1. Leah Weiss OTC Annual Meeting July 22, 2003
Technical Provisions of the Proposed Clear Skies Act that Alter States’ Authorities and Protections in the Clean Air Act
Leah Weiss
OTC Annual Meeting
July 22, 2003

2. Several Technical Concerns, But This List is Not Exhaustive…
Creates a New “Transitional” Designation
Changes the Scientific Basis for Designations
Creates an Unlevel Playing Field Regarding Designations
Extends Attainment Deadlines for “Transitional” Areas
Removes Federal Enforceability and “Backstops” in “Transitional” Areas
Limits How and When Section 126 Can Be Used
Radically Changes the Section 126 Criteria
Weakens Protections Concerning HAPs
Prevents Local Benefits from State Cap-&-Trade Programs
Erodes Full Benefits of the NOx SIP Call
Invites a Future Congress to Weaken Emissions Caps
CSI and States Authorities/Protections: NESCAUM Presentation at OTC Annual Meeting, 7/22/03

3. CSI Creates a New “Transitional” Designation Category
Current CAA designations: “attainment,” “nonattainment” and “unclassifiable”
New “transitional” areas are nonattainment areas; have measured unhealthful air quality (i.e., violate 8-hour O3 or PM-2.5 standards)
Definition: EPA modeling shows will attain by 12/31/15 (with federal measures)
SIPs must be approved by EPA by 12/31/04
if local controls also needed, state must model measures and SIP must include adopted measures
CSI and States Authorities/Protections: NESCAUM Presentation at OTC Annual Meeting, 7/22/03

4. CSI Changes Section 107
Eliminates requirement that upwind areas that contribute to unhealthy air quality in nearby areas be classified as “nonattainment”
Dismantles legal recourse for downwind areas under s. 107
CSI and States Authorities/Protections: NESCAUM Presentation at OTC Annual Meeting, 7/22/03

5. CSI Changes the Scientific Basis on Which Areas are Designated
Current CAA designations based on monitored air quality concentrations
CSI “transitional” designations based on anticipated air quality improvements (via modeling) and an early SIP submittal
CSI and States Authorities/Protections: NESCAUM Presentation at OTC Annual Meeting, 7/22/03

6. CSI Creates an Unlevel Playing Field Regarding Designations
By sidestepping “nonattainment” label, CSI excuses “transitional” areas from adopting key CAA emission reduction requirements that would otherwise be in force
For many areas: excused from measures aimed at controlling growth in emissions from power and mobile source sector
For others: excused from significant emission reduction measures
Areas with identical air quality have differing requirements
Attainment areas in OTR must do more than “transitional” areas
CSI and States Authorities/Protections: NESCAUM Presentation at OTC Annual Meeting, 7/22/03

7. CSI Drastically Extends Attainment Deadlines for “Transitional” Areas
For ozone: allows at least 8 and up to additional years to attain
(CAA: marginal 4/07, moderate 4/10, serious 4/13)
(CSI: “transitional” 12/15)
For PM2.5: allows at least 6 and up to additional years to attain
(CAA: 12/09)
What about impacts to downwind areas? to citizens who live in “transitional” areas?
CSI and States Authorities/Protections: NESCAUM Presentation at OTC Annual Meeting, 7/22/03

8. CSI Removes Federal Enforceability and “Backstop” Provisions for “Transitional” Areas
No transport accountability requirements (CAA: all areas subject to 110(a)(2)(D) provisions)
No contingencies (CAA: moderate and above subject)
New “maintenance requirement” in place
Planning exercise due in 2010
No EPA enforcement authority if problems arise
CSI and States Authorities/Protections: NESCAUM Presentation at OTC Annual Meeting, 7/22/03

9. Section 126
CAA: States may petition EPA and receive expeditious relief if EPA finds that certain stationary sources “contribute significantly to nonattainment in, or interference with maintenance by, and other State with respect to any such national primary or secondary ambient air quality standard”
CSI and States Authorities/Protections: NESCAUM Presentation at OTC Annual Meeting, 7/22/03

10. CSI Limits How and When Section 126 Can Be Used
EPA cannot make findings on any 126 petition for CSI sources prior to 1/1/09 (now, EPA must act within 60 days)
EPA must make findings by 1/31/09 for petitions filed prior to 1/07 (now, EPA must act within 60 days)
EPA must extend the compliance dates for all 126 findings to ensure that no CSI sources are subject to any deadline prior to 1/1/12 (now, EPA must require emission limits within 3 years of findings)
CSI and States Authorities/Protections: NESCAUM Presentation at OTC Annual Meeting, 7/22/03

11. CSI Radically Changes the Section 126 Findings Criteria
Prohibits EPA from making a finding unless the petitioning state shows upwind emissions reductions are at least as cost effective as emission controls on other source types that could be implemented locally or in the upwind area
Must be based on a consideration of other enacted or pending emission reduction programs – even if they are not yet implemented
CSI and States Authorities/Protections: NESCAUM Presentation at OTC Annual Meeting, 7/22/03

12. A Closer Look at CSI’s Section 126 Cost Effectiveness Test
Cost side includes the full cost
Benefit side of limits the benefits to air quality improvements in the petitioning state’s nonattainment area only
Significantly biases the cost effectiveness test against the petitioning state
CSI and States Authorities/Protections: NESCAUM Presentation at OTC Annual Meeting, 7/22/03

13. A Closer Look at CSI’s Section 126 Cost Effectiveness Test
States must compare cost effectiveness to other all programs, including federal programs that states are precluded from adopting on their own
States have little current capacity to conduct these economic analyses
Net effect: states in a Catch-22; renders 126 an ineffective tool for states
CSI and States Authorities/Protections: NESCAUM Presentation at OTC Annual Meeting, 7/22/03

14. CSI and Hazardous Air Pollutants
CSI eliminates a proven plant-by-plant toxic emission control mechanism (MACT) for mercury, and replaces it with a relatively loose mercury cap
Hg control technologies (e.g., activated carbon injection) shown to achieve control effectiveness greater than 90%
CSI Hg cap not fully implemented until a decade later (2018) than the MACT requirement; represents at best 70% control effectiveness, on average
CSI and States Authorities/Protections: NESCAUM Presentation at OTC Annual Meeting, 7/22/03

15. CSI and Hazardous Air Pollutants
CSI removes EPA’s current statutory authority to regulate non-mercury HAP emissions from power plants.
Shifts to a discretionary program that would not take effect until 2018
All non-mercury HAPs regulated under the new and unproven residual risk program, not the MACT program
CSI and States Authorities/Protections: NESCAUM Presentation at OTC Annual Meeting, 7/22/03

16. CSI Prevents Local Benefits from State Cap-and-Trade Programs
CSI prohibits any states from “restricting” or “interfering” with the “transfer, sale or purchase” of allowances
States with own programs could not retire or withhold the allowances that accrue from the setting their more protective caps
Allowances could be used in upwind area
CSI and States Authorities/Protections: NESCAUM Presentation at OTC Annual Meeting, 7/22/03

17. CSI Erodes Full Benefits of the NOx SIP Call
NOx SIP Call sources: electric generating units (EGUs) and other large industrial sources
CSI sources: only EGUs
CSI modified this year to establish separate non-EGU program
Lacks economies of scale of NOx SIP Call
Much less efficient and more costly program
CSI and States Authorities/Protections: NESCAUM Presentation at OTC Annual Meeting, 7/22/03

18. CSI Invites a Future Congress to Weaken its Final Emissions Caps
Midcourse review provision requires EPA to review costs and benefits of CSI power sector caps and recommend changes to Congress
Analysis features a heavy emphasis on cost considerations
Review completed by 2009 (before 1st phase of reductions)
Opens door to weakening of caps
CSI and States Authorities/Protections: NESCAUM Presentation at OTC Annual Meeting, 7/22/03

19. Impacts of Midcourse Review
Business uncertainty for sources; may be unwilling to make capital outlays until review completed
State regulators can’t rely on the power sector emissions reductions that are now being used to sell CSI’s regulatory relief provisions
CSI and States Authorities/Protections: NESCAUM Presentation at OTC Annual Meeting, 7/22/03

20. Summary
CSI changes fundamental designation and attainment provisions of the CAA
Creates an unlevel playing field by providing regulatory relief for new upwind nonattainment areas (O3 and PM-2.5)
CSI materially alters and restricts CAA provisions that allow states to achieve relief from interstate pollution (s. 126, s.110, s.107)
CSI makes changes to CAA that affects several other rights, privileges, protections, and responsibilities currently held by the states under the CAA
CSI and States Authorities/Protections: NESCAUM Presentation at OTC Annual Meeting, 7/22/03

21. Observations
Federal acid rain cap and trade program didn’t need regulatory relief provisions to succeed
Extent and timing of power sector emissions reductions don’t justify public health risks created by regulatory relief provisions (also - no direct timing linkage between the two)
Changes being sought to ease requirements for newly designated NAAs (relief until at least 2015)
CSI and States Authorities/Protections: NESCAUM Presentation at OTC Annual Meeting, 7/22/03

22. Impacts Limits states from seeking relief from upwind pollution
Limits states from adopting or achieving environmental benefits of state emission control measures more stringent than federal requirements
Limits states’ ability to attain health-based NAAQS
CSI and States Authorities/Protections: NESCAUM Presentation at OTC Annual Meeting, 7/22/03

23. What’s at Stake? Citizens’ health States’ economies
CSI and States Authorities/Protections: NESCAUM Presentation at OTC Annual Meeting, 7/22/03