Acid Rain Program: Revisions to Permits, Allowance System, Sulfur Dioxide Opt-Ins, Continuous Emission Monitoring, Excess Emissions, and Appeal Procedures
Federal RegisterOct 24, 1997
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SUMMARY: Title IV of the Clean Air Act (the Act) authorizes the
Environmental Protection Agency (EPA or Agency) to establish the Acid
Rain Program. The purpose of the Acid Rain Program is to significantly
reduce emissions of sulfur dioxide and nitrogen oxides from utility
electric generating plants in order to reduce the adverse health and
ecological impacts of acidic deposition (or acid rain) resulting from
such emissions. On January 11 and March 23, 1993, the Agency
promulgated final rules governing permitting, the allowance system,
continuous emissions monitoring, excess emissions, and appeal
procedures. On December 27, 1996, the Agency published proposed
revisions to those rules, most of which revisions are addressed in
today's final rule.
After considering its experience in applying the Acid Rain Program
rules since 1993, the Agency believes that the permitting, excess
emissions, and appeal procedures rules (as well as minor aspects of the
monitoring rule) can be streamlined and improved in order to reduce the
burden on utilities, State and local permitting authorities, and EPA.
Today's final rule revisions streamline the Acid Rain Program while
still ensuring achievement of its statutory goals of reducing sulfur
dioxide and nitrogen oxides emissions.
In addition, EPA is revising the sulfur dioxide allowances for one
unit. Each allowance authorizes the emission of one ton of sulfur
dioxide. Under the Acid Rain Program, utility units (i.e., fossil fuel-
fired boilers or turbines) are allocated annual allowances and must not
emit sulfur dioxide in excess of the amount authorized by the
allowances that they hold. Today's final rule revises one unit's
allowances pursuant to a settlement agreement. In a future final
action, EPA will act on the other allowance revisions that were set
forth in the December 27, 1996 proposed rule.
EFFECTIVE DATE: November 24, 1997.
ADDRESSES: Docket No. A-95-56, containing the information used to
develop the final rule, is available for public inspection and copying
from 8:30 a.m. to 12 p.m. and 1 p.m. to 3:30 p.m., Monday through
Friday, excluding federal holidays, at EPA's Air Docket Section (6102),
Waterside Mall, Room M1500, 1st Floor, 401 M Street, SW, Washington, DC
20460. Additional information concerning the original rules and today's
final revisions is found in Docket Nos. A-90-38 (permits), A-91-43 and
A-92-06 (allowances), A-90-51 (continuous emissions monitoring), A-91-
68 (excess emissions), A-91-69 (general), and A-93-15 (appeals). A
reasonable fee may be charged for copying.
FOR FURTHER INFORMATION CONTACT: Dwight C. Alpern, Attorney-advisor, at
(202) 233-9151 (U.S. Environmental Protection Agency, 401 M Street, SW,
Acid Rain Division (6204J), Washington, DC 20460); or the Acid Rain
Hotline at (202) 233-9620.
SUPPLEMENTARY INFORMATION:
Regulated Entities
Entities potentially regulated by this action are fossil-fuel fired
boilers or turbines that serve generators producing electricity for
sale. Regulated categories and entities include:
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Examples of regulated
Category entities
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Industry.................................. Electric service providers.
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This table is not intended to be exhaustive, but rather provides a
guide for readers regarding entities likely to be regulated by this
action. This table lists the types of entities that EPA is now aware
could potentially be regulated by this action. Other types of entities
not listed in the table could also be regulated. To determine whether
your facility is regulated by this action, you should carefully examine
the applicability criteria in Sec. 72.6 and the exemptions in
Secs. 72.7, 72.8, and 72.14 of title 40 of the Code of Federal
Regulations. If you have questions regarding the applicability of this
action to a particular entity, consult the persons listed in the
preceding FOR FURTHER INFORMATION CONTACT section.
Organization. The information in this preamble is organized as
follows:
I. General
II. Part 72: Applicability of and Exemptions From Acid Rain Program
A. Applicability
B. Exemptions
1. New Units Exemption
2. Retired Units Exemption
3. Industrial Utility-Units Exemption
III. Part 72: Interaction of Acid Rain Permitting and Title V
A. Relationship Between Acid Rain Rules and Parts 70 and 71
B. State Authority to Administer and Enforce Acid Rain Permits
C. Required Elements for State Acid Rain Program
IV. Part 72: Miscellaneous Permitting Matters
A. Definitions
B. Designated Representative
C. Compliance Plans
D. Federal Permit Issuance
E. Permit Revision
F. Reduced Utilization Accounting
V. Part 73: Allowances
A. Allowance Tables
B. Small Diesel Refinery Provisions
VI. Part 75: Monitoring of Units Burning Digester or Landfill Gas
VII. Part 77: Excess Emissions
VIII. Part 78: Administrative Appeals
IX. Administrative Requirements
A. Executive Order 12866
B. Unfunded Mandates Act
C. Paperwork Reduction Act
D. Regulatory Flexibility
E. Submission to Congress and the General Accounting Office
F. Miscellaneous
I. General
A significant number of the revisions in the December 27, 1996
proposal did not receive any comment. Most of the proposed revisions,
including all on which comment was received, are discussed in this
preamble. Unless otherwise stated below, revisions are adopted in
today's final rule for the reasons discussed in the proposal.
II. Part 72: Applicability of and Exemptions From Acid Rain Program
A. Applicability
The proposal included two types of revisions of the existing rule.
First, the definition of ``power purchase commitment'' was revised to
extend to three years the period by which a letter of intent must have
resulted in execution of a power sales agreement. Second, minor
revisions were made to the procedure for petitioning for a
determination by the Administrator on the applicability of the Acid
Rain Program to a unit. Supportive comment was received on the first
revisions, and no comment was received on the second. The revisions are
therefore adopted in today's rule.
B. Exemptions
1. New Units Exemption
Section 72.7 of the existing rule provides an exemption from most
Acid Rain Program requirements for new units that serve generators with
a total capacity of 25 MWe or less and that combust clean fuels. The
proposal made
[[Page 55461]]
several types of revisions in order to streamline the new units
exemption. With the changes discussed below,1 revisions are
adopted in today's rule for the reasons discussed here and in the
proposal.
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\1\ In addition, today's rule adds language clarifying that the
requirement that a unit serve one or more generators with total
nameplate capacity of 25 MWe or less during the period of the
exemption does not apply to the time before the unit commenced
commercial operation. Today's rule also adds language, under
``Special Provisions'', to reiterate the fact (reflected in
Sec. 72.7(a)) that an exempt unit must continue to meet the
requirements (e.g., the sulfur content limits for its fuels)
throughout the duration of the exemption. Another addition in
today's rule is language clarifying that when the exemption is lost,
the unit must comply with Acid Rain permitting and monitoring
requirements, starting after the loss of the exemption (e.g.,
starting on the first date on which the unit is no longer exempt).
Similar language is added to the retired units and industrial
utility-units exemption provisions.
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First, the requirement for the combustion of clean fuels at the
unit was revised in the proposal. While the existing rule requires that
only fuel with a sulfur content 0.05 percent or less by weight be
combusted, the proposal stated that the unit must burn gaseous fuel
with an annual average sulfur content of 0.05 percent or less by weight
and nongaseous fuel with an annual average sulfur content of 0.05
percent or less by weight. Commenters supported the revisions and
explained that the existing rule was unduly restrictive. These
revisions are adopted in today's rule.
The proposal also set forth revised procedures for determining
annual average sulfur content by weight for gaseous and nongaseous
fuel. The proposal eliminated provisions mandating the use of listed
methods for measuring sulfur content but included provisions concerning
the required frequency of sampling. The proposal provided explicitly
that the owners and operators of the unit bear the burden of proving
compliance with the sulfur content requirement. Commenters supported
these revisions but suggested that EPA state that any ``recognized
industry standard such as an ASTM method would be acceptable.''
Commenters also urged that the rule state that a unit that burns only
diesel fuel meeting the requirements of diesel fuel for motor vehicles
be assumed to meet the limits on sulfur content of fuel.
The proposed revisions are adopted in today's rule. Under the final
rule, since methods for measuring sulfur content are not specified, the
Agency will evaluate on a case-by-case basis the information provided
by the owners and operators of a unit on sulfur content. In order to
ensure that owners and operators understand that they must use a
reasonable method to determine sulfur content, the final rule adopts
language from section 412 concerning emission monitoring and states
that the method of determining sulfur content must provide information
that is reasonably precise, reliable, accessible, and timely. EPA
anticipates that owners and operators will meet their burden of proof
by using a method that is generally recognized in the industry (such as
the applicable ASTM method set forth in the existing rule), is
applicable to the unit, and is consistent with the other provisions
(e.g., sampling frequency requirements) of today's rule.
Further, EPA recognizes that diesel fuel for motor vehicles is
required under Sec. 80.29 to have a sulfur content of 0.05% by weight.
Commenters have suggested that such diesel fuel should be assumed to
meet the sulfur content limit without any testing. One commenter stated
that the testing by the unit owner was burdensome and duplicative of
testing by the fuel supplier.
However, not all diesel fuel is required to meet the sulfur content
limit; only diesel fuel for use in motor vehicles must meet the limit
under Sec. 80.29. 40 CFR 80.29(a)(1)(i). A significant amount of diesel
fuel is produced for other uses (e.g., as fuel for electric generation
by utilities) has a higher sulfur content than mandated for diesel fuel
for motor vehicles. Petroleum Supply Annual 1996, Vol. 1 at 51, Table
17 (Energy Information Administration, June 1997) (indicating that
about 37% of 1996 U.S. distillate production (which is primarily diesel
fuel as defined in Sec. 72.2) had a sulfur content above 0.05% by
weight).2 Moreover, the higher-sulfur diesel fuel is used by
many utility units that combust diesel fuel. For example, during 1996
and the first half of 1997, diesel fuel with a sulfur content of 0.05%
or less by weight accounted for only about 13% of the total heat input
for affected units that used diesel fuel and were required to report
the sulfur content of their fuel to EPA. Most of the diesel fuel used
had a much higher sulfur content; diesel fuel with more than twice the
sulfur content (i.e., over 0.10% sulfur by weight) accounted for about
81% of such total heat input.3
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\2\ Relatively little distillate fuel oil is imported into the
U.S., and most of it has a sulfur content exceeding 0.05%. Id. at
55, Table 20.
\3\ Report to Docket: Diesel Fuel Use of Units Required to Use
Fuel Sampling Under part 75, appendix D (September 16, 1997).
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In contrast, virtually all commercially available natural gas in
the U.S. has sulfur content at or below 0.05% by weight. Because of the
toxic effects of hydrogen sulfide and its corrosive effect on pipeline
and customer equipment, pipelines generally provide pipeline
transportation or distribution service only for natural gas with a very
low hydrogen sulfide content (e.g., 0.25 to 0.30 grain per 100 standard
cubic feet), which results in total sulfur content far below 0.05% by
weight. See, e.g., H. Dale Beggs, Gas Production Operations at 204-5,
209-11, and 227 (1984); and 49 CFR 192.475(c) (provision, in U.S.
Department of Transportation minimum safety standards for natural gas
pipelines, limiting the hydrogen sulfide content of gas ``stored in
pipe-type or bottle-type holders'' to 0.25 grain per 100 standard cubic
feet).
Since diesel fuel is widely available that does not meet the sulfur
content limit, diesel fuel must be treated like any other fuel that is
combusted at an exempt new unit and that could potentially exceed the
limit. The owners and operators of the unit combusting the fuel must
demonstrate that the limit is being met using the results of reliable
testing methods consistent with the sampling and other requirements of
today's rule. Of course, under today's rule, the owners and operators
are not required to conduct the testing themselves. EPA will consider
testing by fuel suppliers in determining whether the owners and
operators have met their burden of proof.
Second, the proposal streamlined the procedure for obtaining a new
units exemption and reduced the burden imposed by the procedure on
owners and operators and permitting authorities. The existing rule
required owners and operators of a unit to submit an application and
for permitting authorities to provide notice and opportunity for
comment before issuing an exemption. The proposal made the obtaining of
an exemption largely automatic so long as the capacity, annual fuel
use, and recordkeeping requirements are met. Under the proposal, owners
and operators of a unit meeting these requirements must submit a
statement to the permitting authority (and, if EPA is not the
permitting authority, to EPA) that the unit meets, and will continue to
meet, the requirements for the exemption. The proposal states that a
new units exemption is effective on January 1 of the first full
calendar year for which the unit meets the exemption requirements and
that the statement must be submitted by December 31 of such year. In
short, where the end-of-year submission deadline and other requirements
for an exemption are met, the exemption will cover the entire year in
which the submission was made. The
[[Page 55462]]
proposed revisions are adopted in today's rule.
The proposal established some additional procedures for the
relatively few new units that were allocated allowances.4
The owners and operators of such units must submit a statement (similar
to the one for units without allocations) stating that the owners and
operators are surrendering the allowances, and proceeds from the
auction of allowances, starting with the first year for which the unit
is exempt. Under the proposal, the exemption for a unit allocated
allowances is effective on January 1 of the first year for which the
Administrator actually deducts the full allowance allocation and
actually receives the full amount of auction proceeds. Commenters
contended that this ``unfairly'' makes the exemption contingent on an
event (i.e., the deduction of allowances) beyond the control of the
owners and operators. Allegedly, the exemption should be contingent
only on submission of the statement surrendering allowances and
proceeds.
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\4\ While the proposal referred to allowances allocated under
Table 2 or 3 of subpart B of part 73, today's rule simply refers to
allowances allocated under that subpart. Under part 73 as currently
organized, all allocations to new units are included in the tables.
Since in the future EPA may reorganize the allowance allocation
information that is currently presented in two separate tables,
today's rule adopts a more general reference to new-unit allowance
allocations.
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EPA notes that the only issue is the date on which the exemption
becomes final. Once the Administrator actually makes the necessary
allowance deductions and receives the proceeds, the exemption runs
starting from January 1 of the year for which the unit meets the
requirements (e.g., fuel sulfur limits and allowance and proceeds
surrender) for this exemption. The difficulty with making the exemption
effective when the surrender statement is submitted is that there is no
guarantee that the unit's allowance account actually has sufficient
allowances to deduct or that the proceeds are actually available to and
received by the Administrator.
In order to ensure that the actual deduction of allowances in the
unit's Allowance Tracking System account is not unduly delayed, the
final rule requires that, within 5 business days of receiving the
owners' and operators' surrender statement, the Administrator either
makes the allowance deductions or notifies the owners and operators
that there are insufficient allowances for the deductions. This is the
same period of time in which, under Secs. 73.52 and 73.53, the
Administrator must act on an allowance transfer request. The approach
adopted in today's rule accommodates both the concern that the
necessary number of allowances actually be available for deduction
before the exemption is effective and the concern that the
effectiveness of the exemption not be unnecessarily delayed.
Finally, the proposal provided that a unit with a new units
exemption is not an ``affected unit'' and so does not need an operating
permit under part 70 or 71 unless such a permit is required because
non-title IV, federal requirements applicable to the unit. See 61 FR
68343. However, for the case where, because of non-title IV
requirements, the source at which the unit is located has or must have
an operating permit, the proposal did not exclude the new units
exemption from the general requirement to incorporate applicable
federal requirements in the operating permit. See 42 U.S.C.
7661a(b)(5)(A) and 7661c(a). The final rule adopts the proposed
provision and makes it clear that if, because of non-title IV
requirements, an operating permit is issued to the source, the new
units exemption must be reflected in that operating permit. In
particular, after the actions necessary for the new units exemption to
take effect have been completed (e.g., the receipt by the permitting
authority of a statement of exemption by the owners and operators of
the unit and the notification by the Administrator that he or she has
deducted any allowances, and received any allowance proceeds, required
to be surrendered), the permitting authority must add the provisions
and ongoing requirements of the exemption to any operating permit that
covers the source at which the unit is located. Consistent with the
elimination of the requirement for notice and comment on a new unit's
exemption, the addition of the exemption to the permit is an
administrative amendment. A written new units exemption issued under
the existing rule prior to revision by today's rule must similarly be
added to any operating permit.
Under this approach, the exemption alone will not result in
issuance of an operating permit, but, if an operating permit would be
issued for the source in any event, that operating permit will include
the ongoing requirements imposed on the unit under the exemption. This
approach reasonably implements the concept that an operating permit
should include the applicable federal requirements for a source. For
the same reasons, analogous provisions are included in today's rule
with regard to the retired units exemption and the industrial-utility
units exemption.
2. Retired Units Exemption
Section 72.8 of the existing rule provides an exemption from Acid
Rain Program requirements for retired units. The proposal made several
types of revisions in order to streamline this retired units exemption.
First, while the existing rule required owners and operators of a unit
to submit an application for the exemption and for permitting
authorities to provide public notice and opportunity for comment before
issuing a final exemption, the proposal made the obtaining of an
exemption largely automatic so long as the unit is permanently retired.
Second, the proposal clarified that the exemption applies to most Acid
Rain Program requirements.
No comments were received on these proposed revisions. In order to
make it clear that only Phase I or Phase II units, and not opt-in units
under part 74, are eligible for the retired units exemption, today's
rule states that the exemption applies to ``any affected unit (except
for an opt-in source)''. This exclusion of opt-in sources is consistent
with the existing provisions of part 74 that impose separate
requirements with regard to permanent shutdown of opt-in sources. See,
e.g., 40 CFR 74.46. In addition, to provide flexibility where a retired
unit has no allowance allocations and has not selected a designated
representative, the final rule allows a certifying official to submit
notice of the exemption to the permitting authority. For the reasons
discussed here and in the proposal, the revisions, as modified, are
adopted in today's rule.
3. Industrial Utility-Units Exemption
Scope of Exemption. In the proposal EPA established a new exemption
for certain industrial units that generate only incidental amounts of
electricity for sale. As explained in detail in the preamble of the
proposal, ``utility units'' (the entities subject to the Acid Rain
SO2 emission limitation and other requirements of the Acid
Rain Program) include, with certain exceptions, any unit serving a
generator that produced electricity for sale any time starting in 1985.
With certain exceptions (e.g., for cogenerators), an industrial unit
serving a generator that produced any amount of electricity for sale
(referred to hereinafter as simply an ``industrial utility-unit'')
5 is an affected unit under
[[Page 55463]]
the Acid Rain Program regardless of the amount of the sale relative to
the total generation by the generator and whether or not the sale is to
the general public or to a public utility for resale to the public.
Moreover, the requirement to hold allowances to cover SO2
emissions and to meet any applicable NOX emission limitation
under the Acid Rain Program applies to all emissions from the unit, not
simply the portion that might be attributed to generation of the
electricity sold.
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\5\ The proposal referred to these units as simply ``industrial
units''. In order to minimize confusion between these units and
industrial boilers not used in generation of electricity for sale,
and because generation of electricity for sale makes industrial
units ``utility units'' under title IV, the final rule refers to the
units as ``industrial utility-units''.
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Despite the applicability of the requirement to hold allowances,
EPA has not allocated allowances to industrial utility-units that might
have qualified for allowance allocations under section 405 of the Act,
including some units whose owners submitted timely comments relating to
allowance allocations. On March 23, 1993, EPA issued notices stating
that such industrial utility-units would not be included in the
National Allowance Database, on which allowance allocations are based,
because EPA ``believe[d]'' that the units were not affected units. 58
FR 15720, 15727 (1993). On the same date, EPA also issued a final
allowance allocation list that allocated allowances only to units then
``believed'' to be affected units. 58 FR 15634, 15641 (1993). EPA
stated that no allowances would be allocated to units that were
subsequently determined to be, or that subsequently became, affected
units. Id.
In light of these circumstances, EPA proposed a limited exemption
from the Acid Rain Program for industrial utility-units that served,
any time starting in 1985, a generator that produced electricity for
sale. First, the industrial utility-unit must have no owner or operator
of which the principal business is electricity sale, transmission, or
distribution or that is a public utility subject to State or local
utility regulation.6 Such unit must not be a cogeneration
unit since cogeneration units already are covered by an express
exemption in the title IV. Further, on or before March 23, 1993, the
owners or operators of the unit must have entered into an
interconnection agreement (and any related power purchase agreement)
with a public utility requiring that the generator served by the unit
produce electricity for sale only for incidental sales of electricity
to that public utility. Moreover, in 1985 and any year thereafter, the
generator served by the unit must have actually produced only
incidental electricity sales for the utility, as required under the
interconnection agreement and any related power purchase agreement.
Incidental sales were defined as sales not exceeding the lesser of 10
percent of the generating output capacity of the generator or 10
percent of the actual annual electric output of the generator.
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\6\ In order to prevent the requirement from being circumvented
through the position of the owner or operator in the corporate
structure, the proposal stated that no owner or operator, subsidiary
or affiliate or parent company of the owner or operator, or
combination thereof could have such a principal business. Consistent
with this approach, the final rule also applies this to any division
of the owner or operator.
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The proposal established a petition and notice-and-comment
procedure for owners or operators to apply for the exemption and for
the Agency to review and approve or disapprove the exemption. If, after
approval of the exemption, any of the conditions for obtaining the
exemption are no longer met, the exemption terminates automatically.
The proposal, as changed below, is adopted for the reasons discussed
here and in the proposal.7
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\7\ In the proposal, EPA relied on the Report For Docket:
Industrial Units (October 31, 1996). In the report, EPA estimated
the number of industrial utility-units in the U.S. that may quality
for an industrial utility-units exemption under Sec. 72.14 and their
total annual SO2 and NOX emissions. One
commenter asserted that the report overestimated the emissions for
two units owned by the commenter. Assuming the accuracy of the
commenter's emission estimates, the total annual SO2 and
NOX emissions estimates for industrial utility-units are
reduced by about 10%, i.e., to about 41,000 tons of SO2
and 17,000 tons of NOX. This is not a significant change
and does not affect EPA's determinations concerning the industrial
utility-units exemption.
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All parties commenting on the new industrial utility-units
exemption supported the concept of such an exemption. However, these
commenters objected to various, specific provisions. First, commenters
claimed that EPA should ``totally'' exempt industrial utility-units
without regard to the amount of electricity sold by an industrial
utility-unit and/or without regard to whether the unit was
contractually obligated to sell electricity on or before March 23,
1993. Allegedly, industrial utility-units not qualifying for the
exemption will incur significant costs ``not related'' to the
objectives of title IV. It was argued that if industrial utility-units
that cannot meet the criteria of the rule are not exempt,
``agreements'' providing for sales by industrial utility-units to
utilities may be ``discontinued'', forcing utilities to ``look
elsewhere for their emergency and backup power needs.'' It was also
argued that the costs of complying with the Acid Rain Program ``will
exceed the benefits of the limited reductions to be achieved by the
regulations'' since the estimated amount of SO2 emissions is
small relative to the annual 8.95 million ton cap for utility units.
Since industrial utility-units are allegedly subject to the nationwide
cap of 5.60 million tons on total annual SO2 emissions by
``industrial sources'', regulation of industrial utility-units under
the existing Acid Rain regulations was claimed to be unnecessary.
However, EPA begins with the fact, undisputed by any commenter,
that Congress included non-cogeneration industrial utility-units in the
Acid Rain Program and thus under the annual 8.95 million ton cap for
SO2 emissions and under applicable NOX emission
limitations. See 61 FR 68344. Further, although the preamble of the
proposal stated that industrial utility-units are also under the 5.60
million ton cap for ``industrial sources'' under section 406(b) of the
Clean Air Act Amendments of 1990, EPA now believes, on further
consideration, that industrial utility-units (which served, any time
starting in 1985, a generator that produced electricity for sale) are
not covered by the latter cap.
Section 406(b) of the Clean Air Act Amendments of 1990 states that
if SO2 emissions from ``industrial sources * * * may
reasonably be expected to reach levels greater than 5.60 million tons
per year,'' the Administrator may take actions ``to ensure that such
emission do not exceed'' the cap. 42 U.S.C. 7651 note. From section
406(a), it is clear that the definition of ``industrial source'' in
section 402 of the Clean Air Act applies. Under section 402, an
``industrial source'' is:
a unit that does not serve a generator that produces electricity, a
``nonutility unit'' as defined in this section, or a process source
as defined in section 410(e). 42 U.S.C. 7651a(24)
As discussed above, an industrial utility-unit is a unit that is not
owned or operated by a utility but that served, anytime starting in
1985, a generator that produced electricity for sale and therefore is a
utility unit under section 402(17). Such a unit does not fall within
any of the three groups of units that are defined as ``industrial
sources''.8 Consequently, the units that are under
consideration in this rulemaking for
[[Page 55464]]
inclusion in the industrial utility-units exemption are not covered by
the 5.60 million ton cap. Contrary to commenters, the Clean Air Act
Amendments of 1990 do not give EPA the ``option'' of regulating
industrial utility-units under section 406. In contrast, Congress
exempted certain cogeneration facilities from the Acid Rain Program
(e.g., the 8.95-million-ton cap) and included them in the 5.60-million-
ton cap. Under section 402(17)(C) and (25), exempt cogeneration
facilities are excluded from the definition of ``utility unit'' and so
are ``nonutility'' units covered by the ``industrial source'' cap.
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\8\ Section 406(a) also states that ``industrial sources''
include units subject to section 405(g)(6), i.e., certain qualifying
facilities and independent power production facilities that are
exempt from title IV. The reference in section 406(b) to units
``subject to section 405(g)(5)'' is an inadvertent error that should
be read as citing section 405(g)(6). See National Annual Industrial
Sulfur Dioxide Emission Trends 1995-2015, EPA-454-R-95-001, at ES-2
(EPA 1995). Industrial utility-units are not exempt under section
405(g)(6).
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This reinforces the conclusion that industrial utility-units are
intended to be covered by the Acid Rain Program and leads to the
conclusion that a blanket exemption for all industrial utility-units is
inconsistent with the overall regulatory scheme under title
IV.9 Exempting all industrial utility-units, without regard
to the amount of their electricity sales or to when the sales became
contractually obligated, would result in a potentially increasing group
of existing and future units that would generate electricity for sale
but would be outside both the utility unit and the ``industrial
source'' caps. Particularly since the ongoing changes in the structure
of the electric industry make it difficult to predict how many
industrial utility-units there may be in the future and how they may be
used, EPA rejects such an open-ended exemption from both
caps.10 Moreover, commenters supporting a blanket exemption
ignore the fact that the Acid Rain Program is aimed at reducing both
SO2 emissions and NOX emissions. To the extent
that existing coal-fired industrial utility-units are Group 1 (i.e.,
dry bottom wall-fired or tangentially fired) or Group 2 (i.e., cell
burner, cyclone, wet bottom, or vertically fired) boilers, exempting
them removes the applicability of the Group 1 or Group 2 NOX
emission limits, which in some cases may be the only NOX
limits for these boilers under the Act.
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\9\ EPA rejects as speculative and irrelevant the commenter's
suggestion that title IV may be amended in a way that would require
non-exempt industrial utility-units to make additional,
``prohibitively expensive'' reductions.
\10\ Even if the ``total'' exemption were limited to the
specific possible industrial utility-units identified thus far by
EPA (see Report to Docket: Industrial Units (October 31, 1996)), the
amount of generation and emissions covered by a ``total'' exemption
could increase in the future. Moreover, the commenters suggested no
basis for limiting a ``total'' exemption to those tentatively
identified industrial utility-units if other units are subsequently
found to meet the ``total''-exemption criteria.
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EPA also rejects, as unsupported and speculative, the claim that
subjecting industrial utility-units to Acid Rain Program requirements
will make interconnection agreements and related power sales agreements
between such units and utilities economically prohibitive. EPA agrees
that industrial companies may have more difficulty than utilities (at
least under the current scheme of utility rate regulation) in passing
through the costs of the Acid Rain Program. However, that is a far cry
from concluding that electricity sales by existing industrial utility-
units would cease or that no new industrial utility-units would
contract to make such sales.
EPA therefore maintains that, if there is to be any exemption for
industrial utility-units, the exemption must be strictly limited in
order to resolve the specific problem set forth in the preamble of the
proposal. That problem is that some industrial utility-units have only
incidental activities (i.e., electricity sales) bringing the entire
operation of the unit under the Acid Rain Program and that these units
likely qualified for, but were not allocated, allowances. Strictly
limiting the exemption to address this problem will minimize the
potential environmental impact of this resolution on SO2 and
NOX emissions and will better harmonize the exemption with
the basic regulatory scheme under title IV. In fact, without the
specific limits on the exemption set forth in today's rule based on the
magnitude of electricity sales and the time period when electricity
sales first became contractually required, EPA would reconsider whether
any exemption for industrial utility-units should be established.
As an alternative to a blanket exemption for industrial utility-
units, one commenter suggested modifying the definition of ``incidental
sales of electricity'' so that units selling up to one-third (rather
than up to 10 percent, as under the proposal) of their electric
generation to utilities could qualify as exempt industrial utility-
units. Allegedly, limiting sales to up to one-third of annual electric
generation would be consistent with the statutory exemption for
cogeneration facilities. Under section 402(17)(C) and Sec. 72.6(b)(4),
a cogeneration facility that supplies to a utility, on an annual basis,
an amount of electricity not exceeding one-third of its potential
electrical output capacity or 219,000 MWe-hrs is an unaffected unit and
is not subject to the Acid Rain Program. The commenter supported
limiting industrial utility-units to annual electricity sales equal to
the lesser of one-third of capacity or one-third of actual generation.
Reflecting that the rationales for the industrial utility-units
exemption and the statutory cogeneration facility exemption are not
identical, today's rule does not make the requirements for the two
types of exemptions identical. On one hand, the cogeneration facility
exemption reflects Congressional intent, manifest in section 402(17)(C)
of the Act, that certain cogeneration facilities be entirely exempt
from the Acid Rain Program whether or not they had contracted before
enactment of title IV to provide electricity at a fixed price.
Presumably, this is because, by using the same steam both for electric
generation and industrial purposes, cogeneration facilities are
inherently more efficient than other units that generate electricity.
See 40 CFR 72.2 (defining ``cogeneration unit'' as unit producing
electricity and useful thermal energy ``through sequential use of
energy''). On the other hand, the industrial utility-units exemption
addresses the category of industrial utility-units, which were intended
by Congress to be subject to the Acid Rain Program but, with regard to
certain individual units, were not allocated allowances for which they
likely qualified. They lack the sequential use of energy that makes
cogeneration facilities inherently more efficient. As discussed above,
EPA maintains that the industrial utility-units exemption should, under
these circumstances, be more narrowly drawn than the provisions for
exempting cogeneration facilities. Consequently, EPA disagrees with the
approach of using the limit on electricity sales by exempt cogeneration
facilities in setting the limit on electricity sales by exempt
industrial utility-units.
In the proposal, the industrial utility-units exemption is limited
to units that were contractually obligated as of March 23, 1993 to make
only incidental sales of electricity to utilities. The proposal defines
``incidental sales'' as sales not exceeding 10 percent of either
nameplate capacity or total actual generation because that level seemed
to be consistent with the general level of historical electricity sales
by the type of unit intended to be covered by the exemption. This
approach limits the exemption by restricting both the number of units
covered by the exemption and the amount of electricity sales to
historical levels and does not allow expansion beyond those levels.
None of the commenting owners of units potentially qualifying for the
industrial utility-units exemption claimed that they had actually made,
in any past year, electricity sales in excess
[[Page 55465]]
of the 10 percent limit or that the 10 percent limit is
unrepresentative of historical levels. EPA maintains that it is
appropriate to impose on the industrial utility-units exemption a limit
reflecting historical levels and that, on their face, electricity sales
as high as one-third of total generation cannot be regarded as simply
incidental to the operation of the unit involved. For these reasons,
while choosing a 10-percent level as the cutoff point for ``incidental
sales''--like choosing any specific cutoff point--is to some extent
arbitrary, EPA maintains that the chosen level is reasonable. Today's
rule, like the proposal, defines ``incidental electricity sales'' as an
amount of electricity sales that does not exceed the smaller of 10
percent of the nameplate capacity of the generator served by the unit
times 8,760 hours per year or 10 percent of the actual annual electric
output of that generator.
Today's rule also continues to impose the incidental-electricity-
sales limit on sales starting in 1985 and continues to require that the
contractual obligation to make such sales must have been in place on
March 23, 1993. One commenter objected to having ``two different
deadlines'' and argued that only sales starting in 1993 should have to
meet the incidental-electricity-sales limit. EPA rejects this approach.
Under the industrial utility-units exemption, EPA considers the
electricity sales of the unit starting in 1985 because that is
analogous to the approach taken by Congress in section 402(17) in
determining what units are utility units that are subject to the Acid
Rain Program. With certain exceptions, any unit that at any time
starting in 1985 or thereafter serves a generator that produces
electricity for sale is a ``utility unit'' subject to the Acid Rain
Program. 42 U.S.C. 7651a(17)(A). In crafting the industrial utility-
units exemption, EPA reasonably takes a parallel approach of
considering actual sales starting in 1985. Actual sales before 1985
will not be considered. EPA sees no basis for the commenter's
suggestion of ignoring any non-incidental electricity sales from 1985
to 1993. In essence, EPA is requiring that, in order to be exempt, a
unit must have maintained its character as an industrial utility-unit
making only incidental sales throughout the period generally used to
determine applicability of the Acid Rain Program.
The rationale for the ``second deadline'' in the industrial
utility-units exemption--i.e., the requirement that there be, as of
March 23, 1993, a contractual obligation to make incidental electricity
sales--is set forth in detail in the proposal and is adopted here. 61
FR 68346. This requirement also makes it likely that the unit was
either (i) in commercial operation as of November 15, 1990 or (ii) was
under construction by December 31, 1990 and therefore qualified for,
but was not allocated, allowances in Phase II. See 42 U.S.C. 7651d(a)-
(f) and (h)-(i) (allowances for existing units) and (g) (allowances for
units under construction and operating by specified deadlines).
Termination of exemption. Under the proposal, a unit's industrial
utility-units exemption terminates automatically once any of the
original requirements for granting the exemption are no longer met.
Commenters raised concern that the proposal terminates the exemption if
the contractual agreement that requires incidental electricity sales by
the unit, and on which the granting of the exemption was originally
based, expires or is amended. A particular agreement may have a
termination date even though the parties intend for the relationship to
continue. Further, an agreement may be modified directly or through
replacement by a new agreement, e.g., in order to change the names of
the parties or the electricity prices. According to commenters, the
exemption should not be terminated so long as there is not an
obligation to sell more than an incidental amount of electricity.
EPA understands the concern that replacement of the interconnection
agreement on which an exemption is based (or of the power purchase
agreement related to the interconnection agreement) by a follow-on
agreement that continues to require the same amount of electricity
sales should not result in termination of the exemption. EPA also
recognizes a similar concern with regard to amendment of the
interconnection agreement or power purchase agreement. On one hand, the
rule should provide for some flexibility allowing agreements to be
modified or replaced so long as the underlying electricity sales
obligation of the industrial utility-unit is not altered in a way that
undermines the original basis for the unit's exemption. On the other
hand, EPA is concerned that this flexibility should not have the effect
of allowing expansion of the unit's exemption beyond its original
scope. For example, just as a unit that as of March 23, 1993 did not
serve a generator required to produce electricity for sale and that
begins after that date to be involved in electricity sales is not
exempt, an exempt unit should not be able to expand its involvement in
electricity sales after March 23, 1993 and retain the exemption.
Finally, EPA believes it must consider that future modifications or
replacements of agreements will be taking place in the context of
restructuring of the electric industry, where utilities may be
restructured and renamed.
In order to meet all of these concerns, today's rule provides that,
in applying the automatic-termination provisions of the exemption, the
interconnection agreement (and related power purchase agreement) and
any successor agreement will be considered. For example, the proposal
stated that if the interconnection agreement on which the exemption is
based expires or terminates and the generator served by the unit
continues to produce electricity for sale, the exemption for the unit
terminates. Under today's rule, if that interconnection agreement is
replaced or supplemented by a ``successor agreement'', the expiration
or termination of the original agreement will not cause termination of
the exemption. Today's rule defines ``successor agreement'' in a way
that is aimed, on one hand, at requiring the unit to continue to meet
the basic requirements for the exemption and taking account of future
electric industry restructuring and, on the other hand, at preventing
this flexibility from being used to expand beyond the original scope of
the exemption when it was approved.
A ``successor agreement'' is defined as an agreement that modifies,
replaces, or supersedes the interconnection agreement or related power
purchase agreement on which the exemption was originally based.
Further, a ``successor agreement'' must be between owners and operators
of the unit and another party (which may be the same party as in the
original agreement) that (i) is principally in the electric utility
business or is a public utility subject to State or local jurisdiction
and (ii) is obligated to sell electricity to the owners and operators
of the unit. In addition, the ``successor agreement'' must require the
generator served by the unit to produce electricity for sale only for
incidental electricity sales to that party. Finally, the total amount
of electricity that the generator served by the unit is required to
produce for sale under all such contracts that are in effect (i.e., the
interconnection agreement, related power purchase agreement, and any
successor agreement) must not exceed the amount that such generator was
required to produce for sale under the original interconnection
agreement and related power purchase agreement on which the exemption
was initially based.
Procedural and other issues. Under the proposal, a unit seeking an
[[Page 55466]]
industrial utility-units exemption must submit a petition to the local
permitting authority. The processing of the petition is similar to that
for an Acid Rain permit. However, once an exemption is approved, it has
no uniform, fixed term and continues in effect unless and until it is
automatically terminated. Commenters claimed that the process of
petitioning for the exemption would be burdensome. They noted that the
proposal removed the requirements to apply for the new units or retired
units exemption and argued that the industrial utility-units exemption
should similarly be made ``self-executing''.
When the new units and retired units exemptions were first adopted
by rule, the regulations required submission of petitions for the
exemptions, processing by the permitting authority using the permit
notice-and-comment procedures, and renewal every five years. The
December 27, 1996 proposal and today's rule make those exemptions self-
executing for the most part. With some exceptions, owners and operators
of units meeting the fairly straightforward requirements of the new
units or retired units exemptions need only notify the permitting
authority and EPA of their qualification for the exemption.
In the case of the industrial utility-units exemption, EPA has
decided that it is necessary to require the submission of a petition
and processing by the permitting authority. This is a newly established
exemption, with which the Agency has had no experience. Moreover, in
determining whether to establish the exemption, EPA has found it
difficult to obtain information on which units might qualify. See
Report to Docket: Industrial Units (October 31, 1996). In addition,
determination of whether a unit qualifies for the exemption is not as
straightforward as the determination of qualification for the new units
or retired units exemption. Qualification for an industrial utility-
units exemption depends, in part, on interpretation of interconnection
and power purchase agreements. Further, particularly in light of other
provisions of today's rule that streamline the permit processing
procedures and thus also apply to processing of a petition for
industrial utility-units exemption, EPA maintains that the petition and
review requirements for the exemption are not unduly burdensome on
either the unit owners and operators or the permitting authorities.
Today's rule requires a one-time review process in that once approved,
the exemption continues in effect without the need for renewal.
One final issue raised by a commenter (Zinc Corporation of America)
is whether industrial utility-units that do not qualify for an
industrial utility-units exemption should be allocated allowances.
Allegedly, such units qualify for allowances but were not allocated any
due to EPA's ``oversight in allowance allocation''.
The difficulty with this argument is that it ignores the fact that
EPA has previously specified deadlines by which parties claiming that
an erroneous failure to allocate allowances to a unit were required to
submit such claims and necessary supporting information to EPA. As
explained in the proposal (61 FR 68345), EPA issued in July 1992 the
Adjunct Data File listing units of ``nontraditional utilities''. 57 FR
30034, 30040 (July 7, 1992). EPA indicated that the units might or
might not be affected units and that, in any event, it lacked
sufficient information on which to base any allowance allocation. Id.
Further, EPA gave notice that if the data necessary for allowance
allocation was not provided by September 8, 1992 for ``a unit that may
be affected now or in the future'', the unit would not be allocated
allowances. Id. Moreover, believing that it had corrected all timely
identified errors in the data and resulting allocations, EPA stated in
the March 23, 1993 notice on final allowance allocations that no
allowances will be allocated to any affected unit that was not
allocated allowances in that notice. 58 FR 15634, 15641 (March 23,
1993).
Neither Zinc Corporation of America nor the predecessor-owner (St.
Joe Minerals Corporation) of the units now owned by Zinc Corporation of
America submitted any data or any objection to the lack of allowance
allocations for the units. The only companies that have units
identified by EPA as potentially industrial utility-units and that
submitted any comments concerning allowance allocations were LTV Steel
Mining Company and Ford Motor Company. Both companies claimed that
their units were not affected units, and neither has ever objected to
the lack of allowance allocations.
Thus, there is no basis for allocating allowances now or in the
future to industrial utility-units, as suggested by the commenter, if
EPA ultimately determines that any such units do not qualify for the
industrial utility-units exemption.11 Such units are treated
like any other unit that has not been allocated allowances and becomes
an affected unit after that date: No allowances will be allocated.
EPA's approach of declining to allocate allowances when the deadline
for submission of information for allowance allocation is missed has
been upheld by the courts. Texas Municipal Power Agency v. EPA, 89 F.3d
858. 872-73 (1996).
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\11\ EPA stresses that it has made no determination at this time
on the qualification of these companies' units for the industrial
utility-units exemption and will await submission of the necessary
applications before making any determination. None of the companies
that commented stated that it could not meet the proposed exemption
requirements.
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III. Part 72: Interaction of Acid Rain Permitting and Title V
A. Relationship Between Acid Rain Rules and Parts 70 and 71
The proposal attempted to clarify the extent to which the Acid Rain
rules apply in lieu of provisions of parts 70 and 71, which address
permitting by State permitting authorities and by the Administrator
under title V of the Act. No comments were received on these revisions.
The revisions are adopted in today's rule with some changes. The
language in several sections of the proposal stating that the Acid Rain
rules ``supersede'' provisions of parts 70 or 71 is removed from the
final rule because of concern that such language might cause confusion
as to whether parts 70 and 71 remain in effect at all.
Instead, today's Sec. 72.60 clarifies that part 72 governs,
notwithstanding the requirements of part 71, and the list of specific
procedural matters that part 72 governs is clarified and augmented so
that the list includes all matters covered by subparts C, D, E, F, and
H of part 72.12 The list of specific matters to which part
71 still applies is also clarified. Further, today's Sec. 72.70 retains
the language in the existing rule stating that subpart G governs to the
extent that the subpart is ``inconsistent'' with part 70. Upon
reconsideration of the language, EPA concludes that this existing
language is reasonably clear, particularly with the revisions in
Sec. 72.72 reducing the number of differences between subpart G and
part 70. EPA also notes that the existing language avoids any potential
confusion about the overall effectiveness of part 70.
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\12\ For similar reasons, the same general approach is used in
Sec. 72.80, which states that subpart H, rather than part 70 or 71,
governs revisions of Acid Rain permit provisions.
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B. State Authority to Administer and Enforce Acid Rain Permits
Under the proposal, a State becomes responsible for administering
and enforcing Acid Rain permits for affected sources if the State has
an operating permits program approved under part
[[Page 55467]]
70 and to the extent the State Acid Rain regulations are accepted by
the Administrator. The proposal also established a procedure for
withdrawal of the Acid Rain Program from a State where the
Administrator determines that the State is not adequately administering
or enforcing the program.
Today's rule adopts the revisions, with several changes. Under the
proposal, the Administrator accepts all or a portion of State Acid Rain
regulations through issuance of a notice in the Federal Register.
Particularly since the State regulations will then become part of the
State title V operating permits program, EPA believes that notice and
opportunity for public comment should be provided before the
Administrator issues a final acceptance or rejection of all or a
portion of the State regulations. This approach is consistent with the
requirement in part 70 that notice and opportunity for public comment
be provided on the Administrator's approval or disapproval of a State
operating permits program under title V. See 40 CFR 70.4(e). Today's
rule includes language that imposes a notice-and-comment requirement
but is flexible enough to allow use of a direct final procedure under
which, for example, the proposed and final acceptance of State
regulations are issued in simultaneous notices and the acceptance
becomes automatically final if no significant, adverse comments are
timely submitted.
Further, the proposal revised the provision concerning the date by
which a State permitting authority must reopen Phase II Acid rain
permits to add Acid Rain NOX requirements. The existing
provision requires the permits to be reopened by January 1, 1999 but is
unclear as to whether this is the deadline for completion, or simply
commencement, of the reopening procedure. In order to clarify the
provision and ensure that State permitting authorities have sufficient
time to process the permits, the proposal stated that the reopening
must be completed by July 1, 1999.
Commenters objected to the July 1, 1999 completion deadline on the
ground that utilities need more than 6 months to plan for compliance
with the NOX terms of their Acid Rain permits. No comment
was received supporting the Agency's concern that State permitting
authorities might need additional time beyond January 1, 1999 to
complete the reopening of the permit. Further, as discussed elsewhere
in this preamble, today's rule includes provisions that enable State
permitting authorities to expedite permit processing, e.g., the
provisions for elimination of newspaper notice and for use of direct
proposed procedures. By further example, today's rule provides that any
EPA-approved early election plan that has not been terminated must be
added to the Phase II permit through an administrative amendment,
rather than through a notice-and-comment procedure. This reflects the
fact that Sec. 76.8, governing early election plans, requires a State
permitting authority to approve, as part of the Phase II permit, any
ongoing early election plans previously approved by EPA. These
streamlining provisions will reduce the administrative burden on the
State permitting authorities.
Consequently, today's rule retains the January 1, 1999 deadline and
makes it clear that the reopening of the permit to add NOX
requirements must be completed by that deadline. By its terms, the
January 1, 1999 deadline for adding the NOX provisions only
applies to the extent that the provisions were included in a timely,
complete permit application concerning NOX emissions. EPA
notes that, under Sec. 76.9(b)(2), such permit application must be
submitted by January 1, 1998 and that, where the State permitting
authority with jurisdiction over the unit has responsibility for
issuing Acid Rain permits covering NOX, the submission
should be made to that State permitting authority.
Finally, language is added (e.g., to Sec. 72.73(b)(1) and
Sec. 72.74(a)) to make it clear that the State permitting authority
issues Acid Rain permits to the extent that it has State Acid Rain
regulations, accepted by EPA, that apply to the sources involved and to
the Acid Rain requirements involved. For example, if accepted State
Acid Rain regulations include the Acid Rain emissions limitation for
SO2 but not the emissions limitations for NOX by
the applicable deadline under Sec. 72.73, EPA has the flexibility to
determine whether the State permitting authority will be responsible
for issuing Acid Rain permits covering both SO2 requirements
under part 72 and NOX requirements under part 76.
C. Required Elements for State Acid Rain Program
The existing rule set forth the criteria for approval of a State
operating permit program under title V and acceptance of the State Acid
Rain regulations. The proposal eliminated or modified several of the
criteria in the existing rule because EPA believed that they were
unnecessary or redundant. Comments were received on only three of these
revisions. With the changes discussed below, all the revisions are
adopted in today's rule for the reasons discussed here and in the
proposal.
First, the existing rule required State permitting authorities to
give written notice of draft permits to specified persons and also to
provide notice in a newspaper or State publication. The proposal gave
State permitting authorities the option of foregoing newspaper or State
publication notice of draft permits that require only that a unit meet
the standard SO2 or NOX emission limitations, a
NOX averaging plan, or a NOX early election plan.
Commenters supported this revision, which is adopted in today's rule.
Second, the proposal gave State permitting authorities the option
of using what was referred to as a ``direct final'' procedure for
issuing Acid Rain permits. Under the procedure, a State permitting
authority issues simultaneously a draft permit and a proposed permit.
If no significant, adverse comments are received, the proposed permit
is deemed to be issued and, after the period for review by the
Administrator, the State permitting authority issues the final permit.
Commenters supported this option and urged that EPA clarify that it
applies to permit revisions as well as permit issuance. EPA notes that
the procedure is misnamed in the proposal in that the permit that is
issued in the absence of significant, adverse comment is a ``proposed
permit'' that is still subject to the Administrator's review.
Consequently, today's rule refers to this option as the ``direct
proposed'' procedure and adopts the provision. 13
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\13\ Today's rule also removes language in Sec. 72.72(b)(1)(iv)
stating that after the comment period on a draft permit, the State
permitting authority will issue or deny a proposed permit. Some
State permitting authorities have provided, with EPA's concurrence,
that the comment period on the draft permit and EPA's review of the
permit run concurrently so long as no adverse comment is received
and no change is made in the draft permit. The language in
Sec. 72.72 is removed in order to allow State permitting authorities
to take this approach, which reduces the length of the permitting
process, for Acid Rain permits.
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With regard to the use of the direct proposed procedure for permit
revisions, EPA notes that Sec. 72.81(c)(2) in the proposal and in
today's rule states that, with certain exceptions not relevant here,
permit modifications must be treated as permit applications. Consistent
with Sec. 72.81(c)(2), the procedures for permit issuance (including,
e.g., the direct proposed procedure) apply to permit modifications.
Similarly, permit issuance procedures apply to permit reopenings.
Because the other types of permit revisions, i.e., fast-track
[[Page 55468]]
modifications and administrative permit amendments, have their own
procedures set forth in the proposal and today's rule, the direct
proposed procedure does not apply to such revisions.
Third, the proposal eliminated a provision in the existing rule
limiting the filing of State administrative or judicial appeals of an
Acid Rain permit to no more than 90 days from the issuance of the
permit. As a result, part 70, which imposes no limit on State
administrative appeals and limits judicial appeals to no more than 90
days from permit issuance, would govern appeals of Acid Rain permits.
40 CFR 70.4(b)(3)(xii); see also 59 FR 44460, 44516 (August 29, 1994)
(proposing to allow States to provide up to 125 days for judicial
appeals).
Commenters objected to the removal of any limit on the periods for
State administrative appeals, and for judicial appeals, under part 72.
The commenters contended that, in the absence of a limit in part 72 (or
in part 70) on administrative appeals, owners and operators ``would
never be able to know whether their permits would be subject to
challenge''. However, the commenters ignored the fact that, in imposing
no federally mandated limit on State administrative appeals, part 72
leaves the matter to the States, which are highly likely to impose such
limits in the interests of finality and administrative efficiency. EPA
is not aware of any State operating permit programs that, to the extent
they provided for administrative appeal, failed to set a time limit on
the filing of administrative appeals. In short, the question here is
not whether to have any limit but rather whether to leave the matter
for the States or impose a federally mandated limit. EPA maintains that
it is preferable to allow each State flexibility to craft time limits
for Acid Rain appeals. Under this approach, each State can set a single
time limit appropriate for and applicable to all administrative
appeals--and also one for all judicial appeals--of the entire title V
operating permit, rather than having one set of time limits for an Acid
Rain permit and another set of time limits for the remaining portions
of the operating permit.
The commenters contended that the Acid Rain permits are a ``stand-
alone portion'' of the operating permit and so it would not be
confusing to have a different deadline for appealing the Acid Rain
portion and appealing the rest of the operating permit. EPA disagrees.
Although the Acid Rain permit is a separate portion of the operating
permit, State permitting authorities are likely, as a matter of
efficiency, to conduct notice and comment and other permitting
procedures for the rest of the operating permit at one time and to
issue a single, all inclusive operating permit, particularly since the
Acid Rain permit is likely to comprise a relatively small part of the
entire title V operating permit. In fact, in response to State concern
over how to coordinate the processing of the Acid Rain permit and the
operating permit, EPA has issued guidance on alternative approaches for
achieving coordination. See Guidance on Coordinating Title IV/Title V
Permitting Schedules (March 15, 1994). EPA believes that having a
single administrative appeal deadline and a single judicial appeal
deadline for the entire operating permit is simpler and less likely to
result in inadvertent failure to meet the applicable filing deadline.
The commenters also alleged that the Acid Rain portion incorporates
new compliance obligations while the remainder of the operating permit
merely restates existing obligations. This, of course, depends on the
timing of the issuance of the operating permit. State permitting
authorities are allowed to phase in the issuance of operating permits
and new obligations may arise before issuance of, and therefore may be
included in, a given operating permit. Moreover, to the extent this
distinction applies, it is likely to apply only for the initial Phase
II Acid Rain permit; in most cases, a subsequent Acid Rain permit will
restate the obligations (e.g., the requirement to hold sufficient
allowances to cover SO2 emissions) already in the initial
Acid Rain permit.
EPA concludes that, with regard to the question of limiting State
administrative and judicial appeals, the Acid Rain portions of
operating permits should not be treated any differently than the
remaining portions of operating permits. The provision in the proposal
is adopted in today's rule.
In the proposal EPA noted that many States have already adopted
Acid Rain rules based on the existing rule. EPA stated that it expected
that, if rule revisions are adopted in final, States will incorporate
the revisions within 2 years after the promulgation of the final rule.
No comment was received on this approach, and EPA continues to believe
that this is a reasonable time frame. To the extent a State permitting
authority fails to incorporate the revisions in a timely manner, EPA
will consider whether the State is adequately administering and
enforcing the Acid Rain Program and may take action under Sec. 72.74 of
today's rule to administer all or a part of the Acid Rain Program for
sources located in the State.
IV. Part 72: Miscellaneous Permitting Matters
A. Definitions
The proposal modified or eliminated several definitions. Only one
of the changes (i.e., the revised definition of ``submit or serve'' to
eliminate the requirement for use of certified mail) received comment
and that comment was supportive. The definition revisions, as modified
below, are adopted in today's rule.14
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\14\ One of the proposed definitions, ``State'', is modified in
today's rule. The proposed definition removed language, stating that
``State'' has its conventional meaning where it is clear ``from the
context'', and listed one specific instance where the conventional
meeting would apply. Because there are several contexts in which the
conventional meaning applies, today's rule retains the formulation
in the existing rule. Thus, for example, in Sec. 72.40(b)(2) the
term ``State'' has its broader meaning (which includes the
jurisdiction of any non-federal permitting authority) while in
Sec. 72.22(e)(1)(i) ``State'' has its conventional meaning.
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B. Designated Representative
The proposal included two types of revisions concerning designated
representatives. First, the procedures for selecting or changing the
designated representative or an alternate were simplified and made less
burdensome. Commenters supported the revisions, which are adopted in
today's final rule.
Second, the proposal provided the option of selecting two alternate
designated representatives for an affected source in certain limited
circumstances. The proposal was aimed at providing flexibility for
sources with units located in more than one State that are in a
NOX averaging plan under Sec. 76.11 and that are subject to
two levels of management, one at the subsidiary operating company and
one at the parent company. In particular, as requested by a commenter,
the proposal allowed a multi-state utility holding company with a
NOX averaging plan covering units in two or more States to
designate for sources with units in the plan a single designated
representative at the holding company level and two alternates, one at
the management level and one at the operations level of the operating
company. Commenters supported the additional flexibility but suggested
certain changes to the proposal.15
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\15\ One commenter suggested that there is no basis for the
requirement in Sec. 76.11 that units in a NOX averaging
plan have the same designated representative. This suggestion is
outside the scope of the rulemaking. While it is unclear whether the
commenter intended to raise that issue here, EPA did not propose,
and is not considering here, such a change in Sec. 76.11.
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[[Page 55469]]
The commenter that originally requested this type of provision in
the proposal expressed concern that the references in the proposal to a
holding company with multiple subsidiaries may become obsolete in light
of future restructuring of the electric industry. For example, a
holding company with subsidiaries operating generation facilities may
be restructured to include all generation facilities in a single
subsidiary. This commenter also was concerned that the proposal limited
the option of having two alternates to cases where the NOX
averaging plan covered all units operated by the subsidiaries. If any
units are covered by early election plans or have alternative emission
limitations and so are outside the NOX averaging plan, the
proposal would not apply. Other commenters echoed these concerns but
suggested that EPA allow any source to have two alternates, regardless
of whether the source has units that are in a NOX averaging
plan or are subject to management at both the subsidiary and parent
company levels.
While retaining the general rule that a source must have one
designated representative and may have one alternate, EPA proposed
allowing two alternates in limited circumstances where it was shown
that such flexibility might be needed. The proposed provision, as
modified in today's rule, covers the only specific circumstance for
which a need for multiple alternates has been explained by commenters,
i.e., where units are in different States but in the same
NOX averaging plan and are subject to both subsidiary and
parent company management. While commenters make a general suggestion
that having two alternates gives greater assurance that a ``point of
contact'' for a source will be available ``at all times'', the
commenters do not claim that having one alternate has generally been
insufficient or point to any other specific circumstances where two
alternates are needed. EPA therefore declines to expand the provision
any further.
For the reasons discussed here and in the proposal, today's rule
adopts the proposed provision, with changes to meet other concerns
stated by commenters. First, the provision expressly covers a unit
whose utility system is the subsidiary of a company (not necessarily a
``holding company''). Second, the provision will cover cases where the
units in the NOX averaging plan are operated by a single
subsidiary or by two or more subsidiaries. Each unit must be in a
utility-system subsidiary of a company, but they may be in the same
such subsidiary. Third, the NOX averaging plan need not
include all units operated by subsidiaries of the company; instead the
plan must simply cover two or more units in more than one State.
C. Compliance Plans
The proposal revised the provisions concerning the submission of
substitution plans and reduced utilization plans in order to clarify
the deadlines and the procedures to be used. No comments were received,
and the revisions are adopted in today's rule.
The proposal also revised the procedures for review of failed
repowering projects. No comments were received on the revisions, which
are adopted in today's rule.
Finally, the proposal revised the deadline for activating
conditional repowering extension plans from December 31, 1997 to July
1, 1997. No comments were received. However, today's rule is being
published after July 1, 1997, and EPA has decided not to revise the
activation deadline retroactively.
D. Federal Permit Issuance
The proposal made several revisions to the federal permit issuance
procedures. For example, the period after which an Acid Rain permit
application received by EPA is deemed to be complete was lengthened
from 30 days to 60 days. This was done in order to be consistent with
part 71, under which the period applicable to operating permit
applications is 60 days. Commenters objected that this prolongs the
``period of uncertainty'' over the completeness of the Acid Rain
application and stated that Acid Rain permitting ``generally proceeds
along a separate track'' from other title V permitting. However, the
commenters' assumption that the Acid Rain portion of the operating
permit is processed separately from the rest of the operating permit is
not necessarily correct. If the State permitting authority is generally
responsible for issuing title V operating permits but, because its Acid
Rain rules are not fully approved, EPA issues the Acid Rain permits,
then the Acid Rain permits may be processed separately. In cases where
EPA is responsible for issuing entire title V operating permits
(including the title IV portion), the title IV and title V procedures
may be coordinated as a matter of efficiency, particularly if EPA
delegates the title IV and title V permitting to the State. See 40 CFR
71.10 (delegation of permitting under title I); and 72.74(a)(2) of
today's rule (delegation of permitting under title IV). A single
completeness review (as well as a single notice and comment procedure)
may be conducted for the entire operating permit. EPA maintains that
the ability to coordinate Acid Rain permitting and title V permitting
and to realize potential efficiencies is enhanced by minimizing the
differences between Acid Rain permitting and title V permitting.
Moreover, the Acid Rain portion of the operating permit is
generally relatively small compared to the entire title V permit
application. It is therefore logical to make the completeness review
period for the title IV permit conform to the 60-day period for title V
permits, rather than to shorten the title V completeness review period
to 30 days. While the period during which owners and operators are
uncertain about the completeness of Acid Rain permit applications will
be lengthened for 30 days, EPA maintains that the advantage of a
consistent completeness review period outweighs the relatively minor,
additional uncertainty.
Further, the proposed rule altered the provision concerning the
time period within which a designated representative must respond to a
request for supplemental information by the Administrator. While the
existing rule set an automatic 30-day period for responding and allowed
the Administrator to lengthen the response period, the proposal stated
that a reasonable period would be set on a case-by-case basis by the
Administrator. A commenter objected on the ground that it is unlikely
that a period less than 30 days would be reasonable and that it would
generally be in the interest of a designated representative to respond
expeditiously. However, the commenter ignores the fact that there can
be significant, but readily remedied gaps or errors in the information
submitted to EPA in a permit application. Setting a minimum response
period of 30 days is likely to lengthen unnecessarily the permitting
process. In addition, while the Agency could treat applications with
such errors as incomplete and avoid the minimum 30-day response period,
EPA maintains that it is preferable to have the flexibility to set a
reasonable, short response period. This flexible approach both promotes
orderly and expeditious processing of permits and protects the
designated representative from unreasonable requests. This is also
preferable to the commenter's approach of assuming that designated
representatives will necessarily respond expeditiously and in a time
frame that meets the Agency's schedule for permit processing.
[[Page 55470]]
E. Permit Revision
The proposal made several changes to the permit revision
procedures. Changes concerning permit reopenings received no comment
and are adopted in the final rule; changes concerning fast-track
amendments and administrative amendments are adopted as discussed
below.
With regard to fast-track modifications, the proposal lengthened
the period within which a State permitting authority must act on a
fast-track modification of a permit from 30 to 60 days after the end of
the public comment period. Commenters objected claiming that there is
no evidence that State permitting authorities need more time and that
the revisions entitled to fast-track modification required little
exercise of administrative discretion and are unlikely to receive
public comment.
EPA notes that, while a NOX averaging plan or plan
change may require little administrative discretion and elicit little
comment, the processing of other types of revisions (e.g., changes to
repowering plans or thermal energy plans) is more likely to involve
discretion or public comment. Further, the processing of Acid Rain
permits and permit revisions represents a very small portion of the
operating permit processing required of State permitting authorities
under title V. Reflecting the significant burden of operating permit
processing, part 70 allows State permitting authorities to take up to
18 months from receipt of a complete permit application to issue an
operating permit and a similar period to make significant modifications
to an existing operating permit. 40 CFR 70.7(a)(2) and (e)(4)(ii). By
comparison, a 90-day period (i.e., the 30-day comment period and 60
days after the end of the period) for completing a fast-track
modification is certainly expedited. EPA maintains that, in light of
the permitting burden faced by State permitting authorities, it is
preferable to set a more realistic, and yet still expedited, deadline
for action by State permitting authorities.
With regard to administrative amendments, the proposal set forth
the amendment procedures in detail, rather than citing the procedures
in part 70. Further, the period for action on one administrative
amendment, an alternative emission limitation (AEL) demonstration
period, was lengthened from 30 days to 60 days after receipt of an AEL
demonstration period petition determined by the permitting authority to
meet all the requirements of Sec. 76.10. No comments were made on these
revisions, which are adopted in today's rule.
In addition, the administrative amendment procedures were changed
to allow a permitting authority to correct minor errors in a permit on
its own motion. Noting that the proposed provision was not explicitly
limited to ``minor'' errors, commenters argued that notice should be
given to the designated representative before even minor changes are
made to the permit. In response to these concerns, today's rule
explicitly limits administrative permit amendments on the motion of the
permitting authority to corrections of typographical errors or
similarly noncontroversial changes (e.g., adding a new units or retired
units exemption for which the requirements were previously met).
Moreover, the rule requires that a permitting authority provide at
least 30 days' notice to the designated representative of the source
involved before making, on its own motion, any administrative permit
amendments. This approach will enable the permitting authority to
correct minor errors with minimal delay while providing the designated
representative the opportunity to commment.
In order to make the reopening provision consistent with the
provision allowing a permitting authority to make administrative
amendments on its own motion, language is added to Sec. 72.85. This
language makes it clear that administrative amendment procedures,
rather than reopening procedures, may be used for typographical or
similar errors.
F. Reduced Utilization Accounting
The proposal made several changes in the reduced utilization
accounting provisions. Most of the changes received no comment or only
favorable comment and are adopted in today's rule. Commenters objected
to one change: The provision that, in accounting for the effect of heat
rate improvements on a Phase I unit's utilization, credit for such
improvements must be limited to the net effect of the improvements on
the unit's heat rate. According to the commenters, if a unit's heat
rate (i.e., Btu/Kwh) since the 1985-1987 base period deteriorates
(i.e., increases) and measures are taken that offset that
deterioration, the entire effect of the heat rate improvements should
be included in accounting for reduced utilization. The commenters
alleged that the statutory reduced utilization provision in section
408(c)(1)(B) of the Act establishes a ``baseline'' heat input, not a
``baseline'' heat rate.
In asserting that there is no connection between utilization in the
base period and heat input in the base period, the commenters ignore
the basic purpose of accounting for reduced utilization and heat rate
improvements. The purpose of the reduced utilization provisions is to
ensure that any increased emissions resulting from reducing utilization
of, and shifting generation from, Phase I units to units compensating
for the reduced utilization ``are accounted for in the allowance
system.'' 56 FR 63002, 63019 (December 3, 1991). Reduced utilization
``as a result of * * * improved unit efficiency programs'' need not be
accounted for through allowance surrender because these programs
``cause decreases in utilization without any shifts of generation to
unaffected units.'' 56 FR 63021. To the extent utilization (i.e., total
annual heat input in mmBtus) at a Phase I unit is reduced below the
baseline level because that unit has improved its heat rate after 1987
over the level reflected in the baseline utilization, there is no
increase in SO2 emissions and allowances need not be
surrendered. In this case, the Phase I unit is using less fuel because
it can produce a kilowatthour of electricity with less fuel and thus
less SO2 emissions.
However, if the Phase I unit's heat rate deteriorates from the
level reflected in the unit's baseline utilization and heat rate
improvement measures are instituted after 1987 that bring heat rate
back to the level reflected in the baseline utilization, then the unit
is using the same amount of fuel to produce a kilowatthour of
electricity. In the latter case, the heat rate improvements made after
1987 do not account for the use of less fuel at the Phase I unit. Just
as heat rate improvements made before 1987 and reflected in baseline
utilization cannot account for utilization below baseline, heat rate
improvements made after 1987 that simply restore the heat rate to the
level reflected in the baseline cannot account for reduced utilization.
See 61 FR 68354. The same logic applies if a Phase I unit is attempting
to account for its reduced utilization through heat rate improvements
at another unit that simply restore the latter unit's heat rate to the
1987 level.
Thus, contrary to the commenters' assertions, EPA did not simply
``assume'' that limiting heat rate improvement to net improvement since
1987 is warranted. On the contrary, EPA explained, albeit in less
detail than in today's rule, the basis for the limitation. Id.
Moreover, the limitation is consistent with long-standing explanations
of the purpose of reduced utilization accounting, as discussed
[[Page 55471]]
above, and with other, regulatory provisions governing such accounting.
In particular, limiting heat rate improvement to net improvement since
1987 is analogous to the approach taken in the existing rule concerning
sulfur-free generation, which is not at issue here. Only the net
increase in current generation at a sulfur-free generator (i.e., the
increase in current generation over the sulfur-free generator's average
1985-1987 annual generation), not the increase from one year to the
next, is used to account for reduced utilization. See 40 CFR
72.91(a)(3)(iii); and 58 FR 3590, 3606-7 (January 11,
1993).16 The commenters' approach is therefore rejected as
inconsistent with the entire thrust of reduced utilization accounting,
and the proposed provision is adopted in today's rule.
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\16\ While EPA uses 1985-1987 average sulfur-free generation as
the bench mark for limiting the use of sulfur-free generation in
reduced utilization accounting, the proposal and today's rule use
1987 heat rate as the bench mark for limiting the use of unit
efficiency improvements. This is because annual generation was more
likely to vary during 1985-1987 than was a unit's annual heat rate
and the use of the 1987 heat rate, which captures any efficiency
improvement measures instituted before 1988, is less burdensome for
utilities and EPA to determine than the average 1985-1987 heat rate.
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V. Part 73: Allowances
A. Allowance Tables
In the proposal, EPA proposed a number of changes in unadjusted
allowances and in the units and allowance figures listed in Tables 2
and 3 of Sec. 73.10, reflecting those allowance changes. For purposes
of the proposal, EPA was able to list the changes in the rule without
reprinting Tables 2 and 3. However, consistent with the requirements of
the Federal Register concerning finalization of multiple changes to
regulatory tables and in the interest of facilitating public
understanding of the final changes, EPA concludes that the changes
should be finalized through republication of information in the tables.
Further, section 403(a) of the Act requires the Administrator to issue
prior to June 1, 1998 a revision of the final allowance allocations
primarily to account for allocations for repowered units under section
409. That revision will necessitate recalculation of all units'
allowance allocations and so must also be implemented through
republication of information in Tables 2 and 3. In order to avoid the
confusion likely to result from, and the large expense associated with,
multiple republications of information in the tables, EPA has decided
not to finalize at this time the allowance revisions in the December
27, 1996 rule. Instead, EPA intends to propose in the near future the
revisions associated with the June 1, 1998 allocations and to
coordinate finalization of both the allowance revisions in the December
27, 1996 proposal and that future proposal.
The only exception to this approach is the allowance changes for
Central Louisiana Electric Company's Rodemacher unit 2. In the December
27, 1996 proposal, the allowances for Rodemacher unit 2 were changed to
20,774 unadjusted allowances. Under a settlement of litigation
concerning Rodemacher unit 2's allowance allocation, the Administrator
agreed to sign a final rule adopting the revision to the unit's
allowances by October 1997. Consistent with that settlement, the
proposed unadjusted allowances for Rodemacher unit 2 are adopted in
today's rule. This single change can be made without republishing the
allowance tables.
B. Small Diesel Refinery Provisions
The proposal made certain revisions to the provisions to small
refinery allowance allocations. No comment was received, and the
revisions are adopted in today's rule.
VI. Part 75: Monitoring of Units Burning Digester or Landfill Gas
In the proposal, EPA requested comment on monitoring requirements
for units burning digester or landfill gas. No comments were received.
EPA intends to consider this matter in future proceedings.
VII. Part 77: Excess Emissions
The proposal made changes to part 77 concerning immediate deduction
of allowances to offset excess emissions, the deadline for paying
excess emissions penalties, and excess NOX emissions under a
NOX averaging plan. The changes received no comment or only
favorable comment and are adopted in the final rule.
VIII. Part 78: Administrative Appeals
The proposal made changes to part 78 to clarify that an
administrative appeal is a prerequisite for judicial review of
decisions of the Administrator under the Acid Rain Program and to
ensure that the requirement for exhaustion of administrative remedies
is consistent with the Supreme Court's decision in Darby v. Cisneros,
509 U.S. 137 (1993). On September 24, 1993, the Agency originally
proposed to add language stating explicitly that administrative appeal
is a prerequisite for judicial review. 58 FR 50088, 50104 (1993).
Certain commenters stated, in response to the September 24, 1993
proposal, that, in light of the alleged potential for ``disruptive
effects'' resulting from an administrative exhaustion requirement, the
Agency should solicit additional comment on the effect of Darby on part
78. EPA therefore did not finalize the September 24, 1993 proposal.
Instead, EPA provided further opportunity for comment by publishing the
December 27, 1996 proposal, which included both the changes explicitly
requiring exhaustion of administrative remedies and some additional
changes to conform with Darby. In its comments on the December 27, 1996
proposed rule, the same commenters submitted further comments. In their
second set of comments, the commenters failed to go beyond their
generalized claim of ``disruptive effects''. Rather than providing any
specific claims or examples of when administrative appeal of a
particular type of Administrator's decision would be ``disruptive'' to
the Acid Rain Program or to affected sources' compliance efforts, the
commenters simply expressed general concern that EPA ``failed to
consider'' unspecified ``disruptive'' effects.
In the September 24, 1993 and December 27, 1996 proposals, EPA set
forth both the basis for requiring exhaustion of administrative
remedies and provisions addressing concerns over delay pending
completion of administrative review. Requiring exhaustion of
administrative remedies promotes efficient use of administrative and
judicial resources in that it ``allows the Agency to review * * *
decisions for correctness before having to defend (them) * * * in
Federal court.'' 58 FR 50104 (quoting the original proposed appeals
procedures at 56 FR 63002, 63033 (December 3, 1991)). Decisions that a
petitioner shows are erroneous can be reversed or corrected without
resource-intensive litigation before the federal courts and decisions
that a petitioner shows are insufficiently explained can be reexamined
and either reversed or better explained. The overall effect is to
increase the likelihood of sound decision-making and reduce the need
for recourse to the courts.17
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\17\ EPA maintains that, contrary to commenters' assertion, the
provision in section 307(b)(1) of the Clean Air Act on motions for
reconsideration is irrelevant to the question of administrative
appeals and is not properly interpreted as evidencing ``hostility''
to the exhaustion requirement involved here. Section 307(b)(1)
involves judicial appeals and the effect of agency reconsideration
of a final action on such appeals. To the extent section 307(b)(1)
addresses reconsideration of a final rule, the section is irrelevant
to this case, which concerns administrative appeals of individual,
adjudicative decisions. To the extent the section addresses
reconsideration of an adjudicative decision, the section is still
irrelevant here. Reconsideration provides a second opportunity for
agency review of an adjudicative decision, for which an opportunity
for administrative review was already provided. In contrast, the
issue here is whether there should be an initial opportunity for EPA
to review its decisions on Acid Rain matters before the decisions
may be appealed to the courts.
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[[Page 55472]]
Further, while nothing in the record indicates that delay pending
administrative appeal of Acid Rain Program decisions (during which
appeal the decisions will not be operative) will likely have
``significant, adverse consequences'', the December 27, 1993 proposal
took reasonable account of the general possibility of such consequences
pending appeal.18 61 FR 68365. Despite two opportunities to
provide information on the alleged, potential, adverse effect of the
exhaustion requirement, the commenters originally objecting to the
requirement were apparently unable to identify any specific
circumstances in the Acid Rain Program under which significant, adverse
consequences would result from the requirement, much less provide any
information on the likelihood of such circumstances arising. No such
circumstances have been identified to EPA, and EPA is not aware of any,
particularly in light of the ability of the Agency, under the proposal
and today's rule, to expedite administrative appeals. EPA therefore
rejects the commenters' claim concerning ``disruptive effects'' of the
exhaustion requirement as speculative and unsupported.
---------------------------------------------------------------------------
\18\ EPA did not ``acknowledge'' that there would be cases of
``significant, adverse consequences'' due to delay pending appeal or
that any such cases would be likely to occur. Instead, EPA provided
procedures that could address such cases (regardless of their
likelihood) if they arose.
---------------------------------------------------------------------------
Moreover, the Agency's general approach under the regulatory
statutes that it administers is to require exhaustion of administrative
remedies prior to judicial review. See, e.g., 40 CFR 71.11(l)(4)
(administrative appeal of final permit decision under title V of Clean
Air Act); 40 CFR 124.19(f)(1) (administrative appeal of final permit
decision under the Solid Waste Disposal Act as amended by the Resource
Conservation and Recovery Act (RCRA), Prevention of Significant
Deterioration (PSD) program in the Clean Air Act, or Underground
Injection Control (UCI) program in the Safe Drinking Water Act); and 40
CFR 124.60(g) (administrative appeal of final permit decision under
National Pollutant Discharge Elimination System (NPDES)). Today's rule
is consistent with that general approach.
Nevertheless, the Agency crafted the proposed rule for Acid Rain
Program appeals to provide for flexibility to minimize delay,
particularly if future cases arise where delay will have a significant,
adverse effect. Specifically, the proposal revised the existing rule to
allow the Administrator, the Environmental Appeals Board, or the
Presiding Officer (as appropriate) to set different, reasonable time
periods (which could be shorter or longer than in the existing rule)
for administrative-appeal-related filing by parties. For example, the
30-day period within which motions to intervene in part 78 appeals may
be filed was changed to allow a different period to be set. As
explained in the proposal, this approach gives the Agency ``the ability
to accelerate the appeals proceeding where delay due to the pending
appeal will have significant, adverse consequences.'' 61 FR 68365. The
commenters argued that the Agency might not always ``share an affected
source's interest in avoiding'' such adverse consequences. However, the
Agency's approach of allowing adjustment of the time periods gives the
Agency the authority to accommodate the need for expeditious
administrative appeal and gives the affected source the opportunity to
show that expedition is necessary. Particularly in cases where such a
showing is made, the Agency intends to make reasonable efforts to
minimize the delay caused by the appeal. The Agency maintains that this
approach reasonably balances, on one hand, the important role of the
exhaustion requirement and, on the other, the commenter's generalized
concern that appeals not cause undue delay.
The commenters failed to recommend any other approach but merely
stated that the Agency had not considered limiting the applicability of
the exhaustion requirement, foregoing the exhaustion requirement, or
setting tighter time limits on procedural steps. However, in explaining
the need for the exhaustion requirement (see 56 FR 63033, 58 FR 50104,
and 61 FR 68365), the Agency rejected the notion of limiting or
foregoing the requirement. Further, recognizing that the major purpose
of providing flexibility in the time periods for filings is to expedite
administrative appeals, EPA is modifying the proposal to provide that,
with a few exceptions discussed below, the time periods involved may be
shortened, but not lengthened.
One of the more important exceptions to that approach is the period
for filing of administrative appeals.19 Commenters raised
concern that an Administrator's decision under the Acid Rain Program
would remain ``in limbo'' during a period of uncertain duration for the
filing of an administrative appeal. Today's rule reduces the standard
period for appeal to 30 days from issuance of the Administrator's
decision and establishes that as a fixed period that cannot be changed
on a case-by-case basis. The Agency is concerned that a period shorter
than 30 days would not provide enough time for preparation of a
petition that fully addresses the issues on appeal, as required under
Sec. 78.3(c). See, e.g., 40 CFR 78.3(c)(1) and (3) (requiring a list of
material issues and a clear and concise brief supporting the petition).
This standard appeal period is consistent with the 30-day time period
for administrative appeal of other actions of the Administrator under
the Clean Air Act and other statutes administered by EPA. See, e.g., 40
CFR 71.11(l)(1) (administrative appeal of final permit decision under
title V); 40 CFR 124.19(a) (administrative appeal of final permit
decision under RCRA, PSD program, or UIC program); and 40 CFR
124.91(a)(1) (administrative appeal of final permit decision under
NPDES). The reduced time period for filing appeals reduces the period
of uncertainty on the status of the decision while still providing a
reasonable opportunity for administrative appeal.20
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\19\ A minor exception under today's rule is the period for
curing defects in filings, which remains as 7 days subject to
shortening or lengthening at the discretion of the Environmental
Appeals Board or the Presiding Officer. This will minimize the
likelihood of a filing being permanently excluded for purely
technical reasons. The Agency is confident that flexibility
concerning this limited type of procedural deadline can be
implemented in a way that will not result in unnecessary delay of
proceedings.
\20\ For similar reasons, the period for appealing a proposed
decision of a Presiding Officer to the Environmental Appeals Board
is fixed at 30 days under Sec. 78.20(a).
---------------------------------------------------------------------------
From the time a decision is issued until the expiration of the
appeal period, there is necessarily some uncertainty about the status
of the decision: the parties will not know for certain whether the
decision will be final until the expiration of the appeal period.
However, this uncertainty is tempered by the fact, admitted by the
commenters, that the vast majority of decisions under the Acid Rain
Program have not been, and probably will not be, appealed. Further, the
limitations on the presenting of new evidence and on the raising of new
issues during an administrative appeal of a decision for which there
was an opportunity to comment will encourage parties interested in a
decision to submit comments. As a result, parties' positions will
probably be known when the decision is issued and the likelihood of
appeal can then be evaluated.
[[Page 55473]]
The commenters also suggested that a decision should be considered
operative during the period between the date the decision is issued and
the expiration of the appeal period (i.e., 30 days under today's rule)
unless and until a petition for administrative appeal is filed with the
Environmental Appeals Board. Prior to today's rule revisions, part 78
provided that a decision was operative from the date of issuance and
throughout the administrative appeal period, except to the extent the
decision was stayed by the Environmental Appeals Board or the Presiding
Officer designated by the Board. 40 CFR 78.7(a). While today's rule
makes a decision inoperative once a timely petition for administrative
appeal is filed, the status of the decision prior to appeal or the
running of the period for filing an appeal is unchanged. The decision
itself (e.g., the approval or denial of an Acid Rain permit or permit
revision or of a petition under part 75) may specify the date on which
the decision is effective. Unless the decision itself specifies an
effective date that is different than the date on which the decision is
actually issued, the decision is operative on the issuance date unless
and until the filing of a timely petition for administrative appeal in
accordance with part 78. For example, with regard to a decision
concerning the transfer of allowances to or from an Allowance Tracking
System Account, the requirement in the existing rule that the
Administrator implement, within 5 business days of receipt, an
allowance transfer request that he or she determines to be properly
submitted (40 CFR 73.52 and 73.53) is unchanged in the December 27,
1996 proposal and today's rule. In principle, if the transfer were
appealed under part 78, the Administrator could take action to render
the transfer inoperative pending appeal. However, appeal in such
circumstances is highly unlikely since an allowance transfer must be
authorized by the designated representative of the party transferring
the allowances. See 42 U.S.C. 7651b(b).
For the reasons discussed here and in the September 24, 1993 and
December 27, 1996 proposals, the December 27, 1996 revisions are
adopted as modified above.
IX. Administrative Requirements
A. Executive Order 12866
Under Executive Order 12866, 58 FR 51735 (October 4, 1993), the
Administrator must determine whether the regulatory action is
``significant'' and therefore subject to Office of Management and
Budget (OMB) review and the requirements of the Executive Order. The
Order defines ``significant regulatory action'' as one that is likely
to result in a rule that may:
(1) Have an annual effect on the economy of $100 million or more or
adversely affect in a material way the economy, a sector of the
economy, productivity, competition, jobs, the environment, public
health or safety, or State, local, or tribal governments or
communities;
(2) Create a serious inconsistency or otherwise interfere with an
action taken or planned by another agency;
(3) Materially alter the budgetary impact of entitlements, grants,
user fees, or loan programs or the rights and obligations of recipients
thereof; or
(4) Raise novel legal or policy issues arising out of legal
mandates, the President's priorities, or the principles set forth in
the Executive Order.
Pursuant to the terms of Executive Order 12866, it has been
determined that this final rule is a ``significant regulatory action''
because the rule seems to raise novel legal or policy issues. As such,
this action was submitted to OMB for review. Any written comments from
OMB to EPA, any written EPA response to those comments, and any changes
made in response to OMB suggestions or recommendations are included in
the docket. The docket is available for public inspection at the EPA's
Air Docket Section, which is listed in the ADDRESSES section of this
preamble.
B. Unfunded Mandates Act
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Pub.
L. 104-4, establishes requirements for federal agencies to assess the
effects of their regulatory actions on State, local, and tribal
governments and the private sector. Under section 202 of the UMRA, EPA
generally must prepare a written statement, including a cost-benefit
analysis, before promulgating a proposed or final rule that includes a
federal mandate that may result in expenditure by State, local, and
tribal governments, in aggregate, or by the private sector, of $100
million or more in any one year. Section 205 generally requires that,
before promulgating a rule for which a written statement must be
prepared, EPA identify and consider a reasonable number of regulatory
alternatives and adopt the least costly, most cost-effective, or least
burdensome alternative that achieves the objectives of the rule. The
provisions of section 205 do not apply when they are inconsistent with
applicable law. Moreover, section 205 allows EPA to adopt an
alternative other than the least costly, most cost-effective, or least
burdensome alternative if the Administrator explains why that
alternative was not adopted. Finally, section 203 requires that, before
establishing any regulatory requirements that may significantly or
uniquely affect small governments, EPA must have developed a small
government agency plan. The plan must provide for notifying any
potentially affected small govenments, enabling officials of affected
small governments to have meaningful and timely input in the
development of EPA regulatory proposals with significant federal
intergovernmental mandates, and informing, educating, and advising
small governments on compliance with the regulatory requirements.
Because this final rule is estimated to result in the expenditure
by State, local, and tribal governments or the private sector of less
than $100 million in any one year, the Agency has not prepared a
budgetary impact statement or specifically addressed the selection of
the least costly, most cost-effective, or least burdensome alternative.
Because small governments will not be significantly or uniquely
affected by this rule, the Agency is not required to develop a plan
with regard to small governments.
For the reasons discussed in detail here and in the proposal (61 FR
68340), the final rule has the net effect of reducing the burden of
parts 72, 77, and 78 of the Acid Rain regulations on regulated entities
(including both investor-owned and municipal utilities) and on State
permitting authorities (which may include State, local, and tribal
governments). For example, the final rule reduces the burden of
obtaining or providing new units and retired units exemptions from the
Acid Rain Program and of issuing Acid Rain permits.
The final revisions to part 73 also do not have a significant,
adverse effect on regulated entities (including small entities) and
have no effect on State permitting authorities. The final rule
increases the annual unadjusted basic allowances for one unit by 2,312
allowances. In a future action, the Agency will act on the other
allowance revisions in the proposal. Sections 403(a) and 405(a)(3) of
the Act set a nationwide cap on annual allowance allocations. Because
of the requirement to adhere to the cap, the increase of allowances
under this final rule (if not offset by the other allowance revisions
when they are finalized) would eventually necessitate an equal decrease
in the total annual allocations of all other units. The small decrease
(i.e., 2,312 allowances out of an annual
[[Page 55474]]
nationwide cap of about 8.95 million allowances or about 0.026 percent)
would be spread among all other units, and so the effect on any one
unit would be insignificant. Moreover, EPA is not, in today's rule,
adjusting the allocations of the other units to account for this small
allowance increase.
C. Paperwork Reduction Act
OMB has approved the information collection requirements contained
in this final rule under the provisions of the Paperwork Reduction Act,
44 U.S.C. 3501, et seq., and has assigned OMB control number 2060-0258.
The only additional information required by this collection of
information is data concerning industrial utility-units that exercise
the option of applying for the industrial utility-units exemption
established by today's rule. If granted, the industrial utility-units
exemption exempts the unit from most requirements of the Acid Rain
Program, e.g., allowance, monitoring, and annual compliance
requirements. The requirements from which qualified industrial utility-
units will be exempt are significantly more burdensome than the
information collection requirements for obtaining the
exemption.21 An industrial utility-unit seeking the
exemption must meet the information collection requirements, which
involve submission of information that is necessary, and will be used,
for determining whether the unit qualifies and will continue to qualify
for the exemption.
---------------------------------------------------------------------------
\21\ Because the information collection burden on industrial
utility-units in the absence of this new exemption was not included
in the ICR for the existing rule, the effect of removing such burden
through the new exemption is not included in the ICR for today's
rule. Consequently, the ICR for today's rule shows an increase in
burden even though exempt industrial utility-units will actually
experience a significant net reduction in the burden imposed on them
by the Acid Rain Program. In addition, as discussed in this
preamble, today's rule includes other revisions that will reduce
somewhat the burden of the program on units that are not exempt.
Because the burden reduction for non-exempt units is small relative
to the total burden of the program, the reduction is not reflected
in the ICR for today's rule.
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The additional information collection increases the estimated
burden, as compared to the burden under the existing rule, by an
average of 24 hours per response for an estimated 15 one-time
responses. Burden means the total time, effort, or financial resources
expended by persons to generate, maintain, retain, or disclose or
provide information to or for a federal agency. This includes the time
needed to: Review instructions; develop, acquire, install, and utilize
technology and systems for the purposes of collecting, validating, and
verifying information, processing and maintaining information, and
disclosing and providing information; adjust the existing ways to
comply with any previously applicable instructions and requirements;
train personnel to be able to respond to a collection of information;
search data sources; complete and review the collection of information;
and transmit or otherwise disclose the information.
An agency may not conduct or sponsor, and a person is not required
to respond to, a collection of information unless it displays a
currently valid OMB control number. The OMB control numbers for EPA's
regulations are listed in 40 CFR part 9. EPA is amending the table in
40 CFR part 9 of currently approved ICR control numbers issued by OMB
for various regulations to list the information requirements contained
in this final rule.
D. Regulatory Flexibility
The Regulatory Flexibility Act, 5 U.S.C. 601, et seq., requires
federal agencies to consider potential impacts of its regulations on
small entities. Under 5 U.S.C. 604(a), an agency issuing a notice of
final rulemaking under section 553 of the Administrative Procedure Act,
must prepare and make available for public comment a final regulatory
flexibility analysis. Such an analysis is not required if the head of
an agency determines, under 5 U.S.C. 605(b), that the final rule will
not have a significant economic impact on a substantial number of small
entities.
In the preamble of the January 11, 1993 rule, the Administrator
certified that the rule, including the provisions revised by today's
rule, would not have a significant, adverse impact on small entities.
58 FR 3649. Today's final revisions are not significant enough to
change the overall economic impact addressed in the January 11, 1993
preamble. Moreover, as discussed in this preamble, today's rule has the
net effect of reducing the burden of the Acid Rain regulations on
regulated entities, including small entities. For example, the rule
makes it less burdensome to obtain new units and retired units
exemptions from the Acid Rain Program. Further, the rule increases the
allowances for one unit, which increase will have an insignificant
effect on other units' allowance allocations.
For the reasons discussed above, EPA has determined that it is not
necessary to prepare a regulatory flexibility analysis in connection
with this final rule. EPA has determined that this rule will not have a
significant, economic impact on a substantial number of small entities.
E. Submission to Congress and the General Accounting Office
Under 5 U.S.C. 801(a)(1)(A) as added by the Small Business
Regulatory Enforcement Fairness Act of 1996, EPA submitted a report
containing this rule and other required information to the U.S. Senate,
the U.S. House of Representatives, and the Comptroller General of the
General Accounting Office prior to publication of the rule in today's
Federal Register. This rule is not a ``major rule'' as defined by 5
U.S.C. 804(2).
F. Miscellaneous
In accordance with section 117 of the Act, issuance of this final
rule was preceded by consultation with any appropriate advisory
committees, independent experts, and federal departments and agencies.
List of Subjects in 40 CFR Parts 9, 72, 73, 74, 75, 77, and 78
Environmental protection, Acid rain, Administrative practice and
procedure, Air pollution control, Compliance plans, Continuous
emissions monitors, Electric utilities, Intergovernmental relations,
Nitrogen oxides, Penalties, Permits, Reporting and recordkeeping
requirements, Sulfur dioxide.
Dated: October 6, 1997.
Carol M. Browner,
Administrator.
For the reasons set out in the preamble, title 40, chapter I of the
Code of Federal Regulations is amended as follows:
PART 9--[AMENDED]
1. The authority citation for part 9 continues to read as follows:
Authority: 7 U.S.C. 135, et seq., 136-136y; 15 U.S.C. 2001,
2003, 2005, 2006, 2601-2671; 21 U.S.C. 331j, 346a, 348; 31 U.S.C.
9701; 33 U.S.C. 1251, et seq., 1311, 1313d, 1314, 1321, 1326, 1330,
1342, 1344, 1345(d) and (e), 1361; E.O. 11735, 38 FR 21243, 3 CFR,
1971-1975 Comp. p. 973; 42 U.S.C. 241, 242b, 243, 246, 300f, 300g,
300g-1, 300g-2, 300g-3, 300g-4, 300g-5, 300g-6, 300j-1, 300j-2,
300j-3, 300j-4, 300j-9, 1857, et seq., 6901-6992k, 7401-7671q, 7542,
9601-9657, 11023, 11048.
Sec. 9.1 [Amended]
2. Section 9.1 is amended by adding to the table under Permits
Regulation in the column ``40 CFR Citation'', after the entry for
``72.7-72.10'', the entry ``72.14'' and adding to the table, as the
corresponding entry in the column ``OMB Control No.'', the entry
``2060-0258''.
[[Page 55475]]
PART 72--[AMENDED]
3. The authority citation for part 72 is revised to read as
follows:
Authority: 42 U.S.C. 7601 and 7651, et seq.
Sec. 72.1 [Amended]
4. Section 72.1 is amended by removing from paragraph (b) the words
``part 70'' and adding, in their place, the words ``parts 70 and 71''.
5. Section 72.2 is amended by: removing the definition for
``Dispatch system''; adding in alphabetical order the definitions for
``Affected States'' and ``Eligible Indian tribe''; and revising
paragraphs (1)(i) and (2) of the definition for ``Acid Rain emissions
limitation'', the definition for ``Acid Rain permit or permit'',
paragraph (2) of the definition of ``Coal-fired'', the definitions for
``Customer'' and ``Permitting authority'' and ``Phase I unit'',
paragraph (3) of the definition of ``Power purchase commitment'', and
the definitions for ``Submit or serve'' and ``State'' and ``State
operating permits program'' to read as follows:
Sec. 72.2 Definitions.
* * * * *
Acid Rain emissions limitation means:
(1) * * *
(i) The tonnage equivalent of the allowances authorized to be
allocated to an affected unit for use in a calendar year under section
404(a)(1), (a)(3), and (h) of the Act, or the basic Phase II allowance
allocations authorized to be allocated to an affected unit for use in a
calendar year, or the allowances authorized to be allocated to an opt-
in source under section 410 of the Act for use in a calendar year;
* * * * *
(2) For purposes of nitrogen oxides emissions, the applicable
limitation under part 76 of this chapter.
* * * * *
Acid Rain permit or permit means the legally binding written
document or portion of such document, including any permit revisions,
that is issued by a permitting authority under this part and specifies
the Acid Rain Program requirements applicable to an affected source and
to the owners and operators and the designated representative of the
affected source or the affected unit.
* * * * *
Affected States means any affected States as defined in part 71 of
this chapter.
* * * * *
Coal-fired means * * *
(2) For all other purposes under the Acid Rain Program, except for
purposes of applying part 76 of this chapter, a unit is ``coal-fired''
if it uses coal or coal-derived fuel as its primary fuel (expressed in
mmBtu); provided that, if the unit is listed in the NADB, the primary
fuel is the fuel listed in the NADB under the data field ``PRIMEFUEL''.
* * * * *
Customer means a purchaser of electricity not for the purposes of
retransmission or resale. For generating rural electrical cooperatives,
the customers of the distribution cooperatives served by the generating
cooperative will be considered customers of the generating cooperative.
* * * * *
Eligible Indian tribe means any eligible Indian tribe as defined in
part 71 of this chapter.
* * * * *
Permitting authority means either:
(1) When the Administrator is responsible for administering Acid
Rain permits under subpart G of this part, the Administrator or a
delegatee agency authorized by the Administrator; or
(2) The State air pollution control agency, local agency, other
State agency, or other agency authorized by the Administrator to
administer Acid Rain permits under subpart G of this part and part 70
of this chapter.
* * * * *
Phase I unit means any affected unit, except an affected unit under
part 74 of this chapter, that is subject to an Acid Rain emissions
reduction requirement or Acid Rain emissions limitation beginning in
Phase I; or any unit exempt under Sec. 72.8 that, but for such
exemption, would be subject to an Acid Rain emissions reduction
requirement or Acid Rain emissions limitation beginning in Phase I.
* * * * *
Power purchase commitment means a commitment or obligation of a
utility to purchase electric power from a facility pursuant to:
* * * * *
(3) A letter of intent or similar instrument committing to purchase
power (actual electrical output or generator output capacity) from the
source at a previously offered or lower price and a power sales
agreement applicable to the source is executed within the time frame
established by the terms of the letter of intent but no later than
November 15, 1993 or, where the letter of intent does not specify a
time frame, a power sale agreement applicable to the source is executed
on or before November 15, 1993; or
* * * * *
Submit or serve means to send or transmit a document, information,
or correspondence to the person specified in accordance with the
applicable regulation:
(1) In person;
(2) By United States Postal Service; or
(3) By other equivalent means of dispatch, or transmission, and
delivery. Compliance with any ``submission'', ``service'', or
``mailing'' deadline shall be determined by the date of dispatch,
transmission, or mailing and not the date of receipt.
* * * * *
State means one of the 48 contiguous States and the District of
Columbia, any non-federal authorities in or including such States or
the District of Columbia (including local agencies, interstate
associations, and State-wide agencies), and any eligible Indian tribe
in an area in such State or the District of Columbia. The term
``State'' shall have its conventional meaning where such meaning is
clear from the context.
State operating permit program means an operating permit program
that the Administrator has approved under part 70 of this chapter.
* * * * *
6. Section 72.6 is amended by adding paragraph (b)(9) and revising
paragraphs (c)(1) and (2) to read as follows:
Sec. 72.6 Applicability.
* * * * *
(b) * * *
(9) A unit for which an exemption under Sec. 72.7, Sec. 72.8, or
Sec. 72.14 is in effect. Although such a unit is not an affected unit,
the unit shall be subject to the requirements of Sec. 72.7, Sec. 72.8,
or Sec. 72.14, as applicable to the exemption.
(c) A certifying official of an owner or operator of any unit may
petition the Administrator for a determination of applicability under
this section.
(1) Petition Content. The petition shall be in writing and include
identification of the unit and relevant facts about the unit. In the
petition, the certifying official shall certify, by his or her
signature, the statement set forth at Sec. 72.21(b)(2). Within 10
business days of receipt of any written determination by the
Administrator covering the unit, the certifying official shall provide
each owner or operator of the unit, facility, or source with a copy of
the petition and a copy of the Administrator's response.
(2) Timing. The petition may be submitted to the Administrator at
any time but, if possible, should be submitted prior to the issuance
(including renewal) of a Phase II Acid Rain permit for the unit.
* * * * *
[[Page 55476]]
7. Section 72.7 is revised to read as follows:
Sec. 72.7 New units exemption.
(a) Applicability. This section applies to any new utility unit
that has not previously lost an exemption under paragraph (f)(4) of
this section and that, in each year starting with the first year for
which the unit is to be exempt under this section:
(1) Serves during the entire year (except for any period before the
unit commenced commercial operation) one or more generators with total
nameplate capacity of 25 MWe or less;
(2) Burns fuel that does not include any coal or coal-derived fuel
(except coal-derived gaseous fuel with a total sulfur content no
greater than natural gas); and
(3) Burns gaseous fuel with an annual average sulfur content of
0.05 percent or less by weight (as determined under paragraph (d) of
this section) and nongaseous fuel with an annual average sulfur content
of 0.05 percent or less by weight (as determined under paragraph (d) of
this section).
(b)(1) Any new utility unit that meets the requirements of
paragraph (a) of this section and that is not allocated any allowances
under subpart B of part 73 of this chapter shall be exempt from the
Acid Rain Program, except for the provisions of this section,
Secs. 72.2 through 72.6, and Secs. 72.10 through 72.13.
(2) The exemption under paragraph (b)(1) of this section shall be
effective on January 1 of the first full calendar year for which the
unit meets the requirements of paragraph (a) of this section. By
December 31 of the first year for which the unit is to be exempt under
this section, a statement signed by the designated representative
(authorized in accordance with subpart B of this part) or, if no
designated representative has been authorized, a certifying official of
each owner of the unit shall be submitted to permitting authority
otherwise responsible for administering a Phase II Acid Rain permit for
the unit. If the Administrator is not the permitting authority, a copy
of the statement shall be submitted to the Administrator. The
statement, which shall be in a format prescribed by the Administrator,
shall identify the unit, state the nameplate capacity of each generator
served by the unit and the fuels currently burned or expected to be
burned by the unit and their sulfur content by weight, and state that
the owners and operators of the unit will comply with paragraph (f) of
this section.
(3) After receipt of the statement under paragraph (b)(2) of this
section, the permitting authority shall amend under Sec. 72.83 the
operating permit covering the source at which the unit is located, if
the source has such a permit, to add the provisions and requirements of
the exemption under paragraphs (a), (b)(1), (d), and (f) of this
section.
(c)(1) Any new utility unit that meets the requirements of
paragraph (a) of this section and that is allocated one or more
allowances under subpart B of part 73 of this chapter shall be exempt
from the Acid Rain Program, except for the provisions of this section,
Secs. 72.2 through 72.6, and Secs. 72.10 through 72.13, if each of the
following requirements are met:
(i) The designated representative (authorized in accordance with
subpart B of this part) or, if no designated representative has been
authorized, a certifying official of each owner of the unit submits to
the permitting authority otherwise responsible for administering a
Phase II Acid Rain permit for the unit a statement (in a format
prescribed by the Administrator) that:
(A) Identifies the unit and states the nameplate capacity of each
generator served by the unit and the fuels currently burned or expected
to be burned by the unit and their sulfur content by weight;
(B) States that the owners and operators of the unit will comply
with paragraph (f) of this section;
(C) Surrenders allowances equal in number to, and with the same or
earlier compliance use date as, all of those allocated to the unit
under subpart B of part 73 of this chapter for the first year that the
unit is to be exempt under this section and for each subsequent year;
and
(D) Surrenders any proceeds for allowances under paragraph
(c)(1)(i)(C) or this section withheld from the unit under Sec. 73.10 of
this chapter. If the Administrator is not the permitting authority, a
copy of the statement shall be submitted to the Administrator.
(ii) The Administrator deducts from the unit's Allowance Tracking
System account allowances under paragraph (c)(1)(i)(C) of this section
and receives proceeds under paragraph (c)(1)(i)(D) of this section.
Within 5 business days of receiving a statement in accordance with
paragraph (c)(1)(i) of this section, the Administrator shall either
deduct the allowances under paragraph (c)(1)(i)(C) of this section or
notify the owners and operators that there are insufficient allowances
to make such deductions. Upon completion of such deductions and receipt
of such proceeds, the Administrator will close the unit's Allowance
Tracking System account and notify the designated representative (or
certifying official) and, if the Administrator is not the permitting
authority otherwise responsible for administering a Phase II Acid Rain
permit for the unit, the permitting authority.
(2) The exemption under paragraph (c)(1) of this section shall be
effective on January 1 of the first full calendar year for which the
requirements of paragraphs (a) and (c)(1) of this section are met.
After notification by the Administrator under the third sentence of
paragraph (c)(1)(ii) of this section, the permitting authority shall
amend under Sec. 72.83 the operating permit covering the source at
which the unit is located, if the source has such a permit, to add the
provisions and requirements of the exemption under paragraphs (a),
(c)(1), (d), and (f) of this section.
(d) Compliance with the requirement that fuel burned during the
year have an annual average sulfur content of 0.05 percent by weight or
less shall be determined as follows using a method of determining
sulfur content that provides information with reasonable precision,
reliability, accessibility, and timeliness:
(1) For gaseous fuel burned during the year, if natural gas is the
only gaseous fuel burned, the requirement is assumed to be met;
(2) For gaseous fuel burned during the year where other gas in
addition to or besides natural gas is burned, the requirement is met if
the annual average sulfur content is equal to or less than 0.05 percent
by weight. The annual average sulfur content, as a percentage by
weight, for the gaseous fuel burned shall be calculated as follows:
[GRAPHIC] [TIFF OMITTED] TR24OC97.001
Where:
%Sannual=annual average sulfur content of the fuel burned
during the year by the unit, as a percentage by weight;
%Sn=sulfur content of the nth sample of the fuel delivered
during the year to the unit, as a percentage by weight;
Vn=volume of the fuel in a delivery during the year to the
unit of which the nth sample is taken, in standard cubic feet; or, for
fuel delivered during the year to the unit continuously by pipeline,
volume of the fuel delivered starting from when the nth sample of such
fuel is taken until the next sample of such fuel is taken, in standard
cubic feet;
dn=density of the nth sample of the fuel delivered during
the year to the
[[Page 55477]]
unit, in lb per standard cubic foot; and
n=each sample taken of the fuel delivered during the year to the unit,
taken at least once for each delivery; or, for fuel that is delivered
during the year to the unit continuously by pipeline, at least once
each quarter during which the fuel is delivered.
(3) For nongaseous fuel burned during the year, the requirement is
met if the annual average sulfur content is equal to or less than 0.05
percent by weight. The annual average sulfur content, as a percentage
by weight, shall be calculated using the equation in paragraph (d)(2)
of this section. In lieu of the factor, volume times density
(Vn dn), in the equation, the factor, mass
(Mn), may be used, where Mn is: mass of the
nongaseous fuel in a delivery during the year to the unit of which the
nth sample is taken, in lb; or, for fuel delivered during the year to
the unit continuously by pipeline, mass of the nongaseous fuel
delivered starting from when the nth sample of such fuel is taken until
the next sample of such fuel is taken, in lb.
(e)(1) A utility unit that was issued a written exemption under
this section and that meets the requirements of paragraph (a) of this
section shall be exempt from the Acid Rain Program, except for the
provisions of this section, Secs. 72.2 through 72.6, and Secs. 72.10
through 72.13 and shall be subject to the requirements of paragraphs
(a), (d), (e)(2), and (f) of this section in lieu of the requirements
set forth in the written exemption. The permitting authority shall
amend under Sec. 72.83 the operating permit covering the source at
which the unit is located, if the source has such a permit, to add the
provisions and requirements of the exemption under this paragraph
(e)(1) and paragraphs (a), (d), (e)(2), and (f) of this section.
(2) If a utility unit under paragraph (e)(1) of this section is
allocated one or more allowances under subpart B of part 73 of this
chapter, the designated representative (authorized in accordance with
subpart B of this part) or, if no designated representative has been
authorized, a certifying official of each owner of the unit shall
submit to the permitting authority that issued the written exemption a
statement (in a format prescribed by the Administrator) meeting the
requirements of paragraph (c)(1)(i)(C) and (D) of this section. The
statement shall be submitted by June 31, 1998 and, if the Administrator
is not the permitting authority, a copy shall be submitted to the
Administrator.
(f) Special Provisions. (1) The owners and operators and, to the
extent applicable, the designated representative of a unit exempt under
this section shall:
(i) Comply with the requirements of paragraph (a) of this section
for all periods for which the unit is exempt under this section; and
(ii) Comply with the requirements of the Acid Rain Program
concerning all periods for which the exemption is not in effect, even
if such requirements arise, or must be complied with, after the
exemption takes effect.
(2) For any period for which a unit is exempt under this section,
the unit is not an affected unit under the Acid Rain Program and parts
70 and 71 of this chapter and is not eligible to be an opt-in source
under part 74 of this chapter. As an unaffected unit, the unit shall
continue to be subject to any other applicable requirements under parts
70 and 71 of this chapter.
(3) For a period of 5 years from the date the records are created,
the owners and operators of a unit exempt under this section shall
retain at the source that includes the unit records demonstrating that
the requirements of paragraph (a) of this section are met. The 5-year
period for keeping records may be extended for cause, at any time prior
to the end of the period, in writing by the Administrator or the
permitting authority.
(i) Such records shall include, for each delivery of fuel to the
unit or for fuel delivered to the unit continuously by pipeline, the
type of fuel, the sulfur content, and the sulfur content of each sample
taken.
(ii) The owners and operators bear the burden of proof that the
requirements of paragraph (a) of this section are met.
(4) Loss of exemption. (i) On the earliest of the following dates,
a unit exempt under paragraphs (b), (c), or (e) of this section shall
lose its exemption and become an affected unit under the Acid Rain
Program and parts 70 and 71 of this chapter:
(A) The date on which the unit first serves one or more generators
with total nameplate capacity in excess of 25 MWe;
(B) The date on which the unit burns any coal or coal-derived fuel
except for coal-derived gaseous fuel with a total sulfur content no
greater than natural gas; or
(C) January 1 of the year following the year in which the annual
average sulfur content for gaseous fuel burned at the unit exceeds 0.05
percent by weight (as determined under paragraph (d) of this section)
or for nongaseous fuel burned at the unit exceeds 0.05 percent by
weight (as determined under paragraph (d) of this section).
(ii) Notwithstanding Sec. 72.30(b) and (c), the designated
representative for a unit that loses its exemption under this section
shall submit a complete Acid Rain permit application on the later of
January 1, 1998 or 60 days after the first date on which the unit is no
longer exempt.
(iii) For the purpose of applying monitoring requirements under
part 75 of this chapter, a unit that loses its exemption under this
section shall be treated as a new unit that commenced commercial
operation on the first date on which the unit is no longer exempt.
8. Section 72.8 is revised to read as follows:
Sec. 72.8 Retired units exemption.
(a) This section applies to any affected unit (except for an opt-in
source) that is permanently retired.
(b)(1) Any affected unit (except for an opt-in source) that is
permanently retired shall be exempt from the Acid Rain Program, except
for the provisions of this section, Secs. 72.2 through 72.6,
Secs. 72.10 through 72.13, and subpart B of part 73 of this chapter.
(2) The exemption under paragraph (b)(1) of this section shall
become effective on January 1 of the first full calendar year during
which that the unit is permanently retired. By December 31 of the first
year that the unit is to be exempt under this section, the designated
representative (authorized in accordance with subpart B of this part),
or, if no designated representative has been authorized, a certifying
official of each owner of the unit shall submit a statement to the
permitting authority otherwise responsible for administering a Phase II
Acid Rain permit for the unit. If the Administrator is not the
permitting authority, a copy of the statement shall be submitted to the
Administrator. The statement shall state (in a format prescribed by the
Administrator) that the unit is permanently retired and will comply
with the requirements of paragraph (d) of this section.
(3) After receipt of the notice under paragraph (b)(2) of this
section, the permitting authority shall amend under Sec. 72.83 the
operating permit covering the source at which the unit is located, if
the source has such a permit, to add the provisions and requirements of
the exemption under paragraphs (b)(1) and (d) of this section.
(c) A unit that was issued a written exemption under this section
and that is permanently retired shall be exempt from the Acid Rain
Program, except for the provisions of this section, Secs. 72.2 through
72.6, Secs. 72.10 through 72.13, and subpart B of part 73 of this
chapter,
[[Page 55478]]
and shall be subject to the requirements of paragraph (d) of this
section in lieu of the requirements set forth in the written exemption.
The permitting authority shall amend under Sec. 72.83 the operating
permit covering the source at which the unit is located, if the source
has such a permit, to add the provisions and requirements of the
exemption under this paragraph (c) and paragraph (d) of this section.
(d) Special Provisions. (1) A unit exempt under this section shall
not emit any sulfur dioxide and nitrogen oxides starting on the date
that the exemption takes effect. The owners and operators of the unit
will be allocated allowances in accordance with subpart B of part 73 of
this chapter. If the unit is a Phase I unit, for each calendar year in
Phase I, the designated representative of the unit shall submit a Phase
I permit application in accordance with subparts C and D of this part
72 and an annual certification report in accordance with Secs. 72.90
through 72.92 and is subject to Secs. 72.95 and 72.96.
(2) A unit exempt under this section shall not resume operation
unless the designated representative of the source that includes the
unit submits a complete Acid Rain permit application under Sec. 72.31
for the unit not less than 24 months prior to the later of January 1,
2000 or the date on which the unit is first to resume operation.
(3) The owners and operators and, to the extent applicable, the
designated representative of a unit exempt under this section shall
comply with the requirements of the Acid Rain Program concerning all
periods for which the exemption is not in effect, even if such
requirements arise, or must be complied with, after the exemption takes
effect.
(4) For any period for which a unit is exempt under this section,
the unit is not an affected unit under the Acid Rain Program and parts
70 and 71 of this chapter and is not eligible to be an opt-in source
under part 74 of this chapter. As an unaffected unit, the unit shall
continue to be subject to any other applicable requirements under parts
70 and 71 of this chapter.
(5) For a period of 5 years from the date the records are created,
the owners and operators of a unit exempt under this section shall
retain at the source that includes the unit records demonstrating that
the unit is permanently retired. The 5-year period for keeping records
may be extended for cause, at any time prior to the end of the period,
in writing by the Administrator or the permitting authority. The owners
and operators bear the burden of proof that the unit is permanently
retired.
(6) Loss of exemption. (i) On the earlier of the following dates, a
unit exempt under paragraph (b) or (c) of this section shall lose its
exemption and become an affected unit under the Acid Rain Program and
parts 70 and 71 of this chapter:
(A) The date on which the designated representative submits an Acid
Rain permit application under paragraph (d)(2) of this section; or
(B) The date on which the designated representative is required
under paragraph (d)(2) of this section to submit an Acid Rain permit
application.
(ii) For the purpose of applying monitoring requirements under part
75 of this chapter, a unit that loses its exemption under this section
shall be treated as a new unit that commenced commercial operation on
the first date on which the unit resumes operation.
Sec. 72.9 [Amended]
9. Section 72.9 is amended by:
a. Removing from paragraphs (b)(1) and (2) the words ``and section
407 of the Act and regulations implementing section 407 of the Act'';
b. Removing from paragraph (b)(3) the words ``and regulations
implementing section 407 of the Act'';
c. Removing from paragraph (c)(6) the words ``the written exemption
under Secs. 72.7 and 72.8'' and adding in their place, the words ``an
exemption under Secs. 72.7, 72.8, or 72.14'';
d. Removing from paragraph (f)(1)(ii) the punctuation ``.'' and
adding in its place the words ``; provided that to the extent that part
75 provides for a 3-year period for recordkeeping, the 3-year period
shall apply.'';
e. Removing from paragraph (g)(1) the words ``a written exemption
under Sec. 72.7 or Sec. 72.8'' and adding, in their place, the words
``an exemption under Secs. 72.7, 72.8, or 72.14'';
f. Removing from paragraph (g)(6) the words ``part 76 of this
chapter'' and adding, in their place, the words ``Sec. 76.11 of this
chapter; and
g. Removing from paragraph (h) introductory text the words ``a
written exemption under Secs. 72.7 or 72.8'' and adding, in their
place, the words ``an exemption under Secs. 72.7, 72.8, or 72.14''.
Sec. 72.13 [Amended]
10. Section 72.13 is amended by:
a. Removing paragraphs (a)(1), (a)(5), (a)(6), (a)(7), (a)(9), and
(a)(10);
b. Redesignating paragraph (a)(2) as paragraph (a)(1);
c. Redesignating paragraph (a)(3) as paragraph (a)(2);
d. Redesignating paragraph (a)(4) as paragraph (a)(3), and
e. Redesignating paragraph (a)(8) as paragraph (a)(4).
11. Section 72.14 is added to read as follows:
Sec. 72.14 Industrial utility-units exemption.
(a) Applicability. This section applies to any non-cogeneration,
utility unit that has not previously lost an exemption under paragraph
(d)(4) of this section and that meets the following criteria:
(1) Starting on the date of the signing of the interconnection
agreement under paragraph (a)(2) of this section and thereafter, there
has been no owner or operator of the unit, division or subsidiary or
affiliate or parent company of an owner or operator of the unit, or
combination thereof whose principal business is the sale, transmission,
or distribution of electricity or that is a public utility under the
jurisdiction of a State or local utility regulatory authority;
(2) On or before March 23, 1993, the owners or operators of the
unit entered into an interconnection agreement and any related power
purchase agreement with a person whose principal business is the sale,
transmission, or distribution of electricity or that is a public
utility under the jurisdiction of a State or local utility regulatory
authority, requiring the generator or generators served by the unit to
produce electricity for sale only for incidental electricity sales to
such person;
(3) The unit served or serves one or more generators that, in 1985
or any year thereafter, actually produced electricity for sale only for
incidental electricity sales required under the interconnection
agreement and any related power purchase agreement under paragraph
(a)(2) of this section or a successor agreement under paragraph
(d)(4)(ii) of this section; and
(4) Incidental electricity sales, under this section, are total
annual sales of electricity produced by a generator that do not exceed
10 percent of the nameplate capacity of that generator times 8,760
hours per year and do not exceed 10 percent of the actual annual
electric output of that generator.
(b) Petition for exemption. The designated representative
(authorized in accordance with subpart B of this part) of a unit under
paragraph (a) of this section may submit to the permitting authority
otherwise responsible for administering a Phase II Acid Rain permit for
the unit a complete petition for an exemption for the unit from the
requirements of the Acid Rain Program, except for the provisions of
this section, Secs. 72.2 through 72.6, and Secs. 72.10 through 72.13.
If the Administrator is
[[Page 55479]]
not the permitting authority, a copy of the petition shall be submitted
to the Administrator. A complete petition shall include the following
elements in a format prescribed by the Administrator:
(1) Identification of the unit;
(2) A statement that the unit is not a cogeneration unit;
(3) A list of the current owners and operators of the unit and any
other owners and operators of the unit, starting on the date of the
signing of the interconnection agreement under paragraph (a)(2) of this
section, and a statement that, starting on that date, there has been no
owner or operator of the unit, division or subsidiary or affiliate or
parent company of an owner or operator of the unit, or combination
thereof whose principal business is the sale, transmission, or
distribution of electricity or that is a public utility under the
jurisdiction of a State or local utility regulatory authority;
(4) A summary of the terms of the interconnection agreement and any
related power purchase agreement under paragraph (a)(2) of this section
and any successor agreement under paragraph (d)(4)(ii) of this section,
including the date on which the agreement was signed, the amount of
electricity that may be required to be produced for sale by each
generator served by the unit, and the provisions for expiration or
termination of the agreement;
(5) A copy of the interconnection agreement and any related power
purchase agreement under paragraph (a)(2) of this section and any
successor agreement under paragraph (d)(4)(ii) of this section;
(6) The nameplate capacity of each generator served by the unit;
(7) For each year starting in 1985, the actual annual electrical
output of each generator served by the unit, the total amount of
electricity produced for sales to any customer by each generator, and
the total amount of electricity produced and sold as required by the
interconnection agreement and any related power purchase agreement
under paragraph (a)(2) of this section or any successor agreement under
paragraph (d)(4)(ii) of this section;
(8) A statement that each generator served by the unit actually
produced electricity for sale only for incidental electricity sales (in
accordance with paragraph (a)(4) of this section) required under the
interconnection agreement and any related power purchase agreement
under paragraph (a)(2) of this section or any successor agreement under
paragraph (d)(4)(ii) of this section; and
(9) The special provisions of paragraph (d) of this section.
(c) Permitting Authority's Action. (1) (i) For any unit meeting the
requirements of paragraphs (a) and (b) of this section, the permitting
authority shall issue an exemption from the requirements of the Acid
Rain Program, except for the provisions of this section, Secs. 72.2
through 72.6 and Secs. 72.10 through 72.13.
(ii) If a petition for exemption is submitted for a unit but the
designated representative fails to demonstrate that the requirements of
paragraph (a) of this section are met, the permitting authority shall
deny an exemption under this section.
(2) In issuing or denying an exemption under paragraph (c)(1) of
this section, the permitting authority shall treat the petition for
exemption as a permit application and apply the procedures used for
issuing or denying draft, proposed (if the Administrator is not the
permitting authority otherwise responsible for administering a Phase II
Acid Rain permit for the unit), and final Acid Rain permits.
(3) An exemption issued under paragraph (c)(1)(i) of this section
shall become effective on January 1 of the first full year the unit
meets the requirements of paragraph (a) of this section.
(4) An exemption issued under paragraph (c)(1)(i) of this section
shall be effective until the date on which the unit loses the exemption
under paragraph (d)(4) of this section.
(5) After issuance of the exemption under paragraphs (c)(1) and (2)
of this section, the permitting authority shall amend under Sec. 72.83
the operating permit covering the source at which the unit is located,
if the source has such a permit, to add the provisions and requirements
of the exemption under paragraphs (c)(1)(i) and (d) of this section.
(d) Special Provisions. (1) The owners and operators and, to the
extent applicable, the designated representative of a unit exempt under
this section shall comply with the requirements of the Acid Rain
Program concerning all periods for which the exemption is not in
effect, even if such requirements arise, or must be complied with,
after the exemption takes effect.
(2) For any period for which a unit is exempt under this section,
the unit is not an affected unit under the Acid Rain Program and parts
70 and 71 of this chapter and is not eligible to be an opt-in source
under part 74 of this chapter. As an unaffected unit, the unit shall
continue to be subject to any other applicable requirements under parts
70 and 71 of this chapter.
(3) For a period of 5 years from the date the records are created,
the owners and operators of a unit exempt under this section shall
retain at the source that includes the unit records demonstrating that
the requirements of paragraph (a) of this section are met. The owners
and operators bear the burden of proof that the requirements of this
section are met. The 5-year period for keeping records may be extended
for cause, at any time prior to the end of the period, in writing by
the Administrator or the permitting authority. Such records shall
include the following information:
(i) A copy of the interconnection agreement and any related power
purchase agreement under paragraph (a)(2) of this section and any
successor agreement under paragraph (d)(4)(ii) of this section;
(ii) The nameplate capacity of each generator served by the unit;
and
(iii) For each year starting in 1985, the actual annual electrical
output of each generator served by the unit, the total amount of
electricity produced for sales to any customer by each generator, and
the total amount of electricity produced and sold as required by the
interconnection agreement and any related power purchase agreement
under paragraph (a)(2) of this section or any successor agreement under
paragraph (d)(4)(ii) of this section.
(4) Loss of exemption. (i) On the earliest of the following dates,
a unit exempt under this section shall lose its exemption and become an
affected unit under the Acid Rain Program and parts 70 and 71 of this
chapter:
(A) The first date on which there is an owner or operator of the
unit, division or subsidiary or affiliate or parent company of an owner
or operator of the unit, or combination thereof, whose principal
business is the sale, transmission, or distribution of electricity or
that is a public utility under the jurisdiction of a State or local
utility regulatory authority.
(B) If any generator served by the unit actually produces any
electricity for sale other than for sale to the person specified as the
purchaser in the interconnection agreement or any related power
purchase agreement under paragraph (a)(2) of this section or a
successor agreement under paragraph (d)(4)(ii) of this section, then
the day after the date on which such electricity is sold.
(C) If any generator served by the unit actually produces any
electricity for sale to the person specified as the purchaser in the
interconnection agreement or any
[[Page 55480]]
related power purchase agreement under paragraph (a)(2) of this section
or a successor agreement under paragraph (d)(4)(ii) of this section
where such sale is not required under that interconnection agreement or
related power purchase agreement or successor agreement or where such
sale will result in total sales for a calendar year exceeding 10
percent of the nameplate capacity of that generator times 8,769 hours
per year, then the day after the date on which such sale is made.
(D) If any generator served by the unit actually produces any
electricity for sale to the person specified as the purchaser in the
interconnection agreement or related power purchase agreement under
paragraph (a)(2) of this section or a successor agreement under
paragraph (d)(4)(ii) of this section where such sale results in total
sales for a calendar year exceeding 10 percent of the actual electric
output of the generator for that year, then January 1 of the year after
such year.
(E) If the interconnection agreement or related power purchase
agreement under paragraph (a)(2) of this section expires or is
terminated, no successor agreement under paragraph (d)(4)(ii) of this
section is in effect, and any generator served by the unit actually
produces any electricity for sale, then the day after the date on which
such electricity is sold.
(ii) A ``successor agreement'' is an agreement that:
(A) Modifies, replaces or supersedes the interconnection agreement
or related power purchase agreement under paragraph (a)(2) of this
section;
(B) Is between the owners and operators of the unit and a person
that is contractually obligated to sell electricity to the owners and
operators of the unit and either whose principal business is the sale,
transmission, or distribution of electricity or that is a public
utility under the jurisdiction of a State or local utility regulatory
authority; and
(C) Requires the generator served by the unit to produce
electricity for sale to the person under paragraph (d)(4)(ii)(B) of
this section and only for incidental electricity sales, such that the
total amount of electricity that such generator is required to produce
for sale under the interconnection agreement or related power purchase
agreement (to the extent they are still in effect) and the successor
agreement shall not exceed the total amount of electricity that such
generator was required to produce for sale under the interconnection
agreement or related power purchase agreement under paragraph (a)(2) of
this section.
(iii) Notwithstanding Sec. 72.30(b) and (c), the designated
representative for a unit that loses its exemption under this section
shall submit a complete Acid Rain permit application on the later of
January 1, 1998 or 60 days after the first date on which the unit is no
longer exempt.
(iv) For the purpose of applying monitoring requirements under part
75 of this chapter, a unit that loses its exemption under this section
shall be treated as a new unit that commenced commercial operation on
the first date on which the unit is no longer exempt.
12. Section 72.22 is amended by adding paragraph (e) to read as
follows:
Sec. 72.22 Alternate designated representative.
* * * * *
(e)(1) Notwithstanding paragraph (a) of this section, the
certification of representation may designate two alternate designated
representatives for a unit if:
(i) The unit and at least one other unit, which are located in two
or more of the contiguous 48 States or the District of Columbia, each
have a utility system that is a subsidiary of the same company; and
(ii) The designated representative for the units under paragraph
(e)(1)(i) of this section submits a NOX averaging plan under
Sec. 76.11 of this chapter that covers such units and is approved by
the permitting authority, provided that the approved plan remains in
effect.
(2) Except in this paragraph (e), whenever the term ``alternate
designated representative'' is used under the Acid Rain Program, the
term shall be construed to include either of the alternate designated
representatives authorized under this paragraph (e). Except in this
section, Sec. 72.23, and Sec. 72.24, whenever the term ``designated
representative'' is used under the Acid Rain Program, the term shall be
construed to include either of the alternate designated representatives
authorized under this paragraph (e).
13. Section 72.24 is amended by revising paragraphs (a)(3), (5),
(10), and (11) to read as follows:
Sec. 72.24 Certificate of representation.
(a) * * *
(3) A list of the owners and operators of the affected source and
of each affected unit at the source.
* * * * *
(5) The following statement: ``I certify that I have given notice
of the agreement, selecting me as the `designated representative' for
the affected source and each affected unit at the source identified in
this certificate of
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