[Federal Register Volume 72, Number 189 (Monday, October 1, 2007)]
[Rules and Regulations]
[Pages 55666-55672]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-19216]
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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Parts 52 and 97
[EPA-R02-OAR-2007-0233; FRL-8472-5]
Approval and Promulgation of Implementation Plans; New Jersey:
Clean Air Interstate Rule
AGENCY: Environmental Protection Agency (EPA).
ACTION: Final rule.
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SUMMARY: EPA is taking final action to approve a revision to New
Jersey's State Implementation Plan (SIP) submitted on February 6, 2007,
and subsequently revised on July 9, 2007. This revision incorporates
provisions related to the implementation of EPA's Clean Air Interstate
Rule (CAIR), and the CAIR Federal Implementation Plan (CAIR FIP)
concerning SO2, NOX annual, NOX ozone
season emissions for the State of New Jersey. The SIP revision that EPA
is fully approving is an ``abbreviated'' SIP revision that addresses
the methodology to be used to allocate annual and ozone season NOX
allowances under the CAIR FIPs. The SIP revision that EPA is approving
will also satisfy New Jersey'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. EPA is not making any changes to the CAIR FIP,
but is amending the appropriate appendices in the CAIR FIP trading
rules simply to note approval of New Jersey's SIP revision.
DATES: This rule is effective on October 31, 2007.
ADDRESSES: EPA has established a docket for this action under Docket ID
No. EPA-R02-OAR-2007-0233. All documents in the docket are available
online at http://www.regulations.gov. Although listed in the index,
some information is not publicly available,
[[Page 55667]]
i.e., Confidential Business Information (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.
FOR FURTHER INFORMATION CONTACT: For information, contact Mr. Kenneth
Fradkin, Environmental Protection Agency, Region 2 Office, 290
Broadway, 25th Floor, New York, New York 10007-1866, phone number (212)
637-3702 or by e-mail at: [email protected].
SUPPLEMENTARY INFORMATION:
Table of Contents
I. What Action Is EPA Taking?
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 Is the Result of EPA's Evaluation of New Jersey's CAIR SIP
Submittal?
A. State Budgets for Allowance Allocations
B. CAIR Cap-and-Trade Programs
C. Applicability Provisions for Non-EGUs NOX SIP Call
Sources
D. NOX Allowance Allocations
E. Allocation of NOX Allowances From the Compliance
Supplement Pool
F. Individual Opt-in Units
G. Satisfying Section 110(a)(2)(D)(i) of the Clean Air Act
V. Final Action
VI. Statutory and Executive Order Reviews
I. What Action Is EPA Taking?
CAIR SIP and 110(a)(2)(D)(i) Approval
EPA is taking final action to approve a revision to New Jersey's
SIP, submitted on February 6, 2007, as revised. In response to EPA's
comments provided during New Jersey's rulemaking and in the proposed
approval, New Jersey adopted new rules regarding the Clean Air
Interstate Rule (CAIR) NOX Trading Program on June 19, 2007.
The State submitted these rules to EPA on July 9, 2007. The adoption
was published in the New Jersey Register on July 16, 2007 (39 N.J.R.
2637(a)). The SIP revision modifies the application of certain
provisions of the CAIR FIPs that require emission reductions of
SO2, NOX annual, and NOX ozone season
emissions. This less comprehensive CAIR SIP is termed an abbreviated
SIP. This revision includes a new regulation, N.J.A.C. 7:27-30, Clean
Air Interstate Rule (CAIR) NOX Trading Program. As part of
the revision, New Jersey has also adopted N.J.A.C. 7:27-31.23 to
provide the date when New Jersey's CAIR NOX Trading Program
will replace New Jersey's NOX Budget Trading Program
(Subchapter 31). New Jersey has also adopted ``7:27A-3.10 Civil
administrative penalties for violation of the rules adopted pursuant to
the Act.''
New Jersey is subject to the CAIR FIPs that implement the CAIR
requirements by requiring certain Electric Generating Units (EGUs) to
participate in the EPA-administered Federal CAIR SO2,
NOX annual, and NOX ozone season cap-and-trade
programs. The SIP revision provides a methodology for allocating
NOX allowances for the NOX annual, and NOX
ozone season trading programs. The CAIR FIPs provide that this
methodology, upon approval by EPA, will be used to allocate NOX
allowances to sources in New Jersey, instead of the federal allocation
methodology otherwise provided in the FIPs. The SIP revision also
retires rather than allocates allowances from the NOX annual
Compliance Supplement Pool (CSP).
EPA has determined that New Jersey's CAIR NOX Trading
Program, as finalized in the New Jersey Register on July 16, 2007 ((39
N.J.R. 2637(a)), satisfies the applicable requirements for an
abbreviated CAIR SIP revision. Consistent with the flexibility provided
in the FIPs, the provisions of New Jersey's CAIR NOX Trading
Program will be used to replace or supplement, as appropriate, the
corresponding provisions in the CAIR FIPs for New Jersey. EPA will not
make any changes to the CAIR FIP, but will amend the appropriate
appendices in the CAIR FIP trading rules simply to note approval of the
New Jersey CAIR NOX Trading Program.
EPA is also approving ``N.J.A.C. 7:27-31.23 Replacement of the
NOX Budget Program'' which establishes a transition date for
the replacement of the State's NOX Budget Program
(Subchapter 31), beginning with the 2009 control period, with the New
Jersey CAIR program.
In addition, EPA is also approving a revision to New Jersey's SIP
to address the requirements of section 110(a)(2)(D)(i) of the Clean Air
Act (CAA). This section of the CAA requires each state to submit a SIP
that contains adequate provisions to prohibit sources in the state from
emitting any air pollutants in amounts which 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.
On July 3, 2007, EPA proposed full approval of New Jersey's SIP
revision provided that New Jersey's final rule was consistent with the
modifications provided in EPA's comments during rulemaking and in its
proposal (72 FR 36406). EPA has determined that New Jersey's revised
CAIR rule, adopted June 19, 2007, has addressed the concerns, discussed
in its comments during rulemaking and in the proposed approval,
regarding shutdown units, correction of allocations to new and existing
units, and prorating for the New Source/Growth Reserve. The comment
period for the EPA proposal closed on August 2, 2007. No comments were
received. EPA is finalizing full approval based on the rationale stated
in the proposal and in this final action.
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 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 emission budgets by participating in
the EPA-administered cap-and-trade programs or by adopting any other
control measures.
CAIR explains to subject states what must be included 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 May 25, 2005, that the
subject states had failed to submit SIPs meeting the requirements of
section 110(a)(2)(D). The SIPs were
[[Page 55668]]
due in July 2000, 3 years after the promulgation of the 8-hour ozone
and PM2.5 NAAQS. These May 25, 2005 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 August
17, 2006, EPA issued guidance for SIP submissions states should make to
address the requirements of section 110(a)(2)(D)(i) for the 8-hour
ozone and PM2.5 NAAQS.
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 certain EGUs to participate
in the EPA-administered CAIR SO2, NOX annual, and
NOX ozone-season model 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 CAIR 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 a 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 the
corresponding 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 CAIR-related final rules that
added the states of Delaware and New Jersey to the list of states
subject to CAIR for PM2.5.
III. What Are the General Requirements of CAIR and the CAIR FIPs?
CAIR establishes 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 Is the Result of EPA's Evaluation of New Jersey's CAIR SIP
Submittal?
A. State Budgets for Allowance Allocations
The CAIR FIP established the EGU budgets for New Jersey as 12,670
tons for the years 2009-2014 (Phase I) and 10,558 tons for the years
2015 and beyond (Phase II) for NOX annual emissions; 6,654
tons for the years 2009-2014 (Phase I) and 5,545 tons for the years
2015 and beyond (Phase II) for NOX ozone season emissions;
and 32,392 tons for the years 2010-2014 (Phase I) and 22,674 tons for
the years 2015 and beyond (Phase II) for SO2 emissions. New
Jersey's SIP revision does not affect these budgets, which are the
total amount of allowances available for allocation for each year under
the EPA-administered cap-and-trade program under the CAIR FIP. In
short, the abbreviated SIP revision only affects allocations of
allowances under the established budgets.
B. CAIR Cap-and-Trade Programs
The CAIR NOX annual and ozone-season FIPs 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 FIPs are similar, there are some
differences. For example, the NOX annual FIP (but not the
NOX ozone season FIP) provides for a Compliance Supplement
Pool (CSP), discussed below, under which allowances may be awarded for
early reductions of NOX annual emissions. As a further
example, the NOX ozone season FIP reflects the fact that the
CAIR NOX ozone season trading program replaces the
NOX SIP Call trading program for EGUs after the 2008 ozone
season and is coordinated with the NOX SIP Call program.
States also have the option of continuing to meet their NOX
SIP Call non-EGU reduction obligations by participating in the CAIR
NOX ozone season trading program and including all their
NOX SIP Call trading sources in that program. In addition,
the NOX ozone season FIP 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.
The provisions of the CAIR SO2 FIP are also similar to
the provisions of the NOX annual and ozone season FIPs.
However, the SO2 FIP is coordinated with the ongoing Acid
Rain SO2 cap-and-trade program under CAA title IV. The
SO2 FIP 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.
EPA used the CAIR model trading rules as the basis for the trading
programs in the CAIR FIPs. The CAIR FIP trading rules are virtually
identical to the CAIR model trading rules, with changes made to account
for federal rather than state implementation. The CAIR model
SO2, NOX annual, and NOX ozone season
trading rules and the respective CAIR FIP trading rules are designed to
work together as integrated SO2, NOX annual, and
NOX ozone season trading programs.
New Jersey is subject to the CAIR FIPs for ozone and
PM2.5 and the CAIR FIP trading programs for SO2,
NOX annual, and NOX ozone season apply to sources
in New Jersey. Consistent with the flexibility it gives to states, the
CAIR FIPs provide that states may submit abbreviated SIP revisions that
will replace or supplement, as appropriate, certain provisions of the
CAIR FIP trading programs. The submission by New Jersey on February 6,
2007, as subsequently revised and submitted on
[[Page 55669]]
July 9, 2007, is such an abbreviated SIP revision.
C. Applicability Provisions for non-EGU NOX SIP Call Sources
States have the option of bringing in, for the CAIR NOX
ozone season program only, those units in a state's NOX SIP
Call trading program that are not EGUs as defined under CAIR. EPA
advises states exercising this option to use provisions for
applicability that are substantively identical to the provisions in 40
CFR 96.304 and 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 in order to include in the CAIR
NOX ozone season trading program all units required to be in
the State's NOX SIP Call trading program that are not
already included under 40 CFR 96.304. 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.
Consistent with the flexibility given to states in the CAIR FIP,
New Jersey has chosen not to expand the applicability provisions of the
CAIR NOX ozone season trading program to include all non-
EGUs in the State's NOX SIP Call trading program. New
Jersey's non-EGUs and small electric generating units (EGUs) will be
subject to Reasonable Available Control Technology (RACT) or state of
the art rules.
D. NOX Allowance Allocations
Under the NOX allowance allocation methodology in the
CAIR model trading rules and in the CAIR FIPs, NOX annual
and NOX ozone season allowances are allocated to units that
have operated at least 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. The CAIR FIPs provide states
the flexibility to establish a different NOX allowance
allocation methodology that will be used to allocate allowances to
sources in the states if certain requirements are met concerning the
timing of submission of units' allocations to the Administrator for
recordation and the total amount of allowances allocated for each
control period.
New Jersey has chosen to replace the provisions of the CAIR
NOX annual and ozone season FIP concerning allowance
allocations with its own methodology. New Jersey will distribute
NOX annual and ozone season allowances to CAIR units based
upon historical electrical and thermal output. Allowances will be
distributed and not auctioned. The distribution of allowances will be
based on the previous three years of data. New Jersey has established
set-asides for new source/growth (``New Source/Growth Reserve''), and
energy efficiency and renewable energy programs or techniques
(``Incentive Reserve''). Each year, New Jersey is allocating ten
percent of the State's CAIR NOX annual and CAIR
NOX ozone season budgets to the New Source/Growth Reserve,
and five percent of the State's CAIR NOX annual and CAIR
NOX ozone season budgets to the Incentive Reserve.
Additional details regarding New Jersey's NOX allocation
methodology can be found in EPA's proposal to approve New Jersey's SIP
revision, which was published in the Federal Register on July 3, 2007
(72 FR 36406).
In the proposal published on July 3, 2007, EPA stated that several
provisions of New Jersey's NOX allocation proposal were
inconsistent with the NOX allocation timing requirements of
the abbreviated SIP revision requirements and the CAIR FIP trading
programs. EPA further stated that full approval of New Jersey's
proposed regulation was contingent upon New Jersey modifying their
proposed rule in order to clarify that EPA's NOX allocation
timing requirements will be met under New Jersey's program. Sections
51.123(p)(1)(ii)(B) and (ee)(2)(ii)(C) of CAIR require that the State
determines and notifies the Administrator of each existing unit's
allowance allocation at least 3 years in advance of the CAIR FIP
NOX annual and ozone season programs. Sections
51.123(p)(1)(ii)(C) and (ee)(2)(ii)(D) require that the state
determines, and notifies the Administrator of each new unit's
allowances by October 31 (for the CAIR NOX annual trading
program) or July 31 (for the CAIR NOX ozone season trading
program) of the year for which the allowances are being allocated.
As we indicated in our July 3, 2007 proposal, New Jersey's proposed
regulation did not meet NOX allocation timing requirements
for existing or new units that must surrender and transfer allowances
to EPA for retirement for the year in which the unit shuts down and any
year thereafter. As written in New Jersey's proposed rule, the owner or
operator of an existing unit that is required to surrender allowances
will no longer be able to buy or sell allowances, or undertake other
allowance market activities, that were provided three years in advance
and already recorded into their compliance account. EPA indicated that
it was not clear from New Jersey's proposal what the timing would be
for surrendering the allowances, and whether the State intended for
recorded allowances to be surrendered.
In response to EPA's comment, New Jersey modified its rule
concerning allocations for shutdown units. EPA has determined that the
modification is acceptable because it terminates future allocations
once a unit is permanently shut down, but does not take back any
allowances that were previously allocated to the unit.
EPA also indicated, in our July 3, 2007 proposal, that New Jersey's
regulation as proposed did not meet NOX allocation timing
requirements with regard to the provision in New Jersey's rule that
provides the state may determine that existing (or new) units for
current or past years had been erroneously allocated too many or too
few allowances based on inaccurate data or projections. As written in
the proposed rule, it was unclear how long after determination and
recordation of an allocation New Jersey may determine that the
allocation was incorrect.
In response to EPA's comment, New Jersey modified its rule
concerning the correction of allocations for existing and new units.
EPA has determined that the modification is acceptable because it
allows corrections only before, and not after, the EPA Administrator
records the allocations. This removes the potential for taking back
units' allocations after recordation.
EPA also indicated in our July 3, 2007 proposal that New Jersey's
proposed rule also provided that if the sum of new unit allocations
(determined by October 31 or July 31 of the year for which allocations
are made) and the existing unit growth allocations (determined by the
end of the year for which allocations are made) exceeded the total
amount of the New Source/Growth Reserve for the year, all the
allocations from the reserve will be reduced on a pro-rata basis so
that the total amount allocated to these new and existing units does
not exceed the reserve. We stated that New Jersey should clarify that
the allocation-proration provisions will be applied to new unit
allocations before the October 31 deadline for NOX annual
submission, or before the July 31 deadline for the NOX ozone
season submission of new unit allocations to EPA and applied to the
existing unit growth allocations
[[Page 55670]]
before the March 1 deadline for submission of those allocations to EPA.
New Jersey modified the proposed rule concerning allocations from
the New Source/Growth Reserve so that the application of pro-rata
distribution of such allocations is performed separately for new units
and for existing units with growth and the process for new units is
performed before new-unit allowances are allocated. EPA has determined
that the modification is acceptable because it removes the potential
for take back of new units' allocations.
EPA is taking final action to approve New Jersey's methodology for
allocating NOX allowances for the NOX annual and
NOX ozone season trading programs because the methodology is
consistent with the flexibility that CAIR provides states with regard
to allocation methodologies.
E. Allocation of NOX Allowances From the Compliance Supplement Pool
The Compliance Supplement Pool (CSP) provides 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 state's share of the projected emission reductions under CAIR. The
CAIR NOX annual FIP 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 those states. EPA had allocated to New Jersey
allowances equal to 660 tons of NOX annual emissions for
possible distribution.
New Jersey has chosen to modify the provisions of the CAIR
NOX annual FIP concerning the allocation of allowances from
the CSP. New Jersey has chosen to retire all of the CSP allowances
budgeted for New Jersey by not allocating them to CAIR units. EPA is
taking final action to approve New Jersey's retirement of the CSP
allowances budgeted to New Jersey since this is consistent with the
flexibility provided to states under CAIR.
F. Individual Opt-In Units
The opt-in provisions allow for 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) the CAIR trading
program. A non-EGU may 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. The 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. The
rules for each of the CAIR FIP trading programs include opt-in
provisions that are essentially the same as those in the respective
CAIR SIP model rules, except that the CAIR FIP opt-in provisions become
effective in a state only if the state's abbreviated SIP revision
adopts the opt-in provisions. The state may adopt the opt-in provisions
entirely or may adopt them but exclude one of the allowance allocation
methodologies. The state also has the option of not adopting any opt-in
provisions in the abbreviated SIP revision and thereby providing for
the CAIR FIP trading program to be implemented in the State without the
ability for units to opt into the program.
New Jersey has chosen not to allow non-EGUs meeting the FIP
specified requirements to participate in the CAIR NOX annual
trading program, the CAIR NOX ozone season trading program,
and the SO2 trading program.
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 Jersey's SIP revision with respect to the statutory
requirements is consistent with the guidance.
New Jersey addresses the first two of these four elements by
complying with the requirements of CAIR. New Jersey satisfies these
requirements either by relying on the existing CAIR FIPs, or through
approval of this SIP revision.
The third element New Jersey 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. For 8-hour ozone, the state has met the
obligation by confirming that the existing ozone Nonattainment New
Source Review (NNSR) permitting program remains in effect and applies
to the 8-hour ozone NAAQS for the State's major stationary sources. New
Jersey has noted that the State's current NNSR program retains the
lower applicability levels and higher off-set ratios previously
required under the states 1-hour ozone classification. EPA anticipates
that the state will adopt a final attainment demonstration for the 8-
hour ozone NAAQS by September 8, 2007. For PM2.5, the State
has confirmed that the state's NNSR and PSD programs are being
implemented in accordance with EPA's interim guidance calling for the
use of PM10 as a surrogate for PM2.5. New Jersey
commits to revising its NNSR program and adopting a PSD program after
EPA finalizes its PM2.5 implementation rule.
It should be noted that the entire State of New Jersey is
nonattainment for 8-hour ozone, necessitating only a NNSR program (not
PSD) for ozone. For PM2.5 the State has both attainment and
non-attainment areas, necessitating both NNSR and PSD programs for
PM2.5.
Consistent with EPA's August 15, 2006 guidance, at this time, it is
impossible for New Jersey to accurately determine whether there is
interference with measures in another state's SIP designed to protect
visibility, which is the fourth element that was addressed. New Jersey
has indicated that it will address the visibility protection
requirements once the regional haze SIP is completed and submitted to
EPA in December of 2007.
EPA is taking final action finding that the SIP revision adequately
addresses the required elements of 110(a)(2)(D)(i) with the exception
of the requirement to protect visibility. This requirement will be re-
evaluated after the regional haze
[[Page 55671]]
SIP is completed and submitted to EPA in December 2007.
V. Final Action
EPA is taking final action to fully approve New Jersey's
abbreviated SIP revision submitted on February 6, 2007, and
subsequently revised on July 9, 2007. New Jersey is covered by the CAIR
FIPs, which require participation in the EPA-administered CAIR FIP cap-
and-trade for SO2, NOX annual, NOX
ozone season emissions. Under this abbreviated SIP revision and
consistent with the flexibility given to states in the FIPs, New Jersey
has adopted under N.J.A.C. 7:27-30, the CAIR NOX Trading
Program, provisions for allocating allowances under the CAIR FIP
NOX annual and ozone season trading programs. In addition,
New Jersey has also adopted at N.J.A.C. 7:27-31.23 the date when New
Jersey's CAIR NOX Trading Program will replace New Jersey's
NOX Budget Trading Program (Subchapter 31). New Jersey has
also adopted in the abbreviated SIP revision provisions that retire CSP
allowances. As provided for in the CAIR FIPs, New Jersey provisions for
allocating NOX annual and ozone season allowances and for
retiring CSP allowances, will replace or supplement the corresponding
provisions of the CAIR FIPs in New Jersey. EPA has determined that New
Jersey's abbreviated CAIR SIP revision meets the applicable
requirements in 40 CFR 51.123(p) and (ee) with regard to NOX
annual and NOX ozone season emissions. EPA is not making
changes to the CAIR FIP, but is amending the appropriate appendices of
40 CFR part 97 in the CAIR FIP trading rules simply to note approval of
New Jersey's SIP revision.
EPA is also taking final action regarding the required elements of
110(a)(2)(D)(i). EPA has determined that, with the exception of the
protection of visibility requirement, that the SIP revision adequately
addresses the requirements of 110(a)(2)(D)(i). This requirement will be
re-evaluated after the regional haze SIP is completed and submitted to
EPA in December 2007.
VI. 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 approves State law as meeting Federal requirements and would
impose no additional requirements beyond those imposed by State law.
Accordingly, the Administrator certifies that this rule will 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 rule approves pre-existing requirements under State law and does
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 rule also does not have tribal implications because it will
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 action also does not have Federalism
implications because it does 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 approves a State rule
implementing a Federal standard, and does not alter the relationship or
the distribution of power and responsibilities established in the CAA.
This 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 approves 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 CAA. 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 CAA. 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 rule does not impose an
information collection burden under the provisions of the Paperwork
Reduction Act of 1995 (44 U.S.C. 3501 et seq.).
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. A major rule cannot
take effect until 60 days after it is published in the Federal
Register. This action is not a ``major rule'' as defined by 5 U.S.C.
section 804(2).
Under section 307(b)(1) of the CAA, petitions for judicial review
of this action must be filed in the United States Court of Appeals for
the appropriate circuit by November 30, 2007. 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).)
List of Subjects
40 CFR Part 52
Environmental protection, Air pollution control, Electric
utilities, Incorporation by reference, Intergovernmental relations,
Nitrogen oxides, Ozone, Particulate matter, Reporting and recordkeeping
requirements, Sulfur dioxide.
40 CFR Part 97
Environmental protection, Air pollution control, Administrative
practice and procedure, Intergovernmental relations, Nitrogen oxides,
Ozone, Particulate matter, Reporting and recordkeeping requirements,
Sulfur dioxide.
Dated: September 18, 2007.
Alan J. Steinberg,
Regional Administrator, Region 2.
0
40 CFR parts 52 and 97 are amended as follows:
PART 52--[AMENDED]
0
1. The authority citation for part 52 continues to read as follows:
Authority: 42 U.S.C. 7401 et seq.
[[Page 55672]]
Subpart FF--New Jersey
0
2. Section 52.1570 is amended by adding new paragraph (c)(83) to read
as follows:
Sec. 52.1570 Identification of plans.
* * * * *
(c) * * *
(83) Revisions to the State Implementation Plan and submitted on
February 6, 2007 as proposed, and subsequently adopted and submitted on
July 9, 2007 by the State of New Jersey Department of Environmental
Protection (NJDEP) that establishes rules for the allowance allocation
of oxides of nitrogen (NOX) for the annual and ozone season
Clean Air Interstate Rule (CAIR) NOX Cap and Trade Programs.
The submission also establishes a date when the CAIR NOX
Trading Programs will replace the State's NOX Budget
Program, and satisfies New Jersey'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.
(i) Incorporation by reference:
(A) Title 7, Chapter 27, Subchapter 30 of the New Jersey
Administrative Code entitled ``Clean Air Interstate Rule (CAIR)
NOX Trading Program,'' effective July 16, 2007 and Title 7,
Chapter 27, Subchapter 31, Section 23 of the New Jersey Administrative
Code entitled ``NOX Budget Program,'' effective July 16,
2007.
(ii) Additional information:
(A) February 2, 2007 letter from Commissioner Lisa P. Jackson,
NJDEP, to Alan J. Steinberg, EPA, submitting proposed SIP revision, and
request for parallel processing.
(B) June 26, 2007 letter from Commissioner Lisa P. Jackson, NJDEP,
to Alan J. Steinberg, EPA, submitting SIP revision.
(C) December 29, 2006 letter from Commissioner Lisa P. Jackson,
NJDEP, to Alan J. Steinberg, EPA, indicating how New Jersey has
addressed the required elements of 110(a)(2)(D)(i).
0
3. In 52.1605, the table is amended by adding an entry for Subchapter
30 and revising the entry for Subchapter 31 under the heading ``Title
7, Chapter 27'' to read as follows:
Sec. 52.1605 EPA-approved New Jersey regulations.
----------------------------------------------------------------------------------------------------------------
State regulation State effective date EPA approved date Comments
----------------------------------------------------------------------------------------------------------------
* * * * * * *
Title 7, Chapter 27
* * * * * * *
Subchapter 30, ``Clean Air July 16, 2007.......... October 1, 2007 [Insert FR
Interstate Rule (CAIR) NOX page citation].
Trading Program.''.
Subchapter 31, ``NOX Budget July 16, 2007.......... October 1, 2007 [Insert FR
Program.''. page citation].
* * * * * * *
----------------------------------------------------------------------------------------------------------------
PART 97--[AMENDED]
0
1. The authority citation for part 97 continues to read as follows:
Authority: 42 U.S.C. 7401, 7403, 7410, 7426, 7601, and 7651, et
seq.
0
2. Appendix A to Subpart EE is amended by adding the entry for ``New
Jersey'' in alphabetical order under paragraphs 1. and 2. to read as
follows:
Appendix A to Subpart EE of Part 97--States With Approved State
Implementation Plan Revisions Concerning Allocations
* * * * *
1. * * *
New Jersey
2. * * *
New Jersey
0
3. Appendix A to Subpart EEEE is amended by adding the entry for ``New
Jersey'' in alphabetical order under the introductory text to read as
follows:
Appendix A to Subpart EEEE of Part 97--States With Approved State
Implementation Plan Revisions Concerning Allocations
* * * * *
New Jersey
[FR Doc. E7-19216 Filed 9-28-07; 8:45 am]
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