On December 9, 2016, U.S. Environmental Protection Agency (EPA) Region 6 Regional Administrator, Ron Curry, signed a proposed rule that promulgates a Federal Implementation Plan (FIP) for Texas to address the remaining outstanding requirements that are not satisfied by the Texas Regional Haze State Implementation Plan (SIP) submission. See EPA, Promulgation of Air Quality Implementation Plans; State of Texas; Regional Haze and Interstate Visibility Transport Federal Implementation Plan; Proposed Rule (signed December 9, 2016) (Proposed Rule) (attached).

Specifically, EPA proposes SO2 limits on 29 Electric Generating Units (EGUs) located at 14 different Texas power plants in order to satisfy requirements for installation and operation of best available retrofit technology (BART) for SO2. Proposed Rule at 1. For NOx emissions, EPA proposes a FIP that relies upon two other EPA rulemakings, one already final and one proposed, that together will establish that participation in the Cross‑State Air Pollution Rule (CSAPR) qualifies as an alternative to NOx BART for EGUs in Texas. Id. EPA also proposes to disapprove a portion of the Texas Regional Haze Plan that addresses the BART requirement for EGUs for particulate matter (PM) and also proposing a FIP with PM BART limits for EGUs at the same 29 EGUs located at 14 different Texas power plants proposed for SO2 BART limits. Id. The PM BART limits will be based on existing practices and control capabilities. EPA also proposes to reconsider and re-propose disapproval of portions of several SIP revisions submitted to satisfy the requirement to address interstate visibility transport for six national ambient air quality standards (NAAQS): (1) the 1997 8-hour ozone; (2) the 1997 PM2.5 (annual and 24-hour); (3) the 2006 PM2.5 (24-hour); (4) the 2008 8-hour ozone; (5) the 2010 1-hour NO2; and (6) the 2010 1-hour SO2. Id. at 2. EPA also proposes that the FIP emission limits meet interstate visibility transport requirements for these NAAQS. Id.

This Proposed Rule is the latest development in EPA's dispute with Texas over its Regional Haze Plan. A previous EPA final rule that partially disapproved and partially approved portions of the Texas Regional Haze Plan, which was promulgated on January 5, 2016, is being challenged by the State of Texas in the Fifth Circuit of Appeals in Case No. 16‑60118. We have summarized that final rule and recent developments in the litigation in KEAG Bulletin No. 2015-80, dated December 16, 2015, and KEAG Bulletin No. 2016-18, dated December 8, 2016. In the January 2016 Final Rule, EPA did not take action on the portion of the State's Regional Haze Plan submittal that was intended to satisfy BART requirements for EGUs. Proposed Rule at 11. In an earlier, separate rulemaking, EPA issued a limited disapproval of the Texas Regional Haze Plan as it related to EGU BART, because of Texas' reliance on the Clean Air Interstate Rule (CAIR) as an alternative to meeting the source-specific BART requirements for SO2 and NOx, because the D.C. Circuit had remanded the CAIR, without vacatur. Proposed Rule at 12, citing North Carolina v. EPA, 531 F.3d 896 (D.C. Cir.), modified, 550 F.3d 1176 (D.C. Cir. 2008). After EPA promulgated CSAPR to replace CAIR, the Agency determined that CSAPR would provide for greater reasonable progress than BART and amended its Regional Haze Rule to allow CSAPR participation as an alternative to source-specific SO2 and NOx BART for EGUs. Proposed Rule at 13, citing 76 Fed. Reg. 48208.

CSAPR has been the subject of extensive litigation, and on July 28, 2015, the D.C. Circuit issued a decision generally upholding CSAPR but remanding without vacating the CSAPR emission budgets for a number of states, including Texas' ozone-season NOx budget and annual SO2 budget. Proposed Rule at 13, citing EME Homer City Generation v. EPA, 795 F.3d 118 (D.C. Cir.). Because of the uncertainty caused by the D.C. Circuit Court's partial remand, EPA determined it was not appropriate to rely on CSAPR to address BART-related deficiencies in Texas' Regional Haze Plan. Proposed Rule at 13. On October 26, 2016, and November 10, 2016, EPA finalized updates to the CSAPR rule that address issues associated with the court's remand. Id. EPA also proposed that the national Regional Haze Rule continue to authorize the use of CSAPR participation as a BART alternative for EGUs. Proposed Rule at 15, citing 81 Fed. Reg. at 78962-78964. Finalization of that proposal would allow for Texas' Regional Haze Program to rely on the CSAPR ozone-season control program participation as an alternative to source-specific EGU BART for NOx.

Based on that national proposal, the Proposed Rule promulgates a FIP to replace Texas' reliance on CAIR with reliance on CSAPR to address the NOx BART requirements for EGUs. Id. at 15. Finalization of this portion of the FIP is contingent on EPA's final action to find that CSAPR continues to be an appropriate alternative to source-specific BART. Id. If finalization involves withdrawal of the Texas FIP provisions for emissions of SO2, however, it would mean that Texas will no longer be eligible to rely on CSAPR participation as an alternative to source-specific EGU BART for SO2. Id. As a result, the Proposed Rule promulgates a FIP that includes BART screening of sources and source-by-source analysis for SO2 BART and controls for this pollutant as appropriate. EPA is also not able to propose approval of the Texas Regional Haze Plan's PM BART evaluation, because that demonstration relied on underlying assumptions that are no longer valid. Instead, EPA proposes to disapprove that portion of the SIP, and in its place, promulgate source-specific PM BART requirements for EGUs. Id. at 16.

In summary, to remedy alleged deficiencies in the Texas Regional Haze Plan, the Proposed Rule promulgates a FIP to meet BART requirements for SO2, NOx, and PM. The Proposed Rule specifies source-specific BART determinations for EGUs subject to BART for SO2 and PM. The Agency is proposing that NOx BART requirements for EGUs will be satisfied by a determination, proposed for separate finalization, that Texas' participation in CSAPR's ozone-season control program is a permissible alternative to source-specific NOx BART.

EPA explained that the proposed FIP includes BART control determinations for Texas EGUs that did not previously have approved BART determinations. The Agency also noted that the FIP includes associated compliance schedules and requirements for equipment maintenance, monitoring, testing, recordkeeping, and reporting for all affected sources and units. Id.

Comments on the Proposed Rule must be received on or before 60 days after the date of publication in the Federal Register. In addition, a public hearing will be held on Tuesday, January 10, 2017, from 4:00 p.m. to 8:00 p.m. at the Joe C. Thompson Conference Center, University of Texas at Austin, 2405 Robert Dedman Drive, Austin, Texas 78712. A prepublication copy of the Proposed Rule is attached.