On October 6, 2011, the EPA proposed what it is referring to as “technical adjustments” to the final Cross-State Air Pollution Rule (“CSAPR”). According to the EPA, the adjustments are needed to correct errors made in certain unit specific modeling assumptions and to smooth the transition from the Clean Air Interstate Rule (“CAIR”) to CSAPR. A summary of the proposed adjustments is as follows:
- The EPA proposes to increase the emission budgets for nine states (Florida, Louisiana, Michigan, Mississippi, Nebraska, New Jersey, New York, Texas and Wisconsin). The EPA previously used incorrect information on either the installation date or type of Selective Catalytic Reduction or Flue Gas Desulfurization technology being installed on certain units. In addition, the EPA had not taken into account the fact that some units are dispatched for non-economic purposes or have other fuel constraints. Therefore, the current proposal calculates emissions according to operational dispatch requirements and not just on economic dispatch curves. The EPA’s revisions result in increases to some state’s ozone season NOx budgets, annual NOx budgets or annual SO2 budgets.
- The emission percentage set aside for new units in the state’s ozone season emission budgets has been increased for Arkansas and Texas. This change reflects the inclusion of emissions from new units that had been left out of the original calculation.
- Specific units in Alabama, Indiana, Kansas, Kentucky, Ohio and Tennessee are under consent decrees that restrict the trading of excess emission allowances. Therefore, CSAPR emission allocations above the amount specified in the corresponding consent decrees would not be available for use by other sources. The EPA proposes aligning the unit level allowances under CSAPR to the levels specified in the consent decree. The proposal would not change the total state budget, just the amount allocated to various units.
- The new effective date of the assurance penalty provision is now January 1, 2014 instead of January 1, 2012. According to the EPA, this change should help ease the transition from CAIR to CSAPR by allowing the development of a more liquid allowance market and providing more access to price information.
The proposed technical adjustments will have a public comment period lasting thirty (30) days after the official publication in the Federal Register. The EPA has indicated that the methodology and levels of stringency (cost per ton) used in the final rule are not being reopened for public comment. Rather, the EPA is encouraging a review of the technical adjustment proposal as well as the submittal of similar relevant information (e.g., information on post-combustion pollution control equipment, on operational requirements for dispatch, or on consent decree constraints) to help improve the accuracy of the calculation of state emission budgets.
What impact this will have on the judicial review process is uncertain. At the Friday deadline for filing appeals of the rule, a slew of new appeals were filed, including new motions to stay the rule. In addition, a number of new petitions were filed with EPA seeking reconsideration of the final rule.