EPA’s New Regional Haze Memo Is a Concern for States and Potential Sources

Clark Hill PLC

EPA’s July 8 Memo may force states to impose stricter emissions controls on sources subject to the Regional Haze program. Recently submitted State Implementation Plans (SIPs) may not meet new EPA criteria and interpretations, leading to delays in SIP approvals and implementation or even lead to more direct federal oversight. The Regional Haze rules were originally set forth to restore visibility to natural conditions in “Class I” areas (i.e. national parks and wilderness areas) by 2064. States are currently in the “second round” of the Regional Haze rules implementation covering the period from 2018 through 2028, and State Implementation Plans were due on July 31. This second round is focused on achieving reasonable further progress (RFP) in haze reduction and a “uniform rate of progress” (URP) to restore visibility.

Many states have already turned in their SIPs, which were drafted in accordance with the Trump Administration’s 2019 Guidance. The 2019 Guidance document provided states increased discretion when drafting their Regional Haze SIPs. The new Memo, however, signals an EPA effort to limit the flexibility granted to states in selecting sources for additional haze-related controls. The new Memo states:

There exist many opportunities for states to leverage both ongoing and upcoming emission reductions under other [Clean Air Act] programs; however, we also expect states to undertake reasonable progress analyses that identify further opportunities to advance the national visibility goal consistent with the statutory and regulatory requirements.

So, even though states and sources may demonstrate that emissions reductions result from regulation under other programs, such as Nonattainment Area SIPs, the National Emissions Standards for Hazardous Air Pollutants (NESHAP), or New Source Performance Standards (NSPS), EPA appears to require states in all cases to thoroughly consider further emissions reductions as part of their Haze SIPs. This could cause potential issues for sources that are already operating under tight rules and regulations, as the new Memo suggests that states will need to point to powerful justifications to avoid imposing new control requirements.

Regional Haze rules require states to perform a “four-factor analysis,” in which the state must document and consider for each identified source: 1) the costs associated with compliance, 2) the time necessary for compliance, 3) the energy and non-air quality environmental impacts of compliance, and 4) the remaining useful life of any existing source. However, the 2019 Guidance implied that “well-controlled” emissions sources could avoid an in-depth four-factor analysis. In turn, many states have submitted SIPs forgoing the four-factor analysis. EPA responded in the new Memo, stating, “[b]ringing no sources forward for sources selection without a thoroughly justified explanation of why it is reasonable to forgo a four-factor analysis is inconsistent with the statutory and regulatory requirements.” It appears that without a thorough justification, a four-factor analysis will be required, potentially for all sources identified by the state.

Environmentalists praise the Memo, saying that it not only clarifies EPA’s expectations of states during the Regional Haze SIP process, but also encourages states to consider equity and environmental justice issues during the process. However, critics find that the new Memo, issued just 23 days prior to the SIP submittal deadline, comes too late in the SIP planning process to be helpful. Most states would have completed any required SIP analyses within the past few years and would not be able to adequately address issues that may have arisen as a result of the Memo. Critics suggest that if EPA had consulted directly with states during the last six months, states could have potentially had time to submit approvable SIPs.

Potential sources should work with their state agencies to ensure SIPs are fully supported and justified. Then, as EPA starts acting on the SIPs, sources should engage in the rulemaking process to preserve their ability to challenge direct EPA mandates. Either way, if, based on the new Memo, EPA decides not to approve state SIPs and implement a Federal Implementation Plan (FIP) instead (as they did during the first round of haze SIPs), states and sources may pursue litigation.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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