ERCC Letter to The Honorable Lisa P. Jackson on Proposed Revisions to the National Ambient Air Quality Standards (“NAAQS”) for Particulate Matter (PM)

December 12, 2012

December 12, 2012

ERCC Letter to The Honorable Lisa Jackson NAAQS for PM

The Honorable Lisa P. Jackson
Administrator
Environmental Protection Agency
1200 Pennsylvania Avenue, NW
Washington, D.C. 20004 

Re:       Proposed Revisions to the National Ambient Air Quality Standards (“NAAQS”) for Particulate Matter (PM)

Dear Administrator Jackson:

On behalf of the Electric Reliability Coordinating Council (“ERCC”), I am writing to express my concerns about EPA’s Proposed Revisions to the National Ambient Air Quality Standards for Particulate Pollution (“PM NAAQS”).  The PM NAAQS rule recently sent to the Office of Management and Budget (“OMB”) would implement standards that are based on incomplete science and would impose new burdens on States and cities.  Further, the rule is being implemented in a rushed manner that fails to properly take into account public comments or changes in legal and regulatory landscape.

ERCC is a group of power-generating companies that provide reliable and affordable power to millions of consumers in geographically diverse regions of the United States.  ERCC members have long supported commonsense interpretation of the Clean Air Act in order to ensure electric reliability, affordability, safety and environmental protection. 

Incomplete Science

Broad-ranging rules such as PM NAAQS need to be predicated on sound and reliable science.  Unfortunately, the current PM NAAQS package is premised on benefits claims that do not have sufficient scientific support.  For example, EPA noted in the preamble to the PM NAAQS proposed rule that “important uncertainties remain in the qualitative and quantitative characterizations of health effects attributable to [PM].” [1]  Additionally, EPA has cited the harms associated with PM in a wide range of proposed rulemakings, such as the Mercury and Air Toxics Rule (“MATS”), which magnifies the problems with uncertainty because of the likelihood that EPA is double-counting health benefits from PM reductions in multiple rulemakings.  Citing the same PM benefits in multiple rulemakings misleads the public and increases the risk that new burdensome regulations will be adopted while delivering little to no unique benefits.

In sum, ERCC shares the concerns that have been raised by other commenters: There are a diverse range of uncertainties about PM claims and these uncertainties need to be more fully addressed and resolved before the PM NAAQS rule is finalized.

New Burdens Under the PM NAAQS

The PM NAAQS proposal would result in substantial changes to the monitoring protocols for PM, and it does not appear that the rule can be implemented in an efficient manner.  For example, EPA’s effort to terminate well-established monitoring protocols, such as the requirement that monitors be “population oriented,” will result in a much more stringent rule and a range of new cost and implementation issues.

As commenters such as Edison Electric Institute (EEI) and the American Petroleum Institute (API) have noted, the wide range of changes to monitoring requirements could result in a large number of new nonattainment areas under the PM NAAQS.  A spike in nonattainment areas will, in turn, impose a range of heavy burdens on States and cities that are designated as being in nonattainment. The crafting and approval of new State Implementation Plans (“SIPs”) would entail substantial costs both in terms of developing SIPs and in lost economic productivity.

Importantly, being designated as a nonattainment area can also have devastating consequences for local economies.  For example, a 2011 study by the University of Chicago’s Center for Economic Studies found that a nonattainment designation increases energy prices, reduces manufacturing productivity, and causes local manufacturing companies to exit the areas that are designated as being in nonattainment.[2]  A similar study conducted by Economics professors at Boise State University found that nonattainment designations cause reductions in the rate of new business formation, cause competitiveness problems for existing businesses, and depress economic growth in designated localities.[3] The study found that a nonattainment designation is particularly devastating to smaller business that are essential to productive entrepreneurial activity and that “non-attainment status designations are increasingly becoming a major concern for economic viability and attractiveness as allocation choice for new business/venture formations.”[4]  

Increasing the cost of doing business and jeopardizing quality manufacturing jobs in new nonattainment areas will come at a heavy price.  As a recent report from the Maguire Energy Institute at the Southern Methodist University states, “Numerous studies find that regulatory burdens of this sort imposed on energy prices and energy supply cause plant closures and maximize the potential that manufacturing jobs will move overseas. For each manufacturing job lost, many other dependent jobs will also exit the economy. One in eight private sector jobs rely upon our manufacturing base.”[5]   

More Time Should Be Taken to Craft a PM NAAQS Rule

ERCC is also concerned that EPA is rushing to finalize the PM NAAQS proposal without properly considering comments on the proposal or changes to the legal and regulatory landscape that have occurred since the rule was initially proposed.

Assistant Administrator McCarthy has previously declared that the complexity of the PM NAAQS rule would require a year for the rule to be finalized.  However, EPA is now moving to finalize the rule less than six months after it was proposed.  Given that over 120,000 comments on the PM NAAQS proposal were received by EPA, many of which raised complex and highly technical issues, it is difficult to envision how EPA could have properly considered these comments within such a brief period of time.

Furthermore, the legal landscape has changed since EPA proposed the PM NAAQS rule. On August 21, 2012 the U.S. Court of Appeals for the D.C. Circuit vacated the Cross-State Air Pollution Rule (CSAPR).  This rule required significant reductions in PM emissions, and EPA’s regulatory impact analysis of the PM NAAQS proposal cited the CSAPR rule as a reason why reductions under the new PM NAAQS would not be as costly as many have contended.   Given that CSAPR has now been vacated, it would be appropriate for EPA to fully reconsider the basis and substance of the PM NAAQS proposal, and stakeholders and the public should be provided an adequate opportunity to review and provide comments on any revised EPA analysis.

Conclusion  

A lower PM NAAQS may have drastic impacts on States and cities around the country and too many of the underlying scientific and legal issues surrounding the proposal have been inadequately analyzed under the truncated timeframe EPA is using for finalizing the rule. Accordingly, EPA should exercise its authority under the Clean Air Act to withdraw or withhold consent from the final order or agreement requiring EPA to finalize the rule by December 14, 2012 because public comments have disclosed facts indicating that such consent is inappropriate.

We appreciate your consideration of these concerns.

Sincerely,

Scott H. Segal, Director
Electric Reliability Coordinating Council


[1] National Ambient Air Quality Standards for Particulate Matter; Proposed Rule, 77 Fed. Reg. 38,890 (June 29, 2012) at 38,900.

[2] Michael Greenstone, John A. List & Chad Syverson, The Effects of Environmental Regulation on the Competitiveness of U.S. Manufacturing, (February 2011), available at: www2.census.gov/ces/wp/2011/CES-WP-11-03.pdf 

[3] Scott E. Lowe & Samia Islam, Impact of Air Quality Regulations on Entrepreneurial Activity (2009), available at: http://cobe.boisestate.edu/economics/files/2009/10/AirQualityRegsandEntrepreneurialActivity.pdf

[4] Id. at 2.

[5] Bernard L. Weinstein, Proposed EPA Power-Sector Air Rules: Weakening Economic Recovery and Putting America’s Most Competitive Manufacturing Industries at Risk (September 2011), available at: http://pressdocs.cox.smu.edu/maguire/SMU_Utility_MACT_Report.pdf, at 2.