Clean Air Update

1. Clean Air Update GA AWMA REGULATORY UPDATE CONFERENCETuesday, April 16, 2013 Beverly BanisterAir, Pesticides, and Toxics Management DivisionU.S. Environmental Protection Agency Atlanta, Georgia

2. EPA Clean Air Update • Air Quality Trends • NAAQS Update and Implementation • NAAQS Review Schedule • Ozone NAAQS Update • 2010 SO2 NAAQS Designations and Implementation • 2012 PM 2.5 NAAQS Implementation • DC Circuit Ruling on Implementing PM2.5 NAAQS • Regulatory Updates • Mercury Air Toxics Standards • Interstate Transport Update • Startup Shutdown and Malfunction  • Tier 3 • Climate Change Activities • GHG Permitting

3. Air Quality Trends

4. National Progress on PM2.5 Cumulative % Reduction in Population-weighted PM2.5 Concentrations

5. Southeast Progress on PM2.5 Average design value and 5th and 95th percentiles of all monitors with a valid design value (117 monitors in 2011)

6. National Progress on Ozone Cumulative % Reduction in Population-weighted Ozone Concentrations

7. Southeast Progress on Ozone Average design value and 5th and 95th percentiles of all monitors with a valid design value (205 monitors in 2011)

8. NAAQS Review Schedule For more information see: http://epa.gov/ttn/naaqs/ *PM Final Rulemaking December 14, 2012

9. Ozone NAAQS Update • 2008 Ozone NAAQS Implementation Rule • Rule and guidance addressing SIP Requirements Rule • 2014 Ozone NAAQS Review: • Integrated Science Assessment – Released February 15, 2013 • Risk and Exposure Assessment and Policy Assessment – second draft due May/June 2013 • Propose - December 2013 • Final - September 2014

10. 2010 SO2 NAAQS Designations and Implementation • 6/3/10– EPA promulgated revised SO2 NAAQS of 75 parts per million. • 8/27/12– EPA announced it would use discretionary year to completed designations in June 2013 versus June 2012. • 2/7/13 - Issued 120-day letters to states for 30 areas with violating monitors • Also issued strategy paper on next steps for designations in other parts of the country • Strategy paper and additional information is located at : http://www.epa.gov/airquality/sulfurdioxide/implement.html

11. Region 4 Proposed Sulfur Dioxide Nonattainment Areas Portion of the information presented herein is considered PRELIMINARY. These projections are based on preliminary 2010-2012 design values. A county with a design value greater than 0.075 ppm is considered violating the 2010 Sulfur Dioxide NAAQS.EPA does not warrant the accuracy or completeness of the information shown. The information herein is subject to revision and is not in final form. EPA shall not be liable for any detrimental reliance upon the information shown.

12. 2012 PM2.5 NAAQS Implementation • EPA strengthened the annual primary PM2.5 NAAQS to 12 μg/m3 from the previous level of 15 μg/m3 on December 14, 2012 • Published in Federal Register on January 15, 2013 • EPA aims to complete initial designations of nonattainment areas by the end of 2014 • Designations will likely become effective in early 2015 • EPA is developing an implementation rule through notice –and-comment rulemaking • Current schedule aims to issue final rule around the time of initial designations (e.g., December 2014)

13. D.C. Circuit Ruling on Implementing PM2.5 NAAQS • On January 4, 2013, the D.C. Circuit Court ruled that EPA erred in implementing the 1997 PM2.5 NAAQS under the general Clean Air Act (CAA) requirements for nonattainment areas (“Subpart 1”) rather than the Act’s PM-specific requirements (“Subpart 4”) • NRDC et al. v. EPA, D.C. Cir., No. 08-1250, 1/4/13 • The Court remanded the 2007 PM2.5 NAAQS Implementation Rule • On January 22, 2013, the Court remanded the 2008 New Source Review (NSR)/Prevention of Significant Deterioration (PSD) Rule back to the Agency, but did not set a deadline for further action

14. Mercury Air Toxics Standard (MATS) • December 21, 2011 - EPA announced final standards to limit mercury, acid gases and other toxic pollution from new and existing electric generating units • Applies to units that are >25 MW that burn coal or oil for the purpose of generating electricity for sale and distribution through the national electric grid to the public • Existing sources generally will have up to 4 years if they need it to comply with MATS • EPA also providing a pathway for reliability critical units to obtain a schedule with up to an additional year to achieve compliance • MATS will save thousands of lives and prevent more than 100K heart and asthma attacks each year while providing important health protections to the most vulnerable such as children • The value of the air quality improvements for human health alone totals $37 billion to $90 billion each year • November 16, 2012 - EPA proposed to update MATS emission limits for new power plants. EPA issued a final reconsideration on March 28, 2013. http://www.epa.gov/mats/ and http://ferc.gov/media/news-releases/2012/2012-2/05-17-12-E-5.asp

15. Interstate Transport Requirements • The “good neighbor provision” (section 110(a)(2)(D)(i)) of the CAA 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 • Section 110(a)(2)(D)(i)(II) also contains provisions prohibiting downwind interference with PSD or visibility requirements • Interstate transport requirements apply for all NAAQS in all states

16. CSAPR Decision: Homer City Generation v. EPA • The Cross-State Air Pollution Rule (CSAPR) is the most recent example of EPA’s efforts to implement the “good neighbor provision” • CSAPR aimed to reduce the harmful power plant emissions reaching Americans in downwind states, thereby protecting public health • CSAPR vacated by the D.C. Circuit Court of Appeals on August 2012 • The prior transport rule addressing this issue, the 2005 Clean Air Interstate Rule (CAIR) remains in place

17. Interstate Transport Update • Status of litigation: • March 29, 2013 - The U.S. Solicitor General has petitioned the Supreme Court to review the D.C. Circuit Court’s decision on CSAPR. CAIR remains in place. As the case proceeds, EPA will continue working with states on next steps to address the interstate transport of pollution. • EPA and states are still responsible for addressing transport • Even as we consider legal options it is prudent to begin moving ahead to meet these obligations expeditiously • EPA is working with states in the coming months on a path forward to address interstate transport • EPA remains committed to working with states and with industry and environmental stakeholders to address pollution transport issues required by the CAA

18. Startup, Shutdown and Malfunction Rulemaking • 6/30/11– Sierra Club filed petition with Administrator regarding SSM provisions in SIPs. • Nationally - 39 states & 7 locals noted in the petition • Region 4 - all 8 Region 4 states & 4 locals • Raised a number of issues related to exemptions to enforcement &/or compliance for excess emissions that occur during periods of SSM • 9/30/11– EPA entered into settlement agreement to respond to the petition. • 2/12/13 - Proposed rule signed in response for a SIP call that addressed 36 states • 8/27/13 – Deadline for EPA action on proposed SIP call

19. Tier 3 • Sets standards for light-duty vehicle emissions and the sulfur content of gasoline. • Is among the most highly cost-effective air quality control measures available. • Will provide immediate emissions reductions that are critically important for states to attain and maintain the existing ozone NAAQS. • Timeline: • Proposed March 29, 2013 • Finalized end of 2013

20. Climate Change Activities • Greenhouse GasReporting Program • Highlights for 2011 • (Data released 2/5/13) • Power plants are the largest stationary source emitter at 2,221 MMT CO2e (about 1/3 of total U.S. emissions) • Petroleum and natural gas systems were the second largest sector, with emissions of 225 mmtCO2e in 2011, the first year of reporting for this group • Refineries were the third-largest emitting source, with 182 mmtCO2e, a half of a percent increase over 2010. • Proposed NSPS for new electricity generation facilities • Output‐based standard of 1,000 pounds of CO2 per megawatt‐hour (lb CO2/MWh gross) • Final Mobile Source Emission and CAFE Standards • Extends passenger vehicle program to model year 2017 through 2025 • Average163 grams CO2 per mile, 54.5 mpg in model year 2025 • Renewable Fuels Standard • EPA continues to work towards the goal of 36 billion gallons of renewable fuel by 2022 • 2012 Climate Change Indicators Report • EPA has compiled an updated set of 26 indicators tracking signs of climate change • Final Step 3 Tailoring Rule • Retains the GHG permitting thresholds that were established in Steps 1 and 2 of the GHG Tailoring Rule www.epa.gov/climatechange

21. Permitting Timeline Under the Tailoring Rule 2011 2012 2013 2014 2015 2016 Step 1: Source already subject to PSD “anyway” (tpy CO2e) New source: N/A Modification: 75,000 Step 2: All Stationary Sources (tpy CO2e) New source: 100,000Modification: 75,000 Step 3: Implementation of potential additional phase-in and streamlining options 5-year study: To examine GHG permitting for smaller sources July 1, 2011 new thresholds subject to regulation began Step 3 Rule was issued July 3, 2012. Proposed no changes to thresholds. Study Complete Implementation of 5-year Study

22. GHG Permitting Activity • Permitting Activities • Nationally: 14 EPA-issued GHG PSD permits to date; about 73 PSD GHG permits issued total (EPA and state/local permitting) • Region 4: Issuing GHG PSD permits in Florida; Region 4 continues to review all GHG PSD permits for other Region 4 state/local permitting authorities • Status of Biomass Deferral • Issued July 1, 2011 and still in effect until July 20, 2014 • EPA continues to work on framework for biogenic CO2 accounting • Status of GHG NSPS • Proposed April 13, 2012; • EPA received over 2 million comments on proposed rule (14,800+ individual submittals)

23. Questions? GA AWMA REGULATORY UPDATE CONFERENCETuesday, April 16, 2013 Beverly Banister U.S. EPA, Atlanta, GA 404-562-9077 www.epa.gov/air