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

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URL: https://www.frixlaw.com/law-library/documents/fr%3A99-2445

## Record

- **Collection:** Federal Register
- **Document type:** Proposed Rule
- **Published:** February 2, 1999
- **Citation:** 64 FR 5015

## Text

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]
BILLING CODE 6560-50-P

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A99-2445. Public record. Not legal advice.