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ŠPetitions€for€Purposes€of€Reducing€Interstate€OzoneŠ “  ŠTransport,šš€A„97„43,€VI„C„01,€at€112„13.€€EPA€intended€toŠ Š Ś Šrefer€to€IPM€projections€for€growth€in€demand€forŠ ` ° Šelectricity,€not€growth€in€heat€input. =Ż ƒMc $ŻŅ°ŅŌ€`X0ŁXXXŌņņŚ  Ś1Ś  ŚóóŻ  ŻŌ_ŌIPM€and€the€manner€in€which€EPA€programmed€it€is€discussedŠ ° Šin€š šReport€on€Analyzing€Electric€Power€Generation€Under€theŠ †Ö ŠCAAA,šš€A„96„56,€V„C„03€(March€1998).(jłEGMSY_ekqAutoList20IVIVIVIVIVIVIVIV(złEGMSY_ekqAutoList21IVIVIVIVIVIVIVIV dmailto:hoffman.howard@epa.gov.(2C$££Ż ƒ!ŻŻ  Ż •Ż ƒMc $ŻŅ°ŅŌ€`X0ŁXXXŌņņŚ  Ś2Ś  ŚóóŻ  ŻŌ_ŌEPA€did€observe€that€heat€input€may€vary€from€year€to€year,Š ° Šbut€the€Court€found€š šno€plausible€explanation€for€howŠ †Ö Šinterannual€variation€can€explain€utilization€rates€in€2007Š \¬ Šsubstantially€lower€than€those€observed€in€1998.šš(’’$’’X[=A<< c’’ !hńEGKOSW[_cAutoList23"""""""")1)a)<4šŪ 9Z+‹ Courier New Ā.Courier New Regular ł Ż ƒ!ŻŻ  ŻŌ_ŌŌ‡`X0ŁXXXŌҰŅŃ  ŃŃ€C*ŃŃ8€e0ŁeXXdÖdČ8ŃŃ€fр€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€6560„50„PŠ ° ŠĢÓ  Óņ ņENVIRONMENTAL€PROTECTION€AGENCYŠ \¬ ŠĢ40€CFR€Parts€51,€52,€96,€and€97Š $t ŠĢAvailability€of€Documents€for€the€Response€to€the€Remands€inŠ ģ < Šthe€Ozone€Transport€Cases€Concerning€the€Method€forŠ Š  ŠComputing€Growth€for€Electric€Generating€Unitsó óŠ “  ŠĢÓ  Óņ ņAGENCY:ó ó€ą ø ąEnvironmental€Protection€Agency€(EPA).Š n ¾  ŠĢņ ņACTION:ó óą0 ø ąNotice€of€data€availability€for€the€NOx€SIP€CallŠ (x  Šand€the€Section€126€Rule.Š \ ø (#ø (# ŠņņóóĢÓÓņ ņSUMMARYó ó:ą ø ąThe€EPA€is€providing€notice€that€it€has€placed€inŠ ø  Šthe€dockets€for€the€two€main€rulemakings€concerning€ozone„Š €Š Šsmog€transport€in€the€eastern€part€of€the€United€Statesš!štheŠ ,| ŠNitrogen€Oxides€State€Implementation€Plan€Call€(NOx€SIPŠ Ų( ŠCall)€and€the€Section€126€Ruleš!šdata€relevant€to€the€remandsŠ „Ō Šby€the€U.S.€Court€of€Appeals€for€the€District€of€ColumbiaŠ 0€ ŠCircuit€(D.C.€Circuit)€concerning€growth€rates€for€seasonalŠ Ü, Šheat€input€by€electric€generating€units€(EGUs).€€In€both€theŠ ˆŲ ŠNOx€SIP€Call€and€Section€126€rulemakings,€EPA€determinedŠ 4„ Šcontrol€obligations€with€respect€to€EGUs€through€the€sameŠ ą 0! Šcomputation,€which€included,€as€one€component,€estimates€ofŠ Œ"Ü# Šgrowth€in€heat€input€by€the€EGUs€from€1996€to€2007.€€In€twoŠ 8$ˆ% Šcases€decided€earlier€this€year€challenging€the€Section€126Š ä%4!' 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Šand€Radiation€Docket€and€Information€Center€(6102),Š ° ŠAttention:€Docket€No.€A„96„56€for€the€NOx€SIP€Call€andŠ \¬ ŠDocket€No.€A„97„43€for€the€Section€126€Rule,€U.S.Š X ŠEnvironmental€Protection€Agency,€1200€Pennsylvania€AvenueŠ “  ŠNW,€Washington,€DC€20460,€telephone€(202)€260„7548.€€The€EPAŠ ` ° Šencourages€electronic€submission€of€comments€following€theŠ  \  Šinstructions€under€SUPPLEMENTARY€INFORMATION€of€thisŠ ø  Šdocument.€€The€e„mail€address€is€Ō4‚?Ż €ŌŻ‚ ĶOŻŌ’ŌņņŻ  ŻŌ5  ŌA„and„R„Docket@epa.gov.Ō6ÖŌŻ‚ ĶOźƒŻóóŌ’ŌŻ  ŻŌ7Ż H!Ō€€NoŠ d“  Šconfidential€business€information€should€be€submittedŠ `  Šthrough€e-mail.€Š ¼  Šą ` ąCopies€of€all€of€the€documents€have€been€placed€in€theŠ hø Šdocket€for€the€NOx€SIP€Call€rule,€Docket€No.€A„96„56,€andŠ d Šhave€been€incorporated€by€reference€in€the€docket€for€theŠ Ą ŠSection€126€Rule,€Docket€No.€A„97„43.€€These€new€documents,Š l¼ Šand€other€documents€relevant€to€these€rulemakings,€areŠ h Šavailable€for€inspection€at€the€Docket€Office,€located€atŠ Ä Š401€M€Street€SW,€Room€M„1500,€Washington,€DC€20460,€betweenŠ pĄ  Š8:00€a.m.€and€5:30€p.m.,€Monday€through€Friday,€excludingŠ !l" Šlegal€holidays.€€A€reasonable€fee€may€be€charged€forŠ Č"$ Šcopying.€€Some€of€the€documents€have€also€been€madeŠ t$Ä& Šavailable€in€electronic€form€at€the€following€EPA€website:ņ ņŠ  &p!( Šó óhttp://www.epa.gov/airmarkets/fednox/126noda/.€Š Ģ'#* Šņ ņFOR€FURTHER€INFORMATION€CONTACTó ó:€Questions€concerningŠ x)Č$, Štodayššs€document€should€be€directed€to€Kevin€Culligan,Š @+&. ŠOffice€of€Atmospheric€Programs,€Clean€Air€Markets€Division,Š ° Š6204M,€1200€Pennsylvania€Ave.€NW,€Washington,€DC€20460,Š \¬ Štelephone€(202)€564„9172,€e„mail€Ō4‚ Ż €ŌŻ‚ ĶOŻŌ’ŌņņŻ  ŻŌ5  Ōculligan.kevin@epa.govŌ6ŌŻ‚ ĶO-ƒŻóóŌ’ŌŻ  ŻŌ7Ż Š [Ō;€orŠ X ŠHoward€J.€Hoffman,€Office€of€General€Counsel,€2344A,€1200Š “  ŠPennsylvania€Ave.€NW,€Washington,€DC€20460,€telephone€(202)Š ` ° Š564„5582,€e„mail€Ō4‚WŻ ŌŻ‚ ĶOŻŌ’ŌņņŻ  ŻŌ5  Ōhoffman.howard@epa.gov.Ō6œŌŻ‚ ĶO°ƒŻóóŌ’ŌŻ  ŻŌ7Ż ČŽŌ€€General€questionsŠ  \  Šabout€the€Section€126€Rule€or€the€NOx€SIP€Call€may€beŠ ø  Šdirected€to€Carla€Oldham,€Office€of€Air€Quality€Planning€andŠ d“  ŠStandards,Ō#†XśˆXX`X0Łķ #ŌŌ‡OX0ŁXXXśˆŌ€Air€Quality€Strategies€and€Standards€Division,Š `  ŠMD„15,€Research€Triangle€Park,€NC,€27711,€telephone€(919)Š ¼  Š541„3347,€e„mail€oldham.carla@epa.gov.€Ō#†XśˆXXOX0ŁH#ŌŌ‡`X0ŁXXXśˆŌŠ hø Šņ ņSUPPLEMENTARY€INFORMATIONó ó:€€Š d Šņ ņSubmitting€Electronic€Commentsó óŠ Ü, Šą ` ąElectronic€comments€are€encouraged€and€can€be€sentŠ ¤ō Šdirectly€to€EPA€at€Ō4‚GŻ šŌŻ‚ ĶOŻŌ’ŌņņŻ  ŻŌ5  ŌA„and„R„Docket@epa.gov.Ō6MŌŻ‚ ĶOaƒŻóóŌ’ŌŻ  ŻŌ7Ż øŌ€€€ElectronicŠ P  Šcomments€must€be€submitted€as€an€ASCII€file€avoiding€the€useŠ üL Šof€special€characters€and€any€form€of€encryption.€€CommentsŠ Øų  Šwill€also€be€accepted€on€disks€in€WordPerfect€8.0€or€ASCIIŠ T!¤" Šfile€format.€€All€comments€in€electronic€form€must€beŠ #P$ Šidentified€by€Docket€No.€A„96„56€for€the€NOx€SIP€Call€andŠ ¬$ü& ŠDocket€No.€A„97„43€for€the€Section€126€Rule.€€ElectronicŠ X&Ø!( Šcomments€may€be€filed€online€at€many€Federal€DepositoryŠ (T#* ŠLibraries.Š °)%, Šņ ņÓÓOutlineó óŠ \+¬&. ŠI.ą0 ` ąBackground€Š@,'/` (#` (# ŠA.ą0 ` ąRulemakingsа` (#` (# Š1.ą0 ` ąNOx€SIP€CallІÖ` (#` (# Š2.ą0 ` ąTechnical€AmendmentsŠ\¬` (#` (# Š3.ą0 ` ąSection€126€RulemakingŠ2‚` (#` (# ŠB.ą0 ` ąCourt€Decisions;€RemandsŠX` (#` (# Š1.ą0 ` ąMichigan€v.€EPA€(NOx€SIP€Call)ŠŽ.` (#` (# Š2.ą0 ` ąAppalachian€Power€v.€EPA€(Section€126€Rule)Š“ ` (#` (# Š3.ą0 ` ąAppalachian€Power€v.€EPA€(Technical€Amendments)ŠŠ Ś` (#` (# ŠII.ą0 ` ąNew€DocumentsŠ` °` (#` (# ŠIII.ą0 ` ąEPAššs€Response€to€RemandsŠ6 † ` (#` (# ŠA.ą0 ` ąActual€Heat€Input;€Reasons€for€State„by„StateŠ  \  ŠFluctuationsŠā 2 ` (#` (# ŠŌ#†XśˆXX`X0ŁC#ŌŌ‡`X0ŁXXXśˆŌB.ą ` ąReasons€for€Calculated€ApproachŠ ø  ŠC.ą0 ` ąGrowth€FactorŠŽŽ ` (#` (# ŠD.ą0 ` ąConsistency€of€Use€of€Heat€Input€Growth€Factors€forŠ d“  ŠBudget€Purposes€and€for€Cost€PurposesŠ:Š ` (#` (# ŠE.ą0 ` ąUtilitiesšš€Multi„State€OperationsŠ` ` (#` (# ŠIV.ą0 ` ąCommentsŠę6` (#` (# ŠŌ#†XśˆXX`X0Ł4%#ŌŌ‡`X0ŁXXXśˆŌĢņ ņÓÓI.€€Backgroundó óŠ ’ā Šņ ņA.€€RulemakingsŠ ZŖ Š1.€€The€NOx€SIP€Call.ó ó€€In€a€final€action€published€OctoberŠ "r Š27,€1998,€EPA€promulgated,€š šFinding€of€SignificantŠ ź: ŠContribution€and€Rulemaking€for€Certain€States€in€the€OzoneŠ –ę ŠTransport€Assessment€Group€Region€for€Purposes€of€ReducingŠ B’ ŠRegional€Transport€of€Ozone,šš€63€FR€57356€(the€NOx€SIPŠ ī> ŠCall).€€This€rulemaking€was€the€culmination€of€a€multi„yearŠ š ź! Šstudy€„„€begun€by€a€cooperative€group€of€States,€industry,Š F"–# Šand€citizen€groups€called€the€Ozone€Transport€AssessmentŠ ņ#B% ŠGroup€(OTAG)€„„€of€the€causes€and€extent€of€ozone„smogŠ ž%ī ' Štransport€in€the€eastern€half€of€the€United€States.€€In€theŠ J'š") ŠNOx€SIP€Call,€EPA€determined€that€NOx€emissions€from€22Š ö(F$+ ŠStates€and€the€District€of€Columbia€contributedŠ ¢*ņ%- Šsignificantly€to€ozone€nonattainment€problems€downwind,Š N,ž'/ Šunder€Clean€Air€Act€(CAA)€section€110(a)(2)(D).€Š ° ŠAccordingly,€EPA€promulgated€a€requirement€that€each€of€theŠ \¬ Š23€jurisdictions€submit€a€SIP€revision€containing€controlsŠ X Šthat€would€yield€specified€levels€of€NOx€emissionsŠ “  Šreductions,€and€thereby€eliminate€that€jurisdictionššsŠ ` ° Šsignificant€contribution.Š  \  Šą ` ąUnder€the€rulemaking,€the€appropriate€level€of€NOxŠ ø  Šreductions€is€the€amount€of€NOx€emissions€that€could€beŠ d“  Šeliminated€through€use€of€highly€cost„effective€controls.€Š `  ŠIn€the€NOx€SIP€Call,€EPA€did€not€require€States€specificallyŠ ¼  Što€impose€controls€on€any€particular€sources,€but€rather€EPAŠ hø Šdetermined€the€amount€of€emissions€reductions€that€wouldŠ d Šcorrespond€to€the€implementation€of€highly€cost„effectiveŠ Ą Šcontrols,€and€required€States€to€submit€SIP€revisions€thatŠ l¼ Šprovide€for€that€amount€of€reduction.€€Although€EPAŠ h Šdetermined€the€amount€of€required€reduction€by€examiningŠ Ä Šseveral€categories€of€sources,€EPA€based€most€of€itsŠ pĄ  Šrequired€emissions€reductions€on€the€availability€of€highlyŠ !l" Šcost„effective€controls€for€large€EGUs.Š Č"$ Šą ` ąIn€studying€EGU€NOx€emissions€and€associated€issues,Š t$Ä& ŠEPA€relied€heavily€on€a€computerized€simulation€of€theŠ  &p!( Šā āelectric€utility€industry€termed€the€Integrated€PlanningŠ Ģ'#* ŠModel€(IPM).׃Sׯ ƒN)ĆŻņņŚ  Ś1Ś  ŚóóŻ  Ż×  ׀€The€IPM€used€by€EPA€covers€48€contiguous€U.S.Š ° Šā āStates€and€incorporates€information€over€a€multi„year€periodŠ \¬ Šas€to€expected€demand€for€electricity,€the€physicalŠ X Šcharacteristics€of€electricity€generators,€transmissionŠ “  Šgrids,€characteristics€of€the€fuels€used,€amounts€of€NOx€andŠ ` ° Šother€pollutant€emissions,€types€of€emissions€controls,€andŠ  \  Šthe€various€costs€involved.€€Based€on€these€inputs,€the€IPMŠ ø  Šprovides€reasonable€projections,€over€a€multi„year€period,Š d“  Šof,€among€other€things,€the€amount€of€electricity€generationŠ `  Šthat€will€be€needed€in€various€areas,€which€sources€willŠ ¼  Šgenerate€how€much€electricity,€to€which€region€thatŠ hø Šelectricity€will€be€transmitted,€what€amounts€of€heat€inputŠ d Šwill€be€needed,€the€amount€of€pollution€that€will€beŠ Ą Šemitted,€what€pollution€controls€will€be€required€on€whichŠ l¼ Šsources,€what€costs€will€be€incurred,€and€how€much€newŠ h Šgeneration€capacity€will€be€built€in€various€regions.Š Ä Šą ` ąFor€the€NOx€SIP€Call,€EPA€conducted€the€IPM€simulationsŠ pĄ  Šfor€the€years€2001€to€2020,€inclusive.€€Further,€EPAŠ !l" Šprogrammed€the€model€to€provide€detailed€data€outputs€forŠ Č"$ Šthe€years€2001,€2003,€2007,€2010,€and€2015.€€Of€particularŠ t$Ä& Šrelevance€for€present€purposes,€IPM€provided€projections€forŠ  &p!( Šheat€input€for€2001€and€2010,€as€well€as€projected€NOxŠ Ģ'#* Šemissions€for€2007.Š ° Šą ` ąEPA€determined€the€amount€of€reductions€attributable€toŠ \¬ ŠEGUs€as€highly€cost€effective€in€the€following€manner:€€ForŠ X Šeach€of€the€23€jurisdictions,€EPA€determined€the€amount€ofŠ “  Šactual€heat€input€used€by€all€large€EGUs€in€the€jurisdictionŠ ` ° Šduring€the€1995€and€1996€ozone€seasons.€€EPA€selected€theŠ  \  Šhigher€of€the€1995€or€1996€amounts€as€the€baseline€heatŠ ø  Šinput.€€EPA€then€applied€a€growth€factor€to€this€baselineŠ d“  Šamount,€to€grow€it€from€the€1996€level€(which,€for€someŠ `  ŠStates,€included€the€1995€amount)€to€a€2007€base€level.€€EPAŠ ¼  Šdetermined€the€growth€factor€by€determining€the€averageŠ hø Šannual€growth€rate€in€heat€input€projected€by€IPM€betweenŠ d Šthe€years€2001€and€2010€inclusive.Š Ą Šą ` ąEPA€then€applied€to€the€2007€projected€heat€input,€theŠ l¼ Šcontrol€level€that€EPA€determined€to€be€highly€costŠ h Šeffective.€€This€calculation€yielded€an€amount€of€NOxŠ Ä Šemissions,€which€may€be€referred€to€as€the€2007€EGU€Budget.€Š pĄ  ŠEPA€subtracted€this€amount€from€the€amount€of€NOx€emissionsŠ !l" ŠIPM€had€projected€for€2007€without€assuming€NOx€controls.€Š Č"$ ŠThe€remainder€constituted€a€portion€of€the€amount€of€NOxŠ t$Ä& Šemissions€reductionsš!š„the€portion€attributable€to€EGUs„„thatŠ  &p!( Šeach€jurisdiction€was€required€to€achieve.Š Ģ'#* Šņ ņ2.€€Technical€Amendmentsó ó.€€When€it€promulgated€the€NOx€SIPŠ x)Č$, ŠCall€rule,€EPA€decided€to€reopen€public€comment€on€theŠ @+&. ŠŃC* Ńā CāŃŃŃ  Ńā CāŃ  Ńsource„specific€data€used€to€establish€each€Stateššs€2007€EGUŠ ° ŠBudget€(63€FR€at€57427).€€EPA€further€extended€this€commentŠ \¬ Šperiod€by€notice€dated€December€24,€1998€(63€FR€71220).€€EPAŠ X Šindicated€that€it€would€entertain€requests€to€correct€theŠ “  Š2007€EGU€Budgets€to€take€into€account€errors€or€updates€inŠ ` ° Šsome€of€the€underlying€emissions€inventory€and€certain€otherŠ  \  Šspecified€data€(63€FR€at€57427).Š ø  Šą ` ąFollowing€its€review€of€the€comments€received,€EPAŠ d“  Špublished€a€rulemaking€providing€Technical€Amendments€to,Š `  Šamong€other€things,€the€2007€EGU€Budgets.€€š šFinal€Rule;Š ¼  ŠTechnical€Amendment€to€the€Finding€of€SignificantŠ hø ŠContribution€and€Rulemaking€for€Certain€States€for€PurposesŠ d Šof€Reducing€Regional€Transport€of€Ozone,šš€(64€FR€26298;€MayŠ Ą Š14,€1999).€€In€response€to€additional€comments€received,€EPAŠ l¼ Špublished€a€second€rulemaking,€making€additional€TechnicalŠ h ŠAmendments€to€the€2007€EGU€Budgets.€€š šFinal€Rule;€TechnicalŠ Ä ŠAmendment€to€the€Finding€of€Significant€Contribution€andŠ pĄ  ŠRulemaking€for€Certain€States€for€Purposes€of€ReducingŠ !l" ŠRegional€Transport€of€Ozone,šš€(65€FR€11222;€March€2,€2000).€Š Č"$ Š(These€two€rulemakings€may€be€referred€to,€together,€as€theŠ t$Ä& ŠTechnical€Amendments.)€€In€promulgating€the€TechnicalŠ  &p!( ŠAmendments,€EPA€kept€intact€its€method€for€determining€theŠ Ģ'#* Š2007€EGU€Budgets,€including€the€method€for€determiningŠ x)Č$, Šgrowth€to€2007.€€EPA€simply€made€adjustments€concerningŠ $+t&. Šwhether€particular€sources€were€large€EGUs,€and€made€theŠ ° Šappropriate€adjustments€in€the€1996€baseline€(which€includedŠ \¬ Š1995€heat€input€values€for€some€States)€for€those€sources.Š X Šņ ņ3.€€Section€126€Rulemaking.€€ó óIn€a€final€action€publishedŠ “  ŠJanuary€18,€2000,€EPA€granted€petitions€from€four€NortheastŠ | Ģ ŠStates€making€findings€that€NOx€emissions€from€large€EGUs,Š ( x  Šamong€other€sources,€in€12€Midwest,€Southeast,€and€NortheastŠ Ō$  ŠStates€and€the€District€of€Columbia€contributedŠ €Š  Šsignificantly€to€ozone€nonattainment€in€the€petitioningŠ ,|  ŠNortheast€States.€€š šFindings€of€Significant€contribution€andŠ Ų( ŠRulemaking€on€Section€126€Petitions€for€Purposes€of€ReducingŠ „Ō ŠInterstate€Ozone€Transport,šš€65€FR€2674€(Section€126€Rule).€Š 0€ ŠAs€a€remedy,€EPA€promulgated€control€requirements€for€theŠ Ü, ŠEGUs.€€These€control€requirements€were€based€on€the€2007€EGUŠ ˆŲ ŠBudgets€from€the€NOx€SIP€Call€(as€revised€by€the€TechnicalŠ 4„ ŠAmendments).€€Specifically,€EPA€established€a€2007€EGUŠ ą0 ŠBudget€for€each€affected€State,€and€then€allocated€theŠ ŒÜ  ŠStateššs€2007€EGU€Budget€to€each€of€the€large€EGUs€in€theŠ 8!ˆ" ŠState,€according€to€a€formula.Š ä"4$ Šņ ņB.€€Court€Decisions;€Remandsó óŠ $ą& Šņņóóą ` ąAll€three€sets€of€rulemakings€„„€the€NOx€SIP€Call,€theŠ X&Ø!( ŠTechnical€Amendments,€and€the€Section€126€Rule€„„€wereŠ (T#* Šchallenged€by€various€groups€of€States€and€industries€in€theŠ °)%, ŠU.S.€Court€of€Appeals€for€the€District€of€Columbia€CircuitŠ \+¬&. Š(the€D.C.€Circuit).Š ° Šņ ņ1.€€ņņMichigan€v.€EPAóó€(NOx€SIP€Call).ó ó€€On€March€3,€2000,€aŠ \¬ Španel€of€the€D.C.€Circuit€largely€upheld€the€NOX€SIP€Call€inŠ $t ŠņņMichigan€v.€EPAóó,€213€F.3d€663€(D.C.€Cir.€2000).€€AlthoughŠ Š  Špartially€vacating€and€remanding€the€SIP€Call€on€certainŠ | Ģ Šspecific€issues,€the€Court€generally€upheld€the€regulatoryŠ ( x  Šapproach€adopted€by€EPA,€including€finding€that€EPAŠ Ō$  Šreasonably€interpreted€the€CAA€as€š šproviding€it€with€theŠ €Š  Šauthority€to€determine€a€stateššs€NOX€significantŠ ,|  Šcontribution€level,šš€as€reflected€in€each€Stateššs€budget.€Š Ų( ŠņņId.óó€at€687.€€No€party€to€that€litigation€specifically€raisedŠ „Ō Šany€issue€concerning€the€EPAššs€method€for€computing€theŠ 0€ Šgrowth€component€for€the€EGU€Budget.Š Ü, Šņ ņ2.€€ņņAppalachian€Power€v.€EPAóó€(Section€126€Rule)ó ó.€€On€May€15,Š ˆŲ Š2001,€a€panel€of€the€D.C.€Circuit€largely€upheld€the€SectionŠ P  Š126€Rule€in€ņņAppalachian€Power€v.€EPAóó,€249€F.3d€1032€(D.C.Š üL ŠCir.€2001).€€ņ ņņņó óóóIn€response€to€a€direct€challenge€by€parties€toŠ Øų  ŠEPAššs€method€for€determining€EGU€growth€rates,€the€CourtŠ T!¤" Šremanded€that€part€of€the€rule€to€EPA.Š #P$ Šą ` ąAt€the€outset,€the€Court€turned€aside€a€challenge€byŠ ¬$ü& Šthe€Midwest€and€Southeast€States€that€EPAššs€emissions€growthŠ X&Ø!( Šprojections€were€arbitrary€and€capricious€because€theyŠ (T#* Šrelied€on€IPM€growth€projections€that€were€significantlyŠ °)%, Šlower€than€certain€individual€state€projections.€€The€CourtŠ \+¬&. Šupheld€š šEPAššs€judgment€[that]€the€IPM€offered€a€moreŠ ° Šcomprehensive€and€consistent€means€of€allocating€emissionŠ \¬ Šallowances€than€sorting€through€the€various€state„specificŠ X Šprojections.šš€€ņņId.óó€at€1053.Š “  Šą ` ąHowever,€the€Court€went€on€to€remand€EPAššs€EGU€growthŠ ` ° Šprojections.€€The€Court€objected€that€EPA€never€articulatedŠ  \  Šwhy€it€adopted€its€methodology€for€projecting€growth.€€InŠ ø  Šaddition,€the€Court€€noted€information€provided€by€theŠ d“  Špetitioners€challenging€the€rule€that„„Š `  ŠÓÓEPAššs€projections€significantly€underestimated€growth€ratesŠ ¼  Šin€some€States.€€In€Michigan€and€West€Virginia,€for€example,Š ’ā Šactual€utilization€in€1998€already€exceeded€the€EPAššsŠ hø Šprojected€levels€for€2007.ÓYÓŠ >Ž ŠThe€Court€stressed€that€š šfuture€growth€projections€thatŠ ź: Šimplicitly€assume€a€baseline€of€negative€growth€inŠ –ę Šelectricity€generation€over€the€course€of€a€decade€appearŠ B’ Šarbitrary,šš€and€that€EPA€did€not€provide€a€recordŠ ī> Šexplanation€of€this€disparity.ņ ņó ó׃Yׯ ƒN)ĆŻņņŚ  Ś2Ś  ŚóóŻ  Ż×  ׊ šź Šą ` ąThe€Court€then€observed€that€although€EPA€relied€on€IPMŠ F –! Šprojections€for€the€2001„2010€period,€EPA€had€admitted€thatŠ ņ!B# Šit€had€IPM€projections€for€2007,€as€well€as€for€the€1996„Š ž#ī% Š2001€period.€€The€Court€quoted€statements€in€EPAššs€ResponseŠ J%š ' Što€Comments€document€indicating€that€EPA€relied€on€the€2001„Š ö&F") Š2010€IPM€growth€projections€to€grow€emissions€from€1996€andŠ ° Šthereby€determine€the€2007€EGU€budgets,€but€then€relied€onŠ \¬ ŠIPM€growth€projections€for€1996„2001€and€2001„2010€ņ ņó ótoŠ X Šanalyze€the€costs€of€complying€with€those€budgets.€€TheŠ “  ŠCourt€concluded€that€EPA€failed€to€explain€why€it€used€twoŠ ` ° Šsets€of€growth€rates€for€different€purposes.׃Qׯ ƒN)ĆŻņņŚ  Ś3Ś  ŚóóŻ  Ż×  ׀€ņņņ ņóóó óFor€theseŠ  \  Šreasons,€the€Court€remanded€š šso€that€the€agency€may€fulfillŠ ø  Šits€obligation€to€engage€in€reasoned€decisionmaking€on€howŠ d“  Što€set€EGU€growth€factors€and€explain€why€results€thatŠ `  Šappear€arbitrary€on€their€face€are,€in€fact,€reasonableŠ ¼  Šdeterminations.šš€€ņņId.óó€at€1053„55.ņņņ ņóóó óŠ hø Šņņóóņ ņ3.€€ņņAppalachian€Power€v.€EPAóó€(Technical€Amendments)ó ó.€€OnŠ d ŠJune€8,€2001,€a€third€panel€of€the€D.C.€Circuit€decidedŠ Ü, Šchallenges€to€the€Technical€Amendments.€€ņņAppalachian€PowerŠ ˆŲ ŠCompany€v.€EPAóó,€251€F.3d€1026€(D.C.€Cir.€2001).€€ņ ņó óAlthoughŠ 4„ Šlargely€upholding€the€Technical€Amendments,€the€CourtŠ ą0 Šremanded€the€EGU€growth€rates.€€The€Court€recognized€that€itŠ ŒÜ  Šš šconfronted€nearly€identical€challenges€to€the€EPAššs€use€ofŠ 8!ˆ" Šgrowth€factors€to€estimate€baseline€NOX€emissions€for€2007Š ä"4$ Šin€the€section€126€litigation,šš€and€remanded€for€the€sameŠ $ą& Šreasons.€€ņņId.óó€at€1034„35.ņņņ ņóóó óŠ <&Œ!( Šņ ņII.€New€Documentsó 󀀀€€Š č'8#* Šą ` ąEPA€is€placing€the€information€described€below€in€theŠ ° Šdocket.€€This€information€is€being€placed€in€the€NOx€SIPŠ \¬ ŠCall€rulemaking€docket,€A„96„46;€and€incorporated€byŠ X Šreference€into€the€Section€126€rulemaking€docket,€A„97„43,Š “  ŠII„L„01.ņ ņó óŠ ` ° Š1.€1995€through€2000€ozone€season€heat€input€values€forŠ  \  ŠEGUs,€at€the€unit€level,€in€the€SIP€Call€Region.€ņ ņ€ó óFor€unitsŠ ø  Šsubject€to€the€Acid€Rain€Program,€these€values€wereŠ €Š  Šcalculated€based€on€hourly€data€reported€to€EPA€forŠ ,|  Šcompliance€with€the€Acid€Rain€Programs.€€For€other€units€notŠ Ų( Šsubject€to€the€Acid€Rain€Program,€these€values€were€based€onŠ „Ō Šmonthly€data€reported€to€the€Energy€InformationŠ 0€ ŠAdministration€(EIA).€€The€1995€and€1996€unit€level€data€isŠ Ü, Šthe€same€data€used€during€the€SIP€Call€rulemaking.€€Most€ofŠ ˆŲ Šthe€1997€and€1998€data€was€placed€in€the€docket€as€part€ofŠ 4„ Šthe€Section€126€rulemaking,€but€data€for€some€additionalŠ ą0 Šunits€for€those€years€has€been€added.€€In€addition,€post„Š ŒÜ  Š1998€data€has€been€added.€€Docket€no.€A„96„56,€XIV„C„01.ņ ņó ó€Š 8!ˆ" ŠTable€1€summarizes€1995„2000€ozone€season€heat€input€valuesŠ ä"4$ Šfor€EGUs€on€a€State„by„State.Ō#†XśˆXX`X0Ł'#ŌŌ‡`X0ŁXXXśˆŌŠ  $ą& ŠŃTRP$Ų'3 Letter LandscapeXą3Ų' LetterŲ'3 Letter Landscape’3Ų'TŃņ ņŃ€D5ŃŃTable€1:€Actual€Heat€Input,€1995„2000€(ozone€season,€total€mmBtu)ó óŌ‡`ō”āņX`X0ŁŌŠ ° ŠŌ*‹ƒ@;Bddd Xdd Xdd Xą.ą.‹ŌŌ,£( ŌŌ,'0ŌŌ,F0ŌŌ,F0ŌŌ,F0ŌŌ,F0ŌŌ,F0ŌŌ+  ŌŠ 2(tÄtÄ ‚8‚ƒƒ„„ˆˆ2ŠStateŠ UK¬ü ,Ÿ@1995„„ˆ‚ˆ‰,Ÿ@‰UŠÓ  Ó1995Š vl9¬ü ‚ ,Ÿ@1995 ,Ÿ@ 0Ÿ@1996„„ˆ‚ˆ‰0Ÿ@‰vŠÓ  Ó1996Š vl9¬ü ‚ 0Ÿ@1996 0Ÿ@ 4Ÿ@1997„„ˆ‚ˆ‰4Ÿ@‰vŠ1997Š vl9¬ü"‚ 4Ÿ@1997 4Ÿ@ 8Ÿ@1998„„ˆ‚ˆ‰8Ÿ@‰vŠ1998Š vl9¬ü"‚ 8Ÿ@1998 8Ÿ@ <Ÿ@1999„„ˆ‚ˆ‰<Ÿ@‰vŠ1999Š vl9¬ü"‚ <Ÿ@1999 <Ÿ@ @Ÿ@2000„„ˆ‚ˆ‰@Ÿ@‰vŠ2000Š bX?¬ü "‚ @Ÿ@2000 8 @Ÿ@ ‚(‚ƒƒ„„ˆˆbŠALŠ \Rą  433ÄzŻ“A 350059204.2„„ˆ†ˆ‰433ÄzŻ“A‰\Š350,059,204Š ‚x@ą 3† 433ÄzŻ“A 350059204.2 433ÄzŻ“A Nnź“A 350907982„„ˆ†ˆ‰Nnź“A‰‚Š350,907,982Š €v>ą 3† Nnź“A 350907982 Nnź“A 4–į“A 350328372„„ˆ†ˆ‰4–į“A‰€Š350,328,372Š €v>ą 3† 4–į“A 350328372 4–į“A Xk ¶A 369978200„„ˆ†ˆ‰Xk ¶A‰€Š369,978,200Š €v>ą3† Xk ¶A 369978200 Xk ¶A ’’’ģ:5·A 389364461„„ˆ†ˆ‰’’’ģ:5·A‰€Š389,364,461Š „z>ą3† ’’’ģ:5·A 389364461 ’’’ģ:5·A  Łŗ ā·A 400689850.078 „„ˆ†ˆ‰Łŗ ā·A‰„Š400,689,850Š pfHą3† Łŗ ā·A 400689850.078 ( Łŗ ā·A €4€‚(‚ƒƒ„„ˆˆpŠCTŠ ^TtÄ  (‹œŹī†A 48093523.5679 „„ˆ†ˆ‰(‹œŹī†A‰^Š48,093,524Š ˆ~BtÄ3† (‹œŹī†A 48093523.5679 (‹œŹī†A  vąæ!iA 61678647.8891 „„ˆ†ˆ‰vąæ!iA‰ˆŠ61,678,648Š ƒyBtÄ3† vąæ!iA 61678647.8891 vąæ!iA 8³ŽA64381511„„ˆ†ˆ‰8³ŽA‰ƒŠ64,381,511Š ~t=tÄ3† 8³ŽA64381511 8³ŽA .üŠA56591808„„ˆ†ˆ‰.üŠA‰~Š56,591,808Š €v=tÄ3† .üŠA56591808 .üŠA ĢĢĢŽ°’A 75967543.7„„ˆ†ˆ‰ĢĢĢŽ°’A‰€Š75,967,544Š …{?tÄ3† ĢĢĢŽ°’A 75967543.7 ĢĢĢŽ°’A  Q‡UĆó=A 61324920.4168 „„ˆ†ˆ‰Q‡UĆó=A‰…Š61,324,920Š ukMtÄ3† Q‡UĆó=A 61324920.4168 ( 4 Q‡UĆó=A €4€‚(‚ƒƒ„„ˆˆuŠDCŠ XNX Ø bź>A2026082„„ˆ†ˆ‰bź>A‰XŠ2,026,082Š {q<X Ø3† bź>A2026082 bź>A ŠL’@128205„„ˆ†ˆ‰ŠL’@‰{Š128,205Š zp;X Ø3† ŠL’@128205 ŠL’@ ¬µ#A645846„„ˆ†ˆ‰¬µ#A‰zŠ645,846Š {q;X Ø3† ¬µ#A645846 ¬µ#A óĄGA3113446„„ˆ†ˆ‰óĄGA‰{Š3,113,446Š |r<X Ø3† óĄGA3113446 óĄGA €€6HA3173633„„ˆ†ˆ‰€€6HA‰|Š3,173,633Š ‚x<X Ø3† €€6HA3173633 €€6HA  Āųiœ8š1A 1153592.61099 „„ˆ†ˆ‰Āųiœ8š1A‰‚Š1,153,593Š ukMX Ø3† Āųiœ8š1A 1153592.61099 ( 4 Āųiœ8š1A 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( 4 å¶U« ¹A €4€‚(‚ƒƒ„„ˆˆuŠILŠ ZP T- ”Õ½“A 347985300„„ˆ†ˆ‰”Õ½“A‰ZŠ347,985,300Š €v> T.3† ”Õ½“A 347985300 ”Õ½“A Ą†—¶A 379029184„„ˆ†ˆ‰Ą†—¶A‰€Š379,029,184Š €v> T/3† Ą†—¶A 379029184 Ą†—¶A 5øA 406127886„„ˆ†ˆ‰5øA‰€Š406,127,886Š €v> T03† 5øA 406127886 5øA ¬£ąŗA 450929580„„ˆ†ˆ‰¬£ąŗA‰€Š450,929,580Š „z> T13† ¬£ąŗA 450929580 ¬£ąŗA  g½Ź•šøA 418420170.565 „„ˆ†ˆ‰g½Ź•šøA‰„Š418,420,171Š ˆ~B T23† g½Ź•šøA 418420170.565 g½Ź•šøA  )Ģ Y¢ż¹A 436052569.628 „„ˆ†ˆ‰)Ģ Y¢ż¹A‰ˆŠ436,052,570Š ukM T33† )Ģ Y¢ż¹A 436052569.628 ( 4 )Ģ Y¢ż¹A €4€‚(‚ƒƒ„„ˆˆuŠINŠ ]Sč 84 XW Z¬¾A 514611872.34„„ˆ†ˆ‰XW Z¬¾A‰]Š514,611,872Š ‡}Ač 853† XW Z¬¾A 514611872.34 XW Z¬¾A  ū~ŚÉ›6æA 523672521.854 „„ˆ†ˆ‰ū~ŚÉ›6æA‰‡Š523,672,522Š „zBč 863† ū~ŚÉ›6æA 523672521.854 ū~ŚÉ›6æA „žæA 536772484„„ˆ†ˆ‰„žæA‰„Š536,772,484Š €v>č 873† „žæA 536772484 „žæA ž2ĮA 577059852„„ˆ†ˆ‰ž2ĮA‰€Š577,059,852Š €v>č 883† ž2ĮA 577059852 ž2ĮA ¶[XĮA 582006636„„ˆ†ˆ‰¶[XĮA‰€Š582,006,636Š ƒy>č 893† ¶[XĮA 582006636 ¶[XĮA õæ‘27æA 523711121.75„„ˆ†ˆ‰õæ‘27æA‰ƒŠ523,711,122Š tjLč 8:3† õæ‘27æA 523711121.75 ( 4 õæ‘27æA €4€‚(‚ƒƒ„„ˆˆtŠKYŠ ZPĢ  ; ›QwøA 410472859„„ˆ†ˆ‰›QwøA‰ZŠ410,472,859Š €v>Ģ  <3† ›QwøA 410472859 ›QwøA ÆÉ±øA 414304687„„ˆ†ˆ‰ÆÉ±øA‰€Š414,304,687Š €v>Ģ  =3† ÆÉ±øA 414304687 ÆÉ±øA –f:øA 406480534„„ˆ†ˆ‰–f:øA‰€Š406,480,534Š €v>Ģ  >3† –f:øA 406480534 –f:øA ō®½¹A 431861492„„ˆ†ˆ‰ō®½¹A‰€Š431,861,492Š €v>Ģ  ?3† ō®½¹A 431861492 ō®½¹A ±&*»A 455747249„„ˆ†ˆ‰±&*»A‰€Š455,747,249Š „z>Ģ  @3† ±&*»A 455747249 ±&*»A  £Némo¹A 426732828.911 „„ˆ†ˆ‰£Némo¹A‰„Š426,732,829Š ukMĢ  A3† £Némo¹A 426732828.911 ( 4 £Némo¹A €4€‚(‚ƒƒ„„ˆˆuŠMAŠ ^T° B  °įi®bĢA 124983467.603 „„ˆ†ˆ‰°įi®bĢA‰^Š124,983,468Š ˆ~B° C3† °įi®bĢA 124983467.603 °įi®bĢA  PüX1›A 113298531.337 „„ˆ†ˆ‰PüX1›A‰ˆŠ113,298,531Š „zB° D3† PüX1›A 113298531.337 PüX1›A ¤Ł†A 123844201„„ˆ†ˆ‰¤Ł†A‰„Š123,844,201Š €v>° E3† ¤Ł†A 123844201 ¤Ł†A †r6 A 136001859„„ˆ†ˆ‰†r6 A‰€Š136,001,859Š ‚x>° F3† †r6 A 136001859 †r6 A ĶĢĢ”“”A 147443918.9„„ˆ†ˆ‰ĶĢĢ”“”A‰‚Š147,443,919Š ‚x@° G3† ĶĢĢ”“”A 147443918.9 ĶĢĢ”“”A lV¤A 124327323„„ˆ†ˆ‰lV¤A‰‚Š124,327,323Š qgI° H3† lV¤A 124327323 ( 4 lV¤A €4€‚(‚ƒƒ„„ˆˆqŠMDŠ ZP”ä I 4”A 143395098„„ˆ†ˆ‰4”A‰ZŠ143,395,098Š €v>”ä J3† 4”A 143395098 4”A D N A 136794146„„ˆ†ˆ‰D N A‰€Š136,794,146Š €v>”ä K3† D N A 136794146 D N A ś}k”A 146128637„„ˆ†ˆ‰ś}k”A‰€Š146,128,637Š €v>”ä L3† ś}k”A 146128637 ś}k”A ×ø„A 182217612„„ˆ†ˆ‰×ø„A‰€Š182,217,612Š €v>”ä M3† ×ø„A 182217612 ×ø„A €„ī„A 183980736„„ˆ†ˆ‰€„ī„A‰€Š183,980,736Š „z>”ä N3† €„ī„A 183980736 €„ī„A  ¦z"ļ—Į”A 148950007.567 „„ˆ†ˆ‰¦z"ļ—Į”A‰„Š148,950,008Š ukM”ä O3† ¦z"ļ—Į”A 148950007.567 ( 4 ¦z"ļ—Į”A €4€‚(‚ƒƒ„„ˆˆuŠMIŠ ^TxČ P  tŠN{*”µA 362883707.307 „„ˆ†ˆ‰tŠN{*”µA‰^Š362,883,707Š ˆ~BxČ Q3† tŠN{*”µA 362883707.307 tŠN{*”µA  ¶„l^\ó“A 351493214.424 „„ˆ†ˆ‰¶„l^\ó“A‰ˆŠ351,493,214Š ‡}BxČ R3† ¶„l^\ó“A 351493214.424 ¶„l^\ó“A > דBµA 356684563.84„„ˆ†ˆ‰> דBµA‰‡Š356,684,564Š ƒyAxČ S3† > דBµA 356684563.84 > דBµA 5xČ T3† 5xČ U3† x¶£·A 396605048 x¶£·A 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Šgeneration.€€Docket€no.€A„96„56,Ō#†XśˆXX`X0Ł”j#ŌŌ‡`X0ŁXXXśˆŌ€XIV„C„04.Š €Š  Šc.€€Generation€dataš!šutility€ozone€season€nuclear€netŠ ,|  Šgeneration.€€Docket€no.€A„96„56,Ō#†XśˆXX`X0ŁŚČ#ŌŌ‡`X0ŁXXXśˆŌ€XIV„C„05.€€ņ ņó óŠ Ų( Š4.€EIA€State€summaries€of€information€related€to€electricalŠ „Ō Šgeneration€and€use€(1988,€1993,€and€1998)Š 0€ Ša.€€Historic€annual€power€generation€and€sales.€€Docket€no.Š Ü, ŠA„96„56,Ō#†XśˆXX`X0٧É#ŌŌ‡`X0ŁXXXśˆŌ€XIV„C„06.Š ˆŲ Šb.€€Historic€fossil„fuel„fired€generation€and€allŠ 4„ Šgeneration.€€Docket€no.€A„96„56,Ō#†XśˆXX`X0ŁöŹ#ŌŌ‡`X0ŁXXXśˆŌ€XIV„C„Ō#†XśˆXX`X0ٽĖ#ŌŌ‡`X0ŁXXXśˆŌ15.Š ą0 Š5.ņ ņó ó€š šPower€Companies€Efforts€to€Comply€with€the€NOx€SIP€CallŠ ŒÜ  Šand€Section€126,"€NESCAUM€(May€31,€2001).€€This€documentŠ 8!ˆ" Šsummarizes€published€reports€regarding€power€companiesššŠ ä"4$ Šintentions€to€install€selective€catalytic€reduction€(SCR)€toŠ $ą& Šmeet€the€requirements€of€the€NOx€SIP€Call.€€ņ ņó óDocket€no.€A„96„Š <&Œ!( Š56,Ō#†XśˆXX`X0ŁĢ#ŌŌ‡`X0ŁXXXśˆŌ€XIV„C„Ō#†XśˆXX`X0ŁĪ#ŌŌ‡`X0ŁXXXśˆŌ07.Š č'8#* Š6.€Information€as€to€the€geographic€location€of€units€ownedŠ ”)ä$, Šby€particular€utility€companies.ņ ņ€€ó óDocket€no.€A„96„56,Ō#†XśˆXX`X0ŁIĪ#ŌŌ‡`X0ŁXXXśˆŌ€XIV„C„Š @+&. ŠŌ#†XśˆXX`X0Ł.Ļ#ŌŌ‡`X0ŁXXXśˆŌ08.Š ° Š7.ÓB.°°` ø hĄpČ xŠ (#°œXBӀÓB.°°` ø hĄpČ xŠ (#°°XBÓInformation€concerning€effectiveness€of€ņ ņó óSCR€in€achievingŠ \¬ Šemissions€reductions€greater€than€90€percent.ņ ņó óŠ X Ša.€Press€release€from€American€Electric€Power€(AEP)Š “  Šannouncing€plans€to€install€SCR€at€the€John€E.€Amos€PlantŠ ` ° Šand€the€Mountaineer€Plant€(Jan.€29,€2000).€€Docket€no.€A„96„Š  \  Š56,Ō#†XśˆXX`X0ٌĻ#ŌŌ‡`X0ŁXXXśˆŌ€XIV„C„Ō#†XśˆXX`X0ŁņŃ#ŌŌ‡`X0ŁXXXśˆŌ09.Š ø  Šb.€Press€release€from€AEP€announcing€plants€to€install€SCRŠ d“  Šat€the€Big€Sandy€Plant€(April€6,€2000).€€Docket€no.€A„96„56,Ō#†XśˆXX`X0Ł;Ņ#ŌŌ‡`X0ŁXXXśˆŌŠ `  ŠXIV„C„Ō#†XśˆXX`X0Ł Ó#ŌŌ‡`X0ŁXXXśˆŌ10.Š ¼  Šc.€š šCommissioning€Experience€on€the€SCR€Retrofit€atŠ hø ŠPennsylvania€Power€and€Lightššs€775€MW€Montour€Station€UnitŠ d Š2,"Tom€Robinson,€Babcock€Borsig€Power€Inc,€.presented€atŠ Ą Š2001€Conference€on€Selective€Catalytic€Reduction€and€Non„Š l¼ ŠCatalytic€Reduction€for€NOx€Control,€May€16„18,€2001.€Š h ŠDocket€no.€A„96„56,Ō#†XśˆXX`X0Ł}Ó#ŌŌ‡`X0ŁXXXśˆŌ€XIV„C„Ō#†XśˆXX`X0ŁmÕ#ŌŌ‡`X0ŁXXXśˆŌ11.Š Ä Šd.€š šFirst€Yearššs€Operating€Experience€with€SCR€on€600€MWŠ pĄ  ŠPRB„Fired€Boiler,šš€Dave€Harris,€Black€and€Veatch,€presentedŠ !l" Šat€2001€Conference€on€Selective€Catalytic€Reduction€and€Non„Š Č"$ ŠCatalytic€Reduction€for€NOx€Control,€May€16„18,€2001.€Š t$Ä& Šņ ņó óDocket€no.€A„96„56,Ō#†XśˆXX`X0ٶÕ#ŌŌ‡`X0ŁXXXśˆŌ€XIV„C„Ō#†XśˆXX`X0Łk×#ŌŌ‡`X0ŁXXXśˆŌ12.Š  &p!( Š8.a.€š šReview€of€Potential€Efficiency€Improvements€at€CoalŠ Ģ'#* ŠFired€Power€Plants,šš€April€17,€2000.€€Docket€no.€A„96„56,Ō#†XśˆXX`X0Ł“×#ŌŌ‡`X0ŁXXXśˆŌŠ x)Č$, ŠXIV„C„Ō#†XśˆXX`X0Ł›Ų#ŌŌ‡`X0ŁXXXśˆŌ13.ņ ņó óŠ $+t&. Šņņóóņ ņó ób.€š šIncreasing€Electricity€Availability€from€Coal„FiredŠ ° ŠGeneration€in€the€Near€Term,šš€National€Coal€Council,€MayŠ \¬ Š2001.€€Docket€no.€A„96„56,Ō#†XśˆXX`X0ŁųŲ#ŌŌ‡`X0ŁXXXśˆŌ€XIV„C„Ō#†XśˆXX`X0ŁŚ#ŌŌ‡`X0ŁXXXśˆŌ14.ņ ņó óŠ X Š9.€€š šThe€Changing€Structure€of€the€Electric€Power€Industry€„Š “  Š„€2000;€An€Updatešš,€Energy€Information€AdministrationŠ ` ° Š(October€2000).Ō#†XśˆXX`X0ŁfŚ#ŌŌ‡`X0ŁXXXśˆŌ€€Docket€no.€A„96„56,€XIV„C„16.Š  \  Šą ` ąEPA€may€place€additional€documents€in€the€docket,€andŠ ø  Šif€EPA€does€so,€EPA€will€announce€their€availability€byŠ d“  Šposting€a€notice€on€theŠ `  ŠŌ4‚ ŠŌŻ‚ ĶOŻŌ’ŌņņŻ  ŻŌ5  Ōhttp://www.epa.gov/airmarkets/fedNOx/126noda/.Ō6—ÜŌŻ‚ ĶO«Ü ŻóóŌ’ŌŻ  ŻŌ7Š˜ŁÜŌ€web€site.ņ ņó óŠ ¼  Šņ ņIII.€EPAššs€Response€to€Remandsó óŠ hø ŠÓ€  !"(ąČx3#Óą ` ąEPA€is€considering€its€response€to€all€issues€raised€byŠ 0€ Šthe€Court€in€its€remand€of€the€EGU€growth€issue.€€OurŠ Ü, Špreliminary€view,€based€on€the€record€in€the€NOx€SIP€CallŠ ˆŲ Šand€Section€126€rulemakings,€is€that€EPAššs€growth€rateŠ 4„ Šmethodology€was€reasonable.€€As€a€result,€we€intend€toŠ ą0 Šprovide€a€more€robust€rationale€for€that€methodology,€takingŠ ŒÜ  Šinto€account€the€concerns€expressed€by€the€Court.€€We€areŠ 8!ˆ" Šalso€examining€additional€data.€€Our€preliminary€review€ofŠ ä"4$ Šthat€data€indicates€that€they€appear€to€confirm€theŠ $ą& Šreasonableness€of€the€growth€rate€methodology.€€We€inviteŠ <&Œ!( Šcomment€on€the€new€data.Š č'8#* Šņ ņó óą ` ąAs€described€above,€to€determine€each€Stateššs€2007€EGUŠ ”)ä$, ŠBudget,€EPA€began€with€each€Stateššs€heat€input,€expressed€inŠ @+&. Šmillion€Btu€(per€ozone€season€for€large€fossil„fuel„firedŠ ° Šunits),€for€1995€and€1996,€and€chose€the€higher€of€those€twoŠ \¬ Šamounts€as€the€1996€baseline€for€that€State.€€EPA€thenŠ X Šcomputed€a€growth€factor€equal€to€the€average€annualŠ “  Šincrease€in€heat€input€predicted€by€IPM€for€that€State€fromŠ ` ° Š2001€to€2010.€€EPA€applied€each€Stateššs€growth€factor€toŠ  \  Šeach€Stateššs€baseline,€to€grow€the€baseline€from€1996€toŠ ø  Š2007.€€EPA€then€applied€the€emission€rate€of€0.15€pounds€ofŠ d“  ŠNOx€per€million€Btu€to€each€Stateššs€predicted€2007€heatŠ `  Šinput.€€The€result€is€each€Stateššs€2007€EGU€Budget,Š ¼  Šexpressed€in€tons€of€NOx€emissions€per€ozone€season.Š hø Šą ` ąAs€described€above,€the€Court€expressed€severalŠ d Šconcerns€with€EPAššs€growth€rate€methodology.€€In€particular,Š Ą Šthe€Court€was€concerned€that€some€States€had€higher€levelsŠ l¼ Šof€heat€input€in€1998€than€EPA€had€projected€for€2007.€€MoreŠ h Šbroadly,€the€Court€was€concerned€that€EPA€did€not€adequatelyŠ Ä Šexplain€why€it€used€its€method,€rather€than€another€method,Š pĄ  Šincluding€the€direct€use€of€IPMššs€projected€2007€heat€input.€Š !l" ŠThe€Court€was€also€concerned€with€EPAššs€explanation€of€whyŠ Č"$ Šthe€accuracy€of€its€projections€on€a€regional€level€offsetŠ t$Ä& Špossible€inaccuracies€in€individual€State€projections.€Š  &p!( ŠFinally,€the€Court€was€also€troubled€by€EPAššs€apparent€useŠ Ģ'#* Šof€two€different€sets€of€growth€rates€for€different€purposesŠ x)Č$, Š(the€establishment€of€the€budgets€and€the€analysis€of€theŠ $+t&. Šcosts€of€the€control€measures).Š ° Šņ ņA.€€Actual€Heat€Input;€Reasons€for€State„by„StateŠ \¬ ŠFluctuationsó óŠ $t Šą ` ąTo€begin€to€address€the€Courtššs€concerns€that€someŠ ģ < ŠStatesšš€actual€heat€input€levels€already€exceed€EPAššsŠ ˜ č Šprojections€for€2007,€we€are€examining€available€dataŠ D ”  Šconcerning€actual€heat€input€for€the€affected€States.€€TheseŠ š@  Šinclude€the€amounts€of€actual€heat€input€for€each€stateŠ œģ  Šaffected€by€the€SIP€Call€and€Section€126€rulemakings€for€theŠ H˜  Šyears€1995„2000.€€A€summary€table€of€these€amounts€isŠ ōD Šincluded€in€Table€1€above.Š  š Šņ ņó óą ` ąIn€the€Section€126€Case,€some€litigants€identified€twoŠ Lœ ŠStates,€Michigan€and€West€Virginia,€as€having€actual€heatŠ ųH Šinput€in€1998€higher€than€EPAššs€2007€projection,€which€ledŠ ¤ō Šthe€Court€to€express€concern€about€the€accuracy€of€EPAššsŠ P  Šmethod€of€projecting€growth.€€We€note,€however,€that€bothŠ üL ŠStates€had€actual€heat€input€in€2000€that€was€moreŠ Øų  Šconsistent€with€what€EPA€projected€for€the€year€2007.€Š T!¤" ŠMichiganššs€2000€heat€input€was€substantially€lower€than€itsŠ #P$ Šheat€input€in€1998€as€well€as€the€2007€projection.€€WestŠ ¬$ü& ŠVirginiaššs€heat€input€for€2000€was€also€lower€than€in€1998Š X&Ø!( Šor€1999.€€This€indicates€that€there€can€be€considerableŠ (T#* Švariability€in€the€year„by„year€heat€input€amounts€forŠ °)%, Šindividual€States.Š \+¬&. Šą ` ąIndeed,€a€review€of€the€State„by„state€heat€inputŠ ° Šamounts€for€the€years€1995€to€2000€in€Table€1€does€indicateŠ \¬ Šthat€many€States€experienced€substantial€fluctuations€on€aŠ X Šyear„by„year€basis€as€well€as€sharply€differing€multi„yearŠ “  Špatterns€from€each€other.€€To€return€to€Michigan,€thatŠ ` ° ŠStateššs€heat€input€fell€between€1995€to€1997,€roseŠ  \  Šsubstantially€in€1998,€and€fell€again€during€1999€and€2000.€Š ø  ŠIndianaššs€heat€input€rose€steadily€from€1995€to€1999,€but€inŠ d“  Š2000,€fell€to€1996€levels.€€New€Jerseyššs€pattern€was€almostŠ `  Šthe€opposite€of€Indianaššs.Ō#†XśˆXX`X0ŁvŪ#ŌŌ‡`X0ŁXXXśˆŌŠ ¼  Šą ` ąMany€factors€may€combine€to€cause€heat€input€amountsŠ hø Šfor€any€particular€State€for€any€particular€year€to€varyŠ d Šwidely€over€a€short„term€period.€These€factors€include,Š Ą Šamong€others,Š l¼ ŠÓ€ ] !(ńxx !"ÓŻ"‚3£"ŻŻ  ŻŻ‚3£OõŻŌ2ńŌš"šŌ3  Ōą0 ` ąŻ  ŻForced€outages€(generating€units€may€be€required€toŠ h Šshut€down€for€unexpected€reasons,€which€would€shiftŠ Ä Šheat€input€to€another€State);Żƒ3£Oõ|õ݌ŠpĄ ` (#` (# ŠŒŻ  ŻÓ€ P !(įxx] !ÓŻ"‚3£"ŻŻ  ŻŻ‚3£3÷ŻŌ2įŌš"šŌ3  Ōą0 ` ąŻ  ŻVariations€in€energy€costs€(ņņe.g.óó,€a€drop€in€natural€gasŠ !l" Šprices€may€attract€generation€to€natural€gas€firedŠ Č"$ Šunits€in€one€State€and€away€from€coal€fired€units€inŠ t$Ä& Šanother€State);Żƒ3£3÷`÷݌Š &p!(` (#` (# ŠŒŻ  ŻŻ"‚3£"ŻŻ  ŻŻ‚3£ŚųŻŌ2įŌš"šŌ3  Ōą0 ` ąŻ  ŻThe€implementation€of€environmental€controls€by€theŠ Ģ'#* Šsources€in€one€State€(which€may€shift€heat€input€toŠ x)Č$, Šanother€State);Żƒ3£Śųł݌Š$+t&.` (#` (# ŠŒŻ  ŻŻ"‚3£"ŻŻ  ŻŻ‚3£/śŻŌ2įŌš"šŌ3  Ōą0 ` ąŻ  ŻThe€start„up€of€new€units€that€are€more€efficient€(andŠ ° Šthereby€take€up€more€generation€and€reduce€overall€heatŠ \¬ Šinput);Żƒ3£/ś\ś݌ŠX` (#` (# ŠŒŻ  ŻŻ"‚3£"ŻŻ  ŻŻ‚3£ƒūŻŌ2įŌš"šŌ3  Ōą0 ` ąŻ  ŻElectricity€transmission€problems€(which€may€require€aŠ “  ŠState€that€imports€electricity€to€do€so€from€aŠ ` ° Šdifferent€geographic€area,€which€may,€in€turn,€resultŠ  \  Šin€heat€input€shifts);Żƒ3£ƒū°ū݌Šø ` (#` (# ŠŒŻ  ŻŻ"‚3£"ŻŻ  ŻŻ‚3£'żŻŌ2įŌš"šŌ3  Ōą0 ` ąŻ  ŻWeather€patterns;Żƒ3£'żTż݌Šd“ ` (#` (# ŠŒŻ  ŻŻ"‚3£"ŻŻ  ŻŻ‚3£īżŻŌ2įŌš"šŌ3  Ōą0 ` ąŻ  ŻEconomic€variability€(industry€in€one€region€mayŠ `  Šexperience€a€boom€and€require€more€electricity);Żƒ3£īżž݌м ` (#` (# ŠŒŻ  ŻŻ"‚3£"ŻŻ  ŻŻ‚3£’ŻŌ2įŌš"šŌ3  Ōą0 ` ąŻ  ŻVariations€in€availability€of€non„fossil„fuel„firedŠ hø Šunits,€including€nuclear€or€hydropower.Żƒ3£’F’݌Šd` (#` (# ŠŒŻ  Żą ` ąņ ņó óIt€should€be€noted€that€fossil€fuel€heat€input€growthŠ Ą Šand€decreases€do€not€directly€correlate€to€growth€andŠ l¼ Šdecreases€in€electricity€generation.׃ׯ ƒN)ĆŻņņŚ  Ś4Ś  ŚóóŻ  Ż×  ׀€Indeed,€from€1998„Š h Š2000,€electricity€generation€in€the€SIP€Call€area€increased,Š Ä Šbut€heat€input€decreased.€€These€results€seem€to€beŠ pĄ  Šattributable€in€part€to€some€of€the€factors€noted€above,Š !l" Šincluding€the€greater€efficiency€in€2000€of€some€units,€andŠ Č"$ Šgreater€reliance€in€2000€on€nuclear€or€other€non„fossil„fuelŠ t$Ä& Šfired€units.€€Short„term€swings€in€fuel€costs€andŠ  &p!( Šelectricity€demand€(either€of€which€could€be€related€to€theŠ ° Šweather,€among€many€other€factors)€could€also€result€inŠ \¬ Šsignificant€year„by„year,€and€State„by„state,€variations€inŠ X Šheat€input.€€To€further€analyze€the€difference€between€heatŠ “  Šinput€and€electricity€generation,€EPA€is€reviewingŠ ` ° Šelectrical€generation€and€electrical€sales€data€compiled€byŠ  \  ŠEIAņ ņó ó.Š ø  Šą ` ąIt€should€be€emphasized€that€EPAššs€method€forŠ d“  Šprojecting€heat€input€for€the€year€2007€was€not€designed€toŠ `  Špredict€accurately€heat€input€on€a€state„by„state€basis€forŠ ¼  Šyears€before€2001.€€This€is€because€some€of€assumptionsŠ hø Šbuilt€into€the€IPM€model€for€the€later€years€in€the€2001„Š d Š2010€period€may€differ€from€what€exists€in€the€pre„2001Š Ą Šperiod.€€For€example,€in€1998,€utility€boilers€subject€toŠ l¼ ŠPhase€II€of€Title€IV€of€the€Clean€Air€Act€(the€Acid€RainŠ h ŠProgram),€were€not€constrained€by€any€emission€limitationsŠ Ä Šunder€the€Acid€Rain€Program.€€By€2007,€these€units€will€beŠ pĄ  Šsubject€to€both€SOņņ2óó€and€NOxņņóó€limitations.ņ ņ€€ó óThese€limits€areŠ !l" Šlikely€to€increase€operating€costs.€€As€a€result,€the€state„Š ä"4$ Šby„state€pattern€of€heat€input€projected€by€the€IPM€modelŠ $ą& Šonce€these€limits€are€in€place€would€differ€from€the€patternŠ <&Œ!( Šof€heat€input€that€would€occur€during€the€pre„2001€period.Ō#†XśˆXX`X0يó#ŌŌ‡`X0ŁXXXśˆŌŠ č'8#* Šą ` ąIn€particular,€the€different€schedules€forŠ ”)ä$, Šimplementation€of€NOx€emission€controls€required€byŠ @+&. Šindividual€States€appear€to€have€been€a€factor€contributingŠ ° Što€the€significant€fluctuations€in€heat€input€levels€seenŠ \¬ Šduring€the€1998„2000€period.€€During€these€years,€ņ ņó óEGUs€inŠ X Šthe€Northeast€States€were€implementing€controls€at€levelsŠ “  Šthat€generally€are€more€stringent€than€those€required€in€theŠ ` ° Šrest€of€the€SIP€Call€region.€€For€the€most€part,€sources€inŠ  \  Šthe€Midwest€and€Southeast€were€not€yet€implementing€theŠ ø  ŠSection€126€Rule„level€controls.€€In€some€instances,€sourcesŠ d“  Šin€these€three€regions€compete€against€each€in€the€sameŠ `  Štransmission€grids.€€This€difference€in€timing€of€controlŠ ¼  Šcosts€could€be€expected€to€give€EGUs€in€the€Midwest€andŠ hø ŠSoutheast€a€competitive€advantage€over€their€NortheastŠ d Šcounterparts,€which€would€constitute€one€factor€leadingŠ Ą Štowards€higher€heat€input€levels€in€those€States,€and€lowerŠ l¼ Šlevels€in€the€Northeast,€during€this€time.€€ImplementationŠ h Šby€the€Midwest€and€Southeast€utilities€of€the€section€126€orŠ Ä ŠNOx€SIP€Call€controls€in€the€coming€years€would€be€a€factorŠ pĄ  Šleading€towards€lower€heat€input€in€those€States,€and€higherŠ !l" Šheat€input€in€the€Northeast€States.Ō#†XśˆXX`X0Ł #ŌŌ‡`X0ŁXXXśˆŌŠ Č"$ Šą ` ąAlthough€these€differences€in€control€assumptions€wouldŠ t$Ä& Šlead€to€different€patterns€of€heat€input€on€a€state„by„stateŠ  &p!( Šbasis€in€2000€than€in€2007,€they€would€not€have€asŠ Ģ'#* Šsignificant€an€impact€on€regionwide€heat€input.€€For€thisŠ x)Č$, Šreason,€EPA€continues€to€believe€that€regionwide€heat€inputŠ $+t&. Šfigures€are€a€better€measure€of€the€accuracy€of€EPAššsŠ ° Šmethodology€for€growth€calculations€than€state„by„stateŠ \¬ Šfigures.Š X Šą ` ąMost€importantly,€we€note€that€if€our€method€wereŠ “  Šapplied€to€the€year€2000,€that€is,€if€our€growth€factor€wereŠ ` ° Šapplied€to€grow€the€1996€baseline€out€to€2000,€ourŠ  \  Šprediction€of€regionwide€heat€input€would€be€6,250,350,677Š ø  ŠmmBtu.€€Compared€to€the€ÓB.°°` ø hĄpČ xŠ (#°°XBÓactual€heat€input€of€6,228,694,532Š d“  ŠmmBtu,€our€projection€differed€by€less€than€0.5€percent.€Š `  ŠEPA€fully€realizes€that€regionwide€heat€input€may€varyŠ ¼  Šsignificantly€year„to„year€due€to€various€factors€that€areŠ hø Šdifficult€to€predict.€€For€example,€regionwide€heat€inputŠ d Šwas€higher€in€1998€and€1999€than€in€2000,€a€phenomenon€thatŠ Ą Šwe€believe€may€have€been€due€in€part€to€unseasonably€hotŠ l¼ Šsummer€weather€in€1998€and€1999€in€significant€portions€ofŠ h Šthe€NOx€SIP€Call€region,€strong€economic€conditions,€and€theŠ Ä Štemporary€shut„down€of€large€non„fossil„fuel€poweredŠ pĄ  Šgeneration€resources€such€as€the€Cook€Nuclear€Power€Plant€inŠ !l" ŠMichigan.€€Even€so,€we€believe€that€the€match„up€of€the€2000Š Č"$ Šactual€heat€input€figure€and€the€figure€that€our€growth€rateŠ t$Ä& Šwould€have€projected€does€suggest€that€our€method€is€withinŠ  &p!( Šthe€range€of€reasonable€accuracy.Ō#†XśˆXX`X0ٚ#ŌŌ‡`X0ŁXXXśˆŌŠ Ģ'#* Šņ ņB.€€Reasons€for€Calculated€Approachó óŠ x)Č$, Šą ` ąOur€method€constitutes€a€calculated€method,€whichŠ @+&. Šrelies€on€both€a€baseline€amount€and€a€growth€factor.€€EPAŠ ° Šselected€this€approach,€instead€of€others,€such€as€directlyŠ \¬ Šusing€IPMššs€projected€2007€heat€input,€for€several€reasons.€Š X ŠIn€particular,€the€baseline€component€of€this€method€offersŠ “  Šseveral€advantages.€€First,€because€EPA€chose€for€theŠ ` ° Šbaseline€actual€heat€input€for€the€1995€or€1996€year,€theŠ  \  Šbaseline€is€reality€based.€€As€a€result,€this€baselineŠ ø  Šnecessarily€gives€the€EPA€method€a€more€accurate€beginningŠ d“  Špoint€than€any€model€could€provide.Š `  Šą ` ąMoreover,€using€a€calculation€method€with€a€baselineŠ ¼  Šbased€on€actual€heat€input€in€a€given€year€created€theŠ hø Šopportunity€to€mitigate€a€significant€problem€inherent€inŠ d Šheat€projection€methodology:€large,€year„to„year€swings€inŠ Ą Šprojected€heat€input€on€an€individual€state€basis.€€That€is,Š l¼ Šthe€amount€of€heat€input€for€any€given€year€could€fluctuateŠ h Šwidely€from€the€year€before€or€the€year€after€due€to€anŠ Ä Šunusual€confluence€of€factors.€ņ ņ€ó óThis€phenomenon€gives€riseŠ pĄ  Što€risk€that€in€2007,€an€individual€State€might€have€anŠ 8!ˆ" Šunusually€high€heat€input.€€Mindful€of€this€risk,€EPA,€inŠ ä"4$ Šselecting€the€baseline€for€each€State,€selected€the€higherŠ $ą& Šof€1995€or€1996€actual€heat€input.€€By€giving€States€anŠ <&Œ!( Šartificially€higher€baseline,€the€EPA€method€allowed€aŠ č'8#* Šcushion€to€protect€States€and€sources€against€undueŠ ”)ä$, Šfluctuations€in€heat€input.Š @+&. Šą ` ąFinally,€the€EPA€method€readily€allowed€for€updates€ofŠ ° Šthe€baseline€when€revised€or€more€detailed€information€forŠ \¬ Šindividual€sources€became€available€during€the€rulemaking.€Š X ŠAt€the€outset€of€the€rulemaking€process€for€the€NOx€SIPŠ “  ŠCall,€EPA€gathered€the€most€accurate€information€availableŠ ` ° Šconcerning€the€heat€input€of€EGUs€as€of€1995.€€However,€EPAŠ  \  Šwas€aware€that€this€information€would€be€subject€to€updatingŠ ø  Šand€refinement.€€Indeed,€States€and€sources€provided€EPAŠ d“  Šwith€a€steady€stream€of€revisions€to€this€baseline€data,Š `  Šwhich€resulted€in€the€publication€of€a€supplemental€noticeŠ ¼  Šof€proposed€rulemaking€for€the€SIP€Call,€extensions€of€theŠ hø Šcomment€periods,€and€two€rulemakings€providing€TechnicalŠ d ŠAmendments.€€EPA€found€it€much€more€practical€to€accommodateŠ Ą Šthese€updates€by€periodically€updating€the€baseline€numberŠ l¼ Š(and€thereby€moving€it€up€or€down)€and€arithmeticallyŠ h Šrecomputing€the€2007€EGU€budget€for€the€State,€rather€thanŠ Ä Što€input€revised€data€into€the€IPM€and€re„run€the€model,Š pĄ  Šwhich€would€be€expensive€and€time„consuming.Š !l" ŠŲ! !ŲӁ€ K(ŗł8xP !Óņ ņC.€€Growth€Factoró óŠ Č"$ Šą ` ąTo€the€baseline,€EPA€applied€a€growth€factor€based€onŠ $ą& ŠIPM€projections€for€heat€input€from€2001€to€2010.€Š <&Œ!( ŠSpecifically,€as€noted€above,€for€each€State,€EPA€dividedŠ č'8#* Šthe€heat€input€projected€for€the€year€2010€by€the€heat€inputŠ ”)ä$, Šfor€the€year€2001.€€EPA€then€arithmetically€converted€thisŠ @+&. Š9„year€ņ ņó ógrowth€factor€to€an€11„year€growth€factor,€and€usedŠ ° Šit€to€grow€the€1996€baseline€(including,€if€higher,€the€1995Š \¬ Šheat€input)€to€2007.ņ ņó óŠ X Šą ` ąAt€the€outset,€it€should€be€noted€that€EPA€considered€aŠ “  Šgrowth€rate€based€entirely€on€modeled€projections€for€bothŠ ` ° Šbeginning€point€(in€this€case,€2001)€and€end€point€(in€thisŠ  \  Šcase,€2010)€to€be€the€most€accurate€method€possible.€€EPAŠ ø  Šchose€not€to€develop€a€growth€rate€based€on€a€Stateššs€actualŠ d“  Š1996€baseline€heat€input€as€the€beginning€point€and€aŠ `  Šmodeled€heat€input€projection€(for€example,€the€IPMŠ ¼  Šprojection€for€2007€heat€input)€as€the€end€point.€€TheŠ hø Šreason€is€simply€that€either€method€would€need€to€rely€onŠ d Šthe€modeled€endpoint;€and€the€modeled€endpoint€wouldŠ Ą Šnecessarily€include€some€degree€of€systemic€inaccuracy€dueŠ l¼ Što€the€need€to€make€simplifying€assumptions€in€a€model€thatŠ h Šmay€vary€from€the€real€world,€or€due€to€unavoidableŠ Ä Šinaccuracies€of€the€model.€EPA€believed€that€theseŠ pĄ  Šlimitations€may€be€mitigated€to€some€extent€if€both€aŠ !l" Šmodeled€beginning€point€and€end€point€were€used.€€On€theŠ Č"$ Šother€hand,€if€an€actual€beginning€point€and€a€modeled€endŠ t$Ä& Špoint€are€used,€the€limitations€of€the€model€could€beŠ  &p!( Šexaggerated.Š Ģ'#* Šą ` ąFor€example,€in€many€cases,€EPA€depended€on€informationŠ x)Č$, Šfrom€various€sources€concerning€the€electricity€generatingŠ $+t&. Šcapacity€of€the€EGUs.€€If€the€information€provided€to€EPAŠ ° Šconcerning€a€particular€source€were€incorrectly€high,€IPMŠ \¬ Šwould€project€incorrectly€higher€electricity€generation€fromŠ X Šthe€EGU,€which,€in€turn,€would€lead€IPM€to€projectŠ “  Šincorrectly€high€heat€input€for€the€State€in€which€the€EGUŠ ` ° Šis€located.€€With€a€modeled€beginning€point€(2001€heat€inputŠ  \  Šprojection)€and€end€point€(2010€heat€input€projection),€theŠ ø  Šeffect€of€this€error€would,€as€a€matter€of€arithmetic,€beŠ d“  Šminimized.€€By€comparison,€with€an€actual€beginning€pointŠ `  Š(ņņe.g.óó,€a€1996€actual€baseline),€the€incorrectly€higher€heatŠ ¼  Šinput€in€the€modeled€endpoint€would€be€a€factor€tendingŠ hø Štowards€greater€inaccuracy.Š d Šą ` ąIn€understanding€why€EPA€selected€the€years€2001€toŠ Ą Š2010,€it€is€important€to€recognize€that€in€promulgating€theŠ l¼ ŠNOx€SIP€Call,€EPA€programmed€IPM€to€project€heat€input€andŠ h Šother€output€for€certain€years€between€2000€and€2021,€butŠ Ä Šnot€for€any€years€prior€to€2001.׃Rׯ ƒN)ĆŻņņŚ  Ś5Ś  ŚóóŻ  Ż×  ׀€IPMššs€projections,€whichŠ pĄ  Šincluded€heat€input,€NOx€emissions,€control€costs,€and€otherŠ !l" Šoutputs,€were€important€for€regulatory€purposes€in€and€afterŠ ° Šthe€year€2001,€but€not€before.€€To€have€generated€outputs,Š \¬ Šsuch€as€heat€input,€for€years€prior€to€2001€would€haveŠ X Šrequired€a€large€number€of€inputs€for€those€years,€such€asŠ “  Šavailabilities€of€various€types€of€generation€units€(fossil„Š ` ° Šfuel€fired,€nuclear,€hydropower,€or€renewable),€€fuel€costs,Š  \  Šcosts€to€build€new€units,€and€performance€characteristics€ofŠ ø  Šnew€units.€ņ ņó óDeveloping€those€inputs€for€the€earlier€yearsŠ d“  Šwould€have€been€costly.€€Furthermore,€increasing€the€lengthŠ `  Šof€the€modelššs€projection€period€increases€the€complexity€ofŠ ¼  Šthe€programming€for€the€model.€€To€run€the€model,€EPA€mustŠ hø Šmake€certain€simplifying€assumptions€(such€as€combiningŠ d Šunits,€as€noted€above).€€Adding€run€years€may€have€requiredŠ Ą Šmaking€more€simplifying€assumptions,€such€as€the€number€ofŠ l¼ Šcontrol€options€available€to€plants.€€More€simplifyingŠ h Šassumptions€would€reduce€the€accuracy€of€the€modeledŠ Ä Šprojections.€€EPA€did€not€believe€that€reprogramming€theŠ pĄ  Šmodel€to€calculate€heat€input€for€earlier€years€was€worthŠ !l" Šthese€tradeoffs.€€Accordingly,€EPA€programmed€IPM€to€provideŠ Č"$ Šoutputs€for€only€during€and€after€2001.Š t$Ä& Šą ` ąIn€selecting€the€post„2000€period€upon€which€to€relyŠ  &p!( Šfor€the€growth€factor,€EPA€decided€to€rely€on€the€2001€toŠ Ģ'#* Š2010€period,€instead€of,€for€example,€the€2001€to€2007Š x)Č$, Šperiod.€€Cognizant€that€its€task€was€to€project€averageŠ $+t&. Šannual€growth€over€an€11„year€period,€from€1996€to€2007,ņ ņ€Š ° Šó óEPA€believed€that€relying€on€a€projection€over€a€9„yearŠ xČ Šperiod,€ņ ņó ó2001„2010,€was€a€reasonably€accurate€way€to€do€so.€Š $t ŠThe€nine„year€period€for€projecting€growth€seemed€to€be€aŠ Š  Šreasonably€close€approximation€to€the€11„year€period,€1996„Š | Ģ Š2007,€for€which€the€growth€projection€was€required.€Š ( x  ŠAlthough€relying€on€the€2001„2007€period€would€have€had€theŠ Ō$  Šadvantage€of€leaving€the€end„point€of€the€projection€periodŠ €Š  Š(2007)€the€same€as€the€year€for€which€the€projection€wasŠ ,|  Šbeing€made,€this€shorter,€six„year€period€ņ ņó ówould€have€beenŠ Ų( Šfurther€afield€from€the€11„year€period€for€which€the€growthŠ „Ō Šprojection€was€required.ņ ņÓÓó óŌ#†XśˆXX`X0Ł#ŌŌ‡`X0ŁXXXśˆŌŠ 0€ ŠĢӁ€ >(Zł88KÓņņóóņ ņÓÓD.€€Consistency€of€Use€of€Heat€Input€Growth€Factors€forŠ Ü, ŠBudget€Purposes€and€for€Cost€Purposesó óŠ ¤ō Šą ` ąIn€the€Section€126€Case,€the€Court€expressed€concernŠ l¼ Šthat€EPA€had€used€the€EPA€Growth€Method€to€determine€2007Š h Šlevels€of€heat€input€for€purposes€of€establishing€StateŠ Ä  Šbudgets,€but€EPA€had€relied€on€IPM€projections€for€2007€heatŠ p!Ą" Šinput€for€purposes€of€developing€EPAššs€cost€estimates.€€TheŠ #l$ ŠCourt€based€this€view€on€statements€EPA€made€in€the€ResponseŠ Č$ & Što€Comments€document,€noted€above.€€The€Court€concluded€thatŠ t&Ä!( ŠEPA€offered€no€cogent€explanation€for€using€different€setsŠ  (p#* Šof€growth€rates€for€different€purposes.€€249€F.3d€at€1054.Š Ģ)%, Šą ` ąEPAššs€statements€in€the€Response€to€Comment€documentŠ x+Č&. Šare€discussed€above,€and€EPA€acknowledges€that€thoseŠ ° Šstatements€are€ambiguous€and€confusing.€€In€fact,€however,Š \¬ ŠEPA€did€not€use€IPM€2007€heat€input€projections€as€an€inputŠ X Šfor€purposes€of€determining€cost€estimates.€€Rather,€EPAŠ “  Šrelied€on€its€own€projections€for€2007€heat€input€forŠ ` ° Šcalculating€the€budget,€and€then€used€IPM€to€test€the€costŠ  \  Šeffectiveness€of€that€budget.€€The€following€summarizesŠ ø  ŠEPAššs€procedure.׃Lׯ ƒN)ĆŻņņŚ  Ś6Ś  ŚóóŻ  Ż×  ×ņņóóŠ d“  Šą ` ąFirst,€EPA€computed€its€projection€for€each€StateššsŠ `  Š2007€heat€input,€using€the€EPA€Growth€Method.€€Then,€toŠ ¼  Šdetermine€the€emission€rate€that€was€highly€cost€effectiveŠ hø Šand,€at€the€same€time,€to€determine€the€costs€of€thatŠ d Šemission€rate,€EPA€applied,€one€at€a€time,€differentŠ Ą Šemissions€rate€limits€to€each€Stateššs€2007€heat€input.€€ForŠ l¼ Šexample,€EPA€applied€the€emission€rates€of€0.12€lbs/mmBtuŠ h Š(that€is,€0.12€pounds€of€NOx€emitted€per€million€BritishŠ Ä Šthermal€units),€0.15€lbs/mmBtu,€0.2€lbs/mmBtu,€and€others.€Š pĄ  ŠApplication€of€each€emission€rate€yielded,€for€each€State,€aŠ !l" Šdifferent€amount€of€emissions€(the€š š2007€Control€CaseŠ Č"$ ŠEmissionsšš).€€EPA€added€the€2007€Control€Case€Emissions€forŠ t$Ä& Šeach€State€for€each€emission€rate€applied,€which€resulted€inŠ  &p!( Šamounts€of€regionwide€NOx€emissions€that€varied€with€theŠ Ģ'#* Šdifferent€emission€rates€applied.€€Thus,€EPA€determined€theŠ ° Šamount€of€regionwide€NOx€emissions€that€would€result€from€aŠ \¬ Š0.12€lbs/mmBtu€emission€rate,€the€amount€of€regionwide€NOxŠ X Šemissions€that€would€result€from€a€0.15€lbs/mmBtu€emissionŠ “  Šrate,€and€so€on.€€EPA€input€into€IPM€the€amount€ofŠ ` ° Šregionwide€NOx€emissions€that€corresponded€to€each€emissionŠ  \  Šrateš!šwhich€amounted€to€a€constraint€on€NOx€emissions„„andŠ ø  Šthen€EPA€ran€IPM€for€each€amount€of€the€regionwide€NOxŠ d“  Šemissions€constraint.€€This€determined€the€cost€ofŠ `  Šgenerating€electricity€with€the€constraint€of€the€regionwideŠ ¼  ŠŌ_ŌNOxŌ_Ō€emissions€level€being€tested.€€Then,€EPA€subtracted€thatŠ hø Šcost€from€the€cost€of€generating€electricity€in€2007€thatŠ d ŠIPM€projected€without€any€NOx€emissions€constraints.€In€thisŠ Ą Šmanner,€EPA€was€able€to€compute€a€cost€figure€for€theŠ l¼ Šcontrols€necessary€to€assure€that€regionwide,€no€more€thanŠ h Šthe€specified€amount€of€NOx€would€be€emitted.€€EPA€comparedŠ Ä Šthe€cost€figures€for€each€of€the€IPM€runs,€and€selected€theŠ pĄ  Šfigure€that€EPA€considered€to€be€highly€cost€effective.€Š !l" ŠThis€figure€was€the€emission€rate€of€0.15€lbs/mmBtu.€€EPAŠ Č"$ Šassigned€to€each€State€an€EGU€budget€based€on€the€sameŠ t$Ä& Šmethodologyš!šthe€use€of€an€0.15€lbs/mmBtu€emission€rate€andŠ  &p!( Šthe€EPA€2007€growth€projection€for€heat€input.€€Thus,€EPAŠ Ģ'#* Šused€the€same€determination€of€each€Stateššs€2007€heat€inputŠ x)Č$, Šfor€the€purpose€of€determining€both€costs€and€each€StateššsŠ $+t&. Šbudget.Š ° Šņ ņE.€€Utilitiesšš€Multi„State€Operationsó óŠ \¬ Šą ` ąEPA€is€aware€that€many€utilities€have€operating€unitsŠ $t Šin€several€States€that€are€linked€to€the€same€transmissionŠ Š  Šgrid.€€As€a€result,€utilities€are€able€to€alter€dispatchesŠ | Ģ Šfrom€one€unit€to€another,€and€thereby€minimize€costs€whileŠ ( x  Šmaintaining€the€same€level€of€electricity€generation.Š Ō$  ŠAccording€to€the€Energy€Information€Administration€(EIA),Š €Š  Š"By€the€end€of€2000,€the€number€of€electric€holdingŠ ,|  Šcompanies€will€decrease€to€53€and€the€generation€capacityŠ Ų( Šthey€own€will€increase€to€about€86€percent€of€the€totalŠ „Ō Šinvestor€owned€utility€capacity,€primarily€because€ofŠ 0€ Šmergers€and€acquisitions.€€This€statistic€suggests€thatŠ Ü, Šrelatively€large€companies€are€becoming€even€larger."€€ņņTheŠ ˆŲ ŠChanging€Structure€of€the€Electric€Power€Industry€„„€2000;Š 4„ ŠAn€Updateóó,€EIA€(October€2000).Š ą0 Šhttp://www.eia.doe.gov/cneaf/electricity/chg_stru_update/updŠ ŒÜ  Šate2000.pdf€p.€91.€€This€statement€indicates€that€anŠ 8!ˆ" Šincreasing€amount€of€the€generation€capacity€is€owned€byŠ ä"4$ Šcompanies€with€multistate€operations.€€EPAššs€preliminaryŠ $ą& Šreview€indicates€that€over€60€percent€of€the€capacity€in€theŠ <&Œ!( ŠSIP€Call€Region€is€owned€by€companies€that€operateŠ č'8#* Šgenerating€units€in€two€or€more€States.€€ņ ņó óThe€AmericanŠ ”)ä$, ŠElectric€Power€Company,€for€example,€owns€units€in€numerousŠ @+&. ŠStates,€including€six€in€the€SIP€Call€region.€€The€fact€thatŠ ° Šmany€utilities€operate€units€in€different€States€appears€toŠ \¬ Šsoften€the€adverse€impact€if€EPAššs€projected€heat€input€forŠ X Š2007€for€individual€States€are€not€completely€accurate.ÓE1°°°` ø hĄpČ xŠ (#°°XEÓŠ “  Šņ ņŲ! !ŲӁ€ U(zł88>ÓIV.ą ` ąCommentsó óŠ ` ° Šą ` ąEPA€is€soliciting€comments€on€the€new€data€placed€inŠ ( x  Šthe€docket€and€set€out€in€Table€1€above.€€EPA€asks€thatŠ Ō$  Šcommenters€provide€us€with€their€comments€within€ņ ņ[insertŠ €Š  Šdate€30€days€from€date€of€publication]ó ó.€€EPA€intends€toŠ H˜  Šcomplete€its€response€to€the€Courtššs€remands€by€or€aboutŠ ` Šmid„November,€2001.Š ¼  ŠÓ€  !(”x8UÓą ` ąThe€EPA€is€not€soliciting€comment€on€IPM€itself€or€onŠ hø Šstate„specific€approaches€for€determining€2007€heat€inputŠ d Šlevels.€€EPA€understands€the€Courtššs€opinion€to€have€held€asŠ Ą Šreasonable€EPAššs€reliance€on€IPM€as€a€regionally€uniformŠ l¼ Šmethodology€for€determining€each€States€2007€EGU€Budget.€€InŠ h Šaddition,€EPA€is€reviewing€the€actual€heat€input€data€inŠ Ä  ŠTable€1€solely€in€the€context€of€the€growth€rate€issue,€Š  p!Ą" Šand€EPA€is€not€re„opening€any€issues€related€to€allowancesŠ ° Šallocated€under€the€Section€126€Rule€or€the€amount€of€theŠ \¬ Š1996€baseline€determined€under€the€NOx€SIP€Call€Rule.Š X ŠÓ€ 7 !"(‘xx !ÓĢĢĢĢ_______________________Š d“  ŠDated:€Š `  ŠĢĢĢ_______________________Š Ą ŠJohn€Seitz,€Director,€Š l¼ ŠOffice€of€Air€Quality€Planning€and€StandardsŌ#†XśˆXX`X0ŁÄ@#Ō