[Federal Register Volume 74, Number 185 (Friday, September 25, 2009)]
[Rules and Regulations]
[Pages 48857-48863]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-23254]
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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 52
[EPA-R05-OAR-2009-0368; FRL-8950-9]
Approval and Promulgation of Air Quality 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) that would address the requirements of EPA's Clean Air
Interstate Rule (CAIR). EPA previously approved an ``abbreviated SIP''
for Ohio, primarily consisting of rules governing allocation of
allowances to electric generating units (EGUs) for use in the trading
programs established pursuant to CAIR and providing for voluntary opt-
in to these programs. The abbreviated SIP was implemented in
conjunction with a Federal Implementation Plan (FIP) that specified
requirements for emissions monitoring, permit provisions, and other
elements of the CAIR programs. EPA is now approving the addition of
non-EGUs to the CAIR Nitrogen Oxides (NOX) Ozone Season
Trading Program, and EPA is issuing a ``full SIP'' approval under which
the various CAIR implementation provisions would be governed by State
rules rather than FIP rules. This rulemaking addresses rules Ohio
submitted on July 15, 2009, and August 13, 2009. This action also
causes the CAIR Federal Implementation Plans (CAIR FIPs) concerning
sulfur dioxides (SO2), NOX annual, and
NOX ozone season emissions by Ohio sources to be
automatically withdrawn.
DATES: This direct final rule will be effective November 24, 2009,
unless EPA receives adverse comments by October 26, 2009. If adverse
comments are received, EPA will publish a timely withdrawal of the
direct final rule in the Federal Register informing the public that the
rule will not take effect.
ADDRESSES: Submit your comments, identified by Docket ID Number EPA-
R05-OAR-2009-0368 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) 692-2551.
4. Mail: John M. Mooney, Chief, Criteria Pollutant Section, Air
Programs Branch (AR-18J), U.S. Environmental Protection Agency, 77 West
Jackson Boulevard, Chicago, Illinois 60604.
5. Hand Delivery: John M. Mooney, Chief, Criteria Pollutant
Section, Air Programs Branch (AR-18J), U.S. Environmental Protection
Agency, 77 West Jackson Boulevard, Chicago, Illinois 60604. Such
deliveries are only accepted during the Regional Office normal hours of
operation, and special arrangements should be made for deliveries of
boxed information. The Regional Office 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-R05-OAR-
2009-0368. 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 information that you
consider to be CBI or otherwise protected through http://www.regulations.gov or e-mail.
The http://www.regulations.gov Web site is an ``anonymous access''
system, which means EPA will not know your identity or contact
information unless you provide it in the body of your comment. If you
send an e-mail comment directly to EPA without going through http://www.regulations.gov, your e-mail address will be automatically captured
and included as part of the comment that is placed in the public docket
and made available on the Internet. If you submit an electronic
comment, EPA recommends that you include your name and other contact
information in the body of your comment and with any disk or CD-ROM you
submit. If EPA cannot read your comment due to technical difficulties
and cannot contact you for clarification, EPA may not be able to
consider your comment. Electronic files should avoid the use of special
characters and any form of encryption and should be free of any defects
or viruses.
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 during normal business hours at the
Air and Radiation Division, U.S. Environmental Protection Agency,
Region 5, 77 West Jackson Boulevard, Chicago, IL 60604. This Facility
is open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding
Federal holidays. We recommend that you telephone John Summerhays,
Environmental Scientist, at (312) 886-6067, before visiting the Region
5 office.
FOR FURTHER INFORMATION CONTACT: John Summerhays, (312) 886-6067, or by
e-mail at [email protected].
SUPPLEMENTARY INFORMATION:
Table of Contents
I. What Action Is EPA Taking?
II. What Is the Regulatory History of CAIR and the CAIR FIPs?
III. What Are the General Requirements of CAIR and the CAIR FIPs?
IV. What Are the Types of CAIR SIP Submittals?
V. History of Ohio's CAIR Submittals
VI. Analysis of Ohio's CAIR SIP Submittal
A. Elements of Ohio's Submittal
B. State Budgets for Allowance Allocations
C. CAIR Cap-and-Trade Programs
D. Applicability Provisions
E. NOX Allowance Allocations
F. Allocation of NOX Allowances From Compliance
Supplement Pool
G. Individual Opt-In Units
VII. Final Action
VIII. Statutory and Executive Order Reviews
I. What Action Is EPA Taking?
EPA is approving a ``full SIP'' revision addressing CAIR in Ohio.
In this action, EPA is approving the entire set of rules in Ohio
Administrative Code (OAC) Chapter 3745-109, entitled ``Clean Air
Interstate Rule.'' Ohio submitted these rules in two parts: A submittal
dated July 15, 2009, provided rules that were to become effective July
16, 2009, and a submittal dated August 13, 2009, provided rules that
had become effective on September 27, 2007.
On February 1, 2008, at 73 FR 6034, EPA approved an ``abbreviated
SIP,'' primarily consisting of rules governing allocation of
NOX allowances to EGUs for use in the trading programs
established pursuant to CAIR and rules
[[Page 48858]]
allowing sources to opt into the CAIR programs. The abbreviated SIP was
implemented in conjunction with a FIP that specified requirements for
emissions monitoring, permit provisions, and other elements of the CAIR
programs. EPA is now approving the addition of non-EGUs to the CAIR
NOX Ozone Season Trading Program, and EPA is issuing ``full
SIP'' approval under which the various CAIR implementation provisions
will be governed by State rules rather than FIP rules. EPA finds that
Ohio's rules meet the applicable CAIR requirements by requiring certain
EGUs to participate in the EPA-administered CAIR cap-and-trade programs
addressing SO2, NOX annual, and NOX
ozone season emissions, and by requiring certain non-EGUs to
participate in the program for NOX ozone season emissions.
II. What Is the Regulatory History of CAIR and the CAIR FIPs?
EPA published CAIR on May 12, 2005 (70 FR 25162). In adopting 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
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
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 Clean
Air Act 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 trading programs for SO2,
NOX annual, and NOX ozone emissions, as
appropriate. These CAIR FIP 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. Further, as provided in a rule published by EPA on
November 2, 2007, at 72 FR 59190, a State's CAIR FIPs are automatically
withdrawn when EPA approves a SIP revision, in its entirety 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 FIPs 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, at 72 FR 59190, 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. Ohio
has amended its rules to incorporate a clarified definition, a change
that EPA is approving in this action.
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 completing that action. Id. Therefore,
CAIR and the CAIR FIP are currently in effect in Ohio.
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 the CAIR
NOX Ozone Season Trading Program.
[[Page 48859]]
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. As EPA anticipated,
most States have chosen 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. History of Ohio CAIR Submittals
Ohio's initial response to CAIR was a submittal, dated April 17,
2007, providing draft rules. These rules were intended to constitute a
full SIP submittal, addressing the requirements under CAIR without
reliance on the CAIR FIPs. However, in its next submittal, dated
September 26, 2007, Ohio acknowledged ongoing discussions with EPA
regarding selected portions of the rules. In this submittal, Ohio
requested abbreviated SIP approval, in order to expedite Ohio's
participation in the CAIR trading programs, but Ohio also reiterated
its desire for full SIP approval once it had completed rule revisions
addressing EPA's concerns.
Rulemaking on a full SIP submittal involves a broader range of
issues than rulemaking on an abbreviated SIP submittal. EPA wished to
expedite action on Ohio's NOx allowance allocation and its rules
allowing sources voluntarily to opt into the trading programs.
Therefore, as requested by Ohio, EPA took action on the abbreviated SIP
portion of Ohio's submittal and did not act on other Ohio CAIR rules.
EPA proposed direct final approval of these abbreviated SIP portions of
Ohio's rules on October 16, 2007 (72 FR 58546), withdrew that action on
December 5, 2007 (72 FR 68515), following receipt of a comment, and
took final action on these rules on February 1, 2008 (73 FR 6034).
Ohio and EPA continued to discuss Ohio's rules, leading Ohio to
propose various rule revisions. These revisions amended Ohio's
applicability provisions consistent with EPA's revised definition of
cogeneration units, to help make Ohio's applicability provisions for
non-EGUs consistent with EPA guidance. Additional revisions corrected
rule references. However, before Ohio could adopt and submit these rule
revisions, the Court of Appeals for the District of Columbia Circuit
issued its opinion concluding that CAIR should be vacated. This opinion
led Ohio to suspend rulemaking on its CAIR-related rules. Then,
following the Court's issuance, on December 23, 2008, of its order
remanding but not vacating CAIR, Ohio resumed work on these rule
revisions. Ohio proposed revised rules, which it submitted to EPA on
May 11, 2009. Ohio held a public hearing on its proposed rules on June
2, 2009, and submitted final revised rules on July 15, 2009.
Ohio's CAIR rules, in Ohio Administrative Code (OAC) Chapter 3745-
109, include rules from OAC 3745-109-01 to 3745-109-21. Thirteen of
these rules reflect revisions that became effective on July 16, 2009;
Ohio submitted these rules on July 15, 2009. The other eight rules,
although effective on September 27, 2007, were not included in either
Ohio's September 26, 2007, submittal or its July 15, 2009, submittal;
these rules were submitted on August 13, 2009. Ohio's August 13, 2009,
submittal also reaffirms Ohio's request for full SIP approval.
VI. Analysis of Ohio's CAIR SIP Submittal
A. Elements of Ohio's Submittal
The rulemaking that EPA completed on February 1, 2008 (73 FR 6034),
granting abbreviated SIP approval, addressed only six of Ohio's CAIR
rules. EPA is today acting on Ohio's full set of rules, constituting a
full SIP that will supersede the FIPs that are currently in effect in
Ohio. Although some rules approved on February 1, 2008, have not
changed, and thus arguably need not be approved again, EPA is acting
again on these rules in conjunction with the remainder of Ohio's CAIR
rules for purposes of clarity and administrative convenience. The
following list identifies the rules that EPA is addressing today and
the applicable submittal date:
3745-109-01 CAIR NOX annual, CAIR SO2 and CAIR
NOX ozone season trading programs definitions and general
provisions--submitted July 15, 2009.
3745-109-02 CAIR designated representative for CAIR NOX
sources--submitted August 13, 2009.
3745-109-03 Permits--submitted August 13, 2009.
3745-109-04 CAIR NOX allowance allocations--submitted July
15, 2009.
3745-109-05 CAIR NOX allowance tracking system--submitted
August 13, 2009.
3745-109-06 CAIR NOX allowance transfers--submitted August
13, 2009.
3745-109-07 Monitoring and Reporting--submitted July 15, 2009.
3745-109-08 CAIR NOX opt-in units--submitted July 15, 2009.
3745-109-09 CAIR designated representative for CAIR SO2 sources--
submitted August 13, 2009.
3745-109-10 Permits--submitted August 13, 2009.
3745-109-11 CAIR SO2 allowance tracking system--submitted July 15,
2009.
3745-109-12 CAIR SO2 allowance transfers--submitted July 15, 2009.
[[Page 48860]]
3745-109-13 Monitoring and reporting--submitted July 15, 2009.
3745-109-14 CAIR SO2 opt-in units--submitted July 15, 2009.
3745-109-15 CAIR designated representative for CAIR NOX
ozone season sources--submitted August 13, 2009.
3745-109-16 Permits--submitted August 13, 2009.
3745-109-17 CAIR NOX ozone season allowance allocations--
submitted July 15, 2009.
3745-109-18 CAIR NOX ozone season allowance tracking
system--submitted July 15, 2009.
3745-109-19 CAIR NOX ozone season allowance transfers--
submitted July 15, 2009.
3745-109-20 Monitoring and reporting--submitted July 15, 2009.
3745-109-21 CAIR NOX ozone season opt-in units--submitted
July 15, 2009.
In order to provide an orderly transition from the NOX Budget
Trading Program to the CAIR NOX Ozone Season Trading
Program, EPA requires States to adopt rules clarifying that the rules
of the NOX Budget Trading Program (adopted to address the NOX SIP Call)
are no longer in effect. However, approval of such transition
provisions is not a prerequisite for approval of Ohio's CAIR rules.
Ohio is taking separate action to propose rule revisions to clarify
that its rules for the NOX Budget Trading Program are no longer in
effect, for as long as EPA is instead implementing the CAIR
NOX Ozone Season Trading Program. EPA is not acting today on
such rules and will conduct separate rulemaking on Ohio's transition
rules at such time as Ohio adopts and submits the rules.
B. 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 Clean Air Act. Under
CAIR, each allowance allocated in the Acid Rain Program for the years
in phase 1 of CAIR (2010 through 2014) authorizes 0.5 ton of
SO2 emissions in the CAIR trading program, and each Acid
Rain Program allowance allocated for the years in phase 2 of CAIR (2015
and thereafter) authorizes 0.35 ton of SO2 emissions in the
CAIR trading program.
In today's action, EPA is approving Ohio's SIP revision that adopts
the budgets established for the State in CAIR. These annual emission
budgets are: For NOX annual emissions, 108,667 tons from
2009 through 2014, and 90,556 tons in 2015 and thereafter; for
NOX ozone season emissions, 45,664 tons from 2009 through
2014, and 39,945 tons in 2015 and thereafter; and, for SO2
annual emissions, 333,520 tons from 2009 through 2014, and 233,464 tons
in 2015 and thereafter. Additionally, the CAIR NOX ozone
season budget will be increased annually by 4,030 tons to account for
NOX SIP Call trading sources that are not EGUs under CAIR
but are included in the CAIR NOX Ozone Season Trading
Program. Ohio'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.
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.\1\ 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 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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\1\ The Court also determined that the CAIR trading programs
were unlawful (id. at 921-23). For the same reasons that EPA is
approving the provisions of Ohio's SIP revision that use the
SO2 and NOX budgets set in CAIR, EPA is also
approving as discussed below, Ohio'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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C. 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 requirements 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, since Clean Air Act title IV establishes an
ongoing Acid Rain cap-and-trade program for SO2 and not for
NOX, the model rule for SO2 must additionally be
coordinated with the Acid Rain program. 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 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
[[Page 48861]]
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 EPA is approving, Ohio 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. Ohio has adopted State rules for
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.
Finally, Ohio's rules provide that non-EGUs that were required to
participate in the NOX Budget Trading Program must
participate in the CAIR NOX Ozone Season Trading Program.
D. 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 megawatts 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
megawatts or less) that the State currently requires to be in the
NOX SIP Call trading program. Ohio has chosen to expand the
applicability provisions of the CAIR NOX Ozone Season
Trading Program to include all non-EGUs that were subject to the
State's NOX SIP Call trading program.
E. 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.
Consistent with the flexibility given to States in the CAIR rules,
Ohio has chosen to distribute NOX annual and NOX
ozone season allowances in a manner that differs in selected respects
from the distribution in the Part 96 model rule. First, as noted above,
the State's NOX ozone season allocation provisions have been
modified to bring the State's non-EGUs into the CAIR NOX
ozone season trading program. Second, while Ohio's NOX ozone
season program rules provide the same set aside for new sources as in
the Part 96 model rule (reflecting five percent of budgeted emissions
for 2009 to 2014 and three percent of budgeted emissions for 2015 and
thereafter), the State provides additional set asides of one percent of
budgeted emissions for energy efficiency and renewable energy projects
and one percent of budgeted emissions for innovative technology
projects. Ohio's rules also authorize Ohio EPA to increase the size of
these two set asides up to five percent of budgeted emissions in the
event that requests for these set asides significantly exceed the one
percent level, with provision that a correspondingly smaller number of
allowances would be issued in the primary allowance distribution so as
to allocate no more than the budgeted number of allowances. In the
February 1, 2008 notice, EPA asked Ohio to clarify these set aside
allocation provisions. EPA believes that this revision provides
sufficient clarification.
As is done in EPA's model rule, Ohio's rules distribute allowances
according to each source's proportion of heat input of subject sources.
CAIR NOX ozone season allowances for non-EGUs are
distributed according to heat input from a separate allowance pool from
the pool for EGUs.
F. 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.
Consistent with the flexibility given to States in CAIR, Ohio has
chosen to adopt a modified version of the provisions of the CAIR
NOX annual model trading rule concerning the allocation of
allowances from the CSP. EPA approved these provisions, as discussed in
EPA's earlier rulemaking. (See 73 FR 6038 (February 1, 2008).) In
brief, Ohio's CSP is comprised of 25,037 allowances. Unlike the model
rule, which allocates allowances in the amount that either (1) early
reductions occur, or (2) allowances are needed to avoid disruption of
electricity supply (provided the total does not exceed the State's
share of the CSP), Ohio's rule provides (1) an initial allocation
reflecting early reductions, limited to the source's proportionate
share of the CSP, with provision for (2) distribution of the remainder
of the CSP according to the distribution of additional early
reductions. Ohio's recent rulemaking did not significantly change these
provisions, but the revised rule does clarify that Ohio will submit CSP
allocations to the Administrator by
[[Page 48862]]
November 30, 2009, as EPA requested in its February 1, 2008, rulemaking
notice. The revised rule continues to satisfy EPA requirements.
G. 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 this flexibility, 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. EPA approved
Ohio's earlier version of rules authorizing these opt-ins (see 73 FR
6038 (February 1, 2008)), and Ohio's revised rules make only minor
ministerial changes.
VII. Final Action
EPA is approving Ohio's full CAIR SIP revision, which includes
rules submitted on July 15, 2009, and August 13, 2009. With these
rules, Ohio is providing for continued participation in the EPA-
administered CAIR cap-and-trade programs for SO2,
NOX annual, and NOX ozone season emissions. The
requested SIP revision 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. In accordance
with 40 CFR 52.35 and 52.36, as an automatic consequence of the
approval of Ohio's full CAIR SIP revision, EPA is also amending the
Ohio plan to withdraw the CAIR FIPs for SO2, NOX
annual, and NOX ozone season emissions for Ohio sources.
We are publishing this action without prior proposal because we
view this as a noncontroversial amendment and anticipate no adverse
comments. However, in the proposed rules section of this Federal
Register publication, we are publishing a separate document that will
serve as the proposal to approve the State plan if relevant adverse
written comments are filed. This rule will be effective November 24,
2009 without further notice unless we receive relevant adverse written
comments by October 26, 2009. If we receive such comments, we will
withdraw this action before the effective date by publishing a
subsequent document that will withdraw the final action. All public
comments received will then be addressed in a subsequent final rule
based on the proposed action. EPA will not institute a second comment
period. Any parties interested in commenting on this action should do
so at this time. If we do not receive any comments, this action will be
effective November 24, 2009.
VIII. Statutory and Executive Order Reviews
Under the Clean Air Act, the Administrator is required to approve a
SIP submission that complies with the provisions of the Clean Air 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 Clean Air Act.
Accordingly, this 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 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);
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 Clean Air Act; 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 in 40 CFR Part 52
Environmental protection, Air pollution control, Incorporation by
reference, Nitrogen dioxide, Ozone, Particulate matter, Reporting and
recordkeeping requirements, Sulfur oxides.
Dated: August 19, 2009.
Walter W. Kovalick, Jr.,
Acting Regional Administrator, Region 5.
0
40 CFR part 52 is 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. Section 52.35 is amended by:
0
a. In paragraph (d)(1), by removing ``[STATE NAME]'' and by adding
``Ohio'', in its place; and
0
b. In paragraph (d)(2), by removing ``[STATE NAME]'' and by adding,
``Ohio'', in its place.
[[Page 48863]]
0
3. Section 52.36 is amended in paragraph (c) by removing ``[STATE
NAME]'' and by adding, ``Ohio'', in its place.
0
4. Section 52.1870 is amended by revising paragraph (c)(140) to read as
follows:
Sec. 52.1870 Identification of plan.
* * * * *
(c) * * *
(140) On July 15, 2009, and August 13, 2009, Ohio submitted rules
addressing the requirements of the Clean Air Interstate Rule.
(i) Incorporation by reference.
(A) Ohio Administrative Code Rule 3745-109-01 ``CAIR NOX
annual, CAIR SO2 and CAIR NOX ozone season
trading programs definitions and general provisions.'', Rule 3745-109-
04 ``CAIR NOX allowance allocations.'', Rule 3745-109-07
``Monitoring and Reporting.'', Rule 3745-109-08 ``CAIR NOX
opt-in units.'', Rule 3745-109-11 ``CAIR SO2 allowance
tracking system.'', Rule 3745-109-12 ``CAIR SO2 allowance
transfers.'', Rule 3745-109-13 ``Monitoring and reporting.'', Rule
3745-109-14 ``CAIR SO2 opt-in units.'', Rule 3745-109-17
``CAIR NOX ozone season allowance allocations.'', Rule 3745-
109-18 ``CAIR NOX ozone season allowance tracking system.'',
Rule 3745-109-19 ``CAIR NOX ozone season allowance
transfers.'', Rule 3745-109-20 ``Monitoring and reporting.'', and Rule
3745-109-21 ``CAIR NOX ozone season opt-in units.'', adopted
on July 6, 2009, effective on July 16, 2009.
(B) July 6, 2009, ``Director's Final Findings and Orders'', signed
by Chris Korleski, Director, Ohio Environmental Protection Agency.
(C) Ohio Administrative Code Rule 3745-109-02 ``CAIR designated
representative for CAIR NOX sources.'', Rule 3745-109-03
``Permits.'', Rule 3745-109-05 ``CAIR NOX allowance tracking
system.'', Rule 3745-109-06 ``CAIR NOX allowance
transfers.'', Rule 3745-109-09 ``CAIR designated representative for
CAIR SO2 sources.'', Rule 3745-109-10 ``Permits.'', Rule
3745-109-15 ``CAIR designated representative for CAIR NOX
ozone season sources.'', and Rule 3745-109-16 ``Permits.'', adopted on
September 17, 2007, effective on September 27, 2007.
(D) September 17, 2007, ``Director's Final Findings and Orders'',
signed by Chris Korleski, Director, Ohio Environmental Protection
Agency.
0
5. Section 52.1891 is removed.
0
6. Section 52.1892 is removed.
[FR Doc. E9-23254 Filed 9-24-09; 8:45 am]
BILLING CODE 6560-50-P