Approval and Promulgation of Air Quality Implementation Plans; Pennsylvania; Nitrogen Oxides Allowance Requirements

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[PA112-4084; FRL-6229-2]

Approval and Promulgation of Air Quality Implementation Plans;

Pennsylvania; Nitrogen Oxides Allowance Requirements

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: EPA is proposing to approve a State Implementation Plan (SIP)

revision submitted by the Commonwealth of Pennsylvania. This revision

implements Pennsylvania's portion of the Ozone Transport Commission's

(OTC) September 27, 1994 Memorandum of Understanding (MOU) including a

regional nitrogen oxides (NOX) cap and trade program that

will significantly reduce NOX emissions generated within the

Ozone Transport Region (OTR). The intended effect of this action is to

propose approval of Pennsylvania's regulations implementing Phase II of

the OTC's MOU to reduce nitrogen oxides.

DATES: Written comments must be received on or before March 4, 1999.

ADDRESSES: Written comments may be mailed to David L. Arnold, Chief,

Ozone & Mobile Sources Branch, Mailcode 3AP21, U.S. EPA, Region III,

1650 Arch Street, Philadelphia, PA 19103. Copies of the documents

relevant to this action are available for public inspection during

normal business hours at the Air

[[Page 5016]]

Protection Division, EPA, Region III, 1650 Arch Street, Philadelphia,

PA 19103 and Pennsylvania Department of Environmental Protection,

Bureau of Air Quality, P.O. Box 8468, 400 Market Street, Harrisburg, PA

17105.

FOR FURTHER INFORMATION CONTACT: Cristina Fernandez, (215) 814-2178, or

by e-mail at [email protected]. While information may be

requested via e-mail, comments must be submitted in writing to the

above Region III address.

SUPPLEMENTARY INFORMATION: On December 19, 1997, the Pennsylvania

Department of Environmental Protection (PADEP) submitted a revision to

its State Implementation Plan (SIP). The revision consists of

amendments to Title 25 of the Pennsylvania Code including Chapter

121.01--Definitions and Chapter 123--NOX Allowance

Requirements.

I. Background

The Ozone Transport Commission (OTC) adopted a Memorandum of

Understanding (MOU) on September 27, 1994, committing the signatory

states to the development and proposal of a two phase region-wide

reduction in nitrogen oxides (NOX) emissions by 1999 and

2003, respectively. As reasonably available control technology (RACT)

to reduce NOX emissions was required to be implemented by

May of 1995, the MOU refers to the reduction in NOX

emissions to be achieved by 1999 as Phase II; and the reduction in

NOX emissions to be achieved by 2003 as Phase III. The OTC

states include Maine, New Hampshire, Vermont, Massachusetts,

Connecticut, Rhode Island, New York, New Jersey, Pennsylvania,

Maryland, Delaware, the northern counties of Virginia and the District

of Columbia. All of the OTC states, with the exception of the

Commonwealth of Virginia, signed the September 27, 1994 MOU. The OTC

MOU requires a reduction in ozone season NOX emissions from

utility and large industrial combustion facilities 2 within the Ozone

Transport Region (OTR) in order to further the effort to achieve the

health-based National Ambient Air Quality Standard (NAAQS) for ozone.

In the MOU, the OTC states agreed to propose regulations for the

control of NOX emissions in accordance with the following

guidelines:

1. The level of NOX required would be established from a

1990 baseline emissions level.

2. The reduction would vary by location, or zone, and would be

implemented in two phases utilizing a region wide trading program.

3. The reduction would be determined based on the less stringent of

each of the following:

a. By May 1, 1999, the affected facilities in the inner zone shall

reduce their rate of NOX emissions by 65% from baseline, or

emit NOX at a rate no greater than 0.20 pounds per million

Btu. (This is a Phase II requirement.)

b. By May 1, 1999, the affected facilities in the outer zone shall

reduce their rate of NOX emissions by 55% from baseline, or

shall emit NOX at a rate no greater than 0.20 pounds per

million Btu. (This is a Phase II requirement.)

c. By May 1, 2003, the affected facilities in the inner and outer

zones shall reduce their rate of NOX emissions by 75% from

baseline, or shall emit NOX at a rate no greater than 0.15

pounds per million Btu. (This is a Phase III requirement.)

d. By May 1, 2003, the affected facilities in the Northern zone

shall reduce their rate of NOX emissions by 55% from

baseline, or shall emit NOX at a rate no greater than 0.20

pounds per million Btu. (This is a Phase III requirement.)

A Task Force of representatives from the OTC states, organized

through the Northeast States for Coordinated Air Use Management

(NESCAUM) and the Mid-Atlantic Regional Air Management Association

(MARAMA), was charged with the task of developing a Model Rule that

would implement the program defined by the OTC MOU. During 1995 and

1996, the NESCAUM/MARAMA NOX Budget Task Force worked with

EPA and developed a model rule as a template for OTC states to adopt

their own rules to implement the OTC MOU. The model was issued May 1,

1996. The model rule was developed for the OTC states to implement the

Phase II reductions called for in the MOU to be achieved by May 1,

1999. The model rule does not include the implementation of Phase III.

II. Summary of SIP Revision

Pennsylvania's Chapters 121.01 Definitions and 123--Nitrogen Oxides

Allowance Requirements are based upon and are consistent with the

``NESCAUM/MARAMA NOX Budget Rule'' issued in May 1, 1996.

The model rule was developed by the states in the OTR using the EPA's

economic incentive rules (59 FR 16690) which were published on April 7,

1994, as the general regulatory framework.

Pennsylvania Chapter 121.01 has been amended to include definitions

for the terms used in Chapter 123--NOX Allowances

Requirements. Chapter 123--NOX Allowances Requirements and

its Appendix A include reduction requirements to implement Phase II of

the OTC's MOU. The regulations include provisions for a regional cap

and trade program, and establish NOX emission allowances for

each NOX control period beginning May 1, 1999 through the

NOX control period ending September 30, 2002. The budgeted

sources and their NOX allowances allocations are identified.

Pennsylvania Chapter 123--NOX Allowances Requirements is

divided into twenty sections: (1) Purpose; (2) Source NOX

allowance requirements and NOX allowance control period; (3)

General NOX allowance provisions; (4) Source authorized

account representative requirements; (5) Allowance Tracking System

(NATS) provisions; (6) NOX allowance transfer protocol; (7)

NOX allowance transfer procedures; (8) Source emissions

monitoring requirements; (9) Source emissions reporting requirements;

(10) Source compliance requirements; (11) Failure to meet source

compliance requirements; (12) Source operating permit provision

requirements; (13) source recordkeeping requirements; (14) General

NOX allocation provisions; (15) Initial NOX

allowance NOX allocations; (16) Source opt-in provisions;

(17) New NOX affected source provisions; (18) Emission

reduction credit provisions; (19) Bonus NOX allowance

awards; (20) Audit. Appendix A to Chapter 123 is where the budgeted

sources and their NOX allowance allocations are identified.

III. Proposed Action

EPA is proposing to approve the Pennsylvania SIP revision for

Chapter 121.01--Definitions and Chapter 123--NOX Allowance

Requirements, submitted on December 19, 1997 implementing Phase II of

the OTC's MOU to reduce nitrogen oxides. EPA is soliciting public

comments on the issues discussed in this document or on other relevant

matters. These comments will be considered before taking final action.

Interested parties may participate in the Federal rulemaking procedure

by submitting written comments to the EPA Regional office listed in the

ADDRESSES section of this document. A more detailed description of the

state submittal and EPA's evaluation are included in a Technical

Support Document (TSD) prepared in support of this rulemaking action. A

copy of the TSD is available upon request from the EPA Regional Office

listed in the ADDRESSES section of this document.

[[Page 5017]]

IV. Administrative Requirements

A. Executive Orders 12866

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

regulatory action from review under 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. If EPA complies by consulting, E.O. 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

Executive Order 13045, entitled ``Protection of Children from

Environmental Health Risks and Safety Risks'' (62 FR 19885, April 23,

1997), applies to any rule that the EPA determines (1) is

``economically significant,'' as defined under Executive Order 12866,

and (2) the environmental health or safety risk addressed by the rule

has 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

proposed rule is not subject to Executive Order 13045 because it is not

an economically significant regulatory action as defined by Executive

Order 12866, and it does not address an environmental health or safety

risk that would have a disproportionate effect on children.

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. If EPA complies by

consulting, E.O. 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 and

other 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 Act

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 proposed 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 a 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 section 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

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

or to 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 proposed approval action does not include a Federal mandate that

may result in estimated annual 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 to approve Pennsylvania's

NOX Allowance Requirements regulations to implement Phase II

of the OTC MOU.

List of Subjects in 40 CFR Part 52

Environmental protection, Air pollution control, Nitrogen dioxide,

Ozone, Reporting and recordkeeping requirements.

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

Dated: January 22, 1999.

W. Michael McCabe,

Regional Administrator, Region III.

[FR Doc. 99-2445 Filed 2-1-99; 8:45 am]

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