On May 30, 2012, EPA finalized its proposal to allow states to use compliance with the Cross-State Air Pollution Rule (“CSAPR”) as an alternative to the Best Available Retrofit Technology (“BART”) requirements for individual sources under the Clean Air Act regional haze program.  To help implement this decision, EPA also replaced several state regional haze plans that relied on the predecessor to CSAPR, the Clean Air Interstate Rule (“CAIR”), with federal plans that rely on CSAPR in lieu of BART.  Although industry generally welcomed this policy decision when it was proposed, EPA’s timing in issuing the rule could complicate matters – with CSAPR on hold under a court-ordered stay, concerns remain that a vacatur of CSAPR could result in unnecessary confusion in the future.

The regional haze rules at the focus of the debate require individual sources to determine and install BART on a unit-by-unit basis, an arduous task that has resulted in several legal battles between regulated industries, states, and EPA regions, particularly in the west.  As such, the proposal to allow the eastern states subject to EPA’s regional trading programs to avoid the BART process for utility units was supported by most of the regulated community and their regulators.  The key to EPA’s proposal was its analyses confirming that CSAPR would result in better visibility improvements in national parks than would a unit-by-unit BART requirement.  EPA had completed just such an analysis for CAIR before it was vacated.  With the vacatur of CAIR and the adoption of its replacement, CSAPR, EPA sought to implement the same policy using the new, more stringent CSAPR trading programs.

In its final rule, EPA confirms that, air quality modeling continues to indicate better visibility improvements will result from CSAPR than with BART.  EPA’s analysis was based on two criteria – CSAPR could only be “better than BART,” and therefore a legal “alternative” to BART, if it (1) did not result in a decline in visibility in any national park and (2) achieved an overall improvement in visibility when compared to the BART scenario.  With that analysis completed, EPA changed its “BART alternative” regulations to refer to CSAPR instead of CAIR, finalized its rejection of state-submitted regional haze plans that relied on CAIR, and issued federal plans to re-focus those states plans on CSAPR. 

The result of this rulemaking will be to continue allowing utility units in eastern states covered by CSAPR to avoid BART requirements for two key pollutants (nitrogen oxides and sulfur dioxide) which are the subject of both programs.  However, if the D.C. Circuit panel currently considering CSAPR vacates that rule in the next few months, sources could be left without any possible alternative to BART because the new rule eliminates CAIR as a possible alternative, and a vacatur of CSAPR would of course eliminate that alternative as well.  Nevertheless, EPA justified its decision to plow ahead with its CSAPR = BART rule, in spite of the legal uncertainty surrounding CSAPR, because of the consent decree requiring EPA to finish the regional haze program by December, a task that already lags somewhat behind schedule.