March 17, 2015
United States Environmental Protection Agency
EPA Docket Center
Mailcode 28221T
1200 Pennsylvania Ave., N.W.
Washington, DC 20460

ATTENTION: Docket No. EPA-HQ-OAR-2008-0699
Comments of the American Coalition for Clean Coal Electricity
On National Ambient Air Quality Standards for Ozone:
Proposed Rule 79 Fed. Reg. 75,234 (December 17, 2014)
Dear Sir or Madam:
On December 17, 2014, the United States Environmental Protection
Agency (“EPA” or “Agency”) published proposed revisions to the
National Ambient Air Quality Standards (“NAAQS” or “standards”) for
ozone. These are the comments of the American Coalition for Clean Coal
Electricity (“ACCCE”) on EPA’s proposal to increase the stringency of the
8-hour primary (health-based) ozone standard from its current level of
0.075 parts per million (ppm) to between 0.070 ppm and 0.065 ppm. In
addition, EPA seeks comment on either retaining the current 0.075 ppm
primary standard or reducing the standard to as low as 0.060 ppm. EPA
is also proposing to increase the stringency of the secondary (welfarebased) standard by making it the same as the revised primary standard.
ACCCE is a national trade organization whose members are involved in
producing electricity from coal. 1 Coal-fired power plants (as well as gas1

 fired and oil-fired power plants)

produce nitrogen oxides (NO x )

emissions, which are a precursor to ozone, the f ocus of this proposal.
Therefore, ACCCE and its members have a direct and substantial interest
in the proposed rule.
ACCCE and its members support responsible efforts to improve air
quality and protect public health and the environment.

The coal -fired

electricity generating industry has spent $125 billion, through 2014, on
emissions controls, and projects spending another $20 billion through
2016. 2 These controls have resulted in a reduction in emissions of sulfur
dioxide, nitrogen oxides, and particulate matter of nearly 90 percent per
kilowatt-hour since 1970. 3
However, ACCCE has a number of major concerns with the proposal and
urges EPA to retain the current ozone standard.

In addition to our

comments, ACCCE is joining the comments of a group of t rade
associations (the U.S. Chamber of Commerce, et.al.) and is a member of
the Utility Air Regulatory Group (UARG) and the Midwest Ozone Group
(MOG).

ACCCE supports and incorporates the U.S. Chamber of

Commerce, et.al, UARG, and MOG comments by reference herein.
This proposed revision of the ozone standard will increase electricity
prices, on top of increases caused by other EPA regulations. At the same
time, declining real household incomes coupled with increasing energy
costs are harming the 60 million American families with low and middle
incomes.

These families, who spend an estimated 20 percent of their

after-tax incomes on energy, have seen their real after-tax incomes decline
by 22 percent since 2001, while their estimated total energy costs have
increased by 27 percent in real terms. 4
ACCCE is troubled about the impact of this rule on an increasinglystrained electricity system.

Over 72,000 megawatts (MW) of coal-fired

electric generating capacity in 41 states have

already announced

retirement or conversion; most of these have been attributed to EPA
2

 policies. 5

We estimate that an additional 30,000 MW to 60,000 MW of

coal-fired

capacity

is

at risk of retirement

under

this

proposal,

heightening widespread concerns about electric reliability that have been
raised in the context of other EPA rules, especially EPA’s proposed Clean
Power Plan. 6
We believe this proposal -- in concert with the Clean Power Plan and
other Administration policies -- is part of a foolish strategy to phase out
the use of affordable fossil fuels in this country through Executive Branch
actions. While many of these actions may be overturned in court, their
cumulative impacts on the American people and the U.S. economy are a
major concern.
EPA has just begun to implement its current ozone standard of 0.075 ppm,
which was promulgated in 2008.

Furthermore, the levels EPA is

considering can be exceeded by background levels of ozone, yet the
Agency does not properly consider that fact in its proposal. As explained
in depth in other comments that ACCCE supports, scientific evidence
does not support increasing the stringency of the ozone standard.

In

addition, even EPA’s understated cost of the ozone proposal would
exceed the Agency’s projected ozone benefits. The following paragraphs
explain why EPA should retain the 0.075 ppm ozone standard.

States have just begun to implement the 2008 ozone standard.
EPA last revised the ozone standard in 2008, setting the primary standard
at 0.075 ppm and the secondary standard at the same level. This standard
has yet to be fully implemented.

EPA Administrator Gina McCarthy

recently stated before the Senate Environment and Public Works
Committee that “we are in the early stages of implementing” the 2008
standard. 7
The final rule implementing the 2008 standard appeared in the Federal
Register on March 6, less than two weeks ago. 8 This rule lays out in detail
the requirements for State Implementation Plans (SIPs) and timelines for
3

 SIP submittal by the states. It requires SIPs to be submitted (depending
on the severity of an area’s nonattainment status) in either the summer of
2015 or the summer of 2016. 9 The final rule also revokes the 1997 ozone
standard and lays out requirements for transitioning areas to the new
2008 standard. 10

States are now developing SIPs designed to meet

required attainment dates for the 2008 standard ranging from 2015 for
marginal areas to 2018 for moderate areas, 2021 for serious areas, and
beyond that for severe and extreme areas. 11

It would be a substantial

waste of administrative effort and taxpayer dollars to impose yet another
ozone standard on top of this while states are still developing plans to
meet the current standard. EPA should give the 2008 standard time to be
implemented and assess the impacts of doing so before adopting another
revision.

EPA is considering a revised ozone standard that can be
exceeded by background ozone concentrations. EPA states that
background levels of ozone are those that occur in the U.S. due to events
other than human activities in this country. 12 This background ozone is
formed from ozone precursors emitted in other countries and by natural
sources.

EPA acknowledges in the proposal that it can consider the

feasibility of a standard in relation to background levels: “The EPA may
consider proximity to background levels as a factor in the decision
whether and how to revise the NAAQS when considering levels within
the range of reasonable values supported by the air quality criteria and
judgments of the Administrator. ATA III, 283 F.3d at 379.” 13

If the

proposed standard exceeds background levels due to natural sources and
emissions from other countries, then the proposed standard is not
feasible.
EPA concedes that ozone levels can exceed the current 0.075 ppm
standard

at

certain

high-elevation

locations

in

the

U.S.

West.14

Furthermore, as detailed in UARG’s comments, background levels can
make a significant contribution to ozone concentrations at both western
4

 and eastern locations. 15 The Clean Air Act requires states to develop SIPs
that specify how the NAAQS “will be attained and maintained.” 16 States
cannot be expected to attain an ozone standard whose exceedance is
caused by natural or foreign sources. The ozone levels EPA is proposing
are not feasible to attain in all areas due to background concentrations .
EPA should therefore not reduce the ozone standard below its current
0.075 ppm level.

Science does not support a more stringent ozone standard. A
decision to increase the stringency of a NAAQS is only justified when the
scientific evidence shows that the existing standard is less stringent than
necessary. As stated in the comments of UARG and others, the science
EPA cites does not differ substantially from the evidence the Agency
relied upon in previous reviews of the ozone standard and therefore does
not justify increasing the stringency of the ozone standard beyond 0.075
ppm. 17
EPA relies heavily on human exposure studies to justify a reduction in the
primary ozone standard. 18 However, a proper interpretation of the studies
EPA cites shows that the current standard provides adequate protection
for sensitive populations. 19
EPA appropriately places less weight on epidemiological studies.
However, as noted by UARG and Gradient, the studies EPA cites suffer
from a number of weaknesses, including the fact that the majority of the
studies were conducted in areas that did not attain the current ozone
standard.

Even EPA admits in its proposal that these studies do not

indicate the current ozone standard is inadequate: “[T]he available U.S.
and Canadian epidemiologic studies evaluating long-term ambient O 3
concentration metrics have not been conducted in locations likely to h ave
met the current 8-hour O 3 standard during the study period … Therefore,
although these studies contribute to understanding of health effects …
consideration of study area air quality does not inform consideration of the
5

 extent to which those health effects may be occurring in locations that
meet the current standard.” 20
Additionally, the UARG and Gradient comments demonstrate that EPA
should retain the secondary standard in its current form. The science of
ozone welfare effects is too uncertain and inconclusive to justify changing
the secondary standard at this time.

As EPA acknowledges in the

proposed rule, “[t]he current body of O 3 welfare effects evidence confirms
the conclusions reached in the last review on the nature of O 3 -induced
welfare effects.” 21 While EPA cites studies of impacts on trees, crops, and
foliage in an attempt to justify increasing the stringency of the standard,
UARG and Gradient show that these studies are subject to substantial
uncertainty and do not demonstrate that lowering the secondary standard
will provide meaningful welfare protection beyond the current standard. 22
Therefore, EPA should retain the current secondary standard.

The cost of the proposed standard outweighs its ozone
benefits. EPA has understated the cost of the proposed ozone standard
and has overstated its benefits. EPA’s analysis of the costs of the proposal
in the Regulatory Impact Analysis (RIA) understates its costs in at least
four areas.

First, EPA admits that it did not include the costs to the

economy as a whole in its RIA analysis. 23 (This is a typical shortcoming of
EPA regulatory impact analyses.) As demonstrated in a recent analysis by
NERA Economic Consulting, those costs would be substantial, including:
‒

A reduction in GDP of $140 billion each year, or $1.7 trillion from
2017 to 2040;

‒

A loss of 1.4 million job equivalents per year; and

‒

An average cost of $830 per year to each U.S. household in the form
of lost consumption. 24

Second, EPA made deliberate choices in its economic analysis that
reduced the cost estimates, such as providing costs for the year 2025, even
though virtually all areas except California would have attainment
6

 deadlines before that date, and therefore most costs of complying with the
current standard would have already been incurred by 2025. 25 Third, EPA
assumed that its proposed Clean Power Plan will be finalized and
implemented as proposed, and that the ozone precursor reductions due to
the CPP will occur prior to 2025. 26

It is unclear, at the least, whether the

CPP will be finalized as proposed, will be implemented by the st ates as
contemplated by EPA, or will survive judicial review. If the CPP is not
implemented in the manner EPA envisions, or is overturned in court, a
greater number of coal-fired power plants may be subject to retirement or
the installation of expensive emissions control equipment, which would
increase the cost of meeting a more stringent ozone standard.

Finally,

EPA assumes that the cost of “unknown controls,” which make up a large
portion of the controls EPA projects will be needed to achieve a revised
standard, will be the same as the cost of controls which are known and are
currently being used. All of these factors together mean that EPA has
underestimated the cost of the proposal.
EPA has also overestimated the benefits of the ozone proposal.

The

majority of the benefits EPA attributes to the revised ozone standard are
not related to ozone at all, but to reductions in fine particulate matter
(PM 2.5 ). EPA separately sets and implements NAAQS for PM 2.5 that, by
definition, protect public health from PM 2.5 in ambient air with an
adequate margin of safety. 27

As stated in recent testimony before the

House Oversight and Government Reform Committee, it is inappropriate
to use reductions in PM 2.5 , an already regulated pollutant, to justify
revising the ozone standard. In fact, EPA’s projected ozone -only benefits
from a revised standard would never match even EPA’s understated
costs. 28

Conclusion

EPA should retain the current primary and secondary

ozone standards. EPA and the states have just begun to implement the
2008 primary ozone standard.

EPA has not taken into proper

consideration the effect of background ozone.
7

The scientific evidence

 does not justify revising the standard.

Lastly, the costs of the proposal

exceed its benefits.
Sincerely,
/s/
Paul Bailey
Senior Vice President, Federal Affairs and Policy

1

A list of ACCCE Board members is provided in Appendix 1.

2

Energy Ventures Analysis, Inc., Coal-Fired Power Investment in Air Pollution Controls,

October 2013.
EIA, Monthly Energy Review, February 2014, Table 7.1; Electric Power Monthly, March

3

2014; U.S. EPA, National Emissions Inventory, Air Pollutant Emissions Trends Data, 1970 2013, Fuel Combustion Electric Utilities (for PM); and (for SO 2 and NO x ) EPA Air
Markets Program data.
4

Eugene Trisko, Energy Cost Impacts on American Families, 2001-2014, February 2014.

5

ACCCE, Coal Unit Shutdowns, January 25, 2015.

6

See, e.g., North American Electric Reliability Corporation, Potential Reliability Impacts of

EPA’s Proposed Clean Power Plan: Initial Reliability Review , November 2014; Brown,
Nicholas A., President & CEO, Southwest Power Pool, Inc., letter to Gina McCarthy,
October 9, 2014; Bear, John R., President & CEO Midcontinent Independent System
Operator, Inc., letter to the Honorable Gina McCarthy, November 25, 2014.
7

Gina McCarthy, Testimony before the Senate Environment and Public Works

Committee hearing entitled “Oversight Hearing: Examining the President’s budget
request for the U.S. Environmental Protection Agency ,” March 4, 2015.
8

80 Fed. Reg. 12,264 (March 6, 2015).

9

80 Fed. Reg. 12,266 (stating that SIPs for moderate areas are due three years after the

July 20, 2012 effective date of nonattainment designations, and SIPs for serious and
higher areas are due four years after that date).
10

80 Fed. Reg. 12,301.

11

80 Fed. Reg. 12,268.

12

79 Fed. Reg. at 75,242-3 (December 17, 2014).

13

79 Fed. Reg. at 75,242-43.
8

 14
15

Id.
Comments of the Utility Air Regulatory Group on the National Ambient Air Quality

Standards for Ozone; Proposed Rule 79 Fed. Reg. 75,234 (Dec. 17, 2014), (March 17, 2014)
(“UARG”).
16

Clean Air Act § 107(a) (emphasis added).

17

UARG and Goodman, Julie E., Gradient, “Comments on the National Ambient Air

Quality Standards for Ozone Proposed Rule; 79 Fed. Reg. 75,234; Docket ID No. EPA HQ-OAR-2008-0699,” March 16, 2105 (“Gradient”).
18

79 Fed. Reg. 75,288.

19

UARG, Gradient.

20

79 Fed. Reg. 75,282 (emphasis added).

21

79 Fed. Reg. 75,314 (emphasis added).

22

UARG, Gradient.

23

U.S. EPA, Regulatory Impact Analysis of the Proposed Revisions to the National

Ambient Air Quality Standards for Ground-Level Ozone, November 2014, pages 7-3738.
24

NERA Economic Consulting, Economic Impacts of a 65 ppb National Ambient Air Quality

Standard for Ozone, February 2015.
25

UARG.

26

Id.

27

Clean Air Act § 109(b)(1).

28

Prepared Statement of Anne E. Smith, Ph.D. at a Hearing on Impacts of U.S. Environmental

Protection Agency Regulations by the Committee on Oversight and Government Reform,
United States House of Representatives, Washington, DC, February 26, 2015.

9

 Appendix 1

Alliance Coal, LLC

Joy Global Incorporated

Alpha Natural Resources

LG&E and KU Energy, LLC

AMEREN Corporation

Murray Energy Corporation

American Electric Power

Natural Resource Partners, L.P.

Arch Coal, Incorporated

Norfolk Southern Corporation

Arkansas Electric Cooperative Corporation

Oglethorpe Power Corporation

Associated Electric Cooperative

Patriot Coal

Basin Electric Power Cooperative

Peabody Energy Corporation

Berwind Natural Resource Corporation

Prairie State Generating Company, LLC

BNSF Railway Company

Southern Company

Buckeye Power, Incorporated

Sunflower Electric Power Corporation

Caterpillar Incorporated

Tri-State Generation & Transmission Assn.

CONSOL Energy Inc.

Union Pacific Railroad

Crounse Corporation

Western Fuels Association

CSX Corporation

Western Fuels Colorado

Drummond Company, Incorporated

March 2015