This is a draft final document prepared by a subgroup member of the National and Regional Strategies Work Group as part of the Federal Advisory Committee Act (FACA) Subcommittee process. It is not an EPA document. This document has not been reviewed by the work group and is subject to further work group discussions. The issues and options for this topic are still being developed by members of the subgroup. No effort has been made to develop recommendations. Interested people should forward their comments to a member of the National and Regional Strategies Work Group.

Reasonable Further Progress

Date: September 4, 1997

Status: Draft Final

Contact: Sarah Peirce-Sandner, Telephone 716-588-6477, FAX 716-722-3695

INTRODUCTION	(3/20/97 RFP paper, revised 5/8/97, 9/4/97))

This paper addresses Phase II implementation issues associated with reasonable further progress (RFP) requirements for the proposed ozone and fine particulate (PM-fine) national ambient air quality standards (NAAQS). This document focuses on the state implementation plan (SIP) phase of RFP or the time period after approval of a SIP by the EPA. A separate document discusses progress during SIP development phase or the time period up to when the SIP has been approved by EPA.

Note: The RFP issue has been explored in the Reasonable Further Progress Metrics paper by Alan Krupnick (October 16, 1996) and in the Reasonable Further Progress Requirements in the Areas of Influence (AOI)/Areas of Violation (AOV) thought piece by Don Theiler (October 8, 1996). Readers are encouraged to refer to these papers for additional insight.

In the case of regional haze, EPA is required to promulgate regulations to assure reasonable progress toward the national visibility goal. The program currently requires states to update regional haze long-term strategies every three years and EPA to report progress every five years. The Regional Haze Issue Paper (November 12, 1996) recommends coordinating reasonable progress requirements for the regional haze program with RFP reporting requirements for the NAAQS. Readers will find a complete discussion of options and recommendations in the Regional Haze paper.

BACKGROUND	(3/20/97 RFP paper)

States have been required to meet the NAAQS for ozone and particulate matter in nonattainment areas. The concept of RFP was first used when EPA was developing a comprehensive tracking system to assess ozone control programs implemented by the States to meet the NAAQS. RFP was defined as the annual incremental reductions in emissions of the relevant air pollutant as are required by regulations or may be reasonably required by the Administrator for the purpose of ensuring attainment of the applicable national ambient air quality standard by the applicable date. The primary purpose of the RFP program was to track and verify whether emission reductions expected to occur as a result of State Implementation Program (SIP) regulations were being achieved. Prior to 1990, the RFP program had three principle requirements: (1) an initial listing in the SIP of sources to be tracked and their projected emissions; (2) an annual updating and RFP status report; and (3) a periodic update of the emissions inventory.

Ozone nonattainment areas have since been classified as either marginal, moderate, serious, severe, or extreme. All ozone nonattainment areas classified as moderate and above are required to submit a SIP revision by November 15, 1993, which describes, in part, how the areas will achieve an actual VOC emissions reduction of at least 15 percent during the first six years (i.e., November 15, 1990 through November 15, 1996). The SIP revision must describe how any growth in emissions from 1990 through 1996 will be fully offset. In addition, ozone nonattainment areas that are classified as serious and above are required to demonstrate how the plan will provide for the attainment of the ozone NAAQS by the applicable attainment date and will result in RFP after the first six years. RFP is defined here as VOC emissions reductions of at least three percent of baseline emissions each year averaged over three-year periods until the ozone NAAQS is attained. NOX emission reductions could be substituted for the VOC requirement where an ozone concentration reduction equivalent to that which would result from the VOC reduction was achieved. A bibliography of EPA guidance for the rate-of-progress plans for ozone nonattainment areas is provided as Attachment 1.

Areas violating the particulate matter (PM-10) ambient air quality standard are classified as either moderate or serious and are required to submit a SIP containing measurable interim steps that show incremental progress towards attaining the NAAQS. PM-10 nonattainment areas are required to submit an implementation plan that includes quantitative emissions reductions milestones that are to be achieved every three years and that demonstrate RFP until the area is redesignated attainment. Each State must demonstrate to EPA within 90 days after milestone due date, that all the SIP measures have been implemented and the milestones are being met. Under the current program, the State is required to submit a SIP revision if it fails to submit the quantitative milestone demonstration or EPA determines the milestones are not being met. The SIP revision must assure that the State will achieve the next milestone by the applicable date and/or achieve the PM-10 standard by the applicable date if there is no next milestone. The starting point for this three year period (i.e., milestone clock) was the due date of the implementation plan containing the control measures for the area (November 15, 1991). EPA chose this date over the actual submittal date of an area's implementation plan because (1) it was included in the statute of specific SIP submittal and attainment deadlines, and (2) would not allow States that submit SIPs late to defer meeting their quantitative milestones and, consequently, making RFP toward attainment of the PM-10 standard.

The Interim Implementation Policy (IIP), which was proposed in November, 1996, will take effect on the date of the NAAQS promulgation and will remain effective until the date of EPA approval of the SIP for achievement of the new NAAQS. The proposed IIP continues the current ozone and PM-10 RFP requirements until the EPA has approved the new SIP for the new NAAQS. The IIP modifies existing ozone RFP requirements by allowing nonattainment areas to take credit for emission reductions from sources outside the nonattainment area so long as the sources are no farther than 100 km (for VOC sources) or 200 km (for NOX) away from the nonattainment area.

Why are we doing RFP? (What about RFP differs from the attainment demonstration?)

RFP is a tracking system used to assess control programs implemented by the States to meet the NAAQS. There are two schools of thought on how RFP can be assessed. The first defines RFP as the demonstration of timely progress toward the NAAQS demonstration. Under this model, RFP is the milestones along the path towards the area's attainment of the standard. The second model to assess RFP views it as the incremental improvement in air quality to reduce exposure to unhealthy air. This model uses air quality related indicators such as emissions inventories or ambient air monitoring to assess RFP. The driving force behind this model is that an area cannot make up for lost time in terms of air quality.

LINKS TO OTHER ISSUE PAPERS	(revised 6/2/97)

Rewards and Sanctions -- The RFP paper recommends sanctions/penalties when planned emission reduction programs are not fully implemented, regardless of whether or not the air quality goals or emission reduction goals are achieved. Sanctions should include at a minimum more expeditious implementation of measures that an area failed to implement and for which the implementation deadline has passed. The Rewards and Sanctions Issue Paper should address sanctions/penalties that should be imposed for various kinds of RFP failures.

Progress During SIP Development -- This issue paper deals with RFP requirements prior to when the SIP is approved by the EPA.

Integrated Implementation Paper -- This issue paper deals with how planning requirements for ozone, PM and regional haze can be integrated. The RFP issue paper relies on the principles in this paper.

Regional Air Management Partnerships and Areas of Influence, and Institutional Mechanism for Development and Implementation of Regional Strategies -- The RFP paper strongly recommends that, during the RAMP and RIP development process, thorough discussions of next steps and responsibilities for interstate programs take place and that these next steps and responsibilities be placed in the relevant SIP.

SIP-PHASE ISSUES -- HOW SHOULD RFP BE DEFINED?

A total of 16 issues related to RFP in the SIP-phase have been identified during various discussions. These issues are discussed sequentially below. Each issue is reviewed in four segments starting with the issue posed as a question, the current manner in which the issue is addressed (i.e., status quo), the options the work group discussed, and finally the group's recommendation. A summary of the issues and how each stake holder group voted is shown in Tables 1 and 2 respectively in Appendix A.

1. Should RFP emission reduction requirements (i.e., type and quantity of reductions predicted necessary to achieve attainment) be standardized nationwide or customized at the AOI/AOV level? [Complete issue revision from Draft #8 (6/5/97)]

Note: Discussion of this issue is premised on the assumption that there are common attainment dates or a common process for assigning attainment dates (based on severity of pollution) nationwide. It also assumes that the RFP process will be reviewed at the RAMP level to insure that any downwind impacts of an AOI are taken into account. Discussion also assumes that each area will perform an attainment demonstration that shows attainment of the standard by the attainment date; it should be noted, however, that Issue 10 deals with the alternate assumption, viz., "Under what circumstances, if any, should an area be allowed to avoid demonstrating attainment, and if so, what will constitute RFP."

Status Quo: For ozone, RFP is 15 percent VOC reduction (from 1990 levels) by 1996 and 3 percent per year (VOC or NOX) until the standard is attained. For PM-10, there is no specified RFP emission reduction.

The subgroup narrowed the range of options down to 4 choices presented as Option A1, Option A2, Option B, and Option C below. The full list of original options (shown in Attachment 4 of Appendix B) is retained for reference.

Option A1 - Standardized percent reduction approach.

EPA would establish a percent emission reduction requirement. For ozone, the percent reduction would expressed as total precursors (i.e., NOX and VOC) with AOI/AOV allowed to select the precursors that will make up the total percent reduction requirement. For PM-fine, the percent emission reduction requirement would be expressed as the total precursors and direct emissions with the AOI/AOV allowed to select the precursors/direct emissions that will make up the total percent reduction requirement. The federally established percent reduction could be different for ozone and PM-fine and might also vary according to the severity of pollution (i.e., classification) of an area.

Option A2 - Standardized percent reduction approach with option to customize at the AOI/AOV level.

Same as Option A1 except the AOI/AOV would be allowed to implement an alternative plan (i.e., that does not meet percent reduction requirements) if such plan meet the following criteria:

a) the plan contains complete technical and modeling analyses to determine the emission reductions needed to attain;

b) the plan includes the state's technical evaluation of the feasibility, cost-effectiveness, and timing of available and anticipated control strategies;

c) the plan documents why an alternative rate-of-progress is desired based on technology development, cost-effectiveness, timing of control strategies, administrative constraints, or other factors;

d) the plan shows the state will continue to make some degree of progress in reducing emissions; and

e) the plan shows the alternative rate-of-progress will allow timely attainment.

Option B - Standardized minimum cost-effectiveness approach followed by customized approach at the AOI/AOV level.

The EPA would establish a minimum national cost-effectiveness level for precursor and direct emission reductions (dollars/ton reduced). This national cost-effectiveness level would be established by EPA through negotiations with stakeholders and is expected to fall in the $500 to $2,000 per ton range for health based standards. There would also be an option for temporarily economically distressed areas to opt out until the area's economy recovers. All control programs that met the minimum cost-effectiveness level would be applied in an AOI/AOV unless: (a) the AOI/AOV could demonstrate attainment at a lower cost-effectiveness level, or (b) the area could demonstrate that specific reductions will not result in air quality benefits. Example of these exceptions are (1) an SO2 strategy may be cost effective, but may not contribute to solving the PM-fine problem if that problem were predominantly caused by nitrate particles and (2) the exemption of certain source categories from control programs that meet the cost-effectiveness test if a demonstration can be made that emissions from those source categories have negligible impact on air quality.

For areas that could not demonstrate attainment after implementation of all controls that meet the minimum cost-effectiveness level, the additional reductions (level and type of precursors) would be customized at the AOI/AOV level, taking into account such considerations as technology availability, and health and economic impacts. Such a customized plan would have to meet the sam technical standards embodied in parts a) and b) of Option A for "alternative rate-of-progress" plans, and set out the basis for establishing the customized rate of progress, which may include consideration of technological availability, cost-effectiveness, regional economic factors, timing of control strategies, administrative constraints, or other elements.

Option C - Fully customized at the AOI/AOV level (i.e., the same as Option B but with no minimum cost-effectiveness requirements to be met).

Recommendation: The work group narrowed the original list of options from seven to four. In doing so, there was clear consensus that the local airshed should determine which precursors should be reduced to meet RFP goals. However, the group differed in opinion with regard to the need for percent reduction mandated by EPA. In general, states and public health and environmental stakeholders preferred some standardized percent reduction approach while industrial stakeholders recommended either a minimum cost-effectiveness approach or a fully customized approach.

2. What is the range of options for the RFP metric? This issue reflects input from the Science and Technology Support Work Group (STSWG). [Complete issue revision from Draft #8 (6/5/97)]

Status Quo: Emission reductions, as determined by inventory, is the primary metric for determining whether RFP requirements have been met.

Note: See Attachment 5 in Appendix B for additional discussion material on the issue by the subgroup. See Attachment 6 in Appendix B for the information provided to the STSWG concerning various RFP metrics. The STSWG response can be found in the issue paper entitled, "STSWG Subgroup Revised Response to NRSWG Questions #1 and #2."

Discussion: In lieu of options, the work group agreed on the following philosophical approach and recommendations relative to the RFP metric. However, consensus was not achieved on wording noted by underscore below:

Because of the current state of the science related to the use of air quality indicators, it may be better to rely on the use of administrative and emissions metrics for demonstrating progress. However, air quality indicators have value in determining: (a) prospectively a proper control path toward attainment and (b) retrospectively whether the chosen control path was in fact directionally correct. Therefore, their use could be required where data and tools are available for their application, but there would be no penalties per se for failing to meet an air quality indicator by itself. Development of improved data and tools to allow expanded use of air quality indicators for use in control strategy development and, ultimately, for use as a component of measuring progress, should be encouraged.

Recommendation: It is generally agreed that the RFP process should be an iterative one requiring states or areas to review their progress toward attainment at fixed intervals. This review of progress will consist of tests to determine if administrative and emission reduction metrics have been met as well as review of available air quality indicators (to the extent practical) to determine if programs are on track and effective. The tests for determining is a state has met its RFP obligations (and the subsequent application of sanctions for failure to meet) will be initially2 based only on administrative and emission reduction metrics (See Figure 1, the Iterative RFP flow diagram). It should be noted that air quality indicators may, in the future, also be considered an RFP metric (in addition to administrative and emission reduction metrics) if there is scientific consensus that air quality would be an effective metric that can be practically implemented. However, while it is agreed that states would benefit from an assessment of air quality indicators (which might include peak values, area exposure, or population exposure, among others), some states have concerns regarding the maturity of these tools for use as a component for assessing RFP at this time. The goal of assessing air quality indicators should be to determine if these values are consistent with the administrative and emissions tests. If they are consistent, no further action is necessary. If they are not consistent, then states or areas should investigate the reason for the inconsistency to determine if a mid-course correction is warranted.

In order to increase the accuracy of emission reductions estimates, evaluate the effect of these reductions on air quality, and improve the usefulness of air quality indicators, states must enhance their technical tools. Therefore, significant additional effort may be needed to: (1) promote RFP plans that do not rely on a single metric but rather on a number of indicators to engender a fuller perspective on each area's progress to attainment; (2) identify the appropriate air quality indicators and emission reduction metric(s) and develop a consistent approach for application of these tools; (3) develop monitoring and data collection requirements to provide sufficient air quality data for both NAAQS pollutants and precursors (type, quantity, and location of monitors); (4) identify computer and human resource requirements (including training) for compilation and analysis of such data; (5) promote increased expertise for implementing all potential RFP metrics at the State, local and regional staff level; and (6) promote ways to improve emission inventories.

It is therefore recommended that a workshop for technical experts of all stakeholder groups be convened to address these issues by December 31, 1997.

3. How frequently should Reasonable Further Progress be demonstrated? [Complete issue revision from Draft #8 (6/5/97)] Once a baseline date is set it is necessary for an area to develop a plan that predicts a certain amount of progress at different times in the future. The State should also have to demonstrate that an area actually realize these expected reductions or air quality improvements. If these demonstrations are required too frequently, the cost of the showings would easily outweigh the benefits. If done too infrequently, an area would be unable to take corrective action in a timely manner. The purpose is to monitor progress often enough so an area can continue effective control strategies safe in the knowledge that the programs are working well or revise ineffective strategies. The time periods for these prospective and retrospective demonstrations should be linked to the issue paper entitled, "Attainment Dates for New National Ambient Air Quality Standards (NAAQS)"

Status Quo: For ozone a state needs to provide a plan that predicts a 15 percent reduction in VOC in between November 15, 1990 and November 15, 1996 and a 9 percent reduction in VOC or NOX every 3 years thereafter until the area attains the standard. A State must also submit to EPA a milestone compliance demonstration 90 days after every RFP period ends showing that the expected emission reductions have actually been realized. EPA has provided extensive guidance on how to do the prospective analysis but has provided minimum guidance on the milestone compliance demonstration. For PM-10 the area must submit milestone plan that shows reasonable progress 3 years after the baseline date and a milestone and RFP report 90 days after the milestone was to be completed.

Option 1 - Standardized time frame (e.g., an area must show RFP for every X years, and an area must show RFP for at least x times before the attainment date). (Ozone and PM do not have to have common periods for demonstration.) Administrative metrics may have a higher frequency of demonstration (e.g., every year) than would an emissions reduction metric (e.g., every 3 years). This should not be construed as an area needing to conduct a full-blown emissions inventory every three years. For the air quality indicator it is anticipated the first lookback would occur after five or six years (STSWG recommendation) to allow initial emission reduction strategies to be implemented enough time to allow a change in air quality, however after the first six year period subsequent air tests would occur every three years.

Pros: Follows the CAA model.

Cons: Does not allow tailoring for unique situations

Option 2 - Allow an area to determine RFP time frames that make sense for their control strategies. This may be different for different metrics, (e.g., it make take longer to see an air quality effect than an emissions effect.)

Pros: Allows for tailoring the time frames to a particular milestones that apply to different control strategies.

Cons: May make doing compliance milestone demonstrations very difficult.

Recommendation: The work group did not achieve consensus on this issue. Industrial stakeholders generally preferred a customized approach while public health and environmental and state stakeholders preferred a standardized approach.

4. What is the base year for RFP? [Complete issue revision from Draft #8 (6/5/97)] When determining RFP it is necessary to have a base year from which reductions are calculated.

Status Quo: In general, air quality modeling will be done to develop a plan for attaining the NAAQS which shows reductions from an emissions baseline. For ozone (an area-wide pollution problem), all areas must use 1990 as the base year when calculating RFP. For PM-10 (a hot spot pollutant with clearly defined source/receptor relationships), the base year is determined by the designation date. For those areas designated when the PM-10 NAAQS was promulgated, the base year is 1987. For areas designated subsequently to promulgation of the standard, the base year is generally set at 18 months after designation. Since EPA can continually designate areas as not attaining the PM-10 standard, the base years for PM-10 can vary from 1987 to future years. It is not necessary to choose the same base year for ozone and PM-fine.

The following options would only apply to areas initially designated as an area of violation (AOV) or as nonattainment under the new/revised standards.

Option 1a - Common Fixed Base Year for Ozone and PM. The Base Year would be 1996.

Pros: Provides a simple, common base by which national comparisons of progress towards the standard can be measured. This would engender area-wide emission control strategies (especially for NOX emissions) and facilitate interstate trading programs. Allows EPA to develop guidance once to ensure consistency among areas. A common base year avoids differences in emission reductions and shifting of production to inflate base year emissions. EPA has a lot of data for a National Inventory for this year.

Cons: There is a disparate amount of information on ozone and PM-fine. This could possibly result in the delay in implementing ozone control strategies while areas collect data on PM-fine or PM-fine control strategies implemented before the cause of the problem can be determined.

Option 1b - Common Fixed Base Year for Ozone and PM. No recommendation for Base Year.

Pros: Provides a simple, common base by which national comparisons of progress towards the standard can be measured. This would engender area-wide emission control strategies (especially for NOX emissions) and facilitate interstate trading programs. Allows EPA to develop guidance once to ensure consistency among areas. A common base year avoids differences in emission reductions and shifting of production to inflate base year emissions.

Cons: There is a disparate amount of information on ozone and PM-fine. This could possibly result in the delay in implementing ozone control strategies while areas collect data on PM-fine or PM-fine control strategies implemented before the cause of the problem can be determined.

Option 2 - Fixed Base Years for Ozone and PM. The ozone base year would be set within three years after the promulgation date while the PM base year would be set close to the initial designation deadline set by EPA.

Pros: Making every State have the same year would engender area-wide emission control strategies and facilitate interstate trading programs. This basically follows the template provided by Congress in the CAA. Allows EPA to develop guidance once to ensure consistency among areas. A common base year avoids differences in emission reductions and shifting of production to inflate base year emissions.

Cons: No guarantee EPA will be able to develop a federal reference method (FRM) for monitoring PM-fine by the base initial designation deadline. Some areas will have FRM monitors sooner than other areas due to manufacturing constraints. Therefore these areas will make an attainment status decision sooner than the other areas. Thus the areas without the necessary monitoring data may be forced to implement control strategies that do not effectively address the pollutant of concern.

Option 3 - Fixed Base Years for Ozone only, the Base Year for PM will be set as areas determine their attainment status.

Pros: Follows the current process for ozone and PM attainment planning. Allows States to choose a base year that best meets their unique PM problems. Will allow for a realistic development of a PM-fine monitoring network.

Cons: May make interstate PM attainment planning and trading more difficult if not impossible. Would make a integrated approach difficult to control common precursors for ozone and PM.

Option 4 - Variable Base Year to be set by the Airshed for both Ozone and PM as areas determine their attainment status.

Pros: Allows States to choose a base year that best meets their unique ozone and PM problems. Allows for a realistic development of new ozone and PM- monitoring networks.

Cons: May make interstate attainment planning and trading more difficult if not impossible. Would make an integrated approach to controlling common precursor emissions difficult.

Principles: Some Subgroup members favored a fixed year, rather than allowing a variable year. The RFP Subgroup developed the following draft set of principles for selecting the base year but did not reach consensus:

A common base year should be set for all areas for the purposes of RFP. This would provide a consistent basis to compare progress toward attaining the standard. A common base year would also reduce the possibility of an area choosing an advantageous base year. In addition, EPA could issue guidance once to ensure consistency among areas.

The base year should be set with enough lead time to allow areas to plan and collect data for the base year emissions inventory.

The base year should not serve as a disincentive to areas considering early reductions. Areas may not be able to take credit for early reductions if the base year is set too far into the future.

The base year should be a future year, but it should build upon current emission inventory development efforts.

The base year should take advantage of any forthcoming compliance programs such as CAM.

Recommendation: The work group did not achieve consensus on this issue, including the principles, and some stakeholder groups declined to vote.

5. What would be the rate of RFP -- that is, what is the nature of the line or curve describing the path from nonattainment to attainment for an AOI/AOV? [Complete issue revision from Draft #8 (6/5/97)]

Note: Discussion of this issue does not address whether or not end-loaded strategies are appropriate. That discussion is captured under Issue 6.

Status Quo: For ozone the CAA requires a minimum of 15 percent reduction of VOC between 1990 and 1996 and a minimum of 3 percent of VOC/NOX every year thereafter. Attainment may require a larger than 3 percent reduction in the later years if necessary to achieve attainment. For PM-10 the RFP line must show whatever reductions are required for attainment.

Option 1 - Standardized percent reduction with mandated higher percent reduction based on INITIAL estimates.

EPA would establish an annual percent reduction for ozone precursors and PM-fine precursor/direct emissions. The percent for ozone precursors may be different than the percent for PM-fine precursors/direct emissions. (The AOI/AOV would identify the mix of precursors/direct emissions that, in sum, achieve each percentage.) However, if initial estimates at the outset of the RFP period indicated a need for a higher percent reduction of either ozone precursors and/or PM-fine precursor/direct emissions, that higher annual percent reduction would be mandated throughout the RFP period.

Pros: This could help with source fudging modeling results that provide tiny actual reductions. Assures the RFP process provides a rate of progress beyond de minimis. Provides for CAA requirement that an area attains the standard "as expeditiously as possible."

Cons: Does not provide for mid-course correction to a lower level of reduction if initial estimates over-predicted reductions required to achieve attainment.

Option 2 - Same as Option 1 except the EPA mandated percent reduction would be followed until an interim assessment (at a pre-determined period) was conducted. If that assessment indicated a need for a higher percent reduction, that higher percent reduction would apply throughout the remainder of the RFP period. If a higher percent reduction was not needed, the EPA mandated percent reduction would be achieved for the remainder of the RFP period.

Pros: Assures a minimum and consistent reduction in emissions from base inventory even in the time before the attainment demonstrations are completed. Forces some emissions reduction early in the period set forth to reach attainment. Will make RFP requirements uniform nation-wide.

Cons: Does not consider the unique nature and needs of local air sheds. Limits flexibility in implementing early period control strategies. Prevents an area from going to a level of reduction lower than the EPA percent reduction (from the interim period on) if the interim assessment demonstrates a "less than EPA percent reduction" is needed to achieve attainment.

Option 3 - Same as Option 1 except that the AOI/AOV could opt out from the EPA mandated percent reduction and achieve a higher or lower level from the initial RFP period to attainment as long as the higher/lower percent reduction was supported by a sufficiently detailed attainment demonstration.

Pros: Allows flexibility while providing for continuous emissions reduction progress. Areas can tailor control measures based on the nature of the air quality problem.

Cons: The lower percent reduction may not meet CAA requirement for attaining the standard "as expeditiously as possible."

Option 4 - Customized. The AOI/AOV identifies the reductions needed to achieve an interim air quality goal set at approximately the mid-point between the nonattainment and attainment (see discussion below). Following the interim assessment, the remaining reductions needed to achieve attainment are predicted and those are implemented for the remainder of the RFP period.

Establish an intermediate air quality-based RFP target "window" at, say the midpoint, of the period set for reaching attainment. The window is centered on the line connecting the base air quality (e. g. design value) and the NAAQS. The upper bound of this window, which is between the base air quality and the linearized window-centering value, is set based on a prescribed procedure. The lower air quality bound of the window is the NAAQS. The percent of emission reductions to reach this intermediate target window are estimated to determine the emissions reduction RFP path from the base year through the window to the attainment year.. At the intermediate target year, reassess emissions reduction needed to attain on the attainment date, and make mid-course correction in control measures, if necessary. Nonlinear RFP paths above (concave down) and below (concave up) the straight line, reflecting end-loading and front-loading control strategies, respectively, may be used to reach the target window.

Pros: Allows flexibility while providing for continuous emissions reduction progress. Provides for midcourse correction in control strategy. Less uncertainty in the effectiveness of the pre-window RFP control strategies because a the emission inventory projection used in modeling to select the pre-window control strategies is projected over a shorter time period.

Cons: Annual rate of emissions reductions may be variable. Will not provide accountability for early or constant emissions reduction.

Recommendation: The work group did not achieve consensus on this issue but did vote to narrow the range of options which merit consideration to three. Option 1 was not selected as a first choice by any stakeholder group.

6. How should end-loaded strategies be handled in RFP? Specifically, how much emission reductions required for attainment may be end-loaded strategies? [Complete issue revision from Draft #8 (6/5/97)]

Status Quo: Prospectively, no strategy can be included in RFP/ROP demonstrations in years that no emission reductions are realized, they can be included for those years that emissions reductions are projected to occur. This means that emission reductions from end loaded strategies can only be included in ROP plans in the years that emission reductions are projected to occur (no ROP credit is given for administrative progress. For milestone compliance demonstrations only emission reductions can be counted.

Discussion: Most emission reduction strategies start to realize most if not all of their reductions within a very short time after the administrative actions are completed (i.e., most source category specific rules have fairly near term effective dates when sources must comply with the new regulations). In contrast, end-loaded strategies require extensive up-front administrative/process activities before reductions ever start occurring. These up-front activities could include securing funding for larger capital investment, obtaining a contractor, legal proceedings to secure needed land, securing legislative authority to undertake a project, actual construction, and developing and infrastructure. Examples of end-loaded strategies that might be considered for reducing emissions include mass transit programs, mobile source fleet turnover programs and HOV construction projects. The up-front effort before any emission reductions are realized could take years. The following discussion presumes that an area must account for growth on a year-by-year basis.

Recommendations: The work group has agreed on the following recommendations:

End-loaded strategies should be allowed as part of a multi-strategy emission reduction program. In general the percentage of the total emission reductions assigned to end-loaded strategies should not be a predominate part of the emission reductions needed for attainment. The actual portion of the emission reduction obligation allocated to end-loaded strategies should be tailored to the unique needs of each area.

It is necessary to develop good, enforceable administrative measures to track RFP for these end-loaded strategies. RFP credit should be accrued based on achievement of milestones considered critical to successfully implementing the end loaded strategy (planning milestones, investment milestones, political milestones, etc.). Failure to meet these administrative milestones is treated like missing an emission reduction milestone which can lead to penalties. An area must have measurable milestones for every three year period.

End-loaded strategies can be included in the menu of strategy options when determining which strategies to incorporate into an RFP demonstration. As with all strategies, end-loaded strategies will be incorporated if they are among the most cost effective measures for achieving attainment of the NAAQS.

It is acknowledged there may be less opportunity for mid-course correction when implementing an end-loaded strategy because of the lack of incremental emission reductions. Therefore, as with all emission reductions, any application of an end-loaded strategy needs to be supported with substantial science to ensure that the emission reductions that eventually occur will be effective in improving air quality.

7. What is the corrective mechanism to get an area back on-track when the area has failed an RFP milestone?

Background: The Iterative RFP Process flow diagram in Figure 1 is based on implementation of an AOI/AOV process as defined elsewhere. If the AOI/AOV process is not adopted for air quality management planning, the traditional SIP planning process would be employed. In cases where multi-state "transport" of emissions must be addressed in order to demonstrate attainment, the Clean Air Act provisions concerning prevention of significant contribution of interstate emissions to nonattainment would be used.

The RFP process starts with developing a plan to achieve full attainment of the NAAQS (attainment demonstration). It is assumed that most plans will have multiple emission reduction programs, some of which are implemented in a sequential (i.e., step-wise) fashion. The plan will consist of stated interim air quality goals and the specific emission reduction milestones and programs needed to achieve those goals. The logic for establishing RFP for each step towards attainment would be to identify the emission reductions needed for achievement of the NAAQS as expeditiously as practicable, as well as to track the progress of each step along the way. The order of implementation of an emission reduction program would have to be evaluated with respect to air quality and cost-effectiveness considerations and may be highly dependent on the RFP metric chosen. In addition, there may be different RFP metrics for the alternate RFP process described elsewhere in the issue paper.

Recommendation: The work group achieved consensus on the iterative flow diagram (See Figure 1) as a general mechanism to handle failure to meet an RFP milestone. Boxes 4b, 4c, and 4d describe actions that occur as a result of missing either an administrative or emission reduction metrics.

8. Can emission reduction measures that are not fully enforceable, quantifiable or permanent be credited towards the RFP emission reduction metric? [This issue has been restated from the previous Draft #5 (March 20, 1997) and supporting text revised from Draft #6 (May 8, 1997)]

Note: See Appendix A for a discussion of this issue that provides the spectrum of kinds of measures, some of which are "voluntary." The appendix also contains a detailed list of principles.

Status Quo: Emission reduction strategies for RFP or emission trading are supposed to be enforceable, real, permanent, and quantifiable. However some emission reduction strategies may partially or fully fail one or more of these requirements but still result in emission reductions. There is no way for these reduction strategies to receive credit for RFP purposes. However a state can propose such measures for its maintenance plans or an emission trading program.

Option 1 - No.

Pro: Eliminates need to put an exact numerical value on such efforts for RFP purposes. If not enforceable, some feel there is no assurance that emission reductions will actually occur. Avoids giving undeserved credit for measures that are not fully enforceable and quantifiable or permanent.

Con: Provides no incentive for voluntary or other innovative efforts that may yield significant air quality benefits without command and control. Severely limits opportunities to control mobile and area sources.

Option 2 -Yes, but limited to principles outlined in the Economic Incentive Rules published in the Federal Register on April 7, 1994, which can be summarized as follows: emission reduction programs that are not enforceable, permanent or fully quantifiable (retrospectively, prospectively, or both) should be assigned discounted RFP credit where the level of discounting is directly related to the level of uncertainty that the predicted reductions will actually occur. In addition, contingency measures--that (a) are enforceable, permanent, and fully quantifiable and (b) provide sufficient emission reductions proportional to the degree of risk of failure of the program--must be pre-adopted to be implemented if one of these programs does not yield anticipated reductions.

Pro: Maximizes encouragement to reduce emissions from a wide array of sources.

Con: Difficult or impossible to quantify emission reductions from some of these measures; may not be permanent.

Recommendation: The work group did not achieve consensus on this issue with the Public Health and Environmental stakeholder and one state stakeholder preferring Option 1 while other stakeholders preferred Option 2.

9. What parts of the RFP requirements for ozone and PM should be integrated with the reasonable progress (RP) requirements for Regional Haze? [This issue has been restated from the previous Draft #7 (May 23, 1997). Principles for this issue were added in Draft #8 (June 5, 1997).]

Discussion: NOX is a common precursor for ozone and PM-fine. This would boost the value of a NOX reduction strategy. Consequences to which strategy is chosen by an area (Alan Krupnick, FACA).

Principles: Instead of developing and recommending specific options, the RFP Issue Subgroup developed the following set of principles:

The Integrated Implementation Issue Paper describes criteria for ensuring integration of the ozone, PM, and regional haze in areas such as monitoring, modeling, emission inventories, and control strategy development. Principles in the Integration Paper are similarly applicable to RFP, particularly, that integration opportunities need to be analyzed on an area-by-area basis to determine where integration would be beneficial.

Therefore, the possibility of integration of RFP (prospectively, and retrospectively) needs to be studied by States on a case-by-case basis to determine where integration would be beneficial.

Protection of public health standards should be the primary driver in developing and integrating RFP for ozone and PM with the reasonable progress requirements for regional haze.

According to the "Conceptual Model" developed by the Science & Technology Support Work Group, all tools needed for integration of regional haze with ozone and PM are not yet available at this time. Also, the Regional Haze rule has not yet been developed/proposed. Beyond the above general principles, the issue of determining the degree of integration that is practical will remain unresolved until the Regional Haze rule is further developed and the scientific tools needed for analysis of regional haze problems are further developed.

Recommendation: The work group did not achieve consensus on these principles. One state stakeholder and the Public Health and Environmental stakeholder dissented.

10. Under what circumstances, if any should an area be allowed to avoid demonstrating attainment, and if so what will constitute RFP? [This issue has been restated from Draft #7 (May 23, 1997). Supporting text and options revised from Draft #7 in Draft #8 (June 5, 1997)]

Status Quo of Alternative RFP Process: Currently an ozone nonattainment area may obtain less than the 15 percent/3 percent emission reduction RFP requirements if it can show: (1) NSR is applied as if the area were classified as extreme; (2) RACT has been applied to all major sources; (3) major source is defined as any source described in section 302 of the act or 5 tons per year (TPY) of VOC; and (4) the plan for the area includes the measures that are achievable in practice in the same category or next higher category. This does not exempt an area from an attainment demonstration and it only applies to moderate, serious and severe areas.

Note: This issue can be linked to the following issue papers:

Attainment Dates (October 18, 1996 - Ad Hoc group recommendations)

Emission Inventory and Modeling (June 2, 1997)

Discussion: There are issues about the attainability of the proposed 8 hour 80 parts per billion (ppb) ozone standard. A technical analysis of historic data for monitoring sites which have shown downward trends in the one hour ozone standard has been done. Using these site, analysis shows that the changes in the corresponding 8 hour proposed standard are not uniform throughout the distribution. To date, strategies have reduced the concentrations above 90 ppb at a faster rate than below 90 ppb. That is, it has taken more reduction to see changes in the mid level concentrations. This suggests that it may be very difficult to attain the proposed standard for a large number of areas. [The analysis is available from the STSWG.] Additional discussion material prepared by an industrial stakeholder and a state agency stakeholder can be found in Attachment 7 of Appendix B.

Option 1 - Under no circumstances should an area be allowed to be exempt from RFP or the attainment demonstration requirement.

Pros: Prohibits an area from pausing in the attempt to attain health based standards. Appears consistent with the Clean Air Act.

Cons: Does not account for extreme cost differentials between areas for implementing controls.

Option 2 - Under certain circumstances (generally described in the above discussion) an area should be allowed an alternative RFP and attainment demonstration requirement. The alternative RFP process would include the following features; the definition of "feasibility" of measures will have to be developed, and must consider the degree to which measures are technically available, avoid extreme economic consequences, and contribute non-trivially to improvements in the air quality metrics:

1.	The "hurdle" for utilizing the alternative RFP process must be sufficiently high to avoid areas from taking advantage of it without adopting all feasible measures.

2.	A provisions requiring that the periodic review of progress would assess whether additional emission reductions had become feasible during the time since adoption of the SIP or the previous periodic review.

3.	A "forcing function" to ensure that progress is made in identifying additional emission reduction measures beyond those considered feasible at the time of SIP development. Such functions may include any or all of the following:

--	A "Clean Air Fund," into which sources that have been uncontrolled or undercontrolled compared to others would pay and amount of money periodically equivalent to an average (or median, mode or other statistic) cost of control of sources in the area or other areas or alternatively the marginal cost of control. The funds could be used by the agency to "purchase" emission reductions from uncontrolled or undercontrolled sources.

--	A program similar to the South Coast's "RECLAIM" program, vis., a permit program with emissions caps that decline periodically (e.g., annually), but with provision for a source to obtain emission reduction credits from other sources.

--	A commitment by the agency to adopt measures by a certain date in the future that would yield an additional set of emission reductions beyond those considered feasible at the time of SIP adoptions. This commitment would establish an emissions budget for the purpose of conformity that would ensure conformity would be as effective with the alternative RFP process as with the typical RFP process.

--	A tightening of new source review requirements (e.g., covering currently exempt smaller sources, mobile sources, or indirect sources; or requiring larger offsets for currently covered sources) to prevent or minimize additional emissions in the area from sources not covered by current NSR requirements.

Pros: Allows areas with very high costs of implementing additional measures to be given a reprieve from additional requirements.

Cons: The environmental representative opposed this option for the following reasons:

1.	It is in conflict with the Clean Air Act's provisions that require a demonstration of attainment by the attainment date and reasonable further progress in the interim.

2.	Cost effectiveness should not be a factor to avoid emission controls needed to attain the NAAQS.

3.	A fixed attainment date with requirements for continual reductions in the interim is the most effective forcing function that will lead to development of additional control techniques that are cost effective and technologically feasible.

Recommendation: Consensus was not achieved on this issue with the Public Health and Environmental stakeholder and one state stakeholder rejecting Option 2.

11. Who is responsible for performing next steps in the iterative RFP process when an interjurisdictional area fails an RFP metric? (An interjurisdictional area covers more than one entity with authority/responsibility to submit an implementation plan to the EPA.) [The question has been restated from Draft #8 (June 5, 1997). The supporting text for this issue has been revised from the Draft #6 (May 8, 1997).]

Note: See Attachment 8 in Appendix B for background information, options considered by the RFP Subgroup, and a list of principles discussed for this issue.

Status Quo: The SIP determines the emission reduction responsibilities of a state.

Recommendations: The work group achieved consensus on the following recommendations. While the SIP will remain the primary vehicle for identifying and implementing emission reduction programs, increasingly it is expected that interstate agreements (such as MOUs), which contain a fair degree of specificity regarding responsibilities, will play a role in solving interstate pollution problems. For example, an interstate "solution" to an interstate air quality problem may include construction of a light rail system between two states. This effort will require funding and other efforts by both states. In such cases, it is essential that the SIP for each state identify responsibilities for each milestone as well as accountability for next steps should the rail system fail to be constructed. It is strongly recommended that, during the RAMP and RIP development process, thorough discussion of "next steps and responsibilities" for interstate programs take place and that these next steps and responsibilities be placed in the relevant SIP. [Note: This issue is discussed further in the issue papers entitled, "Regional Air Management Partnerships and Areas of Influence" (February 13, 1997) and "Institutional Mechanism for Development and Implementation of Regional Strategies" (February 13, 1997).]

12. Should RFP be specified for each source sector (mobile/area/major stationary sources)? [The supporting text for this issue has been revised from the Draft #6 (May 8, 1997).]

Status Quo: RFP is area wide for all source reductions that are allowed to be included under Subparts 2 & 4 of Part A of Title I (some emission reductions are statutorily excluded in the RFP calculation). In other words, any allowable emission reduction is counted toward the RFP goal, regardless of whether it contributes to an air quality goal or attainment of the standard (e.g., VMT tracking components in sections 182(c) and (d)). However, emission budgets that are required for maintenance areas do have separate accounts for stationary, area and mobile sources as well as EPA inventory guidance that requires separate accounting methods for Stationary sources (line items), mobile sources (based on VMT) and area sources (based on population).

Note: Options 1 & 2 below presume that RFP would be a fixed rate of emission reduction similar to the current requirement for ozone nonattainment areas. Option 3 presumes there would be a customized approach to RFP.

Option 1 - Yes

Pros: Consistent with the way inventories and control strategies are developed. Consistent with emission budget requirements. Consistent with transportation conformity. Would allow differentiation between sources that have different effects on air quality (e.g., tall stacks vs. ground level)

Cons: Would artificially separate emission sources into separate categories. May make inter-sector trading more difficult. May require more data gathering efforts. May reduce flexibility in planning control strategies. In certain cases one sector may be overwhelmingly important. There will be difficulty in dealing with the timing issue. The timing for stationary sources is different from the timing for mobile sources.

Option 2 - No

Pros: Groups all sources together which makes intuitive sense. Does not artificially limit emissions trading.

Cons: See pros for option 1 above.

Option 3 - Yes for all sectors but RFP is determined on the AOI level.

Option 4 - Assign RFP emission reduction responsibilities depending on what the SIP requires (e.g., individual sources, individual geographic areas, individual source sectors, etc.) including consideration of trading program and track on that basis.

Pros: Allows maximum flexibility in the SIP to design a control program that achieves the air quality goals desired. Tracking progress would be on the basis of emission reductions that are needed to achieve those air quality goals.

Cons: Some believe the current emission reduction scheme for RFP is preferable (e.g., a fixed rate of reduction). May make intersectoral trading more difficult.

Recommendation: The work group did not achieve consensus on this issue with Public Health and Environmental and state stakeholders generally preferring Options 1 and 2, while Industrial stakeholders preferred Options 3 and 4.

13. Should RFP be measured as seasonal or annual? (Should control measures be required on a seasonal, annual, or episodic basis?) [This issue has been restated from the previous Draft #7 (May 23, 1997) and text revised for Draft #8 (June 5, 1997)]

Status Quo: For ozone, RFP plans are required to be based on typical ozone season weekday emissions. For particulate matter RFP has been a year round measurement.

Note: See Attachment 9 of Appendix B for the original options discussed by the subgroup.

Discussion: Some pollutants can affect the formation of both ozone and PM-fine. Control technology requirements for these pollutants must consider the nature of the ozone and/or PM-fine problem. Ozone problems are seasonal in nature. PM problem, on the other hand, may either be seasonal or year-round. This is dependent on the source and the geographic location of the PM-fine problem. Different geographic areas may have different seasons when problems occur (e.g., western states has PM problems during the winter months while the eastern U.S. have PM problems during summer).

Recommendation: This issue is not a RFP specific issue, rather this issue is related to the Control Strategies (June 2, 1997) and the Emissions Inventory and Modeling (June 2, 1997) issue papers for developing the control measures and performing the analyses.

14. Can RFP include mandatory measures outside of Title I (e.g., national programs such as Titles II, III, and IV)? [This issue has been restated from the previous Draft #7 (May 23, 1997) and text revised for Draft #8 (June 5, 1997)]

Ancillary reductions - To what extent does this get credited to RFP? Example - Global warming gas reductions (Alan Krupnick, FACA).

Option 1 - Yes.

Pros: State/local and Federal agencies will need to control sources under their jurisdiction in parallel to provide the significant emission reductions required for attainment. As a result, RFP should credit all measures that reduce emissions and improve air quality, regardless of both the nature of the measure (i.e., mandatory or discretionary) and who is responsible for implementation. The current CAA requirements for RFP, which required exclusion of the Federal Motor Vehicle Control Program (Title II) from creditable reductions, made the calculation unnecessarily complex for California due to the overlap between State and Federal regulations. Where California programs overlap, but do not match, the federal requirements (e.g., on motor vehicles, fuels, consumer products, and toxics), it would be artificial and impractical to isolate and credit only the state portion. Other states with innovative programs would face the same difficulties (Monica Crumley, CARB)

Cons: The definition of RFP in section 171 of the CAA seems to limit creditable reductions to Part D.

Option 2 - No.

Pros: Appears consistent with the definition of RFP provided in section 171 of the CAA.

Cons: Appears to present logistical problems between State and Federal agencies (see Pros under Option 1).

Recommendation: The work group did not achieve consensus on this issue. The Public Health and Environmental stakeholders preferred Option 1 while state and Industrial stakeholders preferred Option 2.

15. Should there be specific procedures to determine if RFP has been achieved (David Baron, FACA)?

Recommendation: The work group has recommended that the Workshop for Issue 2 identify enhanced procedures for determining if the RFP emission reduction metric has been achieved.

16. How does RFP relate to the secondary standards? [The text of principles for issue added in Draft #8 (June 5, 1997)]

Discussion:

Can activities that were counted towards RFP be counted towards reasonable progress?

The proposed metric should be looked at in terms of the secondary standard. Improve air quality and visibility will have acute forest impacts as well as health impacts. Secondary standard written into the CAA - requires the attainment of the secondary standard as expeditiously as possible.

Principles: Instead of developing and recommending specific options, the RFP Issue Subgroup developed the following set of principles:

A secondary standard for ozone has not been fully developed (e.g., SUM 06), and therefore it would be difficult to determine how to model for attainment of the standard.

A secondary standard would have to be attained "as expeditiously as practicable," but no attainment date is mandated in the CAA.

The primary driver of RFP should be the health-based (primary) standard.

Therefore, the RFP paper will focus on the primary NAAQS.

Recommendation: The work group did not achieve consensus. The Public Health and Environmental representatives did not concur with these principles.

APPENDIX A

Attachment 1

TABLE 1. SUMMARY OF RFP ISSUES.

ISSUE NUM. ISSUE 1 Is RFP standardized or can RFP be customized? Restated by the group as: Should RFP emission reduction requirements (i.e., type and quantity of reductions predicted necessary to achieve attainment) be standardized or customized at the AOI/AOV level? 2 What are the range of options for the RFP metric? 3 How frequently should Reasonable Further Progress be demonstrated? 4 What is the base year for RFP? 5 What would be the rate of RFP? Restated by the group as: What would be the rate of RFP -- that is, what is the nature of the line or curve describing the path from nonattainment to attainment for an AOI/AOV? 6 Can measures that are part of end-loaded strategies be credited toward RFP early in the process? Restated by the group as: How should end-loaded strategies by handled in RFP? 7 What is the corrective mechanism to get an area back on-track when the area has failed an RFP milestone? 8 Can voluntary control measures be credited in the RFP process? Restated by group as: Can emission reductions that are not fully enforceable, quantifiable, or permanent be credited towards the RFP emission reduction metric? 9 Should the RFP requirements for ozone and PM-fine and the reasonable progress requirements for regional haze be integrated? Restated by group as: What parts of the RFP requirements for ozone and PM should be integrated with the reasonable progress (RP) requirements for Regional Haze? 10 Is there an out for RFP? (Assuming the NAAQS is unattainable.) What should RFP look like if it is the only measure of success? Restated by group as: Under what circumstances, if any should an area be allowed to avoid demonstrating attainment, and if so what will constitute RFP? 11 Who is responsible for RFP? Restated by group as: Who is responsible for performing next steps in the iterative RFP process when an interjurisdictional area fails an RFP metric? 12 Sector RFP--Can an implementation plan assign rates of progress for RFP to different sectors? Restated by group as: Should RFP be specified for each source sector (mobile/area/major stationary sources)? 13 In terms of RFP, are there any differences between seasonal versus annual programs? Restated by group as: Should RFP be measured as seasonal or annual? 14 Can RFP include mandatory measures outside of Title I (e.g., national programs such as Titles II, III, and IV)? 15 Should there be specific procedures to determine if RFP has been achieved? 16 How does RFP relate to the secondary standards? [Note--the issue of "pre-SIP RFP" or "Progress during SIP development" is being addressed by a separate subgroup.]

Attachment 2

Table 2 to go here.

Attachment 3

Discussions and Principles for Issue 8

"Can emission reduction measures that are not fully enforceable, quantifiable or permanent be credited towards the RFP emission reduction metric?"

Emission reduction strategies for RFP or emission trading are supposed to be enforceable, real, permanent and quantifiable. However some emission reduction strategies may partially or fully fail one or more of these requirements but still result in emission reductions. There is no way for these reduction strategies to receive credit for RFP purposes. However a state can proposed such measures for their maintenance plans or an emission trading program.

For emission trading programs, emission reductions can be used as credits even if they are not fully enforceable, quantifiable, real or permanent under certain situations. For example, in the situations where 1) the action to make the reductions is enforceable; 2) the amount of reductions is not enforceable or quantifiable prospectively; 3) the amount of reductions is accurately quantifiable retrospectively then, the reductions are creditable retrospectively, or a portion of the expected reductions could be taken prospectively if there is some "semi-accurate" way to predict the amount of reductions. After several years the emission reduction forecast will presumably get better allowing a larger portion of the reductions to be creditable prospectively. The shift from retrospective credit is dependent on the accuracy of the predictions. States that adopt economic incentive programs that do not fully meet the real, enforceable, quantifiable and permanent requirements are also required to adopt contingency measures to make up any shortfalls that were caused by bad predictions of emission reductions.

[Note: these concepts are contained in the Economic Incentive Rules published in the Federal Register on April 7, 1994.]

Discussion

For such measures, there is a wide spectrum of prospective and retrospective quantifiability:

At one extreme are measures whose emission reductions are fairly well quantified both prospectively and retrospectively and for which their continuation in the future is fairly certain, such as voluntary reductions in gasoline volatility (RVP) by regional distributors in one area beyond the minimum requirement simply because it is easier for them to supply a large area with the same fuel.

At the other extreme are general public service announcements to encourage commuters to car pool and take public transit; emission reductions from these would be considered next to impossible to quantify either prospectively or retrospectively.

In-between, there are measures whose emission reductions are fairly well quantified prospectively and retrospectively but whose future continuation is uncertain, such as voluntary reductions in gasoline volatility (RVP) where there is no distributional motive for the gasoline suppliers to do so.

In-between, there are measures whose emission reductions could probably not be very confidently quantified prospectively, but could be done retrospectively. These include market-response measures such as increased tolls on bridges to encourage car pooling or public transit. They might also include fairly sophisticated and targeted public action programs to strongly discourage driving during periods of high pollutant concentrations (although some feel that emission reductions from these could not be quantified even retrospectively).

Principles

1. The RFP program should build on the principals contained in the EIP for creditability.

Measures that are not fully enforceable but are reasonably well quantified prospectively and retrospectively and are considered fairly permanent or are permanent for a well defined time period should be allowed to take full credit in the RFP plan during the time the reductions are occurring.

Measures that are not fully enforceable, but are reasonably well quantified prospectively and retrospectively and whose future continuance appears uncertain should be allowed to take only partial credit in the RFP plan.

Measures that are not fully enforceable and cannot be well-quantified prospectively but can be quantified retrospectively but that appear likely to result in emission reductions should be allowed some reduced amount of credit. Once the measures have proven successful through activity and emissions monitoring, more credit could be taken for future periods.

Measures that are not fully enforceable and cannot be well-quantified either prospectively or retrospectively can be treated in the following manner: If such measures were implemented at the outset of the plan, a group of such measures may be used to substitute for some (but not all) of a set of contingency measures that would have to be implemented for failure to meet an RFP milestone goal.

Back-up contingency measures may have degrees of adoption (i.e., from commitment to adopt to pre-adopted measures) that are implemented if one of these programs does not yield anticipated reductions. These contingency measures must--

--be enforceable, permanent and fully quantifiable; and

--provide sufficient emission reductions proportional to the degree of risk of failure of the program.

2. Any measures that are being used to meet minimum requirements under certain economic incentive programs, such as supplying credit for an emission cap and trade program or as NSR offsets, may not be double counted for RFP purposes.

3. Episodic measures that are not fully enforceable should also be allowed some credit even for emission-reduction type RFP metrics to the extent that they fall into one of the above principles.

APPENDIX B

Attachment 1

Guidance Documents for RFP Requirements

1.	Guidance on the Adjusted Base Year Emissions Inventory and the 1996 Target for the 15 Percent Rate of Progress Plans. EPA-452/R-92-005. Prepared by the Office of Air Quality Planning and Standards, U.S Environmental Protection Agency, Research Triangle Park, NC, 27711. October 1992.

2.	Guidance for Growth Factors, Projections, and Control Strategies for the 15 Percent Rate-of-Progress Plans. EPA-452/R-93-002. Prepared by the Office of Air Quality Planning and Standards, U.S Environmental Protection Agency, Research Triangle Park, NC, 27711. March 1993.

3.	Guidance on the Relationship Between the 15 Percent Rate-of-Progress Plans and Other provisions of the Clean Air Act. EPA-452/R-93-007. Prepared by the Office of Air Quality Planning and Standards, U.S Environmental Protection Agency, Research Triangle Park, NC, 27711. May 1993.

4.	Guidance on Preparing Enforceable Regulations and Compliance Programs for the 15 Percent Rate-of-Progress Plans. EPA-452/R-93-005. Prepared by the Office of Air Quality Planning and Standards, U.S Environmental Protection Agency, Research Triangle Park, NC, 27711. June 1993.

5.	40 CFR Part 52 - State Implementation Plans; General Preamble for the Implementation of Title I of the Clean Air Act Amendments of 1990; Proposed Rule. 57 FR 13498-13570. April 16, 1992.

6.	Guidance on the 15 Percent Rate-of-Progress Plans and the Attainment Demonstration Due November 15, 1993. Teleconference Workshop (Session 1--April 30, 1993; Session 2--May 5, 1993; Session 3--May 13, 1993; Session 4--June 11, 1993). Office of Air Quality Planning and Standards, Ozone/Carbon Monoxide Programs Branch, U.S. Environmental Protection Agency, Research Triangle Park, NC 27711.

7.	Guidance on the Post-1996 Rate of Progress Plan and the Attainment Demonstration. Teleconference Workshop. May 3-5, 1994. APTI Course 016. Office of Air Quality Planning and Standards, Ozone/Carbon Monoxide Programs Branch, U.S. Environmental Protection Agency, Research Triangle Park, NC 27711.

Attachment 2

Underlying Principles/Assumptions of the Customized RFP Process

draft 4/17/97

NOTE: This set of principles and assumptions is based on implementation of an AOI/AOV process as defined elsewhere. If the AOI/AOV process is not adopted for air quality management planning, the traditional SIP planning process would be employed. In cases where multi-state "transport" of emissions must be addressed in order to demonstrate attainment, the Clean Air Act provisions concerning prevention of significant contribution of interstate emissions to nonattainment would be used.

The goal of the RFP process is to ensure measurable, periodic progress towards attaining the NAAQS by the applicable attainment date.

The customized RFP process described in this paper allows an AOI to tailor [within certain bounds to be determined] for its unique area the type, quantity, and rate of emission reductions needed to achieve attainment as expeditiously as practicable but no later than the attainment date. (This differs from the process for the current ozone NAAQS, which provides for a specific quantity and rate of emission reduction (i.e. , 3% per year VOC or NOX), net of growth.

An "Alternate RFP Process" (to be developed) is envisioned in some instances as follows: For areas where attainment appears difficult due to current unavailability of sufficient cost effective control measures, a separate issue paper is recommended to identify "alternative RFP" for such areas. Such paper will identify the criteria an area must meet before the area would be considered potentially eligible to pursue an alternate RFP process. Such paper should address:

--criteria for determining such areas;

--a process/criteria for judging validity of such determinations

--whether the Attainment Date Issue Paper should reflect the possibility of providing additional time for attaining the standard for such areas; and of course,

--criteria for RFP for such areas that ensures that progress continues to be made.

The RFP process starts with developing a plan to achieve full attainment of the NAAQS (attainment demonstration). It is assumed that most plans will have multiple emission reduction programs, some of which are implemented in a sequential (i.e., step-wise) fashion. The plan will consist of stated interim air quality goals and the specific emission reduction milestones and programs needed to achieve those goals. The logic for establishing RFP for each step towards attainment would be to identify the emission reductions needed for achievement of the NAAQS as expeditiously as practicable, as well as to track the progress of each step along the way. The order of implementation of an emission reduction program would have to be evaluated with respect to air quality and cost effectiveness considerations and may be highly dependent on the RFP metric chosen. In addition, there may be different RFP metrics for the alternate RFP process described in the immediately preceding paragraph.

Once the attainment demonstration has been developed above, emission reduction programs are implemented in the sequence identified in the plan. At stated intervals, an RFP metric test is applied. The RFP metric test requires an assessment of--

--Whether both of the following metrics have been achieved: the interim air quality goal and the specific emission milestone goals (accounting for growth) from the reduction program predicted to be necessary to achieve either of these metrics for the interval in question; and

--The underlying cause of success in achieving either of these metrics as well as the underlying cause of failure to achieve either of these metrics must be analyzed and corrective measures implemented if either or both of these metrics is failed.

There are several "next steps" that would occur depending on the outcome of such analysis of success or failure; the following are the principles for those steps:

a. A "mid-course correction" would be a required change to the control strategy that requires a reanalysis of emissions, control measures, and the model and its inputs. It is recommended to get the area back on track for a failure to achieve an air quality goal, assuming that the emission control strategy was fully implemented up to the particular point in time.

b. A reevaluation analysis would be an analysis of emissions, control measures, and the model and its inputs that may or may not lead to a change in the control strategy. It would be undertaken if air quality goals are met at particular points in time, but the emission reduction program milestone goals were not met, assuming that the emission control strategy was fully implemented up to the particular point in time.

c. A contingency measure is one which is pre-defined and would be implemented "automatically" without any further action by the State. It would be triggered when an area fails to achieve an air quality goal, including those cases where a mid-course correction is needed. The intent is to ensure that the area will continue to make progress toward reducing concentrations until the next set of measures are implemented and the reanalysis for the mid-course correction is being performed. We believe that in many cases of failure to achieve an RFP air quality goal, there will be an air quality benefit but less than what was expected. There may be some cases, however, when the air quality RFP goal is not achieved--even though the area met the emission reduction goal that was supposed to result in the air quality goal--and it appears that the emission reductions have produced negligible benefit or actually resulted in disbenefits. For such cases and similar ones, the contingency measure must be selected to ensure air quality progress. This implies that several alternative contingency measures may need to be produced during RIP/SIP development to account for various outcomes, some of which are not anticipated (e.g., one set to be implemented if an ozone area originally thought to be VOC-limited turns out to be NOX-limited, and vice-versa; or, if "generic" VOC reductions produce little benefit, a set of measures focussed on selected species of highly reactive VOC's). [The Contingency Measure/Maintenance Plan Issue Paper should address the actual development & implementation of contingency measures.] [Note that this concept of contingency measures differs from the CAA requirement that would trigger contingency measures when the RFP emission reduction goal is not met.]

[Please note: The Clean Air Act Section 172(c)(9) reads: "(9) Contingency measures. Such plan [the plan for the nonattainment area] shall provide for the implementation of specific measures to be undertaken if the area fails to make reasonable further progress, or to attain the national primary ambient air quality standard by the attainment date applicable under this part. Such measures shall be included in the plan revision as contingency measures to take effect in any such case without further action by the State or the Administrator."]

d. Catch-up implementation is expeditious implementation of control measures whose compliance date has passed and that the area has failed to implement. (There may be a link to sanctions/penalties depending on the degree of expeditiousness of implementation.)

e. Sanctions/penalties are intended to both deter and "punish" willful non-implementation. They are recommended when planned emission reduction programs are not fully implemented, regardless of whether or not the air quality goal is achieved. Sanctions will include at a minimum more expeditious implementation of measures that an area failed to implement and for which the implementation deadline has passed. [The Sanctions/Rewards Issue Paper should address the extent of sanctions/penalties that should be imposed for various kinds of RFP failures.]

Attachment 3

Attachment 4

Original list of options listed and discussed by the RFP work group for Issue 1.

Option 1 - EPA specifies percent reduction and the type and location of precursor reductions.

Pros: Equity across nation as to what is required. Easier for EPA to implement. Easier for the public to participate in tracking emission reductions.

Cons: Emission reductions may not be effective in addressing the pollutant of concern.

Option 2 - Standardized for both ozone and PM-fine. EPA identifies uniform percent reduction nationwide. The mix of precursors and types of emission sources (elevated vs ground level) would be chosen by the area.

Pros: Equity across nation as to what is required. Easier for EPA to implement. Easier for the public to participate in tracking emission reductions.

Cons: Some problems may be unique to airshed. May not be most cost effective solution for attaining the NAAQS given an areas specific mix of sources. Different areas may require reduction of different amounts of different pollutants to be able to attain the NAAQS.

Option 3 - Standardized for ozone, customized for PM-fine.

Pros: Reflects current RFP requirements (i.e., specific percentage per year until attainment for ozone, general progress towards attainment for PM) in the CAA. Emission reduction measures for PM may be more variable than ozone.

Cons: Discriminates against areas with ozone problems. Some ozone problems may be unique to airshed. Standardized reductions may not be most cost effective ozone solution.

Option 4 - Customized. The AOI/AOV identifies the level and type of reductions needed for ozone and PM-fine.

Pros: Different areas may require different reductions of different pollutants - allows choice. Possibly more scientifically defensible.

Cons: Competition among State/Regions. Difficult to determine what customized will be (fuzziness). Time factor - may require a longer period of time to complete. Possible lack of achieving reductions.

Option 5 - Hybrid. The affected area develops a customized plan that defaults to a uniform federal "backstop" level of reductions if the customized plan does not produce equivalent or greater emission reductions. The federal backstop would be based on the approach in Options 1 and 2.

Pros:	Best of both Options 1 and 2. It would provide a "level playing field" while not impeding areas that wish to implement more stringent measures. Provides flexibility while insuring progress towards attaining the standard.

Cons:	The backstop may not be effective in addressing the pollutant of concern.

Option 5A - Same as Option 5 but the customized plan must produce equivalent or greater air quality benefits (instead of emissions reduction benefits) in order to be used in place of the federal "backstop."

Pros: Would increase public's credibility in implemented measures because progress towards the standard is documented.

Cons: Air quality improvements may be difficult to detect in a statistically significant fashion.

Option 5B - Same as Option 5 but the federal "backstop" would require review of cost-effectiveness before mandating specific emission reductions.

Pros: This would keep areas from implementing unduly burdensome measures on the sources.

Cons: Control measures should be judged on technical feasibility and effectiveness only. Economic arguments should not be used when considering impacts to public health.

Attachment 5

Discussion for Issue 2 by the Subgroup for Reference

As a result of the input from the STSWG, the following draft conclusions are drawn:

--Administrative metrics are the easiest way of determining if administrative progress is being done (e.g., whether rules were adopted and enforced), but administrative metrics cannot be used to tell whether emissions were actually reduced or whether emission reductions had any effect on ambient pollutant concentrations (Lydia Salmon).

--Emissions metrics are necessary to determine if emissions actually were reduced from a control program, but emission metrics by themselves cannot be used to tell the effect those reductions had on ambient pollutant concentrations (Harvey Jeffries).

--Air Quality indicators are necessary--

--prospectively to determine whether progress toward attainment is being done to minimize exposure, and

--retrospectively to ensure that the path toward attainment originally chosen was directionally correct (STSWG in general).

--Modeling systems (models and their inputs) are not precise enough to accurately and precisely predict concentrations into the future since it is impossible to predict the meteorology at particular points in time. However, modeling is the only tool available and will be used in air management planning (STSWG in general?). Modeling may not be able to accurately predict "nearfield" disbenefits or benefits.

--Air quality monitoring networks are not sufficiently dense in many areas to properly use population or area-weighted air quality indicators. Such indicators should only be used where sufficient data exist (CARB).

--Precursor ambient monitoring (SOX, NOX, HC) should be employed where available to corroborate emission reductions. Precursor monitors are far less dense than ambient networks for NAAQS pollutants (O3 & PM), however (STSWG in general).

--There are tools available to distinguish the air quality changes that result from control compared to those changes that result from meteorology. However, the changes are more readily distinguishable in a shorter time period if the changes are larger [e.g., if the emission change is around 25 percent, it is possible to detect a change in pollutant concentrations in 2 years after the change; if the emission change is only a few percent a year, it will not be possible to detect a change for a number of years (5-6 years)] (Harvey Jeffries, S.T. Rao). Also, it will be more difficult to detect changes if the concentrations are close to the level of the NAAQS, such as areas in the Northeast US (Glen Cass).

--State agencies have limited resources and cannot devote a disproportionate share to frequent reanalyses that are resource intensive (Cynthia Marvin).

--Whatever system for RFP is adopted it must: (a) not be too complex; and (b) be practicable for implementation given resource constraints (Nina Dougherty).

Attachment 6

Information Provided to the Science and Technical Support Work Group

Related to the RFP Metric Issue

DATE: 4/3/97

TO: DR. H. Jeffries

FROM: S. B. Peirce-Sandner

SUBJECT: Request for Science and Technical Support Group to respond to various air quality related questions

As you know, a subgroup of the National and Regional Strategies group is in the process of developing an issue paper focused on reasonable further progress (RFP) requirements for the new national ambient air quality standards (NAAQS) for ozone and fine particulate matter.

The purpose of this memo is to a) describe the current status of this issue paper and b) request a response from the STS group to various technical questions.

The major challenge to this work group is to determine if there is a better way "to do RFP" for these new NAAQS. Towards that end, the work group has developed a list of key issues that must be addressed. The first key issue the work group is addressing can be summarized in the form of a question as follows: Should the RFP process be standardized across all airsheds or should the RFP process be customized?" We already have in place a working example of what a standardized RFP process looks like for ozone. In order to determine if a customized process would be a better, worse or about the same as a standardized process, one must develop a model for a customized RFP process and identify its strengths and weaknesses. In the attached material you will find a preliminary process diagram as well as key assumptions for a "customized RFP process". There are two primary differences between the customized process and the standardized process:

-- Two metrics, namely air quality and emissions reductions are proposed as RFP metrics in the customized process while a single metric based on emissions reductions is typically used in the standardized process.

-- The customized process allows an airshed to tailor (within certain bounds to be established) the type, quantity and, within the constraints of achieving attainment as "expeditiously as practical", the rate at which emission reductions are achieved. In contrast, the standardized process establishes a rather uniform approach to quantities (e.g. 3 %/yr), type (VOC) and rate of reductions.

Before the work group can proceed to fully evaluate the strengths and weakness of the customized approach, we need guidance from your group regarding what might constitute technically robust metrics for both air quality and emissions reductions. A brainstorm list of potential metrics and related questions are posed in the attached materials. Since the viability of the customized process must be assessed before significant progress can be made on other integral issues, we would appreciate a response as rapidly as possible. Please don't hesitate to contact me if you need additional clarification on these issues. If you would find it useful, a representative subset of the RFP group could work with your group as you develop a response to these questions. Thank you for your help.

REASONABLE FURTHER PROGRESS ISSUE PAPER

QUESTIONS FOR SCIENCE & TECHNOLOGY SUPPORT WORK GROUP

Question #1: The "customized" RFP process contemplates an iterative process where certain air quality metrics will be analyzed at pre-determined intervals to determine if the emission reduction programs are producing the desired air quality changes (i.e., is the area headed for attainment and, if so, at the planned rate?). Question: What guidance can the Science and Tech group provide re: the appropriate length of time needed to determine if a true air quality trend is taking place or whether fluctuations in air quality are random noise. Obviously, it is preferable to know whether or not emissions reduction programs are working in the right direction and at the desired rate ASAP but, it is also understood that 1 year of air quality data is probably not sufficient to make judgments about the efficacy of an emissions reduction program. What guidance can science and tech provide re: an appropriate interval for assessing changes in air quality for ozone? For PM-fine?

Question #2: Attached is a list of air quality metrics that might be suitable for assessing whether or not changes in air quality at the "pre-determined intervals" described above are truly taking place. What guidance can the STSWG provide regarding which of these metrics are reasonable from a science perspective, recognizing that the ultimate goal of this customized RFP process is to produce attainment by the attainment date? Are there alternate metrics that should be used in lieu of the ones listed here? Does the STSWG have a preference--based on scientific principles--for any of the metrics listed here and any other metrics the STSWG proposes? For the emission reduction metric, does the STSWG agree that emission inventories are the preferred metric? If not, what other emission reduction metrics should be used and in what priority?

In evaluating the metrics in this question, the STSWG should account for the following considerations:

Technical Considerations:

a. Uncertainty - all of the metrics (emissions, air quality etc.) have a degree of uncertainty, and some of the metrics build on other metrics (i.e., population exposure builds on air quality modeling and emissions projections).

b. Data requirements - are the necessary data available to drive the metrics; are the data needs so substantial that only the most sophisticated agencies could make use of the metric?

Uses of the metric:

a. Prospective (planning) vs. retrospective (tracking). Some metrics may be more suitable for retrospective application, rather than prospective application.

b. Trading: does the choice of RFP metric influence the choice of metric used for trading?

c. SIP revisions: Is the RFP metric precise enough to determine whether Section 110(l) on plan revisions is violated?

3. Tiered metrics: given the above issues, should there be a hierarchy or tiering of metrics, for instance:

a. "Primary" metrics could be emissions and air quality (in the narrow sense), which all areas would project and track; these metrics could be used to set the minimum requirement for progress, and also provide the common yardstick for "expeditious" progress and attainment.

b. "Secondary" metrics, to be used for further comparison or optimization of the control path. These would be optional and might include cost-effectiveness, population exposure, environmental justice, and so on.

Question #3: As discussed in item #1, there is a desire to assess air quality metrics at pre-determined intervals in order to determine if the emissions reduction programs being implemented are bringing an area towards attainment at the planned rate. In general, the philosophy is "the shorter interval the better" so that if a mid-course correction is needed it can be implemented rapidly so that attainment dates are met. However, it is also recognized that meteorology may exert a short-term influence on these metrics that may have no bearing on whether or not the emissions reduction programs being implemented are having the desired influence on air quality. Is there a valid method for identifying meteorological events that result in ozone or PM-fine concentrations that should be considered "statistical outliers" in an air quality analysis? Also, are there tools that can be applied to "remove" the effect of meteorology in order to better understand true air quality trends? This would include tools not only to eliminate the influence of meteorology that increased concentrations of PM-2.5 and/or ozone but also meteorology that depressed concentrations (i.e., cool summers, etc.)

RFP Metric and Rate Options

The following are the range of RFP metrics discussed during the joint N&RS and BPA&P Work Group meeting on March 14, 1997.

Metric	Rate

Emission Reduction

Precursor emissions inventory for ozone and precursor/direct emissions inventory for PM-fine (Current metric used to determine RFP)

Precursor/direct emissions inventory for ozone and PM-fine with different weights assigned for the effectiveness of emission reductions (See the draft issue paper Reasonable Further Progress Metrics written by Alan Krupnick and Deirdre Farrell, October 16, 1996)

Air Quality

Highest monitor (ozone)

Third highest concentration at highest monitor

Design value

Third highest concentration at highest monitor averaged across monitors

Precursor concentrations (speciated VOC and NOX) such as those measured at PAMS sites

Population Weighted Exposure

Can assume either general population or sensitive population

Where

I = each monitor

n = monitors in the area network

Land Weighted

Where

I = each monitor

n = monitor in the area network

Persistence Weighted

Where

hrs = number of hours greater than the NAAQS

PM Specific Measures

Annual or 24-hour concentrations or both

Mortality risks

Key Health Risk

End-loaded Strategies

Investment

Adoption of rules

Time integration of concentration

Look at all measures to reduce emissions of pollutant.

Whole distribution of total pollutant should be rolled back as a result of the measures.

Attachment 7

Additional Discussion Material for Issue 10

Developed by One Industrial Stakeholder and One State Agency Stakeholder

In addressing the question of showing whether attainment is possible, one needs to recognize that, through use of sensitivity analyses, air quality modeling can be used to provide an estimate (not an absolute number) of the percent reductions needed to attain the proposed standard. As part of the SIP, all available measures can be reviewed for their reduction potential. These measures will probably reflect those which are being considered all over the country, including some of the most problematic areas such as Los Angeles and Houston, so all rational measure will be reviewed. The estimate of the reductions to be achieved by these measures will provide the basis for determining if attainment of the proposed standard is feasible. In some instances, there will be a significant gap between what is needed and what is available. These areas will not be able to show a path to attainment. For other areas, it may be possible to calculate the amount of emissions reductions needed to attain. However, some of these emissions reductions may be prohibitively expensive, based on dollars per unit of improvement in the selected RFP metric. Thus, depending on decisions on how costs are accounted for in including measures in the SIP, some of these measures may not be adopted.

Either of these findings could potentially trigger a temporary alternative RFP process or a "pause", from the attainment requirement. This pause would recognize the need to continue to implement new measures as they become available, provided they pass the cost-effectiveness hurdle. Thus, an alternative RFP process is not an excuse to do nothing, but a recognition of the situation that either the required reductions are not yet available, or they are not cost effective.

If it is decided to require all areas, regardless of their ability, to attain the proposed standards, the customized RFP process should be used. This customized RFP process is based on air quality metrics which, once chosen, require specific emissions reductions in the form of emission control measures. Those measures, and their order of implementation, are included in the SIP's, and would be enforceable. Air quality metrics are predicated on improving air quality throughout a region. That improvement should result in reduced health risk for the population as a whole, which is the underlying goal of the standards. This is especially important if attainment is infeasible, or infeasible with the availability of controls at the time of the planning effort. Further, it is not clear what other alternatives there would be for RFP. All of the criticism of the present system, which uses emissions reduction at a set rate, apply to areas that can not attain as well as those that can.

The definition of cost-effectiveness, is not a technical determination. It is a policy determination, which most likely will be decided by the agency or agencies and their boards or legislatures responsible for the SIP. The decision, along with the entire process, will be reviewed by EPA, either as part of the process (the most productive way) or in its oversight capacity. The best that the technical process can bring to bear is an analysis of the incremental cost per improvement in the chosen air quality metric. The less costly control measures will show larger changes in the air quality metric than the more costly ones, culminating in a set of measures which show no significant change in the air quality metric even with very high costs of the measure. Armed with this type of analysis, the policy decisions can be made. None of these analyses would limit the ability of the regulatory agencies to seek the most flexible approaches to finding emissions reductions. In fact, the difficulty in finding the traditional types of reductions may uncover some reductions made through innovative trading policies rather than command and control. But, in terms of dictating which approaches should be taken, care should be given not to mandate approaches. This is particularly true with things like pollution prevention and energy efficiency approaches. Though these may be good societal goals, they should not be mandated. If they are cost effective, they will be part of the overall SIP strategy.

Attachment 8.

Background Information, Options, and a List of Principles for Issue 11

"Who is responsible for performing next steps in the iterative RFP process when an area or areas have failed an RFP metric?"

In framing this issue, the subgroup will need to discuss the various cases in which responsibility for RFP will need to be resolved. As a starting point for these discussions, a hypothetical situation will be developed for the subgroup's consideration to serve as the base case. This base case is a basis for discussion and does not represent any specific current air quality problem.

The base case for this discussion consists of a five state region. Each of the states has an area of violation (AOV) and the AOVs are contained within a single unified AOI. It is assumed the AOI is not influenced by sources outside of the AOI. The current working assumption is that the development of a SIP under the new/revised standards will follow a five-step planning process [see the issue paper entitled, Regional Air Management Partnerships and Areas of Influence (February 13, 1997)].

The first step is forming a regional air management partnership (RAMP). The RAMP then identifies the preliminary AOI. In this base case, it is assumed the preliminary AOI will consist of portions of the five states in the region and contain each state's AOV. Thus, all levels of government with regulatory authority over sources contained in the preliminary AOI will begin to develop the regionally integrated plan (RIP). The RIP should provide the basic information needed for EPA to issue a SIP call to the base case's five states. A RIP will define, in general terms, what level of control should be applied in the various portions of the AOI. EPA issues a SIP call to the five states within the final AOI.

The final step is developing SIPs that will bring the AOVs into attainment by the applicable date. In the SIPs, each state will determine which sectors within its boundary are responsible for emission reductions provided in the RIP. The SIPs will reflect the RFP metric the state will use to measure progress towards attaining the new/revised standard and the time interval for each successive interim metric test. For the base case, it is assumed that the RFP metric in each state's SIP will be based on an emissions reduction goal and the interim metric tests will occur at the same time in each state.

Who is developing the RFP when multiple States are involved?

RAMP's/nonattainment areas develop the Regional Implementation Plan which will include measures that each State needs to adopt and implement independently and measures that more than States need to work together to adopt or implement It is necessary to know who is responsible for implementing the RFP to know who has to complete the next steps if the RFP is not being met. When one State is solely responsible for the nonattainment problem and its solution its easy to figure who is responsible for fixing the problem. However in some situations it is hard to determine which State is at fault of if any State is at fault. This occurs in at least the following: :

Interstate mass transit -- more than one State will have to do the administrative actions to get the program going. What happens if the one State can not proceed with its plan because another State does not do what it is supposed to? What happens if the whole project fails because one State stops doing its activities, while the other State is ready willing and able to proceed? What role does an interstate Transit Authority play here?

Interstate budget programs -- Each state needs to determine baselines, emission protocols, surplus calculations etc. If State regulations differ which rules are binding? -- and which rules are applicable/enforceable? There are constitutional issues here because one State may not enforce against sources in a different State.

Major new source construction in one State got emission offsets in a neighboring State-- and the State with the new construction misses their emission reduction goal cause by the new source and related mobile source emission growth. The citizens in the State providing the offsets are employed by the new major source. Why should the source with the new source take all the blame for missing the goal?

Air quality goals -- What happens if emission transport causes an area to miss an RFP goal, while every State involved on the immediate AOI or nonattainment area has done everything it was supposed to do?

In the situations above who is responsible for taking the next steps when a next step is needed?

Option 1 - Individual States

Pros: Easy to implement within current program.

Cons: It is difficult to determine responsibility for multi-state measures. Discourages interstate trading and other programs that need interstate cooperation.

Option 2 - The entire AOI or the whole nonattainment area

Pros: Easy to implement.

Cons: Holds some States responsible for other State's actions or inaction. Requires interstate MOU's for all States in the AOI for all measures.

Option 3 - AOI decides when it develops the RIP and requires appropriate interstate MOU's

Pros: Allows some measures to be a responsibility of one State and others to have shared responsibility. Allows some measures to be included in the RIP without an interstate MOU.

Cons: Requires interstate MOU's to be part of the SIP submission for some measures

Instead of recommending answers, the RFP Subgroup developed a draft set of principles as follows:

Proposed Principles

Interstate cooperation is required to solve interstate air quality problems. This cooperation should comply with the following specific principles:

RAMP/AOI planning bodies must plan in advance for recommending RFP action responsibilities to each State.

EPA must be able to base one implementation plan's approvability on another implementation plan's commitments when actions must be taken jointly by several jurisdictions for any emission benefits to occur (e.g., development of a transit system for commuting between two jurisdictions to reduce mobile source emissions). (Jurisdiction is defined as any entity with the authority/responsibility to submit an implementation plan to EPA.)

EPA must be able to identify which jurisdiction(s) are liable for implementation of next steps and penalties (as appropriate) if an AOI or portion thereof misses an RFP milestone.

In addition, the following additional concerns need to be considered:

AOI's should be large enough to minimize inter-AOI transport to clarify RFP responsibility.

Where international transport has a significant impact on an AOI, affected U.S. jurisdictions should not be unfairly burdened by cross border emission contributions.

Attachment 9

Initial Options Discussed by Subgroup for Issue 13

Option 1 - Seasonal

Pros: Focuses on what is most important for air quality standards that have seasonal fluctuation. Limits environmental benefits that could accrue during the off season. Limits resources needed to track. May be difficult to determine seasons.

Cons: May make accounting more difficult because it would be necessary to determine which season emissions are emitted

Option 2 - Annual

Pros: Simplifies accounting because all emissions would count. Allows all emission reductions to count.

Cons: Allows emission reductions to count that may have minimum impact on air quality values. Allows smearing emissions over a large time frame which may not accurately reflect sources that vary emissions by season (e.g., tanks holding volatile liquids or power plant emissions).

Option 3 - Seasonal for ozone. RFP for PM would be measured seasonally or annually depending on the controlling standard: annual if the annual standard controls, but AOI-specific if the 24-hour standard controls.

Option 4 - Some other combination depending on what is in the SIP. Whatever makes sense in the AOI.

Option 5 - Episodic, in addition to annual or seasonal RFP measurements. Examples of emission sources that could take advantage of episodic RFP measurements include, but are not limited to, windblown dust, wildfires, residential wood combustion, storage tank evaporation, and painting.

Pros: Episodic measurements can be used to supplement Options 1, 2, 3, and 4.

Cons: May not be permissible under section 123 of the CAA.