[Federal Register Volume 72, Number 133 (Thursday, July 12, 2007)]
[Proposed Rules]
[Pages 38045-38050]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-13543]
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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 52
[EPA-R04-OAR-2007-0359-200716; FRL-8338-8]
Approval of Implementation Plans of Alabama: 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 Alabama State
Implementation Plan (SIP) submitted on March 7, 2007. This revision
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. The Alabama Department of Environmental
Management (ADEM) also previously submitted a final submittal dated
June 16, 2006, which was subsequently updated in a prehearing request
for parallel processing on November 16, 2006, to comply with EPA's
revisions to the
[[Page 38046]]
model rule. Alabama's final March 7, 2007, submittal replaces the
State's June 16, 2006, and November 16, 2006, submittals. EPA is
proposing to determine that the SIP revision fully implements the CAIR
requirements for Alabama. Therefore, as a consequence of the SIP
approval, 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
Alabama. The CAIR FIPs for all states in the CAIR region were
promulgated on April 28, 2006, and subsequently revised on December 13,
2006.
CAIR requires states to reduce emissions of SO2 and
NOX that significantly contribute to nonattainment of, and
interfere with maintenance of, the national ambient air quality
standards (NAAQS) for fine particulates and/or ozone in any downwind
state. CAIR establishes state budgets for SO2 and
NOX and requires states to submit SIP revisions that
implement these budgets in states that EPA concluded did contribute to
nonattainment in downwind states. States have the flexibility to choose
which 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, Alabama 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 August 13, 2007.
ADDRESSES: Submit your comments, identified by Docket ID No. EPA-R04-
OAR-2007-0359, 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: 404-562-9019.
4. Mail: ``EPA-R04-OAR-2007-0359,'' Regulatory Development Section,
Air Planning Branch, Air, Pesticides and Toxics Management Division,
U.S. Environmental Protection Agency, Region 4, 61 Forsyth Street, SW.,
Atlanta, Georgia 30303-8960.
5. Hand Delivery or Courier: Ms. Stacy Harder, Regulatory
Development Section, Air Planning Branch, Air, Pesticides and Toxics
Management Division, U.S. Environmental Protection Agency, Region 4, 61
Forsyth Street, SW., Atlanta, Georgia 30303-8960. 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 a.m. to 4:30 p.m., excluding federal holidays.
Instructions: Direct your comments to Docket ID No. ``EPA-R04-OAR-
2007-0359.'' EPA's policy is that all comments received will be
included in the public docket without change and may be made available
online at 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
www.regulations.gov or e-mail, information that you consider to be CBI
or otherwise protected. The 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 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
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 www.regulations.gov or
in hard copy at the Regulatory Development Section, Air Planning
Branch, Air, Pesticides and Toxics Management Division, U.S.
Environmental Protection Agency, Region 4, 61 Forsyth Street, SW.,
Atlanta, Georgia 30303-8960. 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 a.m. to 4:30 p.m.,
excluding federal holidays.
FOR FURTHER INFORMATION CONTACT: Ms. Stacy Harder, Regulatory
Development Section, Air Planning Branch, Air, Pesticides and Toxics
Management Division, U.S. Environmental Protection Agency, Region 4, 61
Forsyth Street, SW., Atlanta, Georgia 30303-8960. The telephone number
is (404) 562-9042. Ms. Harder can also be reached via electronic mail
at [email protected].
SUPPLEMENTARY INFORMATION:
Table of Contents
I. What Actions 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 Alabama'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
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 Alabama's SIP, submitted
on March 7, 2007. In its SIP revision, Alabama 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 approving the SIP will be taken by the Regional Administrator
for Region 4. As a consequence of the SIP approval, the Administrator
of EPA will also issue a final rule to withdraw the FIPs concerning
SO2, NOX annual, and NOX ozone season
emissions for Alabama. This action will delete and reserve 40 CFR 52.54
and 40 CFR 52.55. The withdrawal of the CAIR FIPs for Alabama 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 Alabama. Once the SIP is fully approved, EPA no longer
[[Page 38047]]
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. EPA will take action in a separate rulemaking regarding
revisions to Chapters 335-3-1 and 335-3-17.
II. What Is the Regulatory History of CAIR and the CAIR FIPs?
The CAIR rule 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 reduction requirements 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 Clean Air Act
(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 two-year clock for EPA
to promulgate a 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 announced EPA's final
decisions on reconsideration of five issues, without making any
substantive changes to the CAIR requirements.
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 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
[[Page 38048]]
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 Alabama's CAIR SIP Submittal
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 pounds per million British thermal units
(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 this action, EPA is proposing approval of Alabama's SIP revision
that adopts the budgets established for the State in CAIR, i.e., 69,020
(2009-2014) and 57,517 (2015-thereafter) tons for NOX annual
emissions, 34,510 (2009-2014) and 29,146 (2015-thereafter) tons for
NOX ozone season emissions, and 157,582 (2010-2014) and
110,307 (2015-thereafter) tons for SO2 emissions. Alabama's
SIP revision sets these budgets as the total amounts 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. 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.
EPA also 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.
In the SIP revision, Alabama 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. Alabama 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 Megawatt electrical (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 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.
Alabama has chosen 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.
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
FIP 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 that will be used to allocate
allowances to sources in the states, if certain requirements are
[[Page 38049]]
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. 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;
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.
Alabama has chosen to replace the provisions of the CAIR NOX
annual model trading rule concerning the allocation of NOX
annual allowances with its own methodology. Alabama has chosen to
distribute NOX annual allowances based upon allocation
methods for existing, replacement, and new units. ADEM defines a
baseline NOX unit as one that commenced operation on, or
before January 1, 2004, or submitted an acceptable application to the
Department before August 1, 2005. For the control periods in 2009
through 2014, ADEM will allocate NOX allowances to baseline
CAIR units based in an amount equaling 0.15 lb/mmBtu, or the unit's
permitted NOX limit, whichever amount is less, multiplied by
the heat input and an adjustment ratio (to ensure that the total number
of CAIR NOX Ozone Season allowances allocated under this
paragraph equals the number of tons of CAIR NOX Ozone Season
emissions in the State trading program budget) and rounded to the
nearest whole NOX allowance as appropriate. For units with
multiple allowable emissions limits, the allowances may be calculated
based on actual operating data. For each control period in 2015 and
thereafter, ADEM will allocate allowances equaling 0.125 lb/mmBtu, or
the unit's NOX limit, whichever is less, multiplied by the
heat input and an adjustment ratio.
A replacement unit is defined as a NOX unit, or the
portion of a NOX unit, which replaces a baseline unit at the
same facility, and has the same or greater maximum design heat input
capacity. Allowances will be allocated for replacement units after all
baseline units have received allowances. These allowances will be
distributed from the Retired Unit Allowance Pool. After all baseline
and replacement units have received allocations, ADEM will allocate
allowances to new units from allowances remaining in the Retired Unit
Allowance Pool.
ADEM defines a new unit as one that does not meet the definition
for an existing unit or a replacement unit. New unit allocations, for
each applicable control period, will be equal to 0.15 lb/mmBtu or the
unit's permitted NOX limit, whichever is less, multiplied by
the heat input and an adjustment ratio and rounded to the nearest whole
NOX allowance as appropriate.
Allowances were to be allocated by October 31, 2006, for control
periods of 2009, 2010 and 2011. Allowances will be allocated by October
31, 2008, for control periods 2012, 2013 and 2014. By October 31, 2011,
and subsequently, on October 31 of every third year thereafter,
NOX allowance allocations will be submitted for the control
periods in the three years that are four, five, and six years,
respectively, after the year of the applicable deadline for submission.
Alabama has chosen not to use set-asides in their NOX annual
allocations.
Alabama has chosen to replace the provisions of the CAIR NOX
ozone season model trading rule concerning allowance allocations with
its own methodology. Alabama has chosen to distribute NOX
annual allowances based upon allocation methods for existing,
replacement, and new units. ADEM defines a baseline NOX unit
as one that commenced operation on, or before January 1, 2004, or
submitted an acceptable application to the Department before August 1,
2005. For the control periods in 2009 through 2014, ADEM will allocate
NOX allowances to baseline CAIR units based in an amount
equaling 0.15 lb/mmBtu (0.17 lb/mmBtu, if the unit's maximum design
heat input is greater than 250 mmBtu/hr), or the unit's permitted
NOX limit, whichever amount is less, multiplied by the heat
input and an adjustment ratio (to ensure that the total number of CAIR
NOX Ozone Season allowances allocated under this paragraph
equals the number of tons of CAIR NOX Ozone Season emissions
in the State trading program budget) and rounded to the nearest whole
NOX allowance as appropriate. For units with multiple
allowable emissions limits, the allowances may be calculated based on
actual operating data. For each control period in 2015 and thereafter,
ADEM will allocate allowances equaling 0.125 lb/mmBtu, or the unit's
NOX limit, whichever is less, multiplied by the heat input
and an adjustment ratio.
A replacement unit is defined as one which replaces a baseline
ozone season unit at the same facility, and has the same or greater
maximum design heat input.
A new unit is defined as a unit that does not meet the definition
of either an existing unit or a replacement unit.
NOX ozone season allowances were to be allocated by
October 31, 2006, for control periods 2009, 2010, and 2011. Only the
difference between the ozone season allowance allocations and the 2009
budget trading program will be submitted in 2009. By October 31, 2008,
allocations for 2012, 2013, and 2014 will be submitted. Finally, by
October 31, 2011, and October 31 of every third year thereafter,
allocations will be submitted for control periods in the three years
that are four, five, and six years after the applicable deadline for
submission. Alabama has chosen not to use set-asides in their ozone
season allocations.
E. Allocation of NOX Allowances From Compliance Supplement Pool
CAIR establishes a 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.
Alabama has chosen to modify the provisions of the CAIR NOX
annual model trading rule concerning the allocation of allowances from
the CSP. Alabama has chosen to distribute CSP allowances using an
allocation methodology that allows the Department to allocate up to
10,166 additional CAIR NOX allowances for the control period
in 2009. CAIR NOX units that achieve emissions reductions in
2007 and 2008, that are not necessary to comply with applicable
emissions limitations during those years, may request early reduction
credits. The units requesting CSP allocations must submit a request by
May 1, 2009, to ADEM. Sources are eligible to receive CSP allowances
only to the extent that that the total number of allowances
[[Page 38050]]
issued does not exceed 15 percent of the total number of NOX
allowances issued to that unit from the initial allowance allocation.
Any remaining CSP allowances after the initial distribution will be
allocated to eligible units on a pro rata basis, provided that no unit
is issued more allowances than the early reduction credits requested by
that unit in accordance with ADEM's CSP provisions.
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) 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 the 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.
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 decline to adopt the opt-in provisions at all.
Alabama has chosen to allow non-EGUs meeting certain requirements
to opt into the CAIR NOX annual trading program, including
both of the opt-in allocation methods in the model rule.
Alabama has chosen to allow non-EGUs meeting certain requirements
to opt into the CAIR NOX ozone season trading program,
including both of the opt-in allocation methods in the model rule.
Alabama has chosen to allow certain non-EGUs to opt into the CAIR
SO2 trading program, and has chosen to incorporate the
Federal rule by reference.
VI. Proposed Actions
EPA is proposing to approve Alabama's full CAIR SIP revision
submitted on March 7, 2007. Under this SIP revision, Alabama 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. As a
consequence of the SIP approval, 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 Alabama. That withdrawal
will delete and reserve 40 CFR 52.54 and 40 CFR 52.55.
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.
Authority: 42 U.S.C. 7401 et seq.
Dated: July 3, 2007.
J.I. Palmer Jr.,
Regional Administrator, Region 4.
[FR Doc. E7-13543 Filed 7-11-07; 8:45 am]
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