[Federal Register Volume 74, Number 151 (Friday, August 7, 2009)]
[Proposed Rules]
[Pages 39592-39597]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-18999]
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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Parts 52 and 96
[EPA-R04-OAR-2009-0454; FRL-8942-3]
Approval and Promulgation of Air Quality Implementation Plans;
North Carolina; 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 North Carolina
State Implementation Plan (SIP) submitted by the State of North
Carolina through the North Carolina Department of Environment and
Natural Resources on June 20, 2008. This revision addresses the
requirements of EPA's Clean Air Interstate Rule (CAIR). Although the DC
Circuit Court found CAIR to be flawed, the rule was remanded without
vacatur and thus remains in place. Thus, EPA is continuing to approve
CAIR provisions into SIPs as appropriate. CAIR, as promulgated,
requires States to reduce emissions of sulfur dioxide (SO2)
and nitrogen oxides (NOX) that significantly contribute to,
or interfere with maintenance of, the national ambient air quality
standards (NAAQS) for fine particulates and/or ozone in any downwind
state. CAIR establishes budgets for SO2 and NOX
for States that contribute significantly to nonattainment in downwind
States and requires the significantly contributing States to submit SIP
revisions that implement these budgets. States have the flexibility to
choose which control measures to adopt to achieve the budgets,
including participation in EPA-administered cap-and-trade programs
addressing SO2, NOX annual, and NOX
ozone season emissions. In the full SIP revision that EPA is proposing
to approve, North Carolina will meet CAIR requirements by participating
in these cap-and-trade programs. EPA is proposing to approve the full
SIP revision, as interpreted and clarified herein, as fully
implementing the CAIR requirements for North Carolina. Consequently,
this action will also cause the CAIR Federal Implementation Plans (CAIR
FIPs) concerning SO2, NOX annual, and
NOX ozone season emissions by North Carolina sources to be
automatically withdrawn.
DATES: Comments must be received on or before September 8, 2009.
ADDRESSES: Submit your comments, identified by Docket ID No. EPA-R04-
OAR-2009-0454, 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: 404-562-9019.
4. Mail: EPA-R04-OAR-2009-0454, 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: Lynorae Benjamin, Chief, 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 to 4:30, excluding Federal holidays.
Instructions: Direct your comments to Docket ID No. EPA-R04-OAR-
2009-0454. EPA's policy is that all comments received will be included
in the public docket without change and may be made available online at
http://www.regulations.gov, including any personal information
provided, unless the comment includes information claimed to be
Confidential Business Information (CBI) or other information whose
disclosure is restricted by statute. Do not submit through http://www.regulations.gov or e-mail, information that you consider to be CBI
or otherwise protected. The http://www.regulations.gov Web site is an
``anonymous access'' system, which means EPA will not know your
identity or contact information unless you provide it in the body of
your comment. If you send an e-mail comment directly to EPA without
going through http://www.regulations.gov, your e-mail address will be
automatically captured and included as part of the comment that is
placed in the public docket and made available on the Internet. If you
submit an electronic comment, EPA recommends that you include your name
and other contact information in the body of your comment and with any
disk or CD-ROM you submit. If EPA cannot read your comment due to
technical difficulties and cannot contact you for clarification, EPA
may not be able to consider your comment. Electronic files should avoid
the use of special characters, any form of encryption, and be free of
any defects or viruses. For additional information about EPA's public
docket visit the EPA Docket Center homepage at http://www.epa.gov/epahome/dockets.htm.
Docket: All documents in the electronic docket are listed in the
http://www.regulations.gov index. Although listed in the index, some
information is not publicly available, i.e., CBI or other information
whose disclosure is restricted by statute. Certain other material, such
as copyrighted material, is not placed on the Internet and will be
publicly available only in hard copy form. Publicly available docket
materials are available either electronically in http://www.regulations.gov or in hard copy at the 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
[[Page 39593]]
Office's official hours of business are Monday through Friday, 8:30 to
4:30, excluding Federal holidays.
FOR FURTHER INFORMATION CONTACT: Steven Scofield, 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) 562-9034. Mr. Scofield can also be reached via electronic mail
at [email protected].
SUPPLEMENTARY INFORMATION:
Table of Contents
I. What Action is EPA Proposing to Take?
II. What is the Regulatory History of CAIR and the CAIR FIPs?
III. What are the General Requirements of CAIR and the CAIR FIPs?
IV. What are the Types of CAIR SIP Submittals?
V. Analysis of North Carolina's CAIR SIP Submittal
A. State Budgets for Allowance Allocations
B. CAIR Cap-and-Trade Programs
C. Applicability Provisions
D. NOX Allowance Allocations
E. Allocation of NOX Allowances From Compliance
Supplement Pool
F. Individual Opt-In Units
VI. Proposed Action
VII. Statutory and Executive Order Reviews
I. What Action Is EPA Proposing to Take?
EPA is proposing to approve, the full SIP revision, submitted by
North Carolina on June 20, 2008, as interpreted and clarified herein
\1\ as meeting the applicable CAIR requirements by requiring certain
electric generating units (EGUs) to participate in the EPA-administered
CAIR cap-and-trade programs addressing SO2, NOX
annual, and NOX ozone season emissions. As a consequence of
the SIP approval, the CAIR FIPs concerning SO2,
NOX annual, and NOX ozone season emissions for
North Carolina are automatically withdrawn. If this proposal is
finalized, the automatic withdrawal will be reflected in the rule text
that will accompany the final rulemaking notice, and will delete and
reserve the provisions in Part 52 that establish the CAIR FIPs for
North Carolina sources.
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\1\ On May 11, 2009, North Carolina submitted a letter of
clarification related to this SIP revision. This letter clarifies
the reference to ``NOX ozone season trading program'' in
15A North Carolina Administrative Code (NCAC) 02D.2401(b)(3)(4) was
intended to refer to the CAIR NOX ozone season trading
program. North Carolina also clarified the reference to ``oil'' in
15A NCAC 02D.2401(b)(3)(B) to mean fuel oil as that term is used in
40 CFR 96.4(b)(1)(i). Further, North Carolina acknowledged that the
reference to 40 CFR 96.4(b)(1)(iii) in 15 A NCAC 02D .2401(b)(3)(C)
is not a restriction on hours of operation but rather provides how a
unit's potential NOX mass emissions shall be calculated.
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II. What Is the Regulatory History of the CAIR and the CAIR FIPs?
EPA published CAIR 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
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 or budgets for NOX for the ozone season (May 1
to September 30). 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, 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
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. 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 effectively create 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.
Further, as provided in a rule published by EPA on November 2, 2007, a
State's CAIR FIP is automatically withdrawn when EPA approves a SIP
revision, in its entirely and without any conditions, as fully meeting
the requirements of CAIR. Where only portions of the SIP revision are
approved, the corresponding portions of the FIP are automatically
withdrawn and the remaining portions of the FIP stay in place. Finally,
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. On October 19, 2007, EPA
amended CAIR and the CAIR FIPs to clarify the definition of
``cogeneration unit'' and thus the applicability of the CAIR trading
program to cogeneration units.
EPA was sued by a number of parties on various aspects of CAIR, and
on July 11, 2008, the U.S. Court of Appeals for the District of
Columbia Circuit issued its decision to vacate and remand both CAIR and
the associated CAIR FIPs in their entirety. North Carolina v. EPA, 531
F.3d 836 (DC Cir. Jul. 11, 2008). However, in response to EPA's
petition for rehearing, the Court issued an order remanding CAIR to EPA
without vacating either CAIR or the CAIR FIPs. North Carolina v. EPA,
550 F.3d 1176 (DC Cir. Dec. 23, 2008). The Court thereby left CAIR in
place in order to ``temporarily preserve the environmental values
covered by CAIR'' until EPA replaces it with a rule consistent with the
Court's opinion. Id. at 1178. The Court directed EPA to ``remedy CAIR's
flaws'' consistent with its July 11, 2008 opinion, but declined to
impose a schedule on EPA for
[[Page 39594]]
completing that action. Id. Therefore, CAIR and the CAIR FIP are
currently in effect in North Carolina.
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 all NOX SIP Call trading sources that are not
EGUs under CAIR in the CAIR NOX ozone season trading
program;
2. Provide for State allocation of NOX annual or ozone
season allowances using a methodology chosen by the State;
3. Provide for State allocation of NOX annual allowances
from the compliance supplement pool (CSP) using the State's choice of
allowed, alternative methodologies; or
4. Allow units that are not otherwise CAIR units to opt
individually into the CAIR SO2, NOX annual, or
NOX ozone season trading programs under the opt-in
provisions in the model rules.
An approved CAIR full SIP revision addressing EGUs' SO2,
NOX annual, or NOX ozone season emissions will
replace the CAIR FIP for that State for the respective EGU emissions.
As discussed above, EPA approval in full, without any conditions, of a
CAIR full SIP revision causes the CAIR FIPs to be automatically
withdrawn.
V. Analysis of North Carolina'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 unit
(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 0.50 ton of SO2
emissions in the CAIR trading program, and each Acid Rain Program
allowance allocated for the years in phase 2 of CAIR (2015 and
thereafter) authorizes 0.35 ton of SO2 emissions in the CAIR
trading program.
In today's action, EPA is proposing to approve North Carolina's SIP
revision that adopts the budgets established for the State in CAIR.
These budgets are 62,183 tons for NOX annual emissions from
2009 through 2014, and 51,819 tons from 2015 and thereafter; 28,392
tons for NOX ozone season emissions from 2009 through 2014,
and 23,660 tons from 2015 and thereafter; and 137,342 tons for
SO2 annual emissions from 2010 through 2014, and 96,139 tons
from 2015 and thereafter. Additionally, because North Carolina has
chosen to include all non-EGUs in the State's NOX SIP call
trading program, the CAIR NOX ozone season budget will be
increased annually by 2,443 tons to account for such NOX SIP
Call trading sources. North Carolina'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.
EPA notes that, in North Carolina, 531 F.3d at 916-21, the Court
determined, among other things, that the State SO2 and
NOX budgets established in CAIR were arbitrary and
capricious.\2\ However, as discussed above, the Court also decided to
remand CAIR but to leave the rule in place in order to ``temporarily
preserve the environmental values covered by CAIR'' pending EPA's
development and promulgation of a replacement rule that remedies CAIR's
flaws. North Carolina, 550 F.3d at 1178. EPA had indicated to the Court
that development and promulgation of a replacement rule would take
about two years. Reply in Support of Petition for Rehearing or
Rehearing en Banc at 5 (filed Nov. 17, 2008 in North Carolina v. EPA,
Case No. 05-1224, DC Cir.). The process at EPA of developing a proposal
that will undergo notice and comment and result
[[Page 39595]]
in a final replacement rule is ongoing. In the meantime, consistent
with the Court's orders, EPA is implementing CAIR by approving State
SIP revisions that are consistent with CAIR (such as the provisions
setting State SO2 and NOX budgets for the CAIR
trading programs) in order to ``temporarily preserve'' the
environmental benefits achievable under the CAIR trading programs.
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\2\ The Court also determined that the CAIR trading programs
were unlawful (Id. at 906-8) and that the treatment of CAA title IV
allowances in CAIR was unlawful (Id. at 921-23). For the same
reasons that EPA is approving the provisions of North Carolina's SIP
revision that use the SO2 and NOX budgets set
in CAIR, EPA is also approving, as discussed below, North Carolina's
SIP revision to the extent the SIP revision adopts the CAIR trading
programs, including the provisions addressing applicability,
allowance allocations, and use of title IV allowances.
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On May 7, 2009, EPA participated in a teleconference with North
Carolina and requested several clarifications. EPA received a letter
from North Carolina dated May 8, 2009, that provided the requested
clarifications. Specifically, in the May 8, 2009, letter the State
clarified references in North Carolina's rule to ``CAIR NOX
Ozone Season trading program'' and ``fuel oil.'' In addition, North
Carolina acknowledged that the reference to 40 CFR 96.4(b)(1)(iii) in
15A North Carolina Administrative Code (NCAC) 02D .2401(b)(3)(c) is not
a restriction on hours of operation, but rather provides how a unit's
potential NOX mass emissions will be calculated.
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 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, North Carolina 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. North Carolina 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
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.
North Carolina 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 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.
North Carolina has chosen to distribute NOX annual and
NOX ozone season allowances with its own methodology. North
Carolina has chosen to distribute NOX annual allowances by
submitting the table adopted in 15A NCAC 02D .2403(a) which establishes
the North Carolina CAIR NOX annual allocation for existing
units. North Carolina has chosen to establish a new unit set aside for
each control period. For CAIR NOX emissions for each control
period, CAIR NOX allowances available for allocation for new
unit set asides will be 2,638 tons for 2009-2014 and 1,154 tons for
2015 and thereafter.
[[Page 39596]]
North Carolina has chosen to distribute NOX ozone season
allowances by submitting the table adopted in 15A NCAC 02D .2405(a)(1)
which establishes the North Carolina CAIR NOX ozone season
allocations for existing units. North Carolina has chosen to establish
a new unit set aside for each control period. For CAIR NOX
ozone season emissions, allowances available for allocation for new
unit set asides will be 1,234 tons for 2009-2014 and 555 tons for 2015
and thereafter.
The State's NOX ozone season allocation provisions have
been modified to add requirements associated with North Carolina's
option to bring its non-EGUs into the CAIR NOX ozone season
trading program. The State has chosen to distribute CAIR NOX
Ozone season allowances to non-EGUs by submitting a table adopted in
15A NCAC 02D .2405(a)(2).
E. Allocation of NOX Allowances From Compliance Supplement Pool
The 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.
Consistent with the flexibility given to States in the model
trading rule, North Carolina has not chosen to modify the provisions of
the CAIR NOX annual model trading rule concerning the
allocation of allowances from the CSP. North Carolina has not chosen to
adopt CSP provisions since the State does not have any allowances
available to allocate under the 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 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.
Consistent with the flexibility given to States in the FIPs, North
Carolina has chosen to allow non-EGUs meeting certain requirements to
participate in the CAIR NOX annual trading program. The
North Carolina rule allows for both the opt-in allocation methods as
specified in 40 CFR part 96, Subpart II of the CAIR NOX
annual trading program.
Consistent with the flexibility given to the States in the FIPs,
North Carolina has chosen to permit non-EGUs meeting certain
requirements to participate in the CAIR NOX ozone season
trading program. The North Carolina rule allows for both of the opt-in
allocation methods as specified in 40 CFR part 96 Subpart III of the
CAIR NOX ozone season trading program.
Consistent with the flexibility given to the States in the FIPs,
North Carolina has chosen to allow certain non-EGUs to opt into the
CAIR SO2 trading program. The North Carolina rule allows for
both of the opt-in allocation methods as specified in 40 CFR part 96
Subpart III of the CAIR SO2 trading program.
VI. Proposed Action
EPA is proposing to approve, as interpreted and clarified herein,
North Carolina's full CAIR SIP revision submitted on June 20, 2008.
Under the approved SIP revision, North Carolina is choosing to
participate in the EPA-administered CAIR cap-and-trade programs for
SO2, NOX annual, and NOX ozone season
emissions. The approved SIP revision, as interpreted and clarified
herein, meets the applicable requirements of CAIR, which are set forth
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. If this proposed approval for North
Carolina's full CAIR SIP revision is finalized, EPA will promulgate, in
conjunction with the final rule for this action, rules implementing the
automatic withdrawal--in accordance with 40 CFR 52.35 and 52.36--of the
CAIR FIPs for SO2, NOX annual, and NOX
ozone season emissions for North Carolina sources.
VII. Statutory and Executive Order Reviews
Under the CAA, the Administrator is required to approve a SIP
submission that complies with the provisions of the Act and applicable
Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in
reviewing SIP submissions, EPA's role is to approve State choices,
provided that they meet the criteria of the CAA. Accordingly, this
proposed action merely approves State law as meeting Federal
requirements and does not impose additional requirements beyond those
imposed by State law. For that reason, this proposed action:
Is not a ``significant regulatory action'' subject to
review by the Office of Management and Budget under Executive Order
12866 (58 FR 51735, October 4, 1993);
Does not impose an information collection burden under the
provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.);
Is certified as not having a significant economic impact
on a substantial number of small entities under the Regulatory
Flexibility Act (5 U.S.C. 601 et seq.);
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);
Does not have Federalism implications as specified in
Executive Order 13132 (64 FR 43255, August 10, 1999);
Is not an economically significant regulatory action based
on health or safety risks subject to Executive Order 13045 (62 FR
19885, April 23, 1997);
[[Page 39597]]
Is not a significant regulatory action subject to
Executive Order 13211 (66 FR 28355, May 22, 2001);
Is not subject to requirements of Section 12(d) of the
National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272
note) because application of those requirements would be inconsistent
with the CAA; and
Does not provide EPA with the discretionary authority to
address, as appropriate, disproportionate human health or environmental
effects, using practicable and legally permissible methods, under
Executive Order 12898 (59 FR 7629, February 16, 1994).
In addition, this rule does not have Tribal implications as specified
by Executive Order 13175 (65 FR 67249, November 9, 2000), because the
SIP is not approved to apply in Indian country located in the State,
and EPA notes that it will not impose substantial direct costs on
Tribal governments or preempt Tribal law.
List of Subjects
40 CFR Part 52
Environmental protection, Air pollution control, Electric
utilities, Intergovernmental relations, Carbon monoxide, Nitrogen
oxides, Ozone, Particulate matter, Reporting and recordkeeping
requirements, Sulfur dioxide.
40 CFR Part 96
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 29, 2009.
Beverly H. Banister,
Acting Regional Administrator, Region 4.
[FR Doc. E9-18999 Filed 8-6-09; 8:45 am]
BILLING CODE 6560-50-P