Findings of Significant Contribution and Rulemaking on Section 126 Petitions for Purposes of Reducing Interstate Ozone Transport
Federal RegisterOct 21, 1998
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SUMMARY: In accordance with section 126 of the Clean Air Act (CAA), EPA
is proposing action on petitions filed by eight Northeastern States
seeking to mitigate what they describe as significant transport of one
of the main precursors of ground-level ozone, nitrogen oxides
(NOX), across State boundaries. Each petition specifically
requests that EPA make a finding that NOX emissions from
certain stationary sources emit in violation of the CAA's prohibition
on emissions that significantly contribute to ozone nonattainment
problems in the petitioning State. If EPA makes such a finding of
significant contribution, EPA is authorized to establish Federal
emissions limits for the sources. The eight Northeastern States that
filed petitions are Connecticut, Maine, Massachusetts, New Hampshire,
New York, Pennsylvania, Rhode Island, and Vermont.
This notice proposes to find that portions of certain petitions are
technically meritorious under the test applicable under section 126.
The EPA is proposing that the technically meritorious portions of the
petitions be deemed granted or denied at certain later dates pending
certain actions by the States and EPA regarding State submittals in
response to the final NOX State implementation plan call
(NOX SIP call). This notice describes the schedule and
conditions under which applicable final findings on the petitions would
be automatically triggered. Further, this notice proposes the control
requirements that would apply to sources in the source categories for
which a final finding is ultimately granted. This notice also proposes
to deny certain petitions, in whole or in part. The EPA published a
shorter proposal on the section 126 petitions on September 30, 1998
that announced the availability of this longer proposal in the docket
and on EPA's Website, announced the public hearing, and requested
comment on the proposal.
The transport of ozone and its precursors is important because
ozone, which is a primary harmful component of urban smog, has long
been recognized, in both clinical and epidemiological research, to
affect public health. There is a wide range of ozone-induced health
effects, including decreased lung function (primarily in children
active outdoors), increased respiratory symptoms (particularly in
highly sensitive individuals), increased hospital admissions and
emergency room visits for respiratory causes (among children and adults
with pre-existing respiratory disease such as asthma), increased
inflammation of the lung, and possible long-term damage to the lungs.
DATES: Comments may be submitted until November 30, 1998, as previously
announced in a shorter notice of proposed rulemaking published in the
Federal Register on September 30, 1998.
Comments must be postmarked by the last day of the comment period
and sent directly to the Docket Office listed in ADDRESSES (in
duplicate form if possible). The public hearings for the section 126
and FIP proposals will be held on October 28 and 29, 1998, as
previously announced in a shorter notice of proposed rulemaking
published in the Federal Register on September 30, 1998.
ADDRESSES: Comments may be submitted to the Air and Radiation Docket
and Information Center (6102), Attention: Docket No. A-97-43, U.S.
Environmental Protection Agency, 401 M Street SW, room M-1500,
Washington, DC 20460, telephone (202) 260-7548. Comments and data may
also be submitted electronically by following the instructions under
SUPPLEMENTARY INFORMATION of this document. No confidential business
information (CBI) should be submitted through e-mail. For comments that
include color graphics, a courtesy copy of comments to Carla Oldham
would be appreciated at Office of Air Quality Planning and Standards,
Air Quality Strategies and Standards Division, MD-15, Research Triangle
Park, NC 27711, telephone (919) 541-3347, fax (919) 541-0824, e-mail
address [email protected]. The address for sending overnight
packages is U.S. EPA, Air Quality Strategies and Standards Division,
411 W Chapel Hill St., Durham, NC 27701.
The public hearing will be held at the EPA Auditorium, 401 St.,
SW., Washington, DC.
Documents relevant to this action are available for inspection at
the Docket Office, at the above address, between 8 a.m. and 4 p.m.,
Monday though Friday, excluding legal holidays. A reasonable copying
fee may be charged for copying.
FOR FURTHER INFORMATION CONTACT: General questions concerning today's
action should be addressed to Carla Oldham, Office of Air Quality
Planning and Standards, Air Quality Strategies and Standards Division,
MD-15, Research Triangle Park, NC, 27711, telephone (919) 541-3347.
Please refer to SUPPLEMENTARY INFORMATION below for a list of contacts
for specific subjects described in today's action.
SUPPLEMENTARY INFORMATION:
Availability of Related Information
The official record for this rulemaking, as well as the public
version, has been established under docket number A-97-43 (including
comments and data submitted electronically as described below). A
public version of this record, including printed, paper versions of
electronic comments, which does not include any information claimed as
CBI, is available for inspection from 8 a.m. to 4 p.m., Monday through
Friday, excluding legal holidays. The official rulemaking record is
located at the address in ADDRESSES at the beginning of this document.
Electronic comments can be sent directly to EPA at: A-and-R-
D[email protected]. Electronic comments must be submitted as an
ASCII file avoiding the use of special characters and any form of
encryption. Comments and data will also be accepted on disks in
WordPerfect in 5.1 file format or ASCII file format. All comments and
data in electronic form must be identified by the docket number A-97-
43. Electronic comments on this NPR rule may be filed online at many
Federal Depository Libraries.
The EPA has issued a separate rule on NOX transport
entitled, ``Finding of Significant Contribution and Rulemaking for
Certain States in the Ozone Transport Assessment Group Region for
Purposes of Reducing Regional Transport of Ozone'' (see notices
included in the docket for this rulemaking). The rulemaking docket for
that rule, hereafter referred to as the NOX State
implementation plan (SIP) call (NOX SIP call), contains
information and analyses that are relied upon in today's proposal on
the section 126 petitions. Therefore, EPA is incorporating by reference
the entire NOX SIP call record for purposes of the section
126 rulemaking. Documents related to the NOX SIP call
rulemaking are available for inspection in Docket No. A-96-56 at the
address and times
[[Page 56293]]
given above. In addition, the proposed NOX SIP call and
associated documents are located at http://www.epa.gov/ttn/oarpg/
otagsip.html. The EPA is finalizing action on the NOX SIP
call concurrently with today's proposal on the section 126 petitions.
Additional information relevant to this NPR concerning the Ozone
Transport Assessment Group (OTAG) is available on the Agency's Office
of Air Quality Planning and Standards' (OAQPS) Technology Transfer
Network (TTN) via the web at http://www.epa.gov/ttn/. If assistance is
needed in accessing the system, call the help desk at (919) 541-5384 in
Research Triangle Park, NC. Documents related to OTAG can be downloaded
directly from OTAG's webpage at http://www.epa.gov/ttn/otag. The OTAG's
technical data are located at http://www.iceis.mcnc.org/OTAGDC.
For Additional Information
For additional information related to air quality analysis, please
contact Carey Jang, Office of Air Quality Planning and Standards;
Emissions, Monitoring, and Analysis Division, MD-14, Research Triangle
Park, NC 27711, telephone (919) 541-5638. For legal questions, please
contact Howard Hoffman, Office of General Counsel, 401 M Street SW, Mc-
2344, Washington, DC, 20460, telephone (202) 260-5892. For questions
regarding the NOX cap-and-trade program, please contact
Melanie Dean, Office of Atmospheric Programs, Acid Rain Division, MC-
6204J, 401 M Street SW, Washington, DC 20460, telephone (202) 564-9189.
For questions regarding regulatory cost analyses for electricity
generating sources, please contact Ravi Srivastava, Office of
Atmospheric Programs, Acid Rain Division, MC-6204J, 401 M Street SW,
Washington, DC 20460, telephone (202) 564-9093. For questions regarding
regulatory cost analyses for other stationary sources, please contact
Scott Mathias, Office of Air Quality Planning and Standards, Air
Quality Strategies and Standards Division, MD-15, Research Triangle
Park, NC 27711, telephone (919) 541-5310.
Outline
I. Background
A. Summary of Rulemaking
B. Ozone Transport, Ozone Transport Commission NOX
Memorandum of Understanding (OTC NOX MOU), OTAG, the
NOX SIP Call, the Revised Ozone National Ambient Air
Quality Standard, and Ozone Effects
C. Section 126
D. Summary of Section 126 Petitions
1. Control Remedies Recommended By Petitions
2. Sources Covered By Petitions
E. Litigation on Rulemaking Schedule
F. Advance Notice of Proposed Rulemaking on Petitions
II. EPA's Analytical Approach and Proposed Action on Petitions
A. EPA's Proposed Interpretation of Section 126 and Analytical
Approach for Determining Whether to Grant or Deny the Petitions
1. The Appropriate Test under Section 126
2. EPA's Analytical Approach for Determining Whether to Grant or
Deny the Petitions
a. EPA's Interpretation of Significant Contribution under
Section 110
b. Applying EPA's Section 110 Interpretation of ``Significant
Contribution'' and ``Interference'' under Section 126
c. Emitting ``In Violation of the Prohibition'' in Section 110--
the Decision Whether to Grant or Deny Each Petition
B. Weight of Evidence Determination of Named Upwind States
C. Cost-Effectiveness of Emissions Reductions
1. What NOX Controls Are Highly Cost Effective
2. Determining the Cost Effectiveness of NOX Controls
i. Large EGUs
ii. Large Non-EGUs
iii. Legal Process Heaters
iv. Small Sources
v. Summary of Control Measures
3. Other Cost-Related Considerations
D. Identifying Sources
E. Air Quality Assessment
F. Conclusions on Granting or Denying Petitions
1. Technical Determinations
2. Action on Whether to Grant or Deny Each Petition
a. Portions of Petitions For Which EPA is Proposing an
Affirmative Technical Determination
b. Portions of Petitions For Which EPA is Proposing An Negative
Technical Determination
3. Requirements for Sources for Which EPA Makes a Section 126(b)
Finding
III. Federal NOX Budget Trading Program
A. Program Summary
1. Purpose of the Federal NOX Budget Trading Program
2. Relationship of Section 126 Remedy to the NOX SIP
Call and the FIP
B. Federal NOX Budget Trading Program
1. Program Overview
2. Elements of the Federal NOX Budget Trading Program
That Are the Same as the State NOX Budget Trading Program
a. General Provisions
b. Authorized Account Representative
c. Permits
d. Compliance Certification
e. NOX Allowance Tracking System
f. Banking
g. NOX Allowance Transfers
h. Audits
3. Elements of the Federal NOX Budget Trading Program
That Differ from the State NOX Budget Trading Program
a. General Provisions
i. Purpose
ii. Definitions
iii. Applicability
iv. Standard Requirements
b. Compliance Certification
c. Aggregate NOX Emissions Levels and Allowance
Allocations
i. Data Sources
(1) EGUs
(2) Non-EGUs
ii. Methodology Used to Determine Controlled Emission Levels
(1) Large EGUs
(2) Large Non-EGUs
iii. Development of Section 126 Trading Program Budget
iv. Timing Provisions
v. NOX Allowance Allocation Methodology
(1) EGUs
(2) Non-EGUs
(3) Treatment of New Sources
d. Compliance Supplement Pool
i. Size of Compliance Supplement Pool
ii. Distribution of Compliance Supplement Pool to Sources
e. Emissions Monitoring and Reporting
f. Opt-ins
g. Program Administration
C. New Source Review
IV. Non-ozone Benefits to NOX Reductions
V. Administrative Requirements
A. Executive Order 12866: Regulatory Impact Analysis
B. Impact on Small Entities
1. Regulatory Flexibility
2. Outreach to Small Entity Representatives
3. Potentially Affected Small Entities
4. Panel Findings and EPA Actions
a. Exemptions
b. Continuous Emissions Monitoring Systems (CEMS)
c. Electricity Generating Units
d. Industrial Boilers
e. EPA Guidance to States on Small Entities
C. Unfunded Mandates Reform Act
D. Paperwork Reduction Act
E. Executive Order 13045: Protection of Children from
Environmental Health Risks and Safety Risks
1. Applicability of Executive Order 13045
2. Childrens' Health Protection
F. Executive Order 12898: Environmental Justice
G. Executive Order 12875: Enhancing the Intergovernmental
Partnership
H. Executive Order 13084: Consultation and Coordination with
Indian Tribal Governments
I. National Technology Transfer and Advancement Act
I. Background
A. Summary of Rulemaking
In today's action, EPA is proposing to make a technical
determination that certain major stationary sources and source
categories identified in the section 126 petitions are significantly
contributing to nonattainment in, or interfering with maintenance by,
one or more petitioning State with respect to one or more of the
national ambient air quality standards for ozone (hereafter
[[Page 56294]]
referred to as a positive or affirmative technical determination). On
the basis of that proposed affirmative technical determination, EPA is
proposing that the petitions naming these sources and source categories
be granted or denied at certain later dates pending certain actions by
the States and EPA regarding State submittals in response to the final
NOX SIP call. The schedule and conditions under which the
applicable final findings on the petitions would be triggered are
discussed below in Section II.F. The EPA's analysis of significant
contribution is discussed in Section II below.
Under the 1-hour ozone standard, EPA is proposing to make
affirmative technical determinations as to a subset of sources and
source categories named in the petitions from Connecticut, Maine,
Massachusetts, New Hampshire, New York, Pennsylvania, and Rhode Island.
The source categories for which EPA is proposing this affirmative
technical determination of significant contribution are discussed in
Section II. The existing sources that are affected by this technical
determination are listed in appendix A to proposed part 97.
The EPA is also proposing to partially deny the petitions from
Connecticut, Maine, Massachusetts, New Hampshire, New York,
Pennsylvania, and Rhode Island because EPA believes some of the sources
or source categories named in the petitions are not significantly
contributing to nonattainment in the relevant petitioning State with
respect to the 1-hour ozone standard. The EPA is proposing to deny the
Vermont petition in full with respect to the 1-hour ozone standard
because the 1-hour standard no longer applies in that State (See 63 FR
31014).
Three of the petitioners, Massachusetts, Pennsylvania, and Vermont,
also directed their petitions at the new 8-hour ozone standard. Under
the 8-hour ozone standard, EPA is proposing to make a positive
technical determination as to a subset of sources named in the
petitions from Massachusetts and Pennsylvania. The source categories
for which EPA is proposing this affirmative technical determination of
significant contribution are discussed in Section II. The existing
sources that are affected by this technical determination are listed in
appendix A to proposed part 97. The EPA is proposing to deny the
Vermont petition in full with respect to the 8-hour ozone standard
because Vermont has no current 8-hour ozone nonattainment problems and
no future projected nonattainment problems based on available analyses.
In aggregate for all petitions and both ozone standards, the
sources and source categories that EPA is proposing to find
significantly contribute to nonattainment in, or interfere with
maintenance by, (hereafter simply contribute significantly to) one or
more of the petitioning States are located in the following States:
Alabama, Connecticut, Delaware, District of Columbia, Illinois,
Indiana, Kentucky, Maryland, Massachusetts, Michigan, Missouri, New
Jersey, New York, North Carolina, Ohio, Pennsylvania, Rhode Island,
Tennessee, Virginia, and West Virginia. The combined list of existing
sources affected by a positive technical determination with respect to
at least one petition, along with proposed emissions limitations in the
form of tradable allowance allocations, is located in Appendix A to
proposed part 97. The EPA intends to update the list of affected
sources on a periodic basis to include new sources in the source
categories that are significantly contributing.
Some of the sources that EPA is proposing do not significantly
contribute to the petitioning States may be located in States that are
affected by a separate rulemaking on NOX transport, the
NOX SIP call. While emissions from sources in certain States
may not be significantly contributing to nonattainment or maintenance
problems in any of the eight petitioning States, the sources may be
significantly contributing to nonattainment problems in other downwind
States. In acting on these section 126 petitions, EPA can only consider
the impacts on downwind nonattainment problems in the petitioning
States, which are all located in the Northeast. In the NOX
SIP call, EPA considered impacts on nonattainment problems throughout
the eastern half of the United States. Therefore, a determination that
sources in certain States are not significantly contributing for
purposes of this action on the section 126 petitions should not be
assumed to reflect EPA's conclusions on significant contribution with
regard to the NOX SIP call or other transport-related
rulemakings.
The section 126 petitions varied with regard to the control
requirements they recommend for mitigating the interstate transport.
While EPA considered the recommendations, section 126 does not limit
EPA to the recommended controls in determining an appropriate remedy.
In Section III, EPA proposes the emissions limitations that would be
necessary to ensure that the affected sources do not or would not emit
in violation of the applicable statutory prohibition on significant
contribution by upwind States to downwind air quality problems. The
control remedy is based on the uniform application of highly cost-
effective controls (as determined based on cost per ton of
NOX reduced for each type of source). In selecting the
control measures, EPA considered the recommendations made by OTAG on
July 8, 1997 and the analyses for the NOX SIP call. The EPA
considered controls that would effectively minimize emissions while not
exceeding a source-categorywide $2000 per ton for reductions of ozone
season NOX (in 1990 dollars), on average, for each source
category. For electricity generating units larger than 25 MWe, EPA is
proposing a control level corresponding to 0.15 lb/mmBtu. For
industrial boilers and turbines greater that 250 mmBtu/hr, EPA is
proposing a control level corresponding to a 60 percent reduction from
an uncontrolled baseline. For small sources and process heaters, EPA is
proposing no additional controls. For purposes of this rulemaking, EPA
is defining small sources as: (1) Electricity generating boilers and
turbines serving a generator 25 MWe or less, and (2) other indirect
heat exchangers with a heat input of 250 mmBtu/hr or less. The control
requirements are consistent with the assumptions used in developing the
final budgets for the NOX SIP call. Further discussion
concerning small point sources can be found in Section II of this
preamble.
The EPA intends to implement the control requirements through a
Federal NOX cap-and-trade program, which is described in
Section III. The EPA believes a trading program is the most cost-
effective approach for achieving emissions reductions from large
stationary sources. The proposed trading program is consistent with the
model trading rule that EPA is finalizing for purposes of the
NOX SIP call, except for changes necessary to account for
Federal implementation instead of State implementation. The EPA
envisions that there would be a common trading program among section
126 sources and NOX SIP call sources in States that choose
to participate in the State trading program, and sources subject to a
Federal implementation plan under the NOX SIP call.
In accordance with section 126, sources must comply with the
control requirements no later than 3 years from a final positive
finding on the petitions, on a schedule to be determined by the EPA
Administrator. The EPA is proposing that the full 3 years is necessary
for compliance. As discussed below, EPA is proposing that the
technically meritorious portions of the
[[Page 56295]]
petitions be deemed granted or denied at certain later dates, pending
certain actions by States and EPA regarding implementation plans
required in response to the NOX SIP call. The EPA intends to
take final action by April 30, 1999 on the technical determination
described above, the decision as to when each portion of the petitions
would be deemed granted or denied, and the emissions limitations that
would apply to any sources for which a petition is ultimately deemed
granted.
B. Ozone Transport, Ozone Transport Commission NOX
Memorandum of Understanding (OTC NOX MOU), OTAG, the
NOX SIP Call, the Revised Ozone National Ambient Air Quality
Standard (NAAQS), and Ozone Effects
Today's action occurs against a background of a major national
effort, spanning at least the last 10 years, to analyze and take steps
to mitigate the problem of the transport of ozone and its precursors
across State boundaries. This effort has grown more intensive in the
past several years with the approval of the OTC NOX MOU by
11 of the Northeastern States and the District of Columbia included in
the Northeast Ozone Transport Region (OTR), the completion of the OTAG
process (described below), and the publication of EPA's proposed
NOX SIP call. In addition, on July 18, 1997, EPA issued a
revised NAAQS for ozone, for which is determined over an 8-hour period
(the 8-hour standard) (62 FR 38856). In establishing the 8-hour
standard, EPA is setting the standard at 0.08 parts per million and
defines the new standard as a ``concentration-based'' form,
specifically the 3-year average of the annual 4th-highest daily maximum
8-hour ozone concentrations. This has resulted in more areas and larger
areas with monitoring data indicating nonattainment. Thus, it is even
more important to implement regional control strategies to mitigate
interstate pollution in order to assist downwind areas in achieving
attainment. This new 8-hour standard must now be taken into account,
along with the pre-existing 1-hour standard, in resolving transport
issues. These issues and events are detailed in the proposed
NOX SIP call (62 FR 60318) and familiarity with that notice
is assumed for purposes of today's notice. In addition, in many areas
of the country, the 1-hour standard has been revoked because the areas
are attaining that standard (63 FR 31013; June 5, 1998 and 63 FR 39432,
July 22, 1998). A State may petition under section 126 for the both the
1-hour standard, to the extent that it still applies in the petitioning
State, and the 8-hour standard.
The 1990 CAA set forth many requirements to address nonattainment
of the 1-hour ozone NAAQS. Many States have found it difficult to
demonstrate attainment of the NAAQS due to the widespread transport of
ozone and its precursors. The Environmental Council of the States
(ECOS) recommended formation of a national work group to allow for a
thoughtful assessment and development of consensus solutions to the
problem. This work group, OTAG, was established 3 years ago to
undertake an assessment of the regional transport problem in the
eastern half of the United States. The OTAG was a collaborative process
conducted by representatives from the affected States, EPA, and
interested members of the public, including environmental groups and
industry, to evaluate the ozone transport problem and develop
solutions. The OTAG region included the 37 eastern-most States and the
District of Columbia. Through the OTAG process, the States concluded
that widespread NOX reductions are needed in order to enable
areas to attain and maintain the ozone NAAQS. Based on information
generated by OTAG and other available data, EPA determined that certain
States in the OTAG region were significantly contributing to
nonattainment problems in downwind States. Therefore, EPA issued a
proposed NOX SIP call requiring the States to revise their
SIPs to include NOX control measures to mitigate the ozone
transport. The EPA is finalizing the NOX SIP call in the
same timeframe as this proposal on the section 126 petitions.
The EPA's response to the section 126 petitions differs from EPA's
action in the NOX SIP call rulemaking in several ways. In
the NOX SIP call, where EPA concludes that NOX
emissions from a State are significantly contributing to nonattainment
problems in downwind States, EPA will require the State to submit SIP
provisions to prohibit an amount of NOX emissions which
represents the significant contribution. The State will have the
discretion to select the mix of controls measures for their sources to
meet the required statewide NOX reduction reductions. If the
State does not make the required SIP submission, EPA is required to
promulgate a Federal implementation plan (FIP) within 2 years of the
State failure. In the November 7, 1997 NOX SIP call
proposal, EPA announced that it intended to expedite the FIP
promulgation in order to assure that the downwind States receive the
air quality benefits of regional NOX reductions as soon as
practicable. Therefore, the EPA is proposing FIPs for all the States
affected by the NOX SIP call in conjunction with EPA's
issuance of the final NOX SIP call.
By comparison, section 126 petitions are limited to addressing
emissions from upwind stationary sources and not other sectors of the
inventory. If EPA grants the petitions, it is EPA, not the States, that
promulgates control requirements for the sources. The control remedy
for sources in the section 126 petitions that EPA is proposing in this
action is consistent with the control assumptions EPA used for these
sources in determining reductions projected to meet the final statewide
NOX budgets for States subject to the NOX SIP
call.
Because the NOX SIP call process overlaps considerably
with the section 126 petition process, in that they both address
NOX transport in the eastern United States, EPA believes it
is important to coordinate the two actions as much as possible. As
discussed below, EPA and the petitioning States developed a proposed
consent decree on the rulemaking schedule for the petitions that takes
into consideration the NOX SIP call rulemaking.
All of the States that submitted section 126 petitions are included
in the OTR and participated in the OTAG process. In addition, all of
the upwind sources identified in the petitions are located in the OTAG
region. All eight petitions rely, in part, on the OTAG analyses for
technical justification. The OTAG process concluded in June 1997 prior
to the promulgation of the new 8-hour ozone standard and, therefore,
the OTAG analyses focused on the 1-hour standard. All the petitions
request relief under the 1-hour standard. Three of the petitions also
request relief under the new 8-hour standard. In acting on the section
126 petitions, EPA believes that it can only consider 8-hour
nonattainment problems for the petitioning States that expressly
requested relief under that standard. Under the NOX SIP
call, EPA considered both 1-hour and 8-hour nonattainment problems
throughout the OTAG region.
Ground-level ozone, the main harmful ingredient in smog, is
produced in complex chemical reactions when its precursors, volatile
organic compounds (VOCs) and NOX, react in the presence of
sunlight. The chemical reactions that create ozone take place while the
pollutants are being blown through the air by the wind, which means
that ozone can be more severe many miles away from the source of
emissions than it is at the source.
[[Page 56296]]
At ground level, ozone can cause a variety of ill effects to human
health, crops and trees. Specifically, ground-level ozone induces the
following health effects:
Decreased lung function, primarily in children active
outdoors,
Increased respiratory symptoms, particularly in highly
sensitive individuals,
Hospital admissions and emergency room visits for
respiratory causes, among children and adults with pre-existing
respiratory disease such as asthma,
Inflammation of the lung,
Possible long-term damage to the lungs.
The new 8-hour primary ambient air quality standard will provide
increased protection to the public from these health effects.
Each year, ground-level ozone above background is also responsible
for several hundred million dollars worth of agricultural crop yield
loss. It is estimated that full compliance of the newly promulgated
ozone NAAQS will result in about $500 million of prevented crop yield
loss. Ozone also causes noticeable foliar damage in many crops, trees,
and ornamental plants (i.e., grass, flowers, shrubs, and trees) and
causes reduced growth in plants. Studies indicate that current ambient
levels of ozone are responsible for damage to forests and ecosystems
(including habitat for native animal species).
C. Section 126
Subsection (a) of section 126 requires, among other things, that
SIPs require major proposed new (or modified) stationary sources to
notify nearby States for which the air pollution levels may be affected
by the fact that such sources have been permitted to commence
construction. Subsection (b) provides:
Any State or political subdivision may petition the
Administrator for a finding that any major source or group of
stationary sources emits or would emit any air pollutant in
violation of the prohibition of section 110(a)(2)(D)(ii) * * * or
this section.
Subsection (c) of section 126 states that--
[I]t shall be a violation of this section and the applicable
implementation plan in such State [in which the source is located or
intends to locate]--
(1) For any major proposed new (or modified) source with respect
to which a finding has been made under subsection (b) of this
section to be constructed or to operate in violation of the
prohibition of section 110(a)(2)(D)(ii) * * * or this section, or
(2) For any major existing source to operate more than three
months after such finding has been made with respect to it.
However, subsection (c) further provides that EPA may permit the
continued operation of such major existing sources beyond the 3-month
period, if such sources comply with EPA-promulgated emissions limits
within 3 years of the date of the finding.
Section 110(a)(2)(D) provides the requirement that a SIP contain
adequate provisions--
(i) Prohibiting, consistent with the provisions of this title,
any source or other type of emissions activity within the State from
emitting any air pollutant in amounts which will--
(I) Contribute significantly to nonattainment in, or interfere
with maintenance by, any other State with respect to [any] national
* * * ambient air quality standard, or
(II) interfere with measures required to be included in the
applicable implementation plan for any other State under part C to
prevent significant deterioration of air quality or to protect
visibility.
(ii) Insuring compliance with the applicable requirements of
sections 126 and 115 (relating to interstate and international
pollution abatement) * * *
As explained in detail in Section II.A., below, it is EPA's view that,
with respect to existing stationary sources, sections 126(b)-(c) and
110(a)(2)(D), read together, authorize a downwind State to petition EPA
for a finding that major stationary sources or groups of sources upwind
of the State emit in violation of the prohibition of section
110(a)(2)(D)(i) because, among other reasons, their emissions
contribute significantly to nonattainment, or interfere with
maintenance, of a NAAQS in the State. If EPA grants the requested
finding, the existing sources must shut down in 3 months unless EPA
directly regulates the sources by establishing emissions limitations
and a compliance period extending beyond 3 months but no later than 3
years from the finding. In accordance with section 302(j) of the CAA,
the term major stationary source means ``any stationary facility or
source which directly emits, or has the potential to emit, one hundred
tons per year or more of any air pollutant. * * *'' For the purpose of
this rulemaking the relevant pollutant is NOX emissions.
The EPA acknowledges that others have urged different readings of
sections 126(b)-(c) and 110(a)(2)(D) and EPA solicits comments thereon
in this rulemaking, as described in Section II.A.1., below.
D. Summary of Section 126 Petitions
The petitions vary as to the type and geographic location of the
source categories identified as significant contributors. All the
petitions identified source categories; some petitions also provided
lists of sources within the specified categories. The source categories
include electric generating plants, fossil fuel-fired boilers and other
indirect heat exchangers, and certain other related stationary sources
that emit NOX. All the petitions target sources in the
Midwest; some also target sources in the South and Northeast. The
geographic area covered by each petition is shown in Figure 2. The EPA
requests comment from the petitioning States as to whether EPA has
correctly interpreted the geographic scope of their petitions.
The petitions also vary as to the level of controls they recommend
be applied to the sources to mitigate the transport problem. Several
recommend EPA establish a 0.15 lb/mmBtu NOX emission
limitation and several recommend that controls be implemented through a
cap-and-trade program. The petitions are described in greater detail
below.
All of the petitions rely, in part, on OTAG analyses for technical
support. In addition, the States submitted a variety of other technical
analyses which include computerized urban airshed modeling, wind
trajectory analyses, results of a transport study by the Northeast
States for Coordinated Air Use Management, and culpability analyses.
Table I-1 shows, by petitioner, the named source categories, the
named geographic areas, and the requested remedy sought by the
petitioning States. The named source categories are worded as they
appear in the petitions. A map of the OTAG Subregions is provided in
part 52, appendix F,
Figure 1.
[[Page 56297]]
Table I-1.--EPA's Summary of Section 126 Petitions
----------------------------------------------------------------------------------------------------------------
State Named source categories Named States Requested remedy
----------------------------------------------------------------------------------------------------------------
CT................... Fossil fuel-fired boilers or Sources in OTAG Subregions Establish, at a minimum,
other indirect heat 2, 6, and 7 and portion of emission limitations and a
exchangers with a maximum OTR extending west and schedule of compliance
gross heat input rate of 250 south of CT. Includes all consistent with the OTC NOX
mmBtu/hr or greater and or parts of IN, KY, MI, NC, MOU, and a cap-and-trade
electric utility generating OH, TN, VA, WV. And OTR program. Does not request
facilities with a rated States DC, DE, MD, NJ, NY, remedy for OTR States
output of 15 MW or greater. PA. because of OTC NOX MOU.
ME................... Electric utilities and steam- Sources within 600 miles of Establish compliance
generating units with a heat Maine's ozone nonattainmen schedule and emissions
input capacity of 250 mmBtu/ t areas. Includes all or limitation of 0.15 lb/mmBtu
hr or greater. parts of NC, OH, VA, WV, for electric utilities and
and OTR States CT, DE, DC, the OTC NOX MOU level of
MD, MA, NJ, NY, NH, PA, RI, control for steam
VT. generating units, in a
multi-state cap-and-trade
NOX market system.
MA................... Electricity generating Sources in region within 3 Establish emissions
plants.. counties on either side of limitation of 0.15 lb/mmBtu
the Ohio River in IN, KY, or 1.5 lb/MWh and a
OH, WV. compliance schedule.
NH................... Fossil fuel-fired indirect Sources in OTR States and Establish compliance
heat exchange combustion OTAG Subregions 1 through schedule and emission
units and fossil fuel-fired 7. Includes all or parts of limitations no less
electric generating IL, IN, IA, KY, MI, MO, NC, stringent than: (a) Phase
facilities which emit ten OH, TN, VA, WV, WI. Also III OTC NOX MOU reductions;
tons of NOX or more per day. OTR States CT, DE, DC, MD, and/or (b) 85% reductions
MA, ME, NJ, NY, PA, RI, VT. from projected 2007
baseline; and/or (c) An
emission rate of 0.15 lb/
mmBtu.
NY................... Fossil fuel-fired boilers or Sources in OTAG Subregions 2 Establish, at a minimum,
indirect heat exchangers 6, and 7 and portion of OTR emission limitations and a
with a maximum heat input extending west and south of schedule of compliance
rate of 250 mmBtu/hr or NY. Includes all or parts consistent with the OTC NOX
greater and electric utility of IN, KY, MI, NC, OH, TN, MOU, and a cap-and-trade
generating facilities with a VA, WV. And OTR States DC, program. Does not request
rated output of 15 MW or DE, MD, NJ, PA. remedy for OTR States
greater. because of OTC NOX MOU.
PA................... Fossil fuel-fired indirect AL, AR, GA, IL, IN, IA, KY, Establish emission
heat exchange combustion LA, MI, MN, MS, MO, NC, OH, limitations and a
units with a maximum rated SC, TN, VA, WV, WI. compliance schedule for a
heat input capacity of 250 cap-and-trade program
mmBtu/hr or greater, and requiring: (a) seasonal
fossil fuel-fired electric reductions of the less
generating facilities rated stringent of 55% from 1990
at 15 MW or greater. baseline levels, or 0.20 lb/
mmBtu, beginning by May
1999; (b) if necessary,
seasonal reductions of the
less stringent of 75% from
1990 baseline levels, or
0.15 lb/mmBtu, beginning by
May 2003; (c) such
additional reductions as
necessary beginning in
2005.
RI................... Electricity generating plants Sources in region within 3 Establish emissions
counties on either side of limitation of 0.15 lb/mmBtu
Ohio River in IN, KY, OH, or 1.5 lb/MWh and a
WV. compliance schedule.
VT................... Fossil fuel-fired electric Sources located within a Establish emissions
utility generating geographic area extending limitation of 0.15 lb/mmBtu
facilities with a maximum 1000 miles southwest from or 1.5 lb/MWh and a
gross heat input rate of 250 Bennington, VT. Includes compliance schedule. Does
mmBtu/hr or greater and all or parts of IL, IN, KY, not request remedy for OTR
potentially other MI, NC, OH, TN, VA, WV. States because of OTC NOX
unidentified major sources. Also AL GA, IA, MO, SC, WI. MOU.
Also OTR States CT, DE, DC,
MD, MA, NJ, NY, PA.
----------------------------------------------------------------------------------------------------------------
1. Control Remedies Recommended by Petitions
The petitions vary regarding the remedy requested. Several of these
petitions reference the OTC NOX MOU, with regard to control
levels, affected sources, or compliance deadlines. All of the
petitioning States were signatories on the OTC NOX MOU. The
OTC NOX MOU commits these States (and the 4 other signatory
parties--New Jersey, Maryland, Delaware, and the District of Columbia)
to reductions in ozone season NOX emissions from large
utility and industrial combustion sources through implementation of a
phased-in regionwide cap-and-trade program. Specifically, affected
sources in the OTR are fossil fuel-fired boilers and other indirect
heat exchangers with a maximum rated heat input capacity of 250 mmBtu/
hr or greater, and electric generating facilities with a rated output
of 15 megawatts (MW) or greater.
The OTC NOX MOU established emissions reduction
requirements for these sources in the OTR, creating emissions budgets
for 1999 (Phase II) and 2003 (Phase III). (Phase I required the
installation of reasonably available control technology (RACT) by May
1995.) The requirements vary across three control zones in the region:
an inner zone ranging from the District of Columbia metropolitan area
northeast to southeastern New Hampshire (covering all contiguous
moderate and above nonattainment areas), an outer zone ranging out from
the inner zone to western Pennsylvania, and a northern zone which
includes much of northern New York and northern New England (including
most of New Hampshire).
For Phase II of the OTC NOX MOU, which begins in 1999,
sources in the inner zone are subject to emissions reduction
requirements based on the less stringent of an emission rate of 0.20
pounds NOX per million British thermal units of heat input
(lb/mmBtu), or a 65 percent reduction from 1990 NOX levels;
sources in the outer zone are subject to emissions reduction
requirements based on the less stringent of a 0.20 lb/mmBtu rate, or a
55 percent reduction from 1990 NOX levels; and
[[Page 56298]]
sources in the northern zone must adopt RACT. The Phase III
requirements, which may be altered by a ``mid-course correction'' based
on new information such as refined air quality modeling, establish
emissions reduction requirements based on the lesser of a 0.15 lb/mmBtu
rate, or a 75 percent reduction from 1990 levels for sources in both
the inner and outer zones. Northern zone sources would face emissions
reduction requirements based on the lesser of a 0.20 lb/mmBtu rate, or
a 55 percent reduction from 1990 levels. In both Phase II and III in
all three zones, electric generating facilities less than 250 mmBtu/hr
but above 15 MW are subject only to a capping of emissions at 1990
levels for purposes of budget calculation. However, individual States
determine specific allocations for each source from their overall
budget based on independent allocation formulas, and thus the
allocation for these sources will not necessarily reflect this level.
Though all of the petitions request that EPA impose controls in
terms of various emissions limitations, four of the eight petitions--
New York, Connecticut, Pennsylvania, and Maine--also request that a
trading program with a cap, or emissions budget, be established to
implement these controls. Massachusetts, Rhode Island, and Vermont
request that limitations be established for all named sources at 0.15
lb/mmBtu, which is the level of control for electric generating
facilities used to calculate the budget in the proposed NOX
SIP call. Maine requests an emission limitation of 0.15 lb/mmBtu for
named electric utilities, but the OTC NOX MOU level of
control for named steam generating units. New Hampshire requests
emission limitations no less stringent than the Phase III OTC
NOX MOU reductions, and/or 85 percent reductions from the
projected 2007 baseline, and/or an emission rate of 0.15 lb/mmBtu. New
York, Connecticut and Pennsylvania all request that emissions
limitations consistent with the OTC NOX MOU be imposed on
named sources, but Pennsylvania and Connecticut specify the outer zone
requirements; New York does not specify a zone. The level of reduction
requested for 2003 in these three petitions specifying basic OTC
NOX MOU requirements appears to be less stringent than that
in the petitions requesting 0.15 lb/mmBtu, since the remedy requested
would allow sources the option to implement the less stringent of a
percentage reduction or an emission rate. In terms of smaller sources
named by these three States, Pennsylvania's petition appears to seek
somewhat more reductions than the OTC NOX MOU by requiring
the same emission level for electric generating facilities less than
250 mmBtu/hr and greater than 15MW as for larger units. Both
Connecticut and New York appear to be aligned with the OTC
NOX MOU in seeking only a capping of emissions at 1990
levels for these smaller sources.
New York, Connecticut and Pennsylvania recommend a date for the
implementation by sources of control requirements: the OTC
NOX MOU schedule of compliance, including its phased-in
controls and implementation dates of 1999 and 2003. The remaining
States request that EPA establish a schedule of compliance requiring
sources to comply with emission limitations as expeditiously as
practicable.
2. Sources Covered by Petitions
The petitions vary somewhat regarding the universe of sources they
name as significant contributors to their ozone problem. Three of the
petitioning States--New York, Connecticut, and Pennsylvania--name the
same universe of sources covered by the OTC NOX MOU. New
Hampshire names fossil fuel-fired indirect heat exchangers and electric
generating facilities as well, but uses a tonnage applicability cut-off
to include only sources that emit ten tons or more of NOX
per day. Massachusetts and Rhode Island name ``electricity generating
plants'' as the universe requiring controls, without naming a specific
size cutoff. Finally, Vermont names fossil fuel-fired electric
generating facilities of 250 mmBtu or greater.
All of the section 126 petitions, except Pennsylvania's,
Massachusetts' and Rhode Island's, named some States in the OTR as
significant contributors. However, only New Hampshire and Maine
requested relief beyond OTC NOX MOU requirements from
sources in the OTR. The geographic scope of each petition is discussed
in Section II.
Section 126 allows States to petition EPA for a finding against
sources and groups of sources that ``emit'' or ``would emit'' pollution
that significantly contributes to nonattainment problems in the
petitioning State. Thus, a finding could potentially apply not only to
existing sources within a particular source category, but also to
sources that would be built in the future. The EPA believes the current
section 126 petitions are ambiguous as to whether the requested
findings are intended to encompass new sources.
All of the petitions describe the requested finding as against
source categories that ``are emitting'' significantly contributing
levels of NOX. This suggests that perhaps the petitions are
only intended to address existing sources. In addition, four petitions
(Massachusetts, New Hampshire, New York, and Rhode Island) provide
lists of sources in the targeted source categories and do not indicate
that future sources should be added. However, it is notable that, in
defining the universe of covered sources, all of the petitions
identified specific source categories rather than just identifying
specific sources. If emissions from the existing sources in the named
source categories are of concern to the petitioning States, then it
follows that emissions from new sources of the same type would also be
of concern because they would increase the amount of emissions emitted
by the category as a whole.
The recommended control remedies in the petitions may provide the
best insight into whether the petitions are to cover new sources. As
discussed above, all of the petitioning States are signatories on the
OTC NOX MOU. The OTC NOX MOU outlines a cap-and-
trade control program designed to reduce NOX transport from
certain groups of stationary sources in the OTR that are generally the
same types of sources as covered by the petitions. The OTC
NOX MOU program does include controls on both existing and
new sources. The Connecticut, New Hampshire, New York, and Pennsylvania
petitions all request the section 126 control remedy to be consistent
with the OTC NOX MOU. Maine also requests that a control
remedy be implemented through a cap-and-trade program. Further, five of
the eight petitions request that EPA make a section 126 finding against
sources in other OTR States, in addition to sources outside the OTR. It
does not seem reasonable that any of the petitioning States would
determine that both existing and new sources should be controlled for
transport purposes within the OTR through the OTC NOX MOU,
while recommending that outside the OTR only existing sources of the
same type would need to be controlled for transport.
Based on the above information, EPA is proposing to interpret all
eight section 126 petitions to cover both existing and new sources.
Therefore, if any final findings are triggered for source categories in
a particular geographic area, new sources in those source categories
locating in that area would also be subject to the section 126 control
remedy. If any of the petitioning States disagrees with this
interpretation as to its petition, EPA requests that the State
[[Page 56299]]
submit clarifying comments on this issue.
E. Litigation on Rulemaking Schedule
Section 126(b) requires EPA to make the requested finding, or deny
the petition, within 60 days of receipt. It also requires EPA to
provide a public hearing for the petition. In addition, EPA's action
under section 126 is subject to the procedural requirements of section
307(d) of the CAA. One of these requirements is notice-and-comment
rulemaking. Section 307(d) provides for a time extension, under certain
circumstances, for rulemakings subject to that provision. Specifically,
it allows statutory deadlines that require promulgation in less than 6
months from proposal to be extended to not more than 6 months from
proposal to afford the public and the Agency adequate opportunity to
carry out the purposes of section 307(d). In three notices dated
October 22, 1997 (62 FR 55769), November 20, 1997 (62 FR 6194), and
January 2, 1998 (63 FR 26), EPA ultimately extended the deadline for
its requirement to take action on the eight petitions to December 18,
1997.
On February 25, 1998, the eight petitioning States filed a
complaint in the U.S. District Court for the Southern District of New
York to compel EPA to take action on the States' section 126 petitions.
State of Connecticut v. Browner, No. 98-1376. The EPA and the eight
States filed a proposed consent decree that would establish a schedule
for EPA to act on the petitions. Pursuant to CAA section 113(g), the
EPA solicited comments on the proposed consent decree, by notice dated
March 5, 1998 (63 FR 10874). The comment period closed April 6, 1998.
On August 21, 1998, after considering the comments received in the
section 113(g) process, EPA requested the Court to enter a slightly
modified version of the consent decree. Pending the Court's action on
that request, EPA is continuing to follow the schedule in the proposed
consent decree.
The schedule recommended in the proposed consent decree would
require EPA to take final action on at least the technical merits of
the petitions by April 30, 1999. The recommendation would further
permit EPA to structure the final action it would take by April 30,
1999 so as to defer the granting or denial of the petitions to certain
later dates extending to as late as May 1, 2000. The section 126
rulemaking schedule is described in more detail in Section II.A.2. of
this notice.
F. Advance Notice of Proposed Rulemaking on Petitions
In accordance with the schedule in the proposed consent decree, on
April 30, 1998, EPA published in the Federal Register (63 FR 24058) an
advance notice of proposed rulemaking (ANPR) on the section 126
petitions. The ANPR provided EPA's preliminary identification of source
categories named in the petitions that significantly contribute to
nonattainment problems in the petitioning States, provided EPA's
preliminary assessment of the types of recommended emissions
limitations and compliance schedules, provided EPA's preliminary
assessment of the remedy the Agency would propose for approvable
petitions, discussed legal and policy issues raised under section 126,
and outlined the rulemaking schedule for the petitions. The ANPR
solicited comment on all of the issues and preliminary assessments. The
EPA received approximately 50 comments on the ANPR from industry,
States, and environmental groups. These comments covered the full
spectrum of issues discussed in the ANPR and were carefully considered
in the development of today's proposal. The EPA appreciates the efforts
by the commenters to provide early, thoughtful input on this
rulemaking. The EPA will respond to the ANPR comments, if any response
is appropriate, when EPA responds to comments on this proposal. After
reading this proposal, if any commenters on the ANPR believe their
comments are still relevant, there is no need to resubmit the comments
in full. Instead, commenters may simply submit a letter requesting that
EPA consider their ANPR comments for purposes of today's proposal
action. This proposal supersedes any preliminary positions taken in the
ANPR.
II. EPA's Analytical Approach and Proposed Action on Petitions
A. EPA's Proposed Interpretation of Section 126 and Analytical Approach
for Determining Whether to Grant or Deny the Petitions
1. The Appropriate Test Under Section 126
Section 126(b) provides that a State may petition EPA for a finding
that specified sources or groups of sources in other States emit or
would emit air pollutants ``in violation of the prohibition of section
110(a)(2)(D)(ii) of this title or this section.'' \1\ Section 110
(a)(2)(D) provides the requirement that a SIP:
\1\ The cross-reference to section 110(a)(2)(D)(ii) is repeated
3 times in section 126(b). The EPA will refer to these cross-
references in the singular.
---------------------------------------------------------------------------
Contain adequate provisions:
(i) prohibiting, consistent with the provisions of this title,
any source or other type of emissions activity within the State from
emitting any air pollutant in amounts which will--
(I) contribute significantly to nonattainment in, or interfere
with maintenance by, any other State with respect to (any) national
ambient air quality standard, or
(II) interfere with measures required to be included in the
applicable implementation plan for any other State under part C to
prevent significant deterioration of air quality or to protect
visibility,
(ii) insuring compliance with the applicable requirements of
sections 126 and 115 (relating to interstate and international
pollution abatement).
* * * * *
One issue is whether the cross-reference in section 126(b) to
section 110(a)(2)(D)(ii) is valid, or instead should be considered to
be a scrivener's error and be read to refer to section 110(a)(2)(D)(i).
The EPA has offered the latter view in general and preliminary
guidance. See, e.g., 62 FR 55769 (Oct. 22, 1997) and 63 FR 24058 (Apr.
30, 1998).
Some have argued that section 126(b) should be read literally and
that this reading would require EPA to deny the 8 petitions on grounds
that section 126 allows a State to file a petition with EPA only to
force other States to meet the requirements of section 126 itself
(i.e., the requirement in section 126(a) that SIPs include provisions
to require new and modified major stationary sources to give
preconstruction notification to nearby States under certain
circumstances). \2\
---------------------------------------------------------------------------
\2\ See Letter from Henry V. Nickel, et al., Counsel for the
Utility Air Regulatory Group, to Carol M. Browner, Administrator,
U.S. EPA, November 21, 1997 (UARG Letter); Letter from Betty D.
Montgomery, Attorney General of Ohio et. al., to Richard Wilson,
Acting Assistant Administrator for Air & Radiation, U.S. EPA,
November 5, 1997 (letters included in the docket to this
rulemaking).
---------------------------------------------------------------------------
In the alternative, some have argued that, if in fact there is a
scrivener's error, the proper cross-reference should be to section
110(a)(2)(D)(i)(II), and not section 110(a)(2)(d)(i)(I). UARG letter.
The effect of this reading would be to limit section 126 petitions to
cases in which the upwind sources are adversely affecting clean areas
under the prevention of significant deterioration requirements of part
C of title I of the CAA, or visibility.
The EPA believes that there is a scrivener's error in section 126.
Furthermore, EPA disagrees that the scrivener's error is a misreference
to section 110(a)(2)(D)(i)(II). In this
[[Page 56300]]
proposed action, EPA takes the position that the reference in section
126(b) to section 110(a)(2)(D)(ii) is a drafting error and that
Congress intended to reference section 110(a)(2)(D)(i). The merit of
this statutory interpretation is apparent on several levels. First, the
reference to ``the prohibition of section 110(a)(2)(D)(ii)'' is
ambiguous at best, and arguably nonsensical, since section
110(a)(2)(D)(ii) contains no prohibition, yet 110(a)(2)(D)(i) does.
Second, the statutory cross reference contained in section 126(b), if
taken on its face, would render section 126(b) largely meaningless.
Finally, the legislative history of the CAA Amendments supports this
interpretation. The EPA's interpretation is consistent with the reading
of the CAA prior to the 1990 Amendments and Congress expressed no
indication that it meant to substantively revise this provision of the
statute at the time it administratively renumbered the provision.
The EPA also does not believe that the reference to section
110(a)(2)(D)(ii) is a mistaken cross-reference to section
110(a)(2)(D)(i)(II). Such a cross-reference would limit the
availability of section 126 to the prevention of significant
deterioration and visibility provisions of section 110(a)(2)(D)(i), a
severe limitation for which there is no indication in the legislative
history.
Section 126(b) authorizes the EPA to find that any major source or
group of stationary sources emits or would emit any air pollutant ``in
violation of the prohibition of section (a)(2)(D)(ii) of this title or
this section'' (emphasis added). However, section 110(a)(2)(D)(ii)
contains no prohibition. Rather, it provides that SIPs must ``contain
adequate provisions insuring compliance with'' statutory sections
relating to interstate and international pollution abatement.
By contrast, section 110(a)(2)(D)(i)--the provision that EPA
believes Congress intended to cross-reference in section 126(b)--does
contain a prohibition. It requires that SIPs contain adequate
provisions ``prohibiting'' any source or other type of emissions
activity within the State from emitting any air pollutant in amounts
that, among other things, will contribute significantly to
nonattainment in, or interfere with maintenance by, another State with
respect to the NAAQS. Thus, the textual interplay between sections
126(b) and 110(a)(2)(D) provides strong evidence that the CAA contains
``a simple scrivener's error, a mistake made by someone unfamiliar with
the law's object and design.'' In re Chateaugay Corp., 89 F.3d 942, 954
(2d Cir. 1996) (holding that courts are empowered to correct an
erroneous statutory cross-reference that inadvertently results from
legislative changes (quoting United States Nat'l Bank v. Independent
Ins. Agents, 508 U.S. 439, 462 (1993)); see also, United States v.
Gibson, 770 F.2d 306, 308 (2d Cir. 1985) (per curiam) (correcting
ambiguity in criminal fraud statute that resulted from the error of a
scrivener in using the word `and' rather than `or' when codifying the
statute).
As further support, reading section 126(b) as cross-referencing
section 110(a)(2)(D)(ii) essentially renders that provision redundant
and meaningless. Section 126 allows a party to petition EPA with
respect to a ``violation of the prohibition in section 110(a)(2)(D)(ii)
or this section.'' Section 110(a)(2)(D)(ii) cross-references back to
section 126, as well as to section 115. To the extent section
110(a)(2)(D)(ii) cross-references back to section 126, the statute is
redundant. Reading the two provisions together, section 126 would
provide an opportunity for parties to file a petition claiming that a
SIP violates the prohibition of section 110(a)(2)(D)(ii) (i.e., section
126) or this section (i.e., section 126).
Moreover, to the extent section 110(a)(2)(D)(ii) references section
115, the provision is meaningless. There is no relief that can be
provided under section 126. Sections 126 and 115 create separate
processes for different parties to petition the Agency for a finding
that SIP is inadequate. Under section 115, the Administrator may issue
a SIP Call to a State based on a request by an international agency or
the Secretary of State that an air pollutant or pollutants emitted in
the United States ``cause or contribute to air pollution which may
reasonably be anticipated to endanger public health or welfare in a
foreign country.'' In contrast, only ``States'' or ``political
subdivisions''--entities under the jurisdiction of the United States--
may request relief under section 126. If Congress intended States or
political subdivisions in the United States with the opportunity to
seek relief for pollution transported to foreign countries, Congress
could have provided so in a much clearer fashion in section 115. It is
highly doubtful that Congress would have used such a cryptic reference
to grant political entities within the United States the power to
address pollution being transported out of the country from other
States.
Finally, EPA's interpretation that there is a scrivener's error and
that the reference should be to section 110(a)(2)(D)(i), fits with the
legislative history on this provision. Courts ``recognize that during
the drafting process an error may creep in,'' and that ``statutes are
not drafted with mathematical precision, and should be construed with
some insight into Congress' purpose at the time of the enactment.'' In
re Chateaugay Corp., 89 F.3d at 953. Here, the legislative history, as
set forth in the Senate Report and the House Conference Report
regarding the 1990 CAA Amendments, provides additional, persuasive
evidence that section 126(b)'s cross-reference to section
110(a)(2)(D)(ii) is erroneous. See Pierpont v. Barnes, 94 F.3d 813, 817
(2d Cir. 1996) (committee reports are ``particularly good indicator(s)
of congressional intent,'') cert. denied, 117 S. Ct. 1691 (1997).
To start, the Senate Report observes that the CAA, prior to the
1990 amendments, allowed section 126 to be used only for violations of
section 110(a)(2)(E)(i), which ``relate(d) to the preparation of
SIP(s).'' S. Rep. No. 101-228, 101st Cong., 2d Sess. 75 (1989),
reprinted in 1990 U.S.C.C.A.N. 3385, 3461. Thus, under section 126(b)'s
pre-1990 version, ``a State being injured by another State's pollution
(could) file a complaint about the offending State's SIP, but not the
pollution itself.'' Id. at 76, 1990 U.S.C.C.A.N. 3385, 3462. Notably,
the Senate Report makes no mention of changing section 126(b)'s cross-
reference to section 110(a)(2)(E)(i)-- nor would it, since section
110(a)(2)(E)(i) had defined the SIP violation historically redressable
under section 126(b). Because the amendments simply revised the text of
former section 110(a)(2)(E)(i) and then renumbered it as section
110(a)(2)(D)(i), compare 42 U.S.C.A. 7410(a)(2)(E)(i) (1990) with 42
U.S.C.A. 7410(a)(2)(D)(i) (1995), \3\ there is substantial reason to
believe that section 126(b)'s current cross-reference to section
110(a)(2)(D)(ii) is mistaken.
---------------------------------------------------------------------------
\3\ The 1990 CAA Amendments revised section 110(a)(2)(D) by
dropping certain provisions not relevant here, and incorporating
other provisions previously contained in section 110(a)(2)(E). See
CAA Amendments of 1990, Pub. L. 101-549, 101(b), 104 Stat.
2404(1990); S. Rep. No. 101-228, 101st Cong., 2d Sess. 20 (1989),
reprinted in 1990 U.S.C.C.A.N. 3385, 3406.
---------------------------------------------------------------------------
Indeed, ``[w]hen Congress revises and renumbers existing laws, a
court should not infer any legislative aim to change the law's effect
unless such intention is clearly expressed.'' In re Chateaugay Corp.,
89 F.3d at 953 (citing Finley v. United States, 490 U.S. 545, 554
(1989)). Far from expressing a clear intent to effectuate the
fundamental change in law that would result from section 126(b)'s new
cross-reference to section 110(a)(2)(D)(ii), the legislative history
for the 1990 CAA Amendments actually
[[Page 56301]]
demonstrates a contrary purpose. According to the House Conference
Report, these amendments sought to ``enhance the enforcement authority
of the Federal government under the CAA, ``including ``EPA enforcement
authority regarding violations of State Implementation Plans.'' H. Rep.
No. 101-952, 101st Cong. 2d Sess. 347 (1990), reprinted in, 1990
U.S.C.C.A.N. 3385, 3879. As noted above, however, the ambiguous change
in section 126(b)'s cross-reference would apparently divest the EPA of
its former jurisdiction to redress--via the section 126 petition
process--SIP violations regarding interstate pollution. See 42 U.S.C.A.
7426(b) (1990) (authorizing EPA to adjudicate petitions alleging
violations of SIP requirements that are now substantially incorporated
into section 110(a)(2)(D)(i)). Given the lack of any legislative
history that would support such a significant shift in policy, and
considering Congress' stated desire to enhance the EPA's SIP
enforcement authority, this contradictory result is highly suspect. See
In re Chateaugay Corp., 89 F.3d at 953 (``where it appears plain that
an error in drafting has occurred, so that a literal construction would
make a dramatic change in long-standing law, it is both sensible and
permissible for judges to consider, in conjunction with other factors,
Congress' complete silence on the literal effect of the change.'') \4\
---------------------------------------------------------------------------
\4\ The Senate Report also expresses a congressional desire to
promote the EPA's enforcement activity, not to constrain it. As the
Senate committee observed, prior to 1990, the CAA ``allow(ed) a
State to file a petition with the Administrator complaining of
interstate air pollution (in violation of section 110(a)(2)(E)(i)),
but not to file a lawsuit for violation of section 126. The
amendment to section 304, (however,) allow(ed) a State, and
citizens, to sue in Federal district court for violation of section
126.'' S. Rep. No. 101-228, 101st Cong., 2d Sess. 76 (1989),
reprinted in 1990 U.S.C.C.A.N. 3385,3462. That Congress created a
judicial mechanism by which to compel the EPA to respond to section
126 petitions is instructive. Because this legislative action is
clearly inconsistent with any construction of the CAA that divests
the EPA of its authority to enforce the very SIP requirements
formerly contained in section 110(a)(2)(E)(i), it casts serious
doubt upon the validity of section 126(b)'s amended cross-reference
to section 110(a)(2)(D)(ii).
---------------------------------------------------------------------------
The EPA believes that its proposed interpretation is permissible
because it resolves the ambiguity in the interplay between sections 126
and 110(a)(2)(D) in a manner that harmonizes and gives meaning to all
of their provisions and reasonably accommodates the purposes of the
provisions. See Chevron, U.S.A., Inc. v. Natural Resources Defense
Council, 467 U.S. 837, 844 (1984).
2. EPA's Analytical Approach for Determining Whether To Grant or Deny
the Petitions
a. EPA's Interpretation of Significant Contribution under Section
110. The EPA's final NOX SIP call rule sets forth EPA's
interpretations of section 110(a)(2)(D)(i)(I) in the context of
regional transport of ozone. The EPA proposes and is seeking comment on
retaining and employing those interpretations for purposes of
determining, under section 126(b), whether any of the sources and
source categories named in the petitions ``emits or would emit any air
pollutant in violation of the prohibition'' of section
110(a)(2)(D)(i)(I). For purposes of this proposal, EPA incorporates
into the proposal, by reference, the explanation of those
interpretations, as well as all of the supporting rationale and
technical support for them. See, especially, Section II of the preamble
to the final NOX SIP call rule. Each of these steps is
discussed in the remainder of Section II of this notice.
b. Applying EPA's Section 110 Interpretation of ``Significant
Contribution'' and ``Interference'' under Section 126. The EPA proposes
to apply its interpretation of section 110(a)(2)(D)(i)(I) to determine
which if any NOX sources or source categories named in the
section 126 petitions ``emits or would emit any air pollutant in
violation of the prohibition'' in section 110(a)(2)(D)(i)(I). The EPA
believes that its interpretations in the context of section 110 apply
with relative ease to its decision under section 126, with one
additional step noted below.
First, in acting on the section 126 petitions, EPA proposes to use
the linkages it drew in the NOX SIP call rulemaking between
specific upwind States and nonattainment and maintenance problems in
specific downwind States. The EPA is seeking comment on and will
carefully evaluate these linkages, and in particular, the linkages EPA
has made between some of the more distant States, such as the linkages
made between Alabama and Pennsylvania and Missouri and Pennsylvania.
In the next step, EPA determines which of that ``covered'' upwind
State's major stationary NOX sources that are named in the
downwind State's petition may emit in violation of the prohibition in
section 110(a)(2)(D)(i) because they emit in amounts that contribute
significantly to nonattainment in, or interfere with maintenance by,
the petitioning State. For this, EPA proposes to use its analysis of
highly cost-effective measures in the NOX SIP call rule to
determine which of the covered upwind States' major stationary
NOX sources named in the petitions emit NOX in
amounts that contribute significantly. Thus, if EPA identified highly
cost-effective measures for a particular source category in the
NOX SIP call, then EPA proposes in this notice to make an
affirmative ``technical determination''--i.e., a finding that any
source in that category located in a covered upwind State emits in
amounts that will contribute significantly to nonattainment in, or
interfere with maintenance by, the petitioning State(s) linked to that
upwind State.
This methodology applies both to a petition that names sources in
the entire contributing upwind State and to a petition that names
sources in only a small portion of an upwind contributing State. As
described more fully in the NOX SIP call rulemaking, the
only viable solution to ozone nonattainment is to apply pollution-
reduction measures to a large collection of sources in many States,
each one of which by itself may produce a small or perhaps immeasurable
impact on the nonattainment problem for a particular area. Under this
collective contribution approach, if EPA determines that the full set
of NOX sources in an upwind State significantly contributes
to nonattainment in, or interferes with maintenance by, a particular
downwind State, then any NOX sources in the upwind State
that can apply highly cost-effective control measures must be
considered part of the solution to those downwind problems and
therefore contributes to downwind nonattainment.
c. Emitting ``In Violation of the Prohibition'' in Section 110--the
Decision Whether to Grant or Deny Each Petition. As noted above, the
test under EPA's interpretation of section 126 is whether the sources
named in the petitions emit in violation of the section 110(a)(2)(D)(i)
prohibition. That prohibition, however, by the terms of section
110(a)(2)(D)(i), should be included in SIP provisions. The EPA has now
issued its NOX SIP call rule under that section, and has set
forth a track that upwind States must follow to satisfy its terms.
Under the NOX SIP call, EPA has given the covered States
until September 1999 to submit SIPs satisfying the rule, and has
specified that those SIPs must prohibit the NOX emissions
that contribute significantly by a date no later than May 1, 2003. By
that rule, EPA has established emissions budgets for each State, which
reflect elimination of the significant contribution of NOX
emissions within
[[Page 56302]]
the State. The EPA has further established by rule May 1, 2003 as the
final date by which all measures to meet that budget must be
implemented. In addition, EPA has proposed a FIP that could be
promulgated if a State fails to respond adequately to the
NOX SIP call.
Section 126 calls for relief where EPA finds that sources are
emitting ``in violation of the prohibition'' of section
110(a)(2)(D)(i). The EPA believes that it is sensible to interpret this
language in light of the ongoing action of both States and EPA. Thus,
so long as EPA and States (and ultimately the sources the State
determines to regulate) are on track to meet the goals of the
NOX SIP call, EPA believes it is appropriate to determine
that sources are not emitting in violation of the prohibition in
section 110(a)(2)(D)(i) for purposes of section 126(b). States and EPA
will be on track if States timely submit a complete and approvable SIP
and EPA acts promptly to approve the plan. In the alternative, if a
State fails to submit in a timely manner a complete or approvable plan,
efforts will be on track so long as EPA promulgates a FIP. The EPA
further believes this approach is sensible because an alternative
interpretation, which would result in a section 126 remedy going into
effect despite timely action by States and EPA in response to the
NOX SIP call, would lead to unnecessary and duplicative
efforts. Such an approach would not only waste Agency resources, but
could ultimately undermine efforts to reduce interstate transport by
adding confusion to the process.
Based on this interpretation of the language in section 126, EPA
has considered an alternative form of final action on the section 126
petitions that takes into account whether the State and/or EPA is on
track to institute a satisfactory plan in response to the
NOX SIP call rule.
As described in Section I above, the proposed consent decree would
require EPA to take a final action on the section 126 petitions by
April 30, 1999. In formulating the proposed consent decree, EPA
developed an alternative approach that it believes would harmonize the
section 126 and 110 actions. Specifically, paragraph 5.b. and c. state
that:
b. Unless EPA takes the final action described in paragraph 6,
as to each individual petition, EPA's final action will be to--
(i) Grant the requested finding, in whole or part; and/or
(ii) Deny the petition, in whole or part.
c. Unless EPA denies a petition in whole, its final action will
include promulgation of a remedy under CAA section 126(c) for
sources to the extent that a requested finding is granted with
respect to those sources.
Then paragraph 6 states:
6. EPA shall be deemed to have complied with the requirements of
Paragraph 5(a) if it instead takes a final action by April 30, 1999,
that--
a. makes an affirmative determination concerning the technical
components of the ``contribute significantly to nonattainment'' or
``interfere with maintenance'' tests under CAA section
110(a)(2)(D)(i), 42 U.S.C. section 7410(a)(2)(D)(i);
b. further provides that:
(i) If EPA does not issue a proposed approval of the relevant
Upwind State's SIP revision (submitted in response to the
NOX SIP call) by November 30, 1999, then the finding will
be deemed to be granted as of November 30, 1999, without any further
action by EPA;
(ii) If EPA issues a proposed approval of said SIP revision by
November 30, 1999, but does not issue a final approval of said SIP
revision by May 1, 2000, then the finding will be deemed to be
granted as of May 1, 2000, without any further action by EPA;
(iii) If EPA issues a final approval of said SIP revision by May
1, 2000, EPA must take any and all further actions, if necessary to
complete its action under section 126, no later than May 1, 2000;
and
c. Promulgates a remedy under CAA section 126(c) for sources to
the extent that an affirmative determination is made with respect to
those sources.
The EPA believes that the alternative form of final action set
forth in Paragraph 6 of the proposed decree best harmonizes sections
110(a)(2)(D)(i)(I) and 126. The EPA believes that sources in an upwind
State should not be considered to be emitting an air pollutant in
violation of the section 110 prohibition, and hence EPA should not
grant a petition naming such sources, if the State is adhering to the
NOX SIP call rule's schedule for submission of an approvable
SIP revision, and EPA is acting speedily to approve the SIP--or,
failing that, if EPA has promulgated a FIP for the State. After all, if
EPA's rule provides a particular path for the development of a plan
calling on sources to reduce interstate pollution by May 1, 2003, and
under that rule either the upwind State or EPA is moving forward to
develop, take action on or promulgate a satisfactory plan meeting that
rule and achieving attainment as expeditiously as practicable, it would
be difficult to conclude that an affected source in the upwind State
``emits or would emit in violation'' of the prohibition that the plan
is not yet required to contain.5
---------------------------------------------------------------------------
\5\ Moreover there does appear to be tension between section
110(a)(2)(D), which does not establish the timing as to when the SIP
prohibition needs to be effective against sources (i.e., when
sources need to implement controls to reduce emissions) and the
timing in section 126, which requires implementation no later than 3
years following a section 126(b) determination. The EPA does not
believe that Congress intended section 126 to be used to shorten
timeframes for action that EPA has previously determined are
approvable for purposes of eliminating significant contribution to
nonattainment areas in other States.
---------------------------------------------------------------------------
For these reasons, EPA proposes to follow the alternative described
in Paragraph 6 of the proposed decree. Thus, EPA proposes to structure
its final action to contain: (1) A series of ``technical
determinations'' as to which sources in which States named in the
petitions would emit in violation of the section 110 prohibition if the
State or EPA were to fall off track in putting a timely and
satisfactory plan in place;
(2) determinations that the petitions will automatically be deemed
granted or denied on the basis of the events set forth in Paragraph 6;
and (3) the remedial requirements that will apply to the sources
receiving affirmative technical determinations if a petition naming
those sources is ultimately deemed granted.
The EPA believes that the timeframes and triggers in Paragraph 6
are reasonable and feasible, and the Agency intends to execute them
timely. For States that make a timely SIP submission, EPA believes it
is feasible for the Agency to issue a proposed rule within 60 days of
the submission deadline. Under the CAA, EPA is provided 60 days--but no
more than 6 months--in which to affirmatively determine whether a
submission is complete.
If EPA does not make an affirmative completeness determination, the
submission is deemed complete. Once a submission is affirmatively found
to be or is deemed complete, the CAA then provides EPA with 12 months
to approve or disapprove the submission. Thus, at maximum, the CAA
provides EPA with 18 months to approve or disapprove a SIP submission.
The EPA is proposing a 7-month period to act on submissions in response
to the NOX SIP call. While this period is shorter than the
maximum period contemplated under the CAA, EPA believes that it is
feasible and appropriate in the present circumstances. The EPA
anticipates that the EPA Regional Offices will be working with States
as States draft rules in response to the NOX SIP call and
will be well prepared to issue a proposed determination within 60 days
of the required submission date. Further, in light of EPA's work with
the States in development of their plans, the 5-month period between
proposal and final action should allow the Agency ample time to review
any comments and to
[[Page 56303]]
prepare a final action. An additional benefit of this schedule for EPA
action is that it will provide sources with certainty about the
applicable requirements well before the latest implementation date that
is permitted by the NOX SIP call. Moreover, if the State
fails to submit an approvable plan, EPA will be well positioned to
promulgate a FIP for the State, based on the FIP proposal that the
Agency is issuing separately. It is important to achieve the
NOX reductions necessary to protect public health and to
attain the NAAQS as expeditiously as practicable. Therefore, where a
State or EPA has failed to meet a deadline it will be critical to have
the section 126 remedy go into effect as soon as possible thereafter in
order to ensure that the NOX emission reductions are
achieved as soon as practicable, which in the NOX SIP call
EPA has determined to be May 1, 2003. The schedule EPA has proposed to
enter into is intended to ensure that either the FIP or the 126 remedy
goes into effect in order to achieve the NOX emission
reductions by May 1, 2003.
B. Weight of Evidence Determination of Named Upwind States
As discussed above, in acting on the section 126 petitions EPA
proposes to rely on the conclusions it drew in the final NOX
SIP call rulemaking to determine whether the emissions in named upwind
States contribute significantly to the 1-hour and 8-hour nonattainment
and maintenance problems in the petitioning States. To evaluate the air
quality impacts in the final NOX SIP call rulemaking, EPA
used a weight-of-evidence approach involving three sets of modeling
information: The State-by-State UAM-V zero-out modeling, the CAMx
source apportionment modeling, and the OTAG subregional modeling and
other information such as emission density and transport
distance.6 A number of ``metrics'' (i.e., measures of ozone
contributions) were used to assess the air quality effects from several
perspectives of contribution from sources in various upwind States. The
technical details of the modeling information and metrics are described
in the final NOX SIP call rulemaking.
The named upwind States which are linked as containing sources that
are significant contributors to each petitioning State in the final
NOX SIP call rulemaking are listed in Tables II-1 for the 1-
hour NAAQS and Table II-2 for the 8-hour NAAQS. The information that
EPA relied on in making these significance linkages is provided in the
final NOX SIP call rulemaking. All of the information that
is contained in the docket of the NOX SIP call rulemaking is
incorporated by reference into this proposal. The EPA concluded from
all of this information that the following 20 jurisdictions contain
sources that make a significant contribution to nonattainment in, or
interfere with maintenance by, one or more petitioning States under the
1-hour and/or the 8-hour NAAQS:
Alabama
Connecticut
Delaware
District of Columbia
Illinois
Indiana
Kentucky
Maryland
Massachusetts
Michigan
Missouri
New Jersey
New York
North Carolina
Ohio
Pennsylvania
Rhode Island
Tennessee
Virginia
West Virginia
Table II-1.--Named Upwind States which Contain Sources that Contribute
Significantly to 1-Hr Nonattainment in Petitioning States
------------------------------------------------------------------------
Petitioning State
(nonattainment area) Named upwind States
------------------------------------------------------------------------
New York..................... DE, DC, IN, KY, MD, MI, NC, NJ, OH, PA,
VA, WV.
Connecticut.................. DE, DC, IN,* KY,* MD, MI,, NC,, NJ, NY,
OH, PA, VA, WV.
Pennsylvania................. NC, OH, VA, WV.
Massachusetts................ OH, WV.
Rhode Island................. OH, WV.
Maine........................ CT, DE, DC, MD, MA, NJ, NY, PA, RI.
New Hampshire................ CT, DE,* DC,* MA, MD,* NJ, NY, PA, RI,
VA.*
Vermont...................... None.
------------------------------------------
Total.................... CT, DE, DC, IN, KY, MA, MD, MI, NC, NJ,
NY, OH, PA, RI, VA, WV.
------------------------------------------------------------------------
*Upwind States marked with an asterisk are included in the table because
they contribute to an interstate nonattainment area that includes part
of the petitioning State. Part of New Hampshire is included in the
Boston/Portsmouth nonattainment area; part of Connecticut is included
in the New York City nonattainment area.
Table II-2. Named Upwind States which Contain Sources that Contribute
Significantly to 8-Hr Nonattainment in Petitioning States
------------------------------------------------------------------------
Petitioning State Named upwind States
------------------------------------------------------------------------
Pennsylvania................. AL, IL, IN, KY, MI, MO, NC, OH, TN, VA,
WV.
Massachusetts................ OH, WV.
Vermont...................... None.
------------------------------------------
Total.................... AL, IL, IN, KY, MI, MO, NC, OH, TN, VA,
WV.
------------------------------------------------------------------------
The EPA also concluded that sources in the following 11 States do
not make a significant contribution to nonattainment in, or interfere
with maintenance by, any of the petitioning States under the 1-hour
and/or the 8-hour NAAQS:
---------------------------------------------------------------------------
\6\ The UAM-V is the Variable-grid Urban Airshed Model. The CAMx
is the Comprehensive Air Quality Model With Extensions.
---------------------------------------------------------------------------
[[Page 56304]]
Arkansas
Georgia
Iowa
Louisiana
Maine
Minnesota
Mississippi
New Hampshire
South Carolina
Wisconsin
Vermont
As discussed below, in Section II.F., EPA does not have the same
level of information available regarding the named States of Maine, New
Hampshire, and Vermont as it has for the other States named in
petitions. Therefore, EPA intends to conduct further analyses on these
three States. If the additional analyses show that sources in any of
these States significantly contribute to a relevant petitioning State,
EPA will issue a supplemental notice of proposed rulemaking based on
the new information.
C. Cost Effectiveness of Emissions Reductions
As described in Section II.A, above, the second prong of the
significant-contribution interpretation that EPA applied in the
NOX SIP call rule, and that EPA proposes to apply for
purposes of this proposal, is the extent to which ``highly cost-
effective'' NOX control measures are available for the types
of stationary sources named in the petitions.7.
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\7\ As discussed in this section, the highly cost-effective
NOX controls happen to apply only to major stationary
sources. Under section 126, EPA can make a finding for ``any major
source or group of stationary sources.'' In other words, even if not
all sources subject to this action were major, they would be part of
a group of stationary sources that contribute significantly to
nonattainment and hence could potentially be subject to finding.
---------------------------------------------------------------------------
As in the NOX SIP call rule, the EPA proposes to select
these highly cost-effective measures by examining the technological
feasibility, administrative feasibility and cost-per-ton-reduced of
various multistate ozone season NOX control measures and
determining what measures feasibly achieve the greatest NOX
reductions and are among the most reasonable in light of other actions
taken by EPA and States to control NOX.\7\
---------------------------------------------------------------------------
\7\ As discussed in this section, the highly cost-effective
NOX controls happen to apply only to major stationary
sources. Under section 126, EPA can make a finding for ``any major
source or group of stationary sources.'' In other words, even if not
all sources subject to this action were major, they would be part of
a group of stationary sources that contribute significantly to
nonattainment and hence could potentially be subject to a finding.
---------------------------------------------------------------------------
1. What NOX Controls Are Highly Cost Effective
The first step in the cost-effectiveness process was to identify
the types of sources named in the various petitions. The petitioning
States have identified the source categories that they believe
significantly impact their ability to achieve attainment of the ozone
standard. These categories are listed in Table I-1 earlier in this
notice. The EPA has determined that the named source categories can be
combined into one general category--fossil fuel-fired indirect heat
exchangers. This term applies to boilers and turbines used for the
production of steam, electricity, and in some cases mechanical work,
and to process heaters. To assure equity among the various
subcategories of such sources and the industries they represent, EPA
considered the cost effectiveness of controls for each subcategory
separately throughout the affected 20-jurisdiction region described in
Section II.B above. Sources are combined into a common subcategory if
they serve the same general industry (e.g., boilers and turbines that
are used by the electricity generation industry are combined in the
same subcategory). The EPA believes that this categorization better
reflects the industrial sectors served. Thereby, the EPA split the
population of indirect heat exchanges into four subcategories,
consistent with the approach EPA took in the final NOX SIP
call: (1) A subcategory of boilers and turbines serving generators
greater than 25 MWe that produce electricity for sale to the grid
(``large EGUs''); (2) a subcategory of boilers and turbines with a heat
input greater than 250 mmBtu/hr that exclusively generate steam and/or
mechanical work (e.g., provide energy to an industrial pump), or
produce electricity for internal use only and not for sale (``large
non-EGUs''); (3) a subcategory of process heaters with a heat input
greater than 250 mmBtu/hr (``large process heaters''); and (4) a
subcategory of smaller indirect heat exchangers, i.e., all such sources
not included in the first three subcategories (``small sources'').
As mentioned above, in evaluating the cost effectiveness of
NOX controls for indirect heat exchangers, the EPA has taken
the same approach as that taken in the final NOX SIP call.
See generally, Section II.D of the preamble to the final NOX
SIP call rule. In short, for each subcategory, the amounts of emissions
that cause subcategories in the covered upwind States to contribute
significantly to a petitioning State's nonattainment were determined
based on the application of NOX controls that achieve the
greatest feasible emissions reduction while still falling within a
cost-per-ton-reduced range that EPA considers to be highly cost
effective. The NOX controls for this rulemaking were
considered highly cost effective for the purposes of reducing ozone
transport to the extent they achieve the greatest feasible emissions
reduction but still cost no more than $2,000 per ton of ozone season
NOX emissions removed (in 1990 dollars), on average, for
each subcategory. The discussion below further describes the basis for
this cost amount and the techniques used for each subcategory. The EPA
believes that certain controls that cost more than $2,000 per ton of
NOX reduced are reasonably cost effective in reducing ozone
transport or in achieving attainment with the ozone NAAQS in specific
nonattainment areas; however, EPA proposes to base the significant-
contribution determination on only highly cost-effective reductions. In
addition, as discussed further below, in determining whether to assume
reductions from the small source subcategory, EPA considered
administrative efficiency in evaluating this subcategory.
More specifically, to determine what level of control can be
considered highly cost effective, EPA considered other recently
undertaken or planned NOX control measures. Table II-3
provides a reference list of measures that EPA and States have
undertaken to reduce NOX and their average annual costs per
ton of NOX reduced. These measures cost up to $2,000 per
ton. With few exceptions, the average cost effectiveness of these
measures is representative of the average cost effectiveness of the
types of controls EPA and States have needed to adopt most recently,
since their previous planning efforts have already taken advantage of
opportunities for even cheaper controls. The measures listed in Table
II-3 generally represent the average costs (i.e., middle of the range
of costs) that the nation has been willing to bear recently to reduce
NOX. The EPA believes that the cost effectiveness of
measures that it or States have adopted, or proposed to adopt, forms a
good reference point for determining which of the available additional
NOX control measures are among the most cost-effective
measures that can be implemented by the sources considered in today's
action.
[[Page 56305]]
Table II-3.--Average Cost Effectiveness of NOX Control Measures Recently
Undertaken For Stationary Sources
[1990 $]
------------------------------------------------------------------------
Control measure Cost per ton of NOX removed
------------------------------------------------------------------------
NOX RACT.................................. 150-1,300.
Final NOX SIP call........................ Up to 2,000.
State Implementation of the Ozone 950-1,600.
Transport Commission Memorandum of
Understanding.
New Source Performance Standards for 1,290.
Fossil Steam Electric Generation Units.
New Source Performance Standards for 1,790.
Industrial Boilers.
------------------------------------------------------------------------
The EPA notes that there are also a number of less expensive
measures recently undertaken by the Agency to reduce NOX
emission levels that do not appear in Table II-3. These actions include
the title IV NOX reduction program. Though these actions are
very cost effective, the Agency is focusing on what other measures
exist, at a potentially higher (though still not the highest
reasonable) cost-effectiveness value, that can further reduce
NOX emissions. Table II-3 is thereby useful as a reference
of the next higher level of NOX reduction cost effectiveness
that the Agency considers among the most reasonable to undertake. As a
result, the Agency proposes that NOX controls that can
feasibly be achieved and have an average subcategory-specific cost
effectiveness less than $2,000 per ton of NOX removed be
considered highly cost effective. The subcategories that EPA proposes
to control are those major stationary sources in the named categories
for which EPA finds that these highly cost-effective controls are
available.
2. Determining the Cost Effectiveness of NOX Controls
In an effort to determine what, if any, highly cost-effective mix
of controls is available for each subcategory (i.e., large EGUs, large
non-EGUs, large process heaters, and small sources) the Agency
considered the average cost effectiveness of alternative levels of
controls for each subcategory as described in the final NOX
SIP call. That analysis is summarized here. The average cost
effectiveness of the controls was calculated from a baseline level that
included all currently applicable Federal or State NOX
control measures for each subcategory. The baseline did not include
Phase II and Phase III of the OTC NOX MOU since those
measures are not federally required and they have not yet been adopted
by all the involved States; 8 if the MOU were included in
the baseline, the overall costs would be lower. In determining the cost
of NOX reductions from large EGUs, EPA assumed an emissions
trading system. As discussed in the final NOX SIP call, EPA
evaluated and compared the likely air quality impacts both with and
without a multistate NOX emissions trading system for
electricity generating sources. This analysis shows that a multistate
trading program causes no significant adverse air quality impacts.
Because such a program would result in significant cost savings, EPA's
cost-effectiveness determination for large electricity generating
boilers and turbines (i.e., the majority of the core group of sources
in the trading program) assumes sources will participate in a
multistate trading program.9 For non-EGU sources, EPA used a
least cost method which is equivalent to an assumption of an intrastate
trading program. Inclusion of these sources in a multistate trading
program would provide further cost savings.
---------------------------------------------------------------------------
\8\ However, in the Regulatory Analysis of the final
NOX SIP call, EPA evaluates the economic impact of
including the MOU in the baseline for the electric power industry.
\9\ The EPA envisions sources in States that are covered by (1)
the section 110 NOX SIP call, (2) the section 110 FIP, or
(3) section 126, to be able to trade among each other.
---------------------------------------------------------------------------
Table II-4 summarizes the control options investigated for each
subcategory covered by the petitions and the resulting average,
multistate cost effectiveness as presented in EPA's final
NOX SIP call. Note that these cost figures are obtained by
performing the analysis over the 23-jurisdiction NOX SIP
call area. The values will be only slightly different for the States
covered by this action; those differences are insignificant for
purposes of identifying highly cost-effective controls. Additionally,
the cost effectiveness analysis included a consideration of each
subcategory's growth, including new sources. Thus, the control levels
arrived at are cost-effective for new sources also.
Table II-4.--Average Cost Effectiveness of Options Analyzed \10\
[1990 dollars in 2007]
----------------------------------------------------------------------------------------------------------------
Average cost- Average cost-
effectiveness ($/ effectiveness ($/
Subcategory ozone season ton) ozone season ton) Average cost-effectiveness ($/ozone season
for each control for each control ton) for each control option
option option
----------------------------------------------------------------------------------------------------------------
Large EGUs.................... 0.20 lb/mmBtu.... 0.15 lb/mmBtu.... 0.12 lb/mmBtu.
$1,263........... $1,468........... $1,760.
Large Non-EGUs................ 50% reduction.... 60% reduction.... 70% reduction.
$1,235........... $1,477........... $2,155.
Process Heaters............... $3,000/ton $4,000/ton $5,000/ton maximum per source.
maximum per maximum per $2,891.
source. source.
$2,859........... $2,891...........
----------------------------------------------------------------------------------------------------------------
\10\ The cost-effectiveness values in Table II-4 are multistate averages. In the case of large EGUs the cost-
effectiveness values represent reductions beyond those required by title IV or title I RACT, where applicable.
For large non-EGUs and process heaters, the cost-effectiveness values represent reductions from uncontrolled
levels.
[[Page 56306]]
The following discussion explains the controls determined by EPA to
be highly cost-effective for each subcategory.
i. Large EGUs. For large EGUs, the control level was determined by
applying a uniform NOX emissions rate across the 20
jurisdictions potentially subject to section 126 findings. The cost-
effectiveness for each control level was determined using the
Integrated Planning Model (IPM). Details regarding the methodologies
used can be found in the Regulatory Impact Analysis of the
NOX SIP call rulemaking. Table II-4 summarizes the control
levels and resulting cost effectiveness of three levels analyzed.
A regionwide level of 0.20 lb/mmBtu was rejected because though it
resulted in an average cost effectiveness of less than $2,000 per ton,
the air quality benefits were less than those for the 0.15 lb/mmBtu
level which was also less than $2,000 per ton. The results suggest that
a multistate level of 0.15 lb/mmBtu should be assumed when determining
the emission levels for this subcategory. This control level has an
average cost-effectiveness of $1,468 per ozone season ton
removed.11 This amount is consistent with the range for
cost-effectiveness that EPA has derived from recently adopted (or
proposed to be adopted) control measures.
---------------------------------------------------------------------------
\11\ It should be noted that in the final NOX SIP
call EPA also investigated the regionwide cost-effectiveness of
NOX reductions if each State individually met the budget
component for large electricity generating boilers and turbines
(i.e., through intra-state trading). In the case of the 0.15 lb/
mmBtu strategy intra-State trading resulted in a regionwide cost-
effectiveness of $1,499/ton compared to $1,468/ton for regionwide
trading.
---------------------------------------------------------------------------
The EPA acknowledges that a control level of 0.12 lb/mmBtu, which
carries a cost effectiveness of $1,760 per ozone season ton removed,
appears to be within the upper range of cost effectiveness. However,
for reasons explained in Section II.D. of the final NOX SIP
call, the EPA is proposing in the section 126 action not to base the
EGU control level on 0.12 lb/mmBtu. Therefore, EPA proposes to retain
and apply here its determination from the NOX SIP call
rulemaking that it is highly cost effective to control emissions from
large EGUs to a control level corresponding to 0.15 lb/mmBtu.
ii. Large Non-EGUs. The EPA determined a highly cost-effective
control level for large non-EGUs by applying a uniform percent
reduction multistate in increments of 10 percent. Details regarding the
methodologies used are in the Regulatory Impact Analysis. Table II-4
summarizes the control levels and resulting cost effectiveness for non-
EGUs.
For large non-EGUs, the cost-effectiveness determination includes
estimates of the additional emissions monitoring costs that sources
would incur in order to participate in a trading program. Some non-EGUs
already monitor their emissions. In the proposed NOX SIP
call, EPA had not included monitoring costs in the cost-effectiveness
determination because such costs could not be estimated at that time.
Since then, EPA has evaluated monitoring system costs. These costs are
defined in terms of dollars per ton of NOX removed so that
they can be combined with the cost-effectiveness figures related to
control costs. Monitoring costs varied from about $150 to $400 per ton
of NOX removed, depending on the type of subcategory.
The EPA, therefore, proposes to retain and apply here its
determination from the NOX SIP call rulemaking that for
large non-EGUs a control level corresponding to 60 percent reduction
from baseline levels is highly cost effective (this percent reduction
corresponds to a multistate control level of about 0.17 lb/mmBtu).
iii. Large Process Heaters. For large process heaters, the control
level was determined by applying various cost-effectiveness thresholds,
because trading was not assumed to be readily available for this
subcategory. Details regarding the methodologies used are in the
Regulatory Impact Analysis. Table II-4 summarizes the control levels
and resulting cost effectiveness for each option under this
subcategory.
The EPA determined that controlling process heaters, though
reasonably cost effective, is not highly cost effective. Thus EPA
proposes that these sources do not emit in amounts that significantly
contribute to petitioning States' nonattainment or maintenance
problems.
iv. Small Sources. For the subcategory of small sources, EPA is
proposing to determine that no additional control measures or levels of
control are highly cost effective and feasible to mandate. For the
purposes of this rulemaking, EPA considers the following sizes of point
sources to be small: (1) Electricity generating boilers and turbines
serving a generator 25 MWe or less, and (2) other indirect heat
exchangers with a heat input of 250 mmBtu/hr or less. In the
NOX SIP call, EPA found that the collective emissions from
small sources were relatively small (in the context of that rulemaking)
and the administrative burden, to the permitting authority and to
regulated entities, of controlling such sources was likely to be
considerable.
In today's action, for the same reasons as described in the final
NOX SIP call, EPA proposes that these sources do not emit in
amounts that significantly contribute to petitioning States'
nonattainment or maintenance problems. Further discussion concerning
small point sources may be found in the final NOX SIP call
preamble.
v. Summary of Control Measures. Table II-5 summarizes the controls
that are assumed for each subcategory. More detailed discussions of the
controls assumed are contained in the sections that describe each
sector.
Table II-5.--Summary of Feasible, Highly Cost-Effective NOX Control
Measures
------------------------------------------------------------------------
Subcategory Control measures
------------------------------------------------------------------------
Large EGUs........................ State-by-State ozone season
emissions level (in tons) based on
applying a NOX emission rate of
0.15 lb/mmBtu on all applicable
sources.
Large Non-EGUs.................... State-by-State ozone season
emissions level (in tons) based on
applying a 60 percent reduction
from uncontrolled emissions on all
applicable sources.
Large Process Heaters............. No additional controls highly cost
effective.
Small Sources..................... No additional controls highly cost
effective.
------------------------------------------------------------------------
3. Other Cost-Related Considerations
The EPA has addressed other cost-related considerations as
described in Section II.D of the final NOX SIP call notice.
The EPA proposes to rely on that analysis in this rulemaking.
D. Identifying Sources
As discussed previously, all of the petitions named specific upwind
source categories as significantly contributing
[[Page 56307]]
to nonattainment in, or interfering with maintenance by, the
petitioning State. Four petitioning States (Massachusetts, New
Hampshire, New York, and Rhode Island) also attempted to identify the
existing sources in the targeted source categories. However, the
petitioners cautioned EPA that the lists might not be complete and that
any omissions were unintentional. In addition, the EPA has received
several comments from sources on the State lists saying that they do
not meet the source category definitions provided in the petitions. In
order to identify and verify the sources in the named source categories
for the geographic areas covered by each petition, EPA used the most
up-to-date emission inventory available. These data sources are
described in Section III of this notice. The existing sources in the
source categories for which EPA is making an affirmative technical
determination are listed in Appendix A to proposed part 97. The EPA
seeks comment on whether it has identified correctly the sources
covered by the petitions.
E. Air Quality Assessment
In the final NOX SIP Call rulemaking, EPA evaluated the
ozone benefits in the petitioning States of NOX controls
proposed in today's action. The EPA believes that the results of that
modeling analysis are valid for the purpose of this proposed
rulemaking, as well. The EPA performed the modeling for the 23
jurisdictions covered in the NOX SIP Call to confirm that
those States collectively contribute significantly to downwind
nonattainment. The collective contribution of all the upwind States is
one factor that went into EPA's decision that each individual upwind
State contributes significantly to downwind nonattainment.
The ozone benefits determined in the final NOX SIP Call
were based on air quality modeling of the emissions scenarios described
below. Each emissions scenario was modeled by EPA using UAM-V run for
all four of the OTAG episodes (i.e., July 1-11, 1988; July 13-21, 1991;
July 20-30, 1993; and July 7-18, 1995). In brief, the emissions
scenarios include a 2007 Base Case and a control scenario designed to
evaluate the effects of NOX controls on nonattainment in
downwind States, including each of the petitioning States. The Base
Case scenario accounts for growth in emissions and reductions
associated with Clean Air Act mandated controls and additional Federal
measures. In the control strategy scenario, NOX emissions
from utility and non-utility sources were reduced by applying controls,
very similar to those in today's proposal, to all such sources in the
23 jurisdictions which EPA has found, in the NOX SIP Call,
contain emissions which make a significant contribution to
nonattainment in downwind areas. The details on the development of
these two emissions scenarios are described in the final NOX
SIP Call rulemaking.
The EPA recognizes that the amount of emissions reduction in the
modeled strategy is not identical to the amount of emissions reduction
in today's proposal. This is because of differences in (a) the
underlying emissions inventories and (b) the level of emissions
controls applied to individual sources. However, the overall effect of
these differences on the percent emissions reductions is small.
Specifically, the difference in the total NOX emission
reductions for the 20 jurisdictions covered by today's proposal between
what was assumed in the modeling compared to what is being proposed
today is only 3 percent. The EPA also recognizes that there are three
additional upwind States (i.e., Georgia, South Carolina, and Wisconsin)
which are controlled in the modeled strategy that are not covered by
today's proposal. These three States were covered in the NOX
SIP Call because of their contributions to States other than the
petitioning States. Since EPA believes that emissions from sources in
these States do not contribute significantly to nonattainment in any of
the petitioning States, it is reasonable to assume that emissions
reductions in these States will not have any appreciable impact on
nonattainment in any of the petitioning States. The EPA believes that
the differences between today's proposal and what was modeled, as
described above, are relatively small, and thus, the overall
conclusions on air quality benefits from the modeled strategy are
applicable to the controls in today's proposal.
The EPA used a number of ``metrics'' (i.e., measures of ozone
contribution or impact) to evaluate the air quality benefits in the
petitioning States of the proposed NOX controls. The
technical details of the air quality modeling information and metrics
are described in the final NOX SIP call rulemaking. The
results of this modeling indicate that the proposed NOX
controls applied to the sources in the upwind States proposed as making
a significant contribution to nonattainment in one or more of the
petitioning States will provide substantial ozone benefits in each of
the petitioning States.
F. Conclusions on Granting or Denying the Petitions
The EPA is proposing action on the petitions based on the outcome
of the multi-step process described in the preceding sections. The
EPA's proposed action consists of three components: (1) Technical
determinations of which upwind sources or source categories named in
each petition significantly contribute to nonattainment or interfere
with maintenance of the relevant ozone standard in each petitioning
State; (2) action specifying when a finding that such sources emit or
would emit in violation of the section 110(a)(2)(D)(i)(I) prohibition
will be deemed made or not made (or made but subsequently withdrawn)
and, thus, when a petition for such a finding will be deemed granted or
denied (or granted but subsequently denied) for purposes of section
126(b); and (3) the specific emissions-reduction requirements that will
apply when such a finding is deemed made. Each of these proposed
actions is described in more detail below. Under EPA's proposed action,
certain types of new and existing sources in 20 upwind States are
potentially subject to a section 126(b) finding and therefore to the
requirements set forth in this proposal.
1. Technical Determinations
First, EPA proposes to make affirmative and negative technical
determinations as to which of the new (or modified 12) or
existing major sources or groups of stationary sources named in each
petition emit or would emit NOX in amounts that will
contribute significantly to nonattainment of the 1-hour or 8-hour
standard in (or interfere with maintenance of the 8-hour standard by)
each respective petitioning State. The regulatory text accompanying
today's proposal sets forth each of those proposed technical
determinations for sources named in each petition.
---------------------------------------------------------------------------
\12\ Whenever the word ``new'' is used in relation to sources
affected by this proposed rule, it includes both new and modified
sources.
---------------------------------------------------------------------------
In short, for each petition, with respect to each ozone standard,
EPA proposes to make affirmative technical determinations of
significant contribution (or interference) for those large EGU and non-
EGU sources for which highly cost-effective controls are available (as
described in Section II.C.), to the extent those sources are located in
one of the ``Named Upwind States'' corresponding to that petition in
Tables II-1 and II-2. Thus, to illustrate, for the petition from New
York, EPA proposes to find that large EGUs and non-EGUs
[[Page 56308]]
of the types described in Section II.C. that are located in the named
portions of Delaware, the District of Columbia, Indiana, Kentucky,
Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania,
Virginia, and West Virginia emit NOX in amounts that
contribute significantly to nonattainment of the 1-hour standard in New
York. By contrast, EPA proposes to find that such sources located in
Tennessee, which New York also named in its petition, do not emit
NOX in amounts that have that effect on New York. The result
is that EPA proposes to find that the large EGUs and non-EGUs in at
least some upwind States named in every petition except Vermont's
contribute significantly to nonattainment of at least one of the
standards (or interfere with maintenance of the 8-hour standard) in the
petitioning State. The EPA refers the reader to the regulatory text for
a full description of each of the proposed technical determinations for
each petition.
The EPA notes that the Agency is not proposing to make affirmative
technical determinations as to any sources located in Vermont, New
Hampshire, or Maine. That is because, based on the more limited
modeling and other assessments that EPA has done thus far with respect
to those States, EPA is not yet prepared to conclude that sources in
any of those States do contribute significantly to nonattainment (or
interfere with maintenance) of an ozone standard in any downwind State
named in one of those three States in its petition.13
However, EPA is continuing to study the impacts of sources in those
States on downwind States, so that it can make final decisions based on
the fuller set of information available today for other States. If EPA
believes, after completing its assessments, that large EGU or non-EGU
sources in any of those three States do contribute significantly to
downwind air quality problems in any of the States that name them in
their petitions, EPA will issue a supplemental notice of proposed
rulemaking based on those results.
---------------------------------------------------------------------------
\13\ Maine's petition named sources in Vermont and New Hampshire
and New Hampshire's petition named sources in Maine and Vermont.
---------------------------------------------------------------------------
Appendix A to proposed part 97 lists all existing sources for which
EPA proposes to make an affirmative technical determination linking
those sources to at least one petitioning State. These are the existing
sources that could receive a positive section 126(b) finding, depending
on the circumstances described in the next section.
2. Action on Whether To Grant or Deny Each Petition
a. Portions of Petitions for Which EPA Is Proposing an Affirmative
Technical Determination. For the reasons described in Section
II.A.2.c., EPA proposes to issue the type of final action on the
petitions described in that section. Under that approach, EPA's final
action for sources that EPA is proposing an affirmative technical
determination would provide that a finding that certain sources emit or
would emit in violation of the prohibition in section
110(a)(2)(D)(i)(I) would be deemed made as of certain specified dates
if certain events do not occur by those dates. More specifically, a
finding that new or existing sources, for which EPA has made an
affirmative technical determination, do emit in violation of section
110(a)(2)(D)(i)(I) would be deemed made:
As of November 30, 1999, if by such date EPA does not
issue either a proposed approval, under section 110(k) of the CAA, of a
State implementation plan revision submitted by such State to comply
with the requirements of section 110(a)(2)(D)(i)(I) of the CAA; or
final Federal implementation plan meeting such requirements for such
State in which the affected sources are or will be located,
As of May 1, 2000, if by November 30, 1999, EPA takes the
action described above for such State, but, by May 1, 2000, EPA does
not approve or promulgate implementation plan provisions meeting such
requirements for such State.
The EPA also proposes to find, as described earlier, that any such
finding as to any such major source or group of stationary sources
would be considered a finding under section 126(b) and, therefore,
would trigger the remedial requirements of the final rule. At such time
as a finding is deemed made, EPA intends to publish a notice in the
Federal Register announcing the source categories and locations
affected by the finding.
Furthermore, EPA proposes that as to any portion of a petition for
which EPA has made an affirmative technical determination (as described
above) that portion of the petition shall be deemed denied as of May 1,
2000, if a section 126(b) finding has not been deemed to have been made
by that date. In other words, if EPA has taken final action putting
into place an implementation plan meeting the requirements of section
110(a)(2)(D)(i)(I) by May 1, 2000, any outstanding portions of
petitions will be deemed denied by that date. In addition, after a
section 126(b) finding has been deemed made as to sources or groups of
stationary sources in an upwind State, that finding will be deemed
withdrawn, and the corresponding part of the relevant petition(s)
denied, if the Administrator either approves a SIP or promulgates a FIP
which complies with the requirements of section 110(a)(2)(D)(i)(I) for
such upwind State. This would minimize any overlap between an effective
section 126(b) finding, on one hand, and the application of
satisfactory SIP or FIP provisions, on the other.
b. Portions of Petitions for Which EPA Is Proposing a Negative
Technical Determination. Consistent with this overall approach, EPA
proposes that the sources for which EPA would make a negative technical
determination (as described above) do not or would not emit in
violation of the section 110(a)(2)(D)(i)(I) prohibition. As a result,
EPA proposes to deny each aspect of each petition relating to such
sources. For example, EPA proposes to deny New York's petition as to
sources in any State (or portion of a State) named in New York's
petition that is outside the large EGU and non-EGU categories described
in Section II.C., as well as any named sources of any type in
Tennessee. Another example is that EPA proposes today to deny Vermont's
section 126 petition in its entirety, because EPA proposes to find that
no sources named in Vermont's petition, in any of the upwind States
that the petition names, contribute significantly to nonattainment of
either the 1-hour or the 8-hour standard, nor interfere with
maintenance of the 8-hour standard, in Vermont.
3. Requirements for Sources for Which EPA Makes a Section 126(b)
Finding
The EPA proposes in Section III, below, the requirements that would
apply to any new or existing major source or group of stationary
sources for which a section 126(b) finding is ultimately made under the
approach just described. Section 126(c) states, in relevant part, that:
it shall be a violation of this section and the applicable
implementation plan in such State
(1) for any major proposed new (or modified) source with respect
to which a finding has been made under subsection (b) to be
constructed or to operate in violation of this section and the
prohibition of section 110(a)(2)(D)([i]) or this section or
(2) for any major existing source to operate more than three
months after such finding has been made with respect to it.
The Administrator may permit the continued operation of a source
referred to in paragraph (2) beyond the expiration of such three-month
period if
[[Page 56309]]
such source complies with such emission limitations and compliance
schedules (containing increments of progress) as may be provided by the
Administrator to bring about compliance with the requirements contained
in section 110(a)(2)(D)([i]) as expeditiously as practicable, but in no
case later than three years after the date of such finding.
The remedial requirements that EPA proposes to apply to sources for
which a section 126(b) finding is ultimately made would satisfy the
requirements just quoted. First, EPA proposes to find that new sources
for which a section 126(b) finding is ultimately made must comply with
the requirements described in Section III to ensure that they do not
emit in violation of the section 110(a)(2)(D)(i) prohibition. Second,
the program EPA is proposing serves as the alternative set of
requirements that the Administrator may apply for the purpose of
allowing existing sources subject to a section 126(b) finding to
operate for more than three months after the finding is made.
Consistent with section 126(c), the compliance period in EPA's proposed
program extends no further than three years from the making of the
finding. To the extent a finding is deemed made as of November 30,
1999, compliance will be required by November 30, 2002. But since the
program EPA is proposing would require actual emissions reductions only
in the ozone season, actual reductions will not need to occur until May
1, 2003, the start of the first ozone season after the November 30,
2002, compliance date. Thus, compliance by November 30, 2002 would not
require actual reductions until May 1, 2003. As described in Section
V.A.1 of the final NOX SIP call, EPA believes that
compliance by the ozone season beginning May 1, 2003 is feasible.
Section III of this notice describes the proposed section 126 control
requirements in greater detail.
III. Federal NOX Budget Trading Program
A. Program Summary
1. Purpose of the Federal NOX Budget Trading Program
Under section 126(c), EPA proposes to implement the Federal
NOX Budget Trading Program, a capped market-based system for
certain combustion sources in covered upwind States to bring sources
covered by any final section 126 finding into compliance. This type of
program is a proven method for achieving the highly cost-effective
emissions reductions described above while providing sources compliance
flexibility. (See SNPR for NOX SIP call at 63 FR 25918-19,
discussing OTAG's conclusions concerning advantages of market-based
systems).
The Federal NOX Budget Trading Program would be
triggered automatically if EPA makes a final finding as to any sources
under section 126, as described in Section II.F. Participation in the
Federal program would be mandatory for all sources affected by a
triggering of this section 126 remedy. It would also be mandatory for
all sources required to reduce emissions by the promulgated FIP, with
the exception of cement kilns and internal combustion engines.
The EPA would like to clarify that the use of the term ``budget''
in the context of the Federal NOX Budget Trading Program
does not mean that there is an aggregate emissions level that is
enforceable for the purposes of the section 126 remedy. Rather, the
term refers to the aggregate emission levels in each State for units
required to participate in the Federal NOX Budget Trading
Program as a section 126 remedy or as part of a FIP. The aggregation of
sources allocations is initially only for purposes of determining the
total amount available for allocation and and should not be construed
to represent a separate requirement for sources in the program for
purposes of any section 126 remedy.
The Federal NOX Budget Trading Rule is proposed in a new
Part 97 in Title 40 of the Code of Federal Regulations. Because EPA is
proposing to implement the Federal NOX Budget Trading
Program both in response to the section 126 petitions and as part of a
FIP if necessary; EPA intends to finalize part 97 in whichever of these
actions is finalized first. (The EPA expects part 97 will be finalized
in the section 126 rulemaking because final action on the remedy
portion of section 126 is required by April 30, 1999 under the proposed
consent decree discussed above.) In finalizing part 97, EPA intends to
respond to the comments it receives regarding part 97 through both the
proposed section 126 remedy and the proposed FIP. Therefore, commenters
who have identical comments in both rulemakings may submit their
comments to one docket and merely reference such comments in their
submission to the other docket. However, to the extent comments on part
97 are solely related to how it would be applied through a triggering
of the section 126 remedy, commenters should submit such comments to
the docket for this proposed section 126 remedy.
2. Relationship of the Section 126 Remedy to the NOX SIP
Call and the FIP.
The sources or groups of sources identified in the section 126
petitions are also sources for which EPA recommends States adopt
emission limitations and control strategies in response to the
NOX SIP call. The NOX SIP call establishes an
emissions budget for all sources of NOX emissions in all
States determined by EPA to significantly contribute to nonattainment
or interfere with maintenance of the ozone NAAQS in any other
jurisdiction. The FIP sets specific stationary source rules to decrease
NOX emissions and meet the NOX SIP call budget.
The section 126 proposed action, on the other hand, is limited to major
stationary sources or groups of stationary sources that are named in
the section 126 petitions and that EPA finds emit or would emit in
violation of the prohibition in section 110(a)(2)(D)(i) relative to a
petitioning State. Despite this difference in the scope of the proposed
section 126 action and the proposed FIP or final NOX SIP
call, all three actions are aimed at reducing the transport of ozone by
controlling emissions from sources in a given State that are found to
be contributing significantly to nonattainment or maintenance problems
in another State.
The EPA has promulgated the State NOX Budget Trading
Program, a cap-and-trade program for large combustion sources, to
assist States in meeting their obligations under the final
NOX SIP call. The EPA believes that this State
NOX Budget Trading Program--if selected by States to meet
their SIP call obligations--could be coordinated and integrated with
the Federal NOX Budget Trading Program promulgated in a
section 126 rule or a FIP, in order to address the transport problem on
a regional scale.
Integration is possible because, as noted above, both the
NOX SIP call, the corresponding FIP, and the section 126
petitions seek to mitigate the ozone transport problem by reducing
emissions from upwind sources that hinder attainment or maintenance of
the ozone NAAQS downwind. Further, the sources covered in the State
NOX Budget Trading Program under the NOX SIP call
include a majority of the sources named by petitioning States, and are
identical in size and categorization to sources for which EPA proposes
issue rules in the section 126 and FIP proposed actions.
In order to be eligible to participate in a cap-and-trade program,
the EPA
[[Page 56310]]
believes that there are two principal criteria that sources must meet,
as stated in the supplemental notice for the proposed NOX
SIP call (62 FR 25923). The first criterion requires that sources be
able to account accurately and consistently for all of their emissions
in order to maintain emissions within a cap. The second criterion is
the ability to identify a responsible party for each regulated source
who would be accountable for demonstrating and ensuring compliance with
the program's provisions. Assuming that these criteria are met, and
consistent control levels are used in setting emission requirements for
the covered sources, EPA supports the establishment of a common trading
program among sources subject to a trading program under the
NOX SIP call, a section 126 remedy, or a FIP among sources
subject to a trading program under the NOX SIP call, a
section 126 remedy or a FIP.
The resulting multi-state trading program could include all sources
in States found to be significantly contributing to nonattainment or
interfering with maintenance of the ozone standard in another State.
Under this common trading program, sources subject to the Federal
NOX Budget Trading Program under the section 126 rulemaking
or the FIP, and sources in States choosing to participate in the State
NOX Budget Trading Program in response to the NOX
SIP call, could trade with one another under a NOX cap
across participating States. The EPA's analyses in conjunction with the
NOX SIP call exhibit that implementation of a single trading
program with a uniform control level results in no significant changes
in location of emissions reductions as compared to a non-trading
scenario. Therefore, the common trading program will achieve the
intended emissions reductions while providing flexibility and cost
savings to the covered sources.
Integration of the trading programs reduces the possibility of
inconsistent or conflicting deadlines or requirements, increases the
potential cost savings for sources, and streamlines program
administration. Inconsistency could hamper the sources' ability to plan
and achieve the needed reductions as cost-effectively as possible. In
addition, if a State subsequently elects to submit a SIP including a
trading program after EPA has already established a Federal
NOX Budget Trading Program under a FIP or section 126
remedy, disruptions to sources that would shift from regulation under a
FIP or section 126 remedy to regulation under a SIP would be minimized.
Because sources may be included in the common trading program
through one of three possible mechanisms, the sources included in the
trading program for purposes of the NOX SIP call may vary
from sources included for purposes of the section 126 remedy. The EPA
does not foresee this to be problematic since sources would face
consistent control requirements regardless of which rulemaking includes
the sources in the common trading program. That the requirements would
be consistent follows from the similar nature of the rulemakings and
the comparable level of control which EPA has determined to be cost-
effective for each source category across all three actions.
The EPA proposes in part 97 to establish the geographic boundaries
of the common trading program as those States submitting SIPs in
response to the final NOX SIP call or subject to FIPs and/or
the sources in States for which EPA makes a finding for the section 126
petitions. The EPA would administer this common trading program in
collaboration with affected States.
The EPA is proposing a Federal NOX Budget Trading
Program as part of the FIP or section 126 remedy which mirrors, to the
extent feasible, the State NOX Budget Trading Program (set
forth in part 96) which is the model trading program that is available
for States to adopt in response to the NOX SIP call. While
EPA is proposing to keep the programs as similar as possible, there are
several differences which are more fully described below. These
differences arise primarily from the need for Federal implementation of
the program rather than State implementation. For example, EPA must
determine the NOX allowance allocations for each unit in the
Federal NOX Budget Trading Program, rather than simply
provide an example that States may use to determine allocations, as is
the case in the State NOX Budget Trading Program.
B. Federal NOX Budget Trading Program
1. Program Overview
In part 97, the EPA proposes a cap-and-trade program as an
aggregate remedy for the section 126 petitions which it today proposes
to determine are technically valid. Four of the eight petitioning
States (New York, Connecticut, Pennsylvania, and Maine) requested that
EPA establish such a trading program to implement the required
reductions.
The EPA has authority under section 126 to require sources or
groups of sources for which a finding of significant contribution is
made to comply with a cap-and-trade program. Section 126(c) provides
that such sources or groups of sources may continue to operate if they
comply ``with such emission limitations and compliance schedules
(containing increments of progress) as may be provided by the
Administrator to bring about compliance'' with section 110(a)(2)(D).
Under section 302, an ``emission limitation'' is ``a requirement * * *
which limits the quantity, rate, or concentration of emission of air
pollutants on a continuous basis.'' In fact, title IV of the CAA refers
to the allowance requirements of the Acid Rain SO2 cap-and-
trade program as ``emission limitations.'' 42 U.S.C. 7651c(a).
Under a cap-and-trade program, the Administrator sets an emission
limitation and compliance schedule for each unit subject to the
program. The emission limitation for each unit is the requirement that
the quantity of the unit's emissions during a specified period (here,
the tonnage of NOX emissions during the ozone season) cannot
exceed the amount authorized by the allowances (here, NOX
allowances, each authorizing one ton of emissions) that the unit holds.
Allowances are allocated to units subject to the program, and the total
number of allowances allocated to all such units for each control
period is fixed or capped at a specified level. The compliance schedule
is set by establishing a deadline by which units must begin to comply
with the requirement to hold allowances sufficient to cover emissions.
In essence, for purposes of complying with section 126, EPA would be
translating emission limits into allowance requirements. Since under
section 126 EPA has the authority to establish emission limits, and
allowance requirements are equivalent to emission limits, EPA has the
authority to promulgate allowance requirements and allocate allowances
for purposes of section 126. Since a cap-and-trade program is a
compliance mechanism which enables sources to make cost-effective
decisions to meet their allowance requirements, which are equivalent to
emission limits, EPA believes it has the authority under section 126(c)
to adopt a cap-and-trade program as a cost effective means of
implementing the requirements of sections 126 and 110(a)(2)(D).
Sources potentially subject to the emission limitations and
compliance schedule in the Federal NOX Budget Trading
Program for the purposes of the section 126 petitions are those sources
named by petitioning States and found by EPA to be emitting in
violation of the prohibition in a petitioning State. The
[[Page 56311]]
section 126 remedy will apply to these sources in States for which a
finding is triggered by the terms of today's proposed rule. For the
reasons discussed in Section II, these sources include any fossil fuel-
fired unit (boiler, turbine, or combined cycle) that serves a generator
with a nameplate capacity greater than 25 MWe, and any fossil fuel-
fired unit (boiler, turbine, or combined cycle) that has a maximum
design heat input of greater than 250 mmBtu/hr, located in any of the
following twenty States: Alabama, Connecticut, Delaware, District of
Columbia, Illinois, Indiana, Kentucky, Maryland, Massachusetts,
Michigan, Missouri, New Jersey, New York, North Carolina, Ohio,
Pennsylvania, Rhode Island, Tennessee, Virginia, and West Virginia.
The EPA requests comment as to whether additional stationary
sources that emit to a stack, can monitor NOX mass
emissions, and are located in a State where a finding is made under
section 126, but are not named in a petition, should be able to
voluntarily participate in the trading program. In today's notice, EPA
proposes providing these individual stationary sources the opportunity
to opt in to enable further cost savings from the Federal
NOX Budget Trading Program. These opt-in provisions would be
very similar to the opt-in provisions allowed under the State
NOX Budget Trading Program in part 96 (see Section III.B.3.e
for explanation).
The NOX allowances--each allowance representing a
limited authorization to emit one ton of NOX--would be the
currency used in the trading program. A fixed number of NOX
allowances would be allocated to sources for each ozone season equal to
the total amount of the aggregate emissions permitted among the sources
in each State included in the Federal NOX Budget Trading
Program for purposes of the section 126 remedy. The EPA has included in
today's proposal several alternative methodologies that EPA could use
to allocate NOX allowances to units. Appendix A proposed
part 97 sets forth the allocation for each unit based on the proposed
methodologies.
The control period for the trading program (i.e., the period during
which a source must hold sufficient NOX allowances to cover
emissions) would extend from May 1 through September 30, which is the
same as the control period under the NOX SIP call and the
FIP proposal. The EPA's proposed trading program remedy is based on the
application of a uniform control level to the covered universe of
sources. Based on analyses done in connection with the proposed
NOX SIP call (63 FR 25921) and the final NOX SIP
call, EPA maintains that trading could occur across States included in
a NOX Budget Trading Program without restrictions, other
than the requirement to comply with existing emission limits under
title I and title IV of the CAA, as well as any other State
limitations.
Under today's proposed rule, sources in the Federal NOX
Budget Trading Program would be required to monitor and report their
emissions in accordance with relevant portions of 40 CFR part 75. The
EPA has promulgated revisions to part 75 that establish NOX
mass monitoring requirements and provide greater flexibility to
regulated sources. Consistent and accurate monitoring of emissions is
necessary for accountability regarding compliance with the requirement
to hold NOX allowances and to ensure that a ton of emissions
attributed to one source in one State is equivalent to a ton attributed
to another source in the same or another State.
Under today's proposed rule, EPA would be responsible for all
aspects of program implementation, with the exception of permitting.
Permitting would be handled by States in accordance with the
requirements of the proposed rule. As further explained in Section
III.B.2.c., the Federal NOX Budget Trading Program does not
require a new or separate permit. If a source already has in place a
federally enforceable permit, either title V or non-title V, the
source's trading program obligations must be incorporated into this
permit; if a source does not have a federally enforceable permit, the
federally-enforceable NOX Budget Trading Rule applies to the
source on its own accord.
As discussed herein, EPA proposes to make the Federal and State
NOX Budget Trading Programs as similar as possible and has
modeled proposed part 97 after part 96 just finalized. The EPA notes
that discussion of the evolution of the NOX Budget Trading
Program is set forth in the supplemental notice of the proposed
NOX SIP call rule at 63 FR 25921-23 and in the final
NOX SIP call rule.
2. Elements of the Federal NOX Budget Trading Program That
Are the Same as the State NOX Budget Trading Program
Under part 97, as proposed, the following sections would be
virtually identical to the corresponding sections in part 96, which
sets forth the State NOX Budget Trading Program. The EPA
proposes to retain and rely on the analyses and considerations
undertaken in the NOX SIP call process to determine these
program elements. Moreover, the provisions in part 97 would be numbered
in the same sequence as the corresponding provisions in part 96, so
that, for example, Sec. 97.2 and Sec. 96.2 or Sec. 97.81 and Sec. 96.81
would address the same subject matter. The major differences between
the part 97 sections listed below and their corresponding part 96
sections would be the renumbering of cross references to other
regulatory provisions so that a section in part 97 would reference the
appropriate section in that part, as opposed to the section in part 96.
More detailed information on the rationale for the part 96 provisions
themselves can be found in the preamble accompanying the proposed part
96 (63 FR 25917-43) and the final part 96.
Subpart A--Federal NOX Budget Trading Program General
Provisions
Sec.
97.3 Measurements, abbreviations, and acronyms.
97.5 Retired unit exemption.
97.7 Computation of time.
Subpart B--Authorized Account Representative for NOX Budget
Sources
97.10 Authorization and responsibilities of the NOX
authorized account representative.
97.11 Alternate NOX authorized account representative.
97.12 Changing the NOX authorized account representative
and alternate NOX authorized account representative;
changes in the owners and operators.
97.13 Account certificate of representation.
97.14 Objections concerning the NOX authorized account
representative.
Subpart C--Permits
97.20 General NOX Budget permit requirements.
97.21 Submission of NOX Budget permit applications.
97.22 Information requirements for NOX Budget permit
applications.
97.23 NOX Budget permit contents.
97.24 Effective date of initial NOX Budget permit.
97.25 NOX Budget permit revisions.
Subpart D--Compliance Certification
97.30 Compliance certification report.
Subpart F--NOX Allowance Tracking System
97.50 NOX Allowance Tracking System accounts.
97.51 Establishment of accounts.
97.52 NOX Allowance Tracking System responsibilities of
NOX authorized account representative.
97.53 Recordation of NOX allowance allocations.
97.54 Compliance.
97.55 Banking.
97.56 Account error.
97.57 Closing of general accounts.
[[Page 56312]]
Subpart G--NOX Allowance Transfers
97.60 Scope and submission of NOX allowance transfers.
97.61 EPA recordation.
97.62 Notification.
The EPA requests comment on whether any of the part 97 provisions
listed above should differ substantively from the corresponding
provisions in part 96. If a commenter believes substantive differences
in the rules are appropriate, the commenter should describe the favored
changes and explain why these changes are appropriate.
a. General Provisions. For part 97, EPA is proposing to use the
same measurements, abbreviations, and acronyms, the same retired unit
exemption, and the same provisions for computation of time as those
that apply in part 96, with cross references to the appropriate
sections in part 97, rather than to sections in part 96. The EPA is
proposing these part 97 provisions for the reasons set forth both in
the proposed NOX SIP call (63 FR 25923-27) and final
NOX SIP call, and in order to minimize differences between
the Federal and State NOX Budget Trading Programs.
b. Authorized Account Representative. The NOX Authorized
Account Representative (NOX AAR) is the individual who is
authorized to represent the owners and operators of each NOX
Budget unit at a NOX Budget source in matters pertaining to
the NOX Budget Trading Program. Subpart B of part 97
addresses, among other things, the process for designating and changing
the NOX AAR and the responsibilities of the NOX
AAR and alternate NOX AAR. These provisions are the same as
those in part 96, with cross references to the appropriate sections of
part 97. The EPA is proposing these part 97 provisions for the reasons
set forth both in the proposed NOX SIP call (63 FR 25927)
and the final NOX SIP call, and in order to minimize
differences between the Federal and State NOX Budget Trading
Programs.
c. Permits. The regulations governing State permitting under title
V define an ``applicable requirement,'' which must be reflected in a
title V operating permit, as including ``[a]ny standard or other
requirement provided for in the applicable implementation plan approved
or promulgated by EPA through rulemaking under title I of the CAA that
implements the relevant requirements of the CAA, including any
revisions to that plan promulgated in part 52 of this chapter.'' 40 CFR
70.2. Since today's proposed rule is being promulgated under title I
(i.e., under section 126), the requirements of this rule are applicable
requirements under Sec. 70.2 and must be reflected in the title V
operating permit of NOX Budget sources required to have such
a permit. The EPA believes that the majority of NOX Budget
sources will be required to have a title V permit. Further, all State
and local air permitting authorities currently have EPA-approved title
V operating permits programs. These State and local agencies would be
the permitting authorities for the majority of NOX Budget
sources with title V permits, for which the trading program
requirements would be applicable requirements. For any sources that do
not have a title V permit, such a permit is not required. If a source
has a federally enforceable non-title V permit, the trading program
requirements must also be incorporated into this permit. If a source
does not have a federally enforceable permit, the requirements of the
Federal NOX Budget Trading Rule would be federally
enforceable without the federally enforceable permit.
Subpart C of part 97 addresses, among other things, the
administration of a permit, permit applications, permit contents,
effective date, and permit revisions. These provisions are the same as
those in part 96, with cross references to the appropriate sections in
part 97. The EPA is proposing these part 97 provisions for the reasons
set forth both in the proposed NOX SIP call (63 FR 25927-29)
and the final NOX SIP call, and in order to minimize
differences between the Federal and State NOX Budget Trading
Programs.
d. Compliance Certification. The NOX AAR must certify at
the end of each control period that the unit was in compliance with the
emissions limitation and other requirements of the Federal
NOX Budget Trading Program. Proposed Sec. 97.30 sets forth
the same provisions for compliance certification reports as those in
part 96, with cross references to the appropriate sections in part 97.
The EPA is proposing these part 97 provisions for the reasons set forth
both in the proposed NOX SIP call (63 FR 25929) and the
final NOX SIP call, and in order to minimize differences
between the Federal and State NOX Budget Trading Programs.
e. NOX Allowance Tracking System. The NOX
Allowance Tracking System is an automated system used to track
NOX allowances held by NOX Budget units under the
NOX Budget Trading Program, as well as those allowances held
by other organizations and individuals. Subpart F of part 97 addresses,
among other things, NOX allowance tracking system accounts,
the account responsibilities of the NOX AAR, the recordation
of NOX allowance allocations, the compliance process,
account error, and account closing. These provisions are the same as
those in part 96, with cross references to the appropriate sections in
part 97. The EPA is proposing these part 97 provisions for the reasons
set forth both in the proposed NOX SIP call (63 FR 25933-37)
and the final NOX SIP call, and in order to minimize
differences between the Federal and State NOX Budget Trading
Programs.
f. Banking. The EPA proposes to include banking as a feature in the
Federal NOX Budget Trading Program for the reasons set forth
in the final NOX SIP call. Proposed Sec. 97.55 sets forth
the same provisions for banking and the management of banked allowances
as specified in part 96. In accordance with these provisions,
NOX allowances held by units subject to the Federal
NOX Budget Trading Program may be banked for future use
starting in 2003 (except as noted in Section III.B.3.e.ii. of this
preamble). However, as in the State NOX Budget Trading
Program, the Federal NOX Budget Trading Program contains a
flow control mechanism to limit the variability associated with
banking. This mechanism allows unlimited banking by units subject to
the Federal NOX Budget Trading Program, but discourages the
``excessive'' use of banked allowances by establishing a discount rate
on the use of banked allowances over a certain level. Proposed part
Sec. 97.55 establishes a flow control mechanism which applies a 2-for-1
discount ratio to the use of banked allowances above a certain level
when the total number of banked allowances in the program exceeds 10
percent of the allowable NOX emissions for all sources
covered by the Federal trading program. This flow control mechanism,
along with the overall banking provisions, is proposed for the reasons
set forth in both the proposed NOX SIP call (63 FR 25934-37)
and the final NOX SIP call, and in order to minimize
differences between the Federal and State NOX Budget Trading
Programs.
g. NOX Allowance Transfers. Subpart G of part 97
addresses, among other things, submission, recordation, and
notification of transfers of NOX allowances under the
NOX Budget Trading Program. These provisions are the same as
those in part 96, with cross references to the appropriate sections in
part 97. The EPA is proposing these part 97 provisions for the reasons
set forth both in the proposed NOX SIP call (63 FR 25937-38)
and the final NOX SIP call, and in order to minimize
[[Page 56313]]
differences between the Federal and State NOX Budget Trading
Programs.
h. Audits. While program audits are not explicitly required by
today's rule, EPA intends to perform the same types of audits discussed
concerning the proposed NOX SIP call (63 FR 25942) and the
final NOX SIP call.
3. Elements of the Federal NOX Budget Trading Program That
Differ From the State NOX Budget Trading Program
The EPA proposes that the following sections in part 97 incorporate
certain differences from the corresponding sections in part 96 to
provide for Federal implementation of the NOX Budget Trading
Program.
Subpart A--Federal NOX Budget Trading Program General
Provisions
Sec. 97.1 Purpose.
Sec. 97.2 Definitions.
Sec. 97.4 Applicability.
Sec. 97.6 Standard Requirements.
Subpart D--Compliance Certification
Sec. 97.31 Administrator's action on compliance certifications.
Subpart E--NOX Allowance Allocations
Sec. 97.40 Trading program budget.
Sec. 97.41 Timing requirements for NOX allowance
allocations.
Sec. 97.42 NOX allowance allocations.
Subpart H--Monitoring and Reporting
Sec. 97.70 General requirements.
Sec. 97.71 Initial certification and recertification procedures.
Sec. 97.72 Out of control periods.
Sec. 97.73 Notifications.
Sec. 97.74 Recordkeeping and reporting.
Sec. 97.75 Petitions.
Sec. 97.76 Additional requirements to provide data for allocations
purposes.
Subpart I--Individual Unit Opt-Ins
Sec. 97.80 Applicability.
Sec. 97.81 General.
Sec. 97.82 NOX authorized account representative.
Sec. 97.83 Applying for NOX Budget opt-in permit.
Sec. 97.84 Opt-in process.
Sec. 97.85 NOX Budget opt-in permit contents.
Sec. 97.86 Withdrawal from NOX Budget Trading Program.
Sec. 97.87 Change in regulatory status.
Sec. 97.88 NOX allowance allocations to opt-in units.
a. General Provisions. i. Purpose. Proposed Sec. 97.1 explains that
proposed part 97 sets forth the provisions for the Federal
NOX Budget Trading Program addressing interstate transport
of ozone and NOX. As discussed above, this program would be
activated either under section 126 or under a FIP.
ii. Definitions. For part 97, EPA is proposing to use the same
definitions as those that apply in part 96, with cross references to
the appropriate sections in part 97, with three exceptions. First, the
definition of the term ``NOX Budget Trading Program'' would
be altered to reflect the fact that the Federal trading program is
established pursuant to part 52, as opposed to part 51.121, as is the
case with the State NOX Budget Trading Program under part
96. Secondly, the definition for the term ``State'' would be altered to
reference only those States that would be covered by any final section
126 or FIP action, and to reflect the fact that the Federal trading
program would be promulgated for a Sta
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