Promulgation of Air Quality Implementation Plans; State of Texas; Regional Haze and Interstate Visibility Transport Federal Implementation Plan

Federal RegisterAug 12, 2020

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 97

[EPA-R06-OAR-2016-0611; FRL-10010-52-Region 6]

Promulgation of Air Quality Implementation Plans; State of Texas; Regional Haze and Interstate Visibility Transport Federal Implementation Plan

AGENCY:

Environmental Protection Agency (EPA).

ACTION:

Final rule.

SUMMARY:

Pursuant to the federal Clean Air Act (CAA or Act), the Environmental Protection Agency (EPA) is finalizing its affirmation, with amendments, of an intrastate sulfur dioxide (SO

) trading program as an alternative to best available retrofit technology (BART) requirements for certain sources in Texas. This action finalizes the August 2018 proposed affirmation and November 2019 supplemental notice of proposed rulemaking (SNPRM) concerning certain aspects of a final rule published on October 17, 2017, partially approving the 2009 Texas Regional Haze State Implementation Plan (SIP) submission and promulgating a Federal Implementation Plan (FIP) for Texas to address certain outstanding CAA regional haze requirements for the first implementation period.

DATES:

This final rule is effective on September 11, 2020.

ADDRESSES:

The EPA has established a docket for this action under Docket ID No. EPA-R06-OAR-2016-0611. All documents in the docket are listed on the

http://www.regulations.gov

website. Although listed in the index, some information is not publicly available,

e.g.,

Confidential Business Information (CBI) or other information whose disclosure is restricted by statute therefore is not posted to

regulations.gov.

Certain other material, such as copyrighted material, is not placed on the internet and will be publicly available only in hard copy. Publicly available docket materials are available either electronically through

http://www.regulations.gov

or in hard copy at EPA Region 6, 1201 Elm Street, Suite 500, Dallas, Texas 75270.

FOR FURTHER INFORMATION CONTACT:

Jennifer Huser, Air and Radiation Division, Environmental Protection Agency, Region 6, 1201 Elm Street, Suite 500, Dallas, Texas 75270, telephone 214-665-7347; email address

Huser.Jennifer@epa.gov.

SUPPLEMENTARY INFORMATION:

Throughout this document wherever “we,” “us,” or “our” is used, we mean the EPA.

Table of Contents

I. Background

A. Regional Haze

B. Interstate Transport of Pollutants That Affect Visibility

C. Previous Actions Related to Texas Regional Haze

D. EPA's Denial of the Petition for Reconsideration of CSAPR as a BART Alternative and its Relationship to This Final Action

II. Our Proposed Actions

A. Proposed Rule Affirming the October 2017 Final Action

B. Supplemental Notice of Proposed Rulemaking

III. Summary of Our Final Decisions

A. Regional Haze

1. Amendments to the Texas SO

Trading Program

2. Analysis of Texas SO

Trading Program as a BART Alternative

3. PM BART

4. Reasonable Progress

B. Interstate Transport of Pollutants That Affect Visibility

IV. Summary and Responses to Significant Issues Raised by Commenters

A. Texas SO

Trading Program as a BART Alternative

B. PM BART

C. Appropriateness of the Texas SO

Trading Program vs. Source-Specific BART FIP

D. Statutory Requirements for FIP Promulgation and Implementation

E. Timing of the Plan for the First Implementation Period

F. Notice and Comment Requirements

G. Subject-to-BART Determinations

H. Visibility Transport

I. Reasonable Progress

J. Coleto Creek

K. Assurance Provisions and the Variability Limit

L. Venue

M. Other

V. Final Action

A. Regional Haze

B. Interstate Visibility Transport

VI. Statutory and Executive Order Reviews

I. Background

A. Regional Haze

Regional haze is visibility impairment that is produced by a multitude of sources and activities that are located across a broad geographic area. These sources—both human-caused (anthropogenic) and naturally occurring—emit or otherwise introduce into the atmosphere PM, including fine PM (PM

2.5

) (

e.g.,

sulfates, nitrates, organic carbon (OC), elemental carbon (EC), and soil dust), or pollutants that are precursors to the formation of PM

2.5

(

e.g.,

, NO

, and, in some cases, ammonia (NH

) and volatile organic compounds (VOCs)). Fine-particle precursors react in the atmosphere to form PM

2.5

, which impairs visibility by scattering and absorbing light. Visibility impairment limits visual distance and reduces color, clarity, and contrast of view. Reducing PM

2.5

and its precursor gases in the atmosphere is an effective method of improving visibility. PM

2.5

can also cause serious health effects and mortality in humans and contributes to environmental effects, such as acid deposition and eutrophication.

Data from the existing visibility monitoring network, the “Interagency Monitoring of Protected Visual Environments” (IMPROVE) monitoring network, show that visibility impairment caused by air pollution occurs virtually all the time at most national parks and wilderness areas. In 1999, the average visual range

in many mandatory Class I areas

(

i.e.,

national parks and memorial parks, wilderness areas, and international parks meeting certain size criteria) in the western United States was 100-150 kilometers, or about one-half to two-thirds of the visual range that would exist without anthropogenic air pollution. In most of the eastern Class I areas of the United States, the average visual range was less than 30 kilometers, or about one-fifth of the visual range that would exist under estimated natural conditions.

Since the promulgation of the original Regional Haze Rule in 1999, CAA programs have reduced emissions of haze-causing pollution, lessening visibility impairment and resulting in improved average visual ranges.

Visual range is the greatest distance, in kilometers or miles, at which a dark object can be viewed against the sky.

Areas designated as mandatory Class I Federal areas consist of National Parks exceeding 6,000 acres, wilderness areas and national memorial parks exceeding 5,000 acres, and all international parks that were in existence on August 7, 1977. 42 U.S.C. 7472(a). In accordance with section 169A of the CAA, EPA, in consultation with the Department of Interior, promulgated a list of 156 areas where visibility is identified as an important value. 44 FR 69122 (November 30, 1979). The extent of a mandatory Class I area includes subsequent changes in boundaries, such as park expansions. 42 U.S.C. 7472(a). Although states and tribes may designate as Class I additional areas which they consider to have visibility as an important value, the requirements of the visibility program set forth in section 169A of the CAA apply only to “mandatory Class I Federal areas.” Each mandatory Class I Federal area is the responsibility of a “Federal Land Manager.” 42 U.S.C. 7602(i). When we use the term “Class I area” in this action, we mean a “mandatory Class I Federal area.”

64 FR 35714 (July 1, 1999).

An interactive “story map” depicting efforts and recent progress by EPA and states to improve visibility at national parks and wilderness areas may be visited at:

http://arcg.is/29tAbS3.

In Section 169A of the 1977 Amendments to the CAA, Congress created a program for protecting visibility in the nation's national parks

and wilderness areas. This section of the CAA establishes as a national goal the prevention of any future, and the remedying of any existing, man-made impairment of visibility in 156 national parks and wilderness areas designated as mandatory Class I Federal areas. On December 2, 1980, EPA promulgated regulations to address visibility impairment in Class I areas that is “reasonably attributable” to a single source or small group of sources,

i.e.,

“reasonably attributable visibility impairment.”

These regulations represented the first phase in addressing visibility impairment. EPA deferred action on regional haze that emanates from a variety of sources until monitoring, modeling, and scientific knowledge about the relationships between pollutants and visibility impairment were improved.

45 FR 80084 (Dec. 2, 1980).

Congress added section 169B to the CAA in 1990 to address regional haze issues, and we promulgated regulations addressing regional haze in 1999.

The Regional Haze Rule revised the existing visibility regulations to integrate into the regulations provisions addressing regional haze impairment and established a comprehensive visibility protection program for Class I areas. EPA's focus, following congressional direction, continued to be on three important visibility-impairing pollutants from relatively uncontrolled anthropogenic sources: Oxides of nitrogen (NO

), sulfur dioxide (SO

), and particulate matter (PM).

The requirements for regional haze, found at 40 CFR 51.308 and 51.309, are included in our visibility protection regulations at 40 CFR 51.300-309. The requirement to submit a regional haze SIP applies to all 50 states, the District of Columbia, and the Virgin Islands (referred to collectively hereafter as “states”). States were required to submit their first SIP addressing regional haze visibility impairment no later than December 17, 2007.

64 FR 35714 (July 1, 1999), codified at 40 CFR part 51, subpart P (Regional Haze Rule).

Id.

35715.

See

40 CFR 51.308(b). EPA's regional haze regulations require subsequent updates to the regional haze SIPs. 40 CFR 51.308(g)-(i).

Section 169A(b)(2)(A) of the CAA directs states to evaluate the use of retrofit controls at certain larger, often under-controlled, older stationary sources in order to address visibility impacts from these sources. Specifically, section 169A(b)(2)(A) of the CAA requires states to revise their SIPs to contain such measures as may be necessary to make reasonable progress toward the natural visibility goal, including a requirement that certain categories of existing major stationary sources

built between 1962 and 1977 procure, install and operate best available retrofit technology (BART). Larger “fossil-fuel fired steam electric plants” are included among the statutory list of BART source categories at section 169A(g)(7). Under the Regional Haze Rule, states are directed to conduct BART determinations for “BART-eligible” sources that may be anticipated to cause or contribute to any visibility impairment in a Class I area. The evaluation of BART for EGUs that are located at fossil-fuel-fired power plants having a generating capacity in excess of 750 megawatts must follow the “Guidelines for BART Determinations Under the Regional Haze Rule” at appendix Y to 40 CFR part 51 (hereinafter referred to as the “BART Guidelines”). States are required to identify the level of control representing BART after considering the five statutory factors set out in section 169A(g)(2).

States must establish emission limits, a schedule of compliance, and other measures consistent with the BART determination process for each source subject-to-BART.

See

42 U.S.C. 7491(g)(7) (listing the set of “major stationary sources” potentially subject-to-BART).

The State must take into consideration the five statutory factors: (1) The costs of compliance, (2) the energy and non-air quality environmental impacts of compliance, (3) any existing control technology in use at the source, (4) the remaining useful life of the source, and (5) the degree of visibility improvement which may reasonably be anticipated to result.

Rather than requiring source-specific BART controls, states also have the flexibility to adopt an emissions trading program or alternative program as long as the alternative provides greater reasonable progress towards improving visibility than BART. 40 CFR 51.308(e)(2) specifies how a state must conduct the demonstration to show that an alternative program will achieve greater reasonable progress than the installation and operation of BART. 40 CFR 51.308(e)(2)(i)(E) requires a determination under 40 CFR 51.308(e)(3) or otherwise based on the clear weight of evidence that the trading program or other alternative measure achieves greater reasonable progress than would be achieved through the installation and operation of BART at the covered sources. Specific criteria for determining if an alternative measure achieves greater reasonable progress than source-specific BART are set out in 40 CFR 51.308(e)(3); however, as noted above, under 40 CFR 51.308(e)(2)(i)(E) states have the flexibility to develop their own criteria to establish greater reasonable progress based on the “clear weight of the evidence.” Finally, 40 CFR 51.308(e)(4) provides that states whose sources participate in the Cross-State Air Pollution Rule (CSAPR) trading programs need not require the BART-eligible fossil fuel-fired steam electric plants subject to those programs to install, operate, and maintain BART for the pollutant covered by the CSAPR trading program.

Regional haze requirements are generally implemented through the cooperative-federalism framework of section 110 of the Act, in which states are given the primary opportunity to meet the requirements through state implementation plans (SIPs). Under section 110(c) of the CAA, whenever we disapprove a mandatory SIP submission in whole or in part, or make a finding that a state has failed to make such a submission, we are required to promulgate a federal implementation plan (FIP) within two years unless the state corrects the deficiency and we approve the new SIP submittal.

B. Interstate Transport of Pollutants That Affect Visibility

Section 110(a) of the CAA directs states to submit a SIP that provides for the implementation, maintenance, and enforcement of each NAAQS. This is commonly referred to as an “infrastructure SIP.” CAA section 110(a)(2)(D)(i)(II) requires that infrastructure SIPs contain adequate provisions to prohibit interference with measures required to protect visibility in other states. This is referred to as “interstate visibility transport” (or “prong 4” of the four requirements or “prongs” found in section 110(a)(2)(D)(i)). Infrastructure SIPs are due to the EPA within three years after the promulgation of a new or revised NAAQS (or within such shorter period as we may prescribe). A state's failure to submit a complete, approvable infrastructure SIP, including one that meets the requirements for interstate visibility transport, creates an obligation for the EPA to address this requirement pursuant to section 110(c).

C. Previous Actions Related to Texas Regional Haze

On March 31, 2009, Texas submitted a regional haze SIP (the 2009 Regional Haze SIP) to the EPA that included reliance on Texas' participation in trading programs under the Clean Air Interstate Rule (CAIR) as an alternative to BART for SO

and NO

emissions

from EGUs

This reliance was consistent with the EPA's regulations at the time that Texas developed its 2009 Regional Haze SIP.

However, at the time that Texas submitted this SIP to the EPA, the D.C. Circuit had remanded CAIR (without vacatur).

The court left CAIR and our CAIR FIPs in place in order to “temporarily preserve the environmental values covered by CAIR” until we could, by rulemaking, replace CAIR consistent with the court's opinion. The EPA promulgated the Cross-State Air Pollution Rule (CSAPR) to replace CAIR in 2011

(and revised it in 2012).

CSAPR established FIP requirements for sources in a number of states, including Texas, to address the states' interstate transport obligation under CAA section 110(a)(2)(D)(i)(I). CSAPR addresses interstate transport of fine particulate matter and ozone by requiring affected EGUs in these states to participate in one or more of the CSAPR trading programs, which establish emissions budgets that apply to the EGUs' collective annual emissions of SO

and NO

, as well as emissions of NO

during ozone season.

CAIR required certain states, including Texas, to reduce emissions of SO

and NO

that significantly contribute to downwind nonattainment of the 1997 NAAQS for fine particulate matter and ozone. See 70 FR 25152 (May 12, 2005).

70 FR 39104 (July 6, 2005).

See North Carolina

EPA,

531 F.3d 896 (D.C. Cir. 2008),

as modified,

550 F.3d 1176 (D.C. Cir. 2008).

76 FR 48207 (Aug. 8, 2011).

CSAPR was amended three times in 2011 and 2012 to add five states to the seasonal NO

program and to increase certain state budgets. 76 FR 80760 (December 27, 2011); 77 FR 10324 (February 21, 2012); 77 FR 34830 (June 12, 2012).

The ozone season for CSAPR purposes is May 1 through September 30.

Following issuance of CSAPR, the EPA determined that CSAPR would achieve greater reasonable progress towards improving visibility than would source-specific BART in CSAPR states (a determination often referred to as “CSAPR Better-than-BART”).

In the same action, we revised the Regional Haze Rule to allow states whose sources participate in the CSAPR trading programs to rely on such participation in lieu of requiring BART-eligible EGUs in the state to install BART controls as to the relevant pollutant.

77 FR 33641 (June 7, 2012). This determination was recently upheld by the D.C. Circuit.

See Util. Air Regulatory Grp.

EPA,

885 F.3d 714 (D.C. Cir. 2018).

In the same action that EPA determined that states could rely on CSAPR to address the BART requirements for EGUs, EPA issued a limited disapproval of a number of states' regional haze SIPs, including the 2009 Regional Haze SIP submittal from Texas, due to the states' reliance on CAIR, which had been replaced by CSAPR.

The EPA did not immediately promulgate a FIP to address those aspects of the 2009 Regional Haze SIP submittal subject to the limited disapproval of Texas' regional haze SIP to allow more time for the EPA to assess the remaining elements of the 2009 Texas SIP submittal.

Id.

In December 2014, we proposed an action to address the remaining regional haze obligations for Texas.

In that action, we proposed, among other things, to rely on our CSAPR FIP requiring Texas sources' participation in the CSAPR trading programs to satisfy the NO

and SO

BART requirements for Texas' BART-eligible EGUs; we also proposed to approve the portions of the 2009 Regional Haze SIP addressing PM BART requirements for the state's EGUs. Before that rule was finalized, however, the D.C. Circuit issued a decision on a number of challenges to CSAPR, denying most claims, but remanding the CSAPR SO

and/or seasonal NO

emissions budgets of several states to the EPA for reconsideration, including the Phase 2 SO

and seasonal NO

budgets for Texas.

Due to the uncertainty arising from the remand of Texas' CSAPR budgets, we did not finalize our December 2014 proposal to rely on CSAPR to satisfy the SO

and NO

BART requirements for Texas EGUs.

Additionally, because our proposed action on the PM BART provisions for EGUs was dependent on how SO

and NO

BART were satisfied, we did not take final action on the PM BART elements of the 2009 Texas' Regional Haze SIP.

In January 2016, we finalized action on the remaining aspects of the December 2014 proposal.

This final action disapproved, among other things, Texas' Reasonable Progress Goals for the Big Bend and Guadalupe Mountains Class I areas in Texas, Texas's reasonable progress analysis and Texas's long-term strategy. EPA promulgated a FIP establishing a new long-term strategy that consisted of SO

emission limits for 15 coal-fired EGUs at eight power plants. That rulemaking was judicially challenged, however, and in July 2016, the Fifth Circuit granted the petitioners' motion to stay the rule pending review.

On March 22, 2017, following the submittal of a request by the EPA for a voluntary remand of the parts of the rule under challenge, the Fifth Circuit Court of Appeals remanded the rule in its entirety.

79 FR 74818 (Dec. 16, 2014).

EME Homer City Generation,

L.P.

EPA

(EME Homer City II), 795 F.3d 118, 132 (D.C. Cir. 2015).

See

81 FR 296, 301-02 (Jan. 5, 2016).

Id.

81 FR 296 (Jan. 5, 2016).

Texas

EPA,

829 F.3d 405 (5th Cir. 2016).

Order,

Texas

EPA,

16-60118 (5th Cir. Mar. 22, 2017).

On October 26, 2016, the EPA finalized an update to CSAPR to address the interstate transport requirements of CAA section 110(a)(2)(D)(i)(I) with respect to the 2008 ozone NAAQS (CSAPR Update).

The EPA also responded to the D.C. Circuit's remand in

EME Homer City II

of certain CSAPR seasonal NO

budgets in that action. As to Texas, the EPA withdrew Texas' seasonal NO

budget finalized in CSAPR to address the 1997 ozone NAAQS. However, in that same action, the EPA promulgated a FIP with a revised seasonal NO

budget for Texas to address the 2008 ozone NAAQS.

Accordingly, Texas sources remain subject to CSAPR seasonal NO

requirements.

81 FR 74504 (Oct. 26, 2016).

Id.

74524-25.

On November 10, 2016, in response to the D.C. Circuit's remand of Texas's CSAPR SO

budget, we proposed to withdraw the FIP provisions that required EGUs in Texas to participate in the CSAPR trading programs for annual emissions of SO

and NO

We also proposed to reaffirm the EPA's 2012 analytical demonstration that CSAPR provides greater reasonable progress than BART, despite changes in CSAPR's geographic scope to address the

EME Homer City II

remand, including removal of Texas' EGUs from the CSAPR trading program for SO

emissions. On September 29, 2017, we finalized the withdrawal of the FIP provisions for annual emissions of SO

and NO

for EGUs in Texas

and affirmed our proposed finding that the EPA's 2012 analytical demonstration remains valid and that participation in the CSAPR trading programs as they now exist meets the Regional Haze Rule's criteria for an alternative to BART. (We refer to this as the “2017 CSAPR Better-than-BART affirmation finding” throughout this notice.) As discussed in Section I.D below, certain environmental organizations filed a petition for reconsideration of this finding in November 2017.

81 FR 78954 (Nov. 10, 2016).

82 FR 45481 (Sept. 29, 2017). As explained above, Texas sources continue to be subject to the CSAPR Update FIP, under which they participate in a CSAPR trading program for ozone season NO

On January 4, 2017, we proposed a FIP to address the EGU BART

requirements for Texas' EGUs. With respect to NO

, we proposed to replace the 2009 Regional Haze SIP's reliance on CAIR with reliance on our CSAPR FIP to address the NO

BART requirements for EGUs.

This portion of our proposal was based on the CSAPR Update and our separate November 10, 2016 proposed finding, described above, that the EPA's actions in response to the D.C. Circuit's remand would not adversely impact our 2012 demonstration that participation in the CSAPR trading programs meets the Regional Haze Rule's criteria for alternatives to BART. We noted that we could not finalize this portion of our proposed FIP to address the NO

BART requirements for EGUs unless and until we finalized our proposed finding that CSAPR was still better than BART.

(This predicate finding was finalized on September 29, 2017, as described above.)

82 FR 912, 914-15 (Jan. 4, 2017).

Id.

915.

With respect to SO

, our January 4, 2017 proposed action addressing the BART requirements for Texas EGUs acknowledged that because Texas sources would no longer be participating in the CSAPR program for SO

, Texas would no longer be eligible to rely on participation in CSAPR as an alternative to source-specific EGU BART for SO

under 40 CFR 51.308(e)(4). As a result, there were BART requirements that were left unfulfilled with respect to Texas's BART-eligible EGU emissions of SO

that would need to be fulfilled by either an approved SIP or an EPA-issued FIP that satisfied the BART requirements under 40 CFR 51.308(e)(1) or constituted a viable BART alternative under 40 CFR 51.308(e)(2) for those emissions. EPA proposed to satisfy these requirements through a BART FIP, entailing the identification of BART-eligible EGU sources, screening to identify which BART-eligible sources are “subject-to-BART” (

i.e.,

may reasonably be anticipated to cause or contribute to any impairment of visibility in any Class I area), and source-by-source determinations of SO

BART controls as appropriate. For those EGU sources we proposed to find subject to BART, we proposed to promulgate source-specific SO

requirements. We proposed SO

emission limits on 29 EGUs located at 14 facilities.

With respect to PM, in the January 2017 proposal, we proposed to disapprove the portion of the 2009 Regional Haze SIP that made BART determinations for PM from EGUs, on the grounds that the demonstration in the 2009 Texas Regional Haze SIP relied on underlying assumptions as to how the SO

and NO

BART requirements for EGUs were being met that were no longer valid with the proposed source-specific SO

requirements.

In place of these determinations, we proposed to promulgate source-specific PM BART requirements based on existing practices and control capabilities for those EGUs that we proposed to find subject to BART. Previously, we had proposed to approve the EGU BART determinations for PM in the 2009 Texas Regional Haze SIP, and this proposal had never been withdrawn.

At that time, CSAPR was an appropriate alternative for SO

and NO

BART for EGUs. The 2009 Texas Regional Haze SIP included a pollutant-specific screening analysis for PM to demonstrate that Texas EGUs were not subject to BART for PM. In a 2006 guidance document,

the EPA stated that pollutant-specific screening can be appropriate where a state is relying on a BART alternative to address both NO

and SO

BART. However, in the January 2017 proposal, we proposed to disapprove the PM BART determination since SO

BART was no longer addressed by a BART alternative. For coal-fired units, we proposed PM BART limits consistent with PM emission limits in the Mercury and Air Toxics Standards (MATS) rule; for gas-fired units, we proposed PM BART would be satisfied by making burning pipeline-quality gas federally enforceable; and for oil-fired units, we proposed that fuel-content requirements for SO

BART would also satisfy PM BART.

In the 2009 Regional Haze Texas SIP, for EGU BART, Texas' BART-eligible EGUs' emissions of both SO

and NO

were covered by participation in trading programs, which allowed Texas to conduct a screening analysis of the visibility impacts from PM emissions from such units in isolation. However, modeling on a pollutant-specific basis for PM is appropriate only in the narrow circumstance of reliance on BART alternatives to satisfy both NO

and SO

BART. Due to the complexity and nonlinear nature of atmospheric chemistry and chemical transformation among pollutants, EPA has not recommended performing modeling on a pollutant-specific basis to determine whether a source is subject to BART, except in the unique situation described above. See discussion in Memorandum from Joseph Paisie to Kay Prince, “Regional Haze Regulations and Guidelines for Best Available Retrofit Technology (BART) Determinations,” July 19, 2006.

79 FR 74817, 74853-54 (Dec. 16, 2014).

See

discussion in Memorandum from Joseph Paisie to Kay Prince, “Regional Haze Regulations and Guidelines for Best Available Retrofit Technology (BART) Determinations,” July 19, 2006.

82 FR 936.

In our final action addressing BART for Texas published on October 17, 2017, we finalized our January 2017 proposed determination that Texas' participation in CSAPR's trading program for ozone-season NO

qualifies as an alternative to source-specific NO

BART. We determined that the SO

BART requirements for all BART-eligible coal-fired units and a number of BART-eligible gas- or gas/fuel oil-fired units are satisfied by a BART alternative for SO

—specifically, a new intrastate trading program that we established addressing emissions of SO

from certain EGUs in Texas. The remaining BART-eligible EGUs not covered by the SO

BART alternative were previously determined to be not subject to BART based on screening methods using model plants and CALPUFF

modeling as described in our proposed rule and BART Screening technical support document (TSD).

Finally, because both NO

and SO

were now being addressed by a BART alternative, we approved the 2009 Regional Haze SIP's determination, based on a pollutant-specific screening analysis, that Texas' EGUs are not subject to BART for PM. With respect to visibility transport obligations, we determined that the BART alternative to address SO

and Texas sources' participation in CSAPR's trading program for ozone-season NO

to address NO

BART at Texas' EGUs fully addresses Texas' obligations for six NAAQS.

CALPUFF (California Puff Model) is a multi-layer, multi-species non-steady-state puff dispersion modeling system that simulates the effects of time- and space-varying meteorological conditions on pollutant transport, transformation, and removal. CALPUFF is intended for use in assessing pollutant impacts at distances greater than 50 kilometers to several hundreds of kilometers. It includes algorithms for calculating visibility effects from long range transport of pollutants and their impacts on Federal Class I areas. EPA previously approved the use of the CALPUFF model in BART related analyses (40 CFR part 51 Regional Haze Regulations and Guidelines for Best Available Retrofit Technology (BART) Determinations; Final Rule; 70 FR 39104—39172; July 6, 2005). For instructions on how to download the appropriate model code and documentation that are available from Exponent (Model Developer/Owner) at no cost for download, see EPA's website:

https://www.epa.gov/scram/air-quality-dispersion-modeling-preferred-and-recommended-models#calpuff.

See document at docket identification number EPA-R06-OAR-2016-0611-0005.

D. EPA's Denial of the Petition for Reconsideration of CSAPR as a BART Alternative and its Relationship to This Final Action

As explained in the section above, on September 29, 2017, we finalized the withdrawal of the CSAPR FIP provisions for annual emissions of SO

and NO

for EGUs in Texas.

We also finalized our November 2016 proposed finding affirming that the EPA's 2012 analytical demonstration remains valid and that participation in the CSAPR

trading programs continues to meet the Regional Haze Rule's criteria for an alternative to BART. In our October 17, 2017, action promulgating the Texas intrastate SO

trading program, we relied on that determination and the fact that the Texas program would achieve SO

emission reductions similar to what CSAPR would have achieved in Texas to conclude that the Texas program satisfies the requirements for a BART alternative under 40 CFR 51.308(e)(2).

82 FR 45481 (Sept. 29, 2017).

82 FR 48324, 48330, 48357 (Oct. 17, 2017).

On November 28, 2017, Sierra Club and the National Parks Conservation Association submitted a petition for partial reconsideration of our September 2017 finding affirming that CSAPR continues to satisfy requirements as a BART alternative.

Among other things, these petitioners alleged that our analysis was materially flawed and must be reconsidered to the extent that it rested on an assumption that EGU BART sources in Texas would be subject to source-specific BART controls for SO

rather than the intrastate SO

trading program.

Petitioners alleged in particular that EPA's emissions shifting analysis accounted for potential increases in emissions in remaining CSAPR states of between 22,300 to 53,000 tons by assuming these emissions would be offset by an estimated 127,300 tons of SO

emission reductions in Texas due to source-specific BART controls.

However, these petitioners alleged that this assumption was proven false when EPA promulgated the Texas intrastate trading program rather than source-specific BART.

On this basis, among other things, petitioners sought mandatory reconsideration of the September 29, 2017 action under CAA section 307(d)(7)(B).

Sierra Club and National Parks Conservation Association, Petition for Partial Reconsideration of Interstate Transport of Fine Particulate Matter: Revision of Federal Implementation Plan Requirements for Texas; Final Rule; 82 FR 45,481 (Sept. 29, 2017); EPA-HQ-OAR-2016-0598; FRL-9968-46-OAR (Nov. 28, 2017).

See, e.g., id.

6 (citing 82 FR 45494).

Id.

13-14 (citing 82 FR 45493-94).

Id.

In a separate action, EPA is denying this petition for reconsideration.

That action, and the basis for that action as it relates to the determination that CSAPR remains a valid BART alternative, are beyond the scope of this action. With the denial of the petition for reconsideration of our 2017 affirmation in that separate action, EPA has made a final determination that the objections raised by the petitioners on the 2017 affirmation of CSAPR as a BART alternative are not of central relevance.

As such, there is no longer any outstanding question whether CSAPR is a satisfactory BART alternative. Therefore, as discussed in Section III.A.2 below, in this action EPA is finalizing its affirmation that it may rely on the CSAPR BART-alternative analysis as a part of its “clear weight of the evidence” demonstration that the Texas intrastate trading program achieves greater reasonable progress than BART.

See U.S. EPA, Denial of Petition for Partial Reconsideration of “Interstate Transport of Fine Particulate Matter: Revision of Federal Implementation Plan Requirements for Texas” (82 FR 45481; Sept. 29, 2017) (EPA-HQ-OAR-2016-0598). A copy of the denial of petition letter sent to the petitioners and the denial of petition Notice of Availability (NOA) published in the

Federal Register

are available at Docket ID EPA-HQ-OAR-2016-0598.

Id.

II. Our Proposed Actions

A. Proposed Rule Affirming the October 2017 Final Action

On December 15, 2017, EPA received a petition for reconsideration of the October 2017 final rule addressing BART in Texas requesting that the Administrator reconsider certain aspects of the FIP related to the intrastate trading program promulgated to address the SO

BART requirement for Texas EGUs. In our April 30, 2018 letter in response to that petition, we stated that we believed that certain aspects of the federal plan could benefit from further public comment. Accordingly, in a notice published on August 27, 2018, we proposed to affirm certain aspects of our SIP approval and of the FIP, and we provided the public with an opportunity to comment on those aspects, as well as other specified related issues.

Specifically, we took comment on the following elements, which effectively covered all of petitioners' central objections: (1) The proposal to affirm the October 2017 FIP establishing an intrastate trading program addressing emissions of SO

from certain EGUs in Texas as a BART alternative and the determination that this program satisfies the requirements for BART alternatives; (2) the proposal to affirm the finding that the BART alternatives in the October 2017 rulemaking to address SO

and NO

BART at Texas' EGUs result in emission reductions adequate to satisfy the requirements of CAA section 110(a)(2)(D)(i)(II) with respect to visibility for the following NAAQS: 1997 8-hour ozone, 1997 PM

2.5

(annual and 24-hour), 2006 PM

2.5

(24-hour), 2008 8-hour ozone, 2010 1-hour NO

, and 2010 1-hour SO

NAAQS; and (3) the proposal to affirm our October 2017 approval of Texas' SIP determination that no sources are subject to BART for PM. The August 2018 affirmation proposed rule also solicited comment on the specific issues of whether recent shutdowns of sources included in the trading program and the merger of two owners of affected EGUs should impact the allocation methodology for certain SO

allowances. In addition to soliciting comment on the above elements and aforementioned specific issues, the August 2018 affirmation proposal also invited comment on additional issues that could inform our decision making with regard to the SO

BART obligations for Texas. First, we sought input on whether SO

BART would be better addressed through a source-by-source approach (source-specific BART), the October 2017 SO

trading program, or some other appropriate BART alternative. Second, EPA requested comment on whether a SIP-based program would serve Texas better than a FIP. Third, we requested public input on whether and how the SO

trading program finalized in the October 2017 final rule addresses the long-term strategy and reasonable progress requirements for Texas.

83 FR 43586.

B. Supplemental Notice of Proposed Rulemaking

In response to certain comments received during the public comment period for the August 2018 proposal to affirm the October 2017 FIP, we proposed revisions to the Texas SO

Trading Program in a supplemental proposal published on November 14, 2019.

In the supplemental proposal, we proposed to make four sets of amendments to the Texas SO

Trading Program: (1) The addition of assurance provisions; (2) revisions to the Supplemental Allowance Pool allocation provisions; (3) termination of the opt-in provisions; and (4) revision of the allowance recordation provisions.

84 FR 61850.

(1) Addition of Assurance Provisions.

The Texas SO

Trading Program, as promulgated in October 2017, did not include an assurance level. In contrast to CSAPR, the Texas SO

Trading Program does not allow for sources to purchase allowances from sources in other states. Therefore, the number of allowances available to the Texas sources under the SO

trading program, as promulgated in October 2017, is limited by the total number of allowances allocated under the program. While this limits the average annual emissions under the program, we recognized that the potential use of

banked allowances and allowances allocated from the Supplemental Allowance Pool could allow for potentially significant year-to-year variability in emissions. In each of the CSAPR trading programs, EPA set an assurance level for each state in order to ensure that, despite the broad, interstate trading region, emissions reductions would be achieved appropriately in a geographically distributed way commensurate with states' “good neighbor” obligations as determined by EPA through its analysis under CAA section 110(a)(2)(D)(i)(I).

In order to maintain consistency with the CSAPR program and to provide additional support for our determination that SO

emissions under the Texas SO

Trading Program will remain below the requisite level on an annual basis, the EPA proposed to add assurance provisions to the Texas SO

Trading Program in the November 2019 supplemental proposal, setting the assurance level by relying on the same analysis and methodology that were used to set assurance levels in the original CSAPR rulemaking while accounting for the fact that the Texas SO

Trading Program is intrastate-only (

i.e.,

does not permit interstate trading). EPA proposed to set an assurance level for the Texas SO

Trading Program of 255,081 tons and proposed to impose a penalty surrender ratio of three allowances for each ton of emissions in any year in excess of the 255,081-ton assurance level.

76 FR 48208, 48265-66 (Aug. 8, 2011).

EPA further proposed that this assurance level would strengthen our determination that the Texas program compares favorably to CSAPR in terms of stringency. EPA noted that its previous CSAPR Better-than-BART analysis relied on assuming annual SO

emissions from Texas EGUs of 317,100 tons. For certain EGUs not covered by the Texas program but that would have been subject to CSAPR, EPA made a conservative estimate of 35,000 tons of annual emissions. Adding this to the 255,081 ton assurance level produced an upper bound estimate of 290,081 tons of emissions, which EPA noted is below the 317,100 ton assumption used for CSAPR.

84 FR 61850, 61853.

(2)

Revisions to the Supplemental Allowance Pool Allocation Provisions.

40 CFR 97.912 of the existing Texas SO

Trading Program regulations establishes how allowances are allocated from the Supplemental Allowance Pool to sources (collections of participating units at a facility) that have reported total emissions for that control period exceeding the total amounts of allowances allocated to the participating units at the source for that control period (before any allocation from the Supplemental Allowance Pool). While all other sources required to participate in the trading program have flexibility to transfer allowances among multiple participating units under the same owner/operator when planning operations, Coleto Creek consists of only one coal-fired unit, and at the time of our October 2017 FIP, was the only coal-fired unit in Texas owned and operated by Dynegy. To provide this source additional flexibility, in the trading program as it was promulgated in October 2017, Coleto Creek was allocated its maximum supplemental allocation from the Supplemental Allowance Pool as long as there are sufficient allowances in the Supplemental Allowance Pool available for allocation, and its actual allocation would not be reduced in proportion with any reductions made to the supplemental allocations to other sources. In our August 2018 proposal, we noted that Dynegy has merged with Vistra, which owns other units that are subject to the trading program. In the August 2018 proposal, we solicited comment on eliminating this additional flexibility for Coleto Creek in light of the recent change in ownership, and we received no adverse comments on such a change. Therefore, in the November 2019 supplemental proposal, we proposed to make this change to the regulations.

Id.

61855.

Some comments on our August 2018 proposal also expressed the view that it would be more equitable to make allocations from the Supplemental Allowance Pool in proportion to each owner's total emissions in excess of the owner's total base allowance allocations instead of in proportion to each individual source's emissions in excess of the individual source's base allowance allocation. In the November 2019 supplemental proposal, EPA proposed to agree that this change would be equitable and noted that it would also be consistent with the rationale for proposing to eliminate the special flexibility in the existing regulations for Coleto Creek. Accordingly, EPA proposed to amend the Supplemental Allowance Pool allocation provisions to reflect this further change in the allocation methodology. EPA specifically requested comment on the proposed revisions to the Supplemental Allowance Pool allocation provisions.

Id.

(3) Termination of the Opt-in Provisions.

In response to a comment on the August 2018 proposal that asserted that the opt-in provisions weakened the functional equivalence of the Texas SO

Trading Program to CSAPR, EPA proposed to terminate the opt-in provisions in the Texas SO

Trading Program in the November 2019 supplemental proposal. We noted that our proposal to terminate the opt-in provisions is consistent with the supplemental proposal's overall objective of strengthening our finding that the Texas SO

Trading Program will result in SO

emission levels from Texas EGUs that are similar to or less than the emission levels from Texas EGUs that would have been realized from participation in the SO

trading program under CSAPR. EPA also specifically requested comment on the proposed termination of the opt-in provisions and solicited comment as to what other relevant provisions in the Texas SO

Trading Program may offset the commenter's concerns with the opt-in provisions.

Id.

61855-56.

(4)

Revision of the Allowance Recordation Provisions.

In the November 2019 supplemental proposal, we also proposed to amend the language in the recordation provisions such that the Administrator can delay recordation of Texas SO

Trading Program allowances for the specified control periods only in the event that Texas submits a SIP revision

and EPA takes final action to approve it.

Under 40 CFR 97.921(a) of the Texas SO

Trading Program regulations as originally promulgated in October 2017, “[t]he Administrator may delay recordation of Texas SO

Trading Program allowances for the specified control periods if the State of Texas submits a SIP revision before the recordation deadline.” Similarly, under § 97.921(b), “[t]he Administrator may delay recordation of the Texas SO

Trading Program allowances for the applicable control periods if the State of Texas submits a SIP revision by May 1 of the year of the applicable recordation deadline under this paragraph.” The revisions we proposed in the November 2019 supplemental proposal are necessary to ensure that the program remains fully operational unless it is replaced by a SIP revision that is approved by EPA as meeting the SO

BART requirements for the covered units. EPA specifically requested comment on the proposed revisions to the allowance recordation provisions.

Id.

61856.

Finally, the EPA noted that the proposed revisions to the Texas SO

Trading Program would strengthen the program in a manner that provides further support that it will achieve greater emission reductions than Texas had agreed to in consultations with other states in setting reasonable progress goals for Class I areas outside Texas for the first implementation period of the Regional Haze Rule. As a result, the EPA believed the proposed changes strengthened its conclusion that the Texas trading program, in conjunction with Texas' participation in the CSAPR ozone-season NO

trading program, satisfies interstate visibility transport obligations under section 110(a)(2)(D)(i)(II) as to the six NAAQS identified above. The EPA solicited comment on this relationship.

Id.

61856-57.

III. Summary of Our Final Decisions

A. Regional Haze

After carefully considering the comments we received on our August 27, 2018 proposed rule and our November 14, 2019 supplemental proposal, we are taking final action to affirm our determination that our October 2017 FIP that established an intrastate trading program addressing emissions of SO

from certain EGUs in Texas, as amended in this final action as described in section III.A.1 below, satisfies the Regional Haze Rule requirements for a BART alternative under 40 CFR 51.308(e)(2). We are taking final action to affirm our determination that the BART alternatives addressing SO

BART, as amended in this final action, and NO

BART at Texas' EGUs are adequate to satisfy the interstate visibility transport requirements for six NAAQS. We are also taking final action to affirm our October 2017 approval of Texas' SIP determination that no sources are subject to BART for PM. A discussion of the amendments to the Texas SO

Trading Program we are finalizing in today's final action and explanation of how the trading program satisfies the regulatory requirements for BART alternatives are discussed below in sections III.A.1 and III.A.2, respectively. This final rule is promulgated pursuant to CAA section 307(d). This includes our affirmation of the several aspects of the FIP promulgating the Texas SO

Trading Program, amendments to certain provisions of the FIP, which are 307(d)-listed actions,

see

307(d)(1)(B). In addition, EPA exercises its discretion under 307(d)(1)(V) to treat the affirmation of our approval of parts of the 2009 Texas Regional Haze SIP as also an action subject to 307(d) requirements and procedural protections.

1. Amendments to the Texas SO

Trading Program

In response to certain comments we received during the public comment period for the August 2018 proposal to affirm the October 2017 FIP, we proposed revisions to the Texas SO

Trading Program in a supplemental proposal published on November 14, 2019.

We proposed to make four sets of amendments to the Texas SO

Trading Program, with certain modifications. We are also correcting a 2-ton error we made in the allowance allocation for El Paso Electric's Newman Plant due to a unit-identification error, thereby increasing the trading program budget from 238,393 tons to 238,395 tons. The amendments we are finalizing in today's action strengthen the Texas SO

Trading Program and increase its consistency with CSAPR. These amendments are discussed in the paragraphs that follow.

84 FR 61850 (Nov. 14, 2019).

Addition of Assurance Provisions.

In order to maintain consistency with the CSAPR program and to provide additional support for our determination that SO

emissions under the Texas SO

Trading Program will remain below the requisite level on an annual basis, we are taking final action to add assurance provisions to the Texas SO

Trading Program. To set the assurance level, we are relying on the same analysis and methodology that were used to set assurance levels in the original CSAPR rulemaking while accounting for the fact that the Texas SO

Trading Program is intrastate-only (

i.e.,

does not permit interstate trading). As discussed in our supplemental proposal, EPA determined in the CSAPR rulemaking that, on a state-specific basis for Texas, the statistical percentage measure representing the maximum expected one-year deviation from the state's average annual fossil fuel consumption for electricity generation was seven percent.

Applying that same percentage to the current Texas SO

Trading Program budget, EPA is finalizing a variability limit for Texas at 16,688 tons, which is seven percent of the corrected trading budget of 238,395 tons. The assurance level we are finalizing is the sum of the budget and the variability limit, or 255,083 tons, and we are making this assurance level effective beginning with the 2021 compliance period and for each period thereafter. We are also taking final action to amend the Texas SO

Trading Program's regulations to impose a penalty surrender ratio of three allowances for each ton of emissions in any year in excess of the 255,083-ton assurance level. We are taking final action to impose the penalty proportionately to emissions from those groups of sources represented by a common designated representative that emit in excess of the groups' annual allocations of allowances. Thus, if the total emissions of all sources in the program in any year exceed the annual program budget by more than a variability limit of 16,688 tons, the emissions over the assurance level will trigger a requirement for some sources to surrender three allowances for each ton of emissions over the assurance level, providing a strong disincentive against emissions exceeding the assurance level.

Id.

61853.

We are taking final action to add new provisions at multiple locations in the Texas SO

Trading Program regulations at 40 CFR part 97, subpart FFFFF (40 CFR 97.901 through 97.935) to add these assurance provisions. In § 97.902, new definitions of several terms used in the assurance provisions (“assurance account,” “common designated representative,” “common designated representative's assurance level,” and “common designated representative's share”) are being added in this final action. New § 97.906(c)(2) and(c)(3)(ii) set forth the central requirement of the assurance provisions—namely, that if SO

emissions from all covered sources in 2021 or any subsequent year collectively exceed the program's assurance level, then the owners and operators of the groups of sources determined to be responsible for the collective exceedance would be required to surrender allowances totaling twice the amount of the exceedance by a specified deadline, in addition to the allowances surrendered to account for the sources' total emissions. New § 97.910(b) and (c) establish the variability limit that would be added to the trading program budget to determine the amount of the assurance level. New § 97.920(b) provides for the establishment of assurance accounts, when appropriate, to hold the additional allowances to be surrendered. New § 97.925 sets forth

additional procedures for EPA's administration of and sources' compliance with the assurance provisions. In addition to adding the provisions discussed above, in §§ 97.906 and 97.920, we are also taking final action to renumber and update internal cross-references to reflect the added and renumbered paragraphs. Finally, we are making revisions to existing language at §§ 97.902 (definitions of “general account” and “Texas SO

Trading Program allowance deduction”), 97.906(b)(2), 97.913(c), 97.926(b), 97.928(b), and renumbered 97.906(c)(4)(ii) to integrate the new assurance provisions with various existing provisions of the Texas program regulations.

As discussed in our November 2019 supplemental proposal, in addition to being consistent with the original CSAPR methodology for setting assurance levels, an assurance level set at 255,083 tons is appropriate for the Texas SO

Trading Program because it provides further support for our October 2017 finding that the Texas SO

Trading Program will result in SO

emission levels from Texas EGUs that are similar to or less than the emission levels from Texas EGUs that would have been realized from participation in the SO

trading program under CSAPR. Additionally, at an assurance level of 255,083 tons of emissions annually, EPA has high confidence that emissions will be below the amount assumed in the BART-alternative sensitivity analysis utilized for the 2012 CSAPR Better-than-BART determination (

i.e.,

317,100 tons), and thus visibility levels at Class I areas impacted by sources in Texas are anticipated to be at least as good as the levels projected in the 2012 analysis that assumed Texas would be in the larger CSAPR SO

trading program.

Id.

The language of the revisions to the Texas SO

Trading Program regulations we are finalizing in this final rulemaking would generally parallel the analogous language from the CSAPR regulations at 40 CFR part 97, subparts AAAAA through EEEEE, streamlined to reflect the Texas program's narrower applicability (

i.e.,

specific units located only in Texas, excluding any new units built either in Texas or in Indian country within Texas' borders). The only substantive differences from the analogous CSAPR assurance provisions concern the approach used to impute allocation amounts—for use in apportioning responsibility for any collective exceedance of the assurance level—to any units that do not receive actual allowance allocations from the trading program budget. Under CSAPR, the only units potentially in this situation are new units that do not receive allowance allocations from the CSAPR new unit set-asides. The CSAPR regulations include a methodology for computing unit-specific imputed allocation amounts based on several data elements relating to the new units' design and potential operation.

In contrast, under the Texas SO

Trading Program, the only units potentially in this situation would be existing units that have ceased operation for an extended period, thereby losing their allocations from the trading budget under § 97.911(a), and that subsequently resume operation.

Because the Texas SO

Trading Program regulations already identify the unit-specific allowance allocations that these units would formerly have received from the trading budget, the Texas SO

Trading Program assurance provisions we are finalizing in this final rulemaking would use these previously established amounts for purposes of assurance provision calculations instead of requiring new imputed allocation amounts to be computed according to the more complex methodology in the CSAPR assurance provisions. The simpler approach we are finalizing for the Texas SO

Trading Program assurance provisions appears at paragraph (2) of the new definition of “common designated representative's assurance level” we are finalizing in § 97.902.

See, e.g.,

paragraph (3) of the definition of “common designated representative's share” at 40 CFR 97.702.

Although the owners and operators of a unit in this situation might receive an allocation of allowances from the Supplemental Allowance Pool under § 97.912 based in part on the unit's emissions following resumption of operations, under the Texas program assurance provisions, any allocations of allowances from the Supplemental Allowance Pool would not be considered when apportioning responsibility for a collective exceedance of the assurance level.

Revisions to the Supplemental Allowance Pool Allocation Provisions.

All sources required to participate in the Texas SO

Trading Program have the flexibility to transfer allowances among multiple participating units under the same owner/operator when planning operations. As discussed in section II.B of this final action, the October 2017 final rule included additional flexibility to transfer allowances for Coleto Creek, but given the subsequent merger of Dynegy with Vistra, which owns other units that are subject to the trading program, Coleto Creek now has the same flexibility as other sources required to participate in the trading program to transfer allowances among multiple participating units under the same ownership when planning operations. In light of this, we are taking final action to eliminate the additional flexibility originally offered under the trading program for Coleto Creek.

We are also finalizing amendments to the methodology for allocating allowances from the Supplemental Allowance Pool such that allowance allocations are in proportion to each owner's total emissions in excess of the owner's total base allowance allocations instead of in proportion to each individual source's emissions in excess of the individual source's base allowance allocation. Comments we received on our August 2018 proposal and our November 2019 supplemental proposal generally indicated support for this change.

We find that this change would make the methodology for allocating allowances more equitable and is also consistent with the rationale for eliminating the special flexibility in the existing regulations for Coleto Creek. For consistency with the new variability limit of 16,688 tons, we are also reducing the number of allowances that can be allocated from the Supplemental Allowance Pool in any year to 16,688 tons plus any allowances added to the pool in that year from retired units. The effect of this revision is that the total number of allowances that can be issued in any year, considering both initial allocations and allowances issued from the Supplemental Allowance Pool, will not exceed the program's assurance level of 255,083 tons. This revision to the Supplemental Allowance Pool provisions is consistent with and reinforces the disincentive created by the assurance provisions against emissions exceeding the assurance level.

Supportive comments were submitted by most of the sources covered by the Texas SO

Trading Program, except for LCRA who did not specifically comment on the reduction in the number of allowances that can be allocated from the Supplemental Allowance Pool. Supportive comments can be found in the docket for this action at Document IDs EPA-R06-OAR-2016-0611-0157, EPA-R06-OAR-2016-0611-0127, EPA-R06-OAR-2016-0611-0163, EPA-R06-OAR-2016-0611-0156.

To implement these modifications to the Supplemental Allowance Pool, we are finalizing several revisions to §§ 97.911 and 97.912. In § 97.912, we are editing paragraph (a) to limit applicability of the current allocation methodology to the 2019 and 2020 control periods, and we are adding a new paragraph (b) that sets forth the revised allocation methodology for the control periods in 2021 and subsequent years. We are also renumbering two

existing paragraphs of the section to accommodate the new paragraph (b) and are updating internal cross-references to reflect the renumbering and to integrate the provisions of the revised allocation methodology with other existing provisions. We are adding new § 97.912(b)(1) that addresses the revised allocation methodology and sets forth a procedure for assigning units into groups under common ownership called “affiliated ownership groups.” Under the new procedure, the group assignments will remain constant unless and until revised by EPA to reflect an ownership transfer. The initial group assignments for all covered units are specified in a new column that we are adding to the existing allowance allocation table in § 97.911(a)(1). Renumbered § 97.912(d) is revised to reduce the cap on the number of allowances that can be allocated from the Supplemental Allowance Pool for any given control period starting in 2021 to 16,688 tons plus any allowances added to the pool in that year from retired units. Existing § 97.912(a)(3)(ii)(B) is revised to add the same procedure included in new § 97.912(b)(4)(i)(C) for adjusting allocation amounts up or down by one allowance as needed to address rounding errors. Finally, we are finalizing non-substantive revisions to § 97.911(a)(2) and (c)(5) that clarify that allowances from the trading budget that are transferred to the Supplemental Allowance Pool are not necessarily “allocated under” § 97.912, but instead are made available for “potential allocation in accordance with” § 97.912.

Termination of Opt-in Provisions.

To address concerns that the opt-in provisions weakened the functional equivalence of the Texas SO

Trading Program to CSAPR and to be consistent with EPA's determination not to include opt-in provisions in the CSAPR trading programs on the basis that opt-in provisions would undermine achievement of the CSAPR program's emission reduction objectives, we are taking final action to terminate the opt-in provisions in the Texas SO

Trading Program. As we discuss in the response to comments below, we find that this termination of the opt-in provisions will address concerns about the difficulty of distinguishing new emission reductions from reductions that opt-in sources would have made anyway, and the consequent likelihood that the amounts of allowances allocated to the sources would exceed their starting emissions levels and thus introduce “extra” allowances available to be traded to other sources. Our final action to terminate the opt-in provisions strengthens our finding that the Texas SO

Trading Program will result in SO

emission levels from Texas EGUs that are similar to or less than the emission levels from Texas EGUs that would have been realized from participation in the SO

trading program under CSAPR.

Because no units opted into the Texas SO

Trading Program for the 2019 or 2020 control periods and opting in is not allowed for any future control period, we are implementing our final action to terminate the opt-in provisions by removing the provisions from the regulations in their entirety. Specifically, §§ 97.904(b), 97.911(b), and 97.921(d), which concerned the procedure for opting in, allowance allocations for opt-in units, and recordation for opt-in units, respectively, are being removed. In addition, conforming revisions to reflect removal of the opt-in provisions are being made to the existing provisions at §§ 97.911(c)(5), 97.915(d), 97.930(b), 97.934(d)(1), and renumbered § 97.906(c)(3)(i).

Revision of Allowance Recordation Provisions.

We are taking final action to condition any exceptions to scheduled allowance recordation activities on Texas' submission

and

EPA's approval of a SIP revision, rather than just on Texas' submission of a SIP revision. This revision will ensure that the program remains fully operational unless it is replaced by a SIP revision that is approved by EPA as meeting the SO

BART requirements for the covered units. To implement our final revision to the allowance recordation provisions, we are amending three paragraphs of § 97.921. In § 97.921(a), we are deleting without replacement the language providing for a possible delay of recordation activities scheduled for November 1, 2018; the language is moot because the recordation date has already passed. In § 97.921(b), which governs future recordation of allowances allocated from the trading budget under § 97.911(a), we are revising the existing language to provide that future recordation activities will take place as scheduled unless provided otherwise in EPA's approval of a SIP revision replacing the provisions of subpart FFFFF. We are also adding the same revised condition to § 97.921(c), which governs future recordation of allowances allocated from the Supplemental Allowance Pool under § 97.912.

Error Correction Adjusting the Allocation for El Paso Electric's Newman Plant.

Our last amendment to the Texas SO

Trading Program regulations in this action corrects a small error in the allowance allocations and budget established in the October 2017 FIP. In our October 2017 action, we determined that several units at El Paso Electric's Newman plant (ORIS 3456) should be included in the Texas SO

Trading Program, including “Newman unit 4.” This “unit” is actually a multi-unit combined cycle system consisting of two gas- and oil-fired combustion turbine units serving a common steam turbine-generator. The combustion turbine units are identified in the databases used for the CSAPR SO

program as “Newman unit **4” and “Newman unit **5.” Both of these combustion turbine units are BART-eligible and both are properly included in the Texas SO

Trading Program pursuant to the evaluation of “Newman unit 4” set forth in our October 2017 action.

However, in establishing the allowance allocations and budgets in our October 2017 action, while we correctly accounted for the 2-ton CSAPR allocation to Newman unit **4, we mistakenly omitted the 2-ton CSAPR allocation to Newman unit **5. We are correcting our omission in this action. Specifically, in Table 1 in § 97.911(a)(1), we are relabeling the existing entry for “Newman unit 4” as “Newman unit **4” and adding a new entry for “Newman unit **5” with an additional 2-ton allocation, and in § 97.910(a)(1), we are increasing the Texas SO

Trading Program budget by 2 tons to 238,395 tons.

We find that these corrections are entirely consistent with the methodology and rationale we set forth when establishing the allocations and budget in our October 2017 action. Because the otherwise applicable recordation deadlines for the allowances allocated to Newman unit **5 for the control periods from 2019 through 2024 will have already passed by the effective date of this action, new § 97.921(f) establishes December 31, 2020 as the delayed recordation deadline for these allocations. Finally, language is added to § 97.912(a)(1) and (2) clarifying that allocations under § 97.911 are not considered in determining a source's eligibility to receive allocations from the Supplemental Allowance Pool unless the allocations have actually been recorded in the source's compliance account under § 97.921.

See 82 FR at 48354-57, where we identify “Newman unit 4” as a BART-eligible source and discuss our evaluation for determining the inclusion of units in the Texas SO

Trading Program.

Both Newman unit **4 and Newman unit **5 have participated in the Texas SO

Trading Program since January 1, 2019. El Paso Electric has monitored and reported the SO

emissions for both units under the program.

2. Analysis of Texas SO

Trading Program as a BART Alternative

We are taking final action to affirm our October 17, 2017 final action promulgating the Texas SO

Trading Program under 40 CFR 52.2312 and subpart FFFFF of part 97 as a BART alternative, with the amendments discussed in Section III.A.1. We are affirming our determination that the Texas SO

Trading Program, including the addition of the assurance provisions and other amendments to the program we are finalizing in this action, will result in future EGU emissions in Texas that will be less than the SO

emission levels used in the 2012 Better-than-BART demonstration for Texas EGU emissions assuming CSAPR participation.

Additionally, the aggregate visibility impact from Texas EGU emissions under the trading program will be similar to or less than what would have been realized from Texas participation in the CSAPR SO

trading program.

Further, on the basis of EPA's denial of a petition for reconsideration of the 2017 CSAPR Better-than-BART affirmation finding in a separate action,

EPA can now affirm that it has fully accounted for the stringency of the Texas program in the CSAPR Better-than-BART analysis (including accounting for the effects of Texas no longer being a part of the interstate trading region of CSAPR). We are taking final action to affirm our determination that the Texas SO

Trading Program satisfies the Regional Haze Rule requirements for BART alternatives, and therefore satisfies the SO

BART requirements for the BART-eligible coal-fired EGUs and gas- and gas/fuel oil-fired EGUs identified in the table below.

83 FR 43586, 43591 (Aug. 27, 2018).

Id.

43592.

Federal Register

are available at Docket ID EPA-HQ-OAR-2016-0598.

Table 1—Texas EGUs Subject to the FIP SO

Trading Program

Owner/operator

Units

BART-eligible

AEP

Welsh Power Plant Unit 1

Yes.

Welsh Power Plant Unit 2

Yes.

Welsh Power Plant Unit 3

No.

H W Pirkey Power Plant Unit 1

No.

Wilkes Unit 1 †

Yes.

Wilkes Unit 2 †

Yes.

Wilkes Unit 3 †

Yes.

CPS Energy

JT Deely Unit 1

Yes.

JT Deely Unit 2

Yes.

Sommers Unit 1 †

Yes.

Sommers Unit 2 †

Yes.

LCRA

Fayette/Sam Seymour Unit 1

Yes.

Fayette/Sam Seymour Unit 2

Yes.

Vistra

Big Brown Unit 1

Yes.

Big Brown Unit 2

Yes.

Coleto Creek Unit 1

Yes.

Martin Lake Unit 1

Yes.

Martin Lake Unit 2

Yes.

Martin Lake Unit 3

Yes.

Monticello Unit 1

Yes.

Monticello Unit 2

Yes.

Monticello Unit 3

Yes.

Sandow Unit 4

No.

Stryker Unit ST2 †

Yes.

Graham Unit 2 †

Yes.

NRG

Limestone Unit 1

No.

Limestone Unit 2

No.

WA Parish Unit WAP4 †

Yes.

WA Parish Unit WAP5

Yes.

WA Parish Unit WAP6

Yes.

WA Parish Unit WAP7

No.

Xcel

Tolk Station Unit 171B

No.

Tolk Station Unit 172B

No.

Harrington Unit 061B

Yes.

Harrington Unit 062B

Yes.

Harrington Unit 063B

No.

El Paso Electric

Newman Unit 2†

Yes.

Newman Unit 3 †

Yes.

Newman Unit **4 †

Yes.

Newman Unit **5 †

Yes.

† Gas-fired or gas/fuel oil-fired units.

Under 40 CFR 51.308(e)(2), a State may opt to implement or require participation in an emissions trading program or other alternative measure rather than to require sources subject to BART to install, operate, and maintain BART. Among other things, such an emissions trading program or other alternative measure must achieve greater reasonable progress than would be achieved through the installation and operation of BART. In the paragraphs

that follow, we summarize the BART alternative requirements under § 51.308(e)(2) and explain how the Texas SO

Trading Program satisfies each requirement.

Section 51.308(e)(2)(i) requires a demonstration that the emissions trading program or other alternative measure will achieve greater reasonable progress than would have resulted from the installation and operation of BART at all sources subject to BART in the State and covered by the alternative program. This demonstration must be based on the criteria listed under § 51.308(e)(2)(i)(A) through (E).

Section 51.308(e)(2)(i)(A).

As part of the demonstration that the emissions trading program or other alternative measure will achieve greater reasonable progress than BART, the Regional Haze Rule requires that a list of all BART-eligible sources within the state be provided. In our October 2017 final action, we finalized our list of all BART-eligible sources in Texas,

which serves to satisfy 51.308(e)(2)(i)(A). As explained in our August 27, 2018 affirmation proposal,

we did not reopen the identification of BART-eligible sources and thus did not request comment on this element.

See 82 FR at 48356 (final action) and 82 FR at 918 (proposed action).

83 FR at 43598.

Section 51.308(e)(2)(i)(B).

This provision requires that a list of all BART-eligible sources and all BART source categories covered by the alternative program be provided. The regulations do not require inclusion of every BART source category or every BART-eligible source within a BART source category in an alternative program, but each BART-eligible source in the state must be subject to the requirements of the alternative program, have a federally enforceable emission limitation determined by the state and approved by EPA as meeting BART in accordance with section 302(c) or § 51.308(e)(1), or be otherwise addressed under § 51.308(e)(1) or (e)(4). Our October 2017 final action and our August 2018 affirmation proposal included a list of all EGUs covered by the trading program. We are finalizing our affirmation of the list of BART-eligible EGUs in Texas covered by the alternative program with one minor non-substantive change,

satisfying the first requirement of 51.308(e)(2)(i)(B). Table 1 above lists all participating units and identification of BART-eligible participating units. All BART-eligible coal-fired units, some additional coal-fired EGUs, and some BART-eligible gas-fired and oil-and-gas-fired units are covered by the alternative program. This coverage and our determination in a previous final action that the BART-eligible gas-fired and oil-and-gas-fired EGUs not covered by the program are not subject-to-BART for NO

and PM satisfy the second requirement of 51.308(e)(2)(i)(B). We note that EPA's determination that these EGU units not covered by the program are not subject to BART was finalized in our October 2017 final action,

and we did not reopen that determination in the August 2018 proposal.

As discussed in section III.A.2, “Newman unit 4” at the El Paso Electric Newman plant (ORIS 3456), which is included in the Texas SO

Trading Program, is actually a multi-unit combined cycle system consisting of two gas- and oil-fired combustion turbine units (Newman unit **4 and Newman unit **5) serving a common steam turbine-generator. Both of these combustion turbine units are BART-eligible, and both are properly included in the Texas SO

Trading Program. In this final action, we are not identifying any new units as BART-eligible, we are merely relabeling the already-identified BART-eligible “Newman unit 4” as its components: “Newman unit **4” and “Newman unit **5.” Thus, we do not consider this change to be substantive.

82 FR at 48328.

83 FR at 43598, footnote 80.

Section 51.308(e)(2)(i)(C).

This provision requires an analysis of the best system of continuous emission control technology available and associated emission reductions achievable for each source within the state subject to BART and covered by the alternative program. This analysis must be conducted by making a determination of BART for each source subject to BART and covered by the alternative program as provided for under § 51.308(e)(1), unless the emissions trading program or other alternative measure has been designed to meet a requirement other than BART. In such a case, the state may determine the best system of continuous emission control technology and associated emission reductions for similar types of sources within a source category based on both source-specific and category-wide information, as appropriate. As discussed in our August 2018 proposal, we considered the question of whether, in applying this portion of the Regional Haze Rule, we should take as the baseline the application of source-specific BART at the covered sources.

We have determined not to take this approach here, given that 51.308(e)(2)(i)(C) provides for an exception (which we are exercising) to the requirement for source-specific BART determinations for the covered sources. The regulations allow for the BART “benchmark” to be set using “category-wide” information when the alternative measure “has been designed to meet a requirement other than BART (such as the core requirement to have a long-term strategy to achieve the reasonable progress goals established by States).”

See

40 CFR 51.308(e)(2)(i)(C). As discussed below, category-wide information may include, for example, the use of “presumptive” BART emission limits for a particular source category, such as coal-fired EGUs. The Texas SO

Trading Program meets the conditions of the exception allowed under § 51.308(e)(2)(i)(C), as discussed in sections III.B and V.B of this final notice, because it has been designed to meet Texas' interstate visibility transport requirements under CAA section 110(a)(2)(D)(i)(II). This BART alternative extends beyond all BART-eligible coal-fired units to include a number of additional coal-fired EGUs, and some BART-eligible gas-fired and oil-and-gas-fired units, capturing the majority of emissions from EGUs in the state, and is designed to provide the measures that are needed to address interstate visibility transport requirements for several NAAQS. This is because for all sources covered by the Texas SO

Trading Program, those sources' CSAPR allocations for SO

are incorporated into the BART alternative, and the Texas SO

Trading Program ensures more emission reductions of SO

than the level of emissions reductions relied upon by other states during consultation and assumed by other states in their own regional haze SIPs, including their reasonable progress goals for their Class I areas.

83 FR at 43599.

As allowed under § 51.308(e)(2)(i)(C), rather than using source-specific BART at the covered sources, we are relying on the determinations of BART and associated emission reductions for EGUs that were used in our 2012 determination that showed that CSAPR as finalized and amended in 2011 and 2012 achieves more reasonable progress than BART (“CSAPR Better-than-BART”). This analysis establishes by the clear weight of evidence that the Texas SO

Trading Program, which is modeled on the CSAPR trading programs, will provide for greater reasonable progress than BART in Texas. These determinations of the best system of continuous emission control technology and associated emission reductions for EGUs that were used in our 2012 CSAPR Better-than-BART demonstration were based largely on category-wide information, including the use of “presumptive” BART limits.

EPA finds that reliance on the category-wide BART analysis from the

2012 CSAPR Better-than-BART demonstration is appropriate here and that the BART determinations derived from that CSAPR Better-than-BART demonstration are an appropriate BART benchmark for comparison against the Texas SO

Trading Program given that the Texas SO

Trading Program is modeled on the CSAPR trading programs.

77 FR at 33649-50.

We note that in our August 2018 proposal, we proposed to affirm our finding that the Texas SO

trading program is also designed to be part of the long-term strategy needed to meet the reasonable progress requirements of the Regional Haze Rule, which remain outstanding after the remand of our January 2016 FIP addressing Texas' reasonable progress obligations by the Fifth Circuit Court of Appeals. After consideration of the comments we received addressing this issue during the public comment period for our August 2018 proposal, we are not finalizing our affirmation of the finding that the Texas SO

trading program is also designed to be part of the long-term strategy needed to meet the reasonable progress requirements of the Regional Haze Rule at this time. While the Texas SO

trading program certainly contributes to reasonable progress toward meeting the visibility goals of the regional haze program through enforceable reductions of a visibility pollutant from baseline emission levels, EPA has made clear that it intends to address the specific regulatory requirements for the long-term strategy for Texas through a separate action.

However, this does not impact our determination that the Texas SO

trading program satisfies the requirements of section 51.308(e)(2)(i)(C) given that the trading program is designed to provide the measures that are needed to address interstate visibility transport requirements for several NAAQS, and this sufficiently meets the criteria under § 51.308(e)(2)(i)(C) allowing us to exercise the exception allowed under the provision. Thus, we have met the requirements of § 51.308(e)(2)(i)(C).

83 FR at 43596 n.63.

Section 51.308(e)(2)(i)(D).

This provision requires an analysis of the projected emissions reductions achievable through the trading program or other alternative measure. Our analysis is that the Texas trading program will effectively limit the aggregate annual SO

emissions of the covered EGUs to be no higher than the assurance level of 255,083 tons. The Texas SO

Trading Program is an intrastate cap-and-trade program for listed covered sources in the State of Texas modeled after the EPA's CSAPR SO

Group 2 Trading Program. Authorizations to emit SO

known as allowances, are allocated to the affected units as listed in Table 1 above. As discussed elsewhere, the program includes a Supplemental Allowance Pool, as revised in this final action, with additional allowances that may be allocated to subject units and sources to provide compliance assistance. The average total annual allowance allocation for all covered sources is 238,395 tons, with an additional 10,000 tons allocated to the Supplemental Allowance Pool. In addition, while the Supplemental Allowance Pool may grow over time as unused supplemental allowances remain available and allocations from retired units are placed in the pool, the total number of allowances that can be allocated to sources in a control period from the supplemental pool beginning with the 2021 compliance period and for each period thereafter is limited to a maximum 16,688 tons plus the amount of any allowances placed in the pool that year from retired units and corrections. Therefore, the total annual average emissions for the covered sources will be less than or equal to 248,395 tons. Although there will be some year-to-year variability, that variability will be constrained by the addition of an assurance level in this final action. We are finalizing an assurance level of 255,083 tons per year for the Texas SO

Trading Program, which, in light of the three-for-one penalty surrender ratio imposed on emissions exceeding that level, represents the highest annual SO

emissions anticipated from units subject to the Texas program. In reality, there is no reasonable expectation that actual emissions would even approach this level in light of ongoing changes in the electric-generating sector in Texas.

Further, the projected average SO

emission reduction that will be achieved by the program in any given year, relative to any selected historical baseline year, would be the difference between the aggregate historical baseline emissions of the covered units and the average total annual allocation of 238,395 SO

tons plus a Supplemental Allowance Pool budget of 10,000 tons, or 248,395. As detailed in our October 2017 final rule, for the purpose of this analysis, we selected 2014 as the baseline year.

The aggregate 2014 SO

emissions of the covered EGUs were 309,298 tons per year, while the average total annual allocation for the covered EGUs is 238,395 SO

tons plus a Supplemental Allowance Pool budget of 10,000 tons, or 248,395 tons per year. Therefore, compared to 2014 emissions, the Texas trading program is projected to achieve an average reduction of approximately 60,903 tons per year from the covered units.

(We note that with the termination of the opt-in provisions in this final action, there is no need for this comparison to include consideration of the 2014 emissions from those units formerly eligible to opt into the trading program.)

Texas sources were subject to the CSAPR SO

trading program in 2015 and 2016 but are no longer subject to that program. We therefore select 2014 as the appropriate most recent year for comparing the aggregate historical baseline emissions of the covered units to the average total annual allocation for purposes of estimating the SO

emission reduction that will be achieved by the program.

We note that for other types of alternative programs that might be adopted under 40 CFR 51.308(e)(2), the analysis of achievable emission reductions could be more complicated. For example, a program that involved economic incentives instead of allowances or that involved interstate allowance trading would present a more complex situation in which achievable emission reductions could not be calculated simply by comparing aggregate baseline emissions to aggregate allowances.

We also note that the Regional Haze Rule provides that the baseline period for the first planning period is 2000-2004.

The Texas SO

Trading Program, with the assurance level we are finalizing in this action, achieves significantly lower emissions relative to the baseline period using 2002 as the baseline. As shown in Table 2, the total combined SO

emissions from Texas EGUs participating in the Texas SO

Trading Program were 515,526 tons in 2002. The combined actual SO

emissions from all Texas EGUs (both those in the Texas SO

Trading Program and those not in the program) were 562,516 tons in 2002.

By comparison, the Texas SO

Trading Program budget is 238,395 SO

tons (plus a Supplemental Allowance Pool budget of 10,000 tons). Thus for the covered units, the program achieves average annual emissions from the covered units of 248,395 tons. Compared with the 2002 baseline for these units, the program achieves 267,131 tons of reductions.

See 40 CFR 51.308(d)(2)(i).

See Excel spreadsheet file “Texas EGU 2002 SO

Emissions.xlsx,” which is available in the docket for this action.

When we account for Texas units that were in CSAPR but not in the current program, we see a similar result using a conservative assumption about those units' emissions going forward. (As we explained in our supplemental proposal, our comparison of the Texas program to CSAPR should take account

of emissions from these units.

) For illustrative purposes, in this comparison we will also use the higher figure of the assurance level for the Texas program rather than the average annual allocation. When our conservative assumption of 35,000 tons as the future combined SO

emissions for units that were in the CSAPR program but not covered by the Texas SO

Trading Program is added to the highest annual SO

emissions anticipated from units under the Texas SO

Trading Program, 255,083 tons per year (

i.e.,

the assurance level for the program), the total figure is 290,083 tons per year. A comparison of these figures reveals that the combined actual SO

emissions from all Texas EGUs in 2002 during the baseline period (562,516 tons) were considerably higher than the highest annual SO

emissions anticipated from all Texas EGUs anticipated from operation of the Texas SO

Trading Program (290,083 tons), including the CSAPR units not included in that program—a difference of 272,433 tons. The emission reductions that are secured by the Trading Program contribute to improvements in visibility from the baseline period and are permanent and enforceable as part of the long-term strategy for the State of Texas.

84 FR at 61853.

Table 2—2002 SO

Emissions From Texas EGUs Subject to the FIP SO

Trading Program †

Owner/operator

Units

emissions

(tons)

AEP

Welsh Power Plant Unit 1

12,259

Welsh Power Plant Unit 2

11,937

Welsh Power Plant Unit 3

11,584

H W Pirkey Power Plant Unit 1

19,476

Wilkes Unit 1

Wilkes Unit 2

Wilkes Unit 3

CPS Energy

J T Deely Unit 1

9,936

J T Deely Unit 2

11,577

Sommers Unit 1

Sommers Unit 2

LCRA

Fayette/Sam Seymour Unit 1

13,617

Fayette/Sam Seymour Unit 2

16,401

Vistra

Coleto Creek Unit 1

14,288

Big Brown Unit 1

43,413

Big Brown Unit 2

34,448

Martin Lake Unit 1

24,837

Martin Lake Unit 2

22,539

Martin Lake Unit 3

19,023

Monticello Unit 1

28,643

Monticello Unit 2

34,700

Monticello Unit 3

22,976

Sandow Unit 4

23,330

Stryker ST2

Graham Unit 2

NRG

Limestone Unit 1

17,009

Limestone Unit 2

13,830

W A Parish Unit WAP4

W A Parish Unit WAP5

21,310

W A Parish Unit WAP6

18,006

W A Parish Unit WAP7

18,459

Xcel

Tolk Station Unit 171B

12,703

Tolk Station Unit 172B

12,171

Harrington Station Unit 061B

9,197

Harrington Station Unit 062B

8,927

Harrington Station Unit 063B

8,844

El Paso Electric

Newman Unit 2

Newman Unit 3

Newman Unit **4

Newman Unit **5

Total Combined 2002 SO

Emissions

515,526

† Based on 2002 Clean Air Markets Division (CAMD) data.

Section 51.308(e)(2)(i)(E).

This provision requires a determination, under the specific criteria laid out at 40 CFR 51.308(e)(3) or otherwise based on the clear weight of evidence, that the trading program or other alternative measure achieves greater reasonable progress than would be achieved through the installation and operation of BART at the covered sources. The BART alternative EPA is taking final action to affirm here is supported by the clear weight of the evidence. Specifically, with respect to SO

emissions from the covered BART-eligible units, because the Texas SO

trading program, as amended, is designed to ensure that emissions levels in each year under the trading program are similar to or less than what would have been realized from Texas EGUs from participation in the SO

trading program under CSAPR, EPA can rely on the 2012 and 2017 findings that CSAPR achieves greater

reasonable progress than BART as evidence that the Texas program achieves greater reasonable progress than BART, in the context of the continued operation of the CSAPR ozone-season NO

trading program (to which units in Texas remain subject) and the CSAPR annual NO

and SO

trading programs.

As used in our 51.308(e)(2)(i)(D) analysis above and laid out in more detail below, a conservative estimate for the maximum total annual emissions from all EGUs in Texas that can be anticipated with the Texas program in place is 290,083 tons. As explained below, this is less than the maximum total annual emissions assumed for Texas under CSAPR in the CSAPR Better-than-BART analysis, which is 317,100 tons. Thus, we are relying on the demonstration in the 2012 and 2017 CSAPR Better-than-BART rules (as reaffirmed in the separate denial of petition for reconsideration of the 2017 rule) to show that the clear weight of evidence demonstrates that the Texas SO

Trading Program, which is modeled on the CSAPR trading programs, provides for greater reasonable progress than BART in Texas.

EPA's determination that Texas' participation in CSAPR for ozone-season NO

satisfies NO

BART for EGUs is final and we did not reopen that determination in our August 2018 proposal or our November 2019 supplemental proposal.

Because the Texas program is designed to achieve greater SO

emission reductions than CSAPR in Texas, we are finalizing our affirmation that it is appropriate to continue to rely on the 2012 CSAPR Better-than-BART demonstration, which includes the treatment of Texas as a CSAPR state, as reaffirmed in September 2017 (and again affirmed in EPA's denial of the November 28, 2017 petition for reconsideration, as discussed under section I.D of this final action

). That analysis compared CSAPR in Texas and elsewhere in the country to presumptive BART emission limits for the sources in Texas (as elsewhere) and is described in greater detail in our August 2018 proposed affirmation.

See

83 FR 43586, at 43594-95. While Texas is no longer in the CSAPR trading program for SO

itself, we find that it is appropriate for us to continue relying here on the CSAPR Better-than-BART analysis for Texas given that the Texas SO

Trading Program is specifically designed to mimic the CSAPR program and the amendments to the Texas trading program EPA is finalizing in this action allow EPA to affirm that the Texas program is similar to or more stringent than CSAPR in Texas. As such, the stringency of the Texas program is sufficient to allow for the continued use of the CSAPR Better-than-BART analysis for Texas.

Federal Register

are available at Docket ID EPA-HQ-OAR-2016-0598.

Although it is not within the scope of this action, EPA notes that the 2017 CSAPR Better-than-BART finding has been reaffirmed through the denial of a petition for reconsideration.

In our response to the petition for reconsideration, EPA explains that it has fully accounted for the stringency of the Texas trading program as well as the potential for emission shifting back into the remaining CSAPR region with the removal of Texas into its own intrastate trading region.

To the extent that this potential for emission shifting posed any concern that the CSAPR Better-than-BART analysis could not be relied upon by Texas or other states, this issue has been resolved through the analysis set forth in that denial.

Federal Register

are available at Docket ID EPA-HQ-OAR-2016-0598.

Id.

We are finalizing our determination that anticipated maximum potential SO

emissions in Texas under the Texas SO

Trading Program BART alternative are less than the SO

emission levels from Texas EGUs that were forecast in the CSAPR Better-than-BART demonstration assuming their participation in the CSAPR SO

trading program.

In our October 2017 final rule and the August 2018 proposal to affirm that rule, we noted the results of the sensitivity analysis

for the 2012 final “CSAPR Better-than-BART” rulemaking, namely that CSAPR was expected to provide for greater reasonable progress than BART nationwide even with potential SO

emissions from Texas EGUs under CSAPR as high as 317,100 tons.

In our October 2017 final rule and the August 2018 proposal to affirm that rule, EPA used this benchmark (317,100 tons of SO

emissions per year) to gauge whether the Texas SO

Trading Program was sufficiently stringent for EPA to continue to rely on the BART-alternative analysis we conducted in the 2012 “CSAPR Better-than-BART” rulemaking. In the August 2018 proposal, EPA proposed to affirm that the weight of evidence supported the conclusion that the Texas SO

Trading Program met the requirements of a BART alternative.

Informed by comments we received on the August 2018 proposal, we issued a supplemental proposal in November 2019 that proposed to amend a number of provisions of the Texas SO

Trading Program, including the addition of an assurance level. EPA's proposed analysis in November of 2019 accompanying those amendments, updates in certain respects and replaces the analysis of the Texas program's stringency for purposes of determining the appropriateness of relying on the CSAPR Better-than-BART findings for the Texas BART-alternative program.

See

Technical Support Document for Demonstration of the Transport Rule as a BART Alternative, Docket ID No. EPA-HQ-OAR-2011-0729-0014 (December 2011), available in the docket for this action.

See

Sensitivity Analysis Accounting for Increases in Texas and Georgia Transport Rule State Emissions Budgets, Docket ID No. EPA-HQ-OAR-2011-0729-0323 (May 29, 2012), available in the docket for this action.

83 FR at 43595.

83 FR at 43602.

As explained in the November 2019 supplemental proposal and in Section III.A.I above, an assurance level represents the total level of annual emissions above which units participating in the program will be penalized with a higher allowance surrender ratio than the one-to-one ratio that applies to emissions below the assurance level. The assurance level we proposed was determined by relying on the same analysis and methodology that were used to set assurance levels in the original CSAPR rulemaking.

Using this methodology, EPA proposed a variability limit for Texas set at 16,688 tons, which is seven percent of the original trading budget of 238,393 tons. We are finalizing the variability limits set at 16,688 tons with no change from proposal and in light of the minor correction to the trading program budget, as discussed in section III.A.1, we are finalizing an assurance level of 255,083 tons rather than the 255,081-ton assurance level we proposed in the November 2019 supplemental proposal. This 255,083-ton assurance level represents the highest annual SO

emissions anticipated from units subject to the Texas program.

See

Power Sector Variability Final Rule TSD (July 2011), available at

https://www.epa.gov/csapr/power-sector-variability-final-rule-tsd

and in the docket for this action.

In addition to being consistent with the original CSAPR methodology for setting assurance levels, EPA also believes that an assurance level set at 255,083 tons is appropriate for the Texas SO

Trading Program because it will strengthen the stringency of the Texas SO

Trading Program in terms of ensuring that annual emissions from participating units will remain below that level. This allows EPA to project with confidence emissions under the Texas SO

Trading Program for purposes of determining whether the trading program meets the requirements of a BART alternative.

In the modeling conducted for the proposed CSAPR Better-than-BART determination in 2011, projected SO

emissions from Texas' EGUs under CSAPR were 266,600 tons. Subsequent to performance of that modeling, the CSAPR SO

budget for Texas was increased by 50,517 tons. In the BART-alternative sensitivity analysis utilized for the final 2012 CSAPR Better-than-BART determination, EPA made the conservative assumption that SO

emissions from Texas EGUs under CSAPR could potentially increase by the full amount of the Texas budget increase, or up to 317,100 tons per year (266,600 + 50,517). (While this level of emissions would have exceeded Texas' CSAPR budget, it would not have been in excess of Texas' amended assurance level under the CSAPR program of 347,476 tons. In any case, the figure was solely intended to represent a conservative assumption that all allowances allocated under Texas' amended CSAPR budget would be emitted.) In that BART-alternative sensitivity analysis, EPA demonstrated that CSAPR was expected to provide for greater reasonable progress than BART nationwide even with potential SO

emissions from Texas EGUs under CSAPR as high as 317,100 tons.

By comparison, the Texas SO

Trading Program has a budget of 238,395 SO

tons (plus 10,000 tons in the Supplemental Allowance Pool), and we are finalizing an assurance level of 255,083 tons in this final action.

83 FR at 43595.

In determining that the Texas program will perform at least as stringently as CSAPR would have, EPA also must account for the emissions from certain EGUs that would have been subject to CSAPR but are not included in the Texas program. Even with these emissions factored in, the Texas program is designed to ensure reductions similar to or greater than CSAPR. In our analysis in this final action, we are finalizing the more conservative emissions assumptions for these units provided in our November 2019 supplemental proposal. In our August 2018 proposal, we had used an assumption that emissions from these units could be as high as 27,500 tons per year.

As proposed in our November 2019 supplemental proposal,

we are updating our analysis by adjusting this assumption to 35,000 tons per year. Given that Texas units that were in the CSAPR program but not covered by the Texas SO

Trading Program had a combined maximum annual emission level of 34,129 tons over the past five years (2014-2018) and considering that several of these units have recently shut down or have been announced for shutdown in the near future,

EPA regards this as a conservative assumption for emissions performance from these units. Even when this conservative figure is added to the highest annual SO

emissions anticipated from units under the Texas program, 255,083 tons per year (

i.e.,

the assurance level for the program), the total figure is 290,083 tons per year. This figure is still 27,017 tons below the 317,100 ton per year emissions level EPA had used in the CSAPR Better-than-BART analysis.

83 FR 43602.

84 FR at 61853.

See

“Texas EGU SO

emissions, 2014-2018.xlsx”, available in the docket for this action. Sandow Station units 5A and 5B have been permanently retired. AEP has announced retirement of Oklaunion by September 2020. Gibbons Creek is currently not operating although it has not been officially retired.

In addition to finding that the differences in source coverage between the two trading programs do not affect EPA's determination, we also find that the relative stringency of the Texas SO

Trading Program as compared to CSAPR is further demonstrated in the following points, as discussed in our August 27, 2018 affirmation proposal:

• This BART alternative includes all BART-eligible coal-fired units in Texas, additional coal-fired EGUs, and some additional BART-eligible gas and gas/fuel oil-fired units.

• Covered sources under the Texas SO

Trading Program we are taking final action to affirm represent 89%

of all SO

emissions from all Texas EGUs in both 2016 and 2017, and approximately 85% of CSAPR allocations for existing units in Texas.

In 2016, EGUs included in the program emitted 218,292 tons of SO

, and other EGUs emitted 27,507 tons (11.2% of the total emitted by Texas EGUs). In 2017, sources included in the program emitted 245,871 tons of SO

, and other EGUs emitted 30,122 (10.9%).

• The remaining 11% (100 minus 89) of 2016 and 2017 emissions from sources not covered by the Texas SO

Trading Program come from gas units that rarely burn fuel oil or from coal-fired units that on average are better controlled for SO

than the covered sources and generally are less relevant to visibility impairment. As such, any shifting of generation to non-covered sources, as might occur if a covered source were to reduce its operation in order to remain within its SO

emissions allowance allocation, would result in fewer emissions to generate the same amount of electricity.

• Furthermore, the non-inclusion of a large number of gas-fired units that rarely burn fuel oil reduces the amount of available allowances for such units that would typically and collectively be expected to use only a fraction of their CSAPR emissions allowances. Many of these sources typically emit at levels much lower than their allocation level.

• The BART alternative does not allow purchasing of allowances from out-of-state sources. Emission projections under CAIR and CSAPR showed that Texas sources were anticipated to purchase allowances from out-of-state sources.

93 94

See section 10 of the 2009 Texas Regional Haze SIP. Table 10-7 shows CAIR 2018 emission projections of approximately 350,000 tons SO

emitted from Texas EGUs compared to CAIR budget for Texas of 225,000 tons. Thus, Texas was projected to purchase 125,000 tons of allowances (350,000−225,000) from out-of-state sources. The SIP submittal can be found in

www.regulations.gov,

docket ID EPA-R06-OAR-2016-0611, document EPA-R06-OAR-2016-0611-0002.

For the projected annual SO

emissions from Texas EGUs under CSAPR, see Technical Support Document for Demonstration of the Transport Rule as a BART Alternative, Docket ID No. EPA-HQ-OAR-2011- 0729-0014 (December 2011) (2011 CSAPR/BART Technical Support Document), available in the docket for this action at table 2-4.

Based on our quantitative and qualitative assessment of the operation of the BART alternative as presented here, we are taking final action to affirm our determination that the Texas SO

Trading Program as amended in this final action through the addition of the 255,083-ton assurance level and other amendments discussed in section III.A.1, will result in annual emissions from the covered EGUs and other EGUs in Texas that are lower than what was required under Texas participation in CSAPR's SO

trading program. Because this is the case, EPA can rely on the CSAPR Better-than-BART analysis to demonstrate, by the clear weight of the evidence, that the Texas SO

Trading Program, in conjunction with continued implementation of CSAPR in other states, provides greater reasonable progress than BART. Accordingly, we are taking final action to affirm that the Texas SO

Trading Program, as

amended in today's final action, satisfies the requirements for a BART alternative under 40 CFR 51.308(e)(2)(i)(E).

Section 51.308(e)(2)(iii).

This provision requires that the emission reductions from BART alternatives occur “during the period of the first long-term strategy for regional haze.” The Texas SO

BART alternative was implemented beginning in January 2019, and thus emission reductions needed to comply with the BART alternative were required to take place by the end of 2019. In our August 2018 proposal,

we proposed to affirm our determination that for the purpose of evaluating Texas' BART alternative, the end of the period of the first long-term strategy for Texas is 2021, consistent with the requirement that states submit revisions to their long-term strategy to address the second planning period by July 31, 2021.

We also proposed to affirm our determination that because the emission reductions from the Texas SO

Trading Program will be realized prior to that date, the necessary emission reductions will take place within the period of Texas' first long-term strategy for regional haze. We received a comment raising the concern that this determination we proposed to affirm would be at odds with the national finding in the January 2017 action that our amendments there “do not affect the development and review of state plans for the first implementation period. . . .” 82 FR at 3080. After further review of our discussion in the January 2017 final rule making amendments to the Regional Haze Rule and consideration of the comments we received pertaining to this issue, we are not finalizing a position in this action that the first planning period has been extended to July 31, 2021.

83 FR 43592.

40 CFR 51.308(f).

Nonetheless, we are finalizing our determination that the Texas SO

Trading Program satisfies the timing requirements of 51.308(e)(2)(iii), because the level of emissions achieved by the covered Texas units was below the budget of the Texas program prior to the end of 2018 and the program took effect immediately at the beginning of 2019. This meets the requirement at (e)(2)(iii) that the emission reductions called for by the BART alternative occur before the end of the period for the first long-term strategy. As discussed in our November 2019 supplemental proposal, the combined SO

emissions from Texas EGUs participating in the intrastate trading program were 179,630 SO

tons in 2018, which is well below the Texas SO

Trading Program budget of 238,395 tons (as well as the assurance level of 255,083 tons we are finalizing in this action).

Therefore, the emissions reductions secured under the Texas SO

Trading Program occurred prior to the end of the period of the first long-term strategy for regional haze. EPA has previously proposed a view that where emission reductions required by a BART alternative are already achieved in practice during the first planning period, even though the enforceable requirement was not mandated until after the planning period, this can satisfy 40 CFR 51.308(e)(2)(iii). This was our position in our action proposing to approve a SIP revision from the State of Arkansas establishing a BART-alternative for the Domtar Ashdown Mill.

There, we explained that even though the BART alternative emission limits for the Domtar Ashdown Mill became enforceable by the State on February 28, 2019, the SIP revision submitted by Arkansas provided adequate documentation demonstrating that the two subject-to-BART units at the Domtar Ashdown Mill have actually been operating at emission levels below the BART alternative emission limits since December 2016.

Based on the documentation provided in the Arkansas SIP revision, we proposed to find that the subject-to-BART units at the Domtar Ashdown Mill satisfy the timing requirements of 40 CFR 51.308(e) that the necessary emission reductions associated with the BART alternative occur during the first long-term strategy for regional haze.

100

Consistent with that proposed action, we do not interpret § 51.308(e)(2)(iii) as requiring that all enforceable limits on annual emissions under the Texas SO

Trading Program be in place by December 31, 2018, or that the Trading Program itself must be implemented by December 31, 2018, if the emission levels called for by the BART alternative are achieved prior to that date and remain at or below that level until the alternative becomes enforceable (which in this case, is immediately following 2018). We are taking final action that the Trading Program satisfies the timing requirements of § 51.308(e)(2)(iii).

84 FR 61853.

See 85 FR 14847 (March 16, 2020).

85 FR 14861.

100

85 FR 14861.

Section 51.308(e)(2)(iv).

This provision requires a demonstration that the emission reductions resulting from the emissions trading program or other alternative measure will be surplus to those reductions resulting from measures adopted to meet requirements of the CAA as of the baseline date of the SIP. When promulgating this requirement in 1999, the EPA explained that emission reductions must be “surplus to other Federal requirements as of the baseline date of the SIP, that is, the date of the emission inventories on which the SIP relies.”

101

The baseline date for the 2009 Texas Regional Haze SIP emission inventory was previously established as 2002 during SIP planning stages for the first implementation period.

102

The emission reductions secured under the Texas SO

Trading Program are additional and will not result in double-counting of reductions from other Federal requirements since they will occur after the original 2002 emission inventory. Thus, this BART alternative satisfies the requirements of § 51.308(e)(2)(iv).

101

See

64 FR 35714, 35742 (July 1, 1999);

see also

70 FR 39104, 39143 (July 6, 2005).

102

See

Memorandum from Lydia Wegman and Peter Tsirigotis, 2002 Base Year Emission Inventory SIP Planning: 8-hr Ozone, PM

2.5,

and Regional Haze Programs, November 8, 2002.

Section 51.308(e)(2)(vi).

For plans that include an emissions trading program that establishes a cap on total annual emissions of SO

or NO

from sources subject to the program, this provision requires the owners and operators of sources to hold allowances or authorizations to emit equal to emissions, and allows the owners and operators of sources and other entities to purchase, sell, and transfer allowances. The Texas SO

Trading Program is modeled after the EPA's CSAPR SO

Group 2 Trading Program, and we are taking final action to affirm that the Program satisfies the requirements of 51.308(e)(2)(vi). Similar to the CSAPR SO

Group 2 Trading Program, the Texas SO

Trading Program sets an SO

emission budget for affected units and sources in the State of Texas. Authorizations to emit SO

known as allowances, are allocated to affected units. The Texas SO

Trading Program provides flexibility to affected units and sources by allowing units and sources to determine their own compliance path; this includes adding or operating control technologies, upgrading or improving controls, switching fuels, and using allowances. Sources can buy and sell allowances and bank (save) allowances for future use so long as each source holds enough allowances to account for its emissions of SO

by the allowance transfer deadline shortly after the end of the compliance period.

Section 51.308(e)(2)(vi)(A).

This provision requires applicability provisions defining the sources subject to the program. The State (or EPA) must demonstrate that the applicability

provisions (including the size criteria for including sources in the program) are designed to prevent any significant potential shifting within the State of production and emissions from sources in the program to sources outside the program. The October 2017 final rule and the August 2018 proposal affirming that rule discuss the provisions of the Texas SO

Trading Program that satisfy § 51.308(e)(2)(vi)(A).

103

In this final action, we are making amendments to some of these provisions, as discussed in section III.A.1. We are terminating the opt-in provisions by removing sections 97.904(b), 97.911(b), and 97.921(d) from the regulations, and we are making a minor correction to the Texas SO

Trading Program to relabel “Newman unit 4,” which is already participating in the Texas SO

Trading Program, as its components: “Newman unit **4” and “Newman unit **5.” We are taking final action to find that with these amendments, the Texas SO

Trading Program continues to have applicability provisions that satisfy § 51.308(e)(2)(vi)(A).

103

See

82 FR at 48360 and 83 FR at 43602.

Section 51.308(e)(2)(vi)(B).

This provision requires allowance provisions ensuring that the total value of allowances (in tons) issued each year under the program will not exceed the emissions cap (in tons) on total annual emissions from the sources in the program. 40 CFR Section 97.921 establishes how the Administrator will record the allowances for the Texas SO

Trading Program and ensures that the Administrator will not record more allowances than are available under the program consistent with 40 CFR 51.308(e)(2)(vi)(B).

Sections 51.308(e)(2)(vi)(C)-(E).

The provisions of sections 51.308(e)(2)(vi)(C)-(E) require monitoring provisions providing for consistent and accurate measurements of emissions from sources in the program to ensure that each allowance actually represents the same specified tonnage of emissions and that emissions are measured with similar accuracy at all sources in the program; recordkeeping provisions that ensure the enforceability of the emissions monitoring provisions and other program requirements; and reporting provisions requiring timely reporting of monitoring data with sufficient frequency to ensure the enforceability of the emissions monitoring provisions and other program requirements and the ability to audit the program. The monitoring, recordkeeping, and reporting provisions for the Texas SO

Trading Program at 40 CFR 97.930-97.935 are consistent with those requirements in the CSAPR SO

Group 2 Trading Program. The provisions in 40 CFR 97.930-97.935 require the subject units to comply with the monitoring, recordkeeping, and reporting requirements for SO

emissions in 40 CFR part 75, thereby satisfying the requirements of 51.308(e)(2)(vi)(C)-(E).

Section 51.308(e)(2)(vi)(F).

This provision requires tracking system provisions which provide for a tracking system that is publicly available in a secure, centralized database to track in a consistent manner all allowances and emissions in the program. The EPA is implementing the Texas SO

Trading Program using the Allowance Management System, which provides a consistent approach to implementation and tracking of allowances and emissions for the EPA, subject sources, and the public consistent with the requirements of 40 CFR 51.308(e)(2)(vi)(F).

Section 51.308(e)(2)(vi)(G).

This provision requires authorized account representative provisions ensuring that the owners and operators of a source designate one individual who is authorized to represent the owners and operators in all matters pertaining to the trading program. The requirements at 40 CFR 97.913-97.918 for designated and alternate designated representatives are consistent with the requirements of 40 CFR 51.308(e)(2)(vi)(G) and are also consistent with the EPA's other trading programs under 40 CFR part 97.

Section 51.308(e)(2)(vi)(H).

This provision requires allowance transfer provisions providing procedures that allow timely transfer and recording of allowances, minimize administrative barriers to the operation of the allowance market, and ensure that such procedures apply uniformly to all sources and other potential participants in the allowance market. Allowance transfer provisions for the Texas SO

Trading Program at 40 CFR 97.922 and 97.923 provide procedures that allow timely transfer and recording of allowances; these provisions will minimize administrative barriers to the operation of the allowance market and ensure that such procedures apply uniformly to all sources and other potential participants in the allowance market, consistent with 40 CFR 51.308(e)(2)(vi)(H).

Section 51.308(e)(2)(vi)(I).

This provision requires compliance provisions prohibiting a source from emitting a total tonnage of a pollutant that exceeds the tonnage value of its allowance holdings, including the methods and procedures for determining whether emissions exceed allowance holdings. The provision requires that such method and procedures apply consistently from source to source. Compliance provisions for the Texas SO

Trading Program at 40 CFR 97.924 prohibit a source from emitting a total tonnage of SO

that exceeds the tonnage value of its SO

allowance holdings as required by 40 CFR 51.308(e)(2)(vi)(I).

Section 51.308(e)(2)(vi)(J).

This provision requires penalty provisions providing for mandatory allowance deductions for excess emissions that apply consistently from source to source. Additionally, the tonnage value of the allowances deducted must equal at least three times the tonnage of the excess emissions. The Texas SO

Trading Program includes automatic allowance surrender provisions at 40 CFR 97.924(d) that apply consistently from source to source and the tonnage value of the allowances deducted shall equal at least three times the tonnage of the excess emissions, consistent with the penalty provisions at 40 CFR 51.308(e)(2)(vi)(J).

Section 51.308(e)(2)(vi)(K).

For a trading program that allows banking of allowances, this provision requires provisions clarifying any restrictions on the use of these banked allowances. The Texas SO

Trading Program provides for banking of allowances under 40 CFR 97.926; Texas SO

Trading Program allowances are valid for compliance in the control period of issuance or may be banked for use in future control periods, consistent with 40 CFR 51.308(e)(2)(vi)(K).

Section 51.308(e)(2)(vi)(L).

This provision requires program assessment provisions providing for periodic program evaluation to assess whether the program is accomplishing its goals and whether modifications to the program are needed to enhance performance of the program. The CAA and EPA's implementing regulations require comprehensive periodic revisions of implementation plans for regional haze under 40 CFR 51.308(f) and periodic review of the state's regional haze approach under 40 CFR 51.308(g) to evaluate progress towards the reasonable progress goals for Class I areas located within the state and Class I areas located outside the State affected by emissions from within the state. Because the Texas SO

Trading Program is a BART-alternative and part of the long-term strategy for Texas' Regional Haze obligations, this program will be reviewed in each comprehensive periodic revision and progress report. We anticipate these revisions and progress reports will provide the information needed to assess program

performance, as required by 40 CFR 51.308(e)(2)(vi)(L).

Based on the analysis presented here, EPA is taking final action to affirm our determination that the Texas SO

Trading Program, as amended in this final action, meets the requirements of 40 CFR 51.308(e)(2) as a BART alternative for SO

to satisfy Texas' Regional Haze obligations.

3. PM BART

We are taking final action to affirm our October 2017 approval of the portion of the Texas Regional Haze SIP that determined that PM BART emission limits are not required for any Texas EGUs. The majority of Texas' BART-eligible EGUs rely on BART alternatives for both SO

and NO

emissions (or have otherwise been determined to be not subject to BART). We approved Texas' pollutant-specific screening analysis for PM as appropriate and consistent with a 2006 guidance document in which the EPA stated that pollutant-specific screening can be appropriate where a state is relying on a trading program as a BART alternative to address both NO

and SO

BART.

104

All of the BART-eligible sources participating in the SO

intrastate trading program have visibility impacts from PM alone below the subject-to-BART threshold of 0.5 deciviews (dv).

105 106

Furthermore, the BART-eligible sources not participating in the intrastate trading program were screened out of BART for all visibility impairing pollutants. Therefore, we are finalizing our affirmation of our prior approval that no Texas EGUs are subject to PM BART and that PM BART emission limits are not required for any Texas EGUs under EPA's 2006 guidance.

104

See

discussion in Memorandum from Joseph Paisie to Kay Prince, “Regional Haze Regulations and Guidelines for Best Available Retrofit Technology (BART) Determinations,” July 19, 2006.

105

Our technical evaluation of Texas' PM screening approach in the 2009 Texas Regional Haze SIP submittal was originally presented in a December 16, 2014 proposal. See 79 FR 74817, 74848-49 (Dec. 16, 2014). As noted in our August 2018 proposal, the basis of our affirmation of our approval of Texas' PM screening approach remains consistent with the technical evaluation we provided at the time. See 83 FR 43586, at 43593.

106

Stryker Creek Unit ST2 is covered by CSAPR for NO

and by the SO

trading program but was not included in the 2009 Regional Haze SIP. In our August 2018 proposal, we explained that based on our own evaluation in the January 2017 proposal and October 2017 final rule, we determined that the visibility impact attributable to PM emissions from Stryker Creek Unit ST2 is a small fraction (roughly 1%) of the 0.786 dv aggregate impact of the unit's emissions from all pollutants. This is well below the subject-to-BART threshold of 0.5 dv. See 83 FR 43586, at 43593.

4. Reasonable Progress

This final action addressing the BART requirements is part of the long-term strategy for Texas and will contribute to making reasonable progress toward the goal of natural visibility conditions at Texas' and downwind Class I areas. However, the EPA is not determining at this time that this final action fully resolves the EPA's outstanding obligations with respect to reasonable progress that resulted from the Fifth Circuit's remand of our reasonable progress FIP.

107

We intend to take a separate, future action to address the Fifth Circuit's remand.

107

Order,

Texas

EPA,

16-60118 (5th Cir. Mar. 22, 2017).

B. Interstate Transport of Pollutants That Affect Visibility

We are taking final action to affirm our finding that Texas' participation in CSAPR to satisfy NO

BART and our SO

intrastate trading program, as amended in today's final action, fully addresses Texas' interstate visibility transport obligations for the following six NAAQS: (1) 1997 8-hour ozone; (2) 1997 PM

2.5

(annual and 24 hour); (3) 2006 PM

2.5

(24-hour); (4) 2008 8-hour ozone; (5) 2010 1-hour NO

; and (6) 2010 1-hour SO

. The basis for this final action is our determination in the October 2017 FIP that the regional haze measures in place for Texas are adequate to ensure that emissions from the State do not interfere with measures to protect visibility in nearby states, because the emission reductions are consistent with the level of emissions reductions relied upon by other states during interstate consultation under 40 CFR 51.308(d)(3)(i)-(iii) and when setting their reasonable progress goals.

108

As discussed in our August 2018 affirmation proposal, the 2009 Texas Regional Haze SIP relied on participation in CAIR to meet SO

and NO

BART requirements for Texas EGUs. Under CAIR, Texas EGU sources were projected to emit approximately 350,000 tons of SO

annually.

109

These are the 2018 EGU emission projections used by CENRAP for Texas that other states potentially impacted by emissions from Texas sources agreed upon during interstate consultation and relied on in their regional haze SIPs. In today's final action, we are finalizing four revisions to strengthen the Texas SO

Trading Program and increase its consistency with CSAPR, including the addition of an assurance level consistent with the 2012 CSAPR demonstration. As discussed elsewhere in today's final action, Texas EGU annual SO

emissions for sources covered by the trading program will be constrained by the assurance level of 255,083 tons. Including an estimated 35,000 tons per year of emissions from units not covered by the Texas SO

Trading Program yields 290,083 tons of SO

, which is well below the 350,000-ton emissions projection for 2018 for Texas sources under CAIR or the 317,100-ton emissions level assumed for Texas sources under CSAPR participation in the BART-alternative sensitivity analysis utilized for the 2012 CSAPR Better-than-BART determination. Additionally, the October 2017 FIP relies on CSAPR for ozone season NO

as an alternative to EGU BART for NO

, which exceeds the NO

emission reductions that would have been realized from Texas EGUs under CAIR and that other states relied upon during interstate consultation for the first planning period.

110

Because the revisions to the Texas SO

Trading Program we are finalizing in today's final action ensure emission reductions consistent with and below the emission levels relied upon by other states during interstate consultation, we find that these revisions provide further support for our earlier finding that the BART alternative in the October 2017 FIP results in emission reductions adequate to satisfy the requirements of CAA section 110(a)(2)(D)(i)(II) with respect to visibility for the six identified NAAQS.

108

See 2009 Texas Regional Haze SIP, section 4.3 titled “Consultations On Class I Areas In Other States.” The submittal can be found at

www.regulations.gov,

Docket ID EPA-R06-OAR-2016-0611, Document ID EPA-R06-OAR-2016-0611-0002.

109

See section 10 of the 2009 Texas Regional Haze SIP. Table 10-7 shows that under CAIR, the 2018 emission from Texas EGUs were projected to be approximately 350,000 tons SO

. The SIP submittal can be found in

www.regulations.gov,

Docket ID EPA-R06-OAR-2016-0611, Document ID EPA-R06-OAR-2016-0611-0002.

110

Under CAIR, Texas had an annual 2009 CAIR Phase 1 budget of 181,017 tons of NO

and an annual 2015 CAIR Phase 2 budget of 150,845 tons of NO

. See Section 11, Table 11-15 of the 2009 Texas Regional Haze SIP. The SIP submittal can be found at

www.regulations.gov,

Docket ID EPA-R06-OAR-2016-0611, document ID EPA-R06-OAR-2016-0611-0002. The 2018 EGU emission projections for NO

used by CENRAP for Texas, which other states potentially impacted by emissions from Texas sources agreed upon during interstate consultation and relied on in their regional haze SIPs, were approximately 160,000 tons. In contrast, under the CSAPR ozone season NO

trading program, Texas' 2017 NO

ozone season budget is 52,301 tons of NO

. See 81 FR 74504, 74508 (Oct. 26, 2016).

IV. Summary and Responses to Significant Issues Raised by Commenters

We received both written and oral comments at the public hearings we held in Austin and Dallas. We also

received written comments on the August 27, 2018 affirmation proposed action and the November 14, 2019 supplemental proposed action. The full text of comments received is included in the publicly posted docket associated with this action at

www.regulations.gov.

We reviewed all public comments that we received. Below we provide a summary of the most significant comments and our responses. A complete summary of all of the comments we received, and our responses thereto are contained in a separate document titled Response to Comments, which is found in the docket associated with this final action.

A. Texas SO

Trading Program as a BART Alternative

Comment:

We received one comment asserting that in promulgating the Texas SO

Trading Program as a BART alternative in our October 2017 FIP and in affirming the trading program in our August 2018 proposal, EPA did not properly demonstrate that the trading program meets the requirements for an alternative to BART for SO

because EPA did not compare the alternative to source-specific BART in Texas. The commenter asserted that the Regional Haze Rule at 40 CFR 51.308(e)(2) specifies that BART and associated emission reductions achievable for each source within the State subject to BART and covered by the alternative program must be evaluated first for the purpose of comparing to the BART alternative and determining whether the alternative makes greater reasonable progress than BART. The commenter also noted that the Regional Haze Rule at § 51.308(e)(2)(i)(C) provides that the only exception to this requirement is when the emissions trading program or other alternative measure has been designed to meet a requirement other than BART and that in such cases, EPA may analyze BART for similar types of sources within a source category instead of on a source-specific basis. The commenter asserted that in promulgating the Texas SO

Trading Program, EPA did not properly demonstrate that the trading program is better than BART and meets the requirements for an alternative to BART because EPA has not determined which units are subject to BART, and did not provide an analysis of BART at each source subject to BART and covered by the trading program to compare against the trading program. According to the commenter, even if presumptive BART levels were an appropriate assumption that is not outdated, EPA would still be required to compare the trading program directly to presumptive BART, which it has not done. The commenter also contended that EPA's approach of comparing the intrastate trading program to Texas' participation in the SO

trading program under CSAPR is not appropriate because EPA withdrew Texas from the CSAPR program for SO

and thus CSAPR cannot lawfully be BART for SO

for Texas EGUs.

The commenter also disagreed with EPA's position that the trading program was designed to meet requirements other than BART, namely the interstate transport requirements and the long-term strategy provisions. The commenter asserted that even if the trading program had indeed been designed to meet requirements other than BART, this would still not authorize EPA to completely forego analyzing BART for the sources subject to BART and covered by the trading program.

Response:

As explained in our August 27, 2018 proposal, in addition to being a sufficient alternative to BART, the trading program is designed to secure reductions consistent with visibility transport requirements.

111

As allowed by the requirements for a BART alternative in § 51.308(e)(2)(i)(C), we are exercising the exception allowed when the alternative measure “has been designed to meet a requirement other than BART (such as the core requirement to have a long-term strategy to achieve the reasonable progress goals established by States).” See 40 CFR 51.308(e)(2)(i)(C). In such circumstances, BART and associated emission reductions may be analyzed for similar sources “based on both source-specific and category-wide information, as appropriate.” When promulgating the 2012 CSAPR Better-than-BART rule, the EPA relied on an analysis of BART in CSAPR states and a demonstration showing that CSAPR would result in greater reasonable progress than BART under the test in 40 CFR 51.308(e)(3). In that analysis, EPA utilized simplified assumptions regarding “presumptive” BART limits at BART-eligible sources. This analysis was conducted on a category-wide basis (all fossil fuel-fired EGUs). See 77 FR 33642, 33649-50 (June 7, 2012). This analysis satisfied 51.308(e)(2)(i)(C) because CSAPR was designed to meet the requirements of CAA section 110(a)(2)(D)(i)(I) (sometimes referred to as “good neighbor” obligations) for certain NAAQS pollutants. EPA finds that reliance on the category-wide BART analysis from the 2012 CSAPR Better-than-BART demonstration is appropriate here, because, although the Texas program is not designed to meet good neighbor obligations under section 110(a)(2)(D)(i)(I), it is designed to meet separate CAA requirements for interstate visibility transport, as explained in section III.B above. This satisfies the condition in 51.308(e)(2)(i)(C) for using category-wide information such as presumptive BART limits in analyzing the Texas SO

Trading Program. Thus, the BART determinations derived from that CSAPR Better-than-BART demonstration are an appropriate BART benchmark for comparison against the Texas SO

Trading Program given that the Texas SO

Trading Program is modeled on the CSAPR trading programs. In this action, we are relying, in part, on that same 2012 CSAPR Better-than-BART demonstration to show that the clear weight of evidence demonstrates that the Texas SO

Trading Program, which is modeled on the CSAPR trading programs, will provide for greater reasonable progress than BART in Texas. Indeed, the anticipated maximum potential SO

emissions in Texas under the Texas SO

Trading Program BART alternative are less than the SO

emission levels from Texas EGUs that were forecast in the demonstration for Texas EGU emissions assuming their participation in the CSAPR SO

trading program. Under CSAPR, the total allocations for all existing EGUs in Texas were 279,740 SO

tons, the total state budget including the amounts of allowances set aside for potential allocation to new units was 294,471 tons, and the assurance level was 347,476 tons. The level of emissions assumed for Texas EGUs in the BART alternative sensitivity analysis utilized for the 2012 CSAPR Better-than-BART determination is 317,100 SO

tons.

112

By comparison, the Texas SO

Trading Program has a budget of 238,395 SO

tons, and we are finalizing an assurance level of 255,083 tons in this action. In light of the three-

for-one penalty surrender ratio imposed on emissions exceeding the 255,083-ton assurance level, the assurance level represents the highest annual SO

emissions anticipated from units subject to the Texas program. In reality, in light of ongoing changes in the electric-generating sector in Texas, there is a reasonable expectation that actual emissions under the Texas program would remain well below the assurance level. We are also finalizing a more conservative (

i.e.,

higher) estimate of 35,000 annual SO

tons as the projected emissions from Texas units that would have been in the CSAPR program but are not in the Texas SO

Trading Program. This more conservative estimate is based on these units' maximum annual emission level of 34,129 tons over the past five years (2014-2018) and taking into consideration that several of these units have recently shut down or have been announced for shutdown in the near future.

113

Adding that amount to the Texas SO

Trading Program's assurance level of 255,083 tons yields 290,083 tons. Assuming this figure represents a firm upper bound on annual SO

emissions from the relevant EGUs in Texas under the Texas SO

Trading Program, this is less than the 317,100-ton figure EPA had demonstrated was acceptable in the original 2012 CSAPR Better-than-BART analysis.

111

83 FR 43586, at 43597.

112

For the projected annual SO

emissions from Texas EGUs,

see

Technical Support Document for Demonstration of the Transport Rule as a BART Alternative, Docket ID No. EPA-HQ-OAR-2011- 0729-0014 (December 2011) (2011 CSAPR/BART Technical Support Document at Table 2-4,), available in the docket for this action. Certain CSAPR budgets were increased after promulgation of the CSAPR final rule (and the increases were addressed in the 2012 CSAPR/BART sensitivity analysis memo. See memo entitled “Sensitivity Analysis Accounting for Increases in Texas and Georgia Transport Rule State Emissions Budgets,” Docket ID No. EPA-HQ-OAR-2011-0729-0323 (May 29, 2012), available in the docket for this action. The increase in the Texas SO

budget was 50,517 tons which, when added to the Texas SO

emissions projected in the CSAPR + BART-elsewhere scenario of 266,600 tons, yields total potential SO

emissions from Texas EGUs of approximately 317,100 tons.

113

84 FR 61853.

Comment:

The commenter asserted that it was not appropriate for EPA to conclude that because CSAPR achieves greater reasonable progress than BART when averaged across all affected states that this necessarily means that CSAPR achieves greater reasonable progress than BART in Texas. The commenter asserted that the legal test that EPA used during the original “CSAPR Better-than-BART” rulemaking is fundamentally different than the test EPA must use in assessing whether the Texas SO

Trading Program is better than BART. The commenter asserted that in making its determination that CSAPR achieves greater reasonable progress than BART under 40 CFR 51.308(e)(3), EPA was required to demonstrate that visibility does not decline in any Class I area and that there is an overall improvement in visibility, determined by

comparing the average differences

between BART and the alternative over all affected Class I areas. The commenter argued that since EPA averaged the visibility improvement from CSAPR over all the affected Class I areas in the eastern half of the country in the CSAPR Better-than-BART determination, Texas was able to take advantage of reductions from other states without having to reduce its SO

emissions as much as it would have had to do under source-by-source BART. The commenter argued that in contrast to the CSAPR Better-than-BART determination, the legal test required under §§ 51.308(e)(2)(i) and 51.308(e)(3) to demonstrate that the Texas SO

Trading Program is better than BART cannot rest on improvements from CSAPR in other states. The commenter argued that EPA must instead demonstrate that the Texas SO

Trading Program is better than BART in Texas alone by examining the visibility improvement at only the Class I areas affected by Texas sources.

Response:

We disagree that EPA must demonstrate that the Texas SO

Trading Program is better than BART by examining visibility improvement at only Class I areas in Texas and Class I areas in other states affected by Texas sources. As explained in our proposal affirming the Texas SO

Trading Program, the 2012 demonstration that CSAPR, as finalized and amended in 2011 and 2012, meets the Regional Haze Rule's criteria for a demonstration of greater reasonable progress than BART is also the primary evidence that the Texas trading program achieves greater reasonable progress than BART.

114

In the 2012 CSAPR Better-than-BART rule, the EPA relied on an analytic demonstration that included an air quality modeling study showing that CSAPR results in greater improvements in average visibility across all affected Class I areas as compared to adopting source-specific BART. Our finding with respect to the Texas program relies on the demonstration underlying our CSAPR Better-than-BART Rule and our 2017 CSAPR Better-than-BART affirmation (including the basis for our denial of a petition for reconsideration in the latter,

115

as discussed in section I.D of the preamble). Thus, we find that given the particular circumstances in this case, we are not required to focus only on Class I areas in Texas and Class I areas in other states affected by Texas sources. Rather, we are assessing the Texas program in the context of the larger CSAPR Better-than-BART analysis. We find that due to the specific circumstances in this case, as described above, it is reasonable and appropriate to consider improvements in average visibility across all affected Class I areas in our assessment of the Texas SO

Trading Program to demonstrate that it is better than BART. The amendments to the Texas SO

Trading Program we are finalizing in this action ensure that EGU emissions under the Texas program will remain well below the amount assumed in the BART-alternative sensitivity analysis utilized for the 2012 CSAPR Better-than-BART determination (

i.e.,

317,100 tons), and thus visibility levels at Class I areas impacted by sources in Texas are anticipated to be at least as good as (and likely better than) the levels projected under Texas participation in the larger CSAPR SO

trading program.

114

83 FR 43586, at 43599.

115

Federal Register

are available at Docket ID EPA-HQ-OAR-2016-0598.

Comment:

We received one comment that asserted that EPA's reliance on CSAPR to design the Texas SO

Trading Program as a BART alternative is not appropriate because in doing so, EPA did not account for new circumstances or update emissions and other data, which the commenter claimed EPA typically does when evaluating BART. The commenter asserted that if EPA had taken the same technical approach it has taken in other regional haze actions of using the most up-to-date data, this would have changed the allowance distribution of the Texas SO

Trading Program. For instance, the commenter argued that in developing the Texas SO

Trading Program, EPA should have taken into account the retirements of Welsh 2, Big Brown Units 1 and 2, Monticello Units 1, 2, and 3, and Sandow 4 and 5. Similarly, the commenter asserted the Texas SO

Trading Program should have included rule provisions for properly dealing with the impending retirement of the two JT Deely units instead of the current method of addressing retired allowances, which the commenter claimed provides no incentive to reduce SO

emissions. Additionally, the commenter noted that EPA assigned allocations under CSAPR on the basis of a unit's heat input from 2006-2010 and its emissions from 2003-2010 utilizing a detailed ten-step approach based on the heat input and emissions from those periods. The commenter claimed that EPA should have re-applied the same allocation methodology it used for CSAPR using updated information, and that if EPA had done so, the allocations in many instances would have changed significantly. In support of this argument, the commenter performed this analysis using the same number of years as in the original CSAPR methodology but shifted the year ranges forward to include updated information.

The commenter asserted that two cases were analyzed. In the first case, the commenter did not remove retired units and used the original CSAPR methodology to revise the CSAPR allocations while using updated data. In this case, because none of the retired units were removed, the total allocations remained at 238,393 tons. However, the commenter asserted that because the emissions and heat inputs changed with the updated data, almost every unit's allocations changed, in some cases by more than 3,000 tons. In the second case, the commenter asserted that retired units were removed, but the JT Deely units were retained. The commenter asserted that because of the removal of retired units and because of the updated emissions and heat inputs, almost every unit's allocations changed, resulting in a reduction of allocations from 238,393 tons to 176,332 tons. The commenter noted that these additional 62,061 tons in unit allocations that resulted from EPA not using the most updated data in the allocation methodology and not removing retired units should not be moved into the Supplemental Allowance Pool as Section 97.911(a)(2) of the Texas SO

Trading Program provides. The commenter argued that these allowances should never have been in the allowance pool in the first place. The commenter concluded that the analysis performed by the commenter demonstrates that if EPA had updated the emissions data and heat input data using the original CSAPR methodology and removed the retired units' allocations, the Texas SO

Trading Program would not include excess allowances, which the commenter claimed disincentivizes SO

emissions reductions.

Response:

As stated in responses to several other comments in this final action and in our Response to Comments document found in the docket for this action, we disagree that in developing a specific trading program, EPA must incorporate new design features, particularly when other legal and policy considerations weigh in favor of making the program similar in design to a specific previous program that does not include those design features. Likewise, EPA is not required to incorporate new design features that may be suggested by a commenter and is not required to update every data element used in the rulemaking. In this instance, the Texas SO

Trading Program was designed to qualify as a BART alternative in light of EPA's previous determinations regarding permissible BART alternatives, and for that reason was designed to be as similar as possible to the CSAPR SO

program. Both the amounts of the initial allocations to units under the Texas SO

Trading Program and the treatment of the allocations to units that have been retired for at least five years are directly based on the analogous provisions in the CSAPR SO

program. As discussed in response to another comment on the Texas SO

Trading Program's Supplemental Allowance Pool, in those aspects of the overall allocation methodology where the Texas SO

Trading Program allowance allocation provisions deviate from the CSAPR SO

program allowance allocation provisions, the Texas SO

Trading Program is generally more, not less, stringent.

With respect to the commenter's point that the amount of the CSAPR SO

program budget for Texas was initially determined based on our assessments of the state's interstate transport obligations at the time of the CSAPR rulemaking, we agree with the statement but do not consider the point relevant to this final action. The origins of the CSAPR budgets are immaterial to this action. Along with certain budget adjustments that were addressed through sensitivity analyses, the CSAPR budgets were used in our 2012 CSAPR Better-than-BART determination and therefore remain relevant for purposes of our determination in this action that the Texas SO

Trading Program qualifies as a BART alternative in the context of the 2012 CSAPR Better-than-BART determination.

With respect to the commenter's identification of alternative possible distributions of allowances among the units covered by the program, we do not believe that altering the distribution of allowances while leaving the total number of allowances the same would change the stringency of the program, although it could address concerns regarding whether the distribution among the sources is equitable. As none of the sources covered by the program have raised equity concerns about the initial allocations, and given that we do not understand the commenter to be raising such concerns, we see no reason to redistribute the initial allocations. We address the comments regarding the stringency of the program cap elsewhere.

With regard to the commenter's position that allowances allocated to units that retire should be eliminated from the budget instead of being reallocated, that is of course an option in designing a trading program, but it is not a requirement, and it is not a feature of the CSAPR SO

program on which the Texas SO

Trading Program was modeled. We were not required and did not find it necessary to take such an approach in the Texas SO

Trading Program in order to ensure that the program qualifies as a BART alternative in the context of the 2012 and 2017 CSAPR Better-than-BART determinations.

Comment:

We received comments from the State and affected sources in support of our affirmation that the October 2017 Regional Haze FIP satisfies Texas' obligations for BART and in support of our determination that the intrastate SO

trading program for certain EGUs in Texas is an appropriate BART alternative and satisfies all SO

BART requirements. Several affected sources also provided comments in support of the October 2017 SO

trading program over the adoption of a source-by-source approach to address the BART requirements for units subject to BART in Texas. One affected source asserted that the trading program will allow operational flexibility in complying with BART obligations and another affected source asserted that it is appropriate for EPA to respect Texas' preference to meet BART compliance through a BART alternative rather than source-specific BART.

Response:

We appreciate the commenter's support of our FIP that establishes an intrastate trading program that caps emissions of SO

from certain EGUs in Texas and includes the determination that this program meets the requirements for an alternative to BART for SO

Comment:

We received one comment that argued that EPA's reliance on the CSAPR Better-than-BART demonstration is based on the false premise that the Texas SO

Trading Program is functionally equivalent to CSAPR. The commenter asserted that the Texas SO

Trading Program is not sufficiently similar to CSAPR for a comparison between Texas' overall emissions under the Texas SO

Trading Program versus CSAPR to suffice for a weight of evidence determination. In support of the claim that the Texas SO

Trading Program and CSAPR are not sufficiently similar, the commenter pointed to the exclusion from the Texas SO

Trading Program of a number of Texas EGUs that were covered under CSAPR and argued that EPA presented no real analysis of the visibility impacts of these excluded units. The commenter asserted that for some of these excluded units that have existing scrubbers or other types of SO

control, such as Oklaunion, W.A. Parish 8, Oak Grove Units 1 and 2, Twin Oaks Units 1 and 2, and Sandy Creek, EPA should have

evaluated possible upgrades to existing SO

controls.

The commenter also argued that there are flaws in how EPA performed its Q/d analysis that constitute arbitrary deviations from EPA's Q/d testing methodology in past regional haze actions and claimed that the deviations were made in order to exclude certain units from the Texas SO

Trading Program. For instance, the commenter asserted that EPA's decision to base the Q/d analysis on 2009 emissions was arbitrary and claimed that no rationale was provided for selecting that year of data other than EPA noting that it already had this emissions data available from a previous analysis. The commenter asserted that in contrast to the Q/d analysis EPA used to identify sources to include in the Texas SO

Trading Program, in past regional haze actions, EPA has typically considered a 3-5 year range of data to account for data variability from year to year. The commenter also asserted that the Twin Oaks facility had a Q/d greater than EPA's stated threshold of 10 but it was nonetheless excluded on the basis that EPA estimated that the Q/d of each of its individual units were likely less than 10. The commenter claimed that EPA's decision to deviate from its approach is arbitrary and was made in order to exclude the Twin Oaks facility from the trading program. Similarly, the commenter asserted that EPA's decision to exclude Oklaunion from the trading program even though its Q/d was 85, which is much higher than the EPA's stated threshold of 10, is arbitrary. The commenter asserted that EPA's decision to exclude units that came online after 2009 on the basis that these units would be permitted and constructed using emission control technology determined under either BACT or LAER review, was inappropriate given that EPA made no comparison between the levels of control under BACT or LAER versus BART for these units. The commenter argued that this comparison was necessary given that, according to the commenter, BART has been demonstrably more stringent than either BACT or LAER. The commenter also asserted that the opt-in provision is yet another feature of the Texas SO

Trading Program that makes the trading program not functionally equivalent to CSAPR, as EPA removed the opt-in provision in CSAPR.

Response:

We continue to believe that the Texas SO

Trading Program will achieve SO

emission levels that are functionally equivalent to those that had been previously projected for Texas' participation in the original CSAPR program and that our reliance on the original CSAPR Better-than-BART determination for the clear weight of evidence demonstration required under § 51.308(e)(2)(i)(E) was thus appropriate in this case. What we mean by the phrase “functionally equivalent” is that while the two programs are not identical, the differences between the Texas SO

Trading Program and CSAPR are either not significant or work to demonstrate the relatively greater stringency of the Texas SO

Trading Program as compared to CSAPR. As the commenter notes, in our August 27, 2018 proposal affirming the Texas SO

Trading Program, we listed several points that help demonstrate the relative stringency of the Texas SO

Trading Program as compared to CSAPR.

116

These points are summarized below:

116

83 FR 43586, at 43591.

• Covered sources under the Texas SO

Trading Program represent approximately 85% of CSAPR allocations for existing units in Texas. Cove

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