[00:00:00] Speaker 03:
Case number is 19-1231, State of New York at-all petitioners versus Environmental Protection Agency and Andrew Wheeler in his official capacity as administrator of the U.S.

[00:00:13] Speaker 03:
Environmental Protection Agency.

[00:00:15] Speaker 03:
Mr. Wu for the petitioners, Mr. Berman for the interveners, and Ms.

[00:00:19] Speaker 03:
Spence for the respondents.

[00:00:25] Speaker 07:
Mr. Wu, whenever you're ready, please proceed.

[00:00:28] Speaker 05:
Thank you, Your Honors.

[00:00:30] Speaker 05:
May it please the court, Stephen Wu, for the petitioners?

[00:00:33] Speaker 05:
I'm reserving two minutes for rebuttal.

[00:00:35] Speaker 05:
I'll be dividing my time with my friend, Mr. Berman, for the interveners, who will be addressing the specific question of EPA's denial as it relates to electric generating units subject to the now invalidated cross-state update.

[00:00:49] Speaker 05:
I want to spend my time on three reasons that EPA's denial should be vacated and remanded.

[00:00:54] Speaker 05:
First, EPA improperly relied on the purported adequacy of other cross-state air pollution rules that this Court has now found to be inadequate.

[00:01:03] Speaker 05:
Second, EPA improperly faulted the petitioners here for failing to meet what it deemed to be their initial burden under Section 126.

[00:01:11] Speaker 05:
And finally, EPA disregarded relevant evidence about ongoing air quality problems in the denial.

[00:01:18] Speaker 05:
To begin with the first defect in the denial, EPA expressly based its denial here on the assumption that the cross-state update rule and the closeout rule had fully resolved the problem of interstate transport of ozone precursors from these upwind sources.

[00:01:35] Speaker 05:
And this is true both at the step one analysis and at the step three analysis.

[00:01:40] Speaker 05:
At the step one analysis, the denial expressly incorporates the analysis from the update about what it calls the 2023 feature analytic year.

[00:01:49] Speaker 05:
And it bases its finding that New York and other petitioners would not have downwind air quality problems on an assessment of whether in the year 2023, there would be issues.

[00:02:01] Speaker 05:
But in Wisconsin, this court squarely held that 2023 or similar years was the wrong

[00:02:07] Speaker 05:
that was the wrong year to look at because the downwind areas are required to comply by 2021 or earlier times.

[00:02:15] Speaker 05:
And the failure by EPA to adopt that statutory deadline in its analysis here is a reason to overturn their finding that there would be no downwind air quality problems as of the correct future year.

[00:02:31] Speaker 05:
EPA has claimed in a footnote to this denial, which came out after Wisconsin was issued, that there is an independent basis for finding a problem with downwind air quality.

[00:02:40] Speaker 05:
But that is incorrect.

[00:02:41] Speaker 05:
I mean, what they refer to in the footnote, again, is the concept of the future analytic year.

[00:02:46] Speaker 05:
There is no analysis here of the correct future analytic year, which is 2021.

[00:02:50] Speaker 05:
Instead, all of the analysis centers around 2023, and that choice

[00:02:55] Speaker 05:
of an incorrect year that is two years past when the downwind states have to come into attainment is a legal error and a basis for reversal.

[00:03:03] Speaker 05:
At the step three analysis, EPA also incorporated and relied upon both the update and the closeout here.

[00:03:11] Speaker 05:
And I think this is clearest to see at 56089 of the denial, which is at JA51.

[00:03:17] Speaker 05:
In the litany of reasons that EPA gave at the step three analysis, one of the ones they relied upon

[00:03:24] Speaker 05:
was to say that the state peer failed to meet their burden to get relief under 126B, in part because they did not establish that there were necessary additional source-specific unit-level emissions on top of what was established in the update.

[00:03:39] Speaker 05:
In other words, the baseline that EPA chose to determine whether the petitioners had provided sufficient evidence to show

[00:03:47] Speaker 05:
relief under 126B was the baseline established in the update and later in the closeout as well.

[00:03:53] Speaker 07:
But again... Is this part of the particular part of J51 that you're talking about?

[00:03:59] Speaker 05:
Sure.

[00:03:59] Speaker 05:
It's the paragraph that is in the middle column and then the right-hand column that begins while EPA acknowledged the CAFRA update.

[00:04:07] Speaker 05:
Got it.

[00:04:08] Speaker 05:
And it's the end of the paragraph on the right column.

[00:04:11] Speaker 05:
where it says the petition has failed to demonstrate it's necessary to implement these additional source-specific and unit-level emissions.

[00:04:19] Speaker 00:
And so, go ahead.

[00:04:20] Speaker 00:
Mr. Wu, this is Judge Griffith.

[00:04:22] Speaker 00:
May I ask you a question to help me better understand how 126B works?

[00:04:31] Speaker 00:
The language of 126B speaks of a source or a group of stationary sources.

[00:04:39] Speaker 00:
Now, that doesn't sound like

[00:04:41] Speaker 00:
350 sources from nine states to me?

[00:04:49] Speaker 05:
Well, the language allows sort of a range of options here.

[00:04:53] Speaker 00:
What's the group?

[00:04:55] Speaker 00:
The group here is 350 from nine states?

[00:05:00] Speaker 00:
You think the language supports that sort of?

[00:05:02] Speaker 05:
Yes, it would.

[00:05:06] Speaker 05:
I mean, the group here are... What does group mean?

[00:05:09] Speaker 05:
Is it anyone you list?

[00:05:11] Speaker 05:
Well, here a group of sources identifies upwind sources that the petition identifies as contributing to downwind non-attainment or interference with the 2008 ozone NACs, the 2015 ozone NACs.

[00:05:26] Speaker 05:
And so it is targeted in the sense that it is talking about a specific form of interstate transport and identifying the sources that contribute to our downwind non-attainment problems.

[00:05:37] Speaker 00:
Now, this is not, as I said... In your reading, I'd be interested in your reading of how 126B is supposed to work with the Good Neighbor provision.

[00:05:49] Speaker 00:
In your view, is there any meaningful difference between 126B

[00:05:53] Speaker 00:
and the good neighbor provision, other than who initiates the process.

[00:05:58] Speaker 00:
That in 126B, a state can, you know, a governmental entity can start it, you can initiate it, and then in the good neighbor provision, it's EPA.

[00:06:07] Speaker 00:
But other than that, is there any meaningful difference to you in your reading between 126B and the good neighbor provision?

[00:06:14] Speaker 05:
Yes.

[00:06:15] Speaker 05:
And the differences are, were recognized by this court in the Appalachian power cases.

[00:06:19] Speaker 05:
126B, in contrast to 110,

[00:06:22] Speaker 05:
allows for a different schedule for compliance and a more expedited schedule for compliance.

[00:06:28] Speaker 05:
It also empowers EPA to provide for source-specific and short-term limitations that don't have to be the equivalent of a complete regional transport rule.

[00:06:38] Speaker 00:
And how do you respond to the EPA's argument that that shorter timeframe actually cuts against you, that that shorter timeframe

[00:06:49] Speaker 00:
suggests that what your suit is really about is just trying to get them to do what you want them to do under the good neighbor tradition.

[00:06:59] Speaker 00:
And that 126B is intended for something far more targeted.

[00:07:04] Speaker 00:
And it gets to the burden of proof point because then the argument, as I understand it saying, is then the burden's on you to come up with showing the problems and that the shorter time frame

[00:07:17] Speaker 00:
supports that reading.

[00:07:18] Speaker 00:
How do you respond to that?

[00:07:21] Speaker 05:
Well, there's a couple of responses.

[00:07:24] Speaker 05:
I mean, one is that this case in particular is an in-app one for EPA to be complaining about the time frame here.

[00:07:31] Speaker 05:
The information that EPA claims is missing from this petition is information that EPA should have collected already as part of its obligations

[00:07:39] Speaker 05:
under the Good Neighbor provision.

[00:07:41] Speaker 05:
And what was clear from the legislative history of 126B was that Congress intended it to be an independent mechanism for the states to seek relief that is parallel to the Good Neighbor provision, but that is meant to compel the agency to act when it has failed to do so, which is precisely this context.

[00:07:57] Speaker 05:
So, you know, whatever might be true about other instances, this is a context where the same information EPA claims is missing is what it is supposed to collect under the Good Neighbor process, and what this court has now recognized it should have collected in order to ensure that downland states could sort of meet their own obligations by the relevant statutory deadlines.

[00:08:18] Speaker 05:
In addition, there's a mischaracterization of what this petition is seeking.

[00:08:23] Speaker 05:
I mean, EPA has characterized this petition as seeking the equivalent of what is going on in the remanded Wisconsin and prior New York case.

[00:08:32] Speaker 05:
But that is incorrect.

[00:08:34] Speaker 05:
What we are seeking here is not a global transport rulemaking, and therefore, we would be subject to the standards applicable to that.

[00:08:41] Speaker 05:
What we're seeking is to curb emissions from upwind sources that our analysis has demonstrated, you know, result in non-attainment or interference with our maintenance of the 2008 and 2015 standards.

[00:08:53] Speaker 05:
And it is perfectly compatible with that argument for EPA to provide, as we argued both in the petition and in our briefs, short-term and source-specific controls

[00:09:03] Speaker 05:
even if it is not controls necessarily that extend across all 350 sources.

[00:09:09] Speaker 05:
And I guess this is the last thing that I would say about the 60-day deadline, which is if EPA consulates here, the time that it would take to impose controls, decide the actual level of controls across all of these sources,

[00:09:22] Speaker 05:
with what we are asking for with the statute and visions within the 60 days, which is just a finding of significant contribution and therefore sort of placing these sources in the regulatory bucket, allowing EPA or requiring EPA to consider what emissions controls should apply here.

[00:09:39] Speaker 05:
For that sort of discrete analysis, the 60-day period should be enough time for EPA to determine in this context

[00:09:47] Speaker 05:
that these sources are significantly contributing to our downwind attainment problems and therefore should be some more control.

[00:09:54] Speaker 00:
But doesn't the 60-day limit suggest that they're right on the burden of proof here?

[00:09:59] Speaker 00:
That if someone wants to take advantage of this expedited, but more expedited process, then the burden's on you to show them

[00:10:11] Speaker 00:
where the problem is and whether there's a cost-effective solution to it.

[00:10:16] Speaker 00:
That seems to me a pretty powerful reading of the time limits.

[00:10:23] Speaker 05:
Well, we don't dispute that the state has some initial burden in bringing a 126B petition, but the problem with this denial is in how EPA defines what that burden is.

[00:10:34] Speaker 05:
Now, there's many things that EPA says in this denial, but one way of understanding what they think is missing and what the states have to establish is we have to come in with something that EPA has never done, which is a complete regional transport rulemaking that uses the analysis across many sources and many states.

[00:10:53] Speaker 00:
But their response to that is that's because you've asked for, you've identified 350 sources.

[00:11:01] Speaker 00:
You've asked for too much.

[00:11:05] Speaker 00:
Stick to a group, right?

[00:11:08] Speaker 05:
But, I mean, number one, we stick to a group in the sense that we are talking just about interstate ozone transport here, and we are trying to identify all the sources.

[00:11:17] Speaker 05:
that contribute to our problem.

[00:11:19] Speaker 05:
But I think more fundamentally, you know, EPA's complaint about the number of sources here is in a way a red herring, because one of their grounds for finding this petition inadequate is that we don't identify more sources.

[00:11:32] Speaker 05:
We don't analyze more sources.

[00:11:33] Speaker 05:
I mean, one of the things they say at 56090 of the denial is that we were required to conduct an analysis that compares controls for these sources to, and I quote, other unnamed sources

[00:11:47] Speaker 05:
in order to do what they think is necessary under step three.

[00:11:50] Speaker 05:
In other words, that we were supposed to look at more than just these 350 sources and explain why the controls we are proposing are cost-effective compared to that.

[00:11:58] Speaker 05:
And I think that line in particular highlights the degree to which what EPA has defined as the relevant burden here is not what this petition establishes.

[00:12:08] Speaker 05:
But instead, the state's having to come in with a ready-made solution for a regional transport rule.

[00:12:15] Speaker 05:
And EPA is claiming the entitlement to deny a petition on the basis of our failure to do, again, what EPA's responsibility really should be here.

[00:12:24] Speaker 05:
And one reason that that's an improper burden to impose upon the state

[00:12:29] Speaker 05:
is because of what this court recognized in Appalachian power, which is that 126B is meant to be independent of 110.

[00:12:36] Speaker 05:
That what EPA does when it does these regional cross-state transport rulemaking is sort of one thing.

[00:12:43] Speaker 05:
But what the state part of the title to ask for under 126B is a separate remedy that adopts the same analogy.

[00:12:50] Speaker 07:
Can I just ask one question about the overall architecture of your argument?

[00:12:55] Speaker 07:
So we're talking now about the relationship between 110 and 126.

[00:12:59] Speaker 07:
and the burden that's imposed upon you versus the burden that you think ought to be imposed upon EPA.

[00:13:06] Speaker 07:
The first set of arguments that you started out with, just following the way they interrelate, the first set of your arguments that you started out with has nothing to do with this, as I understand it, because your point is even if you're wrong on all this, then there's still something wrong with the order because it inappropriately relies on pre-Wisconsin conceptions of the rule.

[00:13:28] Speaker 05:
Yes, that is correct.

[00:13:30] Speaker 05:
That is correct.

[00:13:32] Speaker 05:
The way that we understand them relating is that the defect you just identified is sort of a complete reason to vacate and remand this rulemaking.

[00:13:41] Speaker 05:
And what I'm now engaging in is the question of, if you ignore all of that, why it's still the case that EPA's finding of a burden on the state is invalid for other reasons, even taken on its own terms.

[00:13:54] Speaker 07:
I didn't mean to sidetrack you, but you can finish that response and then we'll see if my colleagues have any further questions before we move to the interveners.

[00:14:06] Speaker 07:
Sure.

[00:14:07] Speaker 05:
And I'll just very briefly say, I mean, the reason that we are focused on the improper burden defined by EPA is that we are concerned that EPA will just rely upon this same invalid reason on remand if it is able to fix the defects in its reliance on the pre-Wisconsin, pre-New York precedents.

[00:14:26] Speaker 05:
And so we do think it is important in this context to clarify that EPA cannot require the state

[00:14:32] Speaker 05:
to establish a complete regional transport rulemaking in order to obtain any release under 126B.

[00:14:39] Speaker 05:
I'll reserve the remainder of my time for a while.

[00:14:41] Speaker 04:
Wait, I'm sorry.

[00:14:42] Speaker 04:
I apologize, but I had some questions, too, if that's OK.

[00:14:46] Speaker 04:
It's Judge Millett.

[00:14:47] Speaker 04:
So you agree that the states have some initial burden, and that the line here is that they just went too far.

[00:14:54] Speaker 04:
And I'm hoping you can help me pin that down.

[00:14:56] Speaker 04:
And starting from the bottom right corner on JA50,

[00:15:02] Speaker 04:
and going through there and through 52.

[00:15:05] Speaker 04:
There's a list of things that EPA says you should have happened.

[00:15:07] Speaker 04:
I'm trying to figure out which ones you think is part of your burden, where this line is between your burden and their burden.

[00:15:15] Speaker 04:
And so the first thing they have, little roma net one, is verifying that the name sources whose emissions are those from the most recent emissions inventory continue to emit nitrous oxide at the same rate or continue to operate.

[00:15:28] Speaker 04:
Do you agree that's part of your burden?

[00:15:32] Speaker 06:
I apologize.

[00:15:33] Speaker 06:
Let me try to flip to that.

[00:15:35] Speaker 04:
Sorry.

[00:15:36] Speaker 04:
It's JA 50, the very bottom right corner.

[00:15:38] Speaker 04:
50-51.

[00:15:41] Speaker 04:
There's four things, four ruminants there.

[00:15:43] Speaker 04:
Yes.

[00:15:44] Speaker 04:
Okay.

[00:15:44] Speaker 04:
So you agree that's your burden, that first one?

[00:15:51] Speaker 03:
Well... That's pretty basic.

[00:15:52] Speaker 04:
That's just sort of come up with that the sources continue to emit at the rate, right, or continue to operate.

[00:16:01] Speaker 05:
Yes.

[00:16:01] Speaker 05:
I mean, yes.

[00:16:02] Speaker 05:
And we've identified those sources in the, we identified the admission rates of those sources in our petition.

[00:16:08] Speaker 04:
Did you verify that they continue to operate?

[00:16:10] Speaker 04:
Because the Kentucky AMA says, at least theirs don't.

[00:16:15] Speaker 05:
Right.

[00:16:16] Speaker 05:
I mean, I think part of the answer to that is that there was a vast gap in time between when this petition was filed and when EPA actually acted on it.

[00:16:25] Speaker 04:
At the time it was filed, was that all accurate and up to date?

[00:16:29] Speaker 04:
Yes, I believe that is correct.

[00:16:31] Speaker 05:
And the false test for not confirming it years after the fact, I think, is really on EPA.

[00:16:38] Speaker 04:
I just want to make sure, though, that at the time you filed, that that was all up to date.

[00:16:43] Speaker ?:
Yes.

[00:16:44] Speaker 04:
Okay.

[00:16:45] Speaker 04:
And you agree that's part of your burden?

[00:16:48] Speaker 01:
Yes, that's right.

[00:16:49] Speaker 04:
Okay.

[00:16:49] Speaker 04:
And then, Roman, too, I'm sorry, just because I'm really trying to understand how much you're supposed to do on your end and how much

[00:16:56] Speaker 04:
they're supposed to do on their end because everyone's sort of just complaining about the other but not helping me figure out where this line is.

[00:17:01] Speaker 04:
What about Romanette 2?

[00:17:04] Speaker 05:
Well, I do think the rest of them are more appropriately placed on EPA here.

[00:17:10] Speaker 05:
With one caveat, which is we do in the petition provide a method of determining cost-effective controls, which is sort of what Romanette 2 is talking about here.

[00:17:23] Speaker 05:
We do not go source, we agree, we do not go source by source and say, you know, we know for this plant what machines they have installed and what controls they have already done.

[00:17:34] Speaker 05:
And that is in part because the difficulty of states obtaining information for upwind sources that are located outside of our jurisdictions and where EPA has the ability to obtain that information.

[00:17:46] Speaker 05:
But if I could also answer your question in a slightly different way.

[00:17:51] Speaker 05:
One of the frustrations with this denial is that it actually does not identify the standard that it thinks states have to establish.

[00:17:58] Speaker 05:
What it does in the list that you identified here, and it does in the next page in yet another list of information that they claim is missing, it's just repeatedly

[00:18:08] Speaker 05:
sort of talk about information that EPA wishes it could have had to conduct what it deems to be a regional transport rulemaking.

[00:18:15] Speaker 05:
And I do think our global answer to a lot of these is it is unreasonable to impose that burden on the states or unreasonable to deny the petition on that ground.

[00:18:25] Speaker 05:
One, because much of this information, including the Romanettes you're talking about, are not easily available to the states.

[00:18:31] Speaker 05:
And then two, because for much of this information, it goes to a standard the states shouldn't have to meet, which is something like a regional transport rule.

[00:18:39] Speaker 05:
And then three, I should add, is much of the information they claim is missing is also information that is relevant at the 126C stage when you are deciding which specific controls to impose upon these sources.

[00:18:53] Speaker 04:
You said not usually.

[00:18:54] Speaker 04:
Go ahead.

[00:18:55] Speaker 04:
I'm sorry.

[00:18:56] Speaker 05:
I'm sorry.

[00:18:56] Speaker 05:
Go ahead.

[00:18:58] Speaker 04:
Sorry.

[00:18:58] Speaker 04:
No, I really didn't mean to interrupt your thought.

[00:19:01] Speaker 04:
I was going to say that some of this information is not easily obtainable, or is it not obtainable at all?

[00:19:07] Speaker 05:
Well, much of this is not obtainable at all.

[00:19:10] Speaker 05:
And in particular, the source-specific information where we're able to know what exactly they're doing on the plant is actually almost impossible for the states to obtain.

[00:19:25] Speaker 05:
sort of identification of some public sources is not the equivalent of the type of analysis that they think is necessary under their improper standards.

[00:19:36] Speaker 04:
Part of your burden is to show that there are upwind sources that are contributing significantly to your, in this case, non-attainment.

[00:19:45] Speaker 04:
So what contributes significantly, obviously, when the EPA is coming up with rules has

[00:19:52] Speaker 04:
as the meaning it's been given by EPA and upheld in EME Homer.

[00:19:57] Speaker 04:
But what I'm trying to understand from you then, how much are you supposed to show to establish now that there's not just that there's these sources in these other states that are emitting pollutants, but that they are contributing significantly to our non-obtainment?

[00:20:13] Speaker 04:
How do you show that?

[00:20:15] Speaker 04:
How much do you think you can show?

[00:20:16] Speaker 04:
What do you think the law allows EPA to require you to show in that regard?

[00:20:22] Speaker 05:
Right.

[00:20:23] Speaker 05:
Well, I don't know that we have a position on the minimum level of information that's required, although what I can say is we think the evidence provided in this petition is enough.

[00:20:33] Speaker 05:
And the reason that it's enough is for the initial stage of this process, we sort of use the same method that EPA has used in its prior cross-stake analysis to identify sort of first the states that are significantly contributing to downwind attainment problems,

[00:20:51] Speaker 05:
And then two, to identify the sources that are the major contributors to that problem.

[00:20:56] Speaker 05:
And our petition conducts an analysis, which is similar to sort of the air and wind analysis from prior rules, that sort of traces the problem to individual name sources.

[00:21:07] Speaker 05:
And then finally, our petition gives a basis for believing that these sources have available cost-effective controls that should make them part of the regulatory bucket of sources

[00:21:19] Speaker 05:
for which EPA should determine emission controls under 126C.

[00:21:23] Speaker 05:
And the basis for the petition showing on that front is that New York requires its own sources under a parallel analysis to adopt controls to reduce ozone emissions in a cost-effective way.

[00:21:36] Speaker 05:
And we have shown that sources upwind from us emit at greater rates than New York sources are required to do.

[00:21:43] Speaker 05:
and could substantially curb their emissions if they were to either adopt control technologies at the cost level that we have here or to reduce their emissions to that level.

[00:21:52] Speaker 05:
Now, is that the same as, you know, a plan of all 350 states to figure out what their emissions controls are?

[00:22:01] Speaker 05:
I mean, the answer is no.

[00:22:02] Speaker 05:
I mean, but that is in part because 126C envisions that EPA will actually do some analysis and work in response to this petition.

[00:22:11] Speaker 05:
I mean, the statute

[00:22:12] Speaker 05:
is not sort of a remedy that the state can have directly against sources.

[00:22:17] Speaker 05:
It is a request for EPA to exercise its regulatory authority over sources under its direct regulatory ambit.

[00:22:25] Speaker 05:
And we think what that entails is that EPA, number one, has some duty, not a complete duty, but some duty to conduct a further analysis.

[00:22:33] Speaker 05:
And it's particularly appropriate for it to do so using information that is uniquely within its control.

[00:22:39] Speaker 05:
Um, and to put some of that, to shift some of that burden back onto the states is an unreasonable ground for denying a petition that otherwise provides substantial information about the reasons that we have downwind on attainment problems.

[00:22:52] Speaker 04:
Now, you had, um, in response to a question, I think from Judge Griffiths about, you know, the short time limit in the 126B context.

[00:23:02] Speaker 04:
You said, look, here, EPA either has or should already have

[00:23:08] Speaker 04:
this information because it's been for quite some long period of time now engaged in trying to make a transport rule that would govern this good neighbor problem.

[00:23:23] Speaker 04:
Excuse me.

[00:23:24] Speaker 04:
But what if a petition of this magnitude came in early on before EPA would have been in the position of collecting this type of information?

[00:23:33] Speaker 04:
So you wouldn't have that argument, which is a case-specific argument, I think.

[00:23:37] Speaker 04:
How then would EPA within its, let's even assume, eight-month time frame, would it really be able to do everything?

[00:23:46] Speaker 04:
If it didn't already have it in hand, would it be able to do all the analysis that a petition of this magnitude requires and the hearings and everything in eight months?

[00:23:59] Speaker 05:
It may not in a different case.

[00:24:02] Speaker 05:
And so it might be that there's either a pollutant-specific or sort of taste-specific reason for denial in that circumstance.

[00:24:10] Speaker 05:
But I do think it is important that this is a situation where at the time of the denial, EPA was already years late in collecting this information and coming up with a regional transport rule.

[00:24:22] Speaker 05:
And I think that's true for two reasons.

[00:24:24] Speaker 04:
One... No, I'm just trying to understand where... I'm sorry.

[00:24:27] Speaker 04:
I get the arguments about EPA delay on this particular area, this particular, where you all want a rule, and the rule, the partial rule is stuck down and all that, and it's just been going on forever and ever.

[00:24:43] Speaker 04:
But we're trying to understand what the statute means and how it assigns burdens.

[00:24:49] Speaker 04:
And so, is it your position that if

[00:24:52] Speaker 04:
EPA gets to the end of, just as a matter of law, in any case, if EPA gets to the end of that eight month, you know, the 60 days and the six month extension, what we'll call an eight month period, they get there and they still just can't get the information they need.

[00:25:09] Speaker 04:
They haven't been able to get it all.

[00:25:10] Speaker 04:
They just haven't had enough time.

[00:25:12] Speaker 04:
I hear you say that they can then deny it because they didn't have enough time to act.

[00:25:20] Speaker 04:
even if the petition met whatever burden of proof they required, they couldn't act on it.

[00:25:27] Speaker 04:
That's a sufficient ground for denial of a petition under 126B?

[00:25:32] Speaker 05:
Well, I don't think we would say that.

[00:25:34] Speaker 05:
And all I was answering was that.

[00:25:35] Speaker 04:
I thought you just said that when I asked you if a petition of this magnitude would come in at a point when you couldn't say that EPA should already have all this information at hand.

[00:25:43] Speaker 05:
Well, I guess I would answer.

[00:25:46] Speaker 04:
Go ahead.

[00:25:47] Speaker 05:
Oh, I guess I would answer it this way, which is that, again, in a different context and a different pollutant, you know, how EPA defines the standard in that case may depend upon sort of what the delta is between what is presented in the petition and what EPA has to do.

[00:26:03] Speaker 05:
And what I'm not certain about in answering you right now is whether there is sort of a global way of defining that standard.

[00:26:10] Speaker 04:
I'm not talking about different pollutants.

[00:26:11] Speaker 04:
I'm talking about this exact, you know, ozone pollution.

[00:26:15] Speaker 04:
had just, you know, if your petition had come in in 2010 or 2009 with this exact same content.

[00:26:26] Speaker 04:
So I'm not talking about different chemicals.

[00:26:29] Speaker 04:
And they said, thanks for calling us to our attention.

[00:26:33] Speaker 04:
Big problems.

[00:26:35] Speaker 04:
We're wrestling with them.

[00:26:36] Speaker 04:
And we cannot, there's no way eight months is enough time.

[00:26:40] Speaker 04:
Right.

[00:26:40] Speaker 04:
And it's great.

[00:26:40] Speaker 04:
It's like eight years hasn't been enough time.

[00:26:43] Speaker 05:
Yeah, well, so let me answer this in two ways.

[00:26:45] Speaker 05:
I think the first answer is we would not take as given that EPA is right in saying that it's not enough time.

[00:26:52] Speaker 05:
And I think part of the problem here is that, as this court recognized in Wisconsin, administrative infeasibility is not really an excuse for not complying with various statutory deadlines.

[00:27:02] Speaker 05:
And so if EPA were to come in and say,

[00:27:04] Speaker 05:
You know, in the ozone context, we need much more time to do this.

[00:27:08] Speaker 05:
I think a perfectly valid response is, you don't have that time.

[00:27:10] Speaker 05:
And more importantly, we can't wait for that time.

[00:27:12] Speaker 05:
I mean, these are not... This is a delay that results in increasing harms for the downwind areas.

[00:27:17] Speaker 04:
But the second thing I would say... If I could pose with them... Oh, go ahead.

[00:27:20] Speaker 04:
Go ahead.

[00:27:20] Speaker 04:
Go ahead.

[00:27:21] Speaker 05:
Well, I apologize.

[00:27:22] Speaker 05:
But the second thing I would say is that this is not an all-or-nothing proposition.

[00:27:26] Speaker 05:
A 126B petition identifies sources and seeks to curb emissions from those sources.

[00:27:31] Speaker 05:
EPA sort of improperly thinks here that it either does something like a global solution or does absolutely nothing.

[00:27:37] Speaker 05:
And that's not what 126B envisioned.

[00:27:40] Speaker 05:
There's no reason that EPA could not adopt

[00:27:43] Speaker 05:
sort of more limited solutions here.

[00:27:45] Speaker 05:
For instance, we propose for short-term daily emission limits on certain identified sources as opposed to a global solution.

[00:27:52] Speaker 05:
And there is not an explanation for why, and your hypothetical may not be an explanation for why, more targeted relief could not be available even within the 60 days or eight-month period that would meaningfully address the problems that the downwind areas are facing.

[00:28:07] Speaker 05:
And that kind of what I'm calling a partial solution

[00:28:11] Speaker 05:
It fits within the purpose of 126B and the reason that statute is phrased as one that can be about even just a single source or a group of sources and the reason that there are these short-term deadlines is because it recognizes and Congress recognized that downwind areas have urgent needs to control pollution.

[00:28:29] Speaker 05:
126B gives them a mechanism to obtain that even if it is not a complete solution and perhaps

[00:28:36] Speaker 05:
would be appropriate to have a partial solution, especially in areas where EPA has great difficulty coming up with a comprehensive solution to a larger problem.

[00:28:47] Speaker 04:
Okay.

[00:28:47] Speaker 04:
Thank you very much.

[00:28:48] Speaker 07:
Thank you.

[00:28:50] Speaker 07:
I'll reserve my time for a bottle.

[00:28:52] Speaker 07:
Thank you, Mr. Liu.

[00:28:55] Speaker 07:
Mr. Berman.

[00:28:57] Speaker 06:
Thank you, Your Honor.

[00:28:58] Speaker 06:
May it please the Court, Joshua Berman with the CR Club on behalf of Petitioner-Interveners.

[00:29:03] Speaker 06:
Before I jump into the issue of the specific sources subject to the Cross-State Rule, I just wanted to pick up on one thing on the line of questioning from Judge Millett.

[00:29:11] Speaker 06:
I think if you look at the Joint Appendix pages 50 to 51, the list of information that EPA identifies, that list is conjoined by an or, not an and, and I think that sort of highlights

[00:29:26] Speaker 06:
the arbitrariness of EPA's denial here, EPA fails to identify what sufficient information would have been from New York.

[00:29:35] Speaker 06:
And I think that, you know, again, the court's job here is not necessarily to identify here is exactly how the burden should be allocated.

[00:29:43] Speaker 06:
The burden allocation issue is certainly a thorny one.

[00:29:45] Speaker 06:
I think the question here is whether EPA's denial

[00:29:48] Speaker 06:
was arbitrary and capricious and because EPA short of, you know, EPA in places seems to suggest that New York needed to submit an entire transport rule and identify not just the cost-effective emissions reductions available from the sources that identified, but identify how those compare in cost efficacy and control

[00:30:05] Speaker 06:
to sources not identified in the petition.

[00:30:08] Speaker 06:
So that kind of gets past this question of the 350 sources.

[00:30:11] Speaker 06:
But EPA's problem here is that EPA fails short of that to identify what an actual reasonable burden that a petitioning jurisdiction could in theory meet that would satisfy the agency.

[00:30:23] Speaker 06:
The agency says different things on different pages.

[00:30:25] Speaker 06:
The list that Judge Millett identified is conjoined by an or.

[00:30:28] Speaker 06:
It's not entirely clear even what that list is supposed to mean.

[00:30:31] Speaker 06:
And the fact that the agency says different things in different places I think highlights the arbitrariness of EPA denial.

[00:30:37] Speaker 06:
I'm happy to pick up on that, but I was going to turn to the EPA's response regarding certain electric generating units subject to the cross state update.

[00:30:46] Speaker 04:
Before you turn to that, would you be able to help me understand, I don't know how your view is the same or different than Mr. Wu's, but what is your, what in your opinion is the initial burden

[00:31:00] Speaker 04:
that a 126B petitioner needs to meet in showing in particular that not just identifying that there are sources upstate, they're spewing out a lot of pollution and, you know, the jet stream's bringing it over to us, but that they are, that those sources, those specific identified sources are contributing significantly.

[00:31:23] Speaker 04:
What do you think that burden should be?

[00:31:25] Speaker 06:
Sure.

[00:31:26] Speaker 06:
And I guess, again, I would flag that.

[00:31:30] Speaker 06:
think that goes beyond what needs to be, I know the judge is interested and I will answer your question, but I think that goes beyond what the court needs to determine here again because

[00:31:37] Speaker 06:
EPA, it is clearly EPA's burden here to at least identify what the threshold showing needs to be.

[00:31:43] Speaker 06:
And EPA hasn't done that.

[00:31:45] Speaker 06:
EPA has said various things in various places that are contradictory.

[00:31:48] Speaker 06:
And so that to me makes the whole denial, the whole basis for the denial arbitrary.

[00:31:52] Speaker 04:
With regards to... Yeah, but you agree that there is some burden on the 1206B petitioner, right?

[00:31:57] Speaker 06:
No doubt.

[00:31:57] Speaker 06:
And I think what is quite clear is that... What is that?

[00:32:00] Speaker 06:
So what New York has done here, which I think is sufficient, again, I think it's, I don't want to say, I don't know exactly what the line is, but I think what New York has done is clearly sufficient because New York has shown that if you use EPA sophisticated source apportionment modeling tools and the sources that New York has identified, their collective contribution to ozone levels in New York, in the non-attaining areas of New York,

[00:32:27] Speaker 06:
exceeds the 1% threshold that EPA in all of its prior transport rules has said is the threshold for a significant contribution.

[00:32:35] Speaker 06:
So New York has identified sources that collectively impact its ozone levels by more than one part per billion, more than the significant threshold EPA has relied on in all its transport rules.

[00:32:44] Speaker 06:
So I think that is a sufficient showing.

[00:32:46] Speaker 06:
The question is whether the source or group of stationary sources

[00:32:50] Speaker 06:
contributes significantly to non-attainment or interferes with maintenance.

[00:32:53] Speaker 06:
What New York has done here, I think, is clearly sufficient.

[00:32:56] Speaker 06:
Again, though, I don't know that we need to go as far as to say this is the exact burden because I think EPA clearly has the burden to identify what the threshold show needs to be and EPA has not done that.

[00:33:09] Speaker 01:
Thank you.

[00:33:10] Speaker 06:
Okay, sure.

[00:33:10] Speaker 06:
I'll turn to those specific sources.

[00:33:12] Speaker 06:
So, New York's petition identified a number of sources that are failing to fully implement control strategies that EPA has found to be highly cost effective.

[00:33:20] Speaker 06:
This includes electric generating units that have installed catalytic controls but are failing to optimize them and those that lack basic combustion controls.

[00:33:29] Speaker 06:
EPA nevertheless denied New York's petition for these units because it claimed that these control strategies were already accounted for in developing the update rule.

[00:33:37] Speaker 06:
But EPA's reasoning is flawed.

[00:33:39] Speaker 06:
First, the update rule has been found deficient and a deficient cap and trade scheme cannot preclude further relief from underperforming units.

[00:33:47] Speaker 06:
This court recently invalidated the update rule precisely because it failed to require upwind states to eliminate their significant contributions by the relevant attainment date or indeed by any date.

[00:33:58] Speaker 06:
And the update rule does not even purport to address the more protective 2015 ozone standard which will require additional emission reductions.

[00:34:06] Speaker 06:
Consequently, the fact that units subject to the update rule continue to operate without employing control strategies that EPA has deemed highly cost effective means that further relief is available from these units, including through Section 126.

[00:34:21] Speaker 06:
Moreover, meeting the update rule caps does not imply that any particular control strategies have been fully implemented.

[00:34:26] Speaker 06:
And this is an important point.

[00:34:28] Speaker 06:
The rule does not cover all sources of electric generation.

[00:34:31] Speaker 06:
It only covers coal units.

[00:34:32] Speaker 06:
Emissions from coal units can decline simply because the units are running less, a phenomenon that's discussed by industry interveners in their briefing here, and cleaner generation sources are running more, not because the units have actually implemented new or improved controls.

[00:34:47] Speaker 06:
The record shows that many units continue to fail to fully implement basic control strategies.

[00:34:51] Speaker 06:
There's no barrier to EPA granting New York's petition as to these units and requiring them to actually achieve the highly cost-effective emission reductions that EPA previously identified.

[00:35:02] Speaker 04:
I'm sorry, how many of the units at issue, the 350, are electrical generating units that fall within the argument you're making to us right now?

[00:35:13] Speaker 06:
So EPA, approximately 130, if you look at a number of places in the brief where EPA says that it lacks sufficient information for the 220 non-electric generating.

[00:35:22] Speaker 06:
130 units that are subject to the rule.

[00:35:24] Speaker 06:
And then there's a subset of those that have installed but are failing to fully implement controls that EPA has previously identified as highly cost effective.

[00:35:32] Speaker 06:
And those are identified in a couple of different places.

[00:35:35] Speaker 06:
Joint Appendix page 490, Joint Appendix page 543 in particular, also Joint Appendix 491.

[00:35:43] Speaker 06:
So we're talking about several dozen units that have installed high-end controls but are failing to optimize them.

[00:35:51] Speaker 06:
or units that have persisted in not installing basic combustion control, two controls that strategies that EPA has previously found to be highly cost effective.

[00:35:58] Speaker 04:
How do you know that they have them and aren't using them or haven't installed them?

[00:36:03] Speaker 04:
It sounds like, are you able to get that sort of source specific information in other states that New York says they can't get?

[00:36:10] Speaker 06:
So electric generating units are distinct from some of the other source categories that are identified in New York's petition in that electric generating units are subject to very detailed monitoring and reporting requirements, and all of those data are then published on EPA's Clean Air Markets Database.

[00:36:27] Speaker 06:
So in New York's petition, it used then-current data through the date of its petition to show exactly what was happening during the ozone season at all of the electric generating units for the prior three ozone seasons.

[00:36:39] Speaker 06:
That was then supplemented and made more current.

[00:36:41] Speaker 06:
Again, we discussed there was a long delay before EPA actually responded to the petition.

[00:36:45] Speaker 06:
That was then supplemented and additional more current information using the 2018 ozone season was added in New York Department of Environmental Conservation's detailed comments, and that's found in Joint Appendix 489 to 491.

[00:36:57] Speaker 06:
And then additionally in the record, there's additional information about what was happening during the 2018 ozone season in Joint Appendix, Page 543.

[00:37:03] Speaker 01:
Thank you.

[00:37:10] Speaker 07:
Thank you, Council.

[00:37:13] Speaker 07:
Thank you.

[00:37:13] Speaker 07:
Ms.

[00:37:16] Speaker 07:
Spence, we'll hear from you.

[00:37:31] Speaker 02:
Good morning, Your Honors.

[00:37:34] Speaker 07:
Good morning.

[00:37:37] Speaker 02:
May it please support?

[00:37:37] Speaker 02:
My name is Tamara Spence, and I'm here on behalf of EPA.

[00:37:41] Speaker 02:
I'll go into the issues concerning the burden and step three in detail, but before I do, I want to make two points up front.

[00:37:51] Speaker 02:
First, petitioners make this extraordinary concession.

[00:37:55] Speaker 02:
They made it in their reply brief and they made it again here this morning that what they're seeking to do is to force EPA to fulfill its duty in the federal good neighbor plan context.

[00:38:05] Speaker 02:
This case isn't about EPA's duty to issue a federal good neighbor plan.

[00:38:11] Speaker 02:
This case is about EPA's review of a state petition under 7426.

[00:38:18] Speaker 02:
Petitioners had their day in court about the Federal Good Neighbor Plan for the 2008 standard.

[00:38:25] Speaker 02:
It's on remand and EPA's working on it, and it's not before the court today.

[00:38:29] Speaker 02:
Second, many of petitioners' arguments this morning don't really go to the ultimate basis for denial.

[00:38:38] Speaker 02:
The basis for denial is because

[00:38:41] Speaker 02:
the state didn't meet its burden under step three.

[00:38:44] Speaker 02:
We heard from New York Council this morning that the petition was actually based on the pre-existing good neighbor plans.

[00:38:56] Speaker 02:
And it's not.

[00:38:59] Speaker 02:
I can point you to specific statements in the record where EPA says expressly, repeatedly that the reason it denied the petition is because New York failed to meet its burden under step three.

[00:39:11] Speaker 07:
Can I ask you a question about the failure to meet the burden, which is it seems to me that at least in some situations, it's going to be very difficult for a petitioning state to have the information that you appear to require for them to get home on a claim under 126B.

[00:39:31] Speaker 07:
And can you just address that reality that a petitioning state often will lack a means to obtain the information?

[00:39:41] Speaker 02:
Well, they have means to obtain a lot of the information.

[00:39:44] Speaker 02:
They could have done a lot more than they did.

[00:39:46] Speaker 02:
So what we point to in the brief, and respondent and interviewers point to some of this information too, a lot of the building blocks for a step three analysis are publicly available.

[00:40:00] Speaker 02:
What they would need to do with that information is to do the analysis, put it together, and come up with, you know, some kind of basis to make a cost-effectiveness decision.

[00:40:08] Speaker 02:
And that's usually in the form of, you know, a numerator

[00:40:12] Speaker 02:
in a denominator, you know, cost of controls as compared to tons of NOx reduced and the downwind improvement that you would get from that.

[00:40:22] Speaker 02:
For the EGU sources, the vast majority of that information is out there.

[00:40:27] Speaker 02:
What a state would need to do is the analysis.

[00:40:31] Speaker 02:
For the non-EGU sources, there is information out there.

[00:40:34] Speaker 02:
It's a little bit less complete than for the EGU sources, but they're

[00:40:40] Speaker 02:
were things available that they could have done.

[00:40:42] Speaker 02:
We know that New York is able to do air quality modeling.

[00:40:47] Speaker 02:
They do it for their own SIP, and they in fact provided modeling.

[00:40:51] Speaker 02:
They just didn't provide the modeling that EPA would have needed.

[00:40:56] Speaker 07:
So what would happen in this situation?

[00:40:57] Speaker 07:
So I'm not necessarily trying to say that either side is necessarily right or wrong.

[00:41:03] Speaker 07:
I'm just trying to figure out practically what happens.

[00:41:07] Speaker 07:
So if a petitioning state submits

[00:41:11] Speaker 07:
a petition like this and then says, we've obtained as much information as we can get our hands on.

[00:41:18] Speaker 07:
It's true that for us to be, our inquiry to be completely rounded out, we'd need the following additional information.

[00:41:26] Speaker 07:
But we just don't have a means of obtaining that.

[00:41:28] Speaker 07:
You do.

[00:41:29] Speaker 07:
Our petition rests on the idea that once you look at that, we think you'll find that there's a problem vis-a-vis cross-state pollution.

[00:41:39] Speaker 02:
It's possible.

[00:41:40] Speaker 02:
You know, what EPA has said is that, you know, they're looking for a colorable cost-effectiveness analysis.

[00:41:47] Speaker 02:
If a state were to come forward and say, here's the information I have, we think this supports the conception of cost-effectiveness, yes, EPA would look at that.

[00:41:58] Speaker 02:
You know, one of the things that we heard from petitioner-interveners is that, well, EPA hasn't told us how we have to do that.

[00:42:05] Speaker 02:
Well, EPA has given them options

[00:42:08] Speaker 02:
and also said, you know, we would consider any alternative analysis.

[00:42:12] Speaker 02:
Here, petitioners haven't done that.

[00:42:16] Speaker 02:
They haven't provided a cost-effectiveness analysis at all.

[00:42:23] Speaker 04:
How can you say that with respect to the electric generating units?

[00:42:29] Speaker 04:
I mean, it sounds like some of your analysis, they've given a lot of concrete information and EPA just disagreed, you know, like the RACS, R-A-C-T,

[00:42:37] Speaker 04:
using that as a standard.

[00:42:41] Speaker 04:
But disagreeing doesn't mean they haven't met their burden of coming forward with just the sort of information you want.

[00:42:48] Speaker 04:
So why isn't what they came forward with on the electrical generating units at least sufficient?

[00:42:57] Speaker 04:
Just to meet their burden, not to necessarily persuade you or prevail for you, but just to meet their burden.

[00:43:04] Speaker 04:
What more do they need to do on electrical generating units?

[00:43:07] Speaker 02:
So we heard this morning, petitioner interveners talked about 130 electric generating units.

[00:43:16] Speaker 02:
Those actually break down into two categories.

[00:43:18] Speaker 02:
So the 350 sources total, you've got three buckets.

[00:43:21] Speaker 02:
The non-EGUs, the EGUs that were fully addressed in the update, there's about 83 of those.

[00:43:27] Speaker 02:
Those are the sources with catalytic controls.

[00:43:30] Speaker 02:
And then the 47 that don't have those installed.

[00:43:34] Speaker 02:
So the arguments that petitioners are making about, well, you've already made a cost-effectiveness determination in the update.

[00:43:43] Speaker 02:
So in the update rule, EPA did make a cost-effectiveness determination about those 83 power plants with catalytic controls.

[00:43:51] Speaker 02:
But the update also has a remedy for that.

[00:43:55] Speaker 02:
What petitioners provided here was just to say, OK, well, it looks like there are certain units

[00:44:04] Speaker 02:
that aren't running those controls.

[00:44:06] Speaker 02:
And that was true in the record.

[00:44:08] Speaker 02:
There were about seven sources in 2018 that were not running their controls.

[00:44:14] Speaker 02:
And we know that because of the rate that they were admitting at.

[00:44:17] Speaker 02:
If it's operating above 0.20 pounds per million BTUs, we know that they weren't operating their controls.

[00:44:25] Speaker 02:
EPA's response to that is, well, that doesn't tell me that

[00:44:29] Speaker 02:
those violations aren't being remedied.

[00:44:32] Speaker 02:
They are being remedied because we've remedied it with a cap and trade program.

[00:44:37] Speaker 04:
So you haven't provided anything... Isn't this precisely what the point of the 126B petition is?

[00:44:42] Speaker 04:
I mean, you complain about how sweeping it is, but now we're talking about a portion of... Let's pretend all their petition did was say that to those 47 sources that are not using

[00:44:56] Speaker 04:
the controls that EPA found to be cost effective in the update rule.

[00:45:04] Speaker 04:
They're not using them.

[00:45:05] Speaker 04:
Maybe they're doing cap and trade, but you know what?

[00:45:08] Speaker 04:
It's not working.

[00:45:09] Speaker 04:
It's exactly the targeted not rulemaking.

[00:45:12] Speaker 04:
They're not looking for a general transport rule.

[00:45:15] Speaker 04:
What they're saying is the system that's out there is not working because they are contributing significantly to our non

[00:45:24] Speaker 04:
It sounds just like... That sounds like precisely what 126B is for.

[00:45:28] Speaker 04:
And is there an answer to 126B that we're letting them?

[00:45:33] Speaker 04:
It's okay that they contribute significantly to your non-attainment as long as they're engaged in cap and trade?

[00:45:38] Speaker 04:
I'm not sure how the two intersect.

[00:45:40] Speaker 04:
I just didn't see that explanation in your decision, but if that's your explanation... Is that your explanation?

[00:45:45] Speaker 04:
I have to look... 47?

[00:45:51] Speaker 02:
No, there are 47 that do not have collective catalytic installed.

[00:45:56] Speaker 02:
Those sources, I think, have to be entirely separate from the ones that EPA deemed to violate the Good Neighbor provision because of the ability to run SCR.

[00:46:12] Speaker 02:
What EPA has said as to those, and you can see this, there's a discussion of it at JA54, where EPA says, well,

[00:46:22] Speaker 02:
The cap and trade program gets the total down.

[00:46:25] Speaker 02:
So that was the remedy for those violations.

[00:46:29] Speaker 02:
They were deemed to violate.

[00:46:30] Speaker 02:
We implemented a remedy.

[00:46:32] Speaker 02:
And this doesn't mean the remedy is not working.

[00:46:36] Speaker 02:
The remedy is working.

[00:46:37] Speaker 04:
In fact, the thing- I'm trying to ask, I mean, it may work for sort of your transport rule, but I thought their argument was it's not working for New York.

[00:46:51] Speaker 04:
They're pushing us.

[00:46:52] Speaker 04:
up just to credit for these purposes, their assertions, they're pushing us over non-attainment here.

[00:47:02] Speaker 04:
Whatever they're doing up in their state, they're killing us down here.

[00:47:07] Speaker 04:
So here's what we don't know.

[00:47:11] Speaker 02:
We don't know that just because there's a fleet-wide average that can be achieved, we don't know that these specific sources can actually achieve the rate that

[00:47:22] Speaker 02:
New York is proposing.

[00:47:24] Speaker 04:
How are they supposed to, so that's part of their burden failing here, is they didn't show plant by plant by plant what would happen if you impose those controls one at a time?

[00:47:36] Speaker 04:
That's their burden?

[00:47:38] Speaker 02:
What EPA has said their burden is, is to say for the sources that are subject to the petition, what controls can they implement?

[00:47:49] Speaker 02:
What's the cost of those controls?

[00:47:51] Speaker 02:
What's the emission reduction potential from those controls?

[00:47:55] Speaker 02:
And then what's going to be the downwind air quality improvement from that strategy?

[00:48:01] Speaker 02:
Or an alternative analysis to show that.

[00:48:04] Speaker 02:
What the state has done... Okay, go ahead.

[00:48:08] Speaker 02:
Please finish.

[00:48:08] Speaker 02:
What did the state not do here?

[00:48:11] Speaker 02:
What the state didn't do was support a cost-effectiveness finding.

[00:48:15] Speaker 04:
So even for... They used your cost-effectiveness finding that's already in the...

[00:48:20] Speaker 04:
in the rule, in the update rule.

[00:48:22] Speaker 04:
They used your cost-effectiveness finding.

[00:48:25] Speaker 02:
EPA's cost-effectiveness finding was to a fleet-wide average.

[00:48:29] Speaker 02:
It was not as specific sources.

[00:48:32] Speaker 00:
EPA didn't... So, Ms.

[00:48:33] Speaker 00:
Spence, let me... Maybe you answered this and I didn't catch it, but Judge Mallette asked you, are they supposed to do that on a site-by-site basis?

[00:48:43] Speaker 00:
And I didn't hear your answer to that.

[00:48:47] Speaker 02:
The answer's yes.

[00:48:48] Speaker 00:
Yes.

[00:48:48] Speaker 00:
Okay.

[00:48:48] Speaker 00:
Thank you.

[00:48:50] Speaker 07:
Yes, and that's one of the... And the information to make that kind of reticulated analysis, you think that's all in the arsenal of the petitioning state?

[00:49:05] Speaker 02:
For the EGUs, yes.

[00:49:07] Speaker 02:
For the EGUs, yes.

[00:49:09] Speaker 02:
Those building blocks are publicly available.

[00:49:13] Speaker 02:
and New York could do the analysis for that.

[00:49:15] Speaker 02:
They certainly are able to do the modeling to show what the downwind impact of the reductions they're asking for would be.

[00:49:21] Speaker 02:
I noticed there was a comment that Mr. Berman made about some of the coal plants are just operating less.

[00:49:39] Speaker 02:
I'm not sure I see how that would be a problem because if

[00:49:43] Speaker 02:
If the source is operating less, you know, that seems like it might be harder to show that it would be cost effective for that source to, you know, to implement new controls.

[00:49:57] Speaker 02:
That's just a side note there.

[00:49:59] Speaker 02:
I'm sorry, I interrupted your question.

[00:50:01] Speaker 04:
Not at all.

[00:50:03] Speaker 04:
Can you just help me understand what the burden is that's articulated in this rule on pages 50 to 52?

[00:50:12] Speaker 04:
Because you begin with a sense that the EPA begins with a sense that says the petition could have included one or more of the following potential analyses.

[00:50:28] Speaker 04:
And then there's four, four romenettes.

[00:50:32] Speaker 04:
And they said we did one.

[00:50:33] Speaker 04:
And it just says one or more.

[00:50:36] Speaker 04:
They said we did romenette one.

[00:50:39] Speaker 04:
Do you just agree that they did romenette one?

[00:50:43] Speaker 04:
How are they supposed to, and how are they supposed to, let's just get that question, sorry.

[00:50:48] Speaker 04:
Did they do a ruminant one?

[00:50:59] Speaker 02:
I think that's questionable, Your Honor.

[00:51:01] Speaker 02:
They certainly didn't actually... Is there a finding that they didn't do one of the four?

[00:51:14] Speaker 04:
I'm not sure whether EPA thinks they need to do them all or not.

[00:51:17] Speaker 04:
You begin with one or more.

[00:51:18] Speaker 04:
They tell me they did number one.

[00:51:20] Speaker 04:
You're not sure that they didn't do number one.

[00:51:23] Speaker 04:
So what's the problem?

[00:51:27] Speaker 04:
If you can't show that they didn't do number one, then they've made your test.

[00:51:33] Speaker 02:
So I don't read this, Your Honor, as laying out a specific test.

[00:51:36] Speaker 02:
I read this as sort of laying out the categories of things EPA is looking for.

[00:51:42] Speaker 02:
Wait a minute.

[00:51:43] Speaker 02:
Wait a minute.

[00:51:44] Speaker 04:
What does that mean?

[00:51:46] Speaker 04:
I don't understand what that means.

[00:51:47] Speaker 04:
It's not a test.

[00:51:48] Speaker 04:
It's just the categories of the information they want.

[00:51:51] Speaker 04:
That sounds like a test or a list of requirements.

[00:51:55] Speaker 04:
And the commission says, here's a problem with the petition.

[00:51:59] Speaker 04:
It should do, petitions should do one or more, and they did one.

[00:52:03] Speaker 04:
Let's give them that they did one.

[00:52:05] Speaker 04:
They might say they did more, but let's say they did one.

[00:52:09] Speaker 04:
And now you're going to say, well, that's not really the test.

[00:52:13] Speaker 04:
Then what is the test?

[00:52:14] Speaker 04:
I mean, what is the test?

[00:52:15] Speaker 04:
How are they supposed to know what exactly they're supposed to do next time?

[00:52:18] Speaker 04:
Where do I look in this step three analysis for precisely what it is that they need to come back to you with?

[00:52:31] Speaker 02:
So item number one is not talking about cost.

[00:52:34] Speaker 02:
If you go up that same paragraph.

[00:52:36] Speaker 02:
I'm not asking.

[00:52:37] Speaker 02:
OK, go ahead.

[00:52:39] Speaker 02:
You go up the same paragraph, and it says,

[00:52:42] Speaker 02:
New York has not sufficiently developed or evaluated the cost and air quality factors that the EPA has generally relied on in step three, has not described or conducted any sort of multi-factor analysis to determine whether cost effective controls are available at the named sources, and has not provided any alternative analysis that would support a conclusion at step three, that the main sources will significantly contribute.

[00:53:07] Speaker 02:
That's what EPA is talking about.

[00:53:09] Speaker 02:
EPA is looking for cost effectiveness.

[00:53:12] Speaker 02:
So either one, well, you have to get the baseline in order to know what reductions are achievable, but the next part is what reductions are available from these sources and what do they cost?

[00:53:27] Speaker 02:
If you look at the Good Neighbor provision, it says, it talks about amounts, amounts that significantly contribute.

[00:53:36] Speaker 02:
There's no way under EPA's test that relies on cost effectiveness

[00:53:42] Speaker 02:
to say what's significant if you don't know what can be cost-effectively achieved.

[00:53:49] Speaker 02:
So there has to be some consideration of cost.

[00:53:52] Speaker 04:
I'm just, I'm really, I guess I'm even more confused than before.

[00:53:56] Speaker 04:
So what is the point of the sentences with the four romenettes?

[00:54:00] Speaker 04:
Do one or more of these?

[00:54:02] Speaker 04:
What is that, what is that supposed to mean in the list of things at the beginning of the paragraph?

[00:54:09] Speaker 02:
So that's referring to the factors that EPA was looking for in order to identify significance.

[00:54:16] Speaker 02:
So it doesn't mean they have to do all of them, but that one, if that's true for EGUs, and I'm not certain that it is, but I can presume that it is.

[00:54:29] Speaker 04:
Let's assume they did emissions inventory.

[00:54:34] Speaker 04:
If you want to talk about just EGUs, we can do that.

[00:54:37] Speaker 04:
Sure.

[00:54:37] Speaker 04:
But what that doesn't do is talk about cost.

[00:54:42] Speaker 04:
I thought you just said that's what the point of this list was.

[00:54:46] Speaker 04:
And you all said one or more.

[00:54:47] Speaker 04:
I'm not making that up.

[00:54:51] Speaker 04:
That's how you're supposed to identify significant.

[00:54:53] Speaker 04:
That's what you say right there.

[00:54:54] Speaker 04:
I guess it feels to me like both from the ruling itself or the order itself denying the petition

[00:55:05] Speaker 04:
And then the arguments and stuff, they're all over the place on what it is they want.

[00:55:09] Speaker 04:
And you say, well, we've listed some factors.

[00:55:12] Speaker 04:
You can do these, or you can do something else.

[00:55:14] Speaker 04:
But then we need to have this information.

[00:55:16] Speaker 04:
And when they say we can't get some of this information, they go, well, well, then maybe you don't have to do everything.

[00:55:23] Speaker 04:
But over on 52, you say, I'm sorry, 50-51, you say, look, you've got to do source comparison, which isn't.

[00:55:33] Speaker 04:
one or more.

[00:55:34] Speaker 04:
You've got to do those.

[00:55:35] Speaker 04:
And then over on 52, you say you've got to do source comparisons to figure out significance or significant contribution.

[00:55:43] Speaker 04:
You just have to do that.

[00:55:45] Speaker 04:
And then you say on 52, source comparison necessarily involves.

[00:55:50] Speaker 04:
So can you just answer me this question?

[00:55:53] Speaker 04:
Is it the position of the EPA in this order that the state must do comparisons

[00:56:02] Speaker 04:
to other unnamed sources.

[00:56:05] Speaker 04:
And when they do that comparison, they necessarily have to do the things listed on page 52 in the left-hand column.

[00:56:15] Speaker 04:
This source comparison necessarily involves, and then it identifies a number of things.

[00:56:20] Speaker 04:
Am I right in reading the order that way?

[00:56:22] Speaker 02:
That is absolutely not EPA's position.

[00:56:25] Speaker 02:
It is not EPA's position that a petitioning state would have to do a comparative analysis.

[00:56:32] Speaker 02:
What I think EPA means by this list, when they say or, the last item on the list is basically, would be a cost-effectiveness analysis that's comparing relative cost to source, other potential.

[00:56:52] Speaker 02:
So that would be one way.

[00:56:55] Speaker 04:
But I'm wondering also has the relative to other sources requirement.

[00:56:59] Speaker 04:
So they don't have to do either.

[00:57:00] Speaker 04:
So your position is just to be clear that in their petition to show a significant contribution, they do not have to compare to unnamed sources.

[00:57:15] Speaker 02:
Is that how you read this?

[00:57:17] Speaker 02:
Yes, they do not have to compare.

[00:57:20] Speaker 02:
And item number three is not comparative, to be clear.

[00:57:24] Speaker 02:
It is describing downwind air quality impacts

[00:57:27] Speaker 02:
of controlling the sources in the way proposed.

[00:57:30] Speaker 04:
Relative to other sources?

[00:57:32] Speaker 04:
What does relative to other sources mean there?

[00:57:34] Speaker 04:
I'm sorry.

[00:57:35] Speaker 04:
I don't mean I'm taking up too much time here, but I'm really just confused as to what they're supposed to show.

[00:57:42] Speaker 04:
So what does relative to other sources mean there in Roman 3?

[00:57:47] Speaker 02:
I think all that means is if you do a model that says, well, the only thing that I've changed is what these sources are doing.

[00:57:54] Speaker 02:
What's my downwind impact?

[00:57:55] Speaker 02:
I think that's what that means.

[00:57:56] Speaker 04:
You think that's what it means, but you're not certain?

[00:57:59] Speaker 02:
That's how I read it.

[00:58:01] Speaker 02:
Because the downwind impact is part of the cost effectiveness.

[00:58:07] Speaker 04:
How can they show cost effectiveness?

[00:58:13] Speaker 04:
How would you envision someone showing significant contribution or cost effectiveness?

[00:58:18] Speaker 04:
This was just the significance of the rule.

[00:58:20] Speaker 04:
You're saying this is now the test for cost effectiveness?

[00:58:22] Speaker 04:
How are they going to show cost effectiveness and significance both without doing a comparison to other sources?

[00:58:32] Speaker 04:
I know you say you don't have to do it, so how could they do it?

[00:58:37] Speaker 02:
So I would be speculating because petitioners haven't presented a cost effectiveness proposal here.

[00:58:45] Speaker 04:
What EPA said is that if there was a... They say they have because we've relied on your own judgment.

[00:58:53] Speaker 04:
So it's not that they haven't.

[00:58:54] Speaker 04:
You just say what they did isn't good enough, which EPA often does and is often entitled to do.

[00:59:02] Speaker 04:
But when you say something's not good enough, you're supposed to say what you needed to do.

[00:59:06] Speaker 04:
And so if you don't think they had to do these things that are listed here on 50, 51, and 52,

[00:59:15] Speaker 04:
then how are they supposed to know what they need to do other than, and they say we've done, you say they're wrong, but they say we've done cost effectiveness.

[00:59:25] Speaker 04:
When you say they're wrong, isn't EPA supposed to say with some specificity or some level of guidance exactly what they need to do to make it right?

[00:59:37] Speaker 02:
Or do they think they know?

[00:59:39] Speaker 02:
I mean, what EPA has to do is consider a proposal in front of it.

[00:59:43] Speaker 02:
So the proposal here, they did not make a cost-effectiveness proposal for non-EGU sources.

[00:59:50] Speaker 02:
They did not make a cost-effectiveness proposal.

[00:59:53] Speaker 02:
Okay, but what about the EGU sources?

[00:59:55] Speaker 02:
Did they do one for EGU sources?

[00:59:57] Speaker 02:
For the EGU sources, for the 47 that do not have SCR, there is no cost-effectiveness proposal.

[01:00:02] Speaker 02:
We don't know if longer-term strategies would be cost-effectiveness or cost-effective there on this record.

[01:00:08] Speaker 02:
And then you have the 83 sources.

[01:00:11] Speaker 04:
What do you, exactly, what do you mean by cost-effectiveness?

[01:00:13] Speaker 04:
What do you mean exactly by cost effective?

[01:00:17] Speaker 04:
That's done without comparison to other sources.

[01:00:21] Speaker 04:
So then what does it mean?

[01:00:25] Speaker 04:
You said you've made this sort of global conclusion about what installing say catalytic converters can do.

[01:00:35] Speaker 04:
How would it not be cost effective at a specific plant?

[01:00:42] Speaker 04:
has excessive emissions to put a catalytic converter on.

[01:00:45] Speaker 04:
Is the point that it won't reduce at some point?

[01:00:52] Speaker 04:
The granularity is going to get very huge.

[01:00:55] Speaker 04:
Right.

[01:00:56] Speaker 02:
So the easy use sources, there are two buckets.

[01:01:00] Speaker 02:
Bucket one, there's 83 sources that have catalytic controls.

[01:01:06] Speaker 04:
I'm talking about the 47 that don't.

[01:01:08] Speaker 04:
Yeah.

[01:01:09] Speaker 04:
I'm talking about the 47 that don't.

[01:01:10] Speaker 04:
have what the EPA has already said is a cost-effective solution to contributions?

[01:01:20] Speaker 02:
Now I understand your question.

[01:01:23] Speaker 02:
Yeah, it's based on the wrong premise.

[01:01:26] Speaker 02:
So EPA has not made any finding that installing catalytic controls is cost-effective.

[01:01:33] Speaker 02:
The update did not consider

[01:01:38] Speaker 02:
the installation of catalytic controls.

[01:01:41] Speaker 02:
With the update applied to the sources that already had catalytic controls, an EPA found that it was cost effective to operate them as a fleet.

[01:01:51] Speaker 02:
EPA didn't analyze an update.

[01:01:55] Speaker 02:
Do you distinguish between installing and turning them on?

[01:01:59] Speaker ?:
Yes.

[01:02:00] Speaker 04:
Yes.

[01:02:01] Speaker 04:
Controls can be... Well, installing things doesn't do anything.

[01:02:04] Speaker 04:
You got to turn them on.

[01:02:05] Speaker 04:
So I don't think anyone says,

[01:02:07] Speaker 04:
installing is going to stop pollution, you've got to turn it on.

[01:02:11] Speaker 04:
I'm very... Sorry, I'm like... I'm much more necessary than me, but I don't think for a minute that New York would be so silly as to say, we just want you to install them, but not turn them on.

[01:02:23] Speaker 04:
So they're talking about the exact same cost-effectiveness, and that is turning them on.

[01:02:29] Speaker 02:
But you also... Except that there's category one,

[01:02:34] Speaker 02:
sources that have them and haven't turned them on.

[01:02:36] Speaker 02:
Category two, sources that don't even have them.

[01:02:40] Speaker 02:
EPA did not analyze the possibility of installing and then turning on catalytic controls at those sources.

[01:02:48] Speaker 04:
So now I'm really missing something.

[01:02:49] Speaker 04:
Why on earth would EPA care whether people install things they aren't using?

[01:02:59] Speaker 02:
I'm not sure that's the

[01:03:03] Speaker 02:
That's the right consideration.

[01:03:05] Speaker 02:
What EPA looked at in the update was, do sources that already have catalytic controls, is it cost effective for them to operate?

[01:03:17] Speaker 02:
Operate.

[01:03:17] Speaker 02:
Yeah.

[01:03:17] Speaker 02:
OK.

[01:03:18] Speaker 02:
Yes.

[01:03:20] Speaker 02:
And that's what EPA found in the update.

[01:03:23] Speaker 02:
EPA said, as a fleet, that's cost effective.

[01:03:25] Speaker 07:
Do you think operate?

[01:03:26] Speaker 07:
I mean, operate is just that once you operate something, it creates costs.

[01:03:31] Speaker 07:
I take it that's where.

[01:03:32] Speaker 02:
Yes.

[01:03:33] Speaker 02:
In fact, I believe that was $1,400 per ton of NOx reduced.

[01:03:39] Speaker 02:
That's where the cost-effectiveness finding in the update was.

[01:03:43] Speaker 02:
There is no cost-effectiveness finding in the update for installing new controls for sources that don't already have them.

[01:03:50] Speaker 04:
But for the 83 that already have them in and not turning them on, then what about those?

[01:03:55] Speaker 04:
What more are they supposed to show us for those 83?

[01:03:59] Speaker 02:
So for that 83, when we're

[01:04:04] Speaker 02:
breaking this down.

[01:04:05] Speaker 02:
What EPA said was we've already implemented a remedy for that.

[01:04:10] Speaker 02:
That's the tap and trade program.

[01:04:12] Speaker 02:
Yes.

[01:04:14] Speaker 02:
So there were violations and they were remedied and the remedy is working and you haven't just because a small handful of them were not turning them on.

[01:04:25] Speaker 02:
That did not in and of itself establish a new violation of the good neighbor provision.

[01:04:32] Speaker 02:
Because that's how cap-and-trade works.

[01:04:35] Speaker 02:
It sets a cap for the fleet.

[01:04:37] Speaker 02:
And that's saying that, in fact, the states that are subject to the update budgets are not aware of the budget.

[01:04:45] Speaker 04:
That just sounds to me like a merits ruling on a petition, not a burden problem as to those.

[01:04:51] Speaker 04:
They said, look, we're just saying the good neighbor, sorry, 126B doesn't apply if the sources you identified are engaged in cap-and-trade.

[01:05:03] Speaker 04:
Is that right?

[01:05:04] Speaker 04:
Is that what you're saying?

[01:05:05] Speaker 04:
What EPA said?

[01:05:07] Speaker 02:
The way EPA said it was, I'm not saying you could never have a new good neighbor violation for sources that are already covered.

[01:05:16] Speaker 02:
What we're saying is you haven't given us anything new to make an additional finding.

[01:05:20] Speaker 02:
That's how EPA said it.

[01:05:21] Speaker 02:
So they sort of couched it as a burden for those sources, but I think you could live with it either way.

[01:05:27] Speaker 04:
And the new thing isn't that, hey, you're continuing to cause non-attainment?

[01:05:34] Speaker 04:
That's not a new thing.

[01:05:37] Speaker 02:
It's not new to these specific sources.

[01:05:39] Speaker 02:
So what we don't have is the cause, right?

[01:05:44] Speaker 02:
We don't have the connection between, OK, these specific small handful of sources, if they do this on a source-specific basis, what result does that get you down when?

[01:05:56] Speaker 02:
Let's say, for example, as Mr. Berman suggested, that certain coal plants are just running less.

[01:06:01] Speaker 02:
Or let's say that some of them are retired, because since

[01:06:05] Speaker 02:
this denial came out, several of these sources have retired.

[01:06:07] Speaker 02:
That is still a way to keep these sources under the cap.

[01:06:17] Speaker 04:
I'm sorry, I think I've taken up way too much of your time.

[01:06:30] Speaker 04:
No, that's okay.

[01:06:33] Speaker 07:
Let me just make sure

[01:06:35] Speaker 07:
My colleagues don't have any additional questions before I give you a chance to bring it to conclude your segment.

[01:06:48] Speaker 07:
Sure, then please, yeah, can you please wrap up and we'll give petitioners their rebuttal time.

[01:06:57] Speaker 02:
Yes, Your Honor, I would like to wrap up with

[01:07:01] Speaker 02:
One final point on the burden.

[01:07:04] Speaker 07:
I don't mean to cut you off if you're not done with one of your responses, so please just finish your response and wrap up.

[01:07:09] Speaker 07:
I'm not trying to arbitrarily cut you off.

[01:07:12] Speaker 02:
No, I think I've sufficiently answered the questions about the 83 sources.

[01:07:16] Speaker 02:
I just want to wrap up with a response to a question that I believe Judge Millett asked of petitioners, which was about if 60 days is not enough,

[01:07:30] Speaker 02:
in order to make the finding that's requested, or if 60 days plus the optional six month extension, if that's not enough to make the finding requested.

[01:07:39] Speaker 02:
If EPA does not have a basis to support a finding of a good neighbor violation, then under 126, EPA has to deny it.

[01:07:50] Speaker 02:
There is a separate process for EPA to affirmatively assess all of the

[01:07:59] Speaker 02:
upwind states that are potentially contributing to downwind nonattainment.

[01:08:04] Speaker 02:
And that's the FIT process.

[01:08:06] Speaker 02:
That's happening separately.

[01:08:07] Speaker 02:
It's on remand.

[01:08:09] Speaker 02:
And EPA is working on that.

[01:08:12] Speaker 02:
So if there are no further questions, we would ask that the court do not.

[01:08:16] Speaker 04:
I apologize.

[01:08:16] Speaker 04:
Can I just one more?

[01:08:17] Speaker 04:
Yes.

[01:08:19] Speaker 04:
Didn't the update recognize that EGUs may need to actually

[01:08:25] Speaker 04:
do more reductions to comply with the good neighbor provision so that what the update was requiring might not be enough?

[01:08:33] Speaker 04:
And if it did, did that not apply to the cap and trade ones as well as others not involved in cap and trade?

[01:08:40] Speaker 02:
So this goes back to the three buckets.

[01:08:42] Speaker 02:
There are the non-EGU sources.

[01:08:44] Speaker 02:
EPA did in the update say those sources might need to do something.

[01:08:47] Speaker 02:
There are the

[01:08:49] Speaker 02:
47 EGUs that have not installed catalytic controls or non-catalytic controls.

[01:08:56] Speaker 02:
It's possible that those sources will need to do something else.

[01:08:59] Speaker 04:
So when the update said that I'm only talking about EGUs, may need to make more reductions to comply with the good neighbor provision, it was specific only as to those who have not yet installed catalytic converters?

[01:09:15] Speaker 04:
Or was it that specific?

[01:09:17] Speaker 02:
Or was it talking about the EGUs?

[01:09:20] Speaker 02:
So there's the words that EPA used, and then there's what it meant.

[01:09:23] Speaker 02:
So the words EPA used was reductions available after 2017.

[01:09:30] Speaker 02:
What EPA was talking about was things like installation of controls, because that takes longer.

[01:09:35] Speaker 02:
The sources that are operating SCR, that's pretty much all the source can do.

[01:09:40] Speaker 02:
They were able to do it before 2017, and EPA said that as a fleet, they can do it.

[01:09:47] Speaker 02:
before 2017, and that's what was already covered.

[01:09:51] Speaker 02:
So there is a category of EGUs that are potentially subject to more controls on the remand.

[01:09:59] Speaker 04:
And that would be the 47?

[01:10:02] Speaker 04:
Yes.

[01:10:03] Speaker 04:
And the 47, okay.

[01:10:05] Speaker 04:
All right, and that's part of what New York is targeting here, right?

[01:10:09] Speaker 04:
Is this 47?

[01:10:11] Speaker 02:
Yes, and the denial is that

[01:10:14] Speaker 02:
You know, EPA doesn't have the basis to make the finding here.

[01:10:17] Speaker 02:
Yeah.

[01:10:18] Speaker 02:
Okay.

[01:10:20] Speaker 02:
Okay.

[01:10:21] Speaker 02:
So if there are no further questions, we would ask the court to deny the petition for review.

[01:10:27] Speaker 07:
Thank you, Ms.

[01:10:28] Speaker 07:
Pence.

[01:10:29] Speaker 07:
Thank you.

[01:10:31] Speaker 07:
Mr. Wu, we'll give you your rebuttal time.

[01:10:34] Speaker 05:
Thank you, Your Honors.

[01:10:35] Speaker 05:
I just have a couple of points to make.

[01:10:38] Speaker 05:
One is on EPA's argument that what is missing

[01:10:41] Speaker 05:
and the reason the states didn't meet their burdens here, was some failure to establish cost-effectiveness.

[01:10:46] Speaker 05:
And there is a lot that is baked into that term, and it has become less clear, I think, over the course of this argument.

[01:10:55] Speaker 05:
I mean, EPA has said at this argument that a comparison is not required under its analysis of what the burden is.

[01:11:04] Speaker 05:
But the denial says otherwise.

[01:11:06] Speaker 05:
And I think the leftmost column on JA-52

[01:11:10] Speaker 05:
which begins with EPA disagrees with the commenter's assertion, goes into that in great detail.

[01:11:15] Speaker 05:
It says, for example, a portioning responsibility for emissions reductions across many sources in many states is part of the four-state framework.

[01:11:23] Speaker 05:
And then later in that paragraph says that the problem with the petition, with our petition, is that the absence of that comparative information means EPA cannot determine whether the sources we've identified have cost-effective emissions compared to other unnamed sources.

[01:11:39] Speaker 05:
I think this highlights the difficulty that we have had in pinpointing what it is that is missing, assertively missing from our petition.

[01:11:48] Speaker 05:
The concrete omission that EPA appears to have identified as a denial, but may not be insisting on anymore, is the absence of analysis across the entire region for unnamed sources.

[01:12:01] Speaker 05:
We have argued that that's not required by 126B because 126B does not require regional transport rulemaking.

[01:12:09] Speaker 05:
If EPA is now changing its mind about whether that is a reason to deny the petition, that itself is a basis for a remand here.

[01:12:18] Speaker 05:
Separately under cost effectiveness, I think EPA has also acknowledged here that at least for non-EGU sources, there is not readily available information, maybe not even for EPA on what is in order to determine cost effectiveness as EPA has understood it.

[01:12:35] Speaker 05:
And again, this highlights the

[01:12:37] Speaker 05:
unreasonableness of EPA relying upon this lack of information to deny relief to the petitioning state.

[01:12:43] Speaker 05:
If the information is not available even for them, to say that the state had to come with this information from out of state sources is an arbitrary and capricious basis.

[01:12:53] Speaker 05:
And then my very final point is on the EGU sources that were the subject of some discussion.

[01:12:58] Speaker 05:
Again, what I think the argument here is highlighted is the degree to which, for the EGU sources, EPA continues to rely on the adequacy of the update for, as counsel said, providing a solution for the cross-state air pollution problem.

[01:13:13] Speaker 05:
But this court in Wisconsin rejected the update as being adequate there.

[01:13:18] Speaker 05:
It did not say that it was adequate or inadequate only as to some sources rather than others.

[01:13:23] Speaker 05:
What it said was the analysis EPA used to determine adequacy was improper.

[01:13:27] Speaker 05:
For EPA to come in and say that it was proper on the basis for denying the petition sort of confirms the degree to which their reliance on that now invalidated rule makes their analysis also unreasonable.

[01:13:40] Speaker 04:
Thank you.

[01:13:41] Speaker 04:
Sorry, what is your answer to their argument

[01:13:44] Speaker 04:
that what was missing for the electric generating units was source specific modeling.

[01:14:00] Speaker 05:
Well, I think our answer to that is that the update itself, up until the point of actually imposed controls,

[01:14:08] Speaker 05:
did the analysis that is needed for whatever burden is necessary here.

[01:14:13] Speaker 05:
For the EGUs, to be clear, EPA identified in the update those sources as significantly contributing under the four-step cross-state framework.

[01:14:23] Speaker 05:
Later, it made a distinction between sources with SDRs and those with ASICs, but there is a significant contribution finding here for EPA to now say that the states had to do something more to establish that finding.

[01:14:34] Speaker 05:
It's just incompatible with what the update itself found.

[01:14:37] Speaker 05:
And it is, as I believe you articulated earlier, that might be a merit-based ruling later to say that, you know, you need to do more at the control stage, for example.

[01:14:48] Speaker 05:
But it is not a failure for the states to satisfy their burden at the initial stage in order for EPA to conduct a further analysis.

[01:14:59] Speaker 07:
Okay, if my colleagues, I'm going to make sure my colleagues don't have any further questions.

[01:15:05] Speaker 07:
If not, well, thank you for your argument.

[01:15:07] Speaker 07:
this morning all counsel.

[01:15:09] Speaker 07:
We'll take the case under submission.