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Final Response to Petition From New Jersey Regarding SO2

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AGENCY:

Environmental Protection Agency (EPA).

ACTION:

Final rule.

SUMMARY:

The EPA is making a finding that the coal-fired Portland Generating Station (Portland), owned and operated by GenOn REMA LLC (GenOn), in Upper Mount Bethel Township, Northampton County, Pennsylvania, is emitting air pollutants in violation of the interstate transport provisions of the Clean Air Act (CAA or Act). Specifically, the EPA finds that emissions of sulfur dioxide (SO2) from Portland significantly contribute to nonattainment and interfere with maintenance of the 1-hour SO2 national ambient air quality standard (NAAQS) in New Jersey. This finding is made in response to a petition submitted by the State of New Jersey Department of Environmental Protection (NJDEP) on September 17, 2010. In this action, the EPA is establishing emission limitations and compliance schedules to ensure that Portland will eliminate its significant contribution to nonattainment and interference with maintenance of the 1-hour SO2 NAAQS in New Jersey. Compliance with these limits will permit the continued operation of Portland beyond the 3-month limit established by the CAA for sources subject to a contribution finding.

DATES:

This final rule is effective on January 6, 2012.

ADDRESSES:

The EPA has established a docket for this action under Docket ID No. EPA-HQ-OAR-2011-0081. All documents in the docket are listed on the http://www.regulations.gov Web site. Although listed in the index, 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, will be publicly available only in hard copy form. Publicly available docket materials are available either electronically through http://www.regulations.gov or in hard copy at the Air and Radiation Docket and Information Center, EPA/DC, EPA West Building, Room 3334, 1301 Constitution Ave. NW., Washington, DC. The Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding legal holidays. The telephone number for the Public Reading Room is (202) 566-1744, and the telephone number for the Air Docket is (202) 566-1742.

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FOR FURTHER INFORMATION CONTACT:

Mr. Todd Hawes (919) 541-5591, hawes.todd@epa.gov, or Ms. Gobeail McKinley (919) 541-5246, mckinley.gobeail@epa.gov, Office of Air Quality Planning and Standards, Air Quality Policy Division, Mail Code C539-04, Research Triangle Park, NC 27711.

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SUPPLEMENTARY INFORMATION:

Table of Contents

I. Executive Summary

II. Summary of Changes From the April 7, 2011 Proposed Rule

III. The Basis for Making the Section 126 Finding for Portland

A. CAA Section 126(b) and Our Legal Authority

B. Summary of Comments and Responses Regarding Legal Authority

IV. Summary and Assessment of the Modeling and Other Data Relevant to the EPA's Proposed Finding

A. Summary of the Modeling for the Proposed Rule

1. Modeling Analysis in NJDEP's Section 126 Petition

a. Model Selection

b. Meteorological Data

2. The EPA's Modeling Analysis To Quantify Significant Contribution

B. Public Comments Related to the Modeling

1. Model Selection

2. Meteorological Data

3. Emissions and Source Characteristics

4. Identification of Background Concentrations

5. Columbia Monitor Data and Analyses

C. Modeling and Other Analyses To Determine Significant Contribution for the Final Rule

V. Establishing the Emission Limits Necessary for the Remedy

A. Quantification of Necessary Emission Reductions

B. Summary of the EPA's Proposed Remedy Analysis

C. Summary of Comments and Responses Regarding the Remedy Modeling

D. The Final Remedy Limit

E. Compliance Schedule for the Final Remedy Limit

1. Proposed Compliance Schedule

2. Public Comments and the EPA's Responses

a. Technical Feasibility

b. Continued Operation of Facility in the Interim Period

c. Harmonization With Other Requirements

3. The Final Rule

F. Other Considerations for Establishing the Final Remedy

1. Economic Feasibility

2. Requirement for Continuous Monitoring

3. Delegation of Enforcement

VI. Increments of Progress

A. Interim Emission Limits

1. What the EPA Proposed

2. Public Comments and the EPA's Responses

a. Appropriateness of Including Interim Emissions Limits

b. Technical Feasibility of Coal Switching

c. Interim Limits Suggested by the GenOn Test Burn Report

d. Load Shifting

e. One-Year Time Period

f. Effect of Interim Limits on Reliability

g. Clear Rational for Limits

h. Combined Emission Limits

3. Final Rule Interim Emission Limits

B. Increments of Progress: Reporting Milestones

1. What the EPA Proposed

2. Public Comments and the EPA's Responses

3. Final Rule Reporting Milestones

VII. Alternate Compliance Schedule and Consideration of Petition for Rulemaking for Alternative Emission Limits

A. Alternate Compliance Schedule if the Source Owner Opts To Cease Operations

1. What the EPA Proposed

2. Public Comments and the EPA's Responses

3. The Final Rule

B. Consideration of Petition for Rulemaking for Alternative Emission Limits

VIII. 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

C. Regulatory Flexibility Act

D. Unfunded Mandates Reform Act of 1995

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 and Safety Risks

H. Executive Order 13211: Actions That Significantly Affect Energy Supply, Distribution, or Use

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

J. National Technology Transfer and Advancement Act

K. Congressional Review Act

L. Judicial Review

I. Executive Summary

Section 126(b) of the CAA provides, among other things, that any state or political subdivision may petition the Administrator of the EPA to find that any major source or group of stationary sources in upwind states emits or would emit any air pollutant in violation of the prohibition of section 110(a)(2)(D)(i),[1] 42 Start Printed Page 69053U.S.C. 7426(b). On September 17, 2010, NJDEP filed a section 126 petition requesting that the EPA find that emissions from Portland, located in Upper Mount Bethel Township, Northampton County, Pennsylvania, significantly contribute to nonattainment or interfere with maintenance of the 1-hour SO2 NAAQS in New Jersey. In this action, the EPA is granting that petition, and basing its finding on the review of NJDEP's air quality modeling, the EPA's independent assessment of the AERMOD [2] dispersion modeling, and other technical analyses. Based on this assessment, the EPA finds that Portland's emissions significantly contribute to nonattainment and interfere with maintenance of the 1-hour SO2 NAAQS in New Jersey. Pursuant to section 126(c), the EPA is also authorizing continued operation of the plant consistent with emission limitations and compliance schedules (including increments of progress) set forth in this rule to bring the plant into compliance as expeditiously as practicable with the CAA prohibition on emissions that significantly contribute to nonattainment and interfere with maintenance of the 1-hour SO2 NAAQS. Specifically, the final rule requires Portland to reduce its SO2 emissions to meet the following limits: 1,105 pounds per hour (lb/hr) for unit 1; 1,691 lb/hr for unit 2; and 0.67 pounds per million metric British units (lb/mmBtu), based on a 30 boiler operating day rolling average, for units 1 and 2. Portland must achieve and maintain these emission limitations by no later than 3 years after the effective date of this rule. The EPA is establishing an interim SO2 emission limit requirement to ensure that Portland demonstrates appropriate increments of progress toward final compliance. Specifically, no later than 1 year after the effective date of this rule, total SO2 emissions from units 1 and 2 combined may not exceed 6,253 lb/hr. The final rule also requires Portland to submit to the EPA a dispersion modeling protocol within six months of the effective date of the rule, a modeling analysis demonstrating the elimination of significant contribution to nonattainment and interference with maintenance within 1 year of the effective date of the rule, semi-annual interim progress reports, and a final progress report to demonstrate compliance with the interim and final emission limits. Compliance with the final emission limits established in this rule is sufficient to remedy Portland's significant contribution to nonattainment and interference with maintenance in the impacted areas in New Jersey.

II. Summary of Changes From the April 7, 2011 Proposed Rule

The following is a summary of the significant changes made since proposal. Each of these changes is discussed later in this notice, and, where noted, additional information is provided in other supporting documentation in the docket for this rulemaking. The first change is that the final compliance remedy now includes a heat input-based SO2 emission limit of 0.67 lb/mmBtu for units 1 and 2, in addition to the proposed SO2 emission rate limits. The heat-input based SO2 emission limit is based on a 30 boiler operating day rolling average. This additional requirement was made to address concerns raised by commenters that the proposed compliance remedy was not adequate to ensure attainment of the NAAQS in New Jersey. This issue is discussed in more detail in section V.

Second, the interim emission rate limits, proposed as 2,910 lb/hr for unit 1 and 4,450 lb/hr for unit 2, and having a compliance date of no later than 1 year from the effective date of this rule, are now expressed as a single limit for units 1 and 2 combined, and may not exceed 6,253 lb/hr. The 1-year compliance timeframe remains unchanged. This change to the limit is partly in response to comments (including those from GenOn) in support of greater operational flexibility, and acknowledges that the interim limit need not be unit specific. It is also based on the availability of lower sulfur coal than the coal Portland is currently using. Additional details are provided in section VI.C.

Third, in response to comments that the proposed deadlines for submitting a modeling protocol and modeling analysis were too short, the deadline for submitting the modeling protocol is changed to six months after the effective date of this rule, and the requirement to submit a modeling analysis is changed to 12 months after the effective date of this rule. This will allow Portland more time for planning its modeling analysis but does not change the compliance time frames for meeting the emission limits.

Additionally, in response to comments suggesting the plant needed more than 90 days to determine a method of compliance, the final rule gives Portland 12 months from the effective date to indicate how it intends to achieve full compliance. The EPA agrees that the plant may need 12 months to identify the specific engineering and technology decisions to determine how to reach compliance within 3 years. Accordingly, we are eliminating the proposed requirement for Portland to notify the EPA, within 90 days from the effective date of this rule, whether the plant will continue to operate and comply with the emission limits and compliance schedules, or cease operations. The modeling protocol and the initial semi-annual progress report, due 6 months after the effective date of this rule, will appropriately inform Portland's plans for continuing operation. Finally, the EPA is not requiring separate compliance schedules and analyses should Portland decide to permanently cease operation of unit 1 and unit 2 as a means of compliance. The final and interim emission limits and compliance schedules are appropriate regardless of how Portland ultimately decides to meet them. Thus, we decided it was not necessary, as proposed, to include a separate schedule specifically for a compliance approach based on shutting down.

III. The EPA's Basis for Making the Section 126 Finding for Portland

A. CAA Section 126(b) and Our Legal Authority

The statutory authority for this action is provided by the CAA, as amended, 42 U.S.C. 7401 et seq. Section 126 of the CAA provides that any state or political subdivision may petition the Administrator of the EPA to find that any major source or group of stationary sources in upwind states emits or would emit any air pollutant in violation of the prohibition of section 110(a)(2)(D)(i). 42 U.S.C. 7426(b). If the EPA makes such a finding, in order to allow continued operation of the source, the EPA may also issue emission limits and compliance schedules (including increments of progress) to bring the source into compliance as expeditiously as practicable but no later than 3 years from the date of the finding. Absent such emission limits and a compliance schedule, the source may not continue operations beyond 90 days.

Section 110(a)(2)(D) of the CAA, often referred to as the “good neighbor” or “interstate transport” provision of the Act, addresses interstate transport of air pollution. Under section 110(a)(2)(D)(i), emissions in one state that contribute significantly to nonattainment in, or interfere with maintenance of a NAAQS Start Printed Page 69054by, any other state, or interfere with measures required to be included in the applicable implementation plan for any other state under part C to prevent significant deterioration of air quality or to protect visibility, are to be prohibited. 42 U.S.C. 7410(a)(2)(D)(i). Findings by the Administrator, made pursuant to section 126, that a source or group of sources emits air pollutants in violation of the section 110(a)(2)(D)(i) prohibition are commonly referred to as section 126 findings. Similarly, petitions submitted pursuant to this section are commonly referred to as section 126 petitions. This action responds to a section 126 petition submitted by the NJDEP. In this action, the EPA makes a section 126 finding with respect to Portland and establishes emission limits and compliance schedules to permit continued operation of the plant.

Several commenters asserted that the EPA cannot, or should not, make such a section 126 finding at this time, but can only make such a finding after the state has submitted what is usually referred to as its “interstate transport” or section 110(a)(2)(D) State Implementation Plan (SIP). For the recently promulgated 1-hour SO2 standard, those SIPs are due on June 3, 2013. We disagree with this interpretation of the Act. The plain language of the statute confirms that section 126 remedies can, and in some cases must, be promulgated prior to the deadline for states to make SIP submissions under section 110(a)(2)(D).

The EPA has consistently interpreted the language in section 126 as referring to a functional prohibition on emissions. This interpretation is supported by the plain language of the statute, the statutory structure, and the legislative history. Further, the EPA notes that the statute does not exempt, for any period of time, violations of the prohibition from scrutiny under section 126. For these reasons, the EPA believes its interpretation is compelled by the statutory language. Nonetheless, to the extent that the statutory language is ambiguous, the EPA's reasonable interpretation of this language is to be accorded deference.

The EPA interprets the language in section 126 as referring to the actual functional prohibition of section 110(a)(2)(D)(i) that bars impermissible interstate transport. The EPA does not agree with the position taken by some commenters that the language refers only to an emissions limitation contained in a state's section 110(a)(2)(D) SIP. Further, there is nothing in the statute to support the argument that the prohibition on emissions does not arise until after the SIP submission deadline, or that a violation of the functional prohibition cannot occur before that deadline. Where the EPA finds such a violation exists, it must, under section 126, issue emission limits and compliance schedules to permit continued operation of the source.

The EPA's interpretation of section 126 acknowledges that Congress created two independent statutory tools—section 110(a)(2)(D)(i) and section 126—to address the problem of interstate pollution transport. The purpose of each provision is to control upwind emissions that contribute significantly to downwind states' nonattainment or maintenance problems. The two provisions differ in that one relies on state regulation and the other relies on federal regulation. Congress provided both provisions without indicating any preference for one over the other, suggesting it viewed either approach as a legitimate means to produce the desired result. Instead, the statutory language creates two independent tools to address the problem. Section 110(a)(2)(D)(i) establishes an obligation for all states to address emissions within the state significantly contributing to downwind air quality problems or interfering with certain regulatory provisions in downwind states. Section 126 establishes a procedure for a state, or political subdivision, to petition the EPA to take federal action to address transported emissions from an identified source or group of sources in another state. The two provisions are independent, and nothing in the statute suggests that one is intended to limit the other.

In general, statutes are to be interpreted in a way that gives meaning to each section. The EPA's interpretation of section 126 is consistent with this general rule in that it gives section 126 a purpose independent of the other remedies available under the CAA. In contrast, if section 126 were interpreted as referring only to a prohibition contained in a SIP, the section would not have any practical utility in the statutory scheme. The EPA's interpretation of the relationship between sections 126 and 110 is supported by the legislative history of the amendments to the CAA which added section 126. In adopting the section 126 remedies, Congress explained that the petition process was intended to provide an avenue for relief separate from the 110(a)(2)(D) SIP procedure and that it was intended to expedite, not delay, resolution of interstate pollution conflicts.

The EPA's interpretation of the “prohibition” referred to in section 126 is also consistent with the language of section 110(a)(2)(D)(ii), which requires states to include in their SIPs provisions necessary to ensure compliance with sections 126 and 115 of the CAA, which relate to interstate transport and international transport of pollution, respectively. States are required to submit to the EPA such SIPs no later than 3 years after promulgation of a new or revised NAAQS. 42 U.S.C. 7410(a)(1). Thus, pursuant to section 110(a)(2)(D)(ii), any emission limits and compliance schedules issued by the Administrator under section 126 prior to that deadline must be incorporated into the section 110(a)(2)(D) SIP submission for the state in which a source subject to such limits is located. Accordingly, the statute anticipates that the Administrator may address a section 126 petition prior to the deadline for the initial submission of a section 110(a)(2)(D) SIP.

If Congress had intended to limit the EPA's authority to act on section 126 petitions until after the deadline for states to submit 110(a)(2)(D) SIPs, it could have included such a restriction. However, the plain language of the statute does not clearly require this interpretation. Rather, the statute requires the EPA to address a section 126 petition within 60 days after receipt.[3] Since the statute establishes firm deadlines for action on section 126 petitions, it does not provide an exception for petitions submitted prior to the good neighbor SIP submission deadline, and it provides a mechanism for incorporating reductions required in response to section 126 petitions into the state SIPs; the EPA believes it does not have discretion to delay action on a section 126 petition just because the state SIP submission deadline has not yet passed.

The EPA's interpretation of sections 110 and 126 in this context is also reasonable as it is consistent with the EPA's interpretation of these sections in two rulemakings issued in May 1999 and January 2000 which concluded that each section of the Act provides an alternative avenue for relief. Findings of Significant Contribution and Rulemaking on Section 126 Petitions for Purposes of Reducing Interstate Ozone Transport, 64 FR 28250 (May 25, 1999); Findings of Significant Contribution and Rulemaking on Section 126 Petitions for Purposes of Reducing Interstate Ozone Transport, 65 FR 2674 (Jan. 18, 2000). NJDEP has, in this case, sought relief via section 126 from the interstate transport of pollution that is significantly Start Printed Page 69055contributing to nonattainment within the state, and the EPA is obligated to address NJDEP's petition pursuant to the requirements of the Act.

B. Summary of Comments and Responses Regarding Legal Authority

Comment: Several commenters argue that the statutory text is unambiguous in requiring that states be permitted to submit their infrastructure SIPs addressing the transport requirements of section 110(a)(2)(D) before a section 126 petition can be filed.

The commenters primarily argue that this interpretation is compelled because a section 126 petition may only be filed to complain of a violation of a section 110(a)(2)(D) SIP where a state has failed to adequately enforce its own plan. Accordingly, the commenters argue that there is no prohibition of transport emissions absent an approved SIP. The operative language in section 126 is that a petition may be granted where there is “a violation of the prohibition of” section 110(a)(2)(D)(i). The commenters argue that “prohibition” referred to in section 126 is not on the act of emitting or contributing to transboundary nonattainment. Rather, the commenters assert, the prohibition is against emitting at levels that violate the limits imposed by the SIP regulations promulgated in response to the requirements of the CAA.

Some of these commenters also suggest that a section 126 petition would be justified where a state fails to meet its SIP revision obligations under section 110(a)(2)(D). These commenters therefore argue that a section 126 petition may not be filed until the state fails to meet its deadline to file a SIP addressing its transport obligations with respect to the new or revised NAAQS.

Response: The EPA does not agree that the interpretation posited by the commenters is reasonable much less compelled by the statutory text. Nothing in the statutory language in section 126 prohibits a downwind state from filing a section 126 petition until after the upwind state, in which the source or sources are located, has submitted, or is required to submit, a section 110(a)(2)(D) SIP to the EPA for approval. The commenters have not identified any statutory provision that so limits a downwind state's rights. Rather, the right of a state to file a section 126 petition does not have any time limitation, and the EPA is required to act quickly whenever presented with such a petition. The commenters' arguments that a section 126 petition cannot be filed, or a section 126 finding cannot be made, before the 110(a)(2)(D) SIP submission deadline passes are policy arguments with no basis in the statutory text. Instead, as discussed below, the statutory text, the structure of the CAA, and the legislative history all support the EPA's interpretation of the Act as creating, in sections 110 and 126, two independent means of controlling transboundary emissions and find no support for the argument that one should be prioritized over the other.

Moreover, the plain language of the statute does not clearly define “prohibition” to mean a SIP provision that sets emissions limits to address transboundary air pollution. Rather, the EPA believes that the better interpretation, in light of the structure of the CAA and its legislative history, is that the “prohibition” referred to in section 126 is the actual, functional prohibition on transboundary air pollution contained in section 110(a)(2)(D)(i).

The commenters' interpretation of the “prohibition” referred to in section 126 would render the relief provided by a section 126 petition process essentially meaningless. If a source is emitting in violation of an emission limitation in a SIP, there is no question that the source is in violation of the SIP. The language in section 126 stating that “it shall be a violation of * * * the applicable implementation plan” for a source to emit in violation of the prohibition of section 110(a)(2)(D) serves no legal purpose where the source is already directly violating a SIP requirement. By contrast, under the EPA's interpretation, section 126 deems a source's emissions to be a violation of the applicable SIP (as well as of section 126) whenever the emissions significantly contribute to nonattainment downwind or interferes with maintenance of any NAAQS. This interpretation gives legal effect to the language in section 126 and is consistent with Congress' purpose of providing a tool for downwind states and the EPA to use to impel upwind sources to reduce transported emissions even where a SIP may not yet directly regulate such emissions.

Moreover, the EPA's interpretation of section 126 gives it a purpose independent of the other remedies available under the CAA. Under section 113, upon finding that any person is in violation of any requirement of an approved SIP, the EPA has the authority to enforce the requirement by issuing an order to comply, issuing an administrative penalty order, or bringing a civil action. In addition, any person (which includes states) may bring a citizen suit against any person in violation of any requirement of an approved SIP, independent of the EPA action. Section 304(a), (f); see also section 302. These provisions provide more direct and likely quicker recourse against a source that is violating its SIP-imposed emission limits than the section 126 petition process would. Thus, there is no need to have a petition, public hearing, and EPA determination pursuant to section 126 simply to enforce existing SIP limits. By contrast, using the section 126 petition process where transboundary emissions are not yet being controlled by an upwind state serves the unique role of allowing a downwind state to force the EPA's consideration of the problem and potentially achieve emissions reductions directly from sources, without the need to depend on action by the upwind state.

The EPA's interpretation of the relationship between sections 126 and 110 is expressly supported by the legislative history of the CAA. In adopting the section 126 remedies, Congress explained that the petition process was intended to provide an avenue for relief separate from the section 110(a)(2)(D) SIP procedure:

This petition process is intended to expedite, not delay, resolution of interstate pollution conflicts. Thus, it should not be viewed as an administrative remedy which must be exhausted prior to bringing suit under section 304 of the act. Rather, the committee intends to create a second and entirely alternative method and basis for preventing and abating interstate pollution. The existing provision prohibiting any stationary source from causing or contributing to air pollution which interferes with timely attainment or maintenance or [sic] a national ambient air standard (or a prevention of significant deteriorating [sic] or visibility protection plan) in another state is retained. A new provision prohibiting any source from emitting any pollutant after the Administrator has made the requisite finding and granted the petition is an independent basis for controlling interstate air pollution.

H. Rep. 95-294 at 305, reprinted in 1977 Legislative History at 2798. Nothing in the legislative history suggests, as the commenters assert, that the section 126 remedy is dependent on the section 110 SIP procedure. Rather, this language clearly indicates that Congress intended sections 110 and 126 to operate as independent means of controlling transboundary emissions and that it did not intend to prioritize one means of control over the other. Accordingly, there is no basis in the legislative history to support the commenters' argument that a state does not have the right to submit a section 126 petition until after the deadline to submit a section 110(a)(2)(D) SIP has passed. To the contrary, the legislative history supports the conclusion that Congress did not intend to impose any limitation Start Printed Page 69056tied to the section 110(a)(2)(D) SIP procedure on when a state may submit a section 126 petition after a new or revised NAAQS is promulgated.

Moreover, Congress recognized in adopting all of the interstate transport provisions in the CAA that the interstate pollution problem stems from inadequate limits on transported emissions, and not inadequate compliance with adequate SIP requirements. This characterization of the problem is supported by the numerous descriptions of the interstate pollution problem in the 1977 legislative histories, all of which explicitly or implicitly refer to the lack of upwind limitations and none of which mentions sources' violation of upwind SIP limits. See, e.g,. S. Comm. on Envt. and Public Works, Clean Air Act Amendments of 1977, S. Rep. 95-127, 95th Cong., 1st Sess. 41 (1977), reprinted in 3 1977 Legislative History at 1415 (noting that the 1970 Act failed to specify any abatement procedure if a source in one state emitted air pollutants that adversely affected another state, and “[a]s a result, no interstate enforcement actions have taken place, resulting in serious inequities among several States, where one State may have more stringent implementation plan requirements than another state”); H. Rep. 95-294, 95th Cong., 1st Sess. at 304 (1977), reprinted in 4 1977 Legislative History at 2798 (“[A]n effective program must not rely on prevention or abatement action by the State in which the source of the pollution is located, but rather by the state (or residents of the State) which receives the pollution and the harm, and thus which has the incentive and need to act.”). It is reasonable to assume that Congress intended to create a tool that would attack the problem Congress recognized. This supports the conclusion that Congress intended section 126 to provide an alternate means to compel compliance with the prohibition in section 110(a)(2)(D) where upwind states are not controlling transboundary emissions, and not where sources are violating adequate SIP provisions.

The interpretation that the EPA adopts here is also consistent with its historical interpretation of section 126. The EPA previously interpreted this section in two rulemakings issued in 1999 and 2000, wherein commenters challenged the EPA's authority, in light of a pending SIP call, to grant a number of section 126 petitions that sought to mitigate the transport of nitrogen oxides (NOX) from downwind states that were significantly contributing to ozone nonattainment problems in the petitioning states. 64 FR 28250; 65 FR 2674. In both rulemakings, the EPA interpreted the relationship between sections 110 and 126 consistent with the EPA's interpretation here, concluding that the “prohibition” referred to in section 126 is the functional prohibition of section 110(a)(2)(D)(i), as opposed to an emissions limitation contained in a state's SIP, and that the section 110(a)(2)(D) SIP process and the section 126 petition process are independent and alternative means of addressing impermissible interstate transport.

Both rulemakings were challenged in the DC Circuit in Appalachian Power Co. v. EPA, 49 F.3d 1032 (2001), on the theories that the agency was required to refrain from making any section 126 findings while the SIP call was ongoing and that the doctrine of “cooperative federalism” embodied in the Act imposed a constraint on the EPA's ability to act before the section 110 process was complete. Id at 1045. The court deferred to the EPA's interpretation of the relationship between sections 110 and 126, holding that there is no inherent conflict in acting on a section 126 petition during the same period that a state has to develop a SIP submission: “It is entirely reasonable for the EPA to regard a state that is under a legal obligation to revise its plan as being, in the meantime, in violation of a functional prohibition.” Id. at 1046. The court explained that the petitioners' interpretation of section 126 would compromise three critical provisions of section 126:

1. The requirement that source operate no more than 3 years after finding of contribution to downwind nonattainment;

2. The fact that “relief does not depend upon any action by the upwind states, as is necessary for a SIP revision”; and

3. The fact that relief under section 126 is independent of the discretionary policy preferences of the EPA, as the agency is required to act upon a petition within 60 days.

Id. The court noted that the EPA's interpretation retains all three aspects of the statutory requirements.

Id. The court therefore concluded that “[b]ecause it is reasonable, and because the `Congress provided both [§§ 110 and 126] without indicating any preference for one over the other,' * * * the EPA's conclusion that these two provisions operate independently merits our deference under Chevron step two.” Id. at 1048 (quoting 65 FR at 2680/1).

Thus, the EPA believes that the commenters' interpretation of section 126 is unreasonable and inconsistent with the legislative history, the EPA's past interpretations, and court rulings upholding those interpretations. In particular, the commenters' interpretation would render the relief provided by the section 126 petition process duplicative and unnecessary. The EPA's interpretation, on the other hand, gives legal effect to the language in section 126 and is consistent with Congress' purpose of providing an independent tool for a downwind states and the EPA to use to impel upwind sources to reduce transported emissions. The EPA believes this matter is clearly resolved by reference to the terms of the provision itself, so that under the first step of the Chevron analysis, no further inquiry is needed. If, however, it were concluded that the provision is ambiguous on this point, the EPA believes that, under the second step in the Chevron analysis, then the EPA should be given deference for any reasonable interpretation, as courts have given with respect to prior interpretations of section 126. Interpreting section 126 to refer to a functional prohibition on emissions and to preserve a state's right to file a section 126 petition is reasonable for the reasons described above.

Comment: Several commenters argue that the EPA is turning to section 126 as a “first resort” for implementing the new NAAQS and that we are substituting the EPA's judgment for Pennsylvania's regarding the appropriate control strategy for Portland. The commenters contend that revising Pennsylvania's SIP is a usurpation of state discretion and that the SIP process would be superfluous if we allowed petitions to be filed so close on the heels of new or revised NAAQS. The commenters believe that Congress intended states to have primary responsibility for implementing a new or revised NAAQS. They contend that the EPA's interpretation of section 126 places priority on interstate transport over intrastate control of NAAQS attainment.

Response: We respond by noting that the upwind state still retains its obligation to develop a SIP and implement the NAAQS. Applying section 126 independent of an upwind state's failure to act under section 110(a)(2)(D) does not impermissibly pressure upwind states to select certain control measures. The EPA acknowledges that because the section 126 findings precede any required state action, when states are eventually required to submit SIPs to control interstate transport, one of the largest sources of emissions will already be subject to emission control Start Printed Page 69057requirements, and, depending upon the timing, may have already invested in controls. Yet this is not a legal constraint on states' choices—it is the reality that, over time, conditions change and different policy choices become more or less attractive for a variety of reasons. States would still be able to choose to regulate other sources, but depending upon the timing, the option of obtaining emission reductions from sources that have already invested in emission controls or have already reduced emissions may be more attractive on policy and economic grounds than regulating those sources otherwise would have been. There is a vast difference between, on one hand, the EPA prescribing a particular emissions control choice that states must adopt, and on the other, taking action required under the CAA to regulate sources directly with the possible effect of making certain future emissions control choices by some states more or less appealing.

Such a potential future effect on the regulatory environment cannot override the obligation that the EPA act on state petitions under section 126. We do not believe it would be reasonable to conclude that the EPA can take no action under an independent mandate of the statute to respond to petitions submitted by downwind states facing their own time constraints and pressures to meet air quality standards, just to preserve the relative attractiveness of a variety of options for control of SO2 in the upwind states required under another provision of the CAA. The cooperative federalism principles of the CAA do not require the EPA to withhold federal action under section 126 until states have been required to and failed to submit SIPs. It is perfectly reasonable for Congress to have established section 126 as an alternative mechanism under the CAA to address the interstate pollution problem, just as it did again in adopting sections 176A and 184. To provide alternatives, the various interstate transport provisions are necessarily different from each other and from other provisions of the Act, but that does not make them inconsistent with other provisions of the Act. Thus, simply because the EPA will have imposed certain requirements on Portland does not mean that Pennsylvania no longer has any discretion in crafting its SIP submission with respect to NAAQS compliance anywhere in the state. Pennsylvania can take into consideration the controls that Portland chooses to implement when creating its own attainment plan, just as it would take into consideration controls implemented at any other source.

The court in Appalachian Power Co. v. EPA specifically addressed this concern that action on the section 126 petition before the SIP submissions were due would restrict the states' discretion to fashion their own plan for complying with the NAAQS: “SIP development, like any environmental planning process, commonly involves decisionmaking subject to various legal constraints. That § 126 imposes one such limitation—and it is surely not the only independent provision of federal law to do so—does not affect a state's discretion under § 110.” 49 F.3d at 1047.

Finally, as explained in detail above, Congress intended sections 110 and 126 to operate as independent and alternate means to address transboundary pollution, and indicated no preference for one means of compelling compliance over the other. Thus, the EPA's action on this section 126 petition does not prioritize the control of interstate pollution over a state's control of intrastate pollution. Rather, it gives legal effect to section 126, consistent with the structure of the CAA and the legislative history, by providing a tool for downwind states to use to impel upwind sources to reduce transported emissions.

IV. Summary and Assessment of the Modeling and Other Data Relevant to the EPA's Proposed Finding

A. Summary of the Modeling for the Proposed Rule

NJDEP's section 126 petition contained dispersion modeling results, based on both the CALPUFF [4] and AERMOD dispersion models, that NJDEP relied upon to show that emissions from Portland, alone, caused downwind violations of the 1-hour SO2 NAAQS in New Jersey. Given the magnitude of the modeling violations, which were nearly seven times the 1-hour SO2 NAAQS based on AERMOD modeling of maximum allowable emissions, and the fact that significant exceedances of the NAAQS were also shown based on modeling of estimated actual emissions, the EPA concluded that the NJDEP had clearly shown that SO2 emissions from Portland cause violations of the 1-hour SO2 NAAQS in New Jersey.

The EPA also modeled the emissions from Portland using the AERMOD dispersion model and determined that the modeled concentrations from Portland, when combined with the relatively low background concentrations, cause violations of the 1-hour SO2 NAAQS in Morris, Sussex, Warren and Hunterdon Counties in New Jersey.[5] This section discusses the key modeling issues that arise in making that determination, and how the EPA is responding to comments we received on those issues. We also note that this modeling is used not only to characterize the NAAQS violations, but, as discussed in section V, it is also used to determine the appropriate remedy to address such violations.

1. Modeling Analysis in NJDEP's Section 126 Petition

a. Model Selection

Model selection was one of the key issues that the EPA addressed in support of this rule given the critical role played by dispersion modeling both in relation to a finding under a section 126 petition that a source significantly contributes to nonattainment and/or interferes with maintenance of the 1-hour SO2 NAAQS in a neighboring state, and in relation to the determination of an appropriate remedy to address such a finding. As summarized in the proposed rule and documented in more detail in the EPA's proposed rule Air Quality Modeling Technical Support Document, NJDEP included modeling results based on both the CALPUFF and AERMOD dispersion models with its section 126 petition. The importance of this issue is further highlighted by the fact that the maximum 99th percentile of the daily maximum 1-hour modeled SO2 concentrations based on CALPUFF was about 2.5 times higher than the maximum 99th percentile of the daily maximum 1-hour modeled concentrations based on AERMOD. Consequently, a much more stringent remedy would be required to address such a finding based on CALPUFF modeling than based on AERMOD modeling.

The NJDEP acknowledged that AERMOD is the preferred model under the EPA's “Guideline on Air Quality Models,” published as Appendix W to 40 Code of Federal Regulations (CFR) Part 51, for near-field applications such as this, but suggested that the use of CALPUFF may be appropriate under the alternative model provisions in Section 3.2.2b of Appendix W. Section 3.2 of Appendix W lists three separate conditions under which an alternative model may be approved for use:Start Printed Page 69058

(1) If a demonstration can be made that the model produces concentration estimates equivalent to the estimates obtained using a preferred model;

(2) If a statistical performance evaluation has been conducted using measured air quality data and the results of that evaluation indicate the alternative model performs better for the given application than a comparable model in Appendix A of Appendix W; or

(3) If the preferred model is less appropriate for the specific application, or there is no preferred model.

The NJDEP modeling documentation suggested that NJDEP's use of the CALPUFF model in support of this petition was based on condition (2) of Section 3.2.2b, claiming to have shown that CALPUFF “performed better and produced predictions of greater accuracy than AERMOD” for this application. NJDEP also claimed that the use of CALPUFF is more appropriate for this specific application due to the complex winds addressed in Section 7.2.8 of Appendix W and is therefore justified under condition (3) of Section 3.2.2b.

The section 126 petition referenced a CALPUFF model validation study based on the Martin's Creek field study database, submitted by NJDEP with an earlier section 126 petition, as demonstrating that “CALPUFF performed better and produced predictions of greater accuracy than AERMOD” for this application.[6]

At proposal, the EPA included a detailed assessment of the NJDEP CALPUFF validation study as Appendix A of the proposed rule Air Quality Modeling TSD, and concluded that NJDEP had not adequately justified the use of CALPUFF in this application under either conditions (2) or (3) of Section 3.2.2b of Appendix W. The EPA further asserted that AERMOD is the most appropriate model for this application. Our assessment of the CALPUFF validation study identified several aspects of NJDEP's validation methodology that deviated from the EPA's Protocol for Determining the Best Performing Model,[7] which undermined the integrity of the evaluation results. In addition, we cited the “weight of evidence” regarding AERMOD model performance which is based on evaluations for a total of 17 field study databases as compared to NJDEP's CALPUFF validation study which is the only near-field evaluation of CALPUFF model performance that the EPA is aware of that included CALMET-generated 3-dimensional wind fields. We also pointed to the fact that the 1-hour, 3-hour and 24-hour quantile-quantile (Q-Q) plots of modeled versus observed concentrations for AERMOD and CALPUFF included in the NJDEP validation study suggested that the performance of the CALPUFF and AERMOD models was very similar for this database, with both models exhibiting generally good agreement with observations, but with AERMOD showing slightly better overall agreement than CALPUFF. These clear visual comparisons of model performance are difficult to reconcile with NJDEP's assertion that CALPUFF performed better than AERMOD.

b. Meteorological Data

Another key component of the dispersion modeling analysis is the meteorological data. The EPA based the AERMOD modeling in support of the proposed rule on 1 year of Portland site-specific meteorological data available for July 1993 through June 1994. The site-specific meteorological data were collected from a 100-meter instrumented tower and Sound Detection and Ranging instrument (SODAR), located about 2.2 kilometers west of Portland. Based on a review of the data, we determined that the Portland meteorological data from 1993-94 meet the basic criteria for representativeness under Section 8.3.3 of Appendix W, and therefore can be considered as site-specific data for purposes of modeling impacts from the elevated stacks for Portland units 1 and 2. The 1993-94 data also meet the minimum criterion for the length of meteorological data record of at least 1 year of site-specific meteorological data recommended in Section 8.3.1.2 of Appendix W. However, the difference of about 100 meters in the base elevation for the meteorological tower versus the stack base elevation raised concerns regarding how the meteorological data were input to the AERMOD model in the NJDEP modeling analysis given that the stack heights for units 1 and 2 are about 122 meters and that plume heights of concern for units 1 and 2 are about 200 to 400 meters above stack base.

The AERMOD modeling submitted by NJDEP used the measurement heights above local ground at the tower location for the meteorological data input to the model, effectively assuming that the measured profiles of wind, temperature and turbulence are “terrain-following.” Without adjusting for the difference in base elevation of about 100 meters between the meteorological data and the stacks, wind speeds are likely to be biased high and the wind directions may not be representative of plume heights relative to stack base. A review of the raw meteorological data files for Portland also revealed the fact that σw (vertical turbulence) data were available from the SODAR, but had not been used in the AERMOD modeling submitted with NJDEP's section 126 petition. Based on the analyses that are described in more detail in the EPA proposed rule Air Quality Modeling TSD, the EPA concluded that the representativeness of the Por