National Emission Standards for Hazardous Air Pollutants: Coal- and Oil-Fired Electric Utility Steam Generating Units-Revocation of the 2020 Reconsideration, and Affirmation of the Appropriate and Necessary Supplemental Finding; Notice of Proposed Rulemaking, 7624-7673 [2022-02343]

Download as PDF 7624 Federal Register / Vol. 87, No. 27 / Wednesday, February 9, 2022 / Proposed Rules ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 63 [EPA–HQ–OAR–2018–0794; FRL–6716.2– 01–OAR] RIN 2060–AV12 National Emission Standards for Hazardous Air Pollutants: Coal- and Oil-Fired Electric Utility Steam Generating Units—Revocation of the 2020 Reconsideration, and Affirmation of the Appropriate and Necessary Supplemental Finding; Notice of Proposed Rulemaking Environmental Protection Agency (EPA). ACTION: Proposed rule. AGENCY: The EPA is proposing to revoke a May 22, 2020 finding that it is not appropriate and necessary to regulate coal- and oil-fired electric utility steam generating units (EGUs) under Clean Air Act (CAA) section 112, and to reaffirm the Agency’s April 25, 2016 finding that it remains appropriate and necessary to regulate hazardous air pollutant (HAP) emissions from EGUs after considering cost. The Agency is also reviewing another part of the May 22, 2020 action, a residual risk and technology review (RTR) of Mercury and Air Toxics Standards (MATS). Accordingly, in addition to soliciting comments on all aspects of this proposal, the EPA is soliciting information on the performance and cost of new or improved technologies that control HAP emissions, improved methods of operation, and risk-related information to further inform the Agency’s review of the MATS RTR as directed by Executive Order 13990. DATES: Comments must be received on or before April 11, 2022. Public hearing: The EPA will hold a virtual public hearing on February 24, 2022. See SUPPLEMENTARY INFORMATION for information on the hearing. ADDRESSES: You may send comments, identified by Docket ID No. EPA–HQ– OAR–2018–0794, by any of the following methods: • Federal eRulemaking Portal: https://www.regulations.gov/ (our preferred method). Follow the online instructions for submitting comments. • Email: a-and-r-docket@epa.gov. Include Docket ID No. EPA–HQ–OAR– 2018–0794 in the subject line of the message. • Fax: (202) 566–9744. Attention Docket ID No. EPA–HQ–OAR–2018– 0794. • Mail: U.S. Environmental Protection Agency, EPA Docket Center, lotter on DSK11XQN23PROD with PROPOSALS2 SUMMARY: VerDate Sep<11>2014 21:43 Feb 08, 2022 Jkt 256001 Docket ID No. EPA–HQ–OAR–2018– 0794, Mail Code 28221T, 1200 Pennsylvania Avenue NW, Washington, DC 20460. • Hand/Courier Delivery: EPA Docket Center, WJC West Building, Room 3334, 1301 Constitution Avenue NW, Washington, DC 20004. The Docket Center’s hours of operation are 8:30 a.m.–4:30 p.m., Monday–Friday (except Federal holidays). Instructions: All submissions received must include the Docket ID No. for this rulemaking. Comments received may be posted without change to https:// www.regulations.gov/, including any personal information provided. For detailed instructions on sending comments and additional information on the rulemaking process, see the SUPPLEMENTARY INFORMATION section of this document. Out of an abundance of caution for members of the public and our staff, the EPA Docket Center and Reading Room are closed to the public, with limited exceptions, to reduce the risk of transmitting COVID–19. Our Docket Center staff will continue to provide remote customer service via email, phone, and webform. We encourage the public to submit comments via https:// www.regulations.gov/ or email, as there may be a delay in processing mail and faxes. Hand deliveries and couriers may be received by scheduled appointment only. For further information on EPA Docket Center services and the current status, please visit us online at https:// www.epa.gov/dockets. FOR FURTHER INFORMATION CONTACT: For questions about this proposed action, contact Melanie King, 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) 541–2469; and email address: king.melanie@epa.gov. SUPPLEMENTARY INFORMATION: The EPA is proposing to revoke a May 22, 2020 finding that it is not appropriate and necessary to regulate coal- and oil-fired EGUs under CAA section 112, and to reaffirm the Agency’s April 25, 2016 finding that it remains appropriate and necessary to regulate HAP emissions from EGUs after considering cost. The 2016 finding was made in response to the U.S. Supreme Court’s 2015 Michigan v. EPA decision, where the Court held that the Agency had erred by not taking cost into consideration when taking action on February 16, 2012, to affirm a 2000 EPA determination that it was appropriate and necessary to regulate HAP emissions from EGUs. In the same PO 00000 Frm 00002 Fmt 4701 Sfmt 4702 2012 action, the EPA also promulgated National Emission Standards for Hazardous Air Pollutants (NESHAP) for coal- and oil-fired EGUs, commonly known as the Mercury and Air Toxics Standards or MATS. Based on a re-evaluation of the administrative record and the statute, the EPA proposes to conclude that the framework applied in the May 22, 2020 finding was ill-suited to assessing and comparing the full range of benefits to costs, and the EPA concludes that, after applying a more suitable framework, the 2020 determination should be withdrawn. For reasons explained in this notice, the EPA further proposes to reaffirm that it is appropriate and necessary to regulate HAP emissions from EGUs after weighing the volume of pollution that would be reduced through regulation, the public health risks and harms posed by these emissions, the impacts of this pollution on particularly exposed and sensitive populations, the availability of effective controls, and the costs of reducing this harmful pollution including the effects of control costs on the EGU industry and its ability to provide reliable and affordable electricity. This notice also presents information and analysis that has become available since the 2016 finding, pertaining to the health risks of mercury emissions and the costs of reducing HAP emissions, that lend further support for this determination. The review that led to this proposal is consistent with the direction in Executive Order 13990, ‘‘Protecting Public Health and the Environment and Restoring Science to Tackle the Climate Crisis,’’ signed by President Biden on January 20, 2021. In response to the Executive Order, the Agency is also reviewing another part of the May 22, 2020 action, a RTR of MATS. Accordingly, in addition to soliciting comments on all aspects of this proposal, the EPA is soliciting information on the performance and cost of new or improved technologies that control HAP emissions, improved methods of operation, and risk-related information to further inform the Agency’s review of the MATS RTR as directed by the Executive Order. Results of the EPA’s review of the RTR will be presented in a separate action. Participation in virtual public hearing. Please note that the EPA is deviating from its typical approach for public hearings because the President has declared a national emergency. Due to the current Centers for Disease Control and Prevention (CDC) recommendations, as well as state and local orders for social distancing to limit the spread of COVID–19, the EPA E:\FR\FM\09FEP2.SGM 09FEP2 lotter on DSK11XQN23PROD with PROPOSALS2 Federal Register / Vol. 87, No. 27 / Wednesday, February 9, 2022 / Proposed Rules cannot hold in-person public meetings at this time. The virtual public hearing will be held via teleconference on February 24, 2022 and will convene at 10:00 a.m. Eastern Time (ET) and will conclude at 7:00 p.m. ET. The EPA may close a session 15 minutes after the last preregistered speaker has testified if there are no additional speakers. For information or questions about the public hearing, please contact the public hearing team at (888) 372–8699 or by email at SPPDpublichearing@epa.gov. The EPA will announce further details at https://www.epa.gov/stationarysources-air-pollution/mercury-and-airtoxics-standards. The EPA will begin pre-registering speakers for the hearing no later than 1 business day following publication of this document in the Federal Register. The EPA will accept registrations on an individual basis. To register to speak at the virtual hearing, please use the online registration form available at https://www.epa.gov/stationary-sourcesair-pollution/mercury-and-air-toxicsstandards or contact the public hearing team at (888) 372–8699 or by email at SPPDpublichearing@epa.gov. The last day to pre-register to speak at the hearing will be February 18, 2022. Prior to the hearing, the EPA will post a general agenda that will list preregistered speakers in approximate order at: https://www.epa.gov/ stationary-sources-air-pollution/ mercury-and-air-toxics-standards. The EPA will make every effort to follow the schedule as closely as possible on the day of the hearing; however, please plan for the hearings to run either ahead of schedule or behind schedule. Each commenter will have 5 minutes to provide oral testimony. The EPA encourages commenters to provide the EPA with a copy of their oral testimony electronically (via email) by emailing it to king.melanie@epa.gov. The EPA also recommends submitting the text of your oral testimony as written comments to the rulemaking docket. The EPA may ask clarifying questions during the oral presentations but will not respond to the presentations at that time. Written statements and supporting information submitted during the comment period will be considered with the same weight as oral testimony and supporting information presented at the public hearing. Please note that any updates made to any aspect of the hearing will be posted online at https://www.epa.gov/ stationary-sources-air-pollution/ mercury-and-air-toxics-standards. While the EPA expects the hearing to go VerDate Sep<11>2014 21:43 Feb 08, 2022 Jkt 256001 forward as set forth above, please monitor our website or contact the public hearing team at (888) 372–8699 or by email at SPPDpublichearing@ epa.gov to determine if there are any updates. The EPA does not intend to publish a document in the Federal Register announcing updates. If you require the services of a translator or a special accommodation such as audio description, please preregister for the hearing with the public hearing team and describe your needs by February 16, 2022. The EPA may not be able to arrange accommodations without advanced notice. Docket. The EPA has established a docket for this rulemaking under Docket ID No. EPA–HQ–OAR–2018–0794.1 All documents in the docket are listed in https://www.regulations.gov/. Although listed, some information is not publicly available, e.g., Confidential Business Information (CBI) or other information whose disclosure is restricted by statute. Certain other material, such as copyrighted material, is not placed on the internet and will be publicly available only in hard copy. With the exception of such material, publicly available docket materials are available electronically in https:// www.regulations.gov/. Instructions. Direct your comments to Docket ID No. EPA–HQ–OAR–2018– 0794. The EPA’s policy is that all comments received will be included in the public docket without change and may be made available online at https:// www.regulations.gov/, including any personal information provided, unless the comment includes information claimed to be CBI or other information whose disclosure is restricted by statute. Do not submit electronically any information that you consider to be CBI or other information whose disclosure is restricted by statute. This type of information should be submitted by mail as discussed below. The EPA may publish any comment received to its public docket. Multimedia submissions (audio, video, etc.) must be accompanied by a written 1 As explained in a memorandum to the docket, the docket for this action includes the documents 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 00003 Fmt 4701 Sfmt 4702 7625 comment. The written comment is considered the official comment and should include discussion of all points you wish to make. The EPA will generally not consider comments or comment contents located outside of the primary submission (i.e., on the Web, cloud, or other file sharing system). For additional submission methods, the full EPA public comment policy, information about CBI or multimedia submissions, and general guidance on making effective comments, please visit https://www.epa.gov/dockets/ commenting-epa-dockets. The https://www.regulations.gov/ website allows you to submit your comment anonymously, which means the EPA will not know your identity or contact information unless you provide it in the body of your comment. If you send an email comment directly to the EPA without going through https:// www.regulations.gov/, your email address will be automatically captured and included as part of the comment that is placed in the public docket and made available on the internet. If you submit an electronic comment, the EPA recommends that you include your name and other contact information in the body of your comment and with any digital storage media you submit. If the EPA cannot read your comment due to technical difficulties and cannot contact you for clarification, the EPA may not be able to consider your comment. Electronic files should not include special characters or any form of encryption and be free of any defects or viruses. For additional information about the EPA’s public docket, visit the EPA Docket Center homepage at https:// www.epa.gov/dockets. The EPA is temporarily suspending its Docket Center and Reading Room for public visitors, with limited exceptions, to reduce the risk of transmitting COVID–19. Our Docket Center staff will continue to provide remote customer service via email, phone, and webform. We encourage the public to submit comments via https:// www.regulations.gov/ as there may be a delay in processing mail and faxes. Hand deliveries or couriers will be received by scheduled appointment only. For further information and updates on EPA Docket Center services, please visit us online at https:// www.epa.gov/dockets. The EPA continues to carefully and continuously monitor information from the CDC, local area health departments, and our Federal partners so that we can respond rapidly as conditions change regarding COVID–19. Submitting CBI. Do not submit information containing CBI to the EPA E:\FR\FM\09FEP2.SGM 09FEP2 7626 Federal Register / Vol. 87, No. 27 / Wednesday, February 9, 2022 / Proposed Rules lotter on DSK11XQN23PROD with PROPOSALS2 through https://www.regulations.gov/ or email. Clearly mark the part or all of the information that you claim to be CBI. For CBI information on any digital storage media that you mail to the EPA, mark the outside of the digital storage media as CBI and then identify electronically within the digital storage media the specific information that is claimed as CBI. In addition to one complete version of the comments that includes information claimed as CBI, you must submit a copy of the comments that does not contain the information claimed as CBI directly to the public docket through the procedures outlined in Instructions above. If you submit any digital storage media that does not contain CBI, mark the outside of the digital storage media clearly that it does not contain CBI. Information not marked as CBI will be included in the public docket and the EPA’s electronic public docket without prior notice. Information marked as CBI will not be disclosed except in accordance with procedures set forth in title 40 of the Code of Federal Regulations (CFR) part 2. Send or deliver information identified as CBI only to the following address: OAQPS Document Control Officer (C404–02), OAQPS, U.S. Environmental Protection Agency, Research Triangle Park, North Carolina 27711, Attention Docket ID No. EPA–HQ–OAR–2018–0794. Note that written comments containing CBI and submitted by mail may be delayed and no hand deliveries will be accepted. 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: ACI activated carbon injection ATSDR Agency for Toxic Substances and Disease Registry ARP Acid Rain Program BCA benefit-cost analysis CAA Clean Air Act CAAA Clean Air Act Amendments of 1990 CAMR Clean Air Mercury Rule CBI Confidential Business Information CFR Code of Federal Regulations CVD cardiovascular disease DSI dry sorbent injection EGU electric utility steam generating unit EIA Energy Information Administration EPA Environmental Protection Agency ESP electrostatic precipitator EURAMIC European Multicenter CaseControl Study on Antioxidants, Myocardial Infarction, and Cancer of the Breast Study FF fabric filter FGD flue gas desulfurization FR Federal Register GW gigawatt HAP hazardous air pollutant(s) HCl hydrogen chloride VerDate Sep<11>2014 21:43 Feb 08, 2022 Jkt 256001 HF hydrogen fluoride IHD ischemic heart disease IPM Integrated Planning Model IRIS Integrated Risk Information System KIHD Kuopio Ischaemic Heart Disease Risk Factor Study kW kilowatt MACT maximum achievable control technology MATS Mercury and Air Toxics Standards MI myocardial infarction MIR maximum individual risk MW megawatt NAS National Academy of Sciences NESHAP national emission standards for hazardous air pollutants OMB Office of Management and Budget O&M operation and maintenance PM particulate matter PUFA polyunsaturated fatty acid RfD reference dose RIA regulatory impact analysis RTR residual risk and technology review SCR selective catalytic reduction SO2 sulfur dioxide TSD technical support document tpy tons per year Organization of this document. The information in this preamble is organized as follows: I. General Information A. Executive Summary B. Does this action apply to me? C. Where can I get a copy of this document and other related information? II. Background A. Regulatory History B. Statutory Background III. Proposed Determination Under CAA Section 112(n)(1)(A) A. Public Health Hazards Associated With Emissions From EGUs B. Consideration of Cost of Regulating EGUs for HAP C. Revocation of the 2020 Final Action D. The Administrator’s Proposed Preferred Framework and Proposed Conclusion E. The Administrator’s Proposed BenefitCost Analysis Approach and Proposed Conclusion IV. Summary of Cost, Environmental, and Economic Impacts V. Request for Comments and for Information To Assist With Review of the 2020 RTR VI. Statutory and Executive Order Reviews A. Executive Order 12866: Regulatory Planning and Review and Executive Order 13563: Improving Regulation and Regulatory Review B. Paperwork Reduction Act (PRA) C. Regulatory Flexibility Act (RFA) D. Unfunded Mandates Reform Act (UMRA) E. Executive Order 13132: Federalism F. Executive Order 13175: Consultation and Coordination With Indian Tribal Governments G. Executive Order 13045: Protection of Children From Environmental Health Risks and Safety Risks H. Executive Order 13211: Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use I. National Technology Transfer and Advancement Act (NTTAA) PO 00000 Frm 00004 Fmt 4701 Sfmt 4702 J. Executive Order 12898: Federal Actions To Address Environmental Justice in Minority Populations and Low-Income Populations I. General Information A. Executive Summary On January 20, 2021, President Biden signed Executive Order 13990, ‘‘Protecting Public Health and the Environment and Restoring Science to Tackle the Climate Crisis’’ (86 FR 7037, January 25, 2021). The Executive Order, among other things, instructs the EPA to review the 2020 final action titled, ‘‘National Emission Standards for Hazardous Air Pollutants: Coal- and OilFired Electric Utility Steam Generating Units—Reconsideration of Supplemental Finding and Residual Risk and Technology Review’’ (85 FR 31286; May 22, 2020) (2020 Final Action) and consider publishing a notice of proposed rulemaking suspending, revising, or rescinding that action. Consistent with the Executive Order, the EPA has undertaken a careful review of the 2020 Final Action, in which the EPA reconsidered its April 25, 2016 supplemental finding (81 FR 24420) (2016 Supplemental Finding). Based on that review, the Agency proposes to find that the decisional framework for making the appropriate and necessary determination under CAA section 112(n)(1)(A) that was applied in the 2020 Final Action was unsuitable because it failed to adequately account for statutorily relevant factors. Therefore, we propose to revoke the May 2020 determination that it is not appropriate and necessary to regulate HAP emissions from coaland oil-fired EGUs under section 112 of the CAA. We further propose to reaffirm our earlier determinations—made in 2000 (65 FR 79825; December 20, 2000) (2000 Determination), 2012 (77 FR 9304; February 16, 2012) (2012 MATS Final Rule), and 2016—that it is appropriate and necessary to regulate coal- and oilfired EGUs under section 112 of the CAA. In 1990, frustrated with the EPA’s pace in identifying and regulating HAP, Congress radically transformed its treatment of that pollution. It rewrote section 112 of the CAA to require the EPA to swiftly regulate 187 HAP with technology-based standards that would require all major sources (defined by the quantity of pollution a facility has the potential to emit) to meet the levels of reduction achieved in practice by the best-performing similar sources. EGUs were the one major source category excluded from automatic application of these new standards. EGUs were treated differently primarily because the 1990 E:\FR\FM\09FEP2.SGM 09FEP2 lotter on DSK11XQN23PROD with PROPOSALS2 Federal Register / Vol. 87, No. 27 / Wednesday, February 9, 2022 / Proposed Rules Amendments to the CAA (1990 Amendments) included the Acid Rain Program (ARP), which imposed criteria pollution reduction requirements on EGUs. Congress recognized that the controls necessary to comply with this and other requirements of the 1990 Amendments might reduce HAP emissions from EGUs as well. Therefore, under CAA section 112(n)(1)(A), Congress directed the EPA to regulate EGUs if, after considering a study of ‘‘the hazards to public health reasonably anticipated to occur as a result of [HAP] emissions by [EGUs] . . . after imposition of the [Acid Rain Program and other] requirements of this chapter,’’ the EPA concluded that it ‘‘is appropriate and necessary’’ to do so. See CAA section 112(n)(1)(A). The EPA completed that study in 1998 and, in 2000, concluded that it is appropriate and necessary to regulate HAP emissions from coal- and oil-fired EGUs. See 65 FR 79825 (December 20, 2000). The EPA reaffirmed that conclusion in 2012, explaining that the other requirements of the CAA, in particular the ARP, did not lead to the HAP emission reductions that had been anticipated because many EGUs switched to lower-sulfur coal rather than deploy pollution controls that may have also reduced emissions of HAP. Indeed, the statute contemplated that the EPA would be conducting the required study within 3 years of the 1990 Amendments; but when the EPA re-examined public health hazards remaining after imposition of the Act’s requirements in 2012, the Agency accounted for over 20 years of CAA regulation, and EGUs still remained one of the largest sources of HAP pollution. Specifically, in 2012, the EPA concluded that EGUs were the largest domestic source of emissions of mercury, hydrogen fluoride (HF), hydrogen chloride (HCl), and selenium; and among the largest domestic contributors of emissions of arsenic, chromium, cobalt, nickel, hydrogen cyanide, beryllium, and cadmium. The EPA further found that a significant majority of EGUs were located at facilities that emitted above the statutory threshold set for major sources (e.g., 10 tons per year (tpy) of any one HAP or 25 tpy or more of any combination of HAP). See 77 FR 9304 (February 16, 2012). In 2012, the EPA also established limits for emissions of HAP from coal- and oil-fired EGUs. Id. Many aspects of the EPA’s appropriate and necessary determination and the CAA section 112 regulations were challenged in the U.S. Court of Appeals for the District of Columbia Circuit (D.C. Circuit), and all VerDate Sep<11>2014 21:43 Feb 08, 2022 Jkt 256001 challenges were denied and the finding and standards upheld in full in White Stallion Energy Center v. EPA, 748 F.3d 1222 (2014). The Supreme Court granted review on a single issue and, in Michigan v. EPA, 576 U.S. 743 (2015), the Court held that the EPA erred when it failed to consider the costs of its regulation in determining that it is appropriate and necessary to regulate HAP emissions from EGUs, and remanded that determination to the D.C. Circuit for further proceedings. Following Michigan, in 2016 the EPA issued a Supplemental Finding that it is appropriate and necessary to regulate EGU HAP after considering the costs of such regulation. See 81 FR 24420 (April 25, 2016). In 2020, the Agency reversed that determination.2 In this action, we conclude that the methodology we applied in 2020 is ill-suited to the appropriate and necessary determination because, among other reasons, it did not give adequate weight to the significant volume of HAP emissions from EGUs and the attendant risks remaining after imposition of the other requirements of the CAA, including many adverse health and environmental effects of EGU HAP emissions that cannot be quantified or monetized. We propose, therefore, to revoke the 2020 Final Action. We further propose to affirm, once again, that it is appropriate and necessary to regulate coal- and oil-fired EGUs under CAA section 112. We first examine the benefits or advantages of regulation, including new information on the risks posed by EGU HAP. We then examine the costs or disadvantages of regulation, including both the costs of compliance (which we explain we significantly overestimated in 2012) and how those costs affect the industry and the public. We then weigh these benefits and costs to reach the conclusion that it is appropriate and necessary to regulate using two alternative methodologies. Our preferred methodology, as it was in the 2016 Supplemental Finding, is to consider all of the impacts of the regulation—both costs and benefits to society—using a totality-of thecircumstances approach rooted in the 2 The 2020 Final Action, while reversing the 2016 Supplemental Finding as to the EPA’s determination that it was ‘‘appropriate’’ to regulate HAP from EGUs, did not rescind the Agency’s prior determination that it was necessary to regulate. See 84 FR 2674 (February 7, 2019). Instead, the 2020 rulemaking stated that its rescission was based on the appropriate prong alone: ‘‘CAA section 112(n)(1)(A) requires the EPA to determine that both the appropriate and necessary prongs are met. Therefore, if the EPA finds that either prong is not satisfied, it cannot make an affirmative appropriate and necessary finding. The EPA’s reexamination of its determination . . . focuses on the first prong of that analysis.’’ Id. PO 00000 Frm 00005 Fmt 4701 Sfmt 4702 7627 Michigan court’s direction to ‘‘pay[ ] attention to the advantages and disadvantages of [our] decision[ ].’’ 576 U.S. at 753; see id. at 752 (‘‘In particular, ‘appropriate’ is ‘the classic broad allencompassing term that naturally includes consideration of all relevant factors.’’). To help determine the relevant factors to weigh, we look to CAA section 112(n)(1)(A), the other provisions of CAA section 112(n)(1), and to the statutory design of CAA section 112. Initially, we consider the human health advantages of reducing HAP emissions from EGUs because in CAA section 112(n)(1)(A) Congress directed the EPA to make the appropriate and necessary determination after considering the results of a ‘‘study of the hazards to public health reasonably anticipated to occur as a result of [HAP] emissions’’ from EGUs. See CAA section 112(n)(1)(A). We consider all of the advantages of reducing emissions of HAP (i.e., the risks posed by HAP) regardless of whether those advantages can be quantified or monetized, and we explain why almost none of those advantages can be monetized. Consistent with CAA section 112(n)(1)(B)’s direction to examine the rate and mass of mercury emissions, and the design of CAA section 112, which required swift reduction of the volume of HAP emissions based on an assumption of risk, we conclude that we should place substantial weight on reducing the large volume of HAP emissions from EGUs—both in absolute terms and relative to other source categories—that, absent MATS, was entering our air, water, and land, thus reducing the risk of grave harms that can occur as a result of exposure to HAP. Also consistent with the statutory design of CAA section 112, in considering the advantages of HAP reductions, we consider the distribution of those benefits, and the statute’s clear goal in CAA section 112(n)(1)(C) and other provisions of CAA section 112 to protect the most exposed and susceptible populations, such as communities that are reliant on local fish for their survival, and developing fetuses. We think it is highly relevant that while EGUs generate power for all, and EGU HAP pollution poses risks to all Americans exposed to such HAP, a smaller set of Americans who live near EGUs face a disproportionate risk of being significantly harmed by toxic pollution. Finally, we also consider the identified risks to the environment posed by mercury and acid-gas HAP, consistent with CAA section 112(n)(1)(B) and the general goal of CAA E:\FR\FM\09FEP2.SGM 09FEP2 lotter on DSK11XQN23PROD with PROPOSALS2 7628 Federal Register / Vol. 87, No. 27 / Wednesday, February 9, 2022 / Proposed Rules section 112 to reduce risks posed by HAP to the environment. We next weigh those advantages against the disadvantages of regulation, principally in the form of the costs incurred to control HAP before they are emitted into the environment. Consistent with the statutory design, we consider those costs comprehensively, examining them in the context of the effect of those expenditures on the economics of power generation more broadly, the reliability of electricity, and the cost of electricity to consumers. These metrics are relevant to our weighing exercise because they give us a more complete picture of the disadvantages to producers and consumers of electricity imposed by this regulation, and because our conclusion might change depending on how this burden affects the ability of the industry to thrive and to provide reliable, affordable electricity to the benefit of all Americans. These metrics are relevant measures for evaluating costs to the utility sector in part because they are the types of metrics considered by the owners and operators of EGUs themselves. See 81 FR 24428 (April 25, 2016). Per CAA section 112(n)(1)(B), we further consider the availability and cost of control technologies, including the relationship of that factor to controls installed under the ARP. As explained in detail in this document, we ultimately propose to conclude that, weighing the risks posed by HAP emissions from EGUs against the costs of reducing that pollution on the industry and society as a whole, it is worthwhile (i.e., ‘‘appropriate’’) to regulate those emissions to protect all Americans, and in particular the most vulnerable populations, from the inherent risks posed by exposure to HAP emitted by coal- and oil-fired EGUs. We propose to find that this is true whether we are looking at the record in 2016 (i.e., information available as of the time of the 2012 threshold finding and rulemaking) or at the updated record in 2021, in which we quantify additional risks posed by HAP emissions from EGUs and conclude that the actual cost of complying with MATS was almost certainly significantly less than the EPA’s projected estimate in the 2011 RIA, primarily because fewer pollution controls were installed than projected and because the unexpected increases in natural gas supply led to a dramatic decrease in the price of natural gas. In the 2016 Supplemental Finding we did not consider non-HAP health benefits that occur by virtue of controlling HAP from EGUs as a relevant factor for our consideration VerDate Sep<11>2014 21:43 Feb 08, 2022 Jkt 256001 under the preferred approach. However, because the Supreme Court in Michigan directed us to consider health and environmental effects beyond those posed by HAP, ‘‘including, for instance, harms that regulation might do to human health or the environment,’’ and stressed that ‘‘[n]o regulation is ‘appropriate’ if it does significantly more harm than good,’’ 576 U.S. at 752, we take comment on whether it is reasonable to also consider the advantages associated with non-HAP emission reductions that result from the application of HAP controls as part of our totality-of-the-circumstances approach. In the 2012 MATS Final Rule, we found that regulating EGUs for HAP resulted in substantial health benefits accruing from coincidental reductions in particulate matter (PM) pollution and its precursors. We also projected that regulating EGUs for HAP would similarly result in an improvement in ozone pollution. While we propose to reach the conclusion that HAP regulation is appropriate even absent consideration of these additional benefits, adding these advantages to the weighing inquiry would provide further support for our proposed conclusion that the advantages of regulation outweigh the disadvantages. We recognize, as we did in 2016, that our preferred, totality-of-thecircumstances approach to making the appropriate and necessary determination is an exercise in judgment, and that ‘‘[r]easonable people, and different decision-makers, can arrive at different conclusions under the same statutory provision’’ (81 FR 24431; April 25, 2016). However, this type of weighing of factors and circumstances is an inherent part of regulatory decision-making, and we think it is a reasonable approach where the factors the statute identifies as important to consider cannot be quantified or monetized. Next, we turn to our alternative approach of a formal benefit-cost analysis (BCA). This approach independently supports the determination that it is appropriate to regulate EGU HAP. Based on the 2011 Regulatory Impacts Analysis (2011 RIA) 3 performed as part of the 2012 MATS Final Rule, the total net benefits of MATS were overwhelming even though the EPA was only able to monetize one of the many benefits of reducing HAP emissions from EGUs. Like the preferred approach, this 3 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 00006 Fmt 4701 Sfmt 4702 conclusion is further supported by newer information on the risks posed by HAP emissions from EGUs as well as the actual costs of implementing MATS, which almost certainly were significantly lower than estimated in the 2011 RIA. Our proposal is organized as follows. In section II.A of this preamble, we provide as background the regulatory and procedural history leading up to this proposal. We also detail, in preamble section II.B, the statutory design of HAP regulation that Congress added to the CAA in 1990 in the face of the EPA’s failure to make meaningful progress in regulating HAP emissions from stationary sources. In particular, we point out that many provisions of CAA section 112 demonstrate the value Congress placed on reducing the volume of HAP emissions from stationary sources as much as possible and quickly, with a particular focus on reducing HAP related risks to the most exposed and most sensitive members of the public. This background assists in identifying the relevant statutory factors to weigh in considering the advantages and disadvantages of HAP regulation. Against this backdrop, we propose to revoke the 2020 Final Action and reaffirm the 2016 determination that it remains appropriate to regulate HAP emissions from EGUs after a consideration of cost. Specifically, in section III.A of this preamble, we review the long-standing and extensive body of evidence, as well as new mercuryrelated risk analyses performed since 2016, identifying substantial risks to human health and the environment from HAP emissions from coal- and oilfired EGUs that support a conclusion that regulating HAP emissions from EGUs is appropriate. In preamble section III.B, we analyze information regarding how the power sector elected to comply with MATS, and how our 2012 projections for the cost of regulation almost certainly overestimated the actual costs of the regulation by a significant amount. In preamble section III.C, we explain our reasons for revoking the 2020 Final Action, which applied an ill-suited framework for evaluating cost because it gave little to no weight to the statutory concern with reducing the volume of and risks from HAP emissions to protect even the most exposed and most vulnerable members of the public. In section III.D of this preamble, we describe and apply our preferred, totality-of-the-circumstances approach, giving particular weight to the factors identified in CAA section 112(n)(1) and 112 more generally. We propose to conclude that after considering all of the E:\FR\FM\09FEP2.SGM 09FEP2 Federal Register / Vol. 87, No. 27 / Wednesday, February 9, 2022 / Proposed Rules relevant factors and weighing the advantages of regulation against the cost of doing so, it is appropriate and necessary to regulate EGUs under CAA section 112. In section III.E of this preamble, we propose an alternative formal benefit-cost approach for making the appropriate and necessary determination. Under this approach, we propose to conclude that it remains appropriate to regulate HAP emissions from EGUs after considering cost because the BCA issued with the MATS rule indicated that the total net benefits of MATS were overwhelming even though the EPA was only able to monetize one of many statutorily identified benefits of regulating HAP emissions from EGUs. The new information examined by the EPA with respect to updated science and cost information only strengthens our conclusions under either of these methodologies. Section IV of this preamble notes that because this proposal reaffirms prior determinations and does not impact implementation of MATS, this action, if finalized, would not change those standards. Finally, in preamble section V, in addition to soliciting comments on all aspects of this proposed action, we separately seek comment on any data or information that will assist in the EPA’s ongoing review of the RTR that the Agency completed for MATS in 2020. B. Does this action apply to me? The source category that is the subject of this proposal is Coal- and Oil-Fired EGUs regulated by NESHAP under 40 CFR 63, subpart UUUUU, commonly known as MATS. The North American Industry Classification System (NAICS) codes for the Coal- and Oil-Fired EGU source category are 221112, 221122, and 921150. This list of NAICS codes is not intended to be exhaustive, but rather provides a guide for readers regarding the entities that this proposed action is likely to affect. lotter on DSK11XQN23PROD with PROPOSALS2 C. 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 action is available on the internet. Following signature by the EPA Administrator, the EPA will post a copy of this proposed action at https://www.epa.gov/ stationary-sources-air-pollution/ mercury-and-air-toxics-standards. Following publication in the Federal Register, the EPA will post the Federal Register version of the proposal and key technical documents at this same website. VerDate Sep<11>2014 21:43 Feb 08, 2022 Jkt 256001 II. Background A. Regulatory History In the 1990 Amendments, Congress substantially modified CAA section 112 to address hazardous air pollutant emissions from stationary sources. CAA section 112(b)(1) sets forth a list of 187 identified HAP, and CAA sections 112(b)(2) and (3) give the EPA the authority to add or remove pollutants from the list. CAA section 112(a)(1) and (2) specify the two types of sources to be addressed: major sources and area sources. A major source is any stationary source or group of stationary sources at a single location and under common control that emits or has the potential to emit, considering controls, 10 tpy or more of any HAP or 25 tpy or more of any combination of HAP. CAA section 112(a)(1). Any stationary source of HAP that is not a major source is an area source.4 CAA section 112(a)(2). All major source categories, besides EGUs, and certain area source categories, were required to be included on an initial published list of sources subject to regulation under CAA section 112. See CAA sections 112(a)(1) and (c)(1). The EPA is required to promulgate emission standards under CAA section 112(d) for every source category on the CAA section 112(c)(1) list. The general CAA section 112(c) process for listing source categories does not apply to EGUs. Instead, Congress enacted a special provision, CAA section 112(n)(1)(A), which establishes a separate process by which the EPA determines whether to add EGUs to the CAA section 112(c) list of source categories that must be regulated under CAA section 112. Because EGUs were subject to other CAA requirements under the 1990 Amendments, most importantly the ARP, CAA section 112(n)(1)(A) directs the EPA to conduct a study to evaluate the hazards to public health that are reasonably anticipated to occur as a result of the HAP emissions from EGUs ‘‘after imposition of the requirements of this chapter.’’ See CAA section 112(n)(1)(A); see also Michigan v. EPA, 576 U.S. at 748 (‘‘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 provision 4 The statute includes a separate definition of ‘‘EGU’’ that includes both major and area source power plant facilities. CAA section 112(a)(8). PO 00000 Frm 00007 Fmt 4701 Sfmt 4702 7629 directs that the EPA shall regulate EGUs under CAA section 112 if the Administrator determines, after considering the results of the study, that such regulation is ‘‘appropriate and necessary.’’ CAA section 112(n)(1)(A), therefore, sets a unique process by which the Administrator is to determine whether to add EGUs to the CAA section 112(c) list of sources that must be subject to regulation under CAA section 112. The study required under CAA section 112(n)(1)(A) is one of three studies commissioned by Congress under CAA section 112(n)(1), a subsection entitled ‘‘Electric utility steam generating units.’’ The first, which, as noted, the EPA was required to consider before making the appropriate and necessary determination, was completed in 1998 and was entitled the Study of Hazardous Air Pollutant Emissions from Electric Utility Steam Generating Units– Final Report to Congress (Utility Study).5 The Utility Study 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. The study indicated that mercury was the HAP of greatest concern to public health from coal- and oil-fired EGUs. The study also concluded that numerous control strategies were available to reduce HAP emissions from this source category. The second study commissioned by Congress under CAA section 112(n)(1)(B), the Mercury Study Report to Congress (Mercury Study),6 was released in 1997. Under this provision, the statute tasked the EPA with focusing exclusively on mercury, but directed the Agency to look at other stationary sources of mercury emission in addition to EGUs, the rate and mass of emissions coming from those sources, available technologies for controlling mercury and the costs of such technologies, and a broader scope of impacts including environmental effects. As in the Utility Study, the EPA confirmed that mercury is highly toxic, persistent, and bioaccumulates in food chains. Fish consumption is the primary pathway for human exposure to mercury, which can lead to higher risks in certain populations. The third study, required under CAA section 112(n)(1)(C), 5 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. 6 U.S. EPA. 1997. Mercury Study Report to Congress. EPA–452/R–97–003 December 1997. E:\FR\FM\09FEP2.SGM 09FEP2 lotter on DSK11XQN23PROD with PROPOSALS2 7630 Federal Register / Vol. 87, No. 27 / Wednesday, February 9, 2022 / Proposed Rules directed the National Institute of Environmental Health Sciences (NIEHS) to conduct a study to determine the threshold level of mercury exposure below which adverse human health effects were not expected to occur (NIEHS Study). The statute required that the study include a threshold for mercury concentrations in the tissue of fish that could be consumed, even by sensitive populations, without adverse effects to public health. NIEHS submitted the required study to Congress in 1995.7 See 76 FR 24982 (May 3, 2011). Later, after submission of the CAA section 112(n)(1) reports and as part of the fiscal year 1999 appropriations, Congress further directed the EPA to fund the National Academy of Sciences (NAS) to perform an independent evaluation of the data related to the health impacts of methylmercury, and, similar to the CAA section 112(n)(1)(C) inquiry, specifically to advise the EPA as to the appropriate reference dose (RfD) for methylmercury. Congress also indicated in the 1999 conference report directing the EPA to fund the NAS Study, that the EPA should not make the appropriate and necessary regulatory determination until the EPA had reviewed the results of the NAS Study. See H.R. Conf. Rep. No. 105–769, at 281–282 (1998). This last study, completed by the NAS in 2000, was entitled Toxicological Effects of Methylmercury (NAS Study),8 and it presented a rigorous peer-review of the EPA’s RfD for methylmercury. Based on the results of these studies and other available information, the EPA determined on December 20, 2000, pursuant to CAA section 112(n)(1)(A), that it is appropriate and necessary to regulate HAP emissions from coal- and oil-fired EGUs and added such units to the CAA section 112(c) list of source categories that must be regulated under CAA section 112. See 65 FR 79825 (December 20, 2000) (2000 Determination).9 In 2005, the EPA revised the original 2000 Determination and concluded that it was neither appropriate nor necessary to regulate EGUs under CAA section 112 in part because the EPA concluded it could address risks from EGU HAP emissions under a different provision of the statute. See 70 FR 15994 (March 29, 2005) (2005 Revision). Based on that determination, the EPA 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. See 70 FR 28605 (May 18, 2005). Both the 2005 Revision and the CAMR were vacated by the D.C. Circuit in 2008. New Jersey v. EPA, 517 F.3d 574 (DC Cir. 2008). The D.C. Circuit held that the EPA 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. Id. at 582–84. Subsequent to the New Jersey decision, the EPA conducted additional technical analyses, including peerreviewed risk assessments on human health effects associated with mercury (2011 Final Mercury TSD) 10 and nonmercury metal HAP emissions from EGUs (2011 Non-Hg HAP Assessment).11 Those analyses, which focused on populations with higher fish consumption (e.g., subsistence fishers) and residents living near the facilities who experienced increased exposure to HAP through inhalation, found that mercury and non-mercury HAP emissions from EGUs remain a public health hazard and that EGUs were the largest anthropogenic source of mercury emissions to the atmosphere in the U.S. Based on these findings, and other relevant information regarding the volume of HAP, environmental effects, and availability of controls, in 2012, the EPA affirmed the original 2000 Determination that it is appropriate and necessary to regulate EGUs under CAA 7 National Institute of Environmental Health Sciences (NIEHS) Report on Mercury; available in the rulemaking docket at EPA–HQ–OAR–2009– 0234–3053. 8 National Research Council (NAS). 2000. Toxicological Effects of Methylmercury. Committee on the Toxicological Effects of Methylmercury, Board on Environmental Studies and Toxicology, National Research Council. Many of the peerreviewed articles cited in this section are publications originally cited in the NAS report. 9 In the same 2000 action, the EPA Administrator found that regulation of HAP emissions from natural gas-fired EGUs is not appropriate or necessary because the impacts due to HAP emissions from such units are negligible. See 65 FR 79831 (December 20, 2000). 10 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 2011. EPA–452/R–11–009. Docket ID Item No. EPA–HQ– OAR–2009–0234–19913 (2011 Final Mercury TSD). 11 U.S. EPA. 2011. 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. Office of Air Quality Planning and Standards. November 2011. EPA–452/R–11–013. Docket ID Item No. EPA–HQ–OAR–2009–0234–19912 (2011 Non-Hg HAP Assessment). VerDate Sep<11>2014 21:43 Feb 08, 2022 Jkt 256001 PO 00000 Frm 00008 Fmt 4701 Sfmt 4702 section 112. See 77 FR 9304 (February 16, 2012). In the same 2012 action, the EPA established a NESHAP, commonly referred to as MATS, that required coaland oil-fired EGUs to meet HAP emission standards reflecting the application of the maximum achievable control technology (MACT) for all HAP emissions from EGUs.12 MATS 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 steam generating combustion unit of more than 25 megawatts (MW) that serves a generator that produces electricity for sale. See CAA section 112(a)(8) (defining EGU). A unit that cogenerates steam and electricity and supplies more than onethird 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. Id. For coal-fired EGUs, MATS includes 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 HCl serve as a surrogate for the acid gas HAP, with an alternate standard for sulfur dioxide (SO2) that may be used as a surrogate for acid gas HAP for those coal-fired EGUs with flue gas desulfurization (FGD) systems and SO2 continuous emissions monitoring systems that are installed and operational. Standards for filterable PM serve as a surrogate for the nonmercury 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 were established to limit formation and emissions of the organic HAP. For oil-fired EGUs, MATS includes standards to limit emissions of HCl and 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 were established to 12 Although the 2012 MATS Final Rule has been amended several times, the amendments are not a result of actions regarding the appropriate and necessary determination and, therefore, are not discussed in this preamble. Detail regarding those amendatory actions can be found at https:// www.epa.gov/stationary-sources-air-pollution/ mercury-and-air-toxics-standards. E:\FR\FM\09FEP2.SGM 09FEP2 Federal Register / Vol. 87, No. 27 / Wednesday, February 9, 2022 / Proposed Rules lotter on DSK11XQN23PROD with PROPOSALS2 limit formation and emissions of the organic HAP. Additional detail regarding the types of units regulated under MATS and the regulatory requirements that they are subject to can be found in 40 CFR 63, subpart UUUUU.13 The existing source compliance date was April 16, 2015, but many existing sources were granted an additional 1-year extension of the compliance date for the installation of controls. After MATS was promulgated, both the rule itself and many aspects of the EPA’s appropriate and necessary determination were challenged in the D.C. Circuit. In White Stallion Energy Center v. EPA, the D.C. Circuit unanimously denied all challenges to MATS, with one exception discussed below in which the court was not unanimous. 748 F.3d 1222 (D.C. Cir. 2014). As part of its decision, the D.C. Circuit concluded that the ‘‘EPA’s ‘appropriate and necessary’ determination in 2000, and the reaffirmation of that determination in 2012, are amply supported by EPA’s findings regarding the health effects of mercury exposure.’’ Id. at 1245.14 While joining the D.C. Circuit’s conclusions as to the adequacy of the EPA’s identification of public health hazards, one judge dissented on the issue of whether the EPA erred by not considering costs together with the harms of HAP pollution when making the ‘‘appropriate and necessary’’ determination, finding that cost was a required consideration under that 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 13 Available at www.ecfr.gov/cgi-bin/textidx?node=sp40.15.63.uuuuu. 14 In discussing the 2011 Final Mercury TSD, the D.C. Circuit concluded that the EPA considered the available scientific information in a rational manner, and stated: As explained in the technical support document (TSD) accompanying the Final Rule, EPA determined that mercury emissions posed a significant threat to public health based on an analysis of women of child-bearing age who consumed large amounts of freshwater fish. See [2011 Final] Mercury TSD . . . . The design of EPA’s TSD was neither arbitrary nor capricious; the study was reviewed by EPA’s independent Science Advisory Board, stated that it ‘‘support[ed] the overall design of and approach to the risk assessment’’ and found ‘‘that it should provide an objective, reasonable, and credible determination of potential for a public health hazard from mercury emissions emitted from U.S. EGUs.’’ . . . In addition, EPA revised the final TSD to address SAB’s remaining concerns regarding EPA’s data collection practices. Id. at 1245–46. VerDate Sep<11>2014 21:43 Feb 08, 2022 Jkt 256001 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, 576 U.S. at 760. 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 to 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 to complete the required cost analysis, and the D.C. Circuit left the MATS rule in place pending the completion of that analysis. White Stallion Energy Center 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 finalized a supplemental finding on April 25, 2016, that evaluated the costs of complying with MATS and concluded that the appropriate and necessary determination was still valid. The 2016 Supplemental Finding promulgated two different approaches to incorporate cost into the decision-making process for the appropriate and necessary determination. See 81 FR 24420 (April 25, 2016). The EPA determined that both approaches independently supported the conclusion that regulation of HAP emissions from EGUs is appropriate and necessary. The EPA’s preferred approach to incorporating cost evaluated estimated costs of compliance with MATS against several cost metrics relevant to the EGU sector (e.g., historical annual revenues, annual capital expenditures, and impacts on retail electricity prices), and found that the projected costs of MATS were reasonable for the sector in comparison with historical data on those metrics. The evaluation of cost metrics that the EPA applied was consistent with approaches commonly used to evaluate environmental policy cost impacts.15 The EPA also examined as part of its cost analysis what the 15 For example, see ‘‘Economic Impact and Small Business Analysis–Mineral Wool and Wool Fiberglass RTRs and Wool Fiberglass Area Source NESHAP’’ (U.S. EPA, 2015; https://www.epa.gov/ sites/default/files/2020-07/documents/mwwf_eia_ neshap_final_07-2015.pdf) or ‘‘Economic Impact Analysis of Final Coke Ovens NESHAP’’ (U.S. EPA, 2002; https://www.epa.gov/sites/default/files/202007/documents/coke-ovens_eia_neshap_final_082002.pdf). PO 00000 Frm 00009 Fmt 4701 Sfmt 4702 7631 impact of MATS would be on retail electricity prices and the reliability of the power grid. Using a totality-of-thecircumstances approach, the EPA weighed these supplemental findings as to cost against the existing administrative record detailing the identified hazards to public health and the environment from mercury, nonmercury metal HAP, and acid gas HAP that are listed under CAA section 112, and the other advantages to regulation. Based on that balancing, the EPA concluded under the preferred approach that it remains appropriate to regulate HAP emissions from EGUs after considering cost. See 81 FR 24420 (April 25, 2016) (‘‘After evaluating cost reasonableness using several different metrics, the Administrator has, in accordance with her statutory duty under CAA section 112(n)(1)(A), weighed cost against the previously identified advantages of regulating HAP emissions from EGUs—including the agency’s prior conclusions about the significant hazards to public health and the environment associated with such emissions and the volume of HAP that would be reduced by regulation of EGUs under CAA section 112.’’) In a second alternative and independent approach (referred to as the alternative approach), the EPA considered the BCA in the 2011 RIA for the 2012 MATS Final Rule. Id. at 24421. In that analysis, even though the EPA was only able to monetize one HAPspecific endpoint, the EPA estimated that the final MATS rule would yield annual monetized net benefits (in 2007 dollars) of between $37 billion to $90 billion using a 3-percent discount rate and between $33 billion to $81 billion using a 7-percent discount rate, in comparison to the projected $9.6 billion in annual compliance costs. See id. at 24425. The EPA therefore determined that the alternative approach also independently supported the conclusion that regulation of HAP emissions from EGUs remains appropriate after considering cost. Id. 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 then-new Administration an opportunity to review the 2016 action, and the D.C. Circuit ordered that the consolidated challenges to the 2016 E:\FR\FM\09FEP2.SGM 09FEP2 7632 Federal Register / Vol. 87, No. 27 / Wednesday, February 9, 2022 / Proposed Rules lotter on DSK11XQN23PROD with PROPOSALS2 Supplemental Finding be held in abeyance (i.e., temporarily on hold).16 Accordingly, the EPA reviewed the 2016 action, and on May 22, 2020, finalized a revised response to the Michigan decision. See 85 FR 31286 (May 22, 2020). In the 2020 Final Action, after primarily comparing the projected costs of compliance to the one post control HAP emission reduction benefit that could be monetized, the EPA reconsidered its previous determination and found that it is not appropriate to regulate HAP emissions from coal- and oil-fired EGUs after a consideration of cost, 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, in its reconsideration, the Agency asserted that the 2016 Supplemental Finding considering the cost of MATS was flawed based on its assessment that neither of the two approaches to considering cost in the 2016 Supplemental Finding satisfied the EPA’s obligation under CAA section 112(n)(1)(A), as that provision was interpreted by the U.S. Supreme Court in Michigan. Additionally, the EPA determined 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 in the 2012 MATS Final Rule.17 See 85 FR 31312 (May 22, 2020). In the 2020 Final Action, the EPA also finalized the risk review required by CAA section 112(f)(2) and the first technology review required by CAA section 112(d)(6) for the Coal- and OilFired EGU source category regulated under MATS.18 The EPA determined 16 Order, Murray Energy Corp. v. EPA, No. 16– 1127 (D.C. Cir. April 27, 2017), ECF No. 1672987. In response to a joint motion from the parties to govern future proceedings, the D.C. Circuit issued an order in February 2021 to continue to hold the consolidated cases in Murray Energy Corp. v. EPA in abeyance. Order, Murray Energy Corp. v. EPA, No. 16–1127 (D.C. Cir. February 25, 2021), ECF No. 1887125. 17 This finding was based on New Jersey v. EPA, 517 F.3d 574 (D.C. Cir. 2008), which held that the EPA is not permitted to remove source categories from the CAA section 112(c)(1) list unless the CAA section 112(c)(9) criteria for delisting have been met. 18 CAA section 112(f)(2) requires the EPA to conduct a one-time review of the risks remaining after imposition of MACT standards under CAA section 112(d)(2) within 8 years of the effective date of those standards (risk review). CAA section 112(d)(6) requires the EPA to conduct a review of all CAA section 112(d) standards at least every 8 years to determine whether it is necessary to establish more stringent standards after considering, VerDate Sep<11>2014 21:43 Feb 08, 2022 Jkt 256001 that residual risks due to emissions of air toxics from the Coal- and Oil-Fired EGU source category are acceptable and that the current NESHAP provides an ample margin of safety to protect public health and to prevent an adverse environmental effect. In the technology review, the EPA did not identify any new developments in HAP emission controls to achieve further cost-effective emissions reductions. Based on the results of these reviews, the EPA found that no revisions to MATS were warranted. See 85 FR 31314 (May 22, 2020). Several states, industry, public health, environmental, and civil rights groups petitioned for review of the 2020 Final Action in the D.C. Circuit. American Academy of Pediatrics v. Regan, No. 20– 1221 and consolidated cases (D.C. Cir. filed June 19, 2020). On September 28, 2020, the D.C. Circuit granted the EPA’s unopposed motion to sever from the lead case and hold in abeyance two of the petitions for review: Westmoreland Mining Holdings LLC v. EPA, No. 20– 1160 (D.C. Cir. filed May 22, 2020) (challenging the 2020 Final Action as well as prior EPA actions related to MATS, including a challenge to the MATS CAA section 112(d) standards on the basis that the 2020 Final Action’s reversal of the appropriate and necessary determination provided a ‘‘grounds arising after’’ for filing a petition outside the 60-day window for judicial review of MATS), and Air Alliance Houston v. EPA, No. 20–1268 (D.C. Cir. filed July 21, 2020) (challenging only the RTR portion of the 2020 Final Action).19 On January 20, 2021, President Biden signed Executive Order 13990, ‘‘Protecting Public Health and the Environment and Restoring Science to Tackle the Climate Crisis.’’ The Executive Order, among other things, instructs the EPA to review the 2020 Final Action and consider publishing a notice of proposed rulemaking suspending, revising, or rescinding that action. In February 2021, the EPA moved the D.C. Circuit to hold American Academy of Pediatrics and consolidated cases in abeyance, pending the Agency’s review of the 2020 Final Action as prompted in Executive Order 13990, and on February 16, 2021, the among other things, advances in technology and costs of additional control (technology review). The EPA has always conducted the first technology review at the same time it conducts the risk review and collectively the actions are known at RTRs. 19 Order, Westmoreland Mining Holdings LLC v. EPA, No. 20–1160 (D.C. Cir. September 28, 2020), ECF No. 1863712. PO 00000 Frm 00010 Fmt 4701 Sfmt 4702 D.C. Circuit granted the Agency’s motion.20 In the meantime, the requirements of MATS have been fully implemented, resulting in significant reductions in HAP emissions from EGUs and the risks associated with those emissions. The EPA had projected that annual EGU mercury emissions would be reduced by 75 percent with MATS implementation. In fact, EGU emission reductions have been far more substantial (down to approximately 4 tons in 2017), which represents an 86 percent reduction compared to 2010 (pre-MATS) levels. See Table 4 at 84 FR 2689 (February 7, 2019). Acid gas HAP and non-mercury metal HAP have similarly been reduced—by 96 percent and 81 percent, respectively—as compared to 2010 levels. Id. MATS is the only Federal requirement that guarantees this level of HAP control from EGUs. The EPA is now proposing to revoke the 2020 reconsideration of the 2016 Supplemental Finding and to reaffirm once again that it is appropriate and necessary to regulate emissions of HAP from coal- and oil-fired EGUs. We will provide notice of the results of our review of the 2020 RTR in a separate future action. B. Statutory Background Additional statutory context is useful to help identify the relevant factors that the Administrator should weigh when making the appropriate and necessary determination. 1. Pre-1990 History of HAP Regulation In 1970, Congress enacted CAA section 112 to address the millions of pounds of HAP emissions that were estimated to be emitted from stationary sources in the country. At that time, the CAA defined HAP as ‘‘an air pollutant to which no ambient air quality standard is applicable and which, in the judgment of the Administrator may cause, or contribute to, an increase in mortality or an increase in serious irreversible, or incapacitating reversible, illness,’’ but the statute left it to the EPA to identify and list pollutants that were HAP. Once a HAP was listed, the statute required the EPA to regulate sources of that identified HAP ‘‘at the level which in [the Administrator’s] judgment provides an ample margin of safety to protect the public health from such hazardous air pollutants.’’ CAA section 112(b)(1)(B) (pre-1990 amendments); Legislative History of the CAA Amendments of 1990 (‘‘Legislative 20 Order, American Academy of Pediatrics v. Regan, No. 20–1221 (D.C. Cir. February 16, 2021), ECF No. 1885509. E:\FR\FM\09FEP2.SGM 09FEP2 Federal Register / Vol. 87, No. 27 / Wednesday, February 9, 2022 / Proposed Rules History’’), at 3174–75, 3346 (Comm. Print 1993). The statute did not define the term ‘‘ample margin of safety’’ or provide a risk metric on which the EPA was to establish standards, and initially the EPA endeavored to account for costs and technological feasibility in every regulatory decision. In Natural Resources Defense Council (NRDC) v. EPA, 824 F.2d 1146 (D.C. Cir. 1987), the D.C. Circuit concluded that the CAA required that in interpreting what constitutes ‘‘safe,’’ the EPA was prohibited from considering cost and technological feasibility. Id. at 1166. The EPA subsequently issued the NESHAP for benzene in accordance with the NRDC holding.21 Among other things, the Benzene NESHAP concluded that there is a rebuttable presumption that any cancer risk greater than 100-in1 million to the most exposed individual is unacceptable, and per NRDC, must be addressed without consideration of cost or technological feasibility. The Benzene NESHAP further provided that, after evaluating the acceptability of cancer risks, the EPA must evaluate whether the current level of control provides an ample margin of safety for any risk greater than 1-in-1 million and, if not, the EPA will establish more stringent standards as necessary after considering cost and technological feasibility.22 lotter on DSK11XQN23PROD with PROPOSALS2 2. Clean Air Act 1990 Amendments to Section 112 In 1990, Congress radically transformed section 112 of the CAA and its treatment of hazardous air pollution. The legislative history of the amendments indicates Congress’ dissatisfaction with the EPA’s slow pace addressing these pollutants under the 1970 CAA: ‘‘In theory, [hazardous air pollutants] were to be stringently controlled under the existing Clean Air Act section 112. However, . . . only seven of the hundreds of potentially hazardous air pollutants have been regulated by EPA since section 112 was 21 National Emissions Standards for Hazardous Air Pollutants: Benzene Emissions from Maleic Anhydride Plants, Ethylbenzene/Styrene Plants, Benzene Storage Vessels, Benzene Equipment Leaks, and Coke By-Product Recovery Plants (Benzene NESHAP). 54 FR 38044 (September 14, 1989). 22 ‘‘In protecting public health with an ample margin of safety under section 112, EPA strives to provide maximum feasible protection against risks to health from hazardous air pollutants by (1) protecting the greatest number of persons possible to an individual lifetime risk level no higher than approximately 1 in 1 million and (2) limiting to no higher than approximately 1 in 10 thousand the estimated risk that a person living near a plant would have if he or she were exposed to the maximum pollutant concentrations for 70 years.’’ Benzene NESHAP, 54 FR 38044–5, September 14, 1989. VerDate Sep<11>2014 21:43 Feb 08, 2022 Jkt 256001 enacted in 1970.’’ H.R. Rep. No. 101– 490, at 315 (1990); see also id. at 151 (noting that in 20 years, the EPA’s establishment of standards for only seven HAP covered ‘‘a small fraction of the many substances associated . . . with cancer, birth defects, neurological damage, or other serious health impacts.’’). Congress was concerned with how few sources had been addressed during this time. Id. (‘‘[The EPA’s] regulations sometimes apply only to limited sources of the relevant pollutant. For example, the original benzene standard covered just one category of sources (equipment leaks). Of the 50 toxic substances emitted by industry in the greatest volume in 1987, only one—benzene—has been regulated even partially by EPA.’’). Congress noted that state and local regulatory efforts to act in the face of ‘‘the absence of Federal regulations’’ had ‘‘produced a patchwork of differing standards,’’ and that ‘‘[m]ost states . . . limit the scope of their program by addressing a limited number of existing sources or source categories, or by addressing existing sources only on a case-by-case basis as problem sources are identified’’ and that ‘‘[o]ne state exempts all existing sources from review.’’ Id. In enacting the 1990 Amendments with respect to the control of hazardous air pollution, Congress noted that ‘‘[p]ollutants controlled under [section 112] tend to be less widespread than those regulated [under other sections of the CAA], but are often associated with more serious health impacts, such as cancer, neurological disorders, and reproductive dysfunctions.’’ Id. at 315. In its substantial 1990 Amendments, Congress itself listed 189 HAP (CAA section 112(b)) and set forth a statutory structure that would ensure swift regulation of a significant majority of these HAP emissions from stationary sources. Specifically, after defining major and area sources and requiring the Agency to list all major sources and many area sources of the listed pollutants (CAA section 112(c)), the new CAA section 112 required the Agency to establish technology-based emission standards for listed source categories on a prompt schedule and to revisit those technology-based standards every 8 years (CAA section 112(d) (emission standards); CAA section 112(e) (schedule for standards and review)). The 1990 Amendments also obligated the EPA to evaluate the residual risk within 8 years of promulgation of technology-based standards. CAA section 112(f)(2). In setting the standards, CAA section 112(d) requires the Agency to establish technology-based standards that achieve PO 00000 Frm 00011 Fmt 4701 Sfmt 4702 7633 the ‘‘maximum degree of reduction,’’ ‘‘including a prohibition on such emissions where achievable.’’ CAA section 112(d)(2). Congress specified that the maximum degree of reduction must be at least as stringent as the average level of control achieved in practice by the best performing sources in the category or subcategory based on emissions data available to the Agency at the time of promulgation. This technology-based approach permitted the EPA to swiftly set standards for source categories without determining the risk or cost in each specific case, as the EPA had done prior to the 1990 Amendments. In other words, this approach to regulation quickly required that all major sources and many area sources of HAP install control technologies consistent with the top performers in each category, which had the effect of obtaining immediate reductions in the volume of HAP emissions from stationary sources. The statutory requirement that sources obtain levels of emission limitation that have actually been achieved by existing sources, instead of levels that could theoretically be achieved, inherently reflects a built-in cost consideration.23 Further, after determining the minimum stringency level of control, or MACT floor, CAA section 112(d)(2) requires the Agency to determine whether more stringent standards are achievable after considering the cost of achieving such standards and any nonair-quality health and environmental impacts and energy requirements of additional control. In doing so, the statute further specifies in CAA section 112(d)(2) that the EPA should consider requiring sources to apply measures that, among other things, ‘‘reduce the volume of, or eliminate emissions of, such pollutants . . .’’ (CAA section 112(d)(2)(A)), ‘‘enclose systems or processes to eliminate emissions’’ (CAA section 112(d)(2)(B)), and ‘‘collect, capture, or treat such pollutants when released . . .’’ (CAA section 112(d)(2)(C)). The 1990 Amendments also built in a regular review of new 23 Congress recognized as much: ‘‘The Administrator may take the cost of achieving the maximum emission reduction and any non-air quality health and environmental impacts and energy requirements into account when determining the emissions limitation which is achievable for the sources in the category or subcategory. Cost considerations are reflected in the selection of emissions limitations which have been achieved in practice (rather than those which are merely theoretical) by sources of a similar type or character.’’ A Legislative History of the Clean Air Act Amendments of 1990 (CAA Legislative History), Vol 5, pp. 8508 –8509 (CAA Amendments of 1989; p. 168–169; Report of the Committee on Environment and Public Works S. 1630). E:\FR\FM\09FEP2.SGM 09FEP2 lotter on DSK11XQN23PROD with PROPOSALS2 7634 Federal Register / Vol. 87, No. 27 / Wednesday, February 9, 2022 / Proposed Rules technologies and a one-time review of risks that remain after imposition of MACT standards. CAA section 112(d)(6) requires the EPA to evaluate every NESHAP no less often than every 8 years to determine whether additional control is necessary after taking into consideration ‘‘developments in practices, processes, and control technologies,’’ without regard to risk. CAA section 112(f) requires the EPA to ensure that the risks are acceptable and that the MACT standards provide an ample margin of safety. The statutory requirement to establish technology-based standards under CAA section 112 avoided the need for the EPA to identify hazards to public health and the environment in order to justify regulation of HAP emissions from stationary sources, reflecting Congress’ judgment that such emissions are inherently dangerous. See S. Rep. No. 101–228, at 148 (‘‘The MACT standards are based on the performance of technology, and not on the health and environmental effects of the [HAP].’’). The technology review required in CAA section 112(d)(6) further mandates that the EPA continually evaluate standards to determine if additional reductions can be obtained, without consideration of the specific risk associated with the HAP emissions that would be reduced. Notably, the CAA section 112(d)(6) review of what additional reductions may be obtained based on new technology is required even after the Agency has conducted the CAA section 112(f)(2) review and determined that the existing standard will protect the public with an ample margin of safety. The statutory structure and legislative history also demonstrate Congress’ concern with the many ways that HAP can harm human health and Congress’ goal of protecting the most exposed and vulnerable members of society. The committee report accompanying the 1990 Amendments discussed the scientific understanding regarding HAP risk at the time, including the 1989 report on benzene performed by the EPA noted above. H.R. Rep. No. 101– 490, at 315. Specifically, Congress highlighted the EPA’s findings as to cancer incidence, and importantly, lifetime individual risk to the most exposed individuals. Id. The report also notes the limitations of the EPA’s assessment: ‘‘The EPA estimates evaluated the risks caused by emissions of a single toxic air pollutant from each plant. But many facilities emit numerous toxic pollutants. The agency’s risk assessments did not consider the combined or synergistic effects of exposure to multiple toxics, or the effect of exposure through indirect pathways.’’ VerDate Sep<11>2014 21:43 Feb 08, 2022 Jkt 256001 Id. Congress also noted the EPA’s use of the maximum exposed individual (MEI) tool to assess risks faced by heavily exposed citizens. Id. The report cited particular scientific studies demonstrating that some populations are more affected than others—for example, it pointed out that ‘‘[b]ecause of their small body weight, young children and fetuses are especially vulnerable to exposure to PCBcontaminated fish. One study has found long-term learning disabilities in children who had eaten high-levels of Great Lakes fish.’’ Id. The statutory structure confirms Congress’ approach to risk and sensitive populations. As noted, the CAA section 112(f)(2) residual risk review requires the EPA to consider whether, after imposition of the CAA section 112(d)(2) MACT standard, there are remaining risks from HAP emissions that warrant more stringent standards to provide an ample margin of safety to protect public health or to prevent an adverse environmental effect. See CAA section 112(f)(2)(A). Specifically, the statute requires the EPA to promulgate standards under the risk review provision if the CAA section 112(d) standard does not ‘‘reduce lifetime excess cancer risks to the individual most exposed to emissions from a source in the category or subcategory to less than one in one million.’’ Id. Thus, even after the application of MACT standards, the statute directs the EPA to conduct a rulemaking if even one person has a risk, not a guarantee, of getting cancer. This demonstrates the statutory intent to protect even the most exposed member of the population from the harms attendant to exposure to HAP emissions. If a residual risk rulemaking is required, as noted above, the statute incorporates the detailed rulemaking approach set forth in the Benzene NESHAP for determining whether HAP emissions from stationary sources pose an unacceptable risk and whether standards provide an ample margin of safety. See CAA section 112(f)(2)(B) (preserving the prior interpretation of ‘‘ample margin of safety’’ set forth in the Benzene NESHAP). That approach includes a rebuttable presumption that any cancer risk greater than 100-in-1 million to the most exposed person is per se unacceptable. For non-cancer chronic and acute risks, the EPA has more discretion to determine what is acceptable, but even then, the statute requires the EPA to evaluate the risks to the most exposed individual and our RfDs are developed with the goal of being protective of even sensitive members of the population. See e.g., PO 00000 Frm 00012 Fmt 4701 Sfmt 4702 CAA section 112(n)(1)(C) (requiring, in part, the development of ‘‘a threshold for mercury concentration in the tissue of fish which may be consumed (including consumption by sensitive populations) without adverse effects to public health’’). If risks are found to be unacceptable, the EPA must impose additional control requirements to ensure that post CAA section 112(f) risks from HAP emissions are at an acceptable level, regardless of cost and technological feasibility. After determining whether the risks are acceptable and developing standards to achieve an acceptable level of risk if necessary, the EPA must then determine whether more stringent standards are necessary to provide an ample margin of safety to protect public health, and at this stage we must take into consideration cost, technological feasibility, uncertainties, and other relevant factors. As stated in the Benzene NESHAP, ‘‘In protecting public health with an ample margin of safety under section 112, EPA strives to provide maximum feasible protection against risks to health from hazardous air pollutants by . . . protecting the greatest number of persons possible to an individual lifetime risk level no higher than approximately 1 in 1 million.’’ See 54 FR 38044–45 (September 14, 1989); see also NRDC v. EPA, 529 F.3d 1077, 1082 (D.C. Cir. 2008) (finding that ‘‘the Benzene NESHAP standard established a maximum excess risk of 100-in-one million, while adopting the one-in-one million standard as an aspirational goal.’’). The various listing and delisting provisions of CAA section 112 further demonstrate a statutory intent to reduce risk and protect the most exposed members of the population from HAP emissions. See, e.g., CAA section 112(b)(2) (requiring the EPA to add pollutants to the HAP list if the EPA determines the HAP ‘‘presents, or may present’’ adverse human health or adverse environmental effects); id. at CAA section 112(b)(3)(B) (requiring the EPA to add a pollutant to the list if a petitioner shows that a substance is known to cause or ‘‘may reasonably be anticipated to cause adverse effects to human health or adverse environmental effects’’); id. at CAA section 112(b)(3) (authorizing the EPA to delete a substance only on a showing that ‘‘the substance may not reasonably be anticipated to cause any adverse effects to human health or adverse environmental effects.’’); id. at CAA section 112(c)(9)(B)(i) (prohibiting the EPA from delisting a source category if even one source in the category causes E:\FR\FM\09FEP2.SGM 09FEP2 lotter on DSK11XQN23PROD with PROPOSALS2 Federal Register / Vol. 87, No. 27 / Wednesday, February 9, 2022 / Proposed Rules a lifetime cancer risk greater than 1-in1 million to ‘‘the individual in the population who is most exposed to emissions of such pollutants from the source.’’); id. at CAA section 7412(c)(9)(B)(i) (prohibiting the EPA from delisting a source category unless the Agency determines that the noncancer causing HAP emitted from the source category do not ‘‘exceed a level which is adequate to protect public health with an ample margin of safety and no adverse environmental effect will result from emissions of any source’’ in the category); id. at CAA section 112(n)(1)(C) (requiring a study to determine the level of mercury in fish tissue that can be consumed by even sensitive populations without adverse effect to public health). The deadlines for action included in the 1990 Amendments indicate that Congress wanted HAP pollution addressed quickly. The statute requires the EPA to list all major source categories within 1 year of the 1990 Amendments and to regulate those listed categories on a strict schedule that prioritizes the source categories that are known or suspected to pose the greatest risks to the public. See CAA sections 112(c)(1), 112(e)(1) and 112(e)(2). For area sources, where the statute provides the EPA with greater discretion to determine the sources to regulate, it also directs the Agency to collect the information necessary to make the listing decision for many area source categories and requires the Agency to act on that information by a date certain. For example, CAA section 112(k) establishes an area source program designed to identify and list at least 30 HAP that pose the greatest threat to public health in the largest number of urban areas (urban HAP) and to list for regulation area sources that account for at least 90 percent of the area source emissions of the 30 urban HAP. See CAA sections 112(k) and 112(c)(3). In addition to the urban air toxics program, CAA section 112(c)(6) directs the EPA to identify and list sufficient source categories to ensure that at least 90 percent of the aggregate emissions of seven bioaccumulative and persistent HAP, including mercury, are subject to standards pursuant to CAA sections 112(d)(2) or (d)(4). See CAA section 112(c)(6). Notably, these requirements were in addition to any controls on mercury and other CAA section 112(c)(6) HAP that would be imposed if the EPA determined it was appropriate and necessary to regulate EGUs under CAA section 112. This was despite the fact that it was known at the time of enactment that other categories with much lower emissions of mercury VerDate Sep<11>2014 21:43 Feb 08, 2022 Jkt 256001 would have to be subject to MACT standards because of the exclusion of EGUs from CAA section 112(c)(6). As the preceding discussion demonstrates, throughout CAA section 112 and its legislative history, Congress made clear its intent to quickly secure large reductions in the volume of HAP emissions from stationary sources because of its recognition of the hazards to public health and the environment inherent in exposure to such emissions. CAA section 112 and its legislative history also reveal Congress’ understanding that fully characterizing the risks posed by HAP emissions was exceedingly difficult; thus, Congress purposefully replaced a regime that required an assessment of risk in the first instance with one that assumed that risk and directed swift and substantial reductions. The statutory design and direction also repeatedly emphasize that the EPA should regulate with the most exposed and most sensitive members of the population in mind in order to achieve an acceptable level of HAP emissions with an ample margin of safety. As explained further below, this statutory context informs the EPA’s judgment as to the relevant factors to weigh in the analysis of whether regulation remains appropriate after a consideration of cost. III. Proposed Determination Under CAA Section 112(n)(1)(A) In this action, the EPA is proposing to revoke the 2020 Final Action and to reaffirm the appropriate and necessary determination made in 2000, and reaffirmed in 2012 and 2016.24 We 24 Our proposal focuses on an analysis of the ‘‘appropriate’’ prong of the CAA section 112(n)(1)(A). The Michigan decision and subsequent EPA actions addressing that decision have been centered on supplementing the Agency’s record with a consideration of the cost of regulation as part of the ‘‘appropriate’’ aspect of the overall determination. As noted, the 2020 Final Action, while reversing the 2016 Supplemental Finding as to the EPA’s determination that it was ‘‘appropriate’’ to regulate HAP from EGUs, did not rescind the Agency’s prior determination that it was necessary to regulate. See 84 FR 2674 (February 7, 2019) (‘‘CAA section 112(n)(1)(A) requires the EPA to determine that both the appropriate and necessary prongs are met. Therefore, if the EPA finds that either prong is not satisfied, it cannot make an affirmative appropriate and necessary finding. The EPA’s reexamination of its determination . . . focuses on the first prong of that analysis.’’). The ‘‘necessary’’ determination rested on two primary bases: (1) In 2012, the EPA determined that the hazards posed to human health and the environment by HAP emissions from EGUs would not be addressed in its future year modeling, which accounted for all CAA requirements to that point; and (2) our conclusion that the only way to ensure permanent reductions in U.S. EGU emissions of HAP and the associated risks to public health and the environment was through standards set under CAA section 112. See 76 FR 25017 (May 23, 2011). We therefore continue our focus in this PO 00000 Frm 00013 Fmt 4701 Sfmt 4702 7635 propose to find that, under either our preferred totality-of-the-circumstances framework or our alternative formal BCA framework, the information that would have been available to the Agency as of the time of the 2012 rulemaking supports a determination that it is appropriate and necessary to regulate HAP from EGUs. We also consider new information regarding the hazards to public health and the environment and the costs of compliance with MATS that has become available since the 2016 Supplemental Finding, and find that the updated information strengthens the EPA’s conclusion that it is appropriate and necessary to regulate HAP from coaland oil-fired EGUs. At the outset, we note that CAA section 112(n)(1)(A) is silent as to whether the EPA may consider updated information when acting on a remand of the appropriate and necessary determination. CAA section 112(n)(1)(A) directs the EPA to conduct the Utility Study within 3 years, and requires the EPA to regulate EGUs if the Administrator makes a finding that it is appropriate and necessary to do so ‘‘after’’ considering the results of the Utility Study. Consistent with the EPA’s interpretation in 2005, 2012, 2016, and 2020, we do not read this language to require the EPA to consider the mostup-to-date information where the Agency is compelled to revisit the determination, but nor do we interpret the provision to preclude consideration of new information where reasonable. See 70 FR 16002 (March 29, 2005); 77 FR 9310 (February 16, 2012); 81 FR 24432 (April 25, 2016); 85 FR 31306 (May 22, 2020). As such, the Agency has applied its discretion in determining when to consider new information under this provision based on the circumstances. For example, when the EPA was revisiting the determination in 2012, we noted that ‘‘[b]ecause several years had passed since the 2000 finding, the EPA performed additional technical analyses for the proposed rule, even though those analyses were not required.’’ 77 FR 9310 (February 16, 2012).25 Similarly, we think that it is reasonable to consider new information in the context of this proposal, given that almost a decade has passed since we last considered updated information. In this proposed reconsideration of the proposal on reinstating the ‘‘appropriate’’ prong of the determination, leaving undisturbed the Agency’s prior conclusions that regulation of HAP from EGUs is ‘‘necessary.’’ See 65 FR 79830 (December 20, 2000); 76 FR 25017 (May 3, 2011); 77 FR 9363 (February 16, 2012). 25 The EPA was not challenged on this interpretation in White Stallion. E:\FR\FM\09FEP2.SGM 09FEP2 lotter on DSK11XQN23PROD with PROPOSALS2 7636 Federal Register / Vol. 87, No. 27 / Wednesday, February 9, 2022 / Proposed Rules determination per the President’s Executive Order, both the growing scientific understanding of public health risks associated with HAP emissions and a clearer picture of the cost of control technologies and the make-up of power sector generation over the last decade may inform the question of whether it is appropriate to regulate, and, in particular, help address the inquiry that the Supreme Court directed us to undertake in Michigan. We believe the evolving scientific information with regard to benefits and the advantage of hindsight with regard to costs warrant considering currently available information in making this determination. To the extent that our determination should flow from information that would have been available at the ‘‘initial decision to regulate,’’ Michigan, 576 U.S. at 754, we propose conclusions here based on analyses limited to this earlier record. But we also believe it is reasonable to consider new data, and propose to find that the new information regarding both public health risks and costs bolsters the finding and supports a determination that it is appropriate and necessary to regulate EGUs for HAP. In section III.A of this preamble, we first describe the advantages of regulation—the reduction in emissions of HAP and attendant reduction of risks to human health and the environment, including the distribution of these health benefits. We carefully document the numerous risks to public health and the environment posed by HAP emissions from EGUs. This includes information previously recognized and documented in the statutorily mandated CAA section 112(n)(1) studies, the 2000 Determination, the 2012 MATS Final Rule, and the 2016 Supplemental Finding about the nature and extent of health and environmental impacts from HAP that are emitted by EGUs, as well as additional risk analyses supported by new scientific studies. Specifically, new risk screening analyses on the connection between mercury and heart disease as well as IQ loss in children across the U.S. further supports the conclusion that HAP emissions from EGUs pose hazards to public health and the environment warranting regulating under CAA section 112. The EPA also discusses the challenges associated with fully quantifying and monetizing the human health and environmental effects associated with HAP emissions. Finally, we note that in addition to reducing the identified risks posed by HAP emissions from EGUs, regulation of such HAP emissions results in significant health and environmental co-benefits. VerDate Sep<11>2014 21:43 Feb 08, 2022 Jkt 256001 We then turn in preamble section III.B. to the disadvantages of regulation—the costs associated with reducing EGU HAP emissions and other potential impacts to the sector and the economy associated with MATS. With the benefit of hindsight, we first consider whether MATS actually cost what we projected in the 2011 RIA and conclude that the projection in the 2011 RIA was almost certainly a significant overestimate of the actual costs. We then evaluate the costs estimated in the 2011 RIA against several metrics relevant to the impacts those costs have on the EGU sector and American electricity consumers (e.g., historical annual revenues, annual capital and production expenditures, impacts on retail electricity prices, and impacts on resource adequacy and reliability). These analyses, based on data available in 2012 and based on updated data, all show that the costs of MATS were within the bounds of typical historical fluctuations and that the industry would be able to comply with MATS and continue to provide a reliable source of electricity without price increases that were outside the range of historical variability. In section III.C of this preamble, we explain why the methodology used in our 2020 Finding was ill-suited to determining whether EGU HAP regulation is appropriate and necessary because it gave virtually no weight to the volume of HAP that would be reduced, and the vast majority of the benefits of reducing EGU HAP, including the reduction of risk to sensitive populations, based on the Agency’s inability to quantify or monetize post-control benefits of HAP regulations. In preamble section III.D, we explain our preferred totality-of-thecircumstances methodology that we propose to use to make the appropriate determination, and our application of that methodology. This approach looks to the statute, and particularly CAA section 112(n)(1)(A) and the other provisions in CAA section 112(n)(1), to help identify the relevant factors to weigh and what weight to afford those factors. Under that methodology we weigh the significant health and environmental advantages of reducing EGU HAP, and in particular the benefits to the most exposed and sensitive individuals, against the disadvantages of expending money to achieve those benefits—i.e., the effects on the electric generating industry and its ability to provide reliable and affordable electricity. We ultimately propose to conclude that the advantages outweigh the disadvantages whether we look at PO 00000 Frm 00014 Fmt 4701 Sfmt 4702 the record from 2012 or at our new record, which includes an expanded understanding of the health risks associated with HAP emissions and finds that the costs projected in the 2011 RIA were almost certainly significantly overestimated. We further consider that, if we also account for the non-HAP benefits in our preferred totality-of-thecircumstances approach, such as the benefits (including reduced mortality) of coincidental reductions in PM and ozone that flow from the application of controls on HAP, the balance weighs even more heavily in favor of regulating HAP emissions from coal- and oil-fired EGUs. Finally, in section III.E, we consider an alternative methodology to make the appropriate determination, using a formal BCA of MATS that was conducted consistent with economic principles. This methodology is not our preferred way to consider advantages and disadvantages for the CAA section 112(n)(1)(A) determination, because the EPA’s inability to generate a monetized estimate of the full benefits of HAP reductions can lead to an underestimate of the monetary value of the net benefits of regulation. To the extent that a formal BCA is appropriate for making the CAA section 112(n)(1)(A) determination, however, that approach demonstrates that the monetized benefits of MATS outweigh the monetized costs by a considerable margin, whether we look at the 2012 record or our updated record. We therefore propose that it is appropriate to regulate EGUs for HAP applying a BCA approach as well. In sum, the EPA proposes to conclude that it is appropriate and necessary to regulate HAP emissions from coal- and oil-fired EGUs, whether we are applying the preferred totality-of-thecircumstances methodology or the alternative formal benefit-cost approach, and whether we are considering only the administrative record as of the original EPA response on remand to Michigan in 2016 or based on new information made available since that time. The information and data amassed by the EPA over the decades of administrative analysis and rulemaking devoted to this topic overwhelmingly support the conclusion that the advantages of regulating HAP emissions from coal- and oil-fired EGUs outweigh the costs. The EPA requests comment on this proposed finding and on the supporting information presented in this proposal, including information related to the risks associated with HAP emissions from U.S. EGUs and the actual costs incurred by the power sector due to MATS, as well as on the E:\FR\FM\09FEP2.SGM 09FEP2 Federal Register / Vol. 87, No. 27 / Wednesday, February 9, 2022 / Proposed Rules preferred and alternative methodologies for reaching the proposed conclusion. A. Public Health Hazards Associated With Emissions From EGUs lotter on DSK11XQN23PROD with PROPOSALS2 1. Overview The administrative record for the MATS rule detailed several hazards to public health and the environment from HAP emitted by EGUs that remained after imposition of the ARP and other CAA requirements. See 80 FR 75028–29 (December 1, 2015). See also 65 FR 79825–31 (December 20, 2000); 76 FR 24976–25020 (May 3, 2011); 77 FR 9304–66 (February 16, 2012). The EPA considered all of this information again in the 2016 Supplemental Finding, noting that this sector represented a large fraction of U.S. emissions of mercury, non-mercury metal HAP, and acid gases. Specifically, the EPA found that even after imposition of the other requirements of the CAA, but absent MATS, EGUs remained the largest domestic source of mercury, HF, HCl, and selenium and among the largest domestic contributors of arsenic, chromium, cobalt, nickel, hydrogen cyanide, beryllium, and cadmium, and that a significant majority of EGU facilities emitted above the major source thresholds for HAP emissions. Further, the EPA noted that the totality of risks that accrue from these emissions were significant. These hazards include potential neurodevelopmental impairment, increased cancer risks, contribution to chronic and acute health disorders, as well as adverse impacts on the environment. Specifically, the EPA pointed to results from its revised nationwide Mercury Risk Assessment (contained in the 2011 Final Mercury TSD) 26 as well as an inhalation risk assessment (2011 Non-Hg HAP Assessment) for non-mercury HAP (i.e., arsenic, nickel, chromium, selenium, cadmium, HCl, HF, hydrogen cyanide, formaldehyde, benzene, acetaldehyde, manganese, and lead). The EPA estimated lifetime cancer risks for inhabitants near some coal- and oil-fired EGUs to exceed 1-in-1 million 27 and 26 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. November. EPA– 452/R–11–009. Docket ID Item No. EPA–HQ–OAR– 2009–0234–19913. 27 The EPA determined the 1-in-1 million standard was the correct metric in part because CAA section 112(c)(9)(B)(1) prohibits the EPA from removing a source category from the list if even one person is exposed to a lifetime cancer risk greater than 1-in-1 million, and CAA section 112(f)(2)(A) VerDate Sep<11>2014 21:43 Feb 08, 2022 Jkt 256001 noted that this case-study-based estimate likely underestimated the true maximum risks for the EGU source category. See 77 FR 9319 (February 16, 2012). The EPA also found that mercury emissions pose a hazard to wildlife, adversely affecting fish-eating birds and mammals, and that the large volume of acid gas HAP associated with EGUs also pose a hazard to the environment.28 These technical analyses were all challenged in the White Stallion case, and the D.C. Circuit found that the EPA’s risk finding as to mercury alone— that is, before reaching any other risk finding—established a significant public health concern. The court stated that ‘‘EPA’s ‘appropriate and necessary’ determination in 2000, and its reaffirmation of that determination in 2012, are amply supported by EPA’s finding regarding the health effects of mercury exposure.’’ White Stallion Energy Center v. EPA, 748 F.3d 1222, 1245 (D.C. Cir. 2014). Additional scientific evidence about the human health hazards associated with EGU HAP emissions that has been collected since the 2016 Supplemental Finding and is discussed in this section has extended our confidence that these emissions pose an unacceptable risk to the American public and in particular, to vulnerable, exposed populations. This section of the preamble starts by briefly reviewing the long-standing and extensive body of evidence, including new scientific information made available since the 2016 Supplemental Finding, which demonstrates that HAP emissions from oil- and coal-fired EGUs present hazards to public health and the environment warranting regulation under CAA section 112 (section III.A.2). This is followed by an expanded discussion of the health risks associated with domestic EGU mercury emissions based on additional evidence regarding cardiovascular effects that has become available since the 2016 Supplemental Finding (section III.A.3). In section III.A.4, the EPA describes the reasons why it is extremely difficult to estimate the full health and environmental directs the EPA to conduct a residual risk rulemaking if even one person is exposed to a lifetime excess cancer risk greater than 1-in-1 million. See White Stallion at 1235–36 (agreeing it was reasonable for the EPA to consider the 1-in-1 million delisting criteria in defining ‘‘hazard to public health’’ under CAA section 112(n)(1)(A)). 28 The EPA had determined it was reasonable to consider environmental impacts of HAP emissions from EGUs in the appropriate determination because CAA section 112 directs the EPA to consider impacts of HAP emissions on the environment, including in the CAA section 112(n)(1)(B) Mercury Study. See White Stallion at 1235–36 (agreeing it was reasonable for the EPA to consider the environmental harms when making the appropriate and necessary determination). PO 00000 Frm 00015 Fmt 4701 Sfmt 4702 7637 impacts associated with exposure to HAP. We note the longstanding challenges associated with quantifying and monetizing these effects, which may be permanent and life-threatening and are often distributed unevenly (i.e., concentrated among highly exposed individuals). Next, the section provides an expanded discussion of some identified environmental justice (EJ) issues associated with these emissions (section III.A.5). Section III.A.6 identifies health effects associated with other, non-HAP emissions from EGUs such as SO2, direct PM2.5 and other PM2.5 and ozone precursors. Because these pollutants are co-emitted with HAP, the controls necessary to reduce HAP emissions from EGUs often reduce these pollutants as well. After assessing all the evidence, the EPA concludes again (section III.A.7) that regulation of HAP emissions from EGUs under CAA section 112 greatly improves public health for Americans by reducing the risks of premature mortality from heart attacks, cancer, and neurodevelopmental delays in children, and by helping to restore economically vital ecosystems used for recreational and commercial purposes. Further, we conclude that these public health improvements will be particularly pronounced for certain segments of the American population that are especially vulnerable (e.g., subsistence fishers 29 and their children) to impacts from EGU HAP emissions. In addition, the concomitant reductions in co-emitted pollutants will also provide substantial public health and environmental benefits. 2. Overview of Health Effects Associated With Mercury and Non-Mercury HAP In calling for the Agency to consider the regulation of HAP from EGUs, the 29 Subsistence fishers, who by definition obtain a substantial portion of their dietary needs from selfcaught fish consumption, can experience elevated levels of exposure to chemicals that bioaccumulate in fish including, in particular, methylmercury. Subsistence fishing activity can be related to a number of factors including socio-economic status (poverty) and/or cultural practices, with ethnic minorities and tribal populations often displaying increased levels of self-caught fish consumption (Burger et al., 2002, Shilling et al., 2010, Dellinger 2004). Burger J, (2002). Daily consumption of wild fish and game: exposures of high end recreationalists. International Journal of Environmental Health Research 12:4, p. 343–354. Shilling F, White A, Lippert L, Lubell M, (2010). Contaminated fish consumption in California’s Central Valley Delta. Environmental Research 110, p. 334–344. Dellinger J, (2004). Exposure assessment and initial intervention regarding fish consumption of tribal members in the Upper Great Lakes Region in the United States. Environmental Research 95, p. 325–340. E:\FR\FM\09FEP2.SGM 09FEP2 7638 Federal Register / Vol. 87, No. 27 / Wednesday, February 9, 2022 / Proposed Rules lotter on DSK11XQN23PROD with PROPOSALS2 CAA stipulated that the EPA complete three studies (all of which were extensively peer-reviewed) exploring various aspects of risk posed to human health and the environment by HAP released from EGUs. The first of these studies, the Utility Study, published in 1998, focused on the hazards to public health specifically associated with EGUsourced HAP including, but not limited to, mercury. See CAA section 112(n)(1)(A). A second study, the Mercury Study, released in 1997, while focusing exclusively on mercury, was broader in scope including not only human health, but also environmental impacts and specifically addressed the potential for mercury released from multiple emissions sources (in addition to EGUs) to affect human health and the environment. See CAA section 112(n)(1)(B). The third study, required under CAA section 112(n)(1)(C), the NIEHS Study, submitted to Congress in 1995, considered the threshold level of mercury exposure below which adverse human health effects were not expected to occur. An additional fourth study, the NAS Study, directed by Congress in 1999 and completed in 2000, focused on determining whether a threshold for mercury health effects could be identified for sensitive populations and, as such, presented a rigorous peer review of the EPA’s RfD for methylmercury. The aggregate results of these peer-reviewed studies commissioned by Congress as part of CAA section 112(n)(1) supported the determination that HAP emissions from EGUs represented a hazard to public health and the environment that would not be addressed through imposition of the other requirements of the CAA. In the 2 decades that followed, the EPA has continued to conduct additional research and risk assessments and has surveyed the latest science related to the risk posed to human health and the environment by HAP released from EGUs. a. Review of Health Effects and Previous Risk Analyses for Methylmercury Mercury is a persistent and bioaccumulative toxic metal that, once released from power plants into the ambient air, can be readily transported and deposited to soil and aquatic environments where it is transformed by microbial action into methylmercury. See Mercury Study; 76 FR 24976 (May 3, 2011) (2011 NESHAP Proposal); 80 FR 75029 (December 1, 2015) (2015 Proposal). Methylmercury bioaccumulates in the aquatic food web eventually resulting in highly concentrated levels of methylmercury within the larger and longer-living fish, VerDate Sep<11>2014 21:43 Feb 08, 2022 Jkt 256001 which can then be consumed by humans.30 As documented in both the NAS Study and the Mercury Study, fish and seafood consumption is the primary route of human exposure to methylmercury, with populations engaged in subsistence-levels of consumption being of particular concern.31 The NAS Study reviewed the effects of methylmercury on human health, concluding that it is highly toxic to multiple human and animal organ systems. Of particular concern is chronic prenatal exposure via maternal consumption of foods containing methylmercury. Elevated exposure has been associated with developmental neurotoxicity and manifests as poor performance on neurobehavioral tests, particularly on tests of attention, fine motor function, language, and visualspatial ability. Evidence also suggests potential for adverse effects on the cardiovascular system, adult nervous system, and immune system, as well as potential for causing cancer.32 Below we review the broad range of public health hazards associated with methylmercury exposure. Neurodevelopmental Effects of Exposure to Methylmercury. Methylmercury is a powerful neurotoxin. Because the impacts of the neurodevelopmental effects of methylmercury are greatest during periods of rapid brain development, developing fetuses and young children are particularly vulnerable. Children born to populations with high fish consumption (e.g., people consuming fish as a dietary staple) or impaired nutritional status (e.g., people with iron or vitamin C deficiencies) are especially vulnerable to adverse neurodevelopmental outcomes. These dietary and nutritional vulnerabilities are often particularly pronounced in underserved communities with minority populations and low-income populations that have historically faced economic and environmental injustice 30 We recognize that mercury deposition over land with subsequent impacts to agriculturalsourced food may also represent a public health concern, however as noted below, primary exposure to the U.S. population is through fish consumption. 31 In light of the methylmercury impacts, the EPA and the Food and Drug Administration have collaborated to provide advice on eating fish and shellfish as part of a healthy eating pattern (https:// www.fda.gov/food/consumers/advice-about-eatingfish). In addition, states provide fish consumption advisories designed to protect the public from eating fish from waterbodies within the state that could harm their health based on local fish tissue sampling. 32 National Research Council. 2000. Toxicological Effects of Methylmercury. Washington, DC: The National Academies Press. https://doi.org/ 10.17226/9899. PO 00000 Frm 00016 Fmt 4701 Sfmt 4702 and are overburdened by cumulative levels of pollution.33 Infants in the womb can be exposed to methylmercury when their mothers eat fish and shellfish that contain methylmercury. This exposure can adversely affect unborn infants’ growing brains and nervous systems. Children exposed to methylmercury while they are in the womb can have impacts to their cognitive thinking, memory, attention, language, fine motor skills, and visual spatial skills. Based on scientific evidence reflecting concern about a range of neurodevelopmental effects seen in children exposed in utero to methylmercury, the EPA defined an RfD of 0.0001 mg/kg-day for methylmercury.34 An RfD is defined as an estimate (with uncertainty spanning perhaps an order of magnitude) of a daily exposure to the human population (including sensitive subgroups) that is likely to be without an appreciable risk of deleterious effects during a lifetime (EPA, 2002).35 Prenatal exposure to methylmercury from maternal consumption of fish has been associated with several adverse neurodevelopmental outcomes in various fish consuming populations. Although data are limited, the EPA has focused on several subpopulations likely to be at higher risk from methylmercury exposure associated with EGU HAP due to fish consumption. As part of the 2011 Final Mercury TSD, the EPA completed a national-scale risk assessment focused on mercury emissions from domestic EGUs. Specifically, we examined risk associated with mercury released from U.S. EGUs that deposits to watersheds within the continental U.S., bioaccumulates in fish as methylmercury, and is consumed when fish are eaten by female subsistence fishers of child-bearing age and other freshwater self-caught fish consumers. There is increased risk for in utero exposure and adverse outcomes in children born to female subsistence fishers with elevated exposure to methylmercury. The risk assessment modeled scenarios representing highend self-caught fish consumers active at inland freshwater lakes and streams. The analysis estimated that 29 percent of the watersheds studied would lead to 33 Burger J, 2002. Daily consumption of wild fish and game: Exposures of high end recreationalists. International Journal of Environmental Health Research 12:4, p. 343–354. 34 U.S. EPA. 2001. IRIS Summary for Methylmercury. U.S. Environmental Protection Agency, Washington, DC. (USEPA, 2001). 35 U.S. EPA. 2002. A Review of the Reference Dose and Reference Concentration Processes. EPA/ 630/P–02/002F, December 2002. E:\FR\FM\09FEP2.SGM 09FEP2 Federal Register / Vol. 87, No. 27 / Wednesday, February 9, 2022 / Proposed Rules lotter on DSK11XQN23PROD with PROPOSALS2 female subsistence fishers having exposures which exceeded the methylmercury RfD, based on in utero effects, due in whole or in part to the contribution of domestic EGU emissions of mercury. This included up to 10 percent of modeled watersheds where deposition from U.S. EGUs alone leads to potential exposures that exceed the RfD.36 In addition to the 2011 Final Mercury TSD focusing on subsistence fishers referenced above, the EPA also completed a RIA in 2011 including the characterization of benefits associated with the prospective reduction of U.S. EGU mercury emissions under MATS.37 However, due to limitations on the available data with regard to the extent of subsistence fishing activity in the U.S., which prevented the enumeration of subsistence fisher populations, the EPA was unable to develop a quantitative estimate of the reduction in population-level risk or associated dollar benefits for children of female subsistence fishers. Instead, in the 2011 MATS RIA, the EPA focused on a different population of self-caught fish consumers that could be enumerated. Specifically, we quantitatively estimated the amount and value of IQ loss associated with prenatal methylmercury exposure among the children of recreational anglers consuming self-caught fish from inland freshwater lakes, streams and rivers (unlike subsistence fishers, available data allow the characterization of recreational fishing activity across the U.S. including enumeration of these populations). Although the EPA acknowledged uncertainty about the size of the affected population and acknowledged that it could be underestimated, these unborn children associated with recreational anglers represented precisely the type of sensitive population most at risk from mercury exposure that CAA section 112 36 The EPA chose this risk metric in part because CAA section 112(n)(1)(C) directed the NIEHS to develop a threshold for mercury concentration in fish tissue that can be consumed by even sensitive populations without adverse effect and because CAA section 112(c)(6) demonstrates a special interest in protecting the public from exposure to mercury. 37 The 2011 MATS RfD-based risk assessment focusing on the subsistence fisher population was designed as a screening-level analysis to inform consideration for whether U.S. EGU-sourced mercury represented a public health hazard. As such, the most appropriate risk metric was modeled exposure (for highly-exposed subsistence fishers) compared to the RfD for methylmercury. By contrast, the 2011 RIA was focused on estimating the dollar benefits associated with MATS and as such focused on a health endpoint which could be readily enumerated and then monetized, which at the time was IQ for infants born to recreational anglers. VerDate Sep<11>2014 21:43 Feb 08, 2022 Jkt 256001 is designed to protect. The results generated in the 2011 RIA for recreational anglers suggested that by reducing methylmercury exposure, MATS was estimated to yield an additional 511 IQ points among the affected population of children, which would increase their future lifetime earnings. The EPA noted at the time that the analysis likely underestimated potential benefits for children of recreational anglers since, due to data limitations, it did not cover consumption of recreationally caught seafood from estuaries, coastal waters, and the deep ocean which was expected to contribute significantly to overall exposure. Nevertheless, this single endpoint alone, evaluated solely for the recreational angler, provides evidence of potentially significant health harm from methylmercury exposure. In 2011 we noted that other, more difficult to quantify endpoints may also contribute to the overall burden across a broader range of subgroups. The metrics studied in addition to IQ include those measured by performance on neurobehavioral tests, particularly on tests of attention, fine motor-function, language, and visual spatial ability (USEPA, 2001; Agency for Toxic Substances and Disease Registry (ATSDR), 1999).38 Such adverse neurodevelopmental effects are well documented in cohorts of subsistence fisher populations (i.e., Faroe Islands and the Nunavik region of Arctic Canada). At this time, the EPA is conducting an updated methylmercury IRIS assessment and recently released preliminary assessment materials, an IRIS Assessment Plan (IAP) and Systematic Review Protocol for methylmercury.39 The update to the methylmercury IRIS assessment will focus on updating the quantitative aspects of neurodevelopmental outcomes associated with methylmercury exposure. As noted in these early assessment materials, new studies are available, since 2001, assessing the effects of methylmercury exposure on cognitive function, motor function, behavioral, structural, and electrophysiological outcomes at various ages following prenatal or postnatal exposure to methylmercury (USEPA, 2001; NAS Study; 84 FR 13286 38 Agency for Toxic Substances and Disease Registry (ATSDR). 1999. Toxicological profile for mercury. Atlanta, GA: U.S. Department of Health and Human Services, Public Health Service. 39 https://iris.epa.gov/ChemicalLanding/ &substance_nmbr=73. PO 00000 Frm 00017 Fmt 4701 Sfmt 4702 7639 (April 4, 2019); 40 85 FR 32037 (May 8, 2020)).41 Cardiovascular Impacts of Exposure to Methylmercury. The NAS Study indicated that there was evidence that exposure to methylmercury in humans and animals can have adverse effects on both the developing and adult cardiovascular system. Infant exposure in the womb to methylmercury has been associated with altered blood-pressure and heart-rate variability in children. In adults, dietary exposure to methylmercury has been linked to a higher risk of acute myocardial infarction (MI), coronary heart disease, or cardiovascular heart disease. To date, the EPA has not attempted to utilize a quantitative dose-response assessment for cardiovascular effects associated with methylmercury exposures because of a lack of consensus among scientists on the dose-response functions for these effects and inconsistency among available studies as to the association between methylmercury exposure and various cardiovascular system effects. However, additional studies have become available that have increased the EPA’s confidence in characterizing the dose-response relationship between methylmercury and adverse cardiovascular outcomes. These new studies were leveraged to inform new quantitative screening analyses (described in section III.A.3, below) to estimate one cardiovascular endpoint— incidence of MI mortality—that may potentially be linked to U.S. EGU mercury emissions as well as the number of U.S. EGU impacted watersheds. In addition to a new metaanalysis (Hu et al., 2021) 42 on the association of methylmercury generally with cardiovascular disease (CVD), stroke, and ischemic heart disease (IHD), there is a limited body of existing literature that has examined associations between mercury and various cardiovascular outcomes. These include acute MI, hypertension, atherosclerosis, and heart rate variability (Roman et al., 2011).43 40 Availability of the IRIS Assessment Plan for Methylmercury. 84 FR 13286 (April 4, 2019). 41 Availability of the Systematic Review Protocol for the Methylmercury Integrated Risk Information System (IRIS) Assessment. 85 FR 32037 (May 28, 2020). 42 Hu, X. F., Lowe, M., Chan, H.M., Mercury exposure, cardiovascular disease, and mortality: A systematic review and dose-response meta-analysis. Environmental Research 193 (2021),110538. ´, 43 Roman HA, Walsh TL, Coull BA, Dewailly E Guallar E, Hattis D, Marie¨n K, Schwartz J, Stern AH, Virtanen JK, Rice G. Evaluation of the cardiovascular effects of methylmercury exposures: Current evidence supports development of a doseresponse function for regulatory benefits analysis. E:\FR\FM\09FEP2.SGM Continued 09FEP2 7640 Federal Register / Vol. 87, No. 27 / Wednesday, February 9, 2022 / Proposed Rules lotter on DSK11XQN23PROD with PROPOSALS2 Immunotoxic Effects of Exposure to Methylmercury. Although exposure to some forms of mercury can result in a decrease in immune activity or an autoimmune response (ATSDR, 1999), evidence for immunotoxic effects of methylmercury is limited (NAS Study). Other Mercury-Related Human Toxicity Data Including Potential Carcinogenicity. The Mercury Study noted that methylmercury is not a potent mutagen but is capable of causing chromosomal damage in a number of experimental systems. The NAS Study indicated that the evidence that human exposure to methylmercury causes genetic damage is inconclusive; it noted that some earlier studies showing chromosomal damage in lymphocytes may not have controlled sufficiently for potential confounders. One study of adults living in the Tapajos River region in Brazil (Amorim et al., 2000) 44 reported a relationship between methylmercury concentration in hair and DNA damage in lymphocytes, as well as effects on chromosomes. Long-term methylmercury exposures in this population were believed to occur through consumption of fish, suggesting that genotoxic effects (largely chromosomal aberrations) may result from dietary, chronic methylmercury exposures similar to and above those seen in the populations studied in the Faroe Islands and Republic of Seychelles. Since 2000, more recent studies have evaluated methylmercury genotoxicity in vitro in human and animal cell lines and in vivo in rats. Based on limited human and animal data, methylmercury is classified as a ‘‘possible human carcinogen’’ by the International Agency for Research on Cancer (IARC, 1993) 45 and in IRIS (USEPA, 2001). However, a quantitative estimate of the carcinogenic risk of methylmercury has not been assessed under the IRIS program at this time. Multiple human epidemiological studies have found no significant association between methylmercury Environ Health Perspect. 2011 May;119(5):607–14. doi: 10.1289/ehp.1003012. Epub 2011 Jan 10. 44 Amorim MI, Mergler D, Bahia MO, Dubeau H, Miranda D, Lebel J, Burbano RR, Lucotte M. Cytogenetic damage related to low levels of methyl mercury contamination in the Brazilian Amazon. An Acad Bras Cienc. 2000 Dec;72(4):497–507. doi: 10.1590/s0001–37652000000400004. 45 International Agency for Research on Cancer (IARC) Working Group on the Evaluation of Carcinogenic Risks to Humans. Beryllium, Cadmium, Mercury, and Exposures in the Glass Manufacturing Industry. Lyon (FR): International Agency for Research on Cancer; 1993. (IARC Monographs on the Evaluation of Carcinogenic Risks to Humans, No. 58.) Mercury and Mercury Compounds. Available from: https://www.ncbi.nlm. nih.gov/books/NBK499780. VerDate Sep<11>2014 21:43 Feb 08, 2022 Jkt 256001 exposure and overall cancer incidence, although a few studies have shown an association between methylmercury exposure and specific types of cancer incidence (e.g., acute leukemia and liver cancer) (NAS Study). Some evidence of reproductive and renal toxicity in humans from methylmercury exposure exists. However, overall, human data regarding reproductive, renal, and hematological toxicity from methylmercury are very limited and are based on studies of the two high-dose poisoning episodes in Iraq and Japan or animal data, rather than epidemiological studies of chronic exposures at the levels of interest in this analysis. b. Review of Health Effects for NonMercury HAP As noted earlier, EGUs are the largest source of HCl, HF, and selenium emissions, and are a major source of metallic HAP emissions including arsenic, chromium, nickel, cobalt, and others. Exposure to these HAP, depending on exposure duration and levels of exposures, is associated with a variety of adverse health effects. These adverse health effects may include chronic health disorders (e.g., irritation of the lung, skin, and mucus membranes; decreased pulmonary function, pneumonia, or lung damage; detrimental effects on the central nervous system; damage to the kidneys; and alimentary effects such as nausea and vomiting). As of 2021, three of the key metal HAP emitted by EGUs (arsenic, chromium, and nickel) have been classified as human carcinogens, while three others (cadmium, selenium, and lead) are classified as probable human carcinogens. Overall (metal and nonmetal), the EPA has classified four of the HAP emitted by EGUs as human carcinogens and five as probable human carcinogens. See 76 FR 25003–25005 (May 3, 2011) for a fuller discussion of the health effects associated with these pollutants. As summarized in the 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 (2011 Non-Hg HAP Assessment),46 the EPA previously completed a refined chronic inhalation risk assessment for 16 EGU case studies 46 U.S. EPA. 2011. 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. Office of Air Quality Planning and Standards. November. EPA–452/R–11–013. Docket ID Item No. EPA–HQ–OAR–2009–0234–19912. PO 00000 Frm 00018 Fmt 4701 Sfmt 4702 in order to assess potential public health risk associated with non-mercury HAP. The 16 case studies included one unit that used oil and 15 that used coal. As noted in the 2015 Proposal, this set of case studies was designed to include those facilities with potentially elevated cancer and non-cancer risk based on an initial risk screening of prospective EGU units completed utilizing the Human Exposure Model paired with HAP emissions data obtained from the 2005 National Emissions Inventory. For each of the 16 case study facilities, we conducted refined dispersion modeling with the EPA’s AERMOD (American Meteorological Society/Environmental Protection Agency Regulatory Model) system to calculate annual ambient concentrations (see 2011 Non-Hg HAP Assessment). Average annual concentrations were calculated at census block centroids. We calculated the MIR for each facility as the cancer risk associated with a continuous lifetime (24 hours per day, 7 days per week, and 52 weeks per year for a 70year period) exposure to the maximum concentration at the centroid of an inhabited census block, based on application of the unit risk estimate from the EPA’s IRIS program. Based on estimated actual emissions, the highest estimated individual lifetime cancer risk from any of the 16 case study facilities was 20-in-1 million, driven by nickel emissions from the one case study facility with oil-fired EGUs. Of the facilities with coal-fired EGUs, five facilities had MIR greater than 1-in-1 million (the highest was 5-in-1 million), with the risk from four due to emissions of chromium VI and the risk from one due to emissions of nickel. There were also two facilities with coal-fired EGUs that had MIR equal to 1-in-1 million. Based on this analysis, the EPA concludes that cancer risks associated with these HAP emissions supports a finding that it is appropriate to regulate HAP emissions from EGUs. c. Review of Other Adverse Environmental Effects Associated With EGU HAP Emissions Ecological Effects of Methylmercury. Along with the human health hazards associated with methylmercury, it is well-established that birds and mammals are also exposed to methylmercury through fish consumption (Mercury Study). At higher levels of exposure, the harmful effects of methylmercury include slower growth and development, reduced reproduction, and premature mortality. The effects of methylmercury on wildlife are variable across species but have been observed in the environment E:\FR\FM\09FEP2.SGM 09FEP2 Federal Register / Vol. 87, No. 27 / Wednesday, February 9, 2022 / Proposed Rules lotter on DSK11XQN23PROD with PROPOSALS2 for numerous avian species and mammals including polar bears, river otters, and panthers. These adverse effects can propagate into impacts on human welfare to the extent they influence economies that depend on robust ecosystems (e.g., tourism). Ecological Effects of Acid Gas HAP. Even after the ARP was largely implemented in 2005, EGU sources comprised 82 percent of all anthropogenic HCl (a useful surrogate for all acid gas HAP) emissions in the U.S. When HCl dissolves in water, hydrochloric acid is formed. When hydrochloric acid is deposited by rainfall into terrestrial and aquatic ecosystems, it results in acidification of those systems. The MATS rule was expected to result in an 88 percent reduction in HCl emissions. As part of a recent Integrated Science Assessment (EPA, 2020),47 the EPA concluded that the body of evidence is sufficient to infer a causal relationship between acidifying deposition and adverse changes in freshwater biota. Affected biota from acidification of freshwater include plankton, invertebrates, fish, and other organisms. Adverse effects can include physiological impairment, as well as alteration of species richness, community composition, and biodiversity in freshwater ecosystems. This evidence is consistent and coherent across multiple species. More species are lost with greater acidification. 3. Post-2016 Screening-Level Risk Assessments of Methylmercury Impacts This section of the preamble describes three screening-level risk assessments completed since the 2016 Supplemental Finding that further strengthen the conclusion that U.S. EGU-sourced mercury represents a hazard to public health. These ‘‘screening-level’’ assessments are designed as broad bounding exercises intended to illustrate the potential scope and public health importance of methylmercury risks associated with U.S. EGU emissions. In some cases, they incorporate newer peer-reviewed literature that was not available to the Agency previously. Remaining uncertainties, however, prohibit the EPA from generating a more precise estimate at this time. Two of the three risk assessments focus on the potential for methylmercury exposure to increase the risk of MI-related mortality in adults and for that reason, section III.A.3.a 47 U.S. EPA. Integrated Science Assessment (ISA) for Oxides of Nitrogen, Oxides of Sulfur and Particulate Matter Ecological Criteria (Final Report). U.S. Environmental Protection Agency, Washington, DC, EPA/600/R–20/278, 2020. VerDate Sep<11>2014 21:43 Feb 08, 2022 Jkt 256001 begins by describing the methodology used in the analyses, including discussion of the concentration response (CR) function 48 for MI-related mortality and the incorporation of confidence cutpoints designed to address uncertainty. Then, the EPA describes an extension of the original watershed-level subsistence fisher methylmercury risk assessment to evaluate the potential for elevated MImortality risk among subsistence fishers (section III.A.3.b). In addition, a separate risk assessment is presented for elevated MI mortality among all adults utilizing a bounding approach that explores potential risks associated with exposure of the general U.S. population to methylmercury (sourced from U.S. EGUs) through fish consumption (section III.A.3.c). Finally, focusing on neurodevelopmental outcomes, another bounding analysis is presented that focuses on the risk of IQ points loss in children exposed in utero through maternal fish consumption by the population of general U.S. fish consumers (section III.A.3.d). Each of these analyses quantify potential impacts on incidence of adverse health effects. Section III.A.4 provides illustrative examples of how these incidence estimates translate to monetized benefits. a. Methodology for Estimating MIMortality This section describes the methodology used in the new screeninglevel risk assessments related to mortality, including the EPA’s application of a CR function characterizing the relationship between increased MI-mortality and methylmercury exposure. As discussed further in the 2021 Risk TSD,49 which is contained in the docket for this action, the approach draws on recommendations provided by an expert panel convened by the EPA in 2010 to evaluate the cardiovascular effects associated with methylmercury 48 Concentration-response functions relate levels of exposure for the chemical of interest to the probability or rate of response for the adverse health outcome in the exposed individual or population. Typically these mathematical relationships are based on data obtained either from human epidemiology studies, clinical studies, or toxicological (animal) studies. In this case, CR functions for MI-related mortality are based on epidemiology studies as discussed further below. 49 U.S. EPA. 2021. National-Scale Mercury Risk Estimates for Cardiovascular and Neurodevelopmental Outcomes for the National Emission Standards for Hazardous Air Pollutants: Coal- and Oil-Fired Electric Utility Steam Generating Units—Revocation of the 2020 Reconsideration, and Affirmation of the Appropriate and Necessary Supplemental Finding; Notice of Proposed Rulemaking. PO 00000 Frm 00019 Fmt 4701 Sfmt 4702 7641 exposure (the findings of the expert panel were summarized as a peerreviewed paper, Roman et al., 2011). The panel ‘‘found the body of evidence exploring the link between [methylmercury] and acute myocardial infarction (MI) to be sufficiently strong to support its inclusion in future benefits analyses, based both on direct epidemiological evidence of [a methylmercury]–MI link and on [methylmercury’s] association with intermediary impacts that contribute to MI risk.’’ Given the likely mechanism of action associated with MI, the panel further recommended that either hairmercury or toenail-mercury be used as an exposure metric because both reflect a longer-term pattern of exposure. Regarding the shape of the CR function, the panel noted that the EURAMIC study (Guallar et al., 2002) 50 had identified a log-linear model form with log-of exposure providing the best fit using toenail mercury as the biomarker of exposure. The panel also discussed the issue of potential effect modification by cardioprotective compounds including polyunsaturated fatty acids (PUFA).51 Kuopio Ischaemic Heart Disease Risk Factor Study (KIHD) and European Multicenter Case-Control Study on Antioxidants, Myocardial Infarction, and Cancer of the Breast Study (EURAMIC) datasets ‘‘provide the strongest and most useful data sets for quantifying methylmercury-related incidence of MI.’’ However, the panel did note the disconnect between typical levels of exposure to methylmercury in the U.S. population and the relatively higher levels of exposure reflected in the two recommended epidemiology studies (KIHD and EURAMIC). Therefore, the panel suggested that consideration be given to restricting modeling MI mortality to those with higher concentrations reflecting the levels of exposure found in the two key epidemiology studies (corresponding to roughly 75th to 95th percentile hairmercury levels for U.S. women of childbearing age, as characterized in National Health and Nutrition Examination 50 Guallar E, Sanz-Gallardo MI, van’t Veer P, Bode P, Aro A, Go´mez-Aracena J, Kark JD, Riemersma RA, Martı´n-Moreno JM, Kok FJ; Heavy Metals and Myocardial Infarction Study Group. Mercury, fish oils, and the risk of myocardial infarction. N Engl J Med. 2002 Nov 28;347(22):1747–54. doi: 10.1056/ NEJMoa020157. 51 Virtanen JK, Voutilainen S, Rissanen TH, Mursu J, Tuomainen TP, Korhonen MJ, Valkonen VP, Seppa¨nen K, Laukkanen JA, Salonen JT. Mercury, fish oils, and risk of acute coronary events and cardiovascular disease, coronary heart disease, and all-cause mortality in men in eastern Finland. Arterioscler Thromb Vasc Biol. 2005 Jan;25(1):228– 33. doi: 10.1161/01.ATV.0000150040.20950.61. Epub 2004 Nov 11. E:\FR\FM\09FEP2.SGM 09FEP2 7642 Federal Register / Vol. 87, No. 27 / Wednesday, February 9, 2022 / Proposed Rules lotter on DSK11XQN23PROD with PROPOSALS2 Survey (NHANES) data and referenced by the panel). In the intervening period since the release of the expert panel’s findings in 2011 (Roman et al., 2011), the EPA has continued to review literature characterizing the relationship between methylmercury exposure and cardiovascular effects. While the EPA has not yet conducted a systematic review, two recent studies are of particular interest for quantifying the potential relationship between U.S. EGU mercury emissions and acute MI that informed a modeling approach. Giang and Selin (2016) 52 presented an approach for modeling MI mortality reflecting a number of the recommendations presented in Roman et al., 2011 including the use of the KIHD and EURAMIC studies as the basis for a CR function including both the loglinear functional form and the effect estimate derived from the KIHD study results. A second study, Hu et al. 2021,53 presented a meta-analysis looking at the relationship between methylmercury exposure and mortality. That paper utilized eight studies each determined to be of good quality and reflecting at a minimum, adjustments for age, sex, and n-3 PUFA in specifying dose-response relationships. Historically, studies which account for n-3 PUFA have assumed a linear relationship between PUFAs and risk of MI (Roman et al., 2011). However, the association between PUFA intake and cardiovascular risk may not be linear (Mozaffarian and Rimm, 2006).54 The potential for confounding and effect modification by PUFA and selenium makes it difficult to interpret the relationship between methylmercury and MI, particularly at lower doses where there is potential for masking of methylmercury toxicity. The results of the meta-analysis by Hu et al., 2021 illustrated this phenomenon with their J-shaped functions for both IHD and CVD, both of which showed an initial region of negative slope (diminishing net risk with methylmercury exposure) before reaching an inflection point (between 1 and 2 microgram per gram (mg/g) hair-mercury depending on the 52 Giang A, Selin NE. Benefits of mercury controls for the United States. Proc Natl Acad Sci U S A. 2016 Jan 12;113(2):286–91. doi: 10.1073/ pnas.1514395113. Epub 2015 Dec 28. 53 Hu XF, Lowe M, Chan HM. Mercury exposure, cardiovascular disease, and mortality: A systematic review and dose-response meta-analysis. Environ Res. 2021 Feb;193:110538. doi: 10.1016/ j.envres.2020.110538. Epub 2020 Dec 5. 54 Mozaffarian D, Rimm EB. Fish intake, contaminants, and human health: Evaluating the risks and the benefits. JAMA. 2006 Oct 18;296(15):1885–99. doi: 10.1001/jama.296.15.1885. Erratum in: JAMA. 2007 Feb 14;297(6):590. VerDate Sep<11>2014 21:43 Feb 08, 2022 Jkt 256001 endpoint) where the function turns positive (increasing risk). For the EPA’s new screening-level assessment, we have considered the recommendations presented in Roman et al., 2011, as well as the J-shaped functions presented in Hu et al., 2021, and their implications for considering overall confidence in specifying the relationship between cardiovascularrelated mortality and methylmercury exposure. In particular, the EPA has higher confidence in the log-linear relationship at levels of hair-mercury exposure above the selected confidence cutpoints. In specifying these confidence cutpoints (for modeling MI mortality) we have looked to recommendations presented in Roman et al., 2011, specifically that we consider modeling risk for levels of exposure reflected in the EURAMIC and KIHD studies (with these equating to roughly 0.66 and 1.9 mg/g hair-mercury, respectively, or approximately the 75th95th percentile of hair-mercury levels seen in women of childbearing age in available 1999–2000 NHANES survey data 55). Further, we note that these confidence cutpoints roughly match the inflection point for IHD and CVD seen in the J-shaped plot presented in Hu et al., 2021, which further supports their use in defining regions of methylmercury exposure above which we have increased confidence in modeling MI mortality. However, as noted earlier, we are not concluding here that there is an absence of risk below these cutpoints, as such conclusions would require a weight of the evidence analysis and subsequent independent peer review. Rather, we are less confident in our ability to specify the nature of the CR function in those lower exposure regions due to possible effect modification and/or confounding by PUFA and/or selenium. Therefore, in applying the CR function in modeling MI mortality, we included a set of three functions–two including the cutpoints described above and a third no-cutpoint version of the function reflecting the assumption that risk extends across the entire range of methylmercury exposure. In terms of the other elements of the CR function (shape and effect estimate), we 55 NHANES has not continued to collect hairmercury data in subsequent years since the NHANES dataset referenced here. While NHANES has continued with total blood-mercury monitoring, hair mercury is a better biomarker for characterizing methylmercury exposure over time. Given that the CR functions based on the KIHD study (as well as observations presented in Roman et al. 2011 regarding cardio-modeling) were all based on hairmercury, this was chosen as the anchoring analytical biometric. The potential for bias due to the use of the 1999–2000 NHANES data is further discussed in the 2021 Risk TSD. PO 00000 Frm 00020 Fmt 4701 Sfmt 4702 have also followed the advice presented in Roman et al., 2011, as further illustrated through the analysis published by Giang and Selin 2016, and utilized a log-linear form and an effect estimate of 0.10 for MI mortality obtained from the KIHD study (see 2021 Risk TSD). As with the other risk estimates presented for methylmercury, these estimates reflect the baseline for U.S. EGUs prior to implementation of MATS (i.e., 29 tons). b. Increased MI-Mortality Risk in Subsistence Fishers Exposed to Methylmercury This screening-level analysis of MImortality risk is an extension of the female subsistence-fisher-based at-risk watershed analysis originally completed as part of the 2011 risk assessment supporting the appropriate and necessary determination (USEPA, 2011) and documented in the 2011 Final Mercury TSD. In that original analysis, a series of female subsistence fisher risk scenarios was evaluated for a subset of 3,141 watersheds within the continental U.S. for which there were sampled methylmercury fish tissue data (that fish tissue data allowing a higher-confidence empirically-based assessment of methylmercury risk to be generated for those watersheds). For each watershed, we used the fish tissue methylmercury data to characterize total mercuryrelated risk and then we estimated the portion of that total risk attributable to U.S. EGUs (based on the fraction of total mercury deposition to those watersheds associated with U.S. EGU emissions as supported by the Mercury Maps approach, USEPA, 2011).56 We have now extended the at-risk watershed analysis completed in 2011 for the subsistence fisher scenarios to include an assessment of the potential for increased MI mortality risk.57 Specifically, we have utilized the U.S. EGU-attributable methylmercury exposure estimates (mg/kg-day methylmercury intake) generated for the subsistence fisher scenario in each 56 A detailed discussion of the Mercury Maps approach (establishing a proportional relationship between mercury deposition and methylmercury concentrations in fish at the watershed level) is presented in section 1.4.6.1 of the 2011 Final Mercury TSD which in turn references: Mercury Maps—A Quantitative Spatial Link Between Air Deposition and Fish Tissue Peer Reviewed Final Report. U.S. EPA, Office of Water, EPA–823–R–01– 009, September, 2001. 57 Note that while the 2011 Final Mercury TSD, in utilizing an RfD-based approach reflecting neurodevelopmental effects, focused on female subsistence fishers; the analysis focused on MImortality risk covers all adult subsistence fishers, and we use our cutpoint bounding analysis because there is not an RfD focused specifically on cardiovascular effects for methylmercury. E:\FR\FM\09FEP2.SGM 09FEP2 lotter on DSK11XQN23PROD with PROPOSALS2 Federal Register / Vol. 87, No. 27 / Wednesday, February 9, 2022 / Proposed Rules values that exceed the EURAMIC-based MI mortality confidence cutpoints (0.66 mg/g hair-mercury) are shaded in the table and those cells that also exceed the KIHD-based MI mortality confidence cutpoint (1.9 mg/g hair-mercury) are bolded. Once again, these thresholds identify levels of methylmercury exposure (hair-mercury) associated with a clear association with MI-related health effects (i.e., increased risk). Unlike the RfD-based risk estimates, for MI-mortality estimates we only focus on U.S. EGU-attributable methylmercury (i.e., whether U.S. EGU-attributable hair-mercury exceeds the cutpoints of interest). Results for the typical subsistence fisher, representing high-end self-caught fish consumption in the U.S. population, suggest that up to 10 percent of the watersheds modeled are associated with hair-mercury levels (due to U.S. EGU mercury emissions alone) that exceed the lower EURAMIC cutpoint for MI-mortality risk, with 1 percent of modeled watersheds also exceeding the KIHD cutpoint (due to U.S. EGU-mercury emissions alone). For low-income Black subsistence fishers active in the Southeast, up to 25 percent of the watersheds exceed the lower EURAMIC confidence threshold (assuming the highest rate of fish consumption), with only the upper 1 percent of watersheds exceeding the KIHD threshold (again based only on U.S. EGU-sourced mercury exposure). watershed to generate equivalent hairmercury exposure estimates for that subsistence fisher scenario in each watershed (see 2021 Risk TSD for additional detail on the conversion of daily methylmercury intake rates into hair-mercury levels). We then compare those hair-mercury levels to the confidence cutpoints developed for the MI mortality screening-level risk assessment described above in section III.A.3.a. If the hair-mercury level for a particular watershed is above either the EURAMIC or KIHD confidence cutpoint (i.e., above 0.66 and 1.9 mg/g hairmercury, respectively), then we consider that watershed to be at increased risk for MI mortality exclusively due to that U.S. EGUattributable methylmercury exposure.58 Note, that this is not to suggest that exposures at watersheds where U.S. EGU-attributable contributions are below these cutpoints are without risk, but rather that when exposure levels exceed these cutpoints, we have increased confidence in concluding there is an increased risk of MI mortality for subsistence fishers active within that watershed. It is also important to note that in many cases, total methylmercury exposure (i.e., EGU contribution plus contributions from other sources) may exceed these confidence cutpoints such that subsistence fishers active at those watersheds would be at increased risk of MI mortality at least in part due to EGU emissions. See White Stallion, 748 F.3d at 1242–43 (finding reasonable the EPA’s decision to consider cumulative impacts of HAP from EGUs and other sources in determining whether HAP emissions from EGUs pose a hazard to public health under CAA section 112(n)(1)(A)); see also CAA section 112(n)(1)(B) (directing the EPA to study the cumulative impacts of mercury emissions from EGUs and other domestic stationary sources of mercury). Table 3 of the 2021 Risk TSD presents the results of the analysis of risk for MImortality for the subsistence fisher scenarios. As with the original RfDbased risk estimates, these results are dimensioned on two key parameters (self-caught fish consumption rate and the watershed percentile exposure level—hair-mercury mg/g). Those watershed percentile hair-mercury c. Characterization of MI-Mortality Risk for the General U.S. Population Resulting From the Consumption of Commercially-Sourced Fish The second of the three new screening-level risk analyses estimates the incidence of MI mortality in the general U.S. population resulting from consumption of commercially-sourced fish containing methylmercury emitted from U.S. EGUs.59 This is accomplished by first estimating the total burden of methylmercury-related MI mortality in the U.S. population and then estimating the fraction of that total increment attributable to U.S. EGUs. The task of modeling this health endpoint can involve complex mechanistic modeling of the multi-step process leading from U.S. EGU mercury emissions to mercury deposition over global/regional fisheries 58 Although we have used the MI-mortality CR function described in section III.A.3.a of this preamble to generate mortality incidence estimates for the general fish consuming population (see section III.A.3.c), this is not possible for subsistence fishers since we are not able at this point to enumerate them. Consequently, we use the confidence cutpoints associated with that CR function to identify exposures associated with MI mortality risk as described here. 59 Although the analysis presented here focuses on methylmercury exposure associated with fish consumption which, as noted earlier, is the primary source of methylmercury exposure for the U.S. population, EGU mercury deposited to land can also impact other food sources including those associated with agricultural production (e.g., rice). In the context of fish consumption, commerciallysourced fish refers to fish consumed in restaurants or from food stores. VerDate Sep<11>2014 21:43 Feb 08, 2022 Jkt 256001 PO 00000 Frm 00021 Fmt 4701 Sfmt 4702 7643 to bioaccumulation of methylmercury in fisheries stocks to exposure of U.S. fish consumers through consumption of those commercially-sourced fish (e.g., Giang and Selin, 2016). However, in recognition of the uncertainty associated with attempting to model this more complex multi-step process, we have instead developed a simpler screening analysis approach intended to generate a range of risk estimates that reflects the impact of critical sources of uncertainty associated with this exposure scenario. Rather than attempting to generate a single high-confidence estimate of risk, which in our estimation is challenging given overall uncertainty associated with this exposure pathway, the goal with the bounding approach is simply to generate a range of risk estimates for MI mortality that furthers our understanding of the significant public health burden associated with EGU HAP emissions. The bounding approach developed for this particular scenario is based on the assumption that fish sourced from global commercial fisheries are loaded by mercury deposited to those fisheries and that the fraction of that deposited mercury originating from U.S. EGUs will eventually be reflected as a fraction of methylmercury in those fish and subsequently as a fraction of MI mortality risk associated with those U.S. EGUs. One of the challenges associated with this screening analysis is how to attribute domestic EGU contributions to global fisheries and how that might vary from location to location. For simplicity, the bounding analysis includes two assumptions: (1) A potential lowerbound reflecting the assumption that U.S. fish consumption is largely sourced from global fisheries and consequently the U.S. EGU contribution to total global mercury emissions (anthropogenic and natural) can be used to approximate the U.S. EGU fractional contribution to MI mortality and (2) a potential upperbound where we assume that fisheries closer to U.S. EGUs (e.g., within the continental U.S. or just offshore and/or along the U.S. Atlantic and Pacific coastlines) supply most of the fish and seafood consumed within the U.S., and therefore U.S. EGU average deposition over the U.S. (as a fraction of total mercury deposition) can be used to approximate the U.S. EGU fractional contribution to MI mortality (see 2021 Risk TSD for more detail).60 The EPA is 60 Another way of stating this is that the lowerbound estimate reflects an assumption that U.S. EGU mercury is diluted as part of a global pool and impacts commercial fish sourced from across the globe (with lower levels of methylmercury contribution) while the upper-bound estimate E:\FR\FM\09FEP2.SGM Continued 09FEP2 7644 Federal Register / Vol. 87, No. 27 / Wednesday, February 9, 2022 / Proposed Rules lotter on DSK11XQN23PROD with PROPOSALS2 continuing to review the literature (including consideration of research by FDA) to better define the relative contributions for sources of fish consumed within the U.S. Note that the bounding analysis also includes consideration for another key source of uncertainty, namely, the specification of the CR function linking methylmercury exposure to increased MI mortality and, in particular, efforts to account for increased confidence in specifying the CR function for higher levels of methylmercury exposure through the use of confidence cutpoints (section III.A.3.a). Additional detail on the stepwise process used to first generate the total U.S. burden of MI-mortality related to total methylmercury exposure and then apportion that total risk estimate to the fraction contributed by U.S. EGUs is presented the 2021 Risk TSD. Based on the 29 tons of mercury emitted by U.S. EGUs prior to implementation of MATS, the bounding estimates from the fraction of total mercury deposition attributable to U.S. EGUs at the global scale is 0.48 percent (lower bound) and 1.8 percent (upper bound). These estimated bounding percentages are important since they have a significant impact on the overall incidence of MI mortality ultimately attributable to U.S. EGU-sourced mercury. Reflecting both the spread in the apportionment of U.S. EGU-sourced mercury (as described above) and application of the three possible applications of the CR function for MI mortality (no confidence-cutpoint, KIHD cutpoint, EURAMIC cutpoint), the estimated MI-mortality attributable to U.S. EGU-sourced mercury for the general U.S. population associated primarily with consumption of commercially-sourced fish ranges from 5 to 91 excess deaths each year.61 For those Americans with high levels of methylmercury in their body (i.e., above certain cutpoints), the science suggests that any additional increase in methylmercury exposure will raise the risk of fatal heart attacks. Based on this screening analysis, even after imposition of the ARP and other CAA criteria pollutant requirements that also reduce HAP emissions from domestic EGU sources, we find that mercury reflects a focus on more near-field regional impacts by U.S. EGU mercury to fish sourced either within the continental U.S. or along its coastline (with greater relative contribution to methylmercury levels). 61 Inclusion of 95th percentile confidence intervals for the effect estimate used in modeling MI mortality extends this range to from 3 to 143 deaths (reflecting the 5th percentile associated with the 5 lower bound estimate to the 95th percentile for the upper bound estimate of 91). VerDate Sep<11>2014 21:43 Feb 08, 2022 Jkt 256001 emissions from EGUs pose a risk of premature mortality due to MI. d. Characterization of IQ Loss for Children Born to Mothers in the General U.S. Population Resulting From the Consumption of Commercially Sourced Fish (and Other Food Items Containing Methylmercury) The third new screening-level risk analysis estimates the incidence of IQ loss in children in the general U.S. population resulting from maternal consumption of commercially sourced fish containing methylmercury attributable to U.S. EGUs (resulting in subsequent prenatal exposure to methylmercury). The approach used in estimating incidence of this adverse health effect shares several elements with the approach described above for modeling MI mortality in the general U.S. population, including in particular, the method used to apportion the total methylmercury-related health burden to the fraction associated with U.S. EGU mercury emissions (e.g., use of lower and upper bound estimates of the fractional contribution of domestic EGU sources). Other elements of the modeling approach, including the specification of the number of children born annually in the U.S., the specification of maternal baseline hairmercury levels (utilizing NHANES data) and the characterization of the linkage between methylmercury exposure (in utero) and IQ loss, are based on methods used in the original 2011 benefits analysis completed for MATS (USEPA, 2011) and are documented in the 2021 Risk TSD. As with the MI-mortality estimates described earlier, the two bounding estimates for the fraction of total mercury deposition attributable to U.S. EGUs at the global and regional scales (0.48 percent and 1.8 percent, respectively) have a significant impact on the overall magnitude of IQ points lost (for children born to the general U.S. population) which are ultimately attributable to U.S. EGUs. However, the EPA has relatively high confidence in modeling this endpoint due to greater confidence in the IQ loss CR function. The range in IQ points lost annually due to U.S. EGU-sourced mercury is estimated at 1,600 to 6,000 points, which is distributed across the population of U.S. children covered by this analysis.62 Given variation in key factors related to maternal methylmercury exposure, it is likely 62 Inclusion of 95th percentile confidence intervals for the effect estimate used in modeling this endpoint extends this range to from 80 to 12,600 IQ points lost (reflecting the 5th and 95th percentiles). PO 00000 Frm 00022 Fmt 4701 Sfmt 4702 that modeled IQ loss will not be uniformly distributed across the population of exposed children and may instead, display considerable heterogeneity.63 The bounding analysis described here was not designed to characterize these complex patterns of heterogeneity in IQ loss across the population of children simulated and we note that such efforts would be subject to considerable uncertainty. However, it does provide evidence of specific adverse outcomes with real implications to those affected. Even small degradations in IQ in the early stages of life are associated with diminished future outcomes in education and earnings potential. 4. Most HAP Benefits Cannot Be Quantified or Monetized Despite the array of adverse health and environmental risks associated with HAP emissions from U.S. coal- and oilfired EGUs documented above, as the above discussion demonstrates, it can be technically challenging to estimate the extent to which EGU HAP emissions will result in adverse effects quantitively across the U.S. population absent regulation. In fact, the vast majority of the post-control benefits of reducing HAP cannot be quantified or monetized with sufficient quality to inform regulatory decisions due to data gaps, particularly with respect to sensitive populations. But that does not mean that these benefits are small, insignificant, or nonexistent. There are numerous unmonetized effects that contribute to additional benefits realized from emissions reductions. These include additional reductions in neurodevelopmental and cardiovascular effects from exposure to methylmercury, adverse ecosystem effects including mercury-related impacts on recreational and commercial fishing, health risks from exposure to non-mercury HAP, and health risks in EJ subpopulations that face disproportionally high exposure to EGU HAP. Congress well understood the challenges in monetizing risks. As discussed in section II.B above, the statutory language in CAA section 112 clearly supports a conclusion that the intended benefit of HAP regulation is a reduction in the volume of HAP emissions to reduce assumed and 63 Maternal exposure (and hence IQ impacts to children) from U.S. EGU-sourced mercury can display considerable variation due to (a) spatial patterns of U.S. EGU mercury fate and transport (including deposition and methylation) which affects impacts on fish methylmercury and (b) variations in fish consumption by mothers (including differences in daily intake, types of fish consumed and geographical origins of that fish). E:\FR\FM\09FEP2.SGM 09FEP2 lotter on DSK11XQN23PROD with PROPOSALS2 Federal Register / Vol. 87, No. 27 / Wednesday, February 9, 2022 / Proposed Rules quantify and monetize the impacts of reductions in HAP, and it concentrated on a small case study for a single pollutant, entitled ‘‘Air Toxics Case Study—Health Benefits of Benzene Reductions in Houston, 1990–2020.’’ As the EPA summarized in the Second Prospective Report, ‘‘[t]he purpose of the case study was to demonstrate a methodology that could be used to generate human health benefits from CAAA controls on a single HAP in an urban setting, while highlighting key limitations and uncertainties in the process. . . . Benzene was selected for the case study due to the availability of human epidemiological studies linking its exposure with adverse health effects.’’ (pg. 5–29). In describing the approach, the EPA noted: ‘‘[b]oth the Retrospective analysis and the First Prospective analysis omitted a quantitative estimation of the benefits of reduced concentrations of air toxics, citing gaps in the toxicological database, difficulty in designing population-based epidemiological studies with sufficient power to detect health effects, limited ambient and personal exposure monitoring data, limited data to estimate exposures in some critical microenvironments, and insufficient economic research to support valuation of the types of health impacts often associated with exposure to individual air toxics.’’ (pg. 5–29). These difficulties have long hindered the Agency’s ability to quantify post-control HAP impacts and estimate the monetary benefits of HAP reductions. In preparing the benzene case study for inclusion in the Second Prospective Report, the Agency asked the Advisory Council on Clean Air Compliance Analysis (the Council) to review the approach. In its 2008 consensus advice to the EPA after reviewing the benzene case study,65 the Council noted that ‘‘Benzene . . . has a large epidemiological database which OAR used to estimate the health benefits of benzene reductions due to CAAA controls. The Council was asked to consider whether this case study provides a basis for determining the value of such an exercise for HAP benefits characterization nationwide.’’ They concluded: identified risks from HAP with the goal of protecting even the most exposed and most sensitive members of the population. The statute requires the EPA to move aggressively to quickly reduce and eliminate HAP, placing high value on doing so in the face of uncertainty regarding the full extent of harm posed by hazardous pollutants on human health and welfare. The statute also clearly places great value on protecting even the most vulnerable members of the population, by instructing the EPA, when evaluating risk in the context of a determination of whether regulation is warranted, to focus on risk to the most exposed and most sensitive members of the population. See, e.g., CAA sections 112(c)(9)(B), 112(f)(2)(B), and 112(n)(1)(C). For example, in evaluating the potential for cancer effects associated with emissions from a particular source category under CAA section 112(f)(2), the EPA is directed by Congress to base its determinations on the maximum individual risk (MIR) to the most highly exposed individual living near a source. Similarly, in calculating the potential for non-cancer effects to occur, the EPA evaluates the impact of HAP to the most exposed individual and accounts for sensitive subpopulations. Notably, Congress in CAA section 112 did not require the EPA to quantify risk across the entire population, or to calculate average or ‘‘typical’’ risks. The statutory design focusing on maximum risk to individuals living near sources acknowledges the inherent difficulty in enumerating HAP effects, given the large number of pollutants and the uncertainties associated with those pollutants, as well as the large number of sources emitting HAP. However, this does not mean that these effects do not exist or that society would not highly value these reductions, despite the fact that the post-control effects of the reductions generally cannot be quantified. The EPA has long acknowledged the difficulty of quantifying and monetizing HAP benefits. In March 2011, the EPA issued a report on the post-control benefits and costs of the CAA. This Second Prospective Report 64 is the latest in a series of EPA studies that estimate and compare the post-control benefits and costs of the CAA and related programs over time. Notably, it was the first of these reports to include any attempt to As recognized by OAR, the challenges for assessing progress in health improvement as a result of reductions in emissions of hazardous air pollutants (HAPs) are daunting. Accordingly, EPA has been unable to adequately assess the economic benefits 64 U.S. EPA Office of Air and Radiation, April 2011. The Benefits and Costs of the Clean Air Act from 1990 to 2020, Final Report—Rev. A. Available at https://www.epa.gov/sites/production/files/201507/documents/fullreport_rev_a.pdf. 65 U.S. EPA Advisory Council on Clean Air Act Compliance Analysis, Review of the Benzene Air Toxics Health Benefits Case Study. July 11, 2008. Available at https://nepis.epa.gov/Exe/ZyPDF.cgi/ P1000ZYP.PDF?Dockey=P1000ZYP.PDF. VerDate Sep<11>2014 21:43 Feb 08, 2022 Jkt 256001 PO 00000 Frm 00023 Fmt 4701 Sfmt 4702 7645 associated with health improvements from HAP reductions due to a lack of exposureresponse functions, uncertainties in emissions inventories and background levels, the difficulty of extrapolating risk estimates to low doses and the challenges of tracking health progress for diseases, such as cancer, that have long latency periods. . . . The benzene case study successfully synthesized best practices and implemented the standard damage function approach to estimating the benefits of reduced benzene, however the Council is not optimistic that the approach can be repeated on a national scale or extended to many of the other 187 air toxics due to insufficient epidemiological data. With some exceptions, it is not likely that the other 187 HAPs will have the quantitative exposure-response data needed for such analysis. Given EPA’s limited resources to evaluate a large number of HAPs individually, the Council urges EPA to consider alternative approaches to estimate the benefits of air toxics regulations. In addition to the difficulties noted by the Council, there are other challenges that affect the EPA’s ability to fully characterize post-control impacts of HAP on populations of concern, including sensitive groups such as children or those who may have underlying conditions that increase their risk of adverse effects following exposure to HAP. Unlike for criteria pollutants such as ozone and PM, the EPA lacks information from controlled human exposure studies conducted in clinical settings which enable us to better characterize dose-response relationships and identify subclinical outcomes. Also, as noted by the Council and by the EPA itself in preparing the benzene case study, the almost universal lack of HAP-focused epidemiological studies is a significant limitation. Estimated risks reported in epidemiologic studies of fine PM (PM2.5) and ozone enable the EPA to estimate health impacts across large segments of the U.S. population and quantify the economic value of these impacts. Epidemiologic studies are particularly well suited to supporting air pollution health impact assessments because they report measures of population-level risk that can be readily used in a risk assessment. However, such studies are infrequently performed for HAP. Exposure to HAP is typically more uneven and more highly concentrated among a smaller number of individuals than exposure to criteria pollutants. Hence, conducting an epidemiologic study for HAP is inherently more challenging; for starters, the small population size means such studies often lack sufficient statistical power to detect effects. For example, in the case of mercury, the most exposed and most sensitive members of the population E:\FR\FM\09FEP2.SGM 09FEP2 lotter on DSK11XQN23PROD with PROPOSALS2 7646 Federal Register / Vol. 87, No. 27 / Wednesday, February 9, 2022 / Proposed Rules may be both small and highly concentrated, such as the subsistence fishers that the EPA has identified as likely to suffer deleterious effects from U.S. EGU HAP emissions. While it is possible to estimate the potential risks confronting this population in a casestudy approach (an analysis that plays an important role in supporting the public health hazard determination for mercury as discussed above in sections III.A.2 and III.A.3), it is not possible to translate these risk estimates into postcontrol quantitative population-level impact estimates for the reasons described above. Further, for many HAP-related health endpoints, the Agency lacks economic data that would support monetizing HAP impacts, such as willingness to pay studies that can be used to estimate the social value of avoided outcomes like heart attacks, IQ loss, and renal or reproductive failure. In addition, the absence of socio-demographic data such as the number of affected individuals comprising sensitive subgroups further limits the ability to monetize HAPimpacted effects. All of these deficiencies impede the EPA’s ability to quantify and monetize post-control HAP-related impacts even though those impacts may be severe and/or impact significant numbers of people. Though it may be difficult to quantify and monetize most post-control HAPrelated health and environmental benefits, this does not mean such benefits are small. The nature and severity of effects associated with HAP exposure, ranging from lifelong cognitive impairment to cancer to adverse reproductive effects, implies that the economic value of reducing these impacts would be substantial if they were to be quantified completely. By extension, it is reasonable to expect both that reducing HAP-related incidence affecting individual endpoints would yield substantial benefits if fully quantified, and moreover that the total societal impact of reducing HAP would be quite large when evaluated across the full range of endpoints. In judging it appropriate to regulate based on the risks associated with HAP emissions from U.S. EGUs, the EPA is placing weight on the likelihood that these effects are significant and substantial, as supported by the health evidence. The EPA’s new screening-level analyses laid out in the Risk TSD for this proposal illustrate this point. Specifically, in exploring the potential for MI-related mortality risk attributable to mercury emissions from U.S. EGUs, the EPA’s upper bound estimate is that these emissions may contribute to as many as 91 additional VerDate Sep<11>2014 21:43 Feb 08, 2022 Jkt 256001 premature deaths each year. The value society places on avoiding such severe effects is very high; as the EPA illustrates in the valuation discussion in the 2021 Risk TSD, the benefit of avoiding such effects could approach $720 million per year. Similarly, for IQ loss in children exposed in utero to U.S. EGU-sourced mercury, our upper bound estimate approaches 6,000 IQ points lost which could translate into a benefit approaching $50 million per year. These estimates are intended to illustrate the point that the HAP impacts are large and societally meaningful, but not to suggest that they are even close to the full benefits of reducing HAP. There are many other unquantified effects of reducing EGU HAP that would also have substantial value to society. As described above, mercury alone is associated with a host of adverse health and environmental effects. The statute clearly identifies this basket of effects as a significant concern in directing the EPA to study them specifically. If the EPA were able to account for all of these post-control effects in our quantitative estimates, the true benefits of MATS would be far clearer. However, available data and methods currently preclude a full quantitative accounting of the postcontrol impacts of reducing HAP emissions from U.S. EGUs and a monetization of these impacts. There are other aspects of social willingness to pay that are not accounted for in the EPA’s quantitative estimate of benefits either. For example, in previous MATS-related rulemakings and analysis, the EPA has not estimated what individuals would be willing to pay in order to reduce the exposure of others who are exposed (even if they are not experiencing high levels of HAP exposure themselves). These may be considered and quantified as benefits depending on whether it is the health risks to others in particular that is motivating them.66 For example, Cropper et al. (2016) found that focus group participants indicated a preference for more equitable distribution of health risks than for income, which indicates that it is specifically the risks others face that was important to the participants.67 This result is particularly important as exposure to HAP is often disproportionately borne by underserved and underrepresented 66 Jones-Lee, M.W. Paternalistic Altruism and the Value of Statistical Life. The Economic Journal, vol. 102, no. 410, 1992, pp. 80–90. 67 Cropper M., Krupnick A., and W. Raich, Preferences for Equality in Environmental Outcomes, Working Paper 22644 https:// www.nber.org/papers/w22644 National Bureau of Economic Research, September 2016. PO 00000 Frm 00024 Fmt 4701 Sfmt 4702 communities (Bell and Ebisu, 2012).68 Unfortunately, studies to quantify the willingness to pay for a more equitable distribution of HAP exposures are limited, so quantification of this benefit likely cannot be performed until new research is conducted. The HAP-related legislative history for the 1990 Amendments includes little discussion of the monetized benefits of HAP, perhaps due to these attendant difficulties. When such monetized benefits were estimated in several outside reports submitted to Congress before passage of the 1990 Amendments, the estimates were based on reduced cancer deaths and the value of the benefits that are quantified were estimated to be small as compared to the estimated costs of regulating HAP emissions under CAA section 112. See, e.g., A Legislative History of the Clean Air Act Amendments of 1990, Vol. I at 1366–67 (November 1993) (estimating the total annual cost of CAA section 112 to be between $6 billion and $10 billion per year and the estimated annual benefits to be between $0 and $4 billion per year); id. at 1372–73 (estimating the total annual cost of CAA section 112 to be between $14 billion and $62 billion per year and the estimated annual benefits to be between $0 and $4 billion per year). Despite the apparent disparity of estimated costs and monetized benefits, Congress still enacted the revisions to CAA section 112. Thus, it is reasonable to conclude that Congress found HAP emissions to be worth regulating even without evidence that the monetized benefits of doing so were greater than the costs. The EPA believes this stems from the value that the statute places on reducing HAP regardless of whether the post-control benefits of doing so can be quantified or monetized, and the statute’s purpose of protecting even the most exposed and most sensitive members of the population. 5. Characterization of HAP Risk Relevant to Consideration of Environmental Justice In assessing the adverse human health effects of HAP pollution from EGUs, we note that these effects are not borne equally across the population, and that some of the most exposed individuals and subpopulations—protection of whom is, as noted, of particular concern under CAA section 112—are minority and/or low-income populations. Executive Order 12898 (59 FR 7629; 68 Bell, Michelle L., and Keita Ebisu. Environmental inequality in exposures to airborne particulate matter components in the United States. Environmental Health Perspectives 120.12 (2012): 1699–1704. E:\FR\FM\09FEP2.SGM 09FEP2 lotter on DSK11XQN23PROD with PROPOSALS2 Federal Register / Vol. 87, No. 27 / Wednesday, February 9, 2022 / Proposed Rules February 16, 1994) establishes Federal executive policy on EJ issues. That Executive Order’s main provision directs Federal agencies, to the greatest extent practicable and permitted by law, to make EJ 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. Executive Order 14008 (86 FR 7619; February 1, 2021) also calls on Federal agencies to make achieving EJ part of their missions ‘‘by developing programs, policies, and activities to address the disproportionately high and adverse human health, environmental, climate-related and other cumulative impacts on disadvantaged communities, as well as the accompanying economic challenges of such impacts.’’ That Executive Order also declares a policy ‘‘to secure environmental justice and spur economic opportunity for disadvantaged communities that have been historically marginalized and overburdened by pollution and underinvestment in housing, transportation, water and wastewater infrastructure, and health care.’’ Under Executive Order 13563, Federal agencies may consider equity, human dignity, fairness, and distributional considerations, where appropriate and permitted by law. In the context of MATS, exposure scenarios of clear relevance from an EJ perspective include the full set of subsistence fisher scenarios included in the watershed-level risk assessments completed for the rule. Subsistence fisher populations are potentially exposed to elevated levels of methylmercury due to their elevated levels of self-caught fish consumption which, in turn, are often driven either by economic need (i.e., poverty) and/or cultural practices. In the context of MATS, we completed watershed-level assessments of risks for a broad set of subsistence fisher populations covering two health endpoints of clear public health significance including: (a) Neurodevelopmental effects in children exposed prenatally to methylmercury (the methylmercury-based RfD analysis described in the 2011 Final Mercury TSD) and (b) potential for increased MImortality risk in adults due to methylmercury exposure (section III.A.3.b above). The general subsistence fisher population that was evaluated nationally for both analyses was not subdivided by socioeconomic status, VerDate Sep<11>2014 21:43 Feb 08, 2022 Jkt 256001 race, or cultural practices.69 Therefore, the risk estimates derived do not fully inform our consideration of EJ impacts, although the significantly elevated risks generated for this general population are clearly relevant from a public health standpoint. However, the other, more differentiated subsistence fisher populations, which are subdivided into smaller targeted communities, are relevant in the EJ context and in some instances were shown to have experienced levels of risk significantly exceeding those of the general subsistence fisher population, as noted earlier in section III.A.3.b. In particular, for the watershed analysis focusing on the methylmercury RfD-based analysis (i.e., neurodevelopmental risk for children exposed prenatally), while the general female fisher scenario suggested that modeled exposures (from U.S. EGUsourced mercury alone) exceeded the methylmercury RfD in approximately 10 percent of the watersheds modeled (2011 Final Mercury TSD, Table 2–6), for low-income Black subsistence fisher females in the Southeast, modeled exposures exceeded the RfD in approximately 25 percent of the watersheds. These results suggest a greater potential for adverse effects in low-income Black populations in the Southeast. Similarly, while the general subsistence fisher had exposure levels suggesting an increased risk for MImortality risk in 10 percent of the watersheds modeled, two subpopulations were shown to be even further disadvantaged. Low-income Black and white populations in the Southeast and tribal fishers active near the Great Lakes had the potential for increased risk in 25 percent of the watersheds modeled.70 Both of these results (the neurodevelopmental RfD69 Note that the RfD-based analysis described in the 2011 Final Mercury TSD and referenced here addressed the potential for neurodevelopmental effects in children and therefore focused on the ingestion of methylmercury by female subsistence fishers. By contrast, the analysis focusing on increased MI-mortality risk for subsistence fishers described in the 2021 Risk TSD and referenced here was broader in scope and encompassed all adult subsistence fishers. 70 Recognizing challenges in obtaining high-end consumption rates for tribal populations active in areas of high U.S. EGU impact (e.g., Ohio River valley, areas of the central Southeast such as northern Georgia, northern South Carolina, North Carolina and Tennessee) there is the potential for our analysis of tribal-associated risk to have missed areas of elevated U.S. EGU-sourced mercury exposure and risk. In that case, estimates simulated for other subsistence populations active in those areas (e.g., low-income whites and Blacks in the Southeast as reported here and in Table 3 of the 2021 Risk TSD) could be representative of the ranges of risk experienced by tribal populations to the extent that cultural practices result in similar levels of increased fish consumption. PO 00000 Frm 00025 Fmt 4701 Sfmt 4702 7647 based analysis and the analysis of increased MI-mortality risk) suggest that subsistence fisher populations that are racially or culturally, geographically, and income-differentiated could experience elevated risks relative to not only the general population but also the population of subsistence fishers generally. We think these results are relevant in considering the benefits of regulating EGU HAP. 6. Overview of Health and Environmental Effects Associated With Non-HAP Emissions From EGUs Alongside the HAP emissions enumerated above, U.S. EGUs also emit a substantial quantity of criteria pollutants, including direct PM2.5, nitrogen oxides (NOX) (including NO2), and SO2, even after implementation of the ARP and numerous other CAA requirements designed to control criteria pollutants. In the 2011 RIA, for example, the EPA estimated that U.S. EGUs would emit 3.4 million tons of SO2 and 1.9 million tons of NOX in 2015 prior to implementation of any controls under MATS (see Table ES–2). These EGU SO2 emissions were approximately twice as much as all other sectors combined (EPA SO2 Integrated Science Assessment, 2017).71 These pollutants contribute to the formation of PM2.5 and ozone criteria pollutants in the atmosphere, the exposure to which is causally linked with a range of adverse public health effects. SO2 both directly affects human health and is a precursor to PM2.5. Short-term exposure to SO2 causes respiratory effects, particularly among adults with asthma. SO2 serves as a precursor to PM2.5, the exposure to which increases the risk of premature mortality among adults, lung cancer, new onset asthma, exacerbated asthma, and other respiratory and cardiovascular diseases. Likewise, EGU-related emissions of NOX will adversely affect human health in the form of respiratory effects including exacerbated asthma. NOX is a precursor pollutant to both PM2.5 and ground-level ozone. Exposure to ozone increases the risk of respiratory-related premature death, new onset asthma, exacerbated asthma, and other outcomes. Fully accounting for the human health impacts of reduced EGU emissions under MATS entails quantifying both the direct impacts of HAP as well as the avoided premature deaths and illnesses associated with reducing these coemitted criteria pollutants. Similarly, 71 U.S. EPA. Integrated Science Assessment for Sulfur Oxides—Health Criteria (Final Report). U.S. Environmental Protection Agency, Washington, DC, EPA/600/R–17–451, December 2017. E:\FR\FM\09FEP2.SGM 09FEP2 7648 Federal Register / Vol. 87, No. 27 / Wednesday, February 9, 2022 / Proposed Rules U.S. EGUs emit substantial quantities of CO2, a powerful greenhouse gas (GHG): The EPA estimated these emissions at 2.23 million metric tpy in 2015 (2011 RIA, Table ES–2). The environmental impacts of GHG emissions are accounted for through the social cost of carbon,72 which can be used to estimate the benefits of emissions reductions due to regulation. Not all of the non-HAP benefits of MATS were quantified or monetized in the 2011 RIA. However, the EPA thoroughly documented these potential effects and identified those for which quantification and/or monetization was possible. Specifically, the EPA calculated the number and value of avoided PM2.5-related impacts, including 4,200 to 11,000 premature deaths, 4,700 nonfatal heart attacks, 2,600 hospitalizations for respiratory and cardiovascular diseases, 540,000 lost work days, and 3.2 million days when adults restrict normal activities because of respiratory symptoms exacerbated by PM2.5 (2011 RIA, p. ES– 3). We also estimated substantial additional health improvements for children from reductions in upper and lower respiratory illnesses, acute bronchitis, and asthma attacks. In addition, we included in our monetized co-benefits estimates the effect from the reduction in CO2 emissions resulting from this rule, based on the interagency SC–CO2 estimates. These benefits stemmed from imposition of MATS and would be coincidentally realized alongside the HAP benefits. 7. Summary of Public Health Hazards Associated With Emissions From EGUs lotter on DSK11XQN23PROD with PROPOSALS2 The EPA is proposing to find that the evidence provided in this section of the preamble, informed where possible with new scientific evidence available since the publication of the 2016 Supplemental Finding, once again demonstrates that HAP released from U.S. EGUs represent a significant public health hazard absent regulation under 72 See https://19january2017snapshot.epa.gov/ climatechange/social-cost-carbon_.html: ‘‘EPA and other federal agencies use estimates of the social cost of carbon (SC–CO2) to value the climate impacts of rulemakings. The SC–CO2 is a measure, in dollars, of the long-term damage done by a ton of carbon dioxide (CO2) emissions in a given year. This dollar figure also represents the value of damages avoided for a small emission reduction (i.e., the benefit of a CO2 reduction). The SC–CO2 is meant to be a comprehensive estimate of climate change damages and includes changes in net agricultural productivity, human health, property damages from increased flood risk, and changes in energy system costs, such as reduced costs for heating and increased costs for air conditioning. However, given current modeling and data limitations, it does not include all important damages.’’ VerDate Sep<11>2014 21:43 Feb 08, 2022 Jkt 256001 CAA section 112. As noted earlier, the EPA found that even after imposition of the other requirements of the CAA, EGUs were the largest domestic source of mercury, HF, HCl, and selenium and among the largest domestic contributors of arsenic, chromium, cobalt, nickel, hydrogen cyanide, beryllium, and cadmium. The EPA has documented a wide range of adverse health effects in children and adults associated with mercury including, in particular, neurodevelopmental effects in children exposed prenatally (e.g., IQ, attention, fine motor-function, language, and visual spatial ability) and a range of cardiovascular effects in adults including fatal MI and non-fatal IHD. Non-mercury HAP have also been associated with a wide range of chronic health disorders (e.g., irritation of the lung; decreased pulmonary function, pneumonia, or lung damage; detrimental effects on the central nervous system; and damage to the kidneys). Furthermore, three of the key metal HAP emitted by EGUs (arsenic, chromium, and nickel) have been classified as human carcinogens and there is evidence to suggest that, prior to MATS, emissions from these sources had the potential to result in cancer risks greater than 1-in-1 million. Further, this section describes the results from several new screening-level risk assessments considering mercury from domestic EGU sources. These risk assessments focused on two broad populations of exposure: (a) Subsistence fishers exposed to mercury through selfcaught fish consumption within the continental U.S. and (b) the general U.S. population exposed to mercury through the consumption of commerciallysourced fish (i.e., purchased from restaurants and food stores). The results of these screening-level risk assessments are useful for informing our understanding about the potential scope and public health importance of these impacts, but remaining uncertainties prohibit precise estimates of the size of these impacts currently. For example, numerous studies considering multiple, large cohorts have shown that people exposed to high amounts of mercury are at higher risk of fatal and non-fatal CVD. While U.S. EGUs are only one of multiple global sources that contribute to this mercury exposure, the EPA’s screening analysis suggests the potential for U.S. EGU emissions of mercury to contribute to premature mortality in the general U.S. population. Furthermore, as part of the subsistence fisher analyses, we included scenario modeling for a number of EJrelevant populations showing that several populations (including low- PO 00000 Frm 00026 Fmt 4701 Sfmt 4702 income Blacks and whites in the Southeast and tribal populations near the Great Lakes) had risk levels that were significantly above the general subsistence fisher population modeled for the entire U.S. As noted earlier, the EPA believes that Congress intended in CAA section 112 to address risks to the most exposed and most sensitive members of the public. These additional risk assessments suggest that there are populations that are particularly vulnerable to EGU HAP emissions, including populations of concern from an EJ standpoint. MATS plays a critical role in reducing the significant volume and risks associated with EGU HAP emissions discussed above. Mercury emissions have declined by 86 percent, acid gas HAP by 96 percent, and non-mercury metal HAP by 81 percent since 2010 (pre-MATS). See Table 4 at 84 FR 2689 (February 7, 2019). MATS is the only Federal requirement that guarantees this level of HAP control from EGUs. At the same time, the concomitant reductions in CO2, NOX, and SO2, also provide substantial public health and environmental benefits. Given the numerous and important public health and environmental risks associated with EGU emissions, the EPA again concludes that the advantages of regulating HAP emissions from this sector are significant. Acknowledging the difficulties associated with characterizing risks from HAP emissions discussed earlier in this section, we solicit comments about the health and environmental hazards of EGU HAP emissions discussed in this section and the appropriate approaches for quantifying such risks, as well any information about additional risks and hazards not discussed in this proposal. B. Consideration of Cost of Regulating EGUs for HAP 1. Introduction In evaluating the costs and disadvantages of MATS, we begin with the costs to the power industry of complying with MATS. This assessment uses a sector-level (or system-level) accounting perspective to estimate the cost of MATS, looking beyond just pollution control costs for directly affected EGUs to include incremental costs associated with changes in fuel supply, construction of new capacity, and costs to non-MATS units that were also projected to adjust operating decisions as the power system adjusted to meet MATS requirements. Such an approach is warranted due to the nature of the power sector, which is a large, complex, and interconnected industry. E:\FR\FM\09FEP2.SGM 09FEP2 Federal Register / Vol. 87, No. 27 / Wednesday, February 9, 2022 / Proposed Rules This means that while the MATS requirements are directed at a subset of EGUs in the power sector, the compliance actions of the MATSregulated EGUs can affect production costs and revenues of other units due to generation shifting and fuel and electricity price changes. Thus, the EPA’s projected compliance cost estimate represents the incremental costs to the entire power sector to generate electricity, not just the compliance costs projected to be incurred by the coal- and oil-fired EGUs that are regulated under MATS. Limiting the cost estimate to only those expenditures incurred by EGUs directly regulated by MATS would provide an incomplete estimate of the costs of the rule. Using this broad view, in the 2011 RIA we projected that the compliance cost of MATS would be $9.6 billion per year in 2015.73 This estimate of compliance cost was based on the change in electric power generation costs between a base case without MATS and a policy case where the sector complies with the HAP emissions limits in the final MATS. The EPA generated this cost estimate using the Integrated Planning Model (IPM).74 This model is designed to reflect electricity markets as accurately as possible using the best available information from utilities, industry experts, natural gas and coal market experts, financial institutions, and government statistics. Notably, the model includes cost and performance estimates for state-of-theart air pollution control technologies with respect to mercury and other HAP controls. But there are inherent limits to what can be predicted ex ante. And because the estimate was made 5 years prior to full compliance with MATS, stakeholders, including a leading power sector trade association, have indicated that our initial cost projection significantly overestimated actual costs expended by industry. There are significant challenges to producing an ex post cost estimate that provides an apples-to-apples comparison to our initial cost projections, due to the complex and interconnected nature of 73 All costs were reported in 2007 dollars. developed by ICF International, is a stateof-the-art, peer-reviewed, dynamic, deterministic linear programming model of the contiguous U.S. electric power sector. IPM provides forecasts of least-cost capacity expansion, electricity dispatch, and emission control strategies while meeting electricity demand and various environmental, transmission, dispatch, and reliability constraints. The EPA has used IPM for over 2 decades to understand power sector behavior under future business-as-usual conditions and to evaluate the economic and emission impacts of prospective environmental policies. lotter on DSK11XQN23PROD with PROPOSALS2 74 IPM, VerDate Sep<11>2014 21:43 Feb 08, 2022 Jkt 256001 the industry. However, independent analyses provided to the EPA indicate that we may have overestimated the cost of MATS by billions of dollars per year. Moreover, there have been significant changes in the power sector in the time since MATS was promulgated that were not anticipated in either EPA or U.S. Energy Information Administration (EIA) projections at the time.75 Entirely outside of the realm of EPA regulation, there were dramatic shifts in the cost of natural gas and renewables, state policies, and Federal tax incentives, which have also further encouraged construction of new renewables. These have led to significantly faster and greater than anticipated retirement of coal capacity and coal-fired generation. While there are significant limitations to producing an ex post cost estimate, we have endeavored, where possible, to approximate the extent of our overestimate. The unexpected shifts in the power sector, including the rapid increase in natural gas supplies that occurred after promulgation of MATS, resulted in our projected estimates of natural gas prices to be approximately double what they were in actuality. Incremental natural gas expenditures accounted for approximately 25 percent of the $9.6 billion compliance cost estimate for 2015 in the 2011 RIA. The market trends of the power sector also had major impacts on the number of controls installed and operated on coalfired EGUs in the years following promulgation of MATS. With respect to just pollution control installation and operation, we project that we overestimated annual compliance costs by at least $2.2 to 4.4 billion per year, simply as a result of fewer pollution controls being installed than were estimated in the 2011 RIA. Though this range of an overestimate is limited to costs associated with pollution controls and operation, those costs made up 70 percent of the projected $9.6 billion figure. We additionally find that the controls that were installed at MATS-regulated EGUs were likely both less expensive and more effective in reducing pollution than originally projected, resulting in our estimate likely being too high for these reasons as well. Lastly, since completing the 2011 RIA, we have updated several assumptions in our 75 In 2009, coal-fired generation was by far the most important source of utility scale generation, providing more power than the next two sources (natural gas and nuclear) combined. By 2016, natural gas had passed coal-fired generation as the leading source of generation in the U.S. While natural gas-fired generation, nuclear generation and renewable generation have all increased since 2009, coal-fired generation has significantly declined. PO 00000 Frm 00027 Fmt 4701 Sfmt 4702 7649 modeling that would also have resulted in a lower cost estimate had they been incorporated into our modeling at the time of the rule. Taking into account the above considerations, we believe we overestimated the cost of MATS by billions of dollars. We next examine the projected cost of MATS—both total cost and specific types of costs—using sector-level metrics that put those cost estimates in context with the economics of the power sector. The reason we examine these metrics is to better understand the disadvantages that expending these costs had on the EGU industry and the public more broadly, just as on the benefits side we look beyond the volume of pollution reductions to the health and environmental advantages conferred by the reductions. For purposes of these analyses, we use the 2011 RIA projections, keeping in mind our newer analyses, which indicated that those projections were almost certainly overestimated. Specific to the power sector, we evaluate the projected costs of the rule to revenues from electricity sales across nearly 20 years, and we compare the projected expenditures required under the rule with historic expenditures by the industry over the same time period. We additionally evaluate broader impacts on the American public by looking at projected effects of MATS on retail electricity prices and our analyses of whether the power sector could continue to provide adequate and reliable electricity after imposition of the rule. We find that, when viewed in context, the projected costs of MATS to both the power sector and the public were small relative to these metrics and well within the range of historical variability. Moreover, experience has borne out our projection that the EGU sector could continue to provide adequate, reliable, and affordable electricity to the American public after the imposition of the rule. Section III.B.2 contains our discussion of the ways in which the compliance costs for MATS were likely overestimated. Section III.B.3 expands upon and re-evaluates the cost metrics used in the 2016 Supplemental Finding by adding post-promulgation information to our analysis, and we discuss impacts on power sector generating capacity. In section III.B.4, we propose to reaffirm additional cost considerations regarding the availability and cost of control technologies discussed in earlier rulemakings, and in section III.B.5, we provide our proposed conclusions regarding the costs, or disadvantages, of regulating HAP from EGUs. E:\FR\FM\09FEP2.SGM 09FEP2 7650 Federal Register / Vol. 87, No. 27 / Wednesday, February 9, 2022 / Proposed Rules lotter on DSK11XQN23PROD with PROPOSALS2 2. Compliance Cost Projections in the 2011 RIA Were Likely Significantly Overestimated In issuing this proposal, the EPA finds itself in a position Congress was not likely to have contemplated when it promulgated the 1990 Amendments. The statute contemplated that the EPA would have completed the required studies and presumably made its determination more than 20 years ago. Due to litigation and multiple changes of administration following Michigan, we are, at this point, nearly 10 years after promulgation of the regulation about which we are making a threshold determination, and 5 years after full implementation of that regulation. The vast majority of MATS-affected sources were required to be in compliance with the rule’s requirements by April 2016, and installation of new controls–or upgrades to existing controls–were in place by 2017.76 This means we now have on hand unit-level data regarding installations, a clearer picture about market trends, and updated, more accurate assumptions that, taken together, produce a very different picture of the actual costs of MATS than what we projected when we reaffirmed the appropriate and necessary determination and promulgated the rule in 2012. Therefore, while the Agency considers that the information that was available at the time of MATS promulgation provided a valid analytical basis for the threshold appropriate and necessary determination, because many years have elapsed since then, the EPA believes it is reasonable to examine how the power sector has evolved since MATS was finalized and, with the benefit of hindsight, compare important aspects of the 2011 RIA projections with what actually happened since MATS was promulgated. Because our obligation under CAA section 112(n)(1)(A) is to fully consider the advantages and disadvantages of regulating a large, critically important industry, whose role impacts the lives of every American, we think it is important to evaluate and consider the best, currently available information, even if, as discussed in sections III.B.3 and 4, the pre-existing record supports the same conclusion. This ex post examination demonstrates 76 Affected sources were required to be in compliance with the requirements in MATS within 3 years after the effective date of the rule (i.e., by April 2015). However, sources were allowed to request an additional year to comply with the rule and the vast majority of sources were required to be in compliance with the rule’s requirements by April 2016. We therefore think 2017 is a reasonable year in which to analyze installed controls on the EGU fleet. VerDate Sep<11>2014 21:43 Feb 08, 2022 Jkt 256001 that the EPA almost certainly significantly overestimated compliance costs in the 2011 RIA, which further supports the determination that regulation is appropriate and necessary after considering cost. We also do not view this updated, post-hoc evaluation of what happened post-promulgation as undermining the record we established in 2012. Models are not invalidated ‘‘solely because there might be discrepancies between those predictions and the real world. That possibility is inherent in the enterprise of prediction.’’ EME Homer City Generation, L.P. v. EPA, 795 F.3d 118, 135–36 (D.C. Cir. 2015). In an ideal world, with perfect information, we would be able to generate an ex post analysis of regulatory costs that could be compared to our ex ante cost estimate prepared at the time MATS was issued. However, it is extremely challenging to produce rigorous retrospective estimates of regulatory costs. A literature review and series of case studies performed by EPA staff provides insights on how analysts can perform retrospective cost analysis.77 Kopits et al. (2015) identifies several challenges associated with ex post cost assessments, including data limitations with respect to how facilities chose to comply with regulations and comprehensive facility-level pollution abatement costs. A key component to a rigorous retrospective analysis noted by the authors that can be particularly difficult to achieve is an accurate definition of the counterfactual, that is, what would have occurred absent the rule. It is this counterfactual that provides the baseline against which the incremental costs of regulation are estimated. In the case of MATS, to construct an estimate of ex post implementation costs that is directly comparable to the ex ante 2011 RIA cost estimate, we would first need to accurately attribute changes in the power sector that were due to MATS requirements rather than to market and technological changes, other regulations, or, importantly, combinations of these factors (i.e., properly specify the counterfactual). Second, we would need actual information of the incremental costs that had been associated with facilitylevel operational changes due to MATS, such as observed changes in dispatch, actual fuel consumption, and how controls in MATS-affected units were actually operated. Even the operation of 77 Kopits, E., A. McGartland, C. Morgan, C. Pasurka, R. Shadbegian, N. B. Simon, D. Simpson and A. Wolverton (2015). Retrospective cost analyses of EPA regulations: a case study approach. Journal of Benefit-Cost Analysis 5(2): 173–193. PO 00000 Frm 00028 Fmt 4701 Sfmt 4702 non-MATS affected units would be relevant to such an analysis, because operational decisions are interconnected on the grid via dispatch decisions as well as through fuel markets. While there may be approaches such as econometric analysis, simulation modeling, and event study analysis that could capture and estimate components of the problem identified above and derive an estimate of ex post MATS costs, the approach would very likely require different methods and assumptions than the 2011 RIA estimates which were based on the comparison of two forward-looking sets of projections. Even if we undertook such additional analysis or modeling, ultimately we would still only be able to provide a new estimate of regulatory costs, not an actual cost. Given how challenging it is to produce rigorous retrospective estimates of regulatory costs, particularly at a system-level, an ex post analysis is better suited to comparing particular aspects of the analysis, which can help us understand whether costs in the 2011 RIA were over- or under-estimated and can yield a general sense of how much reality diverged from the projection, than to attempting to generate a new and precise ‘‘actual’’ total compliance cost estimate for MATS. Estimating retrospective costs for a rule of the magnitude of MATS is an especially significant challenge because the rule regulates hundreds of units within a complex, interdependent, and dynamic economic sector. Units within the power sector are also subject to many regulatory requirements and other economic drivers. While we can observe the decisions of the sector and individual units in terms of decisions on controls, fuels, and retirement, we cannot pinpoint the reason(s) behind each unit-level decision. With respect to identifying the counterfactual against which to evaluate retrospective compliance costs, several unforeseen factors since MATS promulgation have driven changes in the power sector that have led to the composition of the current fleet being different than the fleet projected in the 2011 RIA. For example, dramatic increases in the supply of natural gas, along with advances in cost and performance of renewable generation technologies and low electricity demand growth, none of which were fully anticipated in the 2011 RIA, have made strong contributions to shifts away from coalfired generation.78 79 Additionally, other 78 Linn, J. and K. McCormack (2019). The Roles of Energy Markets and Environmental Regulation in Reducing Coal-Fired Plant Profits and Electricity E:\FR\FM\09FEP2.SGM 09FEP2 Federal Register / Vol. 87, No. 27 / Wednesday, February 9, 2022 / Proposed Rules lotter on DSK11XQN23PROD with PROPOSALS2 EPA regulations such as the Disposal of Coal Combustion Residuals from Electric Utilities final rule, the Steam Electric Power Generating Effluent Guidelines—2015 Final Rule, and the 2020 Steam Electric Reconsideration Rule, were promulgated after MATS.80 While the compliance periods of these rules all postdate the MATS compliance date, utilities are likely to consider multiple regulations simultaneously when making planning decisions, a likelihood that also complicates the identification of the counterfactual scenario of a world without MATS that is needed to generate an ex post incremental cost estimate of MATS that would be directly comparable to the ex ante 2011 RIA cost estimate. Even though it is extremely challenging to produce the type of ex post incremental cost estimate discussed above, several stakeholders have conducted analyses, focusing on different components of the regulation’s cost, to assess actual costs of compliance. While none of these estimates can be precisely compared against the EPA ex ante estimates because they use different methods than the power sector modeling the EPA used in the 2011 RIA, all of the independent analyses suggested that the actual compliance costs expenditures were significantly lower—by billions of dollars—than the EPA estimated in the 2011 RIA. First, a 2015 analysis by Andover Technology Partners focused on the capital and operating costs associated with the actual installation and operation of pollution control equipment at MATS-regulated units and made two key findings: the number of installed controls was significantly lower than the number of controls that was projected in the 2011 RIA and the cost of the installed controls was generally lower than the control costs that the EPA assumed in the 2011 RIA modeling. Based on these findings, the study estimated that the EPA’s projected cost of compliance was over-estimated by approximately $7 billion.81 82 In other Sector Emissions. RAND Journal of Economics 50: 733–767. 79 Coglianese, J., et al. (2020). The Effects of Fuel Prices, Environmental Regulations, and Other Factors on U.S. Coal Production, 2008–2016. The Energy Journal 41(1): 55–82. 80 85 FR 53516 (August 28, 2020), 80 FR 67838 (November 3, 2015), and 85 FR 64650 (October 13, 2020), respectively. 81 Declaration of James E. Staudt, Ph.D., CFA, at 3, White Stallion Energy Center v. EPA, No. 12– 1100 (DC Cir., December 24, 2015). Also available at Docket ID Item No. EPA–HQ–OAR–2009–0234– 20549. 82 In addition to the 2015 study, Andover Technology Partners produced two other analyses VerDate Sep<11>2014 21:43 Feb 08, 2022 Jkt 256001 words, the Andover Technology Partners estimated that the EPA’s projected cost was approximately four times higher than their retrospective estimate of cost, which they estimated to be approximately $2 billion per year. Second, a 2017 study performed by M.J. Bradley & Associates (MJB&A) used information from the EIA and estimated that owners and operators of coal-fired EGUs incurred total capital expenditures on environmental retrofits of $4.45 billion from December 2014 to April 2016.83 To the EPA’s understanding, the MJB&A cost estimate represents total upfront capital costs (not ongoing operating and maintenance expenditures), and is not annualized as was the capital expenditure in the 2011 RIA-based projected cost estimate. For comparison, the estimated total upfront (not annualized) capital expenditures underpinning the 2011 RIA annual compliance cost estimate is about $36.5 billion, which is more than eight times higher than the MJB&A estimates. This result suggests that the capital cost component of the 2011 RIA cost projections was significantly overestimated, potentially by a factor of more than eight. Third, the Edison Electric Institute (EEI), the association that represents all U.S. investor-owned electric companies, estimated that by April 2019, owners and operators of coal- and oil-based EGUs incurred cumulative (not annual) compliance costs of more than $18 billion to comply with MATS, including both capital and operations and maintenance costs since MATS became effective in April 2012.84 In order to provide a simple comparison between the EEI figure, which was incurred over 7 years, and the annualized amount presented in the 2011 RIA ($9.6 billion), we can divide the EEI figure by 7 to estimate an average annual amount of approximately $2.6 billion, which is similar to the Andover Technology Partners estimate of approximately $2 billion. Also in line with the Andover Technology Partners estimate, EEI’s 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. 83 Available in Docket ID Item No. EPA–HQ– OAR–2018–0794–1145. 84 Available in Docket ID Item No. EPA–HQ– OAR–2018–0794–2267. PO 00000 Frm 00029 Fmt 4701 Sfmt 4702 7651 estimate suggests that the annual costs related to MATS compliance were overestimated in the 2011 RIA by approximately $7 billion. While there is some uncertainty in the amount of time over which those costs were incurred, as well as the exact nature of those expenditures, it is clear that the information provided by EEI supports a conclusion that the costs of compliance with MATS were significantly lower than the Agency’s projections. In summary, it is the EPA’s understanding that two of these studies indicate that the 2011 RIA may have overestimated annual compliance costs by approximately $7 billion, and the third study finds that the projected total upfront capital costs may have been overestimated by a factor of more than eight. While each of these retrospective cost estimates is 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, each of the independent analyses indicate that the costs of MATS are likely significantly less than the EPA estimated in the 2011 RIA. For this proposal, the EPA has evaluated whether the ex ante estimates in the 2011 RIA were likely accurate, overestimated, or underestimated, and the details of the EPA’s new analysis are contained in the docketed TSD (referred to herein as the ‘‘Cost TSD’’).85 Consistent with our systems-level approach, we begin our analysis with an evaluation of natural gas expenditures during the relevant time period. The rapid decrease in the price of natural gas during this time period affected U.S. power generation profoundly, including U.S. EGU fuel expenditures; this has significant implications for our ex post analysis because natural gas expenditures constituted approximately 25 percent of the projected 2015 compliance costs in the 2011 RIA.86 These market shifts in the industry also impacted expenditures associated with the installation and operation of pollution control equipment at MATSaffected facilities. Those costs constituted a majority—about 70 percent—of the projected annual compliance costs in 2015. The following 85 U.S. EPA. 2021. Supplemental Data and Analysis for the National Emission Standards for Hazardous Air Pollutants: Coal- and Oil-Fired Electric Utility Steam Generating Units—Revocation of the 2020 Reconsideration, and Affirmation of the Appropriate and Necessary Supplemental Finding; Notice of Proposed Rulemaking (‘‘Cost TSD’’). 86 We projected that regulation of coal- and oilfired EGUs under MATS would induce units to switch to natural gas, which in turn would increase the price of natural gas and the cost of those expenditures. E:\FR\FM\09FEP2.SGM 09FEP2 7652 Federal Register / Vol. 87, No. 27 / Wednesday, February 9, 2022 / Proposed Rules sections closely examine these two components of the compliance cost and use available information to evaluate whether the projected compliance costs reported in the 2011 RIA were likely higher or lower than actual costs. We also review important cost assumptions used in the 2011 RIA. Taken together, this suite of quantitative and qualitative evaluations indicates that the projected costs in the 2011 RIA were almost certainly significantly overestimated. We find that the 2011 RIA’s estimate of the number of installations alone led to an overestimate of about $2.2 to $4.4 billion, and that if recent updates to the cost and performance assumption for pollution controls had been reflected in the 2011 RIA modeling, the projected compliance costs would likely have been even lower (suggesting the overestimate could be greater than $4.4 billion). a. Natural Gas Supply The natural gas industry has undergone significant change in recent years. Starting in the mid-2000s, technological changes in natural gas drilling and extraction initiated major market changes that resulted in significant increases to domestic supplies of natural gas. As these technologies have continued to advance, they have had a lasting impact on natural gas markets, resulting in major shifts in the economics of electric sector operations given the abundant supply of natural gas at relatively low costs. This section summarizes these changes and the implications for the cost projection presented in the 2011 RIA. In 2005, the EIA estimated that proved reserves of natural gas were 213 trillion cubic feet (tcf).87 In 2019, the estimate of proved reserves was 495 tcf, an increase of 132 percent. The market effects of this major supply shift were profound across the economy, but especially for the power sector. By the end of 2019, aided by advances in drilling and hydraulic fracturing techniques, natural gas production from tight and shale gas formations was the major source of domestic production (see Table 1 below) and had increased three-fold from 2005 production levels. TABLE 1—U.S. NATURAL GAS PRODUCTION, BY SOURCE [Trillion cubic feet] Tight/shale gas Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 ................................................................................................................. ................................................................................................................. ................................................................................................................. ................................................................................................................. ................................................................................................................. ................................................................................................................. ................................................................................................................. ................................................................................................................. ................................................................................................................. ................................................................................................................. ................................................................................................................. ................................................................................................................. ................................................................................................................. ................................................................................................................. ................................................................................................................. ................................................................................................................. Other lower 48 onshore 7.2 8.0 9.0 10.3 11.1 12.4 14.8 16.7 17.6 19.5 21.0 21.1 22.2 25.7 29.3 29.2 Lower 48 offshore 5.1 5.1 4.9 4.9 4.5 4.2 4.0 3.7 3.5 3.4 3.2 2.8 2.7 2.7 2.4 2.3 Other 3.4 3.2 3.1 2.6 2.7 2.5 2.0 1.6 1.4 1.3 1.4 1.3 1.1 1.0 1.0 1.2 2.3 2.3 2.3 2.4 2.4 2.2 2.1 2.0 1.7 1.6 1.5 1.4 1.3 1.3 1.2 1.2 Source: U.S. EIA, https://www.eia.gov/energyexplained/natural-gas/where-our-natural-gas-comes-from.php, accessed July 25, 2021. Note: ‘‘Other’’ includes production from Alaska and Coalbed Methane sources. As a result, the natural gas market underwent a long period of sustained low prices (see Table 2 below). These market shifts were not fully anticipated or predicted by observers, as indicated by natural gas futures prices at the time of MATS promulgation. Although these changes took root in the mid-2000s, the lasting market disruption would take more time to cement itself. From 2010 through 2019, the U.S became one of the world’s leading producers of natural gas, breaking domestic production records year-on-year through the decade, while maintaining record-low prices. During this timeframe, the U.S. shifted from a total net energy importer to an exporter,88 while maintaining some of the lowest relative natural gas prices globally.89 lotter on DSK11XQN23PROD with PROPOSALS2 TABLE 2—NATURAL GAS PRICES Year NYMEX natural gas Henry Hub natural gas futures ($/MMBtu), annual average, as of: 2011–03–16 NYMEX natural gas Henry Hub natural gas futures ($/MMBtu), annual average, as of: 2011–12–21 2005 ........................................................................................................................... 2006 ........................................................................................................................... 2007 ........................................................................................................................... .............................. .............................. .............................. .............................. .............................. .............................. 87 U.S. Crude Oil and Natural Gas Proved Reserves, Year-end 2019 (Table 9: U.S. proved reserves of natural gas). EIA, January 11, 2021 release available at https://www.eia.gov/naturalgas/ crudeoilreserves. Accessed July 23, 2021. VerDate Sep<11>2014 21:43 Feb 08, 2022 Jkt 256001 88 Monthly Energy Review, EIA (June 24, 2021) and Today in Energy (‘‘U.S. total energy exports exceed imports in 2019 for the first time in 67 years’’), EIA (April 20, 2020) available at https:// www.eia.gov/todayinenergy/detail.php?id=43395. Accessed July 23, 2021. PO 00000 Frm 00030 Fmt 4701 Sfmt 4702 Henry Hub spot natural gas index annual average price ($/MMBtu) 8.63 6.74 6.96 89 BP, Statistical Review of World Energy 2021 available at https://www.bp.com/en/global/ corporate/energy-economics/statistical-review-ofworld-energy.html. Accessed July 23, 2021. E:\FR\FM\09FEP2.SGM 09FEP2 Federal Register / Vol. 87, No. 27 / Wednesday, February 9, 2022 / Proposed Rules 7653 TABLE 2—NATURAL GAS PRICES—Continued Year 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 ........................................................................................................................... ........................................................................................................................... ........................................................................................................................... ........................................................................................................................... ........................................................................................................................... ........................................................................................................................... ........................................................................................................................... ........................................................................................................................... ........................................................................................................................... ........................................................................................................................... ........................................................................................................................... ........................................................................................................................... ........................................................................................................................... ........................................................................................................................... ........................................................................................................................... ........................................................................................................................... ........................................................................................................................... NYMEX natural gas Henry Hub natural gas futures ($/MMBtu), annual average, as of: 2011–03–16 NYMEX natural gas Henry Hub natural gas futures ($/MMBtu), annual average, as of: 2011–12–21 Henry Hub spot natural gas index annual average price ($/MMBtu) .............................. .............................. .............................. 4.24 4.91 5.31 5.67 6.04 6.36 6.67 6.97 7.25 7.50 7.76 8.02 8.28 .............................. .............................. .............................. .............................. .............................. 3.43 4.07 4.43 4.66 4.90 5.16 5.43 5.70 5.96 6.23 6.50 6.78 7.06 8.90 3.94 4.37 4.00 2.75 3.73 4.37 2.63 2.51 2.98 3.16 2.56 2.03 .............................. .............................. .............................. .............................. lotter on DSK11XQN23PROD with PROPOSALS2 Source: Annual Average Henry Hub Price, EIA. NYMEX price, from S&P Global data. 2015 data from 2011 RIA, Chapter 3. The EPA projected a 2015 natural gas price of roughly $5/MMBtu when MATS was finalized in December 2011, which was a reasonable expectation based on prevailing market conditions at that time. However, natural gas prices post-MATS promulgation ended up being considerably lower than anticipated, which resulted in major shifts in the economics of fossil fuelfired electric generating technologies (see Table 2 above and Chart A–1 in the Cost TSD). From 2005 through 2010, annual average natural gas prices (at Henry Hub) averaged about $6.60/ MMBtu. Several years later, as MATS compliance began, prices averaged roughly $2.75/MMBtu for the years 2015 through 2019. This market shift greatly changed the economics of power plant operation for fossil fuel-fired facilities, with the electric sector surpassing the industrial sector to become the largest consumer of natural gas (38 percent of the total in 2020),90 and gas-fired generators becoming the leading source of electric generation in the electric sector, representing 40 percent of total generation in 2020.91 The modeling supporting the 2011 RIA did not anticipate this major change in natural gas supply, which has clearly had a significant impact on the electric power sector and those sources covered by MATS. While we do not quantify the impact this change would have on the 90 Table 4.3, Monthly Energy Review, EIA, April 2021, available at https://www.eia.gov/totalenergy/ data/monthly/archive/00352104.pdf. 91 EIA, Electricity Data Browser, Net generation, United States, all sectors, annual, available at https://www.eia.gov/electricity/data/browser/. VerDate Sep<11>2014 21:43 Feb 08, 2022 Jkt 256001 projected compliance costs associated with incremental changes in natural gas use and price (about 25 percent of the total projected compliance cost in the 2011 RIA), we note that any closures of covered units that occurred as a result of the changed relative economics of fuel prices would decrease the MATSrelated compliance costs for the sector. These closures reduced the amount of control capacity necessary for compliance with MATS, and we estimate below a range of costs associated with the overestimation of control installations in the 2011 RIA. Several researchers have investigated the role of relative fuel prices as a factor in decisions that were made regarding closures of coal-fired units around 2015. Generally, these studies attribute closures primarily to the decrease in natural gas prices, and they also note smaller factors such as advances in the cost and performance of renewable generating sources, lower-thananticipated growth in electricity demand, and environmental regulations. For example, Linn and McCormack (2019) developed a simulation model of the U.S. Eastern Interconnection that reproduced unit operation, emissions, and retirements over the 2005–2015 period. The authors use this model to explain the relative contributions of demand, natural gas prices, wind generation, and environmental regulations, including MATS, to the changes in the share of coal in electricity generation. The results showed that lower electricity consumption and natural gas prices account for a large majority of the PO 00000 Frm 00031 Fmt 4701 Sfmt 4702 declines in coal plant profitability and resulting retirements. The authors found that the environmental regulations they modeled, NOX emissions caps and MATS, played a relatively minor role in declines of coal plant profitability and retirements. Additionally, Coglianese et al. (2020) developed a statistical modeling approach to enable the decomposition of changes in U.S. coal production from 2008–2016 into changes due to a variety of factors, including changes in electricity demand, natural gas prices relative to coal, renewable portfolio standards, and environmental regulations that affect coal-fired plants. The results indicated that declines in natural gas prices explained about 92 percent of the decrease in coal production between 2008 and 2016. Air regulations, including MATS, explained about 6 percent of the drop in coal production. The study attributed about 5.2 GW of coal-fired EGU retirements to MATS. These studies both demonstrate that the decrease in natural gas prices played a significant role in closures of coalfired EGUs. While we do not quantify the impact this change had on the projected costs included in the 2011 RIA, we note that any closures of covered units that occurred as a result of the dramatically changed relative economics of fuel prices would decrease the MATS-related compliance costs for the sector. E:\FR\FM\09FEP2.SGM 09FEP2 7654 Federal Register / Vol. 87, No. 27 / Wednesday, February 9, 2022 / Proposed Rules b. Projected Versus Observed Pollution Control Installations The 2011 RIA reported a sector-level compliance cost of $9.6 billion annually in 2015. The majority of those costs— about 70 percent—represented the incremental annualized capital and annual operation and maintenance (O&M) costs associated with installation and operation of pollution controls for compliance with MATS at coal steam units. Given the time that has passed, we can now compare the incremental projected pollution control capacity reported in the 2011 RIA with available information regarding actual (observed) control installations. For this proposal, therefore, the EPA has compared observed installations and costs over 2013–2016 to unit-level estimates of the control installation capacity and associated costs presented in the 2011 RIA. This analysis demonstrates, subject to the caveats and uncertainty discussed below, that the 2011 RIA likely overestimated total pollution control retrofit capacity that would occur in response to MATS and, thus, likely overestimated MATS compliance costs. For example, the analysis that follows demonstrates that fabric filter (FF) systems—which are an expensive and capital-intensive control technology— were only installed on less than onethird of the capacity anticipated in the 2011 RIA analysis. This comparison of projected to observed control capacity installations relies on the simplifying assumption that all dry scrubbers (e.g., dry FGD systems), dry sorbent injection (DSI) systems, activated carbon injection (ACI) systems, and FF systems installed during the 2013–2016 period were installed for compliance with the MATS emissions limits. This assumption is necessitated by the absence of comprehensive data on the specific reasons EGUs installed pollution control equipment. While assuming pollution controls of these types that were installed in this period are singularly attributable to MATS requirements is a reasonable assumption for this analysis, it is a highly conservative assumption given that some of the observed installations likely occurred in response to other regulations to control criteria air pollutants (e.g., Cross-State Air Pollution Rule, Regional Haze, Federal implementation plans, or state implementation plans) or enforcement actions (e.g., consent decrees). Because some of the observed installations in this analysis likely resulted from nonMATS requirements, the approach potentially over-attributes the amount of pollution controls built specifically for MATS compliance, thereby leading to an overestimate of the control costs associated with MATS. Table 3 presents the findings of this analysis in capacity terms. The total capacity projected to retrofit with each control in the 2011 RIA is reported for the base case (i.e., projected future conditions absent MATS) and under MATS. The difference is presented in the ‘Projected Incremental Controls’ column. So, for example, in the 2011 RIA the EPA projected that there would be an incremental 20.3 GW of capacity retrofitting with dry FGD that is attributable to MATS. We compare the projected incremental controls capacity value to the observed installations capacity value. Note that we are unable to estimate the total capacity of observed upgrades to electrostatic precipitators (ESP) and scrubbers due to a lack of available data regarding such upgrades. For additional information, see the docketed Cost TSD. TABLE 3—PROJECTED VS. OBSERVED CAPACITY [Gigawatts (GW)] Pollution control retrofit Base case Dry FGD ................................................... DSI ........................................................... ACI ........................................................... FF ............................................................. ESP Upgrade ........................................... Scrubber Upgrade .................................... 4.6 8.6 0 12.7 0 0 Projected incremental controls MATS 24.8 52.5 99.3 114.7 33.9 63.1 Observed installations (2013–2016) 20.3 43.9 99.3 102 33.9 63.1 16.0 15.8 96.1 31.4 N/A N/A Difference: Observed minus projected (2013–2016) ¥4.3 ¥28.1 ¥3.2 ¥70.6 N/A N/A Percent difference: Observed minus projected (2013–2016) ¥21 ¥64 ¥3 ¥69 N/A N/A lotter on DSK11XQN23PROD with PROPOSALS2 Source: Projected Controls: 2011 RIA; Observed Installations: NEEDS v.5.16. Note: FF installations include installations specifically related to PM control, as well as installations included with dry scrubber, DSI, and some ACI retrofits in the modeling. Totals may not sum due to rounding. This analysis demonstrates that projected incremental capacity of dry FGD, DSI, ACI, and FF was likely significantly overestimated in the 2011 RIA. The capacities of actual installed control technologies are lower, often significantly lower, than projected (and again, this analysis attributes all control installations of certain types during this time period to MATS, even though some portion of those installations were likely made in whole or in part due to other regulations). For example, the installed DSI capacity is about two-thirds lower than was projected. The difference between observed installed control capacities and what we projected those VerDate Sep<11>2014 21:43 Feb 08, 2022 Jkt 256001 incremental control capacities would be translates directly into significantly lower costs than estimated. Because the vast majority of compliance costs in the 2011 RIA were related to the installation and operation of pollution controls, and because significant deployment of any higher-cost compliance strategies did not occur, the large differences observed in Table 3 suggest that the projected compliance costs were likely significantly overestimated as well. For example, approximately $2 billion was estimated to be attributable to the installation and operation of DSI controls (21 percent of the total annual projected costs of MATS), when in PO 00000 Frm 00032 Fmt 4701 Sfmt 4702 actuality, only one-third of those installations occurred (and some were likely attributable to regulations other than MATS). We also conduct an analysis of the approximate costs related to the overestimate of projected incremental pollution controls. This analysis is discussed in detail in the Cost TSD. Specifically, we compared observed installations over 2013–2016 to unitlevel estimates of the control installation capacity and associated costs presented in the 2011 RIA to develop a range of the potential overestimate of compliance costs related E:\FR\FM\09FEP2.SGM 09FEP2 Federal Register / Vol. 87, No. 27 / Wednesday, February 9, 2022 / Proposed Rules lotter on DSK11XQN23PROD with PROPOSALS2 to projected control installations that did not occur. As result of this analysis, we find that based on this one variable—the number of control technology installations—the 2011 RIA overestimated control costs by about $2.2 to $4.4 billion (or 2.7 times). If recent updates to the cost and performance assumptions for pollution controls had been reflected in the 2011 RIA modeling, the projected compliance costs would likely have been even lower (suggesting the overestimate could be greater than $4.4 billion). The EPA did not quantify advances in cost and performance of control technology between the time of the EPA’s modeling and implementation of the rule due to uncertainty. We note that this may be one reason that the Andover Technology Partners’ overestimate for control costs of $7 billion exceeds the EPA’s range of overestimates ($2.2–4.4 billion) for the same control and operation costs. The next section helps explain some of the difference quantified above, and provides further qualitative evidence supporting the EPA’s conclusion that the 2011 RIA likely significantly overestimated the compliance costs associated with meeting MATS requirements. c. 2011 RIA Modeling Assumptions Since promulgation of MATS, the EPA has found it necessary to update some of the modeling assumptions used in the IPM modeling that informed the RIA cost estimate, in order to capture the most recently available information and best reflect the current state of the power sector. Several of these recent updates are directly related to pollution control retrofits that were projected to be installed for MATS in the 2011 RIA. Had these updates been reflected in our modeling, it likely would have projected fewer controls needing to be installed and therefore a lower cost estimate overall. The full suite of assumptions utilized in the IPM modeling are reported in the model documentation, which provides additional information on the assumptions discussed here as well as all other assumptions and inputs to the model.92 Updates specific to MATS modeling are also in the IPM 4.10 Supplemental Documentation for MATS.93 As was included in the 2011 RIA discussion regarding uncertainty and limitations of the power sector modeling analysis (Section 3.15), the 92 See https://www.epa.gov/airmarkets/ipmanalysis-proposed-mercury-and-air-toxicsstandards-mats. Accessed July 23, 2021. 93 See https://www.epa.gov/airmarkets/ documentation-supplement-base-case-v410mats. Accessed July 23, 2021. VerDate Sep<11>2014 21:43 Feb 08, 2022 Jkt 256001 cost and emissions impact projections did not take into account the potential for advances in the capabilities of pollution control technologies or reductions in their costs over time. EPA modeling cannot anticipate in advance the full spectrum of compliance strategies that the power sector may innovate to achieve required emission reductions, and experience has shown that regulated industry often is able to comply at lower costs through innovation or efficiencies. Where possible, the EPA designs regulations to assure environmental performance while preserving flexibility for affected sources to design their own solutions for compliance. Industry will employ an array of responses, some of which regulators may not fully anticipate and will generally lead to lower costs associated with the rule than modeled in ex ante analysis. See, e.g., section III.D of this preamble, discussing how the actual cost of the ARP was up to 70 percent less than what had been estimated. A first example regards the assumptions of HCl removal for certain types of coal. When lignite and subbituminous coals are combusted, the chemistry of coal ash alkalinity removes HCl emissions. The 2011 RIA modeling assumed a 75 percent reduction of HCl emissions from lignite and subbituminous coals.94 Upon subsequent review of available data, the EPA updated this assumption to 95 percent HCl removal.95 This revised assumption regarding improved HCl removal from coal ash alkalinity effectively lowers uncontrolled HCl emissions rates in the projections and is a better reflection of actual removal rates observed by EGUs combusting subbituminous and/or lignite coal. This updated assumption, had it been used in the 2011 RIA modeling, would have significantly decreased the incremental capacity of acid gas controls (e.g., DSI, dry FGD) that the model projected to be needed for compliance with the MATS acid gas limits.96 The lower projection for controls would in turn have resulted in a lower cost estimate. For a second example, the EPA updated the DSI retrofit cost methodology used in our power sector modeling. The 2011 RIA compliance 94 Id. 95 See https://www.epa.gov/sites/default/files/ 2019-03/documents/chapter_5.pdf. Accessed July 23, 2021. 96 While we are unable to quantify precisely the impact that updating this assumption would have on the projected compliance costs, we can observe that most incremental DSI capacity (about 40 GW) would not require DSI controls in the 2011 RIA modeling, holding all else constant. PO 00000 Frm 00033 Fmt 4701 Sfmt 4702 7655 cost projections assumed an SO2 removal rate of 70 percent and a corresponding HCl removal effect of 90 percent 97 based on a technical report, developed by Sargent and Lundy in August 2010.98 These assumptions have been updated to reflect an SO2 removal rate of 50 percent and a corresponding HCl removal effect of 98 percent for units with FF in the EPA’s recent modeling,99 based on an updated technical report from Sargent and Lundy.100 These revised assumptions, which better reflect the actual cost and performance of DSI, would reduce the variable costs significantly, by about one-third at a representative plant,101 because less sorbent is required to achieve the same amount of HCl reduction. If the EPA had been able to use this new information in the 2011 RIA modeling, the projected compliance costs would have been lower, reflecting the reduced sorbent necessary to achieve the MATS emission limits. Furthermore, we note that while these modeling assumptions are based on a single sorbent (trona), alternative sorbents are available, potentially at a lower cost for some units. A third example relates to the assumed cost of ESP upgrades. In the 2011 RIA modeling, the EPA assumed that a range of upgrades would be necessary at units with existing ESP controls in order to meet the MATS PM standard. The EPA assumed the cost of these upgrades ranged from $55/ kilowatt (kW) to $100/kW (in 2009 dollars). However, new evidence suggests that many ESP upgrades were installed and are available at less than $50/kW.102 These examples highlight the uncertainty inherent in ex ante compliance cost projections, and contribute additional evidence that the projected compliance costs presented in 97 See https://www.epa.gov/sites/production/files/ 2015-07/documents/updates_to_epa_base_case_ v4.10_ptox.pdf. Accessed July 23, 2021. 98 See Dry Sorbent Injection Cost Development Methodology at https://www.epa.gov/sites/ production/files/2015-07/documents/append5_ 4.pdf. Accessed July 23, 2021. 99 See https://www.epa.gov/airmarkets/ documentation-epa-platform-v6-november-2018reference-case-chapter-5-emission-control. Accessed July 23, 2021. 100 See Dry Sorbent Injection for SO /HCl Control 2 Cost Development Methodology at https:// www.epa.gov/sites/production/files/2018-05/ documents/attachment_5-5_dsi_cost_development_ methodology.pdf. Accessed July 23, 2021. 101 Based on a 500 MW plant with a heat rate of 9,500 Btu/kWh burning bituminous coal. 102 Analysis of PM and Hg Emissions and Controls from Coal-Fired Power Plants. Andover Technology Partners (August 19, 2021), available in the rulemaking docket. E:\FR\FM\09FEP2.SGM 09FEP2 7656 Federal Register / Vol. 87, No. 27 / Wednesday, February 9, 2022 / Proposed Rules lotter on DSK11XQN23PROD with PROPOSALS2 the 2011 RIA were likely overestimated and that actual compliance costs for MATS in 2015 were likely significantly less than the $9.6 billion estimate. d. Conclusion That the 2011 RIA Costs Were Overestimated After reviewing this suite of quantitative and qualitative updates and considering studies that were performed by outside entities, the EPA concludes that the available ex post evidence points to significantly lower costs of compliance for the power sector under MATS than suggested by the ex ante projections in the 2011 RIA. There are numerous reasons for this, and chief among them is the fact that the natural gas industry has undergone profound change in recent years. Following the promulgation of MATS, natural gas supply increased substantially, leading to dramatic price decreases that resulted in major shifts in the economics of fossil fuel-fired electric generating technologies. The 2011 RIA modeling did not fully anticipate this historic change in natural gas supply and the related decrease in natural gas prices. As a result of this and other fundamental changes in the industry, we see a very different pattern of control installations than was projected: 103 • 21 percent less capacity of dry FGD than projected; • 64 percent less capacity of DSI than projected; • 3 percent less capacity of ACI than projected; • 69 percent less capacity of FF than projected; and • Likely fewer ESP and scrubber control upgrades than projected. These controls were responsible for approximately 70 percent of the projected annual compliance costs in the 2011 RIA. Because so many projected controls were not installed, we know that the control-related costs were almost certainly significantly overestimated. By simply comparing between projected and installed controls, we now find that the projected control-related costs for 2015 of about $7 billion were likely overestimated by $2.2 to $4.4 billion, and possibly more. In addition, we have updated some of the modeling assumptions that supported the 2011 RIA. Specifically: • HCl emissions for EGUs burning subbituminous and lignite coals are much lower than originally modeled, reducing the number of controls necessary for compliance in the model; 103 As discussed above, although we attributed all controls of these types to MATS in this analysis, even those controls that were installed were likely due in part or in whole for reasons other than MATS. VerDate Sep<11>2014 21:43 Feb 08, 2022 Jkt 256001 • DSI controls require less sorbent than originally assumed, lower the operating cost of these controls, and other lower-cost sorbents are likely available; and • The assumed cost of ESP upgrades in the modeling was likely much higher than the actual cost of these upgrades. While not quantified here, the advances in cost and performance of control technology between the time of the EPA’s modeling and implementation of the rule would, if quantified, likely add to the $2.2 to $4.4 billion overestimate. Furthermore, the three studies submitted to the EPA during earlier rulemakings support this finding that the 2011 RIA cost projection was significantly overestimated: • Andover Technology Partners estimated that the actual costs of compliance with MATS were approximately $2 billion, and that the 2011 RIA may have overestimated compliance costs by approximately $7 billion. • MJB&A estimated that the total upfront capital expenditures of pollution controls installed for compliance with the rule were overestimated in the 2011 RIA by a factor of more than eight. • EEI, the association that represents all U.S. investor-owned electric companies, estimated cumulative costs incurred by the industry in response to MATS, and that estimate suggests an annual amount about $7 billion less than the 2011 RIA projected. Taken together, this information indicates that the projected costs in the 2011 RIA were almost certainly significantly overestimated. We solicit comment on data resource and methods such as econometric, simulation, and event study approaches that may aid the EPA in better characterizing the ex post regulatory costs of MATS for consideration before we issue the final rule. 3. Evaluation of Metrics Related to MATS Compliance In the next four sections, we place the costs that we estimated in 2011, and which, as just explained, were likely significantly overestimated, in the context of the EGU industry and the services the EGU industry provides to society. The purpose of these comparisons is to better understand the disadvantages conferred by expending this money, both in terms of their scale and distribution, in order to weigh cost as a factor in our preferred methodology for making the appropriate determination. While we recognize the projected cost estimate from the 2011 PO 00000 Frm 00034 Fmt 4701 Sfmt 4702 RIA in absolute terms is perceived as a large number, our findings demonstrate that, for example, the (overestimated) projected cost estimate is less than 3 percent of the power sector’s revenues from electricity sales, even when compared against data from 2019 (which had the lowest electricity sale revenues in a nearly 20 year period). As we did in 2016, we first contextualize the costs of MATS against power sector data for the years 2000 to 2011, i.e., the information that was available to the Agency when we were promulgating MATS in 2012 and reaffirming the appropriate and necessary determination. For purposes of this proposal, we also expand our assessment to compare the 2011 cost estimates to the most recent years of data available regarding, for example, industry revenue and electricity prices. The intent of expanding the years of analysis is to update our assessments from the 2016 Supplemental Finding considering power sector trends with the newest information. We continue to use projections developed for the 2011 RIA for purposes of these evaluations, because as discussed in section III.B.2, we are unable to generate new, bottomline actual cost projections. However, in section III.D, we consider these evaluations in light of the EPA’s finding that the projected costs were almost certainly significantly overestimated. a. Compliance Costs as a Percent of Power Sector Sales The first metric examined here (as in 2016) is a comparison of the annual compliance costs of MATS to electricity sales at the power sector-level (i.e., revenues), often called a sales test. The sales test is a frequently used indicator of potential impacts from compliance costs on regulated industries.104 Incorporating updated information from the EIA, Section 2.a and Table A–4 of the Cost TSD present the value of retail electricity sales from 2000 to 2019, as well as net generation totals for the electric power sector for the same period. This information indicates that the $9.6 billion in annual compliance costs of MATS projected for 2015 would have represented about 2.7 percent of 2008 power sector revenues from retail electricity sales, the peak year during 104 For example, the sales test is often used by the EPA when evaluating potential economic impacts of regulatory actions on small entities. In the context of a small entity analysis, an evaluation of the change in profits to owners is likely the best approach to assessing the economic burden to owners from a regulatory action. Data limitations prevent solely analyzing profit changes to EGU owners as a result of MATS in this proposal. E:\FR\FM\09FEP2.SGM 09FEP2 Federal Register / Vol. 87, No. 27 / Wednesday, February 9, 2022 / Proposed Rules lotter on DSK11XQN23PROD with PROPOSALS2 the 2000 to 2019 period. The $9.6 billion in projected compliance costs would constitute about 2.9 percent of 2019 sales, which was the lowest sales level observed in the post-2011 period. These projected compliance costs are a very small percentage of total EGU revenues from electricity sales in both robust or lean years, and newer data confirms the findings of the 2016 record. Moreover, if we account for the fact that the $9.6 billion figure likely significantly overestimated the actual cost of compliance, the percentage of compliance costs to revenues would be even smaller. b. Compliance Expenditures Compared to the Power Sector’s Annual Expenditures The next metrics we examine are a comparison of the annual capital expenditures projected in the 2011 RIA to be needed for MATS compliance to historical power sector-level overall capital expenditures, followed by a comparison of projected annual capital and production expenditures related to MATS compliance to historical power sector-level overall capital and production expenditures. First, we evaluate capital expenditures. Capital costs represent largely irreversible investments for firms that must be paid off regardless of future economic conditions, as opposed to other important variable costs, such as fuel costs, that may vary according to economic conditions and generation needs. Section 2.b and Table A–5 of the Cost TSD present two sets of estimates for trends in annual capital expenditures by the electric power sector through 2019. The first set of information is based on data compiled by S&P Global, a private sector firm that provides data and analytical services. The second set of information is from the U.S. Census Bureau’s Annual Capital Expenditures Survey. While each dataset has limitations, the estimates from each correspond to one another reasonably well. The 2011 RIA modeling estimated the incremental capital expenditures associated with MATS compliance to be $4.2 billion for 2015. As discussed in section III.B.2, the 2011 RIA likely significantly overestimated compliance costs. This conclusion also applies to the capital cost component of the overall cost because, as detailed earlier, fewer pollution controls were installed during the 2013–2016 timeframe than were projected in the 2011 RIA. While the EPA is not able to produce an alternative capital cost estimate directly comparable to the estimates from the 2011 RIA, the analysis discussed in VerDate Sep<11>2014 21:43 Feb 08, 2022 Jkt 256001 section III.B.2 and the Cost TSD indicated the annualized capital expenditures at units that installed controls under MATS might be as low as $0.7 billion ($3.5 billion lower than projected in 2011 RIA, or less than onefifth). Even using the significantly overestimated figure of $4.2 billion in our comparison shows that the projected capital expenditures associated with MATS represent a small fraction of the power sector’s overall capital expenditures in recent years. Specifically, the $4.2 billion estimate represents about 3.6 or 3.7 percent of 2019 (i.e., most recent) power sector level capital expenditures based on the S&P Global and U.S. Census information, respectively. Compared against 2004 power sector level capital expenditures (i.e., the 20-year low), the $4.2 billion figure represents 10.4 or 9.3 percent of sector level capital expenditures (using the two respective data sets). Additionally, the projected $4.2 billion in incremental capital costs is well within the range of annual variability associated with capital expenditures for the sector over the 2000–2019 period. During this period, based on the Census information, for example, the largest year-to-year decrease in power sector-level capital expenditures was $19.5 billion (from 2001 to 2002) and the largest year-toyear increase in power sector-level capital expenditures was $23.4 billion (from 2000 to 2001). This wide range (¥$19.5 to +$23.4 billion) indicates substantial year-to-year variability in industry capital expenditures, and the projected $4.2 billion increase in capital expenditures in 2015 projected under MATS falls well within this variability. Similar results are found using the S&P Global information. If a $4.2 billion increase in capital expenditures in 2015 projected under MATS falls well within the variability of historical trends, then a capital expenditure of less than $4.2 billion would also fall within this variability. Next, in order to provide additional perspective to the projected cost information, we look at a broader set of costs faced by industry, including both capital and production expenditures together. Section 2.b and Table A–6 of the Cost TSD present two sets of estimates through 2019 for trends in annual total (capital and production) expenditures by the electric power sector using the same two data sets as above, which we then compare with the projected annual total expenditures required by MATS. We find that even the overestimated $9.6 billion compliance cost projection PO 00000 Frm 00035 Fmt 4701 Sfmt 4702 7657 from the 2011 RIA represents a small fraction of the power sector’s annual capital and production expenditures compared to historical data, and is well within annual variability in total costs over the 2000 to 2011 and the 2012 to 2019 periods. Compared to 2008 data (i.e., the historic high for total industry expenditures), the projected $9.6 billion estimate represents about 4.2 to 4.3 percent of total expenditures. The MATS projected compliance cost represents 6.2 to 6.6 percent of total expenditures in 2003 (which was the lowest year for total industry expenditures during the studied time period). Additionally, the EPA notes that, similar to the capital expenditures analysis set forth in the 2015 Proposal, the projected $9.6 billion in incremental capital plus production costs is well within the range of annual variability in costs in general over the 2000 to 2019 period. For example, during this period, the largest year-to-year decrease in power sector-level capital and production expenditures ranged from $30.5 billion to $32.8 billion. The largest year-to-year increase in power sector-level capital and production expenditures in this period ranged from $27.5 billion to $28.7 billion. If a $9.6 billion increase in expenditures falls well within the variability of historical trends, then an expenditure substantially less than $9.6 billion would also fall within this variability. c. Impact on Retail Price of Electricity We are cognizant that, for an industry like the power sector, costs and disadvantages to regulation are not solely absorbed by regulated sources. Many firms in the industry are assured cost-recovery for expenditures, so there is considerable potential for EGUs to pass through the costs of compliance to consumers via increases in retail electricity prices. This is especially true given that the demand for electricity is not particularly price-responsive. That is, because people are dependent on electricity for daily living, they are not likely to reduce their consumption of electricity even when the price goes up but will instead pay the higher price, thus absorbing the costs of compliance incurred by the industry. Notably, average retail electricity prices have fallen since the promulgation of MATS. While we analyze these aspects of cost separately, control costs and electricity prices are not separate economic indicators. Electricity price increases are generally related to increases in the capital and operating expenditures by the power sector. Therefore, the electricity price impacts and the associated increase in electricity E:\FR\FM\09FEP2.SGM 09FEP2 lotter on DSK11XQN23PROD with PROPOSALS2 7658 Federal Register / Vol. 87, No. 27 / Wednesday, February 9, 2022 / Proposed Rules bills by consumers are not costs that are additional to the compliance costs described earlier in this section. In fact, to the extent the compliance costs are passed on to electricity consumers, the costs to the EGU owners in the power sector are reduced. Therefore, in order to further assess the disadvantages to regulation, in this case to consumers of electricity in all sectors (residential, commercial, industrial, transportation, and other sectors), we evaluate as we did in 2016 the projected effect MATS was anticipated to have on retail electricity prices, as measured against the variations in electricity prices from year to year. For this proposal, we expanded that analysis using updated data from the EIA, as presented in section 2.c and Table A–7 of the Cost TSD. Looking at 2000–2019 data, we find that the projected 0.3 cents per kilowatthour projected increase in national average retail electricity price under MATS is well within the range of annual variability over the 2000–2019 period. During that time period, the largest year-to-year decrease in national average retail electricity price was ¥0.2 cents per kilowatt-hour (from 2001 to 2002) and the largest year-to-year increase was 0.5 cents per kilowatt-hour (from 2005 to 2006). For the newer data analyzed, we also found that average retail electricity prices have generally decreased since 2011, from 9.33 cents per kilowatt-hour in 2011 to 8.68 cents per kilowatt-hour in 2019, or by nearly 7 percent. After considering the potential impacts of MATS on retail electricity prices, the EPA concludes that the projected increase in electricity prices is within the historical range. In addition, any increase in electricity prices would not be additive to the overall compliance costs of MATS. Rather, such price impacts would in part reflect the ability of many EGUs to pass their costs on to consumers, thereby reducing the share of MATS compliance costs borne by owners of EGUs. Given the relationship between compliance costs and electricity prices, we would also therefore expect the significant overestimate of compliance costs reflected in the $9.6 billion figure to translate into overestimates in our projections for electricity price increases. Therefore, incorporating this newer data into our analysis, we find that MATS did not result in increases in electricity prices for American consumers that were outside the range of normal year-to-year variability, and during the period when MATS was implemented, electricity prices generally decreased. VerDate Sep<11>2014 21:43 Feb 08, 2022 Jkt 256001 d. Impact on Power Sector Generating Capacity We recognize that the power sector plays a role of critical importance to the American public. A potential disadvantage to regulation that we consider to be a relevant factor in our consideration under CAA section 112(n)(1)(A) is how such regulation would impact the provision of adequate and reliable electricity throughout the country.105 Therefore, we analyzed, as part of the 2012 record, projected net changes in generation capacity under MATS, as compared to the base case, that is, what expected generation capacity would have been absent the rule.106 We also conducted an analysis of the impacts of projected retirements on electric reliability. Id. And finally, in parallel with finalizing MATS, the EPA’s Office of Enforcement and Compliance Assurance issued a policy memorandum describing an approach for units that were reliability critical that could demonstrate a need to operate in noncompliance with MATS for up to a year.107 Our analysis indicated that the vast majority of the generation capacity in the power sector directly affected by the requirements of MATS would remain operational following MATS. Specifically, our model projected that operational capacity with MATS in place would be reduced by less than 1 percent nationwide. See Resource Adequacy and Reliability TSD at 2. With respect to reliability, our modeling indicated that coal retirements would be distributed throughout the power grid, and that there would only be small impacts at the regional level, and that in those regions, we anticipated small decreases in overall adequacy of resources and robust remaining reserve margins. Id. These analyses therefore found that the power sector would be able to continue to provide adequate and reliable electricity even with regulation of the EGU sector for HAP. 105 The EPA generally uses the term ‘‘reliability’’ to refer to the ability to deliver the resources to the projected electricity loads so the overall power grid remains stable, and the term ‘‘resource adequacy’’ generally refers to the provision of adequate generating resources to meet projected load and generating reserve requirements in each region. 106 U.S. EPA. 2011. Resource Adequacy and Reliability in the Integrated Planning Model Projections for the MATS Rule (Resource Adequacy and Reliability TSD), https://www3.epa.gov/ttn/atw/ utility/revised_resource_adequacy_tsd.pdf, Docket ID Item No. EPA–HQ–OAR–2009–0234–19997. 107 U.S. EPA. 2011. The Environmental Protection Agency’s Enforcement Response Policy For Use of Clean Air Act Section 113(a) Administrative Orders In Relation To Electric Reliability And The Mercury and Air Toxics Standard, https://www.epa.gov/ sites/default/files/documents/mats-erp.pdf, Docket ID Item No. EPA–HQ–OAR–2009–0234–20577. PO 00000 Frm 00036 Fmt 4701 Sfmt 4702 Additionally, since MATS was promulgated, the EPA has not been made aware of reliability or resource adequacy problems attributable to MATS. As noted, the EPA’s enforcement office concurrently issued a policy memorandum to work with sources that faced demonstrated reliability concerns, and five administrative orders were issued in connection with the policy.108 We think this small number of sources obtaining relief due to their reliability critical status provides some confirmation of the EPA’s projections that regulation would not cause widespread resource and reliability problems. 4. Other Cost Considerations We also propose to reaffirm our previous findings regarding the costs of mercury controls, consistent with the instruction from the statute to study the availability and cost of such controls in CAA section 112(n)(1)(B). 80 FR 75036– 37 (December 1, 2015). We similarly propose to reaffirm our previous records and findings regarding the cost of controls for other HAP emissions from EGUs, and the cost of implementing the utility-specific ARP, which Congress wrote into the 1990 CAA Amendments and implementation of which Congress anticipated could result in reductions in HAP emissions. Id. With respect to the costs of technology for control of mercury and non-mercury HAP, the record evidence shows that in 2012 controls were available and routinely used and that control costs had declined considerably over time. Id. at 75037–38. With regard to the ARP, industry largely complied with that rule by switching to lower-sulfur coal, and subsequently the actual costs of compliance were substantially lower than projected. Though the reasons for discrepancies between projected and actual costs are different for MATS, as discussed in section III.B.2, the newer information examined as part of this proposal demonstrates that the projected cost estimates for MATS were also likely significantly overestimated. 5. Summary of Consideration of Cost of Regulating EGUs for HAP In this section, the EPA noted several studies performed by outside entities suggesting that costs of MATS may have been overestimated in the 2011 RIA. We discussed the dramatic impacts to the power sector over the last 10 years due to increasing supplies and decreasing price of natural gas and renewables, and 108 https://www.epa.gov/enforcement/ enforcement-response-policy-mercury-and-airtoxics-standard-mats. E:\FR\FM\09FEP2.SGM 09FEP2 lotter on DSK11XQN23PROD with PROPOSALS2 Federal Register / Vol. 87, No. 27 / Wednesday, February 9, 2022 / Proposed Rules we conducted a suite of quantitative and qualitative updates to the information available in the 2011 RIA. Based on this information, we propose to conclude that the available ex post evidence points to a power sector that incurred significantly lower costs of compliance obligations under MATS than anticipated based on the ex ante projections when the rule was finalized in 2012. This overestimate was significant—for just one part of the original compliance cost estimate, the EPA was able to quantify a range of at least $2.2 to $4.4 billion in projected costs related to the installation, operation, and maintenance of controls which were not expended by industry. This projected overestimation is limited to these costs; it does not account for other ways in which the rule’s costs were likely overestimated, such as advances in control technologies that made control applications less expensive or more efficient at reducing emissions. The other studies conducted by stakeholders asserted there were even greater differences between projected and actual costs of MATS. We next examined the 2011 projected costs, which were almost certainly significantly overestimated, in the context of the EGU industry and the services the EGU industry provides to society. The purpose of these comparisons was to better understand the disadvantages imposed by these costs, in order to weigh cost as a factor in our preferred methodology for making the appropriate determination. Even though the cost estimates we used in this analysis were almost certainly significantly overestimated, we noted they were relatively small when placed in the context of the industry’s revenues and expenditures, and well within historical variations. Based on the 2011 RIA, the total projected cost of the MATS rule to the power sector in 2015 represented between 2.7 and 3.0 percent of annual electricity sales when compared to years from 2000 to 2019, a small fraction of the value of overall sales (and even smaller when one takes into account that the 2011 RIA projections were likely significantly overestimated). Looking at capital expenditures, the EPA demonstrated that the projected MATS capital expenditures in 2015 represented between 3.6 and 10.4 percent of total annual power sector capital expenditures when compared to years surrounding the finalization of the MATS rule. Such an investment by the power sector would comprise a small percentage of the sector’s historical annual capital expenditures on an absolute basis and also would fall VerDate Sep<11>2014 21:43 Feb 08, 2022 Jkt 256001 within the range of historical variability in such capital expenditures. Similarly, the EPA demonstrated that the projected capital and operating expenditures in 2015 represented between 4.3 and 6.2 percent of total annual power sector capital and operating expenditures over 2000 to 2019, and is well within the substantial range of annual variability. This proposal’s analysis indicating that the far fewer controls were installed than the EPA had projected would be required is particularly relevant to considering our findings as to this metric; with the overestimation of capital expenditures in mind, actual investments by the power sector to comply with MATS would have comprised an even smaller percentage of historical annual capital expenditures. With respect to impacts on the wider American public, the EPA examined impacts on average retail electricity prices and found the modest increases— which, like overall compliance costs, are also likely to have been significantly overestimated—to be within the range of historical variability. Experience has also shown that national average retail electricity prices in years after MATS promulgation have declined. Finally, previous analysis indicated that the vast majority of the generation capacity in the power sector would remain operational and that the power sector would be able to continue to provide adequate and reliable electricity after implementation of the rule, and we have seen no evidence to contradict those findings. The EPA proposes that each of these analyses are appropriate bases for evaluating the disadvantages to society conferred by the MATS-related projected compliance expenditures. As we note above, even though the projected costs we use in this analysis are almost certainly significantly overestimated, we find that they are still relatively small when placed in the context of the economics of the industry, and well within historical variations. We solicit comments on all aspects of this proposed consideration of costs. C. Revocation of the 2020 Final Action We are proposing to revoke the 2020 Final Action because we find that the framework used to consider cost in 2020, which centered the Agency’s mandated determination under CAA section 112(n)(1)(A) on a comparison of costs to monetized HAP benefits, was an approach ill-suited to making the appropriate and necessary determination in the context of CAA section 112(n)(1)(A) specifically and the PO 00000 Frm 00037 Fmt 4701 Sfmt 4702 7659 CAA section 112 program generally. Moreover, the statutory text and legislative history do not support a conclusion that the 2020 framework is required under CAA section 112(n)(1)(A), and we exercise our discretion to adopt a different approach. We also disagree with the conclusions presented in the 2020 Final Action as to the 2016 Supplemental Finding’s two approaches. The 2020 Final Action established the following framework for making the appropriate and necessary determination. It stated: ‘‘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. . . . Second, the EPA considers whether unquantified HAP benefits may alter that outcome. . . . 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.’’ 85 FR 31302 (May 22, 2020). Applying the first part of the framework, the Agency noted that the costs of regulation estimated in the 2011 RIA were disproportionately higher—by three orders of magnitude—than the monetized HAP benefits, and concluded ‘‘[t]hat does not demonstrate ‘appropriate and necessary.’ ’’ Id. Under the framework’s second inquiry, the EPA determined that the unquantified HAP benefits, even if monetized, were unlikely to alter its conclusion under the first part of the framework. Id.; see also 85 FR 31304 (noting that ‘‘valuing HAP-related morbidity outcomes would not likely result in estimated economic values similar to those attributed to avoiding premature deaths’’). Finally, applying the third part of its framework, the EPA noted that nearly all of the monetized benefits of MATS as reflected in the 2011 RIA were derived from PM benefits. See 85 FR 31302–03 (May 22, 2020). The EPA then posited that, ‘‘[h]ad 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 cobenefits legally form part of the justification for determination that regulation of EGUs under CAA section 112(d) is appropriate and necessary.’’ See 85 FR 31303 (May 22, 2020). However, because of the factual scenario presented in the record, the Agency in the 2020 Final Action stated that ‘‘[t]he E:\FR\FM\09FEP2.SGM 09FEP2 lotter on DSK11XQN23PROD with PROPOSALS2 7660 Federal Register / Vol. 87, No. 27 / Wednesday, February 9, 2022 / Proposed Rules EPA does not need to, and does not, determine whether that additional step would be appropriate . . . given that the monetized and unquantified HAPspecific benefits do not come close to a level that would support the prior determination.’’ Id. In conclusion, the EPA stated that ‘‘[u]nder 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.’’ Id. We note that the three-step framework employed by the 2020 Final Action is not a BCA conforming to recognized principles (see, e.g., OMB Circular A–4, EPA Economic Guidelines). BCA is a specific tool developed by economists to assess total society-wide benefits and costs, to determine the economic efficiency of a given action. Instead of conforming to this comprehensive approach, the three-step framework focused primarily on comparing the rule’s total costs to a very small subset of HAP benefits that could be monetized. The Agency gave secondary weight to the vast majority of the benefits of regulating HAP emissions from stationary sources that cannot be quantified, and completely ignored the non-HAP monetized benefits directly attributable to the MATS rule. We propose to find that this three-step framework is an unsuitable approach to making the appropriate and necessary determination under CAA section 112(n)(1)(A) because it places undue primacy on those HAP benefits that have been monetized, and fails to consider critical aspects of the inquiry posed to the EPA by Congress in CAA section 112(n)(1). The 2020 three-step framework also did not in any meaningful way grapple with the bases upon which the EPA had relied to design the 2016 preferred approach, as discussed above, including the broad statutory purpose of CAA section 112 to reduce the volume of HAP emissions with the goal of reducing the risk from HAP emissions to a level that is protective of even the most exposed and most sensitive subpopulations; the fact that we rarely can fully characterize or quantify risks, much less benefits, at a nationwide level; and the fact that except for one of the many health endpoints for only one of the many HAP emitted from EGUs, the EPA lacked the information necessary to monetize any post-control benefit of reductions in HAP emissions. The sole rationale provided in the 2020 Final Action for rejecting the relevance of the statute’s clear purpose as evinced in the broader CAA section 112 program and reflected VerDate Sep<11>2014 21:43 Feb 08, 2022 Jkt 256001 in the provisions of CAA section 112(n)(1) was that CAA section 112(n)(1)(A) is a separate provision and threshold determination. See 85 FR 31293–94 (May 22, 2020). But we do not think it is sensible to view the statute’s direction to the EPA to make a separate determination as to EGUs as an invitation to disregard the statutory factors of CAA section 112(n)(1) and the greater statutory context in which that determination exists, and we do not think that the 2020 Final Action provided an adequately reasoned basis for abandoning the interpretation and assessment provided in the 2016 Supplemental Finding. And in any event, we believe the methodology we propose today is better suited to making the statutory finding than the 2020 framework. In the 2020 rulemaking, the EPA did not explain its rationale for its decision to anchor the appropriate and necessary determination at step one as a comparison between the monetized costs of regulation and monetized HAP specific benefits. Rather, the proposed and final rules repeatedly state that the ‘‘primary’’ inquiry in the determination should be a comparison of costs and HAP benefits, but did not explain why only monetized HAP benefits should be given primacy. See, e.g., 85 FR 31286, 31288, 31303 (May 22, 2020). Given the Agency’s recognition of the broad grant of discretion inherent in the phrase ‘‘appropriate and necessary,’’ see 81 FR 24430–31 (April 25, 2016), its acknowledgement of Congress’ ‘‘particularized focus on reducing HAP emissions and addressing public health and environmental risks from those emissions’’ in CAA section 112, see 85 FR 31299 (May 22, 2020), and its knowledge and recognition that the dollar value of one of its points of comparison represented but a small subset of the advantages of regulation, see 85 FR 31302 (May 22, 2020), we now believe it was inappropriate to adopt a framework that first and foremost compared dollar value to dollar value. Nothing in the CAA required the Agency’s decision in 2020 to hinge its framework on monetized HAP benefits. The consideration of the non-monetized benefits of MATS (i.e., dozens of endpoints, including virtually all of the HAP benefits associated with this rule) occurred only at step two, where the Agency considered whether the unquantified benefits, if monetized, were ‘‘likely to overcome the imbalance between the monetized HAP benefits and compliance costs in the record.’’ See 85 FR 31296 (May 22, 2020). This approach discounts the vast array of PO 00000 Frm 00038 Fmt 4701 Sfmt 4702 adverse health and environmental impacts associated with HAP emissions from coal- and oil-fired EGUs that have been enumerated by the EPA 109 and discounts the social value (benefit) of avoiding those impacts through regulation, simply because the Agency cannot assign a dollar value to those impacts. Further, the three-step framework gave no consideration to the important statutory objective of protecting the most at-risk subpopulations. As noted above, in CAA section 112(n)(1)(C) Congress directed the EPA to establish threshold levels of exposure under which no adverse effect to human health would be expected to occur, even considering exposures of sensitive populations, and throughout CAA section 112, Congress placed special emphasis on regulating HAP from sources to levels that would be protective of those individuals most exposed to HAP emissions and most sensitive to those exposures. The rigid and narrow approach to making the appropriate and necessary determination in the 2020 Final Action is at odds with the text and purpose of CAA section 112, and is certainly not required under the express terms of CAA section 112 or CAA section 112(n)(1)(A). Commenters on the 2019 Proposal objected strenuously to the Agency’s revised framework for making the appropriate and necessary determination, arguing that the 2019 Proposal’s interpretation ‘‘fails to meaningfully address factors that are ‘centrally relevant’ to the inquiry of whether it is appropriate and necessary to regulate HAP from EGUs,’’ and that the Agency’s new interpretation must fall because the EPA failed to provide a reasoned explanation for its change in policy, as required by 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). See 85 FR 31294 (May 22, 2020). Among the factors that commenters argued had been inadequately addressed under the new framework were the ‘‘hazards to public health reasonably anticipated to occur’’ that had not been monetized; the non-monetizable benefits of HAP regulation such as preservation of tribal social practices; the latency, persistence in the environment, and toxicity of HAP as recognized by Congress; and the distributional impacts on particular communities and individuals most 109 See, e.g., 65 FR 79829–30 (December 20, 2000); 76 FR 24983–85, 24993–97, 24999–25001, 25003–14, 25015–19 (May 3, 2011). E:\FR\FM\09FEP2.SGM 09FEP2 Federal Register / Vol. 87, No. 27 / Wednesday, February 9, 2022 / Proposed Rules impacted by HAP emitted from power plants. In responses to these comments, the EPA claimed that it was not ‘‘disregarding’’ or ‘‘dismissing’’ the concerns raised by the commenters, but rather simply weighing them differently, and explained that the Administration’s changed priorities provided the ‘‘reasoned basis’’ for its changed interpretation. See 85 FR 31296–97 (May 22, 2020). Agencies do have broad discretion to re-evaluate policies and change their ‘‘view of what is in the public interest,’’ State Farm, 463 U.S. at 57, but such reevaluations must still adhere to principles of reasoned decision-making. The 2020 Final Action did not aver that the concerns identified by commenters were factors that the statute does not instruct the Agency to consider in making its appropriate and necessary determination. Instead, the EPA stated that it was permitted to pick its decisional framework and admitted that its decisional framework might undervalue certain factors. For example, with respect to commenters’ concerns that the revised appropriate and necessary framework did not adequately account for adverse impacts on tribal culture or undue concentration of public health risks on certain population subgroups or individuals, the EPA stated, lotter on DSK11XQN23PROD with PROPOSALS2 ‘‘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).’’ 85 FR 31297 (May 22, 2020). The decisional framework in the 2020 Final Action, however, did not give ‘‘less weight’’ to these factors—it gave them none. In both the selection and application of its framework, the EPA in the 2020 Final Action effectively ignored these factors altogether, and we do not agree that the inability to monetize a factor should render it unimportant. Cf. Am. Trucking Ass’ns, Inc. v. EPA, 175 F.3d 1027, 1052–53 (D.C. Cir. 1999), reversed in part on other grounds in Whitman v. Am. Trucking Ass’ns, 531 U.S. 457 (2001) (holding that the EPA was not permitted to ignore information ‘‘because the . . . benefits are difficult, if not impossible, to quantify reliably and because there is ‘no convincing basis for concluding that any such effects . . . would be significant’ ’’); Pub. Citizen v. Fed. Motor Carrier Safety Admin., 374 F.3d 1209, VerDate Sep<11>2014 21:43 Feb 08, 2022 Jkt 256001 1219 (D.C. Cir. 2004) (‘‘The mere fact that the magnitude of . . . effects is uncertain is no justification for disregarding the effect entirely.’’) (emphasis in original). The mere mention and summary dismissal of factors does not constitute meaningful consideration of those factors. In the 2020 Final Action, like the 2016 Supplemental Finding before it, the EPA maintained that there is more than one permissible way to interpret the Agency’s obligation to consider cost in the appropriate and necessary determination. Given the Agency’s knowledge of the significant risks and often irreversible impacts of HAP exposure on vulnerable populations like developing fetuses, the disproportionate impact of EGU HAP emissions on communities who subsist on freshwater fish due to cultural practices and/or economic necessity, and the record of data demonstrating risks to public health amassed over decades, and, perhaps more importantly, the overwhelming quantity of advantages to regulation that could not be monetized, we do not think that selecting a framework that compared first and foremost monetized HAP benefits with costs was appropriate. And even if the framework ultimately addressed the statutorily relevant factors because at the second step the EPA stated that it was considering non-monetized HAP benefits, we think that the application of that second step fell short. The secondary consideration of nonmonetized HAP benefits in the threestep framework only considered postcontrol HAP-related impacts of regulation insofar as the EPA speculated about what the monetized value of those benefits might be (see 85 FR 31296 (May 22, 2020), asserting that monetized value of avoiding morbidity effects such as neurobehavioral impacts is ‘‘small’’ compared to monetized value associated with avoided deaths). The Agency did not, at this second step, grapple with the existing risk analyses, including those stemming from the statutorily mandated studies in CAA section 112(n)(1). Those analyses demonstrated substantial public health and environmental hazards, even if the hazards were not translated into post-control monetized benefits. See White Stallion, 748 F.3d at 1245. The Agency also did not explain why other attributes of risk—such as impacts on vulnerable populations and the reality that HAP pollution from EGUs is not distributed equally across the population but disproportionately impacts some individuals and communities far more than others— were unimportant, stating only that the PO 00000 Frm 00039 Fmt 4701 Sfmt 4702 7661 selected framework did not accommodate consideration of those factors. As noted, the Agency did not point to anything in the CAA as supporting the use of its three-step framework. This is in stark contrast to the 2016 Supplemental Finding rulemaking, in which the EPA examined CAA section 112(n)(1)(A) and the other section 112(n)(1) provisions, and the rest of CAA section 112 generally, and D.C. Circuit case law on CAA cost considerations to inform the EPA’s interpretation of CAA section 112(n)(1)(A). See 80 FR 75030 (December 1, 2015); 2015 Legal Memorandum. In the 2020 Final Action, the EPA merely asserted that a comparison of benefits to costs is ‘‘a traditional and commonplace way to assess costs’’ and claimed that the Supreme Court’s holding in Entergy Corp. v. Riverkeeper, 556 U.S. 208 (2009) supported the EPA’s 2020 position that, absent an unambiguous prohibition to use a BCA, an agency may generally rely on a BCA as a reasonable way to consider cost. See 85 FR 31293 (May 22, 2020). The 2020 Final Action also pointed out ‘‘many references comparing’’ costs and benefits from the Michigan decision, including: ‘‘EPA refused to consider whether the costs of its decision outweighed the benefits’’ (576 U.S. at 743); ‘‘[o]ne would not say that it is rational, never mind ‘appropriate,’ to impose billions of dollars in economic costs in return for a few dollars in health or environmental benefits’’ (Id. at 752); and ‘‘[n]o regulation is ‘appropriate’ if it does more harm than good’’ (Id.). But while we agree that a comparison of benefits to costs is a traditional way to assess costs, the 2020 framework was not a BCA. There is no economic theory or guidance of which we are aware that endorses the version of BCA presented in the 2020 Final Action, in which total costs are compared against a small subset of total benefits. See section III.E for further discussion. Moreover, general support for weighing costs and benefits does not justify placing undue weight on monetized HAP benefits, with secondary consideration for all other benefits, and only valuing those other benefits to the extent of their speculative monetized effects. As noted in Justice Breyer’s concurrence in Entergy Corp., the EPA has the ability ‘‘to describe environmental benefits in non-monetized terms and to evaluate both costs and benefits in accordance with its expert judgment and scientific knowledge,’’ and to engage in this balancing outside of ‘‘formal cost- E:\FR\FM\09FEP2.SGM 09FEP2 lotter on DSK11XQN23PROD with PROPOSALS2 7662 Federal Register / Vol. 87, No. 27 / Wednesday, February 9, 2022 / Proposed Rules benefit proceedings and futile attempts at comprehensive monetization.’’ 556 U.S. at 235 (Breyer, J., concurring). Benefits—the advantages of regulation— can encompass outcomes that are not or cannot be expressed in terms of dollars and cents, just as the Court found that ‘‘ ‘cost’ includes more than the expense of complying with regulations; any disadvantage could be termed a cost.’’ Michigan, 576 U.S. at 752. And the Court faulted the EPA’s interpretation for ‘‘preclud[ing] the Agency from considering any type of cost—including, for instance, harms that regulation might do to human health or the environment. . . . No regulation is ‘appropriate’ if it does significantly more harm than good.’’ Id. The constricted view of benefits that the Agency adopted in 2020 was ill-suited to the statutory inquiry as interpreted in Michigan. The primary basis in the 2020 action upon which the EPA relied to find that the 2016 preferred approach was flawed was that the preferred approach failed to ‘‘satisf[y] the Agency’s obligation under CAA section 112(n)(1)(A) as interpreted by the Supreme Court in Michigan.’’ See 84 FR 2674 (February 7, 2019). The 2019 Proposal claimed that the chief flaw of the preferred approach was the Agency’s failure to ‘‘meaningfully consider cost within the context of a regulation’s benefits,’’ asserting that the Michigan Court contemplated that a proper consideration of cost would be relative to benefits. See 84 FR 2675 (February 7, 2019). But that is not an accurate characterization of the 2016 preferred approach, wherein the Agency weighed the existing record from 2012 demonstrating that HAP emissions from EGUs pose a number of identified hazards to both public health and the environment remaining after imposition of the ARP and other CAA requirements against the cost of MATS. See 81 FR 24420 (April 25, 2016) (‘‘After evaluating cost reasonableness using several different metrics, the Administrator has, in accordance with her statutory duty under CAA section 112(n)(1)(A), weighed cost against the previously identified advantages of regulating HAP emissions from EGUs— including the agency’s prior conclusions about the significant hazards to public health and the environment associated with such emissions and the volume of HAP that would be reduced by regulation of EGUs under CAA section 112.’’). The 2020 Final Action further stated that the preferred approach was an ‘‘unreasonable’’ interpretation of CAA section 112(n)(1)(A) and impermissibly de-emphasized the VerDate Sep<11>2014 21:43 Feb 08, 2022 Jkt 256001 importance of the cost consideration in the appropriate and necessary determination. See 85 FR 31292 (May 22, 2020). It is a decisional framework which rests primarily upon a comparison of the costs of a regulation and the small subset of HAP benefits which could be monetized that does not ‘‘meaningfully consider[s] cost within the context of a regulation’s benefits,’’ because such a narrow approach relegates as secondary (and in application appeared to ignore altogether) the vast majority of that rule’s HAP benefits and other advantages. We therefore propose to revoke the 2020 three-step approach and determination because we do not think it is a suitable way to assess the advantages and disadvantages of regulation under CAA section 112(n)(1)(A) and in applying it, the Agency failed to meaningfully address key facts in the existing record. Even if the Agency’s selection of the 2020 framework could be considered a permissible interpretation of the broad ‘‘appropriate and necessary’’ determination in CAA section 112(n)(1)(A), we exercise our discretion under the statute and as described in Michigan, to approach the determination differently. D. The Administrator’s Proposed Preferred Framework and Proposed Conclusion The EPA is proposing a preferred, totality-of-the-circumstances approach as a reasonable way to ‘‘pay attention to the advantages and disadvantages of [our] decision,’’ Michigan, 576 U.S. at 753, in determining whether it is appropriate to regulate coal- and oilfired EGUs under section 112 of the CAA. This approach, including which factors we consider and how much weight we give them, is informed by Congress’ design of CAA section 112(n)(1) specifically, and CAA section 112 generally. Specifically, under this approach we first consider and weigh the advantages of reducing EGU HAP via regulation. We focus on the public health advantages of reducing HAP emissions because in CAA section 112(n)(1)(A), Congress specifically directed the EPA to regulate EGUs under CAA section 112 after considering the results of the ‘‘study of hazards to public health reasonably anticipated to occur as a result of emissions’’ by EGUs. We also consider the other studies commissioned by Congress in CAA sections 112(n)(1)(B) and (C) and the types of information the statute directed the EPA to examine under those provisions—the rate and mass of EGU PO 00000 Frm 00040 Fmt 4701 Sfmt 4702 mercury emissions, the health and environmental effects of such emissions, and the threshold level of mercury concentrations in fish tissue which may be consumed (even by sensitive populations) without adverse effects to public health.110 We place considerable weight on the factors addressed in the studies required in the other provisions of CAA section 112(n)(1) because that provision is titled ‘‘Electric utility steam generating units,’’ so it is reasonable to conclude that the information in those studies is important and relevant to a determination of whether HAP emissions from EGUs should be regulated under CAA section 112.111 See Michigan, 576 U.S. at 753–54 (citing CAA sections 112(n)(1)(B) and (C), its caption, and the additional studies required under those subparagraphs as relevant statutory context for the appropriate and necessary determination). Notably, the studies of CAA section 112(n)(1) place importance on the same considerations that are expressed in the terms and overall structure of CAA section 112. For example, CAA section 112(n)(1)(A) and section 112(n)(1)(B) both show interest in the amount of HAP emissions from EGUs—section 112(n)(1)(A) by requiring the EPA to estimate the risk remaining after imposition of the ARP and other CAA requirements and section 112(n)(1)(B) by requiring the EPA to study the rate and mass of mercury emissions; therefore, we believe it is reasonable to conclude that we should consider and weigh the volume of toxic pollution EGUs contributed to our air, water, and land absent regulation under CAA section 112, in total and relative to other domestic anthropogenic sources, and the potential to reduce that pollution, thus reducing its grave harms. In addition, the clear goal in CAA section 112(n)(1)(C) and elsewhere to consider risks to the most exposed and susceptible populations supports our decision to place significant weight on reducing the risks of HAP emissions from EGUs to the most sensitive members of the population (e.g., developing fetuses and children), and communities that are reliant on self110 CAA section 112(n)(1)(B) also directs the EPA to study available technologies for controlling mercury and the cost of such controls, and we consider those in our assessment of cost. 111 The statute directed the EPA to complete all three CAA section 112(n)(1) studies within 4 years of the 1990 Amendments, expressing a sense of urgency with regard to HAP emissions from EGUs on par with addressing HAP emissions from other stationary sources. See CAA section 112(e) (establishing schedules for setting standards on listed source categories as expeditiously as practicable, but no later than between 2–10 years). E:\FR\FM\09FEP2.SGM 09FEP2 lotter on DSK11XQN23PROD with PROPOSALS2 Federal Register / Vol. 87, No. 27 / Wednesday, February 9, 2022 / Proposed Rules caught local fish for their survival. Finally, we also consider the identified risks to the environment posed by mercury and acid-gas HAP, consistent with CAA section 112(n)(1)(B) and the general goal of CAA section 112 to address adverse environmental effects posed by HAP emissions. See CAA section 112(a)(7) (defining ‘‘adverse environmental effect’’). We next examine the disadvantages of regulation, principally in the form of the costs incurred to capture HAP before they enter the environment. As with the advantages side of the equation, where we consider the consequences of reducing HAP emissions to human health and the environment, we consider the consequences of these expenditures for the electricity generating sector and society. We therefore consider compliance costs comprehensively, placing them in the context of the effect those expenditures have on the economics of power generation more broadly, the reliability of electricity, and the cost of electricity to consumers. These metrics are relevant to our weighing exercise because they give us a more complete picture of the disadvantages to society imposed by this regulation, and because our conclusion might change depending on how this burden affects the ability of the industry to thrive and provide reliable, affordable electricity to the benefit of all Americans. Consistent with CAA section 112(n)(1)(B), we further consider relevant control costs for EGUs and the relationship of control costs expected and experienced under the ARP and MATS. Below, consistent with this framework, we consider and weigh the advantages to regulation against the costs of doing so, giving particular weight to our examination of the public health hazards we reasonably anticipate to occur as a result of HAP emissions from EGUs, and the risks posed by those emissions to exposed and vulnerable populations. We note as well that had we found regulation under CAA section 112 to impose significant barriers to provision of affordable and reliable electricity to the American public, this would have weighed heavily in our decision. We acknowledge, as we recognized in the 2016 preferred approach, that this approach to making the appropriate and necessary determination is an exercise in judgment, and that ‘‘[r]easonable people, and different decision-makers, can arrive at different conclusions under the same statutory provision,’’ (81 FR 24431; April 25, 2016), but this type of weighing of factors and circumstances is an inherent part of regulatory decision- VerDate Sep<11>2014 21:43 Feb 08, 2022 Jkt 256001 making. As noted in then-Judge Kavanaugh’s dissent in White Stallion, ‘‘All regulations involve tradeoffs, and . . . Congress has assigned EPA, not the courts, to make many discretionary calls to protect both our country’s environment and its productive capacity.’’ 748 F.3d at 1266 (noting as well that ‘‘if EPA had decided, in an exercise of its judgment, that it was ‘appropriate’ to regulate electric utilities under the MACT program because the benefits outweigh the costs, that decision would be reviewed under a deferential arbitrary and capricious standard of review’’). Bright-line tests and thresholds are not required under the CAA’s instruction to determine whether regulation is ‘‘appropriate and necessary,’’ nor have courts interpreted broad provisions similar to CAA section 112(n)(1)(A) in such manner. In Catawba Cty. v. EPA, the D.C. Circuit held that ‘‘[a]n agency is free to adopt a totality-of-the-circumstances test to implement a statute that confers broad authority, even if that test lacks a definite ‘threshold’ or ‘clear line of demarcation to define an open-ended term.’ ’’ 571 F.3d 20, 37 (D.C. Cir. 2009). In undertaking this analysis, we are cognizant that, while the Agency has been studying the science underlying this determination for decades, the understanding of risks, health, and environmental impacts associated with toxic air pollution continues to evolve. In this notice, we explained the additional information that has become available to the Agency since we performed our national risk assessments, and explained why, despite the certainty of the science demonstrating substantial health risks, we are unable at this time to quantify or monetize many of the effects associated with reducing HAP emissions from EGUs.112 We continue to think it is appropriate to give substantial weight to these public health impacts, even where we lack information to precisely quantify or monetize those impacts. As the D.C. Circuit stated in Ethyl Corp. v. EPA, ‘‘Where a statute is precautionary in nature, the evidence difficult to come by, uncertain, or conflicting because it is on the frontiers of scientific knowledge, the regulations designed to protect public health, and the decision that of an expert administrator, we will not demand rigorous step-by-step proof of cause and effect. . . . [I]n such cases, the Administrator may assess 112 Unquantified effects include additional neurodevelopmental and cardiovascular effects from exposure to methylmercury, ecosystem effects, health risks from exposure to non-mercury HAP, and effects in EJ relevant subpopulations that face disproportionally high risks. PO 00000 Frm 00041 Fmt 4701 Sfmt 4702 7663 risks. . . . The Administrator may apply his expertise to draw conclusions from suspected, but not completely substantiated, relationships between facts, from trends among facts, from theoretical projections from imperfect data, from probative preliminary data not yet certifiable as ‘fact,’ and the like.’’ 541 F.2d 1, 28 (D.C. Cir. 1976). See also Lead Industries Ass’n v. EPA, 647 F.2d 1130, 1155 (D.C. Cir. 1980) (‘‘[R]equiring EPA to wait until it can conclusively demonstrate that a particular effect is adverse to health before it acts is inconsistent with both the [Clean Air] Act’s precautionary and preventive orientation and the nature of the Administrator’s statutory responsibilities.’’). The EPA is not alone in needing to make difficult judgments about whether a regulation that has a substantial economic impact is ‘‘worth it,’’ in the face of uncertainty such as when the advantages of the regulation are hard to quantify in monetary terms. The Transportation Security Administration (TSA), when determining whether to require Advanced Imaging Technology at certain domestic airports, faced assertions that the high cost of widespread deployment of this type of screening was ‘‘not worth the cost.’’ TSA acknowledged that it did not ‘‘provide monetized benefits’’ or ‘‘degree of benefits’’ to justify the use of the screening, but noted that the agency ‘‘uses a risk-based approach . . . in order to try to minimize risk to commercial air travel.’’ See 81 FR 11364, 11394 (March 3, 2016). The agency pointed out that it could not consider ‘‘only the most easily quantifiable impacts of a terrorist attack, such as the direct cost of an airplane crashing,’’ but rather that it had an obligation to ‘‘pursue the most effective security measures reasonably available so that the vulnerability of commercial air travel to terrorist attacks is reduced,’’ noting that some commenters were failing to consider the more difficult to quantify aspects of the benefits of avoiding terrorist attacks, such as ‘‘substantial indirect effects and social costs (such as fear) that are harder to measure but which must also be considered by TSA when deciding whether an investment in security is cost-beneficial.’’ Id. In reviewing Agency decisions like these, courts do ‘‘not to substitute [their] judgment[s] for that of the agenc[ies],’’ State Farm, 463 U.S. at 43 (1983), and ‘‘[t]his is especially true when the agency is called upon to weigh the costs and benefits of alternative policies,’’ Center for Auto Safety v. Peck, 751 F.2d 1336, 1342 (D.C. Cir. 1985). See also E:\FR\FM\09FEP2.SGM 09FEP2 lotter on DSK11XQN23PROD with PROPOSALS2 7664 Federal Register / Vol. 87, No. 27 / Wednesday, February 9, 2022 / Proposed Rules United Church of Christ v. FCC, 707 F.2d 1413, 1440 (D.C. Cir. 1983) (‘‘[C]ost benefit analyses epitomize the types of decisions that are most appropriately entrusted to the expertise of an agency.’’). Agencies are entitled to this deference even where, or perhaps particularly where, costs or benefits can be difficult to quantify. For example, in Consumer Elecs. Ass’n v. FCC, the D.C. Circuit upheld the FCC’s mandate to require digital tuners, finding reasonable the Commission’s identification of benefits, that is, ‘‘principally speeding the congressionally-mandated conversion to DTV and reclaiming the analog spectrum,’’ coupled with the FCC’s ‘‘adequate[ ] estimate[ of] the long-range costs of the digital tuner mandate within a range sufficient for the task at hand . . . and [its finding of] the estimated costs to consumers to be ‘within an acceptable range.’’’ 347 F.3d 291, 303– 04 (D.C. Cir. 2003) (‘‘We will not here second-guess the Commission’s weighing of costs and benefits.’’). Similarly, the Food and Drug Administration, in weighing the costs and benefits of deeming electronic cigarettes to be ‘‘tobacco products,’’ described the benefits qualitatively, ‘‘ ‘potentially coming from’ . . . premarket review [i.e., the statutory consequence of deeming], which will result in fewer harmful or additive products from reaching the market than would be the case in the absence of the rule; youth access restrictions and prohibitions on free samples, which can be expected to constrain youth access to tobacco products and curb rising uptake; health warning statements, which will help consumers understand and appreciate the risks of using tobacco products; prohibitions against false or misleading claims and unsubstantiated modified risk claims; and other changes [such as monitoring and ingredient listings].’’ Nicopure Labs, LLC v. FDA, 266 F. Supp. 3d 360, 403–404 (D.D.C. 2017), aff’d, 944 F.3d 267 (D.C. Cir. 2019). Plaintiffs challenging the rule claimed that because the FDA had not quantified the benefits of the rule, it ‘‘cannot realistically determine that a rule’s benefits justify its costs,’’ because ‘‘it does not have . . . a general grasp of the rule’s benefits.’’ Id. at 406. The court disagreed, finding the agency’s statement of benefits to have ‘‘provided substantial detail on the benefits of the rule, and the reasons why quantification was not possible’’ and in any case agreeing with the agency that there was no obligation to quantify benefits in any particular way. Id. We think the inquiry posed to the Agency by CAA section 112(n)(1)(A) has VerDate Sep<11>2014 21:43 Feb 08, 2022 Jkt 256001 similarities to these other decisions, in which agencies tasked with protecting and serving the American public elected to take actions that would impose significant costs in order to achieve important benefits that could not be precisely quantified or were in some cases uncertain—protection from terrorist attacks, speeding the advancement of digital technology, and subjecting a new product to marketing and safety regulation. In those cases, the framework for decision-making was to make a judgment after a weighing of advantages against disadvantages, considering qualitative factors as well as quantified metrics. Here, we employ a similar totality-of-the-circumstances approach to the CAA section 112(n)(1)(A) inquiry as to whether it is appropriate to regulate HAP emissions from EGUs. Earlier sections of this preamble (sections III.A. and III.B.) discuss in detail the EPA’s evaluation of the public health and environmental advantages of regulating HAP from U.S. EGUs and the reasons it is not possible to quantify or monetize most of those advantages, as well as the EPA’s comprehensive assessment of the costs of doing so. We will not in this section repeat every detail and data point, but we incorporate all of that analysis here and highlight only a few of the considerations that weighed heavily in our application of the preferred totalityof-the-circumstances approach. Under our preferred approach, we first consider the public health advantages to reducing HAP from EGUs, and the other focuses for study identified by Congress in CAA section 112(n)(1). As noted, we give particular weight in our determination to the information related to the statutory factors identified for the EPA’s consideration by the studies—namely, the hazards to public health reasonably anticipated to occur as a result of EGU HAP emissions (112(n)(1)(A)), the rate and mass of mercury emissions from EGUs (112(n)(1)(B)), the health and environmental effects of such emissions (112(n)(1)(B)), and the levels of mercury exposure below which adverse human health effects are not expected to occur as well as the mercury concentrations in the tissue of fish which may be consumed (including by sensitive populations) without adverse effects to public health (112(n)(1)(C)). The statutorily mandated studies are the foundation for the Agency’s finding that HAP emissions from U.S. EGUs represent a clear hazard to public health and the environment, but as documented in section III.A., the EPA has continued to amass an extensive PO 00000 Frm 00042 Fmt 4701 Sfmt 4702 body of evidence related to the original study topics that only furthers the conclusions drawn in the earlier studies. As discussed in section III.A, the EPA completed a national-scale risk assessment focused on mercury emissions from U.S. EGUs as part of the 2011 Final Mercury TSD. That assessment specifically examined risk associated with mercury released from U.S. EGUs that deposits to watersheds within the continental U.S., bioaccumulates in fish as methylmercury, and is consumed when fish are eaten by female subsistence fishers of child-bearing age and other freshwater self-caught fish consumers. We focused on the female subsistence fisher subpopulation because there is increased risk for in utero exposure and adverse outcomes in children born to female subsistence fishers with elevated exposure to methylmercury.113 Our analysis estimated that 29 percent of the watersheds studied would lead to exposures exceeding the methylmercury RfD for this population, based on in utero effects, due in part to the contribution of domestic EGU emissions of mercury. We also found that deposition of mercury emissions from U.S. EGUs alone led to potential exposures that exceed the RfD in up to 10 percent of modeled watersheds. We have also examined impacts of prenatal methylmercury exposure on unborn children of recreational anglers consuming self-caught fish from inland freshwater lakes, streams, and rivers, and found significant IQ loss in the affected population of children. Our analysis, which we recognized did not cover consumption of recreationally caught seafood from estuaries, coastal waters, and the deep ocean, nevertheless indicated significant health harm from methylmercury exposure. Methylmercury exposure also leads to adverse neurodevelopmental effects such as performance on neurobehavioral tests, particularly on tests of attention, fine motor function, language, and visual spatial ability. See section III.A.2.a. The population that has been of greatest concern with respect to methylmercury exposure is women of childbearing age because the developing fetus is the most sensitive to the effects of methylmercury. See 85 FR 24995 (May 3, 2011). In the Mercury Study, the EPA estimated that, at the time of the study, 7 percent of women of childbearing age in the continental U.S. 113 The NAS Study had also highlighted this population as one of particular concern due to the regular and frequent consumption of relatively large quantities of fish. See 65 FR 79830 (December 20, 2000). E:\FR\FM\09FEP2.SGM 09FEP2 lotter on DSK11XQN23PROD with PROPOSALS2 Federal Register / Vol. 87, No. 27 / Wednesday, February 9, 2022 / Proposed Rules (or about 4 million women) were exposed to methylmercury at levels that exceeded the RfD and that about 1 percent of women of childbearing age (or about 580,000 women) had methylmercury exposures three to four times the RfD. See 65 FR 79827 (December 20, 2000). We also performed a new bounding analysis for this proposal that focuses on the potential for IQ points lost in children exposed in utero through maternal fish consumption by the population of general U.S. fish consumers (section III.A.3.d). Another important human health impact documented by the EPA over the last 2 decades includes cardiovascular impacts of exposure to methylmercury—including altered blood-pressure and heart-rate variability in children as a result of infant exposure in the womb and higher risk of acute MI, coronary heart disease, and cardiovascular heart disease in adults, due to dietary exposure. Studies that have become available more recently led the EPA to perform new quantitative screening analyses (as described in section III.A.3) to estimate the incidence of MI (heart attack) mortality that may be linked to U.S. EGU mercury emissions. The new analyses performed include an extension of the original watershed-level subsistence fisher methylmercury risk assessment to evaluate the potential for elevated MImortality risk among subsistence fishers (section III.A.3.b; 2021 Risk TSD) and a separate risk assessment examining elevated MI mortality among all adults that explores potential risks associated with exposure of the general U.S. population to methylmercury from domestic EGUs through commerciallysourced fish consumption (section III.A.3.c; 2021 Risk TSD). The updated subsistence fisher analysis estimated that up to 10 percent of modeled watersheds are associated with exposures linked to increased risk of MI mortality, but for some populations such as low-income Black subsistence fishers active in the Southeast, that number is approximately 25 percent of the watersheds modeled. The bounding analysis results estimating MI-mortality attributable to U.S. EGU-sourced mercury for the general U.S. population range from 5 to 91 excess deaths annually. As noted, we give significant weight to these findings and analyses examining public health impacts associated with methylmercury, given the statutory focus in CAA section 112(n)(1)(B) and 112(n)(1)(C) on adverse effects to public health from EGU mercury emissions and the directive to VerDate Sep<11>2014 21:43 Feb 08, 2022 Jkt 256001 develop an RfD (‘‘threshold level of mercury exposure below which adverse human health effects are not expected to occur’’), and in particular one that is designed to assess ‘‘mercury concentrations in the tissue of fish which may be consumed (including consumption by sensitive populations).’’ See CAA section 112(n)(1)(C). Because of CAA section 112(n)(1)(A)’s broader focus on hazards to public health from all HAP, not just mercury, we also give considerable weight to health effects associated with nonmercury HAP exposure (see section III.A.2.b for further detail), including chronic health disorders such as irritation of the lung, skin, and mucus membranes; decreased pulmonary function, pneumonia, or lung damage; detrimental effects on the central nervous system; damage to the kidneys; and alimentary effects such as nausea and vomiting). The 2011 Non-Hg HAP Assessment, performed as part of the EPA’s 2012 reaffirmation of the appropriate and necessary determination, expanded on the original CAA section 112(n)(1)(A) Utility Study by examining further public health hazards reasonably anticipated to occur from EGU HAP emissions after imposition of other CAA requirements. This study included a refined chronic inhalation risk assessment that was designed to assess how many coal- and oil-fired EGUs had cancer and noncancer risks associated with them, and indicated that absent regulation, a number of EGUs posed cancer risks to the American public (see section III.A.2.b). As discussed in section II.B, the statutory design of CAA section 112 quickly secured dramatic reductions in the volume of HAP emissions from stationary sources. CAA section 112(n)(1)(B) also directs the EPA to study, in the context of the Mercury Study, the ‘‘rate and mass’’ of mercury emissions. We therefore think it is reasonable to consider, in assessing the advantages to regulating HAP emissions from EGUs, what the volume of emissions was from that sector prior to regulation—as an absolute number and relative to other sources—and what the expected volume of emissions would be with CAA section 112(d) standards in place. Prior to the EPA’s promulgation of MATS in 2012, the EPA estimated that in 2016, without MATS, coal-fired U.S. EGUs above 25 MW would emit 29 tons of mercury per year. While these mercury emissions from U.S. EGUs represented a decrease from 1990 and 2005 levels (46 tons and 53 tons, respectively), they still represented PO 00000 Frm 00043 Fmt 4701 Sfmt 4702 7665 nearly half of all anthropogenic mercury emissions in 2011 (29 out of 64 tons total). Considered on a proportional basis, the relative contribution of U.S. EGUs to all domestic anthropogenic mercury emissions was also stark. The EGU sector emitted more than six times as much mercury as any other sector (the next highest being 4.6 tons). See Table 3 at 76 FR 25002 (May 3, 2011). Prior to MATS, U.S. EGUs were estimated to emit the majority of HCl and HF nationally, and were the predominant source of emissions nationally for many metal HAP as well, including antimony, arsenic, chromium, cobalt, and selenium. Id. at 25005–06. In 2012, the EPA projected that MATS would result in an 88 percent reduction in hydrogen chloride emissions, a 75 percent reduction in mercury emissions, and a 19 percent reduction in PM emissions (a surrogate for non-mercury metal HAP) from coal-fired units greater than 25 MW in 2015 alone. See 77 FR 9424 (February 16, 2012). In fact, actual emission reductions since MATS implementation have been even more substantial. In 2017, by which point all sources were required to have complied with MATS, the EPA estimated that acid gas HAP emissions from EGUs had been reduced by 96 percent, mercury emissions had been reduced by 86 percent, and non-mercury metal HAP emissions had been reduced by 81 percent compared to 2010 levels. See 84 FR 2689 (February 7, 2019). Retaining the substantial reductions in the volume of toxic pollution entering our air, water, and land, from this large fleet of domestic sources reduces the substantial risk associated with this pollution faced by all Americans. Even though reducing HAP from EGUs would benefit all Americans by reducing risk and hazards associated with toxic air pollution, it is worth noting that the impacts of EGU HAP pollution in the U.S. have not been borne equally nationwide. Certain communities and individuals have historically borne greater risk from exposure to HAP emissions from EGUs prior to MATS, as demonstrated by the EPA’s risk analyses. The individuals and communities that have been most impacted have shouldered a disproportionate burden for the energy produced by the power sector, which in turn benefits everyone—i.e., these communities are subject to a greater share of the externalities of HAP pollution that is generated by EGUs producing power for everyone. A clear example of these disproportionately impacted populations are subsistence fishers who live near U.S. EGUs E:\FR\FM\09FEP2.SGM 09FEP2 lotter on DSK11XQN23PROD with PROPOSALS2 7666 Federal Register / Vol. 87, No. 27 / Wednesday, February 9, 2022 / Proposed Rules experiencing increased risk due to U.S. EGU mercury deposition at the watersheds where they are active (2011 Final Mercury TSD). CAA section 112(n)(1)(C) directed the EPA to examine risks to public health experienced by sensitive populations as a result of the consumption of mercury concentrations in fish tissue, which we think includes fetuses and communities that are reliant on local fish for their survival, and CAA section 112 more generally is drafted in order to be protective of small cohorts of highly exposed and susceptible populations. We therefore weigh heavily the importance of reducing risks to particularly impacted populations, including those who consume large amounts of self-caught fish reflecting cultural practice and/or economic necessity, including tribal populations, specific ethnic communities and lowincome populations including Black persons living in the southeastern U.S. Consistent with CAA section 112(n)(1)(B) and the general goal of CAA section 112 to reduce risks posed by HAP to the environment, we also consider the ecological effects of methylmercury and acid gas HAP (see section III.A.2.c). Scientific studies have consistently found evidence of adverse impacts of methylmercury on fish-eating birds and mammals, and insect-eating birds. These harmful effects can include slower growth and development, reduced reproduction, and premature mortality. Adverse environmental impacts of emissions of acid gas HAP, in particular HCl, include acidification of terrestrial and aquatic ecosystems. In the EPA’s recent Integrated Science Assessment for Oxides of Nitrogen, Oxides of Sulfur and Particulate Matter—Ecological Criteria (2020), we concluded that the body of evidence is sufficient to infer a causal relationship between acidifying deposition and adverse changes in freshwater biota like plankton, invertebrates, fish, and other organisms. Adverse effects on those animals can include physiological impairment, loss of species, changes in community composition, and biodiversity. Because EGUs contribute to mercury deposition in the U.S., we conclude that EGUs are contributing to the identified adverse environmental effects, and consider the beneficial impacts of mitigating those effects by regulating EGUs. We turn next in our application of the preferred approach to the consideration of the disadvantages of regulation, which in this case we measure primarily in terms of the costs of that regulation. As discussed in section III.B, for purposes of this preferred totality-of- VerDate Sep<11>2014 21:43 Feb 08, 2022 Jkt 256001 the-circumstances approach, we start with the sector-level estimate developed in the 2011 RIA. Given the complex, interconnected nature of the power sector, we think it is appropriate to consider this estimate, which represents the incremental costs to the entire power sector to generate electricity, not just the compliance costs projected to be borne by regulated EGUs. We explain in section III.B that while a precise ex post estimate of this sector-level figure is not possible, we update those aspects of the cost estimate where we can credibly do so (see section III.B.2), and our consideration of the cost of regulation therefore takes into account the fact that new analyses performed as part of this proposal demonstrate that the 2011 RIA cost estimate was almost certainly significantly overestimated. We propose to conclude that regulation is appropriate and necessary under either cost estimate. As with the benefits side of the ledger, where we look comprehensively at the effects of reducing the volume of HAP, we also comprehensively assess costs in an attempt to evaluate the economic impacts of the regulation as a whole. We situate the cost of the regulation in the context of the economics of power generation, as we did in 2016, because we think examining the costs of the rule relative to three sector-wide metrics provides a useful way to evaluate the disadvantages of expending these compliance costs to this sector beyond a single monetary value. For each of these metrics, we use our 2011 estimate of compliance costs, which, as is discussed in section III.B.2 and the Cost TSD, was likely to have been significantly overestimated by a figure in the billions of dollars. We first evaluate the 2011 projected annual compliance costs of MATS as a percent of annual power sector sales, also known as a ‘‘sales test.’’ A sales test is a frequently used indicator of potential impacts from compliance costs on regulated industries, and the EPA’s analysis showed that projected 2015 compliance costs, based on the 2011 estimate, represented between 2.7–3.5 percent of power sector revenues from historical annual retail electricity sales. See section III.B.3; Cost TSD; 80 FR 75033 (December 1, 2015). We also examine the annual capital expenditures that were expected for MATS compliance as compared to the power sector’s historical annual capital expenditures. We conclude that projected incremental annual capital expenditures of MATS would be a small percentage of 2011 power sector-level capital expenditures, and well within PO 00000 Frm 00044 Fmt 4701 Sfmt 4702 the range of historical year-to-year variability on industry capital expenditures. Id. Finally, we consider the annual operating or production expenses in addition to capital expenditures because we were encouraged during the 2016 rulemaking to use this broader metric of power industry costs to provide perspective on the cost of MATS relative to total capital and operational expenditures by the industry historically. Consistent with our other findings, we conclude that, even when using the likely overestimated cost of MATS based on the 2011 RIA, the total capital and operational expenditures required by MATS are in the range of about 5 percent of total historical capital and operational expenditures by the power sector during the period of 2000–2011. See section III.B.3; Cost TSD; 81 FR 24425 (April 25, 2016). In this proposal, we re-analyze all of these metrics using updated data to reflect more recent information (as of 2019), and took into consideration the fact that the 2011 RIA cost estimate was almost certainly significantly overestimated. All of this new analysis further supports our findings as to the cost of MATS relative to other power sector economics based on the record available to the Agency at the time we were making the threshold determination (i.e., the 2012 record). Consistent with the Michigan Court’s instruction to consider all advantages and disadvantages of regulation, we also assess, as we did in 2016, disadvantages to regulation that would flow to the greater American public. Specifically, we examine whether regulation of EGUs would adversely impact the provision of reliable, affordable electricity to the American public, because had regulation been anticipated to have such an effect, it would have weighed heavily on our decision as to whether it was appropriate to require such regulation. The CAA tasks the EPA with the purpose of protecting and enhancing air quality in the U.S., but directs that in doing so we promote public health and welfare and the productive capacity of the U.S. population. CAA section 101(b)(1). As noted, we also think examining these potential impacts is consistent with the ‘‘broad and allencompassing’’ nature of the term ‘‘appropriate,’’ as characterized by the Supreme Court. Michigan, 576 U.S. at 752. We were particularly interested in examining the expected impact of MATS implementation on the retail price of electricity, because in electricity markets, utility expenditures can be fully or partially passed to consumers. It was therefore reasonable to assume E:\FR\FM\09FEP2.SGM 09FEP2 lotter on DSK11XQN23PROD with PROPOSALS2 Federal Register / Vol. 87, No. 27 / Wednesday, February 9, 2022 / Proposed Rules that the cost of MATS could result in increased retail electricity prices for consumers, although we emphasize, as we did in 2016, that the electricity price impacts examined under this metric do not reflect additional compliance costs on top of the estimate produced in the 2011 RIA but rather reflect the passing on of a share of those costs to consumers (and ultimately reducing the costs EGU owners would otherwise bear). However, even though the impacts on electricity prices are reflected in the total cost estimate to the sector as a whole, we think, for the reasons stated above, that electricity price impacts are worthy of special attention because of the potential effect on the American public. We therefore estimate the percent increase in retail electricity prices projected to result from MATS compared to historical levels of variation in electricity prices. See section III.B.3; 80 FR 75035 (December 1, 2015). We estimate that retail electricity prices for 2015 would increase by about 0.3 cents per kilowatthour, or 3.1 percent with MATS in place. Between 2000 and 2011, the largest annual year-to-year decrease in retail electricity price was –0.2 cents per kilowatt-hour and the largest year-toyear increase during that period was +0.5 cents per kilowatt-hour. The projected 0.3 cents increase due to MATS was therefore well within normal historical fluctuations. Id. As with the other metrics examined, as the increase in retail electricity prices due to MATS was within the normal range of historical variability, a substantially lower estimate for impacts on electricity prices would only further support the EPA’s determination. We also note in section III.B.3 that the year-to-year retail electricity price changes in the new information we examined (i.e., years 2011–2019) were within the same ranges observed during the 2000–2011 period, and that in fact, during that period when MATS was implemented, retail electricity prices have generally decreased (9.3 cents per kilowatt-hour in 2011 to 8.7 cents per kilowatt-hour in 2019). Consistent with these observed trends in retail electricity prices, as discussed in section III.B.2 and further below, our ex post analysis of MATS indicates that the projected compliance costs in the 2011 RIA—and, as a corollary, the projected increases in retail electricity prices—were likely significantly overestimated. Certainly, we have observed nothing in the data that suggests the regulation of HAP from EGUs resulted in increases in retail electricity prices for the American VerDate Sep<11>2014 21:43 Feb 08, 2022 Jkt 256001 public that would warrant substantial concern in our weighing of this factor. Similar to our reasoning for examining impacts on electricity prices for American consumers, in assessing the potential disadvantages to regulation, we elected to also look at whether the power sector would be able to continue to provide reliable electricity to all Americans after the imposition of MATS. We think this examination naturally fits into our assessment of whether regulation is ‘‘appropriate,’’ because had MATS interfered with the provision of reliable electricity to the American public, that would be a significant disadvantage to regulation to weigh in our analysis. In examining this factor, we looked at both resource adequacy and reliability—that is, the provision of generating resources to meet projected load and the maintenance of adequate reserve requirements for each region (resource adequacy) and the sector’s ability to deliver the resources to the projected electricity loads so that the overall power grid remains stable (reliability). See section III.B.3; U.S. EPA 2011, Resource Adequacy and Reliability TSD; 80 FR 75036 (December 1, 2015). Our analysis indicated that the power sector would have adequate and reliable generating capacity, while maintaining reserve margins over a 3-year MATS compliance period. Id. We did not in this proposal update the Resource Adequacy and Reliability Study conducted in 2011, but we note that the EPA, as a primary regulator of EGUs, is keenly aware of adequacy and reliability concerns in the power sector and in particular the relationship of those concerns to environmental regulation. We have not seen evidence in the last decade to suggest that the implementation of MATS caused power sector adequacy and reliability problems, and only a handful of sources obtained administrative orders under the enforcement policy issued with MATS to provide relief to reliability critical units that could not comply with the rule by 2016. In addition to the cost analyses described above, the EPA revisited its prior records examining the costs of mercury controls consistent with the requirement in CAA section 112(n)(1)(B), the cost of controls for other HAP emissions from EGUs, and the cost of implementing the utilityspecific ARP, which Congress wrote into the 1990 CAA Amendments and implementation of which Congress anticipated could result in reductions in HAP emissions. 80 FR 75036–37 (December 1, 2015). The ARP, like MATS, was expected to have a PO 00000 Frm 00045 Fmt 4701 Sfmt 4702 7667 significant financial impact on the power sector, with projections of its cost between $6 billion to $9 billion per year (in 2000 dollars), based on the expectation that many utilities would elect to install FGD scrubbers in order to comply with the ARP. Id. at 75037. The actual costs of compliance were much less (up to 70 percent lower than initial estimates), in large part because of the utilities’ choice to comply with the ARP by switching to low sulfur coal instead of installing scrubbers.114 This choice also resulted in far fewer reductions in HAP emissions than would have occurred if more EGUs had installed SO2 scrubbers. We believe the considerable reduction in the implementation cost of the ARP is important because of the economic benefit that accrued from delaying the large capital costs of controls by almost 25 years. With respect to the costs of technology for control of mercury and non-mercury HAP, the record evidence shows that in 2012 controls were available and routinely used and that control costs had declined considerably over time. Id. at 75037–38. We also note that, as explained at length in section III.B.2, the actual compliance costs of MATS, with respect to capital and operating expenditures associated with installing and operating controls, were significantly lower than what we projected at the time of the rule. In addition, the newer information examined as part of this proposal demonstrates that actual control costs were much lower than we projected, which weighs further in favor of a conclusion that it is appropriate to impose those costs in order to garner the advantages of regulation. Our review of the record and application of the preferred totality-ofthe-circumstances approach has demonstrated that we have, over the last 2 decades, amassed a voluminous and scientifically rigorous body of evidence documenting the significant hazards to public health associated with HAP emissions from EGUs, particularly to certain vulnerable populations that bear greater risk from these emissions than the general public. We have looked at the volume of emissions coming from these sources and what the impact of regulation would be on that volume. We examined the cost of regulation to industry (even using an estimate of cost that we know to be higher than what was expended), and the potential 114 U.S. EPA Clean Air Markets Div., 2011, National Acid Precipitation Assessment Program Report to Congress 2011: An Integrated Assessment, National Science and Technology Council, Washington, DC. E:\FR\FM\09FEP2.SGM 09FEP2 lotter on DSK11XQN23PROD with PROPOSALS2 7668 Federal Register / Vol. 87, No. 27 / Wednesday, February 9, 2022 / Proposed Rules adverse impacts that could be felt by the American public via increased electricity prices and access to reliable electricity. And, consistent with the statute, we have also considered adverse impacts of EGU pollution on the environment as well as availability of controls and the costs of those controls. Even based solely on the record available to us at the time we issued the regulation and made the threshold determination in 2012, we find that the benefits of regulation are manifold, and they address serious risks to vulnerable populations that remained after the implementation of the ARP and other controls imposed upon the power sector that were required under the CAA. We have placed considerable weight on these benefits, given the statutory directive to do so in CAA section 112(n)(1)(A) and Congress’ clear purpose in amending CAA section 112 in 1990. In contrast, the costs, while large in absolute terms, were shown in our analyses to be within the range of other expenditures and commensurate with revenues generated by the sector, and our analysis demonstrated that these expenditures would not and did not have any significant impacts on electricity prices or reliability. After considering and weighing all of these facts and circumstances, in an exercise of his discretion under the Act, the Administrator proposes to conclude that the substantial benefits of reducing HAP from EGUs, which accrue in particular to the most vulnerable members of society, are worth the costs. Consequently, we propose to find after weighing the totality of the circumstances, that regulation of HAP from EGUs is appropriate after considering cost. The newer information examined as part of this proposal regarding both benefits and costs is directionally consistent with all of the findings the EPA has made in the 2016 administrative record. The robust and long-standing scientific foundation regarding the adverse health and environmental risks from mercury and other HAP is fundamentally unchanged since the comprehensive studies that Congress mandated in the CAA were completed decades ago. But in this proposal, we completed screening level risk assessments, informed by newer meta-analyses of the dose-response relationship between methylmercury and cardiovascular disease, which indicate that a segment of the American public is at increased risk of prematurely dying by heart attack due to methylmercury exposure with as many as 91 deaths per year (and possibly more) being attributable to mercury VerDate Sep<11>2014 21:43 Feb 08, 2022 Jkt 256001 emissions from EGUs.115 Further, analyses show that some populations (e.g., low-income Blacks in the Southeast and certain tribal communities engaging in subsistence fishing activity) likely bear a disproportionately higher risk from EGU HAP emissions than the general populace. The new cost information analyzed by the EPA, discussed in section III.B, indicates that the cost projection used in the 2016 Supplemental Finding (i.e., the 2011 RIA cost estimate) likely significantly overestimated the actual costs of compliance of MATS. Specifically, the EGU sector installed far fewer controls to comply with the HAP emissions standards than projected; certain modeling assumptions, if updated with newer information, would have resulted in a lower cost estimate; unexpected advancements in technology occurred; and the country experienced a dramatic increase in the availability of comparatively inexpensive natural gas. All of these factors likely resulted in a lower actual cost of compliance than the EPA’s projected estimates in 2011. We therefore find that when we consider information available to the Agency after implementation of the rule, our conclusion that it was appropriate to regulate this sector for HAP is further strengthened. The costs projected in the 2011 RIA were almost certainly overestimated by an amount in the billions of dollars. We note as well that during prior rulemaking processes related to the appropriate and necessary determination, stakeholders suggested that undermining the threshold finding in order to pave the way to rescinding MATS would have grave economic and health consequences. Utilities reported that they rely upon the mandated status of MATS in order to recoup expenditures already made to comply with the rule before Public Utility Commission proceedings.116 States asserted that they rely upon the Federal protections achieved by the rule in state implementation planning and other 115 This estimate of premature mortality is for the EGU sector after imposition of the ARP and other CAA requirements, but before MATS implementation. 116 See, e.g., Comment Letter from Edison Electric Institute, Docket ID Item No. EPA–HQ–OAR–2018– 0794–2267; Comment Letter from Edison Electric Institute, NRECA, American Public Power Association, The Clean Energy Group, Class of ’85 Regulatory Response Group, Large Public Power Council, Global Energy Institute, International Brotherhood of Electrical Workers, International Brotherhood of Boilermakers, Iron Ship Builders, Blacksmiths, Forgers & Helpers, and the Laborers’ International Union of North America, Docket ID Item No. EPA–HQ–OAR–2018–0794–0577. PO 00000 Frm 00046 Fmt 4701 Sfmt 4702 regulatory efforts.117 And other industries, such as pollution control companies, have made business decisions based on the existence of MATS.118 We think these reliance interests, nearly all of which are aligned, also weigh in favor of retaining the appropriate and necessary determination, particularly given the fact that a significant portion of compliance costs have already been spent. Finally, while we focus on the HAP benefits, we note that the Michigan court directed that ‘‘any disadvantage could be termed a cost.’’ Michigan, at 752. The corollary is that any advantage could be termed a benefit. And so, while it is not necessary to our conclusion that regulation is appropriate, we also consider, under our totality-of-thecircumstances approach, whether there are additional advantages or disadvantages to the specific controls imposed under MATS. Specifically, we note that because the controls required to reduce HAP from U.S. EGUs resulted in substantial reductions in co-emitted pollutants, including direct PM2.5 as well as SO2 and NOX, which are both precursors to ozone and fine particle formation, the Administrator’s proposed conclusion is further supported by the ramifications of the regulatory requirements in MATS for these pollutants. We propose that the benefits associated with such reductions may be appropriate to consider where the framework for making the CAA section 112(n)(1)(A) determination is a totalityof-the-circumstances approach, and we take comment on that approach. Therefore, while we conclude that the benefits associated with regulating HAP alone outweigh the costs without consideration of non-HAP benefits, we also propose that, to the extent we consider benefits attributable to reductions in co-emitted pollutants as a concomitant advantage, these benefits act to confirm that regulation is 117 See, e.g., Comment Letter from Attorneys General of Massachusetts, California, Connecticut, Delaware, Illinois, Iowa, Maine, Maryland, Michigan, Minnesota, Nevada, New Jersey, New Mexico, New York, North Carolina, Oregon, Rhode Island, Vermont, Virginia, Washington, and the District of Columbia, the Maryland Department of the Environment, the City Solicitor of Baltimore, the Corporation Counsels of Chicago and New York City, the County Attorney of the County of Erie, NY, and the County Counsel for the County of Santa Clara, CA, Docket ID Item No. EPA–HQ–OAR– 2018–0794–1175. 118 See, e.g., Comment Letter from ADA Carbon Solutions, LLC, Docket ID Item No. EPA–HQ–OAR– 2018–0794–0794; Comment Letter from Advanced Emissions Solutions, Inc., Docket ID Item No. EPA– HQ–OAR–2018–0794–1181; Comment Letter from Exelon Corporation, Docket ID Item No. EPA–HQ– OAR–2018–0794–1158. E:\FR\FM\09FEP2.SGM 09FEP2 Federal Register / Vol. 87, No. 27 / Wednesday, February 9, 2022 / Proposed Rules appropriate under a totality-of-thecircumstances approach. Specifically, we note that reductions in co-emissions of direct PM2.5, SO2 and NOX will have substantial health benefits in the form of decreased risk of premature mortality among adults, and reduced incidence of lung cancer, new onset asthma, exacerbated asthma, and other respiratory and cardiovascular diseases. In the 2011 RIA, the EPA estimated the number and value of avoided PM2.5related impacts, including 4,200 to 11,000 premature deaths, 4,700 nonfatal heart attacks, 2,600 hospitalizations for respiratory and cardiovascular diseases, 540,000 lost work days, and 3.2 million days when adults restrict normal activities because of respiratory symptoms exacerbated by PM2.5. We also estimated substantial additional health improvements for children from reductions in upper and lower respiratory illnesses, acute bronchitis, and asthma attacks. In addition, we estimated the benefit of reductions in CO2 emissions under MATS. Although the EPA only partially monetized the benefits associated with these reductions in co-emitted pollutants in the 2011 RIA, the Agency estimated that—due in particular to the strong causal relationship between PM2.5 and premature mortality—these reductions could result in as much as $90 billion (in 2016 dollars) in additional public health benefits annually. Therefore, if these non-HAP benefits are considered in the totality-of-the-circumstances approach, we take note of the fact that regulating EGUs for HAP emissions results in substantial other health benefits accruing to the American public by virtue of regulating HAP from EGUs. lotter on DSK11XQN23PROD with PROPOSALS2 E. The Administrator’s Proposed Benefit-Cost Analysis Approach and Proposed Conclusion In addition to the preferred approach, we separately put forward an alternative approach, as we did in 2016, to support a determination that it is appropriate and necessary to regulate HAP from EGUs when looking at the results of a formal BCA. The formal BCA we conducted for purposes of meeting Executive Order 12866 using established BCA practices also demonstrates that the benefits estimated for MATS far exceed the estimated costs, as reported in the 2011 RIA.119 In 119 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. Assuming that all consequences can be monetized, actions VerDate Sep<11>2014 21:43 Feb 08, 2022 Jkt 256001 its net benefits projection, the 2011 RIA monetized only one post control benefit from regulating HAP emissions from EGUs because the Agency did not and does not have the information necessary to monetize the many other benefits associated with reducing HAP emissions from EGUs. See section III.A.4. However, the 2011 RIA properly accounted for all benefits by discussing qualitatively those that could not be quantified and/or monetized. While some of the impacts on particularly impacted populations—such as the children of recreational anglers experiencing IQ loss—were reflected in the net benefits calculation, that accounting does not really grapple with the equitable question of whether a subset of Americans should continue to bear disproportionate health risks in order to avoid the increased cost of controlling HAP from EGUs. We continue to prefer a totality-of-thecircumstances approach to making the determination under CAA section 112(n)(1)(A), but we think that if a BCA is to be used, it should, consistent with economic theory and principles, account for all costs and all benefits. BCA has been part of executive branch rulemaking for decades. Over the last 50 years, Presidents have issued Executive Orders directing agencies to conduct these analyses as part of the rulemaking development process. Executive Order 12866, currently in effect, requires a quantification of benefits and costs to the extent feasible for any regulatory action that is likely to result in a rule that may have an annual effect on the economy of $100 million or more or adversely affect in a material way certain facets of society. Executive Order 12866, at section 3(f)(1). The EPA performed a formal BCA to comport with Executive Order 12866 as part of the 2012 MATS rulemaking process (referred to herein as the 2011 RIA). In the 2016 Supplemental Finding, the EPA relied on the BCA it had performed for Executive Order 12866 purposes as an alternative basis upon which to make the appropriate and necessary determination. That BCA, which reflected in its net benefits calculation only certain categories of benefits that could be confidently monetized, estimated that the final MATS would yield annual net 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. See 80 FR 75040 (December 1, 2015). These estimates included the with positive net benefits (i.e., benefits exceed costs) improve economic efficiency. PO 00000 Frm 00047 Fmt 4701 Sfmt 4702 7669 portion of the HAP benefits described in section III.A that could be monetized at the time, along with additional health benefits associated with the controls necessary to control the HAP emissions from U.S. EGUs. Specifically, as noted, the net benefits estimates included only one of the many HAP benefits associated with reduction of HAP. Nonetheless, the monetized benefits of MATS outweighed the estimated $9.6 billion in annual monetized costs by between 3-to-1 or 9-to-1 depending on the benefit estimate and discount rate used. The implementation of control technologies to reduce HAP emissions from EGU sources also led to reductions in emissions of SO2, direct PM2.5, as well as other precursors to PM2.5 and ozone. In the 2011 RIA, the EPA did not quantify the benefits associated with ozone reductions resulting from the emissions controls under MATS, but we did include estimates of the projected benefits associated with reductions in PM2.5. These benefits were quite substantial and had a large economic value. Newer scientific studies strengthen our understanding of the link between PM2.5 exposure to a variety of health problems, including: premature death, lung cancer, non-fatal heart attacks, new onset asthma, irregular heartbeat, aggravated asthma, decreased lung function, and respiratory symptoms, such as irritation of the airways, coughing or difficulty breathing. Furthermore, since the RIA was completed in 2011, the EPA has updated its conclusions about how PM2.5 emissions can adversely affect the environment through acidic deposition, materials damage, visibility impairment, and exacerbating climate change (EPA, 2019).120 In its most recent review of the effects of ozone pollution, the EPA concluded that ozone is associated with a separate but similarly significant set of adverse outcomes including respiratoryrelated premature death, increased frequency of asthma attacks, aggravated lung disease, and damage to vegetation (EPA, 2020).121 BCAs are a useful tool to ‘‘estimate the total costs and benefits to society of an activity or program,’’ and ‘‘can be thought of as an accounting framework of the overall social welfare of a program.’’ EPA Economic Guidelines, Appendix A, A–6 (emphasis in 120 U.S. EPA. Integrated Science Assessment (ISA) for Particulate Matter (Final Report, Dec 2019). U.S. Environmental Protection Agency, Washington, DC, EPA/600/R–19/188, 2019. 121 U.S. EPA. Integrated Science Assessment (ISA) for Ozone and Related Photochemical Oxidants (Final Report, Apr 2020). U.S. Environmental Protection Agency, Washington, DC, EPA/600/R– 20/012, 2020. E:\FR\FM\09FEP2.SGM 09FEP2 7670 Federal Register / Vol. 87, No. 27 / Wednesday, February 9, 2022 / Proposed Rules lotter on DSK11XQN23PROD with PROPOSALS2 original).122 In a BCA, ‘‘[t]he favorable effects of a regulation are the benefits, and the foregone opportunities or losses in utility are the costs. Subtracting the total costs from the total monetized benefits provides an estimate of the regulation’s net benefits to society.’’ Id. Importantly, however, ‘‘[t]he key to performing BCA lies in the ability to measure both benefits and costs in monetary terms so that they are comparable.’’ Id.; see also OMB Circular A–4 (‘‘A distinctive feature of BCA is that both benefits and costs are expressed as monetary units, which allows you to evaluate different regulatory options with a variety of attributes using a common measure.’’).123 In the 2020 Final Action, the EPA rescinded the 2016 alternative approach on the basis that it was ‘‘fundamentally flawed’’ because it applied ‘‘a formal cost-benefit analysis’’ to the CAA section 112(n)(1)(A) determination. The Agency’s objection at the time to the use of ‘‘a formal cost-benefit analysis’’ in the context of this determination was that doing so ‘‘implied that an equal weight was given to the non-HAP co-benefit emission reductions and the HAPspecific benefits of the regulation.’’ See 85 FR 31299 (May 22, 2020). The Agency concluded that it was not appropriate to use a formal BCA in this situation because ‘‘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.’’ Id. The EPA reiterated in the 2020 Final Action that ‘‘HAP benefits, as compared to costs, must be the primary question in making the ‘appropriate and necessary’ determination’’ and ‘‘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.’’ Id. at 31303. ‘‘To be valid, the EPA’s analytical approach to [CAA section 112(n)(1)(A)] must recognize Congress’ particular concern about risks associated with HAP and the benefits that would accrue from reducing those risks.’’ Id. at 31301. 122 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, accessed July 23, 2021. Docket ID Item No. EPA–HQ–OAR– 2009–0234–20503. 123 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, accessed July 23, 2021. VerDate Sep<11>2014 21:43 Feb 08, 2022 Jkt 256001 We agree that the analytical framework for the appropriate and necessary determination should first and foremost be one that is focused on ‘‘Congress’ particular concern about risks associated with HAP and the benefits that would accrue from reducing those risks.’’ Id. It is for this reason, as discussed in section III.C of this preamble, that we propose to revoke the analytical framework advanced for the appropriate and necessary determination by the 2020 Final Action, as being insufficiently attentive to the public health advantages of regulation. However, if the decisional framework is going to be one that considers advantages to regulation primarily in terms of potential monetized outcomes (see 85 FR 31296–97; May 22, 2020), a formal BCA that estimates net outcomes (i.e., by comparing total losses and gains) and conforms to established economic best practices and accounts for all of the effects of the rule that can be quantified should be used.124 Consistent with scientific principles underlying BCA, both OMB Circular A– 4 and the EPA’s Guidelines for Preparation of Economic Analyses direct the Agency to include all benefits in a BCA. Per Circular A–4, OMB instructs ‘‘Your analysis should look beyond the direct benefits and direct costs of your rulemaking and consider any important ancillary benefits and countervailing risks. An ancillary benefit is a favorable impact of the rule that is typically unrelated or secondary to the statutory purpose of the rulemaking.’’ Circular A–4 at 26. Similarly, the Guidelines state, ‘‘An economic analysis of regulatory or 124 In addition, CAA section 112(n)(1)(A) directs the EPA to evaluate the hazards to public health from EGU HAP emissions that a reasonably anticipated ‘‘after imposition of the other requirements of the [CAA].’’ The direction to consider the impacts of non-CAA section 112 requirements on HAP emissions from EGUs demonstrates that Congress understood that criteria pollutant controls would achieve HAP reductions. Given this understanding, it is reasonable for the EPA to consider the consequent criteria pollutant reductions attributable to CAA section 112 standards if a BCA is used to evaluate cost in the context of the appropriate finding. Furthermore, CAA section 112 legislative history not specifically directed at EGUs also supports the consideration of criteria pollutant benefits attributable to the regulation of HAP emissions. Specifically, the Senate report for the 1990 CAA amendments states: ‘‘When establishing technology-based [MACT] standards under this subsection, the Administrator may consider the benefits which result from control of air pollutants that are not listed but the emissions of which are, nevertheless, reduced by control technologies or practices necessary to meet the prescribed limitation.’’ A Legislative History of the Clean Air Act Amendments of 1990 (CAA Legislative History), Vol. 5, pp. 8512 (CAA Amendments of 1989; p. 172; Report of the Committee on Environment and Public Works S. 1630). PO 00000 Frm 00048 Fmt 4701 Sfmt 4702 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.’’ Guidelines at 11–2. As discussed in prior MATS rulemakings (see, e.g., 80 FR 75041; December 1, 2015), installing control technologies and implementing the compliance strategies necessary to reduce the HAP emissions directly regulated by the MATS rule also results in reductions in the emissions of other pollutants such as directly emitted PM2.5 and SO2 (a PM2.5 precursor). A particularly cost-effective control of emissions of particulate-bound mercury and non-mercury metal HAP is through the use of PM control devices that indiscriminately collect PM along with the metal HAP, which are predominately present as particles. Similarly, emissions of the acid gas HAP are reduced by acid gas controls that are also effective at reducing emissions of SO2 (also an acid gas, but not a HAP). Id. While these PM2.5 and SO2 emission reductions are not the objective of the MATS rule, the reductions are, in fact, a direct consequence of regulating the HAP emissions from EGUs. Specifically, controls on direct PM2.5 emissions are required to reduce non-mercury metal HAP, while SO2 emissions reductions come from controls needed to reduce acid gas emissions from power plants. However, we recognize that there are significant reasons to question whether a formal BCA is the best way to interpret the Agency’s mandate in CAA section 112(n)(1)(A), and we take comment on whether the Agency should continue to rely on this alternative basis for making its determination. We have consistently taken the position that a formal BCA is not required under CAA section 112(n)(1)(A). See 80 FR 75039 (December 1, 2015). As set forth above, in Michigan, the Supreme Court declined to hold that CAA section 112(n)(1)(A) required such an assessment, stating, ‘‘We need not and do not hold that the law unambiguously required the Agency, when making this preliminary estimate, to conduct a formal cost-benefit analysis in which each advantage and disadvantage is assigned a monetary value.’’ Michigan, 576 U.S. at 759. However, the Court did note that ‘‘[c]onsideration of cost reflects the understanding that reasonable regulation ordinarily requires paying attention to the advantages and disadvantages of agency decisions.’’ Id. at 2707. Moreover, in finding the EPA’s decision not to E:\FR\FM\09FEP2.SGM 09FEP2 lotter on DSK11XQN23PROD with PROPOSALS2 Federal Register / Vol. 87, No. 27 / Wednesday, February 9, 2022 / Proposed Rules consider cost irrational, the Court suggested that unintended disadvantages of a regulation could be considered costs as well, implying that such disadvantages should be accounted for. Id. at 2707 (‘‘The Government concedes that if the Agency were to find that emissions from power plants do damage to human health, but that the technologies needed to eliminate these emissions do even more damage to human health, it would still deem regulation appropriate. No regulation is ‘appropriate’ if it does significantly more harm than good.’’). In the 2015 Proposal, we identified several policy reasons for preferring to apply a totality-of-the-circumstances approach to weighing costs and benefits over using a formal BCA as our decisional framework under CAA section 112(n)(1)(A). See 80 FR 75025 (December 1, 2015). We recognized that benefits like those associated with reduction of HAP can be difficult to monetize, and this incomplete quantitative characterization of the positive consequences can underestimate the monetary value of net benefits. See 80 FR 75039 (December 1, 2015). This is well-established in the economic literature. As noted in OMB Circular A–4, ‘‘[w]here all benefits and costs can be expressed as monetary units, BCA provides decision makers with a clear indication of the most efficient alternative.’’ Circular A–4 at 2. However, ‘‘[w]hen important benefits and costs cannot be expressed in monetary units, BCA is less useful, and it can even be misleading, because the calculation of net benefits in such cases does not provide a full evaluation of all relevant benefits and costs.’’ Circular A– 4 at 10. The EPA’s Guidelines for Preparation of Economic Analyses also recognizes the limitations of BCA, noting that ‘‘[m]ost important, [BCA] requires assigning monetized values to non-market benefits and costs. In practice it can be very difficult or even impossible to quantify gains and losses in monetary terms (e.g., the loss of a species, intangible effects).’’ Guidelines, Appendix A at A–7. We also pointed out in the 2015 Proposal that national level BCAs may not account for important distributional effects, such as impacts to the most exposed and most sensitive individuals in a population. See 80 FR 75040 (December 1, 2015). These distributional effects and equity considerations are often considered outside of (or supplementary to) analyses like BCAs that evaluate whether actions improve economic efficiency (i.e., increase net benefits). For example, children near a facility emitting substantial amounts of VerDate Sep<11>2014 21:43 Feb 08, 2022 Jkt 256001 lead are at significantly greater risk of neurocognitive effects (including lost IQ) and other adverse health effects. One perspective on the costs and benefits of controlling lead pollution would be to aggregate those costs and benefits across society, as in a BCA net benefits calculation. However, neither costs nor benefits are spread uniformly across society and failing to take account of that can overlook significant health risks for sensitive subpopulations, such as children exposed to lead pollution. Similarly, in the context of this determination, where we have found disproportionate risk for certain highly exposed or sensitive populations, such considerations are also particularly relevant. See section II.B; section III.A. We note too that OMB Circular A–4 highlights the special challenges associated with the valuation of health outcomes for children and infants, because it is ‘‘rarely feasible to measure a child’s willingness to pay for health improvement’’ and market valuations such as increased ‘‘wage premiums demanded by workers to accept hazardous jobs are not readily transferred to rules that accomplish health gains for children.’’ Circular A– 4 at 31. We take comment on whether a BCA, on its own, is an appropriate tool to make a determination of whether to regulate under CAA section 112(n)(1)(A), given that it may not meaningfully capture all the societal interests the statute intends the EPA to consider. See Guidelines, Appendix A at A–7 (‘‘In some cases a policy may be considered desirable even if the benefits do not outweigh the costs, particularly if there are ethical or equity concerns.’’). With those caveats, we propose to reaffirm using a BCA approach, based on the 2011 RIA performed as part of the original MATS rulemaking, as another way to make the CAA section 112(n)(1)(A) determination of whether it is appropriate to regulate HAP emissions from EGUs. Applying the alternative approach, based on the 2011 RIA, we propose to find that it is appropriate to regulate EGUs for HAP under CAA section 112(n)(1)(A). In the 2011 RIA, the total benefits of MATS were estimated to vastly exceed the total costs of the regulation. As we found when applying the 2016 alternative approach, the formal BCA that the EPA performed for the 2012 MATS Final Rule estimated that the final MATS rule would yield annual monetized total benefits (in 2007 dollars) of between $37 billion to $90 billion using a 3-percent discount rate and between $33 billion to $81 billion using a 7-percent discount rate; this PO 00000 Frm 00049 Fmt 4701 Sfmt 4702 7671 compares to projected annual compliance costs of $9.6 billion. This estimate of benefits was limited to those health outcomes the EPA was able to monetize. Despite the fact that these estimates captured only a portion of the benefits of the rule, excluding many important HAP and criteria pollutantrelated endpoints which the Agency was unable to monetize (see section III.A.4) and instead discussed qualitatively in the 2011 RIA, it was clear that MATS was projected to generate overwhelmingly net positive effects on society. We continue to think that the BCA approach independently supports the conclusion that regulation of HAP emissions from EGUs is appropriate. Although as discussed in section III.B.2 it was not possible for the EPA to update the entire comprehensive cost estimate found in the 2011 RIA, we think the new information presented in sections III.A and III.B directionally supports the net benefits calculation of the 2016 alternative approach. That is, we have attempted to quantify additional risks, including risks of premature death from heart attacks that result from exposure to methylmercury associated with domestic EGU emissions, and we believe the 2011 RIA’s projected cost was almost certainly significantly overestimated. Therefore, we propose that if BCA is a reasonable tool to use in the context of the EPA’s determination under CAA section 112(n)(1)(A), newer data collected since 2011 overwhelmingly support an affirmative determination. Further, that both analytical approaches to addressing the inquiry posed by Michigan lead to the same result reinforces the reasonableness of the EPA’s ultimate decision that it is appropriate and necessary to regulate HAP emissions from EGUs after considering cost. In this proposal, the EPA has reexamined the extensive record, amassed over 2 decades, identifying the advantages of regulating HAP from EGUs and evaluating the costs of doing so. We have, for purposes of this proposal, also updated information on both benefits and costs. Of note, we find that new scientific literature indicates that methylmercury exposure from EGUs, absent regulation, poses cardiovascular and neurodevelopmental risks to all Americans and particularly those most exposed to this pollution. With respect to costs, we explain the combination of factors that occurred since the promulgation of MATS that leads us to believe that the projected, sector-level $9.6 billion estimate of the cost of compliance of the rule in 2015 E:\FR\FM\09FEP2.SGM 09FEP2 7672 Federal Register / Vol. 87, No. 27 / Wednesday, February 9, 2022 / Proposed Rules was almost certainly significantly overestimated. We propose two different approaches to considering all of this information, applying first a totality-ofthe-circumstances methodology weighing of benefits and costs and focusing particularly on those factors that we were instructed by the statute to study under CAA section 112(n)(1), and next using a formal benefit-cost approach consistent with established guidance and economic principles. Under either approach, whether looking at only the information available at the time of our initial decision to regulate or at all currently available information, we propose to conclude that it remains appropriate and necessary to regulate EGUs for HAP. Substantial emission reductions have occurred after implementation of MATS, the emission limits established pursuant to the Agency’s 2012 affirmative appropriate and necessary determination, and these limits provide the only Federal guarantee of these emission reductions from EGUs, which, absent regulation, were the largest domestic anthropogenic source of a number of HAP. Finalizing this affirmative threshold determination would provide important certainty about the future of MATS for regulated industry, states, other stakeholders, and the American public. We take comment on the information relied upon in this proposal and the EPA’s proposed approaches to considering that information for this determination. lotter on DSK11XQN23PROD with PROPOSALS2 IV. Summary of Cost, Environmental, and Economic Impacts The EPA estimates that there are 557 existing EGUs located at 265 facilities that are subject to the MATS rule. Because the EPA is not proposing any amendments to the MATS rule, there would not be any cost, environmental, or economic impacts as a result of the proposed action. V. Request for Comments and for Information To Assist With Review of the 2020 RTR On January 20, 2021, President Biden signed Executive Order 13990, ‘‘Protecting Public Health and the Environment and Restoring Science to Tackle the Climate Crisis’’ (86 FR 7037; January 25, 2021). That order, among other things, instructs the EPA to consider publishing a proposed rule suspending, revising, or rescinding the May 22, 2020 final action, ‘‘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.’’ The 2020 Final VerDate Sep<11>2014 21:43 Feb 08, 2022 Jkt 256001 Action contained two distinct, but related, final actions—(1) a reconsideration of the 2016 Supplemental Finding and (2) the RTR. This notice fulfills the Agency’s obligation to address the first action. We solicit comments on all aspects of this proposed action. Separate from this proposal, the EPA has initiated a review of the RTR, taking into account the latest information available on the experience of EGUs in complying with MATS and implementing measures to reduce HAP emissions. As previously noted, since MATS was promulgated in 2012, power sector emissions of mercury, acid gas HAP, and non-mercury metal HAP have decreased by about 86 percent, 96 percent, and 81 percent, respectively, as compared to 2010 emissions levels (Table 4 at 84 FR 2689, February 7, 2019). While EGUs remain the largest domestic emitter of mercury (and other HAP), their emissions and contribution to total mercury in the environment is significantly less now than before MATS implementation. The EPA is seeking input into how both of these facts should factor into its review of the RTR. In this notice, the EPA is soliciting information to allow for a more thorough review of the 2020 MATS RTR. The EPA is soliciting broadly for any data or information—including riskrelated information—that will assist in the review of the RTR. The EPA is also soliciting specifically for any information on performance or cost of new or additional control technologies, improved methods of operation, or other practices and technologies that may result in cost-effective reductions of HAP emissions from coal- or oil-fired EGUs. In addition, the EPA is interested in receiving information on improvements or upgrades to existing controls that may result in cost-effective reductions of HAP emissions from coalor oil-fired EGUs. The EPA also seeks information on the cost or performance of technologies and practices relating to monitoring of HAP emissions, and control of HAP emissions during startup and shutdown events, that could result in cost-effective reductions in HAP or assure improved operation of existing controls. We are seeking input from all interested stakeholders, including states, owners of EGUs, technology vendors and developers, and communities impacted by the emissions from EGUs. VI. Statutory and Executive Order Reviews Additional information about these statutes and Executive Orders can be PO 00000 Frm 00050 Fmt 4701 Sfmt 4702 found at https://www.epa.gov/lawsregulations/laws-and-executive-orders. A. Executive Order 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 under Executive Order 12866. Any changes made in response to OMB recommendations have been documented in the docket. The EPA does not project any incremental costs or benefits associated with this action because it does not impose standards or other requirements on affected sources. B. 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 proposing any changes to the information collection requirements. C. Regulatory Flexibility Act (RFA) I certify that this action will not have a significant economic impact on a substantial number of small entities under the RFA. This action will not impose any requirements on small entities. The EPA does not project any incremental costs or benefits associated with this action because it does not impose standards or other requirements on affected sources. D. Unfunded Mandates Reform Act (UMRA) This action does not contain an unfunded mandate of $100 million or more 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. E. 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. F. Executive Order 13175: Consultation and Coordination With Indian Tribal Governments This action does not have tribal implications as specified in Executive E:\FR\FM\09FEP2.SGM 09FEP2 Federal Register / Vol. 87, No. 27 / Wednesday, February 9, 2022 / Proposed Rules Order 13175. The executive order defines tribal implications as ‘‘actions that have substantial direct effects on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.’’ Revocation of the 2020 determination that it is not appropriate and necessary to regulate HAP emissions from coaland oil-fired EGUs under CAA section 112 and reaffirmation of the 2016 Supplemental Finding that it remains appropriate and necessary to regulate HAP emissions from EGUs after considering cost would not have a substantial direct effect on one or more tribes, change the relationship between the Federal Government and tribes, or affect the distribution of power and responsibilities between the Federal Government and Indian tribes. Thus, Executive Order 13175 does not apply to this action. G. Executive Order 13045: Protection of Children From Environmental Health Risks and Safety Risks lotter on DSK11XQN23PROD with PROPOSALS2 This action is not subject to Executive Order 13045 because it is not economically significant as defined in Executive Order 12866, and because this action does not impose new regulatory requirements that might present a disproportionate risk to children. This action reaffirms the 2016 Supplemental Finding that it is appropriate and necessary to regulate HAP emissions from U.S. EGUs, but does not impose control requirements, which were implemented through MATS (77 FR 9304; February 16, 2012). While this action does not impose or change any standards or other requirements, it addresses the underpinning for the HAP VerDate Sep<11>2014 21:43 Feb 08, 2022 Jkt 256001 emission standards in MATS. The EPA believes the reductions in HAP emissions achieved under MATS have provided and will continue to provide significant benefits to children in the form of improved neurodevelopment and respiratory health and reduced risk of adverse outcomes. Analyses supporting the 2012 MATS Final Rule estimated substantial health improvements for children in 2016 in the form of 130,000 fewer asthma attacks, 3,100 fewer emergency room visits due to asthma, 6,300 fewer cases of acute bronchitis, and approximately 140,000 fewer cases of upper and lower respiratory illness. See 77 FR 9441 (February 16, 2012). Reaffirming the appropriate and necessary determination assures those benefits will continue to accrue among children. H. 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 emissions, costs, or energy supply decisions for the affected electric utility industry as it does not impose standards or other requirements on affected sources. I. National Technology Transfer and Advancement Act (NTTAA) This action does not involve technical standards. J. Executive Order 12898: Federal Actions To Address Environmental Justice in Minority Populations and Low-Income Populations The EPA believes that this action will not have disproportionately high and PO 00000 Frm 00051 Fmt 4701 Sfmt 9990 7673 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), because it does not impose standards or other requirements on affected sources and is limited in scope to only consider whether it is appropriate and necessary to regulate HAP emissions from coaland oil-fired EGUs. While this action does not impose or modify any standards or other requirements, it provides the underpinning for the emission standards regulating HAP from EGUs. As documented in both the NAS Study and Mercury Study, fish and seafood consumption is the primary route of human exposure to methylmercury originating from U.S. EGUs, with populations engaged in subsistence-levels of consumption being of particular concern. As shown in section III.A.5 of this preamble, certain minority, low-income, and indigenous populations are more likely to experience elevated exposures, thus higher health risks relative of the general population due to subsistence fishing. Furthermore, subpopulations with the higher exposure tend to overlap with those subpopulations that are particularly vulnerability to small changes in health risk because of other social determinants of health (e.g., lack of access to health care and access to strong schooling), thereby compounding the implications of the implications of mercury exposure. Reaffirming the appropriate and necessary determination assures that the reduction in risks achieved by MATS continue. Michael S. Regan, Administrator. [FR Doc. 2022–02343 Filed 2–8–22; 8:45 am] BILLING CODE 6560–50–P E:\FR\FM\09FEP2.SGM 09FEP2

Agencies

ENVIRONMENTAL PROTECTION AGENCY

[Federal Register Volume 87, Number 27 (Wednesday, February 9, 2022)]
[Proposed Rules]
[Pages 7624-7673]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-02343]



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Vol. 87

Wednesday,

No. 27

February 9, 2022

Part III





Environmental Protection Agency





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40 CFR Part 63





National Emission Standards for Hazardous Air Pollutants: Coal- and 
Oil-Fired Electric Utility Steam Generating Units--Revocation of the 
2020 Reconsideration, and Affirmation of the Appropriate and Necessary 
Supplemental Finding; Notice of Proposed Rulemaking; Proposed Rule

Federal Register / Vol. 87 , No. 27 / Wednesday, February 9, 2022 / 
Proposed Rules

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 63

[EPA-HQ-OAR-2018-0794; FRL-6716.2-01-OAR]
RIN 2060-AV12


National Emission Standards for Hazardous Air Pollutants: Coal- 
and Oil-Fired Electric Utility Steam Generating Units--Revocation of 
the 2020 Reconsideration, and Affirmation of the Appropriate and 
Necessary Supplemental Finding; Notice of Proposed Rulemaking

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: The EPA is proposing to revoke a May 22, 2020 finding that it 
is not appropriate and necessary to regulate coal- and oil-fired 
electric utility steam generating units (EGUs) under Clean Air Act 
(CAA) section 112, and to reaffirm the Agency's April 25, 2016 finding 
that it remains appropriate and necessary to regulate hazardous air 
pollutant (HAP) emissions from EGUs after considering cost. The Agency 
is also reviewing another part of the May 22, 2020 action, a residual 
risk and technology review (RTR) of Mercury and Air Toxics Standards 
(MATS). Accordingly, in addition to soliciting comments on all aspects 
of this proposal, the EPA is soliciting information on the performance 
and cost of new or improved technologies that control HAP emissions, 
improved methods of operation, and risk-related information to further 
inform the Agency's review of the MATS RTR as directed by Executive 
Order 13990.

DATES: Comments must be received on or before April 11, 2022.
    Public hearing: The EPA will hold a virtual public hearing on 
February 24, 2022. See SUPPLEMENTARY INFORMATION for information on the 
hearing.

ADDRESSES: You may send comments, identified by Docket ID No. EPA-HQ-
OAR-2018-0794, by any of the following methods:
     Federal eRulemaking Portal: https://www.regulations.gov/ 
(our preferred method). Follow the online instructions for submitting 
comments.
     Email: [email protected]. Include Docket ID No. EPA-
HQ-OAR-2018-0794 in the subject line of the message.
     Fax: (202) 566-9744. Attention Docket ID No. EPA-HQ-OAR-
2018-0794.
     Mail: U.S. Environmental Protection Agency, EPA Docket 
Center, Docket ID No. EPA-HQ-OAR-2018-0794, Mail Code 28221T, 1200 
Pennsylvania Avenue NW, Washington, DC 20460.
     Hand/Courier Delivery: EPA Docket Center, WJC West 
Building, Room 3334, 1301 Constitution Avenue NW, Washington, DC 20004. 
The Docket Center's hours of operation are 8:30 a.m.-4:30 p.m., Monday-
Friday (except Federal holidays).
    Instructions: All submissions received must include the Docket ID 
No. for this rulemaking. Comments received may be posted without change 
to https://www.regulations.gov/, including any personal information 
provided. For detailed instructions on sending comments and additional 
information on the rulemaking process, see the SUPPLEMENTARY 
INFORMATION section of this document. Out of an abundance of caution 
for members of the public and our staff, the EPA Docket Center and 
Reading Room are closed to the public, with limited exceptions, to 
reduce the risk of transmitting COVID-19. Our Docket Center staff will 
continue to provide remote customer service via email, phone, and 
webform. We encourage the public to submit comments via https://www.regulations.gov/ or email, as there may be a delay in processing 
mail and faxes. Hand deliveries and couriers may be received by 
scheduled appointment only. For further information on EPA Docket 
Center services and the current status, please visit us online at 
https://www.epa.gov/dockets.

FOR FURTHER INFORMATION CONTACT: For questions about this proposed 
action, contact Melanie King, 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) 541-2469; and email address: 
[email protected].

SUPPLEMENTARY INFORMATION: The EPA is proposing to revoke a May 22, 
2020 finding that it is not appropriate and necessary to regulate coal- 
and oil-fired EGUs under CAA section 112, and to reaffirm the Agency's 
April 25, 2016 finding that it remains appropriate and necessary to 
regulate HAP emissions from EGUs after considering cost. The 2016 
finding was made in response to the U.S. Supreme Court's 2015 Michigan 
v. EPA decision, where the Court held that the Agency had erred by not 
taking cost into consideration when taking action on February 16, 2012, 
to affirm a 2000 EPA determination that it was appropriate and 
necessary to regulate HAP emissions from EGUs. In the same 2012 action, 
the EPA also promulgated National Emission Standards for Hazardous Air 
Pollutants (NESHAP) for coal- and oil-fired EGUs, commonly known as the 
Mercury and Air Toxics Standards or MATS.
    Based on a re-evaluation of the administrative record and the 
statute, the EPA proposes to conclude that the framework applied in the 
May 22, 2020 finding was ill-suited to assessing and comparing the full 
range of benefits to costs, and the EPA concludes that, after applying 
a more suitable framework, the 2020 determination should be withdrawn. 
For reasons explained in this notice, the EPA further proposes to 
reaffirm that it is appropriate and necessary to regulate HAP emissions 
from EGUs after weighing the volume of pollution that would be reduced 
through regulation, the public health risks and harms posed by these 
emissions, the impacts of this pollution on particularly exposed and 
sensitive populations, the availability of effective controls, and the 
costs of reducing this harmful pollution including the effects of 
control costs on the EGU industry and its ability to provide reliable 
and affordable electricity. This notice also presents information and 
analysis that has become available since the 2016 finding, pertaining 
to the health risks of mercury emissions and the costs of reducing HAP 
emissions, that lend further support for this determination.
    The review that led to this proposal is consistent with the 
direction in Executive Order 13990, ``Protecting Public Health and the 
Environment and Restoring Science to Tackle the Climate Crisis,'' 
signed by President Biden on January 20, 2021. In response to the 
Executive Order, the Agency is also reviewing another part of the May 
22, 2020 action, a RTR of MATS. Accordingly, in addition to soliciting 
comments on all aspects of this proposal, the EPA is soliciting 
information on the performance and cost of new or improved technologies 
that control HAP emissions, improved methods of operation, and risk-
related information to further inform the Agency's review of the MATS 
RTR as directed by the Executive Order. Results of the EPA's review of 
the RTR will be presented in a separate action.
    Participation in virtual public hearing. Please note that the EPA 
is deviating from its typical approach for public hearings because the 
President has declared a national emergency. Due to the current Centers 
for Disease Control and Prevention (CDC) recommendations, as well as 
state and local orders for social distancing to limit the spread of 
COVID-19, the EPA

[[Page 7625]]

cannot hold in-person public meetings at this time.
    The virtual public hearing will be held via teleconference on 
February 24, 2022 and will convene at 10:00 a.m. Eastern Time (ET) and 
will conclude at 7:00 p.m. ET. The EPA may close a session 15 minutes 
after the last pre-registered speaker has testified if there are no 
additional speakers. For information or questions about the public 
hearing, please contact the public hearing team at (888) 372-8699 or by 
email at [email protected]. The EPA will announce further 
details at https://www.epa.gov/stationary-sources-air-pollution/mercury-and-air-toxics-standards.
    The EPA will begin pre-registering speakers for the hearing no 
later than 1 business day following publication of this document in the 
Federal Register. The EPA will accept registrations on an individual 
basis. To register to speak at the virtual hearing, please use the 
online registration form available at https://www.epa.gov/stationary-sources-air-pollution/mercury-and-air-toxics-standards or contact the 
public hearing team at (888) 372-8699 or by email at 
[email protected]. The last day to pre-register to speak at the 
hearing will be February 18, 2022. Prior to the hearing, the EPA will 
post a general agenda that will list pre-registered speakers in 
approximate order at: https://www.epa.gov/stationary-sources-air-pollution/mercury-and-air-toxics-standards.
    The EPA will make every effort to follow the schedule as closely as 
possible on the day of the hearing; however, please plan for the 
hearings to run either ahead of schedule or behind schedule.
    Each commenter will have 5 minutes to provide oral testimony. The 
EPA encourages commenters to provide the EPA with a copy of their oral 
testimony electronically (via email) by emailing it to 
[email protected]. The EPA also recommends submitting the text of 
your oral testimony as written comments to the rulemaking docket.
    The EPA may ask clarifying questions during the oral presentations 
but will not respond to the presentations at that time. Written 
statements and supporting information submitted during the comment 
period will be considered with the same weight as oral testimony and 
supporting information presented at the public hearing.
    Please note that any updates made to any aspect of the hearing will 
be posted online at https://www.epa.gov/stationary-sources-air-pollution/mercury-and-air-toxics-standards. While the EPA expects the 
hearing to go forward as set forth above, please monitor our website or 
contact the public hearing team at (888) 372-8699 or by email at 
[email protected] to determine if there are any updates. The 
EPA does not intend to publish a document in the Federal Register 
announcing updates.
    If you require the services of a translator or a special 
accommodation such as audio description, please pre-register for the 
hearing with the public hearing team and describe your needs by 
February 16, 2022. The EPA may not be able to arrange accommodations 
without advanced notice.
    Docket. The EPA has established a docket for this rulemaking under 
Docket ID No. EPA-HQ-OAR-2018-0794.\1\ All documents in the docket are 
listed in https://www.regulations.gov/. Although listed, some 
information is not publicly available, e.g., Confidential Business 
Information (CBI) or other information whose disclosure is restricted 
by statute. Certain other material, such as copyrighted material, is 
not placed on the internet and will be publicly available only in hard 
copy. With the exception of such material, publicly available docket 
materials are available electronically in https://www.regulations.gov/.
---------------------------------------------------------------------------

    \1\ As explained in a memorandum to the docket, the docket for 
this action includes 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).
---------------------------------------------------------------------------

    Instructions. Direct your comments to Docket ID No. EPA-HQ-OAR-
2018-0794. The EPA's policy is that all comments received will be 
included in the public docket without change and may be made available 
online at https://www.regulations.gov/, including any personal 
information provided, unless the comment includes information claimed 
to be CBI or other information whose disclosure is restricted by 
statute. Do not submit electronically any information that you consider 
to be CBI or other information whose disclosure is restricted by 
statute. This type of information should be submitted by mail as 
discussed below.
    The EPA may publish any comment received to its public docket. 
Multimedia submissions (audio, video, etc.) must be accompanied by a 
written comment. The written comment is considered the official comment 
and should include discussion of all points you wish to make. The EPA 
will generally not consider comments or comment contents located 
outside of the primary submission (i.e., on the Web, cloud, or other 
file sharing system). For additional submission methods, the full EPA 
public comment policy, information about CBI or multimedia submissions, 
and general guidance on making effective comments, please visit https://www.epa.gov/dockets/commenting-epa-dockets.
    The https://www.regulations.gov/ website allows you to submit your 
comment anonymously, which means the EPA will not know your identity or 
contact information unless you provide it in the body of your comment. 
If you send an email comment directly to the EPA without going through 
https://www.regulations.gov/, your email address will be automatically 
captured and included as part of the comment that is placed in the 
public docket and made available on the internet. If you submit an 
electronic comment, the EPA recommends that you include your name and 
other contact information in the body of your comment and with any 
digital storage media you submit. If the EPA cannot read your comment 
due to technical difficulties and cannot contact you for clarification, 
the EPA may not be able to consider your comment. Electronic files 
should not include special characters or any form of encryption and be 
free of any defects or viruses. For additional information about the 
EPA's public docket, visit the EPA Docket Center homepage at https://www.epa.gov/dockets.
    The EPA is temporarily suspending its Docket Center and Reading 
Room for public visitors, with limited exceptions, to reduce the risk 
of transmitting COVID-19. Our Docket Center staff will continue to 
provide remote customer service via email, phone, and webform. We 
encourage the public to submit comments via https://www.regulations.gov/ as there may be a delay in processing mail and 
faxes. Hand deliveries or couriers will be received by scheduled 
appointment only. For further information and updates on EPA Docket 
Center services, please visit us online at https://www.epa.gov/dockets.
    The EPA continues to carefully and continuously monitor information 
from the CDC, local area health departments, and our Federal partners 
so that we can respond rapidly as conditions change regarding COVID-19.
    Submitting CBI. Do not submit information containing CBI to the EPA

[[Page 7626]]

through https://www.regulations.gov/ or email. Clearly mark the part or 
all of the information that you claim to be CBI. For CBI information on 
any digital storage media that you mail to the EPA, mark the outside of 
the digital storage media as CBI and then identify electronically 
within the digital storage media the specific information that is 
claimed as CBI. In addition to one complete version of the comments 
that includes information claimed as CBI, you must submit a copy of the 
comments that does not contain the information claimed as CBI directly 
to the public docket through the procedures outlined in Instructions 
above. If you submit any digital storage media that does not contain 
CBI, mark the outside of the digital storage media clearly that it does 
not contain CBI. Information not marked as CBI will be included in the 
public docket and the EPA's electronic public docket without prior 
notice. Information marked as CBI will not be disclosed except in 
accordance with procedures set forth in title 40 of the Code of Federal 
Regulations (CFR) part 2. Send or deliver information identified as CBI 
only to the following address: OAQPS Document Control Officer (C404-
02), OAQPS, U.S. Environmental Protection Agency, Research Triangle 
Park, North Carolina 27711, Attention Docket ID No. EPA-HQ-OAR-2018-
0794. Note that written comments containing CBI and submitted by mail 
may be delayed and no hand deliveries will be accepted.
    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:

ACI activated carbon injection
ATSDR Agency for Toxic Substances and Disease Registry
ARP Acid Rain Program
BCA benefit-cost analysis
CAA Clean Air Act
CAAA Clean Air Act Amendments of 1990
CAMR Clean Air Mercury Rule
CBI Confidential Business Information
CFR Code of Federal Regulations
CVD cardiovascular disease
DSI dry sorbent injection
EGU electric utility steam generating unit
EIA Energy Information Administration
EPA Environmental Protection Agency
ESP electrostatic precipitator
EURAMIC European Multicenter Case-Control Study on Antioxidants, 
Myocardial Infarction, and Cancer of the Breast Study
FF fabric filter
FGD flue gas desulfurization
FR Federal Register
GW gigawatt
HAP hazardous air pollutant(s)
HCl hydrogen chloride
HF hydrogen fluoride
IHD ischemic heart disease
IPM Integrated Planning Model
IRIS Integrated Risk Information System
KIHD Kuopio Ischaemic Heart Disease Risk Factor Study
kW kilowatt
MACT maximum achievable control technology
MATS Mercury and Air Toxics Standards
MI myocardial infarction
MIR maximum individual risk
MW megawatt
NAS National Academy of Sciences
NESHAP national emission standards for hazardous air pollutants
OMB Office of Management and Budget
O&M operation and maintenance
PM particulate matter
PUFA polyunsaturated fatty acid
RfD reference dose
RIA regulatory impact analysis
RTR residual risk and technology review
SCR selective catalytic reduction
SO2 sulfur dioxide
TSD technical support document
tpy tons per year

    Organization of this document. The information in this preamble is 
organized as follows:

I. General Information
    A. Executive Summary
    B. Does this action apply to me?
    C. Where can I get a copy of this document and other related 
information?
II. Background
    A. Regulatory History
    B. Statutory Background
III. Proposed Determination Under CAA Section 112(n)(1)(A)
    A. Public Health Hazards Associated With Emissions From EGUs
    B. Consideration of Cost of Regulating EGUs for HAP
    C. Revocation of the 2020 Final Action
    D. The Administrator's Proposed Preferred Framework and Proposed 
Conclusion
    E. The Administrator's Proposed Benefit-Cost Analysis Approach 
and Proposed Conclusion
IV. Summary of Cost, Environmental, and Economic Impacts
V. Request for Comments and for Information To Assist With Review of 
the 2020 RTR
VI. Statutory and Executive Order Reviews
    A. Executive Order 12866: Regulatory Planning and Review and 
Executive Order 13563: Improving Regulation and Regulatory Review
    B. Paperwork Reduction Act (PRA)
    C. Regulatory Flexibility Act (RFA)
    D. Unfunded Mandates Reform Act (UMRA)
    E. Executive Order 13132: Federalism
    F. Executive Order 13175: Consultation and Coordination With 
Indian Tribal Governments
    G. Executive Order 13045: Protection of Children From 
Environmental Health Risks and Safety Risks
    H. Executive Order 13211: Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use
    I. National Technology Transfer and Advancement Act (NTTAA)
    J. Executive Order 12898: Federal Actions To Address 
Environmental Justice in Minority Populations and Low-Income 
Populations

I. General Information

A. Executive Summary

    On January 20, 2021, President Biden signed Executive Order 13990, 
``Protecting Public Health and the Environment and Restoring Science to 
Tackle the Climate Crisis'' (86 FR 7037, January 25, 2021). The 
Executive Order, among other things, instructs the EPA to review the 
2020 final action titled, ``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'' (85 FR 31286; May 22, 2020) (2020 Final Action) and 
consider publishing a notice of proposed rulemaking suspending, 
revising, or rescinding that action. Consistent with the Executive 
Order, the EPA has undertaken a careful review of the 2020 Final 
Action, in which the EPA reconsidered its April 25, 2016 supplemental 
finding (81 FR 24420) (2016 Supplemental Finding). Based on that 
review, the Agency proposes to find that the decisional framework for 
making the appropriate and necessary determination under CAA section 
112(n)(1)(A) that was applied in the 2020 Final Action was unsuitable 
because it failed to adequately account for statutorily relevant 
factors. Therefore, we propose to revoke the May 2020 determination 
that it is not appropriate and necessary to regulate HAP emissions from 
coal- and oil-fired EGUs under section 112 of the CAA. We further 
propose to reaffirm our earlier determinations--made in 2000 (65 FR 
79825; December 20, 2000) (2000 Determination), 2012 (77 FR 9304; 
February 16, 2012) (2012 MATS Final Rule), and 2016--that it is 
appropriate and necessary to regulate coal- and oil-fired EGUs under 
section 112 of the CAA.
    In 1990, frustrated with the EPA's pace in identifying and 
regulating HAP, Congress radically transformed its treatment of that 
pollution. It rewrote section 112 of the CAA to require the EPA to 
swiftly regulate 187 HAP with technology-based standards that would 
require all major sources (defined by the quantity of pollution a 
facility has the potential to emit) to meet the levels of reduction 
achieved in practice by the best-performing similar sources. EGUs were 
the one major source category excluded from automatic application of 
these new standards. EGUs were treated differently primarily because 
the 1990

[[Page 7627]]

Amendments to the CAA (1990 Amendments) included the Acid Rain Program 
(ARP), which imposed criteria pollution reduction requirements on EGUs. 
Congress recognized that the controls necessary to comply with this and 
other requirements of the 1990 Amendments might reduce HAP emissions 
from EGUs as well. Therefore, under CAA section 112(n)(1)(A), Congress 
directed the EPA to regulate EGUs if, after considering a study of 
``the hazards to public health reasonably anticipated to occur as a 
result of [HAP] emissions by [EGUs] . . . after imposition of the [Acid 
Rain Program and other] requirements of this chapter,'' the EPA 
concluded that it ``is appropriate and necessary'' to do so. See CAA 
section 112(n)(1)(A).
    The EPA completed that study in 1998 and, in 2000, concluded that 
it is appropriate and necessary to regulate HAP emissions from coal- 
and oil-fired EGUs. See 65 FR 79825 (December 20, 2000). The EPA 
reaffirmed that conclusion in 2012, explaining that the other 
requirements of the CAA, in particular the ARP, did not lead to the HAP 
emission reductions that had been anticipated because many EGUs 
switched to lower-sulfur coal rather than deploy pollution controls 
that may have also reduced emissions of HAP. Indeed, the statute 
contemplated that the EPA would be conducting the required study within 
3 years of the 1990 Amendments; but when the EPA re-examined public 
health hazards remaining after imposition of the Act's requirements in 
2012, the Agency accounted for over 20 years of CAA regulation, and 
EGUs still remained one of the largest sources of HAP pollution. 
Specifically, in 2012, the EPA concluded that EGUs were the largest 
domestic source of emissions of mercury, hydrogen fluoride (HF), 
hydrogen chloride (HCl), and selenium; and among the largest domestic 
contributors of emissions of arsenic, chromium, cobalt, nickel, 
hydrogen cyanide, beryllium, and cadmium. The EPA further found that a 
significant majority of EGUs were located at facilities that emitted 
above the statutory threshold set for major sources (e.g., 10 tons per 
year (tpy) of any one HAP or 25 tpy or more of any combination of HAP). 
See 77 FR 9304 (February 16, 2012). In 2012, the EPA also established 
limits for emissions of HAP from coal- and oil-fired EGUs. Id.
    Many aspects of the EPA's appropriate and necessary determination 
and the CAA section 112 regulations were challenged in the U.S. Court 
of Appeals for the District of Columbia Circuit (D.C. Circuit), and all 
challenges were denied and the finding and standards upheld in full in 
White Stallion Energy Center v. EPA, 748 F.3d 1222 (2014). The Supreme 
Court granted review on a single issue and, in Michigan v. EPA, 576 
U.S. 743 (2015), the Court held that the EPA erred when it failed to 
consider the costs of its regulation in determining that it is 
appropriate and necessary to regulate HAP emissions from EGUs, and 
remanded that determination to the D.C. Circuit for further 
proceedings. Following Michigan, in 2016 the EPA issued a Supplemental 
Finding that it is appropriate and necessary to regulate EGU HAP after 
considering the costs of such regulation. See 81 FR 24420 (April 25, 
2016). In 2020, the Agency reversed that determination.\2\ In this 
action, we conclude that the methodology we applied in 2020 is ill-
suited to the appropriate and necessary determination because, among 
other reasons, it did not give adequate weight to the significant 
volume of HAP emissions from EGUs and the attendant risks remaining 
after imposition of the other requirements of the CAA, including many 
adverse health and environmental effects of EGU HAP emissions that 
cannot be quantified or monetized. We propose, therefore, to revoke the 
2020 Final Action.
---------------------------------------------------------------------------

    \2\ The 2020 Final Action, while reversing the 2016 Supplemental 
Finding as to the EPA's determination that it was ``appropriate'' to 
regulate HAP from EGUs, did not rescind the Agency's prior 
determination that it was necessary to regulate. See 84 FR 2674 
(February 7, 2019). Instead, the 2020 rulemaking stated that its 
rescission was based on the appropriate prong alone: ``CAA section 
112(n)(1)(A) requires the EPA to determine that both the appropriate 
and necessary prongs are met. Therefore, if the EPA finds that 
either prong is not satisfied, it cannot make an affirmative 
appropriate and necessary finding. The EPA's reexamination of its 
determination . . . focuses on the first prong of that analysis.'' 
Id.
---------------------------------------------------------------------------

    We further propose to affirm, once again, that it is appropriate 
and necessary to regulate coal- and oil-fired EGUs under CAA section 
112. We first examine the benefits or advantages of regulation, 
including new information on the risks posed by EGU HAP. We then 
examine the costs or disadvantages of regulation, including both the 
costs of compliance (which we explain we significantly overestimated in 
2012) and how those costs affect the industry and the public. We then 
weigh these benefits and costs to reach the conclusion that it is 
appropriate and necessary to regulate using two alternative 
methodologies.
    Our preferred methodology, as it was in the 2016 Supplemental 
Finding, is to consider all of the impacts of the regulation--both 
costs and benefits to society--using a totality-of the-circumstances 
approach rooted in the Michigan court's direction to ``pay[ ] attention 
to the advantages and disadvantages of [our] decision[ ].'' 576 U.S. at 
753; see id. at 752 (``In particular, `appropriate' is `the classic 
broad all-encompassing term that naturally includes consideration of 
all relevant factors.''). To help determine the relevant factors to 
weigh, we look to CAA section 112(n)(1)(A), the other provisions of CAA 
section 112(n)(1), and to the statutory design of CAA section 112.
    Initially, we consider the human health advantages of reducing HAP 
emissions from EGUs because in CAA section 112(n)(1)(A) Congress 
directed the EPA to make the appropriate and necessary determination 
after considering the results of a ``study of the hazards to public 
health reasonably anticipated to occur as a result of [HAP] emissions'' 
from EGUs. See CAA section 112(n)(1)(A). We consider all of the 
advantages of reducing emissions of HAP (i.e., the risks posed by HAP) 
regardless of whether those advantages can be quantified or monetized, 
and we explain why almost none of those advantages can be monetized. 
Consistent with CAA section 112(n)(1)(B)'s direction to examine the 
rate and mass of mercury emissions, and the design of CAA section 112, 
which required swift reduction of the volume of HAP emissions based on 
an assumption of risk, we conclude that we should place substantial 
weight on reducing the large volume of HAP emissions from EGUs--both in 
absolute terms and relative to other source categories--that, absent 
MATS, was entering our air, water, and land, thus reducing the risk of 
grave harms that can occur as a result of exposure to HAP. Also 
consistent with the statutory design of CAA section 112, in considering 
the advantages of HAP reductions, we consider the distribution of those 
benefits, and the statute's clear goal in CAA section 112(n)(1)(C) and 
other provisions of CAA section 112 to protect the most exposed and 
susceptible populations, such as communities that are reliant on local 
fish for their survival, and developing fetuses. We think it is highly 
relevant that while EGUs generate power for all, and EGU HAP pollution 
poses risks to all Americans exposed to such HAP, a smaller set of 
Americans who live near EGUs face a disproportionate risk of being 
significantly harmed by toxic pollution. Finally, we also consider the 
identified risks to the environment posed by mercury and acid-gas HAP, 
consistent with CAA section 112(n)(1)(B) and the general goal of CAA

[[Page 7628]]

section 112 to reduce risks posed by HAP to the environment.
    We next weigh those advantages against the disadvantages of 
regulation, principally in the form of the costs incurred to control 
HAP before they are emitted into the environment. Consistent with the 
statutory design, we consider those costs comprehensively, examining 
them in the context of the effect of those expenditures on the 
economics of power generation more broadly, the reliability of 
electricity, and the cost of electricity to consumers. These metrics 
are relevant to our weighing exercise because they give us a more 
complete picture of the disadvantages to producers and consumers of 
electricity imposed by this regulation, and because our conclusion 
might change depending on how this burden affects the ability of the 
industry to thrive and to provide reliable, affordable electricity to 
the benefit of all Americans. These metrics are relevant measures for 
evaluating costs to the utility sector in part because they are the 
types of metrics considered by the owners and operators of EGUs 
themselves. See 81 FR 24428 (April 25, 2016). Per CAA section 
112(n)(1)(B), we further consider the availability and cost of control 
technologies, including the relationship of that factor to controls 
installed under the ARP.
    As explained in detail in this document, we ultimately propose to 
conclude that, weighing the risks posed by HAP emissions from EGUs 
against the costs of reducing that pollution on the industry and 
society as a whole, it is worthwhile (i.e., ``appropriate'') to 
regulate those emissions to protect all Americans, and in particular 
the most vulnerable populations, from the inherent risks posed by 
exposure to HAP emitted by coal- and oil-fired EGUs. We propose to find 
that this is true whether we are looking at the record in 2016 (i.e., 
information available as of the time of the 2012 threshold finding and 
rulemaking) or at the updated record in 2021, in which we quantify 
additional risks posed by HAP emissions from EGUs and conclude that the 
actual cost of complying with MATS was almost certainly significantly 
less than the EPA's projected estimate in the 2011 RIA, primarily 
because fewer pollution controls were installed than projected and 
because the unexpected increases in natural gas supply led to a 
dramatic decrease in the price of natural gas.
    In the 2016 Supplemental Finding we did not consider non-HAP health 
benefits that occur by virtue of controlling HAP from EGUs as a 
relevant factor for our consideration under the preferred approach. 
However, because the Supreme Court in Michigan directed us to consider 
health and environmental effects beyond those posed by HAP, 
``including, for instance, harms that regulation might do to human 
health or the environment,'' and stressed that ``[n]o regulation is 
`appropriate' if it does significantly more harm than good,'' 576 U.S. 
at 752, we take comment on whether it is reasonable to also consider 
the advantages associated with non-HAP emission reductions that result 
from the application of HAP controls as part of our totality-of-the-
circumstances approach. In the 2012 MATS Final Rule, we found that 
regulating EGUs for HAP resulted in substantial health benefits 
accruing from coincidental reductions in particulate matter (PM) 
pollution and its precursors. We also projected that regulating EGUs 
for HAP would similarly result in an improvement in ozone pollution. 
While we propose to reach the conclusion that HAP regulation is 
appropriate even absent consideration of these additional benefits, 
adding these advantages to the weighing inquiry would provide further 
support for our proposed conclusion that the advantages of regulation 
outweigh the disadvantages.
    We recognize, as we did in 2016, that our preferred, totality-of-
the-circumstances approach to making the appropriate and necessary 
determination is an exercise in judgment, and that ``[r]easonable 
people, and different decision-makers, can arrive at different 
conclusions under the same statutory provision'' (81 FR 24431; April 
25, 2016). However, this type of weighing of factors and circumstances 
is an inherent part of regulatory decision-making, and we think it is a 
reasonable approach where the factors the statute identifies as 
important to consider cannot be quantified or monetized.
    Next, we turn to our alternative approach of a formal benefit-cost 
analysis (BCA). This approach independently supports the determination 
that it is appropriate to regulate EGU HAP. Based on the 2011 
Regulatory Impacts Analysis (2011 RIA) \3\ performed as part of the 
2012 MATS Final Rule, the total net benefits of MATS were overwhelming 
even though the EPA was only able to monetize one of the many benefits 
of reducing HAP emissions from EGUs. Like the preferred approach, this 
conclusion is further supported by newer information on the risks posed 
by HAP emissions from EGUs as well as the actual costs of implementing 
MATS, which almost certainly were significantly lower than estimated in 
the 2011 RIA.
---------------------------------------------------------------------------

    \3\ 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.
---------------------------------------------------------------------------

    Our proposal is organized as follows. In section II.A of this 
preamble, we provide as background the regulatory and procedural 
history leading up to this proposal. We also detail, in preamble 
section II.B, the statutory design of HAP regulation that Congress 
added to the CAA in 1990 in the face of the EPA's failure to make 
meaningful progress in regulating HAP emissions from stationary 
sources. In particular, we point out that many provisions of CAA 
section 112 demonstrate the value Congress placed on reducing the 
volume of HAP emissions from stationary sources as much as possible and 
quickly, with a particular focus on reducing HAP related risks to the 
most exposed and most sensitive members of the public. This background 
assists in identifying the relevant statutory factors to weigh in 
considering the advantages and disadvantages of HAP regulation.
    Against this backdrop, we propose to revoke the 2020 Final Action 
and reaffirm the 2016 determination that it remains appropriate to 
regulate HAP emissions from EGUs after a consideration of cost. 
Specifically, in section III.A of this preamble, we review the long-
standing and extensive body of evidence, as well as new mercury-related 
risk analyses performed since 2016, identifying substantial risks to 
human health and the environment from HAP emissions from coal- and oil-
fired EGUs that support a conclusion that regulating HAP emissions from 
EGUs is appropriate. In preamble section III.B, we analyze information 
regarding how the power sector elected to comply with MATS, and how our 
2012 projections for the cost of regulation almost certainly 
overestimated the actual costs of the regulation by a significant 
amount. In preamble section III.C, we explain our reasons for revoking 
the 2020 Final Action, which applied an ill-suited framework for 
evaluating cost because it gave little to no weight to the statutory 
concern with reducing the volume of and risks from HAP emissions to 
protect even the most exposed and most vulnerable members of the 
public. In section III.D of this preamble, we describe and apply our 
preferred, totality-of-the-circumstances approach, giving particular 
weight to the factors identified in CAA section 112(n)(1) and 112 more 
generally. We propose to conclude that after considering all of the

[[Page 7629]]

relevant factors and weighing the advantages of regulation against the 
cost of doing so, it is appropriate and necessary to regulate EGUs 
under CAA section 112. In section III.E of this preamble, we propose an 
alternative formal benefit-cost approach for making the appropriate and 
necessary determination. Under this approach, we propose to conclude 
that it remains appropriate to regulate HAP emissions from EGUs after 
considering cost because the BCA issued with the MATS rule indicated 
that the total net benefits of MATS were overwhelming even though the 
EPA was only able to monetize one of many statutorily identified 
benefits of regulating HAP emissions from EGUs. The new information 
examined by the EPA with respect to updated science and cost 
information only strengthens our conclusions under either of these 
methodologies. Section IV of this preamble notes that because this 
proposal reaffirms prior determinations and does not impact 
implementation of MATS, this action, if finalized, would not change 
those standards.
    Finally, in preamble section V, in addition to soliciting comments 
on all aspects of this proposed action, we separately seek comment on 
any data or information that will assist in the EPA's ongoing review of 
the RTR that the Agency completed for MATS in 2020.

B. Does this action apply to me?

    The source category that is the subject of this proposal is Coal- 
and Oil-Fired EGUs regulated by NESHAP under 40 CFR 63, subpart UUUUU, 
commonly known as MATS. The North American Industry Classification 
System (NAICS) codes for the Coal- and Oil-Fired EGU source category 
are 221112, 221122, and 921150. This list of NAICS codes is not 
intended to be exhaustive, but rather provides a guide for readers 
regarding the entities that this proposed action is likely to affect.

C. 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 action is available on the internet. Following signature by the 
EPA Administrator, the EPA will post a copy of this proposed action at 
https://www.epa.gov/stationary-sources-air-pollution/mercury-and-air-toxics-standards. Following publication in the Federal Register, the 
EPA will post the Federal Register version of the proposal and key 
technical documents at this same website.

II. Background

A. Regulatory History

    In the 1990 Amendments, Congress substantially modified CAA section 
112 to address hazardous air pollutant emissions from stationary 
sources. CAA section 112(b)(1) sets forth a list of 187 identified HAP, 
and CAA sections 112(b)(2) and (3) give the EPA the authority to add or 
remove pollutants from the list. CAA section 112(a)(1) and (2) specify 
the two types of sources to be addressed: major sources and area 
sources. A major source is any stationary source or group of stationary 
sources at a single location and under common control that emits or has 
the potential to emit, considering controls, 10 tpy or more of any HAP 
or 25 tpy or more of any combination of HAP. CAA section 112(a)(1). Any 
stationary source of HAP that is not a major source is an area 
source.\4\ CAA section 112(a)(2). All major source categories, besides 
EGUs, and certain area source categories, were required to be included 
on an initial published list of sources subject to regulation under CAA 
section 112. See CAA sections 112(a)(1) and (c)(1). The EPA is required 
to promulgate emission standards under CAA section 112(d) for every 
source category on the CAA section 112(c)(1) list.
---------------------------------------------------------------------------

    \4\ The statute includes a separate definition of ``EGU'' that 
includes both major and area source power plant facilities. CAA 
section 112(a)(8).
---------------------------------------------------------------------------

    The general CAA section 112(c) process for listing source 
categories does not apply to EGUs. Instead, Congress enacted a special 
provision, CAA section 112(n)(1)(A), which establishes a separate 
process by which the EPA determines whether to add EGUs to the CAA 
section 112(c) list of source categories that must be regulated under 
CAA section 112. Because EGUs were subject to other CAA requirements 
under the 1990 Amendments, most importantly the ARP, CAA section 
112(n)(1)(A) directs the EPA to conduct a study to evaluate the hazards 
to public health that are reasonably anticipated to occur as a result 
of the HAP emissions from EGUs ``after imposition of the requirements 
of this chapter.'' See CAA section 112(n)(1)(A); see also Michigan v. 
EPA, 576 U.S. at 748 (``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 provision directs that the 
EPA shall regulate EGUs under CAA section 112 if the Administrator 
determines, after considering the results of the study, that such 
regulation is ``appropriate and necessary.'' CAA section 112(n)(1)(A), 
therefore, sets a unique process by which the Administrator is to 
determine whether to add EGUs to the CAA section 112(c) list of sources 
that must be subject to regulation under CAA section 112.
    The study required under CAA section 112(n)(1)(A) is one of three 
studies commissioned by Congress under CAA section 112(n)(1), a 
subsection entitled ``Electric utility steam generating units.'' The 
first, which, as noted, the EPA was required to consider before making 
the appropriate and necessary determination, was completed in 1998 and 
was entitled the Study of Hazardous Air Pollutant Emissions from 
Electric Utility Steam Generating Units-Final Report to Congress 
(Utility Study).\5\ The Utility Study 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. The study indicated that mercury 
was the HAP of greatest concern to public health from coal- and oil-
fired EGUs. The study also concluded that numerous control strategies 
were available to reduce HAP emissions from this source category. The 
second study commissioned by Congress under CAA section 112(n)(1)(B), 
the Mercury Study Report to Congress (Mercury Study),\6\ was released 
in 1997. Under this provision, the statute tasked the EPA with focusing 
exclusively on mercury, but directed the Agency to look at other 
stationary sources of mercury emission in addition to EGUs, the rate 
and mass of emissions coming from those sources, available technologies 
for controlling mercury and the costs of such technologies, and a 
broader scope of impacts including environmental effects. As in the 
Utility Study, the EPA confirmed that mercury is highly toxic, 
persistent, and bioaccumulates in food chains. Fish consumption is the 
primary pathway for human exposure to mercury, which can lead to higher 
risks in certain populations. The third study, required under CAA 
section 112(n)(1)(C),

[[Page 7630]]

directed the National Institute of Environmental Health Sciences 
(NIEHS) to conduct a study to determine the threshold level of mercury 
exposure below which adverse human health effects were not expected to 
occur (NIEHS Study). The statute required that the study include a 
threshold for mercury concentrations in the tissue of fish that could 
be consumed, even by sensitive populations, without adverse effects to 
public health. NIEHS submitted the required study to Congress in 
1995.\7\ See 76 FR 24982 (May 3, 2011). Later, after submission of the 
CAA section 112(n)(1) reports and as part of the fiscal year 1999 
appropriations, Congress further directed the EPA to fund the National 
Academy of Sciences (NAS) to perform an independent evaluation of the 
data related to the health impacts of methylmercury, and, similar to 
the CAA section 112(n)(1)(C) inquiry, specifically to advise the EPA as 
to the appropriate reference dose (RfD) for methylmercury. Congress 
also indicated in the 1999 conference report directing the EPA to fund 
the NAS Study, that the EPA should not make the appropriate and 
necessary regulatory determination until the EPA had reviewed the 
results of the NAS Study. See H.R. Conf. Rep. No. 105-769, at 281-282 
(1998). This last study, completed by the NAS in 2000, was entitled 
Toxicological Effects of Methylmercury (NAS Study),\8\ and it presented 
a rigorous peer-review of the EPA's RfD for methylmercury. Based on the 
results of these studies and other available information, the EPA 
determined on December 20, 2000, pursuant to CAA section 112(n)(1)(A), 
that it is appropriate and necessary to regulate HAP emissions from 
coal- and oil-fired EGUs and added such units to the CAA section 112(c) 
list of source categories that must be regulated under CAA section 112. 
See 65 FR 79825 (December 20, 2000) (2000 Determination).\9\
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    \5\ 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.
    \6\ U.S. EPA. 1997. Mercury Study Report to Congress. EPA-452/R-
97-003 December 1997.
    \7\ National Institute of Environmental Health Sciences (NIEHS) 
Report on Mercury; available in the rulemaking docket at EPA-HQ-OAR-
2009-0234-3053.
    \8\ National Research Council (NAS). 2000. Toxicological Effects 
of Methylmercury. Committee on the Toxicological Effects of 
Methylmercury, Board on Environmental Studies and Toxicology, 
National Research Council. Many of the peer-reviewed articles cited 
in this section are publications originally cited in the NAS report.
    \9\ In the same 2000 action, the EPA Administrator found that 
regulation of HAP emissions from natural gas-fired EGUs is not 
appropriate or necessary because the impacts due to HAP emissions 
from such units are negligible. See 65 FR 79831 (December 20, 2000).
---------------------------------------------------------------------------

    In 2005, the EPA revised the original 2000 Determination and 
concluded that it was neither appropriate nor necessary to regulate 
EGUs under CAA section 112 in part because the EPA concluded it could 
address risks from EGU HAP emissions under a different provision of the 
statute. See 70 FR 15994 (March 29, 2005) (2005 Revision). Based on 
that determination, the EPA 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. 
See 70 FR 28605 (May 18, 2005). Both the 2005 Revision and the CAMR 
were vacated by the D.C. Circuit in 2008. New Jersey v. EPA, 517 F.3d 
574 (DC Cir. 2008). The D.C. Circuit held that the EPA 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. Id. at 582-84.
    Subsequent to the New Jersey decision, the EPA conducted additional 
technical analyses, including peer-reviewed risk assessments on human 
health effects associated with mercury (2011 Final Mercury TSD) \10\ 
and non-mercury metal HAP emissions from EGUs (2011 Non-Hg HAP 
Assessment).\11\ Those analyses, which focused on populations with 
higher fish consumption (e.g., subsistence fishers) and residents 
living near the facilities who experienced increased exposure to HAP 
through inhalation, found that mercury and non-mercury HAP emissions 
from EGUs remain a public health hazard and that EGUs were the largest 
anthropogenic source of mercury emissions to the atmosphere in the U.S. 
Based on these findings, and other relevant information regarding the 
volume of HAP, environmental effects, and availability of controls, in 
2012, the EPA affirmed the original 2000 Determination that it is 
appropriate and necessary to regulate EGUs under CAA section 112. See 
77 FR 9304 (February 16, 2012).
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    \10\ 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 2011. EPA-452/R-11-009. Docket ID Item No. EPA-HQ-OAR-2009-
0234-19913 (2011 Final Mercury TSD).
    \11\ U.S. EPA. 2011. 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. 
Office of Air Quality Planning and Standards. November 2011. EPA-
452/R-11-013. Docket ID Item No. EPA-HQ-OAR-2009-0234-19912 (2011 
Non-Hg HAP Assessment).
---------------------------------------------------------------------------

    In the same 2012 action, the EPA established a NESHAP, commonly 
referred to as MATS, that required coal- and oil-fired EGUs to meet HAP 
emission standards reflecting the application of the maximum achievable 
control technology (MACT) for all HAP emissions from EGUs.\12\ MATS 
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 
steam generating combustion unit of more than 25 megawatts (MW) that 
serves a generator that produces electricity for sale. See CAA section 
112(a)(8) (defining EGU). 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. Id.
---------------------------------------------------------------------------

    \12\ Although the 2012 MATS Final Rule has been amended several 
times, the amendments are not a result of actions regarding the 
appropriate and necessary determination and, therefore, are not 
discussed in this preamble. Detail regarding those amendatory 
actions can be found at https://www.epa.gov/stationary-sources-air-pollution/mercury-and-air-toxics-standards.
---------------------------------------------------------------------------

    For coal-fired EGUs, MATS includes 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 HCl serve as a surrogate for the acid gas HAP, with an 
alternate standard for sulfur dioxide (SO2) that may be used 
as a surrogate for acid gas HAP for those coal-fired EGUs with flue gas 
desulfurization (FGD) systems and SO2 continuous emissions 
monitoring systems that are 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 were 
established to limit formation and emissions of the organic HAP.
    For oil-fired EGUs, MATS includes standards to limit emissions of 
HCl and 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 
were established to

[[Page 7631]]

limit formation and emissions of the organic HAP.
    Additional detail regarding the types of units regulated under MATS 
and the regulatory requirements that they are subject to can be found 
in 40 CFR 63, subpart UUUUU.\13\ The existing source compliance date 
was April 16, 2015, but many existing sources were granted an 
additional 1-year extension of the compliance date for the installation 
of controls.
---------------------------------------------------------------------------

    \13\ Available at www.ecfr.gov/cgi-bin/text-idx?node=sp40.15.63.uuuuu.
---------------------------------------------------------------------------

    After MATS was promulgated, both the rule itself and many aspects 
of the EPA's appropriate and necessary determination were challenged in 
the D.C. Circuit. In White Stallion Energy Center v. EPA, the D.C. 
Circuit unanimously denied all challenges to MATS, with one exception 
discussed below in which the court was not unanimous. 748 F.3d 1222 
(D.C. Cir. 2014). As part of its decision, the D.C. Circuit concluded 
that the ``EPA's `appropriate and necessary' determination in 2000, and 
the reaffirmation of that determination in 2012, are amply supported by 
EPA's findings regarding the health effects of mercury exposure.'' Id. 
at 1245.\14\ While joining the D.C. Circuit's conclusions as to the 
adequacy of the EPA's identification of public health hazards, one 
judge dissented on the issue of whether the EPA erred by not 
considering costs together with the harms of HAP pollution when making 
the ``appropriate and necessary'' determination, finding that cost was 
a required consideration under that determination. Id. at 1258-59 
(Kavanaugh, J., dissenting).
---------------------------------------------------------------------------

    \14\ In discussing the 2011 Final Mercury TSD, the D.C. Circuit 
concluded that the EPA considered the available scientific 
information in a rational manner, and stated:
    As explained in the technical support document (TSD) 
accompanying the Final Rule, EPA determined that mercury emissions 
posed a significant threat to public health based on an analysis of 
women of child-bearing age who consumed large amounts of freshwater 
fish. See [2011 Final] Mercury TSD . . . . The design of EPA's TSD 
was neither arbitrary nor capricious; the study was reviewed by 
EPA's independent Science Advisory Board, stated that it 
``support[ed] the overall design of and approach to the risk 
assessment'' and found ``that it should provide an objective, 
reasonable, and credible determination of potential for a public 
health hazard from mercury emissions emitted from U.S. EGUs.'' . . . 
In addition, EPA revised the final TSD to address SAB's remaining 
concerns regarding EPA's data collection practices.
    Id. at 1245-46.
---------------------------------------------------------------------------

    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, 576 U.S. at 760. 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 to 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 to complete the required cost analysis, and the D.C. Circuit 
left the MATS rule in place pending the completion of that analysis. 
White Stallion Energy Center 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 
finalized a supplemental finding on April 25, 2016, that evaluated the 
costs of complying with MATS and concluded that the appropriate and 
necessary determination was still valid. The 2016 Supplemental Finding 
promulgated two different approaches to incorporate cost into the 
decision-making process for the appropriate and necessary 
determination. See 81 FR 24420 (April 25, 2016). The EPA determined 
that both approaches independently supported the conclusion that 
regulation of HAP emissions from EGUs is appropriate and necessary.
    The EPA's preferred approach to incorporating cost evaluated 
estimated costs of compliance with MATS against several cost metrics 
relevant to the EGU sector (e.g., historical annual revenues, annual 
capital expenditures, and impacts on retail electricity prices), and 
found that the projected costs of MATS were reasonable for the sector 
in comparison with historical data on those metrics. The evaluation of 
cost metrics that the EPA applied was consistent with approaches 
commonly used to evaluate environmental policy cost impacts.\15\ The 
EPA also examined as part of its cost analysis what the impact of MATS 
would be on retail electricity prices and the reliability of the power 
grid. Using a totality-of-the-circumstances approach, the EPA weighed 
these supplemental findings as to cost against the existing 
administrative record detailing the identified hazards to public health 
and the environment from mercury, non-mercury metal HAP, and acid gas 
HAP that are listed under CAA section 112, and the other advantages to 
regulation. Based on that balancing, the EPA concluded under the 
preferred approach that it remains appropriate to regulate HAP 
emissions from EGUs after considering cost. See 81 FR 24420 (April 25, 
2016) (``After evaluating cost reasonableness using several different 
metrics, the Administrator has, in accordance with her statutory duty 
under CAA section 112(n)(1)(A), weighed cost against the previously 
identified advantages of regulating HAP emissions from EGUs--including 
the agency's prior conclusions about the significant hazards to public 
health and the environment associated with such emissions and the 
volume of HAP that would be reduced by regulation of EGUs under CAA 
section 112.'')
---------------------------------------------------------------------------

    \15\ For example, see ``Economic Impact and Small Business 
Analysis-Mineral Wool and Wool Fiberglass RTRs and Wool Fiberglass 
Area Source NESHAP'' (U.S. EPA, 2015; https://www.epa.gov/sites/default/files/2020-07/documents/mwwf_eia_neshap_final_07-2015.pdf) 
or ``Economic Impact Analysis of Final Coke Ovens NESHAP'' (U.S. 
EPA, 2002; https://www.epa.gov/sites/default/files/2020-07/documents/coke-ovens_eia_neshap_final_08-2002.pdf).
---------------------------------------------------------------------------

    In a second alternative and independent approach (referred to as 
the alternative approach), the EPA considered the BCA in the 2011 RIA 
for the 2012 MATS Final Rule. Id. at 24421. In that analysis, even 
though the EPA was only able to monetize one HAP-specific endpoint, the 
EPA estimated that the final MATS rule would yield annual monetized net 
benefits (in 2007 dollars) of between $37 billion to $90 billion using 
a 3-percent discount rate and between $33 billion to $81 billion using 
a 7-percent discount rate, in comparison to the projected $9.6 billion 
in annual compliance costs. See id. at 24425. The EPA therefore 
determined that the alternative approach also independently supported 
the conclusion that regulation of HAP emissions from EGUs remains 
appropriate after considering cost. Id.
    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 then-new Administration an opportunity to 
review the 2016 action, and the D.C. Circuit ordered that the 
consolidated challenges to the 2016

[[Page 7632]]

Supplemental Finding be held in abeyance (i.e., temporarily on 
hold).\16\
---------------------------------------------------------------------------

    \16\ Order, Murray Energy Corp. v. EPA, No. 16-1127 (D.C. Cir. 
April 27, 2017), ECF No. 1672987. In response to a joint motion from 
the parties to govern future proceedings, the D.C. Circuit issued an 
order in February 2021 to continue to hold the consolidated cases in 
Murray Energy Corp. v. EPA in abeyance. Order, Murray Energy Corp. 
v. EPA, No. 16-1127 (D.C. Cir. February 25, 2021), ECF No. 1887125.
---------------------------------------------------------------------------

    Accordingly, the EPA reviewed the 2016 action, and on May 22, 2020, 
finalized a revised response to the Michigan decision. See 85 FR 31286 
(May 22, 2020). In the 2020 Final Action, after primarily comparing the 
projected costs of compliance to the one post control HAP emission 
reduction benefit that could be monetized, the EPA reconsidered its 
previous determination and found that it is not appropriate to regulate 
HAP emissions from coal- and oil-fired EGUs after a consideration of 
cost, 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, in its reconsideration, the Agency asserted that the 2016 
Supplemental Finding considering the cost of MATS was flawed based on 
its assessment that neither of the two approaches to considering cost 
in the 2016 Supplemental Finding satisfied the EPA's obligation under 
CAA section 112(n)(1)(A), as that provision was interpreted by the U.S. 
Supreme Court in Michigan. Additionally, the EPA determined 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 in the 2012 MATS Final 
Rule.\17\ See 85 FR 31312 (May 22, 2020).
---------------------------------------------------------------------------

    \17\ This finding was based on New Jersey v. EPA, 517 F.3d 574 
(D.C. Cir. 2008), which held that the EPA is not permitted to remove 
source categories from the CAA section 112(c)(1) list unless the CAA 
section 112(c)(9) criteria for delisting have been met.
---------------------------------------------------------------------------

    In the 2020 Final Action, the EPA also finalized the risk review 
required by CAA section 112(f)(2) and the first technology review 
required by CAA section 112(d)(6) for the Coal- and Oil-Fired EGU 
source category regulated under MATS.\18\ The EPA determined that 
residual risks due to emissions of air toxics from the Coal- and Oil-
Fired EGU source category are acceptable and that the current NESHAP 
provides an ample margin of safety to protect public health and to 
prevent an adverse environmental effect. In the technology review, the 
EPA did not identify any new developments in HAP emission controls to 
achieve further cost-effective emissions reductions. Based on the 
results of these reviews, the EPA found that no revisions to MATS were 
warranted. See 85 FR 31314 (May 22, 2020).
---------------------------------------------------------------------------

    \18\ CAA section 112(f)(2) requires the EPA to conduct a one-
time review of the risks remaining after imposition of MACT 
standards under CAA section 112(d)(2) within 8 years of the 
effective date of those standards (risk review). CAA section 
112(d)(6) requires the EPA to conduct a review of all CAA section 
112(d) standards at least every 8 years to determine whether it is 
necessary to establish more stringent standards after considering, 
among other things, advances in technology and costs of additional 
control (technology review). The EPA has always conducted the first 
technology review at the same time it conducts the risk review and 
collectively the actions are known at RTRs.
---------------------------------------------------------------------------

    Several states, industry, public health, environmental, and civil 
rights groups petitioned for review of the 2020 Final Action in the 
D.C. Circuit. American Academy of Pediatrics v. Regan, No. 20-1221 and 
consolidated cases (D.C. Cir. filed June 19, 2020). On September 28, 
2020, the D.C. Circuit granted the EPA's unopposed motion to sever from 
the lead case and hold in abeyance two of the petitions for review: 
Westmoreland Mining Holdings LLC v. EPA, No. 20-1160 (D.C. Cir. filed 
May 22, 2020) (challenging the 2020 Final Action as well as prior EPA 
actions related to MATS, including a challenge to the MATS CAA section 
112(d) standards on the basis that the 2020 Final Action's reversal of 
the appropriate and necessary determination provided a ``grounds 
arising after'' for filing a petition outside the 60-day window for 
judicial review of MATS), and Air Alliance Houston v. EPA, No. 20-1268 
(D.C. Cir. filed July 21, 2020) (challenging only the RTR portion of 
the 2020 Final Action).\19\
---------------------------------------------------------------------------

    \19\ Order, Westmoreland Mining Holdings LLC v. EPA, No. 20-1160 
(D.C. Cir. September 28, 2020), ECF No. 1863712.
---------------------------------------------------------------------------

    On January 20, 2021, President Biden signed Executive Order 13990, 
``Protecting Public Health and the Environment and Restoring Science to 
Tackle the Climate Crisis.'' The Executive Order, among other things, 
instructs the EPA to review the 2020 Final Action and consider 
publishing a notice of proposed rulemaking suspending, revising, or 
rescinding that action. In February 2021, the EPA moved the D.C. 
Circuit to hold American Academy of Pediatrics and consolidated cases 
in abeyance, pending the Agency's review of the 2020 Final Action as 
prompted in Executive Order 13990, and on February 16, 2021, the D.C. 
Circuit granted the Agency's motion.\20\
---------------------------------------------------------------------------

    \20\ Order, American Academy of Pediatrics v. Regan, No. 20-1221 
(D.C. Cir. February 16, 2021), ECF No. 1885509.
---------------------------------------------------------------------------

    In the meantime, the requirements of MATS have been fully 
implemented, resulting in significant reductions in HAP emissions from 
EGUs and the risks associated with those emissions. The EPA had 
projected that annual EGU mercury emissions would be reduced by 75 
percent with MATS implementation. In fact, EGU emission reductions have 
been far more substantial (down to approximately 4 tons in 2017), which 
represents an 86 percent reduction compared to 2010 (pre-MATS) levels. 
See Table 4 at 84 FR 2689 (February 7, 2019). Acid gas HAP and non-
mercury metal HAP have similarly been reduced--by 96 percent and 81 
percent, respectively--as compared to 2010 levels. Id. MATS is the only 
Federal requirement that guarantees this level of HAP control from 
EGUs.
    The EPA is now proposing to revoke the 2020 reconsideration of the 
2016 Supplemental Finding and to reaffirm once again that it is 
appropriate and necessary to regulate emissions of HAP from coal- and 
oil-fired EGUs. We will provide notice of the results of our review of 
the 2020 RTR in a separate future action.

B. Statutory Background

    Additional statutory context is useful to help identify the 
relevant factors that the Administrator should weigh when making the 
appropriate and necessary determination.
1. Pre-1990 History of HAP Regulation
    In 1970, Congress enacted CAA section 112 to address the millions 
of pounds of HAP emissions that were estimated to be emitted from 
stationary sources in the country. At that time, the CAA defined HAP as 
``an air pollutant to which no ambient air quality standard is 
applicable and which, in the judgment of the Administrator may cause, 
or contribute to, an increase in mortality or an increase in serious 
irreversible, or incapacitating reversible, illness,'' but the statute 
left it to the EPA to identify and list pollutants that were HAP. Once 
a HAP was listed, the statute required the EPA to regulate sources of 
that identified HAP ``at the level which in [the Administrator's] 
judgment provides an ample margin of safety to protect the public 
health from such hazardous air pollutants.'' CAA section 112(b)(1)(B) 
(pre-1990 amendments); Legislative History of the CAA Amendments of 
1990 (``Legislative

[[Page 7633]]

History''), at 3174-75, 3346 (Comm. Print 1993). The statute did not 
define the term ``ample margin of safety'' or provide a risk metric on 
which the EPA was to establish standards, and initially the EPA 
endeavored to account for costs and technological feasibility in every 
regulatory decision. In Natural Resources Defense Council (NRDC) v. 
EPA, 824 F.2d 1146 (D.C. Cir. 1987), the D.C. Circuit concluded that 
the CAA required that in interpreting what constitutes ``safe,'' the 
EPA was prohibited from considering cost and technological feasibility. 
Id. at 1166.
    The EPA subsequently issued the NESHAP for benzene in accordance 
with the NRDC holding.\21\ Among other things, the Benzene NESHAP 
concluded that there is a rebuttable presumption that any cancer risk 
greater than 100-in-1 million to the most exposed individual is 
unacceptable, and per NRDC, must be addressed without consideration of 
cost or technological feasibility. The Benzene NESHAP further provided 
that, after evaluating the acceptability of cancer risks, the EPA must 
evaluate whether the current level of control provides an ample margin 
of safety for any risk greater than 1-in-1 million and, if not, the EPA 
will establish more stringent standards as necessary after considering 
cost and technological feasibility.\22\
---------------------------------------------------------------------------

    \21\ National Emissions Standards for Hazardous Air Pollutants: 
Benzene Emissions from Maleic Anhydride Plants, Ethylbenzene/Styrene 
Plants, Benzene Storage Vessels, Benzene Equipment Leaks, and Coke 
By-Product Recovery Plants (Benzene NESHAP). 54 FR 38044 (September 
14, 1989).
    \22\ ``In protecting public health with an ample margin of 
safety under section 112, EPA strives to provide maximum feasible 
protection against risks to health from hazardous air pollutants by 
(1) protecting the greatest number of persons possible to an 
individual lifetime risk level no higher than approximately 1 in 1 
million and (2) limiting to no higher than approximately 1 in 10 
thousand the estimated risk that a person living near a plant would 
have if he or she were exposed to the maximum pollutant 
concentrations for 70 years.'' Benzene NESHAP, 54 FR 38044-5, 
September 14, 1989.
---------------------------------------------------------------------------

2. Clean Air Act 1990 Amendments to Section 112
    In 1990, Congress radically transformed section 112 of the CAA and 
its treatment of hazardous air pollution. The legislative history of 
the amendments indicates Congress' dissatisfaction with the EPA's slow 
pace addressing these pollutants under the 1970 CAA: ``In theory, 
[hazardous air pollutants] were to be stringently controlled under the 
existing Clean Air Act section 112. However, . . . only seven of the 
hundreds of potentially hazardous air pollutants have been regulated by 
EPA since section 112 was enacted in 1970.'' H.R. Rep. No. 101-490, at 
315 (1990); see also id. at 151 (noting that in 20 years, the EPA's 
establishment of standards for only seven HAP covered ``a small 
fraction of the many substances associated . . . with cancer, birth 
defects, neurological damage, or other serious health impacts.''). 
Congress was concerned with how few sources had been addressed during 
this time. Id. (``[The EPA's] regulations sometimes apply only to 
limited sources of the relevant pollutant. For example, the original 
benzene standard covered just one category of sources (equipment 
leaks). Of the 50 toxic substances emitted by industry in the greatest 
volume in 1987, only one--benzene--has been regulated even partially by 
EPA.''). Congress noted that state and local regulatory efforts to act 
in the face of ``the absence of Federal regulations'' had ``produced a 
patchwork of differing standards,'' and that ``[m]ost states . . . 
limit the scope of their program by addressing a limited number of 
existing sources or source categories, or by addressing existing 
sources only on a case-by-case basis as problem sources are 
identified'' and that ``[o]ne state exempts all existing sources from 
review.'' Id.
    In enacting the 1990 Amendments with respect to the control of 
hazardous air pollution, Congress noted that ``[p]ollutants controlled 
under [section 112] tend to be less widespread than those regulated 
[under other sections of the CAA], but are often associated with more 
serious health impacts, such as cancer, neurological disorders, and 
reproductive dysfunctions.'' Id. at 315. In its substantial 1990 
Amendments, Congress itself listed 189 HAP (CAA section 112(b)) and set 
forth a statutory structure that would ensure swift regulation of a 
significant majority of these HAP emissions from stationary sources. 
Specifically, after defining major and area sources and requiring the 
Agency to list all major sources and many area sources of the listed 
pollutants (CAA section 112(c)), the new CAA section 112 required the 
Agency to establish technology-based emission standards for listed 
source categories on a prompt schedule and to revisit those technology-
based standards every 8 years (CAA section 112(d) (emission standards); 
CAA section 112(e) (schedule for standards and review)). The 1990 
Amendments also obligated the EPA to evaluate the residual risk within 
8 years of promulgation of technology-based standards. CAA section 
112(f)(2).
    In setting the standards, CAA section 112(d) requires the Agency to 
establish technology-based standards that achieve the ``maximum degree 
of reduction,'' ``including a prohibition on such emissions where 
achievable.'' CAA section 112(d)(2). Congress specified that the 
maximum degree of reduction must be at least as stringent as the 
average level of control achieved in practice by the best performing 
sources in the category or subcategory based on emissions data 
available to the Agency at the time of promulgation. This technology-
based approach permitted the EPA to swiftly set standards for source 
categories without determining the risk or cost in each specific case, 
as the EPA had done prior to the 1990 Amendments. In other words, this 
approach to regulation quickly required that all major sources and many 
area sources of HAP install control technologies consistent with the 
top performers in each category, which had the effect of obtaining 
immediate reductions in the volume of HAP emissions from stationary 
sources. The statutory requirement that sources obtain levels of 
emission limitation that have actually been achieved by existing 
sources, instead of levels that could theoretically be achieved, 
inherently reflects a built-in cost consideration.\23\
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    \23\ Congress recognized as much:
    ``The Administrator may take the cost of achieving the maximum 
emission reduction and any non-air quality health and environmental 
impacts and energy requirements into account when determining the 
emissions limitation which is achievable for the sources in the 
category or subcategory. Cost considerations are reflected in the 
selection of emissions limitations which have been achieved in 
practice (rather than those which are merely theoretical) by sources 
of a similar type or character.''
    A Legislative History of the Clean Air Act Amendments of 1990 
(CAA Legislative History), Vol 5, pp. 8508 -8509 (CAA Amendments of 
1989; p. 168-169; Report of the Committee on Environment and Public 
Works S. 1630).
---------------------------------------------------------------------------

    Further, after determining the minimum stringency level of control, 
or MACT floor, CAA section 112(d)(2) requires the Agency to determine 
whether more stringent standards are achievable after considering the 
cost of achieving such standards and any non-air-quality health and 
environmental impacts and energy requirements of additional control. In 
doing so, the statute further specifies in CAA section 112(d)(2) that 
the EPA should consider requiring sources to apply measures that, among 
other things, ``reduce the volume of, or eliminate emissions of, such 
pollutants . . .'' (CAA section 112(d)(2)(A)), ``enclose systems or 
processes to eliminate emissions'' (CAA section 112(d)(2)(B)), and 
``collect, capture, or treat such pollutants when released . . .'' (CAA 
section 112(d)(2)(C)). The 1990 Amendments also built in a regular 
review of new

[[Page 7634]]

technologies and a one-time review of risks that remain after 
imposition of MACT standards. CAA section 112(d)(6) requires the EPA to 
evaluate every NESHAP no less often than every 8 years to determine 
whether additional control is necessary after taking into consideration 
``developments in practices, processes, and control technologies,'' 
without regard to risk. CAA section 112(f) requires the EPA to ensure 
that the risks are acceptable and that the MACT standards provide an 
ample margin of safety.
    The statutory requirement to establish technology-based standards 
under CAA section 112 avoided the need for the EPA to identify hazards 
to public health and the environment in order to justify regulation of 
HAP emissions from stationary sources, reflecting Congress' judgment 
that such emissions are inherently dangerous. See S. Rep. No. 101-228, 
at 148 (``The MACT standards are based on the performance of 
technology, and not on the health and environmental effects of the 
[HAP].''). The technology review required in CAA section 112(d)(6) 
further mandates that the EPA continually evaluate standards to 
determine if additional reductions can be obtained, without 
consideration of the specific risk associated with the HAP emissions 
that would be reduced. Notably, the CAA section 112(d)(6) review of 
what additional reductions may be obtained based on new technology is 
required even after the Agency has conducted the CAA section 112(f)(2) 
review and determined that the existing standard will protect the 
public with an ample margin of safety.
    The statutory structure and legislative history also demonstrate 
Congress' concern with the many ways that HAP can harm human health and 
Congress' goal of protecting the most exposed and vulnerable members of 
society. The committee report accompanying the 1990 Amendments 
discussed the scientific understanding regarding HAP risk at the time, 
including the 1989 report on benzene performed by the EPA noted above. 
H.R. Rep. No. 101-490, at 315. Specifically, Congress highlighted the 
EPA's findings as to cancer incidence, and importantly, lifetime 
individual risk to the most exposed individuals. Id. The report also 
notes the limitations of the EPA's assessment: ``The EPA estimates 
evaluated the risks caused by emissions of a single toxic air pollutant 
from each plant. But many facilities emit numerous toxic pollutants. 
The agency's risk assessments did not consider the combined or 
synergistic effects of exposure to multiple toxics, or the effect of 
exposure through indirect pathways.'' Id. Congress also noted the EPA's 
use of the maximum exposed individual (MEI) tool to assess risks faced 
by heavily exposed citizens. Id. The report cited particular scientific 
studies demonstrating that some populations are more affected than 
others--for example, it pointed out that ``[b]ecause of their small 
body weight, young children and fetuses are especially vulnerable to 
exposure to PCB-contaminated fish. One study has found long-term 
learning disabilities in children who had eaten high-levels of Great 
Lakes fish.'' Id.
    The statutory structure confirms Congress' approach to risk and 
sensitive populations. As noted, the CAA section 112(f)(2) residual 
risk review requires the EPA to consider whether, after imposition of 
the CAA section 112(d)(2) MACT standard, there are remaining risks from 
HAP emissions that warrant more stringent standards to provide an ample 
margin of safety to protect public health or to prevent an adverse 
environmental effect. See CAA section 112(f)(2)(A). Specifically, the 
statute requires the EPA to promulgate standards under the risk review 
provision if the CAA section 112(d) standard does not ``reduce lifetime 
excess cancer risks to the individual most exposed to emissions from a 
source in the category or subcategory to less than one in one 
million.'' Id. Thus, even after the application of MACT standards, the 
statute directs the EPA to conduct a rulemaking if even one person has 
a risk, not a guarantee, of getting cancer. This demonstrates the 
statutory intent to protect even the most exposed member of the 
population from the harms attendant to exposure to HAP emissions.
    If a residual risk rulemaking is required, as noted above, the 
statute incorporates the detailed rulemaking approach set forth in the 
Benzene NESHAP for determining whether HAP emissions from stationary 
sources pose an unacceptable risk and whether standards provide an 
ample margin of safety. See CAA section 112(f)(2)(B) (preserving the 
prior interpretation of ``ample margin of safety'' set forth in the 
Benzene NESHAP). That approach includes a rebuttable presumption that 
any cancer risk greater than 100-in-1 million to the most exposed 
person is per se unacceptable. For non-cancer chronic and acute risks, 
the EPA has more discretion to determine what is acceptable, but even 
then, the statute requires the EPA to evaluate the risks to the most 
exposed individual and our RfDs are developed with the goal of being 
protective of even sensitive members of the population. See e.g., CAA 
section 112(n)(1)(C) (requiring, in part, the development of ``a 
threshold for mercury concentration in the tissue of fish which may be 
consumed (including consumption by sensitive populations) without 
adverse effects to public health''). If risks are found to be 
unacceptable, the EPA must impose additional control requirements to 
ensure that post CAA section 112(f) risks from HAP emissions are at an 
acceptable level, regardless of cost and technological feasibility.
    After determining whether the risks are acceptable and developing 
standards to achieve an acceptable level of risk if necessary, the EPA 
must then determine whether more stringent standards are necessary to 
provide an ample margin of safety to protect public health, and at this 
stage we must take into consideration cost, technological feasibility, 
uncertainties, and other relevant factors. As stated in the Benzene 
NESHAP, ``In protecting public health with an ample margin of safety 
under section 112, EPA strives to provide maximum feasible protection 
against risks to health from hazardous air pollutants by . . . 
protecting the greatest number of persons possible to an individual 
lifetime risk level no higher than approximately 1 in 1 million.'' See 
54 FR 38044-45 (September 14, 1989); see also NRDC v. EPA, 529 F.3d 
1077, 1082 (D.C. Cir. 2008) (finding that ``the Benzene NESHAP standard 
established a maximum excess risk of 100-in-one million, while adopting 
the one-in-one million standard as an aspirational goal.'').
    The various listing and delisting provisions of CAA section 112 
further demonstrate a statutory intent to reduce risk and protect the 
most exposed members of the population from HAP emissions. See, e.g., 
CAA section 112(b)(2) (requiring the EPA to add pollutants to the HAP 
list if the EPA determines the HAP ``presents, or may present'' adverse 
human health or adverse environmental effects); id. at CAA section 
112(b)(3)(B) (requiring the EPA to add a pollutant to the list if a 
petitioner shows that a substance is known to cause or ``may reasonably 
be anticipated to cause adverse effects to human health or adverse 
environmental effects''); id. at CAA section 112(b)(3) (authorizing the 
EPA to delete a substance only on a showing that ``the substance may 
not reasonably be anticipated to cause any adverse effects to human 
health or adverse environmental effects.''); id. at CAA section 
112(c)(9)(B)(i) (prohibiting the EPA from delisting a source category 
if even one source in the category causes

[[Page 7635]]

a lifetime cancer risk greater than 1-in-1 million to ``the individual 
in the population who is most exposed to emissions of such pollutants 
from the source.''); id. at CAA section 7412(c)(9)(B)(i) (prohibiting 
the EPA from delisting a source category unless the Agency determines 
that the non-cancer causing HAP emitted from the source category do not 
``exceed a level which is adequate to protect public health with an 
ample margin of safety and no adverse environmental effect will result 
from emissions of any source'' in the category); id. at CAA section 
112(n)(1)(C) (requiring a study to determine the level of mercury in 
fish tissue that can be consumed by even sensitive populations without 
adverse effect to public health).
    The deadlines for action included in the 1990 Amendments indicate 
that Congress wanted HAP pollution addressed quickly. The statute 
requires the EPA to list all major source categories within 1 year of 
the 1990 Amendments and to regulate those listed categories on a strict 
schedule that prioritizes the source categories that are known or 
suspected to pose the greatest risks to the public. See CAA sections 
112(c)(1), 112(e)(1) and 112(e)(2). For area sources, where the statute 
provides the EPA with greater discretion to determine the sources to 
regulate, it also directs the Agency to collect the information 
necessary to make the listing decision for many area source categories 
and requires the Agency to act on that information by a date certain.
    For example, CAA section 112(k) establishes an area source program 
designed to identify and list at least 30 HAP that pose the greatest 
threat to public health in the largest number of urban areas (urban 
HAP) and to list for regulation area sources that account for at least 
90 percent of the area source emissions of the 30 urban HAP. See CAA 
sections 112(k) and 112(c)(3). In addition to the urban air toxics 
program, CAA section 112(c)(6) directs the EPA to identify and list 
sufficient source categories to ensure that at least 90 percent of the 
aggregate emissions of seven bioaccumulative and persistent HAP, 
including mercury, are subject to standards pursuant to CAA sections 
112(d)(2) or (d)(4). See CAA section 112(c)(6). Notably, these 
requirements were in addition to any controls on mercury and other CAA 
section 112(c)(6) HAP that would be imposed if the EPA determined it 
was appropriate and necessary to regulate EGUs under CAA section 112. 
This was despite the fact that it was known at the time of enactment 
that other categories with much lower emissions of mercury would have 
to be subject to MACT standards because of the exclusion of EGUs from 
CAA section 112(c)(6).
    As the preceding discussion demonstrates, throughout CAA section 
112 and its legislative history, Congress made clear its intent to 
quickly secure large reductions in the volume of HAP emissions from 
stationary sources because of its recognition of the hazards to public 
health and the environment inherent in exposure to such emissions. CAA 
section 112 and its legislative history also reveal Congress' 
understanding that fully characterizing the risks posed by HAP 
emissions was exceedingly difficult; thus, Congress purposefully 
replaced a regime that required an assessment of risk in the first 
instance with one that assumed that risk and directed swift and 
substantial reductions. The statutory design and direction also 
repeatedly emphasize that the EPA should regulate with the most exposed 
and most sensitive members of the population in mind in order to 
achieve an acceptable level of HAP emissions with an ample margin of 
safety. As explained further below, this statutory context informs the 
EPA's judgment as to the relevant factors to weigh in the analysis of 
whether regulation remains appropriate after a consideration of cost.

III. Proposed Determination Under CAA Section 112(n)(1)(A)

    In this action, the EPA is proposing to revoke the 2020 Final 
Action and to reaffirm the appropriate and necessary determination made 
in 2000, and reaffirmed in 2012 and 2016.\24\ We propose to find that, 
under either our preferred totality-of-the-circumstances framework or 
our alternative formal BCA framework, the information that would have 
been available to the Agency as of the time of the 2012 rulemaking 
supports a determination that it is appropriate and necessary to 
regulate HAP from EGUs. We also consider new information regarding the 
hazards to public health and the environment and the costs of 
compliance with MATS that has become available since the 2016 
Supplemental Finding, and find that the updated information strengthens 
the EPA's conclusion that it is appropriate and necessary to regulate 
HAP from coal- and oil-fired EGUs.
---------------------------------------------------------------------------

    \24\ Our proposal focuses on an analysis of the ``appropriate'' 
prong of the CAA section 112(n)(1)(A). The Michigan decision and 
subsequent EPA actions addressing that decision have been centered 
on supplementing the Agency's record with a consideration of the 
cost of regulation as part of the ``appropriate'' aspect of the 
overall determination. As noted, the 2020 Final Action, while 
reversing the 2016 Supplemental Finding as to the EPA's 
determination that it was ``appropriate'' to regulate HAP from EGUs, 
did not rescind the Agency's prior determination that it was 
necessary to regulate. See 84 FR 2674 (February 7, 2019) (``CAA 
section 112(n)(1)(A) requires the EPA to determine that both the 
appropriate and necessary prongs are met. Therefore, if the EPA 
finds that either prong is not satisfied, it cannot make an 
affirmative appropriate and necessary finding. The EPA's 
reexamination of its determination . . . focuses on the first prong 
of that analysis.''). The ``necessary'' determination rested on two 
primary bases: (1) In 2012, the EPA determined that the hazards 
posed to human health and the environment by HAP emissions from EGUs 
would not be addressed in its future year modeling, which accounted 
for all CAA requirements to that point; and (2) our conclusion that 
the only way to ensure permanent reductions in U.S. EGU emissions of 
HAP and the associated risks to public health and the environment 
was through standards set under CAA section 112. See 76 FR 25017 
(May 23, 2011). We therefore continue our focus in this proposal on 
reinstating the ``appropriate'' prong of the determination, leaving 
undisturbed the Agency's prior conclusions that regulation of HAP 
from EGUs is ``necessary.'' See 65 FR 79830 (December 20, 2000); 76 
FR 25017 (May 3, 2011); 77 FR 9363 (February 16, 2012).
---------------------------------------------------------------------------

    At the outset, we note that CAA section 112(n)(1)(A) is silent as 
to whether the EPA may consider updated information when acting on a 
remand of the appropriate and necessary determination. CAA section 
112(n)(1)(A) directs the EPA to conduct the Utility Study within 3 
years, and requires the EPA to regulate EGUs if the Administrator makes 
a finding that it is appropriate and necessary to do so ``after'' 
considering the results of the Utility Study. Consistent with the EPA's 
interpretation in 2005, 2012, 2016, and 2020, we do not read this 
language to require the EPA to consider the most-up-to-date information 
where the Agency is compelled to revisit the determination, but nor do 
we interpret the provision to preclude consideration of new information 
where reasonable. See 70 FR 16002 (March 29, 2005); 77 FR 9310 
(February 16, 2012); 81 FR 24432 (April 25, 2016); 85 FR 31306 (May 22, 
2020). As such, the Agency has applied its discretion in determining 
when to consider new information under this provision based on the 
circumstances. For example, when the EPA was revisiting the 
determination in 2012, we noted that ``[b]ecause several years had 
passed since the 2000 finding, the EPA performed additional technical 
analyses for the proposed rule, even though those analyses were not 
required.'' 77 FR 9310 (February 16, 2012).\25\ Similarly, we think 
that it is reasonable to consider new information in the context of 
this proposal, given that almost a decade has passed since we last 
considered updated information. In this proposed reconsideration of the

[[Page 7636]]

determination per the President's Executive Order, both the growing 
scientific understanding of public health risks associated with HAP 
emissions and a clearer picture of the cost of control technologies and 
the make-up of power sector generation over the last decade may inform 
the question of whether it is appropriate to regulate, and, in 
particular, help address the inquiry that the Supreme Court directed us 
to undertake in Michigan. We believe the evolving scientific 
information with regard to benefits and the advantage of hindsight with 
regard to costs warrant considering currently available information in 
making this determination. To the extent that our determination should 
flow from information that would have been available at the ``initial 
decision to regulate,'' Michigan, 576 U.S. at 754, we propose 
conclusions here based on analyses limited to this earlier record. But 
we also believe it is reasonable to consider new data, and propose to 
find that the new information regarding both public health risks and 
costs bolsters the finding and supports a determination that it is 
appropriate and necessary to regulate EGUs for HAP.
---------------------------------------------------------------------------

    \25\ The EPA was not challenged on this interpretation in White 
Stallion.
---------------------------------------------------------------------------

    In section III.A of this preamble, we first describe the advantages 
of regulation--the reduction in emissions of HAP and attendant 
reduction of risks to human health and the environment, including the 
distribution of these health benefits. We carefully document the 
numerous risks to public health and the environment posed by HAP 
emissions from EGUs. This includes information previously recognized 
and documented in the statutorily mandated CAA section 112(n)(1) 
studies, the 2000 Determination, the 2012 MATS Final Rule, and the 2016 
Supplemental Finding about the nature and extent of health and 
environmental impacts from HAP that are emitted by EGUs, as well as 
additional risk analyses supported by new scientific studies. 
Specifically, new risk screening analyses on the connection between 
mercury and heart disease as well as IQ loss in children across the 
U.S. further supports the conclusion that HAP emissions from EGUs pose 
hazards to public health and the environment warranting regulating 
under CAA section 112. The EPA also discusses the challenges associated 
with fully quantifying and monetizing the human health and 
environmental effects associated with HAP emissions. Finally, we note 
that in addition to reducing the identified risks posed by HAP 
emissions from EGUs, regulation of such HAP emissions results in 
significant health and environmental co-benefits.
    We then turn in preamble section III.B. to the disadvantages of 
regulation--the costs associated with reducing EGU HAP emissions and 
other potential impacts to the sector and the economy associated with 
MATS. With the benefit of hindsight, we first consider whether MATS 
actually cost what we projected in the 2011 RIA and conclude that the 
projection in the 2011 RIA was almost certainly a significant 
overestimate of the actual costs. We then evaluate the costs estimated 
in the 2011 RIA against several metrics relevant to the impacts those 
costs have on the EGU sector and American electricity consumers (e.g., 
historical annual revenues, annual capital and production expenditures, 
impacts on retail electricity prices, and impacts on resource adequacy 
and reliability). These analyses, based on data available in 2012 and 
based on updated data, all show that the costs of MATS were within the 
bounds of typical historical fluctuations and that the industry would 
be able to comply with MATS and continue to provide a reliable source 
of electricity without price increases that were outside the range of 
historical variability.
    In section III.C of this preamble, we explain why the methodology 
used in our 2020 Finding was ill-suited to determining whether EGU HAP 
regulation is appropriate and necessary because it gave virtually no 
weight to the volume of HAP that would be reduced, and the vast 
majority of the benefits of reducing EGU HAP, including the reduction 
of risk to sensitive populations, based on the Agency's inability to 
quantify or monetize post-control benefits of HAP regulations.
    In preamble section III.D, we explain our preferred totality-of-
the-circumstances methodology that we propose to use to make the 
appropriate determination, and our application of that methodology. 
This approach looks to the statute, and particularly CAA section 
112(n)(1)(A) and the other provisions in CAA section 112(n)(1), to help 
identify the relevant factors to weigh and what weight to afford those 
factors. Under that methodology we weigh the significant health and 
environmental advantages of reducing EGU HAP, and in particular the 
benefits to the most exposed and sensitive individuals, against the 
disadvantages of expending money to achieve those benefits--i.e., the 
effects on the electric generating industry and its ability to provide 
reliable and affordable electricity. We ultimately propose to conclude 
that the advantages outweigh the disadvantages whether we look at the 
record from 2012 or at our new record, which includes an expanded 
understanding of the health risks associated with HAP emissions and 
finds that the costs projected in the 2011 RIA were almost certainly 
significantly overestimated. We further consider that, if we also 
account for the non-HAP benefits in our preferred totality-of-the-
circumstances approach, such as the benefits (including reduced 
mortality) of coincidental reductions in PM and ozone that flow from 
the application of controls on HAP, the balance weighs even more 
heavily in favor of regulating HAP emissions from coal- and oil-fired 
EGUs.
    Finally, in section III.E, we consider an alternative methodology 
to make the appropriate determination, using a formal BCA of MATS that 
was conducted consistent with economic principles. This methodology is 
not our preferred way to consider advantages and disadvantages for the 
CAA section 112(n)(1)(A) determination, because the EPA's inability to 
generate a monetized estimate of the full benefits of HAP reductions 
can lead to an underestimate of the monetary value of the net benefits 
of regulation. To the extent that a formal BCA is appropriate for 
making the CAA section 112(n)(1)(A) determination, however, that 
approach demonstrates that the monetized benefits of MATS outweigh the 
monetized costs by a considerable margin, whether we look at the 2012 
record or our updated record. We therefore propose that it is 
appropriate to regulate EGUs for HAP applying a BCA approach as well.
    In sum, the EPA proposes to conclude that it is appropriate and 
necessary to regulate HAP emissions from coal- and oil-fired EGUs, 
whether we are applying the preferred totality-of-the-circumstances 
methodology or the alternative formal benefit-cost approach, and 
whether we are considering only the administrative record as of the 
original EPA response on remand to Michigan in 2016 or based on new 
information made available since that time. The information and data 
amassed by the EPA over the decades of administrative analysis and 
rulemaking devoted to this topic overwhelmingly support the conclusion 
that the advantages of regulating HAP emissions from coal- and oil-
fired EGUs outweigh the costs. The EPA requests comment on this 
proposed finding and on the supporting information presented in this 
proposal, including information related to the risks associated with 
HAP emissions from U.S. EGUs and the actual costs incurred by the power 
sector due to MATS, as well as on the

[[Page 7637]]

preferred and alternative methodologies for reaching the proposed 
conclusion.

A. Public Health Hazards Associated With Emissions From EGUs

1. Overview
    The administrative record for the MATS rule detailed several 
hazards to public health and the environment from HAP emitted by EGUs 
that remained after imposition of the ARP and other CAA requirements. 
See 80 FR 75028-29 (December 1, 2015). See also 65 FR 79825-31 
(December 20, 2000); 76 FR 24976-25020 (May 3, 2011); 77 FR 9304-66 
(February 16, 2012). The EPA considered all of this information again 
in the 2016 Supplemental Finding, noting that this sector represented a 
large fraction of U.S. emissions of mercury, non-mercury metal HAP, and 
acid gases. Specifically, the EPA found that even after imposition of 
the other requirements of the CAA, but absent MATS, EGUs remained the 
largest domestic source of mercury, HF, HCl, and selenium and among the 
largest domestic contributors of arsenic, chromium, cobalt, nickel, 
hydrogen cyanide, beryllium, and cadmium, and that a significant 
majority of EGU facilities emitted above the major source thresholds 
for HAP emissions.
    Further, the EPA noted that the totality of risks that accrue from 
these emissions were significant. These hazards include potential 
neurodevelopmental impairment, increased cancer risks, contribution to 
chronic and acute health disorders, as well as adverse impacts on the 
environment. Specifically, the EPA pointed to results from its revised 
nationwide Mercury Risk Assessment (contained in the 2011 Final Mercury 
TSD) \26\ as well as an inhalation risk assessment (2011 Non-Hg HAP 
Assessment) for non-mercury HAP (i.e., arsenic, nickel, chromium, 
selenium, cadmium, HCl, HF, hydrogen cyanide, formaldehyde, benzene, 
acetaldehyde, manganese, and lead). The EPA estimated lifetime cancer 
risks for inhabitants near some coal- and oil-fired EGUs to exceed 1-
in-1 million \27\ and noted that this case-study-based estimate likely 
underestimated the true maximum risks for the EGU source category. See 
77 FR 9319 (February 16, 2012). The EPA also found that mercury 
emissions pose a hazard to wildlife, adversely affecting fish-eating 
birds and mammals, and that the large volume of acid gas HAP associated 
with EGUs also pose a hazard to the environment.\28\ These technical 
analyses were all challenged in the White Stallion case, and the D.C. 
Circuit found that the EPA's risk finding as to mercury alone--that is, 
before reaching any other risk finding--established a significant 
public health concern. The court stated that ``EPA's `appropriate and 
necessary' determination in 2000, and its reaffirmation of that 
determination in 2012, are amply supported by EPA's finding regarding 
the health effects of mercury exposure.'' White Stallion Energy Center 
v. EPA, 748 F.3d 1222, 1245 (D.C. Cir. 2014). Additional scientific 
evidence about the human health hazards associated with EGU HAP 
emissions that has been collected since the 2016 Supplemental Finding 
and is discussed in this section has extended our confidence that these 
emissions pose an unacceptable risk to the American public and in 
particular, to vulnerable, exposed populations.
---------------------------------------------------------------------------

    \26\ 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. 
November. EPA-452/R-11-009. Docket ID Item No. EPA-HQ-OAR-2009-0234-
19913.
    \27\ The EPA determined the 1-in-1 million standard was the 
correct metric in part because CAA section 112(c)(9)(B)(1) prohibits 
the EPA from removing a source category from the list if even one 
person is exposed to a lifetime cancer risk greater than 1-in-1 
million, and CAA section 112(f)(2)(A) directs the EPA to conduct a 
residual risk rulemaking if even one person is exposed to a lifetime 
excess cancer risk greater than 1-in-1 million. See White Stallion 
at 1235-36 (agreeing it was reasonable for the EPA to consider the 
1-in-1 million delisting criteria in defining ``hazard to public 
health'' under CAA section 112(n)(1)(A)).
    \28\ The EPA had determined it was reasonable to consider 
environmental impacts of HAP emissions from EGUs in the appropriate 
determination because CAA section 112 directs the EPA to consider 
impacts of HAP emissions on the environment, including in the CAA 
section 112(n)(1)(B) Mercury Study. See White Stallion at 1235-36 
(agreeing it was reasonable for the EPA to consider the 
environmental harms when making the appropriate and necessary 
determination).
---------------------------------------------------------------------------

    This section of the preamble starts by briefly reviewing the long-
standing and extensive body of evidence, including new scientific 
information made available since the 2016 Supplemental Finding, which 
demonstrates that HAP emissions from oil- and coal-fired EGUs present 
hazards to public health and the environment warranting regulation 
under CAA section 112 (section III.A.2). This is followed by an 
expanded discussion of the health risks associated with domestic EGU 
mercury emissions based on additional evidence regarding cardiovascular 
effects that has become available since the 2016 Supplemental Finding 
(section III.A.3). In section III.A.4, the EPA describes the reasons 
why it is extremely difficult to estimate the full health and 
environmental impacts associated with exposure to HAP. We note the 
longstanding challenges associated with quantifying and monetizing 
these effects, which may be permanent and life-threatening and are 
often distributed unevenly (i.e., concentrated among highly exposed 
individuals). Next, the section provides an expanded discussion of some 
identified environmental justice (EJ) issues associated with these 
emissions (section III.A.5). Section III.A.6 identifies health effects 
associated with other, non-HAP emissions from EGUs such as 
SO2, direct PM2.5 and other PM2.5 and 
ozone precursors. Because these pollutants are co-emitted with HAP, the 
controls necessary to reduce HAP emissions from EGUs often reduce these 
pollutants as well. After assessing all the evidence, the EPA concludes 
again (section III.A.7) that regulation of HAP emissions from EGUs 
under CAA section 112 greatly improves public health for Americans by 
reducing the risks of premature mortality from heart attacks, cancer, 
and neurodevelopmental delays in children, and by helping to restore 
economically vital ecosystems used for recreational and commercial 
purposes. Further, we conclude that these public health improvements 
will be particularly pronounced for certain segments of the American 
population that are especially vulnerable (e.g., subsistence fishers 
\29\ and their children) to impacts from EGU HAP emissions. In 
addition, the concomitant reductions in co-emitted pollutants will also 
provide substantial public health and environmental benefits.
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    \29\ Subsistence fishers, who by definition obtain a substantial 
portion of their dietary needs from self-caught fish consumption, 
can experience elevated levels of exposure to chemicals that 
bioaccumulate in fish including, in particular, methylmercury. 
Subsistence fishing activity can be related to a number of factors 
including socio-economic status (poverty) and/or cultural practices, 
with ethnic minorities and tribal populations often displaying 
increased levels of self-caught fish consumption (Burger et al., 
2002, Shilling et al., 2010, Dellinger 2004).
    Burger J, (2002). Daily consumption of wild fish and game: 
exposures of high end recreationalists. International Journal of 
Environmental Health Research 12:4, p. 343-354.
    Shilling F, White A, Lippert L, Lubell M, (2010). Contaminated 
fish consumption in California's Central Valley Delta. Environmental 
Research 110, p. 334-344.
    Dellinger J, (2004). Exposure assessment and initial 
intervention regarding fish consumption of tribal members in the 
Upper Great Lakes Region in the United States. Environmental 
Research 95, p. 325-340.
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2. Overview of Health Effects Associated With Mercury and Non-Mercury 
HAP
    In calling for the Agency to consider the regulation of HAP from 
EGUs, the

[[Page 7638]]

CAA stipulated that the EPA complete three studies (all of which were 
extensively peer-reviewed) exploring various aspects of risk posed to 
human health and the environment by HAP released from EGUs. The first 
of these studies, the Utility Study, published in 1998, focused on the 
hazards to public health specifically associated with EGU-sourced HAP 
including, but not limited to, mercury. See CAA section 112(n)(1)(A). A 
second study, the Mercury Study, released in 1997, while focusing 
exclusively on mercury, was broader in scope including not only human 
health, but also environmental impacts and specifically addressed the 
potential for mercury released from multiple emissions sources (in 
addition to EGUs) to affect human health and the environment. See CAA 
section 112(n)(1)(B). The third study, required under CAA section 
112(n)(1)(C), the NIEHS Study, submitted to Congress in 1995, 
considered the threshold level of mercury exposure below which adverse 
human health effects were not expected to occur. An additional fourth 
study, the NAS Study, directed by Congress in 1999 and completed in 
2000, focused on determining whether a threshold for mercury health 
effects could be identified for sensitive populations and, as such, 
presented a rigorous peer review of the EPA's RfD for methylmercury. 
The aggregate results of these peer-reviewed studies commissioned by 
Congress as part of CAA section 112(n)(1) supported the determination 
that HAP emissions from EGUs represented a hazard to public health and 
the environment that would not be addressed through imposition of the 
other requirements of the CAA. In the 2 decades that followed, the EPA 
has continued to conduct additional research and risk assessments and 
has surveyed the latest science related to the risk posed to human 
health and the environment by HAP released from EGUs.
a. Review of Health Effects and Previous Risk Analyses for 
Methylmercury
    Mercury is a persistent and bioaccumulative toxic metal that, once 
released from power plants into the ambient air, can be readily 
transported and deposited to soil and aquatic environments where it is 
transformed by microbial action into methylmercury. See Mercury Study; 
76 FR 24976 (May 3, 2011) (2011 NESHAP Proposal); 80 FR 75029 (December 
1, 2015) (2015 Proposal). Methylmercury bioaccumulates in the aquatic 
food web eventually resulting in highly concentrated levels of 
methylmercury within the larger and longer-living fish, which can then 
be consumed by humans.\30\ As documented in both the NAS Study and the 
Mercury Study, fish and seafood consumption is the primary route of 
human exposure to methylmercury, with populations engaged in 
subsistence-levels of consumption being of particular concern.\31\ The 
NAS Study reviewed the effects of methylmercury on human health, 
concluding that it is highly toxic to multiple human and animal organ 
systems. Of particular concern is chronic prenatal exposure via 
maternal consumption of foods containing methylmercury. Elevated 
exposure has been associated with developmental neurotoxicity and 
manifests as poor performance on neurobehavioral tests, particularly on 
tests of attention, fine motor function, language, and visual-spatial 
ability. Evidence also suggests potential for adverse effects on the 
cardiovascular system, adult nervous system, and immune system, as well 
as potential for causing cancer.\32\ Below we review the broad range of 
public health hazards associated with methylmercury exposure.
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    \30\ We recognize that mercury deposition over land with 
subsequent impacts to agricultural-sourced food may also represent a 
public health concern, however as noted below, primary exposure to 
the U.S. population is through fish consumption.
    \31\ In light of the methylmercury impacts, the EPA and the Food 
and Drug Administration have collaborated to provide advice on 
eating fish and shellfish as part of a healthy eating pattern 
(https://www.fda.gov/food/consumers/advice-about-eating-fish). In 
addition, states provide fish consumption advisories designed to 
protect the public from eating fish from waterbodies within the 
state that could harm their health based on local fish tissue 
sampling.
    \32\ National Research Council. 2000. Toxicological Effects of 
Methylmercury. Washington, DC: The National Academies Press. https://doi.org/10.17226/9899.
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    Neurodevelopmental Effects of Exposure to Methylmercury. 
Methylmercury is a powerful neurotoxin. Because the impacts of the 
neurodevelopmental effects of methylmercury are greatest during periods 
of rapid brain development, developing fetuses and young children are 
particularly vulnerable. Children born to populations with high fish 
consumption (e.g., people consuming fish as a dietary staple) or 
impaired nutritional status (e.g., people with iron or vitamin C 
deficiencies) are especially vulnerable to adverse neurodevelopmental 
outcomes. These dietary and nutritional vulnerabilities are often 
particularly pronounced in underserved communities with minority 
populations and low-income populations that have historically faced 
economic and environmental injustice and are overburdened by cumulative 
levels of pollution.\33\
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    \33\ Burger J, 2002. Daily consumption of wild fish and game: 
Exposures of high end recreationalists. International Journal of 
Environmental Health Research 12:4, p. 343-354.
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    Infants in the womb can be exposed to methylmercury when their 
mothers eat fish and shellfish that contain methylmercury. This 
exposure can adversely affect unborn infants' growing brains and 
nervous systems. Children exposed to methylmercury while they are in 
the womb can have impacts to their cognitive thinking, memory, 
attention, language, fine motor skills, and visual spatial skills. 
Based on scientific evidence reflecting concern about a range of 
neurodevelopmental effects seen in children exposed in utero to 
methylmercury, the EPA defined an RfD of 0.0001 mg/kg-day for 
methylmercury.\34\ An RfD is defined as an estimate (with uncertainty 
spanning perhaps an order of magnitude) of a daily exposure to the 
human population (including sensitive subgroups) that is likely to be 
without an appreciable risk of deleterious effects during a lifetime 
(EPA, 2002).\35\
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    \34\ U.S. EPA. 2001. IRIS Summary for Methylmercury. U.S. 
Environmental Protection Agency, Washington, DC. (USEPA, 2001).
    \35\ U.S. EPA. 2002. A Review of the Reference Dose and 
Reference Concentration Processes. EPA/630/P-02/002F, December 2002.
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    Prenatal exposure to methylmercury from maternal consumption of 
fish has been associated with several adverse neurodevelopmental 
outcomes in various fish consuming populations. Although data are 
limited, the EPA has focused on several subpopulations likely to be at 
higher risk from methylmercury exposure associated with EGU HAP due to 
fish consumption. As part of the 2011 Final Mercury TSD, the EPA 
completed a national-scale risk assessment focused on mercury emissions 
from domestic EGUs. Specifically, we examined risk associated with 
mercury released from U.S. EGUs that deposits to watersheds within the 
continental U.S., bioaccumulates in fish as methylmercury, and is 
consumed when fish are eaten by female subsistence fishers of child-
bearing age and other freshwater self-caught fish consumers. There is 
increased risk for in utero exposure and adverse outcomes in children 
born to female subsistence fishers with elevated exposure to 
methylmercury. The risk assessment modeled scenarios representing high-
end self-caught fish consumers active at inland freshwater lakes and 
streams. The analysis estimated that 29 percent of the watersheds 
studied would lead to

[[Page 7639]]

female subsistence fishers having exposures which exceeded the 
methylmercury RfD, based on in utero effects, due in whole or in part 
to the contribution of domestic EGU emissions of mercury. This included 
up to 10 percent of modeled watersheds where deposition from U.S. EGUs 
alone leads to potential exposures that exceed the RfD.\36\
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    \36\ The EPA chose this risk metric in part because CAA section 
112(n)(1)(C) directed the NIEHS to develop a threshold for mercury 
concentration in fish tissue that can be consumed by even sensitive 
populations without adverse effect and because CAA section 112(c)(6) 
demonstrates a special interest in protecting the public from 
exposure to mercury.
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    In addition to the 2011 Final Mercury TSD focusing on subsistence 
fishers referenced above, the EPA also completed a RIA in 2011 
including the characterization of benefits associated with the 
prospective reduction of U.S. EGU mercury emissions under MATS.\37\ 
However, due to limitations on the available data with regard to the 
extent of subsistence fishing activity in the U.S., which prevented the 
enumeration of subsistence fisher populations, the EPA was unable to 
develop a quantitative estimate of the reduction in population-level 
risk or associated dollar benefits for children of female subsistence 
fishers. Instead, in the 2011 MATS RIA, the EPA focused on a different 
population of self-caught fish consumers that could be enumerated. 
Specifically, we quantitatively estimated the amount and value of IQ 
loss associated with prenatal methylmercury exposure among the children 
of recreational anglers consuming self-caught fish from inland 
freshwater lakes, streams and rivers (unlike subsistence fishers, 
available data allow the characterization of recreational fishing 
activity across the U.S. including enumeration of these populations). 
Although the EPA acknowledged uncertainty about the size of the 
affected population and acknowledged that it could be underestimated, 
these unborn children associated with recreational anglers represented 
precisely the type of sensitive population most at risk from mercury 
exposure that CAA section 112 is designed to protect. The results 
generated in the 2011 RIA for recreational anglers suggested that by 
reducing methylmercury exposure, MATS was estimated to yield an 
additional 511 IQ points among the affected population of children, 
which would increase their future lifetime earnings. The EPA noted at 
the time that the analysis likely underestimated potential benefits for 
children of recreational anglers since, due to data limitations, it did 
not cover consumption of recreationally caught seafood from estuaries, 
coastal waters, and the deep ocean which was expected to contribute 
significantly to overall exposure. Nevertheless, this single endpoint 
alone, evaluated solely for the recreational angler, provides evidence 
of potentially significant health harm from methylmercury exposure.
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    \37\ The 2011 MATS RfD-based risk assessment focusing on the 
subsistence fisher population was designed as a screening-level 
analysis to inform consideration for whether U.S. EGU-sourced 
mercury represented a public health hazard. As such, the most 
appropriate risk metric was modeled exposure (for highly-exposed 
subsistence fishers) compared to the RfD for methylmercury. By 
contrast, the 2011 RIA was focused on estimating the dollar benefits 
associated with MATS and as such focused on a health endpoint which 
could be readily enumerated and then monetized, which at the time 
was IQ for infants born to recreational anglers.
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    In 2011 we noted that other, more difficult to quantify endpoints 
may also contribute to the overall burden across a broader range of 
subgroups. The metrics studied in addition to IQ include those measured 
by performance on neurobehavioral tests, particularly on tests of 
attention, fine motor-function, language, and visual spatial ability 
(USEPA, 2001; Agency for Toxic Substances and Disease Registry (ATSDR), 
1999).\38\ Such adverse neurodevelopmental effects are well documented 
in cohorts of subsistence fisher populations (i.e., Faroe Islands and 
the Nunavik region of Arctic Canada).
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    \38\ Agency for Toxic Substances and Disease Registry (ATSDR). 
1999. Toxicological profile for mercury. Atlanta, GA: U.S. 
Department of Health and Human Services, Public Health Service.
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    At this time, the EPA is conducting an updated methylmercury IRIS 
assessment and recently released preliminary assessment materials, an 
IRIS Assessment Plan (IAP) and Systematic Review Protocol for 
methylmercury.\39\ The update to the methylmercury IRIS assessment will 
focus on updating the quantitative aspects of neurodevelopmental 
outcomes associated with methylmercury exposure. As noted in these 
early assessment materials, new studies are available, since 2001, 
assessing the effects of methylmercury exposure on cognitive function, 
motor function, behavioral, structural, and electrophysiological 
outcomes at various ages following prenatal or postnatal exposure to 
methylmercury (USEPA, 2001; NAS Study; 84 FR 13286 (April 4, 2019); 
\40\ 85 FR 32037 (May 8, 2020)).\41\
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    \39\ https://iris.epa.gov/ChemicalLanding/&substance_nmbr=73.
    \40\ Availability of the IRIS Assessment Plan for Methylmercury. 
84 FR 13286 (April 4, 2019).
    \41\ Availability of the Systematic Review Protocol for the 
Methylmercury Integrated Risk Information System (IRIS) Assessment. 
85 FR 32037 (May 28, 2020).
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    Cardiovascular Impacts of Exposure to Methylmercury. The NAS Study 
indicated that there was evidence that exposure to methylmercury in 
humans and animals can have adverse effects on both the developing and 
adult cardiovascular system. Infant exposure in the womb to 
methylmercury has been associated with altered blood-pressure and 
heart-rate variability in children. In adults, dietary exposure to 
methylmercury has been linked to a higher risk of acute myocardial 
infarction (MI), coronary heart disease, or cardiovascular heart 
disease. To date, the EPA has not attempted to utilize a quantitative 
dose-response assessment for cardiovascular effects associated with 
methylmercury exposures because of a lack of consensus among scientists 
on the dose-response functions for these effects and inconsistency 
among available studies as to the association between methylmercury 
exposure and various cardiovascular system effects.
    However, additional studies have become available that have 
increased the EPA's confidence in characterizing the dose-response 
relationship between methylmercury and adverse cardiovascular outcomes. 
These new studies were leveraged to inform new quantitative screening 
analyses (described in section III.A.3, below) to estimate one 
cardiovascular endpoint--incidence of MI mortality--that may 
potentially be linked to U.S. EGU mercury emissions as well as the 
number of U.S. EGU impacted watersheds. In addition to a new meta-
analysis (Hu et al., 2021) \42\ on the association of methylmercury 
generally with cardiovascular disease (CVD), stroke, and ischemic heart 
disease (IHD), there is a limited body of existing literature that has 
examined associations between mercury and various cardiovascular 
outcomes. These include acute MI, hypertension, atherosclerosis, and 
heart rate variability (Roman et al., 2011).\43\
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    \42\ Hu, X. F., Lowe, M., Chan, H.M., Mercury exposure, 
cardiovascular disease, and mortality: A systematic review and dose-
response meta-analysis. Environmental Research 193 (2021),110538.
    \43\ Roman HA, Walsh TL, Coull BA, Dewailly [Eacute], Guallar E, 
Hattis D, Mari[euml]n K, Schwartz J, Stern AH, Virtanen JK, Rice G. 
Evaluation of the cardiovascular effects of methylmercury exposures: 
Current evidence supports development of a dose-response function 
for regulatory benefits analysis. Environ Health Perspect. 2011 
May;119(5):607-14. doi: 10.1289/ehp.1003012. Epub 2011 Jan 10.

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[[Page 7640]]

    Immunotoxic Effects of Exposure to Methylmercury. Although exposure 
to some forms of mercury can result in a decrease in immune activity or 
an autoimmune response (ATSDR, 1999), evidence for immunotoxic effects 
of methylmercury is limited (NAS Study).
    Other Mercury-Related Human Toxicity Data Including Potential 
Carcinogenicity. The Mercury Study noted that methylmercury is not a 
potent mutagen but is capable of causing chromosomal damage in a number 
of experimental systems. The NAS Study indicated that the evidence that 
human exposure to methylmercury causes genetic damage is inconclusive; 
it noted that some earlier studies showing chromosomal damage in 
lymphocytes may not have controlled sufficiently for potential 
confounders. One study of adults living in the Tapajos River region in 
Brazil (Amorim et al., 2000) \44\ reported a relationship between 
methylmercury concentration in hair and DNA damage in lymphocytes, as 
well as effects on chromosomes. Long-term methylmercury exposures in 
this population were believed to occur through consumption of fish, 
suggesting that genotoxic effects (largely chromosomal aberrations) may 
result from dietary, chronic methylmercury exposures similar to and 
above those seen in the populations studied in the Faroe Islands and 
Republic of Seychelles. Since 2000, more recent studies have evaluated 
methylmercury genotoxicity in vitro in human and animal cell lines and 
in vivo in rats.
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    \44\ Amorim MI, Mergler D, Bahia MO, Dubeau H, Miranda D, Lebel 
J, Burbano RR, Lucotte M. Cytogenetic damage related to low levels 
of methyl mercury contamination in the Brazilian Amazon. An Acad 
Bras Cienc. 2000 Dec;72(4):497-507. doi: 10.1590/s0001-
37652000000400004.
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    Based on limited human and animal data, methylmercury is classified 
as a ``possible human carcinogen'' by the International Agency for 
Research on Cancer (IARC, 1993) \45\ and in IRIS (USEPA, 2001). 
However, a quantitative estimate of the carcinogenic risk of 
methylmercury has not been assessed under the IRIS program at this 
time. Multiple human epidemiological studies have found no significant 
association between methylmercury exposure and overall cancer 
incidence, although a few studies have shown an association between 
methylmercury exposure and specific types of cancer incidence (e.g., 
acute leukemia and liver cancer) (NAS Study).
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    \45\ International Agency for Research on Cancer (IARC) Working 
Group on the Evaluation of Carcinogenic Risks to Humans. Beryllium, 
Cadmium, Mercury, and Exposures in the Glass Manufacturing Industry. 
Lyon (FR): International Agency for Research on Cancer; 1993. (IARC 
Monographs on the Evaluation of Carcinogenic Risks to Humans, No. 
58.) Mercury and Mercury Compounds. Available from: https://www.ncbi.nlm.nih.gov/books/NBK499780.
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    Some evidence of reproductive and renal toxicity in humans from 
methylmercury exposure exists. However, overall, human data regarding 
reproductive, renal, and hematological toxicity from methylmercury are 
very limited and are based on studies of the two high-dose poisoning 
episodes in Iraq and Japan or animal data, rather than epidemiological 
studies of chronic exposures at the levels of interest in this 
analysis.
b. Review of Health Effects for Non-Mercury HAP
    As noted earlier, EGUs are the largest source of HCl, HF, and 
selenium emissions, and are a major source of metallic HAP emissions 
including arsenic, chromium, nickel, cobalt, and others. Exposure to 
these HAP, depending on exposure duration and levels of exposures, is 
associated with a variety of adverse health effects. These adverse 
health effects may include chronic health disorders (e.g., irritation 
of the lung, skin, and mucus membranes; decreased pulmonary function, 
pneumonia, or lung damage; detrimental effects on the central nervous 
system; damage to the kidneys; and alimentary effects such as nausea 
and vomiting).
    As of 2021, three of the key metal HAP emitted by EGUs (arsenic, 
chromium, and nickel) have been classified as human carcinogens, while 
three others (cadmium, selenium, and lead) are classified as probable 
human carcinogens. Overall (metal and non-metal), the EPA has 
classified four of the HAP emitted by EGUs as human carcinogens and 
five as probable human carcinogens. See 76 FR 25003-25005 (May 3, 2011) 
for a fuller discussion of the health effects associated with these 
pollutants.
    As summarized in the 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 (2011 Non-Hg 
HAP Assessment),\46\ the EPA previously completed a refined chronic 
inhalation risk assessment for 16 EGU case studies in order to assess 
potential public health risk associated with non-mercury HAP. The 16 
case studies included one unit that used oil and 15 that used coal. As 
noted in the 2015 Proposal, this set of case studies was designed to 
include those facilities with potentially elevated cancer and non-
cancer risk based on an initial risk screening of prospective EGU units 
completed utilizing the Human Exposure Model paired with HAP emissions 
data obtained from the 2005 National Emissions Inventory. For each of 
the 16 case study facilities, we conducted refined dispersion modeling 
with the EPA's AERMOD (American Meteorological Society/Environmental 
Protection Agency Regulatory Model) system to calculate annual ambient 
concentrations (see 2011 Non-Hg HAP Assessment). Average annual 
concentrations were calculated at census block centroids. We calculated 
the MIR for each facility as the cancer risk associated with a 
continuous lifetime (24 hours per day, 7 days per week, and 52 weeks 
per year for a 70-year period) exposure to the maximum concentration at 
the centroid of an inhabited census block, based on application of the 
unit risk estimate from the EPA's IRIS program. Based on estimated 
actual emissions, the highest estimated individual lifetime cancer risk 
from any of the 16 case study facilities was 20-in-1 million, driven by 
nickel emissions from the one case study facility with oil-fired EGUs. 
Of the facilities with coal-fired EGUs, five facilities had MIR greater 
than 1-in-1 million (the highest was 5-in-1 million), with the risk 
from four due to emissions of chromium VI and the risk from one due to 
emissions of nickel. There were also two facilities with coal-fired 
EGUs that had MIR equal to 1-in-1 million. Based on this analysis, the 
EPA concludes that cancer risks associated with these HAP emissions 
supports a finding that it is appropriate to regulate HAP emissions 
from EGUs.
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    \46\ U.S. EPA. 2011. 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. 
Office of Air Quality Planning and Standards. November. EPA-452/R-
11-013. Docket ID Item No. EPA-HQ-OAR-2009-0234-19912.
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c. Review of Other Adverse Environmental Effects Associated With EGU 
HAP Emissions
    Ecological Effects of Methylmercury. Along with the human health 
hazards associated with methylmercury, it is well-established that 
birds and mammals are also exposed to methylmercury through fish 
consumption (Mercury Study). At higher levels of exposure, the harmful 
effects of methylmercury include slower growth and development, reduced 
reproduction, and premature mortality. The effects of methylmercury on 
wildlife are variable across species but have been observed in the 
environment

[[Page 7641]]

for numerous avian species and mammals including polar bears, river 
otters, and panthers. These adverse effects can propagate into impacts 
on human welfare to the extent they influence economies that depend on 
robust ecosystems (e.g., tourism).
    Ecological Effects of Acid Gas HAP. Even after the ARP was largely 
implemented in 2005, EGU sources comprised 82 percent of all 
anthropogenic HCl (a useful surrogate for all acid gas HAP) emissions 
in the U.S. When HCl dissolves in water, hydrochloric acid is formed. 
When hydrochloric acid is deposited by rainfall into terrestrial and 
aquatic ecosystems, it results in acidification of those systems. The 
MATS rule was expected to result in an 88 percent reduction in HCl 
emissions. As part of a recent Integrated Science Assessment (EPA, 
2020),\47\ the EPA concluded that the body of evidence is sufficient to 
infer a causal relationship between acidifying deposition and adverse 
changes in freshwater biota. Affected biota from acidification of 
freshwater include plankton, invertebrates, fish, and other organisms. 
Adverse effects can include physiological impairment, as well as 
alteration of species richness, community composition, and biodiversity 
in freshwater ecosystems. This evidence is consistent and coherent 
across multiple species. More species are lost with greater 
acidification.
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    \47\ U.S. EPA. Integrated Science Assessment (ISA) for Oxides of 
Nitrogen, Oxides of Sulfur and Particulate Matter Ecological 
Criteria (Final Report). U.S. Environmental Protection Agency, 
Washington, DC, EPA/600/R-20/278, 2020.
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3. Post-2016 Screening-Level Risk Assessments of Methylmercury Impacts
    This section of the preamble describes three screening-level risk 
assessments completed since the 2016 Supplemental Finding that further 
strengthen the conclusion that U.S. EGU-sourced mercury represents a 
hazard to public health. These ``screening-level'' assessments are 
designed as broad bounding exercises intended to illustrate the 
potential scope and public health importance of methylmercury risks 
associated with U.S. EGU emissions. In some cases, they incorporate 
newer peer-reviewed literature that was not available to the Agency 
previously. Remaining uncertainties, however, prohibit the EPA from 
generating a more precise estimate at this time. Two of the three risk 
assessments focus on the potential for methylmercury exposure to 
increase the risk of MI-related mortality in adults and for that 
reason, section III.A.3.a begins by describing the methodology used in 
the analyses, including discussion of the concentration response (CR) 
function \48\ for MI-related mortality and the incorporation of 
confidence cutpoints designed to address uncertainty. Then, the EPA 
describes an extension of the original watershed-level subsistence 
fisher methylmercury risk assessment to evaluate the potential for 
elevated MI-mortality risk among subsistence fishers (section 
III.A.3.b). In addition, a separate risk assessment is presented for 
elevated MI mortality among all adults utilizing a bounding approach 
that explores potential risks associated with exposure of the general 
U.S. population to methylmercury (sourced from U.S. EGUs) through fish 
consumption (section III.A.3.c). Finally, focusing on 
neurodevelopmental outcomes, another bounding analysis is presented 
that focuses on the risk of IQ points loss in children exposed in utero 
through maternal fish consumption by the population of general U.S. 
fish consumers (section III.A.3.d). Each of these analyses quantify 
potential impacts on incidence of adverse health effects. Section 
III.A.4 provides illustrative examples of how these incidence estimates 
translate to monetized benefits.
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    \48\ Concentration-response functions relate levels of exposure 
for the chemical of interest to the probability or rate of response 
for the adverse health outcome in the exposed individual or 
population. Typically these mathematical relationships are based on 
data obtained either from human epidemiology studies, clinical 
studies, or toxicological (animal) studies. In this case, CR 
functions for MI-related mortality are based on epidemiology studies 
as discussed further below.
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a. Methodology for Estimating MI-Mortality
    This section describes the methodology used in the new screening-
level risk assessments related to mortality, including the EPA's 
application of a CR function characterizing the relationship between 
increased MI-mortality and methylmercury exposure. As discussed further 
in the 2021 Risk TSD,\49\ which is contained in the docket for this 
action, the approach draws on recommendations provided by an expert 
panel convened by the EPA in 2010 to evaluate the cardiovascular 
effects associated with methylmercury exposure (the findings of the 
expert panel were summarized as a peer-reviewed paper, Roman et al., 
2011). The panel ``found the body of evidence exploring the link 
between [methylmercury] and acute myocardial infarction (MI) to be 
sufficiently strong to support its inclusion in future benefits 
analyses, based both on direct epidemiological evidence of [a 
methylmercury]-MI link and on [methylmercury's] association with 
intermediary impacts that contribute to MI risk.'' Given the likely 
mechanism of action associated with MI, the panel further recommended 
that either hair-mercury or toenail-mercury be used as an exposure 
metric because both reflect a longer-term pattern of exposure. 
Regarding the shape of the CR function, the panel noted that the 
EURAMIC study (Guallar et al., 2002) \50\ had identified a log-linear 
model form with log-of exposure providing the best fit using toenail 
mercury as the biomarker of exposure. The panel also discussed the 
issue of potential effect modification by cardioprotective compounds 
including polyunsaturated fatty acids (PUFA).\51\ Kuopio Ischaemic 
Heart Disease Risk Factor Study (KIHD) and European Multicenter Case-
Control Study on Antioxidants, Myocardial Infarction, and Cancer of the 
Breast Study (EURAMIC) datasets ``provide the strongest and most useful 
data sets for quantifying methylmercury-related incidence of MI.'' 
However, the panel did note the disconnect between typical levels of 
exposure to methylmercury in the U.S. population and the relatively 
higher levels of exposure reflected in the two recommended epidemiology 
studies (KIHD and EURAMIC). Therefore, the panel suggested that 
consideration be given to restricting modeling MI mortality to those 
with higher concentrations reflecting the levels of exposure found in 
the two key epidemiology studies (corresponding to roughly 75th to 95th 
percentile hair-mercury levels for U.S. women of child-bearing age, as 
characterized in National Health and Nutrition Examination

[[Page 7642]]

Survey (NHANES) data and referenced by the panel).
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    \49\ U.S. EPA. 2021. National-Scale Mercury Risk Estimates for 
Cardiovascular and Neurodevelopmental Outcomes for the National 
Emission Standards for Hazardous Air Pollutants: Coal- and Oil-Fired 
Electric Utility Steam Generating Units--Revocation of the 2020 
Reconsideration, and Affirmation of the Appropriate and Necessary 
Supplemental Finding; Notice of Proposed Rulemaking.
    \50\ Guallar E, Sanz-Gallardo MI, van't Veer P, Bode P, Aro A, 
G[oacute]mez-Aracena J, Kark JD, Riemersma RA, Mart[iacute]n-Moreno 
JM, Kok FJ; Heavy Metals and Myocardial Infarction Study Group. 
Mercury, fish oils, and the risk of myocardial infarction. N Engl J 
Med. 2002 Nov 28;347(22):1747-54. doi: 10.1056/NEJMoa020157.
    \51\ Virtanen JK, Voutilainen S, Rissanen TH, Mursu J, Tuomainen 
TP, Korhonen MJ, Valkonen VP, Sepp[auml]nen K, Laukkanen JA, Salonen 
JT. Mercury, fish oils, and risk of acute coronary events and 
cardiovascular disease, coronary heart disease, and all-cause 
mortality in men in eastern Finland. Arterioscler Thromb Vasc Biol. 
2005 Jan;25(1):228-33. doi: 10.1161/01.ATV.0000150040.20950.61. Epub 
2004 Nov 11.
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    In the intervening period since the release of the expert panel's 
findings in 2011 (Roman et al., 2011), the EPA has continued to review 
literature characterizing the relationship between methylmercury 
exposure and cardiovascular effects. While the EPA has not yet 
conducted a systematic review, two recent studies are of particular 
interest for quantifying the potential relationship between U.S. EGU 
mercury emissions and acute MI that informed a modeling approach. Giang 
and Selin (2016) \52\ presented an approach for modeling MI mortality 
reflecting a number of the recommendations presented in Roman et al., 
2011 including the use of the KIHD and EURAMIC studies as the basis for 
a CR function including both the log-linear functional form and the 
effect estimate derived from the KIHD study results. A second study, Hu 
et al. 2021,\53\ presented a meta-analysis looking at the relationship 
between methylmercury exposure and mortality. That paper utilized eight 
studies each determined to be of good quality and reflecting at a 
minimum, adjustments for age, sex, and n-3 PUFA in specifying dose-
response relationships. Historically, studies which account for n-3 
PUFA have assumed a linear relationship between PUFAs and risk of MI 
(Roman et al., 2011). However, the association between PUFA intake and 
cardiovascular risk may not be linear (Mozaffarian and Rimm, 2006).\54\ 
The potential for confounding and effect modification by PUFA and 
selenium makes it difficult to interpret the relationship between 
methylmercury and MI, particularly at lower doses where there is 
potential for masking of methylmercury toxicity. The results of the 
meta-analysis by Hu et al., 2021 illustrated this phenomenon with their 
J-shaped functions for both IHD and CVD, both of which showed an 
initial region of negative slope (diminishing net risk with 
methylmercury exposure) before reaching an inflection point (between 1 
and 2 microgram per gram ([micro]g/g) hair-mercury depending on the 
endpoint) where the function turns positive (increasing risk).
---------------------------------------------------------------------------

    \52\ Giang A, Selin NE. Benefits of mercury controls for the 
United States. Proc Natl Acad Sci U S A. 2016 Jan 12;113(2):286-91. 
doi: 10.1073/pnas.1514395113. Epub 2015 Dec 28.
    \53\ Hu XF, Lowe M, Chan HM. Mercury exposure, cardiovascular 
disease, and mortality: A systematic review and dose-response meta-
analysis. Environ Res. 2021 Feb;193:110538. doi: 10.1016/
j.envres.2020.110538. Epub 2020 Dec 5.
    \54\ Mozaffarian D, Rimm EB. Fish intake, contaminants, and 
human health: Evaluating the risks and the benefits. JAMA. 2006 Oct 
18;296(15):1885-99. doi: 10.1001/jama.296.15.1885. Erratum in: JAMA. 
2007 Feb 14;297(6):590.
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    For the EPA's new screening-level assessment, we have considered 
the recommendations presented in Roman et al., 2011, as well as the J-
shaped functions presented in Hu et al., 2021, and their implications 
for considering overall confidence in specifying the relationship 
between cardiovascular-related mortality and methylmercury exposure. In 
particular, the EPA has higher confidence in the log-linear 
relationship at levels of hair-mercury exposure above the selected 
confidence cutpoints. In specifying these confidence cutpoints (for 
modeling MI mortality) we have looked to recommendations presented in 
Roman et al., 2011, specifically that we consider modeling risk for 
levels of exposure reflected in the EURAMIC and KIHD studies (with 
these equating to roughly 0.66 and 1.9 [micro]g/g hair-mercury, 
respectively, or approximately the 75th-95th percentile of hair-mercury 
levels seen in women of childbearing age in available 1999-2000 NHANES 
survey data \55\). Further, we note that these confidence cutpoints 
roughly match the inflection point for IHD and CVD seen in the J-shaped 
plot presented in Hu et al., 2021, which further supports their use in 
defining regions of methylmercury exposure above which we have 
increased confidence in modeling MI mortality. However, as noted 
earlier, we are not concluding here that there is an absence of risk 
below these cutpoints, as such conclusions would require a weight of 
the evidence analysis and subsequent independent peer review. Rather, 
we are less confident in our ability to specify the nature of the CR 
function in those lower exposure regions due to possible effect 
modification and/or confounding by PUFA and/or selenium. Therefore, in 
applying the CR function in modeling MI mortality, we included a set of 
three functions-two including the cutpoints described above and a third 
no-cutpoint version of the function reflecting the assumption that risk 
extends across the entire range of methylmercury exposure. In terms of 
the other elements of the CR function (shape and effect estimate), we 
have also followed the advice presented in Roman et al., 2011, as 
further illustrated through the analysis published by Giang and Selin 
2016, and utilized a log-linear form and an effect estimate of 0.10 for 
MI mortality obtained from the KIHD study (see 2021 Risk TSD). As with 
the other risk estimates presented for methylmercury, these estimates 
reflect the baseline for U.S. EGUs prior to implementation of MATS 
(i.e., 29 tons).
---------------------------------------------------------------------------

    \55\ NHANES has not continued to collect hair-mercury data in 
subsequent years since the NHANES dataset referenced here. While 
NHANES has continued with total blood-mercury monitoring, hair 
mercury is a better biomarker for characterizing methylmercury 
exposure over time. Given that the CR functions based on the KIHD 
study (as well as observations presented in Roman et al. 2011 
regarding cardio-modeling) were all based on hair-mercury, this was 
chosen as the anchoring analytical biometric. The potential for bias 
due to the use of the 1999-2000 NHANES data is further discussed in 
the 2021 Risk TSD.
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b. Increased MI-Mortality Risk in Subsistence Fishers Exposed to 
Methylmercury
    This screening-level analysis of MI-mortality risk is an extension 
of the female subsistence-fisher-based at-risk watershed analysis 
originally completed as part of the 2011 risk assessment supporting the 
appropriate and necessary determination (USEPA, 2011) and documented in 
the 2011 Final Mercury TSD. In that original analysis, a series of 
female subsistence fisher risk scenarios was evaluated for a subset of 
3,141 watersheds within the continental U.S. for which there were 
sampled methylmercury fish tissue data (that fish tissue data allowing 
a higher-confidence empirically-based assessment of methylmercury risk 
to be generated for those watersheds). For each watershed, we used the 
fish tissue methylmercury data to characterize total mercury-related 
risk and then we estimated the portion of that total risk attributable 
to U.S. EGUs (based on the fraction of total mercury deposition to 
those watersheds associated with U.S. EGU emissions as supported by the 
Mercury Maps approach, USEPA, 2011).\56\
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    \56\ A detailed discussion of the Mercury Maps approach 
(establishing a proportional relationship between mercury deposition 
and methylmercury concentrations in fish at the watershed level) is 
presented in section 1.4.6.1 of the 2011 Final Mercury TSD which in 
turn references: Mercury Maps--A Quantitative Spatial Link Between 
Air Deposition and Fish Tissue Peer Reviewed Final Report. U.S. EPA, 
Office of Water, EPA-823-R-01-009, September, 2001.
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    We have now extended the at-risk watershed analysis completed in 
2011 for the subsistence fisher scenarios to include an assessment of 
the potential for increased MI mortality risk.\57\ Specifically, we 
have utilized the U.S. EGU-attributable methylmercury exposure 
estimates ([micro]g/kg-day methylmercury intake) generated for the 
subsistence fisher scenario in each

[[Page 7643]]

watershed to generate equivalent hair-mercury exposure estimates for 
that subsistence fisher scenario in each watershed (see 2021 Risk TSD 
for additional detail on the conversion of daily methylmercury intake 
rates into hair-mercury levels). We then compare those hair-mercury 
levels to the confidence cutpoints developed for the MI mortality 
screening-level risk assessment described above in section III.A.3.a. 
If the hair-mercury level for a particular watershed is above either 
the EURAMIC or KIHD confidence cutpoint (i.e., above 0.66 and 1.9 
[micro]g/g hair-mercury, respectively), then we consider that watershed 
to be at increased risk for MI mortality exclusively due to that U.S. 
EGU-attributable methylmercury exposure.\58\ Note, that this is not to 
suggest that exposures at watersheds where U.S. EGU-attributable 
contributions are below these cutpoints are without risk, but rather 
that when exposure levels exceed these cutpoints, we have increased 
confidence in concluding there is an increased risk of MI mortality for 
subsistence fishers active within that watershed. It is also important 
to note that in many cases, total methylmercury exposure (i.e., EGU 
contribution plus contributions from other sources) may exceed these 
confidence cutpoints such that subsistence fishers active at those 
watersheds would be at increased risk of MI mortality at least in part 
due to EGU emissions. See White Stallion, 748 F.3d at 1242-43 (finding 
reasonable the EPA's decision to consider cumulative impacts of HAP 
from EGUs and other sources in determining whether HAP emissions from 
EGUs pose a hazard to public health under CAA section 112(n)(1)(A)); 
see also CAA section 112(n)(1)(B) (directing the EPA to study the 
cumulative impacts of mercury emissions from EGUs and other domestic 
stationary sources of mercury).
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    \57\ Note that while the 2011 Final Mercury TSD, in utilizing an 
RfD-based approach reflecting neurodevelopmental effects, focused on 
female subsistence fishers; the analysis focused on MI-mortality 
risk covers all adult subsistence fishers, and we use our cutpoint 
bounding analysis because there is not an RfD focused specifically 
on cardiovascular effects for methylmercury.
    \58\ Although we have used the MI-mortality CR function 
described in section III.A.3.a of this preamble to generate 
mortality incidence estimates for the general fish consuming 
population (see section III.A.3.c), this is not possible for 
subsistence fishers since we are not able at this point to enumerate 
them. Consequently, we use the confidence cutpoints associated with 
that CR function to identify exposures associated with MI mortality 
risk as described here.
---------------------------------------------------------------------------

    Table 3 of the 2021 Risk TSD presents the results of the analysis 
of risk for MI-mortality for the subsistence fisher scenarios. As with 
the original RfD-based risk estimates, these results are dimensioned on 
two key parameters (self-caught fish consumption rate and the watershed 
percentile exposure level--hair-mercury [micro]g/g). Those watershed 
percentile hair-mercury values that exceed the EURAMIC-based MI 
mortality confidence cutpoints (0.66 [micro]g/g hair-mercury) are 
shaded in the table and those cells that also exceed the KIHD-based MI 
mortality confidence cutpoint (1.9 [micro]g/g hair-mercury) are bolded. 
Once again, these thresholds identify levels of methylmercury exposure 
(hair-mercury) associated with a clear association with MI-related 
health effects (i.e., increased risk). Unlike the RfD-based risk 
estimates, for MI-mortality estimates we only focus on U.S. EGU-
attributable methylmercury (i.e., whether U.S. EGU-attributable hair-
mercury exceeds the cutpoints of interest).
    Results for the typical subsistence fisher, representing high-end 
self-caught fish consumption in the U.S. population, suggest that up to 
10 percent of the watersheds modeled are associated with hair-mercury 
levels (due to U.S. EGU mercury emissions alone) that exceed the lower 
EURAMIC cutpoint for MI-mortality risk, with 1 percent of modeled 
watersheds also exceeding the KIHD cutpoint (due to U.S. EGU-mercury 
emissions alone). For low-income Black subsistence fishers active in 
the Southeast, up to 25 percent of the watersheds exceed the lower 
EURAMIC confidence threshold (assuming the highest rate of fish 
consumption), with only the upper 1 percent of watersheds exceeding the 
KIHD threshold (again based only on U.S. EGU-sourced mercury exposure).
c. Characterization of MI-Mortality Risk for the General U.S. 
Population Resulting From the Consumption of Commercially-Sourced Fish
    The second of the three new screening-level risk analyses estimates 
the incidence of MI mortality in the general U.S. population resulting 
from consumption of commercially-sourced fish containing methylmercury 
emitted from U.S. EGUs.\59\ This is accomplished by first estimating 
the total burden of methylmercury-related MI mortality in the U.S. 
population and then estimating the fraction of that total increment 
attributable to U.S. EGUs. The task of modeling this health endpoint 
can involve complex mechanistic modeling of the multi-step process 
leading from U.S. EGU mercury emissions to mercury deposition over 
global/regional fisheries to bioaccumulation of methylmercury in 
fisheries stocks to exposure of U.S. fish consumers through consumption 
of those commercially-sourced fish (e.g., Giang and Selin, 2016). 
However, in recognition of the uncertainty associated with attempting 
to model this more complex multi-step process, we have instead 
developed a simpler screening analysis approach intended to generate a 
range of risk estimates that reflects the impact of critical sources of 
uncertainty associated with this exposure scenario. Rather than 
attempting to generate a single high-confidence estimate of risk, which 
in our estimation is challenging given overall uncertainty associated 
with this exposure pathway, the goal with the bounding approach is 
simply to generate a range of risk estimates for MI mortality that 
furthers our understanding of the significant public health burden 
associated with EGU HAP emissions.
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    \59\ Although the analysis presented here focuses on 
methylmercury exposure associated with fish consumption which, as 
noted earlier, is the primary source of methylmercury exposure for 
the U.S. population, EGU mercury deposited to land can also impact 
other food sources including those associated with agricultural 
production (e.g., rice). In the context of fish consumption, 
commercially-sourced fish refers to fish consumed in restaurants or 
from food stores.
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    The bounding approach developed for this particular scenario is 
based on the assumption that fish sourced from global commercial 
fisheries are loaded by mercury deposited to those fisheries and that 
the fraction of that deposited mercury originating from U.S. EGUs will 
eventually be reflected as a fraction of methylmercury in those fish 
and subsequently as a fraction of MI mortality risk associated with 
those U.S. EGUs. One of the challenges associated with this screening 
analysis is how to attribute domestic EGU contributions to global 
fisheries and how that might vary from location to location. For 
simplicity, the bounding analysis includes two assumptions: (1) A 
potential lower-bound reflecting the assumption that U.S. fish 
consumption is largely sourced from global fisheries and consequently 
the U.S. EGU contribution to total global mercury emissions 
(anthropogenic and natural) can be used to approximate the U.S. EGU 
fractional contribution to MI mortality and (2) a potential upper-bound 
where we assume that fisheries closer to U.S. EGUs (e.g., within the 
continental U.S. or just offshore and/or along the U.S. Atlantic and 
Pacific coastlines) supply most of the fish and seafood consumed within 
the U.S., and therefore U.S. EGU average deposition over the U.S. (as a 
fraction of total mercury deposition) can be used to approximate the 
U.S. EGU fractional contribution to MI mortality (see 2021 Risk TSD for 
more detail).\60\ The EPA is

[[Page 7644]]

continuing to review the literature (including consideration of 
research by FDA) to better define the relative contributions for 
sources of fish consumed within the U.S. Note that the bounding 
analysis also includes consideration for another key source of 
uncertainty, namely, the specification of the CR function linking 
methylmercury exposure to increased MI mortality and, in particular, 
efforts to account for increased confidence in specifying the CR 
function for higher levels of methylmercury exposure through the use of 
confidence cutpoints (section III.A.3.a). Additional detail on the 
stepwise process used to first generate the total U.S. burden of MI-
mortality related to total methylmercury exposure and then apportion 
that total risk estimate to the fraction contributed by U.S. EGUs is 
presented the 2021 Risk TSD. Based on the 29 tons of mercury emitted by 
U.S. EGUs prior to implementation of MATS, the bounding estimates from 
the fraction of total mercury deposition attributable to U.S. EGUs at 
the global scale is 0.48 percent (lower bound) and 1.8 percent (upper 
bound). These estimated bounding percentages are important since they 
have a significant impact on the overall incidence of MI mortality 
ultimately attributable to U.S. EGU-sourced mercury.
---------------------------------------------------------------------------

    \60\ Another way of stating this is that the lower-bound 
estimate reflects an assumption that U.S. EGU mercury is diluted as 
part of a global pool and impacts commercial fish sourced from 
across the globe (with lower levels of methylmercury contribution) 
while the upper-bound estimate reflects a focus on more near-field 
regional impacts by U.S. EGU mercury to fish sourced either within 
the continental U.S. or along its coastline (with greater relative 
contribution to methylmercury levels).
---------------------------------------------------------------------------

    Reflecting both the spread in the apportionment of U.S. EGU-sourced 
mercury (as described above) and application of the three possible 
applications of the CR function for MI mortality (no confidence-
cutpoint, KIHD cutpoint, EURAMIC cutpoint), the estimated MI-mortality 
attributable to U.S. EGU-sourced mercury for the general U.S. 
population associated primarily with consumption of commercially-
sourced fish ranges from 5 to 91 excess deaths each year.\61\ For those 
Americans with high levels of methylmercury in their body (i.e., above 
certain cutpoints), the science suggests that any additional increase 
in methylmercury exposure will raise the risk of fatal heart attacks. 
Based on this screening analysis, even after imposition of the ARP and 
other CAA criteria pollutant requirements that also reduce HAP 
emissions from domestic EGU sources, we find that mercury emissions 
from EGUs pose a risk of premature mortality due to MI.
---------------------------------------------------------------------------

    \61\ Inclusion of 95th percentile confidence intervals for the 
effect estimate used in modeling MI mortality extends this range to 
from 3 to 143 deaths (reflecting the 5th percentile associated with 
the 5 lower bound estimate to the 95th percentile for the upper 
bound estimate of 91).
---------------------------------------------------------------------------

d. Characterization of IQ Loss for Children Born to Mothers in the 
General U.S. Population Resulting From the Consumption of Commercially 
Sourced Fish (and Other Food Items Containing Methylmercury)
    The third new screening-level risk analysis estimates the incidence 
of IQ loss in children in the general U.S. population resulting from 
maternal consumption of commercially sourced fish containing 
methylmercury attributable to U.S. EGUs (resulting in subsequent 
prenatal exposure to methylmercury). The approach used in estimating 
incidence of this adverse health effect shares several elements with 
the approach described above for modeling MI mortality in the general 
U.S. population, including in particular, the method used to apportion 
the total methylmercury-related health burden to the fraction 
associated with U.S. EGU mercury emissions (e.g., use of lower and 
upper bound estimates of the fractional contribution of domestic EGU 
sources). Other elements of the modeling approach, including the 
specification of the number of children born annually in the U.S., the 
specification of maternal baseline hair-mercury levels (utilizing 
NHANES data) and the characterization of the linkage between 
methylmercury exposure (in utero) and IQ loss, are based on methods 
used in the original 2011 benefits analysis completed for MATS (USEPA, 
2011) and are documented in the 2021 Risk TSD.
    As with the MI-mortality estimates described earlier, the two 
bounding estimates for the fraction of total mercury deposition 
attributable to U.S. EGUs at the global and regional scales (0.48 
percent and 1.8 percent, respectively) have a significant impact on the 
overall magnitude of IQ points lost (for children born to the general 
U.S. population) which are ultimately attributable to U.S. EGUs. 
However, the EPA has relatively high confidence in modeling this 
endpoint due to greater confidence in the IQ loss CR function. The 
range in IQ points lost annually due to U.S. EGU-sourced mercury is 
estimated at 1,600 to 6,000 points, which is distributed across the 
population of U.S. children covered by this analysis.\62\ Given 
variation in key factors related to maternal methylmercury exposure, it 
is likely that modeled IQ loss will not be uniformly distributed across 
the population of exposed children and may instead, display 
considerable heterogeneity.\63\ The bounding analysis described here 
was not designed to characterize these complex patterns of 
heterogeneity in IQ loss across the population of children simulated 
and we note that such efforts would be subject to considerable 
uncertainty. However, it does provide evidence of specific adverse 
outcomes with real implications to those affected. Even small 
degradations in IQ in the early stages of life are associated with 
diminished future outcomes in education and earnings potential.
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    \62\ Inclusion of 95th percentile confidence intervals for the 
effect estimate used in modeling this endpoint extends this range to 
from 80 to 12,600 IQ points lost (reflecting the 5th and 95th 
percentiles).
    \63\ Maternal exposure (and hence IQ impacts to children) from 
U.S. EGU-sourced mercury can display considerable variation due to 
(a) spatial patterns of U.S. EGU mercury fate and transport 
(including deposition and methylation) which affects impacts on fish 
methylmercury and (b) variations in fish consumption by mothers 
(including differences in daily intake, types of fish consumed and 
geographical origins of that fish).
---------------------------------------------------------------------------

4. Most HAP Benefits Cannot Be Quantified or Monetized
    Despite the array of adverse health and environmental risks 
associated with HAP emissions from U.S. coal- and oil-fired EGUs 
documented above, as the above discussion demonstrates, it can be 
technically challenging to estimate the extent to which EGU HAP 
emissions will result in adverse effects quantitively across the U.S. 
population absent regulation. In fact, the vast majority of the post-
control benefits of reducing HAP cannot be quantified or monetized with 
sufficient quality to inform regulatory decisions due to data gaps, 
particularly with respect to sensitive populations. But that does not 
mean that these benefits are small, insignificant, or nonexistent. 
There are numerous unmonetized effects that contribute to additional 
benefits realized from emissions reductions. These include additional 
reductions in neurodevelopmental and cardiovascular effects from 
exposure to methylmercury, adverse ecosystem effects including mercury-
related impacts on recreational and commercial fishing, health risks 
from exposure to non-mercury HAP, and health risks in EJ subpopulations 
that face disproportionally high exposure to EGU HAP.
    Congress well understood the challenges in monetizing risks. As 
discussed in section II.B above, the statutory language in CAA section 
112 clearly supports a conclusion that the intended benefit of HAP 
regulation is a reduction in the volume of HAP emissions to reduce 
assumed and

[[Page 7645]]

identified risks from HAP with the goal of protecting even the most 
exposed and most sensitive members of the population. The statute 
requires the EPA to move aggressively to quickly reduce and eliminate 
HAP, placing high value on doing so in the face of uncertainty 
regarding the full extent of harm posed by hazardous pollutants on 
human health and welfare. The statute also clearly places great value 
on protecting even the most vulnerable members of the population, by 
instructing the EPA, when evaluating risk in the context of a 
determination of whether regulation is warranted, to focus on risk to 
the most exposed and most sensitive members of the population. See, 
e.g., CAA sections 112(c)(9)(B), 112(f)(2)(B), and 112(n)(1)(C). For 
example, in evaluating the potential for cancer effects associated with 
emissions from a particular source category under CAA section 
112(f)(2), the EPA is directed by Congress to base its determinations 
on the maximum individual risk (MIR) to the most highly exposed 
individual living near a source. Similarly, in calculating the 
potential for non-cancer effects to occur, the EPA evaluates the impact 
of HAP to the most exposed individual and accounts for sensitive 
subpopulations.
    Notably, Congress in CAA section 112 did not require the EPA to 
quantify risk across the entire population, or to calculate average or 
``typical'' risks. The statutory design focusing on maximum risk to 
individuals living near sources acknowledges the inherent difficulty in 
enumerating HAP effects, given the large number of pollutants and the 
uncertainties associated with those pollutants, as well as the large 
number of sources emitting HAP. However, this does not mean that these 
effects do not exist or that society would not highly value these 
reductions, despite the fact that the post-control effects of the 
reductions generally cannot be quantified. The EPA has long 
acknowledged the difficulty of quantifying and monetizing HAP benefits. 
In March 2011, the EPA issued a report on the post-control benefits and 
costs of the CAA. This Second Prospective Report \64\ is the latest in 
a series of EPA studies that estimate and compare the post-control 
benefits and costs of the CAA and related programs over time. Notably, 
it was the first of these reports to include any attempt to quantify 
and monetize the impacts of reductions in HAP, and it concentrated on a 
small case study for a single pollutant, entitled ``Air Toxics Case 
Study--Health Benefits of Benzene Reductions in Houston, 1990-2020.'' 
As the EPA summarized in the Second Prospective Report, ``[t]he purpose 
of the case study was to demonstrate a methodology that could be used 
to generate human health benefits from CAAA controls on a single HAP in 
an urban setting, while highlighting key limitations and uncertainties 
in the process. . . . Benzene was selected for the case study due to 
the availability of human epidemiological studies linking its exposure 
with adverse health effects.'' (pg. 5-29). In describing the approach, 
the EPA noted: ``[b]oth the Retrospective analysis and the First 
Prospective analysis omitted a quantitative estimation of the benefits 
of reduced concentrations of air toxics, citing gaps in the 
toxicological database, difficulty in designing population-based 
epidemiological studies with sufficient power to detect health effects, 
limited ambient and personal exposure monitoring data, limited data to 
estimate exposures in some critical microenvironments, and insufficient 
economic research to support valuation of the types of health impacts 
often associated with exposure to individual air toxics.'' (pg. 5-29). 
These difficulties have long hindered the Agency's ability to quantify 
post-control HAP impacts and estimate the monetary benefits of HAP 
reductions.
---------------------------------------------------------------------------

    \64\ U.S. EPA Office of Air and Radiation, April 2011. The 
Benefits and Costs of the Clean Air Act from 1990 to 2020, Final 
Report--Rev. A. Available at https://www.epa.gov/sites/production/files/2015-07/documents/fullreport_rev_a.pdf.
---------------------------------------------------------------------------

    In preparing the benzene case study for inclusion in the Second 
Prospective Report, the Agency asked the Advisory Council on Clean Air 
Compliance Analysis (the Council) to review the approach. In its 2008 
consensus advice to the EPA after reviewing the benzene case study,\65\ 
the Council noted that ``Benzene . . . has a large epidemiological 
database which OAR used to estimate the health benefits of benzene 
reductions due to CAAA controls. The Council was asked to consider 
whether this case study provides a basis for determining the value of 
such an exercise for HAP benefits characterization nationwide.'' They 
concluded:
---------------------------------------------------------------------------

    \65\ U.S. EPA Advisory Council on Clean Air Act Compliance 
Analysis, Review of the Benzene Air Toxics Health Benefits Case 
Study. July 11, 2008. Available at https://nepis.epa.gov/Exe/ZyPDF.cgi/P1000ZYP.PDF?Dockey=P1000ZYP.PDF.

    As recognized by OAR, the challenges for assessing progress in 
health improvement as a result of reductions in emissions of 
hazardous air pollutants (HAPs) are daunting. Accordingly, EPA has 
been unable to adequately assess the economic benefits associated 
with health improvements from HAP reductions due to a lack of 
exposure-response functions, uncertainties in emissions inventories 
and background levels, the difficulty of extrapolating risk 
estimates to low doses and the challenges of tracking health 
progress for diseases, such as cancer, that have long latency 
periods. . . .
    The benzene case study successfully synthesized best practices 
and implemented the standard damage function approach to estimating 
the benefits of reduced benzene, however the Council is not 
optimistic that the approach can be repeated on a national scale or 
extended to many of the other 187 air toxics due to insufficient 
epidemiological data. With some exceptions, it is not likely that 
the other 187 HAPs will have the quantitative exposure-response data 
needed for such analysis. Given EPA's limited resources to evaluate 
a large number of HAPs individually, the Council urges EPA to 
consider alternative approaches to estimate the benefits of air 
toxics regulations.

    In addition to the difficulties noted by the Council, there are 
other challenges that affect the EPA's ability to fully characterize 
post-control impacts of HAP on populations of concern, including 
sensitive groups such as children or those who may have underlying 
conditions that increase their risk of adverse effects following 
exposure to HAP. Unlike for criteria pollutants such as ozone and PM, 
the EPA lacks information from controlled human exposure studies 
conducted in clinical settings which enable us to better characterize 
dose-response relationships and identify subclinical outcomes. Also, as 
noted by the Council and by the EPA itself in preparing the benzene 
case study, the almost universal lack of HAP-focused epidemiological 
studies is a significant limitation. Estimated risks reported in 
epidemiologic studies of fine PM (PM2.5) and ozone enable 
the EPA to estimate health impacts across large segments of the U.S. 
population and quantify the economic value of these impacts. 
Epidemiologic studies are particularly well suited to supporting air 
pollution health impact assessments because they report measures of 
population-level risk that can be readily used in a risk assessment.
    However, such studies are infrequently performed for HAP. Exposure 
to HAP is typically more uneven and more highly concentrated among a 
smaller number of individuals than exposure to criteria pollutants. 
Hence, conducting an epidemiologic study for HAP is inherently more 
challenging; for starters, the small population size means such studies 
often lack sufficient statistical power to detect effects. For example, 
in the case of mercury, the most exposed and most sensitive members of 
the population

[[Page 7646]]

may be both small and highly concentrated, such as the subsistence 
fishers that the EPA has identified as likely to suffer deleterious 
effects from U.S. EGU HAP emissions. While it is possible to estimate 
the potential risks confronting this population in a case-study 
approach (an analysis that plays an important role in supporting the 
public health hazard determination for mercury as discussed above in 
sections III.A.2 and III.A.3), it is not possible to translate these 
risk estimates into post-control quantitative population-level impact 
estimates for the reasons described above.
    Further, for many HAP-related health endpoints, the Agency lacks 
economic data that would support monetizing HAP impacts, such as 
willingness to pay studies that can be used to estimate the social 
value of avoided outcomes like heart attacks, IQ loss, and renal or 
reproductive failure. In addition, the absence of socio-demographic 
data such as the number of affected individuals comprising sensitive 
subgroups further limits the ability to monetize HAP-impacted effects. 
All of these deficiencies impede the EPA's ability to quantify and 
monetize post-control HAP-related impacts even though those impacts may 
be severe and/or impact significant numbers of people.
    Though it may be difficult to quantify and monetize most post-
control HAP-related health and environmental benefits, this does not 
mean such benefits are small. The nature and severity of effects 
associated with HAP exposure, ranging from lifelong cognitive 
impairment to cancer to adverse reproductive effects, implies that the 
economic value of reducing these impacts would be substantial if they 
were to be quantified completely. By extension, it is reasonable to 
expect both that reducing HAP-related incidence affecting individual 
endpoints would yield substantial benefits if fully quantified, and 
moreover that the total societal impact of reducing HAP would be quite 
large when evaluated across the full range of endpoints. In judging it 
appropriate to regulate based on the risks associated with HAP 
emissions from U.S. EGUs, the EPA is placing weight on the likelihood 
that these effects are significant and substantial, as supported by the 
health evidence. The EPA's new screening-level analyses laid out in the 
Risk TSD for this proposal illustrate this point. Specifically, in 
exploring the potential for MI-related mortality risk attributable to 
mercury emissions from U.S. EGUs, the EPA's upper bound estimate is 
that these emissions may contribute to as many as 91 additional 
premature deaths each year. The value society places on avoiding such 
severe effects is very high; as the EPA illustrates in the valuation 
discussion in the 2021 Risk TSD, the benefit of avoiding such effects 
could approach $720 million per year. Similarly, for IQ loss in 
children exposed in utero to U.S. EGU-sourced mercury, our upper bound 
estimate approaches 6,000 IQ points lost which could translate into a 
benefit approaching $50 million per year.
    These estimates are intended to illustrate the point that the HAP 
impacts are large and societally meaningful, but not to suggest that 
they are even close to the full benefits of reducing HAP. There are 
many other unquantified effects of reducing EGU HAP that would also 
have substantial value to society. As described above, mercury alone is 
associated with a host of adverse health and environmental effects. The 
statute clearly identifies this basket of effects as a significant 
concern in directing the EPA to study them specifically. If the EPA 
were able to account for all of these post-control effects in our 
quantitative estimates, the true benefits of MATS would be far clearer. 
However, available data and methods currently preclude a full 
quantitative accounting of the post-control impacts of reducing HAP 
emissions from U.S. EGUs and a monetization of these impacts.
    There are other aspects of social willingness to pay that are not 
accounted for in the EPA's quantitative estimate of benefits either. 
For example, in previous MATS-related rulemakings and analysis, the EPA 
has not estimated what individuals would be willing to pay in order to 
reduce the exposure of others who are exposed (even if they are not 
experiencing high levels of HAP exposure themselves). These may be 
considered and quantified as benefits depending on whether it is the 
health risks to others in particular that is motivating them.\66\ For 
example, Cropper et al. (2016) found that focus group participants 
indicated a preference for more equitable distribution of health risks 
than for income, which indicates that it is specifically the risks 
others face that was important to the participants.\67\ This result is 
particularly important as exposure to HAP is often disproportionately 
borne by underserved and underrepresented communities (Bell and Ebisu, 
2012).\68\ Unfortunately, studies to quantify the willingness to pay 
for a more equitable distribution of HAP exposures are limited, so 
quantification of this benefit likely cannot be performed until new 
research is conducted.
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    \66\ Jones-Lee, M.W. Paternalistic Altruism and the Value of 
Statistical Life. The Economic Journal, vol. 102, no. 410, 1992, pp. 
80-90.
    \67\ Cropper M., Krupnick A., and W. Raich, Preferences for 
Equality in Environmental Outcomes, Working Paper 22644 https://www.nber.org/papers/w22644 National Bureau of Economic Research, 
September 2016.
    \68\ Bell, Michelle L., and Keita Ebisu. Environmental 
inequality in exposures to airborne particulate matter components in 
the United States. Environmental Health Perspectives 120.12 (2012): 
1699-1704.
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    The HAP-related legislative history for the 1990 Amendments 
includes little discussion of the monetized benefits of HAP, perhaps 
due to these attendant difficulties. When such monetized benefits were 
estimated in several outside reports submitted to Congress before 
passage of the 1990 Amendments, the estimates were based on reduced 
cancer deaths and the value of the benefits that are quantified were 
estimated to be small as compared to the estimated costs of regulating 
HAP emissions under CAA section 112. See, e.g., A Legislative History 
of the Clean Air Act Amendments of 1990, Vol. I at 1366-67 (November 
1993) (estimating the total annual cost of CAA section 112 to be 
between $6 billion and $10 billion per year and the estimated annual 
benefits to be between $0 and $4 billion per year); id. at 1372-73 
(estimating the total annual cost of CAA section 112 to be between $14 
billion and $62 billion per year and the estimated annual benefits to 
be between $0 and $4 billion per year). Despite the apparent disparity 
of estimated costs and monetized benefits, Congress still enacted the 
revisions to CAA section 112. Thus, it is reasonable to conclude that 
Congress found HAP emissions to be worth regulating even without 
evidence that the monetized benefits of doing so were greater than the 
costs. The EPA believes this stems from the value that the statute 
places on reducing HAP regardless of whether the post-control benefits 
of doing so can be quantified or monetized, and the statute's purpose 
of protecting even the most exposed and most sensitive members of the 
population.
5. Characterization of HAP Risk Relevant to Consideration of 
Environmental Justice
    In assessing the adverse human health effects of HAP pollution from 
EGUs, we note that these effects are not borne equally across the 
population, and that some of the most exposed individuals and 
subpopulations--protection of whom is, as noted, of particular concern 
under CAA section 112--are minority and/or low-income populations. 
Executive Order 12898 (59 FR 7629;

[[Page 7647]]

February 16, 1994) establishes Federal executive policy on EJ issues. 
That Executive Order's main provision directs Federal agencies, to the 
greatest extent practicable and permitted by law, to make EJ 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. Executive Order 14008 (86 FR 
7619; February 1, 2021) also calls on Federal agencies to make 
achieving EJ part of their missions ``by developing programs, policies, 
and activities to address the disproportionately high and adverse human 
health, environmental, climate-related and other cumulative impacts on 
disadvantaged communities, as well as the accompanying economic 
challenges of such impacts.'' That Executive Order also declares a 
policy ``to secure environmental justice and spur economic opportunity 
for disadvantaged communities that have been historically marginalized 
and overburdened by pollution and under-investment in housing, 
transportation, water and wastewater infrastructure, and health care.'' 
Under Executive Order 13563, Federal agencies may consider equity, 
human dignity, fairness, and distributional considerations, where 
appropriate and permitted by law.
    In the context of MATS, exposure scenarios of clear relevance from 
an EJ perspective include the full set of subsistence fisher scenarios 
included in the watershed-level risk assessments completed for the 
rule. Subsistence fisher populations are potentially exposed to 
elevated levels of methylmercury due to their elevated levels of self-
caught fish consumption which, in turn, are often driven either by 
economic need (i.e., poverty) and/or cultural practices. In the context 
of MATS, we completed watershed-level assessments of risks for a broad 
set of subsistence fisher populations covering two health endpoints of 
clear public health significance including: (a) Neurodevelopmental 
effects in children exposed prenatally to methylmercury (the 
methylmercury-based RfD analysis described in the 2011 Final Mercury 
TSD) and (b) potential for increased MI-mortality risk in adults due to 
methylmercury exposure (section III.A.3.b above).
    The general subsistence fisher population that was evaluated 
nationally for both analyses was not subdivided by socioeconomic 
status, race, or cultural practices.\69\ Therefore, the risk estimates 
derived do not fully inform our consideration of EJ impacts, although 
the significantly elevated risks generated for this general population 
are clearly relevant from a public health standpoint. However, the 
other, more differentiated subsistence fisher populations, which are 
subdivided into smaller targeted communities, are relevant in the EJ 
context and in some instances were shown to have experienced levels of 
risk significantly exceeding those of the general subsistence fisher 
population, as noted earlier in section III.A.3.b.
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    \69\ Note that the RfD-based analysis described in the 2011 
Final Mercury TSD and referenced here addressed the potential for 
neurodevelopmental effects in children and therefore focused on the 
ingestion of methylmercury by female subsistence fishers. By 
contrast, the analysis focusing on increased MI-mortality risk for 
subsistence fishers described in the 2021 Risk TSD and referenced 
here was broader in scope and encompassed all adult subsistence 
fishers.
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    In particular, for the watershed analysis focusing on the 
methylmercury RfD-based analysis (i.e., neurodevelopmental risk for 
children exposed prenatally), while the general female fisher scenario 
suggested that modeled exposures (from U.S. EGU-sourced mercury alone) 
exceeded the methylmercury RfD in approximately 10 percent of the 
watersheds modeled (2011 Final Mercury TSD, Table 2-6), for low-income 
Black subsistence fisher females in the Southeast, modeled exposures 
exceeded the RfD in approximately 25 percent of the watersheds. These 
results suggest a greater potential for adverse effects in low-income 
Black populations in the Southeast. Similarly, while the general 
subsistence fisher had exposure levels suggesting an increased risk for 
MI-mortality risk in 10 percent of the watersheds modeled, two sub-
populations were shown to be even further disadvantaged. Low-income 
Black and white populations in the Southeast and tribal fishers active 
near the Great Lakes had the potential for increased risk in 25 percent 
of the watersheds modeled.\70\ Both of these results (the 
neurodevelopmental RfD-based analysis and the analysis of increased MI-
mortality risk) suggest that subsistence fisher populations that are 
racially or culturally, geographically, and income-differentiated could 
experience elevated risks relative to not only the general population 
but also the population of subsistence fishers generally. We think 
these results are relevant in considering the benefits of regulating 
EGU HAP.
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    \70\ Recognizing challenges in obtaining high-end consumption 
rates for tribal populations active in areas of high U.S. EGU impact 
(e.g., Ohio River valley, areas of the central Southeast such as 
northern Georgia, northern South Carolina, North Carolina and 
Tennessee) there is the potential for our analysis of tribal-
associated risk to have missed areas of elevated U.S. EGU-sourced 
mercury exposure and risk. In that case, estimates simulated for 
other subsistence populations active in those areas (e.g., low-
income whites and Blacks in the Southeast as reported here and in 
Table 3 of the 2021 Risk TSD) could be representative of the ranges 
of risk experienced by tribal populations to the extent that 
cultural practices result in similar levels of increased fish 
consumption.
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6. Overview of Health and Environmental Effects Associated With Non-HAP 
Emissions From EGUs
    Alongside the HAP emissions enumerated above, U.S. EGUs also emit a 
substantial quantity of criteria pollutants, including direct 
PM2.5, nitrogen oxides (NOX) (including 
NO2), and SO2, even after implementation of the 
ARP and numerous other CAA requirements designed to control criteria 
pollutants. In the 2011 RIA, for example, the EPA estimated that U.S. 
EGUs would emit 3.4 million tons of SO2 and 1.9 million tons 
of NOX in 2015 prior to implementation of any controls under 
MATS (see Table ES-2). These EGU SO2 emissions were 
approximately twice as much as all other sectors combined (EPA 
SO2 Integrated Science Assessment, 2017).\71\ These 
pollutants contribute to the formation of PM2.5 and ozone 
criteria pollutants in the atmosphere, the exposure to which is 
causally linked with a range of adverse public health effects. 
SO2 both directly affects human health and is a precursor to 
PM2.5. Short-term exposure to SO2 causes 
respiratory effects, particularly among adults with asthma. 
SO2 serves as a precursor to PM2.5, the exposure 
to which increases the risk of premature mortality among adults, lung 
cancer, new onset asthma, exacerbated asthma, and other respiratory and 
cardiovascular diseases. Likewise, EGU-related emissions of 
NOX will adversely affect human health in the form of 
respiratory effects including exacerbated asthma. NOX is a 
precursor pollutant to both PM2.5 and ground-level ozone. 
Exposure to ozone increases the risk of respiratory-related premature 
death, new onset asthma, exacerbated asthma, and other outcomes. Fully 
accounting for the human health impacts of reduced EGU emissions under 
MATS entails quantifying both the direct impacts of HAP as well as the 
avoided premature deaths and illnesses associated with reducing these 
co-emitted criteria pollutants. Similarly,

[[Page 7648]]

U.S. EGUs emit substantial quantities of CO2, a powerful 
greenhouse gas (GHG): The EPA estimated these emissions at 2.23 million 
metric tpy in 2015 (2011 RIA, Table ES-2). The environmental impacts of 
GHG emissions are accounted for through the social cost of carbon,\72\ 
which can be used to estimate the benefits of emissions reductions due 
to regulation.
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    \71\ U.S. EPA. Integrated Science Assessment for Sulfur Oxides--
Health Criteria (Final Report). U.S. Environmental Protection 
Agency, Washington, DC, EPA/600/R-17-451, December 2017.
    \72\ See https://19january2017snapshot.epa.gov/climatechange/social-cost-carbon_.html: ``EPA and other federal agencies use 
estimates of the social cost of carbon (SC-CO2) to value 
the climate impacts of rulemakings. The SC-CO2 is a 
measure, in dollars, of the long-term damage done by a ton of carbon 
dioxide (CO2) emissions in a given year. This dollar 
figure also represents the value of damages avoided for a small 
emission reduction (i.e., the benefit of a CO2 
reduction). The SC-CO2 is meant to be a comprehensive 
estimate of climate change damages and includes changes in net 
agricultural productivity, human health, property damages from 
increased flood risk, and changes in energy system costs, such as 
reduced costs for heating and increased costs for air conditioning. 
However, given current modeling and data limitations, it does not 
include all important damages.''
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    Not all of the non-HAP benefits of MATS were quantified or 
monetized in the 2011 RIA. However, the EPA thoroughly documented these 
potential effects and identified those for which quantification and/or 
monetization was possible. Specifically, the EPA calculated the number 
and value of avoided PM2.5-related impacts, including 4,200 
to 11,000 premature deaths, 4,700 nonfatal heart attacks, 2,600 
hospitalizations for respiratory and cardiovascular diseases, 540,000 
lost work days, and 3.2 million days when adults restrict normal 
activities because of respiratory symptoms exacerbated by 
PM2.5 (2011 RIA, p. ES-3). We also estimated substantial 
additional health improvements for children from reductions in upper 
and lower respiratory illnesses, acute bronchitis, and asthma attacks. 
In addition, we included in our monetized co-benefits estimates the 
effect from the reduction in CO2 emissions resulting from 
this rule, based on the interagency SC-CO2 estimates. These 
benefits stemmed from imposition of MATS and would be coincidentally 
realized alongside the HAP benefits.
7. Summary of Public Health Hazards Associated With Emissions From EGUs
    The EPA is proposing to find that the evidence provided in this 
section of the preamble, informed where possible with new scientific 
evidence available since the publication of the 2016 Supplemental 
Finding, once again demonstrates that HAP released from U.S. EGUs 
represent a significant public health hazard absent regulation under 
CAA section 112. As noted earlier, the EPA found that even after 
imposition of the other requirements of the CAA, EGUs were the largest 
domestic source of mercury, HF, HCl, and selenium and among the largest 
domestic contributors of arsenic, chromium, cobalt, nickel, hydrogen 
cyanide, beryllium, and cadmium. The EPA has documented a wide range of 
adverse health effects in children and adults associated with mercury 
including, in particular, neurodevelopmental effects in children 
exposed prenatally (e.g., IQ, attention, fine motor-function, language, 
and visual spatial ability) and a range of cardiovascular effects in 
adults including fatal MI and non-fatal IHD. Non-mercury HAP have also 
been associated with a wide range of chronic health disorders (e.g., 
irritation of the lung; decreased pulmonary function, pneumonia, or 
lung damage; detrimental effects on the central nervous system; and 
damage to the kidneys). Furthermore, three of the key metal HAP emitted 
by EGUs (arsenic, chromium, and nickel) have been classified as human 
carcinogens and there is evidence to suggest that, prior to MATS, 
emissions from these sources had the potential to result in cancer 
risks greater than 1-in-1 million.
    Further, this section describes the results from several new 
screening-level risk assessments considering mercury from domestic EGU 
sources. These risk assessments focused on two broad populations of 
exposure: (a) Subsistence fishers exposed to mercury through self-
caught fish consumption within the continental U.S. and (b) the general 
U.S. population exposed to mercury through the consumption of 
commercially-sourced fish (i.e., purchased from restaurants and food 
stores). The results of these screening-level risk assessments are 
useful for informing our understanding about the potential scope and 
public health importance of these impacts, but remaining uncertainties 
prohibit precise estimates of the size of these impacts currently. For 
example, numerous studies considering multiple, large cohorts have 
shown that people exposed to high amounts of mercury are at higher risk 
of fatal and non-fatal CVD. While U.S. EGUs are only one of multiple 
global sources that contribute to this mercury exposure, the EPA's 
screening analysis suggests the potential for U.S. EGU emissions of 
mercury to contribute to premature mortality in the general U.S. 
population.
    Furthermore, as part of the subsistence fisher analyses, we 
included scenario modeling for a number of EJ-relevant populations 
showing that several populations (including low-income Blacks and 
whites in the Southeast and tribal populations near the Great Lakes) 
had risk levels that were significantly above the general subsistence 
fisher population modeled for the entire U.S. As noted earlier, the EPA 
believes that Congress intended in CAA section 112 to address risks to 
the most exposed and most sensitive members of the public. These 
additional risk assessments suggest that there are populations that are 
particularly vulnerable to EGU HAP emissions, including populations of 
concern from an EJ standpoint.
    MATS plays a critical role in reducing the significant volume and 
risks associated with EGU HAP emissions discussed above. Mercury 
emissions have declined by 86 percent, acid gas HAP by 96 percent, and 
non-mercury metal HAP by 81 percent since 2010 (pre-MATS). See Table 4 
at 84 FR 2689 (February 7, 2019). MATS is the only Federal requirement 
that guarantees this level of HAP control from EGUs. At the same time, 
the concomitant reductions in CO2, NOX, and 
SO2, also provide substantial public health and 
environmental benefits. Given the numerous and important public health 
and environmental risks associated with EGU emissions, the EPA again 
concludes that the advantages of regulating HAP emissions from this 
sector are significant. Acknowledging the difficulties associated with 
characterizing risks from HAP emissions discussed earlier in this 
section, we solicit comments about the health and environmental hazards 
of EGU HAP emissions discussed in this section and the appropriate 
approaches for quantifying such risks, as well any information about 
additional risks and hazards not discussed in this proposal.

B. Consideration of Cost of Regulating EGUs for HAP

1. Introduction
    In evaluating the costs and disadvantages of MATS, we begin with 
the costs to the power industry of complying with MATS. This assessment 
uses a sector-level (or system-level) accounting perspective to 
estimate the cost of MATS, looking beyond just pollution control costs 
for directly affected EGUs to include incremental costs associated with 
changes in fuel supply, construction of new capacity, and costs to non-
MATS units that were also projected to adjust operating decisions as 
the power system adjusted to meet MATS requirements. Such an approach 
is warranted due to the nature of the power sector, which is a large, 
complex, and interconnected industry.

[[Page 7649]]

This means that while the MATS requirements are directed at a subset of 
EGUs in the power sector, the compliance actions of the MATS-regulated 
EGUs can affect production costs and revenues of other units due to 
generation shifting and fuel and electricity price changes. Thus, the 
EPA's projected compliance cost estimate represents the incremental 
costs to the entire power sector to generate electricity, not just the 
compliance costs projected to be incurred by the coal- and oil-fired 
EGUs that are regulated under MATS. Limiting the cost estimate to only 
those expenditures incurred by EGUs directly regulated by MATS would 
provide an incomplete estimate of the costs of the rule.
    Using this broad view, in the 2011 RIA we projected that the 
compliance cost of MATS would be $9.6 billion per year in 2015.\73\ 
This estimate of compliance cost was based on the change in electric 
power generation costs between a base case without MATS and a policy 
case where the sector complies with the HAP emissions limits in the 
final MATS. The EPA generated this cost estimate using the Integrated 
Planning Model (IPM).\74\ This model is designed to reflect electricity 
markets as accurately as possible using the best available information 
from utilities, industry experts, natural gas and coal market experts, 
financial institutions, and government statistics. Notably, the model 
includes cost and performance estimates for state-of-the-art air 
pollution control technologies with respect to mercury and other HAP 
controls. But there are inherent limits to what can be predicted ex 
ante. And because the estimate was made 5 years prior to full 
compliance with MATS, stakeholders, including a leading power sector 
trade association, have indicated that our initial cost projection 
significantly overestimated actual costs expended by industry. There 
are significant challenges to producing an ex post cost estimate that 
provides an apples-to-apples comparison to our initial cost 
projections, due to the complex and interconnected nature of the 
industry. However, independent analyses provided to the EPA indicate 
that we may have overestimated the cost of MATS by billions of dollars 
per year. Moreover, there have been significant changes in the power 
sector in the time since MATS was promulgated that were not anticipated 
in either EPA or U.S. Energy Information Administration (EIA) 
projections at the time.\75\ Entirely outside of the realm of EPA 
regulation, there were dramatic shifts in the cost of natural gas and 
renewables, state policies, and Federal tax incentives, which have also 
further encouraged construction of new renewables. These have led to 
significantly faster and greater than anticipated retirement of coal 
capacity and coal-fired generation.
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    \73\ All costs were reported in 2007 dollars.
    \74\ IPM, developed by ICF International, is a state-of-the-art, 
peer-reviewed, dynamic, deterministic linear programming model of 
the contiguous U.S. electric power sector. IPM provides forecasts of 
least-cost capacity expansion, electricity dispatch, and emission 
control strategies while meeting electricity demand and various 
environmental, transmission, dispatch, and reliability constraints. 
The EPA has used IPM for over 2 decades to understand power sector 
behavior under future business-as-usual conditions and to evaluate 
the economic and emission impacts of prospective environmental 
policies.
    \75\ In 2009, coal-fired generation was by far the most 
important source of utility scale generation, providing more power 
than the next two sources (natural gas and nuclear) combined. By 
2016, natural gas had passed coal-fired generation as the leading 
source of generation in the U.S. While natural gas-fired generation, 
nuclear generation and renewable generation have all increased since 
2009, coal-fired generation has significantly declined.
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    While there are significant limitations to producing an ex post 
cost estimate, we have endeavored, where possible, to approximate the 
extent of our overestimate. The unexpected shifts in the power sector, 
including the rapid increase in natural gas supplies that occurred 
after promulgation of MATS, resulted in our projected estimates of 
natural gas prices to be approximately double what they were in 
actuality. Incremental natural gas expenditures accounted for 
approximately 25 percent of the $9.6 billion compliance cost estimate 
for 2015 in the 2011 RIA. The market trends of the power sector also 
had major impacts on the number of controls installed and operated on 
coal-fired EGUs in the years following promulgation of MATS. With 
respect to just pollution control installation and operation, we 
project that we overestimated annual compliance costs by at least $2.2 
to 4.4 billion per year, simply as a result of fewer pollution controls 
being installed than were estimated in the 2011 RIA. Though this range 
of an overestimate is limited to costs associated with pollution 
controls and operation, those costs made up 70 percent of the projected 
$9.6 billion figure.
    We additionally find that the controls that were installed at MATS-
regulated EGUs were likely both less expensive and more effective in 
reducing pollution than originally projected, resulting in our estimate 
likely being too high for these reasons as well. Lastly, since 
completing the 2011 RIA, we have updated several assumptions in our 
modeling that would also have resulted in a lower cost estimate had 
they been incorporated into our modeling at the time of the rule. 
Taking into account the above considerations, we believe we 
overestimated the cost of MATS by billions of dollars.
    We next examine the projected cost of MATS--both total cost and 
specific types of costs--using sector-level metrics that put those cost 
estimates in context with the economics of the power sector. The reason 
we examine these metrics is to better understand the disadvantages that 
expending these costs had on the EGU industry and the public more 
broadly, just as on the benefits side we look beyond the volume of 
pollution reductions to the health and environmental advantages 
conferred by the reductions.
    For purposes of these analyses, we use the 2011 RIA projections, 
keeping in mind our newer analyses, which indicated that those 
projections were almost certainly overestimated. Specific to the power 
sector, we evaluate the projected costs of the rule to revenues from 
electricity sales across nearly 20 years, and we compare the projected 
expenditures required under the rule with historic expenditures by the 
industry over the same time period. We additionally evaluate broader 
impacts on the American public by looking at projected effects of MATS 
on retail electricity prices and our analyses of whether the power 
sector could continue to provide adequate and reliable electricity 
after imposition of the rule. We find that, when viewed in context, the 
projected costs of MATS to both the power sector and the public were 
small relative to these metrics and well within the range of historical 
variability. Moreover, experience has borne out our projection that the 
EGU sector could continue to provide adequate, reliable, and affordable 
electricity to the American public after the imposition of the rule.
    Section III.B.2 contains our discussion of the ways in which the 
compliance costs for MATS were likely overestimated. Section III.B.3 
expands upon and re-evaluates the cost metrics used in the 2016 
Supplemental Finding by adding post-promulgation information to our 
analysis, and we discuss impacts on power sector generating capacity. 
In section III.B.4, we propose to reaffirm additional cost 
considerations regarding the availability and cost of control 
technologies discussed in earlier rulemakings, and in section III.B.5, 
we provide our proposed conclusions regarding the costs, or 
disadvantages, of regulating HAP from EGUs.

[[Page 7650]]

2. Compliance Cost Projections in the 2011 RIA Were Likely 
Significantly Overestimated
    In issuing this proposal, the EPA finds itself in a position 
Congress was not likely to have contemplated when it promulgated the 
1990 Amendments. The statute contemplated that the EPA would have 
completed the required studies and presumably made its determination 
more than 20 years ago. Due to litigation and multiple changes of 
administration following Michigan, we are, at this point, nearly 10 
years after promulgation of the regulation about which we are making a 
threshold determination, and 5 years after full implementation of that 
regulation. The vast majority of MATS-affected sources were required to 
be in compliance with the rule's requirements by April 2016, and 
installation of new controls-or upgrades to existing controls-were in 
place by 2017.\76\ This means we now have on hand unit-level data 
regarding installations, a clearer picture about market trends, and 
updated, more accurate assumptions that, taken together, produce a very 
different picture of the actual costs of MATS than what we projected 
when we reaffirmed the appropriate and necessary determination and 
promulgated the rule in 2012. Therefore, while the Agency considers 
that the information that was available at the time of MATS 
promulgation provided a valid analytical basis for the threshold 
appropriate and necessary determination, because many years have 
elapsed since then, the EPA believes it is reasonable to examine how 
the power sector has evolved since MATS was finalized and, with the 
benefit of hindsight, compare important aspects of the 2011 RIA 
projections with what actually happened since MATS was promulgated. 
Because our obligation under CAA section 112(n)(1)(A) is to fully 
consider the advantages and disadvantages of regulating a large, 
critically important industry, whose role impacts the lives of every 
American, we think it is important to evaluate and consider the best, 
currently available information, even if, as discussed in sections 
III.B.3 and 4, the pre-existing record supports the same conclusion. 
This ex post examination demonstrates that the EPA almost certainly 
significantly overestimated compliance costs in the 2011 RIA, which 
further supports the determination that regulation is appropriate and 
necessary after considering cost. We also do not view this updated, 
post-hoc evaluation of what happened post-promulgation as undermining 
the record we established in 2012. Models are not invalidated ``solely 
because there might be discrepancies between those predictions and the 
real world. That possibility is inherent in the enterprise of 
prediction.'' EME Homer City Generation, L.P. v. EPA, 795 F.3d 118, 
135-36 (D.C. Cir. 2015).
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    \76\ Affected sources were required to be in compliance with the 
requirements in MATS within 3 years after the effective date of the 
rule (i.e., by April 2015). However, sources were allowed to request 
an additional year to comply with the rule and the vast majority of 
sources were required to be in compliance with the rule's 
requirements by April 2016. We therefore think 2017 is a reasonable 
year in which to analyze installed controls on the EGU fleet.
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    In an ideal world, with perfect information, we would be able to 
generate an ex post analysis of regulatory costs that could be compared 
to our ex ante cost estimate prepared at the time MATS was issued. 
However, it is extremely challenging to produce rigorous retrospective 
estimates of regulatory costs. A literature review and series of case 
studies performed by EPA staff provides insights on how analysts can 
perform retrospective cost analysis.\77\ Kopits et al. (2015) 
identifies several challenges associated with ex post cost assessments, 
including data limitations with respect to how facilities chose to 
comply with regulations and comprehensive facility-level pollution 
abatement costs. A key component to a rigorous retrospective analysis 
noted by the authors that can be particularly difficult to achieve is 
an accurate definition of the counterfactual, that is, what would have 
occurred absent the rule. It is this counterfactual that provides the 
baseline against which the incremental costs of regulation are 
estimated.
---------------------------------------------------------------------------

    \77\ Kopits, E., A. McGartland, C. Morgan, C. Pasurka, R. 
Shadbegian, N. B. Simon, D. Simpson and A. Wolverton (2015). 
Retrospective cost analyses of EPA regulations: a case study 
approach. Journal of Benefit-Cost Analysis 5(2): 173-193.
---------------------------------------------------------------------------

    In the case of MATS, to construct an estimate of ex post 
implementation costs that is directly comparable to the ex ante 2011 
RIA cost estimate, we would first need to accurately attribute changes 
in the power sector that were due to MATS requirements rather than to 
market and technological changes, other regulations, or, importantly, 
combinations of these factors (i.e., properly specify the 
counterfactual). Second, we would need actual information of the 
incremental costs that had been associated with facility-level 
operational changes due to MATS, such as observed changes in dispatch, 
actual fuel consumption, and how controls in MATS-affected units were 
actually operated. Even the operation of non-MATS affected units would 
be relevant to such an analysis, because operational decisions are 
interconnected on the grid via dispatch decisions as well as through 
fuel markets. While there may be approaches such as econometric 
analysis, simulation modeling, and event study analysis that could 
capture and estimate components of the problem identified above and 
derive an estimate of ex post MATS costs, the approach would very 
likely require different methods and assumptions than the 2011 RIA 
estimates which were based on the comparison of two forward-looking 
sets of projections. Even if we undertook such additional analysis or 
modeling, ultimately we would still only be able to provide a new 
estimate of regulatory costs, not an actual cost. Given how challenging 
it is to produce rigorous retrospective estimates of regulatory costs, 
particularly at a system-level, an ex post analysis is better suited to 
comparing particular aspects of the analysis, which can help us 
understand whether costs in the 2011 RIA were over- or under-estimated 
and can yield a general sense of how much reality diverged from the 
projection, than to attempting to generate a new and precise ``actual'' 
total compliance cost estimate for MATS.
    Estimating retrospective costs for a rule of the magnitude of MATS 
is an especially significant challenge because the rule regulates 
hundreds of units within a complex, interdependent, and dynamic 
economic sector. Units within the power sector are also subject to many 
regulatory requirements and other economic drivers. While we can 
observe the decisions of the sector and individual units in terms of 
decisions on controls, fuels, and retirement, we cannot pinpoint the 
reason(s) behind each unit-level decision. With respect to identifying 
the counterfactual against which to evaluate retrospective compliance 
costs, several unforeseen factors since MATS promulgation have driven 
changes in the power sector that have led to the composition of the 
current fleet being different than the fleet projected in the 2011 RIA. 
For example, dramatic increases in the supply of natural gas, along 
with advances in cost and performance of renewable generation 
technologies and low electricity demand growth, none of which were 
fully anticipated in the 2011 RIA, have made strong contributions to 
shifts away from coal-fired generation.^{78 79} Additionally, 
other

[[Page 7651]]

EPA regulations such as the Disposal of Coal Combustion Residuals from 
Electric Utilities final rule, the Steam Electric Power Generating 
Effluent Guidelines--2015 Final Rule, and the 2020 Steam Electric 
Reconsideration Rule, were promulgated after MATS.\80\ While the 
compliance periods of these rules all postdate the MATS compliance 
date, utilities are likely to consider multiple regulations 
simultaneously when making planning decisions, a likelihood that also 
complicates the identification of the counterfactual scenario of a 
world without MATS that is needed to generate an ex post incremental 
cost estimate of MATS that would be directly comparable to the ex ante 
2011 RIA cost estimate.
---------------------------------------------------------------------------

    \78\ Linn, J. and K. McCormack (2019). The Roles of Energy 
Markets and Environmental Regulation in Reducing Coal-Fired Plant 
Profits and Electricity Sector Emissions. RAND Journal of Economics 
50: 733-767.
    \79\ Coglianese, J., et al. (2020). The Effects of Fuel Prices, 
Environmental Regulations, and Other Factors on U.S. Coal 
Production, 2008-2016. The Energy Journal 41(1): 55-82.
    \80\ 85 FR 53516 (August 28, 2020), 80 FR 67838 (November 3, 
2015), and 85 FR 64650 (October 13, 2020), respectively.
---------------------------------------------------------------------------

    Even though it is extremely challenging to produce the type of ex 
post incremental cost estimate discussed above, several stakeholders 
have conducted analyses, focusing on different components of the 
regulation's cost, to assess actual costs of compliance. While none of 
these estimates can be precisely compared against the EPA ex ante 
estimates because they use different methods than the power sector 
modeling the EPA used in the 2011 RIA, all of the independent analyses 
suggested that the actual compliance costs expenditures were 
significantly lower--by billions of dollars--than the EPA estimated in 
the 2011 RIA.
    First, a 2015 analysis by Andover Technology Partners focused on 
the capital and operating costs associated with the actual installation 
and operation of pollution control equipment at MATS-regulated units 
and made two key findings: the number of installed controls was 
significantly lower than the number of controls that was projected in 
the 2011 RIA and the cost of the installed controls was generally lower 
than the control costs that the EPA assumed in the 2011 RIA modeling. 
Based on these findings, the study estimated that the EPA's projected 
cost of compliance was over-estimated by approximately $7 
billion.^{81 82} In other words, the Andover Technology 
Partners estimated that the EPA's projected cost was approximately four 
times higher than their retrospective estimate of cost, which they 
estimated to be approximately $2 billion per year.
---------------------------------------------------------------------------

    \81\ Declaration of James E. Staudt, Ph.D., CFA, at 3, White 
Stallion Energy Center v. EPA, No. 12-1100 (DC Cir., December 24, 
2015). Also available at Docket ID Item No. EPA-HQ-OAR-2009-0234-
20549.
    \82\ 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.
---------------------------------------------------------------------------

    Second, a 2017 study performed by M.J. Bradley & Associates (MJB&A) 
used information from the EIA and estimated that owners and operators 
of coal-fired EGUs incurred total capital expenditures on environmental 
retrofits of $4.45 billion from December 2014 to April 2016.\83\ To the 
EPA's understanding, the MJB&A cost estimate represents total upfront 
capital costs (not ongoing operating and maintenance expenditures), and 
is not annualized as was the capital expenditure in the 2011 RIA-based 
projected cost estimate. For comparison, the estimated total upfront 
(not annualized) capital expenditures underpinning the 2011 RIA annual 
compliance cost estimate is about $36.5 billion, which is more than 
eight times higher than the MJB&A estimates. This result suggests that 
the capital cost component of the 2011 RIA cost projections was 
significantly overestimated, potentially by a factor of more than 
eight.
---------------------------------------------------------------------------

    \83\ Available in Docket ID Item No. EPA-HQ-OAR-2018-0794-1145.
---------------------------------------------------------------------------

    Third, the Edison Electric Institute (EEI), the association that 
represents all U.S. investor-owned electric companies, estimated that 
by April 2019, owners and operators of coal- and oil-based EGUs 
incurred cumulative (not annual) compliance costs of more than $18 
billion to comply with MATS, including both capital and operations and 
maintenance costs since MATS became effective in April 2012.\84\ In 
order to provide a simple comparison between the EEI figure, which was 
incurred over 7 years, and the annualized amount presented in the 2011 
RIA ($9.6 billion), we can divide the EEI figure by 7 to estimate an 
average annual amount of approximately $2.6 billion, which is similar 
to the Andover Technology Partners estimate of approximately $2 
billion. Also in line with the Andover Technology Partners estimate, 
EEI's estimate suggests that the annual costs related to MATS 
compliance were overestimated in the 2011 RIA by approximately $7 
billion. While there is some uncertainty in the amount of time over 
which those costs were incurred, as well as the exact nature of those 
expenditures, it is clear that the information provided by EEI supports 
a conclusion that the costs of compliance with MATS were significantly 
lower than the Agency's projections.
---------------------------------------------------------------------------

    \84\ Available in Docket ID Item No. EPA-HQ-OAR-2018-0794-2267.
---------------------------------------------------------------------------

    In summary, it is the EPA's understanding that two of these studies 
indicate that the 2011 RIA may have overestimated annual compliance 
costs by approximately $7 billion, and the third study finds that the 
projected total upfront capital costs may have been overestimated by a 
factor of more than eight. While each of these retrospective cost 
estimates is 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, each of the independent analyses indicate 
that the costs of MATS are likely significantly less than the EPA 
estimated in the 2011 RIA.
    For this proposal, the EPA has evaluated whether the ex ante 
estimates in the 2011 RIA were likely accurate, overestimated, or 
underestimated, and the details of the EPA's new analysis are contained 
in the docketed TSD (referred to herein as the ``Cost TSD'').\85\ 
Consistent with our systems-level approach, we begin our analysis with 
an evaluation of natural gas expenditures during the relevant time 
period. The rapid decrease in the price of natural gas during this time 
period affected U.S. power generation profoundly, including U.S. EGU 
fuel expenditures; this has significant implications for our ex post 
analysis because natural gas expenditures constituted approximately 25 
percent of the projected 2015 compliance costs in the 2011 RIA.\86\ 
These market shifts in the industry also impacted expenditures 
associated with the installation and operation of pollution control 
equipment at MATS-affected facilities. Those costs constituted a 
majority--about 70 percent--of the projected annual compliance costs in 
2015. The following

[[Page 7652]]

sections closely examine these two components of the compliance cost 
and use available information to evaluate whether the projected 
compliance costs reported in the 2011 RIA were likely higher or lower 
than actual costs. We also review important cost assumptions used in 
the 2011 RIA. Taken together, this suite of quantitative and 
qualitative evaluations indicates that the projected costs in the 2011 
RIA were almost certainly significantly overestimated. We find that the 
2011 RIA's estimate of the number of installations alone led to an 
overestimate of about $2.2 to $4.4 billion, and that if recent updates 
to the cost and performance assumption for pollution controls had been 
reflected in the 2011 RIA modeling, the projected compliance costs 
would likely have been even lower (suggesting the overestimate could be 
greater than $4.4 billion).
---------------------------------------------------------------------------

    \85\ U.S. EPA. 2021. Supplemental Data and Analysis for the 
National Emission Standards for Hazardous Air Pollutants: Coal- and 
Oil-Fired Electric Utility Steam Generating Units--Revocation of the 
2020 Reconsideration, and Affirmation of the Appropriate and 
Necessary Supplemental Finding; Notice of Proposed Rulemaking 
(``Cost TSD'').
    \86\ We projected that regulation of coal- and oil-fired EGUs 
under MATS would induce units to switch to natural gas, which in 
turn would increase the price of natural gas and the cost of those 
expenditures.
---------------------------------------------------------------------------

a. Natural Gas Supply
    The natural gas industry has undergone significant change in recent 
years. Starting in the mid-2000s, technological changes in natural gas 
drilling and extraction initiated major market changes that resulted in 
significant increases to domestic supplies of natural gas. As these 
technologies have continued to advance, they have had a lasting impact 
on natural gas markets, resulting in major shifts in the economics of 
electric sector operations given the abundant supply of natural gas at 
relatively low costs. This section summarizes these changes and the 
implications for the cost projection presented in the 2011 RIA.
    In 2005, the EIA estimated that proved reserves of natural gas were 
213 trillion cubic feet (tcf).\87\ In 2019, the estimate of proved 
reserves was 495 tcf, an increase of 132 percent. The market effects of 
this major supply shift were profound across the economy, but 
especially for the power sector. By the end of 2019, aided by advances 
in drilling and hydraulic fracturing techniques, natural gas production 
from tight and shale gas formations was the major source of domestic 
production (see Table 1 below) and had increased three-fold from 2005 
production levels.
---------------------------------------------------------------------------

    \87\ U.S. Crude Oil and Natural Gas Proved Reserves, Year-end 
2019 (Table 9: U.S. proved reserves of natural gas). EIA, January 
11, 2021 release available at https://www.eia.gov/naturalgas/crudeoilreserves. Accessed July 23, 2021.

                                 Table 1--U.S. Natural Gas Production, by Source
                                              [Trillion cubic feet]
----------------------------------------------------------------------------------------------------------------
                                                    Tight/shale     Other lower      Lower 48
                      Year                              gas         48 onshore       offshore          Other
----------------------------------------------------------------------------------------------------------------
2005............................................             7.2             5.1             3.4             2.3
2006............................................             8.0             5.1             3.2             2.3
2007............................................             9.0             4.9             3.1             2.3
2008............................................            10.3             4.9             2.6             2.4
2009............................................            11.1             4.5             2.7             2.4
2010............................................            12.4             4.2             2.5             2.2
2011............................................            14.8             4.0             2.0             2.1
2012............................................            16.7             3.7             1.6             2.0
2013............................................            17.6             3.5             1.4             1.7
2014............................................            19.5             3.4             1.3             1.6
2015............................................            21.0             3.2             1.4             1.5
2016............................................            21.1             2.8             1.3             1.4
2017............................................            22.2             2.7             1.1             1.3
2018............................................            25.7             2.7             1.0             1.3
2019............................................            29.3             2.4             1.0             1.2
2020............................................            29.2             2.3             1.2             1.2
----------------------------------------------------------------------------------------------------------------
Source: U.S. EIA, https://www.eia.gov/energyexplained/natural-gas/where-our-natural-gas-comes-from.php, accessed
  July 25, 2021.


    Note: ``Other'' includes production from Alaska and Coalbed 
Methane sources.

    As a result, the natural gas market underwent a long period of 
sustained low prices (see Table 2 below). These market shifts were not 
fully anticipated or predicted by observers, as indicated by natural 
gas futures prices at the time of MATS promulgation. Although these 
changes took root in the mid-2000s, the lasting market disruption would 
take more time to cement itself. From 2010 through 2019, the U.S became 
one of the world's leading producers of natural gas, breaking domestic 
production records year-on-year through the decade, while maintaining 
record-low prices. During this timeframe, the U.S. shifted from a total 
net energy importer to an exporter,\88\ while maintaining some of the 
lowest relative natural gas prices globally.\89\
---------------------------------------------------------------------------

    \88\ Monthly Energy Review, EIA (June 24, 2021) and Today in 
Energy (``U.S. total energy exports exceed imports in 2019 for the 
first time in 67 years''), EIA (April 20, 2020) available at https://www.eia.gov/todayinenergy/detail.php?id=43395. Accessed July 23, 
2021.
    \89\ BP, Statistical Review of World Energy 2021 available at 
https://www.bp.com/en/global/corporate/energy-economics/statistical-review-of-world-energy.html. Accessed July 23, 2021.

                                           Table 2--Natural Gas Prices
----------------------------------------------------------------------------------------------------------------
                                                         NYMEX natural gas  NYMEX natural gas
                                                         Henry Hub natural  Henry Hub natural    Henry Hub spot
                                                          gas futures ($/    gas futures ($/   natural gas index
                          Year                             MMBtu), annual     MMBtu), annual     annual average
                                                          average, as of:    average, as of:    price ($/MMBtu)
                                                             2011-03-16         2011-12-21
----------------------------------------------------------------------------------------------------------------
2005...................................................  .................  .................               8.63
2006...................................................  .................  .................               6.74
2007...................................................  .................  .................               6.96

[[Page 7653]]

 
2008...................................................  .................  .................               8.90
2009...................................................  .................  .................               3.94
2010...................................................  .................  .................               4.37
2011...................................................               4.24  .................               4.00
2012...................................................               4.91               3.43               2.75
2013...................................................               5.31               4.07               3.73
2014...................................................               5.67               4.43               4.37
2015...................................................               6.04               4.66               2.63
2016...................................................               6.36               4.90               2.51
2017...................................................               6.67               5.16               2.98
2018...................................................               6.97               5.43               3.16
2019...................................................               7.25               5.70               2.56
2020...................................................               7.50               5.96               2.03
2021...................................................               7.76               6.23  .................
2022...................................................               8.02               6.50  .................
2023...................................................               8.28               6.78  .................
2024...................................................  .................               7.06  .................
----------------------------------------------------------------------------------------------------------------
Source: Annual Average Henry Hub Price, EIA. NYMEX price, from S&P Global data. 2015 data from 2011 RIA, Chapter
  3.

    The EPA projected a 2015 natural gas price of roughly $5/MMBtu when 
MATS was finalized in December 2011, which was a reasonable expectation 
based on prevailing market conditions at that time. However, natural 
gas prices post-MATS promulgation ended up being considerably lower 
than anticipated, which resulted in major shifts in the economics of 
fossil fuel-fired electric generating technologies (see Table 2 above 
and Chart A-1 in the Cost TSD). From 2005 through 2010, annual average 
natural gas prices (at Henry Hub) averaged about $6.60/MMBtu. Several 
years later, as MATS compliance began, prices averaged roughly $2.75/
MMBtu for the years 2015 through 2019. This market shift greatly 
changed the economics of power plant operation for fossil fuel-fired 
facilities, with the electric sector surpassing the industrial sector 
to become the largest consumer of natural gas (38 percent of the total 
in 2020),\90\ and gas-fired generators becoming the leading source of 
electric generation in the electric sector, representing 40 percent of 
total generation in 2020.\91\
---------------------------------------------------------------------------

    \90\ Table 4.3, Monthly Energy Review, EIA, April 2021, 
available at https://www.eia.gov/totalenergy/data/monthly/archive/00352104.pdf.
    \91\ EIA, Electricity Data Browser, Net generation, United 
States, all sectors, annual, available at https://www.eia.gov/electricity/data/browser/.
---------------------------------------------------------------------------

    The modeling supporting the 2011 RIA did not anticipate this major 
change in natural gas supply, which has clearly had a significant 
impact on the electric power sector and those sources covered by MATS. 
While we do not quantify the impact this change would have on the 
projected compliance costs associated with incremental changes in 
natural gas use and price (about 25 percent of the total projected 
compliance cost in the 2011 RIA), we note that any closures of covered 
units that occurred as a result of the changed relative economics of 
fuel prices would decrease the MATS-related compliance costs for the 
sector. These closures reduced the amount of control capacity necessary 
for compliance with MATS, and we estimate below a range of costs 
associated with the overestimation of control installations in the 2011 
RIA.
    Several researchers have investigated the role of relative fuel 
prices as a factor in decisions that were made regarding closures of 
coal-fired units around 2015. Generally, these studies attribute 
closures primarily to the decrease in natural gas prices, and they also 
note smaller factors such as advances in the cost and performance of 
renewable generating sources, lower-than-anticipated growth in 
electricity demand, and environmental regulations.
    For example, Linn and McCormack (2019) developed a simulation model 
of the U.S. Eastern Interconnection that reproduced unit operation, 
emissions, and retirements over the 2005-2015 period. The authors use 
this model to explain the relative contributions of demand, natural gas 
prices, wind generation, and environmental regulations, including MATS, 
to the changes in the share of coal in electricity generation. The 
results showed that lower electricity consumption and natural gas 
prices account for a large majority of the declines in coal plant 
profitability and resulting retirements. The authors found that the 
environmental regulations they modeled, NOX emissions caps 
and MATS, played a relatively minor role in declines of coal plant 
profitability and retirements.
    Additionally, Coglianese et al. (2020) developed a statistical 
modeling approach to enable the decomposition of changes in U.S. coal 
production from 2008-2016 into changes due to a variety of factors, 
including changes in electricity demand, natural gas prices relative to 
coal, renewable portfolio standards, and environmental regulations that 
affect coal-fired plants. The results indicated that declines in 
natural gas prices explained about 92 percent of the decrease in coal 
production between 2008 and 2016. Air regulations, including MATS, 
explained about 6 percent of the drop in coal production. The study 
attributed about 5.2 GW of coal-fired EGU retirements to MATS.
    These studies both demonstrate that the decrease in natural gas 
prices played a significant role in closures of coal-fired EGUs. While 
we do not quantify the impact this change had on the projected costs 
included in the 2011 RIA, we note that any closures of covered units 
that occurred as a result of the dramatically changed relative 
economics of fuel prices would decrease the MATS-related compliance 
costs for the sector.

[[Page 7654]]

b. Projected Versus Observed Pollution Control Installations
    The 2011 RIA reported a sector-level compliance cost of $9.6 
billion annually in 2015. The majority of those costs--about 70 
percent--represented the incremental annualized capital and annual 
operation and maintenance (O&M) costs associated with installation and 
operation of pollution controls for compliance with MATS at coal steam 
units. Given the time that has passed, we can now compare the 
incremental projected pollution control capacity reported in the 2011 
RIA with available information regarding actual (observed) control 
installations. For this proposal, therefore, the EPA has compared 
observed installations and costs over 2013-2016 to unit-level estimates 
of the control installation capacity and associated costs presented in 
the 2011 RIA. This analysis demonstrates, subject to the caveats and 
uncertainty discussed below, that the 2011 RIA likely overestimated 
total pollution control retrofit capacity that would occur in response 
to MATS and, thus, likely overestimated MATS compliance costs. For 
example, the analysis that follows demonstrates that fabric filter (FF) 
systems--which are an expensive and capital-intensive control 
technology--were only installed on less than one-third of the capacity 
anticipated in the 2011 RIA analysis.
    This comparison of projected to observed control capacity 
installations relies on the simplifying assumption that all dry 
scrubbers (e.g., dry FGD systems), dry sorbent injection (DSI) systems, 
activated carbon injection (ACI) systems, and FF systems installed 
during the 2013-2016 period were installed for compliance with the MATS 
emissions limits. This assumption is necessitated by the absence of 
comprehensive data on the specific reasons EGUs installed pollution 
control equipment. While assuming pollution controls of these types 
that were installed in this period are singularly attributable to MATS 
requirements is a reasonable assumption for this analysis, it is a 
highly conservative assumption given that some of the observed 
installations likely occurred in response to other regulations to 
control criteria air pollutants (e.g., Cross-State Air Pollution Rule, 
Regional Haze, Federal implementation plans, or state implementation 
plans) or enforcement actions (e.g., consent decrees). Because some of 
the observed installations in this analysis likely resulted from non-
MATS requirements, the approach potentially over-attributes the amount 
of pollution controls built specifically for MATS compliance, thereby 
leading to an overestimate of the control costs associated with MATS.
    Table 3 presents the findings of this analysis in capacity terms. 
The total capacity projected to retrofit with each control in the 2011 
RIA is reported for the base case (i.e., projected future conditions 
absent MATS) and under MATS. The difference is presented in the 
`Projected Incremental Controls' column. So, for example, in the 2011 
RIA the EPA projected that there would be an incremental 20.3 GW of 
capacity retrofitting with dry FGD that is attributable to MATS. We 
compare the projected incremental controls capacity value to the 
observed installations capacity value. Note that we are unable to 
estimate the total capacity of observed upgrades to electrostatic 
precipitators (ESP) and scrubbers due to a lack of available data 
regarding such upgrades. For additional information, see the docketed 
Cost TSD.

                                                        Table 3--Projected vs. Observed Capacity
                                                                    [Gigawatts (GW)]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                              Percent
                                                                                             Projected       Observed       Difference:     difference:
               Pollution control retrofit                    Base case         MATS         incremental    installations  Observed minus  Observed minus
                                                                                             controls       (2013-2016)      projected       projected
                                                                                                                            (2013-2016)     (2013-2016)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Dry FGD.................................................             4.6            24.8            20.3            16.0            -4.3             -21
DSI.....................................................             8.6            52.5            43.9            15.8           -28.1             -64
ACI.....................................................               0            99.3            99.3            96.1            -3.2              -3
FF......................................................            12.7           114.7             102            31.4           -70.6             -69
ESP Upgrade.............................................               0            33.9            33.9             N/A             N/A             N/A
Scrubber Upgrade........................................               0            63.1            63.1             N/A             N/A             N/A
--------------------------------------------------------------------------------------------------------------------------------------------------------
Source: Projected Controls: 2011 RIA; Observed Installations: NEEDS v.5.16.
Note: FF installations include installations specifically related to PM control, as well as installations included with dry scrubber, DSI, and some ACI
  retrofits in the modeling. Totals may not sum due to rounding.

    This analysis demonstrates that projected incremental capacity of 
dry FGD, DSI, ACI, and FF was likely significantly overestimated in the 
2011 RIA. The capacities of actual installed control technologies are 
lower, often significantly lower, than projected (and again, this 
analysis attributes all control installations of certain types during 
this time period to MATS, even though some portion of those 
installations were likely made in whole or in part due to other 
regulations). For example, the installed DSI capacity is about two-
thirds lower than was projected. The difference between observed 
installed control capacities and what we projected those incremental 
control capacities would be translates directly into significantly 
lower costs than estimated. Because the vast majority of compliance 
costs in the 2011 RIA were related to the installation and operation of 
pollution controls, and because significant deployment of any higher-
cost compliance strategies did not occur, the large differences 
observed in Table 3 suggest that the projected compliance costs were 
likely significantly overestimated as well. For example, approximately 
$2 billion was estimated to be attributable to the installation and 
operation of DSI controls (21 percent of the total annual projected 
costs of MATS), when in actuality, only one-third of those 
installations occurred (and some were likely attributable to 
regulations other than MATS).
    We also conduct an analysis of the approximate costs related to the 
overestimate of projected incremental pollution controls. This analysis 
is discussed in detail in the Cost TSD. Specifically, we compared 
observed installations over 2013-2016 to unit-level estimates of the 
control installation capacity and associated costs presented in the 
2011 RIA to develop a range of the potential overestimate of compliance 
costs related

[[Page 7655]]

to projected control installations that did not occur.
    As result of this analysis, we find that based on this one 
variable--the number of control technology installations--the 2011 RIA 
overestimated control costs by about $2.2 to $4.4 billion (or 2.7 
times). If recent updates to the cost and performance assumptions for 
pollution controls had been reflected in the 2011 RIA modeling, the 
projected compliance costs would likely have been even lower 
(suggesting the overestimate could be greater than $4.4 billion). The 
EPA did not quantify advances in cost and performance of control 
technology between the time of the EPA's modeling and implementation of 
the rule due to uncertainty. We note that this may be one reason that 
the Andover Technology Partners' overestimate for control costs of $7 
billion exceeds the EPA's range of overestimates ($2.2-4.4 billion) for 
the same control and operation costs. The next section helps explain 
some of the difference quantified above, and provides further 
qualitative evidence supporting the EPA's conclusion that the 2011 RIA 
likely significantly overestimated the compliance costs associated with 
meeting MATS requirements.
c. 2011 RIA Modeling Assumptions
    Since promulgation of MATS, the EPA has found it necessary to 
update some of the modeling assumptions used in the IPM modeling that 
informed the RIA cost estimate, in order to capture the most recently 
available information and best reflect the current state of the power 
sector. Several of these recent updates are directly related to 
pollution control retrofits that were projected to be installed for 
MATS in the 2011 RIA. Had these updates been reflected in our modeling, 
it likely would have projected fewer controls needing to be installed 
and therefore a lower cost estimate overall.
    The full suite of assumptions utilized in the IPM modeling are 
reported in the model documentation, which provides additional 
information on the assumptions discussed here as well as all other 
assumptions and inputs to the model.\92\ Updates specific to MATS 
modeling are also in the IPM 4.10 Supplemental Documentation for 
MATS.\93\ As was included in the 2011 RIA discussion regarding 
uncertainty and limitations of the power sector modeling analysis 
(Section 3.15), the cost and emissions impact projections did not take 
into account the potential for advances in the capabilities of 
pollution control technologies or reductions in their costs over time. 
EPA modeling cannot anticipate in advance the full spectrum of 
compliance strategies that the power sector may innovate to achieve 
required emission reductions, and experience has shown that regulated 
industry often is able to comply at lower costs through innovation or 
efficiencies. Where possible, the EPA designs regulations to assure 
environmental performance while preserving flexibility for affected 
sources to design their own solutions for compliance. Industry will 
employ an array of responses, some of which regulators may not fully 
anticipate and will generally lead to lower costs associated with the 
rule than modeled in ex ante analysis. See, e.g., section III.D of this 
preamble, discussing how the actual cost of the ARP was up to 70 
percent less than what had been estimated.
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    \92\ See https://www.epa.gov/airmarkets/ipm-analysis-proposed-mercury-and-air-toxics-standards-mats. Accessed July 23, 2021.
    \93\ See https://www.epa.gov/airmarkets/documentation-supplement-base-case-v410mats. Accessed July 23, 2021.
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    A first example regards the assumptions of HCl removal for certain 
types of coal. When lignite and subbituminous coals are combusted, the 
chemistry of coal ash alkalinity removes HCl emissions. The 2011 RIA 
modeling assumed a 75 percent reduction of HCl emissions from lignite 
and subbituminous coals.\94\ Upon subsequent review of available data, 
the EPA updated this assumption to 95 percent HCl removal.\95\ This 
revised assumption regarding improved HCl removal from coal ash 
alkalinity effectively lowers uncontrolled HCl emissions rates in the 
projections and is a better reflection of actual removal rates observed 
by EGUs combusting subbituminous and/or lignite coal. This updated 
assumption, had it been used in the 2011 RIA modeling, would have 
significantly decreased the incremental capacity of acid gas controls 
(e.g., DSI, dry FGD) that the model projected to be needed for 
compliance with the MATS acid gas limits.\96\ The lower projection for 
controls would in turn have resulted in a lower cost estimate.
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    \94\ Id.
    \95\ See https://www.epa.gov/sites/default/files/2019-03/documents/chapter_5.pdf. Accessed July 23, 2021.
    \96\ While we are unable to quantify precisely the impact that 
updating this assumption would have on the projected compliance 
costs, we can observe that most incremental DSI capacity (about 40 
GW) would not require DSI controls in the 2011 RIA modeling, holding 
all else constant.
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    For a second example, the EPA updated the DSI retrofit cost 
methodology used in our power sector modeling. The 2011 RIA compliance 
cost projections assumed an SO2 removal rate of 70 percent 
and a corresponding HCl removal effect of 90 percent \97\ based on a 
technical report, developed by Sargent and Lundy in August 2010.\98\ 
These assumptions have been updated to reflect an SO2 
removal rate of 50 percent and a corresponding HCl removal effect of 98 
percent for units with FF in the EPA's recent modeling,\99\ based on an 
updated technical report from Sargent and Lundy.\100\
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    \97\ See https://www.epa.gov/sites/production/files/2015-07/documents/updates_to_epa_base_case_v4.10_ptox.pdf. Accessed July 23, 
2021.
    \98\ See Dry Sorbent Injection Cost Development Methodology at 
https://www.epa.gov/sites/production/files/2015-07/documents/append5_4.pdf. Accessed July 23, 2021.
    \99\ See https://www.epa.gov/airmarkets/documentation-epa-platform-v6-november-2018-reference-case-chapter-5-emission-control. 
Accessed July 23, 2021.
    \100\ See Dry Sorbent Injection for SO2/HCl Control 
Cost Development Methodology at https://www.epa.gov/sites/production/files/2018-05/documents/attachment_5-5_dsi_cost_development_methodology.pdf. Accessed July 23, 2021.
---------------------------------------------------------------------------

    These revised assumptions, which better reflect the actual cost and 
performance of DSI, would reduce the variable costs significantly, by 
about one-third at a representative plant,\101\ because less sorbent is 
required to achieve the same amount of HCl reduction. If the EPA had 
been able to use this new information in the 2011 RIA modeling, the 
projected compliance costs would have been lower, reflecting the 
reduced sorbent necessary to achieve the MATS emission limits. 
Furthermore, we note that while these modeling assumptions are based on 
a single sorbent (trona), alternative sorbents are available, 
potentially at a lower cost for some units.
---------------------------------------------------------------------------

    \101\ Based on a 500 MW plant with a heat rate of 9,500 Btu/kWh 
burning bituminous coal.
---------------------------------------------------------------------------

    A third example relates to the assumed cost of ESP upgrades. In the 
2011 RIA modeling, the EPA assumed that a range of upgrades would be 
necessary at units with existing ESP controls in order to meet the MATS 
PM standard. The EPA assumed the cost of these upgrades ranged from 
$55/kilowatt (kW) to $100/kW (in 2009 dollars). However, new evidence 
suggests that many ESP upgrades were installed and are available at 
less than $50/kW.\102\
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    \102\ Analysis of PM and Hg Emissions and Controls from Coal-
Fired Power Plants. Andover Technology Partners (August 19, 2021), 
available in the rulemaking docket.
---------------------------------------------------------------------------

    These examples highlight the uncertainty inherent in ex ante 
compliance cost projections, and contribute additional evidence that 
the projected compliance costs presented in

[[Page 7656]]

the 2011 RIA were likely overestimated and that actual compliance costs 
for MATS in 2015 were likely significantly less than the $9.6 billion 
estimate.
d. Conclusion That the 2011 RIA Costs Were Overestimated
    After reviewing this suite of quantitative and qualitative updates 
and considering studies that were performed by outside entities, the 
EPA concludes that the available ex post evidence points to 
significantly lower costs of compliance for the power sector under MATS 
than suggested by the ex ante projections in the 2011 RIA. There are 
numerous reasons for this, and chief among them is the fact that the 
natural gas industry has undergone profound change in recent years. 
Following the promulgation of MATS, natural gas supply increased 
substantially, leading to dramatic price decreases that resulted in 
major shifts in the economics of fossil fuel-fired electric generating 
technologies. The 2011 RIA modeling did not fully anticipate this 
historic change in natural gas supply and the related decrease in 
natural gas prices. As a result of this and other fundamental changes 
in the industry, we see a very different pattern of control 
installations than was projected: \103\
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    \103\ As discussed above, although we attributed all controls of 
these types to MATS in this analysis, even those controls that were 
installed were likely due in part or in whole for reasons other than 
MATS.
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     21 percent less capacity of dry FGD than projected;
     64 percent less capacity of DSI than projected;
     3 percent less capacity of ACI than projected;
     69 percent less capacity of FF than projected; and
     Likely fewer ESP and scrubber control upgrades than 
projected.

These controls were responsible for approximately 70 percent of the 
projected annual compliance costs in the 2011 RIA. Because so many 
projected controls were not installed, we know that the control-related 
costs were almost certainly significantly overestimated. By simply 
comparing between projected and installed controls, we now find that 
the projected control-related costs for 2015 of about $7 billion were 
likely overestimated by $2.2 to $4.4 billion, and possibly more.
    In addition, we have updated some of the modeling assumptions that 
supported the 2011 RIA. Specifically:
     HCl emissions for EGUs burning subbituminous and lignite 
coals are much lower than originally modeled, reducing the number of 
controls necessary for compliance in the model;
     DSI controls require less sorbent than originally assumed, 
lower the operating cost of these controls, and other lower-cost 
sorbents are likely available; and
     The assumed cost of ESP upgrades in the modeling was 
likely much higher than the actual cost of these upgrades.
    While not quantified here, the advances in cost and performance of 
control technology between the time of the EPA's modeling and 
implementation of the rule would, if quantified, likely add to the $2.2 
to $4.4 billion overestimate.
    Furthermore, the three studies submitted to the EPA during earlier 
rulemakings support this finding that the 2011 RIA cost projection was 
significantly overestimated:
     Andover Technology Partners estimated that the actual 
costs of compliance with MATS were approximately $2 billion, and that 
the 2011 RIA may have overestimated compliance costs by approximately 
$7 billion.
     MJB&A estimated that the total upfront capital 
expenditures of pollution controls installed for compliance with the 
rule were overestimated in the 2011 RIA by a factor of more than eight.
     EEI, the association that represents all U.S. investor-
owned electric companies, estimated cumulative costs incurred by the 
industry in response to MATS, and that estimate suggests an annual 
amount about $7 billion less than the 2011 RIA projected.
    Taken together, this information indicates that the projected costs 
in the 2011 RIA were almost certainly significantly overestimated. We 
solicit comment on data resource and methods such as econometric, 
simulation, and event study approaches that may aid the EPA in better 
characterizing the ex post regulatory costs of MATS for consideration 
before we issue the final rule.
3. Evaluation of Metrics Related to MATS Compliance
    In the next four sections, we place the costs that we estimated in 
2011, and which, as just explained, were likely significantly 
overestimated, in the context of the EGU industry and the services the 
EGU industry provides to society. The purpose of these comparisons is 
to better understand the disadvantages conferred by expending this 
money, both in terms of their scale and distribution, in order to weigh 
cost as a factor in our preferred methodology for making the 
appropriate determination. While we recognize the projected cost 
estimate from the 2011 RIA in absolute terms is perceived as a large 
number, our findings demonstrate that, for example, the (overestimated) 
projected cost estimate is less than 3 percent of the power sector's 
revenues from electricity sales, even when compared against data from 
2019 (which had the lowest electricity sale revenues in a nearly 20 
year period). As we did in 2016, we first contextualize the costs of 
MATS against power sector data for the years 2000 to 2011, i.e., the 
information that was available to the Agency when we were promulgating 
MATS in 2012 and reaffirming the appropriate and necessary 
determination. For purposes of this proposal, we also expand our 
assessment to compare the 2011 cost estimates to the most recent years 
of data available regarding, for example, industry revenue and 
electricity prices. The intent of expanding the years of analysis is to 
update our assessments from the 2016 Supplemental Finding considering 
power sector trends with the newest information. We continue to use 
projections developed for the 2011 RIA for purposes of these 
evaluations, because as discussed in section III.B.2, we are unable to 
generate new, bottom-line actual cost projections. However, in section 
III.D, we consider these evaluations in light of the EPA's finding that 
the projected costs were almost certainly significantly overestimated.
a. Compliance Costs as a Percent of Power Sector Sales
    The first metric examined here (as in 2016) is a comparison of the 
annual compliance costs of MATS to electricity sales at the power 
sector-level (i.e., revenues), often called a sales test. The sales 
test is a frequently used indicator of potential impacts from 
compliance costs on regulated industries.\104\ Incorporating updated 
information from the EIA, Section 2.a and Table A-4 of the Cost TSD 
present the value of retail electricity sales from 2000 to 2019, as 
well as net generation totals for the electric power sector for the 
same period.
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    \104\ For example, the sales test is often used by the EPA when 
evaluating potential economic impacts of regulatory actions on small 
entities. In the context of a small entity analysis, an evaluation 
of the change in profits to owners is likely the best approach to 
assessing the economic burden to owners from a regulatory action. 
Data limitations prevent solely analyzing profit changes to EGU 
owners as a result of MATS in this proposal.
---------------------------------------------------------------------------

    This information indicates that the $9.6 billion in annual 
compliance costs of MATS projected for 2015 would have represented 
about 2.7 percent of 2008 power sector revenues from retail electricity 
sales, the peak year during

[[Page 7657]]

the 2000 to 2019 period. The $9.6 billion in projected compliance costs 
would constitute about 2.9 percent of 2019 sales, which was the lowest 
sales level observed in the post-2011 period. These projected 
compliance costs are a very small percentage of total EGU revenues from 
electricity sales in both robust or lean years, and newer data confirms 
the findings of the 2016 record. Moreover, if we account for the fact 
that the $9.6 billion figure likely significantly overestimated the 
actual cost of compliance, the percentage of compliance costs to 
revenues would be even smaller.
b. Compliance Expenditures Compared to the Power Sector's Annual 
Expenditures
    The next metrics we examine are a comparison of the annual capital 
expenditures projected in the 2011 RIA to be needed for MATS compliance 
to historical power sector-level overall capital expenditures, followed 
by a comparison of projected annual capital and production expenditures 
related to MATS compliance to historical power sector-level overall 
capital and production expenditures.
    First, we evaluate capital expenditures. Capital costs represent 
largely irreversible investments for firms that must be paid off 
regardless of future economic conditions, as opposed to other important 
variable costs, such as fuel costs, that may vary according to economic 
conditions and generation needs. Section 2.b and Table A-5 of the Cost 
TSD present two sets of estimates for trends in annual capital 
expenditures by the electric power sector through 2019. The first set 
of information is based on data compiled by S&P Global, a private 
sector firm that provides data and analytical services. The second set 
of information is from the U.S. Census Bureau's Annual Capital 
Expenditures Survey. While each dataset has limitations, the estimates 
from each correspond to one another reasonably well.
    The 2011 RIA modeling estimated the incremental capital 
expenditures associated with MATS compliance to be $4.2 billion for 
2015. As discussed in section III.B.2, the 2011 RIA likely 
significantly overestimated compliance costs. This conclusion also 
applies to the capital cost component of the overall cost because, as 
detailed earlier, fewer pollution controls were installed during the 
2013-2016 timeframe than were projected in the 2011 RIA. While the EPA 
is not able to produce an alternative capital cost estimate directly 
comparable to the estimates from the 2011 RIA, the analysis discussed 
in section III.B.2 and the Cost TSD indicated the annualized capital 
expenditures at units that installed controls under MATS might be as 
low as $0.7 billion ($3.5 billion lower than projected in 2011 RIA, or 
less than one-fifth).
    Even using the significantly overestimated figure of $4.2 billion 
in our comparison shows that the projected capital expenditures 
associated with MATS represent a small fraction of the power sector's 
overall capital expenditures in recent years. Specifically, the $4.2 
billion estimate represents about 3.6 or 3.7 percent of 2019 (i.e., 
most recent) power sector level capital expenditures based on the S&P 
Global and U.S. Census information, respectively. Compared against 2004 
power sector level capital expenditures (i.e., the 20-year low), the 
$4.2 billion figure represents 10.4 or 9.3 percent of sector level 
capital expenditures (using the two respective data sets). 
Additionally, the projected $4.2 billion in incremental capital costs 
is well within the range of annual variability associated with capital 
expenditures for the sector over the 2000-2019 period. During this 
period, based on the Census information, for example, the largest year-
to-year decrease in power sector-level capital expenditures was $19.5 
billion (from 2001 to 2002) and the largest year-to-year increase in 
power sector-level capital expenditures was $23.4 billion (from 2000 to 
2001). This wide range (-$19.5 to +$23.4 billion) indicates substantial 
year-to-year variability in industry capital expenditures, and the 
projected $4.2 billion increase in capital expenditures in 2015 
projected under MATS falls well within this variability. Similar 
results are found using the S&P Global information. If a $4.2 billion 
increase in capital expenditures in 2015 projected under MATS falls 
well within the variability of historical trends, then a capital 
expenditure of less than $4.2 billion would also fall within this 
variability.
    Next, in order to provide additional perspective to the projected 
cost information, we look at a broader set of costs faced by industry, 
including both capital and production expenditures together. Section 
2.b and Table A-6 of the Cost TSD present two sets of estimates through 
2019 for trends in annual total (capital and production) expenditures 
by the electric power sector using the same two data sets as above, 
which we then compare with the projected annual total expenditures 
required by MATS.
    We find that even the overestimated $9.6 billion compliance cost 
projection from the 2011 RIA represents a small fraction of the power 
sector's annual capital and production expenditures compared to 
historical data, and is well within annual variability in total costs 
over the 2000 to 2011 and the 2012 to 2019 periods. Compared to 2008 
data (i.e., the historic high for total industry expenditures), the 
projected $9.6 billion estimate represents about 4.2 to 4.3 percent of 
total expenditures. The MATS projected compliance cost represents 6.2 
to 6.6 percent of total expenditures in 2003 (which was the lowest year 
for total industry expenditures during the studied time period). 
Additionally, the EPA notes that, similar to the capital expenditures 
analysis set forth in the 2015 Proposal, the projected $9.6 billion in 
incremental capital plus production costs is well within the range of 
annual variability in costs in general over the 2000 to 2019 period. 
For example, during this period, the largest year-to-year decrease in 
power sector-level capital and production expenditures ranged from 
$30.5 billion to $32.8 billion. The largest year-to-year increase in 
power sector-level capital and production expenditures in this period 
ranged from $27.5 billion to $28.7 billion. If a $9.6 billion increase 
in expenditures falls well within the variability of historical trends, 
then an expenditure substantially less than $9.6 billion would also 
fall within this variability.
c. Impact on Retail Price of Electricity
    We are cognizant that, for an industry like the power sector, costs 
and disadvantages to regulation are not solely absorbed by regulated 
sources. Many firms in the industry are assured cost-recovery for 
expenditures, so there is considerable potential for EGUs to pass 
through the costs of compliance to consumers via increases in retail 
electricity prices. This is especially true given that the demand for 
electricity is not particularly price-responsive. That is, because 
people are dependent on electricity for daily living, they are not 
likely to reduce their consumption of electricity even when the price 
goes up but will instead pay the higher price, thus absorbing the costs 
of compliance incurred by the industry. Notably, average retail 
electricity prices have fallen since the promulgation of MATS.
    While we analyze these aspects of cost separately, control costs 
and electricity prices are not separate economic indicators. 
Electricity price increases are generally related to increases in the 
capital and operating expenditures by the power sector. Therefore, the 
electricity price impacts and the associated increase in electricity

[[Page 7658]]

bills by consumers are not costs that are additional to the compliance 
costs described earlier in this section. In fact, to the extent the 
compliance costs are passed on to electricity consumers, the costs to 
the EGU owners in the power sector are reduced. Therefore, in order to 
further assess the disadvantages to regulation, in this case to 
consumers of electricity in all sectors (residential, commercial, 
industrial, transportation, and other sectors), we evaluate as we did 
in 2016 the projected effect MATS was anticipated to have on retail 
electricity prices, as measured against the variations in electricity 
prices from year to year. For this proposal, we expanded that analysis 
using updated data from the EIA, as presented in section 2.c and Table 
A-7 of the Cost TSD.
    Looking at 2000-2019 data, we find that the projected 0.3 cents per 
kilowatt-hour projected increase in national average retail electricity 
price under MATS is well within the range of annual variability over 
the 2000-2019 period. During that time period, the largest year-to-year 
decrease in national average retail electricity price was -0.2 cents 
per kilowatt-hour (from 2001 to 2002) and the largest year-to-year 
increase was 0.5 cents per kilowatt-hour (from 2005 to 2006). For the 
newer data analyzed, we also found that average retail electricity 
prices have generally decreased since 2011, from 9.33 cents per 
kilowatt-hour in 2011 to 8.68 cents per kilowatt-hour in 2019, or by 
nearly 7 percent.
    After considering the potential impacts of MATS on retail 
electricity prices, the EPA concludes that the projected increase in 
electricity prices is within the historical range. In addition, any 
increase in electricity prices would not be additive to the overall 
compliance costs of MATS. Rather, such price impacts would in part 
reflect the ability of many EGUs to pass their costs on to consumers, 
thereby reducing the share of MATS compliance costs borne by owners of 
EGUs. Given the relationship between compliance costs and electricity 
prices, we would also therefore expect the significant overestimate of 
compliance costs reflected in the $9.6 billion figure to translate into 
overestimates in our projections for electricity price increases. 
Therefore, incorporating this newer data into our analysis, we find 
that MATS did not result in increases in electricity prices for 
American consumers that were outside the range of normal year-to-year 
variability, and during the period when MATS was implemented, 
electricity prices generally decreased.
d. Impact on Power Sector Generating Capacity
    We recognize that the power sector plays a role of critical 
importance to the American public. A potential disadvantage to 
regulation that we consider to be a relevant factor in our 
consideration under CAA section 112(n)(1)(A) is how such regulation 
would impact the provision of adequate and reliable electricity 
throughout the country.\105\ Therefore, we analyzed, as part of the 
2012 record, projected net changes in generation capacity under MATS, 
as compared to the base case, that is, what expected generation 
capacity would have been absent the rule.\106\ We also conducted an 
analysis of the impacts of projected retirements on electric 
reliability. Id. And finally, in parallel with finalizing MATS, the 
EPA's Office of Enforcement and Compliance Assurance issued a policy 
memorandum describing an approach for units that were reliability 
critical that could demonstrate a need to operate in noncompliance with 
MATS for up to a year.\107\
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    \105\ The EPA generally uses the term ``reliability'' to refer 
to the ability to deliver the resources to the projected electricity 
loads so the overall power grid remains stable, and the term 
``resource adequacy'' generally refers to the provision of adequate 
generating resources to meet projected load and generating reserve 
requirements in each region.
    \106\ U.S. EPA. 2011. Resource Adequacy and Reliability in the 
Integrated Planning Model Projections for the MATS Rule (Resource 
Adequacy and Reliability TSD), https://www3.epa.gov/ttn/atw/utility/revised_resource_adequacy_tsd.pdf, Docket ID Item No. EPA-HQ-OAR-
2009-0234-19997.
    \107\ U.S. EPA. 2011. The Environmental Protection Agency's 
Enforcement Response Policy For Use of Clean Air Act Section 113(a) 
Administrative Orders In Relation To Electric Reliability And The 
Mercury and Air Toxics Standard, https://www.epa.gov/sites/default/files/documents/mats-erp.pdf, Docket ID Item No. EPA-HQ-OAR-2009-
0234-20577.
---------------------------------------------------------------------------

    Our analysis indicated that the vast majority of the generation 
capacity in the power sector directly affected by the requirements of 
MATS would remain operational following MATS. Specifically, our model 
projected that operational capacity with MATS in place would be reduced 
by less than 1 percent nationwide. See Resource Adequacy and 
Reliability TSD at 2. With respect to reliability, our modeling 
indicated that coal retirements would be distributed throughout the 
power grid, and that there would only be small impacts at the regional 
level, and that in those regions, we anticipated small decreases in 
overall adequacy of resources and robust remaining reserve margins. Id. 
These analyses therefore found that the power sector would be able to 
continue to provide adequate and reliable electricity even with 
regulation of the EGU sector for HAP.
    Additionally, since MATS was promulgated, the EPA has not been made 
aware of reliability or resource adequacy problems attributable to 
MATS. As noted, the EPA's enforcement office concurrently issued a 
policy memorandum to work with sources that faced demonstrated 
reliability concerns, and five administrative orders were issued in 
connection with the policy.\108\ We think this small number of sources 
obtaining relief due to their reliability critical status provides some 
confirmation of the EPA's projections that regulation would not cause 
widespread resource and reliability problems.
---------------------------------------------------------------------------

    \108\ https://www.epa.gov/enforcement/enforcement-response-policy-mercury-and-air-toxics-standard-mats.
---------------------------------------------------------------------------

4. Other Cost Considerations
    We also propose to reaffirm our previous findings regarding the 
costs of mercury controls, consistent with the instruction from the 
statute to study the availability and cost of such controls in CAA 
section 112(n)(1)(B). 80 FR 75036-37 (December 1, 2015). We similarly 
propose to reaffirm our previous records and findings regarding the 
cost of controls for other HAP emissions from EGUs, and the cost of 
implementing the utility-specific ARP, which Congress wrote into the 
1990 CAA Amendments and implementation of which Congress anticipated 
could result in reductions in HAP emissions. Id. With respect to the 
costs of technology for control of mercury and non-mercury HAP, the 
record evidence shows that in 2012 controls were available and 
routinely used and that control costs had declined considerably over 
time. Id. at 75037-38. With regard to the ARP, industry largely 
complied with that rule by switching to lower-sulfur coal, and 
subsequently the actual costs of compliance were substantially lower 
than projected. Though the reasons for discrepancies between projected 
and actual costs are different for MATS, as discussed in section 
III.B.2, the newer information examined as part of this proposal 
demonstrates that the projected cost estimates for MATS were also 
likely significantly overestimated.
5. Summary of Consideration of Cost of Regulating EGUs for HAP
    In this section, the EPA noted several studies performed by outside 
entities suggesting that costs of MATS may have been overestimated in 
the 2011 RIA. We discussed the dramatic impacts to the power sector 
over the last 10 years due to increasing supplies and decreasing price 
of natural gas and renewables, and

[[Page 7659]]

we conducted a suite of quantitative and qualitative updates to the 
information available in the 2011 RIA. Based on this information, we 
propose to conclude that the available ex post evidence points to a 
power sector that incurred significantly lower costs of compliance 
obligations under MATS than anticipated based on the ex ante 
projections when the rule was finalized in 2012. This overestimate was 
significant--for just one part of the original compliance cost 
estimate, the EPA was able to quantify a range of at least $2.2 to $4.4 
billion in projected costs related to the installation, operation, and 
maintenance of controls which were not expended by industry. This 
projected overestimation is limited to these costs; it does not account 
for other ways in which the rule's costs were likely overestimated, 
such as advances in control technologies that made control applications 
less expensive or more efficient at reducing emissions. The other 
studies conducted by stakeholders asserted there were even greater 
differences between projected and actual costs of MATS.
    We next examined the 2011 projected costs, which were almost 
certainly significantly overestimated, in the context of the EGU 
industry and the services the EGU industry provides to society. The 
purpose of these comparisons was to better understand the disadvantages 
imposed by these costs, in order to weigh cost as a factor in our 
preferred methodology for making the appropriate determination. Even 
though the cost estimates we used in this analysis were almost 
certainly significantly overestimated, we noted they were relatively 
small when placed in the context of the industry's revenues and 
expenditures, and well within historical variations.
    Based on the 2011 RIA, the total projected cost of the MATS rule to 
the power sector in 2015 represented between 2.7 and 3.0 percent of 
annual electricity sales when compared to years from 2000 to 2019, a 
small fraction of the value of overall sales (and even smaller when one 
takes into account that the 2011 RIA projections were likely 
significantly overestimated). Looking at capital expenditures, the EPA 
demonstrated that the projected MATS capital expenditures in 2015 
represented between 3.6 and 10.4 percent of total annual power sector 
capital expenditures when compared to years surrounding the 
finalization of the MATS rule. Such an investment by the power sector 
would comprise a small percentage of the sector's historical annual 
capital expenditures on an absolute basis and also would fall within 
the range of historical variability in such capital expenditures. 
Similarly, the EPA demonstrated that the projected capital and 
operating expenditures in 2015 represented between 4.3 and 6.2 percent 
of total annual power sector capital and operating expenditures over 
2000 to 2019, and is well within the substantial range of annual 
variability. This proposal's analysis indicating that the far fewer 
controls were installed than the EPA had projected would be required is 
particularly relevant to considering our findings as to this metric; 
with the overestimation of capital expenditures in mind, actual 
investments by the power sector to comply with MATS would have 
comprised an even smaller percentage of historical annual capital 
expenditures.
    With respect to impacts on the wider American public, the EPA 
examined impacts on average retail electricity prices and found the 
modest increases--which, like overall compliance costs, are also likely 
to have been significantly overestimated--to be within the range of 
historical variability. Experience has also shown that national average 
retail electricity prices in years after MATS promulgation have 
declined. Finally, previous analysis indicated that the vast majority 
of the generation capacity in the power sector would remain operational 
and that the power sector would be able to continue to provide adequate 
and reliable electricity after implementation of the rule, and we have 
seen no evidence to contradict those findings.
    The EPA proposes that each of these analyses are appropriate bases 
for evaluating the disadvantages to society conferred by the MATS-
related projected compliance expenditures. As we note above, even 
though the projected costs we use in this analysis are almost certainly 
significantly overestimated, we find that they are still relatively 
small when placed in the context of the economics of the industry, and 
well within historical variations. We solicit comments on all aspects 
of this proposed consideration of costs.

C. Revocation of the 2020 Final Action

    We are proposing to revoke the 2020 Final Action because we find 
that the framework used to consider cost in 2020, which centered the 
Agency's mandated determination under CAA section 112(n)(1)(A) on a 
comparison of costs to monetized HAP benefits, was an approach ill-
suited to making the appropriate and necessary determination in the 
context of CAA section 112(n)(1)(A) specifically and the CAA section 
112 program generally. Moreover, the statutory text and legislative 
history do not support a conclusion that the 2020 framework is required 
under CAA section 112(n)(1)(A), and we exercise our discretion to adopt 
a different approach. We also disagree with the conclusions presented 
in the 2020 Final Action as to the 2016 Supplemental Finding's two 
approaches.
    The 2020 Final Action established the following framework for 
making the appropriate and necessary determination. It stated:

    ``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. . . . Second, the EPA considers whether 
unquantified HAP benefits may alter that outcome. . . . 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.'' 85 FR 31302 (May 22, 
2020).

    Applying the first part of the framework, the Agency noted that the 
costs of regulation estimated in the 2011 RIA were disproportionately 
higher--by three orders of magnitude--than the monetized HAP benefits, 
and concluded ``[t]hat does not demonstrate `appropriate and 
necessary.' '' Id. Under the framework's second inquiry, the EPA 
determined that the unquantified HAP benefits, even if monetized, were 
unlikely to alter its conclusion under the first part of the framework. 
Id.; see also 85 FR 31304 (noting that ``valuing HAP-related morbidity 
outcomes would not likely result in estimated economic values similar 
to those attributed to avoiding premature deaths''). Finally, applying 
the third part of its framework, the EPA noted that nearly all of the 
monetized benefits of MATS as reflected in the 2011 RIA were derived 
from PM benefits. See 85 FR 31302-03 (May 22, 2020). The EPA then 
posited that, ``[h]ad 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.'' See 85 FR 31303 (May 
22, 2020). However, because of the factual scenario presented in the 
record, the Agency in the 2020 Final Action stated that ``[t]he

[[Page 7660]]

EPA does not need to, and does not, determine whether that additional 
step would be appropriate . . . given that the monetized and 
unquantified HAP-specific benefits do not come close to a level that 
would support the prior determination.'' Id. In conclusion, the EPA 
stated that ``[u]nder 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.'' Id.
    We note that the three-step framework employed by the 2020 Final 
Action is not a BCA conforming to recognized principles (see, e.g., OMB 
Circular A-4, EPA Economic Guidelines). BCA is a specific tool 
developed by economists to assess total society-wide benefits and 
costs, to determine the economic efficiency of a given action. Instead 
of conforming to this comprehensive approach, the three-step framework 
focused primarily on comparing the rule's total costs to a very small 
subset of HAP benefits that could be monetized. The Agency gave 
secondary weight to the vast majority of the benefits of regulating HAP 
emissions from stationary sources that cannot be quantified, and 
completely ignored the non-HAP monetized benefits directly attributable 
to the MATS rule.
    We propose to find that this three-step framework is an unsuitable 
approach to making the appropriate and necessary determination under 
CAA section 112(n)(1)(A) because it places undue primacy on those HAP 
benefits that have been monetized, and fails to consider critical 
aspects of the inquiry posed to the EPA by Congress in CAA section 
112(n)(1). The 2020 three-step framework also did not in any meaningful 
way grapple with the bases upon which the EPA had relied to design the 
2016 preferred approach, as discussed above, including the broad 
statutory purpose of CAA section 112 to reduce the volume of HAP 
emissions with the goal of reducing the risk from HAP emissions to a 
level that is protective of even the most exposed and most sensitive 
subpopulations; the fact that we rarely can fully characterize or 
quantify risks, much less benefits, at a nationwide level; and the fact 
that except for one of the many health endpoints for only one of the 
many HAP emitted from EGUs, the EPA lacked the information necessary to 
monetize any post-control benefit of reductions in HAP emissions. The 
sole rationale provided in the 2020 Final Action for rejecting the 
relevance of the statute's clear purpose as evinced in the broader CAA 
section 112 program and reflected in the provisions of CAA section 
112(n)(1) was that CAA section 112(n)(1)(A) is a separate provision and 
threshold determination. See 85 FR 31293-94 (May 22, 2020). But we do 
not think it is sensible to view the statute's direction to the EPA to 
make a separate determination as to EGUs as an invitation to disregard 
the statutory factors of CAA section 112(n)(1) and the greater 
statutory context in which that determination exists, and we do not 
think that the 2020 Final Action provided an adequately reasoned basis 
for abandoning the interpretation and assessment provided in the 2016 
Supplemental Finding. And in any event, we believe the methodology we 
propose today is better suited to making the statutory finding than the 
2020 framework.
    In the 2020 rulemaking, the EPA did not explain its rationale for 
its decision to anchor the appropriate and necessary determination at 
step one as a comparison between the monetized costs of regulation and 
monetized HAP specific benefits. Rather, the proposed and final rules 
repeatedly state that the ``primary'' inquiry in the determination 
should be a comparison of costs and HAP benefits, but did not explain 
why only monetized HAP benefits should be given primacy. See, e.g., 85 
FR 31286, 31288, 31303 (May 22, 2020). Given the Agency's recognition 
of the broad grant of discretion inherent in the phrase ``appropriate 
and necessary,'' see 81 FR 24430-31 (April 25, 2016), its 
acknowledgement of Congress' ``particularized focus on reducing HAP 
emissions and addressing public health and environmental risks from 
those emissions'' in CAA section 112, see 85 FR 31299 (May 22, 2020), 
and its knowledge and recognition that the dollar value of one of its 
points of comparison represented but a small subset of the advantages 
of regulation, see 85 FR 31302 (May 22, 2020), we now believe it was 
inappropriate to adopt a framework that first and foremost compared 
dollar value to dollar value. Nothing in the CAA required the Agency's 
decision in 2020 to hinge its framework on monetized HAP benefits. The 
consideration of the non-monetized benefits of MATS (i.e., dozens of 
endpoints, including virtually all of the HAP benefits associated with 
this rule) occurred only at step two, where the Agency considered 
whether the unquantified benefits, if monetized, were ``likely to 
overcome the imbalance between the monetized HAP benefits and 
compliance costs in the record.'' See 85 FR 31296 (May 22, 2020). This 
approach discounts the vast array of adverse health and environmental 
impacts associated with HAP emissions from coal- and oil-fired EGUs 
that have been enumerated by the EPA \109\ and discounts the social 
value (benefit) of avoiding those impacts through regulation, simply 
because the Agency cannot assign a dollar value to those impacts. 
Further, the three-step framework gave no consideration to the 
important statutory objective of protecting the most at-risk 
subpopulations. As noted above, in CAA section 112(n)(1)(C) Congress 
directed the EPA to establish threshold levels of exposure under which 
no adverse effect to human health would be expected to occur, even 
considering exposures of sensitive populations, and throughout CAA 
section 112, Congress placed special emphasis on regulating HAP from 
sources to levels that would be protective of those individuals most 
exposed to HAP emissions and most sensitive to those exposures. The 
rigid and narrow approach to making the appropriate and necessary 
determination in the 2020 Final Action is at odds with the text and 
purpose of CAA section 112, and is certainly not required under the 
express terms of CAA section 112 or CAA section 112(n)(1)(A).
---------------------------------------------------------------------------

    \109\ See, e.g., 65 FR 79829-30 (December 20, 2000); 76 FR 
24983-85, 24993-97, 24999-25001, 25003-14, 25015-19 (May 3, 2011).
---------------------------------------------------------------------------

    Commenters on the 2019 Proposal objected strenuously to the 
Agency's revised framework for making the appropriate and necessary 
determination, arguing that the 2019 Proposal's interpretation ``fails 
to meaningfully address factors that are `centrally relevant' to the 
inquiry of whether it is appropriate and necessary to regulate HAP from 
EGUs,'' and that the Agency's new interpretation must fall because the 
EPA failed to provide a reasoned explanation for its change in policy, 
as required by 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). See 85 FR 31294 (May 
22, 2020). Among the factors that commenters argued had been 
inadequately addressed under the new framework were the ``hazards to 
public health reasonably anticipated to occur'' that had not been 
monetized; the non-monetizable benefits of HAP regulation such as 
preservation of tribal social practices; the latency, persistence in 
the environment, and toxicity of HAP as recognized by Congress; and the 
distributional impacts on particular communities and individuals most

[[Page 7661]]

impacted by HAP emitted from power plants. In responses to these 
comments, the EPA claimed that it was not ``disregarding'' or 
``dismissing'' the concerns raised by the commenters, but rather simply 
weighing them differently, and explained that the Administration's 
changed priorities provided the ``reasoned basis'' for its changed 
interpretation. See 85 FR 31296-97 (May 22, 2020).
    Agencies do have broad discretion to re-evaluate policies and 
change their ``view of what is in the public interest,'' State Farm, 
463 U.S. at 57, but such re-evaluations must still adhere to principles 
of reasoned decision-making. The 2020 Final Action did not aver that 
the concerns identified by commenters were factors that the statute 
does not instruct the Agency to consider in making its appropriate and 
necessary determination. Instead, the EPA stated that it was permitted 
to pick its decisional framework and admitted that its decisional 
framework might undervalue certain factors. For example, with respect 
to commenters' concerns that the revised appropriate and necessary 
framework did not adequately account for adverse impacts on tribal 
culture or undue concentration of public health risks on certain 
population subgroups or individuals, the EPA stated,

    ``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).'' 85 FR 31297 (May 22, 2020).

    The decisional framework in the 2020 Final Action, however, did not 
give ``less weight'' to these factors--it gave them none. In both the 
selection and application of its framework, the EPA in the 2020 Final 
Action effectively ignored these factors altogether, and we do not 
agree that the inability to monetize a factor should render it 
unimportant. Cf. Am. Trucking Ass'ns, Inc. v. EPA, 175 F.3d 1027, 1052-
53 (D.C. Cir. 1999), reversed in part on other grounds in Whitman v. 
Am. Trucking Ass'ns, 531 U.S. 457 (2001) (holding that the EPA was not 
permitted to ignore information ``because the . . . benefits are 
difficult, if not impossible, to quantify reliably and because there is 
`no convincing basis for concluding that any such effects . . . would 
be significant' ''); Pub. Citizen v. Fed. Motor Carrier Safety Admin., 
374 F.3d 1209, 1219 (D.C. Cir. 2004) (``The mere fact that the 
magnitude of . . . effects is uncertain is no justification for 
disregarding the effect entirely.'') (emphasis in original). The mere 
mention and summary dismissal of factors does not constitute meaningful 
consideration of those factors.
    In the 2020 Final Action, like the 2016 Supplemental Finding before 
it, the EPA maintained that there is more than one permissible way to 
interpret the Agency's obligation to consider cost in the appropriate 
and necessary determination. Given the Agency's knowledge of the 
significant risks and often irreversible impacts of HAP exposure on 
vulnerable populations like developing fetuses, the disproportionate 
impact of EGU HAP emissions on communities who subsist on freshwater 
fish due to cultural practices and/or economic necessity, and the 
record of data demonstrating risks to public health amassed over 
decades, and, perhaps more importantly, the overwhelming quantity of 
advantages to regulation that could not be monetized, we do not think 
that selecting a framework that compared first and foremost monetized 
HAP benefits with costs was appropriate. And even if the framework 
ultimately addressed the statutorily relevant factors because at the 
second step the EPA stated that it was considering non-monetized HAP 
benefits, we think that the application of that second step fell short. 
The secondary consideration of non-monetized HAP benefits in the three-
step framework only considered post-control HAP-related impacts of 
regulation insofar as the EPA speculated about what the monetized value 
of those benefits might be (see 85 FR 31296 (May 22, 2020), asserting 
that monetized value of avoiding morbidity effects such as 
neurobehavioral impacts is ``small'' compared to monetized value 
associated with avoided deaths). The Agency did not, at this second 
step, grapple with the existing risk analyses, including those stemming 
from the statutorily mandated studies in CAA section 112(n)(1). Those 
analyses demonstrated substantial public health and environmental 
hazards, even if the hazards were not translated into post-control 
monetized benefits. See White Stallion, 748 F.3d at 1245. The Agency 
also did not explain why other attributes of risk--such as impacts on 
vulnerable populations and the reality that HAP pollution from EGUs is 
not distributed equally across the population but disproportionately 
impacts some individuals and communities far more than others--were 
unimportant, stating only that the selected framework did not 
accommodate consideration of those factors.
    As noted, the Agency did not point to anything in the CAA as 
supporting the use of its three-step framework. This is in stark 
contrast to the 2016 Supplemental Finding rulemaking, in which the EPA 
examined CAA section 112(n)(1)(A) and the other section 112(n)(1) 
provisions, and the rest of CAA section 112 generally, and D.C. Circuit 
case law on CAA cost considerations to inform the EPA's interpretation 
of CAA section 112(n)(1)(A). See 80 FR 75030 (December 1, 2015); 2015 
Legal Memorandum. In the 2020 Final Action, the EPA merely asserted 
that a comparison of benefits to costs is ``a traditional and 
commonplace way to assess costs'' and claimed that the Supreme Court's 
holding in Entergy Corp. v. Riverkeeper, 556 U.S. 208 (2009) supported 
the EPA's 2020 position that, absent an unambiguous prohibition to use 
a BCA, an agency may generally rely on a BCA as a reasonable way to 
consider cost. See 85 FR 31293 (May 22, 2020). The 2020 Final Action 
also pointed out ``many references comparing'' costs and benefits from 
the Michigan decision, including: ``EPA refused to consider whether the 
costs of its decision outweighed the benefits'' (576 U.S. at 743); 
``[o]ne would not say that it is rational, never mind `appropriate,' to 
impose billions of dollars in economic costs in return for a few 
dollars in health or environmental benefits'' (Id. at 752); and ``[n]o 
regulation is `appropriate' if it does more harm than good'' (Id.).
    But while we agree that a comparison of benefits to costs is a 
traditional way to assess costs, the 2020 framework was not a BCA. 
There is no economic theory or guidance of which we are aware that 
endorses the version of BCA presented in the 2020 Final Action, in 
which total costs are compared against a small subset of total 
benefits. See section III.E for further discussion. Moreover, general 
support for weighing costs and benefits does not justify placing undue 
weight on monetized HAP benefits, with secondary consideration for all 
other benefits, and only valuing those other benefits to the extent of 
their speculative monetized effects. As noted in Justice Breyer's 
concurrence in Entergy Corp., the EPA has the ability ``to describe 
environmental benefits in non-monetized terms and to evaluate both 
costs and benefits in accordance with its expert judgment and 
scientific knowledge,'' and to engage in this balancing outside of 
``formal cost-

[[Page 7662]]

benefit proceedings and futile attempts at comprehensive 
monetization.'' 556 U.S. at 235 (Breyer, J., concurring). Benefits--the 
advantages of regulation--can encompass outcomes that are not or cannot 
be expressed in terms of dollars and cents, just as the Court found 
that `` `cost' includes more than the expense of complying with 
regulations; any disadvantage could be termed a cost.'' Michigan, 576 
U.S. at 752. And the Court faulted the EPA's interpretation for 
``preclud[ing] the Agency from considering any type of cost--including, 
for instance, harms that regulation might do to human health or the 
environment. . . . No regulation is `appropriate' if it does 
significantly more harm than good.'' Id. The constricted view of 
benefits that the Agency adopted in 2020 was ill-suited to the 
statutory inquiry as interpreted in Michigan.
    The primary basis in the 2020 action upon which the EPA relied to 
find that the 2016 preferred approach was flawed was that the preferred 
approach failed to ``satisf[y] the Agency's obligation under CAA 
section 112(n)(1)(A) as interpreted by the Supreme Court in Michigan.'' 
See 84 FR 2674 (February 7, 2019). The 2019 Proposal claimed that the 
chief flaw of the preferred approach was the Agency's failure to 
``meaningfully consider cost within the context of a regulation's 
benefits,'' asserting that the Michigan Court contemplated that a 
proper consideration of cost would be relative to benefits. See 84 FR 
2675 (February 7, 2019). But that is not an accurate characterization 
of the 2016 preferred approach, wherein the Agency weighed the existing 
record from 2012 demonstrating that HAP emissions from EGUs pose a 
number of identified hazards to both public health and the environment 
remaining after imposition of the ARP and other CAA requirements 
against the cost of MATS. See 81 FR 24420 (April 25, 2016) (``After 
evaluating cost reasonableness using several different metrics, the 
Administrator has, in accordance with her statutory duty under CAA 
section 112(n)(1)(A), weighed cost against the previously identified 
advantages of regulating HAP emissions from EGUs--including the 
agency's prior conclusions about the significant hazards to public 
health and the environment associated with such emissions and the 
volume of HAP that would be reduced by regulation of EGUs under CAA 
section 112.''). The 2020 Final Action further stated that the 
preferred approach was an ``unreasonable'' interpretation of CAA 
section 112(n)(1)(A) and impermissibly de-emphasized the importance of 
the cost consideration in the appropriate and necessary determination. 
See 85 FR 31292 (May 22, 2020). It is a decisional framework which 
rests primarily upon a comparison of the costs of a regulation and the 
small subset of HAP benefits which could be monetized that does not 
``meaningfully consider[s] cost within the context of a regulation's 
benefits,'' because such a narrow approach relegates as secondary (and 
in application appeared to ignore altogether) the vast majority of that 
rule's HAP benefits and other advantages. We therefore propose to 
revoke the 2020 three-step approach and determination because we do not 
think it is a suitable way to assess the advantages and disadvantages 
of regulation under CAA section 112(n)(1)(A) and in applying it, the 
Agency failed to meaningfully address key facts in the existing record. 
Even if the Agency's selection of the 2020 framework could be 
considered a permissible interpretation of the broad ``appropriate and 
necessary'' determination in CAA section 112(n)(1)(A), we exercise our 
discretion under the statute and as described in Michigan, to approach 
the determination differently.

D. The Administrator's Proposed Preferred Framework and Proposed 
Conclusion

    The EPA is proposing a preferred, totality-of-the-circumstances 
approach as a reasonable way to ``pay attention to the advantages and 
disadvantages of [our] decision,'' Michigan, 576 U.S. at 753, in 
determining whether it is appropriate to regulate coal- and oil-fired 
EGUs under section 112 of the CAA. This approach, including which 
factors we consider and how much weight we give them, is informed by 
Congress' design of CAA section 112(n)(1) specifically, and CAA section 
112 generally.
    Specifically, under this approach we first consider and weigh the 
advantages of reducing EGU HAP via regulation. We focus on the public 
health advantages of reducing HAP emissions because in CAA section 
112(n)(1)(A), Congress specifically directed the EPA to regulate EGUs 
under CAA section 112 after considering the results of the ``study of 
hazards to public health reasonably anticipated to occur as a result of 
emissions'' by EGUs. We also consider the other studies commissioned by 
Congress in CAA sections 112(n)(1)(B) and (C) and the types of 
information the statute directed the EPA to examine under those 
provisions--the rate and mass of EGU mercury emissions, the health and 
environmental effects of such emissions, and the threshold level of 
mercury concentrations in fish tissue which may be consumed (even by 
sensitive populations) without adverse effects to public health.\110\ 
We place considerable weight on the factors addressed in the studies 
required in the other provisions of CAA section 112(n)(1) because that 
provision is titled ``Electric utility steam generating units,'' so it 
is reasonable to conclude that the information in those studies is 
important and relevant to a determination of whether HAP emissions from 
EGUs should be regulated under CAA section 112.\111\ See Michigan, 576 
U.S. at 753-54 (citing CAA sections 112(n)(1)(B) and (C), its caption, 
and the additional studies required under those subparagraphs as 
relevant statutory context for the appropriate and necessary 
determination).
---------------------------------------------------------------------------

    \110\ CAA section 112(n)(1)(B) also directs the EPA to study 
available technologies for controlling mercury and the cost of such 
controls, and we consider those in our assessment of cost.
    \111\ The statute directed the EPA to complete all three CAA 
section 112(n)(1) studies within 4 years of the 1990 Amendments, 
expressing a sense of urgency with regard to HAP emissions from EGUs 
on par with addressing HAP emissions from other stationary sources. 
See CAA section 112(e) (establishing schedules for setting standards 
on listed source categories as expeditiously as practicable, but no 
later than between 2-10 years).
---------------------------------------------------------------------------

    Notably, the studies of CAA section 112(n)(1) place importance on 
the same considerations that are expressed in the terms and overall 
structure of CAA section 112. For example, CAA section 112(n)(1)(A) and 
section 112(n)(1)(B) both show interest in the amount of HAP emissions 
from EGUs--section 112(n)(1)(A) by requiring the EPA to estimate the 
risk remaining after imposition of the ARP and other CAA requirements 
and section 112(n)(1)(B) by requiring the EPA to study the rate and 
mass of mercury emissions; therefore, we believe it is reasonable to 
conclude that we should consider and weigh the volume of toxic 
pollution EGUs contributed to our air, water, and land absent 
regulation under CAA section 112, in total and relative to other 
domestic anthropogenic sources, and the potential to reduce that 
pollution, thus reducing its grave harms. In addition, the clear goal 
in CAA section 112(n)(1)(C) and elsewhere to consider risks to the most 
exposed and susceptible populations supports our decision to place 
significant weight on reducing the risks of HAP emissions from EGUs to 
the most sensitive members of the population (e.g., developing fetuses 
and children), and communities that are reliant on self-

[[Page 7663]]

caught local fish for their survival. Finally, we also consider the 
identified risks to the environment posed by mercury and acid-gas HAP, 
consistent with CAA section 112(n)(1)(B) and the general goal of CAA 
section 112 to address adverse environmental effects posed by HAP 
emissions. See CAA section 112(a)(7) (defining ``adverse environmental 
effect'').
    We next examine the disadvantages of regulation, principally in the 
form of the costs incurred to capture HAP before they enter the 
environment. As with the advantages side of the equation, where we 
consider the consequences of reducing HAP emissions to human health and 
the environment, we consider the consequences of these expenditures for 
the electricity generating sector and society. We therefore consider 
compliance costs comprehensively, placing them in the context of the 
effect those expenditures have on the economics of power generation 
more broadly, the reliability of electricity, and the cost of 
electricity to consumers. These metrics are relevant to our weighing 
exercise because they give us a more complete picture of the 
disadvantages to society imposed by this regulation, and because our 
conclusion might change depending on how this burden affects the 
ability of the industry to thrive and provide reliable, affordable 
electricity to the benefit of all Americans. Consistent with CAA 
section 112(n)(1)(B), we further consider relevant control costs for 
EGUs and the relationship of control costs expected and experienced 
under the ARP and MATS.
    Below, consistent with this framework, we consider and weigh the 
advantages to regulation against the costs of doing so, giving 
particular weight to our examination of the public health hazards we 
reasonably anticipate to occur as a result of HAP emissions from EGUs, 
and the risks posed by those emissions to exposed and vulnerable 
populations. We note as well that had we found regulation under CAA 
section 112 to impose significant barriers to provision of affordable 
and reliable electricity to the American public, this would have 
weighed heavily in our decision.
    We acknowledge, as we recognized in the 2016 preferred approach, 
that this approach to making the appropriate and necessary 
determination is an exercise in judgment, and that ``[r]easonable 
people, and different decision-makers, can arrive at different 
conclusions under the same statutory provision,'' (81 FR 24431; April 
25, 2016), but this type of weighing of factors and circumstances is an 
inherent part of regulatory decision-making. As noted in then-Judge 
Kavanaugh's dissent in White Stallion, ``All regulations involve 
tradeoffs, and . . . Congress has assigned EPA, not the courts, to make 
many discretionary calls to protect both our country's environment and 
its productive capacity.'' 748 F.3d at 1266 (noting as well that ``if 
EPA had decided, in an exercise of its judgment, that it was 
`appropriate' to regulate electric utilities under the MACT program 
because the benefits outweigh the costs, that decision would be 
reviewed under a deferential arbitrary and capricious standard of 
review''). Bright-line tests and thresholds are not required under the 
CAA's instruction to determine whether regulation is ``appropriate and 
necessary,'' nor have courts interpreted broad provisions similar to 
CAA section 112(n)(1)(A) in such manner. In Catawba Cty. v. EPA, the 
D.C. Circuit held that ``[a]n agency is free to adopt a totality-of-
the-circumstances test to implement a statute that confers broad 
authority, even if that test lacks a definite `threshold' or `clear 
line of demarcation to define an open-ended term.' '' 571 F.3d 20, 37 
(D.C. Cir. 2009).
    In undertaking this analysis, we are cognizant that, while the 
Agency has been studying the science underlying this determination for 
decades, the understanding of risks, health, and environmental impacts 
associated with toxic air pollution continues to evolve. In this 
notice, we explained the additional information that has become 
available to the Agency since we performed our national risk 
assessments, and explained why, despite the certainty of the science 
demonstrating substantial health risks, we are unable at this time to 
quantify or monetize many of the effects associated with reducing HAP 
emissions from EGUs.\112\ We continue to think it is appropriate to 
give substantial weight to these public health impacts, even where we 
lack information to precisely quantify or monetize those impacts. As 
the D.C. Circuit stated in Ethyl Corp. v. EPA,
---------------------------------------------------------------------------

    \112\ Unquantified effects include additional neurodevelopmental 
and cardiovascular effects from exposure to methylmercury, ecosystem 
effects, health risks from exposure to non-mercury HAP, and effects 
in EJ relevant subpopulations that face disproportionally high 
risks.

    ``Where a statute is precautionary in nature, the evidence 
difficult to come by, uncertain, or conflicting because it is on the 
frontiers of scientific knowledge, the regulations designed to 
protect public health, and the decision that of an expert 
administrator, we will not demand rigorous step-by-step proof of 
cause and effect. . . . [I]n such cases, the Administrator may 
assess risks. . . . The Administrator may apply his expertise to 
draw conclusions from suspected, but not completely substantiated, 
relationships between facts, from trends among facts, from 
theoretical projections from imperfect data, from probative 
---------------------------------------------------------------------------
preliminary data not yet certifiable as `fact,' and the like.''

541 F.2d 1, 28 (D.C. Cir. 1976). See also Lead Industries Ass'n v. EPA, 
647 F.2d 1130, 1155 (D.C. Cir. 1980) (``[R]equiring EPA to wait until 
it can conclusively demonstrate that a particular effect is adverse to 
health before it acts is inconsistent with both the [Clean Air] Act's 
precautionary and preventive orientation and the nature of the 
Administrator's statutory responsibilities.'').
    The EPA is not alone in needing to make difficult judgments about 
whether a regulation that has a substantial economic impact is ``worth 
it,'' in the face of uncertainty such as when the advantages of the 
regulation are hard to quantify in monetary terms. The Transportation 
Security Administration (TSA), when determining whether to require 
Advanced Imaging Technology at certain domestic airports, faced 
assertions that the high cost of widespread deployment of this type of 
screening was ``not worth the cost.'' TSA acknowledged that it did not 
``provide monetized benefits'' or ``degree of benefits'' to justify the 
use of the screening, but noted that the agency ``uses a risk-based 
approach . . . in order to try to minimize risk to commercial air 
travel.'' See 81 FR 11364, 11394 (March 3, 2016). The agency pointed 
out that it could not consider ``only the most easily quantifiable 
impacts of a terrorist attack, such as the direct cost of an airplane 
crashing,'' but rather that it had an obligation to ``pursue the most 
effective security measures reasonably available so that the 
vulnerability of commercial air travel to terrorist attacks is 
reduced,'' noting that some commenters were failing to consider the 
more difficult to quantify aspects of the benefits of avoiding 
terrorist attacks, such as ``substantial indirect effects and social 
costs (such as fear) that are harder to measure but which must also be 
considered by TSA when deciding whether an investment in security is 
cost-beneficial.'' Id.
    In reviewing Agency decisions like these, courts do ``not to 
substitute [their] judgment[s] for that of the agenc[ies],'' State 
Farm, 463 U.S. at 43 (1983), and ``[t]his is especially true when the 
agency is called upon to weigh the costs and benefits of alternative 
policies,'' Center for Auto Safety v. Peck, 751 F.2d 1336, 1342 (D.C. 
Cir. 1985). See also

[[Page 7664]]

United Church of Christ v. FCC, 707 F.2d 1413, 1440 (D.C. Cir. 1983) 
(``[C]ost benefit analyses epitomize the types of decisions that are 
most appropriately entrusted to the expertise of an agency.''). 
Agencies are entitled to this deference even where, or perhaps 
particularly where, costs or benefits can be difficult to quantify. For 
example, in Consumer Elecs. Ass'n v. FCC, the D.C. Circuit upheld the 
FCC's mandate to require digital tuners, finding reasonable the 
Commission's identification of benefits, that is, ``principally 
speeding the congressionally-mandated conversion to DTV and reclaiming 
the analog spectrum,'' coupled with the FCC's ``adequate[ ] estimate[ 
of] the long-range costs of the digital tuner mandate within a range 
sufficient for the task at hand . . . and [its finding of] the 
estimated costs to consumers to be `within an acceptable range.''' 347 
F.3d 291, 303-04 (D.C. Cir. 2003) (``We will not here second-guess the 
Commission's weighing of costs and benefits.'').
    Similarly, the Food and Drug Administration, in weighing the costs 
and benefits of deeming electronic cigarettes to be ``tobacco 
products,'' described the benefits qualitatively, `` `potentially 
coming from' . . . premarket review [i.e., the statutory consequence of 
deeming], which will result in fewer harmful or additive products from 
reaching the market than would be the case in the absence of the rule; 
youth access restrictions and prohibitions on free samples, which can 
be expected to constrain youth access to tobacco products and curb 
rising uptake; health warning statements, which will help consumers 
understand and appreciate the risks of using tobacco products; 
prohibitions against false or misleading claims and unsubstantiated 
modified risk claims; and other changes [such as monitoring and 
ingredient listings].'' Nicopure Labs, LLC v. FDA, 266 F. Supp. 3d 360, 
403-404 (D.D.C. 2017), aff'd, 944 F.3d 267 (D.C. Cir. 2019). Plaintiffs 
challenging the rule claimed that because the FDA had not quantified 
the benefits of the rule, it ``cannot realistically determine that a 
rule's benefits justify its costs,'' because ``it does not have . . . a 
general grasp of the rule's benefits.'' Id. at 406. The court 
disagreed, finding the agency's statement of benefits to have 
``provided substantial detail on the benefits of the rule, and the 
reasons why quantification was not possible'' and in any case agreeing 
with the agency that there was no obligation to quantify benefits in 
any particular way. Id.
    We think the inquiry posed to the Agency by CAA section 
112(n)(1)(A) has similarities to these other decisions, in which 
agencies tasked with protecting and serving the American public elected 
to take actions that would impose significant costs in order to achieve 
important benefits that could not be precisely quantified or were in 
some cases uncertain--protection from terrorist attacks, speeding the 
advancement of digital technology, and subjecting a new product to 
marketing and safety regulation. In those cases, the framework for 
decision-making was to make a judgment after a weighing of advantages 
against disadvantages, considering qualitative factors as well as 
quantified metrics. Here, we employ a similar totality-of-the-
circumstances approach to the CAA section 112(n)(1)(A) inquiry as to 
whether it is appropriate to regulate HAP emissions from EGUs.
    Earlier sections of this preamble (sections III.A. and III.B.) 
discuss in detail the EPA's evaluation of the public health and 
environmental advantages of regulating HAP from U.S. EGUs and the 
reasons it is not possible to quantify or monetize most of those 
advantages, as well as the EPA's comprehensive assessment of the costs 
of doing so. We will not in this section repeat every detail and data 
point, but we incorporate all of that analysis here and highlight only 
a few of the considerations that weighed heavily in our application of 
the preferred totality-of-the-circumstances approach.
    Under our preferred approach, we first consider the public health 
advantages to reducing HAP from EGUs, and the other focuses for study 
identified by Congress in CAA section 112(n)(1). As noted, we give 
particular weight in our determination to the information related to 
the statutory factors identified for the EPA's consideration by the 
studies--namely, the hazards to public health reasonably anticipated to 
occur as a result of EGU HAP emissions (112(n)(1)(A)), the rate and 
mass of mercury emissions from EGUs (112(n)(1)(B)), the health and 
environmental effects of such emissions (112(n)(1)(B)), and the levels 
of mercury exposure below which adverse human health effects are not 
expected to occur as well as the mercury concentrations in the tissue 
of fish which may be consumed (including by sensitive populations) 
without adverse effects to public health (112(n)(1)(C)).
    The statutorily mandated studies are the foundation for the 
Agency's finding that HAP emissions from U.S. EGUs represent a clear 
hazard to public health and the environment, but as documented in 
section III.A., the EPA has continued to amass an extensive body of 
evidence related to the original study topics that only furthers the 
conclusions drawn in the earlier studies. As discussed in section 
III.A, the EPA completed a national-scale risk assessment focused on 
mercury emissions from U.S. EGUs as part of the 2011 Final Mercury TSD. 
That assessment specifically examined risk associated with mercury 
released from U.S. EGUs that deposits to watersheds within the 
continental U.S., bioaccumulates in fish as methylmercury, and is 
consumed when fish are eaten by female subsistence fishers of child-
bearing age and other freshwater self-caught fish consumers. We focused 
on the female subsistence fisher subpopulation because there is 
increased risk for in utero exposure and adverse outcomes in children 
born to female subsistence fishers with elevated exposure to 
methylmercury.\113\ Our analysis estimated that 29 percent of the 
watersheds studied would lead to exposures exceeding the methylmercury 
RfD for this population, based on in utero effects, due in part to the 
contribution of domestic EGU emissions of mercury. We also found that 
deposition of mercury emissions from U.S. EGUs alone led to potential 
exposures that exceed the RfD in up to 10 percent of modeled 
watersheds.
---------------------------------------------------------------------------

    \113\ The NAS Study had also highlighted this population as one 
of particular concern due to the regular and frequent consumption of 
relatively large quantities of fish. See 65 FR 79830 (December 20, 
2000).
---------------------------------------------------------------------------

    We have also examined impacts of prenatal methylmercury exposure on 
unborn children of recreational anglers consuming self-caught fish from 
inland freshwater lakes, streams, and rivers, and found significant IQ 
loss in the affected population of children. Our analysis, which we 
recognized did not cover consumption of recreationally caught seafood 
from estuaries, coastal waters, and the deep ocean, nevertheless 
indicated significant health harm from methylmercury exposure. 
Methylmercury exposure also leads to adverse neurodevelopmental effects 
such as performance on neurobehavioral tests, particularly on tests of 
attention, fine motor function, language, and visual spatial ability. 
See section III.A.2.a.
    The population that has been of greatest concern with respect to 
methylmercury exposure is women of childbearing age because the 
developing fetus is the most sensitive to the effects of methylmercury. 
See 85 FR 24995 (May 3, 2011). In the Mercury Study, the EPA estimated 
that, at the time of the study, 7 percent of women of childbearing age 
in the continental U.S.

[[Page 7665]]

(or about 4 million women) were exposed to methylmercury at levels that 
exceeded the RfD and that about 1 percent of women of childbearing age 
(or about 580,000 women) had methylmercury exposures three to four 
times the RfD. See 65 FR 79827 (December 20, 2000). We also performed a 
new bounding analysis for this proposal that focuses on the potential 
for IQ points lost in children exposed in utero through maternal fish 
consumption by the population of general U.S. fish consumers (section 
III.A.3.d).
    Another important human health impact documented by the EPA over 
the last 2 decades includes cardiovascular impacts of exposure to 
methylmercury--including altered blood-pressure and heart-rate 
variability in children as a result of infant exposure in the womb and 
higher risk of acute MI, coronary heart disease, and cardiovascular 
heart disease in adults, due to dietary exposure. Studies that have 
become available more recently led the EPA to perform new quantitative 
screening analyses (as described in section III.A.3) to estimate the 
incidence of MI (heart attack) mortality that may be linked to U.S. EGU 
mercury emissions. The new analyses performed include an extension of 
the original watershed-level subsistence fisher methylmercury risk 
assessment to evaluate the potential for elevated MI-mortality risk 
among subsistence fishers (section III.A.3.b; 2021 Risk TSD) and a 
separate risk assessment examining elevated MI mortality among all 
adults that explores potential risks associated with exposure of the 
general U.S. population to methylmercury from domestic EGUs through 
commercially-sourced fish consumption (section III.A.3.c; 2021 Risk 
TSD). The updated subsistence fisher analysis estimated that up to 10 
percent of modeled watersheds are associated with exposures linked to 
increased risk of MI mortality, but for some populations such as low-
income Black subsistence fishers active in the Southeast, that number 
is approximately 25 percent of the watersheds modeled. The bounding 
analysis results estimating MI-mortality attributable to U.S. EGU-
sourced mercury for the general U.S. population range from 5 to 91 
excess deaths annually. As noted, we give significant weight to these 
findings and analyses examining public health impacts associated with 
methylmercury, given the statutory focus in CAA section 112(n)(1)(B) 
and 112(n)(1)(C) on adverse effects to public health from EGU mercury 
emissions and the directive to develop an RfD (``threshold level of 
mercury exposure below which adverse human health effects are not 
expected to occur''), and in particular one that is designed to assess 
``mercury concentrations in the tissue of fish which may be consumed 
(including consumption by sensitive populations).'' See CAA section 
112(n)(1)(C).
    Because of CAA section 112(n)(1)(A)'s broader focus on hazards to 
public health from all HAP, not just mercury, we also give considerable 
weight to health effects associated with non-mercury HAP exposure (see 
section III.A.2.b for further detail), including chronic health 
disorders such as irritation of the lung, skin, and mucus membranes; 
decreased pulmonary function, pneumonia, or lung damage; detrimental 
effects on the central nervous system; damage to the kidneys; and 
alimentary effects such as nausea and vomiting). The 2011 Non-Hg HAP 
Assessment, performed as part of the EPA's 2012 reaffirmation of the 
appropriate and necessary determination, expanded on the original CAA 
section 112(n)(1)(A) Utility Study by examining further public health 
hazards reasonably anticipated to occur from EGU HAP emissions after 
imposition of other CAA requirements. This study included a refined 
chronic inhalation risk assessment that was designed to assess how many 
coal- and oil-fired EGUs had cancer and non-cancer risks associated 
with them, and indicated that absent regulation, a number of EGUs posed 
cancer risks to the American public (see section III.A.2.b).
    As discussed in section II.B, the statutory design of CAA section 
112 quickly secured dramatic reductions in the volume of HAP emissions 
from stationary sources. CAA section 112(n)(1)(B) also directs the EPA 
to study, in the context of the Mercury Study, the ``rate and mass'' of 
mercury emissions. We therefore think it is reasonable to consider, in 
assessing the advantages to regulating HAP emissions from EGUs, what 
the volume of emissions was from that sector prior to regulation--as an 
absolute number and relative to other sources--and what the expected 
volume of emissions would be with CAA section 112(d) standards in 
place. Prior to the EPA's promulgation of MATS in 2012, the EPA 
estimated that in 2016, without MATS, coal-fired U.S. EGUs above 25 MW 
would emit 29 tons of mercury per year. While these mercury emissions 
from U.S. EGUs represented a decrease from 1990 and 2005 levels (46 
tons and 53 tons, respectively), they still represented nearly half of 
all anthropogenic mercury emissions in 2011 (29 out of 64 tons total). 
Considered on a proportional basis, the relative contribution of U.S. 
EGUs to all domestic anthropogenic mercury emissions was also stark. 
The EGU sector emitted more than six times as much mercury as any other 
sector (the next highest being 4.6 tons). See Table 3 at 76 FR 25002 
(May 3, 2011). Prior to MATS, U.S. EGUs were estimated to emit the 
majority of HCl and HF nationally, and were the predominant source of 
emissions nationally for many metal HAP as well, including antimony, 
arsenic, chromium, cobalt, and selenium. Id. at 25005-06. In 2012, the 
EPA projected that MATS would result in an 88 percent reduction in 
hydrogen chloride emissions, a 75 percent reduction in mercury 
emissions, and a 19 percent reduction in PM emissions (a surrogate for 
non-mercury metal HAP) from coal-fired units greater than 25 MW in 2015 
alone. See 77 FR 9424 (February 16, 2012). In fact, actual emission 
reductions since MATS implementation have been even more substantial. 
In 2017, by which point all sources were required to have complied with 
MATS, the EPA estimated that acid gas HAP emissions from EGUs had been 
reduced by 96 percent, mercury emissions had been reduced by 86 
percent, and non-mercury metal HAP emissions had been reduced by 81 
percent compared to 2010 levels. See 84 FR 2689 (February 7, 2019). 
Retaining the substantial reductions in the volume of toxic pollution 
entering our air, water, and land, from this large fleet of domestic 
sources reduces the substantial risk associated with this pollution 
faced by all Americans.
    Even though reducing HAP from EGUs would benefit all Americans by 
reducing risk and hazards associated with toxic air pollution, it is 
worth noting that the impacts of EGU HAP pollution in the U.S. have not 
been borne equally nationwide. Certain communities and individuals have 
historically borne greater risk from exposure to HAP emissions from 
EGUs prior to MATS, as demonstrated by the EPA's risk analyses. The 
individuals and communities that have been most impacted have 
shouldered a disproportionate burden for the energy produced by the 
power sector, which in turn benefits everyone--i.e., these communities 
are subject to a greater share of the externalities of HAP pollution 
that is generated by EGUs producing power for everyone. A clear example 
of these disproportionately impacted populations are subsistence 
fishers who live near U.S. EGUs

[[Page 7666]]

experiencing increased risk due to U.S. EGU mercury deposition at the 
watersheds where they are active (2011 Final Mercury TSD). CAA section 
112(n)(1)(C) directed the EPA to examine risks to public health 
experienced by sensitive populations as a result of the consumption of 
mercury concentrations in fish tissue, which we think includes fetuses 
and communities that are reliant on local fish for their survival, and 
CAA section 112 more generally is drafted in order to be protective of 
small cohorts of highly exposed and susceptible populations. We 
therefore weigh heavily the importance of reducing risks to 
particularly impacted populations, including those who consume large 
amounts of self-caught fish reflecting cultural practice and/or 
economic necessity, including tribal populations, specific ethnic 
communities and low-income populations including Black persons living 
in the southeastern U.S.
    Consistent with CAA section 112(n)(1)(B) and the general goal of 
CAA section 112 to reduce risks posed by HAP to the environment, we 
also consider the ecological effects of methylmercury and acid gas HAP 
(see section III.A.2.c). Scientific studies have consistently found 
evidence of adverse impacts of methylmercury on fish-eating birds and 
mammals, and insect-eating birds. These harmful effects can include 
slower growth and development, reduced reproduction, and premature 
mortality. Adverse environmental impacts of emissions of acid gas HAP, 
in particular HCl, include acidification of terrestrial and aquatic 
ecosystems. In the EPA's recent Integrated Science Assessment for 
Oxides of Nitrogen, Oxides of Sulfur and Particulate Matter--Ecological 
Criteria (2020), we concluded that the body of evidence is sufficient 
to infer a causal relationship between acidifying deposition and 
adverse changes in freshwater biota like plankton, invertebrates, fish, 
and other organisms. Adverse effects on those animals can include 
physiological impairment, loss of species, changes in community 
composition, and biodiversity. Because EGUs contribute to mercury 
deposition in the U.S., we conclude that EGUs are contributing to the 
identified adverse environmental effects, and consider the beneficial 
impacts of mitigating those effects by regulating EGUs.
    We turn next in our application of the preferred approach to the 
consideration of the disadvantages of regulation, which in this case we 
measure primarily in terms of the costs of that regulation. As 
discussed in section III.B, for purposes of this preferred totality-of-
the-circumstances approach, we start with the sector-level estimate 
developed in the 2011 RIA. Given the complex, interconnected nature of 
the power sector, we think it is appropriate to consider this estimate, 
which represents the incremental costs to the entire power sector to 
generate electricity, not just the compliance costs projected to be 
borne by regulated EGUs. We explain in section III.B that while a 
precise ex post estimate of this sector-level figure is not possible, 
we update those aspects of the cost estimate where we can credibly do 
so (see section III.B.2), and our consideration of the cost of 
regulation therefore takes into account the fact that new analyses 
performed as part of this proposal demonstrate that the 2011 RIA cost 
estimate was almost certainly significantly overestimated. We propose 
to conclude that regulation is appropriate and necessary under either 
cost estimate.
    As with the benefits side of the ledger, where we look 
comprehensively at the effects of reducing the volume of HAP, we also 
comprehensively assess costs in an attempt to evaluate the economic 
impacts of the regulation as a whole. We situate the cost of the 
regulation in the context of the economics of power generation, as we 
did in 2016, because we think examining the costs of the rule relative 
to three sector-wide metrics provides a useful way to evaluate the 
disadvantages of expending these compliance costs to this sector beyond 
a single monetary value. For each of these metrics, we use our 2011 
estimate of compliance costs, which, as is discussed in section III.B.2 
and the Cost TSD, was likely to have been significantly overestimated 
by a figure in the billions of dollars. We first evaluate the 2011 
projected annual compliance costs of MATS as a percent of annual power 
sector sales, also known as a ``sales test.'' A sales test is a 
frequently used indicator of potential impacts from compliance costs on 
regulated industries, and the EPA's analysis showed that projected 2015 
compliance costs, based on the 2011 estimate, represented between 2.7-
3.5 percent of power sector revenues from historical annual retail 
electricity sales. See section III.B.3; Cost TSD; 80 FR 75033 (December 
1, 2015). We also examine the annual capital expenditures that were 
expected for MATS compliance as compared to the power sector's 
historical annual capital expenditures. We conclude that projected 
incremental annual capital expenditures of MATS would be a small 
percentage of 2011 power sector-level capital expenditures, and well 
within the range of historical year-to-year variability on industry 
capital expenditures. Id. Finally, we consider the annual operating or 
production expenses in addition to capital expenditures because we were 
encouraged during the 2016 rulemaking to use this broader metric of 
power industry costs to provide perspective on the cost of MATS 
relative to total capital and operational expenditures by the industry 
historically. Consistent with our other findings, we conclude that, 
even when using the likely overestimated cost of MATS based on the 2011 
RIA, the total capital and operational expenditures required by MATS 
are in the range of about 5 percent of total historical capital and 
operational expenditures by the power sector during the period of 2000-
2011. See section III.B.3; Cost TSD; 81 FR 24425 (April 25, 2016). In 
this proposal, we re-analyze all of these metrics using updated data to 
reflect more recent information (as of 2019), and took into 
consideration the fact that the 2011 RIA cost estimate was almost 
certainly significantly overestimated. All of this new analysis further 
supports our findings as to the cost of MATS relative to other power 
sector economics based on the record available to the Agency at the 
time we were making the threshold determination (i.e., the 2012 
record).
    Consistent with the Michigan Court's instruction to consider all 
advantages and disadvantages of regulation, we also assess, as we did 
in 2016, disadvantages to regulation that would flow to the greater 
American public. Specifically, we examine whether regulation of EGUs 
would adversely impact the provision of reliable, affordable 
electricity to the American public, because had regulation been 
anticipated to have such an effect, it would have weighed heavily on 
our decision as to whether it was appropriate to require such 
regulation. The CAA tasks the EPA with the purpose of protecting and 
enhancing air quality in the U.S., but directs that in doing so we 
promote public health and welfare and the productive capacity of the 
U.S. population. CAA section 101(b)(1). As noted, we also think 
examining these potential impacts is consistent with the ``broad and 
all-encompassing'' nature of the term ``appropriate,'' as characterized 
by the Supreme Court. Michigan, 576 U.S. at 752. We were particularly 
interested in examining the expected impact of MATS implementation on 
the retail price of electricity, because in electricity markets, 
utility expenditures can be fully or partially passed to consumers. It 
was therefore reasonable to assume

[[Page 7667]]

that the cost of MATS could result in increased retail electricity 
prices for consumers, although we emphasize, as we did in 2016, that 
the electricity price impacts examined under this metric do not reflect 
additional compliance costs on top of the estimate produced in the 2011 
RIA but rather reflect the passing on of a share of those costs to 
consumers (and ultimately reducing the costs EGU owners would otherwise 
bear). However, even though the impacts on electricity prices are 
reflected in the total cost estimate to the sector as a whole, we 
think, for the reasons stated above, that electricity price impacts are 
worthy of special attention because of the potential effect on the 
American public.
    We therefore estimate the percent increase in retail electricity 
prices projected to result from MATS compared to historical levels of 
variation in electricity prices. See section III.B.3; 80 FR 75035 
(December 1, 2015). We estimate that retail electricity prices for 2015 
would increase by about 0.3 cents per kilowatt-hour, or 3.1 percent 
with MATS in place. Between 2000 and 2011, the largest annual year-to-
year decrease in retail electricity price was -0.2 cents per kilowatt-
hour and the largest year-to-year increase during that period was +0.5 
cents per kilowatt-hour. The projected 0.3 cents increase due to MATS 
was therefore well within normal historical fluctuations. Id. As with 
the other metrics examined, as the increase in retail electricity 
prices due to MATS was within the normal range of historical 
variability, a substantially lower estimate for impacts on electricity 
prices would only further support the EPA's determination. We also note 
in section III.B.3 that the year-to-year retail electricity price 
changes in the new information we examined (i.e., years 2011-2019) were 
within the same ranges observed during the 2000-2011 period, and that 
in fact, during that period when MATS was implemented, retail 
electricity prices have generally decreased (9.3 cents per kilowatt-
hour in 2011 to 8.7 cents per kilowatt-hour in 2019). Consistent with 
these observed trends in retail electricity prices, as discussed in 
section III.B.2 and further below, our ex post analysis of MATS 
indicates that the projected compliance costs in the 2011 RIA--and, as 
a corollary, the projected increases in retail electricity prices--were 
likely significantly overestimated. Certainly, we have observed nothing 
in the data that suggests the regulation of HAP from EGUs resulted in 
increases in retail electricity prices for the American public that 
would warrant substantial concern in our weighing of this factor.
    Similar to our reasoning for examining impacts on electricity 
prices for American consumers, in assessing the potential disadvantages 
to regulation, we elected to also look at whether the power sector 
would be able to continue to provide reliable electricity to all 
Americans after the imposition of MATS. We think this examination 
naturally fits into our assessment of whether regulation is 
``appropriate,'' because had MATS interfered with the provision of 
reliable electricity to the American public, that would be a 
significant disadvantage to regulation to weigh in our analysis. In 
examining this factor, we looked at both resource adequacy and 
reliability--that is, the provision of generating resources to meet 
projected load and the maintenance of adequate reserve requirements for 
each region (resource adequacy) and the sector's ability to deliver the 
resources to the projected electricity loads so that the overall power 
grid remains stable (reliability). See section III.B.3; U.S. EPA 2011, 
Resource Adequacy and Reliability TSD; 80 FR 75036 (December 1, 2015). 
Our analysis indicated that the power sector would have adequate and 
reliable generating capacity, while maintaining reserve margins over a 
3-year MATS compliance period. Id. We did not in this proposal update 
the Resource Adequacy and Reliability Study conducted in 2011, but we 
note that the EPA, as a primary regulator of EGUs, is keenly aware of 
adequacy and reliability concerns in the power sector and in particular 
the relationship of those concerns to environmental regulation. We have 
not seen evidence in the last decade to suggest that the implementation 
of MATS caused power sector adequacy and reliability problems, and only 
a handful of sources obtained administrative orders under the 
enforcement policy issued with MATS to provide relief to reliability 
critical units that could not comply with the rule by 2016.
    In addition to the cost analyses described above, the EPA revisited 
its prior records examining the costs of mercury controls consistent 
with the requirement in CAA section 112(n)(1)(B), the cost of controls 
for other HAP emissions from EGUs, and the cost of implementing the 
utility-specific ARP, which Congress wrote into the 1990 CAA Amendments 
and implementation of which Congress anticipated could result in 
reductions in HAP emissions. 80 FR 75036-37 (December 1, 2015). The 
ARP, like MATS, was expected to have a significant financial impact on 
the power sector, with projections of its cost between $6 billion to $9 
billion per year (in 2000 dollars), based on the expectation that many 
utilities would elect to install FGD scrubbers in order to comply with 
the ARP. Id. at 75037. The actual costs of compliance were much less 
(up to 70 percent lower than initial estimates), in large part because 
of the utilities' choice to comply with the ARP by switching to low 
sulfur coal instead of installing scrubbers.\114\ This choice also 
resulted in far fewer reductions in HAP emissions than would have 
occurred if more EGUs had installed SO2 scrubbers. We 
believe the considerable reduction in the implementation cost of the 
ARP is important because of the economic benefit that accrued from 
delaying the large capital costs of controls by almost 25 years. With 
respect to the costs of technology for control of mercury and non-
mercury HAP, the record evidence shows that in 2012 controls were 
available and routinely used and that control costs had declined 
considerably over time. Id. at 75037-38. We also note that, as 
explained at length in section III.B.2, the actual compliance costs of 
MATS, with respect to capital and operating expenditures associated 
with installing and operating controls, were significantly lower than 
what we projected at the time of the rule. In addition, the newer 
information examined as part of this proposal demonstrates that actual 
control costs were much lower than we projected, which weighs further 
in favor of a conclusion that it is appropriate to impose those costs 
in order to garner the advantages of regulation.
---------------------------------------------------------------------------

    \114\ U.S. EPA Clean Air Markets Div., 2011, National Acid 
Precipitation Assessment Program Report to Congress 2011: An 
Integrated Assessment, National Science and Technology Council, 
Washington, DC.
---------------------------------------------------------------------------

    Our review of the record and application of the preferred totality-
of-the-circumstances approach has demonstrated that we have, over the 
last 2 decades, amassed a voluminous and scientifically rigorous body 
of evidence documenting the significant hazards to public health 
associated with HAP emissions from EGUs, particularly to certain 
vulnerable populations that bear greater risk from these emissions than 
the general public. We have looked at the volume of emissions coming 
from these sources and what the impact of regulation would be on that 
volume. We examined the cost of regulation to industry (even using an 
estimate of cost that we know to be higher than what was expended), and 
the potential

[[Page 7668]]

adverse impacts that could be felt by the American public via increased 
electricity prices and access to reliable electricity. And, consistent 
with the statute, we have also considered adverse impacts of EGU 
pollution on the environment as well as availability of controls and 
the costs of those controls.
    Even based solely on the record available to us at the time we 
issued the regulation and made the threshold determination in 2012, we 
find that the benefits of regulation are manifold, and they address 
serious risks to vulnerable populations that remained after the 
implementation of the ARP and other controls imposed upon the power 
sector that were required under the CAA. We have placed considerable 
weight on these benefits, given the statutory directive to do so in CAA 
section 112(n)(1)(A) and Congress' clear purpose in amending CAA 
section 112 in 1990. In contrast, the costs, while large in absolute 
terms, were shown in our analyses to be within the range of other 
expenditures and commensurate with revenues generated by the sector, 
and our analysis demonstrated that these expenditures would not and did 
not have any significant impacts on electricity prices or reliability. 
After considering and weighing all of these facts and circumstances, in 
an exercise of his discretion under the Act, the Administrator proposes 
to conclude that the substantial benefits of reducing HAP from EGUs, 
which accrue in particular to the most vulnerable members of society, 
are worth the costs. Consequently, we propose to find after weighing 
the totality of the circumstances, that regulation of HAP from EGUs is 
appropriate after considering cost.
    The newer information examined as part of this proposal regarding 
both benefits and costs is directionally consistent with all of the 
findings the EPA has made in the 2016 administrative record. The robust 
and long-standing scientific foundation regarding the adverse health 
and environmental risks from mercury and other HAP is fundamentally 
unchanged since the comprehensive studies that Congress mandated in the 
CAA were completed decades ago. But in this proposal, we completed 
screening level risk assessments, informed by newer meta-analyses of 
the dose-response relationship between methylmercury and cardiovascular 
disease, which indicate that a segment of the American public is at 
increased risk of prematurely dying by heart attack due to 
methylmercury exposure with as many as 91 deaths per year (and possibly 
more) being attributable to mercury emissions from EGUs.\115\ Further, 
analyses show that some populations (e.g., low-income Blacks in the 
Southeast and certain tribal communities engaging in subsistence 
fishing activity) likely bear a disproportionately higher risk from EGU 
HAP emissions than the general populace.
---------------------------------------------------------------------------

    \115\ This estimate of premature mortality is for the EGU sector 
after imposition of the ARP and other CAA requirements, but before 
MATS implementation.
---------------------------------------------------------------------------

    The new cost information analyzed by the EPA, discussed in section 
III.B, indicates that the cost projection used in the 2016 Supplemental 
Finding (i.e., the 2011 RIA cost estimate) likely significantly 
overestimated the actual costs of compliance of MATS. Specifically, the 
EGU sector installed far fewer controls to comply with the HAP 
emissions standards than projected; certain modeling assumptions, if 
updated with newer information, would have resulted in a lower cost 
estimate; unexpected advancements in technology occurred; and the 
country experienced a dramatic increase in the availability of 
comparatively inexpensive natural gas. All of these factors likely 
resulted in a lower actual cost of compliance than the EPA's projected 
estimates in 2011. We therefore find that when we consider information 
available to the Agency after implementation of the rule, our 
conclusion that it was appropriate to regulate this sector for HAP is 
further strengthened. The costs projected in the 2011 RIA were almost 
certainly overestimated by an amount in the billions of dollars.
    We note as well that during prior rulemaking processes related to 
the appropriate and necessary determination, stakeholders suggested 
that undermining the threshold finding in order to pave the way to 
rescinding MATS would have grave economic and health consequences. 
Utilities reported that they rely upon the mandated status of MATS in 
order to recoup expenditures already made to comply with the rule 
before Public Utility Commission proceedings.\116\ States asserted that 
they rely upon the Federal protections achieved by the rule in state 
implementation planning and other regulatory efforts.\117\ And other 
industries, such as pollution control companies, have made business 
decisions based on the existence of MATS.\118\ We think these reliance 
interests, nearly all of which are aligned, also weigh in favor of 
retaining the appropriate and necessary determination, particularly 
given the fact that a significant portion of compliance costs have 
already been spent.
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    \116\ See, e.g., Comment Letter from Edison Electric Institute, 
Docket ID Item No. EPA-HQ-OAR-2018-0794-2267; Comment Letter from 
Edison Electric Institute, NRECA, American Public Power Association, 
The Clean Energy Group, Class of '85 Regulatory Response Group, 
Large Public Power Council, Global Energy Institute, International 
Brotherhood of Electrical Workers, International Brotherhood of 
Boilermakers, Iron Ship Builders, Blacksmiths, Forgers & Helpers, 
and the Laborers' International Union of North America, Docket ID 
Item No. EPA-HQ-OAR-2018-0794-0577.
    \117\ See, e.g., Comment Letter from Attorneys General of 
Massachusetts, California, Connecticut, Delaware, Illinois, Iowa, 
Maine, Maryland, Michigan, Minnesota, Nevada, New Jersey, New 
Mexico, New York, North Carolina, Oregon, Rhode Island, Vermont, 
Virginia, Washington, and the District of Columbia, the Maryland 
Department of the Environment, the City Solicitor of Baltimore, the 
Corporation Counsels of Chicago and New York City, the County 
Attorney of the County of Erie, NY, and the County Counsel for the 
County of Santa Clara, CA, Docket ID Item No. EPA-HQ-OAR-2018-0794-
1175.
    \118\ See, e.g., Comment Letter from ADA Carbon Solutions, LLC, 
Docket ID Item No. EPA-HQ-OAR-2018-0794-0794; Comment Letter from 
Advanced Emissions Solutions, Inc., Docket ID Item No. EPA-HQ-OAR-
2018-0794-1181; Comment Letter from Exelon Corporation, Docket ID 
Item No. EPA-HQ-OAR-2018-0794-1158.
---------------------------------------------------------------------------

    Finally, while we focus on the HAP benefits, we note that the 
Michigan court directed that ``any disadvantage could be termed a 
cost.'' Michigan, at 752. The corollary is that any advantage could be 
termed a benefit. And so, while it is not necessary to our conclusion 
that regulation is appropriate, we also consider, under our totality-
of-the-circumstances approach, whether there are additional advantages 
or disadvantages to the specific controls imposed under MATS. 
Specifically, we note that because the controls required to reduce HAP 
from U.S. EGUs resulted in substantial reductions in co-emitted 
pollutants, including direct PM2.5 as well as SO2 
and NOX, which are both precursors to ozone and fine 
particle formation, the Administrator's proposed conclusion is further 
supported by the ramifications of the regulatory requirements in MATS 
for these pollutants. We propose that the benefits associated with such 
reductions may be appropriate to consider where the framework for 
making the CAA section 112(n)(1)(A) determination is a totality-of-the-
circumstances approach, and we take comment on that approach. 
Therefore, while we conclude that the benefits associated with 
regulating HAP alone outweigh the costs without consideration of non-
HAP benefits, we also propose that, to the extent we consider benefits 
attributable to reductions in co-emitted pollutants as a concomitant 
advantage, these benefits act to confirm that regulation is

[[Page 7669]]

appropriate under a totality-of-the-circumstances approach. 
Specifically, we note that reductions in co-emissions of direct 
PM2.5, SO2 and NOX will have 
substantial health benefits in the form of decreased risk of premature 
mortality among adults, and reduced incidence of lung cancer, new onset 
asthma, exacerbated asthma, and other respiratory and cardiovascular 
diseases. In the 2011 RIA, the EPA estimated the number and value of 
avoided PM2.5-related impacts, including 4,200 to 11,000 
premature deaths, 4,700 nonfatal heart attacks, 2,600 hospitalizations 
for respiratory and cardiovascular diseases, 540,000 lost work days, 
and 3.2 million days when adults restrict normal activities because of 
respiratory symptoms exacerbated by PM2.5. We also estimated 
substantial additional health improvements for children from reductions 
in upper and lower respiratory illnesses, acute bronchitis, and asthma 
attacks. In addition, we estimated the benefit of reductions in 
CO2 emissions under MATS. Although the EPA only partially 
monetized the benefits associated with these reductions in co-emitted 
pollutants in the 2011 RIA, the Agency estimated that--due in 
particular to the strong causal relationship between PM2.5 
and premature mortality--these reductions could result in as much as 
$90 billion (in 2016 dollars) in additional public health benefits 
annually. Therefore, if these non-HAP benefits are considered in the 
totality-of-the-circumstances approach, we take note of the fact that 
regulating EGUs for HAP emissions results in substantial other health 
benefits accruing to the American public by virtue of regulating HAP 
from EGUs.

E. The Administrator's Proposed Benefit-Cost Analysis Approach and 
Proposed Conclusion

    In addition to the preferred approach, we separately put forward an 
alternative approach, as we did in 2016, to support a determination 
that it is appropriate and necessary to regulate HAP from EGUs when 
looking at the results of a formal BCA. The formal BCA we conducted for 
purposes of meeting Executive Order 12866 using established BCA 
practices also demonstrates that the benefits estimated for MATS far 
exceed the estimated costs, as reported in the 2011 RIA.\119\ In its 
net benefits projection, the 2011 RIA monetized only one post control 
benefit from regulating HAP emissions from EGUs because the Agency did 
not and does not have the information necessary to monetize the many 
other benefits associated with reducing HAP emissions from EGUs. See 
section III.A.4. However, the 2011 RIA properly accounted for all 
benefits by discussing qualitatively those that could not be quantified 
and/or monetized. While some of the impacts on particularly impacted 
populations--such as the children of recreational anglers experiencing 
IQ loss--were reflected in the net benefits calculation, that 
accounting does not really grapple with the equitable question of 
whether a subset of Americans should continue to bear disproportionate 
health risks in order to avoid the increased cost of controlling HAP 
from EGUs. We continue to prefer a totality-of-the-circumstances 
approach to making the determination under CAA section 112(n)(1)(A), 
but we think that if a BCA is to be used, it should, consistent with 
economic theory and principles, account for all costs and all benefits.
---------------------------------------------------------------------------

    \119\ 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. Assuming that all 
consequences can be monetized, actions with positive net benefits 
(i.e., benefits exceed costs) improve economic efficiency.
---------------------------------------------------------------------------

    BCA has been part of executive branch rulemaking for decades. Over 
the last 50 years, Presidents have issued Executive Orders directing 
agencies to conduct these analyses as part of the rulemaking 
development process. Executive Order 12866, currently in effect, 
requires a quantification of benefits and costs to the extent feasible 
for any regulatory action that is likely to result in a rule that may 
have an annual effect on the economy of $100 million or more or 
adversely affect in a material way certain facets of society. Executive 
Order 12866, at section 3(f)(1).
    The EPA performed a formal BCA to comport with Executive Order 
12866 as part of the 2012 MATS rulemaking process (referred to herein 
as the 2011 RIA). In the 2016 Supplemental Finding, the EPA relied on 
the BCA it had performed for Executive Order 12866 purposes as an 
alternative basis upon which to make the appropriate and necessary 
determination. That BCA, which reflected in its net benefits 
calculation only certain categories of benefits that could be 
confidently monetized, estimated that the final MATS would yield annual 
net 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. See 80 FR 75040 (December 1, 2015). 
These estimates included the portion of the HAP benefits described in 
section III.A that could be monetized at the time, along with 
additional health benefits associated with the controls necessary to 
control the HAP emissions from U.S. EGUs. Specifically, as noted, the 
net benefits estimates included only one of the many HAP benefits 
associated with reduction of HAP. Nonetheless, the monetized benefits 
of MATS outweighed the estimated $9.6 billion in annual monetized costs 
by between 3-to-1 or 9-to-1 depending on the benefit estimate and 
discount rate used. The implementation of control technologies to 
reduce HAP emissions from EGU sources also led to reductions in 
emissions of SO2, direct PM2.5, as well as other 
precursors to PM2.5 and ozone. In the 2011 RIA, the EPA did 
not quantify the benefits associated with ozone reductions resulting 
from the emissions controls under MATS, but we did include estimates of 
the projected benefits associated with reductions in PM2.5. 
These benefits were quite substantial and had a large economic value. 
Newer scientific studies strengthen our understanding of the link 
between PM2.5 exposure to a variety of health problems, 
including: premature death, lung cancer, non-fatal heart attacks, new 
onset asthma, irregular heartbeat, aggravated asthma, decreased lung 
function, and respiratory symptoms, such as irritation of the airways, 
coughing or difficulty breathing. Furthermore, since the RIA was 
completed in 2011, the EPA has updated its conclusions about how 
PM2.5 emissions can adversely affect the environment through 
acidic deposition, materials damage, visibility impairment, and 
exacerbating climate change (EPA, 2019).\120\ In its most recent review 
of the effects of ozone pollution, the EPA concluded that ozone is 
associated with a separate but similarly significant set of adverse 
outcomes including respiratory-related premature death, increased 
frequency of asthma attacks, aggravated lung disease, and damage to 
vegetation (EPA, 2020).\121\
---------------------------------------------------------------------------

    \120\ U.S. EPA. Integrated Science Assessment (ISA) for 
Particulate Matter (Final Report, Dec 2019). U.S. Environmental 
Protection Agency, Washington, DC, EPA/600/R-19/188, 2019.
    \121\ U.S. EPA. Integrated Science Assessment (ISA) for Ozone 
and Related Photochemical Oxidants (Final Report, Apr 2020). U.S. 
Environmental Protection Agency, Washington, DC, EPA/600/R-20/012, 
2020.
---------------------------------------------------------------------------

    BCAs are a useful tool to ``estimate the total costs and benefits 
to society of an activity or program,'' and ``can be thought of as an 
accounting framework of the overall social welfare of a program.'' EPA 
Economic Guidelines, Appendix A, A-6 (emphasis in

[[Page 7670]]

original).\122\ In a BCA, ``[t]he favorable effects of a regulation are 
the benefits, and the foregone opportunities or losses in utility are 
the costs. Subtracting the total costs from the total monetized 
benefits provides an estimate of the regulation's net benefits to 
society.'' Id. Importantly, however, ``[t]he key to performing BCA lies 
in the ability to measure both benefits and costs in monetary terms so 
that they are comparable.'' Id.; see also OMB Circular A-4 (``A 
distinctive feature of BCA is that both benefits and costs are 
expressed as monetary units, which allows you to evaluate different 
regulatory options with a variety of attributes using a common 
measure.'').\123\
---------------------------------------------------------------------------

    \122\ 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, accessed July 23, 2021. Docket ID Item No. EPA-
HQ-OAR-2009-0234-20503.
    \123\ 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, accessed July 23, 2021.
---------------------------------------------------------------------------

    In the 2020 Final Action, the EPA rescinded the 2016 alternative 
approach on the basis that it was ``fundamentally flawed'' because it 
applied ``a formal cost-benefit analysis'' to the CAA section 
112(n)(1)(A) determination. The Agency's objection at the time to the 
use of ``a formal cost-benefit analysis'' in the context of this 
determination was that 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.'' See 85 FR 31299 (May 22, 2020). 
The Agency concluded that it was not appropriate to use a formal BCA in 
this situation because ``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.'' Id. The EPA reiterated in the 2020 Final Action 
that ``HAP benefits, as compared to costs, must be the primary question 
in making the `appropriate and necessary' determination'' and ``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.'' Id. at 31303. ``To be valid, the EPA's 
analytical approach to [CAA section 112(n)(1)(A)] must recognize 
Congress' particular concern about risks associated with HAP and the 
benefits that would accrue from reducing those risks.'' Id. at 31301.
    We agree that the analytical framework for the appropriate and 
necessary determination should first and foremost be one that is 
focused on ``Congress' particular concern about risks associated with 
HAP and the benefits that would accrue from reducing those risks.'' Id. 
It is for this reason, as discussed in section III.C of this preamble, 
that we propose to revoke the analytical framework advanced for the 
appropriate and necessary determination by the 2020 Final Action, as 
being insufficiently attentive to the public health advantages of 
regulation. However, if the decisional framework is going to be one 
that considers advantages to regulation primarily in terms of potential 
monetized outcomes (see 85 FR 31296-97; May 22, 2020), a formal BCA 
that estimates net outcomes (i.e., by comparing total losses and gains) 
and conforms to established economic best practices and accounts for 
all of the effects of the rule that can be quantified should be 
used.\124\
---------------------------------------------------------------------------

    \124\ In addition, CAA section 112(n)(1)(A) directs the EPA to 
evaluate the hazards to public health from EGU HAP emissions that a 
reasonably anticipated ``after imposition of the other requirements 
of the [CAA].'' The direction to consider the impacts of non-CAA 
section 112 requirements on HAP emissions from EGUs demonstrates 
that Congress understood that criteria pollutant controls would 
achieve HAP reductions. Given this understanding, it is reasonable 
for the EPA to consider the consequent criteria pollutant reductions 
attributable to CAA section 112 standards if a BCA is used to 
evaluate cost in the context of the appropriate finding. 
Furthermore, CAA section 112 legislative history not specifically 
directed at EGUs also supports the consideration of criteria 
pollutant benefits attributable to the regulation of HAP emissions. 
Specifically, the Senate report for the 1990 CAA amendments states: 
``When establishing technology-based [MACT] standards under this 
subsection, the Administrator may consider the benefits which result 
from control of air pollutants that are not listed but the emissions 
of which are, nevertheless, reduced by control technologies or 
practices necessary to meet the prescribed limitation.'' A 
Legislative History of the Clean Air Act Amendments of 1990 (CAA 
Legislative History), Vol. 5, pp. 8512 (CAA Amendments of 1989; p. 
172; Report of the Committee on Environment and Public Works S. 
1630).
---------------------------------------------------------------------------

    Consistent with scientific principles underlying BCA, both OMB 
Circular A-4 and the EPA's Guidelines for Preparation of Economic 
Analyses direct the Agency to include all benefits in a BCA. Per 
Circular A-4, OMB instructs ``Your analysis should look beyond the 
direct benefits and direct costs of your rulemaking and consider any 
important ancillary benefits and countervailing risks. An ancillary 
benefit is a favorable impact of the rule that is typically unrelated 
or secondary to the statutory purpose of the rulemaking.'' Circular A-4 
at 26. Similarly, the Guidelines state, ``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.'' 
Guidelines at 11-2. As discussed in prior MATS rulemakings (see, e.g., 
80 FR 75041; December 1, 2015), installing control technologies and 
implementing the compliance strategies necessary to reduce the HAP 
emissions directly regulated by the MATS rule also results in 
reductions in the emissions of other pollutants such as directly 
emitted PM2.5 and SO2 (a PM2.5 
precursor). A particularly cost-effective control of emissions of 
particulate-bound mercury and non-mercury metal HAP is through the use 
of PM control devices that indiscriminately collect PM along with the 
metal HAP, which are predominately present as particles. Similarly, 
emissions of the acid gas HAP are reduced by acid gas controls that are 
also effective at reducing emissions of SO2 (also an acid 
gas, but not a HAP). Id. While these PM2.5 and 
SO2 emission reductions are not the objective of the MATS 
rule, the reductions are, in fact, a direct consequence of regulating 
the HAP emissions from EGUs. Specifically, controls on direct 
PM2.5 emissions are required to reduce non-mercury metal 
HAP, while SO2 emissions reductions come from controls 
needed to reduce acid gas emissions from power plants.
    However, we recognize that there are significant reasons to 
question whether a formal BCA is the best way to interpret the Agency's 
mandate in CAA section 112(n)(1)(A), and we take comment on whether the 
Agency should continue to rely on this alternative basis for making its 
determination. We have consistently taken the position that a formal 
BCA is not required under CAA section 112(n)(1)(A). See 80 FR 75039 
(December 1, 2015). As set forth above, in Michigan, the Supreme Court 
declined to hold that CAA section 112(n)(1)(A) required such an 
assessment, stating, ``We need not and do not hold that the law 
unambiguously required the Agency, when making this preliminary 
estimate, to conduct a formal cost-benefit analysis in which each 
advantage and disadvantage is assigned a monetary value.'' Michigan, 
576 U.S. at 759. However, the Court did note that ``[c]onsideration of 
cost reflects the understanding that reasonable regulation ordinarily 
requires paying attention to the advantages and disadvantages of agency 
decisions.'' Id. at 2707. Moreover, in finding the EPA's decision not 
to

[[Page 7671]]

consider cost irrational, the Court suggested that unintended 
disadvantages of a regulation could be considered costs as well, 
implying that such disadvantages should be accounted for. Id. at 2707 
(``The Government concedes that if the Agency were to find that 
emissions from power plants do damage to human health, but that the 
technologies needed to eliminate these emissions do even more damage to 
human health, it would still deem regulation appropriate. No regulation 
is `appropriate' if it does significantly more harm than good.'').
    In the 2015 Proposal, we identified several policy reasons for 
preferring to apply a totality-of-the-circumstances approach to 
weighing costs and benefits over using a formal BCA as our decisional 
framework under CAA section 112(n)(1)(A). See 80 FR 75025 (December 1, 
2015). We recognized that benefits like those associated with reduction 
of HAP can be difficult to monetize, and this incomplete quantitative 
characterization of the positive consequences can underestimate the 
monetary value of net benefits. See 80 FR 75039 (December 1, 2015). 
This is well-established in the economic literature. As noted in OMB 
Circular A-4, ``[w]here all benefits and costs can be expressed as 
monetary units, BCA provides decision makers with a clear indication of 
the most efficient alternative.'' Circular A-4 at 2. However, ``[w]hen 
important benefits and costs cannot be expressed in monetary units, BCA 
is less useful, and it can even be misleading, because the calculation 
of net benefits in such cases does not provide a full evaluation of all 
relevant benefits and costs.'' Circular A-4 at 10. The EPA's Guidelines 
for Preparation of Economic Analyses also recognizes the limitations of 
BCA, noting that ``[m]ost important, [BCA] requires assigning monetized 
values to non-market benefits and costs. In practice it can be very 
difficult or even impossible to quantify gains and losses in monetary 
terms (e.g., the loss of a species, intangible effects).'' Guidelines, 
Appendix A at A-7.
    We also pointed out in the 2015 Proposal that national level BCAs 
may not account for important distributional effects, such as impacts 
to the most exposed and most sensitive individuals in a population. See 
80 FR 75040 (December 1, 2015). These distributional effects and equity 
considerations are often considered outside of (or supplementary to) 
analyses like BCAs that evaluate whether actions improve economic 
efficiency (i.e., increase net benefits). For example, children near a 
facility emitting substantial amounts of lead are at significantly 
greater risk of neurocognitive effects (including lost IQ) and other 
adverse health effects. One perspective on the costs and benefits of 
controlling lead pollution would be to aggregate those costs and 
benefits across society, as in a BCA net benefits calculation. However, 
neither costs nor benefits are spread uniformly across society and 
failing to take account of that can overlook significant health risks 
for sensitive subpopulations, such as children exposed to lead 
pollution. Similarly, in the context of this determination, where we 
have found disproportionate risk for certain highly exposed or 
sensitive populations, such considerations are also particularly 
relevant. See section II.B; section III.A.
    We note too that OMB Circular A-4 highlights the special challenges 
associated with the valuation of health outcomes for children and 
infants, because it is ``rarely feasible to measure a child's 
willingness to pay for health improvement'' and market valuations such 
as increased ``wage premiums demanded by workers to accept hazardous 
jobs are not readily transferred to rules that accomplish health gains 
for children.'' Circular A-4 at 31. We take comment on whether a BCA, 
on its own, is an appropriate tool to make a determination of whether 
to regulate under CAA section 112(n)(1)(A), given that it may not 
meaningfully capture all the societal interests the statute intends the 
EPA to consider. See Guidelines, Appendix A at A-7 (``In some cases a 
policy may be considered desirable even if the benefits do not outweigh 
the costs, particularly if there are ethical or equity concerns.'').
    With those caveats, we propose to reaffirm using a BCA approach, 
based on the 2011 RIA performed as part of the original MATS 
rulemaking, as another way to make the CAA section 112(n)(1)(A) 
determination of whether it is appropriate to regulate HAP emissions 
from EGUs.
    Applying the alternative approach, based on the 2011 RIA, we 
propose to find that it is appropriate to regulate EGUs for HAP under 
CAA section 112(n)(1)(A). In the 2011 RIA, the total benefits of MATS 
were estimated to vastly exceed the total costs of the regulation. As 
we found when applying the 2016 alternative approach, the formal BCA 
that the EPA performed for the 2012 MATS Final Rule estimated that the 
final MATS rule would yield annual monetized total benefits (in 2007 
dollars) of between $37 billion to $90 billion using a 3-percent 
discount rate and between $33 billion to $81 billion using a 7-percent 
discount rate; this compares to projected annual compliance costs of 
$9.6 billion. This estimate of benefits was limited to those health 
outcomes the EPA was able to monetize. Despite the fact that these 
estimates captured only a portion of the benefits of the rule, 
excluding many important HAP and criteria pollutant-related endpoints 
which the Agency was unable to monetize (see section III.A.4) and 
instead discussed qualitatively in the 2011 RIA, it was clear that MATS 
was projected to generate overwhelmingly net positive effects on 
society. We continue to think that the BCA approach independently 
supports the conclusion that regulation of HAP emissions from EGUs is 
appropriate.
    Although as discussed in section III.B.2 it was not possible for 
the EPA to update the entire comprehensive cost estimate found in the 
2011 RIA, we think the new information presented in sections III.A and 
III.B directionally supports the net benefits calculation of the 2016 
alternative approach. That is, we have attempted to quantify additional 
risks, including risks of premature death from heart attacks that 
result from exposure to methylmercury associated with domestic EGU 
emissions, and we believe the 2011 RIA's projected cost was almost 
certainly significantly overestimated. Therefore, we propose that if 
BCA is a reasonable tool to use in the context of the EPA's 
determination under CAA section 112(n)(1)(A), newer data collected 
since 2011 overwhelmingly support an affirmative determination. 
Further, that both analytical approaches to addressing the inquiry 
posed by Michigan lead to the same result reinforces the reasonableness 
of the EPA's ultimate decision that it is appropriate and necessary to 
regulate HAP emissions from EGUs after considering cost.
    In this proposal, the EPA has re-examined the extensive record, 
amassed over 2 decades, identifying the advantages of regulating HAP 
from EGUs and evaluating the costs of doing so. We have, for purposes 
of this proposal, also updated information on both benefits and costs. 
Of note, we find that new scientific literature indicates that 
methylmercury exposure from EGUs, absent regulation, poses 
cardiovascular and neurodevelopmental risks to all Americans and 
particularly those most exposed to this pollution. With respect to 
costs, we explain the combination of factors that occurred since the 
promulgation of MATS that leads us to believe that the projected, 
sector-level $9.6 billion estimate of the cost of compliance of the 
rule in 2015

[[Page 7672]]

was almost certainly significantly overestimated. We propose two 
different approaches to considering all of this information, applying 
first a totality-of-the-circumstances methodology weighing of benefits 
and costs and focusing particularly on those factors that we were 
instructed by the statute to study under CAA section 112(n)(1), and 
next using a formal benefit-cost approach consistent with established 
guidance and economic principles. Under either approach, whether 
looking at only the information available at the time of our initial 
decision to regulate or at all currently available information, we 
propose to conclude that it remains appropriate and necessary to 
regulate EGUs for HAP. Substantial emission reductions have occurred 
after implementation of MATS, the emission limits established pursuant 
to the Agency's 2012 affirmative appropriate and necessary 
determination, and these limits provide the only Federal guarantee of 
these emission reductions from EGUs, which, absent regulation, were the 
largest domestic anthropogenic source of a number of HAP. Finalizing 
this affirmative threshold determination would provide important 
certainty about the future of MATS for regulated industry, states, 
other stakeholders, and the American public. We take comment on the 
information relied upon in this proposal and the EPA's proposed 
approaches to considering that information for this determination.

IV. Summary of Cost, Environmental, and Economic Impacts

    The EPA estimates that there are 557 existing EGUs located at 265 
facilities that are subject to the MATS rule. Because the EPA is not 
proposing any amendments to the MATS rule, there would not be any cost, 
environmental, or economic impacts as a result of the proposed action.

V. Request for Comments and for Information To Assist With Review of 
the 2020 RTR

    On January 20, 2021, President Biden signed Executive Order 13990, 
``Protecting Public Health and the Environment and Restoring Science to 
Tackle the Climate Crisis'' (86 FR 7037; January 25, 2021). That order, 
among other things, instructs the EPA to consider publishing a proposed 
rule suspending, revising, or rescinding the May 22, 2020 final action, 
``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.'' The 
2020 Final Action contained two distinct, but related, final actions--
(1) a reconsideration of the 2016 Supplemental Finding and (2) the RTR. 
This notice fulfills the Agency's obligation to address the first 
action. We solicit comments on all aspects of this proposed action.
    Separate from this proposal, the EPA has initiated a review of the 
RTR, taking into account the latest information available on the 
experience of EGUs in complying with MATS and implementing measures to 
reduce HAP emissions. As previously noted, since MATS was promulgated 
in 2012, power sector emissions of mercury, acid gas HAP, and non-
mercury metal HAP have decreased by about 86 percent, 96 percent, and 
81 percent, respectively, as compared to 2010 emissions levels (Table 4 
at 84 FR 2689, February 7, 2019). While EGUs remain the largest 
domestic emitter of mercury (and other HAP), their emissions and 
contribution to total mercury in the environment is significantly less 
now than before MATS implementation. The EPA is seeking input into how 
both of these facts should factor into its review of the RTR.
    In this notice, the EPA is soliciting information to allow for a 
more thorough review of the 2020 MATS RTR. The EPA is soliciting 
broadly for any data or information--including risk-related 
information--that will assist in the review of the RTR. The EPA is also 
soliciting specifically for any information on performance or cost of 
new or additional control technologies, improved methods of operation, 
or other practices and technologies that may result in cost-effective 
reductions of HAP emissions from coal- or oil-fired EGUs. In addition, 
the EPA is interested in receiving information on improvements or 
upgrades to existing controls that may result in cost-effective 
reductions of HAP emissions from coal- or oil-fired EGUs. The EPA also 
seeks information on the cost or performance of technologies and 
practices relating to monitoring of HAP emissions, and control of HAP 
emissions during startup and shutdown events, that could result in 
cost-effective reductions in HAP or assure improved operation of 
existing controls. We are seeking input from all interested 
stakeholders, including states, owners of EGUs, technology vendors and 
developers, and communities impacted by the emissions from EGUs.

VI. 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 Order 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 under Executive Order 12866. Any changes made in 
response to OMB recommendations have been documented in the docket. The 
EPA does not project any incremental costs or benefits associated with 
this action because it does not impose standards or other requirements 
on affected sources.

B. 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 proposing any changes to the 
information collection requirements.

C. Regulatory Flexibility Act (RFA)

    I certify that this action will not have a significant economic 
impact on a substantial number of small entities under the RFA. This 
action will not impose any requirements on small entities. The EPA does 
not project any incremental costs or benefits associated with this 
action because it does not impose standards or other requirements on 
affected sources.

D. Unfunded Mandates Reform Act (UMRA)

    This action does not contain an unfunded mandate of $100 million or 
more 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.

E. 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.

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

    This action does not have tribal implications as specified in 
Executive

[[Page 7673]]

Order 13175. The executive order defines tribal implications as 
``actions that have substantial direct effects on one or more Indian 
tribes, on the relationship between the Federal Government and Indian 
tribes, or on the distribution of power and responsibilities between 
the Federal Government and Indian tribes.'' Revocation of the 2020 
determination that it is not appropriate and necessary to regulate HAP 
emissions from coal- and oil-fired EGUs under CAA section 112 and 
reaffirmation of the 2016 Supplemental Finding that it remains 
appropriate and necessary to regulate HAP emissions from EGUs after 
considering cost would not have a substantial direct effect on one or 
more tribes, change the relationship between the Federal Government and 
tribes, or affect the distribution of power and responsibilities 
between the Federal Government and Indian tribes. Thus, Executive Order 
13175 does not apply to this action.

G. 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 this action does not impose new regulatory requirements that 
might present a disproportionate risk to children. This action 
reaffirms the 2016 Supplemental Finding that it is appropriate and 
necessary to regulate HAP emissions from U.S. EGUs, but does not impose 
control requirements, which were implemented through MATS (77 FR 9304; 
February 16, 2012). While this action does not impose or change any 
standards or other requirements, it addresses the underpinning for the 
HAP emission standards in MATS. The EPA believes the reductions in HAP 
emissions achieved under MATS have provided and will continue to 
provide significant benefits to children in the form of improved 
neurodevelopment and respiratory health and reduced risk of adverse 
outcomes. Analyses supporting the 2012 MATS Final Rule estimated 
substantial health improvements for children in 2016 in the form of 
130,000 fewer asthma attacks, 3,100 fewer emergency room visits due to 
asthma, 6,300 fewer cases of acute bronchitis, and approximately 
140,000 fewer cases of upper and lower respiratory illness. See 77 FR 
9441 (February 16, 2012). Reaffirming the appropriate and necessary 
determination assures those benefits will continue to accrue among 
children.

H. 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 emissions, costs, or energy supply decisions for the 
affected electric utility industry as it does not impose standards or 
other requirements on affected sources.

I. National Technology Transfer and Advancement Act (NTTAA)

    This action does not involve technical standards.

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

    The EPA believes that this action will 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), 
because it does not impose standards or other requirements on affected 
sources and is limited in scope to only consider whether it is 
appropriate and necessary to regulate HAP emissions from coal- and oil-
fired EGUs. While this action does not impose or modify any standards 
or other requirements, it provides the underpinning for the emission 
standards regulating HAP from EGUs. As documented in both the NAS Study 
and Mercury Study, fish and seafood consumption is the primary route of 
human exposure to methylmercury originating from U.S. EGUs, with 
populations engaged in subsistence-levels of consumption being of 
particular concern. As shown in section III.A.5 of this preamble, 
certain minority, low-income, and indigenous populations are more 
likely to experience elevated exposures, thus higher health risks 
relative of the general population due to subsistence fishing. 
Furthermore, subpopulations with the higher exposure tend to overlap 
with those subpopulations that are particularly vulnerability to small 
changes in health risk because of other social determinants of health 
(e.g., lack of access to health care and access to strong schooling), 
thereby compounding the implications of the implications of mercury 
exposure. Reaffirming the appropriate and necessary determination 
assures that the reduction in risks achieved by MATS continue.

Michael S. Regan,
Administrator.
[FR Doc. 2022-02343 Filed 2-8-22; 8:45 am]
BILLING CODE 6560-50-P

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