Approval of Implementation Plans of Alabama: Clean Air Interstate Rule, 38045-38050 [E7-13543]
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Federal Register / Vol. 72, No. 133 / Thursday, July 12, 2007 / Proposed Rules
President’s priorities, or the principles
set forth in the Executive Order.
Regulatory Flexibility Act
The Secretary hereby certifies that
this proposed rule would not have a
significant economic impact on a
substantial number of small entities as
they are defined in the Regulatory
Flexibility Act. In addition to affecting
individuals, this document would affect
mainly large insurance companies.
Further, where small entities would be
involved, they would not be impacted
significantly since an inconsequential
portion of their business would be with
VA. Accordingly, pursuant to 5 U.S.C.
605(b), this proposed rule is exempt
from the initial and final regulatory
flexibility analysis requirements of
sections 603 and 604.
Catalog of Federal Domestic Assistance
The Catalog of Federal Domestic
Assistance numbers and titles for the
programs affected by this document are
64.005, Grants to States for the
Construction of State Homes; 64.007,
Blind Rehabilitation Centers; 64.008,
Veterans Domiciliary Care; 64.009,
Veterans Medical Care Benefits; 64.010,
Veterans Nursing Home Care; 64.011,
Veterans Dental Care; 64.012, Veterans
Prescription Service; 64.013, Veterans
Prosthetic Appliances; 64.014, Veterans
State Domiciliary Care; 64.015, Veterans
State Nursing Home Care; 64.016,
Veterans State Hospital Care; 64.018,
Sharing Specialized Medical Resources;
64.019, Veterans Rehabilitation Alcohol
and Drug Dependence; and 64.022,
Veterans Home Based Primary Care.
List of Subjects in 38 CFR Part 17
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Administrative practice and
procedure, Alcohol abuse, Alcoholism,
Claims, Day care, Dental health, Drug
abuse, Foreign relations, Government
contracts, Grant programs-health, Grant
programs-veterans, Health care, Health
facilities, Health professions, Health
records, Homeless, Medical and Dental
schools, Medical devices, Medical
research, Mental health programs,
Nursing homes, Philippines, Reporting
and recordkeeping requirements,
Scholarships and fellowships, Travel
and transportation expenses, Veterans.
Approved: March 30, 2007.
Gordon H. Mansfield,
Deputy Secretary of Veterans Affairs.
For the reasons set forth in the
preamble, the Department of Veterans
Affairs proposes to amend 38 CFR part
17 as follows:
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PART 17—MEDICAL
1. The authority citation for part 17
continues to read as follows:
Authority: 38 U.S.C. 501, 1721, and as
noted in specific sections.
2. Add an undesignated center
heading and § 17.86 to read as follows:
Care During Certain Disasters and
Emergencies
§ 17.86 Provision of hospital care and
medical services during certain disasters
and emergencies under 38 U.S.C. 1785.
(a) This section sets forth regulations
regarding the provision of hospital care
and medical services under 38 U.S.C.
1785.
(b) During and immediately following
a disaster or emergency referred to in
paragraph (c) of this section, VA under
38 U.S.C. 1785 may furnish hospital
care and medical services to individuals
(including those who otherwise do not
have VA eligibility for such care and
services) responding to, involved in, or
otherwise affected by that disaster or
emergency.
(c) For purposes of this section, a
‘‘disaster’’ or ‘‘emergency’’ means:
(1) A major disaster or emergency
declared by the President under the
Robert T. Stafford Disaster Relief and
Emergency Assistance Act (42 U.S.C.
5121 et seq.)(‘‘Stafford Act’’); or
(2) A disaster or emergency in which
the National Disaster Medical System
established pursuant to section 2811(b)
of the Public Health Service Act (42
U.S.C. 300hh–11 (b)) is activated either
by the Secretary of Health and Human
Services under paragraph (3)(A) of that
section or as otherwise authorized by
law.
(d) For purposes of paragraph (b) of
this section, the terms ‘‘hospital care’’
and ‘‘medical services’’ have the
meanings given such terms by 38 U.S.C.
1701(5) and 1701(6).
(e) Unless the cost of care is charged
at rates agreed upon in a sharing
agreement as described in § 17.102(e),
the cost of hospital care and medical
services provided under this section to
an officer or employee of a department
or agency of the United States (other
than VA) or to a member of the Armed
Forces shall be calculated in accordance
with the provisions of § 17.102(c) and
(h). Other individuals who receive
hospital care or medical services under
this section are responsible for the cost
of the hospital care or medical services
when charges are mandated by Federal
law (including applicable appropriation
acts) or when the cost of care or services
is not reimbursed by other-than-VA
Federal departments or agencies. When
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38045
individuals are responsible under this
section for the cost of hospital care or
medical services, VA will bill in the
amounts calculated in accordance with
the provisions of § 17.102(h), without
applying the exception provided in the
first paragraph of § 17.102.
(f) VA may furnish care and services
under this section to a veteran without
regard to whether that individual is
enrolled in the VA healthcare system
under 38 U.S.C. 1705 and § 17.36 of this
part.
(Authority: 38 U.S.C. 501, 1785)
§ 17.102
[Amended]
3. Amend § 17.102 by:
a. In paragraph (b)(1), removing
‘‘§ 17.43(c)(1)’’ and adding, in its place,
‘‘§ 17.43(b)(1)’’.
b. In the first sentence of paragraph
(h), adding ‘‘§ 17.86 and under’’ after
‘‘charges under’’; removing ‘‘Cost
Distribution Report’’ and adding, in its
place, ‘‘Monthly Program Cost Report
(MPCR)’’; and removing ‘‘and outpatient
visit’’ and adding, in its place, ‘‘, and
actual basic costs and rates for
outpatient care visits or prescriptions
filled’’.
c. In the fifth sentence of paragraph
(h), removing ‘‘Cost Distribution
Report’’ and adding, in its place,
‘‘MPCR’’.
[FR Doc. E7–13278 Filed 7–11–07; 8:45 am]
BILLING CODE 8320–01–P
ENVIRONMENTAL PROTECTION
AGENCY
40 CFR Part 52
[EPA–R04–OAR–2007–0359–200716; FRL–
8338–8]
Approval of Implementation Plans of
Alabama: Clean Air Interstate Rule
Environmental Protection
Agency (EPA).
ACTION: Proposed rule.
AGENCY:
SUMMARY: EPA is proposing to approve
a revision to the Alabama State
Implementation Plan (SIP) submitted on
March 7, 2007. This revision addresses
the requirements of EPA’s Clean Air
Interstate Rule (CAIR), promulgated on
May 12, 2005, and subsequently revised
on April 28, 2006, and December 13,
2006. The Alabama Department of
Environmental Management (ADEM)
also previously submitted a final
submittal dated June 16, 2006, which
was subsequently updated in a
prehearing request for parallel
processing on November 16, 2006, to
comply with EPA’s revisions to the
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model rule. Alabama’s final March 7,
2007, submittal replaces the State’s June
16, 2006, and November 16, 2006,
submittals. EPA is proposing to
determine that the SIP revision fully
implements the CAIR requirements for
Alabama. Therefore, as a consequence of
the SIP approval, EPA will also
withdraw the CAIR Federal
Implementation Plans (CAIR FIPs)
concerning sulfur dioxide (SO2),
nitrogen oxides (NOX) annual and NOX
ozone season emissions for Alabama.
The CAIR FIPs for all states in the CAIR
region were promulgated on April 28,
2006, and subsequently revised on
December 13, 2006.
CAIR requires states to reduce
emissions of SO2 and NOX that
significantly contribute to
nonattainment of, and interfere with
maintenance of, the national ambient air
quality standards (NAAQS) for fine
particulates and/or ozone in any
downwind state. CAIR establishes state
budgets for SO2 and NOX and requires
states to submit SIP revisions that
implement these budgets in states that
EPA concluded did contribute to
nonattainment in downwind states.
States have the flexibility to choose
which control measures to adopt to
achieve the budgets, including
participating in the EPA-administered
cap-and-trade programs. In the SIP
revision that EPA is proposing to
approve, Alabama would meet CAIR
requirements by participating in the
EPA-administered cap-and-trade
programs addressing SO2, NOX annual,
and NOX ozone season emissions.
DATES: Comments must be received on
or before August 13, 2007.
ADDRESSES: Submit your comments,
identified by Docket ID No. EPA–R04–
OAR–2007–0359, by one of the
following methods:
1. www.regulations.gov: Follow the
on-line instructions for submitting
comments.
2. E-mail: harder.stacy@epa.gov.
3. Fax: 404–562–9019.
4. Mail: ‘‘EPA–R04–OAR–2007–
0359,’’ Regulatory Development Section,
Air Planning Branch, Air, Pesticides and
Toxics Management Division, U.S.
Environmental Protection Agency,
Region 4, 61 Forsyth Street, SW.,
Atlanta, Georgia 30303–8960.
5. Hand Delivery or Courier: Ms.
Stacy Harder, Regulatory Development
Section, Air Planning Branch, Air,
Pesticides and Toxics Management
Division, U.S. Environmental Protection
Agency, Region 4, 61 Forsyth Street,
SW., Atlanta, Georgia 30303–8960. Such
deliveries are only accepted during the
Regional Office’s normal hours of
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operation. The Regional Office’s official
hours of business are Monday through
Friday, 8:30 a.m. to 4:30 p.m., excluding
federal holidays.
Instructions: Direct your comments to
Docket ID No. ‘‘EPA–R04–OAR–2007–
0359.’’ EPA’s policy is that all
comments received will be included in
the public docket without change and
may be made available online at
www.regulations.gov, including any
personal information provided, unless
the comment includes information
claimed to be Confidential Business
Information (CBI) or other information
whose disclosure is restricted by statute.
Do not submit through
www.regulations.gov or e-mail,
information that you consider to be CBI
or otherwise protected. The
www.regulations.gov Web site is an
‘‘anonymous access’’ system, which
means EPA will not know your identity
or contact information, unless you
provide it in the body of your comment.
If you send an e-mail comment directly
to EPA without going through
www.regulations.gov, your e-mail
address will be automatically captured
and included as part of the comment
that is placed in the public docket and
made available on the Internet. If you
submit an electronic comment, EPA
recommends that you include your
name and other contact information in
the body of your comment and with any
disk or CD–ROM you submit. If EPA
cannot read your comment due to
technical difficulties and cannot contact
you for clarification, EPA may not be
able to consider your comment.
Electronic files should avoid the use of
special characters and any form of
encryption and should be free of any
defects or viruses. For additional
information about EPA’s public docket
visit the EPA Docket Center homepage
at https://www.epa.gov/epahome/
dockets.htm.
Docket: All documents in the
electronic docket are listed in the
www.regulations.gov index. Although
listed in the index, some information is
not publicly available, i.e., CBI or other
information whose disclosure is
restricted by statute. Certain other
material, such as copyrighted material,
is not placed on the Internet and will be
publicly available only in hard copy
form. Publicly available docket
materials are available either
electronically in www.regulations.gov or
in hard copy at the Regulatory
Development Section, Air Planning
Branch, Air, Pesticides and Toxics
Management Division, U.S.
Environmental Protection Agency,
Region 4, 61 Forsyth Street, SW.,
Atlanta, Georgia 30303–8960. EPA
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requests that if at all possible, you
contact the person listed in the FOR
FURTHER INFORMATION CONTACT section to
schedule your inspection. The Regional
Office’s official hours of business are
Monday through Friday, 8:30 a.m. to
4:30 p.m., excluding federal holidays.
FOR FURTHER INFORMATION CONTACT: Ms.
Stacy Harder, Regulatory Development
Section, Air Planning Branch, Air,
Pesticides and Toxics Management
Division, U.S. Environmental Protection
Agency, Region 4, 61 Forsyth Street,
SW., Atlanta, Georgia 30303–8960. The
telephone number is (404) 562–9042.
Ms. Harder can also be reached via
electronic mail at harder.stacy@epa.gov.
SUPPLEMENTARY INFORMATION:
Table of Contents
I. What Actions Is EPA Proposing to Take?
II. What Is the Regulatory History of CAIR
and the CAIR FIPs?
III. What Are the General Requirements of
CAIR and the CAIR FIPs?
IV. What Are the Types of CAIR SIP
Submittals?
V. Analysis of Alabama’s CAIR SIP Submittal
A. State Budgets for Allowance Allocations
B. CAIR Cap-and-Trade Programs
C. Applicability Provisions for non-EGU
NOX SIP Call Sources
D. NOX Allowance Allocations
E. Allocation of NOX Allowances From
Compliance Supplement Pool
F. Individual Opt-in Units
VI. Proposed Actions
VII. Statutory and Executive Order Reviews
I. What Action Is EPA Proposing to
Take?
EPA is proposing to approve a
revision to Alabama’s SIP, submitted on
March 7, 2007. In its SIP revision,
Alabama would meet CAIR
requirements by requiring certain
electric generating units (EGUs) to
participate in the EPA-administered
State CAIR cap-and-trade programs
addressing SO2, NOX annual, and NOX
ozone season emissions. EPA is
proposing to determine that the SIP, as
revised, will meet the applicable
requirements of CAIR. Any final action
approving the SIP will be taken by the
Regional Administrator for Region 4. As
a consequence of the SIP approval, the
Administrator of EPA will also issue a
final rule to withdraw the FIPs
concerning SO2, NOX annual, and NOX
ozone season emissions for Alabama.
This action will delete and reserve 40
CFR 52.54 and 40 CFR 52.55. The
withdrawal of the CAIR FIPs for
Alabama is a conforming amendment
that must be made once the SIP is
approved because EPA’s authority to
issue the FIPs was premised on a
deficiency in the SIP for Alabama. Once
the SIP is fully approved, EPA no longer
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has authority for the FIPs. Thus, EPA
will not have the option of maintaining
the FIPs following the full SIP approval.
Accordingly, EPA does not intend to
offer an opportunity for a public hearing
or an additional opportunity for written
public comment on the withdrawal of
the FIPs. EPA will take action in a
separate rulemaking regarding revisions
to Chapters 335–3–1 and 335–3–17.
II. What Is the Regulatory History of
CAIR and the CAIR FIPs?
The CAIR rule was published by EPA
on May 12, 2005 (70 FR 25162). In this
rule, EPA determined that 28 states and
the District of Columbia contribute
significantly to nonattainment and
interfere with maintenance of the
national ambient air quality standards
(NAAQS) for fine particles (PM2.5) and/
or 8-hour ozone in downwind states in
the eastern part of the country. As a
result, EPA required those upwind
states to revise their SIPs to include
control measures that reduce emissions
of SO2, which is a precursor to PM2.5
formation, and/or NOX, which is a
precursor to both ozone and PM2.5
formation. For jurisdictions that
contribute significantly to downwind
PM2.5 nonattainment, CAIR sets annual
state-wide emission reduction
requirements (i.e., budgets) for SO2 and
annual state-wide emission reduction
requirements for NOX. Similarly, for
jurisdictions that contribute
significantly to 8-hour ozone
nonattainment, CAIR sets state-wide
emission reduction requirements for
NOX for the ozone season (May 1st to
September 30th). Under CAIR, states
may implement these reduction
requirements by participating in the
EPA-administered cap-and-trade
programs or by adopting any other
control measures.
CAIR explains to subject states what
must be included in SIPs to address the
requirements of section 110(a)(2)(D) of
the Clean Air Act (CAA) with regard to
interstate transport with respect to the
8-hour ozone and PM2.5 NAAQS. EPA
made national findings, effective on
May 25, 2005, that the states had failed
to submit SIPs meeting the requirements
of section 110(a)(2)(D). The SIPs were
due in July 2000, three years after the
promulgation of the 8-hour ozone and
PM2.5 NAAQS. These findings started a
two-year clock for EPA to promulgate a
FIP to address the requirements of
section 110(a)(2)(D). Under CAA section
110(c)(1), EPA may issue a FIP anytime
after such findings are made and must
do so within two years, unless a SIP
revision correcting the deficiency is
approved by EPA before the FIP is
promulgated.
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On April 28, 2006, EPA promulgated
FIPs for all states covered by CAIR in
order to ensure the emissions reductions
required by CAIR are achieved on
schedule. Each CAIR state is subject to
the FIPs until the state fully adopts, and
EPA approves, a SIP revision meeting
the requirements of CAIR. The CAIR
FIPs require EGUs to participate in the
EPA-administered CAIR SO2, NOX
annual, and NOX ozone season trading
programs, as appropriate. The CAIR FIP
SO2, NOX annual, and NOX ozone
season trading programs impose
essentially the same requirements as,
and are integrated with, the respective
CAIR SIP trading programs. The
integration of the FIP and SIP trading
programs means that these trading
programs will work together to create
effectively a single trading program for
each regulated pollutant (SO2, NOX
annual, and NOX ozone season) in all
states covered by the CAIR FIP or SIP
trading program for that pollutant. The
CAIR FIPs also allow states to submit
abbreviated SIP revisions that, if
approved by EPA, will automatically
replace or supplement certain CAIR FIP
provisions (e.g., the methodology for
allocating NOX allowances to sources in
the state), while the CAIR FIP remains
in place for all other provisions.
On April 28, 2006, EPA published
two additional CAIR-related final rules
that added the States of Delaware and
New Jersey to the list of states subject
to CAIR for PM2.5 and announced EPA’s
final decisions on reconsideration of
five issues, without making any
substantive changes to the CAIR
requirements.
III. What Are the General Requirements
of CAIR and the CAIR FIPs?
CAIR establishes state-wide emission
budgets for SO2 and NOX and is to be
implemented in two phases. The first
phase of NOX reductions starts in 2009
and continues through 2014, while the
first phase of SO2 reductions starts in
2010 and continues through 2014. The
second phase of reductions for both
NOX and SO2 starts in 2015 and
continues thereafter. CAIR requires
states to implement the budgets by
either: (1) Requiring EGUs to participate
in the EPA-administered cap-and-trade
programs; or (2) adopting other control
measures of the state’s choosing and
demonstrating that such control
measures will result in compliance with
the applicable state SO2 and NOX
budgets.
The May 12, 2005, and April 28, 2006,
CAIR rules provide model rules that
states must adopt (with certain limited
changes, if desired) if they want to
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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 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
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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
replace the CAIR FIP for that state for
the respective EGU emissions.
V. Analysis of Alabama’s CAIR SIP
Submittal
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A. State Budgets for Allowance
Allocations
The CAIR NOX annual and ozone
season budgets were developed from
historical heat input data for EGUs.
Using these data, EPA calculated annual
and ozone season regional heat input
values, which were multiplied by 0.15
pounds per million British thermal
units (lb/mmBtu), for phase 1, and 0.125
lb/mmBtu, for phase 2, to obtain
regional NOX budgets for 2009–2014
and for 2015 and thereafter,
respectively. EPA derived the state NOX
annual and ozone season budgets from
the regional budgets using state heat
input data adjusted by fuel factors.
The CAIR state SO2 budgets were
derived by discounting the tonnage of
emissions authorized by annual
allowance allocations under the Acid
Rain Program under title IV of the CAA.
Under CAIR, each allowance allocated
in the Acid Rain Program for the years
in phase 1 of CAIR (2010 through 2014)
authorizes 0.5 ton of SO2 emissions in
the CAIR trading program, and each
Acid Rain Program allowance allocated
for the years in phase 2 of CAIR (2015
and thereafter) authorizes 0.35 ton of
SO2 emissions in the CAIR trading
program.
In this action, EPA is proposing
approval of Alabama’s SIP revision that
adopts the budgets established for the
State in CAIR, i.e., 69,020 (2009–2014)
and 57,517 (2015-thereafter) tons for
NOX annual emissions, 34,510 (2009–
2014) and 29,146 (2015-thereafter) tons
for NOX ozone season emissions, and
157,582 (2010–2014) and 110,307 (2015thereafter) tons for SO2 emissions.
Alabama’s SIP revision sets these
budgets as the total amounts of
allowances available for allocation for
each year under the EPA-administered
cap-and-trade programs.
B. CAIR Cap-and-Trade Programs
The CAIR NOX annual and ozoneseason model trading rules both largely
mirror the structure of the NOX SIP Call
model trading rule in 40 CFR part 96,
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subparts A through I. While the
provisions of the NOX annual and
ozone-season model rules are similar,
there are some differences. For example,
the NOX annual model rule (but not the
NOX ozone season model rule) provides
for a compliance supplement pool
(CSP), which is discussed below and
under which allowances may be
awarded for early reductions of NOX
annual emissions. As a further example,
the NOX ozone season model rule
reflects the fact that the CAIR NOX
ozone season trading program replaces
the NOX SIP Call trading program after
the 2008 ozone season and is
coordinated with the NOX SIP Call
program. The NOX ozone season model
rule provides incentives for early
emissions reductions by allowing
banked, pre-2009 NOX SIP Call
allowances to be used for compliance in
the CAIR NOX ozone-season trading
program. In addition, states have the
option of continuing to meet their NOX
SIP Call requirement by participating in
the CAIR NOX ozone season trading
program and including all their NOX SIP
Call trading sources in that program.
The provisions of the CAIR SO2
model rule are also similar to the
provisions of the NOX annual and ozone
season model rules. However, the SO2
model rule is coordinated with the
ongoing Acid Rain SO2 cap-and-trade
program under CAA title IV. The SO2
model rule uses the title IV allowances
for compliance, with each allowance
allocated for 2010–2014 authorizing
only 0.50 ton of emissions and each
allowance allocated for 2015 and
thereafter authorizing only 0.35 ton of
emissions. Banked title IV allowances
allocated for years before 2010 can be
used at any time in the CAIR SO2 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
ozone season trading rules and the
respective CAIR FIP trading rules are
designed to work together as integrated
SO2, NOX annual, and NOX ozone
season trading programs.
In the SIP revision, Alabama chooses
to implement its CAIR budgets by
requiring EGUs to participate in EPAadministered cap-and-trade programs
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for SO2, NOX annual, and NOX ozone
season emissions. Alabama has adopted
a full SIP revision that adopts, with
certain allowed changes discussed
below, the CAIR model cap-and-trade
rules for SO2, NOX annual, and NOX
ozone season emissions.
C. Applicability Provisions for non-EGU
NOX SIP Call Sources
In general, the CAIR model trading
rules apply to any stationary, fossil-fuelfired boiler or stationary, fossil-fuelfired combustion turbine serving at any
time, since the later of November 15,
1990, or the start-up of the unit’s
combustion chamber, a generator with
nameplate capacity of more than 25
Megawatt electrical (MWe) producing
electricity for sale.
States have the option of bringing in,
for the CAIR NOX ozone season program
only, those units in the state’s NOX SIP
Call trading program that are not EGUs
as defined under CAIR. EPA advises
states exercising this option to add the
applicability provisions in the state’s
NOX SIP Call trading rule for non-EGUs
to the applicability provisions in 40 CFR
96.304 in order to include in the CAIR
NOX ozone season trading program all
units required to be in the state’s NOX
SIP Call trading program that are not
already included under 40 CFR 96.304.
Under this option, the CAIR NOX ozone
season program must cover all large
industrial boilers and combustion
turbines, as well as any small EGUs (i.e.
units serving a generator with a
nameplate capacity of 25 MWe or less)
that the state currently requires to be in
the NOX SIP Call trading program.
Alabama has chosen to expand the
applicability provisions of the CAIR
NOX ozone season trading program to
include all non-EGUs in the State’s NOX
SIP Call trading program.
D. NOX Allowance Allocations
Under the NOX allowance allocation
methodology in the CAIR model trading
rules and in the CAIR FIP, NOX annual
and ozone season allowances are
allocated to units that have operated for
five years, based on heat input data from
a three-year period that are adjusted for
fuel type by using fuel factors of 1.0 for
coal, 0.6 for oil, and 0.4 for other fuels.
The CAIR model trading rules and the
CAIR FIP also provide a new unit 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
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met concerning the timing of
submission of units’ allocations to the
Administrator for recordation and the
total amount of allowances allocated for
each control period. In adopting
alternative NOX allowance allocation
methodologies, states have flexibility
with regard to:
1. The cost to recipients of the
allowances, which may be distributed
for free or auctioned;
2. The frequency of allocations;
3. The basis for allocating allowances,
which may be distributed, for example,
based on historical heat input or electric
and thermal output; and
4. The use of allowance set-asides
and, if used, their size.
Alabama has chosen to replace the
provisions of the CAIR NOX annual
model trading rule concerning the
allocation of NOX annual allowances
with its own methodology. Alabama has
chosen to distribute NOX annual
allowances based upon allocation
methods for existing, replacement, and
new units. ADEM defines a baseline
NOX unit as one that commenced
operation on, or before January 1, 2004,
or submitted an acceptable application
to the Department before August 1,
2005. For the control periods in 2009
through 2014, ADEM will allocate NOX
allowances to baseline CAIR units based
in an amount equaling 0.15 lb/mmBtu,
or the unit’s permitted NOX limit,
whichever amount is less, multiplied by
the heat input and an adjustment ratio
(to ensure that the total number of CAIR
NOX Ozone Season allowances allocated
under this paragraph equals the number
of tons of CAIR NOX Ozone Season
emissions in the State trading program
budget) and rounded to the nearest
whole NOX allowance as appropriate.
For units with multiple allowable
emissions limits, the allowances may be
calculated based on actual operating
data. For each control period in 2015
and thereafter, ADEM will allocate
allowances equaling 0.125 lb/mmBtu, or
the unit’s NOX limit, whichever is less,
multiplied by the heat input and an
adjustment ratio.
A replacement unit is defined as a
NOX unit, or the portion of a NOX unit,
which replaces a baseline unit at the
same facility, and has the same or
greater maximum design heat input
capacity. Allowances will be allocated
for replacement units after all baseline
units have received allowances. These
allowances will be distributed from the
Retired Unit Allowance Pool. After all
baseline and replacement units have
received allocations, ADEM will
allocate allowances to new units from
allowances remaining in the Retired
Unit Allowance Pool.
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ADEM defines a new unit as one that
does not meet the definition for an
existing unit or a replacement unit. New
unit allocations, for each applicable
control period, will be equal to 0.15 lb/
mmBtu or the unit’s permitted NOX
limit, whichever is less, multiplied by
the heat input and an adjustment ratio
and rounded to the nearest whole NOX
allowance as appropriate.
Allowances were to be allocated by
October 31, 2006, for control periods of
2009, 2010 and 2011. Allowances will
be allocated by October 31, 2008, for
control periods 2012, 2013 and 2014. By
October 31, 2011, and subsequently, on
October 31 of every third year thereafter,
NOX allowance allocations will be
submitted for the control periods in the
three years that are four, five, and six
years, respectively, after the year of the
applicable deadline for submission.
Alabama has chosen not to use setasides in their NOX annual allocations.
Alabama has chosen to replace the
provisions of the CAIR NOX ozone
season model trading rule concerning
allowance allocations with its own
methodology. Alabama has chosen to
distribute NOX annual allowances based
upon allocation methods for existing,
replacement, and new units. ADEM
defines a baseline NOX unit as one that
commenced operation on, or before
January 1, 2004, or submitted an
acceptable application to the
Department before August 1, 2005. For
the control periods in 2009 through
2014, ADEM will allocate NOX
allowances to baseline CAIR units based
in an amount equaling 0.15 lb/mmBtu
(0.17 lb/mmBtu, if the unit’s maximum
design heat input is greater than 250
mmBtu/hr), or the unit’s permitted NOX
limit, whichever amount is less,
multiplied by the heat input and an
adjustment ratio (to ensure that the total
number of CAIR NOX Ozone Season
allowances allocated under this
paragraph equals the number of tons of
CAIR NOX Ozone Season emissions in
the State trading program budget) and
rounded to the nearest whole NOX
allowance as appropriate. For units with
multiple allowable emissions limits, the
allowances may be calculated based on
actual operating data. For each control
period in 2015 and thereafter, ADEM
will allocate allowances equaling 0.125
lb/mmBtu, or the unit’s NOX limit,
whichever is less, multiplied by the heat
input and an adjustment ratio.
A replacement unit is defined as one
which replaces a baseline ozone season
unit at the same facility, and has the
same or greater maximum design heat
input.
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38049
A new unit is defined as a unit that
does not meet the definition of either an
existing unit or a replacement unit.
NOX ozone season allowances were to
be allocated by October 31, 2006, for
control periods 2009, 2010, and 2011.
Only the difference between the ozone
season allowance allocations and the
2009 budget trading program will be
submitted in 2009. By October 31, 2008,
allocations for 2012, 2013, and 2014
will be submitted. Finally, by October
31, 2011, and October 31 of every third
year thereafter, allocations will be
submitted for control periods in the
three years that are four, five, and six
years after the applicable deadline for
submission. Alabama has chosen not to
use set-asides in their ozone season
allocations.
E. Allocation of NOX Allowances From
Compliance Supplement Pool
CAIR establishes a CSP to provide an
incentive for early reductions in NOX
annual emissions. The CSP consists of
200,000 CAIR NOX annual allowances
of vintage 2009 for the entire CAIR
region, and a state’s share of the CSP is
based upon the projected magnitude of
the emission reductions required by
CAIR in that State. States may distribute
CSP allowances, one allowance for each
ton of early reduction, to sources that
make NOX reductions during 2007 or
2008 beyond what is required by any
applicable state or Federal emission
limitation. States also may distribute
CSP allowances based upon a
demonstration of need for an extension
of the 2009 deadline for implementing
emission controls.
The CAIR annual NOX model trading
rule establishes specific methodologies
for allocations of CSP allowances. States
may choose an allowed, alternative CSP
allocation methodology to be used to
allocate CSP allowances to sources in
the states.
Alabama has chosen to modify the
provisions of the CAIR NOX annual
model trading rule concerning the
allocation of allowances from the CSP.
Alabama has chosen to distribute CSP
allowances using an allocation
methodology that allows the
Department to allocate up to 10,166
additional CAIR NOX allowances for the
control period in 2009. CAIR NOX units
that achieve emissions reductions in
2007 and 2008, that are not necessary to
comply with applicable emissions
limitations during those years, may
request early reduction credits. The
units requesting CSP allocations must
submit a request by May 1, 2009, to
ADEM. Sources are eligible to receive
CSP allowances only to the extent that
that the total number of allowances
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issued does not exceed 15 percent of the
total number of NOX allowances issued
to that unit from the initial allowance
allocation. Any remaining CSP
allowances after the initial distribution
will be allocated to eligible units on a
pro rata basis, provided that no unit is
issued more allowances than the early
reduction credits requested by that unit
in accordance with ADEM’s CSP
provisions.
F. Individual Opt-In Units
The opt-in provisions of the CAIR SIP
model trading rules allow certain 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
through a stack and be able to meet the
monitoring, recordkeeping, and
recording requirements of 40 CFR part
75. The owners and operators seeking to
opt a unit into a CAIR trading program
must apply for a CAIR opt-in permit. If
the unit is issued a CAIR opt-in permit,
the unit becomes a CAIR unit, is
allocated allowances, and must meet the
same allowance-holding and emissions
monitoring and reporting requirements
as other units subject to the CAIR
trading program. The opt-in provisions
provide for two methodologies for
allocating allowances for opt-in units,
one methodology that applies to opt-in
units in general and a second
methodology that allocates allowances
only to opt-in units that the owners and
operators intend to repower before
January 1, 2015.
States have several options
concerning the opt-in provisions. States
may adopt the CAIR opt-in provisions
entirely or may adopt them but exclude
one of the methodologies for allocating
allowances. States may also decline to
adopt the opt-in provisions at all.
Alabama has chosen to allow nonEGUs meeting certain requirements to
opt into the CAIR NOX annual trading
program, including both of the opt-in
allocation methods in the model rule.
Alabama has chosen to allow nonEGUs meeting certain requirements to
opt into the CAIR NOX ozone season
trading program, including both of the
opt-in allocation methods in the model
rule.
Alabama has chosen to allow certain
non-EGUs to opt into the CAIR SO2
trading program, and has chosen to
incorporate the Federal rule by
reference.
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VI. Proposed Actions
EPA is proposing to approve
Alabama’s full CAIR SIP revision
submitted on March 7, 2007. Under this
SIP revision, Alabama is choosing to
participate in the EPA-administered
cap-and-trade programs for SO2, NOX
annual, and NOX ozone season
emissions. The SIP revision meets the
applicable requirements in 40 CFR
51.123(o) and (aa), with regard to NOX
annual and NOX ozone season
emissions, and 40 CFR 51.124(o), with
regard to SO2 emissions. EPA is
proposing to determine that the SIP, as
revised, will meet the requirements of
CAIR. As a consequence of the SIP
approval, the Administrator of EPA will
also issue, without providing an
opportunity for a public hearing or an
additional opportunity for written
public comment, a final rule to
withdraw the CAIR FIPs concerning
SO2, NOX annual and NOX ozone season
emissions for Alabama. That withdrawal
will delete and reserve 40 CFR 52.54
and 40 CFR 52.55.
VII. Statutory and Executive Order
Reviews
Under Executive Order 12866 (58 FR
51735, October 4, 1993), this action is
not a ‘‘significant regulatory action’’ and
therefore is not subject to review by the
Office of Management and Budget. For
this reason, this action is also not
subject to Executive Order 13211,
‘‘Actions Concerning Regulations That
Significantly Affect Energy Supply,
Distribution, or Use’’ (66 FR 28355, May
22, 2001). This action merely proposes
to approve State law as meeting Federal
requirements and would impose no
additional requirements beyond those
imposed by State law. Accordingly, the
Administrator certifies that this
proposed rule would not have a
significant economic impact on a
substantial number of small entities
under the Regulatory Flexibility Act (5
U.S.C. 601 et seq.). Because this action
proposes to approve pre-existing
requirements under State law and
would not impose any additional
enforceable duty beyond that required
by State law, it does not contain any
unfunded mandate or significantly or
uniquely affect small governments, as
described in the Unfunded Mandates
Reform Act of 1995 (Pub. L. 104–4).
This proposal also does not have
tribal implications because it would not
have a substantial direct effect on one or
more Indian tribes, on the relationship
between the Federal Government and
Indian tribes, or on the distribution of
power and responsibilities between the
Federal Government and Indian tribes,
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Fmt 4702
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as specified by Executive Order 13175
(65 FR 67249, November 9, 2000). This
proposed action also does not have
Federalism implications because it
would not have substantial direct effects
on the states, on the relationship
between the national government and
the states, or on the distribution of
power and responsibilities among the
various levels of government, as
specified in Executive Order 13132 (64
FR 43255, August 10, 1999). This action
merely proposes to approve a State rule
implementing a Federal standard and
will result, as a consequence of that
approval, in the Administrator’s
withdrawal of the CAIR FIP. It does not
alter the relationship or the distribution
of power and responsibilities
established in the Clean Air Act. This
proposed rule also is not subject to
Executive Order 13045 ‘‘Protection of
Children from Environmental Health
Risks and Safety Risks’’ (62 FR 19885,
April 23, 1997), because it would
approve a State rule implementing a
Federal Standard.
In reviewing SIP submissions, EPA’s
role is to approve state choices,
provided that they meet the criteria of
the Clean Air Act. In this context, in the
absence of a prior existing requirement
for the State to use voluntary consensus
standards (VCS), EPA has no authority
to disapprove a SIP submission for
failure to use VCS. It would thus be
inconsistent with applicable law for
EPA, when it reviews a SIP submission,
to use VCS in place of a SIP submission
that otherwise satisfies the provisions of
the Clean Air Act. Thus, the
requirements of section 12(d) of the
National Technology Transfer and
Advancement Act of 1995 (15 U.S.C.
272 note) do not apply. This proposed
rule would not impose an information
collection burden under the provisions
of the Paperwork Reduction Act of 1995
(44 U.S.C. 3501 et seq.).
List of Subjects in 40 CFR Part 52
Environmental protection, Air
pollution control, Electric utilities,
Intergovernmental relations, Nitrogen
oxides, Ozone, Particulate matter,
Reporting and recordkeeping
requirements, Sulfur dioxide.
Authority: 42 U.S.C. 7401 et seq.
Dated: July 3, 2007.
J.I. Palmer Jr.,
Regional Administrator, Region 4.
[FR Doc. E7–13543 Filed 7–11–07; 8:45 am]
BILLING CODE 6560–50–P
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[Federal Register Volume 72, Number 133 (Thursday, July 12, 2007)]
[Proposed Rules]
[Pages 38045-38050]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-13543]
=======================================================================
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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 52
[EPA-R04-OAR-2007-0359-200716; FRL-8338-8]
Approval of Implementation Plans of Alabama: Clean Air Interstate
Rule
AGENCY: Environmental Protection Agency (EPA).
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: EPA is proposing to approve a revision to the Alabama State
Implementation Plan (SIP) submitted on March 7, 2007. This revision
addresses the requirements of EPA's Clean Air Interstate Rule (CAIR),
promulgated on May 12, 2005, and subsequently revised on April 28,
2006, and December 13, 2006. The Alabama Department of Environmental
Management (ADEM) also previously submitted a final submittal dated
June 16, 2006, which was subsequently updated in a prehearing request
for parallel processing on November 16, 2006, to comply with EPA's
revisions to the
[[Page 38046]]
model rule. Alabama's final March 7, 2007, submittal replaces the
State's June 16, 2006, and November 16, 2006, submittals. EPA is
proposing to determine that the SIP revision fully implements the CAIR
requirements for Alabama. Therefore, as a consequence of the SIP
approval, EPA will also withdraw the CAIR Federal Implementation Plans
(CAIR FIPs) concerning sulfur dioxide (SO2), nitrogen oxides
(NOX) annual and NOX ozone season emissions for
Alabama. The CAIR FIPs for all states in the CAIR region were
promulgated on April 28, 2006, and subsequently revised on December 13,
2006.
CAIR requires states to reduce emissions of SO2 and
NOX that significantly contribute to nonattainment of, and
interfere with maintenance of, the national ambient air quality
standards (NAAQS) for fine particulates and/or ozone in any downwind
state. CAIR establishes state budgets for SO2 and
NOX and requires states to submit SIP revisions that
implement these budgets in states that EPA concluded did contribute to
nonattainment in downwind states. States have the flexibility to choose
which control measures to adopt to achieve the budgets, including
participating in the EPA-administered cap-and-trade programs. In the
SIP revision that EPA is proposing to approve, Alabama would meet CAIR
requirements by participating in the EPA-administered cap-and-trade
programs addressing SO2, NOX annual, and
NOX ozone season emissions.
DATES: Comments must be received on or before August 13, 2007.
ADDRESSES: Submit your comments, identified by Docket ID No. EPA-R04-
OAR-2007-0359, by one of the following methods:
1. www.regulations.gov: Follow the on-line instructions for
submitting comments.
2. E-mail: harder.stacy@epa.gov.
3. Fax: 404-562-9019.
4. Mail: ``EPA-R04-OAR-2007-0359,'' Regulatory Development Section,
Air Planning Branch, Air, Pesticides and Toxics Management Division,
U.S. Environmental Protection Agency, Region 4, 61 Forsyth Street, SW.,
Atlanta, Georgia 30303-8960.
5. Hand Delivery or Courier: Ms. Stacy Harder, Regulatory
Development Section, Air Planning Branch, Air, Pesticides and Toxics
Management Division, U.S. Environmental Protection Agency, Region 4, 61
Forsyth Street, SW., Atlanta, Georgia 30303-8960. Such deliveries are
only accepted during the Regional Office's normal hours of operation.
The Regional Office's official hours of business are Monday through
Friday, 8:30 a.m. to 4:30 p.m., excluding federal holidays.
Instructions: Direct your comments to Docket ID No. ``EPA-R04-OAR-
2007-0359.'' EPA's policy is that all comments received will be
included in the public docket without change and may be made available
online at www.regulations.gov, including any personal information
provided, unless the comment includes information claimed to be
Confidential Business Information (CBI) or other information whose
disclosure is restricted by statute. Do not submit through
www.regulations.gov or e-mail, information that you consider to be CBI
or otherwise protected. The www.regulations.gov Web site is an
``anonymous access'' system, which means EPA will not know your
identity or contact information, unless you provide it in the body of
your comment. If you send an e-mail comment directly to EPA without
going through www.regulations.gov, your e-mail address will be
automatically captured and included as part of the comment that is
placed in the public docket and made available on the Internet. If you
submit an electronic comment, EPA recommends that you include your name
and other contact information in the body of your comment and with any
disk or CD-ROM you submit. If EPA cannot read your comment due to
technical difficulties and cannot contact you for clarification, EPA
may not be able to consider your comment. Electronic files should avoid
the use of special characters and any form of encryption and should be
free of any defects or viruses. For additional information about EPA's
public docket visit the EPA Docket Center homepage at https://
www.epa.gov/epahome/dockets.htm.
Docket: All documents in the electronic docket are listed in the
www.regulations.gov index. Although listed in the index, some
information is not publicly available, i.e., CBI or other information
whose disclosure is restricted by statute. Certain other material, such
as copyrighted material, is not placed on the Internet and will be
publicly available only in hard copy form. Publicly available docket
materials are available either electronically in www.regulations.gov or
in hard copy at the Regulatory Development Section, Air Planning
Branch, Air, Pesticides and Toxics Management Division, U.S.
Environmental Protection Agency, Region 4, 61 Forsyth Street, SW.,
Atlanta, Georgia 30303-8960. EPA requests that if at all possible, you
contact the person listed in the FOR FURTHER INFORMATION CONTACT
section to schedule your inspection. The Regional Office's official
hours of business are Monday through Friday, 8:30 a.m. to 4:30 p.m.,
excluding federal holidays.
FOR FURTHER INFORMATION CONTACT: Ms. Stacy Harder, Regulatory
Development Section, Air Planning Branch, Air, Pesticides and Toxics
Management Division, U.S. Environmental Protection Agency, Region 4, 61
Forsyth Street, SW., Atlanta, Georgia 30303-8960. The telephone number
is (404) 562-9042. Ms. Harder can also be reached via electronic mail
at harder.stacy@epa.gov.
SUPPLEMENTARY INFORMATION:
Table of Contents
I. What Actions Is EPA Proposing to Take?
II. What Is the Regulatory History of CAIR and the CAIR FIPs?
III. What Are the General Requirements of CAIR and the CAIR FIPs?
IV. What Are the Types of CAIR SIP Submittals?
V. Analysis of Alabama's CAIR SIP Submittal
A. State Budgets for Allowance Allocations
B. CAIR Cap-and-Trade Programs
C. Applicability Provisions for non-EGU NOX SIP Call
Sources
D. NOX Allowance Allocations
E. Allocation of NOX Allowances From Compliance
Supplement Pool
F. Individual Opt-in Units
VI. Proposed Actions
VII. Statutory and Executive Order Reviews
I. What Action Is EPA Proposing to Take?
EPA is proposing to approve a revision to Alabama's SIP, submitted
on March 7, 2007. In its SIP revision, Alabama would meet CAIR
requirements by requiring certain electric generating units (EGUs) to
participate in the EPA-administered State CAIR cap-and-trade programs
addressing SO2, NOX annual, and NOX
ozone season emissions. EPA is proposing to determine that the SIP, as
revised, will meet the applicable requirements of CAIR. Any final
action approving the SIP will be taken by the Regional Administrator
for Region 4. As a consequence of the SIP approval, the Administrator
of EPA will also issue a final rule to withdraw the FIPs concerning
SO2, NOX annual, and NOX ozone season
emissions for Alabama. This action will delete and reserve 40 CFR 52.54
and 40 CFR 52.55. The withdrawal of the CAIR FIPs for Alabama is a
conforming amendment that must be made once the SIP is approved because
EPA's authority to issue the FIPs was premised on a deficiency in the
SIP for Alabama. Once the SIP is fully approved, EPA no longer
[[Page 38047]]
has authority for the FIPs. Thus, EPA will not have the option of
maintaining the FIPs following the full SIP approval. Accordingly, EPA
does not intend to offer an opportunity for a public hearing or an
additional opportunity for written public comment on the withdrawal of
the FIPs. EPA will take action in a separate rulemaking regarding
revisions to Chapters 335-3-1 and 335-3-17.
II. What Is the Regulatory History of CAIR and the CAIR FIPs?
The CAIR rule was published by EPA on May 12, 2005 (70 FR 25162).
In this rule, EPA determined that 28 states and the District of
Columbia contribute significantly to nonattainment and interfere with
maintenance of the national ambient air quality standards (NAAQS) for
fine particles (PM2.5) and/or 8-hour ozone in downwind
states in the eastern part of the country. As a result, EPA required
those upwind states to revise their SIPs to include control measures
that reduce emissions of SO2, which is a precursor to
PM2.5 formation, and/or NOX, which is a precursor
to both ozone and PM2.5 formation. For jurisdictions that
contribute significantly to downwind PM2.5 nonattainment,
CAIR sets annual state-wide emission reduction requirements (i.e.,
budgets) for SO2 and annual state-wide emission reduction
requirements for NOX. Similarly, for jurisdictions that
contribute significantly to 8-hour ozone nonattainment, CAIR sets
state-wide emission reduction requirements for NOX for the
ozone season (May 1st to September 30th). Under CAIR, states may
implement these reduction requirements by participating in the EPA-
administered cap-and-trade programs or by adopting any other control
measures.
CAIR explains to subject states what must be included in SIPs to
address the requirements of section 110(a)(2)(D) of the Clean Air Act
(CAA) with regard to interstate transport with respect to the 8-hour
ozone and PM2.5 NAAQS. EPA made national findings, effective
on May 25, 2005, that the states had failed to submit SIPs meeting the
requirements of section 110(a)(2)(D). The SIPs were due in July 2000,
three years after the promulgation of the 8-hour ozone and
PM2.5 NAAQS. These findings started a two-year clock for EPA
to promulgate a FIP to address the requirements of section
110(a)(2)(D). Under CAA section 110(c)(1), EPA may issue a FIP anytime
after such findings are made and must do so within two years, unless a
SIP revision correcting the deficiency is approved by EPA before the
FIP is promulgated.
On April 28, 2006, EPA promulgated FIPs for all states covered by
CAIR in order to ensure the emissions reductions required by CAIR are
achieved on schedule. Each CAIR state is subject to the FIPs until the
state fully adopts, and EPA approves, a SIP revision meeting the
requirements of CAIR. The CAIR FIPs require EGUs to participate in the
EPA-administered CAIR SO2, NOX annual, and
NOX ozone season trading programs, as appropriate. The CAIR
FIP SO2, NOX annual, and NOX ozone
season trading programs impose essentially the same requirements as,
and are integrated with, the respective CAIR SIP trading programs. The
integration of the FIP and SIP trading programs means that these
trading programs will work together to create effectively a single
trading program for each regulated pollutant (SO2,
NOX annual, and NOX ozone season) in all states
covered by the CAIR FIP or SIP trading program for that pollutant. The
CAIR FIPs also allow states to submit abbreviated SIP revisions that,
if approved by EPA, will automatically replace or supplement certain
CAIR FIP provisions (e.g., the methodology for allocating
NOX allowances to sources in the state), while the CAIR FIP
remains in place for all other provisions.
On April 28, 2006, EPA published two additional CAIR-related final
rules that added the States of Delaware and New Jersey to the list of
states subject to CAIR for PM2.5 and announced EPA's final
decisions on reconsideration of five issues, without making any
substantive changes to the CAIR requirements.
III. What Are the General Requirements of CAIR and the CAIR FIPs?
CAIR establishes state-wide emission budgets for SO2 and
NOX and is to be implemented in two phases. The first phase
of NOX reductions starts in 2009 and continues through 2014,
while the first phase of SO2 reductions starts in 2010 and
continues through 2014. The second phase of reductions for both
NOX and SO2 starts in 2015 and continues
thereafter. CAIR requires states to implement the budgets by either:
(1) Requiring EGUs to participate in the EPA-administered cap-and-trade
programs; or (2) adopting other control measures of the state's
choosing and demonstrating that such control measures will result in
compliance with the applicable state SO2 and NOX
budgets.
The May 12, 2005, and April 28, 2006, CAIR rules provide model
rules that states must adopt (with certain limited changes, if desired)
if they want to participate in the EPA-administered trading programs.
With two exceptions, only states that choose to meet the
requirements of CAIR through methods that exclusively regulate EGUs are
allowed to participate in the EPA-administered trading programs. One
exception is for states that adopt the opt-in provisions of the model
rules to allow non-EGUs individually to opt into the EPA-administered
trading programs. The other exception is for states that include all
non-EGUs from their NOX SIP Call trading programs in their
CAIR NOX ozone season trading programs.
IV. What Are the Types of CAIR SIP Submittals?
States have the flexibility to choose the type of control measures
they will use to meet the requirements of CAIR. EPA anticipates that
most states will choose to meet the CAIR requirements by selecting an
option that requires EGUs to participate in the EPA-administered CAIR
cap-and-trade programs. For such states, EPA has provided two
approaches for submitting and obtaining approval for CAIR SIP
revisions. States may submit full SIP revisions that adopt the model
CAIR cap-and-trade rules. If approved, these SIP revisions will fully
replace the CAIR FIPs. Alternatively, states may submit abbreviated SIP
revisions. These SIP revisions will not replace the CAIR FIPs; however,
the CAIR FIPs provide that, when approved, the provisions in these
abbreviated SIP revisions will be used instead of or in conjunction
with, as appropriate, the corresponding provisions of the CAIR FIPs
(e.g., the NOX allowance allocation methodology).
A state submitting a full SIP revision may either adopt regulations
that are substantively identical to the model rules or incorporate by
reference the model rules. CAIR provides that states may only make
limited changes to the model rules, if the states want to participate
in the EPA-administered trading programs. A full SIP revision may
change the model rules only by altering their applicability and
allowance allocation provisions to:
1. Include NOX SIP Call trading sources that are not
EGUs under CAIR in the CAIR NOX ozone season trading
program;
2. Provide for state allocation of NOX annual or ozone
season allowances using a methodology chosen by the state;
3. Provide for state allocation of NOX annual allowances
from the compliance supplement pool (CSP) using the state's
[[Page 38048]]
choice of allowed, alternative methodologies; or
4. Allow units that are not otherwise CAIR units to opt
individually into the CAIR SO2, NOX annual, or
NOX ozone season trading programs under the opt-in
provisions in the model rules.
An approved CAIR full SIP revision addressing EGUs' SO2,
NOX annual, or NOX ozone season emissions will
replace the CAIR FIP for that state for the respective EGU emissions.
V. Analysis of Alabama's CAIR SIP Submittal
A. State Budgets for Allowance Allocations
The CAIR NOX annual and ozone season budgets were
developed from historical heat input data for EGUs. Using these data,
EPA calculated annual and ozone season regional heat input values,
which were multiplied by 0.15 pounds per million British thermal units
(lb/mmBtu), for phase 1, and 0.125 lb/mmBtu, for phase 2, to obtain
regional NOX budgets for 2009-2014 and for 2015 and
thereafter, respectively. EPA derived the state NOX annual
and ozone season budgets from the regional budgets using state heat
input data adjusted by fuel factors.
The CAIR state SO2 budgets were derived by discounting
the tonnage of emissions authorized by annual allowance allocations
under the Acid Rain Program under title IV of the CAA. Under CAIR, each
allowance allocated in the Acid Rain Program for the years in phase 1
of CAIR (2010 through 2014) authorizes 0.5 ton of SO2
emissions in the CAIR trading program, and each Acid Rain Program
allowance allocated for the years in phase 2 of CAIR (2015 and
thereafter) authorizes 0.35 ton of SO2 emissions in the CAIR
trading program.
In this action, EPA is proposing approval of Alabama's SIP revision
that adopts the budgets established for the State in CAIR, i.e., 69,020
(2009-2014) and 57,517 (2015-thereafter) tons for NOX annual
emissions, 34,510 (2009-2014) and 29,146 (2015-thereafter) tons for
NOX ozone season emissions, and 157,582 (2010-2014) and
110,307 (2015-thereafter) tons for SO2 emissions. Alabama's
SIP revision sets these budgets as the total amounts of allowances
available for allocation for each year under the EPA-administered cap-
and-trade programs.
B. CAIR Cap-and-Trade Programs
The CAIR NOX annual and ozone-season model trading rules
both largely mirror the structure of the NOX SIP Call model
trading rule in 40 CFR part 96, subparts A through I. While the
provisions of the NOX annual and ozone-season model rules
are similar, there are some differences. For example, the NOX
annual model rule (but not the NOX ozone season model rule)
provides for a compliance supplement pool (CSP), which is discussed
below and under which allowances may be awarded for early reductions of
NOX annual emissions. As a further example, the NOX
ozone season model rule reflects the fact that the CAIR NOX
ozone season trading program replaces the NOX SIP Call
trading program after the 2008 ozone season and is coordinated with the
NOX SIP Call program. The NOX ozone season model
rule provides incentives for early emissions reductions by allowing
banked, pre-2009 NOX SIP Call allowances to be used for
compliance in the CAIR NOX ozone-season trading program. In
addition, states have the option of continuing to meet their NOX
SIP Call requirement by participating in the CAIR NOX ozone
season trading program and including all their NOX SIP Call
trading sources in that program.
The provisions of the CAIR SO2 model rule are also
similar to the provisions of the NOX annual and ozone season
model rules. However, the SO2 model rule is coordinated with
the ongoing Acid Rain SO2 cap-and-trade program under CAA
title IV. The SO2 model rule uses the title IV allowances
for compliance, with each allowance allocated for 2010-2014 authorizing
only 0.50 ton of emissions and each allowance allocated for 2015 and
thereafter authorizing only 0.35 ton of emissions. Banked title IV
allowances allocated for years before 2010 can be used at any time in
the CAIR SO2 cap-and-trade program, with each such allowance
authorizing 1 ton of emissions. Title IV allowances are to be freely
transferable among sources covered by the Acid Rain Program and sources
covered by the CAIR SO2 cap-and-trade program.
EPA also used the CAIR model trading rules as the basis for the
trading programs in the CAIR FIPs. The CAIR FIP trading rules are
virtually identical to the CAIR model trading rules, with changes made
to account for federal rather than state implementation. The CAIR model
SO2, NOX annual, and NOX ozone season
trading rules and the respective CAIR FIP trading rules are designed to
work together as integrated SO2, NOX annual, and
NOX ozone season trading programs.
In the SIP revision, Alabama chooses to implement its CAIR budgets
by requiring EGUs to participate in EPA-administered cap-and-trade
programs for SO2, NOX annual, and NOX
ozone season emissions. Alabama has adopted a full SIP revision that
adopts, with certain allowed changes discussed below, the CAIR model
cap-and-trade rules for SO2, NOX annual, and
NOX ozone season emissions.
C. Applicability Provisions for non-EGU NOX SIP Call Sources
In general, the CAIR model trading rules apply to any stationary,
fossil-fuel-fired boiler or stationary, fossil-fuel-fired combustion
turbine serving at any time, since the later of November 15, 1990, or
the start-up of the unit's combustion chamber, a generator with
nameplate capacity of more than 25 Megawatt electrical (MWe) producing
electricity for sale.
States have the option of bringing in, for the CAIR NOX
ozone season program only, those units in the state's NOX
SIP Call trading program that are not EGUs as defined under CAIR. EPA
advises states exercising this option to add the applicability
provisions in the state's NOX SIP Call trading rule for non-
EGUs to the applicability provisions in 40 CFR 96.304 in order to
include in the CAIR NOX ozone season trading program all
units required to be in the state's NOX SIP Call trading
program that are not already included under 40 CFR 96.304. Under this
option, the CAIR NOX ozone season program must cover all
large industrial boilers and combustion turbines, as well as any small
EGUs (i.e. units serving a generator with a nameplate capacity of 25
MWe or less) that the state currently requires to be in the NOX
SIP Call trading program.
Alabama has chosen to expand the applicability provisions of the
CAIR NOX ozone season trading program to include all non-
EGUs in the State's NOX SIP Call trading program.
D. NOX Allowance Allocations
Under the NOX allowance allocation methodology in the
CAIR model trading rules and in the CAIR FIP, NOX annual and
ozone season allowances are allocated to units that have operated for
five years, based on heat input data from a three-year period that are
adjusted for fuel type by using fuel factors of 1.0 for coal, 0.6 for
oil, and 0.4 for other fuels. The CAIR model trading rules and the CAIR
FIP also provide a new unit set-aside from which units without five
years of operation are allocated allowances based on the units' prior
year emissions.
States may establish in their SIP submissions a different NOX
allowance allocation methodology that will be used to allocate
allowances to sources in the states, if certain requirements are
[[Page 38049]]
met concerning the timing of submission of units' allocations to the
Administrator for recordation and the total amount of allowances
allocated for each control period. In adopting alternative NOX
allowance allocation methodologies, states have flexibility with regard
to:
1. The cost to recipients of the allowances, which may be
distributed for free or auctioned;
2. The frequency of allocations;
3. The basis for allocating allowances, which may be distributed,
for example, based on historical heat input or electric and thermal
output; and
4. The use of allowance set-asides and, if used, their size.
Alabama has chosen to replace the provisions of the CAIR NOX
annual model trading rule concerning the allocation of NOX
annual allowances with its own methodology. Alabama has chosen to
distribute NOX annual allowances based upon allocation
methods for existing, replacement, and new units. ADEM defines a
baseline NOX unit as one that commenced operation on, or
before January 1, 2004, or submitted an acceptable application to the
Department before August 1, 2005. For the control periods in 2009
through 2014, ADEM will allocate NOX allowances to baseline
CAIR units based in an amount equaling 0.15 lb/mmBtu, or the unit's
permitted NOX limit, whichever amount is less, multiplied by
the heat input and an adjustment ratio (to ensure that the total number
of CAIR NOX Ozone Season allowances allocated under this
paragraph equals the number of tons of CAIR NOX Ozone Season
emissions in the State trading program budget) and rounded to the
nearest whole NOX allowance as appropriate. For units with
multiple allowable emissions limits, the allowances may be calculated
based on actual operating data. For each control period in 2015 and
thereafter, ADEM will allocate allowances equaling 0.125 lb/mmBtu, or
the unit's NOX limit, whichever is less, multiplied by the
heat input and an adjustment ratio.
A replacement unit is defined as a NOX unit, or the
portion of a NOX unit, which replaces a baseline unit at the
same facility, and has the same or greater maximum design heat input
capacity. Allowances will be allocated for replacement units after all
baseline units have received allowances. These allowances will be
distributed from the Retired Unit Allowance Pool. After all baseline
and replacement units have received allocations, ADEM will allocate
allowances to new units from allowances remaining in the Retired Unit
Allowance Pool.
ADEM defines a new unit as one that does not meet the definition
for an existing unit or a replacement unit. New unit allocations, for
each applicable control period, will be equal to 0.15 lb/mmBtu or the
unit's permitted NOX limit, whichever is less, multiplied by
the heat input and an adjustment ratio and rounded to the nearest whole
NOX allowance as appropriate.
Allowances were to be allocated by October 31, 2006, for control
periods of 2009, 2010 and 2011. Allowances will be allocated by October
31, 2008, for control periods 2012, 2013 and 2014. By October 31, 2011,
and subsequently, on October 31 of every third year thereafter,
NOX allowance allocations will be submitted for the control
periods in the three years that are four, five, and six years,
respectively, after the year of the applicable deadline for submission.
Alabama has chosen not to use set-asides in their NOX annual
allocations.
Alabama has chosen to replace the provisions of the CAIR NOX
ozone season model trading rule concerning allowance allocations with
its own methodology. Alabama has chosen to distribute NOX
annual allowances based upon allocation methods for existing,
replacement, and new units. ADEM defines a baseline NOX unit
as one that commenced operation on, or before January 1, 2004, or
submitted an acceptable application to the Department before August 1,
2005. For the control periods in 2009 through 2014, ADEM will allocate
NOX allowances to baseline CAIR units based in an amount
equaling 0.15 lb/mmBtu (0.17 lb/mmBtu, if the unit's maximum design
heat input is greater than 250 mmBtu/hr), or the unit's permitted
NOX limit, whichever amount is less, multiplied by the heat
input and an adjustment ratio (to ensure that the total number of CAIR
NOX Ozone Season allowances allocated under this paragraph
equals the number of tons of CAIR NOX Ozone Season emissions
in the State trading program budget) and rounded to the nearest whole
NOX allowance as appropriate. For units with multiple
allowable emissions limits, the allowances may be calculated based on
actual operating data. For each control period in 2015 and thereafter,
ADEM will allocate allowances equaling 0.125 lb/mmBtu, or the unit's
NOX limit, whichever is less, multiplied by the heat input
and an adjustment ratio.
A replacement unit is defined as one which replaces a baseline
ozone season unit at the same facility, and has the same or greater
maximum design heat input.
A new unit is defined as a unit that does not meet the definition
of either an existing unit or a replacement unit.
NOX ozone season allowances were to be allocated by
October 31, 2006, for control periods 2009, 2010, and 2011. Only the
difference between the ozone season allowance allocations and the 2009
budget trading program will be submitted in 2009. By October 31, 2008,
allocations for 2012, 2013, and 2014 will be submitted. Finally, by
October 31, 2011, and October 31 of every third year thereafter,
allocations will be submitted for control periods in the three years
that are four, five, and six years after the applicable deadline for
submission. Alabama has chosen not to use set-asides in their ozone
season allocations.
E. Allocation of NOX Allowances From Compliance Supplement Pool
CAIR establishes a CSP to provide an incentive for early reductions
in NOX annual emissions. The CSP consists of 200,000 CAIR
NOX annual allowances of vintage 2009 for the entire CAIR
region, and a state's share of the CSP is based upon the projected
magnitude of the emission reductions required by CAIR in that State.
States may distribute CSP allowances, one allowance for each ton of
early reduction, to sources that make NOX reductions during
2007 or 2008 beyond what is required by any applicable state or Federal
emission limitation. States also may distribute CSP allowances based
upon a demonstration of need for an extension of the 2009 deadline for
implementing emission controls.
The CAIR annual NOX model trading rule establishes
specific methodologies for allocations of CSP allowances. States may
choose an allowed, alternative CSP allocation methodology to be used to
allocate CSP allowances to sources in the states.
Alabama has chosen to modify the provisions of the CAIR NOX
annual model trading rule concerning the allocation of allowances from
the CSP. Alabama has chosen to distribute CSP allowances using an
allocation methodology that allows the Department to allocate up to
10,166 additional CAIR NOX allowances for the control period
in 2009. CAIR NOX units that achieve emissions reductions in
2007 and 2008, that are not necessary to comply with applicable
emissions limitations during those years, may request early reduction
credits. The units requesting CSP allocations must submit a request by
May 1, 2009, to ADEM. Sources are eligible to receive CSP allowances
only to the extent that that the total number of allowances
[[Page 38050]]
issued does not exceed 15 percent of the total number of NOX
allowances issued to that unit from the initial allowance allocation.
Any remaining CSP allowances after the initial distribution will be
allocated to eligible units on a pro rata basis, provided that no unit
is issued more allowances than the early reduction credits requested by
that unit in accordance with ADEM's CSP provisions.
F. Individual Opt-In Units
The opt-in provisions of the CAIR SIP model trading rules allow
certain non-EGUs (i.e., boilers, combustion turbines, and other
stationary fossil-fuel-fired devices) that do not meet the
applicability criteria for a CAIR trading program to participate
voluntarily in (i.e., opt into) the CAIR trading program. A non-EGU may
opt into one or more of the CAIR trading programs. In order to qualify
to opt into a CAIR trading program, a unit must vent all emissions
through a stack and be able to meet the monitoring, recordkeeping, and
recording requirements of 40 CFR part 75. The owners and operators
seeking to opt a unit into a CAIR trading program must apply for a CAIR
opt-in permit. If the unit is issued a CAIR opt-in permit, the unit
becomes a CAIR unit, is allocated allowances, and must meet the same
allowance-holding and emissions monitoring and reporting requirements
as other units subject to the CAIR trading program. The opt-in
provisions provide for two methodologies for allocating allowances for
opt-in units, one methodology that applies to opt-in units in general
and a second methodology that allocates allowances only to opt-in units
that the owners and operators intend to repower before January 1, 2015.
States have several options concerning the opt-in provisions.
States may adopt the CAIR opt-in provisions entirely or may adopt them
but exclude one of the methodologies for allocating allowances. States
may also decline to adopt the opt-in provisions at all.
Alabama has chosen to allow non-EGUs meeting certain requirements
to opt into the CAIR NOX annual trading program, including
both of the opt-in allocation methods in the model rule.
Alabama has chosen to allow non-EGUs meeting certain requirements
to opt into the CAIR NOX ozone season trading program,
including both of the opt-in allocation methods in the model rule.
Alabama has chosen to allow certain non-EGUs to opt into the CAIR
SO2 trading program, and has chosen to incorporate the
Federal rule by reference.
VI. Proposed Actions
EPA is proposing to approve Alabama's full CAIR SIP revision
submitted on March 7, 2007. Under this SIP revision, Alabama is
choosing to participate in the EPA-administered cap-and-trade programs
for SO2, NOX annual, and NOX ozone
season emissions. The SIP revision meets the applicable requirements in
40 CFR 51.123(o) and (aa), with regard to NOX annual and
NOX ozone season emissions, and 40 CFR 51.124(o), with
regard to SO2 emissions. EPA is proposing to determine that
the SIP, as revised, will meet the requirements of CAIR. As a
consequence of the SIP approval, the Administrator of EPA will also
issue, without providing an opportunity for a public hearing or an
additional opportunity for written public comment, a final rule to
withdraw the CAIR FIPs concerning SO2, NOX annual
and NOX ozone season emissions for Alabama. That withdrawal
will delete and reserve 40 CFR 52.54 and 40 CFR 52.55.
VII. Statutory and Executive Order Reviews
Under Executive Order 12866 (58 FR 51735, October 4, 1993), this
action is not a ``significant regulatory action'' and therefore is not
subject to review by the Office of Management and Budget. For this
reason, this action is also not subject to Executive Order 13211,
``Actions Concerning Regulations That Significantly Affect Energy
Supply, Distribution, or Use'' (66 FR 28355, May 22, 2001). This action
merely proposes to approve State law as meeting Federal requirements
and would impose no additional requirements beyond those imposed by
State law. Accordingly, the Administrator certifies that this proposed
rule would not have a significant economic impact on a substantial
number of small entities under the Regulatory Flexibility Act (5 U.S.C.
601 et seq.). Because this action proposes to approve pre-existing
requirements under State law and would not impose any additional
enforceable duty beyond that required by State law, it does not contain
any unfunded mandate or significantly or uniquely affect small
governments, as described in the Unfunded Mandates Reform Act of 1995
(Pub. L. 104-4).
This proposal also does not have tribal implications because it
would not have a substantial direct effect on one or more Indian
tribes, on the relationship between the Federal Government and Indian
tribes, or on the distribution of power and responsibilities between
the Federal Government and Indian tribes, as specified by Executive
Order 13175 (65 FR 67249, November 9, 2000). This proposed action also
does not have Federalism implications because it would not have
substantial direct effects on the states, on the relationship between
the national government and the states, or on the distribution of power
and responsibilities among the various levels of government, as
specified in Executive Order 13132 (64 FR 43255, August 10, 1999). This
action merely proposes to approve a State rule implementing a Federal
standard and will result, as a consequence of that approval, in the
Administrator's withdrawal of the CAIR FIP. It does not alter the
relationship or the distribution of power and responsibilities
established in the Clean Air Act. This proposed rule also is not
subject to Executive Order 13045 ``Protection of Children from
Environmental Health Risks and Safety Risks'' (62 FR 19885, April 23,
1997), because it would approve a State rule implementing a Federal
Standard.
In reviewing SIP submissions, EPA's role is to approve state
choices, provided that they meet the criteria of the Clean Air Act. In
this context, in the absence of a prior existing requirement for the
State to use voluntary consensus standards (VCS), EPA has no authority
to disapprove a SIP submission for failure to use VCS. It would thus be
inconsistent with applicable law for EPA, when it reviews a SIP
submission, to use VCS in place of a SIP submission that otherwise
satisfies the provisions of the Clean Air Act. Thus, the requirements
of section 12(d) of the National Technology Transfer and Advancement
Act of 1995 (15 U.S.C. 272 note) do not apply. This proposed rule would
not impose an information collection burden under the provisions of the
Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.).
List of Subjects in 40 CFR Part 52
Environmental protection, Air pollution control, Electric
utilities, Intergovernmental relations, Nitrogen oxides, Ozone,
Particulate matter, Reporting and recordkeeping requirements, Sulfur
dioxide.
Authority: 42 U.S.C. 7401 et seq.
Dated: July 3, 2007.
J.I. Palmer Jr.,
Regional Administrator, Region 4.
[FR Doc. E7-13543 Filed 7-11-07; 8:45 am]
BILLING CODE 6560-50-P
