Rule2026-01413
Air Plan Disapproval; Colorado; Regional Haze Plan for the Second Implementation Period
Primary source
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Published
January 26, 2026
Effective
February 25, 2026
Issuing agencies
Environmental Protection Agency
Abstract
The Environmental Protection Agency (EPA) is disapproving a regional haze state implementation plan (SIP) revision submitted in 2022 by the State of Colorado under the Clean Air Act (CAA or Act) and the EPA's Regional Haze Rule (RHR) for the program's second implementation period. Colorado's 2022 regional haze SIP revision addresses the requirement that states revise their long-term strategies every implementation period to make reasonable progress towards the national goal of preventing any future, and remedying any existing, anthropogenic impairment of visibility, including regional haze, in mandatory Class I Federal areas (Class I areas). We are disapproving Colorado's 2022 regional haze SIP revision pursuant to the CAA and regulatory regional haze requirements. The EPA is not taking final action at this time on a separate revision to Colorado's SIP that consolidates existing, previously approved regional haze provisions into the same regulation where Colorado's new, second planning period provisions are located.
Full Text
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<title>Federal Register, Volume 91 Issue 16 (Monday, January 26, 2026)</title>
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[Federal Register Volume 91, Number 16 (Monday, January 26, 2026)]
[Rules and Regulations]
[Pages 3048-3056]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-01413]
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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 52
[EPA-R08-OAR-2024-0607; FRL-12598-02-R8]
Air Plan Disapproval; Colorado; Regional Haze Plan for the Second
Implementation Period
AGENCY: Environmental Protection Agency (EPA).
ACTION: Final rule.
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SUMMARY: The Environmental Protection Agency (EPA) is disapproving a
regional haze state implementation plan (SIP) revision submitted in
2022 by the State of Colorado under the Clean Air Act (CAA or Act) and
the EPA's Regional Haze Rule (RHR) for the program's second
implementation period. Colorado's 2022 regional haze SIP revision
addresses the requirement that states revise their long-term strategies
every implementation period to make reasonable progress towards the
national goal of preventing any future, and remedying any existing,
anthropogenic impairment of visibility, including regional haze, in
mandatory Class I Federal areas (Class I areas). We are disapproving
Colorado's 2022 regional haze SIP revision pursuant to the CAA and
regulatory regional haze requirements. The EPA is not taking final
action at this time on a separate revision to Colorado's SIP that
consolidates existing, previously approved regional haze provisions
into the same regulation where Colorado's new, second planning period
provisions are located.
DATES: This rule is effective on February 25, 2026.
ADDRESSES: The EPA has established a docket for this action under
Docket ID No. EPA-R08-OAR-2024-0607. All documents in the docket are
listed on the <a href="https://www.regulations.gov">https://www.regulations.gov</a> website. Although listed in
the index, some information is not publicly available, e.g., CBI or
other information whose disclosure is restricted by statute. Certain
other material, such as copyrighted material, is not placed on the
internet and will be publicly available only in hard copy form.
Publicly available docket materials are available through <a href="https://www.regulations.gov">https://www.regulations.gov</a>, or please contact the person identified in the FOR
FURTHER INFORMATION CONTACT section for additional availability
information.
FOR FURTHER INFORMATION CONTACT: Jaslyn Dobrahner, Air and Radiation
Division, EPA, Region 8, Mailcode 8ARD-IO, 1595 Wynkoop Street, Denver,
Colorado 80202-1129, telephone number: (303) 312-6252; email address:
<a href="/cdn-cgi/l/email-protection#bedad1dcccdfd6d0dbcc90d4dfcdd2c7d0fedbcedf90d9d1c8"><span class="__cf_email__" data-cfemail="85e1eae7f7e4edebe0f7abefe4f6e9fcebc5e0f5e4abe2eaf3">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION: Throughout this document ``we,'' ``us,'' and
``our'' means the EPA.
Table of Contents
I. What is being addressed in this document?
II. Background
III. Summary and Analysis of Major Issues Raised by Commenters
IV. Final Action
V. Statutory and Executive Order Reviews
[[Page 3049]]
I. What is being addressed in this document?
The EPA is disapproving a SIP revision submitted by the State of
Colorado to the EPA on May 20, 2022, and supplemented on August 2,
2022, and June 23, 2023 (Colorado's 2022 regional haze SIP revision),
addressing the requirements of the second implementation period of the
RHR.\1\ The EPA is disapproving Colorado's 2022 regional haze SIP
revision pursuant to CAA section 169A and regulatory regional haze
requirements. Under CAA section 110(k)(3), the EPA can only approve a
SIP revision if it meets all applicable requirements of the Act.\2\ If
the EPA concludes that a SIP revision does not meet all applicable CAA
requirements, then the EPA has the authority to fully disapprove that
revision.\3\ The analysis in this notice explains the flaws with the
unconsented source closure of Nixon Unit 1 at the Ray D. Nixon Power
Plant and why it requires a full disapproval. We find that Colorado's
2022 regional haze SIP revision does not meet the requirements of CAA
section 110(a)(2)(E)(i) \4\ because Colorado did not provide necessary
assurances that the unconsented source closure of Nixon Unit 1 at the
Ray D. Nixon Power Plant would not result in a taking pursuant to the
U.S. Constitution.\5\ After Colorado submitted its 2022 regional haze
SIP revision to EPA, Nixon Unit 1 informed the State that it would not
consent to closure and raised concerns about the lawfulness of forcing
a closure and the impacts of such a closure on electricity supply in
the State. Whenever a state learns that a source no longer intends to
close as contemplated by the submitted SIP, it is incumbent on that
state to take appropriate steps which could include revising or
supplementing the SIP, withdrawal, or providing EPA with necessary
assurances that the closure would not violate federal or state law.
Under these circumstances and for the additional reasons set out below,
the EPA need not and cannot simply defer to the State's position in
their comment letter that ``no action before EPA results in a taking''
and therefore the 2022 regional haze SIP revision would not violate
federal or state law, including the U.S. Constitution, the Colorado
Constitution, and applicable provisions of the Act.\6\
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\1\ On November 20, 2025, Colorado withdrew the SIP measures
associated with the closure of Comanche Unit 2 that were initially
included as part of Colorado's long-term strategy and found in
Regulation Number 23, Part A, Section IV.F.1.d. Therefore, the SIP
measures associated with the closure of Comanche Unit 2 are no
longer part of Colorado's 2022 regional haze SIP revision. The post-
proposal withdrawal of the enforceable closure deadline for Comanche
Unit 2 is discussed where appropriate in this preamble and could
not, under the circumstances, have been taken into account when the
EPA issued the proposed rule on July 16, 2025.
\2\ 42 U.S.C. 7410(k)(3).
\3\ Id.
\4\ 42 U.S.C. 7410(a)(2)(E).
\5\ Throughout this document and the response to comment (RTC)
document, we extend ``Nixon Unit 1'' to also include the associated
Nixon coal handling facility.
\6\ See Docket ID No. EPA-R08-OAR-2024-0607-0059 at 29-35.
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The EPA also finds that Colorado's 2022 regional haze SIP revision
does not meet the requirements of CAA section 169A(b)(2) \7\ and the
RHR at 40 CFR 51.308(f) because the unconsented source closure of Nixon
Unit 1 was included in Colorado's long-term strategy, rendering the
long-term strategy similarly unapprovable. Without Colorado addressing
the inclusion of an unconsented closure without the necessary
assurances, the EPA cannot approve Colorado's long-term strategy.
Therefore, consistent with CAA section 110(k)(3), the EPA is fully
disapproving Colorado's 2022 regional haze SIP revision.
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\7\ 42 U.S.C. 7410(a)(2)(E).
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We note that Colorado did not provide flexibility in its long-term
strategy to take into account the possibility of changing circumstances
that may impact whether a source consents to closure, including changes
in electricity demand and supply. For example, Colorado's recent
decision (after the State's public comment process and after the EPA
issued the proposed rule) to withdraw source closure provisions \8\
from the list of enforceable closure deadlines demonstrates not only
the possibility, but the reality, that changing circumstances
necessitated a more flexible strategy.\9\ Colorado did not address this
issue in withdrawing the additional unit and did not revise and
resubmit an updated long-term strategy.
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\8\ On November 20, 2025, Colorado withdrew the SIP measures
associated with the closure of Comanche Unit 2 that were initially
included as part of Colorado's long-term strategy and found in
Regulation Number 23, Part A, Section IV.F.1.d.
\9\ Further, although not included as a required closure in this
rulemaking, the Department of Energy (DOE) issued an order under
section 202(c) of the Federal Power Act on December 30, 2025, to
take all measures necessary to ensure that Unit 1 of Craig Station
in Craig, Colorado is available to operate. See <a href="https://www.energy.gov/documents/federal-power-act-section-202c-craig-order-no-202-25-14">https://www.energy.gov/documents/federal-power-act-section-202c-craig-order-no-202-25-14</a>. This authority requires DOE to find that an emergency
exists related to heightened demand for, or a shortage in supply of,
electricity and that the order will best meet the emergency and
service the public interest. See 16 U.S.C. 824a(c).
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Because the EPA is fully disapproving Colorado's 2022 regional haze
SIP revision, a federal implementation plan (FIP) or an approved SIP
revision will be required to satisfy CAA and regional haze rule
requirements.\10\ The FIP or SIP revision will need to fully address
the second implementation period regulatory requirements, including
revisions to Colorado's long-term strategy and reasonable progress
goals. The EPA further observes that upon Colorado's withdrawal of
Commanche Unit 2's closure from Colorado's 2022 regional haze SIP
revision, Colorado did not address the impact of the withdrawal on
Colorado's previously submitted analysis of its reasonable progress
goals as they relate to the Uniform Rate of Progress (URP). This will
also need to be addressed in the FIP or SIP revision.
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\10\ See 42 U.S.C. 7410(c).
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In this final rule, the EPA is not acting on a separate revision to
Colorado's SIP that consolidates existing, previously approved regional
haze provisions in Regulation Number 3 to the newly adopted Regulation
Number 23 where Colorado's new, second planning period provisions are
located. We will finalize action on that separate revision as
appropriate in the future.
As required by CAA section 169A, the RHR implements a program to
manage visibility impairment from man-made air pollution affecting 156
mandatory Class I areas. The RHR requires the states, in coordination
with the EPA, the National Park Service, the Fish and Wildlife Service,
the Forest Service, and certain other interested parties, to develop
and implement a periodic SIP revision addressing the requirements of
the CAA and the RHR. Visibility impairing pollutants include fine and
coarse particulate matter (PM) (e.g., sulfates, nitrates, organic
carbon, elemental carbon, and soil dust) and their precursors (e.g.,
sulfur dioxide (SO<INF>2</INF>), oxides of nitrogen (NO<INF>X</INF>),
and, in some cases, volatile organic compounds (VOC) and ammonia
(NH<INF>3</INF>)). As discussed in further detail in our proposed rule,
this preamble, and the accompanying Response to Comments (RTC)
document, the EPA finds that Colorado's 2022 regional haze SIP revision
fails to meet applicable requirements as is required to exercise our
authority to approve the revision--and thereby make the elements
included in the revision federally enforceable--under CAA section
110(a)(2). Colorado's 2022 regional haze SIP revision and the RTC
document can be found in the docket for this rulemaking.
[[Page 3050]]
II. Background
On May 20, 2022, Colorado submitted a revision to its SIP to
address its regional haze obligations for the second implementation
period (2018-2028). Colorado supplemented the SIP revision on August 2,
2022, and June 23, 2023. Colorado submitted this SIP revision to
satisfy the requirements of the CAA's regional haze program pursuant to
CAA sections 169A and 169B and 40 CFR 51.308.
On July 16, 2025, the EPA proposed to partially approve and
partially disapprove Colorado's 2022 regional haze SIP revision.\11\
The July 16, 2025 proposed rule provided background on the requirements
of the CAA and RHR, a summary of Colorado's regional haze SIP revisions
and related EPA actions, and our rationale for the proposed rule.
Specifically, we proposed approval for the portions of Colorado's 2022
regional haze SIP revision relating to: 40 CFR 51.308(f)(1):
calculations of baseline, current, and natural visibility conditions,
progress to date, and the uniform rate of progress; 40 CFR
51.308(f)(2)(ii)-(iv): long-term strategy; 40 CFR 51.308(f)(3):
reasonable progress goals; 40 CFR 51.308(f)(4): reasonably attributable
visibility impairment; 40 CFR 51.308(f)(5) and 40 CFR 51.308(g):
progress report requirements; 40 CFR 51.308(f)(6): monitoring strategy
and other implementation plan requirements; and 40 CFR 51.308(i): FLM
consultation. For the reasons described in the proposed rule, we also
proposed to disapprove portions of Colorado's 2022 regional haze SIP
revision relating to 40 CFR 51.308(f)(2)(i). As relevant here, we
proposed that Colorado's 2022 regional haze SIP revision does not meet
the requirements of CAA section 110(a)(2)(E)(i) because the State
included an unconsented source closure deadline for a currently
operating unit without providing necessary assurances that the
enforceable closure deadlines are consistent with federal and state
law. We specifically proposed that Colorado failed to provide necessary
assurances that unconsented source closures, including that of Nixon
Unit 1, would not result in a taking in violation of the U.S.
Constitution and/or comparable provisions of the Colorado Constitution
or otherwise violate the CAA. Concurrently, we also proposed to approve
a separate revision to Colorado's SIP that consolidates existing,
previously approved, regional haze provisions into Regulation Number
23, the same regulation where Colorado's new, second planning period
provisions are located. The public comment period closed on September
15, 2025.
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\11\ 90 FR 31926 (July 16, 2025).
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More than two months after the comment period closed, on November
20, 2025, Colorado withdrew the SIP measures associated with the
closure of Comanche Unit 2 that were initially included as part of
Colorado's long-term strategy and found in Regulation Number 23, Part
A, Section IV.F.1.d. These measures would have required the closure of
Comanche Unit 2 by a date certain, and approval of the SIP measures by
the EPA would have made the closure deadline federally enforceable for
purposes of the Act. Because of Colorado's withdrawal of this portion
of the SIP revision, the SIP measures associated with the closure of
Comanche Unit 2 are no longer part of Colorado's 2022 regional haze SIP
revision.
III. Summary and Analysis of Major Issues Raised by Commenters
During the public comment period, the EPA received 29 comment
submissions on the proposed rule; eight sets of comments in support and
20 sets in opposition.\12\ The full text of comments received is
included in the publicly posted docket associated with this rulemaking
at <a href="https://www.regulations.gov">https://www.regulations.gov</a>. Below we provide brief summaries of
some of the significant comments received and our responses. Our RTC
document, which is also included in the docket for this rulemaking,
provides detailed responses to all significant comments received and is
a part of the administrative record for this action.
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\12\ One comment was not considered due to the presence of
profanity.
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A. Unconsented Source Closures
During the public comment period, the EPA received comments
supporting and opposing the proposal that Colorado failed to provide
necessary assurances that unconsented enforceable source closures would
not be prohibited by state or federal law, as required by CAA section
110(a)(2)(E). The EPA posited that the forced and unconsented closure
of operating sources, without just compensation, could violate the
Takings Clause of the U.S. Constitution and possibly comparable
provisions of state law, and that Colorado has not provided necessary
assurances that such violations would not occur.
Commenters in support of our proposed disapproval agreed with our
finding that enforceable unconsented source closure provisions, without
just compensation, could violate the Takings Clause of the U.S.
Constitution and possibly comparable provisions of state law, and that
Colorado has not provided the necessary assurances to the contrary. A
commenter in support of the proposal stated that forcing a
municipality-owned utility to close against its will may constitute an
unlawful taking and deprives the municipal owner and its ratepayers of
investment-backed expectations. According to another commenter in
support, disapproval of enforceable closure provisions avoids potential
Takings Clause challenges. During Colorado's public hearing process,
Colorado also received similar comments from utilities when Colorado
contemplated accelerating ``voluntary'' source closure provisions such
that the closures would no longer be consensual.\13\ The utilities
stated that forced early closures confiscate ``economical value and
strips the units' owners of the productive use of their property''
resulting in a taking of the utilities' rights and property interests
under the federal and Colorado constitutions.\14\ Although the State
did not accelerate the ``voluntary'' source closure provisions at the
time, Colorado was on notice that unconsented source closures
constitute a ``takings''. Therefore, Colorado appeared to have
dismissed the takings concern for unconsented closures in the State's
comments to our proposed rule.\15\
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\13\ See Docket ID No. EPA-R08-OAR-2024-0607-0004; 14_Public
Service Company of Colorado dba Xcel Energy at 23; 14_Platte River
Power Authority at 24; 14_Tri-State Generation & Transmission
Association Inc at 41; and 14_City of Colorado Springs & Colorado
Springs Utilities at 33.
\14\ Id.
\15\ See Docket ID No. EPA-R08-OAR-2024-0607-0059 at 29-35.
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We agree with these comments in support of disapproving the SIP
revision for containing unconsented source closure provisions. For
Nixon Unit 1, approving the SIP revision that requires its unconsented
closure could harm the municipality-owned public utility and its
citizen ratepayers by destroying the value of the Unit and investments
made in the Unit. Notably, both the municipality (directly) and citizen
ratepayers (through rates that include contributions to long-term
capital costs) continue to invest in the ongoing operation of the Unit
that would, if the SIP revision were approved in this respect, be
forced to close under federal law. Without the necessary contrary
assurances from Colorado, the commenters correctly note the State's
2022 regional haze SIP revision does not meet the requirements of CAA
section
[[Page 3051]]
110(a)(2)(E)(i), and thus the EPA cannot approve the SIP.
Commenters opposing our proposed disapproval of Colorado's 2022
regional haze SIP revision asserted that disapproving a SIP based on
lack of necessary assurances under CAA 110(a)(2)(E) would be unlawful,
speculative, arbitrary, and capricious. Commenters stated that a
disapproval based on CAA section 110(a)(2)(E)(i) would be arbitrary and
capricious because, among other reasons, Colorado has a reliance
interest in the RHR and guidance that commenters understood as
supporting the ability of a state to include enforceable source closure
deadlines as part of its long-term strategy for regional haze SIPs.
Additionally, commenters emphasized that when a state includes
``voluntary'' requirements in a SIP, it is unreasonable for states to
consider a potential violation of the Takings Clause. Commenters
represented that the necessary assurances argument mischaracterizes
closure deadlines as forced or unconsented, and thus that the EPA
failed to provide a legal rationale for requiring Colorado to provide
necessary assurances that a ``voluntary'' closure deadline would not
violate the Takings Clause.
On the takings argument, specifically, commenters argued that
``voluntary'' closure deadlines do not conform with the Supreme Court's
analysis in Penn Central Transportation Co. v. New York City, 438 U.S.
104 (1978) or Lucas v. South Carolina Coastal Council, 505 U.S. 1003
(1992). Further, commenters stated that without specific facts about
each of the closures, our analysis is speculative, arbitrary, and
capricious. Commenters asserted that our reliance at proposal on per se
takings case law is misplaced because the closures are not permanent
physical intrusions and do not deprive owners of their properties'
complete economic value. As for regulatory takings, commenters stated
that we failed in the proposed rule to consider the Penn Central
factors.\16\
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\16\ See Penn Cent., 438 U.S. at 124-5. The Court enumerated
three factors to consider based on the specific facts of the case in
determining if a government regulation goes too far and amounts to
an unconstitutional ``taking'' of private property, requiring
compensation under the Fifth Amendment. These factors are (1)
economic impact on the owner; (2) owner's investment-backed
expectation; and (3) character of the government action.
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Commenters also challenged the EPA's authority to decide
constitutional questions, stating that the analysis of the Takings
Clause is a matter of judicial review. Finally, commenters questioned
the EPA's disapproval of a closure requirement that already exists and
will continue to exist under state law, i.e., before and separately
from whether the EPA's approval makes the closure deadlines federally
effective and enforceable.
We disagree with the comments questioning the EPA's authority to
consider issues involving the Takings Clause under CAA section
110(a)(2)(E)(i). CAA section 110(a)(2)(E)(i) provides that state plans
must provide ``necessary assurances'' that the state ``is not
prohibited by any provision of federal or state law from carrying out
such implementation plan or portion thereof.'' The best reading of this
provision is that the EPA lacks authority to approve a SIP revision
that risks implementation of a SIP in a way that is prohibited by
federal or state law, and for which the state has not provided
necessary assurances that a prohibited action will not occur. The
Takings Clause of the Fifth Amendment, applicable to the states via the
Fourteenth Amendment, provides that the government shall not take
private property, including a municipality-owned public utility
property such as Nixon Unit 1,\17\ for public use without just
compensation. Under the CAA's cooperative-federalism framework, states
can determine what emission limits and other measures to include in
their SIPs as long as they meet the requirements of the Act.\18\
However, those state-selected measures must observe statutory and
constitutional limits, as contemplated by the text of CAA section
110(a)(2)(E). Thus, in this case, while a constitutional issue is
implicated, the fundamental issue is that the SIP revision record lacks
necessary assurances under CAA Section 110(a)(2)(E)(i). In this
context, the EPA disagrees with comments stating that ensuring the
requirements of the CAA are satisfied, including the requirement that
state plans are supported by necessary assurances regarding compliance
with the law, is not within or relevant to the EPA's authority. We are
not adjudicating constitutional claims in this final rule. Rather, we
are ensuring that our exercise of authority to approve or disapprove
the SIP revision before us, thereby making it enforceable as a matter
of federal law, is consistent with applicable requirements and
limitations on the EPA's authority.
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\17\ Municipally owned public utilities are not-for-profit power
providers run by local governments, serving their communities
directly. While municipality-owned public utilities hold physical
property for public purposes, they still possess property rights. If
a higher government authority deprives the use of that property
though regulatory action, the Fifth Amendment still requires just
compensation to the community-owned utility.
\18\ Train v. Natural Resources Defense Council, 421 U.S. 60, 79
(1975).
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The EPA disagrees with comments alleging that we improperly
characterize Nixon Unit 1 as an unconsented closure and thus that we
failed to provide a proper legal rationale requiring Colorado to
provide necessary assurances that a ``voluntary'' closure deadline,
such as Nixon Unit 1, could violate the Takings Clause. At proposal, we
stated ``that Colorado has not provided the assurances required by CAA
section 110 that implementing the SIP's forced closure provisions
(Nixon Unit 1) is not prohibited by state or Federal law. . . . There
is a risk that enforceable source closure provisions, without just
compensation, would violate the Takings Clause and possibly comparable
provisions of state law.'' \19\ We defined a ``forced closure'' as a
``source closure opposed by the source in question that would be made
federally enforceable as a result of a SIP approval.'' \20\ Further, we
defined Nixon Unit 1 as a ``forced'' or unconsented closure given the
documentation \21\ provided to the EPA and Colorado by the municipal
owner of Nixon Unit 1 withdrawing their consent to the closure
provisions contained in Colorado's 2022 regional haze SIP revision. In
addition, we invited comment on whether there were any prior state SIP
revisions under CAA section 110 that sought to force the closure of a
currently operating source without that source's consent.\22\ We did
not receive any comments providing any such examples. Thus, after
considering the comments received, and as explained further in this
section and the RTC document, we disagree with commenters' position
that Nixon Unit 1 is a ``voluntary'' closure. Therefore, Colorado is
required to provide the necessary assurances that the unconsented Nixon
Unit 1 closure provision, without just compensation, would not violate
the Takings Clause and comparable provisions of state law as required
by CAA section 110(a)(2)(E)(i). We note that the facts presented in
this case, where the SIP revision would force a closure clearly opposed
by the source, are novel. For that reason, it is understandable that
Colorado's submission has generated novel concerns.
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\19\ 90 FR 31926, 31938 (July 16, 2025).
\20\ Id.
\21\ Id. Please see docket for correspondence from Colorado
Springs Utilities, owner of Nixon Unit and our proposal discussing
Colorado Springs Utilities' correspondence.
\22\ Id.
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The EPA also disagrees with commenters' position that a disapproval
[[Page 3052]]
based on CAA section 110(a)(2)(E)(i) would be unlawful or arbitrary and
capricious. Commenters emphasized that when Colorado adopted its SIP,
the utilities had already planned to close the sources in question on
the schedule included in the SIP. According to these commenters, the
SIP reflects that the utilities voluntarily decided to close specific
units and Colorado relied on the utilities' decisions when it codified
the closures as state regulations. Therefore, commenters opine that, at
the time, Colorado would not have known to provide necessary assurances
that an unconsented source closure would not amount to a taking without
just compensation. However, after Colorado submitted its SIP revision
to the EPA and prior to us acting on Colorado's SIP revision, Colorado
Spring Utilities (CSU), a municipality-owned public utility, retracted
its decision to voluntarily close Nixon Unit 1 via a letter to Colorado
dated March 11, 2025. CSU explained that it was facing challenges ``to
secure adequate replacement energy to offset the loss of 208 megawatts
of generating capacity resulting from the voluntary planned retirement
of [Nixon Unit 1] as well as putting the Colorado Department of Public
Health and Environment (CDPHE) on notice of Colorado Springs Utilities'
urgent need to defer the closure of Nixon Unit 1 due to these
unforeseen challenges.'' \23\ In addition, CSU met with Colorado on
April 23, 2025, and asked Colorado to remove the December 29, 2029
closure of Nixon Unit 1 from its SIP revision amid concerns regarding
grid reliability.\24\
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\23\ Letter from Travas Deal, CEO, Colorado Spring Utilities, to
Jill Hunsaker Ryan, Executive Director, Colorado Department of
Public Health and Environment. (March 11, 2025). Available in the
docket for this rulemaking at Docket ID No. EPA-R08-OAR-2024-0607-
0026.
\24\ See 90 FR 31926, 31938 (citing ``Overview of Colorado
Springs Utilities meeting with CDPHE_April 23, 2025'').
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On April 2, 2025, CSU submitted similar documentation to the EPA,
asking us not to act on Colorado's 2022 regional haze SIP revision
December 29, 2029 closure provision for Nixon Unit 1.\25\ Once the EPA
and Colorado obtained documentation that the owner of Nixon Unit 1
withdrew their consent for their respective enforceable closure
provisions contained in Colorado's 2022 regional haze SIP revision, the
EPA and Colorado were on notice that approving Colorado's 2022 regional
haze SIP revision with the inclusion of an unconsented closure date
into the SIP could result in violation of a federal requirement. In
addition, with CSU's withdrawal of its consent to close Nixon Unit 1
set out in Colorado's 2022 regional haze SIP revision, the closure
provision for Nixon Unit 1 in Colorado's 2022 regional haze SIP
revision became an unconsented closure provision and it was incumbent
upon Colorado to provide the necessary assurances that the unconsented
source closure would not amount to a taking without just compensation
upon implementation of Colorado's 2022 regional haze SIP revision.\26\
Without any representations from Colorado to the contrary, it is not
possible for the EPA to determine that it may approve Colorado's 2022
regional haze SIP revision as meeting all applicable requirements of
the Act because the submission does not contain necessary assurances
that Colorado ``is not prohibited by any provision of Federal . . .
law'' from executing an unconsented source closure with the imprimatur
of federal approval. Colorado's 2022 regional haze SIP revision is not
compliant with all applicable requirements of the CAA and, because of
that defect, also does not meet the requirements of 40 CFR 51.308(f).
As a result, the EPA is disapproving Colorado's 2022 regional haze SIP
revision.
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\25\ See id. (citing ``Colorado Springs Utilities meeting with
EPA_April 2, 2025'').
\26\ See 42 U.S.C. 7410(a)(2)(E)(i).
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Moreover, the EPA disagrees with commenters' representations that
the lack of the necessary assurances required by the CAA is not a
lawful basis to disapprove the unconsented source closure on the ground
that the disapproval would conflict with the RHR and a 2019 guidance
document.\27\ Nor would it be unreasonable to expect that Colorado
consider potential takings clause violations at the time the State
included the source closures in the SIP. Specifically, commenters state
that the RHR provides for the consideration of additional factors,
including source retirement and replacement schedules.\28\ Similarly,
according to commenters, the 2019 guidance document describes that a
state can shorten the remaining useful life of a source for purposes of
a control analysis to account for an announced retirement but only if
the state makes the retirement federally enforceable. But source
retirement and replacement is much different from enforceable,
unconsented closures, which neither the RHR nor the CAA's regional haze
provisions reference or contemplate in any manner. Moreover, the
guidance document referenced by commenters does not address the
situation here or contain statements that reasonably could be
understood to endorse Colorado's novel assertions that the EPA must
allow states to use the CAA's regional haze provisions to force source
closures. Rather, the guidance states that ``[i]f a source is expected
to close by December 31, 2028, under an enforceable requirement, a
state may consider that to be sufficient reason'' not to select the
source for developing emission controls for the remaining useful life
of the source.\29\ Nothing in the guidance suggests that states may
force unconsented closures as part of a regional haze SIP itself. As
noted previously, commenters did not identify any instance where a
state has attempted this use of the CAA's regional haze provisions or
an instance where the EPA has approved a SIP revision under similar
circumstances. Circumstances change, and insisting on unconsented plant
closures under these circumstances threatens violations of federal and
state law, including additional CAA provisions instructing states and
the EPA to account for the consequences of requirements adopted to
promote regional haze goals.
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\27\ Guidance on Regional Haze State Implementation Plans for
the Second Implementation Period. <a href="https://www.epa.gov/visibility/guidance-regional-haze-state-implementation-plans-second-implementation-period">https://www.epa.gov/visibility/guidance-regional-haze-state-implementation-plans-second-implementation-period</a>. The EPA Office of Air Quality Planning and
Standards, Research Triangle Park (August 20, 2019).
\28\ 40 CFR 51.308(f)(2)(iv)(C).
\29\ Guidance on Regional Haze State Implementation Plans for
the Second Implementation Period at 20 (emphasis added); see also
id. at 42 n.74 (providing further that this discussion applies ``if
a source is certain to close . . . under an enforceable requirement,
a state can reasonably consider that to be sufficient reason to
remove the source from further analysis and reasonable progress
consideration'') (emphasis added).
---------------------------------------------------------------------------
Even if Colorado had a legitimate reliance interest in the RHR and
the 2019 guidance document and shortened the remaining useful life of a
source in its control analysis accordingly, the commenters fail to
address that a SIP containing an unconsented shortened remaining useful
life for a source does not meet all the requirements of the CAA,
including ensuring that a SIP or SIP revision includes necessary
assurances consistent with CAA section 110(a)(2)(E)(i). The EPA can
only approve a SIP revision if it meets all the requirements of the
CAA.\30\ This includes ensuring that the SIP contains the necessary
assurances under CAA 110(a)(2)(E)(i) that the implementation of the SIP
is not prohibited by federal or state law, including here, prohibitions
on uncompensated takings of property interests without consent. Without
these assurances, the EPA lacks authority to approve Colorado's 2022
[[Page 3053]]
regional haze SIP revision containing unconsented closure provisions.
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\30\ 42 U.S.C. 7410(k)(3).
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Additionally, some commenters stated that the EPA cannot disapprove
a closure that exists pursuant to state law because the closure would
still be legally required as a matter of state law, and an EPA
disapproval does not change this fundamental fact. The EPA disagrees
with these commenters' conclusion. Commenters' statements are
unsupported and do not acknowledge that when the EPA approves a
provision into a SIP, it becomes federally enforceable, including here
with respect to the unconsented closure provisions. The EPA does not
have the authority to approve and make federally enforceable an
unconsented closure provision contained in a SIP without the necessary
assurances that the unconsented closure provision does not violate
federal law or state law.
Commenters asserted that when further changes to the SIP are
appropriate, the correct mechanism for the SIP to reflect the new
changes is for the state to submit a SIP revision, after the SIP is
approved by the EPA. In addition to the reasons stated above, the EPA
disagrees with commenters' statements that the appropriate way to
address Nixon Unit's 1 unconsented closure is for EPA to approve the
SIP containing an unconsented closure followed by a SIP revision to
remove the unconsented closure. It is correct that states can
subsequently revise provisions that are already approved as part of a
SIP. However, because the EPA has not acted on Colorado's 2022 regional
haze SIP revision and the EPA cannot approve a SIP or SIP revision
containing an unconsented closure because it does not meet the CAA
requirements, revising an approved SIP is not an option. Based on the
facts of this action, Colorado would have the following options:
supplement the existing 2022 regional haze SIP revision, or withdraw
its 2022 regional haze SIP revision and submit an amended regional haze
SIP revision.\31\ Once Colorado was notified by the owner of Nixon Unit
1 that they no longer consented to their respective closure provisions
in Colorado's 2022 regional haze SIP revision, it was incumbent upon
Colorado to supplement the SIP revision either by removing the closures
or by providing the necessary assurances required by CAA section
110(a)(2)(E). As Colorado did neither, as previously explained, the EPA
must disapprove Colorado's 2022 regional haze SIP revision. We note
that the same options would apply with respect to other sources that
notify Colorado that they no longer consent to closure.
---------------------------------------------------------------------------
\31\ See generally 42 U.S.C. 7410.
---------------------------------------------------------------------------
Finally, commenters pointed to the EPA's ``inappropriate'' reliance
on Cedar Point Nursery v. Hassid, 594 U.S. 139 (2021) and Horne v.
Department of Agriculture, 576 U.S. 351 (2015)--involving physical per
se takings--to argue that a taking cannot occur when a source
voluntarily agrees to a closure and that the cases are inapplicable to
the circumstances in Colorado, positing that there is not a physical or
per se taking. But commenters mischaracterized the EPA's mention of
these cases in the proposal. The EPA stated that approval of Colorado's
2022 regional haze SIP revision ``could amount to a per se taking,'' as
established by the U.S. Supreme Court precedent.\32\ Moreover,
commenters misunderstand these cases. Cedar Point Nursery, for example,
established that a per se taking may occur when the government deprives
property owners of exclusive rights to even a portion of their
property, in that case, by forcing owners to allow union organizers
onto the property for relatively brief periods. Commenters do not
explain or point to necessary assurances provided by Colorado in the
SIP revision record that enforcing an unconsented closure of a power
plant would not similarly involve or amount to any form of per se
taking.
---------------------------------------------------------------------------
\32\ 70 FR 31926, 31939 (July 16, 2025).
---------------------------------------------------------------------------
Some commenters cited to Lucas v. South Carolina Coastal Council in
support of their assessment that because the closure deadline that
would become federally enforceable via an approval does not deprive the
utility of ``all economically beneficial or productive use of land,''
compensation would not be required under the federal Takings
Clause.\33\ But Lucas applies only to instances of total deprivation of
use, and it relied on ``background principles of State's law of
property and nuisance,'' which are not the issues in this action.\34\
The commenters shed no light on the type of taking at issue in the
Colorado action and instead concluded that the forced closure does not
give rise to a takings claim. We disagree with their position. An
unconsented deadline to close Nixon Unit 1 is the equivalent to a per
se taking, permanently restricting CSU's right over its property. It is
also possible that a regulatory taking could occur if Nixon Unit 1 is
considered a segment of its respective facility and the analysis of the
forced closure is limited to each independent unit.
---------------------------------------------------------------------------
\33\ 505 U.S. 1003 (1992).
\34\ Id. at 1029.
---------------------------------------------------------------------------
We recognize the U.S. Supreme Court's determination that there are
only two categories of action that can result in a per se taking: (1)
where the government requires an owner to suffer a permanent physical
invasion of property, and (2) when regulations completely deprive an
owner of ``all economically beneficial us[e]'' of property.\35\ In this
case, we disagree with commenters that because Horne and Cedar Point
involve physical takings, they are inapplicable. Under the Court's
jurisprudence, a physical taking occurs when the government physically
appropriates or occupies private property for public use. As explained
below, the Court in Horne and Cedar Point addressed questions that are
pertinent to the facts at issue in the Colorado action.
---------------------------------------------------------------------------
\35\ See Horne, 576 U.S. 351; Tahoe-Sierra Pres. Council, Inc.
v. Tahoe Reg'l Planning Agency, 535 U.S. 302, 330 (2002) (citing
Lucas, 505 U.S. at 1019-20).
---------------------------------------------------------------------------
According to commenters, closure deadlines are not a physical
appropriation of property for various reasons, including the fact that
the closure deadline applies to Nixon Unit 1 and not the facility as a
whole. In Cedar Point, a government regulation restricted an owner's
``right to exclude'' from the owner's property.\36\ The Court
emphasized the importance of this right, and how the appropriation of
the right to physically invade private property requires
compensation.\37\ Because incorporating the unconsented closure for
Nixon Unit 1 into the SIP would make the unconsented closure federally
enforceable, this would cause the regulation to appropriate CSU's right
to control the operation of its facility. The CAA and RHR do not
require sources to close to meet reasonable progress. Forcing CSU to
close Nixon Unit 1 would deprive CSU of the control and use of its
property in order to meet Colorado's purpose. The forced closure of
Nixon Unit 1 would lead to its decommissioning, causing a permanent
restriction on CSU's property and causing economic harm to the
municipality-owned public utility and its citizen ratepayers.
---------------------------------------------------------------------------
\36\ Cedar Point Nursery, 594 U.S. 139.
\37\ Id. at 158.
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In Horne, the Court determined that whenever there is a physical
appropriation, it is not right to question whether the appropriation
deprives the owner, whether private entity or local government, of all
economically valuable use of the item taken.\38\ This question was also
addressed in Tahoe, where the Court determined that if the government
takes possession of an interest in property for public purpose, ``it
has a categorical duty to compensate
[[Page 3054]]
the former owner, regardless of whether the interest that is taken
constitutes an entire parcel or merely a part thereof.'' \39\
Similarly, the unconsented closure of Nixon Unit 1 would force the
utility to change operating conditions by forcibly decommissioning
Nixon Unit 1--which would be comparable to the government deciding how
to dispose of the goods set aside in Horne--even though a source
closure is not a statutory or regulatory requirement under CAA section
169A and 40 CFR 51.308(f). Thus, the EPA disagrees with commenters'
proposition that Cedar Point and Horne are inapplicable to the
unconsented closure of Nixon Unit 1 in Colorado's 2022 regional haze
SIP revision.
---------------------------------------------------------------------------
\38\ Horne, 576 U.S. at 363.
\39\ Tahoe-Sierra Pres. Council, 535 U.S. at 323.
---------------------------------------------------------------------------
As already discussed, it is reasonable to conclude that the facts
at issue involve a per se taking. Therefore, the framework of Penn
Central,\40\ which governs regulatory takings, is likely not directly
relevant to this final action, as ``[i]t is `inappropriate to treat
cases involving physical takings as controlling precedents for the
evaluation of a claim that there has been a ``regulatory taking,'' and
vice versa.' '' \41\ Nonetheless, for completeness, we also consider
whether the unconsented closure of Nixon Unit 1, absent necessary
assurances under CAA Section 110(a)(2)(E)(i), could constitute a
regulatory taking.
---------------------------------------------------------------------------
\40\ Penn Central, 438 U.S. 104.
\41\ Tahoe-Sierra Pres. Council, 535 U.S. at 323.
---------------------------------------------------------------------------
Without necessary assurances under CAA Section 110(a)(2)(E)(i),
there is no demonstration that neither a total nor partial regulatory
taking will occur from implementation of the unconsented closure
provision for Nixon Unit 1 contained in Colorado's 2022 regional haze
SIP revision. Commenters point to the closure date only affecting a
segment of Nixon and allowing for the operation of the rest of the
facility and argue that therefore there is no total or partial
regulatory taking. However, commenters misconstrue CSU's ownership of
other sources (Front Range Power Plant, Solids and Handling Disposal
Facility) as being part of the Ray D. Nixon Power Plant when in fact
they are separate sources located on adjacent or contiguous property.
The Ray D. Nixon Power Plant only consists of Unit 1 and associated
coal handling and thus when evaluating whether there is a regulatory
taking, the regulatory taking evaluation is limited to Nixon Unit 1 and
should not include evaluation of Front Range Power Plant and Solids and
Handling Disposal Facility as part of that as commenters do.
A total regulatory taking would occur if the closure would fully
deprive the source owner of all economic use of the land under the
standard described in Lucas.\42\ ``The general rule at least is, that
while property may be regulated to a certain extent, if regulation goes
too far it will be recognized as a taking.'' \43\ The U.S. Supreme
Court has defined ``a regulation which `denies all economically
beneficial or productive use of land' will require compensation under
the Takings Clause'' and is a ``regulation that goes too far.'' \44\
Without necessary assurances under CAA Section 110(a)(2)(E)(i), it is
not possible for the EPA to ensure that approval of Colorado's 2022
regional haze SIP revision will not constitute a regulatory taking
under the U.S. Constitution, given the administrative record. For this
reason, the EPA is authorized under the CAA to fully disapprove this
SIP submission to avoid a takings situation. The effect of such a
taking would result in permanent deprivation of property and would be a
textbook example of a ``regulation going too far.'' \45\
---------------------------------------------------------------------------
\42\ Lucas, 505 U.S. at 1116.
\43\ Pa. Coal Co. v. Mahon, 260 U.S. 393, 415 (1922).
\44\ Id.; see also Lucas, 505 U.S. 1003; Palazzolo v. Rhode
Island, 533 U.S. 606, 617 (2001).
\45\ Id.
---------------------------------------------------------------------------
A partial regulatory taking results when a regulation hinders the
use of property but does not deprive the owner of all economically
beneficial use. Here, the analysis involves considering whether the
Nixon Unit 1 closure provision codified in federal regulation results
in (1) a significant economic impact on the claimants; (2) interference
with distinct investment-backed expectations; and (3) shares
characteristics with similar governmental actions considered
takings.\46\ Based on Colorado's action as further described in section
III.A and in the RTC document, without necessary assurances to the
contrary, it is not possible for the EPA to ensure that approval of
Colorado's 2022 regional haze SIP revision containing an unconsented
closure provision will not constitute a partial regulatory taking under
the U.S. Constitution, given the administrative record.
---------------------------------------------------------------------------
\46\ Penn Central, 438 U.S. at 124.
---------------------------------------------------------------------------
Additionally, building on the analysis earlier in this section, the
EPA disagrees with commenters' conclusion that the Penn Central test
does not support a determination that a partial regulatory taking would
result if the EPA codified Colorado's unconsented closure provision for
Nixon Unit 1. A use restriction may constitute a taking if not
reasonably necessary to the effectuation of a substantial public
purpose or if it has an unduly harsh impact upon the owner's use of the
property.\47\ First, contrary to commenters' statements, the purpose of
the CAA's regional haze provisions is to address visibility impairment
in Class I areas, not to address public health. Colorado determined
that the closure of Nixon Unit 1 ``will satisfy and exceed [reasonable
progress] requirements for this implementation period.'' \48\
Therefore, even if the purpose of the closure is to promote ``general
health, safety, and welfare,'' as stated by one commenter,\49\ an
unconsented closure falls outside the statutory and regulatory
requirements of the regional haze program. Moreover, an unconsented
closure of Nixon Unit 1 would negatively impact a municipality-owned
public utility and its citizen shareholders/ratepayers from producing
electricity on its property and could threaten grid reliability for
CSU's customer base and negatively impact people, businesses, military
installations, hospitals, and other services in CSU's service
territory.\50\
---------------------------------------------------------------------------
\47\ Id. at 127 (internal citation omitted).
\48\ Colorado 2022 regional haze SIP revision at 53.
\49\ See Docket ID No. EPA-R08-OAR-2024-0607-0062 at 5.
\50\ Letter from Travas Deal, CEO, Colorado Spring Utilities, to
Jill Hunsaker Ryan, Executive Director of Colorado Department of
Public Health and Environment. (March 11, 2025). Available in the
docket for this rulemaking at Docket ID No. EPA-R08-OAR-2024-0607-
0026.
---------------------------------------------------------------------------
Second, the economic impact of the government regulation ``is
determined by comparing the total value of the affected property before
and after the government action.'' \51\ Here, if the EPA approves the
Nixon Unit 1 unconsented closure deadline into the SIP, the closure
would be federally enforceable, and the decommissioning of the Unit
would diminish its economically beneficial use and value. Further,
according to CSU, the moment CSU determined that a December 29, 2029
closure was no longer viable, the municipality's investment-backed
expectations changed and the closure was no longer part of its business
plan.\52\ As this action demonstrates, many of the coal-fired
electricity generating units in Colorado are closing.\53\ If CSU is
forced to close Nixon Unit 1 by December 29, 2029,
[[Page 3055]]
CSU anticipates capacity deficits of 173 MW in 2030, increasing to 257
MW in 2034.\54\ Thus, after considering the Penn Central factors in
relation to the unconsented closure of Nixon Unit 1, it is not possible
for the EPA to ensure that approval of Colorado's 2022 regional haze
SIP revision will not constitute a partial regulatory taking under the
U.S. Constitution. A partial regulatory taking violates Federal law and
without the CAA Section 110(a)(2)(E)(i) necessary assurances to the
contrary, the EPA does not have the authority to approve a SIP with an
unconsented closure.
---------------------------------------------------------------------------
\51\ Colony Cove Props., LLC v. City of Carson, 888 F.3d 445,
451 (9th Cir. 2018).
\52\ Letter from Travas Deal, CEO, Colorado Spring Utilities, to
Jill Hunsaker Ryan, Executive Director of Colorado Department of
Public Health and Environment. (March 11, 2025). Available in the
docket for this rulemaking at Docket ID No. EPA-R08-OAR-2024-0607-
0026.
\53\ Colorado 2022 regional haze SIP revision at 75.
\54\ Letter from Travas Deal, CEO, Colorado Spring Utilities, to
Jill Hunsaker Ryan, Executive Director of Colorado Department of
Public Health and Environment. (March 11, 2025). Available in the
docket for this rulemaking at Docket ID No. EPA-R08-OAR-2024-0607-
0026.
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The EPA shall approve a SIP revision only if it meets all CAA
requirements.\55\ Given the necessary assurances requirement in CAA
section 110(a)(2)(E)(i) and the withdrawal of consent from the
municipal owner for closure of Nixon Unit 1, Colorado is required to
provide necessary assurances to the EPA to ensure that implementation
of Colorado's 2022 regional haze SIP revision containing an unconsented
closure provision is not prohibited by Federal law including the
Takings Clause of the U.S. Constitution. However, Colorado failed to
provide the necessary assurances required by CAA section
110(a)(2)(E)(i) that approval of Colorado's 2022 regional haze SIP
revision containing the unconsented closure provision for Nixon Unit 1
will not violate Federal law including an uncompensated taking per se
or a partial or full regulatory taking. Because the Nixon Unit 1
closure is not approvable under CAA section 110(a)(2)(E)(i), we cannot
approve Colorado's long-term strategy and are disapproving the SIP
revision in its entirety.
---------------------------------------------------------------------------
\55\ 42 U.S.C. 7410(k)(3).
---------------------------------------------------------------------------
The EPA further observes that upon Colorados's withdrawal of the
closure of Commanche Unit 2 from the SIP submittal, Colorado did not
address the withdrawal's impact on Colorado's previously submitted
analysis of its reasonable progress goals as they relate to the URP.
Furthermore, Colorado withdrew the closure without engaging in the
State processes associated with the development of SIP revisions for
submittal to the EPA for approval. These processes include providing
for State-level notice and comment prior to the submission of a SIP
revision to the EPA. As a result of this full disapproval, Colorado may
now engage in those processes.
B. Other Source Closures
The EPA's final action disapproving Colorado's 2022 regional haze
SIP revision is not based on Colorado's consideration of the energy
impacts associated with the source closures. Nonetheless, we maintain
that Colorado did not independently assess the source closures under
the ``energy and non-air quality environmental impacts of compliance''
statutory factor including impacts on maintaining grid reliability and
the utilities' ability to meet energy demand, particularly given the
number of imminent source closures, as detailed in our proposed rule
and in the RTC document.
Commenters point to information such as grid analyses performed by
the Colorado Public Utilities Commission (PUC) or other utility boards,
utility resource planning processes, statements from the utilities
themselves, as well as the entities that have oversight and
jurisdiction to review and approve electric utilities' plans as
evidence that Colorado considered the ``energy and non-air quality
environmental impacts of compliance'' statutory factor. The mere
citation of analyses, reports, approvals, and associated materials from
the Colorado PUC and other utility boards is not evidence that Colorado
independently assessed the impact on grid reliability in Colorado from
the totality of the retirements included in the SIP revision or that
Colorado considered that information, with respect to the source
closures, within the context of the ``energy and non-air quality
environmental impacts of compliance'' statutory factor. Notwithstanding
the reliance interests identified in this document, it is not
reasonable for Colorado to ignore evaluating the energy impacts
associated with the source closures for this SIP revision.
Contrary to some commenters' claims, instead of using the
information from the Colorado PUC and individual utilities to evaluate
the energy impacts of the source closures, Colorado only used that
information to shorten the remaining useful life of the sources. In its
November 2020 prehearing statement, Colorado states that ``[t]he
closure dates in this proposal are used within the four-factor analysis
with regard to remaining useful life adjustments, not for any
additional pollutant reductions that would be necessary to demonstrate
reasonable progress in 2028 for this round.'' \56\ In Colorado's
comments on the EPA's proposed rule, Colorado further reiterated that
it ``used shortened remaining useful life for certain stationary
sources for its reasonable progress determination based on information
from utilities regarding voluntary, announced source retirements,'' and
that ``[t]he Closure Dates are incorporated into Colorado's 2022 SIP
Submission as a means of limiting the sources' remaining useful life as
required for the four-factor analyses.'' \57\ As Colorado also stated
in its comments on the EPA's proposed rule, Colorado's analysis with
respect to the source closures ``focused on source-specific issues''
and ``did not attempt an independent evaluation of broader grid
reliability issues'' associated with the thirteen source closures
contained in Colorado's 2022 regional haze SIP revision.\58\
---------------------------------------------------------------------------
\56\ See Docket ID No. EPA-R08-OAR-2024-0607-0004; 14_Air
Pollution Control Division at 8.
\57\ See Docket ID No. EPA-R08-OAR-2024-0607-0059 at 17 and 18.
\58\ Id at 24.
---------------------------------------------------------------------------
Despite the shortcomings in Colorado's analysis of grid reliability
concerns, the EPA recognizes that our prior statements may have
generated a reliance interest that led to how Colorado developed its
SIP revision.\59\ For example, the EPA's 2019 guidance document
provided a limited scope of considerations generally involved under the
``energy and non-air quality factor'' and it was reasonable for
Colorado to rely on the interpretation provided in that guidance--
although the EPA's 2019 guidance document did not prohibit the
consideration of grid reliability. Further, during the state-level
public comment process, the EPA included in its public comments that,
generally speaking, Colorado's rationale for the control determination
should be based on the four-factor analysis and should ``not rely on
other factors such as grid reliability, future demand, etc. . . .''
\60\ While the EPA no longer believes that public comment was correct,
it was also reasonable for Colorado to rely on the EPA's representation
in that public comment letter. However, for any additional revisions to
Colorado's SIP, the reliance issue would no longer apply as we no
longer believe it is appropriate for Colorado to ignore grid
reliability issues when meeting regional haze obligations.
---------------------------------------------------------------------------
\59\ See, e.g., Kentucky v. EPA, 123 F.4th 447, 467-71 (4th Cir.
2025).
\60\ See Docket ID No. EPA-R08-OAR-2024-0607-0011; 16_EPA
Comments at 4.
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Thus, recognizing Colorado's reliance interest in the EPA's prior
representations, the EPA is not determining that Colorado's cursory
grid reliability analysis is a reason to disapprove Colorado's 2022
regional haze SIP revision.
[[Page 3056]]
Although the EPA is not disapproving Colorado's 2022 regional haze
SIP revision on the basis of Colorado's lack of independent assessment
of the source closures under the ``energy and non-air quality
environmental impacts of compliance'' statutory factor, including
impacts on maintaining grid reliability and the utilities' ability to
meet energy demand, the concerns regarding grid reliability included in
the proposal still hold true. The EPA recognizes that any source that
previously decided to close could determine in the future that closure
is no longer appropriate. As explained in the proposal, the demand for
electricity is rising due to the resurgence of domestic manufacturing
and the construction of artificial intelligence data processing
centers. As noted in Executive Order 14241, power generated from coal
resources is critical to addressing this surging demand and a matter of
national interest, national security, and energy policy. The EPA does
not encourage electric generating facilities to close in the face of
this energy demand. Moreover, the EPA does not expect any state to
encourage or force an electric generating facility to close in order to
comply with the CAA's regional haze second planning period
requirements.
If a source that previously consented to close changes its plans,
the EPA expects Colorado to work collaboratively with the source and
ensure that any future SIP revision accurately reflects the source's
expected operations, in addition to the analyses required by the RHR.
IV. Final Action
For the reasons stated in the RTC document and in this document, we
are disapproving Colorado's 2022 regional haze SIP revision. A FIP or
an approved SIP revision will be required to satisfy CAA and regional
haze rule requirements.\61\ In this action, the EPA is not taking final
action on a separate revision to Colorado's SIP that moves the regional
haze provisions in Regulation Number 3 to the newly adopted Regulation
Number 23.
---------------------------------------------------------------------------
\61\ 42 U.S.C. 7410(c).
---------------------------------------------------------------------------
V. Statutory and Executive Order Reviews
A. Executive Order 12866: Regulatory Planning and Review
This action is exempt from review under Executive Order 12866
because it applies to only certain facilities in the State of Colorado.
B. Executive Order 14192: Unleashing Prosperity Through Deregulation
This action is not expected to be an Executive Order 14192
regulatory action because this action is not significant under
Executive Order 12866.
C. Paperwork Reduction Act (PRA)
This rule does not impose an information collection burden under
the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
et seq.).
D. Regulatory Flexibility Act (RFA)
I certify that this action will not have a significant economic
impact on a substantial number of small entities under the RFA (5
U.S.C. 601 et seq.). This action will not impose any requirements on
small entities. This action is disapproving SIP provisions that do not
meet the requirements of CAA sections 110(a)(2)(E)(i) and 169A(b)(2)
and the Regional Haze Rule at 40 CFR 51.308(f).
E. Unfunded Mandates Reform Act (UMRA)
This action does not contain any unfunded mandate as described in
UMRA, 2 U.S.C. 1531-1538, and does not significantly or uniquely affect
small governments. The action imposes no enforceable duty on any State,
local of Tribal governments or the private sector.
F. Executive Order 13132: Federalism
This action does not have federalism implications. It will not have
substantial direct effects on the States, on the relationship between
the national government and the States, or on the distribution of power
and responsibilities among the various levels of government.
G. Executive Order 13175: Consultation and Coordination With Indian
Tribal Governments
This rule does not have Tribal implications, as specified in
Executive Order 13175. It will not have substantial direct effects on
Tribal governments. Thus, Executive Order 13175 does not apply to this
rule.
H. Executive Order 13045: Protection of Children From Environmental
Health and Safety Risks
This action is not subject to Executive Order 13045 because it is
not 3(f)(1) significant as defined in Executive Order 12866, and
because EPA does not believe the environmental health or safety risks
addressed by this action present a disproportionate risk to children
because it disapproves revisions to a State program that are
inconsistent with statutory and regulatory requirements for the CAA and
Regional Haze Rule.
I. Executive Order 13211: Actions That Significantly Affect Energy
Supply, Distribution, or Use
This action is not subject to Executive Order 13211 because it is
not a significant regulatory action under Executive Order 12866. This
action will not have a significant adverse effect on the supply,
distribution or use of energy.
J. National Technology Transfer Advancement Act
This rulemaking does not involve technical standards.
K. Congressional Review Act
This action is subject to the Congressional Review Act (CRA), and
the EPA will submit a rule report to each House of the Congress and to
the Comptroller General of the United States. This action is not a
``major rule'' as defined by 5 U.S.C. 804(2).
L. Judicial Review
Under section 307(b)(1) of the CAA, petitions for judicial review
of this action must be filed in the United States Court of Appeals for
the appropriate circuit by March 27, 2026. Filing a petition for
reconsideration by the Administrator of this final rule does not affect
the finality of this action for the purposes of judicial review nor
does it extend the time within which a petition for judicial review may
be filed and shall not postpone the effectiveness of such rule or
action. This action may not be challenged later in proceedings to
enforce its requirements. See CAA section 307(b)(2).
List of Subjects in 40 CFR Part 52
Environmental protection, Air pollution control, Carbon monoxide,
Greenhouse gases, Incorporation by reference, Intergovernmental
relations, Lead, Nitrogen dioxide, Ozone, Particulate matter, Reporting
and recordkeeping requirements, Sulfur oxides, Volatile organic
compounds.
Dated: January 9, 2026.
Cyrus M. Western,
Regional Administrator, Region 8.
[FR Doc. 2026-01413 Filed 1-23-26; 8:45 am]
BILLING CODE 6560-50-P
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</html>Indexed from Federal Register on January 26, 2026.
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