that regulation under section 112 of the Clean Air Act (CAA) of 
hazardous air pollutant (HAP) emissions from coal- and oil-fired 
electric utility steam generating units (EGUs) is appropriate and 
necessary. After primarily comparing the cost of compliance relative to 
the benefits of HAP emission reduction from regulation, the EPA finds 
that it is not ``appropriate and necessary'' to regulate HAP emissions 
from coal- and oil-fired EGUs, thereby reversing the Agency's previous 
conclusion under CAA section 112(n)(1)(A) and correcting flaws in the 
Agency's prior response to Michigan v. EPA. We further find that 
finalizing this new response to Michigan v. EPA will not remove the 
Coal- and Oil-Fired EGU source category from the CAA section 112(c) 
list of sources that must be regulated under CAA section 112(d) and 
will not affect the existing CAA section 112(d) emissions standards 
that regulate HAP emissions from coal- and oil-fired EGUs. The EPA is 
also finalizing the residual risk and technology review (RTR) conducted 
for the Coal- and Oil-Fired EGU source category regulated under 
national emission standards for hazardous air pollutants (NESHAP), 
commonly referred to as the Mercury and Air Toxics Standards (MATS). 
Based on the results of the RTR analyses, the Agency is not 
promulgating any revisions to the MATS rule.

DATES: Effective May 22, 2020.

ADDRESSES: The EPA has established a docket for these actions under 
Docket ID No. EPA-HQ-OAR-2018-0794.\1\ All documents in the docket are 
listed on the https://www.regulations.gov/ website. Although listed, 
some information is not publicly available, e.g., 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 through https://www.regulations.gov/, or in hard copy at 
the EPA Docket Center, WJC West Building, Room Number 3334, 1301 
Constitution Ave. NW, Washington, DC. The Public Reading Room hours of 
operation are 8:30 a.m. to 4:30 p.m. Eastern Standard Time (EST), 
Monday through Friday. The telephone number for the Public Reading Room 
is (202) 566-1744, and the telephone number for the Docket Center is 
(202) 566-1742.
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    \1\ As explained in a memorandum to the docket, the docket for 
these actions include the documents and information, in whatever 
form, in Docket ID Nos. EPA-HQ-OAR-2009-0234 (National Emission 
Standards for Hazardous Air Pollutants for Coal- and Oil-fired 
Electric Utility Steam Generating Units), EPA-HQ-OAR-2002-0056 
(National Emission Standards for Hazardous Air Pollutants for 
Utility Air Toxics; Clean Air Mercury Rule (CAMR)), and Legacy 
Docket ID No. A-92-55 (Electric Utility Hazardous Air Pollutant 
Emission Study). See memorandum titled Incorporation by reference of 
Docket Number EPA-HQ-OAR-2009-0234, Docket Number EPA-HQ-OAR-2002-
0056, and Docket Number A-92-55 into Docket Number EPA-HQ-OAR-2018-
0794 (Docket ID Item No. EPA-HQ-OAR-2018-0794-0005).

FOR FURTHER INFORMATION CONTACT: For questions about these final 
actions, contact Mary Johnson, Sector Policies and Programs Division 
(D243-01), Office of Air Quality Planning and Standards, U.S. 
Environmental Protection Agency, Research Triangle Park, North Carolina 
27711; telephone number: (919) 541-5025; and email address: 
[email protected]. For specific information regarding the risk 
modeling methodology, contact Mark Morris, Health and Environmental 
Impacts Division (C539-02), Office of Air Quality Planning and 
Standards, U.S. Environmental Protection Agency, Research Triangle 
Park, North Carolina 27711; telephone number: (919) 541-5416; and email 
address: [email protected]. For information about the applicability 
of the NESHAP to a particular entity, contact your EPA Regional 
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representative as listed in 40 CFR 63.13 (General Provisions).

SUPPLEMENTARY INFORMATION:
    Preamble acronyms and abbreviations. We use multiple acronyms and 
terms in this preamble. While this list may not be exhaustive, to ease 
the reading of this preamble and for reference purposes, the EPA 
defines the following terms and acronyms here:

CAA Clean Air Act
CAMR Clean Air Mercury Rule
CEMS continuous emissions monitoring systems
CFR Code of Federal Regulations
CRA Congressional Review Act
EGU electric utility steam generating unit
EPA Environmental Protection Agency
EPRI Electric Power Research Institute
HAP hazardous air pollutant(s)
HCl hydrochloric acid
HF hydrogen fluoride
HQ hazard quotient
ICR information collection request
km kilometer
MACT maximum achievable control technology
MATS Mercury and Air Toxics Standards
MIR maximum individual risk
MW megawatt
NAAQS National Ambient Air Quality Standards
NAICS North American Industry Classification System
NEI National Emissions Inventory
NESHAP national emission standards for hazardous air pollutants
NOAEL no-observed-adverse-effect-level
NOX nitrogen oxides
NTTAA National Technology Transfer and Advancement Act
OAQPS Office of Air Quality Planning and Standards
OMB Office of Management and Budget
PB-HAP hazardous air pollutants known to be persistent and bio-
accumulative in the environment
PDF Portable Document Format
PM particulate matter
PM2.5 fine particulate matter
POM polycyclic organic matter
PRA Paperwork Reduction Act
RDL representative detection level
REL reference exposure level
RFA Regulatory Flexibility Act
RIA regulatory impact analysis
RTR residual risk and technology review
SO2 sulfur dioxide
TOSHI target organ-specific hazard index
tpy tons per year
UMRA Unfunded Mandates Reform Act

    Background information. With this action, the EPA is, after review 
and consideration of public comments, finalizing two aspects of the 
2019 Proposal. On February 7, 2019, the EPA proposed to find that it is 
not ``appropriate and necessary'' to regulate HAP emissions from coal- 
and oil-fired EGUs, thereby reversing the Agency's prior conclusion 
under CAA section 112(n)(1)(A) and correcting flaws in the Agency's 
prior response to Michigan v. EPA, 135 S. Ct. 2699 (2015). 84 FR 2670 
(2019 Proposal). We further proposed that finalizing this new response 
to Michigan v. EPA would not remove the Coal- and Oil-Fired EGU source 
category from the CAA section 112(c) list of sources that must be 
regulated under CAA section 112(d) and would not

[[Page 31287]]

affect the existing CAA section 112(d) emissions standards that 
regulate HAP emissions from coal- and oil-fired EGUs. In the same 
action, the EPA also proposed the results of the RTR of the NESHAP for 
Coal- and Oil-Fired EGUs. In this action, we are taking final action 
with regard to these aspects of the 2019 Proposal.\2\ We summarize some 
of the more significant comments regarding the proposed rule and 
provide our responses in this preamble. A summary of all other 
significant comments on the 2019 Proposal and the EPA's responses to 
those comments is available in the document titled Final Supplemental 
Finding and Risk and Technology Review for the NESHAP for Coal- and 
Oil-Fired EGUs Response to Public Comments on February 7, 2019 Proposal 
(Response-to-Comment (RTC) document), in Docket ID No. EPA-HQ-OAR-2018-
0794.
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    \2\ The EPA took final action on the other aspect of the 2019 
Proposal (i.e., solicitation of comment on establishing a 
subcategory of certain existing EGUs firing eastern bituminous coal 
refuse for emissions of acid gas HAP) on April 15, 2020, in a 
separate action (85 FR 20838).
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    Organization of this document. The information in this preamble is 
organized as follows:

I. General Information
    A. Do these actions apply to me?
    B. Where can I get a copy of this document and other related 
information?
    C. Judicial Review and Administrative Reconsideration
II. Appropriate and Necessary Finding
    A. Overview
    B. Background
    C. EPA's Finding Under CAA Section 112(n)(1)(A)
    D. Effects of This Reversal of the Supplemental Finding
III. Background on the RTR Action
    A. What is the statutory authority for this action?
    B. What is the Coal- and Oil-Fired EGU source category and how 
does the NESHAP regulate HAP emissions from the source category?
    C. What changes did we propose for the Coal- and Oil-Fired EGU 
source category in our February 7, 2019, proposed rule?
IV. What is included in this final rule based on results of the RTR?
    A. What are the final rule amendments based on the residual risk 
review for the Coal- and Oil-Fired EGU source category?
    B. What are the final rule amendments based on the technology 
review for the Coal- and Oil-Fired EGU source category?
    C. What are the effective and compliance dates of the standards?
V. What is the rationale for our final decisions regarding the RTR 
action for the Coal- and Oil-Fired EGU source category?
    A. Residual Risk Review for the Coal- and Oil-Fired EGU Source 
Category
    B. Technology Review for the Coal- and Oil-Fired EGU Source 
Category
VI. Summary of Cost, Environmental, and Economic Impacts and 
Additional Analyses Conducted
    A. What are the affected facilities?
    B. What are the air quality impacts?
    C. What are the cost impacts?
    D. What are the economic impacts?
    E. What are the benefits?
    F. What analysis of environmental justice did we conduct?
    G. What analysis of children's environmental health did we 
conduct?
VII. Statutory and Executive Order Reviews
    A. Executive Orders 12866: Regulatory Planning and Review and 
Executive Order 13563: Improving Regulation and Regulatory Review
    B. Executive Order 13771: Reducing Regulation and Controlling 
Regulatory Costs
    C. Paperwork Reduction Act (PRA)
    D. Regulatory Flexibility Act (RFA)
    E. Unfunded Mandates Reform Act (UMRA)
    F. Executive Order 13132: Federalism
    G. Executive Order 13175: Consultation and Coordination With 
Indian Tribal Governments
    H. Executive Order 13045: Protection of Children From 
Environmental Health Risks and Safety Risks
    I. Executive Order 13211: Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use
    J. National Technology Transfer and Advancement Act (NTTAA)
    K. Executive Order 12898: Federal Actions To Address 
Environmental Justice in Minority Populations and Low-Income 
Populations
    L. Congressional Review Act (CRA)

I. General Information

A. Do these actions apply to me?

    Regulated entities. Categories and entities potentially regulated 
by these final actions are shown in Table 1 of this preamble.

Table 1--NESHAP and Industrial Source Categories Affected by These Final
                                 Actions
------------------------------------------------------------------------
    NESHAP and source category                 NAICS \1\ code
------------------------------------------------------------------------
Coal- and Oil-Fired EGUs.........  221112, 221122, 921150.
------------------------------------------------------------------------
North American Industry Classification System.

    Table 1 of this preamble is not intended to be exhaustive, but 
rather to provide a guide for readers regarding entities likely to be 
affected by these final actions for the source category listed. To 
determine whether your facility is affected, you should examine the 
applicability criteria in the appropriate NESHAP. If you have any 
questions regarding the applicability of any aspect of this NESHAP, 
please contact the appropriate person listed in the preceding FOR 
FURTHER INFORMATION CONTACT section of this preamble.

B. Where can I get a copy of this document and other related 
information?

    In addition to being available in the docket, an electronic copy of 
this document will also be available on the internet. Following 
signature by the EPA Administrator, the EPA will post a copy of this 
document at: https://www.epa.gov/mats/regulatory-actions-final-mercury-and-air-toxics-standards-mats-power-plants. Following publication in 
the Federal Register, the EPA will post the Federal Register version 
and key technical documents at this same website.
    Additional information regarding the RTR action is available on the 
RTR website at https://www3.epa.gov/ttn/atw/rrisk/rtrpg.html. This 
information includes an overview of the RTR program, links to project 
websites for the RTR source categories, and detailed emissions and 
other data we used as inputs to the risk assessments.

C. Judicial Review and Administrative Reconsideration

    Under CAA section 307(b)(1), judicial review of these final actions 
is available only by filing a petition for review in the United States 
Court of Appeals for the District of Columbia Circuit (D.C. Circuit) by 
July 21, 2020. Under CAA section 307(b)(2), the requirements 
established by this final rule may not be challenged separately in any 
civil or criminal proceedings brought by the EPA to enforce the 
requirements.
    Section 307(d)(7)(B) of the CAA further provides that only an 
objection to a rule or procedure which was raised with reasonable 
specificity during the period for public comment (including any public 
hearing) may be raised

[[Page 31288]]

during judicial review. That section of the CAA also provides a 
mechanism for the EPA to reconsider the rule if the person raising an 
objection can demonstrate to the Administrator that it was 
impracticable to raise such objection within the period for public 
comment or if the grounds for such objection arose after the period for 
public comment (but within the time specified for judicial review) and 
if such objection is of central relevance to the outcome of the rule. 
Any person seeking to make such a demonstration should submit a 
Petition for Reconsideration to the Office of the Administrator, U.S. 
EPA, Room 3000, WJC South Building, 1200 Pennsylvania Ave. NW, 
Washington, DC 20460, with a copy to both the person(s) listed in the 
preceding FOR FURTHER INFORMATION CONTACT section, and the Associate 
General Counsel for the Air and Radiation Law Office, Office of General 
Counsel (Mail Code 2344A), U.S. EPA, 1200 Pennsylvania Ave. NW, 
Washington, DC 20460.

II. Appropriate and Necessary Finding

A. Overview

    On June 29, 2015, the U.S. Supreme Court ruled in Michigan v. EPA 
that the Agency had erred when it failed to take cost into account in 
its previous CAA section 112(n)(1)(A) determination that it is 
appropriate and necessary to regulate HAP emissions from coal- and oil-
fired EGUs. In response to that decision, the EPA finalized a 
supplemental finding on April 25, 2016, that evaluated cost 
considerations and concluded that the appropriate and necessary finding 
was still valid. 81 FR 24420 (2016 Supplemental Finding). On February 
7, 2019, the EPA proposed a revised response to the U.S. Supreme Court 
decision. 84 FR 2670 (2019 Proposal). In the 2019 Proposal, after 
primarily comparing the cost of compliance relative to the benefits of 
HAP emission reduction from regulation, the EPA proposed to find that 
it is not appropriate and necessary to regulate HAP emissions from 
coal- and oil-fired EGUs, thereby reversing the Agency's conclusion 
under CAA section 112(n)(1)(A), first made in 2000 and later affirmed 
in 2012 and 2016. Specifically, the Agency proposed that the 2016 
Supplemental Finding considering the cost of MATS was flawed as it did 
not satisfy the EPA's obligation under CAA section 112(n)(1)(A), as 
interpreted by the U.S. Supreme Court in Michigan. Additionally, the 
EPA proposed that while finalizing the action would reverse the 2016 
Supplemental Finding, it would not remove the Coal- and Oil-Fired EGU 
source category from the CAA section 112(c)(1) list, nor would it 
affect the existing CAA section 112(d) emissions standards regulating 
HAP emissions from coal- and oil-fired EGUs that were promulgated on 
February 16, 2012. 77 FR 9304 (2012 MATS Final Rule).
    In section II.B of this preamble, which finalizes the reversal of 
the 2016 Supplemental Finding, the EPA provides background information 
regarding the previous appropriate and necessary findings, including 
the affirmations in the preamble of the 2012 MATS Final Rule and in the 
2016 Supplemental Finding. Section II.C of this preamble describes why 
the 2016 Supplemental Finding was flawed, why the EPA has authority to 
revisit that finding now, and what the EPA is finalizing as the 
appropriate approach to satisfy the EPA's obligation under CAA section 
112(n)(1)(A) as interpreted by the U.S. Supreme Court in Michigan. 
Finally, section II.D of this preamble explains that the EPA's revised 
determination that regulation of HAP emissions from EGUs under CAA 
section 112 is not appropriate and necessary will not remove coal- and 
oil-fired EGUs from the CAA section 112(c) list of source categories, 
and that the previously established CAA section 112(d) standards for 
HAP emissions from coal- and oil-fired EGUs will remain in place. In 
this preamble, the EPA provides a summary of certain significant 
comments received on the 2019 Proposal and the Agency's response to 
those comments. The RTC document for this action summarizes and 
responds to all other significant comments that the EPA received.

B. Background

    The CAA establishes a multi-step process for the EPA to regulate 
HAP emissions from EGUs. First, section 112(n)(1)(A) of the CAA 
requires the EPA to perform a study of the hazards to public health 
reasonably anticipated to occur as a result of HAP emissions from EGUs 
``after imposition of the requirements of this chapter.'' \3\ If, after 
considering the results of this study, the EPA determines that it is 
``appropriate and necessary'' to regulate EGUs under CAA section 112, 
the EPA shall then do so.
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    \3\ See CAA section 112(n)(1)(A); see also Michigan v. EPA, 135 
S. Ct. at 2705 (``Quite apart from the hazardous-air-pollutants 
program, the Clean Air Act Amendments of 1990 subjected power plants 
to various regulatory requirements. The parties agree that these 
requirements were expected to have the collateral effect of reducing 
power plants' emissions of hazardous air pollutants, although the 
extent of the reduction was unclear.'').
---------------------------------------------------------------------------

    The required study, which the EPA completed in 1998, contained an 
analysis of HAP emissions from EGUs, an assessment of the hazards and 
risks due to inhalation exposures to these emitted pollutants, and a 
multipathway (inhalation plus non-inhalation exposures) risk assessment 
for mercury and a subset of other relevant HAP.\4\ The study indicated 
that mercury was the HAP of greatest concern to public health from 
coal- and oil-fired EGUs. Mercury is highly toxic, persistent, and 
bioaccumulates in food chains. The study also concluded that numerous 
control strategies, of varying cost and efficiency, were available to 
reduce HAP emissions from this source category. Based on this study and 
other available information, the EPA determined in December 2000, 
pursuant to CAA section 112(n)(1)(A), that it was appropriate and 
necessary to regulate coal- and oil-fired EGUs under CAA section 112 
and added such units to the CAA section 112(c) list of sources that 
must be regulated under CAA section 112(d). 65 FR 79825 (December 20, 
2000) (2000 Finding).\5\ The 2000 Finding did not consider the cost of 
regulating EGUs in its finding that it was appropriate and necessary to 
do so. Id. at 79830.
---------------------------------------------------------------------------

    \4\ U.S. EPA. 1998. Study of Hazardous Air Pollutant Emissions 
from Electric Utility Steam Generating Units--Final Report to 
Congress, Volume 1. EPA-453/R-98-004a.
    \5\ In the same 2000 action, the EPA Administrator found that 
regulation of HAP emissions from natural gas-fired EGUs is not 
appropriate or necessary. 65 FR 79826.
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    In 2005, the EPA revised the original 2000 Finding and concluded 
that it was neither appropriate nor necessary to regulate EGUs under 
CAA section 112. 70 FR 15994 (March 29, 2005) (2005 Revision). This 
action was taken because, at that time, the EPA concluded that the 
original 2000 Finding lacked foundation in that it failed to consider: 
(1) The HAP reductions that could be obtained through implementation of 
CAA sections 110 and 111; and (2) whether hazards to public health 
would still exist after imposition of emission reduction rules under 
those sections. The 2005 Revision also removed coal- and oil-fired EGUs 
from the CAA section 112(c) list of source categories to be regulated 
under CAA section 112. In a separate but related 2005 action, the EPA 
also promulgated the Clean Air Mercury Rule (CAMR) which established 
CAA section 111 standards of performance for mercury emissions from 
EGUs. 70 FR 28605 (May 18, 2005).

[[Page 31289]]

Both the 2005 Revision and the CAMR were vacated by the D.C. Circuit in 
2008. The Court held that the EPA had failed to comply with the 
requirements of CAA section 112(c)(9) for delisting source categories, 
and consequently also vacated the CAA section 111 performance standards 
promulgated in CAMR, without addressing the merits of those standards. 
New Jersey v. EPA, 517 F.3d 574 (D.C. Cir. 2008).
    In response to the New Jersey decision, the EPA conducted 
additional technical analyses, including peer-reviewed risk assessments 
on human health effects associated with mercury and non-mercury HAP 
emissions from EGUs, focusing on risks to the most exposed and 
sensitive individuals in the population. Those analyses found that 
mercury and non-mercury HAP emissions from EGUs remain a significant 
public health hazard and that EGUs were the largest U.S. anthropogenic 
source of mercury emissions to the atmosphere.\6\ Based on these 
findings, in 2012, the EPA affirmed the original 2000 Finding that it 
is appropriate and necessary to regulate EGUs under CAA section 112. 77 
FR 9304 (February 16, 2012).
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    \6\ U.S. EPA. 2011. Revised Technical Support Document: 
National-Scale Assessment of Mercury Risk to Populations with High 
Consumption of Self-caught Freshwater Fish in Support of the 
Appropriate and Necessary Finding for Coal- and Oil-Fired Electric 
Generating Units. Office of Air Quality Planning and Standards. 
December. EPA-452/R-11-009. Docket ID Item No. EPA-HQ-OAR-2009-0234-
19913.
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    In the same 2012 action, the EPA established a NESHAP, commonly 
called MATS, that required coal- and oil-fired EGUs to meet HAP 
emission standards reflecting the application of the maximum achievable 
control technology (MACT) for mercury and other air toxics. After MATS 
was promulgated, both the rule itself and many aspects of the EPA's 
appropriate and necessary finding were challenged in the D.C. Circuit. 
In White Stallion Energy Center v. EPA, the Court denied all 
challenges. 748 F.3d 1322 (D.C. Cir. 2014). One judge dissented, 
expressing the view that the EPA erred by refusing to consider cost in 
its ``appropriate and necessary'' determination. Id. at 1258-59 
(Kavanaugh, J., dissenting).
    The U.S. Supreme Court subsequently granted certiorari, directing 
the parties to address a single question posed by the Court itself: 
``Whether the Environmental Protection Agency unreasonably refused to 
consider cost in determining whether it is appropriate to regulate 
hazardous air pollutants emitted by electric utilities.'' Michigan v. 
EPA, 135 S. Ct. 702 (Mem.) (2014). In 2015, the U.S. Supreme Court held 
that ``EPA interpreted [CAA section 112(n)(1)(A)] unreasonably when it 
deemed cost irrelevant to the decision to regulate power plants.'' 
Michigan v. EPA, 135 S. Ct. 2699, 2712 (2015). In so holding, the U.S. 
Supreme Court found that the EPA ``must consider cost--including, most 
importantly, cost of compliance--before deciding whether regulation is 
appropriate and necessary.'' Id. at 2711. It is ``up the Agency,'' the 
Court added, ``to decide (as always, within the limits of reasonable 
interpretation) how to account for cost.'' Id. The rule was ultimately 
remanded back to the EPA (without vacatur) to complete the required 
cost analysis. White Stallion Energy Ctr. v. EPA, No. 12-1100, ECF No. 
1588459 (D.C. Cir. December 15, 2015).
    In response to the U.S. Supreme Court's direction, the EPA in the 
2016 Supplemental Finding promulgated two different approaches to 
incorporate cost into the appropriate and necessary finding. 81 FR 
24420. The EPA's preferred approach (referred to as the ``cost 
reasonableness'' approach) compared the estimated cost of compliance in 
the regulatory impact analysis (RIA) for the 2012 MATS Final Rule 
(referred to here as 2011 RIA \7\) against several cost metrics 
relevant to the EGU sector (e.g., historical annual revenues, annual 
capital expenditures, and impacts on retail electricity prices). The 
``cost reasonableness'' approach did not compare costs to benefits. 
Under this approach, the EPA concluded that the power sector would be 
able to comply with the MATS requirements while maintaining its ability 
to generate, transmit, and distribute reliable electricity at 
reasonable cost to consumers. Using a totality-of-the-circumstances 
approach, the EPA weighed this analysis that the costs of the rule were 
reasonable along with its prior findings about the amount of HAP 
pollution coming from the Coal- and Oil-Fired EGU source category, the 
scientific studies and modeling assessing the risks to public health 
and the environment from domestic EGU HAP pollution, and information 
about the toxicity and persistence of HAP in the environment.
---------------------------------------------------------------------------

    \7\ U.S. EPA. 2011. Regulatory Impact Analysis for the Final 
Mercury and Air Toxics Standards. EPA-452/R-11-011. Available at: 
https://www3.epa.gov/ttn/ecas/docs/ria/utilities_ria_final-mats_2011-12.pdf.
---------------------------------------------------------------------------

    In a second, alternative, and independent approach (referred to as 
the ``cost benefit'' approach), the EPA considered the benefit-cost 
analysis in the RIA for the 2012 MATS Final Rule. In that analysis, the 
EPA estimated that the final MATS rule would yield total annual 
monetized benefits (in 2007 dollars) of between $37 billion to $90 
billion using a 3-percent discount rate and $33 billion to $81 billion 
using a 7-percent discount rate, plus additional benefits that cannot 
be quantified, in comparison to the projected $9.6 billion in annual 
compliance costs. That analysis reflects that 99.9 percent of the total 
annual monetized benefits were attributable not to benefits from HAP 
reduction, but rather from benefits from co-reduction of non-HAP 
pollutants. In the 2016 Supplemental Finding, the EPA determined that 
both the preferred ``cost reasonableness'' approach and the alternative 
``cost benefit'' approach supported the conclusion that regulation of 
HAP emissions from EGUs is appropriate and necessary.
    Several state and industry groups petitioned for review of the 2016 
Supplemental Finding in the D.C. Circuit. Murray Energy Corp. v. EPA, 
No. 16-1127 (D.C. Cir. filed April 25, 2016). In April 2017, the EPA 
moved the D.C. Circuit to continue oral argument and hold the case in 
abeyance in order to give the new Administration an opportunity to 
review the 2016 action. (As further explained below, as of the date of 
signature, the case remains pending in the D.C. Circuit.) Accordingly, 
the EPA reviewed the 2016 action and proposed on February 7, 2019, to 
correct flaws in the prior response to Michigan v. EPA (84 FR 2670). 
Specifically, the 2019 Proposal proposed to reverse the 2016 action and 
to conclude that it is not ``appropriate and necessary'' to regulate 
HAP emissions from coal- and oil-fired EGUs. The public comment period 
for the 2019 Proposal ended on April 17, 2019. The remainder of this 
section of this preamble responds to significant comments received on 
the appropriate and necessary finding and describes the EPA's 
justification for finalizing this reversal of the 2016 Supplemental 
Finding.

C. EPA's Finding Under CAA Section 112(n)(1)(A)

1. EPA Has the Statutory Authority To Revisit the Appropriate and 
Necessary Finding
a. Summary of 2019 Proposal
    Section 112(n)(1)(A) of the CAA directs the Administrator of the 
EPA to determine whether it is ``appropriate and necessary'' to 
regulate HAP emissions from fossil fuel-fired EGUs after conducting a 
study of the hazards to public health reasonably anticipated to occur 
as a result of emissions of HAP

[[Page 31290]]

from EGUs after imposition of emission controls imposed under other 
provisions of the CAA. In Michigan v. EPA, the U.S. Supreme Court 
instructed the Agency that it was required to consider cost as part of 
its appropriate and necessary determination. The Agency completed a 
consideration of the cost to regulate HAP emissions from coal- and oil-
fired EGUs in the 2016 Supplemental Finding. The EPA's 2019 action 
proposed to revisit the 2016 Supplemental Finding's consideration of 
cost, on the basis that the 2016 action is flawed. The 2019 Proposal 
stated that such reexamination was permissible as a basic principle of 
administrative law and under the CAA. 84 FR 2674 n.3.
b. Final Rule
    The EPA is finalizing this action as proposed in February 2019 on 
the basis that the CAA and CAA section 112(n)(1)(A) do not prohibit the 
Administrator from revisiting a prior finding made under that section.
c. Comments and Responses
    Comment: Some commenters asserted that it is unlawful for the EPA 
to revisit its 2016 Supplemental Finding at all, because the EPA has 
completed the analytic process Congress set in motion in 1990, and the 
statute unambiguously prohibits the EPA from revisiting or revising the 
CAA section 112(n)(1)(A) finding. Commenters asserted that the 
legislative history, statutory context, and statutory structure support 
their position that Congress intended the CAA section 112(n)(1)(A) 
appropriate and necessary finding to be a one-time decision, and that 
the provision gives the EPA ``limited discretion to activate a one-way 
switch to `turn on' regulation of power plants.'' The commenters argued 
that ``[o]nce EPA turns on that switch, as it did in its 2000 finding . 
. . it must regulate power plants under section 112.''
    Moreover, those commenters argued that even if CAA section 112 were 
ambiguous as to the EPA's authority to revisit the appropriate and 
necessary finding, the EPA was still bound to follow CAA section 
112(c)(9)'s delisting procedure before it could reverse its finding 
under CAA section 112(n)(1)(A). The commenters claimed that New Jersey 
confirms that the EPA lacks inherent authority to reconsider the 
appropriate and necessary finding.
    Finally, the commenters claimed that it would be ``illogical'' for 
the EPA to have authority to revise the appropriate and necessary 
finding independent of removing power plants from the list of regulated 
sources under CAA section 112. Commenters argued that a revised finding 
that has no regulatory effect would be ``inherently irrational,'' and 
that the EPA has failed to articulate a reasoned basis for undertaking 
this action (citing Air Alliance Houston v. EPA, 906 F.3d 1049 (D.C. 
Cir. 2018), and asserting that in that decision the D.C. Circuit found 
an EPA rule irrational where the EPA tried to ``have it both ways'' by 
claiming that a rule was necessary to prevent harms to regulated 
industry but also ``does nothing more than maintain the status quo,'' 
Id. at 1068).
    Other commenters said that the EPA has authority to reconsider 
prior Agency decisions and the 2016 Supplemental Finding in particular. 
These commenters noted that if the 2016 Supplemental Finding were left 
unamended, it would establish policy precedents at odds with well-
established precepts about how benefits and costs should be considered 
in regulatory decisions.
    Response: The EPA disagrees with commenters that CAA section 
112(n)(1)(A) speaks to the EPA's authority to revisit its appropriate 
and necessary finding, and we, therefore, disagree with commenters' 
contention that the statute on its face prohibits the EPA from 
revisiting a determination made under that provision. The provision 
reads: ``The Administrator shall regulate electric utility steam 
generating units under this section, if the Administrator finds such 
regulation is appropriate and necessary after considering the results 
of the study required by this subparagraph [the ``Utility Study'' 
\8\].'' The only clear requirement with regard to timing or sequence 
found in the text of the provision is that the Administrator may not 
make the finding prior to considering the results of the Utility Study, 
which the EPA completed in 1998. The statute does not restrict the 
Administrator's ability to revise or reconsider a prior finding made 
under CAA section 112(n)(1)(A).
---------------------------------------------------------------------------

    \8\ CAA section 112(n)(1)(A) directs the EPA to conduct a study 
to evaluate the hazards to public health reasonably anticipated to 
occur as the result of HAP emissions from EGUs after the imposition 
of the requirements of the CAA, and to report the results of such 
study to Congress by November 15, 1993. See U.S. EPA, Study of 
Hazardous Air Pollutant Emissions from Electric Utility Steam 
Generating Units--Final Report to Congress. EPA-453/R-98-004a, 
February 1998.
---------------------------------------------------------------------------

    We also disagree with commenters' argument that because other 
statutory provisions in the CAA mandate that the EPA review and revise 
regulations on a set schedule or continuing basis, it must follow that 
every other statutory provision lacking such a review-and-revise clause 
prohibits an agency from rethinking its interpretation of such 
provision. The EPA's CAA rulemaking history contains many examples of 
the Agency's changing position on a previous interpretation of a 
provision, even where there is no explicit directive within the 
provision to review or revise.
    Absent a specific statutory prohibition, the EPA's ability to 
revisit existing decisions is well established. The EPA has inherent 
authority to reconsider and/or revise past decisions to the extent 
permitted by law so long as the Agency provides a reasoned explanation. 
The authority to reconsider exists in part because the EPA's 
interpretations of statutes it administers ``[are not] instantly carved 
in stone,'' but must be evaluated ``on a continuing basis.'' Chevron 
U.S.A. v. Natural Resources Defense Council, 467 U.S. 837, 863-64. This 
is true when, as is the case here, review is undertaken partly ``in 
response to . . . a change in administrations.'' National Cable & 
Telecommunications Ass'n v. Brand X internet Services, 545 U.S. 967, 
981 (2005). Indeed, ``[a]gencies obviously have broad discretion to 
reconsider a regulation at any time.'' Clean Air Council v. Pruitt, 862 
F.3d 1, 8-9 (D.C. Cir. 2017).
    Commenters' assertions that the statutory context and structure of 
CAA section 112 and the legislative history of that provision support 
their view that the EPA lacks authority to revisit its CAA section 
112(n)(1)(A) determination are marred by the commenters' assumed 
premise that the EPA necessarily would find that it is appropriate and 
necessary to regulate EGUs. The commenters argue that their 
interpretation of the statute must be correct because it creates a tidy 
framework: The EPA makes an affirmative appropriate and necessary 
finding, regulations under CAA section 112 are promulgated, and the 
only statutory means by which the appropriate and necessary finding 
could be revisited is to satisfy the delisting criteria under CAA 
section 112(c)(9). According to commenters, such a framework fits with 
Congress' concerns about dangers to public health and welfare due to 
air pollution and what they broadly characterize as congressional 
desire to regulate HAP from power plants ``promptly.'' The problem with 
the commenters' statutory interpretation is that it makes sense only if 
an affirmative appropriate and necessary finding occurs in the first 
instance. If, as commenters assert, CAA section 112(c)(9) is the only 
statutory means by which a finding under CAA section 112(n)(1)(A) may 
be revisited, commenters' framework provides no pathway by which the 
EPA could revisit

[[Page 31291]]

a finding that it is not appropriate and necessary to regulate HAP from 
power plants. Commenters' ``unambiguous'' reading of CAA section 
112(n)(1)(A) and its assumption that Congress drafted the provision in 
order to ensure ``prompt'' reductions of HAP from EGUs treats an 
affirmative finding under that section as a foregone conclusion rather 
than a decision left up to the expertise of the Agency and its 
Administrator.
    The commenters' reading of the statute also cannot be squared with 
the Michigan v. EPA decision. They assert that CAA section 112(n)(1)(A) 
only allows the EPA ``to activate a one-way switch to `turn on' 
regulation,'' and notes that the Agency did so ``in its 2000 finding.'' 
Commenters are essentially arguing that the U.S. Supreme Court's 
instruction to the EPA that it was required to consider cost as part of 
a CAA section 112(n)(1)(A) finding could never have had any practical 
effect, because according to commenters, the ``only . . . statutorily 
mandated avenue to turn the switch off and reverse course . . . [is] 
the section 112(c)(9) procedures.'' Therefore, in petitioners' view, 
regardless of what the EPA determined on remand from Michigan, only the 
satisfaction of the CAA section 112(c)(9) criteria, which contain no 
consideration of cost, could have altered the EPA's finding under CAA 
section 112(n)(1)(A). We do not agree that this is a reasonable reading 
of the statute or the Michigan decision.
    Additionally, the EPA notes that the D.C. Circuit in New Jersey 
held that the EPA's reversal of a prior determination that it was 
appropriate and necessary to regulate EGUs under CAA section 112 did 
not by itself effect a delisting of EGUs from the CAA section 112(c) 
list of source categories. This holding recognizes that the CAA section 
112 appropriate and necessary determination is structurally and 
functionally separate from the EPA's ability, conditioned on certain 
predicate findings, to remove source categories from the CAA section 
112(c) list. Commenters are, therefore, wrong to assert that the EPA 
can reverse an appropriate and necessary determination under CAA 
section 112(n)(1)(A) only if it has first undertaken CAA section 
112(c)(9)'s delisting procedure, and wrong to assert that New Jersey 
supports their position that the EPA lacks inherent authority to 
reconsider the appropriate and necessary finding; in fact, that case 
supports the opposite position.
    For similar reasons, we also reject the commenters' contention that 
CAA section 112(c)(9)'s health protective criteria are substantively 
incorporated into CAA section 112(n)(1)(A)'s appropriate and necessary 
determination, such that a failure to consider those criteria in the 
context of reversing a determination under CAA section 112(n)(1)(A) is 
arbitrary and renders CAA section 112(c)(9) a nullity. As explained in 
section II.D of this preamble, we agree that the EPA may not delist 
EGUs from the CAA section 112(c) list and revoke MACT standards for 
power plants without meeting the delisting criteria of CAA section 
112(c)(9). We do not agree, however, that the delisting provision has 
any effect on the Agency's ability to make an affirmative or negative 
determination under CAA section 112(n)(1)(A) where we are not 
purporting to alter the CAA section 112(c) list. In particular, we do 
not agree with the commenters' reading of New Jersey that the D.C. 
Circuit's holding means that the EPA could reverse an affirmative 
appropriate and necessary finding only if it found that the CAA section 
112(c)(9) delisting criteria were met. The Court's holding in New 
Jersey plainly states that CAA section 112(c)(9) ``unambiguously 
limit[s] EPA's discretion to remove sources, including EGUs, from the 
section 112(c)(1) list once they have been added to it.'' 517 F.3d 574, 
583 (D.C. Cir. 2008). Commenters' presumed incorporation of the 
statutory delisting criteria into the CAA section 112(n)(1)(A) 
determination also finds no support in the Michigan decision, which 
said nothing about the EPA's obligation to consider those criteria in 
determining whether regulation of power plants is appropriate and 
necessary.
    Finally, we disagree with commenters who assert that this final 
action is ``inherently irrational'' because the MATS standards would 
not be reversed as a result of the negative appropriate and necessary 
finding, due to controlling legal precedent from the D.C. Circuit (New 
Jersey). In this action the EPA is setting out the Agency's revised 
reasoning to respond to a U.S. Supreme Court decision and remand 
(Michigan), because the EPA concludes that the 2016 Supplemental 
Finding is not appropriate as a matter of interpretation of the statute 
or as a matter of policy. As noted by some of the commenters, leaving 
in place the incorrect interpretation of ``appropriate'' in CAA section 
112(n)(1)(A) could establish policy precedent that could have ``long-
term and harmful consequences.''
    Moreover, the EPA disagrees that Air Alliance Houston v. EPA has 
any bearing on this action. There, in admonishing the Agency that it 
could not ``have it both ways,'' the Court was criticizing the EPA for 
attempting to characterize its rule as relieving ``substantial 
compliance and implementation burden'' while also ``maintaining the 
status quo'' (such that the rule would have little effect on compliance 
requirements). See Air Alliance Houston, 906 F.3d at 1068. Here, the 
Agency believes a different finding and better response to the U.S. 
Supreme Court's decision in Michigan v. EPA is warranted given the 
proper application of that decision and the facts in the EPA's record. 
We acknowledge that this change in policy will not affect the CAA 
section 112 MACT standards for EGUs because the D.C. Circuit's decision 
in New Jersey v. EPA prohibits the Agency from removing listed sources 
from the CAA section 112(c) list without satisfying the CAA section 
112(c)(9) delisting criteria (see section II.D of this preamble). But 
we do not agree that simply because D.C. Circuit precedent establishes 
that the Agency's reversing its prior determination will have a 
particular regulatory consequence, the Agency is, therefore, prohibited 
from revisiting that prior determination in the first instance.
    Comment: Some commenters stated that the EPA has no authority to 
``revise'' its response to the U.S. Supreme Court's decision in 
Michigan, and its attempt to do so would impermissibly subvert the 
judicial review process. These commenters argued that the EPA's 
response to Michigan is the 2016 Supplemental Finding, and that at this 
stage, that response cannot be altered or reversed. The commenters 
contended that the 2016 Supplemental Finding constitutes final Agency 
action and noted that the Finding is currently subject to petitions for 
review in the D.C. Circuit. The commenters suggested that seeking to 
undo the 2016 Supplemental Finding by administrative action would 
unlawfully circumvent that review. Other commenters asserted that the 
EPA has an obligation to explain how final action on the 2019 Proposal 
could impact the government's position in ongoing litigation of the 
2016 Supplemental Finding. Commenters also said the EPA must address 
the implications of a reversal of that finding, considering the 
petitioner's positions in the ongoing litigation where the petitioner 
has argued that reversal of the appropriate and necessary finding must 
be followed by vacatur of MATS.
    Response: The EPA disagrees with the commenters that finalizing 
this action ``subverts the judicial review process'' with respect to 
the 2016 Supplemental Finding. To the extent that commenters are 
arguing that the EPA lacks statutory

[[Page 31292]]

authority to review the 2016 Supplemental Finding, the EPA has 
addressed that contention in the response to the comment above. We 
agree that the 2016 Supplemental Finding constituted final Agency 
action, and we acknowledge that petitions for review of that action 
were filed in the D.C. Circuit in Murray Energy Corp. v. EPA, No. 16-
1127 (and consolidated cases) (D.C. Cir. filed April 25, 2016). 
However, we disagree that our final action unlawfully circumvents the 
judicial process. The EPA filed a motion in the Murray Energy 
litigation requesting the Court to continue oral argument, which had 
been scheduled for May 18, 2017, to allow the new Administration 
adequate time to review the 2016 Supplemental Finding to determine 
whether it needed to be reconsidered.\9\ On April 27, 2017, in 
consideration of the EPA's motion, the D.C. Circuit ordered that the 
consolidated challenges to the 2016 Supplemental Finding be held in 
abeyance.\10\ That case continues to be held in abeyance, pending 
further order of the Court. In its order, the Court directed the 
parties to file motions to govern future proceedings within 30 days of 
the Agency's concluding its review of the 2016 Supplemental 
Finding.\11\
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    \9\ Respondent EPA's Motion to Continue Oral Argument at 6, 
Murray Energy Corp. v. EPA, No. 16-1127 (D.C. Cir. April 18, 2017), 
ECF No. 1671687.
    \10\ Order, Murray Energy Corp. v. EPA, No. 16-1127 (D.C. Cir. 
April 27, 2017), ECF No. 1672987.
    \11\ Id.
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    The EPA disagrees with the commenters that the Agency has an 
obligation to address in the context of this regulatory action the 
government's position in that ongoing litigation. We address in section 
II.D of this preamble the implications of the reversal of the 2016 
Supplemental Finding, including addressing those comments received that 
argue that a vacatur of MATS is required upon finalization of this 
action. To the extent that the commenter is suggesting that it would be 
appropriate or required for the EPA at this point to address potential 
future arguments petitioners might make in the Murray Energy litigation 
following this final action, the Agency disagrees. The appropriate 
venue for addressing such arguments is the judicial review process for 
that action. Commenters provide no authority to support their assertion 
that an agency is obliged to discuss in a rulemaking the implications 
of that rulemaking for pending litigation challenging a previous, 
related agency action; the EPA is aware of no such authority; and the 
EPA declines to take such litigation positions in this final action.
2. The Preferred Cost Reasonableness Approach of the 2016 Supplemental 
Finding Was Deficient
a. Summary of 2019 Proposal
    The EPA proposed to determine that the Agency's 2016 Supplemental 
Finding erred in its consideration of cost. Specifically, we proposed 
to find that what was described in the 2016 Supplemental Finding as the 
preferred approach, or the ``cost reasonableness test,'' does not meet 
the statute's requirements to fully consider costs and was an 
unreasonable interpretation of CAA section 112(n)(1)(A)'s mandate, as 
informed by the U.S. Supreme Court's opinion in Michigan. A summary of 
that approach can be found in the 2019 Proposal. 84 FR 2674-75.
b. Final Rule
    After considering comments submitted in response to the EPA's 2019 
Proposal, the EPA is finalizing the proposed approach. The EPA 
concludes that the ``preferred approach'' in the 2016 Supplemental 
Finding did not meaningfully consider cost, which the Michigan Court 
observed to be a ``centrally relevant factor'' in making the CAA 
section 112(n)(1)(A) appropriate and necessary finding. The 2016 
Supplemental Finding's de-emphasis of the importance of the cost 
consideration in the appropriate and necessary determination was based 
on an impermissible attempt to ``harmonize'' CAA section 112(n)(1)(A) 
with the remainder of CAA section 112,\12\ and was not consistent with 
Congress' intent and the U.S. Supreme Court's decision in Michigan v. 
EPA, given that statutory provision's directive to treat EGUs 
differently from other sources. See 135 S. Ct. at 2710 (``The Agency 
claims that it is reasonable to interpret [CAA section 112(n)(1)(A)] in 
a way that `harmonizes' the program's treatment of power plants with 
its treatment of other sources. This line of reasoning overlooks the 
whole point of having a separate provision about power plants: Treating 
power plants differently from other sources.'') (emphasis in original).
---------------------------------------------------------------------------

    \12\ See Legal Memorandum Accompanying the Proposed Supplemental 
Finding that it is Appropriate and Necessary to Regulate Hazardous 
Air Pollutants from Coal- and Oil-Fired Electric Utility Steam 
Generating Units (EGUs) (2015 Legal Memorandum) (Docket ID Item No. 
EPA-HQ-OAR-2009-0234-20519), at 6-15 (describing statutory purpose 
of 1990 CAA Amendments and CAA section 112, and concluding that 
``while cost is certainly an important factor, it is one of several 
factors that must be considered and section 112(n)(1) does not 
support a conclusion that cost should be the predominant or 
overriding factor.'').
---------------------------------------------------------------------------

c. Comments and Responses
    Comment: Some commenters asserted that the cost analysis in the 
2016 Supplemental Finding was consistent with longstanding cost-
effectiveness methodologies used in other CAA programs, such as the CAA 
section 111 New Source Performance Standards and CAA section 169 
Prevention of Significant Deterioration (PSD). These commenters 
disagreed with what they characterized as the 2019 Proposal's position 
that CAA section 111 case law was irrelevant to the CAA section 
112(n)(1)(A) appropriate and necessary determination, noting that cost 
effectiveness is used in CAA section 111 to determine standards for 
existing sources, much as the EPA is determining whether to regulate 
existing sources in CAA section 112(n)(1)(A). These commenters further 
said that the proposed monetized cost-benefit approach is inferior to 
the longstanding cost-effectiveness test for addressing concerns about 
standards that impose costs too high for the industry to bear. However, 
other commenters agreed with the EPA that cases interpreting section 
111 of the CAA were not an appropriate guide to considering costs under 
CAA section 112(n)(1)(A).
    Response: The broad language of CAA section 112(n)(1)(A) and the 
holding of the Michigan Court suggest that there is more than one 
permissible way to interpret the Agency's obligation to consider cost 
in the appropriate and necessary finding. The text of that section does 
not require the Agency to consider cost in a particular fashion. The 
U.S. Supreme Court, in identifying that the Agency's obligation to 
consider cost in some fashion in light of the broad term 
``appropriate,'' recognized the discretion afforded the Administrator, 
noting, ``[i]t will be up the Agency to decide (as always, within the 
limits of reasonable interpretation) how to account for cost.'' 135 S. 
Ct. at 2711. Even in the final 2016 Supplemental Finding, the EPA 
acknowledged that the cost reasonableness test was but one way to 
interpret its CAA section 112(n)(1)(A) obligation to consider cost, and 
``that the agency need not demonstrate that [its] decision is the same 
decision that would be made by another Administrator or a reviewing 
court.'' 81 FR 24431. The commenters provide many reasons for why they 
preferred the EPA's ``cost reasonableness'' test, but even they do not 
attempt to argue that the EPA's 2016 ``preferred approach'' is

[[Page 31293]]

the only permissible interpretation of the statute.
    Comparisons of a regulation's costs and the relationship of those 
costs to the benefits the regulation is expected to accrue are a 
traditional and commonplace way to assess the costs of a regulation and 
are a permissible way to comply with Congress' broad directive to the 
Administrator to determine whether regulation is ``appropriate'' in CAA 
section 112(n)(1)(A). The EPA has never taken the position, nor do 
commenters argue now, that any comparison of costs to benefits would be 
an impermissible reading of the Agency's obligation to consider cost in 
CAA section 112(n)(1)(A); indeed, the Agency's alternative approach to 
considering cost in the 2016 Supplemental Finding was a formal cost-
benefit analysis based on its 2011 RIA, and many of the commenters who 
now evince a preference for the 2016 ``cost reasonableness test'' at 
the time agreed that the 2011 RIA cost-benefit analysis could 
independently satisfy the Agency's obligation to consider cost under 
CAA section 112(n)(1)(A). U.S. Supreme Court precedent also supports 
the Agency's position that, absent an unambiguous prohibition to use 
cost-benefit analysis, the Agency generally may do so as a reasonable 
way to consider cost.\13\ In Entergy Corp. v. Riverkeeper, Inc., 556 
U.S. 208 (2009), the U.S. Supreme Court struck down a Second Circuit 
decision prohibiting the EPA from employing benefit-cost analysis where 
the statute was silent as to how the Agency was to consider cost in 
adopting standards for cooling water intake standards for power plants. 
The Second Circuit found that because analogous provisions in the Clean 
Water Act explicitly instructed the EPA to consider ``the total cost of 
application of technology in relation to the effluent reduction 
benefits to be achieved,'' (33 U.S.C. 1314(b)(4)(B)), Congress' failure 
to include such an instruction to the EPA in the provision at issue in 
the case meant that the EPA was not permitted to compare compliance 
costs to expected environmental benefits. The U.S. Supreme Court 
reversed, holding that the EPA's use of cost-benefit analysis ``governs 
if it is a reasonable interpretation of the statute--not necessarily 
the only possible interpretation, nor even the interpretation deemed 
most reasonable by the courts.'' Id. at 218 (emphasis in original).
---------------------------------------------------------------------------

    \13\ See S. Masur & Eric A. Posner, Cost-Benefit Analysis and 
the Judicial Role, 85 U. Chi. L. Rev. 935, 981 (2018).
---------------------------------------------------------------------------

    The EPA's choice to employ cost-effectiveness analyses, rather than 
cost-benefit comparisons, in the context of other statutory provisions 
such as CAA section 111 or the PSD program in no way binds the Agency 
to using that method to consider cost in CAA section 112(n)(1)(A). The 
EPA's citation in the 2015 Legal Memorandum of our consideration of 
cost under CAA section 111 and the case law evaluating those instances 
was only to provide context to explain the genesis of the EPA's newly 
minted ``cost reasonableness'' test in the 2016 Supplemental Finding. 
Even then the EPA did not take the position that the D.C. Circuit cases 
reviewing the Agency's cost considerations under CAA section 111 were 
binding precedent upon which the Court should review our action under 
CAA section 112(n)(1)(A). In short, the commenters' preference that the 
EPA consider cost in a different way does not preclude the Agency from 
instead considering cost using an approach that compares costs and 
benefits, where the statute's broad directive suggests that it may. See 
Entergy, 556 U.S. at 226.
    Comment: Some commenters asserted that the EPA's proposed approach 
to considering costs and benefits is inconsistent with what they 
broadly characterize as congressional intent to err on the side of 
protecting public health. These commenters argued that Congress 
recognized the insufficiency of available methods for quantifying costs 
and benefits when revising CAA section 112 in 1990 and that Congress 
concluded that the nature and latency of harms posed by HAP are not 
given sufficient weight in a regulatory process that must balance long-
term benefits against present-day costs. Commenters said that the 
Agency should not construe the Michigan Court's instruction to 
``meaningfully consider cost'' as a requirement to consider benefits in 
a way that is inconsistent with Congress' determination that reductions 
in HAP emissions have great value to the public. These commenters added 
that the EPA's proposed approach is based on an incorrect 
interpretation of Michigan, which stated only that consideration of 
cost should play some role in the appropriate and necessary finding, 
not that cost considerations should dominate that finding. According to 
these commenters, the studies required in CAA section 112(n) indicate 
that Congress put public health and environmental concerns at the 
forefront of CAA section 112, which was enacted explicitly in response 
to the EPA's lack of action in addressing the harmful effects of HAP, 
and, therefore, shares the section's overall focus on harm prevention. 
These commenters asserted that the ``preferred approach'' in the 2016 
Supplemental Finding met the requirements of Michigan and were 
consistent with congressional intent and the CAA's statutory goals.
    Other commenters, however, agreed with the 2019 Proposal that the 
``cost reasonableness'' test in the 2016 Supplemental Finding's 
``preferred approach'' was invalid, harmful, and failed to meet the 
Michigan Court's expectation that the Agency should weigh benefits 
against costs. These commenters characterized the cost-reasonableness 
test, which compared costs of MATS compliance with various other costs 
incurred by the power sector, as an ``affordability test,'' or an 
inquiry into whether the power sector could absorb the costs of 
compliance. These commenters noted that such a test ignores benefits by 
failing to provide important information on whether society's 
investment in additional costs is worth the expected benefits and fails 
to consider whether costs would be ``prudently incurred'' as a means to 
reduce hazards to public health. As one commenter put it, ``Simply 
because the power sector could absorb costs without affecting current 
operational performance does not mean that it should absorb those 
costs.'' Some commenters objecting to the ``preferred approach'' in the 
2016 Supplemental Finding emphasized that looking at cost in this 
manner would invite the promulgation of regulations that are poorly 
designed, with few potential benefits. They voiced concern that using 
affordability tests could result in agencies focusing public and 
private sector resources on extinguishing relatively small risks while 
leaving larger risks unattended. Other commenters noted that such tests 
also penalize successful industries due to their success, and risk 
failing to appropriately regulate industries that are less profitable.
    Response: The EPA agrees with commenters who stated that Congress' 
intent with respect to CAA section 112, as a whole, evinces an 
acknowledgment of the seriousness of toxic air pollutants. We do not 
agree, however, that general congressional concern about the toxicity 
of HAP overrides the specific instruction given to the Administrator in 
CAA section 112(n)(1)(A) to make a determination about whether 
regulation of EGUs in particular is ``appropriate and necessary.'' As 
the U.S. Supreme Court admonished the EPA in Michigan, the text and 
structure of CAA section

[[Page 31294]]

112, and 112(n)(1)(A) in particular, evince Congressional design to 
approach the question whether to regulate EGUs differently than other 
source categories:

    Congress crafted narrow standards for EPA to apply when deciding 
whether to regulate other sources; in general, these standards 
concern the volume of pollution emitted by the source, [CAA section 
112(c)(1)], and the threat posed by the source ``to human health or 
the environment,'' [citing CAA section 112(c)(3)]. But Congress 
wrote the provision before us [CAA section 112(n)(1)(A)] more 
expansively . . . That congressional election settles this case. 
[The Agency's] preference for symmetry cannot trump an asymmetrical 
statute.

135 S. Ct. at 2710 (internal citations omitted).
    Moreover, we do not agree with commenters' suggestion that in the 
Agency's comparison of costs and benefits, the EPA is considering 
benefits in a way that is inconsistent with a congressional 
determination that reductions in HAP emissions have great value to the 
public and Congress' public health and environmental concerns. We 
disagree that CAA section 112's general concerns about public health 
and environmental risks from HAP emissions mandated a particular manner 
of valuing or weighing the benefits of reducing those risks.
    As noted in the 2019 Proposal, we do not think the 2016 
Supplemental Finding's analysis of cost satisfied the Agency's mandate 
under CAA section 112(n)(1)(A) and Michigan. The ``preferred approach'' 
in the 2016 Supplemental Finding considered cost insofar as the Agency 
at the time analyzed whether the utility industry as a whole could 
continue to operate, and found that it could (i.e., that costs were 
``reasonable''). 81 FR 24420, 24422, 24424, 24427, 24428, 24429, 24430, 
24431. But we do not think the ``preferred approach'' in the 2016 
Finding gave sufficient weight to cost as a ``centrally relevant 
factor,'' Michigan, 135 S. Ct. at 2707--that is, we do not think that a 
cost standard that is satisfied by establishing that regulation will 
not fundamentally impair the functioning of a major sector of the 
economy places cost at the center of a regulatory decision--and we are 
in this action heeding the Michigan Court's reading of the 
Administrator's role under CAA section 112(n)(1)(A), which directed the 
Agency to meaningfully consider cost within the context of a 
regulation's benefits. We agree that Michigan did not hold that the 
Agency is required to base its decision whether it is appropriate and 
necessary to regulate EGUs under CAA section 112 on a formal benefit-
cost analysis, but neither did it hold that a comparison of costs and 
benefits is an impermissible approach to considering cost.
    The U.S. Supreme Court contemplated that a proper consideration of 
cost would be relative to benefits, and the Court's decision contains 
many references comparing the two considerations. In establishing the 
facts of the case, the Court pointed out that ``EPA refused to consider 
whether the costs of its decision outweighed the benefits.'' 135 S. Ct. 
at 2706. The Court questioned whether a regulation could be considered 
``rational'' where there was a gross imbalance between costs and 
benefits and stated that ``[n]o regulation is `appropriate' if it does 
more harm than good.'' Id. at 2707. The Court also made numerous 
references to a direct comparison of the costs of MATS with benefits 
from reducing emissions of HAP. For instance, the Court pointed out 
that ``[t]he costs [of MATS] to power plants were thus between 1,600 
and 2,400 times as great as the quantifiable benefits from reduced 
emissions of hazardous air pollutants.'' Id. at 2706. Although the 
Court's holding established no bright-line rules, the opinion as a 
whole, thus, repeatedly suggests that CAA section 112(n)(1)(A)'s 
requisite consideration of cost would not be met if the cost analysis 
did not ``prevent the imposition of costs far in excess of benefits.'' 
Id. at 2710.
    The 2016 Supplemental Finding's ``test'' of whether an industry can 
bear the cost of regulation, and its subsequent conclusion that such 
costs are ``reasonable,'' does not satisfy the statute's mandate to 
determine whether such regulation is appropriate and necessary. We 
agree with commenters who stated that the metrics ``tested'' by the 
Agency in the 2016 Supplemental Finding are not an appropriate basis 
for the determination whether it is ``appropriate and necessary'' to 
impose that regulation. Each cost metric the Agency examined compared 
the cost of MATS to other costs borne by the industry, but never in its 
``preferred approach'' did the Agency make the assessment of whether 
the benefits garnered by the rule were worth it--i.e., a comparison of 
costs and benefits. Even if the EPA determined that cost of regulation 
was, viewed on its own terms, unreasonable after comparing the cost of 
regulation to other costs borne by the industry, the ``preferred 
approach'' could have still resulted in a finding that regulation was 
``appropriate'' because the EPA placed so much weight on hazards to 
public health and the environment that needed to be prevented. See 81 
FR at 24432. In other words, much as it did in 2012 when it read cost 
consideration entirely out of the CAA section 112(n)(1)(A) 
determination, the Agency in 2016 was fixated on the term 
``necessary,'' without considering whether any countervailing factors, 
i.e., cost, might call into question whether regulation was 
``appropriate.'' As many commenters pointed out, the ``cost 
reasonableness test'' failed to consider cost relative to benefits, and 
really focused only on whether costs could be absorbed, rather than on 
whether they should be absorbed--the inquiry that is specifically 
required by the word ``appropriate.'' We, therefore, conclude that the 
``cost reasonableness'' approach did not adequately address the U.S. 
Supreme Court's instruction that a reasonable regulation requires an 
agency to fully consider ``the advantages and the disadvantages'' of a 
decision. See Michigan, 135 S. Ct. at 2707 (emphasis in original).
    Moreover, we take seriously commenters' concerns that leaving the 
``preferred approach'' in place, with its ``cost reasonableness'' or 
affordability test, could have a harmful influence on other agencies 
interpreting similarly broad congressional directives to consider cost. 
Statutes that direct agencies to make determinations about whether 
regulation is ``appropriate'' are precisely the contexts in which those 
agencies should retain discretion to select and prioritize public 
policies which provide the most value for the public good in relation 
to the cost.
    Comment: Commenters said that the EPA's proposed new approach to 
considering cost in the CAA section 112(n)(1)(A) finding is an 
impermissible interpretation of that provision because it fails to 
meaningfully address factors that are ``centrally relevant'' to the 
inquiry of whether it is appropriate and necessary to regulate HAP from 
EGUs. Some commenters noted that the Agency's alleged failure in the 
2019 Proposal to adequately address these factors, upon which the 2016 
Supplemental Finding was predicated, runs afoul of the Agency's 
obligation to provide a reasoned explanation for abandoning these 
considerations, citing Motor Vehicle Mfrs. Ass'n of United States, Inc. 
v. State Farm Mut. Automobile Ins. Co., 463 U.S. 29 (1983) and FCC v. 
Fox Television Stations, Inc., 556 U.S. 502 (2009). The commenters 
noted that these cases state the principle that agencies cannot simply 
ignore prior factual determinations but must provide a ``reasoned 
explanation'' for a proposed departure from ``facts and circumstances 
that underlay or were engendered by the

[[Page 31295]]

prior policy.'' These commenters specifically faulted the EPA for not 
giving appropriate weight to the following factors:
i. Unquantified Benefits
    Commenters stated that the 2019 Proposal does not acknowledge that 
some ``hazards to public health'' are unquantified and asserted that 
the 2019 Proposal presents a significant change in position with 
insufficient justification for revising the EPA's longstanding 
interpretation that the phrase ``hazards to public health'' encompasses 
risks that have not been monetized because of the limitations of 
current methods, data, and uncertainty. Commenters said the 2019 
Proposal gave no discernable weight to these risks as required by the 
statutory phrase ``hazards to public health reasonably anticipated to 
occur.''
    Moreover, the commenters asserted that the monetized, HAP-specific 
benefits at issue, which quantify avoided IQ loss in children 
associated with prenatal methylmercury exposure from self-caught fish 
consumption among recreational anglers, are but a small fraction of the 
public health benefits attributable to reductions in mercury emissions 
alone. The commenters cited the statement from the EPA's Science 
Advisory Board (SAB), which stated that IQ loss ``is not the most 
potentially significant health effect associated with mercury exposure 
as other neurobehavioral effects, such as language, memory, attention, 
and other developmental indices, are more responsive to mercury 
exposure.'' 80 FR 75040. The commenters noted that none of the 
environmental benefits from reductions in mercury emissions could be 
quantified, nor any of the health or environmental benefits 
attributable to reductions in other HAP.
ii. Qualitative Benefits Such as Impacts on Tribal Culture and 
Practices
    Some commenters stated that the EPA's proposed approach ignores 
non-monetizable benefits. These commenters asserted that methylmercury 
contamination threatens traditional American Indian lifeways, including 
longstanding traditions of fishing and fish consumption that are 
central to many tribes' cultural identity and that make individual 
tribes as distinct as different individual people. These commenters 
stated that for many tribes, fishing and fish consumption are critical 
social practices, handed down from generation to generation. Where 
tribal members no longer fish due to health concerns, these fishing 
traditions are not passed down to new generations of tribal members, 
leading to permanent cultural loss. Furthermore, these commenters 
stated that many tribes are connected to particular waters for 
cultural, spiritual, or other reasons (and others' fishing rights are 
limited to certain grounds by treaty), so tribal members cannot simply 
move their fishing to another location to avoid mercury contamination. 
The commenters asserted that the preferred approach of the 2016 
Supplemental Finding recognized that regulation of HAP from EGUs would 
benefit American Indians by allowing them to safely engage in, and 
thereby perpetuate, their culture. These commenters argued that the 
Agency's preferred approach in the 2016 Supplemental Finding properly 
deemed these qualitative benefits to be cognizable and highly 
significant. In addition, the commenters stated that mercury emissions 
likewise cause significant harm to Indian subsistence and fishing 
economies, contaminating food sources that many tribal members depend 
on for survival. According to these commenters, the EPA's 2016 
preferred approach methodology allowed for a full range of qualitative 
benefits to be accounted for, whereas the 2019 proposed reversal does 
not.
iii. Latency, Persistence in the Environment, and Toxicity of Regulated 
Pollutants
    Some commenters asserted that the EPA's proposed approach 
disregarded the physiochemical nature and toxicity of the toxic air 
pollutants regulated by CAA section 112 and the concern Congress had 
expressed about these qualities in enacting that section. These 
commenters pointed out that, in enacting the list of regulated air 
toxics, Congress deliberately withdrew the EPA's authority to judge the 
importance of the harms threatened by the listed pollutants. The 
commenters noted that Congress itself listed the pollutants, rather 
than waiting for the EPA to do so, because of a difficulty which 
commenters argue is particular to air toxics: ``[t]he public health 
consequences of substances which express their toxic potential only 
after long periods of chronic exposure will not be given sufficient 
weight in the regulatory process when they must be balanced against the 
present-day costs of pollution control and its other economic 
consequences.'' Leg. Hist. at 8522 (S. Rep. No. 101-228 at 182). The 
commenters argued that these identified harms from air toxics occur 
regardless of the source of the pollutants, and, therefore, there is no 
reason to believe that Congress might have, by inserting CAA section 
112(n)(1)(A), authorized the EPA to reassess the benefits of reducing 
those harms in the context of EGUs. The commenters stated that no 
study, including the EPA's Utility Study, suggests that HAP from EGUs 
are of any different character or pose less harm by their nature than 
HAP emitted by any other industrial source category.
iv. Distributional Impacts of the Pollutants on the Population
    Commenters pointed to Congress' intent to address harms that are 
concentrated within particular communities or populations, citing CAA 
section 112(f)(2)(A)'s requirement that the EPA address lifetime excess 
cancer risks borne by the ``individual most exposed to emissions,'' CAA 
section 112(n)(1)(C)'s directive that the EPA consider power plant 
mercury harms to sensitive fish-consuming populations, and legislative 
history (``EPA is to consider individuals who are sensitive to a 
particular chemical'' in assessing whether a pollutant's harm warrants 
regulation) (Leg. Hist. at 8501). The commenters noted that the 2016 
Supplemental Finding's preferred approach identified several 
populations that were disproportionately at risk of mercury exposure 
from EGUs, including African-Americans living below the poverty line in 
the Southeast who rely on the fish they catch for food, and the 
children and fetuses in those communities in particular whose risk of 
exposure is amplified; and individuals and communities who live near 
coal- and oil-fired power plants, who are disproportionately members of 
racial and ethnic minorities. The commenters cited a study that found 
that of the 8.1 million people living within 3 miles of a coal-fired 
plant in the year 2000, 39 percent were people of color, a percentage 
significantly higher than the proportion of people of color in the U.S. 
population as a whole. The same study found that people living within 3 
miles of such power plants had an average annual per capita income of 
$18,596, significantly lower than the national average.
    Some commenters pointed to various executive orders that 
independently direct the EPA to consider some of these factors, 
including Executive Order 12898 (February 11, 1994), which establishes 
that ``disproportionately high and adverse human health or 
environmental effects'' of EPA decisions ``on minority populations and 
low-income populations in the U.S. and its territories and 
possessions'' are of central concern to the EPA's decision-making, with 
specific emphasis upon ``subsistence consumption of fish and

[[Page 31296]]

wildlife.'' The commenters also pointed to Executive Order 13045 (April 
21, 1997),\14\ which is particularly concerned about ``environmental 
health risks'' that may ``disproportionately affect children.''
---------------------------------------------------------------------------

    \14\ Commenters cite Executive Order 13035 in their comments, 
but we believe this was a typographical error.
---------------------------------------------------------------------------

    Response: Agency decisions, once made, are not forever ``carved in 
stone.'' Nat'l Cable & Telecomms. Ass'n v. Brand X Internet Servs., 545 
U.S. 967, 981 (2005) (internal quotation marks and citations omitted). 
We disagree with the commenters' view that the EPA is not permitted to 
determine that the ``cost reasonableness'' approach is not the correct 
way to consider cost in the CAA section 112(n)(1)(A) appropriate and 
necessary finding, and their view that the EPA is not permitted to re-
evaluate the significance of the factual findings underpinning its 2016 
Supplemental Finding and come to a different conclusion. D.C. Circuit 
and U.S. Supreme Court precedent, including those cases cited by the 
commenters, support the Agency's position that it is within its 
authority to do so, provided that the Agency's new action is based on a 
permissible interpretation of the statute and is supported by a 
reasoned explanation.
    In FCC v. Fox, the U.S. Supreme Court stated an agency's obligation 
with respect to changing a prior policy quite plainly:

    We find no basis . . . for a requirement that all agency change 
be subjected to more searching review. The [Administrative 
Procedure] Act mentions no such heightened standard. And our opinion 
in State Farm neither held nor implied that every agency action 
representing a policy change must be justified by reasons more 
substantial than those required to adopt a policy in the first 
instance.\15\
---------------------------------------------------------------------------

    \15\ FCC v. Fox, 556 U.S. at 514.

    In cases where an agency is changing its position, the Court stated 
that a reasoned explanation for the new policy would ordinarily 
``display awareness that it is changing position'' and ``show that 
there are good reasons for the new policy.'' Id. at 515. However, the 
Court held that the agency ``need not demonstrate . . . that the 
reasons for the new policy are better than the reasons for the old one; 
it suffices that the new policy is permissible under the statute, that 
there are good reasons for it, and that the agency believes it to be 
better.'' Id. In cases where a new policy ``rests upon factual findings 
that contradict those which underlay its prior policy; or when its 
prior policy has engendered serious reliance interests that must be 
taken into account,'' the Court found that a more detailed 
justification might be warranted than what would suffice for a new 
policy.
    Although commenters assert that the EPA has failed to provide a 
reasoned basis for its action here, their real complaint with the 
Agency's abandonment of the 2016 Supplemental Finding's ``cost 
reasonableness test'' and ``preferred approach'' is that they favored 
the way the Agency under that approach weighed certain factors, 
including unquantified benefits, impacts on tribes and tribal culture, 
the latency and persistence of air toxics in the environment, and 
distributional concerns and impacts. That the EPA now weighs these 
concerns differently--a weighing that is further explained below--does 
not mean the Agency is ``disregarding'' or ``dismissing'' these 
concerns.
    In the 2019 Proposal, the EPA clearly stated that the unquantified 
HAP benefits associated with regulating power plants were 
``significant,'' and enumerated the impacts on human health that have 
been linked to mercury (including neurologic, cardiovascular, 
genotoxic, and immunotoxic effects), the adverse health effects 
associated with non-mercury HAP (including cancer and chronic and acute 
health disorders that implicate organ systems such as the lungs and 
kidneys), and other effects on wildlife and ecosystems. 84 FR 2677. 
Contrary to commenters' assertions, the EPA did not ignore these 
concerns but said, ``The EPA acknowledges the importance of these 
benefits and the limitations on the Agency's ability to monetize HAP-
specific benefits. The EPA agrees that such benefits are relevant to 
any comparison of the benefits and costs of a regulation.'' Id. at 
2677-78. Moreover, as the Agency pointed out in its proposal, the 2011 
RIA, which summarizes the factual findings and scientific studies which 
form the basis of this action as well as the EPA's 2016 action, 
discussed all of the monetized and unquantified benefits of regulating 
HAP from power plants, including the qualitative impacts on American 
Indian tribes,\16\ distributional impacts,\17\ and latency and 
persistence of the pollutant.\18\ Id. at 2678.
---------------------------------------------------------------------------

    \16\ 2011 RIA at 7-40 to -49.
    \17\ 2011 RIA at 7-49 to -54.
    \18\ 2011 RIA at Chapter 4.
---------------------------------------------------------------------------

    In the context of this action, in which the lens we use to consider 
cost is based on a comparison of benefits to cost, we are choosing to 
weigh these concerns (and particulate matter (PM) co-benefits discussed 
in more detail in section II.C.3 of this preamble) differently than the 
manner in which the EPA evaluated them in the 2016 Supplemental 
Finding. While it is true that many of the benefits associated with 
reducing emissions of HAP from power plants have not been quantified, 
the EPA provided in the 2019 Proposal its reasons for concluding that 
those unquantified benefits were not likely to overcome the imbalance 
between the monetized HAP benefits and compliance costs in the record. 
First, as the EPA pointed out and as discussed below, most of the 
unquantified benefits of MATS are morbidity effects associated with 
exposure to mercury and other HAP. Second, to the extent commenters 
have identified potential mortality outcomes such as potential 
cardiovascular impacts from mercury exposure and potential cancer risks 
from exposure to other HAP, the EPA disagrees, for the reasons provided 
below, with the proposition that significant monetized benefits would 
be expected from either outcome.
    As the commenters acknowledged, the SAB noted that IQ loss ``is not 
the most potentially significant health effect associated with mercury 
exposure, as other neurobehavioral effects, such as language, memory, 
attention, and other developmental indices, are more responsive to 
mercury exposure.'' 80 FR 75040. The Agency explained in its 2019 
Proposal that the neurobehavioral effects of mercury exposure 
identified by the SAB as more ``potentially significant'' are 
morbidity, not mortality, outcomes. In the EPA's experience, the 
economic value of avoided morbidity effects (e.g., impaired cognitive 
development, problems with language, abnormal social development, etc.) 
per incident is a small fraction of the monetizable value of avoided 
premature deaths. Further, when estimating the economic value of 
avoided cases of air pollution-related effects, the Agency has 
generally found that the aggregate value of the avoided illnesses 
(e.g., hospital admissions, emergency department visits, cases of 
aggravated asthma, etc.) is small as compared to the total value of 
avoided deaths.\19\
---------------------------------------------------------------------------

    \19\ See U.S. EPA 2010a: Regulatory Impact Analysis for the 
Nitrogen Oxide National Ambient Air Quality Standards Page 4-8 
through 4-10; U.S. EPA. 2010b: Regulatory Impact Analysis for the 
Sulfur Dioxide National Ambient Air Quality Standards Page 5-26 
through 5-28; U.S. EPA. 2012: Regulatory Impact Analysis for the 
Particulate Matter National Ambient Air Quality Standards pages 5-
69; U.S. EPA. 2015: Regulatory Impact Analysis for the Ozone 
National Ambient Air Quality Standards. Pages 6-57 through 6-60.
---------------------------------------------------------------------------

    And the EPA does not expect that to the extent the prevention of 
any premature deaths due to regulation of

[[Page 31297]]

HAP could be associated with the MATS rule, the value of that effect 
would be significant. With respect to potential premature deaths due to 
cardiovascular impacts from mercury exposure, as discussed further in 
section II.C.4 of this preamble, there is inconsistency among available 
studies as to the degree of association between methylmercury exposure 
and various cardiovascular system effects, including studies showing no 
association. As a result, based on the presently available information, 
the EPA believes available evidence does not support a clear 
characterization of the potential relationship between mercury exposure 
and cardiovascular mortality. For that reason, the EPA has not modeled 
risk (incidence) estimates for this health endpoint and has not 
included benefits associated with that endpoint in the analysis. With 
respect to potential premature deaths associated with inhalation 
exposure to non-mercury HAP, based on existing case-study analyses for 
EGUs which focus on the assessment of individual risk based on a number 
of conservative assumptions regarding exposure, the EPA anticipates 
that the mortality incidence associated with these non-mercury HAP 
exposures would be low (see section II.C.3 of this preamble for 
additional detail).\20\ In sum, while the EPA recognizes the importance 
of unquantified benefits in a comparison against costs, the evaluation 
of evidence of unquantified benefits is based on qualitative 
information that helps understand the likelihood and potential scale of 
those benefits, relative to the monetized benefits and monetized costs. 
These qualitative assessments help confirm that unquantified benefits 
do not alter the underlying conclusion that costs greatly outweigh HAP 
benefits. This topic is discussed in more detail in section II.C.3 of 
this preamble.
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    \20\ U.S. EPA, Supplement to the Non-Hg Case Study Chronic 
Inhalation Risk Assessment In Support of the Appropriate and 
Necessary Finding for Coal- and Oil-Fired Electric Generating Units, 
November 2011, EPA-452/R-11-013.
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    The other factors identified by the commenters concern qualitative 
concerns such as impacts to tribal cultures and the concentration of 
public health risks occurring among certain population subgroups or for 
individuals living proximate to EGUs. The distribution of potential 
health effects may indicate more risk to some individuals than to 
others or more impacts to some groups like tribes than others; but in a 
cost-benefit comparison, the overall amount of the benefits stays the 
same no matter what the distribution of those benefits is. The EPA, 
therefore, believes it is reasonable to conclude that those factors to 
which the EPA previously gave significant weight--including qualitative 
benefits, and distributional concerns and impacts on minorities--will 
not be given the same weight in a comparison of benefits and costs for 
this action under CAA section 112(n)(1)(A).\21\
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    \21\ Nor does the EPA agree with the commenters that Executive 
Orders 12898 and 13045 require a particular outcome in the EPA's 
appropriate and necessary finding. Executive orders recognize that 
agencies must weigh conflicting goals, priorities, and associated 
costs as a necessary part of reasoned decision making. Other more 
recent executive orders, which emphasize the environmentally 
responsible use and development of domestic natural resources, are 
also part of the policy calculus to consider. See, e.g., Executive 
Order No. 13783, 82 FR 16093 (March 28, 2017) (directing the EPA to 
review for possible reconsideration any rule that could 
``potentially burden the development or use of domestically produced 
energy resources, with particular attention to oil, natural gas, 
coal, and nuclear energy resources.
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    None of the information underlying the EPA's action here 
constitutes new factual findings, but rather is a reevaluation of the 
existing record to arrive at what the Agency believes to be the better 
policy regarding whether regulation is ``appropriate.'' In Nat'l Ass'n 
of Home Builders v. EPA, the D.C. Circuit reviewed challenges brought 
against the EPA that were similar to those concerns raised by 
commenters here and found that ``this kind of reevaluation is well 
within an Agency's discretion.'' 682 F.3d 1032, 1038 (D.C. Cir. 2012) 
(NAHB). There, the EPA reversed course on a prior policy, and 
petitioners in that case contended that ``EPA has provided no 
justification for its decision to reverse course . . . that is grounded 
in any information or experience that was not available to the Agency 
when it [adopted] the original rule . . . Rather, EPA merely revisited 
old arguments that had already been addressed as part of the original 
rulemaking.'' NAHB, 682 F.3d at 1036. Petitioners insisted in that case 
that the Agency was required to be held to a higher standard in 
reversing its prior decision based on the same factual record, but the 
D.C. Circuit disagreed. The Court held that FCC v. Fox ``foreclosed'' 
petitioners' argument, and that the Agency was permitted to rely on ``a 
reevaluation of which policy would be better in light of the facts.'' 
Id. at 1036-38. It is well settled that such re-weighing or re-
balancing is permissible. See State Farm, 463 U.S. at 57 (``An agency's 
view of what is in the public interest may change, either with or 
without a change in circumstances.''); Am. Trucking Ass'ns v. Atchison, 
Topeka & Santa Fe Ry. Co., 387 U.S. 397, 416 (1967) (declaring that an 
agency, ``in light of reconsideration of the relevant facts and its 
mandate, may alter its past interpretation and overturn past 
administrative rulings''); Organized Village of Kake v. Dept. of 
Agriculture, 795 F.3d 956 (9th Cir. 2015) (``We do not question that 
the Department was entitled in 2003 to give more weight to 
socioeconomic concerns than it had in 2001, even on precisely the same 
record.'').
    As alluded to in these cases, the ``reasoned basis'' for an 
agency's change of interpretation need not be overly complex. Even 
Justice Breyer, who dissented from the FCC v. Fox majority, admitted, 
``I recognize that sometimes the ultimate explanation for a change may 
have to be, `We now weight the relevant considerations differently.' '' 
556 U.S. at 550. Such change can, and often is, fueled by the basic 
functioning of American democracy--when new presidential 
administrations come into office--and the courts have recognized this 
to be a legitimate basis for a re-weighing of priorities. See NAHB, 682 
F.3d at 1038 (noting the ``inauguration of a new President and the 
confirmation of a new EPA Administrator'' largely provided the 
reasoning for the EPA's change in policy). Unlike in State Farm, where 
the administering agency issued a rollback of a regulation requiring 
passive restraints in automobiles without even mentioning airbags at 
all, 463 U.S. at 48, 49, 51, here we acknowledge and address those 
factors to which we are giving less weight than was given in the 2016 
Supplemental Finding. Cf. Organized Village of Kake, 795 F.3d at 968 
(suggesting that a policy reversal could be premised upon ``merely 
decid[ing] that [the agency] valued socioeconomic concerns more highly 
than environmental protection''). The commenters disagree with the way 
the Agency has now weighed the facts and circumstances underlying the 
original appropriate and necessary finding and the Agency's 
consideration of cost in 2016. But that does not mean that the Agency 
has not provided a ``reasoned basis'' for its action.
    Comment: Some commenters asserted that a ``more detailed 
justification'' of the EPA's change in policy is required in this case 
given the ``serious reliance interests'' of states, the public, and 
industry in maintaining the appropriate and necessary determination and 
the MATS rule (citing Fox, 556 U.S. at 515; Encino Motorcars, LLC v. 
Navarro, 136 S. Ct. 2117 (2016)). With respect to state and public 
interests, the commenters pointed to the fact that the implementation 
of MATS has led to a dramatic decrease in HAP emissions

[[Page 31298]]

from power plants, and that the public has an interest in having those 
controls remain in place and in the continuation of improvements in air 
quality and the corresponding public health and environmental benefits. 
Other commenters pointed to the major capital investments that 
regulated utilities have already made to comply with MATS and asserted 
that a reversal of the 2016 Supplemental Finding creates uncertainty 
for the standards themselves. The commenters argued that these reliance 
interests, which they claim depend on the maintenance of the 2016 
Supplemental Finding, therefore, require the EPA to provide the 
heightened justification required under Fox and Encino Motorcars for 
its reversal of that finding.
    Response: The EPA disagrees with the commenters that the Agency is 
required to provide a ``heightened justification'' for this action. In 
Fox, the U.S. Supreme Court stated that as a general matter, no 
heightened scrutiny or review applies to decisions by agencies to 
reverse policies, and that policy changes need not be justified by 
reasons more substantial than those required to adopt a policy in the 
first instance. See Fox, 556 U.S. at 514-15. But the Court noted that 
``in such cases it is not that further justification is demanded by the 
mere fact of policy change; but that a reasoned explanation is needed 
for disregarding facts and circumstances that underlay or were 
engendered by the prior policy, i.e., . . . when its prior policy has 
engendered serious reliance interests that must be taken into 
account.'' Id. at 515. The Court elaborated on this principle in Encino 
Motorcars v. Navarro, 136 S. Ct. 2117 (2016). There, the Court found 
that the retail automobile and truck dealership industry had relied for 
decades on the Department of Labor's (DOL) position that service 
advisors are exempt from the Fair Labor Standard Act's overtime pay 
requirements. Given this reliance and the impact that the DOL's change 
in policy would have on the industry (citing ``systemic, significant 
changes to the dealerships' compensation arrangements'' and the risk 
that non-conforming dealerships could face ``substantial FLSA 
liability''), the Court held that the DOL had not provided good reasons 
for its change in policy, noting that the agency ``said almost 
nothing'' and that it merely stated that exempting such employees from 
overtime pay was contrary to the statute and it believed its 
interpretation was reasonable. Encino Motorcars, 136 S. Ct. at 2126-27. 
The Court stated that ``an agency may justify its policy choice by 
explaining why that policy is more consistent with statutory language 
than alternative policies,'' Id. (internal citations omitted), but 
chided the DOL for failing to include such a justification in its 
policy reversal.
    First, we note that commenters raising serious reliance interests 
differ in at least one major way from the petitioners in Encino 
Motorcars. While those petitioners faced very real impacts based on the 
Agency's changed position (``systemic, significant'' changes to 
employee compensation and potential liabilities from failure to comply 
with the changed policy), the reliance interests cited by the 
commenters are not upended by this final action. As we stated in the 
proposal, the EPA finds that its re-evaluation of the costs and 
benefits of regulation of HAP emissions from power plants will not 
rescind or affect the regulatory program upon which the commenters 
rely, due to binding D.C. Circuit precedent (see section II.D of this 
preamble). To the contrary, the EPA is finalizing the results of the 
proposed RTR of MATS in this final action. The EPA determined that 
after compliance with MATS, the residual risks due to emissions of HAP 
from the Coal- and Oil-Fired EGU source category are acceptable in 
accordance with CAA section 112, and that there are no developments in 
HAP emissions controls to achieve further cost-effective reductions 
beyond the current standards. Therefore, based on the results of the 
RTR analyses, the Agency is promulgating this final action that 
maintains MATS in its current form.
    Second, unlike the DOL in Encino Motorcars, the EPA has provided 
its reasons for changing its determination that the regulation of HAP 
emissions from power plants is not ``appropriate.'' As explained in the 
proposal and in this preamble, the EPA believes that a consideration of 
costs that compares the costs of compliance with the HAP-specific 
benefits of regulation ``is more consistent with statutory language'' 
than the 2016 Supplemental Finding's ``preferred approach.'' Further, 
as discussed in section II.C.3 of this preamble, we do not think the 
determination that regulation is ``appropriate'' under CAA section 
112(n)(1)(A), an air toxics provision, should primarily hinge on the 
monetary benefits associated with reductions in emissions of pollutants 
not regulated under CAA section 112. We believe the explanations 
provided in this action fully comply with the case law's requirement to 
provide a reasoned explanation for our reversal of the 2016 
Supplemental Finding.
3. The EPA's Alternative Benefit-Cost Approach Used in the 2016 
Supplemental Finding Improperly Considered Co-Benefits From Non-HAP 
Emissions Reductions
    The 2016 Supplemental Finding presented an alternative approach 
under which the EPA made an independent finding under CAA section 
112(n)(1)(A) based on a formal benefit-cost analysis \22\ that it was 
appropriate and necessary to regulate EGUs under CAA section 112. See 
81 FR 24427. The formal benefit-cost analysis used in the 2016 
Supplemental Finding relied on information reported in the RIA 
developed for the 2012 MATS Final Rule pursuant to Executive Orders 
12866 and 13563 and applicable statutes other than the CAA (e.g., the 
Regulatory Flexibility Act and the Unfunded Mandates Reform Act), as 
informed by Office of Management and Budget (OMB) guidance \23\ and the 
EPA's Economic Guidelines.\24\
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    \22\ We use the term ``formal benefit-cost analysis'' to refer 
to an economic analysis that attempts to quantify all significant 
consequences of an action in monetary terms in order to determine 
whether an action increases economic efficiency. A benefit-cost 
analysis evaluates the favorable effects of policy actions and the 
associated opportunity costs of those actions. The favorable effects 
are defined as benefits. Opportunities forgone define economic 
costs. A formal benefit cost analysis seeks to determine whether the 
willingness to pay for an action by those advantaged by it exceeds 
the willingness to accept the action by those disadvantaged by it. 
The key to performing benefit-cost analysis is the ability to 
measure both benefits and costs in monetary terms so that they are 
comparable. Assuming all consequences can be monetized, actions with 
positive net benefits (i.e., benefits exceed costs) improve economic 
efficiency. This usage is consistent with the definition of a 
benefit-cost analysis used in the economics literature and the EPA's 
Guidelines for Preparing Economic Analyses.
    \23\ U.S. OMB. 2003. Circular A-4 Guidance to Federal Agencies 
on Preparation of Regulatory Analysis. Available at https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/circulars/A4/a-4.pdf.
    \24\ U.S. EPA. 2014. Guidelines for Preparing Economic Analyses. 
EPA-240-R-10-001. National Center for Environmental Economics, 
Office of Policy. Washington, DC. December. Available at https://www.epa.gov/environmental-economics/guidelines-preparing-economic-analyses. Docket ID Item No. EPA-HQ-OAR-2009-0234-20503.
---------------------------------------------------------------------------

    The quantified benefits accounted for in the formal benefit-cost 
analysis in the 2016 Supplemental Finding's alternative approach 
included both HAP and non-HAP air quality benefits. Based on the 2011 
RIA, the EPA projected the quantifiable benefits of HAP reductions 
under the rule to be $4 to $6 million in 2015.\25\ The RIA also 
identified unquantified benefits associated with reducing HAP emissions 
from EGUs.

[[Page 31299]]

The EPA projected that the co-benefits associated with reducing these 
non-HAP pollutants would be substantial. Indeed, these projected co-
benefits comprised the overwhelming majority (approximately 99.9 
percent) of the monetized benefits of MATS ($36 billion to $89 billion 
in 2015). The compliance costs of the 2012 MATS Final Rule were 
projected to be $9.6 billion in 2015.\26\ These compliance costs are an 
estimate of the increased expenditures in capital, fuel, and other 
inputs by the entire power sector to comply with MATS emissions 
requirements, while continuing to meet a given level of electricity 
demand.
---------------------------------------------------------------------------

    \25\ Like the 2011 RIA, all benefits and costs in this and 
subsequent sections of this preamble are reported in 2007 dollars.
    \26\ See Table 3-5 of the RIA: https://www3.epa.gov/ttn/ecas/docs/ria/utilities_ria_final-mats_2011-12.pdf.
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a. Summary of 2019 Proposal
    The EPA proposed to find that it had erred in the 2016 Supplemental 
Finding's benefit-cost analysis in giving equal weight to the air 
quality co-benefits projected to occur as a result of the reductions in 
HAP. The focus of CAA section 112(n)(1)(A) is HAP emissions reductions.
    The EPA outlined in detail in the 2019 Proposal that the Agency had 
erred in concluding in the 2016 Supplemental Finding that the statutory 
text of CAA section 112(n)(1)(A) and the legislative history of CAA 
section 112 more generally supported the position that it was 
reasonable to give equal weight to co-benefits in a CAA section 
112(n)(1)(A) appropriate and necessary finding. 81 FR 24439. The EPA 
explained in the 2019 Proposal that, because the vast majority of the 
estimated monetized benefits in the 2011 RIA that were estimated to 
result from MATS are associated with reductions in fine particulate 
matter (PM2.5) precursor emissions, the EPA had erred in the 
2016 Supplemental Finding by giving equal weight to non-HAP co-benefits 
in making the appropriate and necessary determination. As the 2019 
Proposal observed, Congress, in the National Ambient Air Quality 
Standards (NAAQS) program, established a rigorous system for setting 
standards of acceptable levels of criteria air pollutants requisite to 
protect public health with an adequate margin of safety, and by state, 
regional, and national rulemakings establishing control measures to 
meet those levels.
    The EPA did acknowledge the importance of unquantified benefits in 
the 2019 Proposal, but also pointed out the limitations of the Agency's 
ability to monetize HAP-specific benefits. The EPA explained that 
unquantified benefits are relevant to any comparison of the benefits 
and costs of regulation. Because unquantified benefits are, by 
definition, not considered in monetary terms, the EPA proposed that the 
Administrator would evaluate the evidence of unquantified benefits and 
determine the extent to which they alter any appropriate and necessary 
conclusion based on the comparison of monetized costs and benefits.
b. Final Rule
    The EPA is finalizing the determination outlined in the 2019 
Proposal. The EPA believes that the alternative approach to the 2016 
Supplemental Finding was fundamentally flawed in applying a formal 
cost-benefit analysis to the specific decision making standard directed 
by CAA section 112(n)(1)(A) because, in the context of the appropriate 
and necessary finding, doing so implied that an equal weight was given 
to the non-HAP co-benefit emission reductions and the HAP-specific 
benefits of the regulation. The total cost of compliance with MATS 
($9.6 billion in 2015) vastly outweighs--by a factor of 1 thousand, or 
3 orders of magnitude--the monetized HAP benefits of the rule ($4 to $6 
million in 2015). In these circumstances, to give equal weight to the 
monetized PM2.5 co-benefits would permit those benefits to 
become the driver of the regulatory determination, which the EPA 
believes would not be appropriate for the reasons stated in the 
proposal and set forth below.
c. Comments and Responses
    Comment: Many commenters argued that the EPA's proposed approach to 
considering co-benefits in the CAA section 112(n)(1)(A) appropriate and 
necessary determination is not consistent with the statute. The 
commenters believe that basic principles of statutory construction do 
not allow the EPA to read CAA section 112(n)(1)(A) only in isolation. 
The commenters asserted that the EPA has not explained why CAA section 
112(n)(1)(A)'s reference to regulation of EGUs allows the Agency to 
disregard a portion of the consequences of its decision. One commenter 
noted that the language in the Senate Report on the 1990 amendments to 
CAA section 112, which directs the EPA to consider the co-benefits of 
HAP regulation, is the closest specific indication of congressional 
intent for interpreting CAA section 112(n). The commenter also pointed 
to the portion of CAA section 112(n) that requires the EPA to conduct a 
study of hazards to health likely to occur from utility HAP emissions 
after implementation of other non-HAP provisions of the CAA, and 
suggested that this provision implies that the EPA should evaluate non-
HAP benefits of HAP regulations to see if they are sufficient to 
establish the case for HAP regulation. One commenter noted that the 
EPA's approach arbitrarily excludes from consideration a critically 
important set of the consequences of the EPA's decision, namely the 
public health concerns at the heart of the CAA.
    Response: The EPA agrees with the commenters that it is critical to 
examine the language in CAA section 112(n)(1)(A), as well as the 
overall context of CAA section 112, in determining the scope of the 
cost consideration for the appropriate and necessary determination. In 
CAA section 112, Congress has a particularized focus on reducing HAP 
emissions and addressing public health and environmental risks from 
those emissions. In CAA section 112(n)(1)(A), Congress directs the EPA 
to decide whether regulation of EGUs is appropriate and necessary under 
CAA section 112, i.e., whether the deployment of specific CAA 
provisions targeted at reducing HAP emissions from the EGU sector is 
warranted. The EPA believes that it cannot answer this question by 
pointing to benefits that are overwhelmingly attributable to reductions 
in an entirely different set of pollutants not targeted by CAA section 
112. The EPA believes that it is illogical for the Agency to make a 
determination, informed by a study of what hazards remain after 
implementation of other CAA programs, that regulation under CAA section 
112, which is expressly designed to deal with HAP emissions, is 
``appropriate'' principally on the basis of criteria pollutant impacts.
    The EPA believes that relying almost exclusively on benefits 
accredited to reductions in pollutants not targeted by CAA section 112 
is particularly inappropriate given that those other pollutants are 
already comprehensively regulated under other CAA provisions, such as 
those applying to the NAAQS. As the EPA outlined in the 2019 Proposal, 
the determination that it is not appropriate to give equal weight to 
non-HAP co-benefits in making the appropriate and necessary 
determination is further supported by the fact that Congress 
established a rigorous system for setting standards of acceptable 
levels of criteria air pollutants and provided a comprehensive 
framework directing the implementation of those standards in

[[Page 31300]]

order to address the health and environmental impacts associated with 
those pollutants. See, e.g., 42 U.S.C. 7409; 7410; 7501; 7502; 7505a; 
7506; 7506a; 7507; 7509; 7509a; 7511; 7511a; 7511b; 7511c; 7511d; 
7511e; 7511f; 7512; 7512a; 7513; 7513a; 7513b; 7514; and 7515. The vast 
majority of the monetized benefits in the 2011 RIA that were estimated 
to result from MATS are associated with reductions in PM2.5 
precursor emissions, principally nitrogen oxides (NOX) and 
sulfur dioxide (SO2). NOX, SO2, and 
PM2.5 are already addressed by a multitude of statutory 
provisions governing levels of these pollutants, including the NAAQS 
provisions that require the EPA to set standards for criteria 
pollutants requisite to protect public health with an adequate margin 
of safety, and by state, regional, and national rulemakings 
establishing control measures to meet those levels.
    The 2016 Supplemental Finding pointed to CAA section 112(n)(1)(A)'s 
directive to ``perform a study of the hazards to public health 
reasonably anticipated to occur as a result of emissions by electric 
utility steam generating units of [HAP] after imposition of the 
requirements of [the CAA],'' and noted that the requirement to consider 
co-benefit reduction of HAP resulting from other CAA programs 
highlighted Congress' understanding that programs targeted at reducing 
non-HAP pollutants can and do result in the reduction of HAP emissions. 
Id. The finding also noted that the Senate Report on CAA section 
112(d)(2) recognized that MACT standards would have the collateral 
benefit of controlling criteria pollutants. Id. However, these 
statements acknowledging that reductions in HAP can have the collateral 
benefit of reducing non-HAP emissions and vice versa, provides no 
support for the proposition that any such co-benefits should be 
considered on equal footing as the HAP-specific benefits when the 
Agency makes its finding under CAA section 112(n)(1)(A).
    The study referenced in CAA section 112(n)(1)(A) specifically 
focuses on the hazards to public health that will reasonably occur as a 
result of HAP emissions, not harmful emissions in general. (``The 
Administrator shall perform a study of the hazards to public health 
reasonably anticipated to occur as a result of emissions by electric 
utility steam generating units of pollutants listed under subsection 
(b) of this section after imposition of the requirements of this 
chapter.'') According to that section, ``[t]he Administrator shall 
regulate electric utility steam generating units under this section, if 
the Administrator finds such regulation is appropriate and necessary 
after considering the results of the study required by this 
subparagraph.'' The text on its face suggests that Congress wanted the 
Administrator's appropriate and necessary determination to be focused 
on the health hazards related to HAP emissions and the potential 
benefits of avoiding those hazards by reducing HAP emissions. While the 
provision in one sense does acknowledge the existence of co-benefits--
i.e., by referencing the potential for ancillary reductions of HAP 
emissions by way of CAA provisions targeting other pollutants--it does 
not follow from this that any ancillary reductions of criteria 
pollutants that may be projected to result from the regulation of EGU 
HAP emissions should, therefore, play a part in the Administrator's 
consideration under CAA section 112(n)(1)(A) whether the regulation of 
EGUs is ``appropriate and necessary.'' To the contrary, the statutory 
direction to consider whether it is appropriate and necessary to 
regulate HAP after criteria pollutants have been addressed by the CAA's 
other requirements suggests that it is not proper for the co-benefits 
of further criteria pollutant reductions to provide the dominant 
justification for an affirmative CAA section 112(n)(1)(A) 
determination. Certainly, Congress' instruction to the EPA that it 
study HAP effects under CAA section 112 after implementation of other 
CAA provisions cuts against any suggestion that such benefits should be 
given equal consideration in a CAA section 112(n)(1)(A) determination.
    Comment: Several commenters argued that the EPA's proposed 
approach, of not providing consideration to co-benefits equal to the 
consideration provided to the benefits specific to HAP reductions, 
takes a too-narrow approach that conflicts with Michigan. Commenters 
pointed out that the Court found that CAA section 112(n) tells the EPA 
to undertake a ``broad and all-encompassing'' review of ``all the 
relevant factors.'' 135 S. Ct. at 2707. Commenters argued that if the 
Court read ``appropriate'' to be a ``broad and all-encompassing term,'' 
then the EPA cannot excise relevant factors from consideration. 
Commenters also stated that the Court, in instructing the EPA to 
consider cost, appeared to adopt a broad reading of the word ``cost,'' 
including ``more than the expense of complying with regulations; any 
disadvantage could be termed a cost.'' 137 S. Ct. at 2707.
    Response: Nothing in the Michigan decision decides this issue. To 
the contrary, the Court said that the proper treatment of co-benefits 
is ``a point we need not address.'' 135 S.Ct. at 2711. Additionally, 
commenters seem to mistake the EPA's position (see, e.g., Environmental 
Protection Network (EPN) comment at 25 (April 17, 2019) (Docket ID Item 
No. EPA-HQ-OAR-2018-0794-2261) (referring to ``EPA's crabbed claim that 
it can focus only on reduction of `HAP emissions--without even 
considering reductions in non-HAP pollutants').'' See also States and 
Local Governments comment at 35-36 (April 17, 2019) (Docket ID Item No. 
EPA-HQ-OAR-2018-0794-1175) (``In proposing to exclude consideration of 
[co-benefits], EPA misinterprets and misapplies the Supreme Court's 
directive in Michigan.'')). The commenters essentially argue that the 
language in Michigan requires the EPA to review ``all the relevant 
factors,'' including co-benefits. As described at length in the 2019 
Proposal and other parts of this section of this preamble, the EPA is 
considering what significance co-benefits have for its determination 
under CAA section 112(n)(1)(A)--but we are concluding that the finding 
must be justified overwhelmingly by the HAP benefits due to the 
statutory structure.
    Comment: Some commenters argued that existing case law, beyond the 
Michigan decision, supports inclusion of indirect benefits into an 
agency's benefit-cost analysis. A commenter quoted the D.C. Circuit's 
statement in American Trucking Ass'ns v. EPA that the EPA must consider 
both the direct and indirect effects of pollutants, rather than only 
``half of a substance's health effects.'' 175 F.3d 1027, 1051-53 (D.C. 
Cir. 1999), rev'd on other grounds sub nom. Whitman v. Am. Trucking 
Ass'ns, Inc., 531 U.S. 457 (2001). The commenter also cited a Fifth 
Circuit case in which the Court held that the EPA had to consider the 
indirect safety harm that could result from the use of substitute, non-
asbestos brakes when attempting to ban asbestos-based brakes under the 
Toxic Substances Control Act. Corrosion Proof Fittings v. EPA, 947 F.2d 
1202, 1225 (5th Cir. 1991). A few commenters also noted the D.C. 
Circuit's favorable treatment of the EPA's consideration of co-benefits 
in regulating HAP from boilers, process heaters, and incinerators in 
U.S. Sugar Corp. v. EPA, 830 F.3d 579, 591, 625 (D.C. Cir. 2016).
    Response: As explained elsewhere in this preamble, the EPA is 
interpreting and applying the statutory directive to make an 
appropriate and necessary determination under CAA section 112(n)(1)(A) 
and determining what role

[[Page 31301]]

consideration of co-benefits should play in making that determination. 
None of the case law the commenters cite pertains to CAA section 
112(n)(1)(A), and, therefore, the case law is not directly relevant to 
this action.
    As explained in the 2019 Proposal and in this preamble, the EPA 
believes that it would be inconsistent with the statute and with case 
law to base the appropriate and necessary finding on a monetized 
benefit estimate that is almost exclusively attributable to reductions 
of non-HAP pollutants. Further, the CAA sets out a specific regulatory 
scheme for the PM pollutants in question, the NAAQS, and as a first 
principle the EPA believes those regulations, not CAA section 112, 
should be the primary method by which the Agency targets those 
pollutants.
    Comment: Several commenters argued that the EPA's approach of 
giving less weight to co-benefits in the appropriate and necessary 
determination is fundamentally arbitrary. The commenters pointed out 
that the PM2.5 emission reductions are a direct result of 
HAP emissions controls, and that there is no way to reduce the HAP 
emissions without reducing PM emissions. Some commenters asserted that 
excluding some benefits from the appropriate and necessary 
determination creates a biased analysis. One commenter argued that the 
EPA's approach is arbitrary and contrary to Michigan and other U.S. 
Supreme Court precedent because it ``fai[ls] to consider [such] an 
important aspect of the problem.'' Michigan, 135 S. Ct. at 2707 
(quoting State Farm, 463 U.S. at 53).
    Response: The EPA acknowledges the existence and importance of 
these co-benefits. However, when the EPA is comparing benefits to costs 
as a required prerequisite to regulation, it is critical to examine the 
particular statutory provision that is being implemented. That 
statutory provision may limit the relevance of certain costs and 
benefits--e.g., serve to establish that any benefits attributable to 
the ancillary reduction of pollutant emissions that are not the focus 
of the provision at issue are not ``an important aspect of the 
problem'' that Congress is seeking to address. As noted in the 2019 
Proposal and in earlier responses to comments, in CAA section 
112(n)(1)(A), Congress directs the EPA to decide whether regulation of 
EGUs is appropriate and necessary under CAA section 112; the EPA 
believes that it is not appropriate to answer this question in the 
affirmative by pointing to benefits that are overwhelmingly 
attributable to reductions in an entirely different set of pollutants 
that CAA section 112 is not designed to address. In fact, the EPA 
believes that it would be arbitrary and capricious to do so. See Motor 
Vehicle Mfrs. Ass'n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 
(1983) (``Normally, an agency rule would be arbitrary and capricious if 
the agency has relied on factors which Congress has not intended it to 
consider.'').
    The EPA is not turning a blind eye to the reasonably predictable 
consequences of MATS. The 2011 RIA appropriately details the magnitude 
of the PM2.5-related co-benefits in the form of avoided 
premature deaths, hospital admissions, emergency department visits and 
asthma attacks, among other endpoints. However, CAA section 
112(n)(1)(A) requires a threshold determination of whether any 
regulation of EGUs under CAA section 112 is ``appropriate and 
necessary.'' The EPA believes that this inquiry must be focused 
primarily on the risks posed by the pollutants targeted by CAA section 
112, i.e., HAP emissions. The gross disparity between monetized costs 
and HAP benefits, which should be the primary focus of the 
Administrator's determination in CAA section 112(n)(1)(A), is so great 
as to make it inappropriate to form the basis of the necessary 
statutory finding. While the Agency acknowledges that PM co-benefits 
are substantial, the Agency cannot rely on PM co-benefits to supplant 
the primary factors Congress directed the Administrator to consider.
    Comment: Several commenters asserted that the EPA's approach to 
considering co-benefits under the CAA section 112(n)(1)(A) analysis was 
inappropriate because it is unprecedented in the EPA's regulatory 
practice and contrary to OMB and EPA policy. Commenters asserted that 
co-benefits are universally accepted as an important tool in regulatory 
economics and economic planning. Commenters quoted OMB Circular A-4 as 
directing agencies in conducting RIAs to ``look beyond the direct 
benefits and direct costs of your rulemaking and consider any important 
ancillary benefits and countervailing risks.'' The commenters also 
identified the EPA's ``Guidelines for Preparing Economic Analyses'' 
that states: ``An economic analysis of regulatory or policy options 
should present all identifiable costs and benefits that are incremental 
to the regulation or policy under consideration. These should include 
directly intended effects and associated costs, as well as ancillary 
(or co-) benefits and costs.'' Commenters also cited to previous clean 
air rules where the EPA has afforded co-benefits equal weight in cost-
benefit analyses.
    Response: The EPA developed the 2011 RIA for the 2012 MATS Final 
Rule pursuant to Executive Orders 12866 and 13563, as well as certain 
other applicable statutes, as informed by OMB guidance and the EPA's 
Economic Guidelines. It is true that, in this action, the EPA is 
drawing on information generated in that RIA in order to make the 
determination required under CAA section 112(n)(1)(A) concerning 
whether regulation of EGUs under CAA section 112 is appropriate. How 
costs are to be considered in making the congressionally-directed CAA 
section 112(n)(1)(A) determination, however, is not governed 
independent from statutory requirements, by preexisting OMB or EPA 
guidelines, nor could it be. Furthermore, for the many reasons 
explained elsewhere in this preamble and in the 2019 Proposal, the CAA 
section 112(n)(1)(A) determination is governed by the particular 
statutory provision at issue, and, therefore, is distinct from any 
other CAA action.
    In the context of conducting the CAA section 112(n)(1)(A) 
determination, the EPA finds it is not only appropriate but indeed, 
necessary for the EPA to interpret and apply the particular provision 
of CAA section 112(n)(1)(A), which as mentioned earlier specifically 
cites to HAP listed under section 112(b) of the CAA. To be valid, the 
EPA's analytical approach to that provision must recognize Congress' 
particular concern about risks associated with HAP and the benefits 
that would accrue from reducing those risks. OMB and EPA guidance 
outline regulatory principles that agencies are encouraged to follow to 
the extent permissible under law. These guidance documents, and the 
standard economic principles reflected in them, are not necessarily 
informative regarding how Congress intended the EPA to make the CAA 
section 112(n)(1)(A) determination, nor should they be read to override 
statutory text and structure that, as explained earlier in this 
preamble, requires a focus on a limited set of costs and benefits. 
Although an analysis of all reasonably anticipated benefits and costs 
in accordance with generally recognized benefit-cost analysis practices 
(including extending analytic efforts to ancillary impacts in a 
balanced manner across both benefits and costs) is appropriate for 
informing the public about the potential effects of any regulatory 
action, as well as for complying with the requirements of Executive 
Order 12866, it does not follow that equal consideration of all 
benefits and costs, including co-benefits, is warranted, or even

[[Page 31302]]

permissible, for the specific statutory provision requiring the EPA to 
make an appropriate and necessary finding called for under CAA section 
112(n)(1)(A).
    Comment: Some commenters asserted that the EPA's 2019 Proposal 
erroneously suggests that CAA sections 110 and 112 must be treated as 
mutually exclusive authorities for reducing the public health impacts 
of PM emissions. Commenters argued that there is no basis to ignore the 
benefits of reducing pollutants merely because they are also subject to 
regulation under state and federal implementation plans approved to 
implement the NAAQS. One commenter noted that the existence of other 
CAA provisions that deal with criteria pollutant emissions likely 
indicates Congress' deep concern about the health and environmental 
risks they pose. One commenter argued that there is no legal support 
for the idea that CAA section 110 or 112 requires exclusivity; the EPA 
is not required to pick one avenue through which it can impact PM 
emissions. The commenter noted that many CAA provisions can address PM, 
such as those for interstate transport and regional haze, and the EPA 
itself has encouraged states in their implementation planning to 
consider selecting controls that will minimize emissions of multiple 
pollutants. Another commenter acknowledged that the EPA does not argue 
that the other provisions should be the exclusive vehicle for 
addressing criteria pollutants, but this commenter asserted that the 
2019 Proposal did not explain how criteria pollutant reductions could 
be realized more effectively by some other legal mechanism and did not 
claim that criteria pollutants have been fully controlled through those 
other programs. One commenter also argued that the EPA's proposal is 
particularly unfounded because many metal HAP are emitted as PM.
    Response: The EPA disagrees with the commenters. The EPA's 
discussion of co-benefits, and the impropriety of giving them equal 
weight to HAP-specific benefits within the context of the appropriate 
and necessary determination, is based on an interpretation of CAA 
section 112(n)(1)(A), a provision enacted by Congress to address the 
unique situation facing EGUs. We have limited our analysis to the 
specifically tailored provision of CAA section 112(n)(1)(A), in which 
Congress recognized that EGUs would face regulation under numerous 
parts of the CAA and chose to ask the EPA to consider whether further 
regulation of EGUs under CAA section 112 would be appropriate and 
necessary. As noted previously in this preamble and the 2019 Proposal, 
the vast majority of estimated monetized benefits resulting from MATS 
are associated with reductions in PM2.5 precursor emissions, 
principally NOX and SO2. Both NOX and 
SO2 are criteria pollutants in their own right and are 
already addressed by the numerous statutory provisions governing 
criteria pollutants. In interpreting and applying CAA section 
112(n)(1)(A), we believe it is important to acknowledge that the CAA 
has established numerous robust avenues for minimizing PM-precursor 
emissions to a level that is requisite to protect public health with an 
adequate margin of safety. Because other CAA programs are already in 
place to ensure reductions in criteria pollutants to the level 
requisite to protect public health with an adequate margin of safety, 
the EPA believes that it is not reasonable to point to criteria 
pollutant co-benefits as the primary benefit to justify regulation of 
EGUs under a provision of the CAA that authorizes such regulation only 
where the Administrator determines that it is ``appropriate and 
necessary'' to do so.\27\
---------------------------------------------------------------------------

    \27\ A number of commenters raised this same issue and made this 
same point. See, e.g., Docket ID Item Nos. EPA-HQ-OAR-2018-0794-
1135, -1178, -1189, -1190.
---------------------------------------------------------------------------

    With respect to one commenter's assertion that the EPA's approach 
was particularly unfounded given that many metal HAP are emitted as PM, 
the EPA agrees that most non-mercury metal HAP are emitted as PM. In 
fact, the EPA established an emission standard for filterable PM in the 
2012 MATS Final Rule that serves as a surrogate for the non-mercury 
metal HAP (recognizing that controls for PM are also effective for the 
non-mercury metal HAP). However, the fact that the non-mercury metal 
HAP are emitted in a solid particulate form does not mean that the EPA 
should give equal weight to the benefits from removal of all PM. As 
described in the 2011 RIA for the 2012 MATS Final Rule, 
PM2.5 benefits result from emissions reductions of 
SO2 (1,330,000 tons), NOX (46,000 tons), 
carbonaceous PM2.5 (6,100 tons), and crustal 
PM2.5 (39,000 tons). Control of directly-emitted filterable 
PM for purposes of controlling non-mercury metal HAP constituted 
approximately 5 percent of the total PM2.5 health co-
benefits of the rule. Based on analysis of available data, the EPA 
estimates that non-mercury metal HAP represent, at most, 0.8 percent of 
this directly emitted filterable PM.\28\ The actual HAP-related 
benefits of controlling non-mercury metal HAP were unquantified. Again, 
the vast majority of estimated monetized benefits resulting from MATS 
are associated with reductions in premature mortality resulting from 
emissions reductions of PM precursors and not from metal HAP or even 
direct PM.
---------------------------------------------------------------------------

    \28\ As mentioned in the Emission Factor Development for RTR 
Risk Modeling Dataset for Coal- and Oil-fired EGUs memorandum 
(Docket ID Item No. EPA-HQ-OAR-2018-0794-0010), the EPA developed 
ratios of non-mercury metal and filterable PM emissions for use in 
estimating emissions from coal- and oil-fired EGUs without current 
non-mercury metal emissions data. These ratios were determined by 
dividing the fuel-specific averages of the 2010 MATS Information 
Collection Request (ICR) non-mercury metals data, combined by 
control technique where possible, by the filterable PM emissions 
data. The ratios represent the amount of non-mercury metals present 
in filterable PM. For more detail, see memorandum titled Non-mercury 
Metals Content of Filterable Particulate Matter in the docket for 
this action.
---------------------------------------------------------------------------

    Comment: Several commenters asserted that the EPA has not explained 
what weight is given to co-benefits, or how the EPA chose that 
standard, aside from saying that the weight is less than what is given 
to HAP-specific benefits. One commenter noted that the EPA essentially 
claims that co-benefits cannot affect the appropriate and necessary 
determination unless quantified HAP benefits are ``moderately 
commensurate'' with compliance costs, but the EPA does not provide any 
clarity on the point at which HAP benefits would be ``moderately 
commensurate'' to allow the EPA to rely on co-benefits.
    Response: The Administrator has concluded that the following 
procedure provides the appropriate method under which the EPA should 
proceed to determine whether it is appropriate and necessary to 
regulate EGUs under CAA section 112(n)(1)(A). First, the EPA compares 
the monetized costs of regulation against the subset of HAP benefits 
that could be monetized. Here, those costs are disproportionate to the 
monetized benefits, by three orders of magnitude. That does not 
demonstrate ``appropriate and necessary.'' Second, the EPA considers 
whether unquantified HAP benefits may alter that outcome. For the 
reasons proposed in February 2019 and further discussed in this final 
action, the EPA determines they do not. Third, the EPA considers 
whether it is appropriate, notwithstanding the above, to determine that 
it is ``appropriate and necessary'' to regulate EGUs under CAA section 
112(n)(1)(A) out of consideration for the PM co-benefits that result 
from such regulation. For the reasons proposed in February 2019 and set 
forth in this final action, on the record before the Agency, it is not 
appropriate to do so.
    Here, almost the entirety of monetized benefits (about 99.9 
percent) of MATS

[[Page 31303]]

reflected in the RIA were derived from non-HAP co-benefits. Had the 
HAP-specific benefits of MATS been closer to the costs of regulation, a 
different question might have arisen as to whether the Administrator 
could find that co-benefits legally form part of the justification for 
determination that regulation of EGUs under CAA section 112(d) is 
appropriate and necessary. The EPA does not need to, and does not, 
determine whether that additional step would be appropriate in this 
factual scenario given that the monetized and unquantified HAP-specific 
benefits do not come close to a level that would support the prior 
determination. Under the interpretation of CAA section 112(n)(1)(A) 
that the EPA adopts in this action, HAP benefits, as compared to costs, 
must be the primary question in making the `appropriate and necessary' 
determination. While the Administrator could consider air quality 
benefits other than HAP-specific benefits in the CAA section 
112(n)(1)(A) context, consideration of these co-benefits could 
permissibly play only, at most, a marginal role in that determination, 
given that the CAA has assigned regulation of criteria pollutants to 
other provisions in title I of the CAA, specifically the NAAQS regime 
pursuant to CAA sections 107-110, which requires the EPA to determine 
what standards for the ambient concentration of PM are necessary to 
protect human health. Here, to the extent that the alternative approach 
set forth within the 2016 Supplemental Finding was legally grounded in 
co-benefits, the massive disparity between co-benefits and HAP benefits 
on this record would mean that that alternative approach clearly 
elevated co-benefits beyond their permissible role.
    If the Administrator were to consider the size of the 
PM2.5-related co-benefits in deciding whether regulating 
EGUs under CAA section 112(d) is appropriate and necessary, he should 
also consider taking into account key assumptions affecting the size 
and distribution of these co-benefits and potential uncertainty 
surrounding them. In the past, the EPA has highlighted a number of 
these assumptions as having particularly significant effect on 
estimates of PM-related benefits, including assumptions about: The 
causal relationship between PM exposure and the risk of adverse health 
effects; the shape of the concentration-response relationship for long-
term exposure-related PM2.5 and the risk of premature death; 
the toxicity of individual PM2.5 particle components; the 
levels of future PM2.5; the validity of the reduced-form 
technique used to relate PM2.5 emission precursors to the 
number and value of PM2.5 adverse health effects; and the 
approach used to assign a dollar value to adverse health effects. The 
Agency has separately noted that, in general, it is more confident in 
the size of the risks we estimate from simulated PM2.5 
concentrations that coincide with the bulk of the observed PM 
concentrations in the epidemiological studies that are used to estimate 
the benefits. Likewise, the Agency is less confident in the risk 
estimated from simulated PM2.5 concentrations that fall 
below the bulk of the observed data in these studies.\29\ Furthermore, 
when setting the 2012 PM NAAQS, the Administrator acknowledged greater 
uncertainty in specifying the ``magnitude and significance'' of PM-
related health risks at PM concentrations below the NAAQS. As noted in 
the preamble to the 2012 PM NAAQS final rule, in the context of 
selecting an alternative NAAQS, the ``EPA concludes that it is not 
appropriate to place as much confidence in the magnitude and 
significance of the associations over the lower percentiles of the 
distribution in each study as at and around the long-term mean 
concentration.'' (78 FR 3154, January 15, 2013).
---------------------------------------------------------------------------

    \29\ The Federal Register document for the 2012 PM NAAQS 
indicates that ``[i]n considering this additional population level 
information, the Administrator recognizes that, in general, the 
confidence in the magnitude and significance of an association 
identified in a study is strongest at and around the long-term mean 
concentration for the air quality distribution, as this represents 
the part of the distribution in which the data in any given study 
are generally most concentrated. She also recognizes that the degree 
of confidence decreases as one moves towards the lower part of the 
distribution.''
---------------------------------------------------------------------------

    Comment: Some commenters argued that the EPA is inappropriately 
giving full weight to the consideration of indirect costs of regulating 
EGUs while simultaneously giving less than equal weight to co-benefits. 
One commenter argued that comparing direct and indirect costs to only 
the ``direct'' benefits associated with HAP reductions is not an 
apples-to-apples comparison. Some commenters stated that the EPA is 
including not only compliance costs incurred by the sources regulated 
under MATS, but also costs incurred by other power plants that are not 
regulated under MATS due to the effects on the power sector of 
regulated sources' investing in pollution abatement technologies or 
taking other steps to reduce emissions. The commenter argued that the 
EPA does not explain why it is appropriate to discount or ignore co-
benefits while giving full weight to indirect compliance costs.
    Response: The EPA disagrees with the commenters that co-benefits 
and the types of compliance costs that the commenters consider 
``indirect'' must be given comparable treatment within this action. As 
discussed throughout this section, the EPA believes that it is 
inappropriate to rely, as did the alternative, benefit-cost approach in 
the 2016 Supplemental Finding, almost exclusively on benefits 
accredited to reductions in pollutants not targeted by CAA section 112 
when those other pollutants are already extensively regulated under 
other CAA provisions.
    Additionally, unlike benefits, which can be disaggregated into 
benefits attributable to reduction in HAP and co-benefits attributable 
to reduction in non-HAP pollutants, costs cannot similarly be 
disaggregated. There is no analogous distinction with respect to 
compliance costs and, thus, nothing in the statute that directs the EPA 
to partition compliance costs into direct and indirect (or ancillary) 
costs, or that supports the view that such a partitioning would be 
appropriate.
    From an economic perspective, MATS was a consequential rulemaking 
that was expected to induce changes in both electricity and fuel 
markets beyond the impacts on affected coal- and oil-fired EGUs. The 
policy case examined in the 2011 RIA introduced the requirements of 
MATS as constraints on affected EGUs, which resulted in new projections 
of power sector outcomes under MATS. These compliance costs are an 
estimate of the increased expenditures in capital, fuel, labor, and 
other inputs by the entire power sector to comply with MATS emissions 
requirements, while continuing to meet a given level of electricity 
demand. These costs were summarized in Table 3-16 of the 2011 RIA.\30\
---------------------------------------------------------------------------

    \30\ The EPA estimated the impacts of MATS on oil-fired units 
and costs associated with monitoring, recordkeeping, and reporting 
in separate analyses, which are summarized in Chapter 3 and Appendix 
3A of the 2011 RIA.
---------------------------------------------------------------------------

    The commenters do not attempt to present an alternative analysis 
under which the EPA would assess what they term ``indirect costs.'' To 
focus on the projected impact of MATS on only affected entities would 
produce an incomplete estimate of the entire cost of complying with the 
rule and, thus, lead to an inappropriate consideration of the costs of 
the 2012 MATS Final Rule. The costs termed ``indirect costs'' by 
commenters are neither ancillary or incidental costs; these costs are 
an integral part of the compliance costs that are attributable to 
expected changes

[[Page 31304]]

to production behavior in the sector in order to minimize the cost of 
complying with MATS. Furthermore, an evaluation of the costs borne 
solely by the owners of EGUs subject to MATS would need to account for 
the ability of owners of these EGUs to recoup their increased 
expenditures through higher electricity prices; otherwise, an estimate 
of the costs of MATS borne by the owners of those EGUs (i.e., their 
economic incidence) would be an overestimate. However, if the EPA was 
to only account for the economic incidence for owners of EGUs, the 
costs borne by the consumers of electricity from these higher prices 
would be ignored, which the EPA finds inappropriate. Therefore, the EPA 
determined it was appropriate to account for all of the costs that may 
be incurred as a result of the rule that could be reasonably estimated, 
recognizing that these expenditures would ultimately be borne either by 
electricity consumers or electricity producers, rather than limiting 
our consideration of costs to just those borne by a subset of producers 
or consumers.
    Comment: Some commenters asserted that the EPA has failed to 
explain how it has given any meaningful consideration in its benefit-
cost comparison to the numerous health effects of reducing HAP 
emissions that the EPA has not quantified. A few commenters asserted 
that the non-monetized benefits of the rule encompass virtually all the 
HAP reductions that the rule yields. One commenter argued that the EPA 
has only given ``lip service'' to these benefits, but not any 
discernible weight in reaching the conclusion that regulating EGUs 
under CAA section 112 is not appropriate and necessary. Further, the 
commenter asserted that the EPA has offered no support or explanation 
for the assertion that the unquantified benefits are not sufficient to 
overcome the difference between the monetized benefits and the costs of 
MATS.
    Response: The 2011 RIA attempted to account for all the monetized 
and unquantified benefits of the rule, and the EPA's benefit-cost 
analysis in the RIA does not discount the existence or importance of 
the unquantified benefits of reducing HAP emissions. However, in this 
final action, the EPA has determined that it is reasonable to evaluate 
unquantified benefits separately in the comparison of benefits and 
costs for this action under CAA section 112(n)(1)(A).
    The EPA explained in the 2011 RIA that there are significant 
obstacles to successfully quantifying and monetizing the public health 
benefits from reducing HAP emissions (see also Gwinn, et al., 2011,\31\ 
and Fann, Wesson, and Hubbell, 2016 \32\ for a detailed discussion of 
the complexities associated with estimating the benefits of reducing 
emissions of air toxics). These obstacles include gaps in toxicological 
data, uncertainties in extrapolating results from high-dose animal 
experiments and worker studies to estimate human effects at lower 
doses, limited monitoring data, difficulties in tracking diseases such 
as cancer that have long latency periods, and insufficient economic 
research to support the valuation of the health impacts often 
associated with exposure to individual HAP.
---------------------------------------------------------------------------

    \31\ Gwinn, M.R., et al., 2011. Meeting Report: Estimating the 
Benefits of Reducing Hazardous Air Pollutants--Summary of 2009 
Workshop and Future Considerations. Environmental Health 
Perspectives, 119(1): 125-130.
    \32\ Fann N., Wesson K., and Hubbell B (2016), Characterizing 
the confluence of air pollution risks in the United States. Air Qual 
Atmos Health 9:293. Available at https://doi.org/10.1007/s11869-015-0340-9.
---------------------------------------------------------------------------

    The EPA fully acknowledges the existence and importance of the 
unquantified benefits. The EPA explained in the 2019 Proposal reasons 
why the EPA has determined that the unquantified benefits are unlikely 
to overcome the significant difference (which, the EPA notes again, is 
a difference of three orders of magnitude) between the monetized HAP-
specific benefits and compliance costs of the MATS rule. This is also 
further discussed in section II.C.2 of this preamble. As noted there, 
many of the HAP-related effects that were unquantified in the 2011 RIA 
consist of morbidity effects in humans. The EPA's methods estimating 
the economic value of avoided health effects values mortality effects 
significantly more than avoided illnesses (e.g., hospital admissions, 
emergency department visits, cases of aggravated asthma, etc.).\33\ 
Hence, valuing HAP-related morbidity outcomes would not likely result 
in estimated economic values similar to those attributed to avoiding 
premature deaths.
---------------------------------------------------------------------------

    \33\ See U.S. EPA. 2010a: Regulatory Impact Analysis for the 
Nitrogen Oxide National Ambient Air Quality Standards Page 4-8 
through 4-10; U.S. EPA. 2010b: Regulatory Impact Analysis for the 
Sulfur Dioxide National Ambient Air Quality Standards Page 5-26 
through 5-28; U.S. EPA. 2012: Regulatory Impact Analysis for the 
Particulate Matter National Ambient Air Quality Standards pages 5-
69; U.S. EPA. 2015: Regulatory Impact Analysis for the Ozone 
National Ambient Air Quality Standards. Pages 6-57 through 6-60.
---------------------------------------------------------------------------

    Commenters raised the possibility that there could be unquantified 
HAP-related benefits of mortality effects, based on the comments the 
EPA believes the most significant are associated with avoiding 
premature death, and in particular, potential cancer risks.\34\ As part 
of the 2012 MATS Final Rule, the EPA modeled the maximum individual 
risk (MIR) associated with non-mercury HAP including arsenic, 
hexavalent chromium, nickel, and hydrogen chloride for a subset of 16 
EGUs. MIR is the ``maximum individual risk'' experienced by the most 
highly exposed individual living in proximity to the source, presuming 
continuous exposure for 70 years. The analysis found that the one oil-
fired EGU studied had a lifetime cancer risk of 20-in-1 million, and 
that none of the remaining 15 coal-fired EGU facilities posed a 
lifetime risk of cancer for the maximally exposed individual exceeding 
8-in-1 million, with most facilities posing a risk of equal to, or less 
than, 1-in-1 million. These risks are significantly below the levels 
defined by the EPA as being the presumptive upper limit of acceptable 
risk (i.e., 1-in-10 thousand). While that analysis did not separately 
estimate the number of new cases of HAP-attributable cancer among each 
year, the size of the MIR implies that the number of new cases would 
likely be very small. The EPA's evaluation of evidence of unquantified 
benefits is based on qualitative information that helps understand the 
likelihood and potential scale of those benefits, relative to the 
monetized benefits and monetized costs. These qualitative assessments 
help confirm that unquantified benefits do not alter the underlying 
conclusions that costs greatly outweigh HAP benefits.
---------------------------------------------------------------------------

    \34\ See sections II.C.2 and II.C.4 of this preamble for the 
EPA's response to commenters' assertions regarding potential 
mortality effects due to methylmercury exposure and cardiovascular 
impacts.
---------------------------------------------------------------------------

    Comment: Several commenters pointed out that the EPA's 2019 
Proposal relies on undefined terms such as ``moderately commensurate,'' 
``gross disparity,'' and ``significant difference,'' which are not 
statutory terms and do not appear in prior regulatory actions 
associated with MATS. Without explanation of what these terms mean, the 
commenters asserted that the public did not receive adequate notice so 
that they could provide meaningful comments on the proposal. Commenters 
said the 2019 Proposal leaves the public in the dark as to what data 
and methodology the EPA relies on to determine that the costs of 
regulating power plants under CAA section 112 ``grossly outweigh'' the 
hazardous air pollution benefits. One commenter asserted that the 
failure to define these terms and outline the EPA's analytical

[[Page 31305]]

methodology has rendered this action in violation of CAA section 
307(d).
    Response: The EPA believes that the language used in its 2019 
Proposal and final actions is reasonable and understandable and is 
consistent with legal standards that have been previously upheld in 
litigation challenges. For example, in the Entergy decision the U.S. 
Supreme Court upheld the EPA's use of a ``wholly disproportionate'' 
standard. 556 U.S. at 224 (``[I]t is also not reasonable to interpret 
Section 1326(b) as requiring use of technology whose cost is wholly 
disproportionate to the environmental benefit to be gains'') (internal 
quotation removed). Further, as recognized in the 2016 Supplemental 
Finding, CAA section 112(n)(1)(A) and the Michigan decision give broad 
discretion to the Administrator to apply his expert judgment in 
considering cost in order to determine whether it is appropriate and 
necessary to regulate HAP emissions from EGUs. See 81 FR 24428. CAA 
section 112(n)(1)(A) requires that ``the Administrator shall regulate 
[EGUs] . . . if the Administrator finds such regulation is appropriate 
and necessary.'' The Michigan Court explicitly acknowledged the 
discretion held by the Administrator: ``[i]t will be up to the Agency 
to decide (as always, within the limits of reasonable interpretation) 
how to account for cost.'' 135 S. Ct. at 2711. As explained in the 
prior response and in other places in this preamble, the EPA has 
concluded, as a result of our qualitative evaluation of evidence, that 
unquantified benefits cannot reasonably be expected to be comparable to 
the cost of regulation or to meaningfully redress the gross disparity 
between that cost and the monetized HAP benefits. The commenters take 
issue with some of the terminology used in the 2019 Proposal, but given 
the discretion afforded to the Administrator by CAA section 
112(n)(1)(A), as acknowledged by the U.S. Supreme Court, we believe 
this preamble outlines a reasonable and fitting approach to Congress' 
open-ended instruction to the Administrator to determine whether a 
regulation of EGUs is ``appropriate and necessary.'' The EPA further 
believes that, in a context where costs outweigh monetized HAP-specific 
benefits by three orders of magnitude, the meaning and relevance of 
terms such as ``gross disparity'' and ``significant difference'' are 
self-evident.
4. It Is Reasonable To Continue To Rely on the Original 2011 Regulatory 
Cost-Benefit Data Comparison as Part of a CAA Section 112(n)(1)(A) 
Assessment of Costs and Benefits
a. Summary of 2019 Proposal
    As discussed above, in the 2016 Supplemental Finding, the EPA 
considered an alternative approach to considering cost as part of the 
appropriate and necessary finding that was based on a benefit-cost 
analysis originally performed as part of the 2011 RIA for the 2012 MATS 
Final Rule. This analysis summarized the EPA's projected estimates of 
annualized benefits, costs, and net benefits of the MATS rule in 2015. 
The 2011 RIA considered costs, quantified HAP benefits, unquantified 
HAP benefits, and non-HAP co-benefits and concluded that aggregated 
monetized benefits ($37 to $90 billion each year) exceeded the costs of 
compliance ($9.6 billion) by 3 to 9 times. The EPA, therefore, 
concluded in the 2016 Supplemental Finding's alternative approach that 
the RIA's benefit-cost analysis supported its affirmation of the prior 
appropriate and necessary finding under CAA section 112(n)(1)(A).
    The 2019 Proposal also used the estimates from the 2011 RIA to 
address costs in the context of a CAA section 112(n)(1)(A) appropriate 
and necessary finding but concluded that the alternative approach in 
the 2016 Supplemental Finding had improperly weighed the non-HAP co-
benefits estimates reported in the 2011 RIA. Specifically, the EPA 
concluded that the Agency's previous equal weighting of the 
PM2.5 co-benefits projected to occur as a result of the 
reductions in HAP emissions was inappropriate given that the focus of 
CAA section 112(n)(1)(A) is on the HAP emissions reductions themselves. 
Upon reconsideration, the EPA proposed to determine that it would be 
illogical for the Agency to decide that regulation under CAA section 
112, which is expressly designed to deal with HAP, could be justified 
primarily based on the non-HAP pollutant impacts of these regulations. 
In the 2019 Proposal, the EPA provided an updated comparison of costs 
and targeted pollutant benefits (i.e., HAP benefits) in a memorandum to 
the proposed rulemaking docket.\35\ The EPA used the results from the 
2011 RIA for the updated comparison, as this RIA contained the best 
available information on the projected costs, benefits, and impacts of 
the MATS rule at the time the Agency was making its regulatory decision 
to establish CAA section 112(d) emissions standards.
---------------------------------------------------------------------------

    \35\ See Compliance Cost, HAP Benefits, and Ancillary Co-
Pollutant Benefits for ``National Emission Standards for Hazardous 
Air Pollutants: Coal-and Oil-Fired Electric Utility Steam Generating 
Units--Reconsideration of Supplemental Finding and Residual Risk and 
Technology Review'' (Docket ID Item No. EPA-HQ-OAR-2018-0794-0007).
---------------------------------------------------------------------------

b. Final Rule
    The EPA is finalizing the determination outlined in the 2019 
Proposal. The EPA believes that the approach to the formal benefit-cost 
analysis presented in the 2011 RIA contains the best available 
information on the projected costs, benefits, and impacts of the MATS 
rule at the time the Agency was making its regulatory decision to 
establish CAA section 112(d) emissions standards. The EPA maintains 
that, based upon an evaluation of the information in the record, even 
if the Agency were to perform new analysis to estimate the benefit and 
cost impacts of MATS, the results are unlikely to materially alter the 
general conclusions of the analysis, with small benefits associated 
with the targeted quantified HAP benefits and compliance costs and 
would not alter the final determination herein.
c. Comments and Responses
    Comment: Some commenters asserted that the EPA has failed to comply 
with basic principles of administrative law by failing to develop an 
adequate factual record in basing its cost-benefit comparison on the 
data contained in the 2011 RIA, as opposed to gathering the body of 
information relevant to these issues that has since become available. 
These commenters asserted that any consideration of the appropriate and 
necessary finding must consider new information on what the benefits 
and costs of regulating EGUs would be if the question were revisited in 
light of current knowledge, not as the facts were thought to be 8 years 
in the past.
    Response: The EPA agrees with the commenters that courts have 
required administrative agencies to address ``newly acquired data in a 
reasonable fashion,'' but depending on the circumstances, agencies are 
not always required to rely on updated data when engaged in decision-
making. American Iron & Steel Inst. v. EPA, 115 F.3d 979, 1007 (D.C. 
Cir. 1997). The EPA maintains that its use of benefit and cost 
information from the 2011 RIA is reasonable in this context.
    To determine whether an agency reasonably addressed updated data, 
courts may look to the statutory mandate to the Agency. NRDC v. 
Herrington, 786 F.2d 1355 (D.C. Cir.

[[Page 31306]]

1985). Under the statutory structure of CAA section 112, the CAA 
section 112(n)(1)(A) finding is a preliminary determination that is 
made significantly before the CAA section 112(d) standards would be 
promulgated. The suggestion by some commenters that the EPA is required 
to conduct a new analysis that attempts to estimate the actual costs 
incurred through compliance with the final CAA section 112(d) standards 
is, thus, not consistent with the statute. The 2016 Supplemental 
Finding similarly declined to conduct new analysis before reaffirming 
the appropriate and necessary determination, arguing that this was an 
appropriate approach to the problem because that determination is a 
threshold question under the statute. 81 FR 24432 (2016 Supplemental 
Finding). We also note that in 2012, the EPA interpreted CAA section 
112(n)(1)(A) as not obligating the Agency to update its data, and we 
maintain that interpretation here. That interpretation is consistent 
with the text and structure of CAA section 112(n)(1)(A), which focuses 
on an expressly required study that evaluates hazards to public health. 
When the EPA reaffirmed the 2000 appropriate and necessary finding in 
2012, it explained that although it was choosing to undertake an 
updated analysis of the public health risks associated with EGU HAP 
emissions, doing so was ``not required.'' 77 FR 9304, 9310 (February 
16, 2012). The EPA argued at the time that the continued existence of 
the appropriate and necessary finding in 2012 was warranted by the 
analysis undertaken in 1998 and summarized in the 2000 appropriate and 
necessary finding. Id.
    Both the statute and the Michigan decision support the EPA's 
reliance on the cost estimates from the 2011 RIA. First, any cost 
analysis included in an ``initial decision to regulate,'' Michigan, 135 
S. Ct. at 2709, must precede any regulations flowing out of that 
decision. Therefore, in considering the costs of compliance as part of 
its appropriate and necessary finding, it is reasonable for the EPA to 
look at what types of cost information, such as the 2011 RIA cost 
estimates, would be available at this threshold stage. In addition, 
nothing in the Michigan decision precludes the EPA's use of the 
existing cost information in the record in addressing the Agency's 
obligation on remand to consider cost as part of the appropriate and 
necessary finding. In Michigan, the Court rejected arguments that it 
could conclude that the Agency had properly considered cost based on 
the Agency's consideration of costs in other stages of the rulemaking 
(e.g., in setting the emission standards or in the RIA). The Court 
emphasized that the Agency itself had not relied upon these rationales 
at the finding stage. 135 S. Ct. 2710-11 (citing SEC v. Chenery Corp., 
318 U.S. 80, 87 (1943)). However, the Court left open the possibility 
that the economic analyses the Agency had already conducted could 
suffice to satisfy its obligation to consider costs as part of the 
appropriate finding. Id. at 2711.
    There is nothing in the operative statutory language here that is 
akin to wording that courts have found to require an agency to 
incorporate updated information. See Sierra Club v. EPA, 671 F.3d 955 
(9th Cir. 2012) (directing the EPA to rely on updated data when 
approving nonattainment state implementation plans (SIPs) because CAA 
section 172(c)(3) requires SIPs to include ``comprehensive, accurate, 
current inventory of actual emissions''); see also City of Las Vegas v. 
Lujan, 891 F.2d 927 (D.C. Cir. 1989) (holding that the Secretary of the 
Interior could not disregard available scientific information because 
the Endangered Species Act required the ``best scientific and 
commercial data available'').
    In addition to looking at the statutory language, courts also often 
examine the impact any updated data would have had on the agency's 
decision. Catawba County v. EPA, 571 F.3d 20, 45 (D.C. Cir. 2009) 
(upholding the EPA's designations for the NAAQS because ``EPA dealt 
with the newly acquired data in a reasonable fashion by explaining why 
it would not have changed the designations''); see also Eastern 
Carolinas Broadcasting v. FCC, 762 F.2d 95, 98 (D.C. Cir. 1985) 
(upholding FCC's determination in light of the Commission's failure to 
utilize updated data because it was a ``harmless error in light of the 
ultimate rationale'').
    According to the commenters, costs of MATS compliance have been 
lower than the EPA estimated in 2011 and the EPA has not accounted for 
more recent studies of quantified HAP benefits. However, even if the 
EPA updated its analysis, there is no reason to believe that the new 
data and analysis would change the overall conclusion of the 2011 
analysis that costs outweighed the quantified benefit attributed to 
reduction in HAP emissions.
    However, while it is challenging to produce rigorous retrospective 
estimates of the benefits and costs of MATS, it is possible to 
demonstrate, using publicly available information, that there is no 
reason to believe that the relative difference between compliance costs 
and quantified HAP benefits projected in the 2011 RIA ($9.6 billion 
versus $4 to $6 million annually in 2015) would be materially different 
under any re-analysis.\36\ Several commenters pointed to independent 
analyses that provided three estimates of the actual costs of MATS. 
While none of these estimates can be precisely compared against the EPA 
ex ante estimates because they use different cost metrics and dollar 
years, the independent analyses indicate that, if actual costs were to 
be estimated in a manner consistent with the EPA's 2011 RIA estimates, 
the compliance costs expenditures would still likely be in the billions 
of dollars.
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    \36\ The EPA's April 15, 2020, finalization of the 
subcategorization of Eastern Bituminous Coal Refuse-Fired EGUs could 
alter the benefits and costs of MATS. However, given that such 
subcategorization will affect only six units, we think it is 
reasonable to expect that any changes to the 2011 RIA's projected 
cost and benefits as a result of the potential subcategorization 
would not materially affect the EPA's conclusion that compliance 
costs of MATS disproportionately outweigh the HAP benefits 
associated with the standards.
---------------------------------------------------------------------------

    First, a 2015 analysis by Andover Technology Partners referred to 
by commenters estimated that the actual cost of compliance in the 
initial years of implementation was approximately $2 billion per 
year.^{37 38} The second study referred to by commenters was a 
study performed by M.J. Bradley & Associates (MJB&A) using information 
from the U.S. Energy Information Administration.\39\ MJB&A estimated 
that MATS-regulated facilities incurred total capital expenditures on 
environmental retrofits of $4.45 billion, an estimate that does not 
include ongoing operating and maintenance expenditures. Finally, as 
documented in a letter to the EPA and cited by several commenters, the 
Edison Electric Institute estimated that the power sector incurred 
total compliance costs of more than $18 billion, including both capital 
and

[[Page 31307]]

operations and maintenance costs.\40\ While these retrospective cost 
estimates are developed from bases that are dissimilar from one another 
and, in particular, from how the EPA developed the prospective cost 
estimates in the 2011 RIA, it is evident that the independent analyses 
each indicate that the industry costs of MATS are of a similar order of 
magnitude and in the billions of dollars.
---------------------------------------------------------------------------

    \37\ Declaration of James E. Staudt, Ph.D., CFA, at 3, White 
Stallion Energy Center v. EPA, No. 12-1100 (D.C. Cir., December 24, 
2015). Also available at Docket ID Item No. EPA-HQ-OAR-2009-0234-
20549.
    \38\ In addition to the 2015 study, Andover Technology Partners 
produced two other analyses in 2017 and 2019, respectively, that 
estimated the ongoing costs of MATS. The 2017 report estimated that 
the total annual operating cost for MATS-related environmental 
controls was about $620 million, an estimate that does not include 
ongoing payments for installed environmental capital. The 2019 
report estimates the total annual ongoing incremental costs of MATS 
to be about $200 million; again, this estimate does not include 
ongoing MATS-related capital payment. The 2017 report is available 
in Docket ID Item No. EPA-HQ-OAR-2018-0794-0794. The 2019 report is 
available in Docket ID Item No. EPA-HQ-OAR-2018-0794-1175.
    \39\ Available in Docket ID Item No. EPA-HQ-OAR-2018-0794-1145.
    \40\ Available in Docket ID Item No. EPA-HQ-OAR-2018-0794-2267.
---------------------------------------------------------------------------

    At the same time, the quantified mercury-related benefits would 
still likely be in the millions of dollars and not substantially more 
than what was estimated when the rule was finalized. Table 3-4 of the 
2011 RIA shows that the EPA estimated that MATS would reduce mercury 
emissions from MATS-regulated units about 20 tons in 2015 (from 27 to 7 
tons). According to recent EPA estimates, mercury emissions from MATS-
regulated units decreased by about 25 tons from 2010 (pre-MATS) to 2017 
(from 29 to 4 tons).\41\ Even if the 25-ton decrease in mercury 
emissions from 2010 to 2017 is entirely attributed to MATS (which would 
be a very strong assumption given other economic and regulatory factors 
that influenced the trajectory of mercury emissions downward during 
this period), the quantified mercury-related benefits are likely to be 
not much greater than the estimates in the 2011 RIA, and certainly 
would continue to be at least an order of magnitude smaller than the 
actual costs of MATS.
---------------------------------------------------------------------------

    \41\ https://www3.epa.gov/airmarkets/progress/reports/.
---------------------------------------------------------------------------

    Similarly, as discussed in more detail in sections II.C.2 and 
II.C.3 of this preamble, we would expect that the unquantified HAP-
related benefits of MATS would not meaningfully redress the large 
disparity between monetized costs and monetized HAP benefits estimated 
in the 2011 RIA. Lastly, whether the co-benefits that MATS achieved are 
larger or smaller than estimated in the 2011 RIA is not a central 
consideration in the EPA's appropriate and necessary finding, as 
discussed previously in section II.C.3 of this preamble.\42\ The net 
result of this inquiry is that we believe that if the EPA were to 
perform retrospective analysis of the impacts of MATS for the purposes 
of the appropriate and necessary determination, the results of that 
analysis would not lead to any material change in the relative 
magnitude of costs and HAP-related benefits. In satisfaction of the 
requirements of OMB's Circular A-4, Section 3 of the memorandum, 
Compliance Cost, HAP Benefits, and Ancillary Co-Pollutant Benefits, 
that accompanies this final action presents all reasonably anticipated 
costs and benefits arising out of the MATS rule, including those 
arising out of co-benefits.
---------------------------------------------------------------------------

    \42\ As previously discussed, section 112(n) of the CAA requires 
the EPA to make a finding as to whether regulation of EGUs is 
``appropriate and necessary'' following consideration of hazards to 
public health reasonably anticipated to result from EGU emissions of 
HAP listed in CAA section 112(b).
---------------------------------------------------------------------------

    Comment: Commenters said that the compliance cost estimates 
underlying the 2019 Proposal are several times higher than actual costs 
because the projections in the 2011 RIA assumed that MATS would require 
the installation of additional fabric filters, scrubber upgrades, and 
electrostatic precipitator upgrades that were subsequently not 
required. Additionally, the commenters suggested the EPA's analysis 
erred because the projected price of natural gas was too low in the 
2011 RIA. Commenters said that what they characterized as substantial 
inaccuracies of the 2011 RIA projections render these projections an 
inappropriate basis for the proposed comparison of the costs and 
benefits.
    Response: The EPA disagrees with the commenters that the entire 
economic analysis that the EPA performed in the 2011 RIA is invalid 
simply because of an asserted discrepancy between modeling projections 
and actual outcomes. See, e.g., EME Homer City Generation, L.P. v. EPA, 
795 F.3d 118, 135-36 (D.C. Cir. 2015) (``We will not invalidate EPA's 
predictions solely because there might be discrepancies between those 
predictions and the real world. That possibility is inherent in the 
enterprise of prediction. The best model might predict that the 
Nationals will win the World Series in 2015. If that does not happen, 
you can't necessarily fault the model.''). The EPA used the best 
available data and modeling information, in accordance with Executive 
Order 12866 and the EPA's economic guidelines, and provided the public 
with the opportunity to comment on all aspects of its analysis in 
developing the 2011 RIA.
    The independent analyses cited by several commenters find that a 
variety of control technology costs have shown to be lower than the 
EPA's projection from the 2011 RIA. However, the suggestion that 
important components of the actual compliance cost of MATS are lower 
than the Agency's projections does not alter the Agency's determination 
that the analysis in the 2011 RIA represents the best and most 
comprehensive estimate of the cost of compliance with MATS available to 
the EPA for use in this finding, because it was developed at the time 
when the Agency reaffirmed the appropriate and necessary finding and 
established CAA section 112(d) standards for EGUs. Additionally, as 
discussed in another comment response in this section, even if actual 
compliance costs are lower than the EPA projected in the 2011 RIA, the 
costs are still likely to be at least an order of magnitude greater 
than the monetized HAP benefits.
    Comment: Other commenters rejected the argument that actual utility 
sector compliance costs for MATS have been less than predicted in 2011. 
One commenter said that utilities have spent less on retrofitting power 
plants by simply closing plants to avoid installing costly controls. 
However, the commenter also claimed that the utility sector's avoided 
MATS compliance costs did not simply disappear; they were translated 
into costs borne by the former employees of retired coal-fired plants, 
by coal workers who have lost their jobs, and by the communities of 
those displaced workers. Commenters said that the 2019 Proposal 
continues to treat these MATS-driven ``costs'' as irrelevant when 
considering the regulatory impacts, but the commenters said that the 
EPA must add these regulatory costs to its analysis as required by 
Michigan. The commenter cited data indicating an individual's job loss 
has a direct correlation with adverse health outcomes.
    Response: The 2011 RIA provided estimates of employment changes for 
the regulated power sector and for the air pollution control sector, 
including estimates of employment impacts from changes in fuel demand 
from EGUs. However, examining localized employment impacts that may 
arise from MATS compliance actions is outside of the scope of this 
action. The commenter asserts that the cost of the rule will result in 
lost income or employment that will, in turn, result in negative health 
impacts. The EPA disagrees that this point is relevant to the 
appropriate and necessary finding.
    Comment: Commenters highlighted that the industry has already 
incurred costs to implement MATS and cannot recover these costs except 
through rate recovery and similar mechanisms. Commenters argued that 
finalization of a reconsideration of the appropriate and necessary 
finding under CAA section 112(n)(1)(A) should be based on an analysis 
of ongoing and future costs weighed against ongoing and future 
benefits, as opposed to considering past costs and benefits. If the EPA 
considers past costs that have already been incurred by the industry to 
comply with MATS in connection with the proposed

[[Page 31308]]

rule, the Agency must consider whether those past costs might weigh in 
favor of maintaining or affirming the 2016 Supplemental Finding.
    Response: A previous response in this section explains why the 
EPA's use of the benefit and cost estimates from the 2011 RIA is 
reasonable. Additionally, with respect to the suggestion that the EPA 
estimate future costs and benefits flowing from this action, section 
II.D of this preamble explains that the EPA's revised determination 
that regulation of HAP emissions from EGUs under CAA section 112 is not 
appropriate and necessary will not remove EGUs from the CAA section 
112(c) list of sources, and the previously established MATS rule will 
remain in place. As a result, there will be no changes in future 
compliance expenditures or emissions under MATS as a result of the 
revised determination under CAA section 112(n)(1)(A).
    Comment: Commenters said that many utilities that expended 
resources to comply with MATS are subject to ongoing rate reviews by 
public utility commissions regarding recovery of MATS-associated costs. 
Some utilities expressed concerns that, if MATS or the appropriate and 
necessary finding is rescinded, whether through EPA action or as a 
result of judicial review of a reversal of the 2016 Supplemental 
Finding, stakeholders will intervene in rate cases before public 
utility commissions, arguing that utilities' investments in the MATS-
required pollution controls were imprudent and should no longer be 
recoverable through their approved rates. Because of this reasoning, 
the commenters said the EPA should consider the impacts on recovery of 
sunk costs jeopardized by a reversal of the appropriate and necessary 
finding in its benefit-cost analysis.
    Response: Section II.D of this preamble explains that the EPA's 
revised determination that regulation of EGUs under CAA section 112 is 
not appropriate and necessary will not remove EGUs from the CAA section 
112(c) list of sources, and the previously established MATS rule will 
remain in place. As a result, the EPA does not anticipate that the 
ability of utilities to recover MATS-related expenditures will be 
jeopardized as a result of this action. Even if MATS were to be 
rescinded, a number of states have mercury rules that would continue to 
mandate the use of mercury controls. The EPA is committed to working 
with states that are interested in developing their own HAP-specific 
requirements. The EPA's proposal noted that, in 2011, the Utility Air 
Regulatory Group (UARG) submitted a petition pursuant to CAA section 
112(c)(9) requesting that coal-fired EGUs be removed from the CAA 
section 112(c) List of Categories of Major and Area Sources, and that 
the EPA denied this petition on several grounds.\43\ The EPA's position 
on denial of this petition has not changed.
---------------------------------------------------------------------------

    \43\ 84 FR 2679-2680.
---------------------------------------------------------------------------

    Comment: Commenters stated that since the revised consideration of 
weighing costs and benefits as part of a CAA section 112(n)(1)(A) 
finding hinges on the estimation of HAP reduction benefits, the EPA 
must make a better effort to monetize all HAP reduction benefits. These 
commenters asserted that new research suggests that the EPA 
underestimated the benefits associated with HAP reductions across 
several effects. Specific criticisms of the EPA HAP benefit estimation 
focused primarily on methylmercury \44\ and included: (1) Failure to 
quantify cardiovascular effects; (2) criticism of the approach used in 
modeling the IQ loss endpoint; (3) failure to consider other 
neurological endpoints besides IQ loss; (4) failure to consider 
additional health effects besides neurological and cardiovascular 
impacts; and (5) failure to model the full range of fish consumption 
pathways related to mercury emissions from EGUs.
---------------------------------------------------------------------------

    \44\ Additional comments also addressed the modeling of non-
mercury HAP in the context of the appropriate and necessary risk 
assessment (as opposed to the benefits analysis), with these 
comments focusing on claims that EPA had failed to appropriately 
include adjustment factors addressing individual-variability and 
limitations in using the census block-centroid approach to capturing 
risk for the most exposed individual. These comments are addressed 
in the RTC document.
---------------------------------------------------------------------------

    Response: After reviewing the additional peer-reviewed studies on 
health effects attributable to mercury that were submitted in the 
comments, the EPA concludes that the approach to assessing quantified 
and unquantified methylmercury benefits in the 2011 RIA, while subject 
to uncertainty, remains valid. We address the major criticisms across 
the five major categories of comments below.
i. Failure To Quantify Cardiovascular Effects
    Commenters cited several studies regarding the linkage between 
methylmercury concentrations in blood and tissue samples and 
cardiovascular health. Some of the studies cited in the comments were 
available to the EPA at the time of the 2011 RIA, while others were 
not. The former category includes Rice et al. (2010) \45\ and Roman et 
al. (2011) \46\ which characterize methylmercury-related effects. These 
two articles concluded that methylmercury is both directly linked to 
acute myocardial infarction and intermediary impacts that contribute to 
myocardial infarction risk. They also discussed a host of uncertainties 
associated with methylmercury cardiovascular effects.
---------------------------------------------------------------------------

    \45\ Rice, G.E., et al. (2010). A Probabilistic Characterization 
of the Health Benefits of Reducing Methyl Mercury Intake in the 
United States. Environmental Science & Technology, 44(13): 5216-
5224.
    \46\ Roman, H.A., et al. (2011). Evaluation of the 
cardiovascular effects of methylmercury exposures: Current evidence 
supports development of a dose-response function for regulatory 
benefits analysis. Environmental Health Perspectives, 119(5): 607-
614.
---------------------------------------------------------------------------

    Rice et al. (2010) evaluated the benefits of a 10-percent reduction 
in methylmercury exposure for U.S. populations (reflecting IQ loss and 
presumed mortality impacts). The study used a probabilistic approach to 
address confidence in a causal association between methylmercury and 
heart attacks. Importantly, they state ``we view the evidence for 
causal interpretation as relatively weak.'' They use a subjectively 
defined probability of one-third that the association between 
methylmercury and cardiovascular effects is causal, acknowledging that 
the strength of the association was ``modest.'' The Rice et al. (2010) 
estimates are also sensitive to assumptions regarding the coefficient 
linking hair mercury to heart attack and the timing of the exposure-
response relationship.
    The Roman et al. (2011) paper was a workshop report from a panel 
convened to assess the potential for developing a concentration-
response function for the cardiovascular effect from methylmercury 
exposure. The report recommended that the EPA develop a new dose-
response relationship for cardiovascular-related methylmercury effects. 
However, the study also reports the results of a literature review that 
yield a very small number of in vitro or animal studies; the review 
characterized the strength of the epidemiological studies that assessed 
clinically significant endpoints as being ``moderate.'' The Roman et 
al. (2011) review also mentions uncertainty as to which exposure metric 
(including the timing of exposure and appropriate bio-marker) would 
provide the most robust statistical outcome in modeling cardiovascular 
effects.
    In the 2012 MATS Final Rule, the EPA also addressed comments on the 
linkage between methylmercury exposure and cardiovascular effects. One 
of the references cited as part of the EPA response was Mozaffarian et 
al.

[[Page 31309]]

(2011), which evaluated health outcomes from two large cohorts of men 
and women in the U.S. and showed no evidence of a relationship between 
mercury exposure and increased cardiovascular disease risk.\47\ This 
study also evaluated multiple coronary heart disease subtypes and 
concluded that mercury exposure was not associated with the risk of 
nonfatal myocardial infarction or fatal coronary heart disease. Based 
on the available scientific literature at the time of the MATS rule, 
the Agency concluded that there was inconsistency among available 
studies as to the association between methylmercury exposure and 
various cardiovascular system effects.
---------------------------------------------------------------------------

    \47\ Mozaffarian, D.; Shi, P.; Morris, J.S.; Spiegelman, D.; 
Grandjean, P.; Siscovick, D.S.; Willett, W.C.; Rimm, E.B. Mercury 
exposure and risk of cardiovascular disease in two U.S. cohorts. N 
Engl J Med, 2011, 364, 1116-1125.
---------------------------------------------------------------------------

    In the second category of newer literature, commenters referenced 
the Genchi et al. (2017) \48\ review article that summarizes the 
methylmercury-cardiovascular literature but does not report dose-
response parameters. The paper cites studies from 2002-2007 looking at 
cardiovascular-related effects (e.g., heart rate variability, 
myocardial infarction, atherosclerosis, hypertension, etc.) for a range 
of populations, some U.S. and some non-U.S. The article recommends 
development of a dose-response function for methylmercury exposure and 
myocardial infarctions for regulatory benefits analysis, but does not 
provide specific recommendations regarding which studies, effect 
estimates or functional forms to use. The authors also acknowledge the 
need ``to improve the characterization of the potential linkage between 
methylmercury exposure and the risk of cardiovascular disease.'' 
Commenters also cited Giang and Selin (2016) \49\ as support for their 
argument that the monetized benefits of reducing mercury is greater 
than the EPA estimates in the proposal. This study also acknowledges 
that the relevant literature (through 2016) is relatively small and 
inconsistent with respect to the association between methylmercury 
exposure and cardiovascular disease. The study notes that all of the 
literature discusses the challenges associated with teasing out any 
adverse effects of methylmercury exposure through fish consumption in 
the midst of the positive cardiovascular impacts associated with fish 
consumption. However, based on the information available in the 
existing record and material submitted during the public comment 
period, the EPA believes available evidence does not support a clear 
characterization of the potential relationship between mercury exposure 
and cardiovascular effects at this time. This does not preclude the 
possibility that later scientific work may provide more clarity as to 
the existence or absence of an association.
---------------------------------------------------------------------------

    \48\ Genchi, G.; Sinicropi, M.S.; Carocci, A.; Lauria, G.; 
Catalano, A. Mercury Exposure and Heart Diseases. Int. J. Environ. 
Res. Public Health, 2017, 14, 74. https://doi.org/10.3390/ijerph14010074.
    \49\ Giang, A.; Selin, N. Benefits of mercury controls for the 
United States. Proceedings of the National Academy of Sciences, Vol 
113, No. 2, January 12, 2016. https://doi.org/10.1073/pnas.1514395113.
---------------------------------------------------------------------------

    Further, current research is also insufficient to support modeling 
of the cardiovascular mortality endpoint with a sufficient degree of 
confidence for inclusion in an EPA benefits analysis due to (1) 
questions regarding overall causality and uncertainty in specifying the 
dose-response relationship required (including the form and 
parameterization of the function) and (2) uncertainty in modeling the 
prospective bio-markers (e.g., hair mercury) required in part due to 
questions regarding the temporal aspects of the exposure-response 
relationship.
ii. Criticism of the Approach Used in Modeling the IQ Loss Endpoint
    The second category of criticism related to the 2011 RIA estimation 
of benefits involves the approach used in modeling IQ loss, 
specifically the effect estimate used in modeling this endpoint. 
Commenters pointed out that in modeling IQ loss, two studies, Bellanger 
et al. (2013) \50\ and Trasande et al. (2005),\51\ employ effect 
estimates significantly larger than the effect estimate utilized by the 
EPA in the 2011 RIA, which was obtained from Axelrad et al. (2007).\52\ 
In responding to these comments, the EPA notes that both of these 
alternate studies (Bellanger et al., 2013 and Trasande et al., 2005) 
utilized data from one of the three key datasets (Faroes study) in 
characterizing the relationship between methylmercury exposure and IQ 
loss. By contrast, Axelrad et al. (2007) uses data from all three key 
studies (Faroes, Seychelles, and New Zealand) in fitting their 
function. In addition, Axelrad et al. (2007) also obtained a new 
modeled estimate for IQ loss for the Faroes data from the study authors 
based on structural equation modeling involving underlying neurological 
endpoints. And finally, Axelrad et al. (2007) also used a sophisticated 
hierarchical random-effects model that can consider study-to-study and 
endpoint-to-endpoint variability in modeling the endpoint. When 
considered in aggregate, these details regarding study design 
associated with Axelrad et al. (2007) lead the EPA to conclude that the 
effect estimate obtained from this particular study is well supported 
by the underlying evidence and continues to be appropriate for modeling 
IQ loss benefits related to methylmercury exposure.
---------------------------------------------------------------------------

    \50\ Bellanger, D., et al. (23 authors), Economic benefits of 
methylmercury exposure control in Europe: Monetary value of 
neurotoxicity prevention. Environmental Health, 2013, 12:3.
    \51\ Trasande, L.; Landrigan, P.; Schechter, C. Public Health 
and Economic Consequences of Methyl Mercury Toxicity to the 
Developing Brain. Environmental Health Perspectives, Vol 113, No 5, 
May 2005. https://doi.org/10.1289/ehp.7743.
    \52\ Axelrad, D.; Bellinger, D.; Ryan, L.; Woodruff, T. Dose-
Response relationship of Prenatal Mercury Exposure and IQ: An 
Integrative Analysis of Epidemiologic Data. Environmental Health 
Perspectives, Vol 115, No 4, April 2007.
---------------------------------------------------------------------------

iii. Failure To Consider Other Neurological Endpoints Besides IQ Loss
    The third broad category of criticism related to the 2011 RIA 
estimation of benefits was that the EPA failed to consider other 
neurological endpoints besides IQ loss in modeling benefits. 
Specifically, commenters asserted that pre-existing literature \53\ and 
more recent data have revealed a suite of more sensitive 
neurodevelopmental effects than IQ loss. For example, one recent study 
(Patel et al., 2019) \54\ referenced in the comments suggests an 
association between methylmercury exposure and behavioral problems 
(specifically anxiety), even at relatively low prenatal exposure 
levels. Another study, Masley et al. (2012) \55\ cited by commenters 
concludes that cognitive effects of methylmercury on adults are 
substantial enough to negate beneficial effects of omega-3 fatty acids 
among adults who consume large amounts of some types of fish. Finally, 
commenters pointed to new research (Julvez et al., 2013) \56\ which 
suggests that some individuals might be genetically susceptible to the 
neurological effects of methylmercury and that null groups which do not 
include these individuals could mask significant impacts among

[[Page 31310]]

genetically susceptible within the larger study group.
---------------------------------------------------------------------------

    \53\ National Research Council, The Toxicological Effects of 
Methylmercury, 2000. https://www.nap.edu/catalog/9899/toxicological-effects-of-methylmercury, p. 310.
    \54\ Patel, N.B.; Xu, Y.; McCandless, L.C.; Chen, A.; Yolton, 
K.; Braun, J.; . . . Lanphear, B.P. (2019). Very low-level prenatal 
mercury exposure and behaviors in children: The HOME Study. 
Environmental health: A global access science source, 18(1), 4. 
doi:10.1186/s12940-018-0443-5.
    \55\ Masley, S.C.; Masley, L.V.; Gualtieri, T.: Effect of 
mercury levels & seafood intake on cognitive function in middle-aged 
adults. Integrative Medicine, 11:32-40, 2012.
    \56\ Julvez, J. and Grandjean, P. Genetic susceptibility to 
methylmercury developmental neurotoxicity matters. Front Genet, 4: 
278, 2013.
---------------------------------------------------------------------------

    Taking these comments in order, regarding the potential for 
modeling additional neurological endpoints, including behavioral 
problems (e.g., anxiety), the EPA notes that the cited study (Patel et 
al., 2019) is equivocal in its findings, with the authors stating that 
they ``did not find a consistent association between very low-level 
prenatal mercury exposure and behavior problem scores in children, but 
[they] did find some evidence of an association between very low-level 
mercury exposure during early pregnancy and parent-reported anxiety 
scores in children.'' The authors note that the association of low-
level mercury exposure with behavioral problems, including anxiety, 
deserves further scrutiny. The EPA concludes that we are not yet at the 
point where we can reliably model the effects of low-level mercury 
exposure on children's behavior, including anxiety.
    Regarding the potential for the beneficial cognitive effects of 
omega-3 fatty acids in adults (resulting from fish consumption) to be 
partially negated by coexistent methylmercury exposure, the EPA 
recognizes conceptually that this could occur. However, it is important 
to note that the effects of methylmercury on omega-3 fatty acid intake 
and associated benefits were seen only for the subset of the population 
with relatively elevated consumption of larger fish (i.e., more than 3-
4 servings a month, Masley et al., 2012). Modeling benefits-related 
changes in fish consumption typically focuses on the general consumer 
rather than attempting to model benefits for a specific subset of that 
population which can be challenging to enumerate (i.e., the subgroup of 
those consuming relatively elevated levels of higher-trophic level 
fish)--that level of more refined subgroup modeling is often reserved 
for scenario-based risk assessments, where population enumeration is 
not the focus. For that reason, data on how methylmercury could obscure 
the benefits of omega-3 fatty acid intake (for a specific higher large-
fish-consuming segment of the population) would have less utility in 
the context of a benefits analysis aimed at the more generalized fish-
consuming population. In addition, the EPA would note potential 
challenges in modeling this kind of trade-off related to fish 
consumption, since not only would levels of methylmercury and omega-3 
fatty acids need to be characterized for a broad range of fish species; 
in addition, the specific mix of those types of fish consumed by the 
high-consuming study population would need to be specified in order to 
increase overall confidence in modeling cognitive-related benefits at 
the representative population-level for this subgroup.
    Regarding the potential that certain individuals could be 
genetically susceptible to the neurological effects of methylmercury 
and that, consequently, these individuals may not be fully covered by 
existing studies characterizing neurodevelopmental effects of 
methylmercury, the EPA acknowledges this as a possibility. However, the 
study cited by commenters (Julvez et al., 2013) does not provide effect 
estimates for these potentially at-risk subgroups, which prevents 
quantitative analysis of risk and associated dollar-benefits associated 
with mercury-exposure in these subgroups.
iv. Failure To Consider Additional Health Effects Besides Neurological 
and Cardiovascular Impacts
    Commenters pointed to the potential for methylmercury exposure to 
be associated with a range of additional adverse health effects 
(besides neurological and cardiovascular), including cancer (leukemia 
and liver) and possible effects on the reproductive, hematological, 
endocrine (diabetes), and immune systems. The EPA notes the distinction 
between evidence-based support for specific health effects (potentially 
even including support for causal associations should it exist) and the 
ability to reliably model those health endpoints quantitatively. In 
referencing the above health endpoints, commenters referred to a range 
of study data which can be used as evidence for an association, 
including elucidation of potential toxicity pathways.
    In response to these comments, the EPA notes that in order to model 
a health effect within a defined population as part of a benefits 
analysis, high-confidence concentration-response functions linked to 
clearly defined biometrics (which can themselves be simulated at the 
population-exposure level) are required. At this time, as noted 
earlier, with the exception of IQ loss in children, the EPA does not 
believe research is currently sufficient to support quantitative 
assessment of any of these additional endpoints in the context of a 
benefits analysis involving mercury (accessed through a fish-
consumption pathway).
v. Failure To Model the Full Range of Fish Consumption Pathways Related 
to Mercury Emissions From EGUs
    A number of commenters stated that the EPA underestimated IQ-
related benefits by focusing the benefits analysis on self-caught 
(recreational) freshwater fish. Specifically, commenters pointed to 
Trasande et al. (2005) as an example of an assessment that, while also 
modeling benefits associated with controlling mercury emissions from 
U.S. power plants, more fully considers exposure to methylmercury, 
including the general consumption of commercial fish by the U.S. 
population. The Trasande et al. (2005) study employs general linear 
apportionment (based on estimates of U.S. EGU emissions relative to 
global emissions) to estimate the fraction of methylmercury in U.S. 
freshwater and coastal fish associated with U.S. EGU emissions. A 
similar calculation is used to estimate the fraction of methylmercury 
in non-U.S. sourced commercial fish associated with U.S. EGU emissions. 
They then apportion their estimate of total IQ loss for children in the 
U.S. (assumed to come completely from fish consumption) to U.S. EGU-
sourced mercury versus other sources. Similarly, commenters have also 
cited Giang and Selin (2016) as another example of a study that 
attempts to generate a more complete picture of methylmercury benefits 
associated with controlling U.S. EGU mercury emissions, including 
exposures associated with commercial fish consumption. Notably, the 
Giang et al. (2016) study uses a more sophisticated modeling approach 
(compared with Trasande et al., 2005), to project potential benefits 
associated with MATS within the United States out to 2050, including 
application of global mercury deposition modeling covering specific 
regions associated with commercial fishing. The authors note that 
greater than 90 percent of U.S. commercial fish consumption, and the 
majority of U.S. mercury intake, comes from marine and estuarine 
sources, particularly from the Pacific and Atlantic Ocean basins. 
Regarding the assertion that the EPA should have used methodologies 
similar to those cited in these studies to incorporate consideration of 
commercial fish consumption (linked to U.S. EGU mercury emissions) in 
its benefits analysis, the EPA again reiterates the importance of 
including only those consumption pathways that can be modeled with a 
reasonable degree of confidence. Both of the studies cited employ 
broad-scale simplifying assumptions in order to link changes in U.S. 
EGU mercury emissions to potential changes in the concentration of 
methylmercury in commercial fish, which Giang et al. (2016) suggest is 
responsible for the vast majority of fish-

[[Page 31311]]

related methylmercury exposure in the U.S. Specifically, as noted 
earlier, the Trasande et al. (2005) study links U.S. EGU emissions (as 
a fraction of total global emissions) to methylmercury concentrations 
in commercially and recreational fish consumed by the U.S. population. 
With the Giang et al. (2016) study, the authors utilize U.S. EGU 
deposition (as a fraction of total) in specific broad fishing regions 
(e.g., Atlantic) to estimate the fraction of methylmercury in 
commercially sourced fish caught in those broad regions attributable to 
U.S. EGUs. Both of these simplifying assumptions mask the potential 
complexity associated with linking U.S. EGU-sourced mercury to 
methylmercury concentrations in these commercial fish species. In 
particular, a larger region such as the Atlantic likely displays 
smaller-scale variation in critical factors such as fish species 
habitat/location, patterns of mercury deposition, and factors related 
to the methylation of mercury and associated bioaccumulation/
biomagnification. In developing these kinds of more sophisticated 
models aimed at factoring commercial fish consumption into a benefits 
analysis involving U.S. EGU mercury, additional analyses could be 
needed to understand this critical element of spatial scale and the 
generalizing assumptions used by these authors in linking mercury 
emissions and deposition to commercial fish. Note that in the EPA's 
benefits analysis completed for MATS, one reason focus was placed on 
the freshwater angler scenario was increased confidence in modeling 
this exposure pathway given our ability to link patterns of U.S. EGU 
mercury deposition (relative to total deposition) over specific 
watersheds to sampled fish tissue concentrations in those same 
watersheds. This degree of refined spatial precision in linking U.S. 
EGU deposition to actual measured fish tissue data increased overall 
confidence in modeling benefits associated with this pathway, leading 
us to focus on the recreational angler exposure pathway.

D. Effects of This Reversal of the Supplemental Finding

1. Summary of 2019 Proposal
    In the 2019 Proposal, the EPA proposed to conclude that finalizing 
a revision to the 2016 Supplemental Finding to determine that it is not 
appropriate and necessary to regulate HAP emissions from coal- and oil-
fired EGUs would not lead to the removal of that source category from 
the CAA section 112(c)(1) list, nor would it affect the CAA section 
112(d) standards established in the MATS rule.
    As described in section II.B of this preamble, in 2005, the EPA 
reversed the 2000 determination that regulation of HAP emissions from 
EGUs under CAA section 112 was appropriate and necessary. At that time, 
the EPA justified its decision to delist EGUs because it ``reasonably 
interprets section 112(n)(1)(A) as providing it authority to remove 
coal- and oil-fired units from the section 112(c) list at any time that 
it makes a negative appropriate and necessary finding under the 
section.'' 70 FR 16032. In the 2005 Delisting Rule, the EPA 
``identified errors in the prior [2000] finding and determined that the 
finding lacked foundation.'' 70 FR 16032. Because the EPA concluded the 
2000 Finding had been in error at the time of listing, the Agency 
asserted that coal- and oil-fired EGUs ``should never have been listed 
under section 112(c) and therefore the criteria of section 112(c)(9) do 
not apply'' in removing the source category from the list. Id. at 
16033. Therefore, the EPA stated that it had ``inherent authority under 
the CAA to revise [the listing] at any time based on either identified 
errors in the December 2000 finding or on new information that bears 
upon that finding.'' Id. at 16033.
    The D.C. Circuit rejected the EPA's interpretations, holding that 
the Agency did not have authority to remove source categories from the 
CAA section 112(c) list based only on a revised CAA section 
112(n)(1)(A) negative appropriate and necessary finding. The Court held 
that the CAA unambiguously requires the EPA to demonstrate that the 
delisting criteria in CAA section 112(c)(9) have been met before 
``any'' source category can be removed from the CAA section 112(c)(1) 
list. New Jersey, 517 F.3d at 582. The D.C. Circuit specified that, 
under the plain text of the CAA, ``the only way the EPA could remove 
EGUs from the section 112(c)(1) list'' was to satisfy those criteria. 
Id. The Court expressly rejected the EPA's argument that, 
``[l]ogically, if EPA makes a determination under section 112(n)(1)(A) 
that power plants should not be regulated at all under section 112 . . 
. [then] this determination ipso facto must result in removal of power 
plants from the section 112(c) list.'' Id. (quoting the EPA's brief). 
Instead, the Court maintained that CAA section 112(n)(1) governed only 
how the Administrator determines whether to list EGUs, and that the 
EPA's authority to remove a source category from the list, even for 
EGUs, must be exercised only in accordance with the requirements of CAA 
section 112(c)(9). Accordingly, the Court vacated the 2005 Delisting 
Rule.
    Based on the D.C. Circuit's holding in New Jersey, the EPA proposed 
that finalization of the reversal of the 2016 Supplemental Finding, 
much like the 2005 Delisting Rule's reversal of the 2000 appropriate 
and necessary determination, would not have the effect of removing the 
Coal- and Oil-Fired EGU source category from the CAA section 112(c)(1) 
list because the EPA had not met the statutorily required CAA section 
112(c)(9) delisting criteria. Because coal- and oil-fired EGUs would 
remain on the CAA section 112(c)(1) source category list, the EPA 
proposed to conclude that the CAA section 112(d) standards for that 
category, as promulgated in the MATS rule, would be unaffected by the 
proposal if finalized.
    In the proposal, the EPA requested comment on two alternative 
interpretations of the New Jersey holding. The first alternative 
interpretation probed whether the New Jersey decision does not apply 
because the facts of the current situation are distinguishable from the 
underlying facts of that case. Specifically, the EPA requested comment 
on the view that New Jersey would not apply because the proposed 
reversal of the 2016 Supplemental Finding is a continuation of the 
Agency's response to the U.S. Supreme Court's remand in Michigan. Under 
this view, the Agency could rescind MATS without demonstrating that the 
CAA section 112(c)(9) criteria had been met because New Jersey did not 
address the situation in which the Agency was revising its CAA section 
112(n)(1)(A) determination in response to a U.S. Supreme Court 
decision. The second alternative interpretation solicited comment on 
whether the EPA would have the authority to rescind the standards 
regulating HAP emissions under CAA section 112(d) in light of the fact 
that CAA section 112(n)(1)(A) plainly requires that the Administrator 
must find that regulation under CAA section 112 is appropriate and 
necessary as a prerequisite to undertaking such regulation. Under this 
theory, EGUs would remain on the CAA section 112(c) list, but would not 
be subject to CAA section 112(d) standards, because New Jersey did not 
address the question of whether, in the absence of a valid and 
affirmative appropriate and necessary finding, the EPA must regulate 
EGUs for HAP. For both alternative interpretations, the EPA solicited 
comment on whether the Agency had the discretion to follow an 
alternative or was, in fact, obligated to pursue an alternative 
interpretation.

[[Page 31312]]

2. Final Rule
    After considering comments submitted in response to the EPA's 2019 
Proposal, we are concluding that the current action to reverse the 2016 
Supplemental Finding would not affect the CAA section 112(c) listing of 
EGUs or the CAA section 112(d) regulations. The situation here is 
essentially indistinguishable to that in the New Jersey case, and, 
therefore, in the absence of the CAA section 112(c)(9) delisting 
criteria being satisfied, coal- and oil-fired EGUs necessarily remain 
on the list of regulated sources, and the CAA section 112(d) standards 
promulgated in the MATS rule necessarily remain in place. The EPA did 
not propose a delisting analysis, and the EPA does not intend to 
examine the delisting criteria for the Coal- and Oil-Fired EGU source 
category. Moreover, as noted in the proposal, the results of the CAA 
section 112(f)(2) residual risk review conducted as part of this final 
action indicate that with the MATS rule in place, the estimated 
inhalation cancer risk to the individual most exposed to actual 
emissions from the source category is 9-in-1-million, which would not 
satisfy the requirements for delisting as specified in CAA section 
112(c)(9).\57\
---------------------------------------------------------------------------

    \57\ As relevant here, CAA section 112(c)(9) provides that the 
``Administrator may delete any category from the list under this 
subsection . . . whenever the Administrator makes the following 
determination . . . (i) In the case of hazardous air pollutants 
emitted by sources in the category that may result in cancer in 
humans, a determination that no source in the category . . . emits 
such hazardous air pollutants in quantities which may cause a 
lifetime risk of cancer greater than one in one million to the 
individual in the population who is most exposed to emissions of 
such pollutants from the source . . . .'' (emphases added). The 
findings of the EPA's residual risk review indicate that it is 
extremely unlikely that any EPA Administrator could (much less 
would) lawfully exercise his or her discretion to ``de-list'' the 
Coal- and Oil-Fired EGU source category.
---------------------------------------------------------------------------

3. Comments and Responses
    Comment: Some commenters argued that the EPA must rescind MATS if 
the Agency finalizes a determination that regulation under CAA section 
112(n)(1)(A) is not appropriate and necessary. The commenters cited the 
finding in Michigan which held that ``EPA interpreted [section 
112(n)(1)(A)] unreasonably when it deemed cost irrelevant to the 
decision to regulate power plants'' and asserted that if the EPA now 
concludes that, based on a proper evaluation of costs, regulation of 
EGUs under CAA section 112 is not appropriate and necessary, then 
either the CAA section 112(c) listing, the MATS rule, or both must be 
invalidated. The commenters argued that, after the finalization of the 
proposal, there is no valid appropriate and necessary determination, 
which was the basis for the EPA's listing of the Coal- and Oil-Fired 
EGU source category. The commenters also argued that under the plain 
meaning of the statutory text, Congress' intention is clear that if the 
EPA determines that regulation of EGU emissions under CAA section 112 
is not ``appropriate and necessary,'' then the EPA lacks jurisdiction 
to regulate such emissions. One commenter asserted that the EPA's 
proposal to continue to enforce MATS while simultaneously rejecting the 
factual and statutory basis for the rule, offends the rule of law.
    The commenters argued that the EPA's reliance on the New Jersey 
decision is misplaced because the regulatory landscape presented in 
this action is fundamentally different than what was assessed by the 
D.C. Circuit in New Jersey. According to the commenters, the New Jersey 
decision only addressed the EPA's authority to delist based on the 
reversal of an appropriate and necessary finding presumed to be legally 
valid, which is a fact pattern not present in this action given the 
Michigan holding. One commenter argued that because the EPA had not yet 
issued any EGU HAP standards under CAA section 112(d) at the time of 
New Jersey, the EPA's interpretation of its regulatory jurisdiction 
under CAA section 112(n) had not been subject to judicial review and 
the New Jersey decision, therefore, does not speak to whether the EPA 
has authority to rescind a CAA section 112(d) standard after reversing 
the appropriate and necessary finding. One commenter further argued 
that to the extent the EPA views its legal authority regarding 
continued enforcement of MATS to be ambiguous, it would be arbitrary 
and capricious for the EPA to voluntarily leave MATS in place.
    Conversely, there were many commenters who agreed with the EPA's 
proposed approach to leave the MATS rule in place. These commenters 
agreed that the situation here is identical to what was adjudicated in 
New Jersey; that is, in both cases (1) the EPA had reversed an earlier 
final and effective finding that regulating EGUs under CAA section 
112(n)(1)(A) was appropriate and necessary, and (2) coal- and oil-fired 
EGUs had been listed pursuant to CAA section 112(c). These commenters 
concluded that following a final EPA determination that regulation of 
EGUs under CAA section 112 is not appropriate and necessary, both the 
CAA and the New Jersey holding are clear that the only way to delist or 
de-regulate EGUs would be through meeting the delisting criteria of CAA 
section 112(c)(9).
    Response: As explained in the 2019 Proposal, the EPA believes that 
the D.C. Circuit's New Jersey decision governs the effects of the EPA's 
final action. More specifically, this final action reversing the 2016 
Supplemental Finding does not remove the Coal- and Oil-Fired EGU source 
category from the CAA section 112(c)(1) list. As the Court stated, 
``Congress . . . undoubtedly can limit an agency's discretion to 
reverse itself, and in section 112(c)(9) Congress did just that, 
unambiguously limiting EPA's discretion to remove sources, including 
EGUs, from the section 112(c)(1) list once they have been added to 
it.'' 517 F.3d at 583. The Court expressly rejected the argument made 
by the EPA at the time that if the Agency reversed course and 
determined it was not appropriate and necessary to regulate EGUs under 
CAA section 112, then that determination ``logically'' resulted in the 
removal of EGUs from the CAA section 112(c)(1) list. 517 F.3d at 582. 
As the D.C. Circuit stated: ``EPA's disbelief that it would be 
prevented from correcting its own `errors' except through section 
112(c)(9)'s delisting process or court-sanctioned vacatur cannot 
overcome the plain text enacted by Congress.'' 517 F.3d at 583. Because 
coal- and oil-fired EGUs remain on the CAA section 112(c)(1) source 
category list, the CAA section 112(d) standards for the Coal- and Oil-
Fired EGU source category, as promulgated in the MATS rule, are 
unaffected by this action.
    The EPA does not find persuasive commenters' argument that New 
Jersey is distinguishable because this action is not a reversal of a 
valid prior appropriate and necessary finding. As the commenters 
acknowledge, the D.C. Circuit in New Jersey did not directly assess the 
validity of the EPA's 2000 appropriate and necessary determination. 
Rather, the EPA in its 2005 action revised the 2000 appropriate and 
necessary finding because it was flawed. Similarly, here, the EPA has 
determined that the 2016 Supplemental Finding was erroneous (just as it 
did in 2005 with respect to the 2000 finding) and is finalizing 
reversal of the 2016 Supplemental Finding (just as the EPA revised the 
2000 finding).
    We also disagree with the commenters' argument that New Jersey is 
distinguishable because it was decided before the EPA had promulgated a 
NESHAP for EGUs, and, therefore, the D.C. Circuit did not address the 
EPA's authority to rescind MATS following a final determination that it 
is not appropriate and necessary

[[Page 31313]]

to regulate EGUs under CAA section 112. The statute does preclude a 
challenge to the EPA's appropriate and necessary finding until 
standards are in place, see CAA section 112(e)(4); Util. Air Regulatory 
Grp. v. EPA, D.C. Cir. No. 01-1074, 2001 WL 936363 at *1 (D.C. Cir., 
July 26, 2001), but nothing in the D.C. Circuit's reasoning in the New 
Jersey decision relied on the fact that the earlier appropriate and 
necessary finding was not yet reviewable. In New Jersey, the 2000 
Finding was not yet subject to judicial review and the EPA argued that 
the inclusion of EGUs on the CAA section 112(c) list was not final 
Agency action; here, the 2016 Supplemental Finding was final and 
subject to judicial review. New Jersey is clear that, even following an 
EPA determination that it is not appropriate and necessary to regulate 
EGUs under CAA section 112, the EPA cannot delist EGUs without going 
through the statutory delisting criteria (which the EPA has not done 
here). As long as EGUs stay on the CAA section 112(c) list of source 
categories, the EPA is required to promulgate emission standards under 
CAA section 112(d) regulating such sources. 42 U.S.C. 7412(c)(2) (``For 
the categories and subcategories the Administrator lists, the 
Administrator shall establish emissions standards under subsection (d) 
of this section.''). Thus, there is no question about it: Under the 
D.C. Circuit's holding in New Jersey, in order to rescind regulation 
under CAA section 112(d), i.e., to rescind MATS, EGUs must first be 
delisted as a CAA section 112(c) source category.
    As explained, the EPA believes that it is bound by the D.C. 
Circuit's New Jersey decision. The New Jersey decision itself was 
decided on Chevron step 1 grounds. 517 F.3d at 582 (``EPA's purported 
removal of EGUs from the section 112(c)(1) list therefore violated the 
CAA's plain text and must be rejected under step one of Chevron.''). 
Because the facts of this rulemaking are substantially similar to those 
before the D.C. Circuit in New Jersey, and because the D.C. Circuit 
recognized that in such a scenario the Agency has no discretion, the 
EPA does not believe that it has any discretion under Chevron, as one 
commenter asserted, to voluntarily rescind MATS following this final 
action. For these reasons, the EPA rejects commenters' assertion that 
it is acting in an arbitrary and capricious manner in this 
determination of the effect of this final Agency action.
    The EPA additionally notes that one commenter stated in its comment 
that if the EPA finalized the proposal ``based on any justification 
that does not include a full updating, subject to public comment, of 
the analytical data base on which it rests,'' EPN ``formally petitions 
EPA to continue the EGU MACT rule in effect'' by making a new 
appropriate and necessary finding ``based on the facts as they stand 
today,'' which EPN believes would support a determination that 
regulation of EGUs under CAA section 112 is appropriate and necessary. 
EPN comment at 36 (April 17, 2019) (Docket ID Item No. EPA-HQ-OAR-2018-
0794-2261). However, as explained above, the EPA determines that this 
final action has no effect on the MATS for EGUs; the MATS rule remains 
in effect without any further action by the EPA. To the extent any 
response is needed, the EPA denies the EPN petition.
    Comment: Numerous stakeholders claimed a serious reliance interest 
in the MATS rule that should weigh against delisting or rescission of 
MATS as a result of the EPA's reversal of the 2016 Supplemental 
Finding. These stakeholders cited concerns about how delisting or 
rescission could lead to negative impacts on cost recovery of 
significant capital investments, potential disruptions to pre-existing 
air quality planning efforts at the state-level, or potentially 
foregone improvements in public health of the kind that have already 
resulted from improved air quality due to MATS emissions reductions. 
Some commenters pointed to these interests as a reason why the EPA 
should not adopt either of the two alternative interpretations 
presented by the Agency in the 2019 Proposal regarding the potential 
effects of this Agency action.
    Response: The EPA's revised determination that regulation of EGUs 
under CAA section 112 is not appropriate and necessary will not remove 
EGUs from the CAA section 112(c) list of sources, and the previously 
established EGU MACT standard, as established in MATS, remains in 
place. As a result, the EPA does not anticipate that any of the 
reliance interests cited above will be jeopardized as a result of this 
action.

III. Background on the RTR Action

A. What is the statutory authority for this action?

    Section 112 of the CAA establishes a two-stage regulatory process 
to address emissions of HAP from stationary sources. In the first 
stage, we must identify categories of sources emitting one or more of 
the HAP listed in CAA section 112(b) and then promulgate technology-
based NESHAP for those sources. ``Major sources'' are those that emit, 
or have the potential to emit, any single HAP at a rate of 10 tons per 
year (tpy) or more, or 25 tpy or more of any combination of HAP. For 
major sources, these standards are commonly referred to as MACT 
(maximum achievable control technology) standards and must reflect the 
maximum degree of emission reductions of HAP achievable after 
considering cost, energy requirements, and non-air quality health and 
environmental impacts. CAA section 112(d)(2) directs the EPA, in 
developing MACT standards, to consider the application of measures, 
processes, methods, systems, or techniques, including, but not limited 
to, those that reduce the volume of or eliminate HAP emissions through 
process changes, substitution of materials, or other modifications; 
enclose systems or processes to eliminate emissions; collect, capture, 
or treat HAP when released from a process, stack, storage, or fugitive 
emissions point; are design, equipment, work practice, or operational 
standards; or any combination of the above.
    For these MACT standards, the statute specifies certain minimum 
stringency requirements, which are referred to as MACT floor 
requirements, and which may not be based on cost considerations. See 
CAA section 112(d)(3). For new sources, the MACT floor cannot be less 
stringent than the emission control achieved in practice by the best-
controlled similar source. The MACT standards for existing sources can 
be less stringent than floors for new sources, but they cannot be less 
stringent than the average emission limitation achieved by the best-
performing 12 percent of existing sources in the category or 
subcategory (or the best-performing five sources for categories or 
subcategories with fewer than 30 sources). In developing MACT 
standards, we must also consider control options that are more 
stringent than the floor under CAA section 112(d)(2). We may establish 
standards more stringent than the floor, based on the consideration of 
the cost of achieving the emissions reductions, any non-air quality 
health and environmental impacts, and energy requirements.
    In the second stage of the regulatory process, the CAA requires the 
EPA to undertake two different analyses, which we refer to as the 
technology review and the residual risk review. Under the technology 
review, we must review the technology-based standards and revise them 
``as necessary (taking into account developments in practices, 
processes, and control technologies)'' no less frequently than every 8 
years, pursuant

[[Page 31314]]

to CAA section 112(d)(6). Under the residual risk review, we must 
evaluate the risk to public health remaining after application of the 
technology-based standards and must revise the standards, if necessary, 
to provide an ample margin of safety to protect public health or to 
prevent, taking into consideration costs, energy, safety, and other 
relevant factors, an adverse environmental effect. The residual risk 
review is required within 8 years after promulgation of the technology-
based standards, pursuant to CAA section 112(f). In conducting the 
residual risk review, if the EPA determines that the current standards 
provide an ample margin of safety to protect public health, it is not 
necessary to revise the MACT standards pursuant to CAA section 
112(f).\58\ For more information on the statutory authority for this 
rule, see 84 FR 2670, February 7, 2019.
---------------------------------------------------------------------------

    \58\ The D.C. Circuit has affirmed this approach to implementing 
CAA section 112(f)(2)(A). See NRDC v. EPA, 529 F.3d 1077, 1083 (D.C. 
Cir. 2008) (``If EPA determines that the existing technology-based 
standards provide an 'ample margin of safety,' then the Agency is 
free to readopt those standards during the residual risk 
rulemaking.'').
---------------------------------------------------------------------------

B. What is the Coal- and Oil-Fired EGU source category and how does the 
NESHAP regulate HAP emissions from the source category?

    The EPA promulgated the NESHAP for Coal- and Oil-Fired EGUs 
(commonly referred to as MATS) on February 16, 2012 (77 FR 9304). The 
standards are codified at 40 CFR part 63, subpart UUUUU. The MATS rule 
applies to existing and new coal- and oil-fired EGUs located at both 
major and area sources of HAP emissions. An EGU is a fossil fuel-fired 
combustion unit of more than 25 megawatts (MW) that serves a generator 
that produces electricity for sale. A unit that cogenerates steam and 
electricity and supplies more than one-third of its potential electric 
output capacity and more than 25 MW electric output to any utility 
power distribution system for sale is also an EGU. The source category 
covered by this MACT standard currently includes an estimated 713 EGUs 
located at approximately 323 facilities.
    For coal-fired EGUs, the rule established standards to limit 
emissions of mercury, acid gas HAP, non-mercury HAP metals (e.g., 
nickel, lead, chromium), and organic HAP (e.g., formaldehyde, dioxin/
furan). Standards for hydrochloric acid (HCl) serve as a surrogate for 
the acid gas HAP, with an alternate standard for SO2 that 
may be used as a surrogate for acid gas HAP for those coal-fired EGUs 
with flue gas desulfurization systems and SO2 continuous 
emissions monitoring systems installed and operational. Standards for 
filterable PM serve as a surrogate for the non-mercury HAP metals, with 
standards for total non-mercury HAP metals and individual non-mercury 
HAP metals provided as alternative equivalent standards. Work practice 
standards that require periodic combustion process tune-ups limit 
formation and emissions of the organic HAP.
    For oil-fired EGUs, the rule establishes standards to limit 
emissions of HCl and hydrogen fluoride (HF), total HAP metals (e.g., 
mercury, nickel, lead), and organic HAP (e.g., formaldehyde, dioxin/
furan). Standards for filterable PM serve as a surrogate for total HAP 
metals, with standards for total HAP metals and individual HAP metals 
provided as alternative equivalent standards. Periodic combustion 
process tune-up work practice standards limit formation and emissions 
of the organic HAP.
    The MATS rule was amended on April 19, 2012 (77 FR 23399), to 
correct typographical errors and certain preamble text that was 
inconsistent with regulatory text; on April 24, 2013 (78 FR 24073), to 
update certain emission limits and monitoring and testing requirements 
applicable to new sources; on November 19, 2014 (79 FR 68777), to 
revise definitions for startup and shutdown and to finalize work 
practice standards and certain monitoring and testing requirements 
applicable during periods of startup and shutdown; and on April 6, 2016 
(81 FR 20172), to correct conflicts between preamble and regulatory 
text and to clarify regulatory text. In addition, the electronic 
reporting requirements of the rule were amended on March 24, 2015 (80 
FR 15510), to allow for the electronic submission of Portable Document 
Format (PDF) versions of certain reports until April 16, 2017, to allow 
for time for the EPA's Emissions Collection and Monitoring Plan System 
to be revised to accept all reporting that is required by the rule, and 
on April 6, 2017 (82 FR 16736), and on July 2, 2018 (83 FR 30879), to 
extend the interim submission of PDF versions of reports through June 
30, 2018, and July 1, 2020, respectively.
    Additional detail regarding the standards applicable to the seven 
subcategories of EGUs regulated under the MATS rule can be found in 
section IV.B of the 2019 Proposal. 84 FR 2670 (February 7, 2019).

C. What changes did we propose for the Coal- and Oil-Fired EGU source 
category in our February 7, 2019, proposed rule?

    On February 7, 2019, the EPA published a proposed rule in the 
Federal Register for the NESHAP for Coal- and Oil-Fired EGUs, 40 CFR 
part 63, subpart UUUUU, that took into consideration the RTR analyses. 
84 FR 2670. In the proposed rule, we found that residual risks due to 
emissions of air toxics from this source category are acceptable and 
that the current NESHAP provides an ample margin of safety to protect 
public health, and we identified no new developments in HAP emission 
controls to achieve further cost-effective emissions reductions under 
the technology review. Based on the results of these analyses, we 
proposed no revisions to the MATS rule.

IV. What is included in this final rule based on results of the RTR?

    This action finalizes the EPA's determinations pursuant to the RTR 
provisions of CAA section 112 for the Coal- and Oil-Fired EGU source 
category.

A. What are the final rule amendments based on the residual risk review 
for the Coal- and Oil-Fired EGU source category?

    We found risk due to emissions of air toxics to be acceptable from 
this source category and determined that the current NESHAP provides an 
ample margin of safety to protect public health and prevent an adverse 
environmental effect. Therefore, we did not propose and are not 
finalizing any revisions to the NESHAP for Coal- and Oil-Fired EGUs 
based on our analyses conducted under CAA section 112(f).

B. What are the final rule amendments based on the technology review 
for the Coal- and Oil-Fired EGU source category?

    We determined that there are no developments in practices, 
processes, and control technologies that warrant revisions to the MACT 
standard for this source category. Therefore, we did not propose and 
are not finalizing revisions to the MACT standard under CAA section 
112(d)(6).

C. What are the effective and compliance dates of the standards?

    The final rule is effective on May 22, 2020. No amendments to the 
MATS rule are being promulgated in this action. Thus, there are no 
adjustments being made to the compliance dates of the standards.

[[Page 31315]]

V. What is the rationale for our final decisions regarding the RTR 
action for the Coal- and Oil-Fired EGU source category?

    This section of this preamble provides a description of what we 
proposed and what we are finalizing, the EPA's rationale for the final 
decisions, and a summary of key comments and responses. For comments 
not discussed in this preamble, comment summaries and the EPA's 
responses can be found in the document titled Final Supplemental 
Finding and Risk and Technology Review for the NESHAP for Coal- and 
Oil-Fired EGUs Response to Public Comments on February 7, 2019 
Proposal, available in the docket for this action.

A. Residual Risk Review for the Coal- and Oil-Fired EGU Source Category

1. What did we propose pursuant to CAA section 112(f) for the Coal- and 
Oil-Fired EGU source category?
    Pursuant to CAA section 112(f), the EPA conducted a residual risk 
review and presented the results of this review, along with our 
proposed decisions regarding risk acceptability, ample margin of 
safety, and adverse environmental effects, in the February 7, 2019, 
proposed rule. 84 FR 2697-2700. The results of the risk assessment are 
presented briefly in Table 2, and in more detail in the document titled 
Residual Risk Assessment for the Coal- and Oil-Fired EGU Source 
Category in Support of the 2019 Risk and Technology Review Proposed 
Rule (risk document for the proposed rule), available in the docket for 
this action.

                                                Table 2--Coal- and Oil-Fired EGU Inhalation Risk Assessment Results in the February 2019 Proposal
                                                                                 [84 FR 2670, February 7, 2019]
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                 Maximum individual      Population at increased   Annual cancer incidence       Maximum chronic        Maximum screening acute noncancer HQ 4
                                                  cancer risk (in 1      risk of cancer >=1-in-1      (cases per year)          noncancer TOSHI 3    -------------------------------------------
                                                     million) 2                  million         ----------------------------------------------------
                                             ----------------------------------------------------      Based on . . .            Based on . . .
           Number of facilities 1                  Based on . . .            Based on . . .      ----------------------------------------------------
                                             ----------------------------------------------------                                                           Based on actual emission level
                                                 Actual     Allowable      Actual     Allowable      Actual     Allowable      Actual     Allowable
                                               emissions    emissions    emissions    emissions    emissions    emissions    emissions    emissions
                                                 level        level        level        level        level        level        level        level
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
322.........................................            9           10      193,000      636,000         0.04          0.1          0.2          0.4  HQREL = 0.09
                                                                                                                                                      (arsenic).
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
1 Number of facilities evaluated in the risk analysis. There are an estimated 323 facilities in the Coal- and Oil-Fired EGU source category; however, one facility is located in Guam, which is
  beyond the geographic range of the model used to estimate risks. Therefore, the Guam facility was not modeled and the emissions for that facility are not included in this assessment.
2 Maximum individual excess lifetime cancer risk due to HAP emissions from the source category.
3 Maximum target organ-specific hazard index (TOSHI). The target organ systems with the highest TOSHI for the source category are neurological and reproductive.
4 The maximum estimated acute exposure concentration was divided by available short-term threshold values to develop an array of hazard quotient (HQ) values. HQ values shown use the lowest
  available acute threshold value, which in most cases is the reference exposure level (REL). When an HQ exceeds 1, we also show the HQ using the next lowest available acute dose-response
  value.

a. Chronic Inhalation Risk Assessment Results
    The results of the chronic inhalation cancer risk assessment based 
on actual emissions, as shown in Table 2 of this preamble, indicate 
that the estimated maximum individual lifetime cancer risk (cancer MIR) 
is 9-in-1 million, with nickel emissions from oil-fired EGUs as the 
major contributor to the risk. The total estimated cancer incidence 
from this source category is 0.04 excess cancer cases per year, or one 
excess case in every 25 years. Approximately 193,000 people are 
estimated to have cancer risks at or above 1-in-1 million from HAP 
emitted from the facilities in this source category. The estimated 
maximum chronic noncancer TOSHI for the source category is 0.2 
(respiratory), which is driven by emissions of nickel and cobalt from 
oil-fired EGUs. No one is exposed to TOSHI levels above 1 based on 
actual emissions from sources regulated under this source category.
    The EPA also evaluated the cancer risk at the maximum emissions 
allowed by the MACT standard (i.e., ``allowable emissions''). As shown 
in Table 2 of this preamble, based on allowable emissions, the 
estimated cancer MIR is 10-in-1 million, and, as before, nickel 
emissions from oil-fired EGUs are the major contributor to the risk. 
The total estimated cancer incidence from this source category, 
considering allowable emissions, is 0.1 excess cancer cases per year, 
or one excess case in every 10 years. Based on allowable emissions, 
approximately 636,000 people are estimated to have cancer risks at or 
above 1-in-1 million from HAP emitted from the facilities in this 
source category. The estimated maximum chronic noncancer TOSHI for the 
source category is 0.4 (respiratory) based on allowable emissions, 
driven by emissions of nickel and cobalt from oil-fired EGUs. No one is 
exposed to TOSHI levels above 1 based on allowable emissions.
b. Screening Level Acute Risk Assessment Results
    Table 2 of this preamble provides the worst-case acute HQ (based on 
the REL) of 0.09, driven by emissions of arsenic. There are no 
facilities that have acute HQs (based on the REL or any other reference 
values) greater than 1. For more detailed acute risk results, refer to 
the risk document for the proposed rule, available in the docket for 
this action.
c. Multipathway Risk Screening and Site-Specific Assessment Results
    Potential multipathway health risks under a fisher and gardener 
scenario were identified using a three-tier screening assessment of the 
HAP known to be persistent and bio-accumulative in the environment (PB-
HAP) emitted by facilities in the Coal- and Oil-Fired EGU source 
category, and a site-specific assessment of mercury using the EPA's 
Total Risk Integrated Methodology.Fate, Transport, and Ecological 
Exposure (TRIM.FaTE) for one location (i.e., three facilities located 
in North Dakota) as further described below. Of the 322 MATS facilities 
modeled, 307 facilities have reported emissions of carcinogenic PB-HAP 
(arsenic, dioxins, and polycyclic organic matter (POM)) that exceed a 
Tier 1 cancer screening value of 1, and 235 facilities have reported 
emissions of non-carcinogenic PB-HAP (lead, mercury, and cadmium) that 
exceed a Tier 1 noncancer screening value of 1. For facilities that 
exceeded a Tier 1 multipathway screening value of 1, we used additional 
facility site-specific information to perform an assessment through 
Tiers 2 and 3, as necessary, to determine the maximum chronic cancer 
and noncancer impacts

[[Page 31316]]

for the source category. For cancer, the highest Tier 2 screening value 
was 200. This screening value was reduced to 50 after the plume rise 
stage of Tier 3. Because this screening value was much lower than 100-
in-1 million, and because we expect the actual risk to be lower than 
the screening value (site-specific assessments typically lower 
estimates by an order of magnitude), we did not perform further 
assessment for cancer. For noncancer, the highest Tier 2 screening 
value was 30 (for mercury), with four facilities having screening 
values greater than 20. These screening values were reduced to 9 or 
lower after the plume rise stage of Tier 3.
    Because the final stage of Tier 3 (time-series) was unlikely to 
reduce the highest mercury screening values to 1, we conducted a site-
specific multipathway assessment of mercury emissions for this source 
category. Analysis of the facilities with the highest Tier 2 and Tier 3 
screening values helped identify the location for the site-specific 
assessment and the facilities to model with TRIM.FaTE. The assessment 
took into account the effect that multiple facilities within the source 
category may have on common lakes. The three facilities selected are 
located near Underwood, North Dakota. All three facilities had Tier 2 
screening values greater than or equal to 20. Two of the facilities are 
near each other (16 kilometers (km) apart). The third facility is more 
distant, about 20 to 30 km from the other facilities, but it was 
included in the analysis because it is within the 50-km modeling domain 
of the other facilities and because it had an elevated Tier 2 screening 
value. We expect that the exposure scenarios we assessed for these 
facilities are among the highest, if not the highest, that might be 
encountered for other facilities in this source category. The refined 
multipathway assessment estimated an HQ of 0.06 for mercury for the 
three facilities assessed. We believe the assessment represents the 
highest potential for mercury hazards through fish consumption for the 
source category.
    In evaluating the potential multipathway risk from emissions of 
lead compounds, rather than developing a screening threshold emission 
rate, we compare maximum estimated chronic inhalation exposure 
concentrations to the level of the current NAAQS for lead (0.15 
micrograms per cubic meter). Values below the level of the primary 
(health-based) lead NAAQS are considered to have a low potential for 
multipathway risk. We did not estimate any exceedances of the lead 
NAAQS in this source category.
d. Environmental Risk Screening Results
    An environmental risk screening assessment for the Coal- and Oil-
Fired EGU source category was conducted for the following pollutants: 
Arsenic, cadmium, dioxins/furans, HCl, HF, lead, mercury (methylmercury 
and mercuric chloride), and POMs. In the Tier 1 screening analysis for 
PB-HAP (other than lead, which was evaluated differently), POM 
emissions had no exceedances of any of the ecological benchmarks 
evaluated. Arsenic and dioxin/furan emissions had Tier 1 exceedances 
for surface soil benchmarks. Cadmium and methylmercury emissions had 
Tier 1 exceedances for surface soil and fish benchmarks. Divalent 
mercury emissions had Tier 1 exceedances for sediment and surface soil 
benchmarks.
    A Tier 2 screening analysis was performed for arsenic, cadmium, 
dioxins/furans, divalent mercury, and methylmercury emissions. In the 
Tier 2 screening analysis, arsenic, cadmium, and dioxin/furan emissions 
had no exceedances of any of the ecological benchmarks evaluated. 
Divalent mercury emissions from two facilities exceeded the Tier 2 
screen for a sediment threshold level benchmark by a maximum screening 
value of 2. Methylmercury emissions from the same two facilities 
exceeded the Tier 2 screen for a fish (avian/piscivores) no-observed-
adverse-effect-level (NOAEL) (merganser) benchmark by a maximum 
screening value of 2. A Tier 3 screening assessment was performed to 
verify the existence of the lake associated with these screening 
values, and it was found to be located on-site and is a man-made 
industrial pond, and, therefore, was removed from the assessment.
    Methylmercury emissions from two facilities exceeded the Tier 2 
screen for a surface soil NOAEL for avian ground insectivores 
(woodcock) benchmark by a maximum screening value of 2. Other surface 
soil benchmarks for methylmercury, such as the NOAEL for mammalian 
insectivores and the threshold level for the invertebrate community, 
were not exceeded. Given the low Tier 2 maximum screening value of 2 
for methylmercury, and the fact that only the most protective benchmark 
was exceeded, a Tier 3 environmental risk screen was not conducted for 
methylmercury.
    For lead, we did not estimate any exceedances of the secondary lead 
NAAQS. For HCl and HF, the average modeled concentration around each 
facility (i.e., the average concentration of all off-site data points 
in the modeling domain) did not exceed any ecological benchmark. In 
addition, each individual modeled concentration of HCl and HF (i.e., 
each off-site data point in the modeling domain) was below the 
ecological benchmarks for all facilities. Based on the results of the 
environmental risk screening analysis, we do not expect an adverse 
environmental effect as a result of HAP emissions from the Coal- and 
Oil-Fired EGU source category.
e. Facility-Wide Risk Results
    An assessment of risk from facility-wide emissions was performed to 
provide context for the source category risks. Based on facility-wide 
emissions estimates developed using the same estimates of actual 
emissions for emissions sources in the source category, and emissions 
data from the 2014 National Emissions Inventory (NEI) (version 2) for 
the sources outside the source category, the estimated cancer MIR is 9-
in-1 million, and nickel emissions from oil-fired EGUs are the major 
contributor to the risk. The total estimated cancer incidence based on 
facility-wide emissions is 0.04 excess cancer cases per year, or one 
excess case in every 25 years. Approximately 203,000 people are 
estimated to have cancer risks at or above 1-in-1 million from HAP 
emitted from all sources at the facilities in this source category. The 
estimated maximum chronic noncancer TOSHI posed by facility-wide 
emissions is 0.2 (respiratory), driven by emissions of nickel and 
cobalt from oil-fired EGUs. No one is exposed to TOSHI levels above 1 
based on facility-wide emissions. These results are very similar to 
those based on actual emissions from the source category because there 
is not significant collocation of other sources with EGUs.
f. Proposed Decisions Regarding Risk Acceptability, Ample Margin of 
Safety, and Adverse Environmental Effect
    In determining whether risks are acceptable for this source 
category in accordance with CAA section 112, the EPA considered all 
available health information and risk estimation uncertainty. The risk 
results indicate that both the actual and allowable inhalation cancer 
risks to the individual most exposed are well below 100-in-1 million, 
which is the presumptive limit of acceptability. Also, the highest 
chronic noncancer TOSHI, and the highest acute noncancer HQ, are well 
below 1, indicating low likelihood of adverse noncancer effects from 
inhalation exposures. There are also low risks associated with 
ingestion, with the highest cancer risk being less than 50-

[[Page 31317]]

in-1 million based on a conservative screening assessment, and the 
highest noncancer hazard being less than 1 based on a site-specific 
multipathway assessment. Considering this information, the EPA proposed 
that the residual risks of HAP emissions from the Coal- and Oil-Fired 
EGU source category are acceptable.
    We then considered whether the current standards provide an ample 
margin of safety to protect public health and whether more stringent 
standards were necessary to prevent an adverse environmental effect by 
taking into consideration costs, energy, safety, and other relevant 
factors. In determining whether the standards provide an ample margin 
of safety to protect public health, we examined the same risk factors 
that we investigated for our acceptability determination and also 
considered the costs, technological feasibility, and other relevant 
factors related to emissions control options that might reduce risk 
associated with emissions from the source category. In our analysis, we 
considered the results of the technology review, risk assessment, and 
other aspects of our MACT rule review to determine whether there are 
any cost-effective controls or other measures that would reduce 
emissions further to provide an ample margin of safety. The risk 
analysis indicated that the risks from the source category are low for 
both cancer and noncancer health effects, and, therefore, any risk 
reductions from further available control options would result in 
minimal health benefits. Moreover, no additional measures were 
identified for reducing HAP emissions from affected sources in the 
Coal- and Oil-Fired EGU source category. Thus, we proposed that the 
current MATS requirements provide an ample margin of safety to protect 
public health in accordance with CAA section 112.
    Based on the results of our environmental risk screening 
assessment, we also proposed that more stringent standards are not 
necessary to prevent an adverse environmental effect.
2. How did the residual risk review change for the Coal- and Oil-Fired 
EGU source category?
    Since proposal (84 FR 2670, February 7, 2019), neither the risk 
assessment nor our determinations regarding risk acceptability, ample 
margin of safety, or adverse environmental effects have changed.
3. What key comments did we receive on the residual risk review, and 
what are our responses?
    The EPA received comments in opposition to and in support of the 
proposed residual risk review and our determination that no revisions 
were warranted under CAA section 112(f)(2) for the Coal- and Oil-Fired 
EGU source category.
    Generally, the comments that were not supportive of the proposed 
determination from the risk review claimed that the risks are 
understated with the methods used by the EPA to assess inhalation, 
multipathway, and environmental risks and suggested changes to the 
underlying risk assessment methodology. For example, some commenters 
stated that the EPA should lower the acceptability benchmark so that 
risks below 100-in-1 million are unacceptable, include emissions 
outside of the source category in question in the risk assessment, and 
assume that pollutants with noncancer health risks have no safe level 
of exposure. With regard to the Coal- and Oil-Fired EGU source category 
risk review, several commenters claimed that the type and quantity of 
organic HAP emissions modeled were underestimated, disagreeing with the 
EPA's determination to model only 16 organic HAP and to base the 
estimated emissions on EPA-developed representative detection levels 
(RDLs). Commenters pointed to the difference between the modeled 3.4 
tons of total source category organic HAP emissions versus other 
estimates of total source category organic HAP, such as the EPA's 2014 
NEI estimate of over 3,000 tons of total source category organic HAP 
emissions from 130 organic HAP.
    The EPA disputes the comments objecting to the type and quantity of 
organic HAP modeled under the risk review. As discussed in section IV.B 
of the proposed rule (84 FR 2670, February 7, 2019), during the 2010 
ICR effort for the original MATS rulemaking process, most of the 
organic HAP emissions data for EGUs were at or below the detection 
levels of the prescribed test methods, even when long duration test 
runs (i.e., approximately 8 hours) were required. Under the MATS rule, 
organic HAP are regulated by a work practice standard that requires 
periodic combustion process tune-ups. As such, EGUs are not required to 
meet numeric emission limits for organic HAP or to test and report 
organic HAP emissions. Because the MATS rule does not require 
measurements of organic HAP, the EPA reviewed the available organic HAP 
test results from the 2010 ICR when developing the RTR emissions 
dataset. For each organic HAP tested, if 40 percent or more of the 
available test data were above test method detection limits, emissions 
estimates for that HAP were included in the modeling file. We assert 
that this approach which modeled each organic HAP where up to 60 
percent of its 2010 ICR emissions data were below test method detection 
limits is a reasonable and conservative means of estimating which 
organic HAP are emitted from currently operating coal- and oil-fired 
EGUs. We also assert that the use of RDLs, which are based on averages 
of better-performing unit method detection levels, as well as 
laboratories using the most sensitive analyses across many source 
categories, is a reasonable means of estimating organic HAP emissions 
from currently operating EGUs which, under the MATS rule, are not 
required to measure organic HAP emissions. With regard to the 2014 NEI 
organic HAP emissions estimates referred to by commenters, the EPA 
points out that those estimates are based on pre-MATS compliance 
information and, thus, do not reflect reductions in organic HAP 
resulting from periodic tune-ups that have been conducted as required 
by the MATS rule. In addition, the pre-MATS compliance estimates in 
instances are likely to be based on, at most, 19 site-specific tests 
which have an average ``D'' rating and which were conducted over 25 
years ago, as opposed to the MATS ICR data from up to 170 site-specific 
tests which would have an average A rating and which were conducted 
just 9 years ago.\59\ Moreover, the pre-MATS compliance estimates most 
certainly includes emissions from EGUs that have since shut down.
---------------------------------------------------------------------------

    \59\ As discussed in the Introduction to AP-42 (see https://www3.epa.gov/ttn/chief/ap42/c00s00.pdf), the AP-42 emission factor 
rating is an overall assessment of how good a factor is, based on 
both the quality of the test(s) or information that is the source of 
the factor and on how well the factor represents the emission 
source. A `D' rated emission factor is below average and is 
developed from test data from a small number of facilities, and 
there may be reason to suspect that these facilities do not 
represent a random sample of the industry. In addition, test data 
from `D' rated emission factors may show evidence of variability 
within the source population. Emission factors from the MATS ICR 
have not been developed for AP-42 and the current rating process has 
been revised from letter grades to descriptors. However, under the 
previous rating process, emission factors from the MATS ICR data 
would have received `A' ratings, where an `A' rated emission factor 
is excellent and is developed from test data taken from many 
randomly chosen facilities in the industry population. Moreover, for 
an `A' rated emissions factor, the source category population is 
sufficiently specific to minimize variability.
---------------------------------------------------------------------------

    Although some comments were supportive of the EPA's proposed 
determination based on results of the risk review, the comments claimed 
that

[[Page 31318]]

the risks are overstated due to the overly conservative risk assessment 
methodology used by the EPA. Commenters stated, for example, that the 
risk assessment makes numerous conservative assumptions regarding 
emissions and exposures, the exposure assumptions are scientifically 
outdated, and the assessment used unrealistically high fish consumption 
rates. With regard to the Coal- and Oil-Fired EGU source category risk 
review, several commenters suggested data corrections to emissions 
estimates for particular EGUs that, according to commenters, resulted 
in overstated emissions being modeled. One commenter also suggested 
several revisions to the emissions estimation methodology for HAP 
emissions from EGUs. Several commenters pointed out that the EPA's risk 
review for the Coal- and Oil-Fired EGU source category and the June 
2018 Electric Power Research Institute (EPRI) risk studies for coal-
fired power plants \60\--each of which followed somewhat different 
methodologies--similarly concluded that human health risks associated 
with HAP emissions are within EPA acceptability thresholds.
---------------------------------------------------------------------------

    \60\ EPRI. June 8, 2018. Hazardous Air Pollutants (HAPs) 
Emission Estimates and Inhalation Human Health Risk Assessment for 
U.S. Coal-Fired Electric Generating Units: 2017 Base Year Post-MATS 
Evaluation. Available at https://www.epri.com/#/pages/product/3002013577/?lang=en.EPRI. June 22, 2018. Multi-Pathway Human Health 
Risk Assessment for Coal-Fired Power Plants. Available at https://www.epri.com/#/pages/product/3002013523/?lang=en.
---------------------------------------------------------------------------

    The EPA acknowledges that the risk assessment results for the Coal- 
and Oil-Fired EGU source category are dependent on the emission values 
used in the assessment. If we were to lower emission rates based on 
more accurate data, we expect lower risk estimates. Because the EPA has 
determined that the risk is acceptable, and that the existing standards 
provide an ample margin of safety to protect public health in 
accordance with CAA section 112, making the data corrections suggested 
by commenters would potentially reduce risk further but would not 
change the determinations under the risk review. Accordingly, we 
conclude that it is reasonable not to update the risk assessment 
following the proposal, and we have finalized the risk document and re-
submitted it to the docket for this action as the Residual Risk 
Assessment for the Coal- and Oil-Fired EGU Source Category in Support 
of the 2019 Risk and Technology Review Final Rule.
4. What is the rationale for our final approach and final decisions for 
the residual risk review?
    We evaluated all of the comments on the EPA's proposed residual 
risk review and determined that no changes to the review are needed. 
For the reasons explained in the proposed rule, we determined that the 
risks from the Coal- and Oil-Fired EGU source category are acceptable, 
and that the current standards provide an ample margin of safety to 
protect public health and prevent an adverse environmental effect. 
Therefore, pursuant to CAA section 112(f)(2), we are finalizing our 
residual risk review as proposed.

B. Technology Review for the Coal- and Oil-Fired EGU Source Category

1. What did we propose pursuant to CAA section 112(d)(6) for the Coal- 
and Oil-Fired EGU source category?
    Pursuant to CAA section 112(d)(6), the EPA conducted a technology 
review, which focused on identifying and evaluating developments in 
practices, processes, and control technologies for the emission sources 
in the source category. After conducting the CAA section 112(d)(6) 
technology review of the NESHAP for Coal- and Oil-Fired EGUs, we 
proposed that revisions to the standards are not necessary because we 
identified no cost-effective developments in practices, processes, or 
control technologies. More information concerning our technology review 
is in the memorandum titled Technology Review for the Coal- and Oil-
Fired EGU Source Category, available in the docket for this action, and 
in the February 7, 2019, proposed rule. 84 FR 2700.
2. How did the technology review change for the Coal- and Oil-Fired EGU 
source category?
    Since proposal (84 FR 2670, February 7, 2019), the technology 
review has not changed.
3. What key comments did we receive on the technology review, and what 
are our responses?
    The EPA received comments in support of and against the proposed 
technology review and our determination that no revisions were 
warranted under CAA section 112(d)(6) for the Coal- and Oil-Fired EGU 
source category.
    The comments that agreed with the EPA's proposed determination that 
no revisions to the MATS rule are warranted based on results of the 
technology review also asserted that the reductions required by MATS 
were not cost-effective at the time they were adopted and forced 
widespread and unprecedented coal-fired EGU retirements, that the 
general costs of emission control technologies have not significantly 
been reduced and have increased in some instances, and that the beyond-
the-floor analyses conducted by the EPA in support of the 2012 MATS 
Final Rule are still valid. Commenters also asserted that the EPA 
cannot adopt more stringent standards under CAA section 112(d)(6) where 
there is no appreciable HAP-related benefit from doing so and pointed 
to the results of the risk assessment for the Coal- and Oil-Fired EGU 
source category.
    The comments that were not supportive of the proposed determination 
from the technology review generally claimed that the review failed to 
assess whether control technologies deployed for compliance with the 
2012 MATS Final Rule were less expensive and more effective than 
projected and whether technologies deemed economically infeasible in 
2012 have since become cheaper.
    The EPA disagrees with the comments opposing the proposed 
determination that no revisions were warranted under CAA section 
112(d)(6). As explained in section VI.C of the proposed rule (84 FR 
2670, February 7, 2019), control technologies typically used to 
minimize emissions of pollutants that have numeric emission limits 
under the MATS rule include electrostatic precipitators and fabric 
filters for control of PM and non-mercury HAP metals; wet scrubbers and 
dry scrubbers for control of acid gases (SO2, HCl, and HF); 
and activated carbon injection for control of mercury. These existing 
air pollution control technologies that are currently in use are well-
established and provide the capture efficiencies necessary for 
compliance with the MATS emission limits. Organic HAP, including 
emissions of dioxins and furans, are regulated by a work practice 
standard that requires periodic burner tune-ups to ensure good 
combustion. This work practice continues to be a practical approach to 
ensuring that combustion equipment is maintained and optimized to run 
to reduce formation and emissions of organic HAP and continues to be 
expected to be more effective than establishing a numeric standard for 
emissions that, due to current detection levels, cannot reliably be 
measured or continuously monitored. We received no comments that 
included specific information on costs or performance for control 
technologies deployed to comply with the 2012 MATS Final Rule or for 
other control technology, work practices, operational

[[Page 31319]]

procedures, process changes, or pollution prevention approaches that 
reduce HAP emissions. Since proposal, no information has been presented 
to cause us to change the proposed determination that no developments 
in practices, processes, or control technologies, nor any new 
technologies or practices were identified for the control of non-
mercury HAP metals, acid gas HAP, or mercury, and that no developments 
in work practices nor any new work practices or operational procedures 
have been identified for the control of organic HAP.
4. What is the rationale for our final approach for the technology 
review?
    We evaluated all of the comments on the EPA's technology review and 
determined that no changes to the review are needed. For the reasons 
explained in the proposed rule, we determined that no cost-effective 
developments in practices, processes, or control technologies were 
identified in our technology review to warrant revisions to the 
standards. Therefore, pursuant to CAA section 112(d)(6), we are 
finalizing our technology review as proposed.

VI. Summary of Cost, Environmental, and Economic Impacts and Additional 
Analyses Conducted

A. What are the affected facilities?

    The EPA estimates that there are 713 existing coal- and oil-fired 
EGUs located at 323 facilities that are subject to the MATS rule and 
will be affected by this final action.

B. What are the air quality impacts?

    Because the EPA is not promulgating any amendments to the MATS 
rule, there will be no air quality impacts as a result of this final 
action.

C. What are the cost impacts?

    Because the EPA is not promulgating any amendments to the MATS 
rule, there will be no cost impacts as a result of this final action.

D. What are the economic impacts?

    Because the EPA is not promulgating any amendments to the MATS 
rule, there will be no economic impacts as a result of this final 
action.

E. What are the benefits?

    Because the EPA is not promulgating any amendments to the MATS 
rule, there will be no benefits as a result of this final action.

F. What analysis of environmental justice did we conduct?

    Executive Order 12898 (59 FR 7629, February 16, 1994) establishes 
federal executive policy on environmental justice. Its main provision 
directs federal agencies, to the greatest extent practicable and 
permitted by law, to make environmental justice part of their mission 
by identifying and addressing, as appropriate, disproportionately high 
and adverse human health or environmental effects of their programs, 
policies, and activities on minority populations and low-income 
populations in the U.S.
    As discussed in section VI.A of the proposed rule (84 FR 2670, 
February 7, 2019), to examine the potential for any environmental 
justice issues that might be associated with the source category, we 
performed a demographic analysis, which is an assessment of risk to 
individual demographic groups of the populations living within 5 km and 
within 50 km of the facilities.\61\ In the analysis, we evaluated the 
distribution of HAP-related cancer and noncancer risks from the Coal- 
and Oil-Fired EGU source category across different demographic groups 
within the populations living near facilities. The results of the Coal- 
and Oil-Fired EGU source category demographic analysis indicate that 
emissions from the source category expose approximately 193,000 people 
to a cancer risk at or above 1-in-1 million and no people to a chronic 
noncancer TOSHI greater than 1. There are only four facilities in the 
source category with cancer risk at or above 1-in-1 million, and all of 
them are located in Puerto Rico. Consequently, all of the percentages 
of the at-risk population in each demographic group associated with the 
Puerto Rican population are much higher than their respective 
nationwide percentages, and those not associated with Puerto Rico are 
much lower than their respective nationwide percentages. The 
methodology and the results of the demographic analysis are presented 
in the technical report titled Risk and Technology Review--Analysis of 
Demographic Factors for Populations Living Near Coal- and Oil-Fired 
EGUs Regulated Under the Mercury and Air Toxics Standards (MATS), 
available in Docket ID No. EPA-HQ-OAR-2018-0794.
---------------------------------------------------------------------------

    \61\ See technical report titled Risk and Technology Review--
Analysis of Demographic Factors for Populations Living Near Coal- 
and Oil-Fired EGUs Regulated Under the Mercury and Air Toxics 
Standards (MATS). May 23, 2018; Docket ID Item No. EPA-HQ-OAR-2018-
0794-0012.
---------------------------------------------------------------------------

G. What analysis of children's environmental health did we conduct?

    This action is not subject to Executive Order 13045 because it is 
not economically significant as defined in Executive Order 12866, and 
because the EPA does not believe the environmental health or safety 
risks addressed by this action present a disproportionate risk to 
children. This action's health and risk assessments are summarized in 
section V.A of this preamble and are further documented in sections V 
and VI of the proposed rule (84 FR 2670, February 7, 2019), and the 
risk document for the final rule,\62\ available in the docket for this 
action.
---------------------------------------------------------------------------

    \62\ See document titled Residual Risk Assessment for the Coal- 
and Oil-Fired EGU Source Category in Support of the 2019 Risk and 
Technology Review Final Rule, available in Docket ID No. EPA-HQ-OAR-
2018-0794.
---------------------------------------------------------------------------

VII. Statutory and Executive Order Reviews

    Additional information about these statutes and Executive Orders 
can be found at https://www.epa.gov/laws-regulations/laws-and-executive-orders.

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

    This action is a significant regulatory action that was submitted 
to OMB for review because it is likely to raise novel legal or policy 
issues. Any changes made in response to OMB recommendations have been 
documented in the docket. The EPA does not project any potential costs 
or benefits associated with this action.

B. Executive Order 13771: Reducing Regulations and Controlling 
Regulatory Costs

    This action is not considered an Executive Order 13771 regulatory 
action. There are no quantified cost estimates for this final rule 
because it will not result in any changes in costs.

C. Paperwork Reduction Act (PRA)

    This action does not impose any new information collection burden 
under the PRA. OMB has previously approved the information collection 
activities contained in the existing regulations and has assigned OMB 
control number 2060-0567. This action does not impose an information 
collection burden because the EPA is not making any changes to the 
information collection requirements.

D. Regulatory Flexibility Act (RFA)

    I certify that this action will not have a significant economic 
impact on a

[[Page 31320]]

substantial number of small entities under the RFA. This action will 
not impose any requirements on small entities. The EPA does not project 
any potential costs or benefits associated with this action.

E. Unfunded Mandates Reform Act (UMRA)

    This action does not contain any unfunded mandate as described in 
UMRA, 2 U.S.C. 1531-1538, and does not significantly or uniquely affect 
small governments. The action imposes no enforceable duty on any state, 
local, or tribal governments or the private sector.

F. Executive Order 13132: Federalism

    This action does not have federalism implications. It will not have 
substantial direct effects on the states, on the relationship between 
the national government and the states, or on the distribution of power 
and responsibilities among the various levels of government.

G. Executive Order 13175: Consultation and Coordination With Indian 
Tribal Governments

    This action does not have tribal implications as specified in 
Executive Order 13175. It would neither impose substantial direct 
compliance costs on tribal governments, nor preempt Tribal law. Thus, 
Executive Order 13175 does not apply to this action.
    Consistent with the EPA Policy on Consultation and Coordination 
with Indian Tribes, the EPA consulted with tribal officials during the 
development of this action. A summary of the consultations follows.
    On April 2, 2019, the EPA held a consultation with the Blue Lake 
Rancheria. The tribe indicated that they did not support the 2019 
Proposal for several reasons. The tribe expressed concern that the 
EPA's proposed finding that it is not appropriate and necessary to 
regulate HAP emissions from coal- and oil-fired EGUs under section 112 
of the CAA would remove the legal foundation for the MATS rule. The 
tribe added that the EPA has neither the authority nor the obligation 
to remove coal- and oil-fired EGUs from the CAA section 112(c) source 
category list or to rescind MATS. The tribe noted that the costs of 
compliance for EGUs subject to MATS have already been incurred, and 
that those investments could be in vain if MATS is rescinded. In 
addition, the proposed finding will likely lead to litigation which 
would be a waste of taxpayer dollars, according to the tribe. The Blue 
Lake Rancheria stated that the EPA's cost-benefit analysis should not 
exclude co-benefits, and that the analysis should include healthcare 
costs and environmental remediation costs. The tribe discussed the 
health effects of exposure to mercury and noted that the RTR shows that 
the risks are acceptable with MATS in place; that margin of safety 
would be eliminated if the rule is rescinded. The tribe also expressed 
concern that eliminating the MATS rule will prolong the use of coal-
fired power plants, which would lead to increased greenhouse gas 
emissions.
    The EPA held a consultation with the Fond du Lac Band of Lake 
Superior Chippewa on April 3, 2019. The tribe also did not support the 
proposed finding that regulation of HAP emissions from coal- and oil-
fired EGUs is not appropriate and necessary. The tribe stated that 
studies have shown that mercury is harmful and should be controlled, 
and that the EPA does not have the authority to delist EGUs from 
regulation under CAA section 112. According to the tribe, co-benefits 
from reductions of non-HAP pollutants should be considered equally with 
benefits from reductions of HAP. The tribe asked whether the EPA had 
considered factors specific to their tribe in the EPA's analysis, such 
as their higher consumption of fish due to cultural and subsistence 
reasons and the prevalence of wetlands and ditches on the reservation, 
which are mercury sinks. The tribe also questioned whether impacts to 
wildlife such as otters, loons, and eagles were considered.
    Responses to these comments and others received are available in 
the RTC document,\63\ available in the docket for this action.
---------------------------------------------------------------------------

    \63\ See document titled Final Supplemental Finding and Risk and 
Technology Review for the NESHAP for Coal- and Oil-Fired EGUs 
Response to Public Comments on February 7, 2019 Proposal, available 
in Docket ID No. EPA-HQ-OAR-2018-0794.
---------------------------------------------------------------------------

H. Executive Order 13045: Protection of Children From Environmental 
Health Risks and Safety Risks

    This action is not subject to Executive Order 13045 because it is 
not economically significant as defined in Executive Order 12866, and 
because the EPA does not believe the environmental health or safety 
risks addressed by this action present a disproportionate risk to 
children. This action's health and risk assessments are contained in 
sections V and VI of the proposed rule (84 FR 2670, February 7, 2019), 
and the risk document for the final rule, available in the docket for 
this action (see document titled Residual Risk Assessment for the Coal- 
and Oil-Fired EGU Source Category in Support of the 2019 Risk and 
Technology Review Final Rule, available in Docket ID No. EPA-HQ-OAR-
2018-0794).

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

    This action is not a ``significant energy action'' because it is 
not likely to have a significant adverse effect on the supply, 
distribution, or use of energy. This action is not anticipated to have 
impacts on energy supply decisions for the affected electric utility 
industry.

J. National Technology Transfer and Advancement Act (NTTAA)

    This action does not involve technical standards.

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

    The EPA believes that this action does not have disproportionately 
high and adverse human health or environmental effects on minority 
populations, low-income populations, and/or indigenous peoples, as 
specified in Executive Order 12898 (59 FR 7629, February 16, 1994). The 
documentation for this decision is contained in section VI.F of this 
preamble, section VI.A of the proposed rule (84 FR 2670, February 7, 
2019), and the technical report, Risk and Technology Review--Analysis 
of Demographic Factors for Populations Living Near Coal- and Oil-Fired 
EGUs Regulated Under the Mercury and Air Toxics Standards (MATS), 
available in the docket for this action (see Docket ID Item No. EPA-HQ-
OAR-2018-0794-0012).

L. Congressional Review Act (CRA)

    This action is subject to the CRA, and the EPA will submit a rule 
report to each House of the Congress and to the Comptroller General of 
the United States. This action is not a ``major rule'' as defined by 5 
U.S.C. 804(2).

    Dated: April 16, 2020.
Andrew Wheeler,
Administrator.
[FR Doc. 2020-08607 Filed 5-21-20; 8:45 am]
 BILLING CODE 6560-50-P

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