[Federal Register Volume 72, Number 189 (Monday, October 1, 2007)]
[Proposed Rules]
[Pages 55723-55729]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-19346]
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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 52
[Docket No. EPA-R02-OAR-2007-0913; FRL-8474-9]
Approval and Promulgation of Implementation Plans; New York:
Clean Air Interstate Rule
AGENCY: Environmental Protection Agency (EPA).
ACTION: Proposed rule.
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SUMMARY: EPA is proposing to approve a revision to the New York State
Implementation Plan (SIP) that addresses the requirements of EPA's
Clean Air Interstate Rule (CAIR), promulgated on May 12, 2005 and
subsequently revised on April 28, 2006, and December 13, 2006. EPA is
proposing to determine that the SIP revision fully implements the CAIR
requirements for New York. EPA will also withdraw the CAIR Federal
Implementation Plans (CAIR FIPs) concerning sulfur dioxide
(SO2), nitrogen oxides (NOX) annual, and
NOX ozone season emissions for New York pending final
approval of New York's SIP revision. The CAIR FIPs for all states in
the CAIR region were promulgated on April 28, 2006 and subsequently
revised on December 13, 2006.
The SIP revision that EPA is proposing to approve will also satisfy
New York's 110(a)(2)(D)(i) obligations to submit a SIP revision that
contains adequate provisions to prohibit air emissions from adversely
affecting another state's air quality through interstate transport.
CAIR requires states to reduce emissions of SO2 and
NOX that significantly contribute to and interfere with the
maintenance of the national ambient air quality standards for fine
particulates and/or ozone in any downwind state. CAIR establishes state
budgets for SO2 and NOX and requires states,
which EPA has concluded contribute to nonattainment in downwind states,
to submit SIP revisions that implement these budgets. States have the
flexibility to choose the control measures to adopt to achieve the
budgets, including participating in the EPA-administered cap-and-trade
programs. In the SIP revision that EPA is proposing to approve, New
York would meet CAIR requirements by participating in the EPA-
administered cap-and-trade programs addressing SO2,
NOX annual, and NOX ozone season emissions.
DATES: Comments must be received on or before October 31, 2007.
ADDRESSES: Submit your comments, identified by Docket ID No. EPA-R02-
OAR-2007-0913, by one of the following methods:
1. www.regulations.gov: Follow the on-line instructions for
submitting comments.
2. E-mail: [email protected].
3. Fax: (212) 637-3901.
4. Mail: EPA-R02-OAR-2007-0913, Raymond Werner, Chief, Air Programs
Branch, Environmental Protection Agency, Region 2 Office, 290 Broadway,
25th Floor, New York, New York 10007-1866.
[[Page 55724]]
5. Hand Delivery or Courier: Raymond Werner, Chief, Air Programs
Branch, Environmental Protection Agency, Region 2 Office, 290 Broadway,
25th Floor, New York, New York 10007-1866. Such deliveries are only
accepted during the Regional Office's normal hours of operation. The
Regional Office's official hours of business are Monday through Friday,
8:30 to 4:30, excluding federal holidays.
Instructions: Direct your comments to Docket ID No. EPA-R02-OAR-
2007-0913. EPA's policy is that all comments received will be included
in the public docket without change and may be made available on-line
at http://www.regulations.gov, including any personal information
provided, unless the comment includes information claimed to be
Confidential Business Information (CBI) or other information whose
disclosure is restricted by statute. Do not submit through http://www.regulations.gov or e-mail, information that you consider to be CBI
or otherwise protected. The http://www.regulations.gov Web site is an
``anonymous access'' system, which means EPA will not know your
identity or contact information unless you provide it in the body of
your comment. If you send an e-mail comment directly to EPA without
going through http://www.regulations.gov, your e-mail address will be
automatically captured and included as part of the comment that is
placed in the public docket and made available on the Internet. If you
submit an electronic comment, EPA recommends that you include your name
and other contact information in the body of your comment and with any
disk or CD-ROM you submit. If EPA cannot read your comment due to
technical difficulties and cannot contact you for clarification, EPA
may not be able to consider your comment. Electronic files should avoid
the use of special characters and any form of encryption and should be
free of any defects or viruses. For additional information about EPA's
public docket visit the EPA Docket Center homepage at http://www.epa.gov/epahome/dockets.htm.
Docket: All documents in the electronic docket are listed in the
http://www.regulations.gov index. Although listed in the index, some
information is not publicly available, i.e., CBI or other information
whose disclosure is restricted by statute. Certain other material, such
as copyrighted material, is not placed on the Internet and will be
publicly available only in hard copy form. Publicly available docket
materials are available either electronically in http://www.regulations.gov or in hard copy at the Air Programs Branch,
Environmental Protection Agency, Region 2 Office, 290 Broadway, 25th
Floor, New York, New York 10007-1866. EPA requests that if at all
possible, you contact the person listed in the FOR FURTHER INFORMATION
CONTACT section to schedule your inspection. The Regional Office's
official hours of business are Monday through Friday, 8:30 to 4:30,
excluding federal holidays.
FOR FURTHER INFORMATION CONTACT: If you have questions concerning
today's proposal, please contact Kenneth Fradkin, Air Programs Branch,
Environmental Protection Agency, Region 2 Office, 290 Broadway, 25th
Floor, New York, New York 10007-1866. The telephone number is (212)
637-3702. Mr. Fradkin can also be reached via electronic mail at
[email protected].
SUPPLEMENTARY INFORMATION:
Table of Contents
I. What Action Is EPA Proposing To Take?
II. What Is the Regulatory History of CAIR and the CAIR FIPs?
III. What Are the General Requirements of CAIR and the CAIR FIPs?
IV. What Are the Types of CAIR SIP Submittals?
V. Analysis of New York's CAIR SIP Submittal
A. State Budgets for Allowance Allocations
B. CAIR Cap-and-Trade Programs
C. Applicability Provisions for Non-EGU NOX SIP Call
Sources
D. NOX Allowance Allocations
E. Allocation of NOX Allowances From Compliance
Supplement Pool
F. Individual Opt-In Units
G. Satisfying Section 110(a)(2)(D)(i) of the Clean Air Act
H. What Other Clarifications Should New York Make in Its
Program?
VI. Proposed Actions
VII. Statutory and Executive Order Reviews
I. What Action Is EPA Proposing To Take?
EPA is proposing to approve a revision to New York's SIP that was
adopted on August 28, 2007 and submitted on September 17, 2007. New
York's revision addresses the Clean Air Interstate Rule (CAIR) and
obligations under 110(a)(2)(D)(i) for the 8-hour ozone and fine
particle (PM2.5) National Ambient Air Quality Standards
(NAAQS). New York had submitted an earlier version of the revision on
March 30, 2007. EPA is proposing to approve the September revision only
since it contains the version of New York's CAIR rulemaking that was
adopted by New York's Environmental Control Board (ECB) on August 28,
2007.
In its SIP revision, New York would meet CAIR requirements by
requiring certain electric generating units (EGUs) to participate in
the EPA-administered State CAIR cap-and-trade programs addressing
SO2, NOX annual, and NOX ozone season
emissions. EPA is proposing to determine that the SIP, as revised, will
meet the applicable requirements of CAIR. Any final action on the SIP
will be taken by the Regional Administrator for Region 2. In the event
the proposed approval is finalized, the Administrator of EPA will also
issue a final rule to withdraw the FIPs concerning SO2,
NOX annual, and NOX ozone season emissions for
New York. This action will delete and reserve 40 CFR 52.1684 and 40 CFR
52.1685, relating to the CAIR FIP obligations for New York. The
withdrawal of the CAIR FIPs for New York is a conforming amendment that
must be made once the SIP is approved because EPA's authority to issue
the FIPs was premised on a deficiency in the SIP for New York. Once the
SIP is fully approved, EPA no longer has authority for the FIPs. Thus,
EPA will not have the option of maintaining the FIPs following the full
SIP approval. Accordingly, EPA does not intend to offer an opportunity
for a public hearing or an additional opportunity for written public
comment on the withdrawal of the FIPs.
In addition, EPA is also proposing approval of a revision to New
York's SIP to address the requirements of section 110(a)(2)(D)(i) of
the Clean Air Act (CAA). This section of the Act requires each state to
submit a SIP that prohibits emissions that could adversely affect
another state. The SIP must prevent sources in the state from emitting
pollutants in amounts that will: (1) Contribute significantly to
downwind nonattainment of the NAAQS, (2) interfere with maintenance of
the NAAQS, (3) interfere with provisions to prevent significant
deterioration of air quality, and (4) interfere with efforts to protect
visibility.
II. What Is the Regulatory History of the CAIR and the CAIR FIPs?
The Clean Air Interstate Rule (CAIR) was published by EPA on May
12, 2005 (70 FR 25162). In this rule, EPA determined that 28 states and
the District of Columbia contribute significantly to nonattainment and
interfere with maintenance of the national ambient air quality
standards (NAAQS) for fine particles (PM2.5) and/or 8-hour
ozone in downwind states in the eastern part of the country. As a
result, EPA required those upwind states to revise their SIPs to
include control measures that reduce emissions
[[Page 55725]]
of SO2, which is a precursor to PM2.5 formation,
and/or NOX, which is a precursor to both ozone and
PM2.5 formation. For jurisdictions that contribute
significantly to downwind PM2.5 nonattainment, CAIR sets
annual state-wide emission reduction requirements (i.e., budgets) for
SO2 and annual state-wide emission reduction requirements
for NOX. Similarly, for jurisdictions that contribute
significantly to 8-hour ozone nonattainment, CAIR sets state-wide
emission reduction requirements for NOX for the ozone season
(May 1st to September 30th). Under CAIR, states may implement these
reduction requirements by participating in the EPA-administered cap-
and-trade programs or by adopting any other control measures.
CAIR provides an explanation of what states must include in SIPs to
address the requirements of section 110(a)(2)(D) of the CAA with regard
to interstate transport with respect to the 8-hour ozone and PM2.5
NAAQS. EPA made national findings, effective on May 25, 2005, that the
states had failed to submit SIPs meeting the requirements of section
110(a)(2)(D). The SIPs were due in July 2000, three years after the
promulgation of the 8-hour ozone and PM2.5 NAAQS. These
findings started a 2-year clock for EPA to promulgate a Federal
Implementation Plan (FIP) to address the requirements of section
110(a)(2)(D). Under CAA section 110(c)(1), EPA may issue a FIP anytime
after such findings are made and must do so within two years unless a
SIP revision correcting the deficiency is approved by EPA before the
FIP is promulgated.
On April 28, 2006, EPA promulgated FIPs for all states covered by
CAIR in order to ensure the emissions reductions required by CAIR are
achieved on schedule. Each CAIR state is subject to the FIPs until the
state fully adopts, and EPA approves, a SIP revision meeting the
requirements of CAIR. The CAIR FIPs require EGUs to participate in the
EPA-administered CAIR SO2, NOX annual, and
NOX ozone season trading programs, as appropriate. The CAIR
FIP SO2, NOX annual, and NOX ozone
season trading programs impose essentially the same requirements as,
and are integrated with, the respective CAIR SIP trading programs. The
integration of the FIP and SIP trading programs means that these
trading programs will work together to create effectively a single
trading program for each regulated pollutant (SO2, NOX
annual, and NOX ozone season) in all states covered by the
CAIR FIP or SIP trading program for that pollutant. The CAIR FIPs also
allow states to submit abbreviated SIP revisions that, if approved by
EPA, will automatically replace or supplement certain CAIR FIP
provisions (e.g., the methodology for allocating NOX
allowances to sources in the state), while the CAIR FIP remains in
place for all other provisions.
On April 28, 2006, EPA published two additional CAIR-related final
rules that added the States of Delaware and New Jersey to the list of
states subject to CAIR for PM2.5, and without making any
substantive changes to the CAIR requirements, announced EPA's final
decisions on reconsideration of five issues, including certain
technical, allocation, compliance, cost-effectiveness, and timing
issues, as well as a decision specific to Florida.
III. What Are the General Requirements of CAIR and the CAIR FIPs?
CAIR established state-wide emission budgets for SO2 and
NOX and is to be implemented in two phases. The first phase
of NOX reductions starts in 2009 and continues through 2014,
while the first phase of SO2 reductions starts in 2010 and
continues through 2014. The second phase of reductions for both
NOX and SO2 starts in 2015 and continues
thereafter. CAIR requires states to implement the budgets by either:
(1) Requiring EGUs to participate in the EPA-administered cap-and-trade
programs; or (2) adopting other control measures of the state's
choosing and demonstrating that such control measures will result in
compliance with the applicable state SO2 and NOX
budgets.
The May 12, 2005 and April 28, 2006 CAIR rules provide model rules
that states must adopt (with certain limited changes, if desired) if
they want to participate in the EPA-administered trading programs.
With two exceptions, only states that choose to meet the
requirements of CAIR through methods that exclusively regulate EGUs are
allowed to participate in the EPA-administered trading programs. One
exception is for states that adopt the opt-in provisions of the model
rules to allow non-EGUs individually to opt into the EPA-administered
trading programs. The other exception is for states that include all
non-EGUs from their NOX SIP Call trading programs in their
CAIR NOX ozone season trading programs.
IV. What Are the Types of CAIR SIP Submittals?
States have the flexibility to choose the type of control measures
they will use to meet the requirements of CAIR. EPA anticipates that
most states will choose to meet the CAIR requirements by selecting an
option that requires EGUs to participate in the EPA-administered CAIR
cap-and-trade programs. For such states, EPA has provided two
approaches for submitting and obtaining approval for CAIR SIP
revisions. States may submit full SIP revisions that adopt the model
CAIR cap-and-trade rules. If approved, these SIP revisions will fully
replace the CAIR FIPs. Alternatively, states may submit abbreviated SIP
revisions. These SIP revisions will not replace the CAIR FIPs; however,
the CAIR FIPs provide that, when approved, the provisions in these
abbreviated SIP revisions will be used instead of or in conjunction
with, as appropriate, the corresponding provisions of the CAIR FIPs
(e.g., the NOX allowance allocation methodology).
A state submitting a full SIP revision may either adopt regulations
that are substantively identical to the model rules or incorporate by
reference the model rules. CAIR provides that states may only make
limited changes to the model rules if the states want to participate in
the EPA-administered trading programs. A full SIP revision may change
the model rules only by altering their applicability and allowance
allocation provisions to:
1. Include NOX SIP Call trading sources that are not
EGUs under CAIR in the CAIR NOX ozone season trading
program;
2. Provide for state allocation of NOX annual or ozone
season allowances using a methodology chosen by the State;
3. Provide for state allocation of NOX annual allowances
from the compliance supplement pool (CSP) using the state's choice of
allowed, alternative methodologies; or
4. Allow units that are not otherwise CAIR units to opt
individually into the CAIR SO2, NOX annual, or
NOX ozone season trading programs under the opt-in
provisions in the model rules.
An approved CAIR full SIP revision addressing EGUs' SO2,
NOX annual, or NOX ozone season emissions will
replace the CAIR FIP for that state for the respective EGU emissions.
V. Analysis of New York's CAIR SIP Submittal
New York has submitted regulations in its SIP revision, Title 6 of
the New York Code of Rules and Regulations (NYCRR), Parts 243, 244, and
245, to implement the CAIR Cap-and-Trade Programs in New York. The SIP
revision also addresses outstanding obligations under 110(a)(2)(D)(i).
The acceptability
[[Page 55726]]
of New York's submittal is discussed below.
A. State Budgets for Allowance Allocations
The CAIR NOX annual and ozone season budgets were
developed from historical heat input data for EGUs. Using these data,
EPA calculated annual and ozone season regional heat input values,
which were multiplied by 0.15 lb/mmBtu, for phase 1, and 0.125 lb/
mmBtu, for phase 2, to obtain regional NOX budgets for 2009-
2014 and for 2015 and thereafter, respectively. EPA derived the State
NOX annual and ozone season budgets from the regional
budgets using state heat input data adjusted by fuel factors.
The CAIR State SO2 budgets were derived by discounting
the tonnage of emissions authorized by annual allowance allocations
under the Acid Rain Program under title IV of the CAA. Under CAIR, each
allowance allocated in the Acid Rain Program for the years in phase 1
of CAIR (2010 through 2014) authorizes 0.5 ton of SO2
emissions in the CAIR trading program, and each Acid Rain Program
allowance allocated for the years in phase 2 of CAIR (2015 and
thereafter) authorizes 0.35 ton of SO2 emissions in the CAIR
trading program.
In today's action, EPA is proposing approval of New York's SIP
revision that adopts the budgets established for the State in CAIR. The
Statewide CAIR NOX ozone season budget is 20,632 tons of
NOX ozone season emissions for phase 1 (2009-2014) and
17,193 tons for phase 2 (2015 and thereafter), plus an additional
10,459 tons of NOX ozone season emissions for both phases 1
and 2 to account for NOX ozone season emissions from ``non-
EGU'' units from the New York NOX SIP Call trading program
(see V.B. below). The total NOX ozone season budget is
therefore 31,091 tons of NOX ozone season emissions for CAIR
phase 1 and 27,652 tons for CAIR phase 2. The Statewide CAIR
NOX annual budget is 45,617 for CAIR phase 1 and 38,014 for
CAIR phase 2 for NOX annual emissions. The Statewide CAIR
SO2 trading program budget is 135,139 for phase 1 (2010-
2014) and 94,597 for phase 2 (2015 and thereafter) tons for
SO2 emissions. New York's SIP revision sets these budgets as
the total amount of allowances available for allocation for each year
under the EPA-administered cap-and-trade programs.
B. CAIR Cap-and-Trade Programs
The CAIR NOX annual and ozone-season model trading rules
both largely mirror the structure of the NOX SIP Call model
trading rule in 40 CFR part 96, subparts A through I. While the
provisions of the NOX annual and ozone-season model rules
are similar, there are some differences. For example, the
NOX annual model rule (but not the NOX ozone
season model rule) provides for a Compliance Supplement Pool (CSP),
which is discussed below and under which allowances may be awarded for
early reductions of NOX annual emissions. As a further
example, the NOX ozone season model rule reflects the fact
that the CAIR NOX ozone season trading program replaces the
NOX SIP Call trading program after the 2008 ozone season and
is coordinated with the NOX SIP Call program. The
NOX ozone season model rule provides incentives for early
emissions reductions by allowing banked, pre-2009 NOX SIP
Call allowances to be used for compliance in the CAIR NOX
ozone-season trading program. In addition, states have the option of
continuing to meet their NOX SIP Call requirement by
participating in the CAIR NOX ozone season trading program
and including all their NOX SIP Call trading sources in that
program.
The provisions of the CAIR SO2 model rule are also
similar to the provisions of the NOX annual and ozone season
model rules. However, the SO2 model rule is coordinated with
the ongoing Acid Rain SO2 cap-and-trade program under CAA
title IV. As discussed in Section V.A. above, the SO2 model
rule uses the title IV allowances for compliance, with each allowance
allocated for 2010-2014 authorizing only 0.50 ton of emissions and each
allowance allocated for 2015 and thereafter authorizing only 0.35 ton
of emissions. Banked title IV allowances allocated for years before
2010 can be used at any time in the CAIR SO2 cap-and-trade
program, with each such allowance authorizing 1 ton of emissions. Title
IV allowances are to be freely transferable among sources covered by
the Acid Rain Program and sources covered by the CAIR SO2
cap-and-trade program.
In the SIP revision, New York chooses to implement its CAIR budgets
by requiring EGUs to participate in EPA-administered cap-and-trade
programs for SO2, NOX annual, and NOX
ozone season emissions. New York has adopted a full SIP revision that
adopts, with certain allowed changes discussed below, the CAIR model
cap-and-trade rules for SO2, NOX annual, and NOX
ozone season emissions.
C. Applicability Provisions for Non-EGU NOX SIP Call Sources
In general, the CAIR model trading rules apply to any stationary,
fossil-fuel-fired boiler or stationary, fossil-fuel-fired combustion
turbine serving at any time, since the later of November 15, 1990 or
the start-up of the unit's combustion chamber, a generator with
nameplate capacity of more than 25 MWe producing electricity for sale.
States have the option of bringing in, for the CAIR NOX
ozone season program only, those units in the State's NOX
SIP Call trading program that are not EGUs as defined under CAIR. EPA
advises states exercising this option to add the applicability
provisions in the State's NOX SIP Call trading rule for non-
EGUs to the applicability provisions in 40 CFR 96.304 of EPA's model
trading rule. Under this option, the CAIR NOX ozone season
program must cover all large industrial boilers and combustion
turbines, as well as any small EGUs (i.e. units serving a generator
with a nameplate capacity of 25 MWe or less) that the state currently
requires to be in the NOX SIP Call trading program.
New York has chosen to expand the applicability provisions of the
CAIR NOX ozone season trading program to include all non-
EGUs currently in the State's NOX SIP Call trading program.
D. NOX Allowance Allocations
Under the NOX allowance allocation methodology in the
CAIR model trading rules and in the CAIR FIP, NOX annual and
ozone season allowances are allocated to units that have operated for
five years, based on heat input data from a three-year period that are
adjusted for fuel type by using fuel factors of 1.0 for coal, 0.6 for
oil, and 0.4 for other fuels. The CAIR model trading rules and the CAIR
FIPs also provide a new unit set-aside from which units without five
years of operation are allocated allowances based on the units' prior
year emissions.
States may establish in their SIP submissions a different
NOX allowance allocation methodology to allocate allowances
to sources in the states if certain requirements are met. Primarily,
the timing of the submission of NOX annual and
NOX ozone season CAIR units' allocations to the
Administrator for recordation and the total amount of NOX
annual and NOX ozone season allowances allocated for each
control period must be consistent with the applicable requirements in
40 CFR 51.123(o) and (aa). In adopting alternative NOX
allowance allocation methodologies, states have flexibility with regard
to:
1. The cost to recipients of the allowances, which may be
distributed for free or auctioned;
2. The frequency of allocations;
[[Page 55727]]
3. The basis for allocating allowances, which may be distributed,
for example, based on historical heat input or electric and thermal
output; and
4. The use of allowance set-asides and, if used, their size.
New York has chosen to replace the provisions of the CAIR
NOX annual and ozone-season model trading rules concerning
the allocation of NOX annual and ozone-season allowances
with its own methodology.
New York's allocation methodology is based on the highest heat
input (EGUs and non-EGUs) experienced by a CAIR unit for any single
control period among the three most recent control periods, for which
data is available. The number of allocations to be allocated to each
unit will not exceed the unit's control period potential to emit
(CPPTE), which is defined as the maximum capacity of a CAIR
NOX unit to emit NOX under its physical and
operational design during a control period. All fuel types are weighed
evenly without adjustment of heat input data for fuel type.
New York is establishing new CAIR NOX Ozone Season and
CAIR NOX annual set-aside accounts for units commencing
operation on/or after May 1, 2003 for CAIR NOX Ozone Season
units, and on/or after January 1, 2003 for CAIR NOX annual
units. The new unit set-aside accounts will consist of five percent of
the statewide CAIR NOX ozone season and NOX
annual budgets for both phases of the CAIR program. Therefore, the new
unit set-aside includes 1,554 CAIR NOX ozone-season
allowances during phase 1, and 1,382 CAIR NOX ozone-season
allowances during phase 2; and 2,280 CAIR NOX annual
allowances during phase 1 and 1,900 CAIR NOX annual
allowances during phase 2 .
If the number of requests for allowances exceeds the number of
allowances in the new set-aside account, New York will reserve
allowances in the order in which approvable requests were submitted.
Requests will be considered simultaneous if received in the same
calendar quarter. Should approvable requests in excess of the set-aside
be submitted in the same quarter, New York will reserve allowances for
those units in an amount proportional to the allowances requested. Any
unused allowances from the set-aside will flow back to existing sources
as additional allocations in proportion to their original allocation.
New York will distribute all allowances at no cost with the
exception of allowances held in the Energy Efficiency and Renewable
Energy Technology (EERET) Account. New York is allocating ten percent
of emission allowances to the Energy Efficiency and Renewable Energy
Technology (EERET) Account, which will be administered by the New York
State Energy Research and Development Authority (NYSERDA). Allowances
will be sold or distributed in order to provide funds to be used to
support programs that encourage and foster energy efficiency measures
and renewable energy technologies and cover reasonable costs associated
with the administration and evaluation of these programs by NYSERDA.
Any EERET allowances that are not sold or distributed by NYSERDA within
12 months of the initial allocation to the EERET account, will flow
back to the New York Department of Environmental Conservation and be
redistributed to existing CAIR units.
E. Allocation of NOX Allowances From Compliance Supplement
Pool
The CAIR establishes a compliance supplement pool (CSP) to provide
an incentive for early reductions in NOX annual emissions.
The CSP consists of 200,000 CAIR NOX annual allowances of
vintage 2009 for the entire CAIR region, and a state's share of the CSP
is based upon the projected magnitude of the emission reductions
required by CAIR in that state. States may distribute CSP allowances,
one allowance for each ton of early reduction, to sources that make
NOX reductions during 2007 or 2008 beyond what is required
by any applicable state or Federal emission limitation. States also may
distribute CSP allowances based upon a demonstration of need for an
extension of the 2009 deadline for implementing emission controls.
The CAIR annual NOX model trading rule establishes
specific methodologies for allocations of CSP allowances. States may
choose an allowed, alternative CSP allocation methodology to be used to
allocate CSP allowances to sources in the states.
As a result of emission reductions already achieved in New York,
the state will not receive any CSP allowances. Therefore, New York will
not modify the provisions of the CAIR NOX annual model
trading rule concerning the allocation of allowances from the CSP.
F. Individual Opt-In Units
The opt-in provisions of the CAIR SIP model trading rules allow
certain non-EGUs (i.e., boilers, combustion turbines, and other
stationary fossil-fuel-fired devices) that do not meet the
applicability criteria for a CAIR trading program to participate
voluntarily in (i.e., opt into) one or more of the CAIR trading
programs. In order to qualify to opt into a CAIR trading program, a
unit must vent all emissions through a stack and be able to meet
monitoring, recordkeeping, and recording requirements of 40 CFR part
75. Owners and operators seeking to opt a unit into a CAIR trading
program must apply for a CAIR opt-in permit. If the unit is issued a
CAIR opt-in permit, the unit becomes a CAIR unit, is allocated
allowances, and must meet the same allowance-holding and emissions
monitoring and reporting requirements as other units subject to the
CAIR trading program. The opt-in provisions provide for two
methodologies for allocating allowances for opt-in units, one
methodology that applies to opt-in units in general and a second
methodology that allocates allowances only to opt-in units that the
owners and operators intend to repower before January 1, 2015.
States have several options concerning the opt-in provisions.
States may adopt the CAIR opt-in provisions entirely or may adopt them
but exclude one of the methodologies for allocating allowances. States
may also decide to adopt none of the opt-in provisions.
New York has chosen to allow non-EGUs to opt into the CAIR
NOX annual, CAIR NOX ozone season, and CAIR
SO2 trading programs. New York's program allows for both
opt-in allocation methods as indicated in the model rule for opt-in
units in general and for opt-in units that the owners and operators
intend to repower before January 1, 2015.
G. Satisfying Section 110(a)(2)(D)(i) of the Clean Air Act
Section 110(a)(2)(D)(i) of the CAA requires each state to submit a
SIP that prohibits emissions that could adversely affect another state.
The SIP must prevent sources in the state from emitting pollutants in
amounts that will: (1) Contribute significantly to downwind
nonattainment of the NAAQS, (2) interfere with maintenance of the
NAAQS, (3) interfere with provisions to prevent significant
deterioration of air quality, and (4) interfere with efforts to protect
visibility.
EPA issued guidance on August 15, 2006, relating to SIP submissions
to meet the requirements of section 110(a)(2)(D)(i). As discussed
below, New York's SIP revision is consistent with the guidance and the
statute.
New York addresses the first two of these four elements by
complying with the requirements of CAIR. New York satisfies these
requirements either by
[[Page 55728]]
relying on the existing CAIR FIPs, or through approval of this SIP
revision.
The third element New York addresses is prevention of significant
deterioration (PSD). In accordance with the guidance issued on August
15, 2006, states may continue to rely on their existing Nonattainment
New Source Review (NNSR) and PSD permitting programs to prevent
significant deterioration of air quality within their own boundaries
and in adjacent states. New York has met the obligation by confirming
that the federal PSD and state NNSR permitting programs remain in
effect and continue to apply for the State's major stationary sources.
In addition, New York is currently in the rulemaking process for part
231, New Source Review for New and Modified Facilities, which will be
submitted to EPA as expeditiously as possible for approval and
inclusion in the SIP. Part 231 will include 8-hour ozone and
PM2.5 PSD and NNSR permitting requirements for major sources
in the state. Part 231 will also use PM10 as a surrogate for
PM2.5 in the PSD and NNSR programs.
With respect to the fourth element, visibility protection, and
consistent with EPA's August 15, 2006 guidance, it is not possible at
this time for New York to accurately determine whether there is
interference with measures in another state's SIP designed to protect
visibility. New York will need to address the visibility protection
requirements once the regional haze SIP is completed and submitted to
EPA in December of 2007.
H. What Other Clarifications Should New York Make in Its Program?
New York should incorporate the definition of ``fossil-fuel fired''
under the NOX SIP Call into its CAIR NOX ozone
season regulation. This revision should specify that the definition
applies only for purposes of determining applicability for units that
are not CAIR NOX Ozone Season units under the applicability
criteria in 40 CFR 96.304. In the final New York CAIR ozone season
regulation, the definition for ``Fossil fuel fired'' contained in 243-
1.2(43)(ii), does not include this cross-reference to the applicability
in 243-1.4(a)(3).
New York agrees with EPA's interpretation of the definition of
``fossil fuel fired.'' As indicated in the September 17, 2007 SIP
revision, New York has committed to revise the definition of ``Fossil
fuel fired'' in its NOX CAIR ozone season regulation as
discussed above. New York has committed to modify the definition
simultaneous with revision of its CAIR regulations to address EPA's
proposed rulemaking revising the cogeneration unit definitions. New
York will revise the definition of ``fossil fuel fired'' no later than
the effective date of the NOX CAIR program.
VI. Proposed Actions
EPA is proposing to approve New York's full CAIR SIP revision
submitted on September 17, 2007. Under this SIP revision, New York is
choosing to participate in the EPA-administered cap-and-trade programs
for SO2, NOX annual, and NOX ozone
season emissions. The SIP revision meets the applicable requirements in
40 CFR 51.123(o) and (aa), with regard to NOX annual and
NOX ozone season emissions, and 40 CFR 51.124(o), with
regard to SO2 emissions. EPA is proposing to determine that
the SIP as revised will meet the requirements of CAIR. If EPA approves
New York's SIP revision, the Administrator of EPA will also issue,
without providing an opportunity for a public hearing or an additional
opportunity for written public comment, a final rule to withdraw the
CAIR FIPs concerning SO2, NOX annual, and
NOX ozone season emissions for New York. This action will
delete and reserve 40 CFR 52.1684 and 40 CFR 52.1685.
EPA is also proposing that this revision adequately addresses the
required elements of 110(a)(2)(D)(i) with the exception of the
visibility protection requirement. This requirement will be re-
evaluated after the regional haze SIP is completed and submitted to EPA
in December 2007.
VII. Statutory and Executive Order Reviews
Under Executive Order 12866 (58 FR 51735, October 4, 1993), this
action is not a ``significant regulatory action'' and therefore is not
subject to review by the Office of Management and Budget. For this
reason, this action is also not subject to Executive Order 13211,
``Actions Concerning Regulations That Significantly Affect Energy
Supply, Distribution, or Use'' (66 FR 28355, May 22, 2001). This action
merely proposes to approve state law as meeting Federal requirements
and would impose no additional requirements beyond those imposed by
state law. Accordingly, the Administrator certifies that this proposed
rule would not have a significant economic impact on a substantial
number of small entities under the Regulatory Flexibility Act (5 U.S.C.
601 et seq.). Because this action proposes to approve pre-existing
requirements under state law and would not impose any additional
enforceable duty beyond that required by state law, it does not contain
any unfunded mandate or significantly or uniquely affect small
governments, as described in the Unfunded Mandates Reform Act of 1995
(Pub. L. 104-4).
This proposal also does not have tribal implications because it
would not have a substantial direct effect on one or more Indian
tribes, on the relationship between the Federal Government and Indian
tribes, or on the distribution of power and responsibilities between
the Federal Government and Indian tribes, as specified by Executive
Order 13175 (65 FR 67249, November 9, 2000). This proposed action also
does not have Federalism implications because it would not have
substantial direct effects on the states, on the relationship between
the national government and the states, or on the distribution of power
and responsibilities among the various levels of government, as
specified in Executive Order 13132 (64 FR 43255, August 10, 1999). This
action merely proposes to approve a state rule implementing a Federal
standard and will result, as a consequence of that approval, in the
Administrator's withdrawal of the CAIR FIP. It does not alter the
relationship or the distribution of power and responsibilities
established in the Clean Air Act. This proposed rule also is not
subject to Executive Order 13045 ``Protection of Children from
Environmental Health Risks and Safety Risks'' (62 FR 19885, April 23,
1997), because it would approve a state rule implementing a Federal
Standard.
In reviewing SIP submissions, EPA's role is to approve state
choices, provided that they meet the criteria of the Clean Air Act. In
this context, in the absence of a prior existing requirement for the
state to use voluntary consensus standards (VCS), EPA has no authority
to disapprove a SIP submission for failure to use VCS. It would thus be
inconsistent with applicable law for EPA, when it reviews a SIP
submission, to use VCS in place of a SIP submission that otherwise
satisfies the provisions of the Clean Air Act. Thus, the requirements
of section 12(d) of the National Technology Transfer and Advancement
Act of 1995 (15 U.S.C. 272 note) do not apply. This proposed rule would
not impose an information collection burden under the provisions of the
Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.).
List of Subjects in 40 CFR Part 52
Environmental protection, Air pollution control, Electric
utilities, Intergovernmental relations, Nitrogen oxides, Ozone,
Particulate matter, Reporting and recordkeeping requirements, Sulfur
dioxide.
[[Page 55729]]
Authority: 42 U.S.C. 7401 et seq.
Dated: September 21, 2007.
Alan J. Steinberg,
Regional Administrator, Region 2.
[FR Doc. E7-19346 Filed 9-28-07; 8:45 am]
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