Reasonable Further Progress Issue Paper

National and Regional Strategies Work Group

FACA Subcommittee for Ozone, Particulate Matter and

Regional Haze Implementation Programs

Draft Final

October 2, 1997

Table of Contents

Section	Page

Table of Contents	ii

List of Figures	iv

Executive Summary	ES-1

Introduction	1

Background	2

Links to Other Issue Papers	4

SIP-Phase Issue -- How Should RFP be Defined?	4

Issue 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?	5

Issue 2	What is the range of options for the RFP metric?	7

Issue 3	How frequently should Reasonable Further Progress be demonstrated?	9

Issue 4	What is the base year for RFP?	10

Issue 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?	13

Issue 6	How should end-loaded strategies be handled in RFP? Specifically, how much emission reductions required for attainment may be end-loaded strategies?	15

Issue 7	What is the corrective mechanism to get an area back on-track when the area has failed an RFP milestone?	16

Issue 8	Can emission reduction measures that are not fully enforceable, quantifiable or permanent be credited towards the RFP emission reduction metric?	17

Issue 9	What parts of the RFP requirements for ozone and PM should be integrated with the reasonable progress (RP) requirements for Regional Haze?	18

Issue 10	Under what circumstances, if any should an area be allowed to avoid demonstrating attainment, and if so what will constitute RFP?	19

Issue 11	Who is responsible for performing next steps in the iterative RFP process when an interjurisdictional area fails an RFP metric?	21

Issue 12	Should RFP be specified for each source sector (mobile/area/major stationary sources)?	22

Issue 13	Should RFP be measured as seasonal or annual? (Should control measures be required on a seasonal, annual, or episodic basis?)	23

Issue 14	Can RFP include mandatory measures outside of Title I (e.g., national programs such as Titles II, III, and IV)?	23

Issue 15	Should there be specific procedures to determine if RFP has been achieved?	24

Issue 16	How does RFP relate to the secondary standards?	24

RFP Postscript	25

APPENDIX A	A-1

Table 1.	Summary of RFP Issues	A-2

Table 2.	Results of July 30, 1997 RFP Issues Ballot	A-4

APPENDIX B Supporting Reference Material for the RFP Issue Paper	B-1

Preface for Appendix B	B-2

Attachment 1. Guidance Documents for RFP Requirements	B-3

Attachment 2. Underlying Principles/Assumptions of the Customized RFP Process	B-4

Attachment 3. Original list of options listed and discussed by the RFP work group for Issue 1	B-7

Attachment 4. Discussion for Issue 2 by the Subgroup	B-9

Attachment 5. Letter from Cynthia Marvin, California Air Resource Board, to John Silvasi, U.S. Environmental Protection Agency, Additional Material from CARB on the Appropriate use of an Air Quality Indicators	B-11

Attachment 6. Information Provided to the Science and Technical Support Work Group Related to the RFP Metric Issue	B-17

Attachment 7. STSWG issue paper - "STSWG Subgroup Revised Response to NRSWG Questions #1 and #2"	B-30

Attachment 8. STSWG issue paper - "STSWG Subgroup Response to NRSWG Question #1 - Meteorological Variability"	B-54

Attachment 9. Discussions and Principles for Issue 8	B-56

Attachment 10. Additional Discussion Material for Issue 10 Developed by One Industrial Stakeholder and One State Agency Stakeholder	B-58

Attachment 11. Letter from Ellen Hardebeck, Great Basin Unified Air Pollution Control District, to Sarah Peirce-Sandner, National and Regional Strategies Work Group, Comments on Issue 10 of the RFP Issue Paper	B-60

Attachment 12. Background Information, Options, and a List of Principles for Issue 11	B-62

Attachment 13. Initial Options Discussed by Subgroup for Issue 13	B-65

List of Figures

Figure	Page

1	Iterative RFP Process flow diagram (draft 9/4/97)	ES-4

EXECUTIVE SUMMARY

BACKGROUND: The focus of the issue paper is to define reasonable further progress (RFP) for the new/revised national ambient air quality standards (NAAQSs). The issue paper focuses on the SIP-phase of RFP or the time period after approval of the SIP by the EPA. Why are we doing RFP? (What about RFP differs from the attainment demonstration?): (1) Demonstration of timely progress towards attainment of the NAAQS; or (2) Incremental improvement in air quality to reduce exposure to unhealthy air.

ISSUES:

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? Recommendation:

The subgroup narrowed the 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 regarding the need for an EPA-mandated percent reduction approach. In general, states and public health and environmental stakeholders preferred either a standardized percent reduction approach or a standardized percent reduction approach with an option to customize at the local airshed level if the customized process was demonstrated to be technically superior to the standardized approach. Industrial stakeholders preferred either a standardized minimum cost-effectiveness approach followed by customization at the local airshed level or a fully customized approach.

2.	What is the range of options for the RFP metric? Recommendation:

The subgroup 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 reductions metrics have been met as well as review of available air quality indicators (to the extent practical) to determine if programs are an track and effective. The subgroup could not reach agreement on whether the RFP tests should consist solely of administrative and emission reduction metrics or should include the use of air quality indicators. The subgroup also could not agree whether the use of an air quality indicator for RFP should be left to the state's discretion or should be made a mandatory requirement. The subgroup recommended that a workshop for technical experts of all stakeholder groups be convened to address issues of improving emission reduction metrics and air quality indicators by December 31, 1997 or as soon as possible there after.

3.	How frequently should RFP be demonstrated? Recommendation:

The subgroup 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? Recommendation:

The subgroup could not reach consensus as to whether the base year should be a fixed year nationwide or variable based on when an area determines its attainment status.

5.	What should be the rate of RFP -- that is, what is the nature of the line or curve describing the path from nonattainment to attainment? Recommendation:

The subgroup did not achieve consensus on this issue but did vote to narrow the range of options for primary consideration to three which provide for a less prescriptive approach.

6.	How should end-loaded strategies be handled in RFP? Specifically, how much emission reductions required for attainment may be end-loaded strategies? Recommendation:

The subgroup agreed that 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 predominate part of the emission reductions needed for attainment. The actual portion of emission reduction obligation allocated to end-loaded strategies should be tailored to the unique needs of each area. 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.).

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

The subgroup achieved near-consensus on the iterative RFP process flow diagram (See Figure 1) as a general mechanism to handle failure to meet an RFP milestone. Public health and environmental stakeholder participants had some concerns on the potential gap in time between the review of whether milestones are achieved and the next activities to be pursued.

8.	Can emission reductions measures that are not fully enforceable, quantifiable or permanent be credited towards the RFP emission reduction metric? Recommendation:

The subgroup did not achieve consensus on this issue with the public health and environmental stakeholders and one state stakeholder preferring not to allow these types of reduction measures, and the industrial stakeholders and one state stakeholder wanting to allow such reduction measures but limited to principles outlined in the Economic Incentive Rule (April 7, 1994).

9.	What parts of the RFP requirements for ozone and PM should be integrated with the reasonable progress (RP) requirements for Regional Haze? Recommendation:

The subgroup did not achieve consensus on this issue. One public health and environmental stakeholder believed that given the concept and goal of integration in the FACA process, the "job" of the RFP program should be to track progress in attaining the NAAQS and regional haze as a dual goal.

10.	Under what circumstances, if any should an area be allowed to avoid demonstrating attainment, and if so what will constitute RFP? Recommendation:

Consensus was not achieved on this issue. Further, some stakeholders felt that the options defined by the subgroup were not acceptable and that additional options should be explored.

11.	Who is responsible for performing next steps in the iterative RFP process when an interjurisdictional area fails an RFP metric? Recommendation:

The subgroup agreed that 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. It is strongly recommended 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.

12.	Should RFP be specified for each source sector (mobile/area/major stationary sources)? Recommendation:

The subgroup did not achieve consensus on this issue.

13.	Should RFP be measured as seasonal or annual? (Should control measures be required on a seasonal, annual, or episodic basis?) Recommendation:

This issue is not an RFP specific issue, rather this issue is related to the Control Strategies and Emissions Inventory and Modeling issue papers for developing the control measures and performing the analysis.

14.	Can RFP include mandatory measures outside of Title I (e.g., national programs such as Titles II, III, and IV)? Recommendation:

The subgroup did not achieve consensus on this issue. The public health and environmental stakeholders preferred not to allow the use of measures outside of Title I for RFP while state and industrial stakeholders would allow the use of these measures for RFP.

15.	Should there be specific procedures to determine if RFP has been achieved? Recommendation:

The subgroup 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? Recommendation: The subgroup did not achieve consensus on this issue.

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 discussion at the October FACA Subcommittee meeting. Issues and options for this topic were developed by the subgroup although consensus on recommendations for many of these issues has yet to be achieved. Interested people should forward their comments to a member of the National and Regional Strategies Work Group.

Reasonable Further Progress

Date: October 2, 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.

This issue paper summarizes subgroup deliberations on 16 issues related to RFP for the new/revised standards. Each issue is divided into three parts: status quo/background, discussion/options, and recommendations. The status quo/background provides information on how the issue is currently addressed in the Clean Air Act. The discussion/options summarizes the deliberations of the subgroup and presents potential solutions to each issue for the new/revised standards. The recommendations indicates whether the subgroup achieved consensus on the issue. In the cases where consensus was not achieved, the recommendations indicates, when possible, the differences between the various stakeholder groups. Appendix A provides the reader with a summary of the RFP issue and the results of the balloting of the subgroup on each of the issues. Several of the more complicated issues required discussions over a period of several months as the subgroup refined the issue and defined the range of options that addressed the issue. Appendix B contains background information developed by the subgroup for these complicated issues. This information is intended to provide the reader with a sense of how the subgroup's thinking progressed while considering the issue. Please note that Appendix A is included with the issue paper while Appendix B is contained in a separate electronic file which can be found on the TTN.

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 Plan (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 were required to submit a SIP revision by November 15, 1993, which describes, in part, how the areas would 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 would be fully offset. In addition, ozone nonattainment areas that were classified as serious and above were required to demonstrate how the plan would provide for the attainment of the ozone NAAQS by the applicable attainment date and would 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 in Appendix B.

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 the 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.

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 attainment of the NAAQS. Under this model, RFP is the series of 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 Progress 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. Note that the recommendations reflect the views of the stakeholders participating in the subgroup discussions and not the views of the stakeholders of the FACA subcommittee or National and Regional Strategies Work Group. 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." The "Underlying Principles/Assumptions of the Customized RFP Process" drafted after the April FACA Subcommittee meeting is provided in Attachment 2, Appendix B. This material served as the subgroup's starting point for discussions on the customized RFP process.

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 (provided in Attachment 3 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 be 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 direct and precursors emissions with the AOI/AOV allowed to select the direct/precursors 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 same technical standards embodied in parts a) and b) of Option A2 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 (the original list of seven options is in Appendix B, Attachment 3). 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 regarding the need for an EPA-mandated percent reduction approach. In general, states and public health and environmental stakeholders preferred either a standardized percent reduction approach (Option A1) or a standardized percent reduction approach with an option to customize at the local airshed level if the customized process was demonstrated to be technically superior to the standardized approach (Option A2). Industrial stakeholders preferred either a standardized minimum cost-effectiveness approach followed by customization at the local airshed level (Option B) or a fully customized approach (Option C).

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 4 in Appendix B for additional discussion material on the issue by the subgroup. See Attachment 5 in Appendix B for comments from a state stakeholder concerning the appropriate use of an air quality indicators for determining RFP. See Attachment 6 in Appendix B for the information provided to the STSWG concerning various RFP metrics. See Attachments 7 and 8 in Appendix B for the STSWG response to the subgroup's questions. Attachment 7 is the issue paper entitled, "STSWG Subgroup Revised Response to NRSWG Questions #1 and #2," which discusses potential RFP metrics. Attachment 8 is the issue paper entitled, "STSWG Subgroup Response to NRSWG Question #1 - Meteorological Variability," which discusses tools to discern changes in ozone concentrations due to meteorological variabilities.

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 if 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 at the states discretion (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 or as soon as possible thereafter.

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 a 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 and enough time thereafter 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. These principles do not imply a common base year for both ozone and PM as in Options 1a and 1b. The subgroup did not reach consensus on the following principles:

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 practicable."

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 and give Options 2, 3, and 4, which provide for a less prescriptive approach, primary consideration. 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, but 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 which would delay implementation or emission reductions 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 near consensus on the iterative flow diagram (See Figure 1) as a general mechanism to handle failure to meet an RFP milestone. A public health and environmental stakeholder participant had some concerns on the potential gap in time between the review of whether milestones are achieved and the next activity to be pursued. 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 B, Attachment 9 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.

Attainment of the primary NAAQS should be the principal driver in developing RFP requirements for ozone and PM. Integration with the reasonable progress requirements should be considered where practicable but regional haze requirements should not be the focus of RFP requirements. Further, it is expected that RFP requirements will be accepted as meeting any and all reasonable progress requirements until the NAAQS in an airshed are achieved.

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 been proposed but not promulgated. 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 promulgated 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 one public health and environmental stakeholder dissented. The public health and environmental stakeholder believed that given the concept and goal of integration in the FACA process, the "job" of the RFP program should be to track progress in attaining the NAAQS and regional haze as a dual goal.

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 sites, 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 10 of Appendix B. Comment on this issue from a state stakeholder can be found in Attachment 11 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 provision 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. Further, some stakeholders felt that neither option was acceptable and that additional options should be explored.

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 12 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 13 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.

Cons: The definition of RFP in section 171 of the CAA may appear to limit creditable reductions to Part D, however, not all stakeholders believe that RFP under section 171 is strictly limited to the emissions reductions of 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 2 while state and industrial stakeholders preferred Option 1.

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 was not promulgated (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.

RFP POSTSCRIPT [EPA note: This is a synopsis of the postscript originally reviewed by the RFP Issue Paper Group]

Generally, the paper is consistent with the Presidential Directive (the Directive) of July 16, 1997, although the paper's proposed RFP process occurs almost entirely after the timeframes presented by the Directive. There are no areas where the paper appears totally inconsistent with the Directive.

APPENDIX A

TABLE 1. SUMMARY OF RFP ISSUES.

ISSUE NUM. ISSUE 1 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 is 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 -- that is, what is the nature of the line or curve describing the path from nonattainment to attainment for an AOI/AOV? 6 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 emission reductions that are not fully enforceable, quantifiable, or permanent be credited towards the RFP emission reduction metric? 9 What parts of the RFP requirements for ozone and PM should be integrated with the reasonable progress (RP) requirements for Regional Haze? 10 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 performing next steps in the iterative RFP process when an interjurisdictional area fails an RFP metric? 12 Should RFP be specified for each source sector (mobile/area/major stationary sources)? 13 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.]

TABLE 2. RESULTS OF 7/30/97 RFP ISSUES BALLOT. Issue 1 Issue 2 Issue 3 Issue 4 Sector Options Recmdn Options Options Concur w/ Principles A1 A2 B C Comment C/NC Comment 1 2 Comment 1a 1b 2 3 4 O3 Only O3 & PM Comment Industrial 2 1 C 1 1 2 Y Industrial 2 1 C 2 1 2 1 N N 4-B Industrial 2 1 C 1 2 1 Y Industrial 1 C 2-D 1 1 N N Industrial 1 2 C 2-E 1 1 Y 4-E Summary 1st Choice (%) 0 0 40 60 C 100 20 80 0 20 0 40 40 Y 20 Y 40 Industrial 2nd Choice (%) 0 0 60 20 NC 0 20 0 0 20 0 40 0 N 40 N 40 State & Local Agencies 1 2 C 1 2 2 1 --- --- 4-F State & Local Agencies 1 2 C 1 1 State & Local Agencies 1 NC 2-H 1 1* --- --- 4-H Summary 1st Choice (%) 33 67 0 0 C 67 100 0 33 33 0 0 33 Y 0 Y 0 State & Local Agencies 2nd Choice (%) 0 33 0 33 NC 33 0 33 0 0 0 33 0 N 0 N 0 Public Health & Environmental 2 1 C 1 2 1 N N Public Health & Environmental 1 C* 2-J 1 1 2 Summary 1st Choice (%) 50 50 0 0 C 100 100 0 0 0 100 0 0 Y 0 Y 0 Public Health & Environmental 2nd Choice (%) 50 0 0 0 NC 0 0 0 0 50 0 50 0 N 50 N 50 Composite 1st Choice (Rank 300 Max) 83 117 40 60 C 267 220 80 33 55 100 40 73 Y 20 Y 40 Summary 2nd Choice (Rank 300 Max) 50 33 60 55 NC 33 20 33 0 70 0 123 0 N 90 N 90 * Qualified vote with comments provided on ballot

TABLE 2. RESULTS OF 7/30/97 RFP ISSUES BALLOT. (continued) Issue 5 Issue 6 Issue 7 Issue 8 Issue 9 Issue 10 Sector Options Principles RFP Flw Cht Options Principles Options 1 2 3 4 Comment C/NC Comment C/NC Comment 1 2 Comment C/NC Comment 1 2 Comment Industrial 2 1 C C X C X Industrial 2 1 C C X C X 10-B Industrial 2 1 C C X C X Industrial 1 C C X 8-D C 9-D X Industrial --- --- --- --- 5-E --- 6-E --- 7-E X 8-E C 9-E X 10-E Summary 1st Choice (%) 0 0 0 80 C 80 C 80 0 100 C 100 0 100 Industrial 2nd Choice (%) 0 0 60 0 NC 0 NC 0 0 0 NC 0 0 0 State & Local Agencies 2 1 C 6-F C N N 8-F C 9-F X State & Local Agencies 2 1 C C X NC X State & Local Agencies 1 5-H C* 6-H NC 7-H X 8-H C 9-H --- --- 10-H Summary 1st Choice (%) 0 33 33 33 C 100 C 67 33 33 C 67 33 33 State & Local Agencies 2nd Choice (%) 33 0 33 0 NC 0 NC 33 0 0 NC 33 0 0 Public Health & Environmental 1 2 C C 7-I X NC 9-I X Public Health & Environmental 1 C NC* 7-J X 9-J X Summary 1st Choice (%) 0 100 0 0 C 100 C 50 10 0 C 0 100 0 Public Health & Environmental 2nd Choice (%) 0 0 50 0 NC 0 NC 50 0 0 NC 50 0 0 Composite 1st Choice (Rank 300 Max) 0 133 33 113 C 280 C 197 13 133 C 167 133 133 Summary 2nd Choice (Rank 300 Max) 33 0 143 0 NC 0 NC 88 0 0 NC 88 0 0 * Qualified vote with comments provided on ballot TABLE 2. RESULTS OF 7/30/97 RFP ISSUES BALLOT. (continued) Issue 11 Issue 12 Issue 13 Issue 14 Issue 15 Issue 16 Sector Principles Options Recmdn Options Recmdn Principles C/NC Comment 1 2 3 4 Comment C/NC Comment 1 2 Comment C/NC Comment C/NC Comment Industrial C 2 1 C X C C Industrial C 2 1 C 13-B X C C Industrial C 2 1 C X C C Industrial C 1 C X C C Industrial C 1 2 12-E C 13-E X C C 16-E Summary 1st Choice (%) C 100 0 20 0 80 C 100 100 0 C 100 C 100 Industrial 2nd Choice (%) NC 0 0 20 60 0 NC 0 0 0 NC 0 NC 0 State & Local Agencies C 1 C X C 15-F C State & Local Agencies C 1 C X C C State & Local Agencies C* 11-H 1 --- X C C Summary 1st Choice (%) C 100 33 67 0 0 C 100 100 0 C 100 C 100 State & Local Agencies 2nd Choice (%) NC 0 0 0 0 0 NC 0 0 0 NC 0 NC 0 Public Health & Environmental C 1 --- 13-I X C NC Public Health & Environmental NC* 11-J 1 C X C NC Summary 1st Choice (%) C 50 100 0 0 0 C 50 0 100 C 100 C 0 Public Health & Environmental 2nd Choice (%) NC 50 0 0 0 0 NC 0 0 0 NC 0 NC 100 Composite 1st Choice (Rank 300 Max) C 250 133 87 0 80 C 250 200 100 C 300 C 200 Summary 2nd Choice (Rank 300 Max) NC 50 0 20 60 0 NC 0 0 0 NC 0 NC 100 * Qualified vote with comments provided on ballot	Table 2 Comments

Comment Number

Comment 2-D Workshop date not realistic. 2-E Metrics must be based on option picked in Issue 1 (emission reduction or cost-effectiveness). 2-H All language must clearly state and/or imply that air quality metrics will not be required in the future. 2-J Remove the third sentence ("Therefore, their use could be required...") from the "philosophical approach." 4-B Common base year is likely to be an unrepresentative year for some areas. 4-E If Option B of Issue 1 is chosen, the baseline is only relevant to planning (how much reduction is needed, etc.) and not for a starting point. 4-F Should require re-setting of baseline at time of mid-course correction. 4-H Base year must be early so states can get credit for early reductions. Problems with concur principles. 5-E Propose an Option 1B by changing the "percent reduction" in Option 1 to "cost-effectiveness level." Under Option 1B rate of RFP could be determined by adopting cost-effectiveness measures. 5-H Support this option if replace "EPA mandated" with "standardized." 6-E Under proposed Option 1B (Issue 5, comment 5-E), everything that is cost-effective and consistent with other air quality indicators should be done. 6-F Administrative measures should not be so onerous to deter end-loaded strategies as a viable option. 6-H Concur if reference to table and changes on penalties for missing administrative milestones are made to principles. Credit for reductions can only be taken when they are projected to occur. 7-E Use cost-effective measures in lieu of emission reductions. Remove contingency measures from flow chart boxes 4C and 4D. Just use penalty and keep implementing contingency measures only if needed for attainment and after implementing all other qualified measures. 7-H Still concerned with table linkages to flow chart. 7-I Continuation of control measures should be included during correction phase. 7-J Flow chart does not make it clear that control measures are continuing while correction takes place. 8-D What happens when there are no real contingency measures? 8-E Yes, reduction credits should be given; but, if Option 1B (Issue 5, comment 5-E) is used, only need to determine if all cost-effective measures were implemented. 8-F Need option to encourage voluntary emission reductions. 8-H Still have problems with backstop/contingency text. 9-D Under no circumstances should regional haze drive control requirements. 9-E Areas meeting RFP are meeting RP. Clean air areas subject to RP get to meet a lower $/ton = acid rain market trading indicator. 9-F RFP should be the driver for regional haze RP. 9-H But Science/Tech "Conceptual Model" is unknown. 9-I Regional haze rules should be integrated into RFP requirements. 9-J Little discussion on this issue. Feel neither sufficiently positive nor negative to vote on this issue. 10-B Option 1 mandates the impossible. 10-E Approval of one state's SIP should not depend on another state's SIP being approved. 10-H Neither option encompasses our views. This is a major issue that still needs discussion and work. 11-H With minor edits, we could support principles 11-J Could concur except for first principle which relies on RAMP concept. 12-E No sector RFP, strictly an area wide determination. 13-B Should be AOI-specific. 13-E Should depend on what is best for each area, including combination, tested each planning cycle. 13-I No opinion on this issue. 15-F Must have some element of flexibility; should not be an onerous task. 16-E RFP should satisfy RP. NAAQS must be the driver.