WPC Zkx٤*C ω[h/ysw}^s&ZkH)Pْhr_겝R3d Q')XmecZb:%#y"ot!4QU&{MfA_OZ'!~)h (|kI)9{X %Ή\KjP @GEǁ?=߃6æ!Y(s9 niu>EA09~XW.cٷa2$>*n8[GrJ2R[4 KDx7Χ0mdXl ieE}zp{-xi&m D} y[+JO+zvD WN*M4FX SW c&6kY7$Ot_8%QxՏEZ m`<)3 8cj{"݆#!UN %- 0:3UFmU98U>UF)o^ w.4K_n mpN D5<@q 09 09cP=I09fifkmf!aC!f!!#f$:$])@+9./0S4fI9aK9f_9aa9u9<X==O?_@HBDD1oFH,CJoKvLRNROQfRaR"RVUTYXrZXZ"[f]]` Bb D 3bcl e|vf&fia ia4ifHiJiak 0Nlf_laalfulawlflalfl Bulalalflalflam<m}PmnZpWpp8q(qq'uf{a{/{}) afa//)??=hCtLXXXXXXYfaOlbbbbb B ΰΰΰac C bbbbbbbbbbbbbbb|HP LaserJet 4100 PCL 60(9 Z6Times New Roman RegularX($USUS.,<4 9Z .Courier New Regular<4 9Z+ Courier New <( 9Z+&Courier Regular<Q 9Z+.Courier New Regular    ' &Kevin Culligan&0Kevin Culligan .   c,D{EWd0,@C$,X3|xU  /$USUS.,X^XXX  2    _ԀTheStateswere:Alabama,Connecticut,Delaware,Georgia,  Illinois,Indiana,Kentucky,Maryland,Massachusetts,Michigan,Missouri,NewJersey,NewYork,NorthCarolina,Ohio,Pennsylvania,RhodeIsland,SouthCarolina,Tennessee,Virginia,WestVirginia,andWisconsin.)!dxdxhttp://www.epa.gov/ttn/rto/,and(^2/$ !USUS.,  X^XXX  0  ("$XDXXX  0   3 /$USUS.,X^XXX  3    _ԀTheStateswere:Delaware,Indiana,Kentucky,Maryland,  Michigan,NorthCarolina,NewJersey,NewYork,Ohio,Pennsylvania,Virginia,andWestVirginia. ? /$USUS.,X^XXX  11    _ԀX^XXX^Acommenterquestionedtheaccuracyoftheprojectionsof e reductionsattributabletotheprogramsonthespreadsheetbecausethoseprojectionsweredoneonaprogrambyprogrambasis,withoutconsiderationoftheinteractiveeffectsoftheprograms.TheIDEASmodelrun,notedabove,ineffectconsideredthoseinteractiveeffectsoftheprogramsandprovidedasanoutputthetotalelectricitysavings i   expressedinbillionKwh(alongwithotheroutputs,includingtheemissionsreductions).ThetotalelectricitysavingsindicatedbytheIDEASmodelrunarevirtuallyidenticaltothetotalamountsprojectedonaprogrambyprogrambasis._(Docket_Ԁ___#_ԀA96_Ԅ56,XIV_F_Ԅ03).#X^XXX^#_Ԁ  & /$USUS.,X^XXX  53    _ԀAsaconceptualmatter,X^XXX^ԀEPAconsidersthisalternative e lessreasonable_than_ԀEPAsmethodologybecauseitcalculatesgrowthbetweenanactualyearofheatinput(1996)andamodeledyearofheatinput.See_section_ԀV.C.2ofthis  notice.#X^XXX^#Լ   /$USUS.,X^XXX  5    _ԀTheportionofEPAsbriefonthegrowthrateissuein  AppalachianPowerv.EPAreflectstheconfusingresponseto  comments.Asdiscussedaboveandcontrarytothesuggestioninthebrief(at712),thecosteffectivenessrunandEPAscosteffectivenessanalysisdidnotuse 19962001growthratesforheatinput.(#(#K(#hHCTABLE H/SIPSTATEHEATINPUT  /$USUS.,X^XXX  18    _ԀThisissue,liketheCCAPissues,wasraisedby e commentersforthefirsttimeinresponsetotheAugust3,_2001NODA_ԀandwasnotraisedinanyearlierrulemakingorbeforetheCourt.Nevertheless,EPAisaddressingalltheseissuesonthemeritsintodaysnotice. /$USUS.,X^XXX  31    _InoneofthoseStates,Michigan,EPAsheatinput e projectionshavenotactuallybeenexceeded.X 0 /$USUS.,X^XXX  17    _ԀX^XXX^EPAalsonotesthattheAgencysuseofassumedCCAP e reductionsdidnotsignificantlyaffectthe_costeffectiveness_ԀoftheNOxemissionsreductionsonwhichtheStateNOxemissionbudgetsarebasedanddidnotchangewhetherthereductionsmetEPAs_costeffectiveness_criteria._As_ԀexplainedintheNOxSIPCall,EPAexaminedtheimpactoftheCCAPreductionsandfoundthat eveniftheAgencydidnotassumetheCCAPreductions,itwasstillhighly_costeffective_ԀtodeveloparegionallevelNOxbudgetfortheelectricpowerindustry,basedonthelevelofcontrolthatEPAhas_assumed,_Ԁ_(63_Ԁ_F__R_Ԁ_57414)._Ԁ_(See_Ԁalso  \  RegulatoryImpactAnalysisfortheRegionalNOxSIPCall,at624and625,September_1998). #X^XXX^# _ S /$USUS.,X^XXX  1    _ԀUnlessotherwisestated,allreferencesinthisnoticeto  actualorprojected heatinputor heatinputgrowthratesconcernheatinputduringtheozoneseasonforEGUs.  /$USUS.,X^XXX  33    _ԀEPAcalculatedthepartialStateheatinputbudgetsfor e largeEGUsforAlabama,Georgia,andMissouribysummingtheheatinputfor1996,1995,and1995respectivelyforallsuchunitsinthefinegridcountiesoftheparticularState_andapplyingtheappropriategrowthrate._ԀThisinformationisinDocketItemXVC29andisconsistentwiththepartialStateNOxemissionbudgetsproposedin67Fed.Reg._8395,___8416,_Feb._Ԁ22,_2002._  /$USUS.,X^XXX  55    _ԀUnderFederalRegisterdraftingrequirements,EPAmust e havean ActioncaptionineverydocumentpublishedintheFederalRegister.Theuseofcaptionatthebeginningof  todaysnoticedoesnotmakethenoticean actionunderSection307(d)(1)(N).The Actioncaptionisrequiredforallnotices,includingpolicystatementsandinterpretationsforwhichpublicnoticeandcommentandapublichearingareclearlynotrequired. % /$USUS.,X^XXX  36    _ԀEPAstatedthattheimprovementsinthe1998IPMBase e Caseforecastincluded usingthemostrecentNERCestimateforregionalelectricitydemand;thelatestavailableEIAandNERCgenerationunitdata;updatedfuelforecasts;updatedassumptionsonnuclear,hydroelectricandimport X  assumptions(withspecialattentiontodifferencesinsummeruse);andanincreaseinthelevelofdetailinthemodeltomoreaccuratelycapturethetransmissionconstraintsthatexistformovingpowerbetweenvariousregionsofthecountry.Id.  Inaddition,theforecastincludedupdated X assumptions onthesizeandoperationofallelectricitygenerationunitsofutilitiesandindependentpowerproducers(withspecialattentiontocogenerators)and planningreservemarginsandthecostsofbuildingnewgenerationcapacity.Id. I /$USUS.,X^XXX  30    _ԀX^XXX^CommentershavecharacterizedEPAspreliminaryviewsin e theAugust3,_2000NODA_Ԁasattempting,inessence,toarguethattheonlythingthatmattersisthe_regionwide_Ԁheatinputgrowthrate,nottheindividualStategrowthrates.Thisisamischaracterization.EPAbelievesthataslongasthe_regionwide_Ԁprojectionisreasonablyclosetotheactual_regionwide_Ԁheatinput,then,asamatterofsimplearithmetic,tradingopportunitieswilllikelybepresentforanyStatewhoseactualNOxemissionsexceeditsNOx#X^XXX^#X^XXX^Ԁemission   B budget.Asdiscussedabove,theavailabilityoftrading,inturn,limitstheimpactofhigherthanexpectedheatinput.#X^XXX^k#ԤxTABLE CDmTABLE G  /$USUS.,X^XXX  56    _ԀOneofthesecommentersarguedthatEPAshouldremoveany e limitonthesizeoftheComplianceSupplementPool,whichisapoolofextraallowancesestablishedbyEPAforeachStateforuseinthefirst_2_ԀyearsoftheNOxSIPCallandthe_section_Ԁ126RulebysourcesthatmaynotbeabletoinstallNOx_emissions_Ԁintime.Notonlyisthisclaimoutsidethescopeofthisnotice,butalsotheCourthasalreadyruledonandupheldEPAsimpositionofthecapontheComplianceSupplementPool.SeeMichiganv.EPA,_213__ _    F.3d_at694__._Ԁ__mailto:hoffman.howard@epa.gov  /$USUS.,X^XXX  48    _ԀThe_____periods_Ԁfordecreasingozoneseasonheatinput e obviously_differ_Ԁslightlyfrom_the___Ԁ_periods_Ԁfordecreasingannualheatinput. E /$USUS.,X^XXX  38    _ԀThiscontrastswithfossil_fuelfired_Ԁunits,whose e operatingcostsarehigherbecauseofthecostoffossil ;  fuel. U /$USUS.,X^XXX  51    _ԀAsdiscussedin_section_ԀV.C.3ofthisnotice,OTAGs e projectionsalsoarefundamentallyflawedinthattheyarenotbasedonconsistentassumptions. | /$USUS.,X^XXX  19    _ԀX^XXX^AsnotedintheAugust3,_2001NODA,_ԀEPAsmethodology e calledforprojecting2007heatinput,notheatinputatinterimpointsintime.However,forpurposesofrespondingtoconcernsaboutthereasonablenessofthemethodology,itisusefultoexaminewhatthemethodologywouldprojectifappliedtointerimpointsintimewhendataconcerningactualheatinputareavailable.#X^XXX^#  /$USUS.,X^XXX  4    _ԀEPAisnotanalyzingthereasonablenessofthegrowth  methodologywithrespecttoWisconsinbecausetheCourtvacatedtheNOxSIPCallforthatStateandEPAdoesnotintend,atpresent,tofurtherevaluateWisconsininthecontextofozonetransport. ' /$USUS.,X^XXX  52    _ԀX^XXX^Further,asaconceptualmatter,EPAconsidersthis e alternativelessreasonable_than_ԀEPAsmethodologybecausethisalternativeassumesthesameamountofheatinputgrowthforeachState,aphenomenonthatisdemonstrablyunrealistic,basedonbothhistoricalexperienceandmodelprojections.#X^XXX^#  /$USUS.,X^XXX  7    _ԀNotethatwhileEPAstarteditselectricdemandforecasts e usingNERCforecastsfortheyear1997,EPAusedheretheactualelectricitydemandfor1996inordertodemonstratetheeffectivegrowthratefor19962001,whichisreferencedbythecommenters. " /$USUS.,X^XXX  54    _ԀEPAnotesthattheDistrictofColumbiaisuniqueinthat e ithasonlysixunitsandsoitsheatinputisparticularlyvariable.   /$USUS.,X^XXX  44    _ԀMonthlydatawasnotavailablefortheyear1983,soa e comparisonoftheperiodbetween1977and1983cannotbemade. l /$USUS.,X^XXX  22    _ԀX^XXX^See e http://www.nrc.gov/reading-rm/doc-collections/news/archive/01-136.html#X^XXX^#X^XXX^.#X^XXX^)# H /$USUS.,X^XXX  41    _EIAprovidedgenerationdataforthisentireperiodonly e forlargeutilityunits.IntheStateofMichigan,nonutilityunitsmakeupabout12%ofthegenerationcapacity.  /$USUS.,X^XXX  6    _ԀInaddition,EPAconsidered,butrejected,theapproachof e usingasingle,uniformheatinputgrowthrateindevelopingalloftheState_NOx_Ԁemissionbudgets.(See_section_Ԁ_D.IV_.10ofthisnotice.)  /$USUS.,X^XXX  23    _ԀSee e http://yosemite.epa.gov/r5/il_permt.nsf/50d44ae9785337bf8625666c0063caf4/b04c4b1ab67564e48625685d0068df82/$FILE/99080101fnl.PDF;andhttp://www.dom.com/operations/station-fossil/unit.htmlX^XXX^.#X^XXX^]#ԤTABLE L  /$USUS.,X^XXX  24    _ԀSeeX^XXX^http://www.sargentlundy.com/fossil/plant.asp#X^XXX^#4B5ЋTO  5  6TOngg  7ra<;and e К4C5TO  5  X^XXX^http://www.pegasustec.com/docs/NICE3.pdf#X^XXX^ #X^XXX^. 6TOngg  7ra  #X^XXX^s# L /$USUS.,X^XXX  45    _ԀEPAnotesthatitpreviouslysolicitedcorrectionsto e baselineheatinputdataandrespondedtorequestedcorrectionsthroughtheTechnicalAmendmentsin1999and2000.EPAalsonotesthat,basedonthedataprovidedbycommenters,therequestedchangesto1996heatinputwouldhaveverylittleimpactonVirginiasEGUNOxemissionbudget._Virginias_Ԁ1996baselineheatinput(whichwasusedtodevelopthebudget)wouldincreaseby131tons,and,withtheapplicationofEPAsgrowthfactorof1.32forVirginia,    _the_ԀStatesEGUNOxemissionbudgetwouldincreaseby173tonsor1%.  /$USUS.,X^XXX  46    _ԀEPAsimilarlyincorporatedotherspecificdata e correctionsrequestedbycommentersforotherStatesfor1997orlater.(http://www.pegasustec.com/docs/NICE3.pdf),(http://www.pegasustec.com/docs/NICE3.pdf).  /$USUS.,X^XXX  25    _ԀOnecommenterclaimedEPAsheatinputgrowthmethodology e therebyresultsin draconianeconomicsanctionsanda nogrowthpolicyforMichigan.Asdiscussedbelowin_section_V.D.9ofthisnotice,thereisnobasisforclaimingthatEPAsheatinputgrowthrateunderestimatesMichigansfutureheatinput.Infact,MichigansactualheatinputhasneverexceededEPAs2007projectionand,since1998,hasdeclinedtowherefor2001itis8.7%belowthatprojection.\|  /$USUS.,X^XXX  28    _ԀInventoryofPowerPlantsintheU.S.asofJanuary1, e 1998,_EIA,_ԀDecember1998,_atpg._Ԁ3;InventoryofElectric ; UtilityPowerPlantsintheU.S.1999WithDataasofJanuary1,_1999,EIA,_ԀNovember1999,at_pg.1;_ԀInventoryof  ElectricUtilityPowerPlantsintheU.S._1999,EIA,_ X September2000at_pg._Ԁ1.  /$USUS.,X^XXX  50    _ԀWhileEPAs2007heatinputprojectionwasexceededby e NewYorks1999heatinput,nocommenterdisputedtheheatinputgrowthrateforthatState.Moreover,theStatesheatinputhasdecreasedsince1999andisnowwellbelowEPAsprojection.Infact,heatinputineveryyearotherthan1999hasbeenlowerthantheactualheatinputin1995. dHHHH'dxd  /$USUS.,X^XXX  29    _ԀSeeEPARegion4NationalCombustionSpreadsheet e maintainedat_4LlTO  5  http://www.epa.gov/region4/air/permits/national_ct_list.xls.6TOectr  7l-_ b /$USUS.,X^XXX  9    _ԀEIAisanindependentagencywithintheU.S.Departmentof e Energy(DOE)thatisresponsiblefor,amongotherthings,collecting,compiling,andreportinginformationontheU.S.electricityindustry.http://www.epa.gov/region4/air/permits/national_ct_list.xls).  /$USUS.,X^XXX  20    _ԀEPA,ofcourse,recognizesthattherealsocanbe e significantincreasesinStateheatinputovermultiyearperiods.However,commenterssuggestedthatsignificantdecreasescouldnotoccur.Thepointisthat,sincesignificantdecreasescanoccur,thefactthatStatesrecentheatinputexceedsorisclosetoEPAs2007projectiondoesnotmaketheprojectionunreasonable. TABLE ITABLE A$  /$USUS.,X^XXX  15    _ԀX^XXX^AcommenterstatedthatCCAPhasnotgeneratedthe e expectedlevelofreductionsbecauseitdidnotachieveitsgoalofreducingU.S.greenhousegasemissionsto1990levels.However,theamountsofreductionsprojectedbytheClimateActionReportforparticularCCAPprogramsaffectingelectricitydemand,whicharetheonesrelevantforpresentpurposes,werefarlessthanwouldbenecessarytoreduceoverallU.S.greenhousegasemissionsto1990levels.#X^XXX^#TABLE A(O$Լ TABLE A TABLE A TABLE A  dTABLE BTABLE JvTABLE D/TABLE Emailto:culligan.kevin@epa.gov s /$USUS.,X^XXX  8    _ԀInaddition,EPAnotesthatsincetheCCAPreductionsare e assumedtooccuronanationwidebasis,anyassumptionsregardingCCAPwouldnothavebeenthecauseofStatebyStatevariationinheatinputgrowthrates.  /$USUS.,X^XXX  10    _ԀPartiestothe1992UnitedNationsFrameworkConvention e onClimateChange(includingtheU.S.)agreedtosubmitreportsdetailingtheiremissionsofgreenhousegases(suchasCO2)andanystrategiestoreducethoseemissions. e  M /$USUS.,X^XXX  12    _ԀManyotherCCAPprogramsgeneratedenergysavingsbutin e waysotherthanreducingelectricitydemand,sothatEPAdidnottakeintoaccountbenefitsfromtheseprogramseither.http://www.epa.gov/ttn/rto/  /$USUS.,X^XXX  14    _ e ЀX^XXX^Indeed,severalcommenterscriticalofEPAselectricity  demandassumptionsneverthelessacknowledgedthatitisuncleartowhatextentindividualutilitiesincorporatedCCAPprogramsintotheirdemandprojections._(Docket_Ԁ_#A_9656,Item#XIVD_Ԅ14,_Ԁ_Michigan,_ԀAttachment,p._5,_ԀandItem#XIVD_Ԅ31,_Ԁ_UARG,_ԀAttachmentH,p.7).#X^XXX^#  /$USUS.,X^XXX  35    __EPAsreviewindicatesthatfouroutofthe34sevenyear e periodsfrom19602000hadadecreaseinannualheatinput,withadecreaseofover4%forthreeperiods(Docket#A9656,Item#XVC18,at10),whiletwooutofthe21sevenyearperiodsfrom19701998hadadecreaseinozoneseasonheatinput,withoneofthosedecreasesgreatlyexceeding4%(Docket#A9656,Item#XVC19,at10).Sincetheseperiodsalthoughaminorityindicatethatsuchdecreasescanoccur,EPAbelievesthatitsmethodologyshouldnotbeconsideredunreasonablebasedontherecentStateheatinput.  Moreover,X^XXX^whiletheselongterm  \  historicaldatacertainlyshowthepotentialforsuchdecreases,thedataareotherwiseoflimiteduseinprojectingfutureheatinput.AsexplainedinSectionV.D.6.ofthisnotice,theelectricityindustryhasbeenundergoingderegulationofgenerationandrestructuring.Asaresult,trendsinthepast,asreflectedinthedata,#X^XXX^!#X^XXX^Ԁmay `  notcontinueinthefuture.TheIPMreflectsthesechanges,andbyusingtheIPMindevelopingheatinputgrowthrates,EPAhastakenthesechangesintoaccount.#X^XXX^#_D4TABLE A  /$USUS.,X^XXX  21    _ԀEIAcollected,onalongtermhistoricalbasis,monthly e andannualplantbyplantdataonquantityandheatcontentoffuelused.EIAusedthesedatatodetermineannualheatinputforeachStateanddidnotdetermineStateheatinputonanozoneseasonbasis.EPAnotesthatitsanalysisdoesnotincludetheDistrictofColumbia,forwhichafullsetofhistorical,annualheatinputdatawasnotavailable.However,theheatinputgrowthratefortheDistrictofColumbiaisnotdisputedbycommenters.  /$USUS.,X^XXX  40    _ԀIthasbeensuggestedthatX^XXX^ԀCooknucleargenerationhas e beentakenupbyoutofstateaffiliatesofCookandthereforethatCooksoperationalproblemshavenotaffectedfossilfiredgenerationinMichigan.However,EPAhasnotreceivedspecificinformationpurportingtodemonstratethispattern.Indeed,theMichiganPublicUtilityCommissionhas . highlightedthattheresumptionofnormaloperationsbytheCookNuclearfacilityincreasesbothavailablegenerationandtheabilitytoimportpower,whichsuggeststhatCookandfossilfiredMichigangeneratorsareinterrelated.#X^XXX^#Ԁ    Summer2001,EnergyAppraisal,MichiganPublicUtilityCommission,_http://www.cis.state.mi.us/mpsc/reports/energy/01summer/electric.htm._  /$USUS.,X^XXX  26    _ԀOil/gasunitsareincludedinthesamecategorybecause e manyunitsthatburnonefuelcanalsoburntheother.However,astheanalysispointsout,moreinefficientoil/gasboilersarebeingretiredandmostoftheincreaseingenerationcomesfromhighlyefficient,highlycontrollednaturalgascombinedcycleunits.AnalyzingElectricPowerat8. /$USUS.,X^XXX  27    _ԀEPAnotesthatoilgenerationwillaccountforatrivial e amountofoil/gasgeneration.TABLE A TABLE A  /$USUS.,X^XXX  49    _Throughoutthisnoticethetermgrowthrate(expressedin e _percent)_Ԁhasbeen_used._ԀIntheoriginal_rulemaking_ԀEPAactuallyusedgrowthfactors(afactorusedtomultiplythebaselineheatinput).Growthfactorscanbeconvertedtogrowthratesbysubtracting1andexpressingthevalueintermsofapercent(e.g.agrowthfactorof1.08isequivalenttoagrowthrateof8%).Inotherwords,increasingabaselineheatinputby8%growthrateisequivalenttomultiplyingthebaselineheatinputbya1.08growthfactor.  /$USUS.,X^XXX  32    _ԀEPAalsousedtheIPMinordertomakesurethat e consistentassumptionswereusedforprojectingeachStatesheatinputgrowth. 3 /$USUS.,X^XXX  43    _Ԁ_EPAsreviewindicatesthattenoutofthe32nineyear e periodsfrom19602000hadadecrease,oranincreaseofnomorethan1%,inannualheatinput(Docket#A9656,Item#XVC18,at58),while7ofthe19nineyearperiodsfrom19701998hadadecrease,oranincreaseofnomorethan1%,inozoneseasonheatinput(Docket#A9656,Item#XVC19,at58).Sincetheseperiodsalthoughaminorityindicatethatsuchdecreasesandsmallincreasescanoccur,EPAbelievesthatitsmethodologyshouldnotbeconsideredunreasonablebasedontherecentStateheatinput.Moreover,X^XXX^whiletheselongtermhistoricaldatacertainly  \  showthepotentialforsuchdecreasesandsmallincreases,thedataareotherwiseoflimiteduseinprojectingfutureheatinput.#X^XXX^#X^XXX^ԀAsexplainedinSectionV.D.6.ofthisnotice, C  theelectricityindustryhasbeenundergoingderegulationofgenerationandrestructuring.Asaresult,trendsinthepast,asreflectedinthedata#X^XXX^ #X^XXX^,maynotcontinueinthe `  future.TheIPMreflectsthesechanges,andbyusingtheIPMindevelopingheatinputgrowthrates,EPAhastakenthesechangesintoaccount.#X^XXX^%#_  /$USUS.,X^XXX  47    _Ԁ___EPAsreviewindicatesthattwooutofthe31tenyear e periodsfrom19602000hadadecreaseinannualheatinput,withthelargestdecreasebeing5.5%(Docket#A9656,Item#XVC18,at61),whilefouroutofthe18tenyearsperiodsfrom19701998hadadecreaseinozoneseasonheatinput,withthelargestdecreasebeing9.1%(Docket#A9656,Item#XVC19,at61).Sincetheseperiodsalthoughaminorityindicatethatsuchdecreasescanoccur,EPAbelievesthatitsmethodologyshouldnotbeconsideredunreasonablebasedontherecentStateheatinput.  Moreover,X^XXX^whiletheselongtermhistoricaldata  \  certainlyshowthepotentialforsuchdecreases,thedataareotherwiseoflimiteduseinprojectingfutureheatinput.#X^XXX^+#X^XXX^ԀAsexplainedinSectionV.D.6.ofthisnotice,the C  electricityindustryhasbeenundergoingderegulationofgenerationandrestructuring.Asaresult,trendsinthepast,asreflectedinthedata,maynotcontinueinthefuture.TheIPMreflectsthesechanges,andbyusingtheIPMindevelopingheatinputgrowthrates,EPAhastakenthesechangesintoaccount.#X^XXX^#_ 9 /$USUS.,X^XXX  16    _ԀOnlyasmallpartoftheEnergyStarreductionswere e consideredtobeincludedintheNERCforecastsbecausetheyinvolvedprogramsinexistencebefore1993. j /$USUS.,X^XXX  37    __EPAsreviewindicatesthat13outofthe32nineyear e periodsfrom19602000hadadecreaseinannualheatinput,withadecreaseofmorethan10.2%ineightofthoseperiods(Docket#A9656,Item#XVC18,at13),while11ofthe19nineyearperiodsfrom19701998hadadecreaseinozoneseasonheatinput,withadecreaseofmorethan10.2%ineightofthoseperiods.(Docket#A9656,Item#XVC19,at13).Sincetheseperiodsalthoughaminority ?   indicatethatsuchdecreasescanoccur,EPAbelievesthatitsmethodologyshouldnotbeconsideredunreasonablebasedontherecentStateheatinput.  Moreover,X^XXX^whiletheselong  termhistoricaldatacertainlyshowthepotentialforsuchdecreases,thedataareotherwiseoflimiteduseinprojectingfutureheatinput.#X^XXX^L#X^XXX^ԀAsexplainedinSection . V.D.6.ofthisnotice,theelectricityindustryhasbeenundergoingderegulationofgenerationandrestructuring.Asaresult,trendsinthepast,asreflectedinthedata,#X^XXX^@#X^XXX^Ԁmay   notcontinueinthefuture.TheIPMreflectsthesechanges,andbyusingtheIPMindevelopingheatinputgrowthrates,EPAhastakenthesechangesintoaccount.#X^XXX^]#_http://www.epa.gov/capi/ipm/npr.htm). O /$USUS.,X^XXX  39    __EPAsreviewindicatesthateightoutofthe32nineyear e periodsfrom19602000hadadecrease,oranincreaseofnomorethan0.4%,inannualheatinput(Docket#A9656,Item#XVC18,at28),while2ofthe19nineyearperiodsfrom19701998hadadecrease,oranincreaseofnomorethan0.4%,inozoneseasonheatinput.(Docket#A9656,Item#XVC19,at28).Sincetheseperiodsalthoughaminorityτindicatethatsuchdecreasesandsmallincreasescanoccur,EPAbelievesthatitsmethodologyshouldnotbeconsideredunreasonablebasedontherecentStateheatinput.  Moreover,X^XXX^whiletheselongtermhistoricaldata  \   certainlyshowthepotentialforsuchdecreasesandsmalldecreases,thedataareotherwiseoflimiteduseinprojectingfutureheatinput.#X^XXX^#X^XXX^ԀAsexplainedinSection  V.D.6.ofthisnotice,theelectricityindustryhasbeenundergoingderegulationofgenerationandrestructuring.Asaresult,trendsinthepast,asreflectedinthedata,#X^XXX^%#X^XXX^Ԁmay . notcontinueinthefuture.TheIPMreflectsthesechanges,andbyusingtheIPMindevelopingheatinputgrowthrates,EPAhastakenthesechangesintoaccount.#X^XXX^B#_TABLE A E /$USUS.,X^XXX  34    __EPAsreviewindicatesthatoneoutofthe33eightyear e periodsfrom19602000hadadecreaseinannualheatinputofwellover3.8%(Docket#A9656,Item#XVC18,at1),whilethreeoutofthe20eightyearperiodsfrom19701998hadadecreaseinozoneseasonheatinput,withadecreaseofwellover3.8%fortwoperiods(Docket#A9656,Item#XVC19,at1).Sincetheseperiodsalthoughaminorityτindicatethatsuchdecreasescanoccur,EPAbelievesthatitsmethodologyshouldnotbeconsideredunreasonablebasedontherecentStateheatinput.  Moreover,X^XXX^whiletheselong     termhistoricaldatacertainlyshowthepotentialforsuchdecreases,thedataareotherwiseoflimiteduseinprojectingfutureheatinput.#X^XXX^#X^XXX^ԀAsexplainedinSection  V.D.6.ofthisnotice,theelectricityindustryhasbeenundergoingderegulationofgenerationandrestructuring.Asaresult,trendsinthepast,asreflectedinthedata,#X^XXX^#X^XXX^Ԁmay . notcontinueinthefuture.TheIPMreflectsthesechanges,andbyusingtheIPMindevelopingheatinputgrowthrates,EPAhastakenthesechangesintoaccount.#X^XXX^#___ b /$USUS.,X^XXX  42    _Ԁ_EPAsreviewindicatesthatsixoutofthe33eightyear e periodsfrom19602000hadadecreaseinannualheatinput,withadecreaseof8.4%ormoreinoneoftheseperiods(Docket#A9656,Item#XVC18,at31),whiletwooutofthe20eightyearperiodsfrom19701998hadadecreaseinozoneseasonheatinput,withadecreaseof8.4%ormoreinoneoftheseperiods(Docket#A9656,Item#XVC19,at31).Sincetheseperiodsalthoughaminorityindicatethatsuchdecreasescanoccur,EPAbelievesthatitsmethodologyshouldnotbeconsideredunreasonablebasedontherecentStateheatinput.  Moreover,X^XXX^whiletheselong  \  termhistoricaldatacertainlyshowthepotentialforsuchdecreases,thedataareotherwiseoflimiteduseinprojectingfutureheatinput.#X^XXX^1#Ԁ  X^XXX^ԀAsexplainedinSection C  V.D.6.ofthisnotice,theelectricityindustryhasbeenundergoingderegulationofgenerationandrestructuring.Asaresult,trendsinthepast,asreflectedinthedata#X^XXX^8#X^XXX^,may `  notcontinueinthefuture.TheIPMreflectsthesechanges,andbyusingtheIPMindevelopingheatinputgrowthrates,EPAhastakenthesechangesintoaccount.#X^XXX^S#Ԁ_  dTABLE K Y /$USUS.,X^XXX  13    ݀Forexample,theResidentialApplianceProgramdepended e onaseriesofDOEregulationsestablishingstandardsfornumerousappliances.By1997,DOEhadnotyetpromulgatedthefirstoftheseregulations.Asof1997,theDOEprogrammanagerwouldneverthelessbeinapositiontoestimatetheimpactofthisprogramonanationallevelforfutureyears,butindividualutilitiesestimatingelectricitydemandintheirareaswouldnotbeinapositiontodoso.dd      !USUS.,  _X^XXX8$nXXdd8fO% `     h      p   656050P   `     h      p     󀀀   @-  ENVIRONMENTALPROTECTIONAGENCY 2 40_CFR_ԀParts51,52,96,and97[FRL72033XXXXX]NoticeinResponsetoCourtRemandon_NOx_Ԁ#X$nXXX^K#X^XXX$nSIPCall    ЀandSection126Rule n     AGENCY:  EnvironmentalProtectionAgency(EPA) 6   ACTION:0 NoticeinResponsetoCourtRemand   x   @  @ N  (# (#  SUMMARY : Intodaysnotice,EPAisrespondingtotwocourt  decisionsdirectingEPAtoreconsiderheatinputgrowthratesprojectedandusedinsettingnitrogenoxides(_NOx_)emissionbudgetsintworulesdesignedtoreduceinterstatetransportofozoneand_NOx_,anozoneprecursor.Afterreviewingtheheatinputgrowthratesandconsideringthecourtdecisionsandadditionalcomments,EPAhasdecidedtocontinuetousetheheatinputgrowthratesdevelopedintherules.Onerule,the_NOx_ԀStateImplementationPlanCall(_NOx_ԀSIPCall)underSection110oftheCleanAirAct(CAA),setozoneseason_NOx_Ԁemissionbudgetsbased,inpart,onemissionsreductionscalculatedforlarge,fossilfuelfiredelectricgeneratingunits(_EGUs_)in22StatesandtheDistrictofColumbia.Thesecondrule,issuedinresponsetopetitionsbynortheasternStatesunderSection126oftheCAA(Section126Rule),includedozoneseason_NOx_Ԁemission +F'. _budgetsforEGUsin12StatesandtheDistrictofColumbia.#X$nXXX^Q#X^XXX$nԀ  TheU.S.CourtofAppealsfortheDistrictofColumbiaCircuit(theCourt)remandedtheheatinputgrowthratestoEPAtoeitherproperlyjustifythegrowthratescurrentlyusedbyEPAortodevelopandjustifynewgrowthrates.Afterreviewingthematter,EPAbelievesthatthemethodologyusedindevelopingtheheatinputgrowthratesandtheresultinggrowthratesarereasonablebasedontheinformationavailableatthetimetheruleswereissued,confirmedbynewinformationconcerningactivitytodate.#X$nXXX^ #X^XXX$n    ADDRESSES :Documentsrelevanttothisactionareavailable h forinspectionattheDocketOffice,locatedat401MStreet,SW,WatersideMall,RoomM1500,Washington,D.C.20460,between8:00a.m.and5:30p.m.,MondaythroughFriday,excludinglegalholidays.Areasonablefeemaybechargedforcopying. FORFURTHERINFORMATIONCONTACT :Generalquestions,and   questionsontechnicalissuesconcerningtoday's#X$nXXX^U #X^XXX$nԀnotice T!" shouldbeaddressedtoKevinCulligan,OfficeofAtmosphericPrograms,CleanAirMarketsDivision,U.S.EnvironmentalProtectionAgency,1200PennsylvaniaAve.,N.W.(6204N),Washington,D.C.20460,telephone(202)5649172,emailat4c TO  5  culligan.kevin@epa.gov6TO  7 .Questionsonlegalissues )%, concerningtodaysnotice#X$nXXX^#X^XXX$nԀshouldbeaddressedtoHowardJ. \+&. Hoffman,OfficeofGeneralCounsel,U.S.EnvironmentalProtectionAgency,1200PennsylvaniaAve.,N.W.(2344A),Washington,D.C.20460,telephone(202)5645582,emailat4. TO  5  hoffman.howard@epa.gov#X$nXXX^#X^XXX$n6TO  7 ԀorDwightC.Alpern,CleanAir   MarketsDivision,U.S.EnvironmentalProtectionAgency,1200PennsylvaniaAve.,N.W.(6204N),Washington,D.C.20460,telephone(202)5649151,emailatalpern.dwight@epa.gov. SUPPLEMENTARYINFORMATION : d   ` Intodaysnotice,EPAisrespondingtotworulingsbytheCourtdirectingEPAtoreconsidergrowthratesforheatinput(i.e.,fossilfueluse)fortheozoneseason(May1September30)projectedandusedinsettingStateNOxemissionbudgetsintworulesdesignedtoreduceinterstatetransportofozoneandNOx.#X$nXXX^W#X^XXX$n$ XN XXX^XN X XXNXN X XXNX^X XXN  1      ׀OnMay15,2001,theCourt  issuedadecisioninAppalachianPowerv.U.S.EPA,249F.3d 4 1032(D.C.Cir.2001)concerningtheSection126Rule( Section126Decision).Aspartofthatdecision,theCourtremandedtheheatinputgrowthratesthatEPAusedtocalculateNOxemissionbudgetssetinresponsetoseveralpetitionsbynortheasternStatesunderSection126oftheCAA.TheCourtremandedthesegrowthratestoEPAtoeitherproperlyjustifythegrowthratescurrentlyusedbyEPAor '8#* todevelopandjustifynewgrowthrates.OnJune8,2001,theCourtissuedasimilardecisioninAppalachianPowerv. \ U.S.EPA,251F.3d1026(D.C.Cir.2001)concerningheat X inputgrowthratesusedtodevelopNOxemissionbudgetsusedintheNOx#X$nXXX^X#X^XXX$nSIPCallrelatedtointerstatetransportofozone `  ( TechnicalAmendmentsDecision).TheCourtraisedconcernsaboutEPAsexplanationofthemethodologyfordevelopingprojectedheatinputgrowthratesandaboutStatesforwhichheatinputforEGUshadalreadyexceededtheheatinputthatEPAprojectedfor2007. ` InresponsetotheCourtsdecisions,EPAhasreviewedtheheatinputgrowthratesforEGUsandthemethodologyusedtodevelopthosegrowthrates.Basedonthatreview,EPAbelievesthattheheatinputgrowthratesandthemethodologyusedtodevelopthemwerereasonable.Furthermore,inresponsetotheCourtsandcommentersconcerns,EPAhasalsoreviewednewinformationconcerningcurrentactivity.ThisnoticeexplainswhyEPAthinksthatthegrowthrateswerereasonablebasedontheinformationthatEPAhadavailableatthetimeoftheoriginalrulemakings,asconfirmedbynewinformation. x   &p!(  AvailabilityofRelatedInformation  '#*  ` TheofficialrecordfortheSection126rulemakinghasbeenestablishedunderdocketnumberA9743.Theofficial @+&. recordfortheNOxSIPCallrulemakinghasbeenestablishedunderdocketnumberA9656.Thepublicversionofbothrecords,includingprinted,paperversionsofelectroniccomments,whichdoesnotincludeanyinformationclaimedasconfidentialbusinessinformation,isavailableforinspectionfrom8:00a.m.to5:30p.m.,MondaythroughFriday,excludinglegalholidays.TherulemakingrecordislocatedattheU.S.EnvironmentalProtectionAgency,401MStreet,SW,WatersideMall,RoomM1500,Washington,D.C#X$nXXX^#X^XXX$n. `  20460.Inaddition,theFederalRegisterrulemakingsand   associateddocumentsarelocatedat4hab=TO  5  http://www.epa.gov/ttn/rto/6!TO!.F  7abl !,andcertaindocumentsare d locatedathttp://www.epa.gov/airmarkets/fednox/126noda2/index.html#X$nXXX^ #X^XXX$n. l  -,- Outline  h I.0 ` Background0` (#` (# A.0 ` NOxSIPCall` (#` (# B.0 ` Section126Rule ` (#` (# C.0 ` TechnicalAmendmentsb !` (#` (# II.0 ` CourtDecisions8!"` (#` (# A.0 ` Section126Decision"^#` (#` (# B.0 ` TechnicalAmendmentsDecision"4$` (#` (# III.NoticesofDataAvailability#X$nXXX^"#X^XXX$nIV.StatesAddressedinTodaysNotice $& A.0 ` NOx#X$nXXX^\%#X^XXX$nSIPCallf% '` (#` (# B.0 ` Section126Rule#X$nXXX^%#X^XXX$nԀ<&!(` (#` (# V.0 ` EPAsExplanationofHeatInputGrowthRateMethodology 'b") andResponsetoCourtRemandandPublicComments ` (#` (# A.0 ` Overview($+` (#` (# B.0 ` DescriptionofEPAsMethodology)$,` (#` (# 0 `  1.0` ` (#` (#EPAsMethodologyforDeterminingStateNOx#X$nXXX^|&#X^XXX$nEmission j*%- BudgetsandHeatInputGrowthRates ` (#` (# 2.0 ` UseofConsistentHeatInputGrowthRatesforDifferent ,f'/ PartsofEPAsAnalysis ` (#` (# C.0 ` JustificationforEPAsMethodologyandReasonableness  ofEPAsUnderlyingAssumptions#X$nXXX^m(#X^XXX$n\` (#` (# 1.0 ` CourtsandCommentersConcerns2` (#` (#  #X$nXXX^*#X^XXX$n 2.0 ` EPAReasonablyDecidedtoDevelopState#X$nXXX^*#X^XXX$nNOxEmission X BudgetsbyUsingHeatInputGrowthRates.#X$nXXX^M+#X^XXX$n.` (#` (# 3.0 ` StateHeatInputGrowthRatesBasedonIPMOutputsfor   20012010WereReasonablyRepresentativeof19972007HeatInputGrowth. ` (#` (# 4.0 ` EPADidNot DoubleCountElectricityDemand 6   ReductionsUnderCCAP. ` (#` (# 5.0 ` EPAs #X$nXXX^+#X^XXX$n AssumptionsRegardingtheLocationofNewUnits  2  WereReasonable#X$nXXX^-#X^XXX$n. ` (#` (# D.0 ` ActualHeatInputComparedtoEPAsProjectionsofHeat   Input ` (#` (# 1.0 ` CourtsandCommentersConcerns: ` (#` (# 2.0 ` EPAsHeatInputProjectionsfortheRegionAre `  ConsistentWithActualHeatInputData. ` (#` (# 3.0 ` EPAsHeatInputGrowthRatesand2007Projectionsfor   MostStatesarenotDisputedbyCommenters. ` (#` (# 4.0 ` HistoricalDataShowThataState'sHeatInputCan h DecreaseSignificantlyOverMultiYearPeriods. ` (#` (#  #X$nXXX^,.#X^XXX$n 5.0 ` ApproachofUsingRecentStateHeatInputtoProject d FutureStateHeatInputisnotStatisticallySound. #X$nXXX^.1#X^XXX$n:` (#` (# 6.0 ` EPAsHeatInputProjectionsdonotImplicitlyAssume  NegativeGrowthinElectricityGeneration. ` (#` (# 7.0 ` EvenifThereWereaSubstantialRiskthatEPAsState l HeatInputProjectionWouldbeLessThanaStatesActual2007HeatInput,ThisWouldnotMakeEPAsProjectionUnreasonable. ` (#` (# 8.0 ` CommentersOverstatedtheImpactsofActualStateHeat  InputExceedingProjectedStateHeatInput. ` (#` (# 9.0 ` DiscussionofIndividualStatesforWhichEPAsHeat p  InputGrowthRatesareDisputedbyCommenters. ` (#` (# 10.0 ` NoHeatInputGrowthMethodologyhasBeenPresented !l" ThatWouldHaveResultsThatBetterComportWithActualHeatInput. ` (#` (# E.0 ` ProceduralIssues#%` (#` (# 1.0 ` NoticeAndCommentRulemakingt$&` (#` (# 2.0 ` PetitionToReconsiderJ% '` (#` (# O# I.Background &F") A.NOxSIPCall  ($+  ` InOctober1998,EPAissuedtheNOxSIPCall--afinalruleunderSection110(k)(5)oftheCAA,42U.S.C. 2,'/ 7410(k)(5)requiring22StatesandtheDistrictofColumbia("upwindStates")torevisetheirSIPstoimposeadditionalcontrolsonNOxemissions. XN XXX^XN X XXNXN X XXNX^X XXN  2      ׀SeeFindingof X SignificantContributionandRulemakingforCertainStatesintheOzoneTransportAssessmentGroupRegionforPurposesofReducingRegionalTransportofOzone,63FR57,356(Oct.27,1998).EPAconcludedthatemissionsfromtheupwindStates"contributesignificantly"toozonenonattainmentindownwindStates,inviolationofSection110(a)(2)(D)(i).UndertheNOxSIPCall,upwindStatesarerequiredtoreduceemissionsbyamountsthatwouldallowmeetingNOxemissionbudgets.EPAdeterminedthesebudgetsbyprojectingNOxemissionsto2007forallsourcecategoriesandthenreducingthoseamountsbytheemissionsreductionsachievableusingthecontrolsthatEPAdeterminedtobehighlycosteffective.EPAdefinedhighlycosteffectivecontrolsasthosecontrolscapableofremovingNOxatanaveragecostof$2,000orlessperton.ForEGUs,EPAdeterminedthatitwashighlycosteffectivetoachieveanaverageemissionrateof0.15lb/mmBtu,basedonprojected2007fossilfueluse(i.e.,heatinput).Projected2007  &p!( heatinputforeachStatewascalculatedbyapplyingozoneseasonheatinputgrowthratesdevelopedbyEPAforeachStateforEGUs(referredtoas Stateheatinputgrowthrates)tobaseline(thehigherof1995or1996)EGUheatinput. ` EPArecommendedthataStatecouldmeettheStates#X$nXXX^ 2#X^XXX$nԀNOx  \  emissionbudgetinpartbyestablishingacapandtradeprogramforNOxemissionsfromEGUs.CoveredsourceswouldberequiredtoholdNOxallowancesatleastequaltotheirNOxemissionsandcouldeitherobtainadditionalallowancesorreduceemissions,e.g.,byinstallingadditionalcontrols.ThetotalnumberofallowancesdistributedtoEGUswouldequaltheEGUportionoftheNOxemissionbudget,i.e.,theprojected2007heatinputmultipliedbyaNOxemissionrateof0.15lb/mmBtu.Stateshadtheoptionofadoptingapproachesotherthanacapandtradeprogramtomeetthebudgets. B.Section126Rule  !l"  ` OnJanuary18,2000,EPAissuedafinalruletocontrolemissionsofNOxunderSection126oftheCAA,42U.S.C. $& 7426.Intherule,EPAmadefinalitsfindingsthatstationarysourcesofNOxemissionsin12upwindStatesand '8#*  theDistrictofColumbiacontributesignificantlytoozone )$, nonattainmentinnortheasternStates. XN XXX^XN X XXNXN X XXNX^X XXN  3      ׀Thisfinding   triggereddirectFederalregulationofstationarysourcesof \ NOxintheupwindStates.TheSection126RulefurtherestablishedacapandtradeprogramforNOxemissionswithineachupwindjurisdiction,includingNOxemissionsfromEGUs.ThisprogramwasessentiallythesameasthatsuggestedbyEPAforStateimplementationintheNOxSIPCall.EPAdeterminedthetotalnumberofNOxallowancestobedistributedtoEGUsineachindividualStatebasedonthesamemethodologyusedintheNOxSIPCall(i.e.,projected2007heatinputmultipliedbyaNOxemissionrateof0.15lb/mmBtu). C.TechnicalAmendments    ` WhenEPApromulgatedtheNOxSIPCallonOctober27,1998,EPAreopenedpubliccommentontheaccuracyofdatauponwhichtheemissioninventoriesandbudgetswerebased(63FR57,427).OnDecember24,1998,EPAextendedthecommentperiod"foremissioninventoryrevisionsto2007baselinesub-inventoryinformationusedtoestablisheachState'sbudgetintheNOxSIPCall"andfurtherexplainedthatitwasseekingcommentontherelevantdataandassumptionssotheAgencycouldcorrecterrorsandupdate '8#* informationusedtocomputethe2007budgets.(CorrectionandClarificationtotheFindingofSignificantContributionandRulemakingforPurposesofReducingRegionalTransportofOzone,63FR71,220,Dec.24,1998).EPAalsoannouncedthatitwouldreopenthecommentperiodonequivalentinventorydatafortheSection126rulemakingbecausetherulesrelieduponthesameinventories.Id.    ` Subsequently#X$nXXX^>#X^XXX$n,EPApublishedtwoTechnicalAmendments d  revisingtheNOxSIPCallemissionbudgets.InthefirstTechnicalAmendment,EPAmadesomemodificationstosource-specific1995and1996emissionsdata,whichresultedinchangesinthe2007NOxemissionbudgets(TechnicalAmendmenttotheFindingofSignificantContributionandRulemakingforCertainStatesforPurposesofReducingRegionalTransportofOzone,64FR26,298,May14,1999).InthesecondTechnicalAmendment,EPAmademorecorrectionsbaseduponadditionalpubliccommentsitreceivedandEPA'sowninternalreviewoftheaccuracyofitsdataandcalculations(TechnicalAmendmenttotheFindingofSignificantContributionandRulemakingforCertainStatesforPurposesofReducingRegionalTransportofOzone,65FR11,222,Mar.2,2000).EPAalsoexplainedthattheMarch2000TechnicalAmendmentwas"necessarytomaketheNOxSIPCallinventoryconsistentwiththeinventoryadopted"bythe $+t&. EPAintheSection126rule,asthetworulesweretobebaseduponthesameinventory.Id.󀀀 \  II.CourtDecisions X A.Section126Decision     ` OnMay15,2001,theCourtruledonanumberofchallengestoEPAsSection126Rule.SeeAppalachianPower D   v.EPA,249F.3d1032.WhiletheCourtsdecisionlargely @  upheldtheSection126Rule,theCourtremandedtwoissuestoEPA.TheCourtremandedtheSection126RuletoEPAtoallowEPAto(1)properlyjustifyeitherthecurrentornewStateheatinputgrowthratesforEGUsusedincalculatingprojectedStateheatinputfor2007and(2)eitherproperlyjustifyoralteritscategorizationofcogeneratorsthatsellelectricitytotheelectricitygridasEGUs.Withregardtoheatinputgrowthrates,theCourtwasconcernedthatEPAmayhaveusedinconsistentgrowthratesindifferentpartsoftheAgencysanalysisandthatsomeStatesalreadyhadheatinputexceedingthelevelsprojectedbyEPAfor2007.EPAisrespondingtotheremandrelatedtothecategorizationofcogeneratorsinaseparaterulemaking(InterstateOzoneTransport:ResponsetoCourtDecisionsinNOxSIPCall,NOxSIPCallTechnicalAmendments,andSection126Rules,67FR8396,Feb.22,2002). B.TechnicalAmendmentsDecision \+&.   ` OnJune8,2001,theCourtruledonanumberof  challengestoEPAsTechnicalAmendments.SeeAppalachian \ Powerv.EPA,251F.3d1026.Initsdecision,theCourt X remandedtoEPAthesameissuesasintheSection126Decisionconcerning(1)StateheatinputgrowthratesforEGUsand(2)cogenerators.TheCourtciteditsdecisionintheSection126Decision.Id.,251F.3dat1034.#X$nXXX^J#X^XXX$n    III. #X$nXXX^MV#X^XXX$nԀ NoticesofDataAvailability  d   #X$nXXX^V#X^XXX$n ` #X$nXXX^/W#X^XXX$nANoticeofDataAvailability(NODA)ofdocumentsthat ,|  EPAwasconsideringinresponsetotheremandconcerningheatinputgrowthrateswaspublishedonAugust3,2001,66  FR40609#X$nXXX^}W#X^XXX$n).ThesedocumentswereplacedintheNOxSIPCall 0 andSection126Ruledockets.Thenewdocumentscontain,amongotherthings,informationanddataonmorerecentelectricitysalesandgeneration.#X$nXXX^X#X^XXX$nԀTheinformationanddata 4 werenotavailablewhenthetworuleswerepromulgated.Table1oftheNODAcontainsactualheatinputvaluesforthe19952000ozoneseasonsfortheDistrictofColumbiaand21States,whicharesubjecttotheNOxSIPCallandincludetheStatessubjecttotheSection126Rule.Commentsonthenewinformationanddatawererequested.Thirtyfourcommentswerereceived. ` TheNODAexplainsthattherearesubstantialfluctuationsinStateheatinputforEGUsonayearbyyear @+&. basis.Someofthereasonsmentionedforthesefluctuationsareforcedoutages,variationsinenergycosts,weather,andeconomicconditions.AdiscussionofthegrowthratemethodologyusedbyEPAtodevelopStateheatinputgrowthratesforEGUs#X$nXXX^Y#X^XXX$nԀandoftherationalefordifferentcomponents `  ofthemethodologyisincludedintheNODA. EPAstatesin  \  theNODAthattheAgencyspreliminaryviewisthatthenewdataandtheexistingrecordintheNOxSIPCallandSection d  126rulemakingsappeartoconfirmthereasonablenessoftheheatinputgrowthratesusedbyEPAindevelopingNOx   emissionbudgetsforEGUs. ` AsecondNODAwaspublishedonMarch11,2002,67#X$nXXX^/]#X^XXX$nԀFR d 10844#X$nXXX^_#X^XXX$n.DocumentsreferencedinthisNODAinclude,among  otherthings,2001ozoneseasonheatinputdataand19602000annualheatinputdataand19701998ozoneseasonheatinputdatafortheDistrictofColumbiaand21States,whicharesubjecttotheNOxSIPCall.One#X$nXXX^_#X^XXX$nԀcommentwasreceivedon p  thisnotice.#X$nXXX^Pa#X^XXX$nԀIntheMarch11,2002NODA,0EPAstatedthat !l" itmightplaceadditionaldocumentsinthedocket,withnoticethereofprovidedonaparticularwebsite.EPAdidsoatvarioustimesafter March11,2002.EPAalsostated  &p!( thatiftheAgencydecidedtoconfirmitspreviouslyadoptedheatinputgrowthrates,itintendedtoissueitsresponsetotheremandbyMarch29,2002. $+t&.  ` EPAreceivedacommentontheMarch11,2002NODAstatingthattherewasnoreasontoexpectthatEPAwouldtakeadditionalcommentsintoconsiderationsincetheAgencywouldbeissuingitsresponsebyMarch29,2002.ThecommenteralsoassertedthatbothNODAsfailedtoexplaintherelevanceofthedocumentsthatwereaddedtothedocket.     ` OnMarch29,2002,EPAinformedthecommenterin d  writingthattheAgencysresponsetotheremandwouldbeissuedonoraboutApril17,2002andthattheAgencywouldconsidercommentssubmittedsufficientlyinadvance.Inaddition,EPAnotedthatadditionaldocumentswouldbeplacedinthedocket.EPAalsoidentifiedthepurposesforwhichthedatareferencedintheMarch11,2002NODAhadbeenaddedtothedocket.(Docket#A9654,Item#XVE2.)Copiesofallthesedocumentsandinformationwereplacedinthedocket.EPAsubsequentlyreceivedasecondcommentthatwassimilartothefirstcomment,andEPAreferredthecommentertotherelevantdocumentsandinformationinthedocket.Finally,EPAreceivedathirdcommentstatingthatthedatareferencedintheMarch29,2002NODAwerehighlygermaneandsupportedEPAsheatinputgrowthratemethodology. IV.StatesAddressedinTodaysNotice  $+t&.  ` Attheoutset,itshouldbeestablishedwhichStatesshouldbeaddressedintodaysnoticeontheheatinputgrowthrateissue,inlightoftheCourtsdecisionsvacatingEPAsruleswithrespecttocertainStatesandEPAsresponsetothosevacaturs.#X$nXXX^a#X^XXX$n `   #X$nXXX^3j#X^XXX$nA.NOxSIPCall   \   ` Asnotedabove,theNOxSIPCallcovered22StatesandtheDistrictofColumbia.InreviewingtheNOxSIPCall,   theCourt#X$nXXX^j#X^XXX$nvacatedtheNOxSIPCallforGeorgiaandMissouri ,|  onthegroundthattherewasinsufficientrecordevidenceconcerningportionsofthoseStates.Michiganv.EPA,213  F.3d663,685#X$nXXX^k#X^XXX$n(D.C.Cir.,2000). #X$nXXX^l#X^XXX$nԀTherecordincluded 0 modelingbytheOzoneTransportAssessmentGroup(OTAG)apartnershipamongEPA,37easternStatesandtheDistrictofColumbia,industry,andenvironmentalgroupsthatdividedtheeasternU.S.intotwogrids,the finegridandthe coarsegrid.ThegridsdidnottrackStateboundaries,andGeorgiaandMissouriweresplitbetweenthefineandcoarsegrids.OTAGstatedthat,basedonairqualityimpacts,itwasrecommending#X$nXXX^0m#X^XXX$nNOxemissioncontrolsforthe $& finegridareabutnotthecoarsegridarea.InlightofOTAGsrecommendations,theCourtconcludedthatEPAhadnotsufficientlyexplainedthebasisforincludingtheentireStatesofGeorgiaandMissouri,ratherthansimplythefine @+&. -    gridportions.TheCourtvacatedandremandedtheNO#X$nXXX^co#X^XXX$nxSIP  CallfortheseStatesforagencyreconsideration.TheCourtalsovacatedtheruleforWisconsinongroundsnotrelevanthere.Id.at681.    ` OnFebruary22,2002,EPAissuedanoticeofproposedrulemakinginresponsetotheCourtsremand,(67FR8396).rInthatnotice,EPAstatedthattheAgencydoesnotintendtoproceedatthistimewithfurtheractionevaluatingwhether#X$nXXX^[q#X^XXX$nԀNOxemissionsshouldbereducedforozonetransport `  reasonsinWisconsinorthecoarsegridportionsofGeorgiaandMissouri.Inaddition,EPAnotedthat,whilenotaddressedbytheCourt,AlabamaandMichiganalsoaredividedbetweenthefinegridandthecoarsegridinOTAGsmodeling.EPAstatedthatitwouldthereforetreatallfourStatesthesameandincludeintheNOXSIPCallonly h countiesthatarefullywithinthefinegridportionsofthefourStates.EPAproposedpartialStateNOxemissionbudgetsforAlabama,Georgia,Michigan,andMissouriusingtheStateheatinputgrowthratesestablishedforthewholeStates.#X$nXXX^s#X^XXX$n t$& #X$nXXX^xv#X^XXX$n ` EPAhastakenthepositionthatasingleheatinput  &p!( growthmethodologyshouldbeconsistentlyappliedtoeachState,andEPAreceivednumerouscommentsdisputingtheapplicationofEPAsheatinputgrowthmethodologytothese $+t&. fourStates,aswellastothreeotherStates(i.e.,Illinois,Virginia,andWestVirginia).Consequently,inthecontextofrespondingtotheremandontheheatinputgrowthissueintodaysnotice,EPAsanalysisofthereasonablenessofthatmethodologyandtheresultingheatinputgrowthratesincludesAlabama,Georgia,Michigan,andMissouri.#X$nXXX^v#X^XXX$nԀAsnotedbelow,forAlabama,Georgia,and   Missouri,EPAhasevaluatedthereasonablenessofthemethodologywithrespecttoboththeentireStateandthefinegridportionalone.ForMichigan,EPAevaluatedthemethodologyfortheentireStateandnotforthefinegridportionalonebecausetheamountofNOxemissionsinthecoarsegridportionwastrivialforpresentpurposes.3 XN XXX^X^X XXN  4      ׀#X$nXXX^y#X^XXX$n   #X$nXXX^{#X^XXX$nB.Section126Rule  l  ` Asnotedabove,theSection126Rulecovered12StatesandtheDistrictofColumbia.OfthefourStatesthatEPAproposedtoincludeonlypartiallyintheNOxSIPCall,onlyMichiganissubjecttotheSection126Rule.Asdiscussedabove,theNOxemissionbudgetforMichiganchangesverylittlewhenthecoarsegridportionoftheStateisexcluded#X$nXXX^O|#X^XXX$n,andEPAhasthereforeanalyzedtheheatinput <&!( growthonlyfortheentireState.#X$nXXX^.~#X^XXX$nԀInaddition,withregard  tothethreeotherStatesconcerningwhichEPAreceivedadversecommentsonitsheatinputprojections,theSection126RulecoversVirginiaandWestVirginia,butnotIllinois.#X$nXXX^~#X^XXX$nAsaresult,strictlyspeaking,thevalidityof `  EPAsgrowthratemethodologyfortheSection126RuleshouldnotdependonitsapplicationtoAlabama,Georgia,Missouri,Illinois,oranyotherStatecoveredundertheNOxSIPCall,butnottheSection126Rule.#X$nXXX^#X^XXX$nԀ#X$nXXX^W#X^XXX$n  `  #X$nXXX^#X^XXX$nV.EPAsExplanationofHeatInputGrowthRateMethodology ( andResponsetoCourtRemandandPublicComments    A.Overview  h  ` Afterathoroughreview,#X$nXXX^#X^XXX$nEPAhasconcludedthatits 0 methodologyfordevelopingStateheatinputgrowthrates,andtheresultinggrowthratesthemselves,werereasonableinlightoftherecorddevelopedfortheNOxSIPCallandSection126Rule,andremainreasonableinlightofnewinformationconcerningcurrentactivitythathassincebecomeavailable#X$nXXX^##X^XXX$n.Thereasonsaresummarizedbelowand 8#$ explainedmorefullyintheremainderofthisnotice.#X$nXXX^„#X^XXX$n ` 1.#X$nXXX^v#X^XXX$nEPAbelievesthatitsmethodologywasreasonablein &!( lightoftherecordfortheNOxSIPCallandtheSection126Rule,basedonthefollowingconsiderations:#X$nXXX^Dž#X^XXX$n  a.#X$nXXX^#X^XXX$nEPAs )8%, methodologyforprojectingfutureheatinputwaslogicaland +&. wasconsistentlyappliedtoallNOx#X$nXXX^ #X^XXX$nSIPCallStates.#X$nXXX^#X^XXX$nԀEPA  usedanactualStateheatinputbaseline(thehigherof1995or1996levels)#X$nXXX^8#X^XXX$nԀinviewofyeartoyearvariabilityofState X heatinput.EPAappliedtoeachStatesbaselineaheatinputgrowthrateestimatedusing#X$nXXX^߈#X^XXX$ntheIntegratedPlanning `  Model(theIPM),#X$nXXX^#X^XXX$nԀastateoftheartmodelforanalyzing  \  futureelectricitymarkets.EPAsuseoftheIPMwasupheldbytheCourt. #X$nXXX^?# X^XXX$n d   ` b.ContrarytotheCourtsunderstanding,EPAusedconsistentStateheatinputgrowthrates(i.e.,growthratesbasedon20012010heatinputgrowthdeterminedusingIPMprojectionsfor2001and2010)throughouttheanalysisfortheNOx#X$nXXX^#X^XXX$nSIPCallandtheSection126Rule.EPAdidnotuse,  orevenhaveavailable,19962000heatinputgrowthratesdeterminedusingIPMprojectionsfor1996and2000.#X$nXXX^p#X^XXX$nEPA h acknowledgesthattheCourtsmisunderstandingonthispointstemmedfrominadvertentlyconfusingstatementsEPAmadeintherecord.#X$nXXX^j#X^XXX$n !l"  ` c.ThespecificassumptionsthatEPAmadeinusingtheIPMtodevelopStateheatinputgrowthrateswerereasonable.Theseincludedassumptionsthat:(i)heatinputgrowthratesduring20012010arereasonablyrepresentativeofheatinputgrowthduring19962007;(ii)electricitydemandprojectionsshouldbereducedtotakeaccountof $+t&. demandreductionsunderClimateChallengeActionProgram(CCAP);and(iii)theuseofavailabledataonnewunitsandthehistoricaldistributionofgeneratingcapacityamongStatescouldbeusedtoprojectthelocationofnewunits.  ` 2.TheStateheatinputgrowthratesandprojections `  weregeneratedusingareasonedmethodologyandreasonableassumptions,alongwithdatathatwentthroughfullpublicreview (andwerenotatissueintheCourtremands),and d  thissuggeststhattheresultingheatinputprojectionsarereasonable.#X$nXXX^K#X^XXX$nToconfirmthis,andtorespondtoconcerns   expressedbytheCourtandcommentersabouttheplausibilityofEPAsprojectionsbasedonrecent,actualheatinputdata,EPAhasexaminedtheprojectionsinlightofhistoricalheatinputdataandnewheatinputdatathathavebecomeavailablesincetheAgencydevelopedtheprojections.EPAbelieves#X$nXXX^m#X^XXX$nԀthatitsheatinputprojectionsremain  plausibleandreasonablebasedonthefollowingconsiderations:#X$nXXX^!#X^XXX$n !l"  #X$nXXX^ޔ#X^XXX$n ` a.TheStateheatinputamountsprojectedbyEPAare "$ reasonablyconsistentwiththeactualheatinputdatathathavebecomeavailablesincetheprojectionsweremade.Onaregionwidebasis,EPAsprojectedheatinputfor2000and2001are0.1%lowerand2.0%higherrespectivelythanactualregionalheatinput.Further,formostStates,EPAsheat $+t&. inputgrowthrateshavenotbeenspecificallychallenged.CommentershavedisputedEPAsheatinputgrowthratesforsevenoutofthe22jurisdictionsundertheNOxSIPCallonthegroundthattheStatesinvolvedhadrecentheatinputamountsexceeding,orcloseto,EPAs2007heatinputprojections.However,recently,heatinputforseveraloftheseStatesdeclinedsignificantly.Moreover,Stateheatinputisquitevariablefromyeartoyearandso,inoneyearoroverseveralyears,mayincreaseandthendecrease.Indeed,therehavebeenmanyinstancesinthepastwhenState heatinputhasdecreasedsignificantlyforthelast h yearofamultiyearperiodascomparedtothefirstyearofsuchperiod.Consequently,thefactthataStatesrecentheatinputexceeds,oriscloseto,EPAs2007heatinputprojectiondoesnotbyitselfdemonstratethattheprojection,ortheunderlyingheatinputgrowthrate,isunreasonable. ` b.CommenterswhoarguethatEPAs2007projectionisunreasonablebasedonrecentheatinputdataareineffectassertingthatpredictingaStates2007heatinputbasedontrendsinrecent,shorttermheatinputdataisabettermethodologythantheoneemployedbyEPA.Somecommentersexplicitlyrecommendedthisapproach.Inresponse,EPAexaminedthisapproachusinghistoricalannualheatinput $+t&. dataandfoundthatinmostStates,recent,shorttermdataisanunreliablepredictorofaStatesheatinputinthefuture.Therefore,EPAbelievesthatitsmethodology,usingastateoftheartmodelthattakesintoaccountmanyfactors,includingthedynamicsofregionalelectricitymarkets,ismorerational.#X$nXXX^;#X^XXX$n  \   ` c.ContrarytotheCourtsunderstanding,EPAs2007heatinputprojectionsdonotassumenegativegrowthinelectricitygeneration .Stateheatinput(i.e.,fossilfuel `  useforgeneration)candecreasewhileelectricitygenerationincreasesintheStateorintheregionasawhole.WithinaState,electricitygenerationdoesnotnecessarilyvarywithheatinputbecause:#X$nXXX^#X^XXX$n(i)significant  amountsofelectricityareproducedusingnonfossilfuelgeneration;and(ii)efficiencyimprovements(e.g.,fromreplacementofoldunitswithnew,moreefficientunits)makeitpossibletoproducemoreelectricitywithlessheatinput.Further,electricityisgeneratedandsoldonaregional,notonaStatebyStatebasis.#X$nXXX^۟#X^XXX$nԀHeatinputand "$ electricitygenerationmaydecreaseinoneStatebecausethatStateisimportingmoreelectricitygeneratedinanotherStateintheregion.Thisisconsistentwithincreasedelectricitygenerationintheregionasawhole. ` d.EPAsheatinputprojectionsaresimplyrequiredto $+t&. bereasonable,nottomatchperfectlyactualheatinput.   #X$nXXX^#X^XXX$n ThisisbecausetheCourtsrecognizethatpredictionsofthe \ resultsofcomplexactivities(inthiscase,futureStateheatinput,whichwillresultfromoperationoftheregionalelectricitymarket)willnotnecessarilymatchactual,futureresultsexactly.#X$nXXX^{#X^XXX$nTorequiresuchperfectionwouldbe  \  toprecludetheuseofprojectionsorofamodeltodevelopsuchprojections.#X$nXXX^ؤ#X^XXX$nԀEPAsheatinputprojectionsthusshould d  notbeconsideredunreasonableeveniftherewereasubstantialriskthattheywouldturnouttobelessthanStatesactual2007heatinput,inlightofalltheothercircumstances.#X$nXXX^#X^XXX$nԀInthiscase,unavoidablelimitationsonthe d accuracyofheatinputprojectionsresultfrom:#X$nXXX^ݦ#X^XXX$n(i)the  complexityoftheelectricitymarketingsystem,whichcannotbemodeledperfectlybecauseofthenecessitytousesimplifyingassumptionsaboutfactors(e.g.,fuelpricesandelectricitydemandinthefuture)affectingfutureheatinput;(ii)thenecessitytomakeStatebyStateprojectionsofheatinputeventhoughelectricityisgeneratedandsoldonaregionalbasis;#X$nXXX^#X^XXX$nand(iii)significantvariabilityon t$& ayeartoyearandseveralyearbasisinherentinStateheatinput.#X$nXXX^d#X^XXX$nԀTherefore,EPAsheatinputprojectionsshould '#* notbeconsideredunreasonableinthecurrentcontext,eveniftherewereasubstantialriskthattheywouldturnoutto $+t&. belessthanStatesactual2007heatinput.#X$nXXX^(#X^XXX$nԀ#X$nXXX^o#X^XXX$n   ` e.CommentersoverstatedtheimpactsofaStates 2007 \ heatinputexceedingEPAs2007heatinputprojectionforthatState.TheNOxSIPCallandtheSection126RulelimitNOxemissions,notheatinput.EvenifaStatesactualheatinputfor2007turnsouttoexceedtheprojectedheatinput,NOxemissionswouldincreaseatamuchlowerratethanheatinput#X$nXXX^#X^XXX$nԀbecausethevastmajorityofnewunitsare, d  andwillcontinuetobe,gasfiredwithverylowNOxemissionratesandhighefficiency.#X$nXXX^#X^XXX$nԀTheimpactonthe   stringencyoftheNOxemissionbudgetandontheStateeconomythereforewouldbemuchlessthanclaimedbycommenters.Further,theNOxSIPCallandtheSection126RulearebeingimplementedthroughaNOxcapandtradeprogramthatfurthermitigatesthecostimpactofanydifferencesbetweenprojectedandactualStateheatinput. `  ` f.NocommenterhasidentifiedanalternativemethodologyfordevelopingStateheatinputgrowthratesthatwouldbelikelytoyieldgrowthratesthatwouldcomportbetterwithactualheatinputdatathanthegrowthratesunderEPAsmethodology.InlightofthevariabilityofStateheatinput,itisquitepossiblethatanyalternativemethodologyforpredictingStateheatinputwill $+t&. resultinprojectedvaluesforsomeStatesthatwillnotmatchactualheatinputinsomefutureyear.#X$nXXX^}#X^XXX$n ` g.CommentersfailedtoshowthatEPAsheatinput X growthrateforanyofthesevenindividualStatesforwhichadversecommentswerereceived(Alabama,Georgia,Illinois,Michigan,Missouri,Virginia,andWestVirginia)areunreasonable.TheheatinputforseveraloftheStateshasalreadydecreasedtolevelsbeloworonlyslightlyaboveEPAsprojection.Inaddition,#X$nXXX^S#X^XXX$nԀ thecommentsfailedto `  addressthefactthat,inthepast,eachState#X$nXXX^/#X^XXX$nhashadmany   multiyearperiodswhenheatinputhasdeclinedsignificantlyforthelastyear,ascomparedtothefirstyearofsuchperiods.Further,inarguingthateconomicgrowthorplannednewcapacityprovethatheatinputwillincreasesubstantiallyforparticularStates,thecommenterslimitedtheinformationtheyprovidedtostatewidedataandfailedtoprovide regionaldata.Asaresult,these p  commentsarenotpersuasivebecauseanyparticularStatesheatinputisdeterminedby#X$nXXX^Ҵ#X^XXX$nԀ#X$nXXX^4#X^XXX$n regional,notjustthat "$ individualStates,demandandsupply.#X$nXXX^w#X^XXX$nԀ  t$& #X$nXXX^# X^XXX$nB.DescriptionofEPAsMethodology#X$nXXX^{#X^XXX$n  &p!( 1.#X$nXXX^#X^XXX$nԀEPAsMethodologyforDeterminingStateNOxEmission '8#* #X$nXXX^B#X^XXX$nBudgetsandHeatInputGrowthRates #X$nXXX^׹#X^XXX$n )%,  ` #X$nXXX^?#X^XXX$nEPAusedamultistepproceduretodetermineforeach x+&. StatetheportionoftheNOxSIPCallemissionsbudgetattributabletoEGUs.Inbrief,EPAstartedwiththeStatesbaselineofthehigherofEGUheatinputfor1995and1996andgrewthatamounttothe2007levelusingtheprojectedheatinputgrowthrateforthatStatebasedontheIPM.#X$nXXX^#X^XXX$nThen,EPAdeterminedtheappropriatelevelofNOx  \  emissionscontrol(whichwasthesamelevelforeachState)andappliedthisleveltoeachStatesprojected2007heatinput.TheresultwaseachStatesNOxemissionsbudgetforEGUs. ` Throughoutthemethodology,EPAreliedontheIPM.#X$nXXX^U#ԀX^XXX$nԀThe h IPMsimulatestheoperationoftheelectricitymarketinthecontinentalU.S.byusinginputs(suchaselectricitydemandandfuelandemissioncontrolcosts)andbymodelingelectricitygeneration,transmission,anddistributiononasubregionalbasis.TheIPMprojectstheleastcostscenariofortheregionforgeneratingelectricityconsistentwiththissetofinputs.Thisscenarioincludesprojectionsofwhichunitsoperateatwhatlevels,whichunitsinstallemissioncontrols,andwhattype,when,andwherenewunitsarebuilt. ` TodeveloptheStateheatinputgrowthrates,EPAfirstconductedanIPMrun(the basecaserun).Thisbasecaserunwasdesignedtoyield,asoutputs,projectionsofthe \+&. heatinputnecessarytogenerateelectricitysufficienttomeetprojectedelectricitydemandinthe2001and2010ozoneseasons.Toconductthisrun,EPAused,asmodelinputs,assumptionsregarding,amongmanyotherthings:(i)electricitydemandin20012020,whichEPAcalculatedbydeterminingactualelectricitydemandin1997 andapplying  \  growthratesinelectricitydemand for1997 2020;(ii )   reductionsinelectricitydemandbasedontheCCAP,discussedbelow;(iii) NOx#X$nXXX^޽#X^XXX$nemissioncontrolrequirementsand `  associatedcosts;(iv)locationandcostsofprojectednewunits;and(v)fuelcosts.Forthisbasecaserun,EPAassumednoadditionalNOxemissioncontrolswouldberequiredforozonetransportpurposes(62FR60318,60347,Nov.7,1997). ` Withtheseinputs,thebasecaserunproduced,asoutputs,thesourcesofelectricitygenerationforyearsselectedbyEPA,including2001,2007,2010,and2020.Inaddition,theoutputsincludedtheamountsofheatinputusedbythefossilfuelfiredsourcesinthoseyears,theprojectedNOxemissionsforthe2007ozoneseason,andthetotalcostforgeneratingelectricityforthe2007ozoneseason.  '#* #X$nXXX^h# X^XXX$n ` EPAusedthe2001and2010 heatinputtogenerateheat x)$, inputgrowthratesforeachState.Forexample,thebase $+t&. caserunprojected thatVirginiasbasecase2001and2010  heatinputwouldbe194,000,000mmBtuand243,000,000mmBtu,respectively.Anannualheatinputgrowthratewasthenmathematicallydetermined.ForVirginia,thisannualgrowthrateis1.025. ` Then,EPAappliedeachStatesannualheatinputgrowthratetothebaselineheatinputfortheState(thehigherofthe1995or1996actualheatinputforEGUs) todevelop d  theStatesemissionbudgetfor2007(63FR5740657408)#X$nXXX^#X^XXX$n. `   #X$nXXX^#X^XXX$n Forexample,forVirginia,the1995heatinputwas   #X$nXXX^#X^XXX$n154,233,310#X$nXXX^#X^XXX$nԀmmBtu,the1996heatinputwas#X$nXXX^#X^XXX$n172,633,028#X$nXXX^Y#X^XXX$n h mmBtu,andsoEPAusedthe1996heatinputasthebaselineheatinput.ForWestVirginiatheoppositeoccurred.The1995heatinputwas#X$nXXX^#X^XXX$n347,687,307#X$nXXX^#X^XXX$nԀmmBtu,andthe1996heat l inputwas#X$nXXX^#X^XXX$n341,738,426mmBtu,andso#X$nXXX^O#X^XXX$nԀEPAusedthe1995heat h inputasthebaselineheatinput.#X$nXXX^#  X^XXX$n   ` #X$nXXX^E#X^XXX$nThen,EPAappliedtoeachStatesbaselineamount! p  whichEPAtreatedasthe1996valueevenifthehigherheatinputamountactuallyoccurredin1995!thatStatesannualheatinputgrowth#X$nXXX^#X^XXX$nԀ#X$nXXX^#X^XXX$nratetodeterminetheprojected2007heat t$& input.ForVirginia,thiscomputation(172,633,028mmBtumultipliedby1.025overan11yearperiod)yielded227,875,597mmBtu. ` Next,EPAusedprojected2007heatinputtotestthe $+t&. costeffectivenessofvariousNOxemissioncontrollevels.First,EPAselectedasetofNOxemissionscontrollevelsascandidatestobetestedforappropriateness.Thelevelstestedwere,0.12poundsofNOxpermmBtuofheatinput(lbs/mmBtu),0.15lb/Btu,0.2lb/Btu,and0.25lb/Btu.Then,EPAappliedoneofthecontrollevelstoeachStatesprojected2007heatinput.#X$nXXX^ #X^XXX$nԀ#X$nXXX^#X^XXX$nԀForexample,forVirginiathe   2007projectedheatinputof#X$nXXX^#X^XXX$n227,875,597#X$nXXX^#X^XXX$nԀmmBtuwas d  multipliedby0.15lb/mmBtutoobtainanEGUNOxemissionbudgetof#X$nXXX^#X^XXX$n34,181,340#X$nXXX^#X^XXX$nԀpoundsor17,091tons.  #X$nXXX^#X^XXX$nԀ#X$nXXX^T#X^XXX$nInthismanner,   EPAcalculatedtheNOxemissionbudgetforeachStatebasedonthelevelofNOxemissionscontroltobetested.Then,EPAsummedeachStatesNOxemissionsbudgettodeterminetheregionwideNOxemissionsbudgetfortheNOxcontrolleveltested.   h  ` Then,EPAconducted#X$nXXX^#X^XXX$nԀ anotherIPMrun(the cost  effectivenessrun)todeterminethecosteffectivenessofmeetingtheregionwideNOxemissionbudgetforthecontrolleveltested.Forthisrun,EPAincludedinthemodeleachoftheassumptionsthatwereusedinthebasecaserun.#X$nXXX^># X^XXX$n However,EPAaddedoneadditionalassumption,i.e.,the  &p!( requirementthattotalNOxemissionsforEGUsintheNOxSIPCallregioncouldnotexceedtheregionwideNOxemissionbudget(i.e.,thesumoftheStateNOxemissionbudgetsfor $+t&. EGUsdevelopedusingthe20012010heatinputgrowthratesfromthebasecaserunandthespecifiedlevelofNOxemissioncontrols#X$nXXX^#X^XXX$nԀbeingtested).#X$nXXX^# X^XXX$nԀThiscosteffectiveness X runyielded,asanoutput,thetotalcostofgeneratingelectricityforthe2007ozoneseasonforthecontrollevel.EPArepeatedthisprocessforeachcontrolleveltested.#X$nXXX^#X^XXX$n  \   ` EPAthenperformed,foreachNOxemission#X$nXXX^#X^XXX$nԀcontrol   level,threecalculationstodeterminethecostpertonofNOxemissionsreduced,ofmeetingtheregionwideNOxemissionbudgetassociatedwiththatcontrollevel.First,EPAsubtractedthetotalNOxemissionsinthecosteffectivenessrunfromthetotalNOxemissionsinthebasecaseruntocalculatethetonsofNOxreducedduetotheimpositionofthecontrollevel.Second,EPAsubtractedthetotalcostofgeneratingelectricityinthebasecaserunfromthetotalcostinthecosteffectivenessruntocalculatethetotalcostofmeetingtheregionwidebudget.Third,EPAdividedthetotalcostofmeetingthebudgetbythetotaltonsreducedduetotheimpositionofthecontrolleveltocalculatethecosteffectivenessofmeetingthebudgetassociatedwiththecontrollevel(indollarsperton). #X$nXXX^#X^XXX$nForexample,thecosteffectivenessofmeetingthe '#* 0.15lb/mmBtucontrollevelwas$1,440pertonofNOxemissionsreducedin2007 (RegulatoryImpactAnalysisfor $+t&. theNOxSIPCall,FIP,andSection126Petitions,Volume1:CostsandEconomicImpacts,September1998,atp.ADD2).Ofcourse,thecosteffectivenesswasahigherdollaramountformorerestrictivecontrollevels(e.g.,0.08lb/mmBtu)andalowerdollaramountforlessrestrictivecontrollevels(e.g.,0.2lb/mmBtu). ` Finally,EPAevaluatedthecosteffectivenesslevelforeachcontrollevelagainstcertaincriteria#X$nXXX^##X^XXX$nandselected d  0.15lb/mmBtuasthehighlycosteffectivelevelforEGUs.Thebasisforthisselection,whichisnotatissueintodaysnotice,isdiscussedat63FR574012.#X$nXXX^#X^XXX$n h  ` Havingselected0.15lb/mmBtu,EPAset,astheNOxemissionbudgetforEGUsforeachStateintheNOxSIPCall,theStatesbudgetassociatedwiththatcontrollevel.Forexample,forVirginia,theNOxemissionbudgetforEGUswas17,091tons. ` FortheSection126Rule,whichimposedrequirementsonindividualEGUsincertainStates,butdidnotimposestatewidecontrollimitations,EPAusedthesameStateNOxemissionbudgetsthatweredevelopedfortheNOxSIPCall.FortheindividualEGUsinagivenState,EPAallocatedatotalamountofallowancesequaltotheamountoftonsofNOxintheStateNOxemission#X$nXXX^#X^XXX$nԀ#X$nXXX^#X^XXX$nbudgetforEGUs.Individual x)$, EGUswereallocatedaproportionateshareoftheStateNOx $+t&. emissionbudgetbasedonitsshareofthetotalheatinputforEGUsinthatState. #X$nXXX^# X^XXX$n  \ #X$nXXX^+# X^XXX$n 2.#X$nXXX^#X^XXX$nԀUseofConsistentHeatInputGrowthRatesforDifferent X PartsofEPAsAnalysis #X$nXXX^#X^XXX$n   #X$nXXX^#X^XXX$n ` OneconcernthattheCourthadaboutthereasonableness   ofEPAsapproachwasthebeliefthatEPA utilizedonesetofgrowth-rateprojectionstosetallowancebudgets,[and]anothertoassessemissionreductioncosts.Appalachian   Powerv.EPA,249F.3dat1054.TheCourttherefore H  believedthat EPAhadotherwaysofgenerating2007utilizationprojections.Id.󀀀#X$nXXX^#X^XXX$n p #X$nXXX^#X^XXX$nTheabovedescriptionof  EPAsmultistepproceduremakesclearthat,infact,EPAutilizedonlyIPMheatinputgrowthrateprojectionsfor20012010.Themethodologyrequired(i)developingmanyinputsin theIPM,includingassumptionsaboutgrowthin P electricitydemandduring19972020;(ii)conductinganIPMbasecaserunandasetofcosteffectivenessruns;and(iii)usingIPMoutputstomakevariouscomputations.However,atanystepthatrequiredIPMgeneratedheatinputgrowthrateprojectionswhetherforpurposesofdeterminingabudgetorforpurposesofdeterminingthecosteffectivenessofcontrollevelsEPAusedonlytheprojectionsfor20012010,andnotanyotherperiod.#X$nXXX^E#X^XXX$nԀ )%,  ` EPArespectfullyobservesthattheCourtsviewstothe \+&. contraryaremisperceptionsthatresultedfromwhatEPAnowrealizeswasEPAsowninadvertentlyconfusingstatementbyEPAintheResponsetoCommentdocumentfortheSection126Rule.#X$nXXX^v#X^XXX$nԀTheResponsetoCommentdocumentstates,inrelevant   part:#X$nXXX^#X^XXX$nԀ  `  0 ` Thebudgetswereconstructedusinggrowthratesfor19962007thatwereconsistentwiththegrowthratesinIPMfor20012010,whichmaybehigherorlowerthanthegrowthratesfortheyears19962001.EPA'sanalysisofthecostsofcomplyingwiththesebudgets,however,wasconductedusingIPM,whichincorporatesinternallyconsistentgrowthassumptions"i.e.,thegrowthfor1996through2001isbasedonIPMassumptionsfor1996through2001,andthegrowthfor2001through2010isbasedonIPMassumptionsfor2001through2010.TheseIPMgrowthforecastsareconsistentwiththeNERCforecasts. >` (#` (#  Docket#A9743,Item#VIC01, ResponsetoSignificant H CommentsontheProposedFindingsofSignificantContributionandRulemakingonSection126PetitionsforPurposesofReducingInterstateOzoneTransport,April1999atp.112.#X$nXXX^x#X^XXX$nԀ#X$nXXX^#X^XXX$n     ` Thefirsttwosentencesintheresponsereferto T !  growthrates, growthassumptions,or growth,butunfortunatelyfailtoprovidefurtherclarificationastowhattypeof growthisbeingreferenced.Thefirstsentenceindicatesthat,forbudgetpurposes,EPAdeterminedthe growthratesfor19962007basedon"thegrowthratesinIPMfor20012010."Thesecondsentenceindicatesthat, \*%- forcostanalysispurposes,EPAused growthfor19962001 ,X'/ "basedonIPMassumptionsfor1996through2001"and growthfor2001through2010"basedonIPMassumptionsfor2001through2010."However,theresponsefailstoexplain X thatthereferencesinthefirstsentenceto"growthratesaretogrowthinheatinput,whichisanoutputfromIPMrunsfortheyears2001and2010,whilethereferencesinthesecondsentencetothe"growthassumptions"and growthfor19962001and20012010aretogrowthinelectricitydemand,whichisaninputintotheIPM.Thethirdsentenceconfirmsthatthe growthassumptionsinthesecondsentencearelikethe NorthAmericanElectricReliabilityCouncil(NERC)forecastsforelectricitydemand. ` ThesecondsentenceoftheResponsetoCommentdocumentshouldnotbereadtoindicatethatEPAhadavailableIPMgeneratedgrowthratesinheatinputforthe19962001period.#X$nXXX^#X^XXX$nItissimplynottruethatEPAhadthatdata p  available.#X$nXXX^'#X^XXX$nԀRather,EPAhadavailableIPMgeneratedheat !l" inputdataforonly20012010,andEPAdevelopedthebudgetsandcostanalysesinthemannerdescribedinsectionV.B.1ofthisnotice.#X$nXXX^#X^XXX$nԀTherefore,ofcourse,EPAdidnotusesuch  &p!( data toassessemissionreductioncostsandcouldnothaveusedsuchdataasanotherway ofgenerating2007utilizationprojections.AppalachianPowerv.EPA,249 $+t&. F.3dat2054.#X$nXXX^#X^XXX$n XN XXX^XN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNX^X XXN  5      ׀#X$nXXX^#X^XXX$n  #X$nXXX^#X^XXX$n C.JustificationforEPAsMethodologyandReasonablenessof \ EPAsUnderlyingAssumptions  $t #X$nXXX^#X^XXX$n 1.CourtsandCommentersConcerns   <  ` WhileupholdingingeneralEPAsuseoftheIPMandnotfindingthatanyspecificassumptionsorotheraspectsofEPA'smethodologywereunreasonable,theCourtstatedthat"eveninthefaceofevidence[i.e.,actualStateheatinputinexcessofEPAsprojection]suggestingtheEPAsprojectionswereerroneous#X$nXXX^#X^XXX$n,EPAneverexplainedwhyit ` adoptedthisparticularmethodology."AppalachianPowerv.   EPA,249F.3dat1053.#X$nXXX^#X^XXX$nԀ h  ` Moreover,commentersraisedconcernsaboutcertainassumptionsthatEPAmadeintheIPM,orinusingtheresultsfromtheIPM,todevelopheatinputgrowthrates.Inparticular,commenterswereconcernedabout:0 ` 1)TheassumptionthatStatebyStateheatinputgrowthrates,derivedfromtheIPMoutputsfor2001and2010,werereasonablyrepresentativeof,andreasonablyusedtocalculate,heatinputgrowthratesfor1996to2007.$ &` (#` (# 0 ` 2)TheassumptionthatelectricitydemandprojectionswerereasonablyreducedbyreductionsundertheCCAP;and ` (#` (# 0 ` 3)Theassumptionthatthelocationsofnewunitswerereasonablyprojectedusingcurrentlyavailabledataonnewunitsandthehistoricaldistributionofgeneratingcapacity.#X$nXXX^#X^XXX$n ` (#` (#  ` Asdiscussedbelow,EPAbelievesthatitsmethodologyand,inparticular,allofthechallengedassumptionshadareasonablebasis. 2.EPAReasonablyDecidedtoDevelopState#X$nXXX^#X^XXX$nNOxEmission h BudgetsbyUsingHeatInputGrowthRates  0  ` #X$nXXX^? #X^XXX$nAsnotedabove,EPAsmethodologyforprojecting2007 H heatinputwasbased,inessence,onestablishingabaselinebasedonactualheatinput,andthenapplyinganIPMdeterminedgrowthratetothatbaseline.TheoverallapproachofusinganactualbaselineandapplyingagrowthratewasreasonableandconsistentwiththewayEPAprojectedutilizationforotherstationarysourcecategories.(Docket#A9656,Item#XB09, DevelopmentofEmissionBudgetInventoriesforRegionalTransportNOxSIPCall,U.S.EPA,OfficeofAirQualityPlanningandStandards,May1999.) ` Startingwithanactualbaselineobviouslyconstitutes \+&. areasonablyaccuratestartingpointforthecalculation.Becauseoftheyeartoyearvariabilityinheatinput,asdiscussedbelow,EPAdecidedtoalloweachStatetousethehigheroftwoyearsasthebaseline.EPAinitiatedtheNOxSIPCallrulemakingin1997,andsoEPAselectedasthetwoyears1995and1996.EPAsapproachoverstatedtotalactualheatinputfortheregion.SincesomeStateshadhigherheatinputinoneyearandotherStateshadhigherheatinputinthesecondyear,thetotaloftheStatesbaselinesexceededthetotalheatinputfortheStatesineitheroftheyears. ` ApplyingtothatbaselineanIPMgeneratedheatinputgrowthrateisalsoreasonablebecausetheIPMprovidesareasonably accuratemethod ofpredictinggrowthinheat l input. Themodelhasbeenthoroughlyvettedthroughpublic h commentinseveralrulemakingsandgenerallyhasbeenupheldbytheCourtinboththeNOxSIPCallDecisionandanearlierdecision.AppalachianPowerv.EPA,247F.3dat !l" 105253;AppalachianPowerv.EPA,135F.3d791,81415 "$ (D.C.Cir.,1998).#X$nXXX^ #X^XXX$nAsdiscussedbelow,EPAsapproachof t$& determiningthegrowthrateofStateheatinputfromonemodeledyear(here,2001)toalatermodeledyear(here,2010)minimizedtheeffectofnecessary,simplifyingassumptionsusedbytheIPMandtherebyincreasedthe $+t&. fO& fe f  accuracyofthedetermination. ` #X$nXXX^#X^XXX$nEPAconsideredalternativewaystohandleheatinput  growthindeterminingStateNOxemissionbudgets.Forexample,EPAconsiderednotallowingforheatinputgrowthatall.Underthismethod,EPAwouldbaseeachStatesNOxemissionbudgetonheatinputasofaselectedyearforwhichhistoricaldatawasavailable,withoutaccountingforchangesinfutureheatinput.IntheNOxSIPCall,EPArejectedthismethod,explainingthatalthoughitwouldhavebeensimpler,it maybeviewedaslessequitableforStateswithsignificantlyhigherprojectedutilization,(62FR60318,60351,#X$nXXX^#X^XXX$nԀNov.7,1997).#X$nXXX^A#X^XXX$n d #X$nXXX^#X^XXX$n ` EPAalsoconsideredusing,astheStateNOx#X$nXXX^#X^XXX$nԀemission u budgetforeachState,theamountofNOxemissionsthattheIPMprojectedfortheStatein2007inthecosteffectivenessrun.; XN XXX^X^X XXN  6      ׀EPAdidnotusethisapproachfor y severalreasons.First,thisapproachwouldhavemadeitdifficulttoaccommodatechangesintheStateinventoryofEGUsasEPAreceivedbetterinformationregardingexistingunits.EPAundertookmultiplenoticeandcommentrulemakingstoobtainthemostaccuratedatapossibleabout %p!( existingunitsandreceivednewdatathrougheachrulemaking.ItwasrelativelysimpleforEPAtousethisnewinformationtoadjusttheStates1995and1996emissioninventories,andthustheStatesbaseline,andthenapplyprojectedfuturegrowthfromtheIPMtoadjusttheStatesNOxemissionbudget.IfinsteadEPAhadusedtheIPM2007projectedheatinput,then,eachtimenewdatawerereceived,EPAwouldhavehadtoreruntheIPMfor2007withtheStateinventoryofEGUsrevisedtoincludethenewinformation.Itwouldhavetaken#X$nXXX^h#X^XXX$nsignificantresourcesand q  timetochangetheIPMonseveraloccasionstoreflectthisnewinformation.#X$nXXX^n#X^XXX$n d  ` Further,#X$nXXX^*#X^XXX$nԀtheIPMislikelytobemoreaccuratein u projectingStatebyStateratesofchangeofanoutputfromoneyearinanIPMruntoanotheryearinthatIPMrun(here,growthinStateheatinputfrom20012010)thanin#X$nXXX^#X^XXX$npredictinganactualoutputStatebyStateinaparticular %  year(here,actualheatinputin2007).#X$nXXX^#X^XXX$n Thisisbecause  l" modelingofcomplexactivitiesrequirestheuseofsimplifyingassumptionsinordertomakethemodelfeasibleτfromthestandpointofresourcesandtimetorun.Thisisparticularlytruehere,whereEPAmustdevelopStatebyStateprojectionsofheatinputthatresultsfromcomplexactivities(i.e.,theoperationoftheregional *t&. electricitymarket).(SeesectionsV.C.3andV.D.7ofthisnotice.)#X$nXXX^z#X^XXX$nԀBecause thesameassumptionsweremadeforevery  yearmodeled,calculatingdifferencesbetweentwomodelyearsreducesanyinaccuraciescausedbytheseassumptions. Therefore,EPAbelievesthat,onaStatebyStatebasis,the   IPMislikelytobemoreaccurateinprojectingratesofchangebetweenmodeledyears.#X$nXXX^!# X^XXX$n  m   ` Forthesereasons,EPAdecidedthattheapproachofapplyinganIPMgeneratedheatinputgrowthrateforeachStatetoabaselineStateheatinputbasedonhistoricaldata#X$nXXX^R##X^XXX$nwouldbeareasonablyaccuratepredictoroftheStates  actualheatinputin2007andamoreaccuratepredictor,andsignificantlysimplerandlesscostlyfromanadministrativestandpoint#X$nXXX^j$#X^XXX$n,thanIPMsprojectionoftheStates2007heat ! input.#X$nXXX^%#X^XXX$n h   #X$nXXX^&#X^XXX$n3.StateHeatInputGrowthRatesBasedonIPMOutputsfor y 20012010WereReasonablyRepresentativeof19962007HeatInputGrowth   !"  a.EPA'sMethodology .Anumberofcommenterssuggested "l$ thatinsteadofusingheatinputgrowthratesbasedon2001to2010projections,EPAshouldhaveusedStateheatinputgrowthratesbasedon1996data#X$nXXX^y&#X^XXX$nԀand2007projections.#X$nXXX^R(#X^XXX$nEPA '#* believesthatrelyingontheIPMprojectionsfor2001to2010isreasonablyaccurate.  I+&.  ` Although#X$nXXX^(#X^XXX$nEPAhadinformationon,andprojectionsof, e annualgrowthratesinregionwideelectricitydemandfrom1995or1996to2007(whichEPAusedasinputstotheIPM),EPAwasnotawareofanyprojectedheatinputgrowthratesforthatperiodforeachStateintheNOxSIPCallregionthatweredevelopedusingaconsistentsetofassumptions.See,e.g.,63FR57409#X$nXXX^)#.X^XXX$nԀ#X$nXXX^S+#X^XXX$nSince,asdiscussedinsection m  V.D.6ofthisnotice,electricityisgenerated,transmitted,anddistributedonaregionalbasis,consistentassumptionsaboutregionalandsubregionalfactors(e.g.,demandforelectricity,fuelcosts, andcostofnewunits)mustbeused U todeveloptheheatinputgrowthratesforallStates.#X$nXXX^+#X^XXX$nThe  CourthasalreadyupheldEPAsdecisiontorelyonaninternallyconsistentmethodologyfordeterminingheatinput,asopposedtorecommendationsbyvariouscommentersfavoringStatespecificgrowthratesthatwouldhavebeeninconsistentwitheachother.AppalachianPowerv.EPA,249 ]  F.3dat105253.#X$nXXX^R-#X^XXX$nԀ ` SinceEPAwasnotawareofanyavailableconsistentset "P$ ofheatinputgrowthrateprojections,EPAdevelopeditsownprojections.#X$nXXX^.#X^XXX$nEPAdecidedto usetheheatinputvaluesfrom  &!( IPMrunsfor2001and2010tocalculatealongtermheatinputgrowthrateforeachState.Because,asdiscussedabove,theIPMisacomprehensivemodeloftheelectricity +&. market,EPAbelievesthatitprovidesreasonableheatinputgrowthrateprojections.Further,EPAbelievesthatheatinputgrowthratesforthenineyearperiod20012010werereasonablyrepresentativeoftheelevenyearperiod19962007because,amongotherthings,theperiodsoverlapandareofsimilarlength.Inaddition,EPAbelievesthattheassumptionsusedintheIPMrunsfor2001and2010arereasonablyapplicabletothe19962001periodaswellas20012007.(SeesectionV.D.7ofthisnoticediscussingassumptionsintheIPM.)Infact,outofthemanyassumptionsintheIPM,commentershavepointedtoonlyafewthattheybelievedifferpreandpost2001.Asdiscussedbelow,EPAexaminedtheassumptionsdiscussedbycommentersandmaintainsthattheseassumptionsdonotdifferinanywaythatwouldaffectthereasonablenessoftheheatinputgrowthrates.#X$nXXX^/#X^XXX$n y #X$nXXX^4#X^XXX$n ` EPAconsidereddevelopingheatinputgrowthratesbased %  ondatadevelopedbyOTAG.OTAGdevelopedaheatinputgrowthprojectionseparatelyforeachindividualStatefortheyears1990to2007withoutconsideringtheinteractionsamongtheindividualStates.#X$nXXX^4#X^XXX$nԀEPAchosetousetheIPM %p!( growthratesbecause,#X$nXXX^`6#X^XXX$nunliketheOTAGgrowthprojections, '#* theIPMswere#X$nXXX^6#X^XXX$nnotdevelopedseparatelyforeachState,but -)$, weredevelopedbyanalyzingperformanceoftheelectric *t&. industryasaregionwidesystem.Therefore,theIPMgrowthratesareamoreinternallyconsistentsetofgrowthratesthantheOTAGgrowthrates,(62FR60353).b.Costofaddingrunyears.SomecommentersquestionedwhyEPAdidnotprogramtheIPMtoprovideoutputsfor1996inordertogenerate19962007heatinputgrowthrates(inlieuof20012010growthrates)usingtheIPM.EPAbelievesthatitsdecisiontoprogramtheIPMbeginningwith2001wasreasonable. ` AsexplainedbytheCourtintheSection126Decision:0 ` [T]heEPAhas undoubtedpowertousepredictivemodelssolongasit explain[s]theassumptionsandmethodologyusedinpreparingthemodeland provide[s]acompleteanalyticdefenseshouldthemodelbechallenged.SmallRefinerLeadPhaseDown u TaskForcev.EPA,705F.2d506,535(D.C.Cir. K 1983)...(citationsandinternalquotationmarksomitted).Thatamodelislimitedorimperfectisnot,initself,areasontoremandagencydecisionsbaseduponit. ` (#` (#  ` 0 0 (# (#Ultimately...wemustdefertotheagencysdecisiononhowtobalancethecostandcomplexityofamoreelaboratemodelagainsttheoversimplificationofasimplermodel.Wecanreverseonlyifthemodelissooversimplifiedthattheagencysconclusionsfromitareunreasonable. (#(# =: ` Id. )$& AppalachianPowerv.EPA,294F.3dat1052.#X$nXXX^s7#X^XXX$n %p!(  ` TheIPMwasprogramedtomodelspecifiedyearsstartingwith2001.EPAselectedtheserunyears#X$nXXX^}>#X^XXX$ntoprovide -)$, informationnotjustfortheNOxSIPCallandSection126 *t&. Rule,butalsoforseveralotherprogramsoverthenextfewyears,including#X$nXXX^A?#X^XXX$nԀimplementationprogramsfortherecently  revisedNationalAmbientAirQualityStandardsforozoneandfineparticles.#X$nXXX^<@#X^XXX$n(RegulatoryImpactAnalysisfortheNoxSIP i  Call,FIPandSection126Petitions,Volume1:CostsandEconomicImpacts,September1998,atp.42.,#X$nXXX^ A#X^XXX$nhttp://www.epa.gov/ttn/rto/sip/related.html#doc.#X$nXXX^A#)X^XXX$nԀAdding m  morerunyears(e.g.,1996)#X$nXXX^dB#X^XXX$nwouldnothaveprovided Q  informationusefulforthoseotherprograms,but#X$nXXX^B#X^XXX$nwouldhave   addedsignificantcomplexityandcoststothemodeling.#X$nXXX^C#X^XXX$n  D  ` Themodelconsistsofmodelplantsthatrepresentindividualgeneratingunits(e.g.,fossilfuelfiredboilers,nuclearunitsandhydroelectricunits)thatcomprisetheinventoryofelectricityproducers.Duplicatingpreciselyeachoftheboilersandgeneratorswouldbeimpracticable;accordingly,themodelaggregatesthefossilfuelfiredunitsintoaseriesofmodelplantsandaggregatesthenonfossilfuelfiredunitsintoseparatemodelplants.(Docket#A9656,Item#VC03,ReportonAnalyzingElectricPowerGenerationUndertheCleanAirActAmendments,atp.5.) ` For eachrunyear,EPAprovidesvariousinputs(i.e., 'T#* constraints),suchastherequirementtomeetacertainelectricitydemandforeachseasonandeachgeographic +&. subregionmodeled.Inaddition,foreachrunyear,themodelprovidesvariables,whicharevaluesbasedontheinputs,suchasthelevelofelectricitygenerationfromeachmodelplantandthelevelofemissioncontrolsatamodelplant.Foreachyearthemodelisrun,themodelmustoptimize(i.e.,determinetheleastcostscenario,includingfuelmix,emissioncontrols,andamountofoperation)foreverymodelplanttoreacheachconstraintinthemodel.TheIPMincludesthousandsofconstraintsandvariables.  `   ` Thecomplexityofthemodelitssimulations,inputs, q  andvariablesmeansthateachadditionalrunyearaddsmanymorecalculationstothemodel,ataskthatrequirestimeandresources.Tokeepthemodelmanageable,meettimeschedules,andconserveresources,#X$nXXX^D#X^XXX$nԀaddinganadditionalrun ! yearwouldhavemeantsimplifyingotherassumptionswithinthemodel.Inotherwords,becausethenumberofequationswouldbeincreasedbyaddingconstraintsandvariablesassociatedwithanewrunyear,otherwayswouldhavehadtobefoundtoreducethenumberofequations.Thiswouldhavemeanteitherreducingthenumberof#X$nXXX^J#X^XXX$n(i) modelplants;(ii) )$& #X$nXXX^L#X^XXX$nconstraints,suchas thenumberofsubregions,which %p!( determinesthenumberofelectricitydemandconstraints;or(iii)variables,suchasNOxemissioncontroltechnologyoptions.  *t&.  ` Whendevelopingthemodel,EPAhadtodecide howto e balancethecostandcomplexityofamoreelaboratemodelagainsttheoversimplificationofasimplermodel."Small X RefinerLeadPhaseDownTaskForcev.EPA,705F.2d506, i  535(D.C.Cir.,1983).Balancingthesefactors,EPAdecidedtodeveloptheIPMtostartin2001.#X$nXXX^!M#X^XXX$nUnderthese  \  circumstances,themodeladequatelyservedtheneedsofseveralprogramstheNOxSIPCall,theSection126Rule,andotherprograms.Moreover,#X$nXXX^O#X^XXX$nԀEPAbelievedthat#X$nXXX^P#X^XXX$nheatinput `  growthratesfortheyears2001to2010werereasonablyrepresentativeofgrowthduringtheperiod1996through2007.#X$nXXX^+Q#X^XXX$nInEPAsjudgment,anyfurtherrefinementintheheat d inputgrowthratethatmayhaveresultedfromaddinga1996runyearwouldnothavemeritedtheadditionaltimeandcostandmayhavebeenoffsetbytheincreaseinmodelinaccuracythatmayhaveresultedfromtheconsequentneedtofurthersimplifyorotherwiselimitthemodel.> XX^Ԁ#a  >R##X$nX aS#X^XXX$nԀTherefore,EPA %  decided,onbalance,thatitwasreasonabletouse20012010heatinputgrowthratestodevelopthe2007StateNOxemissionbudgets. c.Consistencyofassumptions .Somecommentersquestioned I&!( whetherthe20012010heatinputgrowthratewasrepresentativeofgrowthduring19962007,allegingthatspecificassumptionsintheIPMweredifferentforthosetwo i+'. timeperiodsandwouldresultindifferentheatinputgrowthratesforthoseperiods.  ` Asnotedabove,oneoftheinputsforthebasecaseand X costeffectivenessIPMrunsfor2001and2010wasprojectedelectricitydemand.Todetermineelectricitydemand,EPAbeganwithavailableinformationforactualannualelectricitydemandfor1997,projectedtheincreasesouttotheIPMrunyears,andthenreducedthoseprojectionstotakeaccountofreductionsinelectricitydemandexpectedtoresultfromCCAP.CCAPisaFederalprogramstartedin1993tosignificantlyreduceemissionsofcarbondioxide(CO2)  andtherebyaddressconcernsaboutglobalclimatechange.SinceconsumptionoffossilfueltogenerateelectricityisasignificantcontributortoCO2emissions,amajor ! componentofCCAPwasabroadsetofvoluntaryprogramsdesignedtoreduceelectricitydemandandgeneration. ` CommentersclaimedthattheassumptionsforelectricitydemandreductionsduetoCCAPfortheyears20012010differedfromwhatwouldhavebeenusedfortheyears19962001.#X$nXXX^S#X^XXX$nAccordingtoacommenter: )$& 0 ` [b]ecauseEPAsassumedCCAPreductionsincreasedbyalmost300%from2001to2010...theelectricitydemandgrowthratethatEPAusedinitsanalysisdecreasedsubstantiallyfrom2001to2010.ThustherecordestablishesthatEPAitselfassumedvastlydifferentelectricitydemandgrowthratesforthe19962000periodthanthe20012010period... ` (#` (#  +J'/ Z ` Infact,however,thecommentersconclusioniscontradictedbytherecord.ThedataintherecordsupportingIPMrunsshowsthatEPAassumedelectricitydemandgrowthratesof1.6%for199 72000and1.8%#X$nXXX^Z#X^XXX$nԀfor2001 i  2010.Actualelectricitydemandin1996was3,305billionKWh.6 XN XXX^X^X XXN  7      ׀EPAsprojectedelectricitydemandwithoutaccounting  \  forCCAPwas3,575billionKWhfor2001and4,198billion m  KWhfor2010.EPAprojectedthatCCAPwouldresultinelectricitydemandreductionsof100billionKWhfor2001, `  and389billionKWhfor2010(AnalyzingElectricPower,Appendix2atA22).AftersubtractingprojectedCCAPelectricitydemandreductionsfromassumedelectricitydemand,EPAprojectedelectricitydemandof3,475billionKWhfor2001,and3,809billionKWhfor2010.#X$nXXX^]#X^XXX$nԀThisresulted ! inanannualgrowthrateforadjustedelectricitydemandof1.03%for19962001and1.07%,for20012010.(Docket#A9656,Item##X$nXXX^a#X^XXX$nXVC22.)Inshort,whileEPAassumed %  somewhatlowerCCAPreductionsin19962001thanin20012010,theAgencyalsoassumedlowerelectricitydemandgrowthwithoutCCAPadjustmentsin19962001thanin20012010.ThenetresultwasthatEPA'sprojectedelectricity %p!( -1    demandgrowthratesafterCCAPadjustmentswereverysimilarfor19962001and20012010.d XN XXX^XN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNX^X XXN  8        #X$nXXX^a#  X^XXX$n4.EPADidNot DoubleCountElectricityDemandReductions X UnderCCAP.#X$nXXX^kf#    X^XXX$n ` Asnotedabove,oneinputintotheIPMwaselectricity M  demand.EPAprojectedelectricitydemandbystartingwithcertainindustrysponsoredforecastsfordemandandthenreducingthembyprojectedCCAPdemandreductionsinaccordancewithamultiagencytaskforcesprojections,madeforpurposesofaU.S.DepartmentofStatereportonthesubject.#X$nXXX^&g#X^XXX$nԀ U  ` EPAreceivedcommentsontheAugust3,2001NODAallegingthatEPAfailedtoexplain,and,indeed,doublecountedtheprojectedelectricitydemandreductionsunderCCAP.Accordingtocommenters,thedoublecountingleadEPAtounderestimateprojectedheatinputfor2007.TheEPAbelievesthatitsCCAPassumptionsarewellsupportedbytherecordandthatnodoublecountingoccurred. a.EPAsMethodologyforDeterminingElectricityDemand #X$nXXX^h#X^XXX$n. "P$ EPAstartedwithelectricitydemandforecastsfromtheNERC,whichisavoluntaryassociationofmostofthelarge )&!( electricitygeneratorsandsellersintheU.S.andwhosepurposeistopromotethereliabilityandsecurityoftheelectricitysystem.#X$nXXX^k#X^XXX$nԀNERCdividesthecontinentalU.S.into X regions,eachofwhichhasitsowncouncilcomprisedofrepresentativesoftheutilitiesgeneratingandsellingelectricityintheregion.EachutilitymakesforecastsofelectricitydemandbyitsendusecustomersandofelectricitysupplyavailabletothatutilityandsubmitstheseforecaststotheappropriateNERCregion.NERCcompilestheindividualutilitiesdemandandsupplyprojectionsbyregionandreportsthecompiledprojectionstotheEnergyInformationAgency(EIA).K XN XXX^X^X XXN  9      ׀SinceNERC d forecastedelectricitydemandouttoonly2006atthetimethatEPAwasdevelopingtheIPMfortheNOxSIPCall,EPAusedtheNERCelectricitydemandprojectionsfor1996to2006andextendedthemto2010usinga1995forecastbyDRI,aprivateconsultinggroup.(AnalyzingElectricPower,Appendix2atA23.  )  l"  ` Then,#X$nXXX^|l#X^XXX$nEPAreducedtheseelectricitydemandprojections }"$ bytheamountsofdemandreductionsexpectedtooccurasaresultofCCAP.Asdescribedabove,CCAP,aFederalprogram %p!( establishedin1993,includesabroadcollectionofvoluntaryprogramsdesignedtoreduceelectricitydemandandgenerationtoreduce#X$nXXX^p#X^XXX$nԀCO2#X$nXhX^r#X^XhX$nemissions.Someoftheseprograms X wereinexistencebeforeCCAPsestablishmentin1993andwereincorporatedintoCCAP,alongwithanewsetofprograms.#X$nXXX^r#X^XXX$nCCAPwasupdatedin1995,aprocessthatincluded  \  revisedestimatesoftheeffectivenessofitsprograms,basedonpublicinputsolicitedthroughaFederalRegister   notice(60FR44022,Aug.24,1995)andapublichearingheldonSeptember22,1995.SeeReviewofClimateChange q  ActionPlan:RequestforPublicComment;NoticeofMeeting,60FR44,022,August24,1995(CouncilonEnvironmentalQualitysolicitationofpubliccomment).#X$nXXX^s#X^XXX$nԀ u  ` In1997,theU.S.DepartmentofState( StateDepartment)developedandissuedareport,ClimateActionReport,settingforththeexpectedresultsfromCCAP.Thereportwasdevelopedtofulfillanobligationunderthe1992UnitedNationsFrameworkConventiononClimateChange.e XN XXX^XN X XXNXN X XXNX^X XXN  10      ׀#X$nXXX^v#X^XXX$n  l" #X$nXXX^ox#X^XXX$nTheStateDepartmentfirstissuedadraftreportand }"$ requestedpubliccomment#X$nXXX^x#X^XXX$nontwooccasions,inDecember1996 )$& andMay1997.(SeePreparationofSecondU.S.Climate %p!( ActionReport:RequestforPublicComments,62FR25988,May12,1997).#X$nXXX^py#X^XXX$nԀ#X$nXXX^z#X^XXX$nAfterconsideringthecommentsreceived,the  StateDepartmentissuedthefinalreportin1997.ThereportpresentedaconsensusviewoftheFederalagenciesinvolved,includingEPA,theU.S.DOE,andtheStateDepartment.#X$nXXX^z#X^XXX$n  \   ` Inparticular,todeterminetheeffectivenessoftheCCAPprograms,aninteragencyworkgrouppolledtheprogrammanagersatEPA,DOE,theU.S.DepartmentofTransportation,andtheU.S.DepartmentofAgriculturewhowereresponsibleforthevariousCCAPprograms.TheprogrammanagersprovidedestimatesofreductionsforeachCCAPprogram,generallyexpressedinbillionkilowatthours(billionKWh)ofelectricityusageandmmBtuofheatinput,orotherunitsofmeasureappropriatefortheprogram.Theworkgroupcompiledandreviewedthoseprojections(Docket#A9656,Item#XIVF03).EPAusedthoseestimatestoreducethe %  NERCbasedelectricitydemandprojectionsfor2001through2020.(SeeAnalyzingElectricPower,Appendix2,atA23).#X$nXXX^{#X^XXX$nԀ }"$ Inaddition,DOEusedthoseestimatestoprojecttheamountofgreenhousegasemissionsreductionsthatwouldresultfromtheCCAPprograms.TheseemissionsreductionsandothertypesofsavingswereincludedintheStateDepartmentsClimateActionReport. #X$nXXX^t#X^XXX$n *t&.  b.Therecordcontainssufficientdocumentationofthe e additionalCCAPdemandreductionsthatEPAtookintoaccount. Somecommentersclaimed,inresponsetotheAugust  3,2001NODA,thatEPAdidnotprovideadequatedocumentationtoexplainhowtheelectricitydemandreductionsunderCCAPwerederived.#X$nXXX^Ԁ#X^XXX$n ` EPAnotesthatthisissueaswellastheissueof \  doublecountingofCCAPdemandreductions,discussedbelowwasnotraisedinanyoftherulemakingstothispointorbroughttotheCourtsattentionineithertheSection126ortheTechnicalAmendmentscases.#X$nXXX^#X^XXX$nԀ#X$nXXX^#X^XXX$nCommentershadafull q  opportunitytoraisetheissuesduringthedevelopmentoftheNOxSIPCallandSection126Rule.Infact,someofthepartiesraisingtheissuesnowclaimed,incommentsintheNOx#X$nXXX^C#X^XXX$nSIPCallandSection126rulemakings,thatnoCCAP ! electricitydemandreductionsshouldbeconsideredinprojectingelectricitydemand.ThesecommentersbasedtheseclaimsonthegroundthatCCAPwasavoluntary,ratherthanamandatory,program.Thus,thesecommentersclearly#X$nXXX^k#X^XXX$nhadtheopportunityduringtheearlierrulemakingstoraise }$ & theissuesconcerningCCAPthattheyareraisingonlynow. ` Thelackofattentiontotheseissuesbycommentersduringtheearlierrulemakingshassomeimpactontheextenttowhichtherecordaddressesthem.Hadcommentersraised -+&. theseissuesearlier,EPAwouldhavebeenobligedtorespond,andtherecordwouldhaveincludedthatdialogue.Thus,ifthecommentersviewtherecordasdeficient,theirfailuretoraisethisissueatseveralearlierjuncturesshouldbeconsidered.Moreover,itisquestionablewhetherEPAisrequired,atthispoint,toaddresstheseissuesinlightofthecommentersearlieropportunities.#X$nXXX^چ#X^XXX$n m   ` Evenso,EPAmaintainsthatitsassumptionsabouttheCCAPdemandreductionsarewellsupported.#X$nXXX^#ԀX^XXX$nTheIPM `  documentationshowstheamountofactualelectricitydemandin1997,andtheamountofprojectedelectricitydemandfrom1997to2010(andbeyond),allexpressedinbillionKwh,  (IPMbasecasemodelingruns,4 TO  5  http://www.epa.gov/capi/ipm/npr.htm).6TO_  7 -#X$nXXX^NJ#ԀX^XXX$nԀAsnotedabove,EPA Y basedtheseprojectionsoninformationsuppliedbyNERC.Inaddition,otherIPMdocumentationshowsthetotalamountofCCAPreductions,expressedinbillionkwh,for2001through2010(andbeyond)(AnalyzingElectricPower,Appendix2atA22). "$  ` ThesetotalamountsofCCAPreductions weretakenfromthesupportinganalysisthatwasdonetoforecastfutureU.S.carbonemissionsfromthepowerindustrythatappearedintheU.S.DepartmentofStatesClimateActionReport,July1997,(AnalyzingElectricPower,Appendix2atA23). I+&. Specifically,thissupportinganalysisconsistedofaspreadsheet,entitled CCAPInputsforApril1997Update,developedbytheabovedescribedinteragencyworkgrouptaskedwithprojectingtheamountofreductionsforeachCCAPprogram,(Docket#A9656,Item#XIVF03).The   workgroupsolicitedinformationfromthevariousagencieschargedwithadministeringCCAPprogramsand,basedonthatinformation,preparedthespreadsheet.NocommenterrequestedthisinformationduringtheNOxSIPCallandSection126rulemakingsuntilthecommentperiodfortheAugust3,2001NODA.Atthattime,EPAprovidedthespreadsheetannotatedtoreflecttheadjustmentrelatedtotheNERCforecasts,describedbelowtocommenterswhenrequestedandplaceditinthedocket,(LetterfromJohnSeitztoAndreaBearField,August31,2001,Docket#A9656,Item#XIVF01,includedasAttachmentDtoDocketItem#A9656XIVD31). ` Thespreadsheetidentifiestheamountofreductions,expressedinbillionKwhandmmBtuofeachofthedozenorsorelevantCCAPprograms,fortheyears2000and2010(aswellas2020).Theamountofreductionsfromtheseprograms %p!( for2010aftertheadjustmentrelatedtotheNERCforecasts,describedbelowequalstheamountincludedforthatyearinAnalyzingElectricPower,Appendix2atA22. *t&. Moreover,theIPMdocumentationstatesthat EPAdidalinearinterpolationtodeterminetheamountofCCAPreductionsassumedforyearsbetween2000and2010,including2001,(AnalyzingElectricPower,Appendix2atA23).#X$nXXX^܌#X^XXX$nԀ   #X$nXXX^%#X^XXX$n ` OnecommenterclaimedthatitwasnotclearhowEPA  \  convertedthe#X$nXXX^}#X^XXX$nCO2#X$nXXX^!#X^XXX$nԀreductionscitedintheStateDepartments m  ClimateActionReportintotheelectricitydemandreductionssetforthinAnalyzingElectricPowerorthespreadsheet#X$nXXX^l#X^XXX$n `  usedbyEPAtoadjusttheNERCelectricitydemandforecasts.#X$nXXX^f#X^XXX$nԀ q  Actually,theCO2reductions#X$nXXX^#X^XXX$nԀintheStateDepartmentreport  werebasedontheelectricitydemandreductionsinthespreadsheet#X$nXXX^s#X^XXX$n,nottheotherwayaround.Asnotedabove, u theseelectricitydemandreductionsweredevelopedbytheagenciesinvolvedinimplementingCCAPandthenwereconvertedtoCO2reductionsforpurposesoftheState y Departmentreport,usingaU.S.DOEmodel(theIntegratedDynamicEnergyAnalysisSimulation(IDEAS))oftheU.S.energysystem.Thesevalueswerethenincludedintheproposedandfinalversionsofthatreport. X^XXX^  11      ׀  )$&  c.CommentersfailedtoprovetheirclaimthatNERCandEIA e projectionsalreadyincludedtheCCAPdemandreductionsthatEPAtookintoaccount. #X$nXXX^+#X^XXX$nԀCommenterssuggestedthattheNERC  electricitydemandforecaststhatEPAadjustedforcertainCCAPreductionsalreadyassumedthosereductions.Accordingtocommenters,theNERCmembersthatsuppliedtheinformationusedintheNERCforecastswouldhavebeenawareof,andinsomecasesparticipatedin,CCAPprogramsandso wouldhave...takenintoaccountCCAPprogramsintheinformationsuppliedtoNERC.#X$nXXX^{#X^XXX$nԀThecommentersemphasized ` thatNERCprojectedelectricitydemandgrowthatanannualrateof1.7%,whichishigherthanEPAsprojectionof1.1%,andthereforeconcludedthatEPA,bypurportedlydoublecountingCCAPreductions,underestimatedelectricitydemand.#X$nXXX^s#X^XXX$nԀThecommentersmadeasimilarpointwithrespectto ! electricitydemandforecastsbyEIA,emphasizingthatin1997,#X$nXXX^֠#X^XXX$nEIAprojectedelectricitydemandgrowthat1.6% y  annually,andthat,inmakingthisprojection,EIAexplicitlynotedthatitwastakingaccountofCCAP.#X$nXXX^#X^XXX$n "l$  ` Asdiscussedbelow,afterweighingalltheevidenceintherecordrelevanttotheclaimthatEPAdoublecounted )&!( CCAPdemandreductions,EPAconcludesthatnosuchdoublecountingoccurredandthatcommentersfailedtoshowotherwise. ` (i)NERCforecasts  i  #X$nXXX^# X^XXX$n ` WhenEPAdevelopedelectricitydemandforecastsforthe 1  NOxSIPCallandtheSection126Rule,theNERCforecastsdidnotmentiontheenergyefficiencyprogramsasafactorthatwasconsidered.NERCexplainedonlythatitconsideredan economicvariable,weatherandarandomcomponentthatexpressesunknowndeterminantsofnetenergyforload.(Docket#A9656,Item#XVC23,PeakDemandandEnergy 9 ProjectionBandwidths:19972006projections,p.4,Load  ForecastingWorkGroupoftheEngineeringCommitteeNorthAmericanElectricReliabilityCouncil,June1997).  =  Consequently,EPAhadtoexerciseitsbestjudgementin  determiningtheextenttowhichtheNERCforecaststookintoaccountCCAPdemandreductions.Ratherthanassuming,fromtheabsenceofanyaffirmativestatementsbyNERCaboutCCAPreductions,thatNERCdidnotconsideranyCCAPreductions,EPAtookthemoreconservativeapproachofassumingthatsomeofthereductionswerelikelytohavebeenconsideredbyNERC.(See #X$nXXX^6#X^XXX$nԀ Docket#A9656,Item#XIVF03.#X$nXXX^#X^XXX$n)EPA '8#* reducedtheNERCelectricitydemandforecastsonlytotakeaccountoftheadditionalCCAPdemandreductionsbeyond *&. thoseEPAbelievedwereincludedintheNERCforecasts.EPAbelievedthatitwasappropriatetofactorintheseadditionalCCAPdemandreductions giventheextensiveAdministration,State,andbusinesseffortsunderwayandthepromisingearlyresultsthatEPAhasseeninsomeoftheCCAPsprogramsthathavesubstantiallyloweredelectricenergyuseandsavedmoneyformanybusinesses.(ResponsestoSignificantCommentsontheProposedFindingofSignificantContributionandRulemakingforCertainStatesintheOzoneTransportAssessmentGroup(OTAG)RegionforPurposesofReducingRegionalTransportofOzone,September1998,at182).#X$nXXX^Z#X^XXX$n  ` InapplyingthisapproachtoCCAPreductions,EPAdid u notfactorinreductionsfromeithertheGreenLightsProgramortheEnergyStarProductsOfficeEquipmentProgram,whichexistedbeforeCCAPandthatweresimplyputundertheumbrellaofCCAPwhenCCAPwasestablishedin1993.GreenLightswasoneofEPAsearliestvoluntaryenergyefficiencyprogramsandwasaimedatencouragingtheuseofenergyefficientlightingproducts.#X$nXXX^ά#X^XXX$nԀThisprogramwas )$& expandedunderCCAP.#X$nXXX^#X^XXX$nSimilarly,theEnergyStarProducts %p!( programincludedapre1993programtoencouragethepurchaseofenergyefficientofficeequipment.EPAassumedthatbecauseGreenLightsandEnergyStarProducts!Office *t&. Equipmentwerepreexistingprograms,theywerebetterestablishedandtheirbenefitsmorepredictablebytheutilitiesinforecastingdemand;asaresult,EPAassumedthattheNERCforecastsweremorelikelytohavealreadytakentheirreductionsintoaccount.Thesetwoprogramswerecategorizedascommercialprogramsandwereprojectedtoresultinover89billionKwhinreducedelectricitydemandby2010.(Docket#A9656.Item#XIVF01).Bycomparison,theremainingCCAPcommercialprogramsresultedinreducedelectricitydemandof119.6billionKwh.Id. q  Therefore,EPAassumedthattheNERCforecastsaccountedforover42percentofthereductionsfromthecommercialCCAPprograms,includingthepre1993programs. ` EPAalsodecidednottoincludereductionsfromafuelcellsprogramandrenewableenergyprogram,whichwereprojectedtototal24.5billionKwhby2010,bothforreasonsoferringonthesideoftheconservative(notincludingthosereductionshadtheeffectofincreasingelectricitydemand)andbecauseaddingthemwouldhavecreatedsometechnicalmodelingcomplexities.Specifically,EPAwouldhavehadtodecideatwhatlevel,andwhere,toallocatethiscapacityamongtheStateswithinandoutsideoftheNOxSIPCallregion.EPAdecided,ratherthanmakethatjudgment,toerronthesideoftheconservativeby *t&. assumingthatthefuelcellprogramandrenewableenergyprogramdidnotreduceelectricity.Inaddition,theemissionfactorsforfuelcellsandbiomassfacilitiesthatcouldhavebeenemployedwerehighlyuncertain.#X$nXXX^p#X^XXX$nԀ(SeeDocket i  #A9656,Item#XIVF01).#X$nXXX^#X^XXX$n   #X$nXXX^#X^XXX$n  ` NordidEPAfactorinreductionsfromtheClimate  \  Challengeprogram,whichwasinitiatedin1994aspartofCCAP.Under#X$nXXX^#X^XXX$nԀClimateChallenge,utilitiesagreedto   voluntarilyreduceemissionsofCO2throughprojectsfor, `  e.g.,improvingelectricitygenerationortransmissionefficiency.#X$nXXX^Ƹ#X^XXX$nBecauseClimateChallengewasspecifically  directedtowardsutilities,EPAassumedthattheutilitiessubmittingtheirdemandestimatestoNERCwouldbefamiliarwiththeprogramandwouldbemorelikelytohavetakendemandreductionsfromthatprogramintoaccount.#X$nXXX^ܹ#X^XXX$nInany h event,theClimateActionReportworkgroupdidnotassignaspecificamountofreductionstothisprogram. ` Alltold,EPAassumedthatCCAPprogramswouldresultin389billionKwhinreductionsby2010andfurtherassumedthatanadditional113.5billionKwhfromCCAPprogramsandtheirpre1993predecessors,or22.6%ofthetotal,hadalreadybeenincludedintheNERCestimates.Thus,itisevidentthatEPAconservativelyassumedthatNERCtookintoaccountdemandreductionsfromsomeCCAPprograms,even *t&. thoughNERCsdocumentationdidnotindicatethatanyCCAPreductionsweretakenintoaccountandnoutilitycommenterprovideddocumentationthatthedemandforecaststheysubmittedtoNERCassumedanyCCAPreductions.g X^XXX^  12      #X$nXXX^>#X^XXX$n i   ` Ontheotherhand,#X$nXXX^ #X^XXX$nEPAdidfactorintotheelectricity   demandprojectionsthereductionsfromtheCCAPprogramsinitiatedin1993orlaterthatwereaimedatabroadergroupofpotentialparticipantsthanonlyutilities.Someofthelargestoftheseprogramsincluded(i)WasteWise(avoluntaryprogramdesignedtoreducemunicipalwastethroughwastepreventionandrecycling);(ii)MotorChallenge(aprogramdesignedtohelpindustryrealizeelectricitysavingsbyprovidingindustrywiththetechnicalexpertiseconcerningmanagementofelectricmotorsystemsandpurchaseofmoreenergyefficientelectricmotors);#X$nXXX^#X^XXX$nԀ(iii)Rebuild h America(aprogramdesignedtoencouragepartnershipsofvarioustypesofcompaniesandorganizations!rangingfrombuilderstolocalgovernments!toretrofitexistingpublichousingaswellascommercialandmultifamilybuildingstobemoreenergyefficient);(iv)EnergyStarBuildings(aprogramdesignedtoencourageindividualbuildingowners,developers,andotherstomakecomprehensive,energy '#* efficientbuildingupgrades);and(v)ResidentialApplianceStandards(aprogramunderwhichDOEwouldestablishbyrulemakingstandardsforimprovedenergyefficientappliancessuchasroomairconditioners,refrigerators,waterheaters,andothers).(Docket#A9656,Item#XIVF01;ClimateActionReport,AppendixA).#X$nXXX^2#X^XXX$nԀBecausesuch  \  programswererelativelynewandweregearedprimarilytocompaniesotherthanutilities,#X$nXXX^#X^XXX$nitislesslikelythat   utilitieswouldhaveincludeddemandreductionsfromtheseprogramsintheirelectricitydemandprojections. #X$nXXX^L#X^XXX$n  q   ` AcommentinggroupofutilitiesarguedthattheNERCforecastslikelyalreadyincludedtheCCAPreductionsthatEPAusedtoadjustthoseforecasts,resultingindoublecounting.ThecommentingutilitygroupnotedthatsomeutilitiesparticipatedintwoCCAPprograms(i.e.,WasteWiseandMotorChallenge)andspeculatedthattheparticipatingutilities wouldhaveincludedCCAPreductionsindevelopingtheinformationprovidedfortheNERCforecasts. ` However,utilitiescompriseonlyasmallnumberofcompaniesparticipatinginWasteWiseandMotorChallenge.In1996,WasteWiseinvolvedover600partners,representingover30 industries,includingsomeutilities.(Docket#A '#* 9656,Item#XVC24,Wastewise,ThirdYearProgress -)$, Report,USEPA,November,1997,atp.2.)MotorChallengeis *t&. aimedprimarilyatindustrialendusers,notutilities,(60FR6144347,Nov.29,1995).Thus,thecommentersevidencethatafewutilitieswereamongthemanyparticipantsinthesetwoprogramsprovidesaveryweakbasisfor i  speculatingthattheNERCforecastsincludedCCAPdemandreductionsfactoredinbyEPA.#X$nXXX^(#X^XXX$nԀ#X$nXXX^c#X^XXX$nSimilarly,manyotherCCAP  \  programs,includingtheRebuildAmericaandEnergyStarBuildingsprograms,weregenerallydirectedatentitiesotherthanutilities.#X$nXXX^#X^XXX$nԀ `   ` Moreover,exceptforClimateChallenge,theCCAPprogramsaredesignedtoachieveelectricitydemandreductionsfromawiderangeofelectricityendusers(i.e.,residential,commercial,andindustrialendusers)andwererelativelynewonlyafewyearsoldwhentheutilitiesreportedtheir1997demandestimatestoNERC.Theinteragencyworkgrouphadestimatedamountsofdemandreductionsfromtheseprogramsonanationalbasis,buthadnotbrokenthoseestimatesdowntotheNERCregionlevelthatwasthebasisforindividualutilitiesreportstoNERC.Accordingly,itappearsthattheindividualutilitieswouldhavehadrelativelylittleexperienceinanalyzingtheextenttowhichtheirparticularcustomersfollowedtheCCAPprogramsandwouldnothavehadanyothersourceofinformationforquantifyingtheCCAP#X$nXXX^#X^XXX$nԀ#X$nXXX^@#X^XXX$ndemandreductionsin *t&. theirrespectiveregions. X^XXX^  13       e  ` Forthesereasons,itseemsreasonabletoconcludethatasof1997,theonlyCCAPprogramreductionsthatutilitiesarelikelytohaveincludedintheirreportstoNERCwouldhavebeenthefewolderprogramsorthoseprimarilytargetingutilities,andnotthemanyotherCCAPprograms.Indeed,whileacommentinggroupofutilitiesspeculatedthatutilitiesmusthavetakenCCAPintoaccountinsubmittingtheirelectricitydemandinformationtoNERCin1997,EPAdidnotreceiveanydirectevidencefromtheutilitiesthatmadethesubmissionsstating(muchlessdemonstrating)thattheirsubmissionsactuallytookintoaccountanyspecificCCAPprogramsorotherwisereflectedanyspecificdemandreductions.i@ X^XXX^  14      ׀Particularly,inlightof ! thesilenceoftheindividualutilitiesaboutwhatCCAPreductionstheyactuallyincluded#X$nXXX^#X^XXX$nԀ(asdistinguishedfrom y speculationaboutwhattheywouldhaveincluded),EPAmaintainsthatitsassumptionsaboutwhatCCAPreductionswereincludedarereasonable. ` Inaddition,theargumentthatutilitiesaccountedforallCCAPreductionsisundercutbyutilitiescommentsintheNOxSIPCallproceeding.SeveralutilitiescommentedthatbecauseCCAPreductionsarevoluntary,suchreductionsshouldnotbeconsideredwhenmakingfuturedemandassumptions. GiventhisviewoftheCCAPreductions,it `  seemsdoubtfulthattheseutilitieswouldhaveconsidered,intheirdemandforecastssubmittedtoNERC,theCCAPreductionsfactoredinbyEPA.Moreover,ananalysis,included#X$nXXX^^#X^XXX$nԀ#X$nXXX^#X^XXX$nincommentsbytheutilitygrouponwhethertheNOx u SIPCallwouldhaveanimpactonthereliabilityoftheregionselectricitysupplyinmeetingelectricitydemand,#X$nXXX^#X^XXX$n h didnottakeintoaccountanydemandreductionsunderCCAP #X$nXXX^#X^XXX$n  y (ResponsestoSignificantCommentsontheProposedFindingofSignificantContributionandRulemakingforCertainStatesintheOzoneTransportAssessmentGroup(OTAG)RegionforPurposesofReducingRegionalTransportofOzone,September1998,at18182;seealso#X$nXXX^d#X^XXX$nDocket#A9656,Item# %p!( VJ66,UARGbriefingentitled TheImpactofEPAsRegionalSIPCallontheReliabilityoftheElectricPowerSupplyintheEasternUnitedStates,September11,1998.)#X$nXXX^#X^XXX$n  *t&.  ` Finally,oneutilitycommenterstatedthatNERCsforecastswereunlikelytoconsiderCCAPdemandreductions.Thecommenterexplained:#X$nXXX^#X^XXX$n X 0 ` NERCsreliabilityplanningmissionsuggestsjusttheopposite.NERCprojectionsoffuturedemandgrowthareusedtodeterminehowmuchcapacityisneededtomeetdemandtoensureelectricsystemreliability.TheprojectionsareacompilationofindividualutilityprojectionssenttoeachoftheNERCregionalcouncilstoensureadequatesupplyexiststomeetdemandineachregion.TheprojectionsmustbeconservativeanderronthesideofoverstatingdemandtoavoidsupplyshortfallsitisoflittleconsequenceifNERCoverestimatesdemand,butofpotentiallygreatconsequenceifitunderestimatesit.Forthisreason,althoughthecompilednatureofNERCsforecastsmakesitvirtuallyimpossibletoassessitsunderlyingassumptions,itisreasonabletoassumeNERCprojectionslargelyignorenew,uncertainelectricitydemanddampeningimpacts,suchasvoluntaryprogramswithnocleartrackrecordofaffectingelectricityconsumption.(#X$nXXX^#X^XXX$nSeeDocket#A9656,Item#XIVE01, u LetterfromMarkBrownstein,PublicServiceElectric&Gas,Sept.15,2001,atp.8)#X$nXXX^#X^XXX$nԀ#X$nXXX^# X^XXX$n!` (#` (#  ` (ii)EIAforecasts  h  ` #X$nXXX^)#X^XXX$nSeveralcommenterspointedoutthatNERCselectricity 0 demandforecast(1.8%demandgrowthperyear)andEIAselectricitydemandforecast(1.7%demandgrowthperyear)aresimilarandhigherthanEPAsforecast. Emphasizing "4$ thatEIAexplicitlytookCCAPreductionsintoaccount,commenterssuggestedthattheEIAforecastfactoredintheproperamountofCCAPdemandreductionsandthatthesimilarityoftheEIAandNERCforecaststhereforeshowsthattheNERCforecastsalreadyproperlyfactoredinsuch *&. demandreductions. ` However,EIAsexplanation,intheAnnualEnergyOutlookfor1998,ofitselectricitydemandforecastindicatedthat#X$nXXX^#X^XXX$nwhileEPAfactoredintoitsforecastsallthe i  CCAPdemandreductionsprojectedbytheStateDepartmentsClimateActionReport,describedabove,EIAfactoredintoitsforecastsonlyasmallportionofthosereductions.ThisdifferenttreatmentofCCAPreductionsexplainsmuchofthedifferenceindemandreductionsbetweenEIAandEPA. ` TheClimateActionReportorganizesvirtuallyalloftheCCAPprogramsthataffectelectricitydemandintothreecategories:residential,commercial,andindustrial,(ClimateActionReport,Table12).Thereportindicatesthattheresidentialandcommercialprogramswereexpectedtogeneratereductionsofcarbonemissionstotaling53millionmetrictonsby2010.Id.󀀀Notincludingthe y reductionsfromprogramsthatEPAassumedwereincludedintheNERCestimates,EPAreducedprojectedelectricitydemandin2010duetotheseprogramsby282.5billionKWh(Docket#A9656,Item#XIVF01).EIA,however,reducedprojectedelectricitydemandin2010fromtheseprogramsbymuchless#X$nXXX^#X^XXX$n. %p!( InexplainingitsanalysisoftheimpactofCCAPresidentialandcommercialprograms,EIAstated:0 ` OtherCCAPprogramswhichcouldhaveamajorimpactonresidentialenergyconsumptionaretheEnvironmental +J'/ ProtectionAgencys(EPA)GreenPrograms.TheseprogramswhicharecooperativeeffortsbetweentheEPAandhomebuildersandenergyappliancemanufacturersencouragethedevelopmentandproductionofhighlyenergyefficienthousingandequipment.Atfullyfundedlevels,residentialCCAPprogramsareestimatedbyprogramsponsorstoreducecarbonemissionsbyapproximately28millionmetrictonsbytheyear2010.Forthereferencecase ,carbonreductionsareestimated   tobe8millionmetrictons,primarilybecauseofdifferencesintheestimatedpenetrationofenergysavingtechnologies.... ` (#` (# 0 ` Atfullyfundedlevels,commercialCCAPprogramsareestimatedbyprogramsponsorstoreducecarbonemissionsbyapproximately25millionmetrictonsbytheyear2010.Forthereferencecase,carbonreductionareestimatedtobejustover9millionmetrictonsin2010,primarilybecauseofdifferencesinestimatedpenetrationofenergysavingtechnologies.#X$nXXX^#X^XXX$nԀq ` (#` (# '0 ` (AnnualEnergyOutlook1998(AEO98),EnergyInformation  Administration,December1997at20910). d` (#` (#  Inotherwords,EIAbelievedthatCCAPresidentialand u commercialprogramswouldbeaboutonethirdaseffectiveatreducingenergyuse(includingelectricityuse)astheStateDepartmentandEPAandothersponsorsprojectedandincludedthelowerestimateoftheenergyusereductionsinthe referencecaseonwhichEIAbaseditselectricitydemandforecasts. ` EIAsimilarlyassumedmuchfewerenergysavingsfromCCAPindustrialprogramsthanEPAbelievedbasedontheClimateActionReport.AsEIAexplained:0 ` Fortheirannualupdate,theprogramofficesestimatedthatfullimplementationoftheseprogramswouldreduceindustrialelectricityconsumptionby20billionkilowatthours...Howeversincetheenergysavings +J'/ associatedwiththevoluntaryprogramsare,toalargeextent,alreadycontainedintheAEO98baselinetotalCCAPenergysavingswerereduced.Consequently,CCAPisassumedtoreduceelectricityconsumptionby9billionkilowatthours.Id.at210.X` (#` (# EIAessentiallyassumedthatCCAPindustrialprogramsresultedinrelativelyfewadditionalenergysavingactivitiesbeyondthoseactivitiesthatindustrialcompanieswerealreadycarryingoutandthatwerethereforealreadyreflectedinthe AEO98 baselineor referencecaseon   whichEIAbaseditselectricitydemandforecasts.#X$nXXX^#X^XXX$n #X$nXXX^#X^XXX$nBy `  comparison,theStateDepartmentanalysisprojectedthatindustrialCCAPprogramswouldgeneratereductionsof96.4billionKwh(countinganadjustmentfromprogramscategorizedascommercial)(Docket#A9656,Item#XIVF01).Thus,EIAprojectedthattheseindustrialprogramswouldgeneratesavingsoflessthanonetenththeamountthatEPAdid.#X$nXXX^(#X^XXX$n  y  ` Asdiscussedabove,EPAsmoreaggressiveassumptions %  weretakenfromthesupportinganalysisfortheStateDepartmentsClimateActionReport,whichincludedreductionestimatesthatweredevelopedthroughinteragencyconsultationandweresubjecttopubliccomment.EPAbelievesitwasappropriatetousethem. ` SomecommenterssuggestthatEPAshouldassesswhethertheCCAPdemandreductionsarestilljustifiedbasedonany *t&. newinformationthathasbecomeavailablesinceEPAissuedtheSection126RuleandtheTechnicalAmendments.EPAbelievesthatitisappropriatefortheAgencytorelyontheinformationthatwasavailableduringtherulemakingsthatresultedinthoserules.However,EPAnotesthatcommentersdidnotprovideanyspecificinformationshowingthatEPAsprojectedCCAPdemandreductionswereincorrect.R X^XXX^  15      ׀Further,new,currentinformationprovides   someconfirmationthatEPA'sprojectedCCAPdemandreductionswerereasonable.Arecentreport, (Docket#A q  9656,Item#XVC25,ThePowerofPartnershipsEnergyStar  andOtherVoluntaryPrograms!2000AnnualReport,EPA, d 2001atp.6)statesthattheEnergyStarProgram,whichpromoteshighlyefficientequipmentsuchasenergyefficientrefrigerators,dishwashers,andwindows,hasexceededthelevelforecastedbyCCAPfor2000bymorethan20percentoftheforecastedlevelintheCCAP.}@ X^XXX^  16      ׀Furthermore,EPAhas %  expandedCCAPtocoverotherusesofelectricity(e.g.,athospitals)thatwillincrease savingsfurther.(SeeDocket  #A9656,Item#XVC26,EPAAdministratorLaunchesNewEnergyStarRatingToolforHospitals,HonorsFirstHospitaltoEarnEnergyStarLabel,November15,2001.)#X$nXXX^#X^XXX$n 1   ` Inshort,commentersfailedtoshowthattheEIAelectricitydemandforecastproperlyfactoredintheCCAPdemandreductions,muchlessthattheNERCforecast(whichwashigherthantheEIAforecast)alreadyincludedtheCCAPdemandreductionsthatEPAusedtoreducetheNERCforecast.#X$nXXX^#X^XXX$n (  ` (iii)ConsistencyWithRegionalHeatInput#X$nXXX^#X^XXX$n  x  9 e ` Finally,EPAnotesthat #X$nXXX^#X^XXX$ntheelectricitydemand  reductions[underCCAP]weredistributedevenlythroughouttheUnitedStates,andthereforehavenoinfluenceontheshareofthetotalamountofNOxemissionsthateachStatereceives,(63FR57414).AnyoverestimationoftheCCAPdemandreductionswouldthereforebelikelytoresultinregionwideprojectionsofheatinputbeinglowerthanactuallevels,ratherthaninonlyafewStatesprojectionsbeinglowerthanactuallevels.Yet,asexplainedbelow,EPA'sheatinputprojectionshavebeenreasonablyaccurateonaregionwidebasis.EPAsprojectionswere0.1%lowerthanactualregionwideheatinputfor2000and2%higherthanactualregionwideheatinputfor2001.Thisindicatesthat +&. theCCAPassumptionswerereasonableanddidnotleadto starkdisparitiesbetween[EPAs]projectionsandrealworldobservations.AppalachianPowerv.EPA,249F.3d X 1054.# XN XXX^XN X XXNXN X XXNX^X XXN  17      #X$nXXX^R#X^XXX$n i  #X$nXXX^> #X^XXX$n5#X$nXXX^ #X^XXX$n.#X$nXXX^ #X^XXX$nEPAsAssumptionsRegardingtheLocationofNewUnits   WereReasonable#X$nXXX^ #  \  X^XXX$n ` CommentersonEPAsAugust3,2001NODA#X$nXXX^ #X^XXX$nԀexpressed#X$nXXX^H #X^XXX$n m  concernaboutthemethodologythatEPAusedtoassignnewunitstoindividualStates. n  XN XXX^XN X XXNXN X XXNX^X XXN  18      ׀TheIPMdividedthecountry `  intogeographicregionsthatarebasedonNERCregions.Theseregionsarefurthersubdividedtoaccountfortransmissionbottlenecksorareasthathavedifferentenvironmentalrequirements.TheseregionsandsubregionsdonotcorrespondtoStateboundaries,inmanycases.For ! example,partofIllinoisandpartofMissouriissplitbetweentwoNERCRegions,theEastCentralReliabilityAreaCouncil(ECAR)andtheMidAmericaInterconnectedNetwork.Similarly,VirginiaandKentuckyaresplitbetweenECARandtheSouthernElectricReliabilityCouncil(SERC).WhileAlabamaandGeorgiaarebothlocatedentirelywithintheSERCRegion,inIPMtheyhavebeenfurthersubdividedintomultipleIPMsubregionstomorecloselymatchtheconstraintswithintheelectricdistributionsystem. The `  IPMrunsindicatedwhichnewunitswouldoperateinwhichsubregionsbutdidnotspecifyinwhichStatesinthesesubregions.InordertodevelopStatebudgets,EPAhadtodevelopamethodologytodisaggregatethesenewunitsfromthesubregionalleveltotheStatelevel.#X$nXXX^ #X^XXX$n !  ` UnderEPAsmethodology,newunitsthathadcommencedconstructionorreceivedfinancing,atthetimethatthemodelwasupdated(i.e.,in1998)foruseintheNOxSIPCallandtheSection126Rule,wereincludedintheStateinwhichtheyexistedorwereplanned.#X$nXXX^#ԀX^XXX$nԀSecond,newunitsthat }"$ hadnotcommencedconstructionorreceivedfinancingatthattime,butthatwereprojectedbytheIPMtobebuiltwereassignedtoanindividualStatebasedontheshareofthesubregionsgenerationcapacity(bothfossilandnonfossil)thatwaslocatedintheState.EPAmaintainsthatthiswas +&. areasonableapproachthattookintoaccountthethenmostcurrent,availableinformationonnewunitconstructionandfinancing. ` EPAalsonotesthattheonlyalternativeapproachsuggestedbycommenterswastousenewinformationonthecommencementofconstructionandfinancingofnewunits.TotheextentthatthistypeofinformationwasavailableatthetimethatEPAupdatedtheIPM(i.e.,in1997)foruseintheNOxSIPCallandtheSection126Rule,EPAdidusesuchinformation.However,EPArejectstheapproachofnowusingnewinformationof thistype,forunitsthathavebeenmore  recentlybuiltorarecurrentlybeingbuilt,thatwasnotavailablewhentheIPMwasupdated.EPAbelievesthatitreasonablyreliedonthemostcurrentinformationavailablearoundthetimetheIPMwasupdatedandthatitwouldnotbereasonabletorequiretheAgencytoredoitsanalysiswhenever,asinevitablyoccurs,morerecentinformationbecomesavailable.Imposingsucharequirementwouldbeaprescriptionforendlessrulemaking. ` Itshouldalsobenotedthat,whilecoalfiredandnuclearunitsmakeupabout77%ofexistingelectricitygenerationcapacity(with gasandoilfiredunitsmakingup '#* 13%andhydroelectricandrenewalfacilitiesmakinguptherest),theonlynewunitsprojectedbytheIPMintheruns *t&. fortheNOxSIPCall(andapplicabletotheSection126Rule)weregasfiredunits.BecausenewgasfiredunitswilllikelyhaveveryhighlevelsofNOxcontrolandmuchlowerNOxemissionsascomparedtoexistingunits(seediscussionofnewunits'lowNOxemissionsinsectionV.D.8ofthisnotice),theseunitswillhaveamuchsmallerimpactonNOx#X$nXXX^#X^XXX$nemissionsthandoexistingunits.Therefore,evenif m  somenewunitslocateindifferentStatesthanthoseprojectedbytheIPM,thoseunitswillnotsignificantlyincreasetheNOxemissionsintheStateswheretheylocateandsowillnotsignificantlyincreasethestringencyoftheNOxemissionreductionrequirementsforotherunitsinsuchStates.Inconclusion,EPAbelievesthatitsheatinputgrowthratemethodologyincludingthechallengedassumptionsonnewunitlocation,electricitydemand,andrepresentativenessofthe20012007heatinputgrowthratesτisreasonable.#X$nXXX^#X^XXX$n #X$nXXX^a # %   X^XXX$nD.ActualHeatInputComparedtoEPAProjectionsofHeat  l" Input  "4$  1.Court'sandCommenters'Concerns  a$& #X$nXXX^ #X^XXX$n ` TheCourtexpressedconcernabouttheperceived )&!( discrepanciesbetweenEPAsheatinputprojectionsandactualheatinputdata.TheCourtstated: InMichiganandWestVirginia,forexample,actualutilizationin1998 -+&. alreadyexceededtheEPA'sprojectedlevelsfor2007.This,onitsface,raisesquestionsaboutthereliabilityoftheEPA'sprojections.(AppalachianPowerv.EPA,249F.3dat X 1053).TheCourtaddedthat"[f]urthergrowthprojectionsthatimplicitlyassumeabaselineofnegativegrowthinelectricitygenerationoverthecourseofadecadeappeararbitrary,andtheEPAcanpointtonothingintherecordtodispelthisappearance.#X$nXXX^!#X^XXX$nId.    #X$nXXX^$#X^XXX$n ` #X$nXXX^K%#X^XXX$nCommentersexpressedsimilarconcerns.Throughthe `  August13,2001NODA,EPAputinthedocketdataindicatingozoneseasonheatinputforeachStateintheNOxSIPCallregionfortheyears19972000.Commenterspointedoutthatthisdataindicatedthatin2000,actualheatinputforfourotherStatesAlabama,Georgia,Illinois,andMissouriexceededEPAsprojectedheatinputfortheyear2007.CommentersclaimedthatthisshowedthatEPAsheatinputgrowthratesandprojectionswereunreasonable.ThroughtheMarch11,2002NODA,EPAputinthedocketcomparabledatafortheyear2001and,subsequently,putinannualdataforeachStatefor19602000.#X$nXXX^%#X^XXX$nԀ(SeeDocket#A9656,Item#s )$& XVC18andXVC19). ` AftercarefulreviewoftheseandotherdataintherecordandtheCourtsandcommentersconcerns,EPAconcludesthattheavailable,actualheatinputdoesnot *t&. indicatethattheAgencysheatinputgrowthmethodologyisunreasonable.#X$nXXX^(#X^XXX$n  #X$nXXX^;*#X^XXX$n2. EPA'sHeatInputProjectionsfortheRegionAre X ConsistentWithActualHeatInputData     ` EPA'sheatinputprojectionsforEGUsfortheNOxSIPCallregion(21StatesandtheDistrictofColumbia),takenasawhole,areconsistentwiththeactualheatinputdatathatareavailable.EPAprojectedheatinputfor2007byapplyingStateheatinputgrowthratesto1995or1996baselineheatinput.Although2007istheonlyyearforwhichEPAwasprojectingheatinputandforwhichEPAestablishedNOxemissionbudgetsforEGUs,theEPAmethodologycanbeappliedtoyieldheatinputvaluesforotheryears,suchas2000and2001.Whencomparedwithactualheatinputdatanowavailablefor2000and2001,EPAprojectionsforthoseyearsareconsistentwiththeactualdata. ` Specifically,EPA'sprojectionsfortotalregionwideheatinputforEGUsare#X$nXXX^*#X^XXX$n6,250,350,678mmBtu#X$nXXX^p.#X^XXX$nԀfor2000and "P$ #X$nXXX^.#X^XXX$n6,328,056,922#X$nXXX^)/#X^XXX$nԀmmBtufor2001.2 XN XXX^XN X XXNXN X XXNX^X XXN  19      ׀Theseprojectionsare0.1% a$& lowerand2%higherrespectivelythanactualregionwideheatinputforEGUsfor2000andfor2001(seeTable1).#X$nXXX^x/#X^XXX$n   ` IncommentingonthedatapresentedbytheAugust3,2001NODA,whichincludedtheactualheatinputvaluesforyearsupto2000,commentersstated#X$nXXX^=1#X^XXX$nԀthattheclosenessof   theregionwideprojectionfor2000andactualregionwideheatinput#X$nXXX^32#X^XXX$ndidnotcastdoubtontheirviewthatEPAsheat m  inputgrowthmethodologyprovidedunreasonablylowgrowthrates.Rather,commentersasserted,thecloseness#X$nXXX^2#X^XXX$nԀwas"pure `  coincidence"resultingfromEPAusinganinflated19951996baselineandapplyingtoita"lessthanreasonable"heatinputgrowthrate.Accordingtothecommenters,insubsequentyears,EPA'sregionwideprojectionwoulddivergesignificantlyfromactualregionwideheatinput. ` #X$nXXX^3#X^XXX$nTheactualheatinputvaluesfor2001becameavailable h afterthesubmissionofcommentsontheAugust3,2001NODAandwereputinthedocket.Asnotedabove,theregionwide,actualheatinputfor2001remainsquitecloseto,andinfactisalittlelowerthan,theEPAsregionwideheatinputprojectionfor2001.Ofcourse,regionwideelectricitydemand,andsoregionwideheatinput,inthe2001ozoneseasonwereprobablysomewhatlowerthantheyotherwisewouldhavebeenbecauseoftheunusualreductionineconomicactivityimmediatelyaftertheSeptember11,2001terrorist *t&. attacks.#X$nXXX^^5#X^XXX$nEvenso,regionwideelectricitydemandstillgrew e slightlyover2000ozoneseasonlevels.(Docket#A9656,Item#XVC12,summarizingEIAelectricitysalesdatafortheozoneseasonfortheNOx#X$nXXX^8#X^XXX$nSIPCallStatesduring1995 i  2001).With#X$nXXX^>9#X^XXX$nԀ#X$nXXX^9#X^XXX$nthecontinuedclosenessofEPA'sprojectedand   theactualvaluesforregionwideheatinput,itisdifficulttogivethecommenters'assertionof purecoincidencemuchcredence.Moreover,asdiscussedabove,EPA'smethodologyfordevelopingheatinputgrowthrates,andtheassumptionsunderlyingthemethodology,arereasonable,andsoitislogicaltoexpectthattheheatinputprojectionsresultingfromthatmethodologyarereasonable.3. EPA'sHeatInputGrowthRatesand2007ProjectionsFor u MostStatesAreNotDisputedbyCommenters  =  ` EPA'sheatinputgrowthratesand2007projectionsformostStatesintheNOxSIPCallregion,andformostStatescoveredbytheSection126Rule,arenotspecificallydisputedbycommenters.Ofthe21StatesandtheDistrictofColumbiacoveredbytheNOx#X$nXXX^:#X^XXX$nSIPCall,orrecently "P$ proposedtobecovered,theheatinputgrowthratesand2007projectionsforonlysevenStates(Alabama,Georgia,Illinois,Michigan,Missouri,Virginia,andWestVirginia)aredisputedbycommenters.Ofthe12StatesandtheDistrictofColumbiacoveredbytheSection126Rule,these +&. valuesforonlythreeStates(Michigan,Virginia,andWestVirginia)aredisputedbycommenters. ` Asnotedabove,petitionersandtheCourtraisedconcernsaboutEPA'sgrowthratesandprojectionsforMichiganandWestVirginia,statingthatEPAsStateheatinputgrowthratesresultedinStateprojectionsfor2007belowthe1998actualheatinputvalues.#X$nXXX^=#X^XXX$nԀSubsequently,in m  commentsontheAugust3,2001NODA,commentersraisedconcernsthattheheatinputgrowthratesforfiveotherStates(Alabama,Georgia,Illinois,Missouri,andVirginia)weretoolowbecause,foreachState,theactualheatinputin2000exceededorwereclosetoEPA's2007projection.Fortheremaining15jurisdictionsintheNOxSIPCallregion,EPA'sheatinputgrowthratesandprojectionswerenotdisputedbyanypetitionerandarenotdisputedinanycommentsontheAugust3,2001andMarch11,2002NODAsoronanyotherdocumentsaddedtothedocketconcerningtheremandongrowthrates. ` #X$nXXX^@#X^XXX$nThefactthatnoobjectionshavebeenraisedwith }"$ respecttothe majorityoftheStatesisanindicationof )$& thereasonablenessofEPAsheatinputgrowthmethodology.Further,asdiscussedbelow,alloftheStatesaboutwhichtheCourtorcommentersexpressedconcernhaverecentlyhaddecreasesintheirheatinput,insomecasestolevelsbelow *t&. EPAs2007projections .Alsoasdiscussedbelow,becausein e anumberofinstancesStateannualheatinputhasdecreasedsignificantlyovermultiyearperiods,thefactthataStatehasrecentlyhadheatinputexceedingorclosetoEPAs2007projectionsdoesnotmeanthattheprojectionisunreasonable.#X$nXXX^C#X^XXX$n  \   #X$nXXX^F#X^XXX$n 4.HistoricalDataShowThataState'sHeatInputCan m  DecreaseSignificantlyOverMultiYearPeriods #X$nXXX^7G#X^XXX$n 5  e ` #X$nXXX^G#X^XXX$nAsnotedabove,theCourtindicatedsignificantdoubt   thataStatesheatinputcoulddecreaseoveralongperiodofyears.TheCourtseemedtobeconcernedthatunderlyingadecreaseinStateheatinputwouldhavetobeadecreaseinelectricitygeneration.Consequently,theCourtquestionedthereasonablenessofEPAsheatinputgrowthratemethodologybecausethemethodologyresultedinaStateexceedingits2007levelnineyearsinadvance.However,historicalheatinputdatashowsthat,onmanyoccasions,Stateannualandozoneseasonheatinputhasdecreasedsignificantlyforthelastyear,ascomparedtothefirstyear,ofmultiyearperiods.#X$nXXX^kH#X^XXX$n a$& #X$nXXX^[K#X^XXX$n ` Table1belowshowstheozoneseasonheatinputforEGUs  &!( for19952001foreachStateintheNOxSIPCallregion.Foreachozoneseason,EPAsummedtheheatinputdataforAcidRainProgramunits,asreportedtoEPAunder40CFRpart75, +&. andforotherEGUs,asreportedtoEIA.#X$nXXX^K#X^XXX$n e  ^M  Table1HeatInputforEGUsfor19952001OzoneSeasons   M*I\ddd Xdd Xdd X##, ( , , , , , ,( ,( +  8# t 88^۟_XX^#^|__^۟?M#^۟__^|State M8' M1995OzoneSeasonHeatInput M8')  3 M1996OzoneSeasonHeatInput M8') 3 M1997OzoneSeasonHeatInput M8') 3 M1998OzoneSeasonHeatInput M8') 3 M1999OzoneSeasonHeatInput M8') 3 M2000OzoneSeasonHeatInput M8') #3 M2001OzoneSeasonHeatInput#^|__^۟O#^۟__^|Ԁ UK-) (3 8  4(UAL \R r) 433zݴA 350059204.2433zݴA\350,059,204 yA r*3 433zݴA 350059204.2 433zݴA NnA 350907982NnA350,907,982 w? r+3 NnA 350907982 NnA 4A 3503283724A350,328,372 w? r,3 4A 350328372 4A Xk A 369978200Xk A369,978,200 w? r-3 Xk A 369978200 Xk A :5A 389364461:5A389,364,461 {? r.3 :5A 389364461 :5A  A 400689850.078  A400,689,850 ^TC r/3  A 400689850.078  A ^391.665,691 F<# r03 ( 4 (FCT ^T} 1 (A 48093523.5679 (A^48,093,524 C} 23 (A 48093523.5679 (A v!iA 61678647.8891 v!iA61,678,648 zC} 33 v!iA 61678647.8891 v!iA 8A643815118A64,381,511 u>} 43 8A64381511 8A .A56591808.A56,591,808 u>} 53 .A56591808 .A A75967544A75,967,544 z>} 63 A75967544 A QU=A 61324920.4168 QU=A61,324,920 zC} 73 QU=A 61324920.4168 QU=A PA54430209PA54,430,209 lbD} 83 PA54430209 ( PA 4(lDC XN# 9 b>A2026082b>AX2,026,082 |r=# :3 b>A2026082 b>A L@128205L@|128,205 {q<# ;3 L@128205 L@ #A645846#A{645,846 |r<# <3 #A645846 #A GA3113446GA|3,113,446 }s=# =3 GA3113446 GA 6HA31736336HA}3,173,633 y=# >3 6HA3173633 6HA i81A 1153592.61099 i81A1,153,593 yC# ?3 i81A 1153592.61099 i81A i3A1272251i3A1,272,251 pfH# @3 i3A1272251 ( 4 i3A 4(pDE ^T dA uA 42077856.3397 uA^42,077,856 C dB3 uA 42077856.3397 uA ScUA 45204266.6735 ScUA45,204,267 zC dC3 ScUA 45204266.6735 ScUA =A39315387=A39,315,387 u> dD3 =A39315387 =A PA45932682PA45,932,682 w> dE3 PA45932682 PA gffȂA 39394171.3gffȂA39,394,171 w@ dF3 gffȂA 39394171.3 gffȂA "ǀA35185752"ǀA35,185,752 u> dG3 "ǀA35185752 "ǀA hA38898944hA38,898,944 lbI dH3 hA38898944 ( 4 hA (lGA ^To I -!FA 356963346.497 -!FA^356,963,346 Co J3 -!FA 356963346.497 -!FA -!5A 335977013.497 -!5A335,977,013 {Co K3 -!5A 335977013.497 -!5A FA 351207750FA351,207,750 w?o L3 FA 351207750 FA ";A 403716898";A403,716,898 w?o M3 ";A 403716898 ";A A 387781101A387,781,101 {?o N3 A 387781101 A U A 420260693.711 U A420,260,694 {Co O3 U A 420260693.711 U A 7PA 3743559567PA374,355,956 mcEo P3 7PA 374355956 ( 7PA 4(m#X^X_^۟O#^۟_XX^IL ZP Q սA 347985300սAZ347,985,300 w? R3 սA 347985300 սA A 379029184A379,029,184 w? S3 A 379029184 A 5A 4061278865A406,127,886 w? T3 5A 406127886 5A A 450929580A450,929,580 {? U3 A 450929580 A gʕA 418420170.565 gʕA418,420,171 C V3 gʕA 418420170.565 gʕA )̠YA 436052569.628 )̠YA436,052,570 {C W3 )̠YA 436052569.628 )̠YA A 434282881A434,282,881 mcJ X3 A 434282881 ( 4 A (mIN ]SV Y XWZA 514611872.34XWZA]514,611,872 ~BV Z3 XWZA 514611872.34 XWZA ~ɛ6A 523672521.854 ~ɛ6A523,672,522 {CV [3 ~ɛ6A 523672521.854 ~ɛ6A A 536772484A536,772,484 w?V \3 A 536772484 A 2A 5770598522A577,059,852 w?V ]3 2A 577059852 2A [XA 582006636[XA582,006,636 z?V ^3 [XA 582006636 [XA 27A 523711121.7527A523,711,122 zBV _3 27A 523711121.75 27A A 564472583A564,472,583 h^EV `3 A 564472583 ( A (hKY ZPa a QwA 410472859QwAZ410,472,859 w?a b3 QwA 410472859 QwA ɱA 414304687ɱA414,304,687 w?a c3 ɱA 414304687 ɱA f:A 406480534f:A406,480,534 w?a d3 f:A 406480534 f:A A 431861492A431,861,492 w?a e3 A 431861492 A &*A 455747249&*A455,747,249 {?a f3 &*A 455747249 &*A NEA 440776958.911 NEA440,776,959 {Ca g3 NEA 440776958.911 NEA UA 447829251UA447,829,251 mcEa h3 UA 447829251 ( UA 4(m#^|__^۟!S#^۟__^|MA ^T i ib̝A 124983467.603 ib̝A^124,983,468 C j3 ib̝A 124983467.603 ib̝A PX1A 113298531.337 PX1A113,298,531 {C k3 PX1A 113298531.337 PX1A نA 123844201نA123,844,201 w? l3 نA 123844201 نA r6A 136001859r6A136,001,859 y? m3 r6A 136001859 r6A ̝A 147443918.9̝A147,443,919 yA n3 ̝A 147443918.9 ̝A lVA 124327323lVA124,327,323 w? o3 lVA 124327323 lVA HA 122126098HA#^|__^۟t#^۟__^|122,126,098#^|__^۟x#^۟__^| mcJ p3 HA 122126098 ( 4 HA (m#^|__^۟ y#^۟__^|MD ZPH q 4A 1433950984AZ143,395,098 w?H r3 4A 143395098 4A DNA 136794146DNA136,794,146 w?H s3 DNA 136794146 DNA }kA 146128637}kA146,128,637 w?H t3 }kA 146128637 }kA ׸A 182217612׸A182,217,612 w?H u3 ׸A 182217612 ׸A A 183980736A183,980,736 {?H v3 A 183980736 A z"A 148950007.567 z"A148,950,008 {CH w3 z"A 148950007.567 z"A -QA 153654978-QA153,654,978 mcEH x3 -QA 153654978 ( -QA 4(mMI ^TS y tN{*A 362883707.307 tN{*A^362,883,707 CS z3 tN{*A 362883707.307 tN{*A l^\A 351493214.424 l^\A351,493,214 ~CS {3 l^\A 351493214.424 l^\A > BA 356684563.84> BA356,684,564 zBS |3 > BA 356684563.84 > BA 5A 5661318216>A566,131,821 w?,3 6>A 566131821 6>A  2A 543431600 2A543,431,600 w?,3  2A 543431600  2A 0FA 5969378240FA596,937,824 w?,3 0FA 596937824 0FA A 590290990A590,290,990 {?,3 A 590290990 A $/7Z A 571651486.431 $/7Z A571,651,486 {C,3 $/7Z A 571651486.431 $/7Z A tA 540109544tA540,109,544 rhJ,3 tA 540109544 ( 4 tA 4(rPA ^T7 &rA 527611361.942 &rA^527,611,362 ~C73 &rA 527611361.942 &rA ƾA 516308527/>ƾA516,308,527 w?73 />ƾA 516308527 />ƾA A 499158768A499,158,768 rhJ73 A 499158768 ( 4 A 4(rRI YOx nA16066757nAY16,066,757 u>x3 nA16066757 nA A43102370A43,102,370 u>x3 A43102370 A  fA12029849 fA12,029,849 u>x3  fA12029849  fA }?eA11140079}?eA11,140,079 w>x3 }?eA11140079 }?eA fffFA 34133202.8fffFA34,133,203 w@x3 fffFA 34133202.8 fffFA |A30158008|A30,158,008 u>x3 |A30158008 |A {A28428750{A28,428,750 qgIx3 {A28428750 ( 4 {A 4(qSC ZP NA 136790135NAZ136,790,135 {?3 NA 136790135 NA ):A 156359804.114 ):A156,359,804 {C3 ):A 156359804.114 ):A  A 148194438 A148,194,438 w?3  A 148194438  A VfA 175584043VfA175,584,043 w?3 VfA 175584043 VfA 4A 1862560004A186,256,000 {?3 4A 186256000 4A TTA 187329450.283 TTA187,329,450 {C3 TTA 187329450.283 TTA >A 186606291>A186,606,291 rhJ3 >A 186606291 ( 4 >A 4(rTN ]S) أp@fͰA 281896512.44أp@fͰA]281,896,512 }B)3 أp@fͰA 281896512.44 أp@fͰA QEA 269960693.32QEA269,960,693 zB)3 QEA 269960693.32 QEA AA 268808769AA268,808,769 w?)3 AA 268808769 AA |EA 256156350|EA256,156,350 w?)3 |EA 256156350 |EA r.A 261568838r.A261,568,838 z?)3 r.A 261568838 r.A pM°A 281169293.99pM°A281,169,294 zB)3 pM°A 281169293.99 pM°A A 269012650A269,012,650 mcJ)3 A 269012650 ( 4 A (mVA ]Sj  bA 154233309.52 bA]154,233,310 ~Bj3  bA 154233309.52  bA zWA 172633028.239 zWA172,633,028 {Cj3 zWA 172633028.239 zWA cA 179436621cA179,436,621 w?j3 cA 179436621 cA "A 219246917"A219,246,917 w?j3 "A 219246917 "A A 225665092A225,665,092 {?j3 A 225665092 A 5@ HA 212075792.125 5@ HA212,075,792 {Cj3 5@ HA 212075792.125 5@ HA vA 213583835vA213,583,835 o^Ej3 vA 213583835 ( vA (oWV sb'u IA 347687306.91IAs347,687,307 Qu3 IA 347687306.91 IA o^A 341738426.434 o^A341,738,426 Ru3 o^A 341738426.434 o^A )A 364757289)A364,757,289 Nu3 )A 364757289 )A A 386442663A386,442,663 Nu3 A 386442663 A '9WA 391592231'9WA391,592,231 Nu3 '9WA 391592231 '9WA W)RA 380868434.567 W)RA380,868,435 Ru3 W)RA 380868434.567 W)RA BwA 360185154BwA360,185,154 wmTu3 BwA 360185154 ( BwA (wTotal [Q+ A 5808181338A[5,808,181,338 y@+3 A 5808181338 A PJA 5820605605PJA5,820,605,605 y@+3 PJA 5820605605 PJA @A 5841199188@A5,841,199,188 y@+3 @A 5841199188 @A 0lA 64158942110lA6,415,894,211 y@+3 0lA 6415894211 0lA kAA 6467884728kAA6,467,884,728 y@+3 kAA 6467884728 kAA `YA 6268189238`YA6,268,189,238 y@+3 `YA 6268189238 `YA JA 6195717293JA6,195,717,293VLJ+3 JA 6195717293 (  JA V#^|__^۟y#^۟__^|#X^X_^۟̊#ThisozoneseasondatashowsdecreasesinStateheatinput T forseveralStatesforthelastyear,ascomparedtothefirstyear,ofmultiyearperiodsof3to6years.M XN XXX^XN X XXNXN X XXNX^X XXN  20      ׀For  example,during1995through2001,Delaware,Georgia,Illinois,Indiana,Massachusetts,Maryland,Michigan,NorthCarolina,Ohio,Pennsylvania,Virginia,andWestVirginiahaddecreasesinheatinputforthelastyear,ascomparedtothe #\ firstyear,ofthe3yearperiod19982001.Heatinputdecreasesforothermultiyearperiodsoccurredduring1995through2001forDelaware(6yearperiod19952001),NorthCarolina(5yearperiod19962001),NewJersey(3yearperiod19951998),NewYork(6yearperiod19952001),Pennsylvania(6yearperiod19952001)RhodeIsland(4yearperiod19962000),andTennessee(6yearperiod19952001). ` EPAalsoexaminedlongterm,fossilfuelusedata.ThelongtermdatafromEIAshowfossilfueluse(inmmBtu)onanannual,notanozoneseason,basisforthe21StatessubjecttotheNOxSIPCallfor19602000#X$nXXX^w#X^XXX$n.n XN XXX^XN X XXNXN X XXNX^X XXN  21      ׀(#X$nXXX^#X^XXX$nBecauseofthe  largeamountofdata,thefullsetof19602000annualdataisprovidedinDocket#A9656,Item#X$nXXX^#X^XXX$nԀ#XVC18,ratherthan u beingincludedintodaysnotice.)#X$nXXX^׼#X^XXX$nThesedatademonstrate ! thatdecreasesinStateannualheatinput,likedecreasesinStateozoneseasonheatinput,arenotunusual.#X$nXXX^l#X^XXX$nԀ y  ` Specifically,the19602000annualheatinputdatashowsignificantdecreasesinStateannualheatinputforthelastyear,ascomparedtothefirstyear,ofmultiyearperiodsof }"$ 3to10years(orlonger).Infact,allbutoneofthe21StatesundertheNOx#X$nXXX^E#X^XXX$nSIPCallhashadsignificantdecreases  inannualheatinputovermanymultiyearperiodsrangingfrom3to10years;oneoftheStates(Indiana)hashadsuchdecreasesovermultiyearperiods,withinthatrange,ofonly3years.Tables2,3,4,5,6,7,8,and9summarizethisinformationbyshowingthelargestpercentagedecreases(forthelastyear,ascomparedtothefirstyear,ofmultiyearperiods)thatthelistedStateshavehadinannualheatinputover3year,4year,5year,6year,7year,8year,9yearand10yearperiodsrespectively.   Table2LargestDecreasesinStateAnnual d HeatInputOverThreeYears  H *6*I\Pdd (      ( ( I\##,dd ,dd ,A dd +   g {XX^State 'f '3yearperiod 'f '%decreaseinheatinput f Alabama   19791982 5+   1@171@517 5+)  1@17 1@ 5Connecticut  a  19891992 4* a!  @6@46 4*(a"  @6 @ 4Delaware  B# 19951998 5+ B$  8@248@524 5+)B%  8@24 8@ 5Georgia  & 19891992 4* '  "@9"@49 4*((  "@9 "@ 4Illinois#X^X{N#{XX^#{ǿ#{  3 ) 19861989 5+ 3 *  1@171@517 5+)3 +  1@17 1@ 5Indiana  y!, 19791982 4* y!-  @3@43 4*(y!.  @3 @ 4Kentucky  "Z/ 19972000 4* "Z0   @8 @48 4*("Z1   @8  @ 4Massachusetts  $2 19972000 5+ $3  E@42E@542 5+)$4  E@42 E@ 5Maryland  K% 5 19781981 5+ K% 6  :@26:@526 5+)K% 7  :@26 :@ 5Michigan  &,"8 19791982 5+ &,"9  3@193@519 5+)&,":  3@19 3@ 5Missouri  'r#; 19901993 5+ 'r#<  (@12(@512 5+)'r#=  (@12 (@ 5NewJersey#X^X{z#{XX^#{#{  )$> 19891992 5+ )$?  G@46G@546 5+))$@  G@46 G@ 5NewYork  c*%A 19901993 5+ c*%B  A@34A@534 5+)c*%C  A@34 A@ 5NorthCarolina  +D'D 19811984 5+ +D'E  1@171@517 5+)+D'F  1@17 1@ 5Ohio  d 19791982 5+ d  &@11&@511 5+)d  &@11 &@ 5Pennsylvania   19961999 5+   ,@14,@514 5+)  ,@14 ,@ 5RhodeIsland  U 19901993 5+ U  V@88V@588 5+)U   V@88 V@ 5SouthCarolina  6  19811984 5+ 6   3@193@519 5+)6   3@19 3@ 5Tennessee   |  19791982 5+  |  0@160@516 5+) |  0@16 0@ 5Virginia  '  19791982 5+ '   A@35A@535 5+)'   A@35 A@ 5WestVirginia  m  19881991 5+ m   *@13*@5139/-m   *@13  *@ 9#X^X{ #   Table3LargestDecreasesinStateAnnualHeatInputOverFourYears }k*I\Sdddd dd A dd A I\P##,dd ,dd ,A dd +   z  {XX^State 'C  '4yearperiod 'C  '%decreaseinheatinput C  Alabama  . 19801984 4* .  "@9"@49 4*(.  "@9 "@ 4Connecticut  t  19891993 5+ t!  K@55K@555 5+)t"  K@55 K@ 5Delaware  # 19962000 5+ $  9@259@525 5+)%  9@25 9@ 5Georgia  e& 19881992 5+ e'  (@12(@512 5+)e(  (@12 (@ 5Illinois#X^X{#{XX^#{L#{  F) 19841988#X^X{7#{XX^#{y#{ 5+ F*  2@182@518#X^X{#{XX^#{#{ 5+)F+  2@18 2@ 5Indiana  , None  - None  . Kentucky  7/ 19962000 4* 70  @5@45 4*(71  @5 @ 4Massachusetts  }2 19891993#X^X{#{XX^#{#{ 5+ }3  A@34A@534#X^X{[#{XX^#{#{ 5+)}4  A@34 A@ 5Maryland  ^5 19781982#X^X{#{XX^#{Y#{ 5+ ^6  7@237@523#{:#{#X^X{#{XX^ 5+)^7  7@23 7@ 5Michigan   8 19791983#X^X{#{XX^#{#{ 5+  9  3@193@519#X^X{#{XX^#{#{ 5+) :  3@19 3@ 5Missouri  O; 19891993 5+ O<  *@13*@513 5+)O=  *@13 *@ 5NewJersey#X^X{P#{XX^#{#{   0> 19891993#X^X{#{XX^#{#{ 5+  0?  H@48H@548 5+) 0@  H@48 H@ 5NewYork  !vA 19901994 5+ !vB  B@37B@537 5+)!vC  B@37 B@ 5NorthCarolina  !#D 19831987#X^X{K#{XX^#{#{ 5+ !#E  H@48H@548#X^X{#{XX^#{?#{ 5+)!#F  H@48 H@ 5Ohio  g$ G 19791983 5+ g$ H  (@12(@512 5+)g$ I  (@12 (@ 5Pennsylvania  %H!J 19801984 5+ %H!K  ,@14,@514 5+)%H!L  ,@14 ,@ 5RhodeIsland  &"M 19891983 5+ &"N  U@86U@586 5+)&"O  U@86 U@ 5SouthCarolina  9(#P 19801984 5+ 9(#Q  .@15.@515 5+)9(#R  .@15 .@ 5Tennessee  )%S 19781982 5+ )%T  8@248@524 5+))%U  8@24 8@ 5Virginia  *`&V 19791983 5+ *`&W  A@35A@535 5+)*`&X  A@35 A@ 5WestVirginia   ,'Y 19891993 5+  ,'Z  ,@14,@5149/- ,'[  ,@14  ,@ 9 #X^X{#  Table4LargestDecreasesinStateAnnualHeatInputOverFiveYears *UI\Vdddd dd A dd A I\S##,dd ,dd ,A dd +   t {XX^State '=  '5yearperiod '=  '%decreaseinheatinput =  Alabama   (  19771982 5+  (   .@15.@515 5+) (   .@15 .@ 5Connecticut   n  19891994 5+  n   K@55K@555 5+) n  K@55 K@ 5Delaware    19931998 5+    <@28<@528 5+)   <@28 <@ 5Georgia  _  19871992 5+ _   ,@14,@514 5+)_   ,@14 ,@ 5Illinois#X^X{0#{XX^#{#{  @  19831988 5+ @   7@237@523 5+)@   7@23 7@ 5Indiana    None    None    Kentucky  1  19952000 4* 1   @2@42 4*(1   @2 @ 4Massachusetts  w 19891994 5+ w  A@35A@535 5+)w   A@35 A@ 5Maryland  X! 19761981 5+ X"  8@248@524 5+)X#  8@24 8@ 5Michigan  $ 19781983 5+ %  1@171@517 5+)&  1@17 1@ 5Missouri  I' 19881993 5+ I(  *@13*@513 5+)I)  *@13 *@ 5NewJersey#X^X{b#{XX^#{#{  ** 19891994 5+ *+  F@44F@544 5+)*,  F@44 F@ 5NewYork  p- 19891994 5+ p.  D@40D@540 5+)p/  D@40 D@ 5NorthCarolina  0 19821987 5+ 1  9@259@525 5+)2  9@25 9@ 5Ohio  a3 19791984 5+ a4  &@11&@511 5+)a5  &@11 &@ 5Pennsylvania  B6 19801985 5+ B7  *@13*@513 5+)B8  *@13 *@ 5RhodeIsland  9 19881993 5+ :  V@90V@590 5+);  V@90 V@ 5SouthCarolina  3 < 19811986 5+ 3 =  ,@14,@514 5+)3 >  ,@14 ,@ 5Tennessee  y!? 19771982 5+ y!@  7@237@523 5+)y!A  7@23 7@ 5Virginia  "ZB 19771982 5+ "ZC  C@38C@538 5+)"ZD  C@38 C@ 5WestVirginia  $E 19881993 5+ $F  (@12(@5129/-$G  (@12  (@ 9#{##X$nXְ#X^XXX$n   Table5LargestDecreasesinStateAnnualHeatInputOverSixYears  &J"I eS *WI\Xdddd dd A dd A UI\V##,dd ,dd ,A dd +   ?)$L {XX^State ')>%M '6yearperiod ')>%N '%decreaseinheatinput )>%O Alabama  *&P 19761982#X^X{ #{XX^#{1#{ 5+ *&Q  &@11&@511#X^X{ #{XX^#{K#{ 5+)*&R  &@11 &@ 5Connecticut  d 19891994 5+ d  J@52J@552 5+)d  J@52 J@ 5Delaware   19931999#X^X{#{XX^#{#{ 5+   <@28<@528#X^X{<#{XX^#{~#{ 5+)  <@28 <@ 5Georgia  U 19851991#X^X{#{XX^#{:#{ 5+ U  ,@14,@514#X^X{#{XX^#{#{ 5+)U   ,@14 ,@ 5Illinois#X^X{#{XX^#{#{  6  19831989#X^X{U#{XX^#{#{ 5+ 6   9@259@525#X^X{#{XX^#{;#{ 5+)6   9@25 9@ 5Indiana   |  None   | None   | Kentucky  '  19931999 4* '   @2@42 4*('   @2 @ 4Massachusetts  m  19891995 5+ m   B@37B@537 5+)m   B@37 B@ 5Maryland   N  19741980 5+  N   ;@27;@527 5+) N   ;@27 ;@ 5Michigan    19761982#X^X{#{XX^#{#{ 5+    *@13*@513#X^X{#{XX^#{#{ 5+)   *@13 *@ 5Missouri  ?  19871993#X^X{^#{XX^#{#{ 4* ?   "@9"@49#X^X{?#{XX^#{#{ 4*(?   "@9 "@ 4NewJersey#X^X{#{XX^#{:#{    19891995 5+    F@45F@545 5+) !  F@45 F@ 5NewYork  f" 19901996 5+ f#  F@44F@544 5+)f$  F@44 F@ 5NorthCarolina  % 19811987 5+ &  =@29=@529 5+)'  =@29 =@ 5Ohio  W( 19771983 4* W)   @8 @48 4*(W*   @8  @ 4Pennsylvania  8+ 19801986#{#{#X^X{#{XX^ 5+ 8,  .@15.@515#{ #{#X^X{ #{XX^ 5+)8-  .@15 .@ 5RhodeIsland  ~. 19871993#{n #{#X^X{ #{XX^ 5+ ~/  V@91V@591#{S #{#X^X{ #{XX^ 5+)~0  V@91 V@ 5SouthCarolina  )1 19771983 5+ )2  &@11&@511 5+))3  &@11 &@ 5Tennessee  o 4 19761982#{ #{#X^X{P #{XX^ 5+ o 5  8@248@524#{ #{#X^X{ #{XX^ 5+)o 6  8@24 8@ 5Virginia  P7 19771983 5+ P8  C@38C@538#{F#{#X^X{#{XX^ 5+)P9  C@38 C@ 5WestVirginia  : 19851991#{_#{#X^X{#{XX^ 5+ ;  &@11&@511#{E#{#X^X{#{XX^9/-<  &@11  &@ 9#{##X$nXB# X^XXX$n  Table6LargestDecreasesinStateAnnualHeatInputOverSevenYears  @>  *YI\Zdddd dd A dd A WI\X##,dd ,dd ,A dd +   _!@ {XX^State '!^A '7yearperiod '!^B '%decreaseinheatinput !^C #X^X{#{XX^#{#{Alabama  #D 19751982 4* #E   @8 @48 4*(#F   @8  @ 4Connecticut  Y$G 19861993 5+ Y$H  J@53J@553 5+)Y$I  J@53 J@ 5Delaware  %:!J 19932000 5+ %:!K  ?@31?@531 5+)%:!L  ?@31 ?@ 5Georgia  &"M 19851992 5+ &"N  1@171@517 5+)&"O  1@17 1@ 5Illinois  +(#P 19811988 5+ +(#Q  6@226@522 5+)+(#R  6@22 6@ 5Indiana  q) %S None  q) %T None  q) %U Kentucky  *R&V 19932000 4* *R&W  ?1?41 4*(*R&X  ?1 ? 4Massachusetts  +'Y 19891996 5+ +'Z  D@40D@540 5+)+'[  D@40 D@ 5Maryland  d 19741981 5+ d  B@37B@537 5+)d  B@37 B@ 5Michigan   19751982 5+   .@15.@515 5+)  .@15 .@ 5Missouri  U 19841991 4* U  @7@47 4*(U   @7 @ 4NewJersey  6  19891996 5+ 6   K@54K@554 5+)6   K@54 K@ 5NewYork   |  19891996 5+  |  G@47G@547 5+) |  G@47 G@ 5NorthCarolina  '  19811988 5+ '   ;@27;@527 5+)'   ;@27 ;@ 5Ohio  m  19771984 4* m   @7@47 4*(m   @7 @ 4Pennsylvania   N  19801987 5+  N   ,@14,@514 5+) N   ,@14 ,@ 5RhodeIsland    19861993 5+    @V@89@V@589 5+)   @V@89 @V@ 5SouthCarolina  ?  19771984 4* ?   @6@46 4*(?   @6 @ 4Tennessee    19761983 5+    .@15.@515 5+) !  .@15 .@ 5Virginia  f" 19761983 5+ f#  C@38C@538 5+)f$  C@38 C@ 5WestVirginia  % 19841991 5+ &  $@10$@5109/-'  $@10  $@ 9#{##X$nX֌# X^XXX$n  Table7LargestDecreasesinStateAnnualHeatInputOverEightYears  :* Y!G! *[I\tdddd dd A dd A YI\Z##,dd ,dd ,A dd +   Y, {XX^State 'X- '8yearperiod 'X. '%decreaseinheatinput X/ Alabama   0 #X^X{"#{XX^#{'!#{19741982#{5$#{#X^X{## 5+  1  (@12(@5{XX^#{$#{12 5+) 2  (@12 (@ 5Connecticut  S3 #X^X{$#{XX^19861994#X^X{%#{XX^ 5+ S4  J@52J@552 5+)S5  J@52 J@ 5Delaware  46 #X^X{!&#{XX^#{;%#{19911999#X^X{&# 5+ 47  =@29=@5{XX^#{.'#{29 5+)48  =@29 =@ 5Georgia  z9 #X^X{'#{XX^#{'#{19841992#X^X{(# 5+ z:  &@11&@5{XX^#{(#{11 5+)z;  &@11 &@ 5Illinois#X^X{K)#{XX^#{)#{  % < #X^X{*#{XX^#{P*#{19801988#X^X{*# 5+ % =  <@28<@5{XX^#{*#{28 5+)% >  <@28 <@ 5Indiana  k!? #X^X{k+#{XX^None#X^X{B,#{XX^  k!@ None  k!A Kentucky  "LB #X^X{,#{XX^None#X^X{-#{XX^  "LC None  "LD Massachusetts  #E #X^X{[-#{XX^19922000#X^X{-#{XX^ 5+ #F  D@41D@541 5+)#G  D@41 D@ 5Maryland  =% H #X^X{:.#{XX^19741982#X^X{/#{XX^ 5+ =% I  A@35A@535 5+)=% J  A@35 A@ 5Michigan  &"K #X^X{S/#{XX^#{+#{19741982#X^X{0# 5+ &"L  *@13*@5{XX^#{`0#{13 5+)&"M  *@13 *@ 5Missouri  'd#N #X^X{0#{XX^#{$1#{19841992#X^X{1# 5+ 'd#O  &@11&@5{XX^#{1#{11 5+)'d#P  &@11 &@ 5NewJersey#X^X{~2#{XX^#{2#{  )$Q #X^X{C3#{XX^19841992#X^X{3#{XX^ 5+ )$R  J@53J@553 5+))$S  J@53 J@ 5NewYork  U*%T #X^X{)4#{XX^19881996#X^X{4#{XX^ 5+ U*%U  E@42E@542 5+)U*%V  E@42 E@ 5NorthCarolina  +6'W #X^X{A5#{XX^19801988#X^X{6#{XX^ 5+ +6'X  8@248@524 5+)+6'Y  8@24 8@ 5Ohio  d #X^X{_6#{XX^19761984#X^X{&7#{XX^ 4* d  @5@45 4*(d  @5 @ 4Pennsylvania   #X^X{s7#{XX^#{3#{19911999#X^X{?8# 5+   (@12(@5#X$nXXX^8#X^XXX$n{XX^12 5+)  (@12 (@ 5RhodeIsland  U #X^X{E9#{XX^#{&9#{19851993#X^X{9# 5+ U  V@88V@5#X$nXXX^!:#X^XXX$n{XX^88 5+)U   V@88 V@ 5SouthCarolina  6  #X^X{:#{XX^19781986#X^X{;#{XX^ 4* 6   @2@42 4*(6   @2 @ 4Tennessee   |  #X^X{;#{XX^#{:#{19761984#X^X{<# 5+  |  *@13*@5#X$nXXX^<#X^XXX$n{XX^13 5+) |  *@13 *@ 5Virginia  '  #X^X{=#{XX^19771985#X^X{3>#{XX^ 5+ '   B@36B@5#{~=#{#X^X{>#{XX^36 5+)'   B@36 B@ 5WestVirginia  m  #X^X{9?#{XX^#{>#{19851993#X^X{?# 5+ m   &@11&@5#X$nXXX^@#X^XXX$n{XX^119/-m   &@11  &@ 9#{@##X$nX@# X^XXX$n  Table8LargestDecreasesinStateAnnualHeatInputOverNineYears    AA *uI\vdddd dd A dd A [I\t##,dd ,dd ,A dd +   P  {XX^State '  '9yearperiod '  '%decreaseinheatinput   Alabama  i #X^X{SC#{XX^#{}A#{19731982#{D#{#X^X{HD# 5+ i  1@171@5{XX^#{D#{17 5+)i   1@17 1@ 5Connecticut  J! #X^X{NE#{XX^19841993#X^X{)F#{XX^ 5+ J"  I@51I@551 5+)J#  I@51 I@ 5Delaware  $ #X^X{vF#{XX^#{E#{19912000#X^X{AG# 5+ %  @@33@@5{XX^#{G#{33 5+)&  @@33 @@ 5Georgia  ;' #X^X{H#{XX^#{GH#{19841993#X^X{H# 4* ;(  @3@4{XX^#{I#{3 4*(;)  @3 @ 4Illinois#X^X{I#{XX^#{I#{  * #X^X{`J#{XX^#{J#{19901989#X^X{J# 5+ +  ?@31?@5{XX^#{;K#{31 5+),  ?@31 ?@ 5Indiana  b- #X^X{K#{XX^None#X^X{L#{XX^  b. None  b/ Kentucky   0 #X^X{L#{XX^None#X^X{gM#{XX^   1 None   2 Massachusetts  S3 #X^X{M#{XX^19912000#X^X{?N#{XX^ 5+ S4  G@47G@547 5+)S5  G@47 G@ 5Maryland  46 #X^X{N#{XX^19721981#X^X{WO#{XX^ 5+ 47  ?@31?@531 5+)48  ?@31 ?@ 5Michigan  z9 #X^X{O#{XX^#{K#{19741983#X^X{oP# 5+ z:  *@13*@5{XX^#{P#{13 5+)z;  *@13 *@ 5Missouri  % < #X^X{3Q#{XX^#{uQ#{19841993#X^X{ R# 5+ % =  4@204@5{XX^#{MR#{20 5+)% >  4@20 4@ 5NewJersey#X^X{R#{XX^#{S#{  k!? #X^X{S#{XX^19841993#X^X{-T#{XX^ 5+ k!@  K@54K@554 5+)k!A  K@54 K@ 5NewYork  "LB #X^X{zT#{XX^19871996#X^X{EU#{XX^ 5+ "LC  A@35A@535 5+)"LD  A@35 A@ 5NorthCarolina  #E #X^X{U#{XX^19811990#X^X{cV#{XX^ 5+ #F  :@26:@526 5+)#G  :@26 :@ 5Ohio  =% H #X^X{V#{XX^19791988#X^X{wW#{XX^ 4* =% I  @2@42 4*(=% J  @2 @ 4Pennsylvania  &"K #X^X{W#{XX^#{S#{19901999#X^X{X# 5+ &"L  ,@14,@5#X$nXXX^X#X^XXX$n{XX^14 5+)&"M  ,@14 ,@ 5RhodeIsland  'd#N #X^X{Y#{XX^#{wY#{19841993#X^X{0Z# 5+ 'd#O  V@88V@5#X$nXXX^rZ#X^XXX$n{XX^88 5+)'d#P  V@88 V@ 5SouthCarolina  )$Q #X^X{6[#{XX^None#X^X{[#{XX^  )$R None  )$S Tennessee  U*%T #X^X{\#{XX^#{[#{19731982#X^X{\# 5+ U*%U  2@182@5#X$nXXX^\#X^XXX$n{XX^18 5+)U*%V  2@18 2@ 5Virginia  +6'W #X^X{]#{XX^19741983#X^X{B^#{XX^ 5+ +6'X  A@35A@5#{]#{#X^X{^#{XX^35 5+)+6'Y  A@35 A@ 5WestVirginia  d #X^X{H_#{XX^#{_#{19841993#X^X{_# 4* d  "@9"@4#X$nXXX^%`#X^XXX$n{XX^98.,d  "@9  "@ 8#{`##X$nX`# X^XXX$n  Table9LargestDecreasesinStateAnnualHeatInputOverTenYears #X$nXXX^a#X^XXX$n W aa*I\Odddd dd A dd A uI\v##,dd ,dd ,A dd +     {XX^State 'u   '10yearperiod 'u   '%decreaseinheatinput u   Alabama   `  #X^X{c##X$nXXX^9b#X^XXX$n{XX^19731983 4*  `   "@9"@4#{d#{9 4*( `  "@9 "@ 4Connecticut    19831993 5+    H@48H@548 5+)   H@48 H@ 5Delaware  Q  #{Ye#{19881998 5+ Q   ?@31?@5#{f#{31 5+)Q   ?@31 ?@ 5Georgia  2  #{g#{None  2  #{g#{None  2  Illinois#{g#{  x  #{Yh#{19791989 5+ x   @@32@@5#{h#{32 5+)x   @@32 @@ 5Indiana  #  None  #  None  #  Kentucky  i None  i None  i  Massachusetts  J! 19902000 5+ J"  H@48H@548 5+)J#  H@48 H@ 5Maryland  $ 19721982 5+ %  <@28<@528 5+)&  <@28 <@ 5Michigan  ;' #{2i#{19731983 5+ ;(  &@11&@5#{k#{11 5+);)  &@11 &@ 5Missouri  * #{l#{19831993 5+ +  0@160@5#{l#{16 5+),  0@16 0@ 5NewJersey#{,m#{  b- 19831993 5+ b.  K@55K@555 5+)b/  K@55 K@ 5NewYork   0 19891999 5+  1  ?@31?@531 5+) 2  ?@31 ?@ 5NorthCarolina  S3 19801990 5+ S4  7@237@523 5+)S5  7@23 7@ 5Ohio  46 None  47 None  48 Pennsylvania  z9 #{m#{19891999 5+ z:  5@215@5#{p#{21 5+)z;  5@21 5@ 5RhodeIsland  % < #{p#{19831993 5+ % =  V@88V@5#{3q#{88 5+)% >  V@88 V@ 5SouthCarolina  k!? 19731983 4* k!@  @6@46 4*(k!A  @6 @ 4Tennessee  "LB #{q#{19731983 4* "LC   @8 @4#{r#{8 4*("LD   @8  @ 4Virginia  #E 19721982 5+ #F  B@36B@5#{ds#{36 5+)#G  B@36 B@ 5WestVirginia  =% H #{8t#{19811991 4* =% I  @6@4#{t#{68.,=% J  @6  @ 8#{Tu##X$nXd# XX$n { ` #X^X{u# AlthoughthelongertermEIAannualheatinputdataand &!J EPAsshortertermozoneseasondatashowthesametypesofmultiyearperioddecreases,EPAconductedfurtheranalysisinordertoconfirmthatozoneseasonandannualStateheat #+&P inputhavesimilarfluctuations.Specifically,EPAusedEIAmonthlydataonfuelquantity(whichwasavailableforyearsstartingwith1970)andgenericheatcontentfactorsinordertoderiveestimatedozoneseasonheatinputdatafor19701998.[SeeDocket#A9656,Item#XVC19(explaininghowEPAderivedestimatedozoneseasondataandprovidingthatestimateddata)].BecauseofthenatureofthesimplifyingassumptionsthatEPAmadeinordertoderivelongtermozoneseasondata,EPAsanalysisinthisnoticereliesprimarilyonthelongtermStateannualheatinputdata,notthederivedlongtermStateozoneseasonheatinputdata.However,EPAbelievesthatthelatterdataconfirmEPAsannualdataanalysisbecausethelongtermozoneseasondatashowmultiyeardecreasesinStateheatinputthatareverysimilarinlengthandmagnitudetothoseshownbythelongtermStateannualheatinputdata.Id. y  ` Insummary,historicaldatashowthatheatinput(whetherfortheozoneseasonortheentireyear)inindividualStatesisquitevariableandhasdecreasedsignificantlyovermultiyearperiodsonanumberofoccasions.#X$nXXX^v#X^XXX$nԀEPArespectfullysubmitsthatthedataprovidea %p!( basisfortheCourttoreconsideritsconcernthatthefactthatheatinputvaluesforsomeStatesforcertainyearshavealreadyexceededEPAs2007heatinputprojectionssupports *t&. objectionstothereasonablenessofEPAsheatinputgrowthmethodology.#X$nXXX^X|#X^XXX$n   5.ApproachofUsingRecentStateHeatInputtoProject X FutureStateHeatInputisnotStatisticallySound    #X$nXXX^}#X^XXX$n ` Commentersclaimedthat,becausetherecentheatinput M  forsevenStates(Alabama,Georgia,Illinois,Michigan,Missouri,Virginia,andWestVirginia)hasexceededorbeenclosetoEPAs2007heatinputprojections,EPAsprojectionsareunreasonable.Inmakingthisclaim,commentersimplicitlyassumedthatfutureheatinputcanreasonablybeprojectedusingarelativelyshortperiodofyearsofactualStateheatinputdata.    ` Inordertotestthevalidityofthisassumption,EPA H simulatedthatapproachusinghistoricalannualheatinputdataforthe21NOxSIPCallStatesfor19602000(orinsomeStateswherelessdatawasavailable,from19702000).Usingthisdata,EPAused6yearsworthofhistoricaldata(e.g.,19601966)toprojectannualheatinputforthesixthyearafterthe6yearperiod(e.g,1972).EPAdidthisonarollingbasis,usinghistorical6yearperiodsfrom1960to1994(or1970to1994),toprojectannualheatinputfortheyears1972(or1982)to2000.EPAtestedhowwellthehistoricaldatapredictedfutureannualheatinputvaluebycomparingtheprojectedvaluewiththeactualvalueforthe +&. sameyear.Specifically,EPAperformedanrsquaredtestontheactualannualheatinputvs.theprojectedannualheatinputforthesameyear.Thistestprovidesameasureofhowmuchachangeinonevariable(here,actualannualheatinput)isrelatedtoachangeinasecondvariable(here,projectedannualheatinput).Forinstance,anrsquaredvalueof1impliesthatallofthechangeinthefirstvariableisrelatedtochangeinthesecondvalue.Conversely,anrsquaredvalueof0impliesthatnoneofthechangeinthefirstvariableisrelatedtochangeinthesecondvariable. ` EPAfoundthat,intestingtheactualannualheatinputdatavs.theprojectedannualheatinputdataforeachState,10States(includingIllinois,MichiganandVirginia)#X$nXXX^~#X^XXX$nԀoutof ! the21NOxSIPCallStateshadrsquaredvaluesbelow0.12.#X$nXXX^%#X^XXX$nAnadditionalsixStates(includingMissouriandWest y Virginia)hadrsquaredvaluesbelow0.32.#X$nXXX^#X^XXX$nԀBecausether %  squaredtestshowedthatlessthanonethirdofthevariabilityinprojectedannualheatinputcanbeexplainedbythevariabilityinactualannualheatinputfor16oftheNOxSIPCallStates,EPAbelievesthatitisclearthathistoricalheatinputcannotbeusedasareliableindicatoroffutureheatinput.Moreover,#X$nXXX^v#X^XXX$nԀthersquaredvaluesforthe -)$, remainingStateswere:Alabama,0.63;Georgia0.42;Indiana, *t&. 0.80;Kentucky,0.67;NewJersey(0.59).ExceptforIndiana,thisindicatesonlyaweakcorrelationbetweenactualheatinputdataandprojectedheatinputdatabecause33%to58%ofthevariabilityofprojectedheatinputdatacannotbeexplainedbythevariabilityinactualheatinputdata. (#    EveninIndianawherethecorrelationwasstrongest,theprojectionsrangedfrom13.4%belowtheactualvalueto10.9%abovetheactualvalue.ForAlabama,15ofthe29projectionsweremorethan10%aboveorbelowtheactualvalue,andtheprojectionsrangedfrom26.7%belowtheactualvalueto27.9%abovetheactualvalue.#X$nXXX^#X^XXX$n(SeeDocket#A96  56,Item#sXVC19andXVC20.)#X$nXXX^w#X^XXX$nԀForotherStates, d disparitiesbetweentheprojectedvaluesandtheactualvalueswereevenwider.ThevariabilityintheprojectionsfortheStateswhereconcernshavebeenraisedaresummarizedbelow.*\dddd dd A dd A I\O##, dd , dd , dd +   %     State '$!  '   Numberof $" Projectionsoffbymorethan10% 'Q!$  'u   Rangeof $% projections 'm &  'PAlabama '"d' '15of29 '"d( 'Є26.7%to27.3% '"d) 'Georgia '3$* '14of29 '3$+ 'Є50.9%to37.0% '3$, 'Illinois '%8!- '21of29 '%8!. 'Є46.4%to40.1% '%8!/ 'Michigan ''"0 '25of29 ''"1 'Є33.4%to54.6% ''"2 'Missouri 'q( $3 '23of29 'q( $4 'Є36.4%to31.9% 'q( $5 'Virginia ')v%6 '25of29 ')v%7 'Є60.2%to71% ')v%8 'WestVirginia 'E+&9 '21of29 'E+&: 'Є44.0%to37.9%"E+&;  "#X$nXXX^#X^XXX$nInshort,historicalStateheatinputforarelativelyshort e periodofyearsisnotareliablemethodforpredictingfutureStateheatinput.#X$nXXX^#X^XXX$n X #X$nXXX^#X^XXX$n 6.EPA'sHeatInputProjectionsdonotImplicitlyAssume i  NegativeGrowthinElectricityGeneration _ 1   ` InAppalachianPowerv.EPA,249F.3dat1053,theCourt    expressedconcernthat,forStateswhoseactualheatinputforEGUsalreadyexceededEPA'sprojectionsfor2007,EPA'sprojection"implicitlyassumeabaselineofnegativegrowthinelectricitygeneration."#X$nXXX^#X^XXX$nAlthoughtheCourtexpressed D concernaboutelectricitygeneration,itshouldberecalledthatintheNOxSIPCallandSection126Rule,theregulatoryrequirementswerecomputedwithreferencetoheatinput,andnotelectricitygeneration.Accordingly,inexpressingconcernaboutelectricitygeneration,theCourtapparentlywasconcernedthatadecreaseinheatinputwouldnecessarilymeanadecreaseinelectricitygenerationandthataprojectionofaheatinputdecreasewouldimplicitlyassumedecreasedelectricitygeneration. ` Inresponse,EPArespectfullysubmitsthatfossilfueluseattheStatelevelwhichisatissueinthepresentcaseisbutonefactorassociatedwithelectricitygeneration.Manyotherfactorsaffectelectricitygenerationaswell.Accordingly,_#X$nXXX^#X^XXX$nEPArespectfullysubmitsthata +&. decreaseinStateheatinput(whetheractualorprojected)doesnotimplicitlymeanadeclineinelectricitygeneration. ` Indeed,StateheatinputcandecreasewhileelectricitygenerationintheStateorintheregionincrease.Thereareatleasttworeasonswhythiscanhappen.First,evenwithinaState,heatinputdoesnotnecessarilycorrelatewithelectricitygenerationbecauseofelectricitygeneratedusingnonfossilfuelsourcesandincreasedefficiencyoffossilfuelgeneration.Second,becauseelectricityissoldonaregionwidebasis,electricitygenerationcandecreaseinoneStateandincreaseinanotherState,withincreasedelectricitybeingsoldandusedinthefirstState.  d a. Stateheatinputdoesnotnecessarilycorrelatewith u electricitygenerationintheState .#X$nXXX^#X^XXX$nElectricity_Ԁgeneration =  inaStatecanincreaseatthesametimethatheatinput  (i.e.,fossilfueluse)decreasesinthatState.Onereasonforthisisthatsignificantamountsofelectricitycanbegeneratedfromnonfossilsources,suchasnuclearunitsorhydroelectricfacilities. ` Commenterssuggestedthatheatinputwillhavetoincreaseinthenextseveralyearsbecausenuclearpowerplantsarealreadyoperatingatnearcapacity.Thismaybegenerallycorrectona_regionwide_Ԁbasis,andEPAprojectsincreased_regionwide_Ԁheatinputin2007.However,thisis +&. nottrueonaStatebyStatebasisforallStates.Forexample,inIllinoisseveralnuclearpowerplantsrecentlyreceivedapprovalbytheNuclearRegulatoryCommissiontoincreasetheirgenerationcapacity.#X$nXXX^W#X^XXX$nFourunits(Dresden i  Units2and3andQuadCitiesUnits1and2)plantoincreasetheircapacityby17to18%in2002and2003.9 XN XXX^XN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNX^X XXN  22      ׀Carryingout  \  theseplans#X$nXXX^D#X^XXX$nԀwilltendtoreduceheatinput,whileincreasing m  electricitygeneration.Further,twounitsattheCookNuclearPlantinMichiganunderwentanextended,unexpectedoutagein19982000.Theoutageofthetwounitstendedtoincreasefossilfueluse,andbringingthemback_online_tendedtodecreasefossilfueluse.AnincreaseinnucleargenerationcanreduceheatinputwithoutreducingtotalelectricitygenerationinaState.  ` Heatinputcanalsodecrease,withoutdecreasing h electricitygeneration,becausetheefficiencyoffossilfuelfiredelectricitygeneratingunitscanbeincreased,allowinggenerationofthesameamountofelectricitywithuseoflessfossilfuel.#X$nXXX^{#X^XXX$nԀOnewaythiscanoccuristhroughreplacement }"$ ofexistingboilers,whichareonaveragebetween33%and35%efficientatconvertingfossilfueltoelectricity,withcombinedcycleturbines,whichcanbeupto60%efficient. '#* Forexample,onFebruary25,2000,IllinoisapprovedapermitforAmerenCorporationtoreplacetwocoalfiredunitsattheGrandTowerGeneratingStationwithtwocombinedcyclegasturbines.< XN XXX^XN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNX^X XXN  23      #X$nXXX^#X^XXX$nԀ #X$nXXX^#X^XXX$n  i   ` Efficiencycanalsobeimprovedthroughmodificationsat   existinggenerationfacilities.Forexample,improvementscanbemadetotheboilerthatallowbettertransferofheatfromtheburningcoaltothesteamusedtopowertheturbinegenerators;theefficiencyofauxiliaryequipmentsuchasfanscanbeimproved;theefficiencyoftheturbinegeneratorsthatconvertthesteamtoelectricitycanbeimproved#X$nXXX^&#X^XXX$n;andcombustionoptimizationsoftware,whichcan d reduceNOxemissionswhileincreasingefficiency,canalsobeadded.? XN XXX^XN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNX^X XXN  24      #X$nXXX^C#X^XXX$n #X$nXXX^C#X^XXX$nGreaterefficiency,whetherfromimprovementsto ! existingfacilitiesorfromnewunits,canresultinthesameormoreelectricitygeneration inaStatewithlessheat 0 input.#X$nXXX^#X^XXX$nԀEPAnotesthattheincentivesforcompaniesthat A  generateelectricityforsaletoimprovetheefficiencyofelectricitygenerationhasincreasedwithderegulationof "4$ electricitygenerationandincreasedcompetitionintheelectricitymarket.   b.Electricityisgeneratedandsoldonaregional,notonaStateby_ԄState_Ԁbasis._Ԁ____ #X$nXXX^#X^XXX$nElectricity_Ԁgenerationmaydecreasein   oneStatebut,becauseelectricityisgeneratedandsoldonaregionalbasis,thedecreasemaysimplyreflectthefactthatcustomersareusingelectricitygeneratedinanotherState.Threefactorsthederegulationofelectricitygeneration,therestructuringoftheelectricityindustry,andtheeffortsoftheFederalEnergyRegulatoryCommissiontopromotemarketbasedratesofelectricityandnondiscriminatoryaccessforallelectricitysuppliestothetransmissionsystemhaveresultedinsignificantamountsofelectricitybeinggeneratedinoneStateandsoldinanother.Forexample,in_1993,_ԀWestVirginiageneratedthreetimestheamountofelectricitysoldinthatState,_and_Ԁin_1999,_ԀAlabamageneratedoneandhalftimestheamountofelectricitysoldinthatState.Historically,electricitywasgeneratedandsoldbyverticallyintegratedutilitiesprovidingforgeneration,transmission,anddistributionforallcustomersinadesignatedfranchiseservicearea,whichoftenwaswithinasingleState. ` Withelectricityderegulation,restructuring,and_Federal_Ԁpoliciespromotingcompetitionandopentransmission +&. access,theindustry_has_Ԁ_beenchanging_Ԁ fromaverticallyintegratedandregulatedmonopolytoafunctionallyunbundledindustrywithacompetitivemarketforpowergeneration.TheChangingStructureoftheElectricPowerIndustry1999: i  MergersandOtherCorporateCombinations,EnergyInformation   Administration,December1999at_pg._Ԁ5.Nonutilitiesareparticipatingintheelectricitymarkettoanincreasingextentbygeneratingelectricityforsaletoutilitiesortoendusers.TheChangingStructureoftheElectricPower `  Industry2000:AnUpdate,_Energy_ԀInformationAdministration, q  October2000at_pp.#X$nXXX^#X^XXX$n_Ԁix,xi,and117.Significantamountsof  newgeneratingcapacity(about82%oftotalcapacityadditionsin1998)havebeenbuiltbynonutilitiesinordertogenerateelectricityforsaleintheregionalelectricitymarket.Id.atxi. h _#X$nXXX^#____ X^XXX$n7._ԀEvenifThereWereaSubstantialRiskThatEPA'sState y HeatInputProjectionWouldbeLessThanaState'sActual2007HeatInput,ThisWouldnotMakeEPA'sProjection_Unreasonable #X$nXXX^#X^XXX$n_ "l$   ` #X$nXXX^#X^XXX$nForthereasonsdiscussedabove,commentersfailedto $4 & showthathavingrecentStateheatinputexceedingorclosetoEPAs2007heatinputprojectionmeansthattheactual2007StateheatinputwillexceedEPAs2007projection.However,EPAbelievesthat,eveniftheyhadshownthatthere I+&. wasasubstantialriskthattheactualheatinputwouldturnouttoexceedtheprojectionin2007,thiswouldnotmakeEPAsprojectionunreasonable.Projectionsmaynotmatchperfectlyactual,futurevaluesandarenotrequiredtodoso.SeeAppalachianPowerv.EPA,249F.3dat1052(stating   thatthefactthat"amodelislimitedorimperfectisnot,initself,areasontoremandagencydecisionsbaseduponit").#X$nXXX^`#X^XXX$nԀIftheprojectionsoftheresultsofcomplex   activities(here,Stateheatinputresultingfromtheoperationoftheregionalelectricitymarket)wererequiredtomatchactual,futureresults,thiswould,ineffect,precludetheuseofprojectionsoramodeltodevelopsuchprojections. ` #X$nXXX^#X^XXX$nInthis_case,_ԀwhereEPAdevelopedStateheatinput ! growthratesusingtheIPMandappliedthemtoaStatebaselinetoproject2007Stateheatinput,there#X$nXXX^>#X^XXX$nare y unavoidablesourcesofvariabilitybetweenprojectionsandactual,futureheatinputdata.Thesesourcesofvariabilityare:thenecessitytomakesimplifyingassumptionsinamodel;thenecessitytomodelregionalactivities(i.e.,electricitygeneration,transmissionanddistribution)#X$nXXX^O#X^XXX$nԀbut %p!( makeStatebyStateprojectionsofheatinputresultingfromthoseactivities;andtheinherent,yeartoyearvariabilityofactualStateheatinput. *t&.  a.Models,suchastheIPM,necessarilycontainsimplifying e assumptions ._Ԁ____The_ԀIPMsimulatesthecomplexoperationofthe - electricitygeneration,transmission,anddistributionsector.Likeanymodeldesignedtosimulatecomplexphenomena,theIPMmustusesimplifyingassumptionsinordertomakeitfeasibletoconstructandrunthemodel.Furthermore,themodelusesinputsthatarethemselvesprojections(e.g.,electricitydemandandfuelcosts).Becauseofthesesimplifyingassumptionsandprojectedinputs,theresultsfromtheIPM,likethosefromanymodel,maywelldifferfromreality.Forexample,theIPMassumestypicalelectricitydemandeachyear,whichreflectstypicalconditionsliketypicalweatherandtypicaleconomicgrowth.Thebasisforassumingtypicalconditionsistheassumptionthatperiodsofhighorlowdemandorhotorcoldweathertendtoaverageoutovertime.Inreality,ofcourse,thereareyearsofunusuallywarmweatherorunusuallyhigheconomicgrowth,resultinginunusuallyhighelectricitydemand.Forexample,in1998,largepartsoftheNOxSIPCallregionexperiencedparticularlywarmweather,andthecountryexperiencedaneconomicboom.Themodelwillnotpredictextraheatinputinsuchyears. ` TheIPMaccountsforunplannedoutagesinasimilarway.Itassumesthat,onaverage,plantswillbeavailablesome +&. portionoftimelessthan100%.Themodelalsoincludesassumptionsaboutacapacityreservemargin,therebyassuringthatthecostsofbuildingplantsthatmaybeneededtomeetdemandareaccountedfor.However,themodel#X$nXXX^#X^XXX$nԀdoesnotassume i  thatanyspecificunitsareoutforanyextendedlengthoftime.Inreality,unplannedoutagesdonotaffecteveryunitforthesameamountoftimeeveryyear.Therefore,themodelwillnotpredictexactlythedispatchpatternofunitsintherealworld.Thesedifferencescouldbesubstantialinayearormore.__ԀForexample,ifseverallargenuclearunitswentoutofserviceinonegeographicregionforanextendedperiodoftime(aswasthecase,discussedbelow,whentwounitsattheCookNuclearPlantwentoutofserveduring1998through2000),fossil_fuelfired_Ԁunitsmighthaveasignificantincreaseinheatinputtoprovidetheelectricitythatwouldotherwisehavebeengeneratedbythenuclearunits.Themodelwouldnotpredictthislargeincreaseinheatinput. ` TheIPMalsopickstheoptimumwaytominimizecostsgiventheconstraintsthathavebeenincludedinthemodel.Intherealworld,differentpeopleanddifferentcompaniesmayhavedifferingviewpointsaboutwhatfutureconstraintsmaybe.Thismayleadthemtoactdifferentlythanthemodelprojected.Forinstance,themodelisgivenspecific *t&. constraintsregardingtheprojectedfuturedemandforelectricity.Itassumesthattherearejustenoughunitstomeetthatdemandplusareservemargin.Intherealworld,futuredemandislesscertain,andthiscanleadtoconstructionoffewerormoreunitsthanprojectedbytheIPM.   \   ` ForanyparticularState,aseriesofeventsmayoccurthatdifferfromthemodelsassumptions,suchasaperiodofhigherelectricitydemandfirstcausedbywarmerweatherthanassumedinthemodel,followedbyaperiodofhighereconomicactivitythanassumedinthemodel.Thisseriesofeventsmaylead,overayearormore,toactualheatinputthatishigherthanmodeledforthatState.Insubsequentperiods,thedifferentthanmodeledfactorsmayreturntolevelsclosertothosemodeled,sothatheatinputreturnstolevelsclosertothosemodeled.#X$nXXX^#X^XXX$n y  ` Inshort,indesigningtheIPM,EPAnecessarilymademany assumptions.Theseassumptionsmaywellresultin  l" _differences_ԀbetweenprojectedandactualStateheatinputforaspecificyearorspecificyears.However,thiswouldnotmaketheheatinputprojectionmethodologyortheresultingheatinputprojectionunreasonable. b.Whilethe electricityindustryfunctionsonaregionwide -)$, basis,budgetsmustbeestablishedonaStatebyState_basis #X$nXXX^v#X^XXX$n_ *&.  ` AnothersourceofdifferencesbetweenprojectedandactualStateheatinputisthat,whileNOxemissionbudgetsmustbeprojectedonaStatebyStatebasis,electricityisgeneratedandsoldona_regionwide,_ԀnotStatebyState,basis.Asdiscussedabovein_section_ԀV.D.6ofthisnotice,deregulationofelectricitygeneration,restructuringoftheelectricindustry,and_Federal_Ԁpoliciespromotingmarketbasedelectricitypricesandopenaccesstotransmissionhaveresultedindevelopmentofaregionalelectricitymarket.TheIPMnecessarilymodelselectricitygenerationandsalesonaregionalbasisinordertoreflecttheregionalnatureoftheelectricitysector.Forinstance,asexplainedabove,themodeldividestheU.S.intosubregionsbasedontheNERCregionsandontransmissionconstraints,notbasedonStateboundaries.(See_section_ԀV.C.5ofthisnoticediscussingsubregionsintheIPM.) ` However,EPAhadtodevelopStatebyStateNOxemissionbudgetsundertheNOxSIPCall.EPAusedthosesamebudgetsundertheSection126RuleinordertoallowasinglecapandtradeprogramtobedevelopedandimplementedunderboththeNOxSIPCallandtheSection126Rule.EPAhadtodisaggregateregionallydevelopedheatinputprojectionsdowntotheStatelevelinordertoestablishStateNOxemissionbudgets,andthisdisaggregationmaywellcreateadditional *t&. differencesbetweenprojectedandactualStateheatinput.#X$nXXX^#X^XXX$nԀ e Thesedifferencesshouldnotbetakentoindicatethattheheatinputgrowthmethodologyortheresultingprojectionsareunreasonable.#X$nXXX^#X^XXX$nԀ i   c.ActualStateheatinputisinherentlyvariable. _Ԁ____State_   heatinputisquitevariable,asdiscussedin_section_ԀV.D.4ofthisnotice.Thisisbecauseheatinputresultsfromtheactivitiesofthecomplex,regionalelectricitymarket.ThevariabilityofStateheatinputfromyeartoyearmaywellresultinadditionaldifferencesbetweenprojectedandactualStateheatinputforanyparticularyear.Again,thesedifferencesshouldnotbetakenasanindicationofunreasonablenessoftheheatinputgrowthmethodologyortheprojections._ 8._ԀCommentersOverstatedtheImpactsofActualStateHeat  InputExceedingProjectedStateHeat_Input _ L  ` EvenifEPA'sheatinputprojectionsturnouttobelowerforsomeStatesthanactual2007heatinput,theimpactsofanysuchdifferenceswillnotbeassignificantascommenterssuggest.Thisisbecausetheimpactswillbemitigatedby:(i)thefactthatmuchofheatinputgrowthwillcomefromnew,verylowNOxemissionunits;and(ii)theflexibilityprovidedbytheNOxcapandtradeprogram. a.Higher_than_Ԁ_projected_ԀState_heat_Ԁ_input_Ԁ_will_Ԁ_not_Ԁ_mean_ -+&. _proportionately_Ԁ_higher_ԀNOx_emissions. _Ԁ_Ԁ____Commenters_Ԁclaimed e thatEPA'sprojectionsunderestimateheatinputforcertainStatesandwouldresultinsourcesinthoseStatesfacingunderestimated,andsooverlystringent,NOxemissionsbudgets.#X$nXXX^#X^XXX$nԀCommentersalsostatedthatunderestimatedState 1  heatinputwouldcauseelectricsupplyinterruptions.__ԀInaddition,commenterssuggestedthatunderestimatedStateheatinputwouldjeopardizeorprohibiteconomicgrowthinthoseStatesbyincreasingEGUoperatingcostsandjeopardizingaccesstoadequateelectricitybypreventingnewEGUsfromlocatingintheState._D XN XXX^XN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNX^X XXN  25      _#X$nXXX^#X^XXX$n 9 #X$nXXX^]#X^XXX$n ` TheNOxSIPCallandtheSection126Rulelimitunits  NOxemissions,nottheirheatinput.EPAanticipatesthat,asStateheatinputgrowsfrom1996to2007,aState'stotalEGUNOxemissionswillgrowatamuchslowerratethanheatinputbecauseoftheadditionofnew,verylowNOxemissionunitsaccountingformuchoftheincreasedheatinput.Thevastmajorityofnewunitsaddedsince1996areorwillbegasfiredcombustionturbinesandcombinedcycleunitsthat "4$ includegasfiredcombustionturbinesandductburners.BecauseNOxemissionsfromtheseunitswillbeverylowandsignificantlybelowthe0.15lbs/mmBtulevelusedtosettheStateNOxemissionbudgetsforEGUs,therateofincreaseinNOxemissionsinanyStatewillbesignificantlylessthantheactual19962007growthrateinStateheatinput.  ` Specifically,EPAprojectsthatgasfiredgeneration m  will_ increase_Ԁatagreaterratethancoalfiredgeneration.   (SeeAnalyzingElectricPowerat_pg.7,_ԀTable1,Winter1998BaseCaseForecastfortheU.S.ofElectricPowerGenerationbyFuelType(billionKWh),which indicatesthatcoal  generationwillincreaseby85billionKWhbetween2001and2005andby95billionKWhbetween2001and2007,whileoil/gasgenerationp XN XXX^X^X XXN  26      ׀willincreaseby95billionKWhbetween ! 2001and2005and158billionKWhbetween2001and2007.)qj XN XXX^X^X XXN  27      ׀ h Inotherwords,EPAprojectsthatgasfiredgenerationwillincreaseatarate1.66timesfasterthancoalfiredgeneration(forevery3Mwhincreaseincoalfired  l" generation,therewouldbea5Mwhincreaseingasfiredgeneration.)Becausegasfiredcombinedcycleunitsaremore___efficient_Ԁthancoalunits,heatinputfrombothcategoriesofunitswillincreaseatasimilarrate,eventhoughgenerationfromthegasfiredunitswillincreaseatafasterrate. Thisprojectedtrendofincreasinguseofgasfiredcombined  \  cycleuseisconsistentwithobservedresults.Forexample,  m  fortheyears20002004,#X$nXXX^#X^XXX$nԀ #X$nXXX^L#X^XXX$nelectricutilitiesreportedplansto   add38,051MWofgeneratingcapacityinnewunits.Ninetythreepercentofthistotalisgasfiredcapacity(Inventory q  ofElectricUtilityPowerPlantsintheU.S.1999,Energy  InformationAdministration,September2000,at_pg.1)._ԀThisisacontinuationofthetrendin19971999,whenmostnewcapacityforutilities(81%in1997and88%in1998and1999)hasbeengasfiredcombustionturbinesandcombinedcycle units._F XN XXX^XN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNX^X XXN  28      _ y  ` NewEGUsaresubjecttonewsourcereviewrequirementsand,therefore,arewellcontrolled.Newcombinedcycle turbinesgenerallyarepermittedat9ppmorless(i.e.,less }"$ than0.035lb/mmBtu).J XN XXX^XN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNX^X XXN  29      ׀Thismeansthesenewunitswillemit e  about_onefifth_Ԁoftheaverage0.15lb/mmBtuNOxemissionrateassumedfor EGUsintheNOxSIPCallandSection126 X Rules.Mostexistingcombinedcycleunitsarecontrolledtolevelssimilarlybelow0.15lb/mmBtu.Consequently,NOxemissionswillgrowatamuchlowerratethanheatinputastheseunitscomeonline. ` Forexample,considerthehypotheticalcasewhere19962007heatinputgrowthwouldbe10%andaboutequallydividedbetweengenerationfromnewgasfiredunitsandincreasedcapacityutilizationatexistingcoalfiredunits.Becauseemissionsfromthegasfiredunitsareonly_onefifth_Ԁofthe0.15lb/mmBtuNOxemissionrateassumedintheNOxSIPCallandtheSection126Rule,NOxemissionswouldgrowonly1%whileheatinputwouldgrow5%atnewgasfiredunits.A5%growthinheatinputatexistingcoalfiredplantsemittingatthe0.15lb/mmBtuNOxemissionratewouldresultina5%growthinNOxemissionsfromthecoalfiredunitsinthisexample.Thus,thetotalNOxemissionsgrowthwouldbeabout6%whentotalheatinputgrowthwas10%. ` Insummary,evenifStateheatinputgrowsataratefasterthanprojectedbyEPA,NOxemissionswillgrowata '#* muchslowerratethanStateheatinputandtheimpactontheState'sEGUNOxemissionbudgetfromthedifferencebetweenactualandprojectedheatinputgrowthwillbesignificantlyreduced.ThisisreflectedinEPA'smodelingshowingthatincreasedheatinputgrowthwouldnotsignificantlyincreasethecostofmeetingtheStateNOxEGUbudget.EvenwhenelectricitydemandgrowthisassumedtobehigherthanEPAprojected(e.g.,withnoelectricitydemandreductionsunderCCAP),theaveragecostofmeetingtheNOxEGUbudgetsonlyincreased$40/ton. ` SincehigherthanprojectedStateheatinputgrowthresultsinmuchlessthanproportionatelyhigherStateNOxemissions,thecommentersgreatlyoverstatedtheimpactsofhigherthanprojectedStateheatinputonthestringencyoftheNOxemissionratereflectedintheStateNOxemissionbudget.Similarly,commentersgreatlyoverstatedtheimpactsofhigherthanprojectedStateheatinputontheStateeconomy.__ԀSincenewunitstendtohaveverylowNOxemissions,higherthanprojectedStateheatinputwillnotpreventthelocationofnewunitsintheStatetotheextentsuggestedbycommenters.Moreover,theamountofelectricityavailableinaStateisnottiedtotheamountofelectricitygeneratedinthatStatesinceelectricityisgeneratedandsoldona_regionwide,_ԀnotStatebyState,basis.Therefore, *t&. higherthanprojectedStateheatinputwillnotlimittheamountofelectricityavailableforindustrial,commercialandresidentialcustomersinthatState.(See_section_ԀV.D.6discussingthatStateheatinputisnotnecessarilycorrelatedwithavailabilityofelectricityandeconomicgrowthintheState.)_Since_ԀthecommentersignorethefactthataStateselectricitysupplyisnotlimitedtothegenerationcapacityinthatStateandsince,asdiscussedabove,EPAsregionalheatinputprojectionsareconsistentwithactualregionalheatinput,thecommentersfailedtoshowthatunderestimatedStateheatinputwillpreventaccesstoadequateelectricitysupply.#X$nXXX^#X^XXX$n d #X$nXXX^"#X^XXX$n ` Finally,#X$nXXX^ ##X^XXX$nԀsomecommentersclaimingthatlowheatinput u growthrateswouldpreventnewunitsfromlocatingincertainStatesalsoclaimedthatlargenumbersofnewunitsarebeinglocatedinthoseStatesandthatthisshowsthatEPAsheatinputgrowthratesaretoolow.However,thefactthatnewunitsarecontinuingtobelocatedintheseStatesindicatesthattheselectedlocationsintheseStatescontinuetobeeconomicallydesirablefornewunits,despitetheNOxemissionbudgetsthatEPAestablishedundertheNOxSIPCallin1998andmodifiedintheTechnicalAmendmentsin1999.Onereasonforthis,ofcourse,isthatmostofthesenewunitsaregasfiredunitswithverylowNOxemission *t&. rates.#X$nXXX^_##X^XXX$n e  b.The_cap_and_Ԅtrade_Ԁ_program_Ԁ_will_Ԁ_further_Ԁ_limit_Ԁthe_impact_Ԁof  _higher_Ԁ_than_Ԁ_projected_ԀState_heat_Ԁ_input. ____The_ԀNOxSIPCalland t theSection126RulearebeingimplementedthroughacapandtradeprogramthatwillreducethecostofmeetingtheStateNOxemissionbudgetsandthuswilllimitthecostimpactofhigherthanprojectedStateheatinput.UndertheNOxSIPCall,eachStateisrequiredtoreviseitsSIPtomeettheNOxemissionbudgetfor2007,whichwasdevelopedusing,amongotherthings,theState'sheatinputgrowthrateprojectedbyEPA.EachStatehastheoptionofmeetingitsNOxemissionbudgetbysubmittingarevisedSIPthatadoptsEPAsrecommendedcapandtradeprogramcoveringNOxemissionsfromEGUs.MostStateshavealreadytakenthisoptionbysubmittingaSIPandfinalregulationsadoptingsuchaprogram,andEPAhasapprovedanumber ofStaterules, L includingAlabamas(66FR36919,July16,2001)andIllinois(66FR56434,Nov.8,2001).WestVirginiahasdevelopedfinalregulationsadoptingEPAsrecommendedcapandtradeprogram,ashaveNorthCarolina,SouthCarolina,andTennessee.Michigan,Virginia,andOhiohavedraftregulationsadoptingsuchaprogram.OnlyGeorgiaandMissouridonothavedraftorfinalregulationssinceEPAhasnotyetfinalizedarulerespondingtotheCourtsremandof +&. theNOxSIPCallforthosetwoStates._(See_ԀDocketA9656,Item#XIIK_Ԅ84)._Ԁ ` UndertheSection126Rule,EPArequiredaffectedunitstoparticipateinacapandtradeprogram,whichisvirtuallyidenticaltothecapandtradeprogramsthathavebeen(orarelikelytobe)adoptedbyStatesundertheNOxSIPCall.Infact,EPAhasstatedthatitintendstointegratetheapprovedSIPtradingprogramwiththeSection126tradingprogramintoasinglecapandtradeprogram. ` Underthecapandtradeprogram,theStateEGUNOxbudgetisallocatedamongtheaffectedunitsintheformofNOxallowances,eachallowanceprovidinganauthorizationtoemitonetonofNOxduringtheozoneseasonforwhichtheallowanceisallocatedorforanysubsequentozoneseason.Aftertheendofeachozoneseason,theowneroroperatorofeachaffectedunitisrequiredtosurrenderanumberofNOxallowancesequaltothenumberoftonsthattheunitemittedduringthatperiod.Ownersoroperators(oranyotherperson)maybuyorsellallowancesorbankallowancesforuseinfutureyears.TheabilitytotradeandbankallowancesprovidesunitsinaStateflexibilityincomplyingwiththeNOxemissionlimitundertheNOxSIPCallandtheSection126Ruleandtherebylimitstheimpactthathigherthanprojectedheatinputwouldhaveonthecostofcompliance. *t&.  ` Specifically,theowneroroperatorofaunitwithanallowanceallocationlowerthantheunit'stonnageofNOxemissionsforanozoneseasonhasseveralcomplianceoptions,includingtheoptionsofinstallingandoperatingadditionalNOxemissioncontrolsattheunitorofpurchasingallowancesallocatedtootherunitsinthesameStateorinotherStatesunderthetradingprogram.Theownersoroperatorswillpresumablychoosethemosteconomicallyefficientoption.Ifthecostofallowancesinthe_regionwide_Ԁmarketforallowancesunderthetradingprogramislessthanthecostofinstallingandoperatingadditionalcontrolsattheunit,thentheowneroroperatorwillpurchaseallowances.Assuming,forthesakeofargument,theunitisinaStatewhereactualheatinputfortheyearexceedsEPA'sprojected2007heatinputandactualNOxemissionsexceedtheNOxemissionbudget,thecostimpactofthedifferencebetweenactualandprojectedheatinputislimitedbytheowner'soroperator'soptiontobuyallowances,ratherthaninstallingemissioncontrols._( XN XXX^XN X XXNXN X XXNX^X XXN  30      _ }"$  ` Moreover,asdiscussedabovein_section_ԀV.D.4ofthisnotice,Stateheatinputisquitevariable.EvenifactualStateheatinputexceedsEPA'sprojected2007heatinputinoneormoreyears,itisquitepossiblethatactualStateheatinputwillbelessthanEPA'sprojected2007heatinputinalateryear.UndertheNOxcapandtradeprogram,theowneroroperatorintheexampleabovewhohastobuyallowancesinoneyearmayhaveexcessallowancesduringthesubsequentyearofreducedStateheatinput.Thatowneroroperatormaysellallowancesandtherebyoffset,atleastinpart, thecostofbuyingallowancesinthepreviousyear.  EPAisnotsuggestingthatsuchanoffsetofcostswillalwaysbeavailable.Rather,EPAnotesthatthecapandtradeprogramwill tendtocreatethepotentialtooffsetin ! oneyearaunit'sshortfallsinallocations(whetherornotattributabletohigherthanprojectedStateheatinput)inanotheryear._#X$nXXX^&# X^XXX$n9._ԀDiscussionofIndividualStatesforWhichEPAsHeatInput  l" GrowthRatesareDisputedby_Commenters_  "4$  ` Outofthe21StatesandtheDistrictofColumbiaforwhichEPAdevelopedheatinputgrowthratesandheatinputprojectionsfor_EGUs_Ԁfor2007,_commenters_Ԁspecifically 'T#* disputedtheheatinputgrowthratesandprojectionsfor7States,i.e.,Alabama,Georgia,Illinois,Michigan,Missouri,Virginia,andWestVirginia.InsixStates,the_commenters_claimedthatEPAsheatinputgrowthratesandheatinputprojectionsareunreasonablebecausetheseStatesrecentlyhadactualheatinputthatexceededEPAsprojectedheatinputfor2007.! XN XXX^XN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNX^X XXN  31      ׀IntheseventhState,Virginia,_commenters_ m  claimedthattheStatesheatinputhadalmost exceededEPAs   projectionsandwouldsoondoso.WithregardtosomeStates,_commenters_Ԁalsosuggestedthatactualdataandprojectionsconcerningelectricitydemand,economicoutput,population,andnewgeneratingcapacityfortheseindividualStatessupporthigherheatinputgrowthratesthantheratesadoptedforthoseStatesbyEPA. ` EPAbelievesthat,ingeneral,thesecommentshavecommonflawsthatpreventthemfromprovidingabasisforconcludingthatEPAsheatinputgrowthratesareunreasonablefortheparticularStatesatissue.First,several_commenters_ԀflatlystatedorimplicitlyassumedthatsignificantnegativegrowthinheatinputwasnotplausiblefortheirrespectiveStatesbetweennowand2007.Asnotedabove,historicalheatinputdatashowthatindividual '#* Statesheatinputcandecreasesignificantlyinthelastyear,ascomparedtothefirstyear,ofmultiyearperiodsandisquitevariablefromyeartoyear.(See_section_ԀV.D.4ofthisnotice.) ` #X$nXXX^=#X^XXX$nIndeed,theStateheatinputsforfouroftheStates   that,as_commenters_Ԁhaveemphasized,rosetooverornearlyoverEPAs2007projections,haverecentlydecreasedtobelowornearlybelowthe2007projections.Specifically,#X$nXXX^J#X^XXX$nԀtheheat   inputofMichiganwhichin1998wasclosetoEPAs2007projectionand,alongwithWestVirginia,wasthefocusoftheCourtsconcernsaboutEPAsgrowthrates!hasdeclinedsince1998andremainedwellbelowEPAs2007projection.TheheatinputofWestVirginiawashigherin1998,andstillisslightlyhigher,thanEPAs2007projectionbuthasdeclinedover8%since1998.GeorgiasheatinputrecentlyincreasedaboveEPAs2007projectionsbutdecreasedin2001belowthatprojection.EPAmaintainsthattherecentheatinputdecreasesandthevariabilityinStateheatinputshowwhythefactthatcurrentheatinputforaStateexceeds,oriscloseto,EPAs2007heatinputprojectionfortheStatedoesnotshowthatEPAsheatinputgrowthrateand2007projectionfortheStateareunreasonable.#X$nXXX^K#X^XXX$n  '#*  ` Second,several_commenters_ԀcomparedEPAsheatinputgrowthrateforanindividualStatewiththeheatinput *t&. growththattheStatehadduring19962000andeitherassertedorimpliedthatEPAshouldprojecttheStateheatinputfor2007usingtheactual19962000growthrate. #X$nXXX^O# X^XXX$nԀ X However,EPAbelievesthatitisinappropriatetoproject_longterm_Ԁheatinputgrowthto2007basedona_shortterm_historictrend(here,19962000heatinputgrowth)forseveral_reasons._Ԁ_Because_Ԁheatinputcanvarygreatlyfromyeartoyearbecauseoffactorssuchastheweatherand_the_economy,_shortterm_Ԁtrenddatacanbegreatlyskewed.__#X$nXXX^mQ#X^XXX$n ` Moreover,asdiscussedabove,inordertotestthe q  validityofusingarelativelyshortperiodofyearsofactualStateheatinputdatatoprojectfutureStateheatinput,EPAsimulatedthatapproachusinghistoricalannualheatinputdataforthe21_NOx_ԀSIPCallStatesfor19602000(orinsomeStateswherelessdatawasavailable,from19702000).See_section_ԀV.D.4ofthisnotice.Basedonthisdata,EPAused_6_Ԁyearsworthofhistoricaldata(e.g.,19601966)toprojectannualheatinputforthesixthyearafterthe_6_yearperiod(e.g,1972).EPAdidthisonarollingbasis.For16States,EPAfoundthattherewasaverylittlecorrelationbetweenthepredictedvaluebasedonthehistorical_6_yearperiodsandtheactualvalueforthesixthyearafterthatperiod.For_four_Ԁoftheremaining_five_States,thecorrelationwasweak.Inshort,the_commenters_ *t&. approachofusinghistoricalStatefossilfueluseforarelativelyshortperiodofyearsisnotareliablemethodforpredictingfutureStateheatinput.#X$nXXX^S#X^XXX$n X  ` Third,inpointingtocertainfactorsconcerningeachindividualStatetosupporttheclaimthattheStatesheatinputcouldnotreasonablybeprojectedtodecline,#X$nXXX^Y#X^XXX$n_commenters_ԀimplicitlyassumedthattheStatesheatinputis m  determinedsolelybythoseStatespecificfactors,ratherthanbytheoperationoftheregionalelectricitymarketasawhole.#X$nXXX^Z#X^XXX$nԀEPAbelievesthatheatinputforanindividualState q  cannotreasonablybeprojectedbyconsideringonlytheStatesprojectedelectricitydemandandotherStatespecificfactors. Becauseelectricityisgeneratedandsoldina u regionalelectricitymarket,anindividualStatesheatinputisnotdetermined,andcannotreasonablybeprojected,basedsolelyonfactorsrelatingonlytothatState._Rather,aStatesheatinputmustbeprojectedusingacomprehensiveapproachthatconsiderstheregionalmarket.Largelyforthisreason,EPAusedtheIPMwhichmodelselectricitymarketsinthecontinentalU.S.andtheregionalelectricitymarketfortheNOxSIPCallareainitsanalysisforthe NOx#X$nXXX^[#X^XXX$nԀSIPCallandtheSection126Rule,includingtheanalysis '#* formakingheatinputgrowthprojections.y XN XXX^XN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNX^X XXN  32      ׀SeeAppalachian e  Powerv.EPA,249F.3dat1053(upholdingEPAsdetermination  that theIPMofferedamorecomprehensiveandconsistentmeansofallocatingemissionallowancesthansortingthroughthevariousstatespecificprojections). ` ContrarytothiscomprehensiveapproachtoprojectingindividualStatesheatinput,commenterspresentedprojectionsofsignificanteconomicandpopulationgrowthforindividualStates.WhiletheseeconomicandpopulationprojectionsforaStatemaysuggestthattherewillbesignificantgrowthinelectricitydemandinthatState,theseStatespecificfactorssuggestlittleaboutwhethertheStatesincreasedelectricitydemandwillbemetfrominStateEGUs.ItmaybemetthroughincreasedgenerationfromunitswithintheState,whichmayincreasethatStatesheatinput,oritmaybemetthroughincreasedgenerationfromunitsoutsidetheStatefromwhichtheStateimportselectricity,whichmayincreasetheheatinputforanotherState.EveniftheelectricitydemandismetbyunitsintheStatethathastheincreaseddemand,theStatesheatinputmaybeaffectedbytheamountofelectricitythattheStateexportstootherStates,aswellasbytheamountof '#* electricityusedwithintheState.TheStatesheatinputmaystilldeclineunderthesecircumstancesifsuchexportsdecline.Inshort,becauseelectricityisgeneratedandsoldonaregionalbasis,aStatesheatinputcandecreaseevenastheStateselectricitydemandincreases.#X$nXXX^ _#X^XXX$nԀBecausethe   commentsonindividualStatesfailedtoaddresstheseregionalfactors,thecommentersclaimsthattherespectiveStatesheatinputcouldnotbeexpectedtodeclinetothelevelofEPAs2007projectionareunpersuasive. ` AnotherStatespecificfactoronwhichsomecommentersreliedinchallengingEPAsheatinputgrowthrateforanindividualStateistheamountofnewcapacitythathasbeenpermittedorthatisunderconstructioninthatState.Thecommentersassumedthatasignificantamountofnew,permittedcapacityorcapacityunderconstructionnecessarilymeansthattheStatesheatinputwillincreasesignificantly.However,ownersandoperatorsmayseekpermitsforunitsthat,asitturnsout,arenot_actuallybuilt.Further,newunitsthatarebuiltandoperatedmaydisplaceexistingunitsand,sincethenewunitsarelikelytobemoreefficientinconvertingheatinputtoelectricity,theStatesheatinputmayactuallydecline.(See_sections_V.D.6and8ofthisnoticediscussingthatmostnewunitsaregasfiredunitsandarelikelytobemoreefficientthan *t&. existingunits.)Moreover,theamountofelectricitythatthenewunitsproducewilldependonthesupplyanddemandfactorsintheregionalelectricitymarket,notsimplyonsupplyanddemandintheStatewheretheunitsarelocated.Thus,_projectedincreased_Ԁnewcapacity_maypotentiallybeafactorpointingtoincreased_ԀheatinputintheStatewherethenewcapacityis_tobe_Ԁ_located,but,becausesomanyotherfactorsareinvolved,thatdoesnotnecessarilymeanheatinputwillincreaseinthatState._Ԁ____ ` Inlightoftheabovediscussion,EPAdoesnotbelievethat_commenters_ԀhavedemonstratedthatitisunreasonabletoprojectthattheheatinputforthoseStateswithrecentheatinputexceedingEPAs2007projectionswilldeclineby2007tothelevelsprojectedbyEPA.EPAaddressesbelowthespecificcommentsmadeabouteachStatewhoseheatinputgrowthrateandheatinputprojectionareindispute.#X$nXXX^On#X^XXX$n  y  a.Alabama  %   ` (_i_)Comments   "  ` A_commenter_ԀstatedthatAlabamasgrossStateproductisprojectedtogrowat2.5%peryearduring20012010.__ԀThe_commenter_Ԁalsonotedthatthe averageannualeconomicgrowthratefortheregionwas3.9%peryearduring19952000,Alabamahasrecentlyhad economicannualgrowthwellover3%,andseasonalheatinputgrowthforAlabamahasaveraged +&. 3.37%peryearin19962000.#X$nXXX^w#X^XXX$nԀNotingthatAlabamasheat e inputin1999and2000exceededEPAs2007heatinputprojection,the_commenter_Ԁclaimedthat [_n]egative_Ԁgrowthbetweennowand2007forAlabamaissimplynotaplausiblescenario.The_commenter_ԀcomparedEPAsheatinputgrowthratetotheStateshistoricalheatinputgrowthratefor19952000._Claiming_Ԁthatnucleargenerationincreasedduring19952000butisnotexpectedtoincreasesignificantlyduring20012007,the_commenter_ԀsuggestedthatAlabamasheatinputwillgrowevenmorethanthehistoricalheatinputgrowthrate.Finally,the_commenter_Ԁstatedthatthe_NOx_ԀSIPCallcurrentlyappliesonlytothenortherntwothirdsoftheState,wheremostoftheStatespopulationcentersarelocatedandmosteconomicgrowthwillbeconcentrated.ThisiscitedasanotherreasonwhyEPAsheatinputgrowthrateisinadequateandunrealistic.  ` (ii)Response %   ` #X$nXXX^z#X^XXX$nEPAnotesthatin1999and2000,Alabamasozoneseason  " heatinput(389,364,461_mmBtu_Ԁand400,689,850_mmBtu_)exceededEPAs2007heatinputprojection(385,998,780_mmBtu_)by0.9%and3.8%respectively.However,#X$nXXX^#X^XXX$nԀ#X$nXXX^W#X^XXX$nin_2001,_ԀAlabamasheat %!( input(391,665,691_mmBtu_)fell2.5%andwasonly1.4%aboveEPAs2007projection.#X$nXXX^#X^XXX$nFurther,asdiscussedabove,EPA I)$, intendstoincludeonlythenorthernportionofAlabamain *&. the_NOx_ԀSIPCall.Whenactualheatinputfor2001fornorthernAlabamaiscomparedwithEPAsrecentlyproposed2007projectionfornorthernAlabama,theactualheatinputinnorthernAlabama(#X$nXXX^#X^XXX$n284,528,783#X$nXXX^M#X^XXX$nԀ_mmBtu_)is7.9%belowEPAs i  2007projection(308,912,352_mmBtu_). _% X^XXX^  33      _    ` Moreover,asdiscussedabove,individualStateheatinputisquitevariableandcandecreasesignificantlyovermultiyearperiods.#X$nXXX^#X^XXX$nԀInfact,#X$nXXX^#X^XXX$nhistoricaldatafor19602000   showsthattherehavebeenperiodsinthepastwhenAlabamasannualheatinputdecreasedsignificantlyforthelastyear,ascomparedtothefirstyear,ofamultiyearperiod.Forexample,for_the8_yearperiod19741982(comparableinlengthtotheperiod19992007),Alabamasannualheatinputdecreasedby12%._@ X^XXX^  34      _ԀOzoneseasonheatinputdecreased17% ! overthesameperiod,19741982.#X$nXXX^#X^XXX$nԀThus,thefactthat e AlabamasmostrecentheatinputexceededEPAs2007projectiondoesnotmeanthattheprojectionisunreasonable. #X$nXXX^ʉ#X^XXX$n  ` Further,whilethe_commenter_Ԁdidnotprovidethedatato i  supportitsclaimsaboutAlabamaseconomicgrowthorgrowthin_grossStateproduct,EPAuseddatafromtheBureauofEconomicAnalysistoevaluatethecommenter'sclaims.Thecommentersassumed,butdidnotdemonstrate,thatgrowthingrossStateproductnecessarilyresultsingrowthinheatinput.Infact,datafor19961999forAlabama,asreflectedinTable10below,showsthatgrowthin grossStateproduct   doesnotnecessarilyresultingrowthinheatinput.Forexample,in1997,Stateheatinputdeclined0.2%#X$nXXX^#X^XXX$nԀwhilegross u Stateproductgrew3.4%.In1996,whileGrossStateProductgrewat2.8%,heatinputgrewatamuchslowerrateof0.2%.EPAtestedthecorrelationofheatinputgrowthratetogrossStateproductgrowthrateusingthersquaredtest,whichisdescribedaboveinsectionV.D.5ofthisnotice.EPAfoundthatthetwosetsofgrowthratedatahavearsquaredvalue }"$ of0.12,showingverylittlecorrelationbetweengrowthinheatinputandgrowthingrossStateproduct.     Table10GrossAlabamaStateProductGrowthRatevs.HeatInputGrowthRatefor19961999  <  *l\mdd dd dd dd \##, dd , dd , dd +   [   Year   Z BEAGrossStateProductGrowthRate ' " " 'HeatInputGrowthRate @6 > " 0@19960@@1996 7-+  0@1996 0@ 72.8%    0.2% 7-   4@19974@71997 7-+i  4@1997 4@ 73.4%  i  Є0.2% 7- i  8@19988@71998 7-+n  8@1998 8@ 72.9%  n  5.6% 7- n  <@1999<@71999 7-+=  <@1999 <@ 74.2%  =  5.2% =    ` ThereareseveralreasonsthatEPAbelievesthatheatinputgrowthonaStateleveldoesnotcorrelatewitheconomicgrowth.First,electricitydemandisaffectedbymanyvariables.Thisincludesnotonlyeconomicgrowth,butalsootherfactorssuchasweatherandchangesinefficiencyintheuseofelectricity. ` Second,asdiscussedabove,aStatesheatinputdoesnotnecessarilycorrelatewiththeStateselectricitydemand.(SeesectionV.D.6ofthisnoticediscussingthatStateheatinputcandeclinewhenStateelectricityuseincreases.)Forinstance,inthecaseofAlabama,theStateisgenerallyanetexporterofelectricity.In1999,AlabamaEGUsgenerated120,865,327Mwhofelectricity.Inthatsameyear,only80,401,000MwhofelectricityweresoldinAlabama.Therefore,inordertoassesswhetherelectricity *F&5 generationorheatinputinAlabamawillgrow,itisnecessarytoconsidernotonlyelectricitydemandinAlabama,butalsoelectricitydemandandsupplyintheregionalmarketforelectricityoutsideofAlabama.ThecommenterdidnotprovideanyinformationonfutureelectricitydemandandsupplyoutsideofAlabamaandhowtheymightaffectfuturegenerationandheatinputinAlabama.#X$nXXX^#X^XXX$n m   ` ThelackofstrongcorrelationbetweeneconomicgrowthandheatinputisconfirmedbyhistoricaldataonelectricitydemandandheatinputinnorthernAlabama. Notingthat#X$nXXX^#X^XXX$nԀthe q  NOxSIPCallnowcoversonlythenorthernpartofAlabama(thefinegridcounties),the#X$nXXX^#X^XXX$nԀcommenterpresentedevidence d suggestingthattheeconomyandpopulationaregrowingfasterinthenorthernpartthaninthesouthernpartoftheState.ThecommentersuggestedthatheatinputwillthereforegrowfasterinnorthernAlabamathanintheStateasawhole.EPAreviewedheatinputdataforAlabamaandfoundthat,despitehighergrowthintheeconomyandpopulationinnorthernAlabama,heatinputhasactuallygrownfasterinthesouthernpartoftheState.ThedataaresummarizedinTable11below.   Table11HeatInput(mmBtu)inAlabamafor19962001 '#*   I)$, *Q\^d d dd dd dd l\m##,dd",dd",Pdd",dd"+  +\\ e + B\\/!d"\\ BFineGridCounties B\\/!,"\\ BOutsideFineGrid Counties @\/!Y "\\ @AllCounties d\Q!d "\ ,@1995,@d1995 \xC l " ,@1995 ,@\ 1A 2793927561A*LILXX*279,392,756 \|H l " 1A 279392756 1A\ @#ِA70666448@#ِA70,666,448 |G l " @#ِA70666448 @#ِA\ zݴA 350059204zݴA+ XLILX+350,059,204 \xH l" zݴA 350059204 zݴA 0@19960@Ѐ1996 \xCI " 0@1996 0@\ A 280829411A*LILXX*280,829,411 \|HI " A 280829411 A\ AA70078571AA70,078,571 |GI " AA70078571 AA\ NnA 350907982NnA+ XLILXK+350,907,982 \xHI " NnA 350907982 NnA 4@19974@1997 \xC \" 4@1997 4@\ o⍰A 277733999o⍰A*LILXX*277,733,999 \|H \" o⍰A 277733999 o⍰A\ NA72594373NA72,594,373 |G \" NA72594373 NA\ 4A 3503283724A+ XLILX+350,328,372 \xH \" 4A 350328372 4A 8@19988@Ѐ1998 \xC9 " 8@1998 8@\ 4ʱA 2984645044ʱA*LILXX*298,464,504 \|H9 " 4ʱA 298464504 4ʱA\  A71513696 A71,513,696 |G9 "  A71513696  A\ Xk A 369978200Xk A+ XLILX+369,978,200 \xH9 " Xk A 369978200 Xk A <@1999<@Ѐ1999 \xCL " <@1999 <@\ ^&A 318056030^&A*LILXX*318,056,030 \|HL " ^&A 318056030 ^&A\ #X^XXX$ncommenters 'T#* notedthatGeorgiascurrentheatinputexceedsEPAs2007heatinputprojectionsandsotheStatesheatinputwill +&. havetodecreaseby2007inorderfortheprojectiontobecorrect.Commenterscitedseveralfactorsi.e.,rapidpopulationgrowth,projectedgrowthinpeakdemandforelectricity,andrapidgrowthingrossStateproducttoshowthatGeorgiasheatinputwillcontinuetogrowfasterthanEPAprojected.#X$nXXX^#X^XXX$nԀCommentersalsostatedthattheNOxSIP  \  CallwillcoveronlythenorthernpartofGeorgia(thefinegridcounties),whosepopulationisgrowingfasterthaninthesouthernportionoftheState.ThecommenterssuggestedthattheheatinputwillthereforegrowevenfasterforthenorthernpartofGeorgia.#X$nXXX^#X^XXX$n   ` (ii)Response  d  ` EPAnotesthatGeorgiasheatinputin1998(403,716,898mmBtu)and2000(420,260,694mmBtu)exceededEPAs2007heatinputprojection(403,368,582mmBtu).However,inbothcases,heatinputfellsignificantlythenextyearandwasbelowEPAs2007projection.Georgiasheatinputfell3.9%between1998and1999and10.9%between2000and2001.In2001,theStatesheatinput(374,355,956mmBtu)was7.2%belowEPAs2007projection.#X$nXXX^W#X^XXX$nԀ#X$nXXX^#X^XXX$nFurther,asdiscussedabove, E$& EPAintendstoincludeonlythenorthernportionofGeorgiaintheNOxSIPCall.WhenactualheatinputfornorthernGeorgiafor2001iscomparedwithEPAsrecentlyproposed2007projectionfornorthernGeorgia,actual2001heatinput *&. (360,162,148mmBtu)is8.2%belowprojectedheatinput(392,215,442mmBtu). #X$nXXX^# X^XXX$n   #X$nXXX^#X^XXX$n ` Moreover,#X$nXXX^,#X^XXX$nasdiscussedabove,individualStateheat X inputisquitevariableandcandecreasesignificantlyovermulti_Ԅyearperiods.Inthepast,Georgiasannualheatinputhasdecreasedsignificantlyforthelastyear,ascomparedtothefirstyear,ofmultiyearperiodsand,#X$nXXX^#X^XXX$nԀforexample, m  decreasedby17%overthesevenyearperiod19851992(comparableinlengthtotheperiod20002007)._k X^XXX^  35      _ԀOzone `  seasonheatinputdec_reased9.9_%overthesameperiod,19851992. ` Furthermore,asdiscussedabove,EPAdoesnotbelievethatcommentershaveshownthatincreasesinparameterssuch u aspopulation,economicoutput,orpeakelectricitydemandinaparticularStatenecessarilymeanthatheatinputwillincreaseinthatState.Infact,EPAsanalysisoftheheatinputdataforthenorthernandsouthernportionsofGeorgia_showsthat_ԀrecentlyheatinputhasincreasedmoreinthesouthernpartoftheState,where,accordingtocommenterstherehasbeenlessgrowthinpopulation,th_anin_ԀthenorthernpartoftheState.The#X$nXXX^#X^XXX$ndataaresummarizedinTable   12_below.__#X$nXXX^f#X^XXX$n_  Table12HeatInput(mmBtu)inGeorgiafor19952001  q  B*"\d  ddd"dd"Pdd"Pdd"Q\^##,dd",dd",Pdd",dd"+  +\\ 9 +*LLXX* B\\/!8"\\ BFineGridCounties B\\/!"\\ BOutside 8 FineGridCounties @\/!e"\\ @+ XLLX+AllCounties d\Q!8"\ ,@1995,@dӀ1995 \xCx" ,@1995 ,@\ ?9A 347093311?9A347,093,311 \{Hx" ?9A 347093311 ?9A\ `ZbA9870035`ZbA9,870,035 {Fx" `ZbA9870035 `ZbA\ FA 356963346FA356,963,346 \xHx" FA 356963346 FA 0@19960@Ѐ1996 \xCU " 0@1996 0@\ |A 326944480|A326,944,480 \{HU!" |A 326944480 |A\ j:aA9032533j:aA9,032,533 {FU"" j:aA9032533 j:aA\ 5A 3359770135A335,977,013 \xHU#" 5A 335977013 5A 4@19974@Ѐ1997 \xCh$" 4@1997 4@\ oA 342870775oA342,870,775 \{Hh%" oA 342870775 oA\ _A8336975_A8,336,975 {Fh&" _A8336975 _A\ FA 351207750FA351,207,750 \xHh'" FA 351207750 FA 8@19988@Ѐ1998 \xCE(" 8@1998 8@\ -|LA 390888493-|LA_390,888,493_ \|HE)" -|LA 390888493 -|LA\ whA12828405whA_12,828,405_ |GE*" whA12828405 whA\ ";A 403716898";A_403,716,898_ \xHE+" ";A 403716898 ";A <@1999<@Ѐ1999 \xCX," <@1999 <@\ " A 370011938" A_370,011,938_ \|HX-" " A 370011938 " A\ ,pA17769163,pA_17,769,163_ |GX." ,pA17769163 ,pA\ A 387781101A_387,781,101_ \xHX/" A 387781101 A @@2000@@Ѐ2000 \xC5 0" @@2000 @@\ ɷA 399110359ɷA_399,110,359_ \|H5 1" ɷA 399110359 ɷA\ +tA21150335+tA_21,150,335_ |G5 2" +tA21150335 +tA\ V A 420260694V A_420,260,694_ \xH5 3" V A 420260694 V A D@2001D@Ѐ2001 \xC!H4" D@2001 D@\ dwA 360162148dwA_360,162,148_ \|H!H5" dwA 360162148 dwA\ kA14193808kA_14,193,808_ |G!H6" kA14193808 kA\ 7PA 3743559567PA_374,355,956_ i\VH!H7" 7PA 374355956 7PA  iAvgAnnualGrowthRate1995to2001 c\P!'4#=" \ 333333?0.6333333? c_0.6_ \qB%#>" 333333?0.6 333333? \ @6.2@ 6.2 {qB%#?" @6.2 @ \ ?0.8? {_0.8_RHF%#@" ?0.8  ?  Rr#X$nXXX^#X^XXX$n  ` Fortheabovereasons,EPArejects#X$nXXX^#X^XXX$nthe_commenters_ (H$@ claimsthatEPAsheatinputgrowthrateand2007heatinputprojectionofGeorgiaareunreasonable.#X$nXXX^Z#X^XXX$n  ,'D   #X$nXXX^K#X^XXX$nc.Illinois e  ` (_i_)Comments ` _Commenters_ԀwereconcernedthatEPAinitiallyproposedto  establishtheIllinoisheatinputgrowthrateat34%,butthenadoptedafinalgrowthrateof8%._Commenters_Ԁcontendedthatthe_8%_ԀgrowthratedoesnotreflectarealisticgrowthprojectionfortheState,inlightoftheactualheatinputgrowthinIllinoisduring19952000.#X$nXXX^#X^XXX$nAccordingtothe Q  _commenters_,theactualheatinputgrowthfor19952000exceededEPAsprojectedgrowthrate,andby1998Illinoisheatinput_exceeded_ԀEPAsheatinputprojectionfor2007.#X$nXXX^#X^XXX$nԀ U _Commenters_Ԁpointedtothe2000ozoneseason(describedasarelativelymildsummer)whenheatinputwas15%higherthanthe1996baseline._Commenters_Ԁsuggestedthattotalgrowthfrom1996to2007couldexceed30%,faraboveEPAs8%estimate,andthatthedatasupportagrowthof34%andcertainlynolowerthan22%._Commenters_ԀassertedthatitisalsonotlikelythatheatinputintheStatewilldeclinebelow2000levelsbecauseIllinoishasapprovedanadditional436.6million_mmBtu_/ozoneseasoningeneratingcapacitysince1999forwhichconstructionhasbeeninitiated,withanadditional25.2million_mmBtu_Ԁpending. #X$nXXX^z#X^XXX$n 'T#*  ` (ii)Response ` WithregardtoEPAsrevisionofIllinoisannualheat -+&. inputgrowthratefrom34%to8%,EPAexplainedinthe_NOx_SIPCallthattheAgencytookcommentonusingtwoalternativeelectricitydemandforecaststodeveloptheState_NOx_Ԁemissionbudgetsandtoperformthecost_Ԅ_Ԁeffectivenessanalysis.Onealternativewasa1995electricitydemandforecast,modifiedbydemandreductionsunder_CCAP_,thatwasusedinan_IPM_Ԁrun( 1996_IPM_ԀBaseCaseforecast)#X$nXXX^#X^XXX$nԀandwould m  haveresultedincertainheatinputgrowthrates( correctedgrowthrates),includingagrowthrateof34%forIllinois.Thesecondalternativewasa1997electricitydemandforecast,modifiedbydemandreductionsunder_CCAP_,thatwasusedinalater_IPM_Ԁrun( 1998_IPM_ԀBaseCaseforecast)andresultedinanothersetofheatinputgrowthrates( revisedgrowthrates),includingagrowthrateof8%forIllinois.Asexplainedinthe_NOx_ԀSIPCall(63_F__R___Ԁ57409),EPAusedthe1998_IPM_ԀBaseCaseforecast(asthebasecaserundescribedin_section_ԀV.B.1ofthisnotice)andresultingheatinputgrowthrates becausethatforecastreflectedassumptionsthat  l" hadbeenrevisedbasedonpubliccommentandthat leadtoabetterprojectionofelectricitygenerationnationally,byregionandbyState.' XN XXX^XN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNX^X XXN  36       #X$nXXX^#X^XXX$n %p!(  ` EPAnotesthat Illinoisheatinputin1998(450,929,580 e _mmBtu_)exceededEPAs2007heatinputprojections(409,351,519_mmBtu_),by10.2%andhascontinuedtoexceedthatprojection.However,theStatesheatinputpeakedin1998andhasremainedbelowthe1998levelsincethen.#X$nXXX^J#X^XXX$nԀBy 1  2001,Illinoisheatinput(434,282,881_mmBtu_)declinedby3.7%fromthe1998levelandwas6.1%higherthanEPAs2007projection.__Ԁ#X$nXXX^*#X^XXX$nAsdiscussedabove,individualStateheatinput 5  isquitevariableandcan_decrease_Ԁsignificantlyovermultiyearperiods.Inthepast,Illinoisannualheatinputhasdecreasedsignificantlyforthelastyear,ascomparedtothefirstyear,ofmultiyearperiodsand,forexample,decreased31%overthe#X$nXXX^P#X^XXX$nԀ_9_yearperiod19811990(comparableinlengthto , the19982007period)._  X^XXX^  37      _#X$nXXX^#X^XXX$nԀOzoneseasonheatinputdecreased = 25.8%overthesameperiod,19811990.#X$nXXX^K#X^XXX$nԀThus,thefactthat e IllinoisrecentheatinputexceededEPAs2007projectiondoesnotmeanthattheprojectionisunreasonable.#X$nXXX^#X^XXX$nԀ X  ` IllinoisdecreasesinheatinputoverthelastfewyearsmaybepartlyattributedtoanincreaseinnucleargenerationinIllinoissince1998,asshowninTable13.Inboth1997and1998,#X$nXXX^#X^XXX$nfivenuclearunitsrepresentingover5000 m  MWofcapacity(nearly14%ofthetotalinstalledcapacityinIllinois)were_offline._ԀThisresultedinsignificantlylessgenerationfromnuclearunits.Itappearsthatatleastsomeofthegenerationwasmadeupbyadditionalfossilfiredgeneration.In1999,whenthreeofthenuclearunitsreturned_online,_Ԁheatinputdeclined.Duringthisperiod,electricitydemandinIllinoisincreased.#X$nXXX^#X^XXX$n !    _Table_Ԁ13HeatInput,NuclearGeneration,andElectricity A ! SalesinIllinoisfor1995_Ԅ2001  e _"s"*)\*d ddd"dd"Pdd"Pdd""\##,%dd ,dd ,dd ,dd +    Year '" 'HeatInput  (_mmBtu_) 'g" 'NuclearGeneration(_Mwh_) 'K" 'ЀElectricitySales(_Mwh_) @6g " ,@1995,@@$1995 g]+ ^  ,@1995 ,@ սA 347985300սAg#X$nXXX^<"#X^XXX$n347,985,300 ka9 ^  սA 347985300 սA A35410101Ak35,410,101 aW/ ^  A35410101 A A55960000Aa55,960,000 ]S/ ^ A55960000 A 0@19960@]1996 g]+-  0@1996 0@ A 379029184Ag379,029,184 ka9-  A 379029184 A ~{A29038573~{Ak29,038,573 aW/-  ~{A29038573 ~{A 5pA533480005pAa53,348,000 ]S/-  5pA53348000 5pA 4@19974@]1997 g]+ 2 4@1997 4@ 5A 4061278865Ag406,127,886 ka9 2 5A 406127886 5A uA23038672uAk23,038,672 aW/ 2 uA23038672 uA @NqA53357000@NqAa53,357,000 ]S/ 2 @NqA53357000 @NqA 8@19988@]1998 g]+  8@1998 8@ A 450929580Ag450,929,580 ka9  A 450929580 A s(xA25331514s(xAk25,331,514 aW/  s(xA25331514 s(xA @AA58665000@AAa58,665,000 ]S/  @AA58665000 @AA <@1999<@]1999 qg+k  <@1999 <@ gʕA 418420170.565 gʕAq418,420,171 ukCk  gʕA 418420170.565 gʕA A37004253Au37,004,253 aW/k  A37004253 A ՌA60470000ՌAa60,470,000 ]S/k  ՌA60470000 ՌA @@2000@@]2000 g]+p  @@2000 @@ ZA 436052570ZAg436,052,570 ka9p  ZA 436052570 ZA AA38287858AAk38,287,858 aW/p ! AA38287858 AA A59834000Aa59,834,000 ]S/p " A59834000 A D@2001D@]2001 g]+? # D@2001 D@ A 434282881Ag434,282,881 ka9? $ A 434282881 A fA38590400fAk38,590,400 aW/? % fA38590400 fA ŒA60310000ŒAa60,310,000?53? & ŒA60310000  ŒA ? #X$nXXX^&#X^XXX$n ` The_commenters_Ԁdidnotprovideanyinformationonfuture E& nucleargenerationinIllinoisandhowthatmightaffectfuturegenerationandheatinputintheState.However,#X$nXXX^2#X^XXX$nthe 8* NuclearRegulatoryCommissionrecentlyapprovedsignificantexpansionsingeneratingcapacityforseveralnuclearunitsinIllinois(i.e.,a17%expansiontoabout912MWeachforDresden2and3anda17.8%expansiontoabout912MWeachforQuadCities1and2).The_upgradesarescheduledforcompletionduringoutagesin2002and2003.(DocketA9656,Item#XVC07, NRCApprovesPowerUpratesforDresden2,3andQuadCities1,2,"NuclearRegulatoryCommissionPressRelease,December26,2001.)Oncethecapitalinvestmentismadeinexpandingnuclearcapacity,nucleargenerationhasrelativelylowoperatingcosts.0 XN XXX^XN X XXNXN X XXNX^X XXN  38      ׀Asaresult,nuclear )$@ generationinIllinoismaywellincreaseinthenext2yearsandthereforemaybeonefactortendingtoreduceheatinputfortheState.#X$nXXX^3#  X   ` X^XXX$nAnotherfactorthatmayhavebeenapartialcauseof i  increasedheatinputinIllinoisandthatmaychangeinthefutureisIllinoisrecentlyincreasedexportsofelectricitytootherStates.In1994,Illinoiswasexporting14%ofitselectricity;by1999thatnumberhadreached19%.Heatinputincreasedalongwiththisincreaseinexportofelectricity.#X$nXXX^S8#ԀX^XXX$n `  Whetherthislevelofexportswillcontinuewilldependonelectricitysupplyanddemandintheregionalelectricitymarket.Forexample,increasesingenerationinneighboringStatesmayleadtolessofanexportmarketandthereforeadecreaseinheatinput.#X$nXXX^:#X^XXX$nԀThecommentersdidnotprovideany Y informationonfutureelectricitydemandandsupplyoutsideofIllinoisorhowtheymightaffectfuturegenerationandheatinputinIllinois.#X$nXXX^p;#X^XXX$n  ]   ` Finally,thecommenterspointedtoapprovalor  !" constructionofnewunitsinIllinoisasshowingthatIllinoisheatinputwillcontinuetogrowthrough2007.However,asdiscussedabove,approvalorconstructionofnewunitsisnotadefinitiveindicatorofincreasedheatinputinthefuture.  e)%,  #X$nXXX^y<#X^XXX$n ` Forthereasonsabove,EPArejects#X$nXXX^6>#X^XXX$nthecommenters e claimsthatEPAsheatinputgrowthrateand2007heatinputprojectionforIllinoisareunreasonable.#X$nXXX^>#X^XXX$n  X d.Michigan  i   ` (i)Comments  1   ` CommentersstatedthatMichigansheatinputin1998exceededEPAs2007heatinputprojection.#X$nXXX^y?#X^XXX$nCommentersalso @  statedthattheMichiganPublicServiceCommissionestimatesMichigansgrowthinelectricitydemandtobetwicetheamountthatEPA presumedinitscalculationsforthe#X$nXXX^@#X^XXX$nNOx D SIPCallandSection126Rule#X$nXXX^A#X^XXX$nandthatthereisnobasisfor U the presumednegativegrowthinenergydemandforMichigan.#X$nXXX^5B#X^XXX$nԀFurther,commenterspointedtoweatherasthemajorreason H foryeartoyearvariabilityinMichigansheatinput.Notingthehottemperaturesin1995,1998,and1999andthecooltemperaturesin1996,1997,and2000,#X$nXXX^B#X^XXX$nԀtheystatedthat L weatherwastheprimarycauseofthedramaticincreaseinheatinputin1998andthedeclinein2000.Thecommenterscomparedthe#X$nXXX^!D#X^XXX$nԀyearswithsimilarsummerweatherpatternsto "P$ findanozoneseasongrowthrateof2.0%or2.1%peryear,whichismuchhigherthanEPAs1.1%projectedannualgrowthrate.CommentersalsopointedtooperationalproblemsatthefossilfuelfiredMonroePlantascontributingtothelowerStateheatinputin2000.Finally,commenterssuggestedthat +&. themodelingofunitdispatchintheIPMdoesnotaccuratelyreflectunitdispatchinginMichiganbecausetheIPMdispatchesonanationalbasis. ` (ii)Response  i   ` EPAnotesthatMichigansheatinputhasneveractuallyexceededEPAs2007heatinputprojection.In1998,Michigansheatinput(408,239,157mmBtu)camecloseto(i.e.,0.4%below)EPAs2007projection(410,058,589mmBtu).#X$nXXX^ E#X^XXX$nԀ 5  Since1998,Michigansheatinputhasdeclinedeachyear.Michigans2001heatinput(374,318,406mmBtu)was8.7%belowEPAs2007projection.#X$nXXX^H#X^XXX$nMoreover,asdiscussedabove, 9 individualStateheatinputisquitevariableandcandecreasesignificantlyovermultiyearperiods.Inthepast,Michigansannualheatinputhasdecreasedsignificantlyforthelastyear,ascomparedtothefirstyear,ofmultiyearperiodsand,forexample,decreasedby#X$nXXX^I#X^XXX$n10.9%overthe9year 0 period19731982(comparableinlengthtothe19982007period). X^XXX^  39      ׀Ozoneseasonheatinputdecreased13.4%overthe  " sameperiod,19731982.#X$nXXX^K#X^XXX$n ` EPAbelievesthatMichigansdeclineinheatinputin  thelastfewyearsmaybeatleastpartlyattributabletoresolutionofoperationalproblemsattheCookNuclearfacility,asreflectedinTable14below.o  X^XXX^  40      ׀#X$nXXX^L#X^XXX$nThespikein   Michigan'sheatinputin_1998coincideswiththeoutageof_two_ԀnuclearunitsattheCookNuclearPlantinMichigan. These_two_Ԁunitsarecapableofgeneratingatotalof2285MW,   whichrepresentsover_9%___Ԁofthecapacity_in_ԀMichigan.CookUnit2didnotreturntoserviceuntilthemiddleofthe2000ozoneseason,andCookUnit1didnotreturntoserviceuntil  afterthe2000ozoneseason.Theseoutagesresultedinsignificantlylessgenerationfromnuclearplantsandcoincidedwithsignificantlymorefossilfuelgenerationandheatinputin1998and1999.Asthenuclearunitscamebackintoserviceandincreasedtheirgeneration,fossilfuelgenerationandheatinputinMichigandeclined.Underthesecircumstances,thefactthatMichigans1998heatinputcameclosetoEPAs2007projectiondoesnotdemonstratethatEPAsprojectionisunreasonable.   Table14NuclearGeneration_vs._ԀTotalUtility_ q  Generation_ԀforMichiganin19952001 @  @   @x _ U _RR*+\,dd%dd %dd dd dd )\*##, dd , dd , dd +     Year 's" ' OzoneSeason s NuclearGeneration(_Mwh_) ';" ' TotalUtilityOzone s SeasonGeneration: XN XXX^XN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN 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X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN 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X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNX^X XXN  41       W (_Mwh_) @6;" ,@1995,@@9U1995 \R+N ,@1995 ,@ Ҿ`A8779412Ҿ`A\8,779,412 `V.N Ҿ`A8779412 Ҿ`A 84A3817536784A`38,175,367 ]S/N 84A38175367 84A 0@19960@]1996 ]S+  0@1996 0@ "=hA12708112"=hA]12,708,112 aW/! "=hA12708112 "=hA `⏃A41024588`⏃Aa41,024,588 ]S/" `⏃A41024588 `⏃A 4@19974@]1997 ]S+"# 4@1997 4@ lhA12804255lhA]12,804,255 aW/"$ lhA12804255 lhA vcA40660688vcAa40,660,688 ]S/"% vcA40660688 vcA 8@19988@]1998 \R+& 8@1998 8@ RA4923916RA\4,923,916 `V.' RA4923916 RA vA36618364vA`36,618,364 ]S/( vA36618364 vA <@1999<@]1999 \R+[) <@1999 <@ )XA6472871)XA\6,472,871 `V.[* )XA6472871 )XA HqA38679849HqA`38,679,849 ]S/[+ HqA38679849 HqA @@2000@@]2000 \R+ `, @@2000 @@ C_A8195891C_A\8,195,891 `V. `- C_A8195891 C_A ۂA39550421ۂA`___39,550,421_ ]S/ `. ۂA39550421 ۂA D@2001D@]2001 f\+/"/ D@2001 D@ cA10456684cAf_10,456,684_ si8/"0 cA10456684 cA 8yA408442638yAs_40,844,263_H></"1 8yA40844263  8yA H#X$nXXX^=N#X^XXX$n ` WithregardtothecommentthatEPAsheatinput ;#1 projectionsarenotconsistentwiththeMichiganPublicUtilityCommissions_electricitydemandprojections,EPAnotesthatelectricitydemandandheatinputarenot ?(#7 necessarilycorrelated.(SeesectionV.D.6ofthisnotice.)Forexample,from1988to1993,Michiganselectricitysalesgrew6.1%atthesametimethattheStatesheatinputdropped8%. ` SeveralcommentssuggestthatMichigans2000heatinputwasnotrepresentativebecause2000wasacoolsummerandthattheStatesheatinputthereforeshouldbedisregardedinconsideringthereasonablenessofEPAs2007heatinputprojection.Thecommentersseemtosuggestthatthefactthatthesummerwasrelativelycoolmeantthatelectricitydemand,andsoheatinput,werelowerinMichiganin2000.However,EPAnotesthatMichiganselectricitydemandin1998was44,451,681Mwhandhasbeenhighereveryyearsince1998.Inotherwords,eventhoughelectricitydemandhasgrown  ! since1998,heatinputhasnot.AsforthecommentthatoperationalproblemsattheMonroePowerPlantreducedMichigansheatinputin2000,EPAnotesthatMichigansheatinputin2001continuedtodecreasefrom2000,eventhoughtherewasmuchlessofadecreaseinheatinputfromtheMonroePowerPlantfrom2000to2001.Furthermore,EPAbelievesthatheatinputshouldnotbeevaluatedonaplantbyplantbasis,becausedeclinesinheatinputforoneplantmaywellbeaccompaniedbyincreasesinheatinputforanotherplant.Forinstance,whiletheMonroePowerPlant *t&. hadlowerheatinputin2000thanithadinpreviousyears,heatinputfromtheDavidE.KarnPlantinMichiganwassignificantlyhigherin2000thaninpreviousyears,andtheamountsofthedecreaseinMonroeheatinputandtheincreaseinKarnheatinputwereaboutthesame. #X$nXXX^'X#X^XXX$n    ` Finally,EPAdisagreeswiththecommentthatthemodelingofunitdispatchintheIPMisinaccurateforMichiganbecausetheIPMmodelstheentireU.S.TheIPMdividedtheU.S.intomultiplesubregions(includingasubregioncomprisingmostofMichigan).Thisallowsthemodeltoreflectbothlocaldispatchpatternsandtheinterstatenatureoftheelectricgrid. ` Forthereasonsabove,EPArejects#X$nXXX^N`#X^XXX$nthecommenters u claimsthatEPAsheatinputgrowthrateand2007heatinputprojectionofMichiganareunreasonable.#X$nXXX^Ob#X^XXX$n h #X$nXXX^ c#X^XXX$n e.Missouri  y  ` (i)Comments  A   ` AcommenternotedthatMissourisaverageactualheatinputgrowthratefor19952000exceededEPAsheatinputgrowthratebyaboutthreetimes.ThecommenteralsonotedthatMissourisheatinputin1998exceededEPAs2007heatinputprojectionfortheState. ` (ii)Response  e)%,  ` EPAnotesthatMissouris1999heatinput(335,273,139 -+&. mmBtu)exceededEPAs2007heatinputprojection(309,316,824mmBtu)by8.4%.#X$nXXX^wc#X^XXX$nԀSince1999,Missourisheatinputdeclinedto  332,332,587mmBtuin2000and329,668,165mmBtuin2001#X$nXXX^f#X^XXX$n,but X continuedtoexceedEPAsprojection.Missouris2001heatinputexceededEPAs2007projectionby6.2%.Theheatinputdeclineoccurredeventhough,duringthistime,electricitydemandinMissouriincreasedfrom31,704,000Mwhin1999to#X$nXXX^f#X^XXX$n33,519,000Mwhin2000and32,539,000Mwhin2001.#X$nXXX^&h#X^XXX$nԀ#X$nXXX^h#X^XXX$nԀFurther,   asdiscussedabove,EPAintendstoincludeonlytheeasternportion(thefinegridcounties)ofMissouriintheNOxSIPCall.WhenactualheatinputforeasternMissourifor2001iscomparedwithEPAsrecentlyproposed2007projectionforeasternMissouri,thedifferencebetweentheactual2001heatinput(184,541,335mmBtu)andtheprojected2007heatinput(178,431,621mmBtu)narrowsto3.4%.#X$nXXX^h#X^XXX$n h  #X$nXXX^j#X^XXX$n  Table15HeatInput(mmBtu)inMissourifor19952001 y  #X$nXXX^)k#HkX^XXX$n*=\>d d dd  dd dd +\,##,dd",dd",Pdd",dd"+  +\\ A  + B\\/!@!"\\ BFineGridCounties B\\/! $#"\\ BOutside @$ FineGridCounties @\/!m!&"\\ @AllCounties d\Q!@'"\ ,@1995,@djmӀ1995 \xC"(" ,@1995 ,@\ ^A 163698735^A163,698,735 \}H")" ^A 163698735 ^A\ \A 120078167\A120,078,167 }H"*" \A 120078167 \A\ A 283776902A283,776,902 \xH"+" A 283776902 A 0@19960@Ѐ1996 \xC]$," 0@1996 0@\ h A 159770676h A159,770,676 \}H]$-" h A 159770676 h A\ ppA 116268060ppA116,268,060 }H]$." ppA 116268060 ppA\ PtA 276038736PtA276,038,736 \xH]$/" PtA 276038736 PtA 4@19974@1997 \xC%p!0" 4@1997 4@\ TA 176843306TA176,843,306 \}H%p!1" TA 176843306 TA\ @JA 121262736@JA121,262,736 }H%p!2" @JA 121262736 @JA\ ıA 298106042ıA298,106,042 \xH%p!3" ıA 298106042 ıA 8@19988@Ѐ1998 \xCM'"4" 8@1998 8@\ A 190237705A190,237,705 \}HM'"5" A 190237705 A\ tA 124494173tA124,494,173 }HM'"6" tA 124494173 tA\ fm²A 314731878fm²A314,731,878 \xHM'"7" fm²A 314731878 fm²A <@1999<@Ѐ1999 \xC(`$8" <@1999 <@\ $A 200802706$A200,802,706 \}H(`$9" $A 200802706 $A\ BA 134470433BA134,470,433 }H(`$:" BA 134470433 BA\ A 335273139AЀ335,273,139 \xH(`$;" A 335273139 A @@2000@@Ѐ2000 \xC=*%<" @@2000 @@\ foiA 196392883foiA196,392,883 \}H=*%=" foiA 196392883 foiA\ 4A 1359397034A135,939,703 }H=*%>" 4A 135939703 4A\ +γA 332332587+γA332,332,587 \xH=*%?" +γA 332332587 +γA D@2001D@Ѐ2001 \xC+P'@" D@2001 D@\ .A 184541335.A184,541,335 \}H+P'A" .A 184541335 .A\ \LA 145126830\LA145,126,830 }H+P'B" \LA 145126830 \LA\ EVA 329668165EVA329,668,165 i\VH+P'C" EVA 329668165 EVA  iAvgAnnualGrowthRate1995to2001 c\P!= " \ @2.0@ c2.0 \qBd" @2.0 @ \  @3.2 @ 3.2 {qBd"  @3.2  @ \ @2.5@ {2.5RHFd " @2.5  @  R~ ` Moreover,asdiscussedabove,individualStateheatinputisquitevariable,isnotnecessarilycorrelatedwithelectricitydemandintheState,andcandecreasesignificantlyovermultiyearperiods.Inthepast,Missourisannualheatinputhasdecreasedsignificantlyforthelastyear,ascomparedtothefirstyear,ofmultiyearperiodsand,forexample,decreased11%overthe#X$nXXX^k#X^XXX$nԀ8year Y period19841992(comparableinlengthtothe20002007period).#X$nXXX^#X^XXX$n X^XXX^  42      ׀Ozoneseasonheatinputdecreased9.1%overthe L sameperiod,19841992.Thus,thefactthatMissourismost ] recentheatinputexceededEPAs2007projectiondoesnotmeanthattheprojectionisunreasonable.#X$nXXX^G#X^XXX$n   ` Forthereasonsabove,EPArejects#X$nXXX^#X^XXX$nthecommenters X claimsthatEPAsheatinputgrowthrateand2007heatinputprojectionofMissouriareunreasonable.#X$nXXX^#X^XXX$n    f.Virginia   \   `     ` (i)Comments  5   ` Commentersassertedthattherearevariousdataomissionsanderrorsintheheatinputdataforbaselineyear(1995)andforsubsequentyearsthrough1999forVirginia,particularlyasappliedtoindependentpowerproducers.Accordingtocommenters,thelackofheatinputdataforseveralofthesefacilitiesresultedinunderstatedbaselineheatinputand,intheSection126Rule,inunderstatedallowanceallocationsforcertainunits,whoseallocationswerebasedon19951998heatinput.CommentersrequestedthatEPAcorrecttheallowanceallocationsintheSection126Rule.CommentersalsostatedthattherehasbeenasubstantialincreaseinVirginiasheatinputbetween1995and2000andthattheStatesheatinputin1997and1998waswithin7%ofEPAs2007heatinputprojectionsandwithin1.3%in1999.CommenterspredictedthattheStates2007heatinputlevelwillbe319,087,054mmBtu,forexisting +&. unitsbasedonthe historicaltrendofheatinput,and395,216,765mmBtu,basedon powergenerationoutput,ascomparedtoEPAsprojectionof228,699,872mmBtu.#X$nXXX^S#X^XXX$nCommentersalsowereconcernedthatEPAunderestimated i  Virginiasnewgenerationcapacity.Virginiahas12,000MWofpotentialnewcapacityatvariousstagesofthepermittingprocess.Accordingtothecommenters,EPAsestimateofnewgenerationcapacityisunderestimatedbyover3,000MW,andthe5%setasideintheStatesEGU#X$nXXX^#X^XXX$nԀNOxemissionbudgetunder `  theSection126Ruleisinadequatetoaccommodateprojectednewcapacity.#X$nXXX^Y# X^XXX$n   #X$nXXX^#X^XXX$n ` (ii)Response d  ` EPAnotesthatits2007heatinputprojectionfor , Virginia(227,875,597mmBtu)hasnotbeenexceeded,thoughVirginias1999heatinput(225,665,092mmBtu)wascloseto(i.e.,1%below)the2007projection.Since1999,Virginiasheatinputhasdeclined,andin2001theStatesheatinput(213,583,835mmBtu)fellto6.3%belowEPAs2007projection.#X$nXXX^y#X^XXX$nԀMoreover,#X$nXXX^#X^XXX$nasdiscussedabove,individualStateheatinputis "4$ quitevariableandcandecreasesignificantlyovermultiyearperiods.Inthepast,Virginiasannualheatinputhasdecreasedsignificantlyforthelastyear,ascomparedtothefirstyear,ofmultiyearperiodsand,forexample,decreased38%over#X$nXXX^̐#X^XXX$nԀthe6yearperiod19771983(comparableinlengthto *&. the20012007period).{ X^XXX^  43      ׀Ozoneseasonheatinputdecreasedby e 23.9%over1978and1984.8H XN XXX^XN X XXNXN X XXNX^X XXN  44         ` Further,asdiscussedabove,becauseheatinputisquitevariable,EPAbelievesthatitisinappropriatetoprojectlongtermheatinputgrowthto2007basedonashorttermtrendlikeVirginiasheatinputgrowthfor19952000.WithregardtocommentsconcerningthenewgenerationcapacitythatisatvariousstagesofpermittinginVirginia,projectednewunitsdonotnecessarilyresult,asdiscussedabove,inincreasedStateheatinput.  q   #X$nXXX^R#X^XXX$n ` Forthereasonsabove,EPArejects#X$nXXX^#X^XXX$nthecommenters  claimsthatEPAsheatinputgrowthrateand2007heatinputprojectionofVirginiaareunreasonable.#X$nXXX^#X^XXX$n      ` EPAnotesthatthecommentsonVirginias1996baseline X heatinputandonunitspecificallowancesallocationsandthesizeofthesetasidefornewunitsundertheSection126Rule#X$nXXX^Ǘ#X^XXX$nԀareoutsidethescopeoftheremandandtodaysnotice.  \  TheCourtremandedEPAsheatinputgrowthratesand2007heatinputprojectionsanddidnotaddressorremandanyissuesconcerningthedatausedtocalculateStates1995or1996baselineheatinput.Inaddition,theCourtdidnotremandanyissuesconcerningthedeterminationofindividualunitsallowanceallocationsorthesizeofthesetasidefornewunits.ConsistentwiththeCourtsremand,EPAexplainedintheAugust3,2001NODAthatEPAwasnotseekingcommentsonthedatausedtocalculate1995or1996baselineheatinputoronallowanceallocations,#X$nXXX^#ԀX^XXX$n(66FR.40616).#X$nXXX^#X^XXX$nԀEPAis y thereforenotaddressingtodaythecommentsonVirginias1996baselineheatinput,unitspecificallowanceallocations,andthesetasidefornewunits.@ XN XXX^XN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNX^X XXN  45      ׀However,data "P$ forsubsequentyearswerenotusedincalculatingVirginias1996baselineheatinput.EPAhasincorporatedthecommentersdatacorrectionsfor19971999forpurposesoftheAgencysreviewofVirginiasheatinputgrowthrates.#X$nXXX^4#X^XXX$nA< XN XXX^XN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNX^X XXN  46       i  g.WestVirginia     ` (i)Comments   x   ` CommentersarguedthatEPAsgrowthfactorforWestVirginiaisinaccurate,technicallyunjustifiable,andsignificantlylowerthanthegrowthratesassignedtoneighboringStates.Commenterspointedtothediscrepancybetweenactualheatinputgrowthduring19952000inWestVirginia(1.84%ayear)toEPAsheatinputgrowthrateof0.25%ayear.Accordingtocommenters,extrapolatingthe1.84%growthrateto2007wouldresultina32.3%increaseinheatinputcomparedtoEPAsprojected3%increase.CommentersalsonotedthatWestVirginiasactualaverageheatinputfor19982000#X$nXXX^#X^XXX$nԀexceedsEPAs2007heatinput ]  projectionby8%.CommentersassertedthatinorderforEPAsprojectionstobereasonablyaccurate,WestVirginiasheatinputwillhavetodecreaseasmuchas6%overthenext a$& 6years.#X$nXXX^#X^XXX$nԀ e  ` Further,commentersdescribedWestVirginiaasanelectricityexporterandarguedthattheStatecanbeexpectedtohaveheatinputincreasescommensuratewithrisingnationalelectricitydemand.Commenterspointedtotheactual1.84%increaseinozoneseasonheatinputfrom19952000,whichtheyarguediscomparabletotheprojected1.8%increaseinelectricitydemandoverthenext20yearsintheNationalEnergyPolicy. ` ThecommentersclaimedthattheunreasonablenessofEPAsmethodologyisfurtherdemonstratedbycomparingWestVirginiasheatinputrelativetothetotalheatinputfortheNOxSIPCallregion.WithEPAsheatinputgrowthratesand2007heatinputprojections,theStatewasallottedonly5%oftheregionalheatinput,butuseofthe2001and2010IPMheatinputprojectionsshowWestVirginiawith6.9%and6.4%respectivelyofregionalheatinput.Inaddition,commentersnotedthattheIPMrunfor2007projectsheatinputforWestVirginiathatexceedsEPAs2007heatinputprojectionfortheState. ` CommentersstatedthatyeartoyearvariationinheatinputdidnotexplainthedifferencebetweenWestVirginiascurrentheatinputandEPAs2007heatinputprojection,whichislower.CommentersassertedthatWestVirginiahas *t&. loweryeartoyearvariabilityinheatinputthansurroundingStates. ` Finally,commenterscontendedthatEPAsheatinputgrowthratesfailtoaccountsufficientlyfornewEGUunitsintheState.Accordingtothecommenters,whileeightnewEGUswithacombinedgeneratingcapacityof5,833MWhavebeenplannedandcommittedforconstruction,EPAprojected1,049MWofnewnaturalgasfiredunitstoWestVirginiathrough2010.#X$nXXX^# X^XXX$n `   ` (ii)Response  q   ` #X$nXXX^y#X^XXX$nEPAnotesthatWestVirginiasheatinputexceededEPAs 9 2007heatinputprojection(358,117,926mmBtu)beginningin1997whenitexceededEPAs2007projectionby1.9%.TheStatesheatinputpeakedin1999(391,592,231mmBtu),exceedingEPAs2007projectionby9.3%.Since1999,WestVirginiasheatinputdeclinedby8%overthenext2years,andthe2001heatinput(360,185,154mmBtu)exceededEPAs2007projectionbyonly0.6%.Moreover,#X$nXXX^#X^XXX$nԀasdiscussedabove,  " individualStateheatinputisquitevariableandcandecreasesignificantlyovermultiyearperiods.Inthepast,WestVirginiasannualheatinputhasdecreasedsignificantlyforthelastyear,ascomparedtothefirstyear,ofmultiyearperiodsand,forexample,decreased5.5%over#X$nXXX^;#X^XXX$nԀthe10yearperiod19811991(comparableinlengthto *&. the19972007period)anddecreased10.9%overthe8yearperiod19831991(comparableinlengthtothe19992001period)| X^XXX^  47       #X$nXXX^#X^XXX$nԀand13%over19841992#X$nXXX^N#X^XXX$n.#X$nXXX^#X^XXX$n#X$nXXX^#X^XXX$nOzoneseasonheatinput X decreased9.1%over19821992./H X^XXX^  48      ׀Thus,thefactthatWest u  VirginiasheatinputhasrecentlyexceededEPAs2007heatinputprojectiondoesnotmeanthatEPAsprojectionisunreasonable. ` Further,whileEPAagreesthatWestVirginiaisasignificantexporterofelectricity,EPAdoesnotbelievethatitnecessarilyfollowsthatWestVirginiasheatinputwillcontinuetogrow.Sincelessthanathirdofthe ) electricitygeneratedinWestVirginiaissoldinWestVirginia,theabilitytoexportelectricityplaysanimportantpartintheamountsofbothelectricitygenerationandheatinputinWestVirginia.ThelevelofWestVirginiasexportsinthefuturewilldependonelectricitysupplyanddemandintheregionalelectricitymarket.#X$nXXX^5#X^XXX$nԀThe  \  commentersdidnotprovideanyinformationonfutureelectricitydemandandsupplyoutsideofWestVirginiaandhowtheymightaffectfuturegenerationandheatinputinWestVirginia.#X$nXXX^A#X^XXX$nԀWestVirginiasheatinputdeclinedover8% q  during19992001despitethefactthatelectricitysalesincreased1.2%intheNOxSIPCallregion.   #X$nXXX^U#X^XXX$n  d  ` WhilecommentersprovidedagraphtodemonstratethatWestVirginiasheatinputhasbeenlessvariablethanotherStatesheatinput,thatgraphcoversonly19952000andsofailstoshowthevariabilityreflectedbytheheatinputdecreasebetween2000and2001.Further,sincetherangeofmovement,upanddown,oflinesonagraphcanvarydependingontherangeoftheverticalandhorizontalscalespresentedinthegraph,thevariabilityofthegraphedparameter(here,Stateheatinput)cannotbedeterminedsimplybylookingatthegraph.Commentersprovidednoothersupportfortheclaimoflessvariableheatinput.Moreover,the19952001ozoneseasondataandthe19602000annualheatinputdata *t&. forWestVirginiashow,contrarytothecommenters,thattheStatesheatinputisquitevariable,asreflectedinsignificantdecreasesovermultiyearperiods.(SeeTables2through9above.) ` Finally,#X$nXXX^N#X^XXX$nԀasdiscussedabove,becauseheatinputisquite   variable,EPAbelievesthatitisinappropriatetoprojectlongtermheatinputgrowthto2007basedonashorttermtrendlikeWestVirginiasheatinputgrowthfor19952000.#X$nXXX^r#X^XXX$n   Withregardtocommentsconcerningtheheatinput,orpercentageshareofheatinput,projectedforWestVirginiabytheIPM,EPAmaintainsthattheIPMismoreaccurateinpredictingthechangeinStateheatinputbetweenmodeledyearsthaninpinpointingStateheatinputforaparticularyear.(SeesectionV.C.2ofthisnotice.)WithregardtocommentsconcerningthenewgasfiredgenerationcapacitythatisplannedinWestVirginia,projectednewunitsdonotnecessarilyresult,asdiscussedabove,inincreasedStateheatinput.#X$nXXX^#X^XXX$n  l" #X$nXXX^#X^XXX$n ` Forthereasonsabove,EPArejects#X$nXXX^v#X^XXX$nthecommenters }"$ claimsthatEPAsheatinputgrowthrateand2007heatinputprojectionofWestVirginiaareunreasonable.#X$nXXX^#X^XXX$n  %p!( #X$nXXX^#X^XXX$n10.NoHeatInputGrowthRateMethodologyhasBeenPresented '#* ThatWouldHaveResultsThatBetterComportWithActualHeatInput #X$nXXX^#X^XXX$n  +&.  ` Asdiscussedindetailabove,EPAbelievesthatthefactthataStatesrecentheatinputexceedsaheatinputprojectionfortheStatefor2007doesnotmaketheprojectionunreasonable.However,inlightoftheCourtsandcommentersconcernsovercaseswhererecentactualStateheatinputexceededthe2007projection,EPAdecidedtocomparetheheatinputgrowthratesand2007heatinputprojectionsundertheAgencysmethodologytothoseunderthealternativeheatinputgrowthmethodologiesconsideredpreviouslybyEPAordiscussedbycommenters.Inmakingthiscomparison,EPAfocusedonhowthe2007projectionscomparedwithactualheatinputdatatodateformostoftheNOxSIPCallStates.EPAexcludedConnecticut,Massachusetts,andRhodeIslandfromthecomparisonofthegrowthratemethodologiesbecausetheyenteredintoaFebruary1999MemorandumofUnderstandinginwhichtheyreallocatedtheirNOxemissionbudgetsforEGUs,andeffectivelyreallocatedtheirprojectedheatinput,amongthethreeStates.Thisagreement,whichwasimplementedintheirSIPsapprovedonDecember27,2000,renderedmootanypotentialissuesconcerningthe2007heatinputprojectionsusedtocalculatetheiroriginalNOxemissionbudgets.#X$nXXX^#X^XXX$nԀAsdiscussedbelow,EPA '#* foundthat,whilethealternativemethodologiesresultedinhigher2007projectedheatinputforsomeindividualStates, *t&. overallthealternative2007projectionswouldnotcomportbetterthanEPAs2007projectionswiththeactualheatinputdatafortheNOxSIPCallStates. ` ThefirstalternativemethodologywouldinvolveusingheatinputgrowthratesfromOTAG.DuringtheNOxSIPCallrulemaking,EPAreviewedNOxemissionprojectionsbyOTAGand  \  converted_themintoheatinputprojectionsandgrowthrates.TheEPAand_OTAG_ԀheatinputgrowthratesarecomparedinTable16below.   _Table_Ԁ16Comparisonof_OTAG_ԀandEPAState_Heat_ԀInputGrowth_Factorsw X^XXX^  49      _Ԁ_{XX^ __ = _gU*E\]d ddd"dd"Pdd"Pdd"=\>##, dd , dd , dd +   n  State '7 " ' OTAGGrowthRate '7!" ' EPAGrowthRate '7"" 'AL I? "#" \(\?1.21\(\?I1.21 ka4 "$" \(\?1.21 \(\? ?1.10?k1.10 I?4 "%" ?1.10 ? IDC I?!h&" ?1.00?I1.00 ka4!h'" ?1.00 ? (\?1.36(\?k1.36 I?4!h(" (\?1.36 (\? IDE I?d" ffffff?1.15ffffff?I1.15 ka4d" ffffff?1.15 ffffff? RQ?1.27RQ?k1.27 I?4d" RQ?1.27 RQ? IGA I?" {Gz?1.03{Gz?I1.03 ka4" {Gz?1.03 {Gz? Gz?1.13Gz?k1.13 I?4" Gz?1.13 Gz? IIL I?U" HzG?1.08HzG?I1.08 ka4U" HzG?1.08 HzG? HzG?1.08HzG?k1.08 I?4U " HzG?1.08 HzG? IIN I?6 " Q?1.12Q?I1.12 ka46 " Q?1.12 Q? Q?1.17Q?k1.17 I?46 " Q?1.17 Q? IKY I? | " HzG?1.08HzG?I1.08 ka4 |" HzG?1.08 HzG? (\?1.16(\?k1.16 I?4 |" (\?1.16 (\? IMD I?' " ?1.05?I1.05 ka4' " ?1.05 ? ?1.35?k1.35 I?4' " ?1.35 ? IMI I?m " Gz?0.94Gz?I0.94 ka4m " Gz?0.94 Gz? Gz?1.13Gz?k1.13 I?4m " Gz?1.13 Gz? IMO I? N " ?1.05?I1.05 ka4 N " ?1.05 ? q= ףp?1.09q= ףp?k1.09 I?4 N " q= ףp?1.09 q= ףp? INC I? " ?1.10?I1.10 ka4 " ?1.10 ? \(\?1.21\(\?k1.21 I?4 " \(\?1.21 \(\? INJ I?? " ?1.10?I1.10 ka4? " ?1.10 ? \(\?1.21\(\?k1.21 I?4? " \(\?1.21 \(\? INY I? " HzG?1.08HzG?I1.08 ka4 " HzG?1.08 HzG? ?1.05?k1.05 I?4 !" ?1.05 ? IOH I?f"" p= ף?1.04p= ף?I1.04 ka4f#" p= ף?1.04 p= ף? Q?1.07Q?k1.07 I?4f$" Q?1.07 Q? IPA I?%" (\?1.06(\?I1.06 ka4&" (\?1.06 (\? ffffff?1.15ffffff?k1.15 I?4'" ffffff?1.15 ffffff? ISC I?W(" {Gz?1.03{Gz?I1.03 ka4W)" {Gz?1.03 {Gz? zG?1.43zG?k1.43 I?4W*" zG?1.43 zG? ITN I?8+" Gz?1.13Gz?I1.13 ka48," Gz?1.13 Gz? \(\?1.21\(\?k1.21 I?48-" \(\?1.21 \(\? IVA I?~." Q?1.07Q?I1.07 ka4~/" Q?1.07 Q? Q?1.32Q?k1.32 I?4~0" Q?1.32 Q? IWV I?)1" ?1.05?I1.05 ka4)2" ?1.05 ? {Gz?1.03{Gz?k1.03 I?4)3" {Gz?1.03 {Gz? IRegion @6o 4 p= ף?1.04p= ף?@1.04 XN+o 5 p= ף?1.04 p= ף? ?1.1?X1.1:0.o 6 ?1.1  ? : ` #X^X{#FocusingfirstontheStatesforwhichEPAsheatinput [6 growthrateshavebeendisputedby_commenters_,EPAnotesthatEPAsStateheatinputgrowthrateishigherthan_OTAG_sforthreeStates(Georgia,Michigan,andVirginia),lowerforthreeStates(Alabama,Missouri,andWestVirginia)andthesameforoneState(Illinois).Further,asshowninTable19below,the2007heatinputprojectionbasedon_OTAG_sgrowthrateswouldbeexceededbyactualStateheatinputinarecentyearfor_ten_Ԁjurisdictions,ascomparedto_seven_ jurisdictionswhen2007projectionsarebasedon_EPAsgrowth g*&H rates.G XN XXX^XN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNXN X XXNX^X XXN  50      ׀Inaddition,usingOTAGsheatinputgrowthrates, e  theov