Approval And Promulgation of Implementation Plans; Iowa; Clean Air Interstate Rule, 26040-26045 [E7-8665]

Download as PDF 26040 Federal Register / Vol. 72, No. 88 / Tuesday, May 8, 2007 / Proposed Rules Energy Effects We have analyzed this proposed rule under Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use. We have determined that it is not a ‘‘significant energy action’’ under that order because it is not a ‘‘significant regulatory action’’ under Executive Order 12866 and is not likely to have a significant adverse effect on the supply, distribution, or use of energy. The Administrator of the Office of Information and Regulatory Affairs has not designated it as a significant energy action. Therefore, it does not require a Statement of Energy Effects under Executive Order 13211. The National Technology Transfer and Advancement Act (NTTAA) (15 U.S.C. 272 note) directs agencies to use voluntary consensus standards in their regulatory activities unless the agency provides Congress, through the Office of Management and Budget, with an explanation of why using these standards would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards (e.g., specifications of materials, performance, design, or operation; test methods; sampling procedures; and related management systems practices) that are developed or adopted by voluntary consensus standards bodies. This proposed rule does not use technical standards. Therefore, we did not consider the use of voluntary consensus standards. Bridges. For the reasons discussed in the preamble, the Coast Guard proposes to amend 33 CFR part 117 as follows: PART 117—DRAWBRIDGE OPERATION REGULATIONS 1. The authority citation for part 117 continues to read as follows: Authority: 33 U.S.C. 499; Department of Homeland Security Delegation No. 0170.1; 33 CFR 1.05–1(g); section 117.255 also issued under the authority of Pub. L. 102–587, 106 Stat. 5039. § 117.821 Atlantic Intracoastal Waterway, Albermarle Sound to Sunset Beach. * * * * * (a) * * * (5) S.R. 1172 Bridge, mile 337.9, at Sunset Beach, NC, shall open on the hour on signal between 7 a.m. to 9 p.m. * * * * * Dated: April 9, 2007. L.L. Hereth, Rear Admiral, U.S. Coast Guard, Commander, Fifth Coast Guard District. [FR Doc. E7–8723 Filed 5–7–07; 8:45 am] BILLING CODE 4910–15–P ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 52 [EPA–R07–OAR–2007–0347; FRL–8309–6] Environment cprice-sewell on PROD1PC62 with PROPOSALS List of Subjects in 33 CFR Part 117 2. In § 117.821, paragraph (a)(5) is revised to read as follows: Technical Standards We have analyzed this proposed rule under Commandant Instruction M16475.lD, and Department of Homeland Security Management Directive 5100.1, which guides the Coast Guard in complying with the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321–4370f), and have made a preliminary determination that there are no factors in this case that would limit the use of a categorical exclusion under section 2.B.2 of the Instruction. Therefore, we believe that this rule should be categorically excluded, under figure 2– 1, paragraph (32)(e), of the Instruction, from further environmental documentation. Under figure 2–1, paragraph (32)(e), of the Instruction, an ‘‘Environmental Analysis Check List’’ and a ‘‘Categorical Exclusion Determination’’ are not required for this rule. However, comments on this VerDate Aug<31>2005 section will be considered before the final rule. 15:54 May 07, 2007 Jkt 211001 Approval And Promulgation of Implementation Plans; Iowa; Clean Air Interstate Rule Environmental Protection Agency (EPA). ACTION: Proposed rule. AGENCY: SUMMARY: EPA is proposing to approve a revision to the Iowa State Implementation Plan (SIP) submitted on August 15, 2006. This revision addresses the requirements of EPA’s Clean Air Interstate Rule (CAIR) promulgated on May 12, 2005, and subsequently revised on April 28, 2006, and December 13, 2006. EPA is proposing to determine that the SIP revision fully implements the CAIR requirements for Iowa. Therefore, as a consequence of the SIP approval, EPA will also withdraw the CAIR Federal Implementation Plans (FIPs) concerning SO2, NOX annual, NOX ozone season PO 00000 Frm 00055 Fmt 4702 Sfmt 4702 emissions for Iowa. The CAIR FIPs for all States in the CAIR region were promulgated on April 28, 2006, and subsequently revised on December 13, 2006. CAIR requires States to reduce emissions of sulfur dioxide (SO2) and nitrogen oxides (NOX) that significantly contribute to, and interfere with maintenance of, the national ambient air quality standards for fine particulates and/or ozone in any downwind state. CAIR establishes State budgets for SO2 and NOX and requires States to submit SIP revisions that implement these budgets in States that EPA concluded did contribute to nonattainment in downwind states. States have the flexibility to choose which control measures to adopt to achieve the budgets, including participating in the EPA-administered cap-and-trade programs. In the SIP revision that EPA is proposing to approve, Iowa would meet CAIR requirements by participating in the EPA-administered cap-and-trade programs addressing SO2, NOX annual, and NOX ozone season emissions. Comments must be received on or before June 7, 2007. ADDRESSES: Submit your comments, identified by Docket ID No. EPA–R07– OAR–2007–0347, by one of the following methods: 1. http://www.regulations.gov: Follow the on-line instructions for submitting comments. 2. E-mail: jay.michael@epa.gov. 3. Mail: Michael Jay, Environmental Protection Agency, Air Planning and Development Branch, 901 North 5th Street, Kansas City, Kansas 66101. 4. Hand Delivery or Courier: Deliver your comments to: Michael Jay, Environmental Protection Agency, Air Planning and Development Branch, 901 North 5th Street, Kansas City, Kansas 66101. 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 a.m. to 4:30 p.m., excluding Federal holidays. Instructions: Direct your comments to Docket ID No. EPA–R07–OAR–2007– 0347. 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, DATES: E:\FR\FM\08MYP1.SGM 08MYP1 Federal Register / Vol. 72, No. 88 / Tuesday, May 8, 2007 / Proposed Rules 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 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 at the Environmental Protection Agency, Air Planning and Development Branch, 901 North 5th Street, Kansas City, Kansas 66101. EPA requests that you contact the person listed in the FOR FURTHER INFORMATION CONTACT section to schedule your inspection. The interested persons wanting to examine these documents should make an appointment with the office at least 24 hours in advance. FOR FURTHER INFORMATION CONTACT: If you have questions concerning this proposal, please contact Michael Jay at (913) 551–7460 or by e-mail at jay.michael@epa.gov. cprice-sewell on PROD1PC62 with PROPOSALS SUPPLEMENTARY INFORMATION: Throughout this document whenever ‘‘we,’’ ‘‘us,’’ or ‘‘our’’ is used, we mean EPA. 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? VerDate Aug<31>2005 15:54 May 07, 2007 Jkt 211001 IV. What Are the Types of CAIR SIP Submittals? V. Analysis of Iowa’s CAIR SIP Submittal A. State Budgets for Allowance Allocations B. CAIR Cap-and-Trade Programs C. NOX Allowance Allocations D. Allocation of NOX Allowances from Compliance Supplement Pool E. Individual Opt-in Units VI. Proposed Actions VII. Statutory and Executive Order Reviews I. What Action Is EPA Proposing to Take? EPA is proposing to approve a revision to Iowa’s SIP submitted on August 15, 2006. In its SIP revision, Iowa would meet CAIR requirements by requiring certain electric generating units (EGUs) to participate in the EPAadministered State CAIR cap-and-trade programs addressing SO2, NOX annual, and NOX ozone season emissions, as finalized in the Iowa Administrative Bulletin on June 7, 2006 (567– 20.1(455B,17A), 21.1(4), and Chapter 34). Iowa’s regulations adopt by reference most of the provisions of EPA’s SO2, NOX annual, and NOX ozone season model trading rules, with certain changes discussed below. EPA is proposing to determine that the SIP as revised will meet the applicable requirements of CAIR. Any final action approving the SIP will be taken by the Regional Administrator for Region 7. If EPA approves this revision, the Administrator of EPA will also issue a final rule to withdraw the FIPs concerning SO2, NOX annual, and NOX ozone season emissions for Iowa. This action would delete and reserve 40 CFR 52.840 and 40 CFR 52.841, relating to the CAIR FIP obligations for Iowa. The withdrawal of the CAIR FIPs for Iowa is a conforming amendment that must be made once the SIP is approved because EPA’s authority to issue the FIPs was premised on a deficiency in the SIP for Iowa. Once a SIP is fully approved, EPA no longer has authority for the FIPs. Thus, EPA will not have the option of maintaining the FIPs following full SIP approval. Accordingly, EPA does not intend to offer an opportunity for a public hearing or an additional opportunity for written public comment on the withdrawal of the FIPs. II. What Is the Regulatory History of CAIR and the CAIR FIPs? The Clean Air Interstate Rule (CAIR) was published by EPA on May 12, 2005 (70 FR 25162). In this rule, EPA determined that 28 States and the District of Columbia contribute significantly to nonattainment and interfere with maintenance of the national ambient air quality standards (NAAQS) for fine particles (PM2.5) and/ PO 00000 Frm 00056 Fmt 4702 Sfmt 4702 26041 or 8-hour ozone in downwind States in the eastern part of the country. As a result, EPA required those upwind States to revise their SIPs to include control measures that reduce emissions of SO2, which is a precursor to PM2.5 formation, and/or NOX, which is a precursor to both ozone and PM2.5 formation. For jurisdictions that contribute significantly to downwind PM2.5 nonattainment, CAIR sets annual State-wide emission reduction requirements (i.e., budgets) for SO2 and annual State-wide emission reduction requirements for NOX. Similarly, for jurisdictions that contribute significantly to 8-hour ozone nonattainment, CAIR sets State-wide emission reduction requirements for NOX for the ozone season (May 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 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. Iowa submitted its SIP in response to EPA’s section 110(a)(2)(D) finding, which EPA approved in a rule published March 8, 2007 (72 FR 10380). In that rule, EPA stated that Iowa had met its obligation with regard to interstate transport by adoption of the CAIR model rule. EPA also stated that it would review and act on Iowa’s CAIR rule in a separate rulemaking. This document proposes action on Iowa’s CAIR rule as explained below. 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 E:\FR\FM\08MYP1.SGM 08MYP1 26042 Federal Register / Vol. 72, No. 88 / Tuesday, May 8, 2007 / Proposed Rules cprice-sewell on PROD1PC62 with PROPOSALS 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. The CAIR FIPs also allow States to submit abbreviated SIP revisions that, if approved by EPA, will automatically replace or supplement certain CAIR FIP provisions (e.g., the methodology for allocating NOX allowances to sources in the State), while the CAIR FIP remains in place for all other provisions. On April 28, 2006, EPA published two additional CAIR-related final rules that added the States of Delaware and New Jersey to the list of States subject to CAIR for PM2.5 and announced EPA’s final decisions on reconsideration of five issues, without making any substantive changes to the CAIR requirements. III. What Are the General Requirements of CAIR and the CAIR FIPs? CAIR establishes State-wide emission budgets for SO2 and NOX and is to be implemented in two phases. The first phase of NOX reductions starts in 2009 and continues through 2014, while the first phase of SO2 reductions starts in 2010 and continues through 2014. The second phase of reductions for both NOX and SO2 starts in 2015 and continues thereafter. CAIR requires States to implement the budgets by either: (1) Requiring EGUs to participate in the EPA-administered cap-and-trade programs; or (2) adopting other control measures of the State’s choosing and demonstrating that such control measures will result in compliance with the applicable State SO2 and NOX budgets. The May 12, 2005, and April 28, 2006, CAIR rules provide model rules that States must adopt (with certain limited changes, if desired) if they want to participate in the EPA-administered trading programs. With two exceptions, only States that choose to meet the requirements of CAIR through methods that exclusively regulate EGUs are allowed to participate in the EPA-administered trading programs. One exception is for States VerDate Aug<31>2005 15:54 May 07, 2007 Jkt 211001 that adopt the opt-in provisions of the model rules to allow non-EGUs individually to opt into the EPAadministered 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 EPAadministered CAIR cap-and-trade programs. For such States, EPA has provided two approaches for submitting and obtaining approval for CAIR SIP revisions. States may submit full SIP revisions that adopt the model CAIR cap-and-trade rules. If approved, these SIP revisions will fully replace the CAIR FIPs. Alternatively, States may submit abbreviated SIP revisions. These SIP revisions will not replace the CAIR FIPs; however, the CAIR FIPs provide that, when approved, the provisions in these abbreviated SIP revisions will be used instead of or in conjunction with, as appropriate, the corresponding provisions of the CAIR FIPs (e.g., the NOX allowance allocation methodology). A State submitting a full SIP revision may either adopt regulations that are substantively identical to the model rules or incorporate by reference the model rules. CAIR provides that States may only make limited changes to the model rules if the States want to participate in the EPA-administered trading programs. A full SIP revision may change the model rules only by altering their applicability and allowance allocation provisions to: (1) Include NOX SIP Call trading sources that are not EGUs under CAIR in the CAIR NOX ozone season trading program; (2) provide for State allocation of NOX annual or ozone season allowances using a methodology chosen by the State; (3) provide for State allocation of NOX annual allowances from the compliance supplement pool (CSP) using the State’s 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 optin provisions in the model rules. An approved CAIR full SIP revision addressing EGUs’ SO2, NOX annual, or NOX ozone season emissions will PO 00000 Frm 00057 Fmt 4702 Sfmt 4702 replace the CAIR FIP for that State for the respective EGU emissions. V. Analysis of Iowa’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 in the Acid Rain Program for the years in phase 1 of CAIR (2010 through 2014) authorizes 0.5 ton of SO2 emissions in the CAIR trading program, and each Acid Rain Program allowance allocated for the years in phase 2 of CAIR (2015 and thereafter) authorizes 0.35 ton of SO2 emissions in the CAIR trading program. In this action, EPA is proposing approval of Iowa’s SIP revision that adopts the budgets established for the State in CAIR, i.e., 32,692 (2009–2014) and 27,243 (2015-thereafter) tons for NOX annual emissions, 14,263 (2009– 2014) and 11,886 (2015-thereafter) tons for NOX ozone season emissions, and 64,095 (2010–2014) and 44,866 (2015thereafter) tons for SO2 emissions. Iowa’s SIP revision sets these budgets as the total amounts of allowances available for allocation for each year under the EPA-administered cap-andtrade programs. Iowa has committed to revising a definition in all three CAIR rules in order to fully ensure allowances can be traded among all sources participating in the EPA-administered cap-and-trade programs as intended. EPA discovered after review of other States’ rules, but after Iowa had adopted its CAIR rules, that there was an issue related to the definition of ‘‘permitting authority’’ when it is revised to refer to a specific State’s permitting authority. In each of Iowa’s rules for CAIR, the EPA model trading rules were revised to limit all references to ‘‘permitting authority’’ to refer to the Iowa Department of Natural Resources. This E:\FR\FM\08MYP1.SGM 08MYP1 cprice-sewell on PROD1PC62 with PROPOSALS Federal Register / Vol. 72, No. 88 / Tuesday, May 8, 2007 / Proposed Rules change is acceptable in most, but not all, instances under the current model rules. In certain definitions in the model rules incorporated by Iowa (i.e., ‘‘allocate’’ or ‘‘allocation,’’ ‘‘CAIR NOX allowance,’’ ‘‘CAIR SO2 allowance,’’ and ‘‘CAIR NOX Ozone Season allowance’’), it is important that the term ‘‘permitting authority’’ cover permitting authorities in all States that choose to participate in the respective EPA-administered trading programs. This is necessary to ensure that all allowances issued in each EPAadministered trading program are fungible and can be traded and used for compliance with the allowance-holding requirement in any State in the program. On February 17, 2007, EPA provided a letter to Iowa that requested and outlined necessary definition revisions. EPA received a letter from Iowa on February 28, 2007, that provided a commitment to make the EPA suggested rule revisions as soon as is practicable upon publication of the final rule concerning the proposed Clean Air Mercury Rule (CAMR) Federal plan. On April 11, 2007, EPA received an electronic correspondence from Iowa stating that Iowa will, in any event, complete these rule revisions before January 1, 2008. The State will be able to simultaneously revise the ‘‘permitting authority’’ definition in all cap-andtrade rules for both CAIR and CAMR, and properly update the State’s rule as necessary to meet the requirements of the EPA-administered cap-and-tradeprogram for mercury. The final rule concerning the CAMR Federal plan is expected to be published before the earliest, major deadline for compliance with requirements for source owners and operators under the CAIR trading programs, i.e., the January 1, 2008, deadline for emissions monitoring requirements under the CAIR Annual Trading Program. EPA expects that, by timing adoption of the EPA requested rule revisions to be soon after the publication of the final rule concerning the CAMR Federal plan, the State will ensure the revisions to the definition of ‘‘permitting authority’’ will be completed prior to any of the major compliance deadlines for source owners and operators under the CAIR trading programs. In the event the final rule concerning the CAMR Federal plan is not published in the expected timeframe, the State will need to ensure the necessary State rule revisions are completed and submitted to EPA in advance of the January 1, 2008, monitoring deadline for the CAIR NOX Annual Trading Program. To be clear, EPA notes that it is not proposing to approve the State’s rule to comply with CAMR as part of this VerDate Aug<31>2005 15:54 May 07, 2007 Jkt 211001 rulemaking. EPA will propose a separate rulemaking for the Iowa rule relating to CAMR. B. CAIR Cap-and-Trade Programs The CAIR NOX annual and ozone season model trading rules both largely mirror the structure of the NOX SIP Call model trading rule in 40 CFR part 96, subparts A through I. While the provisions of the NOX annual and ozone season model rules are similar, there are some differences. For example, the NOX annual model rule (but not the NOX ozone season model rule) provides for a compliance supplement pool (CSP), which is discussed below and under which allowances may be awarded for early reductions of NOX annual emissions. As a further example, the NOX ozone season model rule reflects the fact that the CAIR NOX ozone season trading program replaces the NOX SIP Call trading program after the 2008 ozone season and is coordinated with the NOX SIP Call program. The NOX ozone season model rule provides incentives for early emissions reductions by allowing banked, pre2009 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 0.36 ton of emissions. Banked title IV allowances allocated for years before 2010 can be used at any time in the CAIR SO2 capand-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 capand-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 PO 00000 Frm 00058 Fmt 4702 Sfmt 4702 26043 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, Iowa has chosen to implement its CAIR budgets by requiring EGUs to participate in EPAadministered cap-and-trade programs for SO2, NOX annual, and NOX ozone season emissions. Iowa has adopted a full SIP revision that adopts, with the changes discussed above and with certain allowed changes discussed below, the CAIR model cap-and-trade rules for SO2, NOX annual, and NOX ozone season emissions. C. 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 setaside 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. Iowa has chosen to adopt the essential components of the CAIR NOX annual and CAIR NOX ozone season model trading rules concerning the allocation of allowances with two notable exceptions. Language is provided in Iowa’s rules that attempts to clarify that allowances will be allocated in future years only ‘‘to meet the minimum timing requirements’’ specified in the Federal regulations. EPA understands that the language is intended to mean that allocations will be determined by E:\FR\FM\08MYP1.SGM 08MYP1 26044 Federal Register / Vol. 72, No. 88 / Tuesday, May 8, 2007 / Proposed Rules the dates and only for the years identified or described in 40 CFR 96.141 and 40 CFR 96.341. Additionally, Iowa’s CAIR NOX Annual and CAIR NOX ozone rules establish permanent allocations for specified units designated as ‘‘existing units’’ or ‘‘new units’’ and do not include provisions of the EPA’s model rules that call for adjusting the allocations for existing units to provide allocations for future, new units. EPA is proposing to approve these changes to the model rule provisions because the changes are consistent with the flexibility that CAIR provides States with regard to allocation methodologies. cprice-sewell on PROD1PC62 with PROPOSALS D. Allocation of NOX Allowances From Compliance Supplement Pool The CAIR establishes a compliance supplement pool 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. Iowa has not chosen to modify the provisions of the CAIR NOX annual model trading rule concerning the allocation of allowances from the CSP. Iowa has chosen to distribute CSP allowances using the allocation methodology provided in 40 CFR 96.143 and has adopted this section by reference. E. Individual Opt-in Units The opt-in provisions of the CAIR SIP model trading rules allow certain nonEGUs (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 VerDate Aug<31>2005 15:54 May 07, 2007 Jkt 211001 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. Iowa has chosen to allow non-EGUs meeting certain requirements to opt into the CAIR trading programs by adopting by reference the entirety of EPA’s model rule provisions for opt-in units in the CAIR SO2, CAIR NOX annual, and CAIR NOX ozone season trading programs. VI. Proposed Actions EPA is proposing to approve Iowa’s full CAIR SIP revision submitted on August 15, 2006. Under this SIP revision, Iowa is choosing to participate in the EPA-administered cap-and-trade programs for SO2, NOX annual, and NOX ozone season emissions. EPA believes that the SIP revision meets the applicable requirements in 40 CFR 51.123(o) and (aa), with regard to NOX annual and NOX ozone season emissions, and 40 CFR 51.124(o), with regard to SO2 emissions. EPA is proposing to determine that the SIP as revised will meet the requirements of CAIR. If EPA finalizes this action as proposed, the Administrator of EPA will also issue, without providing an opportunity for a public hearing or an additional opportunity for written public comment, a final rule to withdraw the CAIR FIPs concerning SO2, NOX annual, and NOX ozone season emissions for Iowa. The Administrator’s action would delete and reserve 40 CFR 52.840 and 40 CFR 52.841. VII. Statutory and Executive Order Reviews Under Executive Order 12866 (58 FR 51735, October 4, 1993), this action is PO 00000 Frm 00059 Fmt 4702 Sfmt 4702 not a ‘‘significant regulatory action’’ and therefore is not subject to review by the Office of Management and Budget. For this reason, this action is also not subject to Executive Order 13211, ‘‘Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use’’ (66 FR 28355, May 22, 2001). This action merely proposes to approve State law as meeting Federal requirements and would impose no additional requirements beyond those imposed by State law. Accordingly, the Administrator certifies that this proposed rule would not have a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.). Because this action proposes to approve pre-existing requirements under State law and would not impose any additional enforceable duty beyond that required by State law, it does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104–4). This proposal also does not have tribal implications because it would not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes, as specified by Executive Order 13175 (65 FR 67249, November 9, 2000). This proposed action also does not have Federalism implications because it would not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132 (64 FR 43255, August 10, 1999). This action merely proposes to approve a State rule implementing a Federal standard and will result, as a consequence of that approval, in the Administrator’s withdrawal of the CAIR FIP. It does not alter the relationship or the distribution of power and responsibilities established in the Clean Air Act. This proposed rule also is not subject to Executive Order 13045 ‘‘Protection of Children from Environmental Health Risks and Safety Risks’’ (62 FR 19885, April 23, 1997), because it would approve a State rule implementing a Federal Standard. In reviewing SIP submissions, EPA’s role is to approve State choices, provided that they meet the criteria of the Clean Air Act. In this context, in the absence of a prior existing requirement for the State to use voluntary consensus E:\FR\FM\08MYP1.SGM 08MYP1 Federal Register / Vol. 72, No. 88 / Tuesday, May 8, 2007 / Proposed Rules standards (VCS), EPA has no authority to disapprove a SIP submission for failure to use VCS. It would thus be inconsistent with applicable law for EPA, when it reviews a SIP submission, to use VCS in place of a SIP submission that otherwise satisfies the provisions of the Clean Air Act. Thus, the requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) do not apply. This proposed rule would not impose an information collection burden under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.). List of Subjects in 40 CFR Part 52 Environmental protection, Air pollution control, Electric utilities, Intergovernmental relations, Nitrogen oxides, Ozone, Particulate matter, Reporting and recordkeeping requirements, Sulfur dioxide. Dated: April 30, 2007. John B. Askew, Regional Administrator, Region 7. [FR Doc. E7–8665 Filed 5–7–07; 8:45 am] BILLING CODE 6560–50–P ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 52 [EPA–R09–OAR–2006–0827; FRL–8303–1] Revisions to the Arizona State Implementation Plan, Maricopa County Environmental Services Department Environmental Protection Agency (EPA). ACTION: Proposed rule. cprice-sewell on PROD1PC62 with PROPOSALS AGENCY: SUMMARY: EPA is proposing to approve a revision to the Maricopa County Environmental Services Department (MCESD) portion of the Arizona State Implementation Plan (SIP). This revision concerns particulate matter (PM–10) emissions from open burning. We are proposing approval of a local rule that regulates these emission sources under the Clean Air Act as amended in 1990 (CAA or the Act). DATES: Any comments on this proposal must arrive by June 7, 2007. ADDRESSES: Submit comments, identified by docket number EPA–R09– OAR–2006–0827, by one of the following methods: • Federal eRulemaking Portal: http:// www.regulations.gov. Follow the on-line instructions. • E-mail: steckel.andrew@epa.gov. • Mail or deliver: Andrew Steckel (Air–4), U.S. Environmental Protection VerDate Aug<31>2005 15:54 May 07, 2007 Jkt 211001 Agency Region IX, 75 Hawthorne Street, San Francisco, CA 94105. Instructions: All comments 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 Confidential Business Information (CBI) or other information whose disclosure is restricted by statute. Information that you consider CBI or otherwise protected should be clearly identified as such and should not be submitted through http://www.regulations.gov or e-mail. http://www.regulations.gov is an ‘‘anonymous access’’ system, and EPA will not know your identity or contact information unless you provide it in the body of your comment. If you send email directly to EPA, your e-mail address will be automatically captured and included as part of the public comment. 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. Docket: The index to the docket for this action is available electronically at http://www.regulations.gov and in hard copy at EPA Region IX, 75 Hawthorne Street, San Francisco, California. While all documents in the docket are listed in the index, some information may be publicly available only at the hard copy location (e.g., copyrighted material), and some may not be publicly available in either location (e.g., CBI). To inspect the hard copy materials, please schedule an appointment during normal business hours with the contact listed in the FOR FURTHER INFORMATION CONTACT section. FOR FURTHER INFORMATION CONTACT: Al Petersen, Rulemaking Office (AIR–4), U.S. Environmental Protection Agency, Region IX, (415) 947–4118, petersen.alfred@epa.gov. SUPPLEMENTARY INFORMATION: This proposal addresses the approval of local MCESD Rule 314. In the Rules and Regulations section of this Federal Register, we are approving this local rule in a direct final action without prior proposal because we believe this SIP revision is not controversial. If we receive adverse comments, however, we will publish a timely withdrawal of the direct final rule and address the comments in subsequent action based on this proposed rule. We do not plan to open a second comment period, so anyone interested in commenting should do so at this time. If we do not receive adverse comments, no further activity is planned. For further information, please see the direct final action. PO 00000 Frm 00060 Fmt 4702 Sfmt 4702 26045 Dated: March 23, 2007. Laura Yoshii, Acting Regional Administrator, Region IX. [FR Doc. E7–8691 Filed 5–7–07; 8:45 am] BILLING CODE 6560–50–P ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 52 [EPA–R07–OAR–2007–0249; FRL–8310–5] Approval and Promulgation of Implementation Plans; Missouri; Interstate Transport of Pollution Environmental Protection Agency (EPA). ACTION: Proposed rule. AGENCY: SUMMARY: EPA is proposing a revision to the Missouri State Implementation Plan (SIP) for the purpose of approving the Missouri Department of Natural Resources’ (MDNR) actions to address requirements of section 110(a)(2)(D)(i) of the Clean Air Act. Section 110(a)(2)(D)(i) requires each state to submit a SIP that prohibits emissions that adversely affect another state’s air quality through interstate transport. MDNR has adequately addressed the four distinct elements related to the impact of interstate transport of air pollutants. These include prohibiting significant contribution to downwind nonattainment of the National Ambient Air Quality Standards (NAAQS), interference with maintenance of the NAAQS, interference with plans in another state to prevent significant deterioration of air quality, and interference with efforts of other states to protect visibility. The requirements for public notification were also met by MDNR. DATES: Comments on this proposed action must be received in writing by June 7, 2007. ADDRESSES: Submit your comments, identified by Docket ID No. EPA–R07– OAR–2007–0249 by one of the following methods: 1. http://www.regulations.gov: Follow the on-line instructions for submitting comments. 2. E-mail: hamilton.heather@epa.gov. 3. Mail: Heather Hamilton, Environmental Protection Agency, Air Planning and Development Branch, 901 North 5th Street, Kansas City, Kansas 66101. 4. Hand Delivery or Courier. Deliver your comments to Heather Hamilton, Environmental Protection Agency, Air Planning and Development Branch, 901 North 5th Street, Kansas City, Kansas E:\FR\FM\08MYP1.SGM 08MYP1

Agencies

[Federal Register Volume 72, Number 88 (Tuesday, May 8, 2007)]
[Proposed Rules]
[Pages 26040-26045]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-8665]


=======================================================================
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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R07-OAR-2007-0347; FRL-8309-6]


Approval And Promulgation of Implementation Plans; Iowa; Clean 
Air Interstate Rule

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

-----------------------------------------------------------------------

SUMMARY: EPA is proposing to approve a revision to the Iowa State 
Implementation Plan (SIP) submitted on August 15, 2006. This revision 
addresses the requirements of EPA's Clean Air Interstate Rule (CAIR) 
promulgated on May 12, 2005, and subsequently revised on April 28, 
2006, and December 13, 2006. EPA is proposing to determine that the SIP 
revision fully implements the CAIR requirements for Iowa. Therefore, as 
a consequence of the SIP approval, EPA will also withdraw the CAIR 
Federal Implementation Plans (FIPs) concerning SO2, 
NOX annual, NOX ozone season emissions for Iowa. 
The CAIR FIPs for all States in the CAIR region were promulgated on 
April 28, 2006, and subsequently revised on December 13, 2006.
    CAIR requires States to reduce emissions of sulfur dioxide 
(SO2) and nitrogen oxides (NOX) that 
significantly contribute to, and interfere with maintenance of, the 
national ambient air quality standards for fine particulates and/or 
ozone in any downwind state. CAIR establishes State budgets for 
SO2 and NOX and requires States to submit SIP 
revisions that implement these budgets in States that EPA concluded did 
contribute to nonattainment in downwind states. States have the 
flexibility to choose which control measures to adopt to achieve the 
budgets, including participating in the EPA-administered cap-and-trade 
programs. In the SIP revision that EPA is proposing to approve, Iowa 
would meet CAIR requirements by participating in the EPA-administered 
cap-and-trade programs addressing SO2, NOX 
annual, and NOX ozone season emissions.

DATES: Comments must be received on or before June 7, 2007.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-R07-
OAR-2007-0347, by one of the following methods:
    1. http://www.regulations.gov: Follow the on-line instructions for 
submitting comments.
    2. E-mail: jay.michael@epa.gov.
    3. Mail: Michael Jay, Environmental Protection Agency, Air Planning 
and Development Branch, 901 North 5th Street, Kansas City, Kansas 
66101.
    4. Hand Delivery or Courier: Deliver your comments to: Michael Jay, 
Environmental Protection Agency, Air Planning and Development Branch, 
901 North 5th Street, Kansas City, Kansas 66101. 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 a.m. to 4:30 p.m., excluding Federal holidays.
    Instructions: Direct your comments to Docket ID No. EPA-R07-OAR-
2007-0347. 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,

[[Page 26041]]

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 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 at the Environmental Protection 
Agency, Air Planning and Development Branch, 901 North 5th Street, 
Kansas City, Kansas 66101. EPA requests that you contact the person 
listed in the FOR FURTHER INFORMATION CONTACT section to schedule your 
inspection. The interested persons wanting to examine these documents 
should make an appointment with the office at least 24 hours in 
advance.

FOR FURTHER INFORMATION CONTACT: If you have questions concerning this 
proposal, please contact Michael Jay at (913) 551-7460 or by e-mail at 
jay.michael@epa.gov.

SUPPLEMENTARY INFORMATION: Throughout this document whenever ``we,'' 
``us,'' or ``our'' is used, we mean EPA.

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 Iowa's CAIR SIP Submittal
    A. State Budgets for Allowance Allocations
    B. CAIR Cap-and-Trade Programs
    C. NOX Allowance Allocations
    D. Allocation of NOX Allowances from Compliance 
Supplement Pool
    E. Individual Opt-in Units
VI. Proposed Actions
VII. Statutory and Executive Order Reviews

I. What Action Is EPA Proposing to Take?

    EPA is proposing to approve a revision to Iowa's SIP submitted on 
August 15, 2006. In its SIP revision, Iowa would meet CAIR requirements 
by requiring certain electric generating units (EGUs) to participate in 
the EPA-administered State CAIR cap-and-trade programs addressing 
SO2, NOX annual, and NOX ozone season 
emissions, as finalized in the Iowa Administrative Bulletin on June 7, 
2006 (567-20.1(455B,17A), 21.1(4), and Chapter 34). Iowa's regulations 
adopt by reference most of the provisions of EPA's SO2, 
NOX annual, and NOX ozone season model trading 
rules, with certain changes discussed below. EPA is proposing to 
determine that the SIP as revised will meet the applicable requirements 
of CAIR. Any final action approving the SIP will be taken by the 
Regional Administrator for Region 7. If EPA approves this revision, the 
Administrator of EPA will also issue a final rule to withdraw the FIPs 
concerning SO2, NOX annual, and NOX 
ozone season emissions for Iowa. This action would delete and reserve 
40 CFR 52.840 and 40 CFR 52.841, relating to the CAIR FIP obligations 
for Iowa. The withdrawal of the CAIR FIPs for Iowa is a conforming 
amendment that must be made once the SIP is approved because EPA's 
authority to issue the FIPs was premised on a deficiency in the SIP for 
Iowa. Once a SIP is fully approved, EPA no longer has authority for the 
FIPs. Thus, EPA will not have the option of maintaining the FIPs 
following full SIP approval. Accordingly, EPA does not intend to offer 
an opportunity for a public hearing or an additional opportunity for 
written public comment on the withdrawal of the FIPs.

II. What Is the Regulatory History of CAIR and the CAIR FIPs?

    The Clean Air Interstate Rule (CAIR) was published by EPA on May 
12, 2005 (70 FR 25162). In this rule, EPA determined that 28 States and 
the District of Columbia contribute significantly to nonattainment and 
interfere with maintenance of the national ambient air quality 
standards (NAAQS) for fine particles (PM2.5) and/or 8-hour 
ozone in downwind States in the eastern part of the country. As a 
result, EPA required those upwind States to revise their SIPs to 
include control measures that reduce emissions of SO2, which 
is a precursor to PM2.5 formation, and/or NOX, 
which is a precursor to both ozone and PM2.5 formation. For 
jurisdictions that contribute significantly to downwind 
PM2.5 nonattainment, CAIR sets annual State-wide emission 
reduction requirements (i.e., budgets) for SO2 and annual 
State-wide emission reduction requirements for NOX. 
Similarly, for jurisdictions that contribute significantly to 8-hour 
ozone nonattainment, CAIR sets State-wide emission reduction 
requirements for NOX for the ozone season (May 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 
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.
    Iowa submitted its SIP in response to EPA's section 110(a)(2)(D) 
finding, which EPA approved in a rule published March 8, 2007 (72 FR 
10380). In that rule, EPA stated that Iowa had met its obligation with 
regard to interstate transport by adoption of the CAIR model rule. EPA 
also stated that it would review and act on Iowa's CAIR rule in a 
separate rulemaking. This document proposes action on Iowa's CAIR rule 
as explained below.
    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

[[Page 26042]]

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. The CAIR FIPs also allow States 
to submit abbreviated SIP revisions that, if approved by EPA, will 
automatically replace or supplement certain CAIR FIP provisions (e.g., 
the methodology for allocating NOX allowances to sources in 
the State), while the CAIR FIP remains in place for all other 
provisions.
    On April 28, 2006, EPA published two additional CAIR-related final 
rules that added the States of Delaware and New Jersey to the list of 
States subject to CAIR for PM2.5 and announced EPA's final 
decisions on reconsideration of five issues, without making any 
substantive changes to the CAIR requirements.

III. What Are the General Requirements of CAIR and the CAIR FIPs?

    CAIR establishes State-wide emission budgets for SO2 and 
NOX and is to be implemented in two phases. The first phase 
of NOX reductions starts in 2009 and continues through 2014, 
while the first phase of SO2 reductions starts in 2010 and 
continues through 2014. The second phase of reductions for both 
NOX and SO2 starts in 2015 and continues 
thereafter. CAIR requires States to implement the budgets by either: 
(1) Requiring EGUs to participate in the EPA-administered cap-and-trade 
programs; or (2) adopting other control measures of the State's 
choosing and demonstrating that such control measures will result in 
compliance with the applicable State SO2 and NOX 
budgets.
    The May 12, 2005, and April 28, 2006, CAIR rules provide model 
rules that States must adopt (with certain limited changes, if desired) 
if they want to participate in the EPA-administered trading programs.
    With two exceptions, only States that choose to meet the 
requirements of CAIR through methods that exclusively regulate EGUs are 
allowed to participate in the EPA-administered trading programs. One 
exception is for States that adopt the opt-in provisions of the model 
rules to allow non-EGUs individually to opt into the EPA-administered 
trading programs. The other exception is for States that include all 
non-EGUs from their NOX SIP Call trading programs in their 
CAIR NOX ozone season trading programs.

IV. What Are the Types of CAIR SIP Submittals?

    States have the flexibility to choose the type of control measures 
they will use to meet the requirements of CAIR. EPA anticipates that 
most States will choose to meet the CAIR requirements by selecting an 
option that requires EGUs to participate in the EPA-administered CAIR 
cap-and-trade programs. For such States, EPA has provided two 
approaches for submitting and obtaining approval for CAIR SIP 
revisions. States may submit full SIP revisions that adopt the model 
CAIR cap-and-trade rules. If approved, these SIP revisions will fully 
replace the CAIR FIPs. Alternatively, States may submit abbreviated SIP 
revisions. These SIP revisions will not replace the CAIR FIPs; however, 
the CAIR FIPs provide that, when approved, the provisions in these 
abbreviated SIP revisions will be used instead of or in conjunction 
with, as appropriate, the corresponding provisions of the CAIR FIPs 
(e.g., the NOX allowance allocation methodology).
    A State submitting a full SIP revision may either adopt regulations 
that are substantively identical to the model rules or incorporate by 
reference the model rules. CAIR provides that States may only make 
limited changes to the model rules if the States want to participate in 
the EPA-administered trading programs. A full SIP revision may change 
the model rules only by altering their applicability and allowance 
allocation provisions to: (1) Include NOX SIP Call trading 
sources that are not EGUs under CAIR in the CAIR NOX ozone 
season trading program; (2) provide for State allocation of 
NOX annual or ozone season allowances using a methodology 
chosen by the State; (3) provide for State allocation of NOX 
annual allowances from the compliance supplement pool (CSP) using the 
State's choice of allowed, alternative methodologies; or (4) allow 
units that are not otherwise CAIR units to opt individually into the 
CAIR SO2, NOX annual, or NOX ozone 
season trading programs under the opt-in provisions in the model rules.
    An approved CAIR full SIP revision addressing EGUs' SO2, 
NOX annual, or NOX ozone season emissions will 
replace the CAIR FIP for that State for the respective EGU emissions.

V. Analysis of Iowa'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 in the Acid Rain Program for the years in phase 1 
of CAIR (2010 through 2014) authorizes 0.5 ton of SO2 
emissions in the CAIR trading program, and each Acid Rain Program 
allowance allocated for the years in phase 2 of CAIR (2015 and 
thereafter) authorizes 0.35 ton of SO2 emissions in the CAIR 
trading program.
    In this action, EPA is proposing approval of Iowa's SIP revision 
that adopts the budgets established for the State in CAIR, i.e., 32,692 
(2009-2014) and 27,243 (2015-thereafter) tons for NOX annual 
emissions, 14,263 (2009-2014) and 11,886 (2015-thereafter) tons for 
NOX ozone season emissions, and 64,095 (2010-2014) and 
44,866 (2015-thereafter) tons for SO2 emissions. Iowa'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.
    Iowa has committed to revising a definition in all three CAIR rules 
in order to fully ensure allowances can be traded among all sources 
participating in the EPA-administered cap-and-trade programs as 
intended. EPA discovered after review of other States' rules, but after 
Iowa had adopted its CAIR rules, that there was an issue related to the 
definition of ``permitting authority'' when it is revised to refer to a 
specific State's permitting authority.
    In each of Iowa's rules for CAIR, the EPA model trading rules were 
revised to limit all references to ``permitting authority'' to refer to 
the Iowa Department of Natural Resources. This

[[Page 26043]]

change is acceptable in most, but not all, instances under the current 
model rules. In certain definitions in the model rules incorporated by 
Iowa (i.e., ``allocate'' or ``allocation,'' ``CAIR NOX 
allowance,'' ``CAIR SO2 allowance,'' and ``CAIR 
NOX Ozone Season allowance''), it is important that the term 
``permitting authority'' cover permitting authorities in all States 
that choose to participate in the respective EPA-administered trading 
programs. This is necessary to ensure that all allowances issued in 
each EPA-administered trading program are fungible and can be traded 
and used for compliance with the allowance-holding requirement in any 
State in the program.
    On February 17, 2007, EPA provided a letter to Iowa that requested 
and outlined necessary definition revisions. EPA received a letter from 
Iowa on February 28, 2007, that provided a commitment to make the EPA 
suggested rule revisions as soon as is practicable upon publication of 
the final rule concerning the proposed Clean Air Mercury Rule (CAMR) 
Federal plan. On April 11, 2007, EPA received an electronic 
correspondence from Iowa stating that Iowa will, in any event, complete 
these rule revisions before January 1, 2008. The State will be able to 
simultaneously revise the ``permitting authority'' definition in all 
cap-and-trade rules for both CAIR and CAMR, and properly update the 
State's rule as necessary to meet the requirements of the EPA-
administered cap-and-trade-program for mercury.
    The final rule concerning the CAMR Federal plan is expected to be 
published before the earliest, major deadline for compliance with 
requirements for source owners and operators under the CAIR trading 
programs, i.e., the January 1, 2008, deadline for emissions monitoring 
requirements under the CAIR Annual Trading Program. EPA expects that, 
by timing adoption of the EPA requested rule revisions to be soon after 
the publication of the final rule concerning the CAMR Federal plan, the 
State will ensure the revisions to the definition of ``permitting 
authority'' will be completed prior to any of the major compliance 
deadlines for source owners and operators under the CAIR trading 
programs. In the event the final rule concerning the CAMR Federal plan 
is not published in the expected timeframe, the State will need to 
ensure the necessary State rule revisions are completed and submitted 
to EPA in advance of the January 1, 2008, monitoring deadline for the 
CAIR NOX Annual Trading Program.
    To be clear, EPA notes that it is not proposing to approve the 
State's rule to comply with CAMR as part of this rulemaking. EPA will 
propose a separate rulemaking for the Iowa rule relating to CAMR.

B. CAIR Cap-and-Trade Programs

    The CAIR NOX annual and ozone season model trading rules 
both largely mirror the structure of the NOX SIP Call model 
trading rule in 40 CFR part 96, subparts A through I. While the 
provisions of the NOX annual and ozone season model rules 
are similar, there are some differences. For example, the 
NOX annual model rule (but not the NOX ozone 
season model rule) provides for a compliance supplement pool (CSP), 
which is discussed below and under which allowances may be awarded for 
early reductions of NOX annual emissions. As a further 
example, the NOX ozone season model rule reflects the fact 
that the CAIR NOX ozone season trading program replaces the 
NOX SIP Call trading program after the 2008 ozone season and 
is coordinated with the NOX SIP Call program. The 
NOX ozone season model rule provides incentives for early 
emissions reductions by allowing banked, pre-2009 NOX SIP 
Call allowances to be used for compliance in the CAIR NOX 
ozone season trading program. In addition, States have the option of 
continuing to meet their NOX SIP Call requirement by 
participating in the CAIR NOX ozone season trading program 
and including all their NOX SIP Call trading sources in that 
program.
    The provisions of the CAIR SO2 model rule are also 
similar to the provisions of the NOX annual and ozone season 
model rules. However, the SO2 model rule is coordinated with 
the ongoing Acid Rain SO2 cap-and-trade program under CAA 
title IV. The SO2 model rule uses the title IV allowances 
for compliance, with each allowance allocated for 2010-2014 authorizing 
only 0.50 ton of emissions and each allowance allocated for 2015 and 
thereafter authorizing only 0.36 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, Iowa has chosen 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. Iowa has adopted a full SIP revision that 
adopts, with the changes discussed above and with certain allowed 
changes discussed below, the CAIR model cap-and-trade rules for 
SO2, NOX annual, and NOX ozone season 
emissions.

C. 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.
    Iowa has chosen to adopt the essential components of the CAIR 
NOX annual and CAIR NOX ozone season model 
trading rules concerning the allocation of allowances with two notable 
exceptions. Language is provided in Iowa's rules that attempts to 
clarify that allowances will be allocated in future years only ``to 
meet the minimum timing requirements'' specified in the Federal 
regulations. EPA understands that the language is intended to mean that 
allocations will be determined by

[[Page 26044]]

the dates and only for the years identified or described in 40 CFR 
96.141 and 40 CFR 96.341. Additionally, Iowa's CAIR NOX 
Annual and CAIR NOX ozone rules establish permanent 
allocations for specified units designated as ``existing units'' or 
``new units'' and do not include provisions of the EPA's model rules 
that call for adjusting the allocations for existing units to provide 
allocations for future, new units. EPA is proposing to approve these 
changes to the model rule provisions because the changes are consistent 
with the flexibility that CAIR provides States with regard to 
allocation methodologies.

D. Allocation of NOX Allowances From Compliance Supplement 
Pool

    The CAIR establishes a compliance supplement pool 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.
    Iowa has not chosen to modify the provisions of the CAIR 
NOX annual model trading rule concerning the allocation of 
allowances from the CSP. Iowa has chosen to distribute CSP allowances 
using the allocation methodology provided in 40 CFR 96.143 and has 
adopted this section by reference.

E. 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.
    Iowa has chosen to allow non-EGUs meeting certain requirements to 
opt into the CAIR trading programs by adopting by reference the 
entirety of EPA's model rule provisions for opt-in units in the CAIR 
SO2, CAIR NOX annual, and CAIR NOX 
ozone season trading programs.

VI. Proposed Actions

    EPA is proposing to approve Iowa's full CAIR SIP revision submitted 
on August 15, 2006. Under this SIP revision, Iowa is choosing to 
participate in the EPA-administered cap-and-trade programs for 
SO2, NOX annual, and NOX ozone season 
emissions. EPA believes that the SIP revision meets the applicable 
requirements in 40 CFR 51.123(o) and (aa), with regard to 
NOX annual and NOX ozone season emissions, and 40 
CFR 51.124(o), with regard to SO2 emissions. EPA is 
proposing to determine that the SIP as revised will meet the 
requirements of CAIR. If EPA finalizes this action as proposed, the 
Administrator of EPA will also issue, without providing an opportunity 
for a public hearing or an additional opportunity for written public 
comment, a final rule to withdraw the CAIR FIPs concerning 
SO2, NOX annual, and NOX ozone season 
emissions for Iowa. The Administrator's action would delete and reserve 
40 CFR 52.840 and 40 CFR 52.841.

VII. Statutory and Executive Order Reviews

    Under Executive Order 12866 (58 FR 51735, October 4, 1993), this 
action is not a ``significant regulatory action'' and therefore is not 
subject to review by the Office of Management and Budget. For this 
reason, this action is also not subject to Executive Order 13211, 
``Actions Concerning Regulations That Significantly Affect Energy 
Supply, Distribution, or Use'' (66 FR 28355, May 22, 2001). This action 
merely proposes to approve State law as meeting Federal requirements 
and would impose no additional requirements beyond those imposed by 
State law. Accordingly, the Administrator certifies that this proposed 
rule would not have a significant economic impact on a substantial 
number of small entities under the Regulatory Flexibility Act (5 U.S.C. 
601 et seq.). Because this action proposes to approve pre-existing 
requirements under State law and would not impose any additional 
enforceable duty beyond that required by State law, it does not contain 
any unfunded mandate or significantly or uniquely affect small 
governments, as described in the Unfunded Mandates Reform Act of 1995 
(Pub. L. 104-4).
    This proposal also does not have tribal implications because it 
would not have a substantial direct effect on one or more Indian 
tribes, on the relationship between the Federal Government and Indian 
tribes, or on the distribution of power and responsibilities between 
the Federal Government and Indian tribes, as specified by Executive 
Order 13175 (65 FR 67249, November 9, 2000). This proposed action also 
does not have Federalism implications because it would not have 
substantial direct effects on the States, on the relationship between 
the national government and the States, or on the distribution of power 
and responsibilities among the various levels of government, as 
specified in Executive Order 13132 (64 FR 43255, August 10, 1999). This 
action merely proposes to approve a State rule implementing a Federal 
standard and will result, as a consequence of that approval, in the 
Administrator's withdrawal of the CAIR FIP. It does not alter the 
relationship or the distribution of power and responsibilities 
established in the Clean Air Act. This proposed rule also is not 
subject to Executive Order 13045 ``Protection of Children from 
Environmental Health Risks and Safety Risks'' (62 FR 19885, April 23, 
1997), because it would approve a State rule implementing a Federal 
Standard.
    In reviewing SIP submissions, EPA's role is to approve State 
choices, provided that they meet the criteria of the Clean Air Act. In 
this context, in the absence of a prior existing requirement for the 
State to use voluntary consensus

[[Page 26045]]

standards (VCS), EPA has no authority to disapprove a SIP submission 
for failure to use VCS. It would thus be inconsistent with applicable 
law for EPA, when it reviews a SIP submission, to use VCS in place of a 
SIP submission that otherwise satisfies the provisions of the Clean Air 
Act. Thus, the requirements of section 12(d) of the National Technology 
Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) do not apply. 
This proposed rule would not impose an information collection burden 
under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 
3501 et seq.).

List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Electric 
utilities, Intergovernmental relations, Nitrogen oxides, Ozone, 
Particulate matter, Reporting and recordkeeping requirements, Sulfur 
dioxide.

    Dated: April 30, 2007.
John B. Askew,
Regional Administrator, Region 7.
[FR Doc. E7-8665 Filed 5-7-07; 8:45 am]
BILLING CODE 6560-50-P