2000-04-11 summary for states of NOx SIP Call Phase I approach

April 11,2000

SUMMARY OF EPA’S APPROACH
TO THE NOx SIP CALL
IN LIGHT OF THE MARCH 3m COURT DECISION
BACKGROUND
In September 1998, EPA issued a rule to reduce smog in the eastern United
States. The rule, known as the NOx SIP Call, required 22 states and the District of
Columbia to reduce emissions of nitrogen oxides (NOx), which react with other
chemicals in the atmosphere to form ozone (smog). EPA required these reductions
after determining that pollution from each of these states is transported by the wind and
significantly contributes to unhealthy air quality in downwind states. EPA believes that
these reductions are critical to help enable cities in the eastern half of our country to
attain the national ambient air quality standard for ozone.
CURRENT STATUS
In response to litigation from several parties on the NOx SIP Call, the United
States Court of Appeals for the District of Columbia Circuit upheld EPA’s authority to
issue the NOx SIP Call and to establish state “NOx budgets”-- the maximum amount of
nitrogen oxides allowed to be emitted in each state (Michiqan v. EPA, No. 98-1497
/March 3, 2000). In addition, the Court upheld the Agency’s definition of how to
determine if states “significantly contribute” to smog problems downwind. It also upheld
EPA’s method of calculating budgets by assuming the same level of control in all the
affected states. Although in May 1999, as an interim measure, the Court stayed the
portion of the rule that required states to submit their responses to the NOx SIP Call by
September 30, 1999, €PA believes the stay is no longer justified given the March 3rd
decision.
Based on the Court‘s decision and the significant public health benefits of the
NOx SIP Call, EPA believes it is essential to implement this regional strategy as quickly
as possible and is initiating a two-phased approach to do so. As part of this approach,
the Department of Justice and EPA have requested that the Court lift its stay as of April
27, 2000.
If the Court grants EPA’s motion, State Implementation Plan’s (SIPs) addressing
the portion of the NOx SIP Call upheld by the Court technically would be due to EPA
immediately. However, EPA recognizes that the litigation may have caused some
states to get off track in developing their SIPs. Therefore, EPA would allow states until
September 1, 2000 to submit SIPs before taking further actions to ensure
implementation of the NOx SIP Call. September 1, 2000 provides states with the
additional four months and five days that they had remaining on the SIP submission
schedule at the time the Court put the stay in place. This date will give states the
additional time, yet it will not jeopardize the public health benefits achieved through the
reduction of NOx emissions by May 1,2003.
The first phase of the approach, which addresses the portion of the NOx SIP Call
upheld by the Court, will achieve the majority of the reductions in the NOx SIP Call. If
the Court grants EPA’s request, the following I 9 states and the District of Columbia

would need to submit State Implementation Plans (SIPS)for this phase by September I,
2000: Alabama; Connecticut; Delaware; Illinois; Indiana; Kentucky; Massachusetts;
Maryland; Michigan; North Carolina; New Jersey; New York; Ohio; Pennsylvania; Rhode
Island; South Carolina; Tennessee; Virginia; and West Virginia. Of these states,
Massachusetts, New Jersey, Connecticut and Rhode island have already submitted
plans to meet t h e NOx SIP Call. The other affected states should move forward to
prepare plans on all aspects of the NOx SIP Call that the Court upheld.

In the decision, the Court also remanded limited parts of the rule to EPA for
further rulemaking. The second phase will address the few narrow issues that the Court
remanded to EPA, including: whether, and if so, how, a small subclass of facilities that
generate electricity should be included in the rule; what control levels should be
assumed for large, stationary internal combustion engines; and what budget is
appropriate for Missouri and for Georgia. For the second phase, EPA intends to issue
a proposed rule addressing the remanded issues later this spring. Generally, any
changes resulting from this second phase would have a small impact on the overall NOx
budget for any particular state. States will have to submit Phase 2 plans no earlier than
December 2000.
While no petitioners raised the issue of including the entire states of Alabama
and Michigan in the NOx SIP Call, the Court‘s reasoning regarding Georgia and
Missouri applies equally to Alabama and Michigan. Like Georgia and Missouri,
Alabama and Michigan have both a “finegrid” and a “coarse grid” portion of the state
a classification established as part of a two-year, multi-state process to reduce smog
levels across the eastern United States. Therefore, based on the information in the
record, EPA has calculated a NOx budget for Alabama and Michigan that reflects
reductions only in the fine grid portions of these states. EPA intends to propose that
Alabama and Michigan would meet their Phase 1 requirement if they submitted plans
meeting these modified budgets.

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EPA expects that states will move quickly to develop and submit a SIP to the
Agency by September 1 , 2000; The Clean Air Act requires EPA to issue a federal plan
in cases where EPA determines that states fail to make required submissions. EPA
proposed a federal plan at the time we issued t h e NOx SIP Call in September 1998.
EPA hopes to avoid issuing any federal plans for the NOx SIP Call and stands ready to
assist states a s they prepare their state plans.
NOx Budqet
A NOx budget is the maximum amount of nitrogen oxides allowed to be emitted
in each state affected by the NOx SIP Call. States have flexibility in choosing how to
achieve the NOx reductions needed to meet the budget. The existing record in the NOx
SIP Call rulemaking provides a sufficient break down of t h e data on which t h e original
budgets were developed to allow states to readily adjust their SIP submissions to
account for the issues remanded by t h e Court. In light of the Court decision, EPA has
reviewed the record and for the convenience of the states, identified in Table 1 an
adjusted Phase INOx budget for each state that needs to submit a Phase 1 plan. In
addition, Table 2 provides a comparison of t h e NOx reductions under the original NOx
SIP Call to those under the Phase Ibudgets. €PA staff will be available to provide
additional details about the calculations of these budgets.

Compliance date
Sources that states choose to regulate in the first phase must comply with their
control requirements by May 1, 2003. This will provide sources adequate time to install
the appropriate pollution control devices by May 1, 2003. To the extent that states
choose to regulate power plants, EPA has confirmed that achieving these reductions by
2003 is feasible without endangering the reliability of the electric power supply. Over
40% of the power plants that states could choose to regulate under the NOx SIP Call
are already required to reduce NOx emissions as a result of EPA’s recent action on
petitions submitted by Connecticut, Massachusetts, New York and Pennsylvania to
reduce air pollution from upwind sources. Power plants will have sufficient time so that
they will not have to install controls during the peak usage seasons. Many of the
pollution control devices can be built next to the boiler, and then connected to the boiler
during routine maintenance outages. EPA’s analysis, which is included in the record for
the NOx SIP Call, confirms that even the most complicated installation of pollution
control technology for a single plant not covered by the recent EPA action on the state
petitions can occur in less than 28 months. In addition, the NOx SIP Call provides extra
assurance that there will not be reliability problems by allowing states to adopt a
Compliance Supplement Pool.
PETITIONS FROM NORTHEASTERN STATES
Under section 126 of the Clean Air Act, EPA is also addressing regional transport
of smog in response to petitions submitted by four Northeastern States. In our January
18, 2000 response, EPA determined that NOx emissions from large electric generating
units and large industrial boilers and turbines in I 2 states and the District of Columbia
are contributing to ozone nonattainment problems in the petitioning states. The EPA
established Federal emission control requirements for these sources with a compliance
deadline of May 1,2003. As a result, some sources have already begun planning on
how to meet the emissions limits by the 2003 ozone season.
The EPA rule responding to the petitions and the NOx SIP Call have the same
goal -- to reduce NOx emissions that cause downwind ozone problems. If a state
submits and EPA approves a SIP revision meeting all the requirements of both phases
of the NOx SIP Call (including providing for control measures to be in place by 2003),
then EPA will withdraw the Federal requirements for sources in that state subject to
EPA’s rule responding to the section 126 petitions. Thus, through timely action, states
will have flexibility to address transport through a different control strategy than EPA is
requiring under the section 126 rule.

TABLE 1: NOX BUDGETS (total amount of NOx a state can emit to comply with Phase I)

I State

I

I

Alabama*

I

I
I
172,619 I

NOx Budget Under SIP
Call (Tons)

NOx Budget Under
Phase I*
(Tons)

183,473

I

NOTES: Consistent with the Court's opinion, the Phase INOx budgets reflect controls on electricity

generating units subject to the acid rain program; large boilers and turbines; and cement kilns. The
P h a s e INOx budgets d o not reflect controls on internal combustion engines. States with N/A under
budget requirements d o not have to submit P h a s e 1 SIPS,either because they already have submitted
plans, or because (for GA, MO and WI) the court vacated the rule for that state.
*EPA intends to propose that Michigan and Alabama would meet their P h a s e 1 NOx SIP Call budget
requirement if they submitted plans meeting NOx emission budgets of 191,941 and 124,795 tons
respectively. Although the Court did not order EPA to modify budgets for these states, EPA believes this
approach is consistent with the Court's March 3,2000 opinion concerning Georgia and Missouri. These
budgets would result in reductions of 53,988 tons for Michigan and 44,361 tons for Alabama.

TABLE 2: NOx REDUCTIONS REQUIRED

The table below sets out the NOx emission reductions that each state would
achieve through a SIP that meets the Phase 1 budgets.

I

NOTES: Consistent with the Court's opinion, the Phase 1 NOx budgets reflect controls on electricity
generating units subject to the acid rain program; large boilers and turbines; and cement kilns. The
Phase 1 NOx budgets do not reflect controls on internal combustion engines. States with NIA under
budget requirements do not have to submit Phase 1 SIPS, either because they already have submitted
plans, or because (for GA, MO and WI) the court vacated the rule for that state.
*EPA intends to propose that Michigan and Alabama would meet their Phase 1 NOx SIP Call budget
requirement if they submitted plans meeting NOx emission budgets of 191,941 and 124,795 tons
respectively. Although the Court did not order EPA to modify budgets for these states, EPA believes this
approach is consistent with the Court's March 3, 2000 opinion concerning Georgia and Missouri. These
budgets would result in reductions of 53,988 tons for Michigan and 44,361 tons for Alabama.

**Not projected to need additional reductions.