[Federal Register Volume 72, Number 199 (Tuesday, October 16, 2007)]
[Rules and Regulations]
[Pages 58546-58553]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-20252]
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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Parts 52 and 97
[EPA-R05-OAR-2007-0390; FRL-8481-2]
Approval of Implementation Plans; Ohio; Clean Air Interstate Rule
AGENCY: Environmental Protection Agency (EPA).
ACTION: Direct final rule.
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SUMMARY: EPA is approving a revision to the Ohio State Implementation
Plan (SIP) submitted on September 26, 2007. Ohio initially submitted a
SIP revision on April 17, 2007, with a proposed rule and then revised
it and submitted a SIP revision with a final rule on September 26,
2007. This SIP revision incorporates provisions related to the
implementation of EPA's Clean Air Interstate Rule (CAIR), promulgated
on May 12, 2005, and subsequently revised on April 28, 2006, and
December 13, 2006, and the CAIR Federal Implementation Plan (CAIR FIP)
concerning sulfur dioxide (SO2), oxides of nitrogen
(NOX) annual, and NOX ozone season emissions for
the State of Ohio, promulgated on April 28, 2006 and subsequently
revised December 13, 2006. EPA is not making any changes to the CAIR
FIP, but is amending to the extent EPA approves Ohio's SIP revision,
the appropriate appendices in the CAIR FIP trading rules simply to note
that approval.
The Ohio SIP revision that was submitted on April 17, 2007, was a
full CAIR SIP revision. In a letter submitted on September 26, 2007,
Ohio requested that EPA consider the September 26, 2007, submittal as
two separate submittals, i.e., as a full CAIR SIP and as an abbreviated
CAIR SIP. Ohio requested that EPA act on specific portions of the
September 26, 2007,
[[Page 58547]]
submittal as an abbreviated CAIR SIP. Consequently, today, EPA is
taking final action only on the abbreviated SIP revision and not the
full CAIR SIP revision, which will be the subject of a separate future
action. EPA is approving Ohio's abbreviated SIP revision that addresses
the methodology used to allocate annual and ozone season NOX
allowances to affected electric generating units (EGUs), and the opt-in
provisions, under the CAIR trading programs and the CAIR FIP.
DATES: This direct final rule is effective December 17, 2007 without
further notice, unless EPA receives adverse comment by November 15,
2007. If EPA receives such comments, it will publish a timely
withdrawal of the direct final rule in the Federal Register and inform
the public that the rule will not take effect.
ADDRESSES: Submit your comments, identified by Docket ID No. EPA-R05-
OAR-2007-0390, by one of the following methods:
1. http://www.regulations.gov: Follow the on-line instructions for
submitting comments.
2. E-mail: [email protected].
3. Fax: (312) 886-5824.
4. Mail: Reference EPA-R05-OAR-2007-0390 Docket, Air Programs
Branch, U.S. Environmental Protection Agency, (AR-18J), 77 West Jackson
Boulevard, Chicago, Illinois 60604.
5. Hand Delivery or Courier: John Mooney, Chief, Criteria Pollutant
Section, Air Programs Branch, U.S. Environmental Protection Agency,
(AR-18J), 77 West Jackson Boulevard, Chicago, Illinois 60604. 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-R05-OAR-
2007-0390''. 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 Environmental Protection Agency, Region 5, Air and
Radiation Division, 77 West Jackson Boulevard, Chicago, Illinois 60604.
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: John Paskevicz, Engineer, Criteria
Pollutant Section, Air Programs Branch (AR-18J), Environmental
Protection Agency, Region 5, 77 West Jackson Boulevard, Chicago,
Illinois 60604. The telephone number is (312) 886-6084. Mr. Paskevicz
can also be reached via electronic 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 Are the Types of CAIR SIP Submittals?
V. Analysis of Ohio'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 (CSP)
F. Individual Opt-in Units
VI. Final Action
VII. Statutory and Executive Order Reviews
I. What Action Is EPA Taking?
CAIR SIP Approval
EPA is approving a revision to Ohio's SIP, submitted on September
26, 2007, that modifies the application of certain provisions of the
CAIR FIP concerning SO2, NOX annual, and
NOX ozone season emissions. (As discussed below, this less
comprehensive CAIR SIP is termed an abbreviated SIP.) Ohio is subject
to the CAIR FIPs that implement the CAIR requirements by requiring
certain 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 will be used to allocate NOX
allowances to sources in Ohio, instead of the federal allocation
methodology otherwise provided in the FIPs. The SIP revision provides a
methodology for allocating the compliance supplement pool in the CAIR
NOX annual trading program. The SIP also allows for
individual units not otherwise subject to the CAIR trading programs to
opt into such trading programs in accordance with opt-in provisions of
the CAIR FIPs. Consistent with the flexibility provided in the FIPs,
these provisions will be used to replace or supplement, as appropriate,
the corresponding provisions in the CAIR FIPs for Ohio. EPA is not
making any changes to the CAIR FIPs, but is amending to the extent EPA
approves Ohio's SIP revision, the appropriate appendices in the CAIR
FIP trading rules simply to note that approval.
II. What Is the Regulatory History of the CAIR and the CAIR FIPs?
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
[[Page 58548]]
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 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
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, 3
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 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 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 two more 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 an abbreviated SIP revision may submit limited
SIP revisions to tailor the CAIR FIP cap-and-trade programs to the
state submitting the revision. Specifically, an abbreviated SIP
revision may establish certain applicability and allowance allocation
provisions that, the CAIR FIPs provide, will be used instead of or in
conjunction with the corresponding provisions in the CAIR FIP rules in
that State. Specifically, the abbreviated SIP revisions may:
1. Include NOX SIP Call trading sources that are not
EGUs under CAIR in the CAIR FIP NOX ozone season trading
program;
2. Provide for allocation of NOX annual or ozone season
allowances by the State, rather than the Administrator, and using a
methodology chosen by the State;
3. Provide for allocation of NOX annual allowances from
the CSP by the State, rather than by the Administrator, and using the
State's choice of allowed, alternative methodologies; and/or
4. Allow units that are not otherwise CAIR units to opt
individually into the CAIR FIP cap-and-trade programs under the opt-in
provisions in the CAIR FIP rules.
With approval of an abbreviated SIP revision, the CAIR FIP remains in
place, as tailored to sources in the State by that approved SIP
revision.
Abbreviated SIP revisions can be submitted in lieu of, or as part
of, CAIR full SIP revisions. States may want to designate part of their
full SIP as an abbreviated SIP for EPA to act on first when the timing
of the State's submission might not provide EPA with sufficient time to
approve the full SIP prior to the deadline for recording NOX
allocations. This will help ensure that the elements of the trading
programs where flexibility is allowed are
[[Page 58549]]
implemented according to the State's decisions. Submission of an
abbreviated SIP revision does not preclude future submission of a CAIR
full SIP revision. In this case, the September 26, 2007, submittal from
Ohio requests an abbreviated SIP revision. As discussed below, Ohio
requested three of the four provisions for which a State may request an
abbreviated SIP. The State requested that its allocation of
NOX annual and NOX ozone season allowances for
EGUs under the FIP be used instead of the corresponding provisions of
the CAIR FIPs in effect in the State. The State requested that its
allocation of NOX annual allowances from the compliance
supplement pool (CSP) be used instead of the corresponding provisions
of the CAIR FIPs in effect in the State. Finally, the State asked that
units, that are not otherwise CAIR units, may opt individually into the
CAIR FIP cap-and-trade program under the opt-in provisions in the CAIR
FIP rules.
V. Analysis of Ohio'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 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 under 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 emissions in the CAIR trading
program.
The CAIR FIPs established the budgets for Ohio as 108,667 tons for
NOX annual emissions, 45,664 tons for NOX ozone
season emissions, and 333,520 tons for SO2 emissions. The
Ohio SIP revision, approved in today's action, does not affect these
budgets, which are total amounts of allowances available for allocation
for each year under the EPA-administered cap-and-trade programs under
the CAIR FIPs. 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 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 FIP 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 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.
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 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.
Ohio is subject to the CAIR FIPs concerning SO2,
NOX annual, and NOX ozone season emissions, and
the CAIR FIP trading programs for SO2, NOX
annual, and NOX ozone season apply to sources in Ohio.
Consistent with the flexibility they give 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 Ohio EPA September 26, 2007, submission is
such an abbreviated SIP revision.
C. Applicability Provisions for Non-EGU NOX SIP Call Sources
In general, the CAIR FIP trading programs 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 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
Ohio has not chosen, in the abbreviated CAIR SIP approved here, 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. However, EPA notes that Ohio
has indicated that the full SIP revision submitted on September 26,
2007, expands the applicability provisions of CAIR NOX ozone
season trading program in this manner. As such, EPA is not taking final
[[Page 58550]]
action on the non-EGU portion of the State's September 26, 2007, full
CAIR SIP revision. The full CAIR SIP revision including actions to
approve the non-EGU portions of the State's CAIR rule will be the
subject of a separate future action.
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.
The CAIR FIP provides 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. 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/or
4. The use of allowance set-asides and, if used, the size of the
set-aside.
Consistent with the flexibility given to States in the CAIR FIPs,
Ohio has chosen to replace the provisions of the CAIR NOX
annual FIP concerning the allocation of NOX annual
allowances with its own methodology. Ohio has chosen to distribute
NOX annual allowances based upon heat input data from a
three year period adjusted for fuel type by using fuel adjustment
factors of 1.0 for coal, 0.6 for oil, and 0.4 for other fuels. Based on
this methodology, Ohio determined NOX allocations for EGUs
in the State under the CAIR FIP, and submitted its allocations to EPA
on April 24, 2007.
Ohio also has included, in the abbreviated SIP revision, provisions
regarding set-aside programs for energy efficiency/renewable energy and
innovative technology projects under the CAIR NOX Ozone
Season program. The State's energy-efficiency/renewable energy (EE/RE)
and innovative technology set-aside program provisions establish two
set-asides for each control period, one set-aside for EE/RE projects
and one set-aside for innovative technology projects, and specify
procedures for allocating the allowances in the set-asides. Each set-
aside is limited to one percent of the state trading budget for
NOX ozone season allowance allocations. Beginning with the
end of 2009 and every three years thereafter, Ohio EPA will review the
number of allowances allocated from the set-asides and will, under
certain circumstances, increase the size of each set-aside in future
years as necessary, up to a maximum of five percent of the state
trading budget.
EPA notes that the set-aside provisions do not explicitly state how
allowances will be reserved in the set-asides if the total amount of
allowances requested from a set-aside exceeds the total amount of
allowances in that set-aside. However, set-aside provisions explicitly
limit the amount of allowances available from each set-aside to one
percent of the state trading budget unless Ohio EPA expands the set-
asides in future years. In addition, Ohio informed EPA, in the
September 26, 2007, letter, that its guidance for the set-asides
provides that set-aside allowances will be reserved on a pro-rata basis
if the total requested allowances exceed the size of the set-aside.
Ohio has indicated that it will clarify its set-aside provisions
consistent with this guidance.
The set-aside provisions also do not explicitly state how a set-
aside will be increased up to five percent of the state trading budget
if the existing set-aside amounts plus the total amounts allocated to
units with and without baseline heat input under Ohio's other
allocation provisions for NOX ozone season allowances
already equal the state trading budget. However, Ohio's CAIR
NOX ozone season allocation provisions clearly limit the
total allocations for each control period of CAIR NOX ozone
season allowances to the amount of the state trading budget for that
control period. Further, as written, the provisions for expanding the
set-asides cannot have any effect on the current allocations, which
Ohio has already submitted to the Administrator for phase 1 of the
trading program. In addition, Ohio informed EPA, in the September 28,
2007, letter, that Ohio EPA will reduce the total amount of allowances
allocated to existing units under the other allocation provisions to
the extent the size of a set-aside is increased in the future. Ohio has
indicated that it will clarify its allocation provisions consistent
with this statement in the September 28, 2007, letter.
Consequently, EPA interprets Ohio's abbreviated SIP to limit the
total allocations for each control period of CAIR NOX ozone
season allowances (whether from current or expanded set-asides or under
the other allocation provisions in the abbreviated SIP) to the state
trading budget, consistent with the requirements of 40 CFR
51.123(ee)(2)(ii)(B).
E. Allocation of NOX Allowances From the Compliance Supplement Pool
(CSP)
The 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. 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 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.
Consistent with the flexibility given to States in the FIP, Ohio
has chosen to modify the provisions of the CAIR NOX annual
FIP concerning the allocation of allowances from the CSP. Ohio has
chosen to distribute CSP allowances using an allocation methodology
that provides more certainty to unit owners and operators that a known
quantity of allowances per unit will be available for distribution at
the beginning of the control period. Ohio also provides owners and
operators with an incentive for the operation of expensive post-
combustion control equipment year-round and provides incentives for
early reductions in emissions before 2009. Ohio EPA is required to
submit allocations from the CSP to the Administrator by July 1, 2009,
or such time when unit's 2008 emissions data are available so that the
allocations can be determined. Ohio's abbreviated SIP also states that
the Administrator will record the allocations by January 1, 2010. While
Ohio's abbreviated SIP does not explicitly state that allocations will
be submitted to the Administrator by
[[Page 58551]]
November 30, 2009, EPA notes that units' 2008 emissions data should
certainly be available before that date and that the allocations need
to be submitted by that date in order to ensure that the Administrator
will complete recordation of allowances by January 1, 2010. Further,
Ohio has indicated, in the September 26, 2007, letter, that it will
clarify its CSP provisions to provide for a deadline of November 30,
2009, for submission of CSP allocations to the Administrator.
Consequently, EPA considers the Ohio abbreviated SIP to meet the
requirements of 40 CFR 51.123(p)(2).
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.
Consistent with the flexibility given to States in the FIPs, Ohio
has chosen to allow non-EGUs meeting certain requirements to
participate in the CAIR NOX annual trading program, the CAIR
NOX ozone season trading program and the CAIR SO2
trading program. Ohio EPA submitted the CAIR SIP program rules, OAC
3745-109-08 and OAC 3745-109-14 and OAC 3745-109-21, which incorporate
the opt-in provisions as provided in the final EPA CAIR rule of April
28, 2006. These rules address opt-ins for NOX ozone season,
NOX annual, and SO2 annual programs.
VI. Final Action
EPA is approving the rules contained in Ohio's abbreviated CAIR SIP
revision submitted on September 26, 2007. Ohio is covered by the CAIR
FIPs, which require participation in the EPA-administered CAIR FIP cap-
and-trade programs for SO2, NOX annual, and
NOX ozone season emissions. Under this abbreviated SIP
revision, and consistent with the flexibility given to States in the
FIPs, Ohio adopts provisions for allocating allowances under the CAIR
FIP NOX annual and ozone season trading programs. In
addition, Ohio adopts in the abbreviated SIP revision provisions that
establish a methodology for allocating allowances in the CSP and allow
for individual non-EGUs to opt into the CAIR FIP SO2,
NOX annual, NOX ozone season cap-and-trade
programs. As provided for in the CAIR FIPs, these provisions in the
abbreviated SIP revision will replace or supplement the corresponding
provisions of the CAIR FIPs in Ohio. The abbreviated SIP revision meets
the applicable requirements in 40 CFR 51.123(p) and (ee), with regard
to NOX annual and NOX ozone season emissions, and
40 CFR 51.124(r), with regard to SO2 emissions. EPA is not
making any changes to the CAIR FIPs, but is amending the appropriate
appendices in the CAIR FIP trading rules simply to note that approval.
VII. Statutory and Executive Order Reviews
Executive Order 12866: Regulatory Planning and Review
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.
Executive Order 13211: Actions That Significantly Affect Energy Supply,
Distribution, or Use
Because it is not a ``significant regulatory action'' under
Executive Order 12866 or a ``significant energy action,'' 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).
Regulatory Flexibility Act
This action merely approves state law as meeting Federal
requirements and imposes 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.).
Unfunded Mandates Reform Act
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).
Executive Order 13175: Consultation and Coordination With Indian Tribal
Governments
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 (59
FR 22951, November 9, 2000).
Executive Order 13132: Federalism
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 Clean Air
Act.
[[Page 58552]]
Executive Order 13045: Protection of Children From Environmental Health
and Safety Risks
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.
National Technology Transfer Advancement Act
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.
Paperwork Reduction Act
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.).
Congressional Review Act
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.
804(2).
Under section 307(b)(1) of the Clean Air Act, petitions for
judicial review of this action must be filed in the United States Court
of Appeals for the appropriate circuit by December 17, 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, Administrative practice and procedure,
Air pollution control, Electric utilities, Intergovernmental relations,
Nitrogen oxides, Ozone, Particulate matter, Reporting and recordkeeping
requirements, Sulfur dioxide.
Dated: September 28, 2007.
Bharat Mathur,
Acting Regional Administrator, Region 5.
0
For the reasons set forth in the preamble, parts 52 and 97 of chapter 1
of title 40 of the Code of Federal Regulations 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.
Subpart KK--Ohio
0
2. In Sec. 52.1870 is amended by adding paragraph (c)(140) to read as
follows:
Sec. 52.1870 Identification of plan.
* * * * *
(c) * * *
(140) Ohio Environmental Protection Agency submitted amendments on
September 26, 2007, to the State Implementation Plan to control
emissions from electric generating units (EGU). Rules affecting these
units include: Ohio Administrative Code (OAC) 3745-109-01 (B)(59) and
(72), 3745-109-04, 3745-109-08, 3745-109-14, 3745-109-17 (except the
following: the language in paragraph (A) referencing the state trading
budget for non-EGUs in 3745-109-17-01(C)(4), paragraphs
(C)(1)(a)(i)(d), (C)(2)(b), (C)(2)(d), (C)(2)(e), and (C)(2)(f), and
the language in paragraph (C)(3)(a) referencing non-EGUs), and 3745-
109-21.
(i) Incorporation by reference. The following sections of the Ohio
Administrative Code (OAC) are incorporated by reference.
(A) OAC 3745-109-01(B)(59) ``Energy efficiency/renewable energy
project''; OAC 3745-109-01(B)(72) ``Innovative technology project'';
OAC 3745-109-04 ``CAIR NOX allowance allocations''; OAC
3745-109-08 ``CAIR NOX opt-in units''; OAC 3745-109-14
``CAIR SO2 opt-in units''; and OAC 3745-109-21 ``CAIR
NOX ozone season opt-in units''; effective on September 27,
2007.
(B) OAC 3745-109-17 ``CAIR NOX ozone season allowance
allocations''; effective on September 27, 2007, except the following:
the language in paragraph (A) referencing the state trading budget for
non-EGUs in 3745-109-17-01(C)(4), paragraphs (C)(1)(a)(i)(d),
(C)(2)(b), (C)(2)(d), (C)(2)(e), and (C)(2)(f), and the language in
paragraph (C)(3)(a) referencing non-EGUs.
PART 97--[AMENDED]
0
3. 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
4. Appendix A to subpart EE is amended by adding in alphabetical order
the entry ``Ohio'' 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. * * *
Ohio
* * * * *
2. * * *
Ohio
* * * * *
0
5. Appendix A to subpart II is amended by adding in alphabetical order
the entry ``Ohio'' under paragraphs 1. and 2. to read as follows:
Appendix A to Subpart II of Part 97--States With Approved State
Implementation Plan Revisions Concerning CAIR NOX Opt-In
Units
1. * * *
Ohio
* * * * *
2. * * *
Ohio
* * * * *
0
6. Appendix A to subpart III of part 97 is amended by adding in
alphabetical order the entry ``Ohio'' under paragraphs 1. and 2. to
read as follows:
[[Page 58553]]
Appendix A to Subpart III of Part 97--States With Approved State
Implementation Plan Revisions Concerning CAIR SO2 Opt-In
Units
1. * * *
Ohio
* * * * *
2. * * *
Ohio
* * * * *
0
7. Appendix A to subpart EEEE of part 97 is amended by adding in
alphabetical order the entry ``Ohio'' to read as follows:
Appendix A to Subpart EEEE of Part 97--States With Approved State
Implementation Plan Revisions Concerning Allocations
* * * * *
Ohio
* * * * *
0
8. Appendix A to subpart IIII of part 97 is amended by adding in
alphabetical order the entry ``Ohio'' under paragraphs 1. and 2. to
read as follows:
Appendix A to Subpart IIII of Part 97--States With Approved State
Implementation Plan Revisions Concerning CAIR NOX Ozone
Season Opt-In Units
1. * * *
Ohio
2. * * *
Ohio
* * * * *
[FR Doc. E7-20252 Filed 10-15-07; 8:45 am]
BILLING CODE 6560-50-P