Interstate Transport National Tribal Forum Air Quality Track April 30,

Interstate Transport ► States are responsible for developing SIPs that address nonattainment within their borders, but must also address significant contributions to air quality violations in downwind states. Section 110(a)(2)(D)(i)) – the “good neighbor provision.” ► EPA has addressed transport through several rules: ► NO X SIP Call ► Clean Air Interstate Rule (CAIR) ► Cross State Air Pollution Rule (CSAPR) 2

Interstate Transport: Legal Context ► The “good neighbor provision” requires submittal of interstate transport SIPs in the same 3-year timeframe as infrastructure SIP submittals. ► SIPs must contain provisions prohibiting emissions that contribute significantly to downwind nonattainment with (or interfere with maintenance of) a NAAQS by any other state. ► SIPs are required for each pollutant covered by a NAAQS (including each revision) and must also address identified precursors to those pollutants. ► The “good neighbor” provision applies to all states regardless of whether they contain nonattainment areas. ► Section 110(a)(2)(D)(i)(II) also contains provisions prohibiting downwind interference with PSD or visibility requirements. 3 3

Interstate Transport: Litigation ► All three rules have been litigated. ► CAIR was remanded by the D.C. Circuit to EPA in 2008, but remained in effect while EPA developed a replacement. ► CSAPR aimed to address the Court’s concerns with CAIR and reduce transported pollution, but was vacated by the D.C. Circuit in August Homer City Generation v. EPA, 696 F.3d 7. ► CAIR continues in effect. ► EPA remains committed to working with states and with industry and environmental stakeholders to address pollution transport issues as required by the CAA. 4

Interstate Transport: Key Points of Homer City Generation v. EPA ► EPA must define a state’s obligation under the “good neighbor” provision, and a state is not required to submit a 110(a)(2)(D)(i)(l) SIP until EPA does so. ► EPA’s transport rule must quantify states’ 110(a)(2)(D)(i)(l) duties to trigger the SIP submission obligation. ► Under Homer City, EPA’s role is to quantify each state’s obligation and the state’s role, in turn, is to satisfy that obligation as defined by EPA – not to redefine or re-quantify the obligation. 5

Interstate Transport: Key Points of Homer City Generation v. EPA ► Proportionality ► Homer City: “EPA’s Transport Rule violated the statute because it made no attempt to calculate upwind States’ required reductions on a proportional basis that took into account contributions of other upwind States to the downwind States’ nonattainment problems.” (emphasis added) ► Proportionality could apply to either emission reductions (e.g., tons of ozone-season NO X or reductions in contributions (e.g., ppb of ozone) 6

Interstate Transport: Key Points of Homer City Generation v. EPA ► Cost ► “EPA may consider cost, but only to further lower an individual state’s obligations.” 696 F.3d at 21. ► EPA must have a methodology for determining each state’s proportional share independent of cost considerations, but then may consider cost to reduce some states’ obligations. 7

Interstate Transport: Key Points of Homer City Generation v. EPA ► Sub-NAAQS Over Control ► Transport obligations must reflect an attempt by EPA to minimize unnecessary collective sub-NAAQS over-control. 8

Interstate Transport: Key Points of Homer City Generation v. EPA ► Maintenance ► The Court in the CAIR decision said that EPA must give independent effect to the “interfere with maintenance” prong of 110(a)(2)(D)(i)(l). ► The Court in Homer City said: ► To require a State to reduce “amounts” of emissions pursuant to the “interfere with maintenance” prong, EPA must show some basis in evidence for believing that those “amounts” from an upwind State, together with amounts from other upwind contributors, will reach a specific maintenance area in a downwind State and push that maintenance area back over the NAAQS in the near future. Put simply, the “interference with maintenance” prong of the statute is not an open-ended invitation for EPA to impose reductions on upwind States. Rather, it is a carefully calibrated and commonsense supplement to the “contribute significantly” requirement. 9

CSAPR - Interstate Transport Update ► Status of litigation: ► In January 2013, the D.C. Circuit denied all requests for rehearing. ► On March 29, 2013, the U.S. Solicitor General petitioned the Supreme Court for review. ► EPA and states are still responsible for addressing transport. ► Even as the Supreme Court evaluates our petition, it is prudent for EPA to consider how we would proceed if that petition were denied. ► EPA is beginning to work with states and other stakeholders on a path forward to address interstate transport. 10

Thank you! Questions? 11