Approval and Promulgation of Air Quality Implementation Plans; Massachusetts and Rhode Island; Nitrogen Oxides Budget and Allowance Trading Program

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[MA-67-7202a; A-1-FRL-6346-6]

Approval and Promulgation of Air Quality Implementation Plans;

Massachusetts and Rhode Island; Nitrogen Oxides Budget and Allowance

Trading Program

AGENCY: Environmental Protection Agency (EPA).

ACTION: Direct final rule.

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SUMMARY: EPA is approving State Implementation Plan (SIP) revisions

submitted by the States of Rhode Island (RI) and Massachusetts (MA).

This action consists of approving regulations in RI and MA which are

part of a regional nitrogen oxide (NOX) reduction program

designed to reduce stationary source NOX emissions during

the ozone season in the Ozone Transport Region (OTR) of the

northeastern United States. (Section 184(a) of the Clean Air Act

defines an ozone transport region in the northeastern United States

comprised of the States of Connecticut, Delaware, Maine, Maryland,

Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode

Island, Vermont, and the Consolidated metropolitan Statistical Area

that includes the District of Columbia.) Additionally, this action

involves the approval of a source specific order which establishes

alternative NOX reasonably available control technology

(RACT) requirements for four boilers at the Rhode Island Economic

Development Corporation (RIEDC). These SIP revisions were submitted

pursuant to section 110 of the Clean Air Act (CAA).

DATES: This direct final rule is effective on August 2, 1999 without

further notice, unless EPA receives adverse comment by July 2, 1999. If

adverse comment is received, EPA will publish a timely withdrawal of

the direct final rule in the Federal Register and inform the public

that the rule will not take effect.

ADDRESSES: Comments may be mailed to Susan Studlien, Deputy Director,

Office of Ecosystem Protection (mail code CAA), U.S. Environmental

Protection Agency, Region I, One Congress Street, Suite 1100, Boston,

MA 02114-2023. Copies of the documents relevant to this action are

available for public inspection during normal business hours, by

appointment at the Office Ecosystem Protection, U.S. Environmental

Protection Agency, Region I, One Congress Street, 11th floor, Boston,

MA; at the Division of Air and Hazardous Materials, Rhode Island

Department of Environmental Management, 291 Promenade Street,

Providence, RI 02908-5767, and at the Massachusetts Division of Air

Quality Control, Department of Environmental Protection, One Winter

Street, 8th Floor, Boston, MA 02108.

FOR FURTHER INFORMATION CONTACT: Steven A. Rapp, (617) 918-1048 or at

[email protected]

SUPPLEMENTARY INFORMATION: On December 19, 1997, the Massachusetts (MA)

Department of Environmental Protection (DEP) submitted to EPA a request

to revise its State Implementation Plan (SIP). The request proposes to

add 310 CMR 7.27, ``NOX Allowance Program'' to the SIP.

Similarly, on January 20, 1999, the Rhode Island (RI) Department of

Environmental Management (DEM) submitted Regulation No. 38, ``Nitrogen

Oxides Allowance Program,'' and Consent Agreement No. 96-04-AP for the

Rhode Island Economic Development Corporation (RIEDC) as revisions to

the Rhode Island SIP. The two regulations are part of a regional

NOX reduction program designed to reduce stationary source

NOX emissions during the ozone season in the OTR. The

consent agreement no. 96-04-AP establishes alternative NOX

reasonably available control technology (RACT) requirements for four

boilers at the RIEDC facility in North Kingstown, RI.

I. Summary of SIP Revisions

NOX RACT Consent Agreement No. 96-04-AP for RIEDC

On September 2, 1997, EPA approved Regulation No. 27, ``Control of

Nitrogen Oxides Emissions'' as meeting the NOX RACT

requirements of sections 182(b) and (c) of the Clean Air Act and

revised the Rhode Island SIP accordingly (see 62 FR 46202). Section

27.4.8 allows RI DEM to relax the RACT requirements on a case-by-case

basis, upon approval by EPA. The NOX RACT Consent Agreement

No. 96-04-AP for RIEDC represents a case-specific alternative RACT

determination as provided for under section 27.4.8.

Ozone Transport Region Nitrogen Oxides Allowance Program in

Massachusetts and Rhode Island

Sections 182(b)(1)(A) and 182(c)(2)(A) of the CAA require States

with areas classified as ``moderate,'' ``serious,'' and ``severe''

ozone nonattainment to submit revisions to their applicable SIPs to

provide for specific annual reductions in emissions of volatile organic

compounds (VOCs) and oxides of nitrogen (NOX) as necessary

to attain the national primary ambient air quality standard for ozone.

Additionally, section 110 of the Act requires that such plans be

subject to public notice, comment, and hearing procedures and that the

States adopt and submit the plans to EPA.

As part of MA's and RI's efforts to meet these requirements, the

States have submitted regulations which impose statewide caps on

NOX emissions from certain industrial sectors (e.g.,

electric utility boilers, industrial boilers, combustion turbines,

etc.). RI's Regulation No. 38 and MA's Regulation 310 CMR 7.27 are

based closely on a model rule which was developed using the EPA's

economic incentive program rules (67 FR 16690, April 7, 1994) as the

general regulatory framework. This model rule was developed by the

Northeast States for Coordinated Air Use Management (NESCAUM) and the

Mid-Atlantic Regional Air Management Association (MARAMA) and is

entitled, ``NESCAUM/MARAMA NOX Budget Model Rule,'' issued

on May 1, 1996. The basis for the model rule was a memorandum of

understanding entitled, ``Memorandum of Understanding Among the States

of the Ozone Transport Commission on Development of a Regional Strategy

Concerning the Control of Stationary Source Nitrogen Oxide Emissions,''

dated September 27, 1994, otherwise known as the OTC MOU.

RI's and MA's NOX budget regulations set statewide, five

month (May 1 through September 30) NOX ``budgets,'' or mass

emission limits in tons, to reduce the aggregate emissions from large

fossil fuel fired combustion equipment by as much as 75% from a 1990

baseline. In order to achieve the aggregate NOX reductions,

the regulations proportion NOX ``allowances'' (in tons) to

the facilities with emission units subject to the program. The

regulations require each owner or operator of each unit to hold, by

December 31 of each year, at least as many NOX allowances in

their compliance account as total tons of NOX emitted during

the previous five month ozone season. Under these regulations,

NOX allowances may be bought or sold and unused allowances

may be banked from one year to another in a central registry

administered by EPA. The program requires NOX emissions to

be monitored by either a continuous emission monitoring system (CEMS)

or equivalent, although the use of alternatives is allowed where

approved

[[Page 29568]]

by the State and EPA. The program will begin on May 1, 1999. Starting

in 2002 and occurring every three years after, an audit of the program

will be conducted to ensure that the program is providing the expected

reductions.

Additional information concerning EPA's evaluation of the RI and MA

NOX allowance program regulations is detailed in two

memoranda: ``Technical Support Document for Massachusetts'' Regulation

310 CMR 7.27, ``NOX Allowance Program,'' dated December 16,

1998, and ``Technical Support Document for Rhode Island's Regulation

No. 38, ``Nitrogen Oxides Allowance Program'' and NOX RACT

Consent Agreement No. 96-04-AP for Rhode Island Economic Development

Corporation,'' dated February 2, 1999. Copies of those documents are

available, upon request, from the EPA Regional Office listed in the

ADDRESSES section of this document.

II. Issues

An issue associated with the approval of the Rhode Island and

Massachusetts regulations is that the regulations currently contain

NOX emissions budget and allocation schemes only for 1999

through the ozone season of 2002, i.e., ``phase II'' of the OTC

NOX Budget program. However, the OTC MOU obliges

Massachusetts and Rhode Island to require its allowance program sources

to make specific additional NOX reductions by May 1, 2003

and continuing thereafter, i.e., ``phase III.'' Additionally, in May

1998, Massachusetts proposed an attainment demonstration for the

western MA nonattainment area which relies on the NOX

reductions associated with the OTC program in 2003 and beyond to

achieve attainment with the one hour ozone standard.

Section 7.27 (3)(b) of the MA regulation and section 38.2.1(b) of

the RI regulation are currently reserved for the purpose of setting the

statewide allocation for 2003 and beyond. In their current form,

Regulation No. 38 and 310 CMR 7.27 are approvable for 1999, 2000, 2001,

and 2002. However, in order to meet the interstate MOU and for MA to

have a credible attainment demonstration, both MA and RI will need to

amend their regulations to establish the NOX caps in those

States during 2003 and beyond.

The EPA is publishing this rule without prior proposal because the

Agency views this as a noncontroversial amendment and anticipates no

adverse comments. However, in the proposed rules section of this

Federal Register publication, EPA is publishing a separate document

that will serve as the proposal to approve the SIP revision should

adverse comments be filed. This action will be effective August 2, 1999

without further notice unless the Agency receives adverse comments by

July 2, 1999.

If the EPA receives such comments, then EPA will publish a document

withdrawing the final rule and informing the public that the rule will

not take effect. All public comments received will then be addressed in

a subsequent final rule based on the proposed rule. The EPA will not

institute a second comment period. Parties interested in commenting

should do so at this time. If no such comments are received, the public

is advised that this rule will be effective on August 2, 1999, and no

further action will be taken on the proposed rule.

III. Final Action

EPA is approving Massachusetts' regulation 310 CMR 7.27,

``NOX Allowance Program,'' Rhode Island's Regulation No. 38,

``Nitrogen oxides Allowance Program,'' and Rhode Island's Consent

Agreement No. 96-04-AP. Nothing in this action should be construed as

permitting or allowing or establishing a precedent for any future

request for revision to any State implementation plan. Each request for

revision to the State implementation plan shall be considered

separately in light of specific technical, economic, and environmental

factors and in relation to relevant statutory and regulatory

requirements.

IV. Administrative Requirements

A. Executive Order 12866

The Office of Management and Budget (OMB) has exempted this

regulatory action from Executive Order (E.O.) 12866, entitled

``Regulatory Planning and Review.''

B. Executive Order 12875

Under E.O. 12875, EPA may not issue a regulation that is not

required by statute and that creates a mandate upon a state, local, or

tribal government, unless the Federal government provides the funds

necessary to pay the direct compliance costs incurred by those

governments, or EPA consults with those governments. If EPA complies by

consulting, Executive Order 12875 requires EPA to provide to the Office

of Management and Budget a description of the extent of EPA's prior

consultation with representatives of affected state, local, and tribal

governments, the nature of their concerns, copies of written

communications from the governments, and a statement supporting the

need to issue the regulation. In addition, E.O. 12875 requires EPA to

develop an effective process permitting elected officials and other

representatives of state, local, and tribal governments ``to provide

meaningful and timely input in the development of regulatory proposals

containing significant unfunded mandates.''

Today's rule does not create a mandate on state, local or tribal

governments. The rule does not impose any enforceable duties on these

entities. Accordingly, the requirements of section 1(a) of E.O. 12875

do not apply to this rule.

C. Executive Order 13045

Protection of Children from Environmental Health Risks and Safety

Risks (62 FR 19885, April 23, 1997), applies to any rule that: (1) is

determined to be ``economically significant'' as defined under E.O.

12866, and (2) concerns an environmental health or safety risk that EPA

has reason to believe may have a disproportionate effect on children.

If the regulatory action meets both criteria, the Agency must evaluate

the environmental health or safety effects of the planned rule on

children, and explain why the planned regulation is preferable to other

potentially effective and reasonably feasible alternatives considered

by the Agency.

This rule is not subject to E.O. 13045 because it does not involve

decisions intended to mitigate environmental health or safety risks and

is not economically significant under E.O. 12866.

D. Executive Order 13084

Under E.O. 13084, EPA may not issue a regulation that is not

required by statute, that significantly affects or uniquely affects the

communities of Indian tribal governments, and that imposes substantial

direct compliance costs on those communities, unless the Federal

government provides the funds necessary to pay the direct compliance

costs incurred by the tribal governments, or EPA consults with those

governments. If EPA complies by consulting, Executive Order 13084

requires EPA to provide to the Office of Management and Budget, in a

separately identified section of the preamble to the rule, a

description of the extent of EPA's prior consultation with

representatives of affected tribal governments, a summary of the nature

of their concerns, and a statement supporting the need to issue the

regulation. In addition, Executive Order 13084 requires EPA to develop

an effective process permitting elected officials and other

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representatives of Indian tribal governments ``to provide meaningful

and timely input in the development of regulatory policies on matters

that significantly or uniquely affect their communities.''

Today's rule does not significantly or uniquely affect the

communities of Indian tribal governments. This action does not involve

or impose any requirements that affect Indian Tribes. Accordingly, the

requirements of section 3(b) of E.O. 13084 do not apply to this rule.

E. Regulatory Flexibility

The Regulatory Flexibility Act (RFA) generally requires an agency

to conduct a regulatory flexibility analysis of any rule subject to

notice and comment rulemaking requirements unless the agency certifies

that the rule will not have a significant economic impact on a

substantial number of small entities. Small entities include small

businesses, small not-for-profit enterprises, and small governmental

jurisdictions. This final rule will not have a significant impact on a

substantial number of small entities because SIP approvals under

section 110 and subchapter I, part D of the Clean Air Act do not create

any new requirements but simply approve requirements that the State is

already imposing. Therefore, because the Federal SIP approval does not

create any new requirements, I certify that this action will not have a

significant economic impact on a substantial number of small entities.

Moreover, due to the nature of the Federal-State relationship under the

Clean Air Act, preparation of flexibility analysis would constitute

Federal inquiry into the economic reasonableness of state action. The

Clean Air Act forbids EPA to base its actions concerning SIPs on such

grounds. Union Electric Co., v. U.S. EPA, 427 U.S. 246, 255-66 (1976);

42 U.S.C. 7410(a)(2).

F. Unfunded Mandates

Under sections 202 of the Unfunded Mandates Reform Act of 1995

(``Unfunded Mandates Act''), signed into law on March 22, 1995, EPA

must prepare a budgetary impact statement to accompany any proposed or

final rule that includes a Federal mandate that may result in estimated

costs to State, local, or tribal governments in the aggregate; or to

the private sector, of $100 million or more. Under section 205, EPA

must select the most cost-effective and least burdensome alternative

that achieves the objectives of the rule and is consistent with

statutory requirements. Section 203 requires EPA to establish a plan

for informing and advising any small governments that may be

significantly or uniquely impacted by the rule.

EPA has determined that the approval action promulgated does not

include a Federal mandate that may result in estimated costs of $100

million or more to either State, local, or tribal governments in the

aggregate, or to the private sector. This Federal action approves pre-

existing requirements under State or local law, and imposes no new

requirements. Accordingly, no additional costs to State, local, or

tribal governments, or to the private sector, result from this action.

G. Submission to Congress and the Comptroller General

The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the

Small Business Regulatory Enforcement Fairness Act of 1996, generally

provides that before a rule may take effect, the agency promulgating

the rule must submit a rule report, which includes a copy of the rule,

to each House of the Congress and to the Comptroller General of the

United States. EPA will submit a report containing this rule and other

required information to the U.S. Senate, the U.S. House of

Representatives, and the Comptroller General of the United States prior

to publication of the rule in the Federal Register. This rule is not a

``major rule'' as defined by 5 U.S.C. 804(2).

H. Petitions for Judicial Review

Under section 307(b)(1) of the Clean Air Act, petitions for

judicial review of this action must be filed in the United States Court

of Appeals for the appropriate circuit by August 2, 1999. Filing a

petition for reconsideration by the Administrator of this final rule

does not affect the finality of this rule for the purposes of judicial

review nor does it extend the time within which a petition for judicial

review may be filed, and shall not postpone the effectiveness of such

rule or action. This action may not be challenged later in proceedings

to enforce its requirements. (See section 307(b)(2).) EPA encourages

interested parties to comment in response to the proposed rule rather

than petition for judicial review, unless the objection arises after

the comment period allowed for in the proposal.

List of Subjects in 40 CFR Part 52

Environmental protection, Air pollution control, Incorporation by

reference, Intergovernmental relations, Nitrogen dioxide, Ozone,

Reporting and recordkeeping requirements.

Note: Incorporation by reference of the State Implementation

Plan for the State of Massachusetts and Rhode Island was approved by

the Director of the Federal Register on July 1, 1982.

Dated: May 6, 1999.

John P. DeVillars,

Regional Administrator, Region I.

Part 52 of chapter I, title 40 of the Code of Federal Regulations

is amended as follows:

PART 52--[AMENDED]

1. The authority citation for part 52 continues to read as follows:

Authority: 42 U.S.C. 7401 et seq.

Subpart W--Massachusetts

2. Section 52.1120 is amended by adding paragraph (c)(118) to read

as follows:

Sec. 52.1120 Identification of plan

* * * * * *

(c) * * *

(118) Revisions to the State Implementation Plan submitted by the

Massachusetts Department of Environmental Protection on December 19,

1997.

(i) Incorporation by reference.

(A) Letter from the Massachusetts Department of Environmental

Protection dated December 19, 1997 submitting a revision to the

Massachusetts State Implementation Plan.

(B) Regulation 310 CMR 7.27, NOX Allowance Program,

effective on June 27,1997.

(ii) Additional materials.

(A) Letter from the Massachusetts Department of Environmental

Protection dated March 9, 1998 clarifying the program implementation

process.

3. In Sec. 52.1167 Table 52.1167 is amended by adding a new state

citation for regulation 310 CMR 7.27, ``NOX Allowance

Program'' to read as follows:

Sec. 52.1167--EPA-approved Massachusetts State regulations.

* * * * *

Table 52.1167. EPA-Approved Massachusetts Regulations

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Date Federal Comments/

State citation Title/Subject submitted Date approved Register 52.1120(c) unapproved

by State by EPA citation sections

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* * * * * *

*

310 CMR 7.27.. NOX Allowance 12/19/97 6/2/99......... [Insert FR (c)(118)..... Approval of NOx

Program. citation from cap and

published allowance

date]. trading

regulations

* * * * * *

*

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Subpart OO--Rhode Island

4. Section 52.2070 is amended by adding paragraph (c)(55) to read

as follows:

Sec. 52.2070 Identification of plan

* * * * *

(c) * * *

(55) Revisions to the State Implementation Plan submitted by the

Rhode Island Department of Environmental Management on February 13,

1998 and January 20, 1999 which define alternative NOX RACT

requirements and impose seasonal limitations on the emissions of

nitrogen oxides at certain major stationary sources in Rhode Island.

(i) Incorporation by reference.

(A) Letters from the Rhode Island Department of Environmental

Management, dated February 13, 1998 and January 20, 1999 submitting

revisions to the Rhode Island State Implementation Plan.

(B) Regulation number 38, ``Nitrogen Oxides Allowance Program,'' as

adopted on May 21, 1998, submitted on effective on June 10, 1998.

(C) An administrative consent agreement between Rhode Island

Department of Environmental Management and Rhode Island Economic

Development Corporation, file no. 96-04-AP, adopted and effective on

September 2, 1997.

5. In Sec. 52.2081, Table 52.2081 is amended by revising the state

citation for Regulation No. 27 and by adding a new state citation for

Regulation No. 38, ``Nitrogen Oxides Allowance Program'' to read as

follows:

Sec. 52.2081--EPA--approved Rhode Island state regulations.

* * * * *

Table 52.2081.--EPA-Approved Rules and Regulations

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Date Comments/

State citation Title/subject adopted by Date approved by FR citation 52.2070 Unapproved

State EPA sections

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* * * * * *

*

No. 27........ Control of 9/2/97 6/2/99.......... [Insert FR (c)(55)...... Establishes

Nitrogen Oxides citation from alternative NOx

Emissions. published RACT for Rhode

date]. Island Economic

Development

Corporation in

North

Kingstown, RI

* * * * * *

*

No. 38........ Nitrogen Oxides 5/21/98 6/2/99.......... [Insert FR (c)(55)...... Adds ozone

Allowance citation from season NOx

Program. published emission

date]. limitations at

certain

stationary

sources.

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*

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[FR Doc. 99-13026 Filed 6-1-99; 8:45 am]

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