Rulemaking To Reaffirm the Promulgation of Revisions of the Acid Rain Program Rules, 75959-75968 [E8-29382]

Download as PDF Federal Register / Vol. 73, No. 241 / Monday, December 15, 2008 / Rules and Regulations List of Subjects in 40 CFR Parts 72, 73, 74, 77, and 78 Environmental protection, Acid rain, Administrative practice and procedure, Air pollution control, Electric utilities, Intergovernmental relations, Reporting and recordkeeping requirements, Sulfur oxides. Dated: December 5, 2008. Stephen L. Johnson, Administrator. [FR Doc. E8–29389 Filed 12–12–08; 8:45 am] BILLING CODE 6560–50–P ENVIRONMENTAL PROTECTION AGENCY 40 CFR Parts 72, 73, 74, 77, and 78 [EPA–HQ–OAR–2008–0744; FRL–8750–8] RIN 2060–AP35 Rulemaking To Reaffirm the Promulgation of Revisions of the Acid Rain Program Rules AGENCY: Environmental Protection Agency (EPA). ACTION: Interim final rule. SUMMARY: EPA is taking interim final action to reaffirm the promulgation of certain revisions of the Acid Rain Program rules in order to prevent disruption of this program, which has achieved significant, cost-effective reductions in sulfur dioxide (SO2) emissions from utility sources since its commencement in 1995. These rule revisions were finalized in the Federal Register notices that also finalized the Clean Air Interstate Rule (CAIR) and the Federal Implementation Plans for CAIR (CAIR FIPs). The U.S. Court of Appeals for the District of Columbia Circuit recently issued a decision vacating and remanding CAIR and the CAIR FIPs. EPA and other parties have petitioned for rehearing, and the Court has not yet issued a mandate in the case. These revisions to the Acid Rain Program rules were not addressed by, or involved in any of the issues raised by, any parties in the proceeding or the Court. EPA believes it is reasonable to view these revisions as unaffected by the Court’s decision. However, EPA is reaffirming— pursuant to its authority under Title IV of the Clean Air Act (CAA) and CAA section 301—the promulgation of these revisions in this interim final rule in order to remove any uncertainty about their legal status because they have been in effect since mid-2006, most of them are crucial to the ongoing operation of the Acid Rain Program, and the rest of them streamline and clarify requirements of the program. DATES: This action is effective on December 15, 2008 and will continue in effect until December 15, 2009. ADDRESSES: EPA has established a docket for this action under Docket ID No. EPA–HQ–OAR–2008–0774, which incorporates by reference the dockets for CAIR and the CAIR FIPs (Docket ID Nos. EPA–HQ–OAR–2003–0053 and EPA– HQ–OAR–2004–0076). All documents in the docket are listed in the Federal Docket Management System index at https://www.regulations.gov. Although listed in the index, some information is 75959 not publicly available, e.g., Confidential Business Information (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 through https:// www.regulations.gov or in hard copy at the Air and Radiation Docket, EPA West Building, Room 3334, 1301 Constitution Ave., NW., Washington, DC 20460. The Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding legal holidays. The telephone number for the Public Reading Room is (202) 566–1744, and the telephone number for the Air and Radiation Docket is (202) 566–1742. FOR FURTHER INFORMATION CONTACT: Dwight C. Alpern, Clean Air Markets Division, U.S. Environmental Protection Agency, Clean Air Markets Division, MC 6204J, Ariel Rios Building, 1200 Pennsylvania Ave., NW., Washington, DC 20460, telephone (202) 343–9151, e-mail at alpern.dwight@epa.gov. Electronic copies of this document can be accessed through the EPA Web site at: https://www.epa.gov/airmarkets. Regulated Entities. Entities regulated by this action primarily are fossil fuel-fired boilers, turbines, and combined cycle units that serve generators that produce electricity for sale or cogenerate electricity for sale and steam. Regulated categories and entities include: SUPPLEMENTARY INFORMATION: NAICS code Examples of potentially regulated industries Industry .............................................................................. pwalker on PROD1PC71 with RULES Category 221112 and others ............................................................. Electric service providers. This table is not intended to be exhaustive, but rather to provide a guide for readers regarding entities likely to be regulated by this action. This table lists the types of entities, of which EPA is now aware, that could potentially be regulated by this action. Other types of entities not listed in this table could also be regulated. To determine whether your facility, company, business, organization, etc., is regulated by this action, you should carefully examine the applicability provisions in §§ 72.6, 72.7, and 72.8 of title 40 of the Code of Federal Regulations. If you have questions regarding the applicability of this action to a particular entity, consult the person listed in the preceding FOR FURTHER INFORMATION CONTACT section. VerDate Aug<31>2005 16:19 Dec 12, 2008 Jkt 217001 Judicial Review. Under CAA section 307(b)(1), judicial review of this final rule is available only by filing a petition for review in the U.S. Court of Appeals for the District of Columbia Circuit on or before February 13, 2009. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this rule for the purposes of judicial review, does not extend the time within which a petition for judicial review may be filed, and does not postpone the effectiveness of this rule. Under CAA section 307(b)(2), the requirements established by this rule may not be challenged separately in any civil or criminal proceedings brought by EPA to enforce these requirements. PO 00000 Frm 00033 Fmt 4700 Sfmt 4700 Outline. The following outline is provided to aid in locating information in this preamble. I. Overview II. Administrative Procedures Used in This Action III. Acid Rain Rule Revisions Whose Promulgation Is Reaffirmed A. Rule Revisions Implementing SourceLevel Compliance B. Rule Revisions Allowing Use of Agents by Designated Representative and Authorized Account Representatives C. Rule Revisions Making Technical Changes D. Identification of Specific Rule Revisions Whose Promulgation Is Reaffirmed IV. Statutory and Executive Order Reviews A. Executive Order 12866: Regulatory Planning and Review B. Paperwork Reduction Act C. Regulatory Flexibility Act E:\FR\FM\15DER1.SGM 15DER1 75960 Federal Register / Vol. 73, No. 241 / Monday, December 15, 2008 / Rules and Regulations D. Unfunded Mandates Reform Act E. Executive Order 13132: Federalism F. Executive Order 13175: Consultation and Coordination With Indian Tribal Governments G. Executive Order 13045: Protection of Children From Environmental Health and Safety Risks H. Executive Order 13211: Actions That Significantly Affect Energy Supply, Distribution, or Use I. National Technology Transfer Advancement Act J. Executive Order 12898: Federal Actions To Address Environmental Justice in Minority Populations and Low-Income Populations K. Congressional Review Act pwalker on PROD1PC71 with RULES I. Overview In May 2005 and April 2006, EPA promulgated certain revisions to the rules for the Acid Rain Program (in 40 CFR parts 72 through 78). These revisions were finalized in the Federal Register notices that also finalized CAIR and the CAIR FIPs. 70 FR 25162 (May 12, 2005); 71 FR 25328 (Apr. 28, 2006).1 Most of these revisions were adopted for reasons independent of CAIR and the CAIR FIPs, although some were adopted to facilitate coordination of the Acid Rain trading program with the trading programs offered by EPA in CAIR and the CAIR FIPs. A few additional revisions, which are not being reaffirmed by this rule, were adopted to implement CAIR and the CAIR FIPs. On July 11, 2008, the U.S. Court of Appeals for the District of Columbia Circuit issued a decision vacating and remanding CAIR and the CAIR FIPs. North Carolina v. EPA, 531 F.3d 896 (D.C. Cir. 2008). EPA and other parties in the proceeding have petitioned for rehearing, and the Court has not yet issued a mandate in the case. However, depending on its response to the petitions, the Court may issue a mandate. While the Court’s July 11, 2008 decision upheld petitioners’ objections concerning a number of issues related to CAIR and the CAIR FIPs, none of the issues raised by the petitioners, and none of the Court’s determinations, addressed the Acid Rain Program rule revisions reaffirmed by this rule. 1 The titles for the May 12, 2005 and April 28, 2006 Federal Register notices identify the actions taken in those notices. The full title for the May 12, 2005 notice is ‘‘Rule to Reduce Interstate Transport of Fine Particulate Matter and Ozone (Clean Air Interstate Rule); Revisions to Acid Rain Program; Revisions to the NOX SIP Call.’’ 70 FR 25162. The full title for the April 28, 2006 Federal Register notice is ‘‘Rulemaking on Section 126 Petition from North Carolina to Reduce Interstate Transport of Fine Particulate Matter and Ozone; Federal Implementation Plans to Reduce Interstate Transport of Fine Particulate Matter and Ozone; Revisions to the Acid Rain Program.’’ 71 FR 25328. VerDate Aug<31>2005 16:19 Dec 12, 2008 Jkt 217001 Only a few of the Acid Rain Program rule revisions were adopted to implement CAIR and the CAIR FIPs and thus were encompassed by petitioners’ arguments and the Court’s decision: i.e., revisions to part 73 providing that SO2 allowances used for compliance with CAIR and CAIR FIPs could not be used for compliance in the Acid Rain Program and revisions to part 78 providing that final actions of the Administrator under the CAIR and CAIR FIP trading programs could be appealed under the administrative appeal procedures applicable to the Acid Rain Program. See 70 FR 25,335/3 (revision adding § 73.35(a)(3)) and 25,338–39 (revisions referencing subparts AA through IIII of part 96 and the CAIR designated representative and CAIR authorized account representative); and 71 FR 25,379–80 (revisions referencing subparts AA through IIII of part 97 and the CAIR designated representative and CAIR authorized account representative). This notice reaffirms the promulgation of only the other Acid Rain Program rule revisions—i.e., the revisions that were not necessary for implementing CAIR and the CAIR FIPs—finalized in the Federal Register notices that also finalized the CAIR and CAIR FIP rules. (These revisions are herein referred to as ‘‘non-CAIR- and non-CAIR-FIP-related Acid Rain Program rule revisions’’.) EPA believes it is reasonable to view the non-CAIRand non-CAIR-FIP-related Acid Rain Program rule revisions (which are described in detail below) as unaffected by the Court’s decision, which did not address them. However, EPA is concerned that there be no uncertainty about the legal status of these rule revisions. Most of them are crucial to the ongoing operation of the Acid Rain Program, while the rest of them streamline and, in some cases, clarify the requirements of the program, thereby facilitating its operation. For example, some of the Acid Rain Program rule revisions published in the same Federal Register notice as CAIR, require owners and operators to meet the requirement to hold SO2 allowances covering annual SO2 emissions by maintaining a sufficient amount of allowances in an allowance account for each entire plant (i.e., source). Consistent with this approach, the rule revisions also provide for SO2 allowance transfers to be made from one source account to another source account. See 70 FR 25,296–98. Under the Acid Rain Program rules in place before these revisions, owners and operators were required to have a separate allowance account for each unit (e.g., boiler or PO 00000 Frm 00034 Fmt 4700 Sfmt 4700 combustion turbine) and could trade allowances by transferring allowances from one unit account to another. (Of course, under both the pre-revision Acid Rain Program rules and the revised rules, general accounts, which are not associated with a specific unit or source, can also be involved in allowance transfers.) The revisions requiring source-based compliance were made effective on July 1, 2006 in order to give EPA time to make the software changes necessary for implementing sourcebased allowance compliance and transfers and to conduct the testing to ensure proper operation of the revised allowance tracking system and in order to give owners time to adapt to sourcebased compliance. Id. at 25,296–97. By further example, the Acid Rain Program rule revisions published in the same Federal Register notice as the CAIR FIPs, made effective on June 27, 2006, expressly allow, and govern, the use of agents by designated representatives, authorized account representatives, and alternates to make various types of electronic submissions under the Acid Rain Program, while preserving the representatives’ ultimate responsibility for such submissions. 71 FR 25,365. These revisions give each regulated company greater flexibility in distributing, among its individual employees, the task of making electronic submissions. After the non-CAIR- and non-CAIRFIP-related Acid Rain Program rule revisions became final and effective in mid-2006, EPA modified its electronic allowance and emissions tracking systems to reflect the revisions. For example, EPA removed individual-unit allowance accounts, replaced them with source accounts to which previously recorded allowance holdings were moved, and established elements in the tracking systems for making allowance transfers to and from source accounts (instead of unit accounts) and comparing the sum of the annual emissions of all regulated units at each source (instead of only an individual unit’s annual emissions) to the allowances held in the source account. See 69 FR 32,684, 32,701 (June 10, 2004). EPA also added elements to the tracking systems for designated representatives, authorized account representatives, and alternates to create and use agents to submit quarterly emissions reports, including the resubmissions that are often necessary to correct reporting errors found by EPA. The revised Acid Rain Program provisions have been used and relied on by most, if not all, regulated companies since mid-2006. E:\FR\FM\15DER1.SGM 15DER1 pwalker on PROD1PC71 with RULES Federal Register / Vol. 73, No. 241 / Monday, December 15, 2008 / Rules and Regulations EPA is concerned that the non-CAIRand non-CAIR-FIP-related Acid Rain Program revisions are too important to the ongoing operation of the Acid Rain Program to allow for any uncertainty concerning their legal status, which might result in the event that the Court issues a mandate in North Carolina. This is particularly true for the large number of revisions that significantly affect how SO2 allowance transfers are made and recorded, how owners and operators submit quarterly emissions reports, and how EPA compares each year the amount of allowances held and the amount of SO2 emissions. Allowance transfer, emissions reporting, and the comparison of emissions and allowances are matters that go to the heart of the Acid Rain Program. Under this program, an annual cap (which is about 40% lower than historical emissions for utility emissions sources) is set on the total amount of allowances issued each year. Each allowance authorizes the emission of one ton of SO2 in the year for which the allowance is issued or in a later year. Nationwide SO2 emissions are reduced through implementation of an emissions limitation that requires each utility emissions source to have annual SO2 emissions not exceeding the emissions authorized by the allowances held for the year and allows for compliance through the use of allowances obtained through allocation or auction from EPA or transferred from other allowance holders. The ability of each utility emissions source to consider potential, alternative compliance options involving emission reduction actions and/or purchases or sales of SO2 allowances in the SO2 allowance market and to choose the option that is the most cost-effective for that emissions source results in cost-effective achievement of the national SO2 emissions reduction goals of the Acid Rain Program. EPA implements the annual SO2 emissions limitation through electronic allowance and tracking emissions systems that incorporate the existing Acid Rain Program rules (including rule revisions whose promulgation is reaffirmed in this notice). If (contrary to EPA’s position as discussed above) the rule revisions affecting allowance transfer, submission of quarterly emissions reports, and comparison of emissions and allowances were suddenly to become no longer effective, EPA would likely be unable to operate its electronic allowance tracking system, and might be unable to operate its electronic emissions tracking system, until extensive system modifications were made. Were the rule revisions no longer VerDate Aug<31>2005 16:19 Dec 12, 2008 Jkt 217001 effective, the allowance tracking system would likely have to be modified to reinstate unit accounts and unit-based compliance. Similarly, the emissions tracking system might have to be modified to provide an alternative, workable approach for submission of quarterly emissions reports by designated representatives (for whom direct involvement in the submission and resubmission process for emissions reports is often not practical). Consequently, it is likely that, in the near term until the systems were modified, EPA could not record allowances transfers, owners and operators could not use transferred allowances to comply with the allowance-holding requirement, and EPA could not determine if, and owners and operators could not demonstrate that, utility emissions sources were in compliance with the SO2 emissions limitation. Moreover, the inability—or even uncertainty about the ability—to transfer and use allowances for compliance in the near term would likely have a significant, adverse effect on the SO2 allowance market in the near term. Under these circumstances, it is likely that potential market participants would be reluctant to rely on allowance purchases for compliance, would have difficulty determining the value of allowances that were or might be unusable, and so would be reluctant to buy or sell allowances. For these reasons and the reasons discussed below, EPA is, in this notice, reaffirming—pursuant to its authority under Title IV of the Clean Air Act (CAA) and CAA section 301—the promulgation of the non-CAIR- and nonCAIR-FIP-related revisions to the Acid Rain Program rules as an interim final rule, whose effectiveness is immediate upon the date of promulgation in the Federal Register. Because it is immediately effective, the interim final rule provides no opportunity for hearing and comment. This action removes any uncertainty concerning the legal status of these non-CAIR- and non-CAIR-FIPrelated revisions in the event that the Court issues a mandate in North Carolina. Further, simultaneously with this notice, EPA is publishing in the Federal Register parallel notices of proposed and direct final rules reaffirming the promulgation of the nonCAIR- and non-CAIR-FIP-related Acid Rain Program rule revisions. As explained in the proposed and direct final notices, those notices provide interested persons an opportunity for public hearing and comment on the rule revisions. This interim final rule will continue in effect until December 15, PO 00000 Frm 00035 Fmt 4700 Sfmt 4700 75961 2009, unless it is withdrawn on an earlier date by the direct final rule or (if the direct final rule itself is withdrawn) the final rule addressing these rule revisions. Under this approach, EPA is ensuring that the public will have an opportunity to comment on these Acid Rain Program rule revisions and that these revisions will continue in effect in the meantime on an interim basis. In the event that any timely adverse comments are submitted on any of the revisions whose promulgation is reaffirmed in the proposed and direct final rules, EPA will withdraw the direct final rule, address the merits of such comments, and finalize, to the extent appropriate, any revisions. EPA intends to complete that rulemaking process and have any final Acid Rain Program rule revisions in place December 15, 2009. If that rulemaking process is completed and the resulting direct final rule or final rule is effective before December 15, 2009, the interim final rule will be withdrawn as of the effective date of the direct final rule or final rule. II. Administrative Procedures Used in This Action Under CAA section 307(d)(1)(S), this action revising the Acid Rain Program rules is subject to the requirements of CAA section 307(d). Section 307(d)(3) provides that a notice of proposed rulemaking, providing an opportunity for a public hearing and comment, must be published in the Federal Register, except under certain circumstances, as provided in the Administrative Procedure Act (5 U.S.C. 553(b)). The requirement for such a notice does not apply ‘‘when the agency for good cause finds * * * that notice and public procedure thereon are impracticable, unnecessary, or contrary to the public interest.’’ 5 U.S.C. 553(b)(3)(B). EPA finds, for the following reasons, that providing notice and opportunity for public hearing and comment before reaffirming the promulgation of the nonCAIR- and non-CAIR-FIP-related revisions of the Acid Rain Program rules in the instant rulemaking are impracticable, unnecessary, and contrary to the public interest. As discussed above, these rule revisions were finalized on May 12, 2005 and April 28, 2006 and, since mid-2006 when they became effective, have been implemented by EPA and utilized by most, if not all, regulated companies and EPA. In fact, most of these revisions have been incorporated in the software for the allowance tracking system, which likely could not be operated without extensive modifications, and for the emissions tracking system, which E:\FR\FM\15DER1.SGM 15DER1 pwalker on PROD1PC71 with RULES 75962 Federal Register / Vol. 73, No. 241 / Monday, December 15, 2008 / Rules and Regulations might not be operable without extensive modifications, if the incorporated revisions were no longer in effect. Consequently, as discussed above in Section I of this preamble, the loss of the effectiveness of these revisions—or even uncertainty about their continuing effectiveness—would likely result in a significant disruption of the operation of the Acid Rain Program and the SO2 allowance market in the near term, contrary to Congressional intent that EPA implement the Acid Rain Program under CAA Title IV and contrary to the public interest in continuation of the significant, cost-effective emission reductions required, and actually achieved, under the Acid Rain Program since its commencement in 1995. Moreover, no party petitioned for review of these rule revisions. The judicial proceedings involving the rulemaking notices (i.e., the May 12, 2005 notice at 70 FR 25162, which also finalized CAIR, and the April 28, 2006 notice at 71 FR 25328, which also finalized the CAIR FIPs) in which these Acid Rain Program rule revisions were promulgated, relate only to Petitions for Review of specific aspects of CAIR and the CAIR FIPs. No party to those proceedings asked the Court to review these revisions to the Acid Rain Program rules, and no issues concerning these revisions were raised or addressed by any petitioners, any intervenors, amici, EPA, or the Court. Although EPA therefore believes that the Court’s July 11, 2008 decision vacating and remanding of CAIR and the CAIR FIPs in North Carolina can reasonably be interpreted as not applying to these revisions, it is important that the legal status of these revisions be absolutely clear. EPA is concerned that, if and when the Court issues a mandate for the North Carolina decision, that might create uncertainty about whether these revisions remain in effect, despite EPA’s belief that the decision does not apply to these revisions. For the reasons discussed above, any such uncertainty about their continuing effectiveness would likely cause significant disruption in the near term to operation of the Acid Rain Program, the SO2 allowance market, and the achievement of the significant, costeffective emission reductions required under the Acid Rain Program. In order to avoid such disruption, EPA maintains that it should provide certainty about the legal status of these rule revisions as soon as possible. However, the delay inherent in providing notice and opportunity for hearing and public comment before taking final action would prevent EPA from providing this VerDate Aug<31>2005 16:19 Dec 12, 2008 Jkt 217001 certainty as soon as possible. EPA therefore finds that providing notice and opportunity for comment in the instant rulemaking before reaffirming the promulgation of the revisions incorporated in the electronic allowance and emissions tracking systems is impracticable and contrary to the public interest. In addition, EPA finds that providing notice and opportunity for comment in the instant rulemaking before reaffirming the promulgation of the nonCAIR- and non-CAIR-FIP-related revisions of the Acid Rain Program rules —including both those revisions incorporated in the electronic allowance and emissions tracking systems and the other revisions—is unnecessary. No petitions for review of these rule revisions were filed. Since, in addition, these rule revisions have been in effect since mid-2006 without any indication they have caused concern or problems for sources subject to the Acid Rain Program or any other members of the public, EPA maintains that it is unlikely that the public will be particularly interested in commenting on the revisions. Moreover, EPA is limiting the effectiveness of the interim final rule reaffirming the promulgation of these rule revisions and, during the period of the interim final rule’s effectiveness, is providing a full opportunity for comment on the rule revisions. Specifically, EPA is providing that the interim final rule will be effective for one year and, simultaneously with this notice, is publishing in the Federal Register parallel notices of direct final and proposed rules that will provide the opportunity for comment on these rule revisions. If any timely adverse comment is submitted on the direct final rule, EPA will withdraw the direct final rule and may issue a final rule that changes the revisions and implements any such change in a manner that will not disrupt the ongoing operation of the Acid Rain Program and the SO2 allowance market. In order to coordinate the interim final, direct final, and proposed rulemakings, EPA is making the interim final rule effective until December 15, 2009, unless the interim final rule is withdrawn on an earlier date by the direct final rule, or (if the direct final rule itself is withdrawn) the final rule, addressing these revisions. For all of the above-discussed reasons, EPA finds, under 5 U.S.C. 553(b)(3)(B), that providing notice of proposed rulemaking and hearing and comment opportunity before making these revisions final on an interim basis is impracticable, unnecessary, and/or contrary to the public interest. PO 00000 Frm 00036 Fmt 4700 Sfmt 4700 In addition, EPA also finds that there is good cause under 5 U.S.C. 553(d) to make this interim final rule— reaffirming the promulgation of the Acid Rain Program rule revisions— immediately effective upon publication in the Federal Register. As explained above, operation of the Acid Rain Program and the SO2 allowance market in the near term would likely be significantly disrupted by any uncertainty over the effectiveness of most of the rule revisions. Further, no petitions for review of these revisions were filed, and no concerns or issues have been raised on the merits of any of the revisions in the proceedings concerning CAIR and the CAIR FIPs. EPA therefore finds that the effectiveness of the rule revisions should be made clear as soon as possible by making the interim final rule immediately effective upon publication. III. Acid Rain Rule Revisions Whose Promulgation Is Reaffirmed In this notice, EPA is reaffirming, as an interim final rule, the promulgation of the non-CAIR- and non-CAIR-FIPrelated revisions of the Acid Rain Program rules, which revisions were finalized in the Federal Register notices that also finalized CAIR and the CAIR FIPs. EPA is reaffirming the following three types of non-CAIR- and non-CAIRFIP-related revisions to the Acid Rain Program rules: (1) Revisions that implement source-level, rather than unit-level compliance with the allowance-holding requirement in the Acid Rain Program, effective on July 1, 2006; (2) revisions that expressly allow designated representatives, authorized account representatives, and alternates to use agents to make electronic submissions to the Administrator, effective on June 27, 2006; and (3) revisions making technical changes to streamline and, in some cases, clarify the requirements of the Acid Rain Program, effective on June 27 and July 1, 2006 depending on the specific revision. Out of all the Acid Rain Program rule revisions that were finalized in the Federal Register notices that also finalized CAIR and the CAIR FIPs, the only revisions whose promulgation EPA is not reaffirming are those that are related to CAIR and the CAIR FIPs, i.e., those (which are described in detail in Section III.D of this preamble) that are necessary for implementation of the CAIR and CAIR FIP trading programs. This action will have no impact on those revisions. E:\FR\FM\15DER1.SGM 15DER1 pwalker on PROD1PC71 with RULES Federal Register / Vol. 73, No. 241 / Monday, December 15, 2008 / Rules and Regulations A. Rule Revisions Implementing SourceLevel Compliance As noted above, on May 12, 2005, EPA finalized revisions to the Acid Rain Program rules to implement the allowance-holding requirement on a source-by-source, rather than on a unitby-unit, basis. Specifically, these revisions require each source to hold (as of the allowance transfer deadline, which is generally March 1) an amount of allowances in its allowance tracking system account at least equal to the tonnage of SO2 emissions for all Acid Rain Program units at the source for the preceding calendar year. These revisions replaced earlier Acid Rain Program rule language that instead required each unit to hold allowances in its own allowance tracking system account at least equal to the tonnage of SO2 emissions for the unit in such calendar year. For the reasons detailed in the Notice of Supplemental Proposal published on June 10, 2004 (69 FR 32,698–701) and adopted in the final rule published on May 12, 2005 (70 FR 25,296), EPA reaffirms its findings that: (1) Title IV is ambiguous concerning whether the allowance-holding requirement must be met on a unit-by-unit basis and so EPA has discretion in deciding what approach to adopt in the rules implementing Title IV; (2) it is important to provide additional compliance flexibility by allowing a unit at a source to use allowances from any other unit at the same source; and (3) many non-allowance-holding provisions of Title IV evidence a unitby-unit orientation. For these reasons, as explained in the final CAIR (id.), EPA reaffirms its conclusion that the adoption of source-level compliance with the allowance-holding requirement reasonably balances these considerations. In balancing these considerations, EPA also reaffirms its conclusion that company-level compliance is not appropriate because it represents too much of a deviation from the unit-by-unit orientation in the nonallowance holding provisions of Title IV and is likely to require much more dramatic changes in the operation of the Acid Rain Program. See 69 FR 32,700. For example, company-level compliance would add to the compliance determination process complexities such as the need to identify the ‘‘company’’ in cases where owners or operators are organized using complex corporate or other ownership structures and to handle cases where ownership structures are changed, or units or sources are transferred among corporate or other entities, during the year. EPA VerDate Aug<31>2005 16:19 Dec 12, 2008 Jkt 217001 notes that these conclusions about source-by-source compliance address only compliance with the allowanceholding requirement, not with the emissions monitoring and reporting requirements, which continue to be applied unit by unit. Because language reflecting or referencing the unit-by-unit compliance approach was included in many provisions throughout the earlier Acid Rain Program rules, a significant number of rule revisions was necessary to implement source-by-source allowance holding. Other than implementing the shift from unit-to source-level compliance, the rule revisions did not make any substantive changes to the revised provisions. Examples of the revisions necessary to implement source-based compliance are as follows: 1. The term ‘‘unit account’’ was replaced by ‘‘compliance account’’ in § 72.2 and, as appropriate, in every other provision of the Acid Rain Program rules in which the term appeared. Similarly, references to a ‘‘unit’s’’ account in the allowance tracking system were replaced by references to a ‘‘source’s’’ account. In addition, references to allowances held by a ‘‘unit’’ were changed to refer to allowances held by a ‘‘source.’’ 2. References to a ‘‘unit’s’’ Acid Rain emissions limitation for SO2 were replaced by references to a ‘‘source’s’’ Acid Rain emissions limitation for SO2 throughout the Acid Rain Program rules. Similarly, references to a ‘‘unit’s’’ SO2 emissions for purposes of applying the SO2 emissions limitation (or a ‘‘unit’s’’ excess emissions) were replaced, where appropriate, by references to the SO2 emissions of the ‘‘affected units at a source’’ (or to a ‘‘source’s’’ excess emissions). 3. The provisions in §§ 72.90(b)(5) and 73.35(e) concerning the assignment of allowance deductions, for compliance with the allowance-holding requirement, among units at a common stack were removed. These provisions were made unnecessary by the shift from unit-to source-level compliance because all units at a common stack are necessarily at the same source. 4. The terms ‘‘compliance subaccount’’, ‘‘future year subaccount’’, and ‘‘current year subaccount’’ and their definitions were removed or replaced, as appropriate, throughout the Acid Rain Program rules. The earlier rules distinguished between two subaccounts in each unit account, i.e., a ‘‘compliance subaccount’’ for allowances usable for compliance in a given year and a ‘‘future year subaccount’’ for allowances not usable until a future year. Similarly, PO 00000 Frm 00037 Fmt 4700 Sfmt 4700 75963 the earlier rules referred to a ‘‘current year subaccount’’ and a ‘‘future year subaccount’’ of a general account. However, whether compliance was on a unit-or source-level, there was no need to use or refer to the subaccounts. In fact, the electronic allowance tracking system has never actually used subaccounts. See 69 FR 32,700. Consequently, for example, § 73.34(a) and (b)—providing that the allowance tracking system show in allowance accounts the holdings of allowances issued for 30 years and that each year the holdings of allowances issued for the new 30th year will be added—were revised to set forth these requirements without using the obsolete references to subaccounts. 5. The provision in § 73.35(b)(3) limiting the use of allowances from another unit at the same source for compliance was removed. In that provision, a unit that would otherwise have excess emissions was allowed to use a limited number of allowances from other units at the same source in order to reduce, but not to eliminate, the excess emissions. Such a limitation was unnecessary, and indeed was inconsistent, with source-based compliance. 6. The provision in § 74.4(c) allowing two designated representatives for the same source under certain circumstances was removed.2 While it was workable to have one designated representative for a non-opt-in unit at a source and a different designated representative for an opt-in unit at the same source where compliance with the allowance-holding requirement was required on a unit-by-unit basis, EPA maintains that this is not workable where compliance is at the source-level and one individual must be responsible for compliance by all units at the source. When EPA first proposed the Acid Rain Program rule revisions to implement source-based compliance, some commenters supported, and some opposed, the shift to source-by-source allowance holding. EPA addressed each of the comments opposing the change and reaffirms, in this notice, the responses to those comments. For 2 In the Acid Rain Program rule revisions finalized in May 12, 2005 Federal Register notice certain language in § 74.4(c) was revised. However, in the revisions finalized in the April 28, 2006 Federal Register notice these § 74.4(c) revisions were superseded by entirely removing and reserving § 74.4(c) in light of the change from unitto source-level compliance with the allowanceholding requirement. 71 FR 25379/2. While the April 28, 2006 rule revisions did not also remove all references to § 74.4(c), EPA is not reaffirming their promulgation since they refer to a non-existent provision (i.e., § 74.4(c)). E:\FR\FM\15DER1.SGM 15DER1 pwalker on PROD1PC71 with RULES 75964 Federal Register / Vol. 73, No. 241 / Monday, December 15, 2008 / Rules and Regulations example, a commenter opposed the change claiming that a source-by-source allowance-holding requirement was ‘‘contrary to market-based principles.’’ In response, EPA rejected the comment, explaining that the adoption of sourceby-source compliance preserves marketbased principles. Whether compliance is unit-by-unit or source-by-source, the owner or operators of Acid Rain Program units still have the option to change or maintain emissions and/or to retain, purchase, or sell allowances and the responsibility to take whatever actions are necessary to ensure that enough allowances are held to cover emissions. The only difference between the types of actions taken under unitlevel and source-level compliance is that, under unit-level compliance, the owners or operators must transfer an allowance from one unit at a source to a second unit at that source (except as discussed above concerning the removed § 73.35(b)(3)) in order to use the first unit’s allowances for compliance by the second unit, while under source-level compliance, any allowance held for compliance can be used—without a transfer—for compliance by any units at the source. While fewer allowance transfers may be needed with source-level compliance, the market price of allowances still plays a crucial role in owners’ or operators’ decisions on what actions to take (including whether to transfer allowances between sources). See 70 FR 25,296–97. As a further example, a commenter opposed a source-level compliance because the NOX Budget Trading Program (established under the NOX State Implementation Plan Call (NOX SIP Call) and aimed at reducing ozone season emissions) uses unit-level compliance but allows owners or operators to establish source-level overdraft accounts, in which may be held extra allowances usable for compliance by any unit at the source. In response, EPA rejected the comment, explaining that, based on experience with the Acid Rain and the NOX Budget trading programs, EPA concluded that a source-level allowance-holding requirement results in a less complicated program and a reduced likelihood of owners or operators making inadvertent, minor errors that could result in significant excess emissions penalties and yet still achieves the trading program’s environmental goals. See 69 FR 32,699– 700; and 70 FR 25,297. As a further example, a commenter stated that EPA should revise the Acid Rain Program rules to allow owners or operators, each year, the option of VerDate Aug<31>2005 16:19 Dec 12, 2008 Jkt 217001 choosing whether to use unit-level or source-level compliance. In response, EPA rejected the comment, explaining that such an approach would significantly complicate the achievement by owners or operators, and the determination by EPA, of compliance. The potential for error (e.g., due to erroneous assumptions about whether unit-or source-level compliance would be applicable to a particular source for a particular year) on the part of owners or EPA would be significantly increased. EPA concluded that the only reasonable options for the allowanceholding requirement in the Acid Rain Program were to require either compliance by all sources each year on a unit-level basis or compliance by all sources each year on a source-level basis. See 70 FR 25,297. For the reasons discussed above (including the reasons for rejecting the comments opposing source-level compliance), EPA reaffirms its promulgation of the revisions implementing source-level compliance. B. Rule Revisions Allowing use of Agents by Designated Representative and Authorized Account Representatives As noted above, in the April 28, 2006 Federal Register notice that also finalized the CAIR FIPs, EPA finalized revisions to the Acid Rain Program rules clarifying that designated representatives, authorized account representatives, and alternates may use agents to make electronic submissions to the Administrator. The revisions in §§ 72.26 and 73.33(g) clarified this by making this option explicitly available and establishing procedures and requirements for such use of agents. EPA reaffirms its conclusion that the Acid Rain Program rules, even without these revisions, already allowed designated representatives, authorized account representatives, and alternates to use agents to make electronic submissions. Specifically, the Acid Rain Program rules provided before the revisions were adopted, and continue to provide, for certain submissions (i.e., certificates of representation, applications for general account, allowance transfers, and quarterly emissions reports) required to be ‘‘in a format prescribed’’ or ‘‘in a format specified’’ by the Administrator. (The terms ‘‘prescribed’’ and ‘‘specified’’ have the identical meaning in these contexts.) These submissions may be made, and in the case of quarterly emissions reports must be made, electronically. The electronic formats prescribed by the Administrator for the Acid Rain Program allowed before the PO 00000 Frm 00038 Fmt 4700 Sfmt 4700 revisions were adopted, and continue to allow, the designated representative, authorized account representative, or alternate, as appropriate, to designate other individuals (‘‘agents’’) who may make the electronic submissions for him and required that the designated representative, authorized account representative, or alternate be fully bound by the agent’s actions. (EPA notes that the NOX Budget Trading Program includes analogous regulatory provisions for electronic submissions to the Administrator and prescribes analogous electronic formats.) See 71 FR 25,363–64 and 25,365. Consequently, EPA reaffirms its conclusion that the references in the Acid Rain Program (as well as the NOX Budget Trading Program) rules to ‘‘prescribed’’ or ‘‘specified’’ formats, coupled with the existing electronic formats, provide the legal authority necessary for designated representatives, authorized account representatives, and alternates to use agents to make electronic submissions to the Administrator. However, in order to remove any uncertainty about such legal authority and in order to provide more detail concerning the procedures and requirements for using agents, EPA also reaffirms the promulgation of the Acid Rain Program rule revisions that explicitly authorize, and govern, the use of agents for electronic submissions. C. Rule Revisions Making Technical Changes As noted above, in the May 12, 2005 and April 28, 2006 Federal Register notices that also finalized the CAIR and the CAIR FIPs, EPA finalized revisions to the Acid Rain Program rules making technical changes. In those notices, EPA generally categorized these technical revisions as changes that facilitated interaction among the trading programs administered by EPA under Title IV, the NOX SIP Call, CAIR, and the CAIR FIPs. However, independent of any need to coordinate the Acid Rain Program with the CAIR and CAIR FIP trading programs, EPA maintains that these technical revisions streamline, and in some cases clarify, the requirements of the Acid Rain Program. Further, these revisions have been in effect, and used by, source owners, operators, designated representatives, and EPA since around mid-2006. Based on that experience with these technical revisions, EPA finds that they streamline and, in some cases, clarify the Acid Rain Program requirements without adversely affecting the achievement of, and compliance with, the emissions reductions required under Title IV. For reasons independent of CAIR and the E:\FR\FM\15DER1.SGM 15DER1 pwalker on PROD1PC71 with RULES Federal Register / Vol. 73, No. 241 / Monday, December 15, 2008 / Rules and Regulations CAIR FIPs (including the above-stated reasons and the more detailed reasons discussed below), EPA reaffirms its promulgation of these revisions. For example, some of the Acid Rain Program rule revisions clarified that EPA intended to use the original definition of ‘‘cogeneration unit’’ in § 72.2. EPA noted in the May 12, 2005 Federal Register notice that the Agency had recently changed the ‘‘cogeneration unit’’ definition in § 72.2 in June 2002 (67 FR 40394, 40420 (June 12, 2002)). The original definition in § 72.2 had been used since the commencement of the Acid Rain Program. The only significant difference between the original and revised definitions was that the former refers to a unit ‘‘having the equipment used to produce’’ electricity and useful thermal energy through sequential use of energy, while the latter simply refers to a unit ‘‘that produces’’ electricity and useful thermal energy in that manner. The reason that EPA gave for revising the definition in June 2002 was to conform with the definition in a rule issued under CAA section 126 related to the NOX SIP Call. However, neither that rule nor the NOX SIP Call actually specified a ‘‘cogeneration unit’’ definition. Consequently, there is no reason to use the June 2002 revised definition. Moreover, EPA is concerned that the change in the definition of ‘‘cogeneration unit’’ as of June 2002 may cause confusion or raise question about what units qualify for exemptions for ‘‘cogeneration units’’ from the Acid Rain Program. Under these circumstances, EPA concludes that the definition should be changed back to the original definition in § 72.2 and, in any event, intends to interpret the June 2002 revised definition as having the same meaning as the original definition. As a further example, some Acid Rain Program rule revisions involved units meeting the requirements for new units and retired units exemptions under §§ 72.7 and 72.8. The revisions clarify that such units are treated as unaffected units under the Acid Rain Program but continue to be subject to any permitting requirements under parts 70 and 71 applicable to unaffected units. As a further example, some Acid Rain Program rule revisions involved the certification that a designated representative must include with each submission made to the Administrator and the certificate of representation for a designated representative and an authorized account representative. The language in § 72.21(b)(1) for the certification of any submission by a designated representative and in § 72.24(a) and § 73.31(c)(1) for the certificates of representation was VerDate Aug<31>2005 16:19 Dec 12, 2008 Jkt 217001 streamlined by removing extraneous language. Not only does this streamline the language, but also makes the certification and certificates of representation essentially the same as in the NOX Budget Trading Program under the NOX SIP Call, which allows use of essentially the same forms for the two trading programs. As part of this streamlining of language, § 72.24(a)(5), (a)(7), and (a)(10) and an analogous provision in § 73.31(c)(1)(v), setting forth certain required provisions for the certificate of representation, were removed as unnecessary. Among other things, this results in removal of the requirement of 1-day newspaper notice for the selection of designated representatives for sources subject to the Acid Rain Program, which was required in addition to submission to the Administrator of the certification of such selection. EPA believes that this notice requirement is unnecessary because information on the identity of designated representatives (as well as authorized account representatives) for Acid Rain Program sources and allowance accounts is already available to the public, as well as State permitting authorities, through on-line access to the allowance tracking system. This availability 24 hours a day on the allowance tracking system seems to be a much better way of ensuring interested persons access to the information than publication of a single notice in a local newspaper of which interested parties may or may not become aware. Consequently, EPA maintains that the newspaper notice requirement is obsolete and unnecessary. In addition, the provisions listing the content of a certificate of representation for a designated representative were revised to clarify that the identification of each unit covered by the certificate of representation includes identification and nameplate capacity of each generator served by the unit. EPA believes that the current rule language requiring ‘‘identification’’ of each unit subject to the trading program is already broad enough to encompass such information concerning each generator served by the unit, particularly since the nameplate capacity of each generator served by a unit may determine whether and to what extent the unit is subject to requirements under the Acid Rain Program. However, in order to remove any uncertainty, EPA concludes that the revised language should be adopted to make it clear that generator information is required in the certificate of representation. In addition, some of the Acid Rain Program rule revisions were technical PO 00000 Frm 00039 Fmt 4700 Sfmt 4700 75965 revisions to the provisions in § 72.23(c) concerning the reflection in certificates of representation of the owners and operators of the source and units involved. The changes make it clear that all owners and operators must be listed and that those that should be, but are not, listed are still bound by the certificate of representation. EPA notes that the revised certification accompanying every submission and the revised certificate of representation have been widely used since mid-2006 without any adverse consequences. For all of the above reasons, EPA concludes that these streamlining and clarifying revisions concerning the certification and certificate of representation are appropriate for the Acid Rain Program. As a further example of Acid Rain Program rule revisions, one revision involved elimination of the requirement in §§ 72.90 and 74.43 for owners and operators to submit an annual compliance certification report for each source. EPA notes that other provisions of the Acid Rain Program rules require designated representatives of owners and operators of sources subject to the Acid Rain Program to submit, with each quarterly emissions report, a certification that the monitoring and reporting requirements under part 75 of the Acid Rain Program rules have been met. See 40 CFR 75.64(c). The quarterly emissions reports are available on-line to the public and the States. In addition, owners and operators of Acid Rain Program sources must submit, under title V of the CAA, annual compliance certification reports concerning all CAA requirements, including all Acid Rain Program requirements. EPA also notes that it appears that, up to the time (around mid-2006) that the requirement to submit annual compliance certification reports under the Acid Rain Program was removed, few (if any) requests for copies of these annual compliance certification reports had been made by States or any other persons since the commencement of the Acid Rain Program. Apparently, other certifications and submissions required of owners and operators have been sufficient. Under these circumstances, EPA concludes that the separate Acid Rain Program annual compliance certification reports are duplicative and unnecessary. As further examples of Acid Rain Program rule revisions, several involved removal of provisions in part 73 of those rules. One was the removal of § 73.32 (prescribing the contents of an allowance account), which has proved to be superfluous. Section 73.32 set forth a rather self-evident list of E:\FR\FM\15DER1.SGM 15DER1 pwalker on PROD1PC71 with RULES 75966 Federal Register / Vol. 73, No. 241 / Monday, December 15, 2008 / Rules and Regulations information to be recorded in an allowance account in the allowance tracking system, such as the name of the authorized account representative, the persons represented by the authorized account representative, and the transfers of allowances in and out of the account. This section also stated that an allowance account must include a compliance or current year subaccount and a future year subaccount, as well as emissions information. Several items on this list of informational contents for allowance accounts are obsolete in that they do not reflect how the electronic allowance tracking system operated or will operate in the near future. As noted above, the electronic allowance tracking system has not actually ever used or referred to subaccounts. Also, emissions data, which, under § 73.32, were to be reflected in the allowance tracking system account, have always been available instead through the electronic emissions tracking system. Because the information list in § 73.32 contains either self-evident items or items that are obsolete and because the NOX Allowance Tracking System has been operating successfully even though the NOX Budget Trading Program rules lack a provision analogous to § 73.32, EPA concludes that § 73.32 should be removed. Another provision removed in part 73 was § 73.33(c) requiring that the authorized account representative of a general account (i.e., an account for an entity (such as an allowance broker) other than an Acid Rain source) notify all owners of allowances in the account of any submissions made under the Acid Rain Program, unless the owner waived the requirement. EPA believes that, because the establishment of a general account (as distinguished from a compliance account) by owners of allowances is entirely discretionary, it is reasonable to leave it to those owners to determine whether and when they want notification from their authorized account representative. Other provisions removed in part 73 were § 73.37(a) through (c) and (e) through (f). EPA concludes that these provisions should be removed because the claim of error procedure has never been used and so has proved to be superfluous. The provision in § 73.37(d), setting forth the Administrator’s ability to correct, on his own motion, any type of error that he finds in an allowance tracking system account remains, renumbered as § 73.37. Another provision removed in part 73 was § 73.51. Section 73.51 prohibited the transfer of allowances from a future year subaccount to a subaccount for an earlier year. The removal of this section VerDate Aug<31>2005 16:19 Dec 12, 2008 Jkt 217001 is consistent with the elimination throughout the rest of the Acid Rain Program rules of any references to subaccounts. Further, the prohibition on using allowances allocated for a year to meet the allowance-holding requirement for a preceding year is retained in other provisions of the Acid Rain Program rules, e.g., §§ 72.9(c)(5) and 73.35(a)(1). As further examples, §§ 73.50 and 73.52 were revised to remove superfluous language. Language referring to ‘‘subaccounts’’ was removed as obsolete. Language referring to allowance transfers in perpetuity was also removed since such transfers can be made under these sections without such language. Further, the requirement in § 73.50(b)(3)—that transfers of allowances, after the allowance transfer deadline but before completion of compliance determinations concerning the allowance-holding requirement, were not recorded until such completion if the transferred allowances were usable for compliance—was removed and then restated in § 73.52(b) without using the obsolete reference to compliance subaccounts. EPA notes that these revisions to part 73 have been in effect since mid-2006 without any adverse consequences. For all of the above reasons, EPA concludes that these streamlining revisions are appropriate for the Acid Rain Program. As a further example, the Acid Rain Program rule revisions included revising § 74.42. This section was revised to remove references of subaccounts and still preserve the existing requirement that allowances allocated for a future year for an opt-in unit cannot be transferred to another unit before completion of the determination of compliance with the allowance-holding requirement (including the deduction of allowances to account for the opt-in unit’s emissions and reduced utilization). EPA concludes that these streamlining revisions are appropriate for the Acid Rain Program. in the revisions in the April 28, 2006 notice)); 2. For § 73.35, item 9.f (70 FR 25,335/ 3 (adding a new paragraph providing that an allowance deducted or otherwise permanently retired in accordance with CAIR or the CAIR FIPs is not available for compliance with the allowanceholding requirement in the Acid Rain Program)); 3. For § 74.4, item 2.b (70 FR 25,336/ 3 (revising § 74.4(c)(2), which is entirely removed and reserved in the revisions in the April 28, 2006 notice)); 4. For § 74.40, in item 4.b, the addition of the language ‘‘or the opt-in source has, under § 74.4(c), a different designated representative than the designated representative for the source’’ (70 FR 25,336/3 (adding language referencing § 74.4(c), which is entirely removed and reserved in the revisions in the April 28, 2006 notice)); 5. For § 78.1, items 3.a and 3.c (70 FR 25,338/1 (referencing the CAIR model trading rules, subparts AA through IIII of part 96)); 6. For § 78.3, items 4.a through 4.d (70 FR 25,338/2–3 and 25,339/1 (adding language referencing the CAIR designated representative, the CAIR authorized account representative, and the CAIR model trading rules, subparts AA through IIII of part 96)); 7. For § 78.4, item 5 (70 FR 25,339/1 (adding language referencing the CAIR designated representative and the CAIR authorized account representative)); 8. For § 78.12 item 7.b (70 FR 25,339/ 1 (adding language referencing the CAIR permit)); 9. For § 78.1, item 2.b (71 FR 25,379/ 2 (adding language referencing the CAIR FIPs trading rules, subparts AA through IIII of part 97)); and 10. For § 78.3, items 3.a through 3.c (71 FR 25,379/3 and 25,380/1–2 (adding language referencing the CAIR FIPs trading rules, subparts AA through IIII of part 97)). D. Identification of Specific Rule Revisions Whose Promulgation is Reaffirmed In this interim final rule, EPA is reaffirming the promulgation of all of the revisions of the Acid Rain Program rules that were finalized in the May 12, 2005 final rulemaking notice that also finalized CAIR (70 FR 25,333–39) and the April 28, 2006 final rulemaking notice that also finalized the CAIR FIPs (71 FR 25,377–80) except the following revisions: 1. For § 72.2, item 2.l (70 FR 25,334/ 1 (adding language referencing § 74.4(c), which is entirely removed and reserved A. Executive Order 12866: Regulatory Planning and Review This action is not a ‘‘significant regulatory action’’ under the terms of Executive Order 12866 (58 FR 51735 (October 4, 1993)) and is therefore not subject to review under the Executive Order. In this action, EPA is simply reaffirming the promulgation of Acid Rain Program rule revisions that were previously issued and are currently in effect and have been since mid-2006. PO 00000 Frm 00040 Fmt 4700 Sfmt 4700 IV. Statutory and Executive Order Reviews B. Paperwork Reduction Act This action does not impose any new information collection burden. This rule E:\FR\FM\15DER1.SGM 15DER1 Federal Register / Vol. 73, No. 241 / Monday, December 15, 2008 / Rules and Regulations simply reaffirms the promulgation of Acid Rain Program rule revisions that were previously issued, does not change the existing requirements in 40 CFR Parts 72, 73, 74, 77, and 78, and thus does not change the existing information collection burden. Moreover, EPA maintains that the effect of these revisions when they were first promulgated was, if anything, to reduce somewhat the information collection burden on regulated sources, e.g., by requiring compliance with the allowance-holding requirement at a source, rather than unit, level (thereby removing the need to transfer allowances among units at the same source) and by making other changes to the rules in place when the rule revisions were originally promulgated (such as removing the requirement for submission of an annual compliance certification report). However, the Office of Management and Budget (OMB) has previously approved the information collection requirements in the existing rules under the provisions of the Paperwork Reduction Act, 44 U.S.C. 3501, et seq., and has assigned OMB control number 2060–0258. OMB control numbers for EPA’s regulations in 40 CFR are listed in 40 CFR part 9. pwalker on PROD1PC71 with RULES C. Regulatory Flexibility Act The Regulatory Flexibility Act (5 U.S.C. 601, et seq.) (RFA) generally requires an agency to prepare a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements under the Administrative Procedure Act or any other statute unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. Small entities include small businesses, small organizations, and small governmental jurisdictions. For purposes of assessing the impacts of today’s rule on small entities, small entity is defined as: (1) A small business as defined by the Small Business Administration’s regulations at 13 CFR 121.201; (2) a small governmental jurisdiction that is a government of a city, county, town, school district or special district with a population of less than 50,000; and (3) a small organization that is any not-forprofit enterprise which is independently owned and operated and is not dominant in its field. Because EPA has made a ‘‘good cause’’ finding that this action is not subject to notice and comment requirements under the Administrative Procedure Act and CAA section 307(d), it is not subject to the regulatory flexibility provisions of the RFA. VerDate Aug<31>2005 16:19 Dec 12, 2008 Jkt 217001 D. Unfunded Mandates Reform Act Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public Law 104–4, establishes requirements for Federal agencies to assess the effects of their regulatory actions on State, local, and tribal governments and the private sector. Under section 202 of the UMRA, EPA generally must prepare a written statement, including a cost-benefit analysis, for proposed and final rules with ‘‘Federal mandates’’ that may result in expenditures to State, local, and tribal governments, in the aggregate, or to the private sector, of $100 million or more in any one year. Before promulgating an EPA rule for which a written statement is needed, section 205 of the UMRA generally requires EPA to identify and consider a reasonable number of regulatory alternatives and adopt the least costly, most cost effective or least burdensome alternative that achieves the objectives of the rule. The provisions of section 205 do not apply when they are inconsistent with applicable law. Moreover, section 205 allows EPA to adopt an alternative other than the least costly, most cost-effective, or least burdensome alternative if the Administrator publishes with the final rule an explanation why that alternative was not adopted. Before EPA establishes any regulatory requirements that may significantly or uniquely affect small governments, including tribal governments, it must have developed under section 203 of the UMRA a small government agency plan. The plan must provide for notifying potentially affected small governments, enabling officials of affected small governments to have meaningful and timely input in the development of EPA regulatory proposals with significant Federal intergovernmental mandates, and informing, educating, and advising small governments on compliance with the regulatory requirements. This rule does not change the existing Acid Rain Program rules and therefore does not result in any additional expenditures to State, local, and tribal governments or to the private sector. The rule simply reaffirms the promulgation of Acid Rain Program rule revisions that were previously issued and that are still in effect and have been since mid-2006. Moreover, when first promulgated, the effect of these revisions was, if anything, to reduce somewhat the expenditures of State, local, and tribal governments and the private sector under the then-existing Acid Rain Program rules. For the same reasons, EPA has determined that this rule contains no regulatory PO 00000 Frm 00041 Fmt 4700 Sfmt 4700 75967 requirements that might significantly or uniquely affect small governments. E. Executive Order 13132: Federalism Executive Order 13132, entitled ‘‘Federalism’’ (64 FR 43255 (August 10, 1999)), requires EPA to develop an accountable process to ensure ‘‘meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications.’’ ‘‘Policies that have federalism implications’’ is defined in the Executive Order to include regulations that 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.’’ This rule does not have federalism implications. It will 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. This rule simply reaffirms the promulgation of Acid Rain Program rule revisions that were previously issued and that are still in effect and have been since mid-2006. Moreover, when first promulgated, these revisions did not have substantial direct effects on States, the relationship between the national government and the States, or the distribution of power and responsibilities. Thus, Executive Order 13132 does not apply to this rule. F. Executive Order 13175: Consultation and Coordination With Indian Tribal Governments Executive Order 13175, entitled ‘‘Consultation and Coordination With Indian Tribal Governments’’ (65 FR 67249 (November 9, 2000)), requires EPA to develop an accountable process to ensure ‘‘meaningful and timely input by tribal officials in the development of regulatory policies that have tribal implications.’’ This rule does not have tribal implications, as specified in Executive Order 13175. This rule simply reaffirms the promulgation of Acid Rain Program rule revisions that were previously issued and that are still in effect and have been since mid-2006. Moreover, when first promulgated, these revisions did not have substantial direct effects on tribal governments, 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. Thus, Executive Order 13175 does not apply to this rule. E:\FR\FM\15DER1.SGM 15DER1 75968 Federal Register / Vol. 73, No. 241 / Monday, December 15, 2008 / Rules and Regulations G. Executive Order 13045: Protection of Children From Environmental Health and Safety Risks Executive Order 13045, entitled ‘‘Protection of Children From Environmental Health Risks and Safety Risks’’ (62 FR 19885 (April 23, 1997)), applies to any rule that: (1) Is determined to be ‘‘economically significant’’ as defined under Executive Order 12866, and (2) concerns an environmental health or safety risk that EPA has reason to believe may have a disproportionate effect on children. If the regulatory action meets both criteria, the Agency must evaluate the environmental health or safety effects of the planned rule on children and explain why the planned regulation is preferable to other potentially effective and reasonably feasible alternatives considered by the Agency. EPA interprets Executive Order 13045 as applying only to those regulatory actions that are based on health or safety risks, such that the analysis required under section 5–501 of the Executive Order has the potential to influence the regulation. This rule is not subject to the Executive Order because it is not a significant regulatory action under Executive Order 12866 and is not based on health or safety risks. This rule simply reaffirms the promulgation of Acid Rain Program rule revisions that were previously issued and that are still in effect and have been since mid-2006. Moreover, when first promulgated, these revisions implemented certain requirements of the Acid Rain Program that were not based on health or safety risks. H. Executive Order 13211: Actions That Significantly Affect Energy Supply, Distribution, or Use This rule is not subject to Executive Order 13211, entitled ‘‘Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use’’ (66 FR 28355 (May 22, 2001)), because it is not a significant regulatory action under Executive Order 12866. pwalker on PROD1PC71 with RULES I. National Technology Transfer Advancement Act Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (NTTAA), Public Law 104– 113, section 12(d) (15 U.S.C. 272 note), directs EPA to use voluntary consensus standards in its regulatory activities unless to do so would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards (e.g., VerDate Aug<31>2005 16:19 Dec 12, 2008 Jkt 217001 materials specifications, test methods, sampling procedures, and business practices) that are developed or adopted by voluntary consensus standards bodies. The NTTAA directs EPA to provide Congress, through OMB, explanations when the Agency decides not to use available and applicable voluntary consensus standards. This rule simply reaffirms the promulgation of Acid Rain Program rule revisions that were previously issued and that are still in effect and have been since mid-2006. Moreover, when first promulgated, these revisions did not address the use of any technical standards. Thus, this rule is not subject to the NTTAA. J. Executive Order 12898: Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations Executive Order 12898 (59 FR 7629 (February 16, 1994)) establishes federal executive policy on environmental justice. Its main provision directs federal agencies, to the greatest extent practicable and permitted by law, to make environmental justice part of their mission by identifying and addressing, as appropriate, disproportionately high and adverse human health or environmental effects of their programs, policies, and activities on minority populations and low-income populations in the United States. EPA has determined that this rule will not have disproportionately high and adverse human health or environmental effects on minority or low-income populations because it does not change the level of protection provided to human health or the environment, but simply reaffirms the promulgation of Acid Rain Program rule revisions that were previously issued and that are still in effect and have been since mid-2006. Moreover, when first promulgated, these revisions did not change the level of protection provided to human health or the environment. K. Congressional Review Act The Congressional Review Act, 5 U.S.C. 801, et seq., as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the Federal Register. A major rule PO 00000 Frm 00042 Fmt 4700 Sfmt 4700 cannot take effect until 60 days after it is published in the Federal Register. This action is not a ‘‘major rule’’ as defined by 5 U.S.C. 804(2). This rule will be effective on December 15, 2008 for good cause found as explained in Section II of this preamble. List of Subjects in 40 CFR Parts 72, 73, 74, 77, and 78 Environmental protection, Acid rain, Administrative practice and procedure, Air pollution control, Electric utilities, Intergovernmental relations, Reporting and recordkeeping requirements, Sulfur oxides. Dated: December 5, 2008. Stephen L. Johnson, Administrator. [FR Doc. E8–29382 Filed 12–12–08; 8:45 am] BILLING CODE 6560–50–P DEPARTMENT OF COMMERCE National Oceanic and Atmospheric Administration 50 CFR Part 600 [Docket No. 070920529–81555–02] RIN 0648–AW05 Magnuson–Stevens Act Provisions; Limited Access Privilege Programs; Individual Fishing Quota Referenda Guidelines and Procedures for the New England Fishery Management Council, the Gulf of Mexico Fishery Management Council, and the National Marine Fisheries Service AGENCY: National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce. ACTION: Final rule. SUMMARY: NMFS issues a final rule implementing guidelines and procedures for the New England Fishery Management Council (NEFMC) and the Gulf of Mexico Fishery Management Council (GMFMC)(collectively the Councils) and NMFS to follow in determining procedures and voting eligibility requirements for referenda on Individual Fishing Quota (IFQ) program proposals in accordance with the Magnuson–Stevens Fishery Conservation and Management Act, as amended (Magnuson–Stevens Act). The intended effect of these procedures and guidance is to help develop IFQ program referenda in the New England and Gulf of Mexico fisheries that are fair and equitable. DATES: This rule is effective January 14, 2009. E:\FR\FM\15DER1.SGM 15DER1

Agencies

[Federal Register Volume 73, Number 241 (Monday, December 15, 2008)]
[Rules and Regulations]
[Pages 75959-75968]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-29382]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 72, 73, 74, 77, and 78

[EPA-HQ-OAR-2008-0744; FRL-8750-8]
RIN 2060-AP35


Rulemaking To Reaffirm the Promulgation of Revisions of the Acid 
Rain Program Rules

AGENCY: Environmental Protection Agency (EPA).

ACTION: Interim final rule.

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SUMMARY: EPA is taking interim final action to reaffirm the 
promulgation of certain revisions of the Acid Rain Program rules in 
order to prevent disruption of this program, which has achieved 
significant, cost-effective reductions in sulfur dioxide 
(SO2) emissions from utility sources since its commencement 
in 1995. These rule revisions were finalized in the Federal Register 
notices that also finalized the Clean Air Interstate Rule (CAIR) and 
the Federal Implementation Plans for CAIR (CAIR FIPs). The U.S. Court 
of Appeals for the District of Columbia Circuit recently issued a 
decision vacating and remanding CAIR and the CAIR FIPs. EPA and other 
parties have petitioned for rehearing, and the Court has not yet issued 
a mandate in the case. These revisions to the Acid Rain Program rules 
were not addressed by, or involved in any of the issues raised by, any 
parties in the proceeding or the Court. EPA believes it is reasonable 
to view these revisions as unaffected by the Court's decision. However, 
EPA is reaffirming--pursuant to its authority under Title IV of the 
Clean Air Act (CAA) and CAA section 301--the promulgation of these 
revisions in this interim final rule in order to remove any uncertainty 
about their legal status because they have been in effect since mid-
2006, most of them are crucial to the ongoing operation of the Acid 
Rain Program, and the rest of them streamline and clarify requirements 
of the program.

DATES: This action is effective on December 15, 2008 and will continue 
in effect until December 15, 2009.

ADDRESSES: EPA has established a docket for this action under Docket ID 
No. EPA-HQ-OAR-2008-0774, which incorporates by reference the dockets 
for CAIR and the CAIR FIPs (Docket ID Nos. EPA-HQ-OAR-2003-0053 and 
EPA-HQ-OAR-2004-0076). All documents in the docket are listed in the 
Federal Docket Management System index at https://www.regulations.gov. 
Although listed in the index, some information is not publicly 
available, e.g., Confidential Business Information (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 through 
https://www.regulations.gov or in hard copy at the Air and Radiation 
Docket, EPA West Building, Room 3334, 1301 Constitution Ave., NW., 
Washington, DC 20460. The Public Reading Room is open from 8:30 a.m. to 
4:30 p.m., Monday through Friday, excluding legal holidays. The 
telephone number for the Public Reading Room is (202) 566-1744, and the 
telephone number for the Air and Radiation Docket is (202) 566-1742.

FOR FURTHER INFORMATION CONTACT: Dwight C. Alpern, Clean Air Markets 
Division, U.S. Environmental Protection Agency, Clean Air Markets 
Division, MC 6204J, Ariel Rios Building, 1200 Pennsylvania Ave., NW., 
Washington, DC 20460, telephone (202) 343-9151, e-mail at 
alpern.dwight@epa.gov. Electronic copies of this document can be 
accessed through the EPA Web site at: https://www.epa.gov/airmarkets.

SUPPLEMENTARY INFORMATION: Regulated Entities. Entities regulated by 
this action primarily are fossil fuel-fired boilers, turbines, and 
combined cycle units that serve generators that produce electricity for 
sale or cogenerate electricity for sale and steam. Regulated categories 
and entities include:

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                                                                           Examples of potentially regulated
                Category                           NAICS code                          industries
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Industry................................  221112 and others..........  Electric service providers.
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    This table is not intended to be exhaustive, but rather to provide 
a guide for readers regarding entities likely to be regulated by this 
action. This table lists the types of entities, of which EPA is now 
aware, that could potentially be regulated by this action. Other types 
of entities not listed in this table could also be regulated. To 
determine whether your facility, company, business, organization, etc., 
is regulated by this action, you should carefully examine the 
applicability provisions in Sec. Sec.  72.6, 72.7, and 72.8 of title 40 
of the Code of Federal Regulations. If you have questions regarding the 
applicability of this action to a particular entity, consult the person 
listed in the preceding FOR FURTHER INFORMATION CONTACT section.
    Judicial Review. Under CAA section 307(b)(1), judicial review of 
this final rule is available only by filing a petition for review in 
the U.S. Court of Appeals for the District of Columbia Circuit on or 
before February 13, 2009. Filing a petition for reconsideration by the 
Administrator of this final rule does not affect the finality of this 
rule for the purposes of judicial review, does not extend the time 
within which a petition for judicial review may be filed, and does not 
postpone the effectiveness of this rule. Under CAA section 307(b)(2), 
the requirements established by this rule may not be challenged 
separately in any civil or criminal proceedings brought by EPA to 
enforce these requirements.
    Outline. The following outline is provided to aid in locating 
information in this preamble.

I. Overview
II. Administrative Procedures Used in This Action
III. Acid Rain Rule Revisions Whose Promulgation Is Reaffirmed
    A. Rule Revisions Implementing Source-Level Compliance
    B. Rule Revisions Allowing Use of Agents by Designated 
Representative and Authorized Account Representatives
    C. Rule Revisions Making Technical Changes
    D. Identification of Specific Rule Revisions Whose Promulgation 
Is Reaffirmed
IV. Statutory and Executive Order Reviews
    A. Executive Order 12866: Regulatory Planning and Review
    B. Paperwork Reduction Act
    C. Regulatory Flexibility Act

[[Page 75960]]

    D. Unfunded Mandates Reform Act
    E. Executive Order 13132: Federalism
    F. Executive Order 13175: Consultation and Coordination With 
Indian Tribal Governments
    G. Executive Order 13045: Protection of Children From 
Environmental Health and Safety Risks
    H. Executive Order 13211: Actions That Significantly Affect 
Energy Supply, Distribution, or Use
    I. National Technology Transfer Advancement Act
    J. Executive Order 12898: Federal Actions To Address 
Environmental Justice in Minority Populations and Low-Income 
Populations
    K. Congressional Review Act

I. Overview

    In May 2005 and April 2006, EPA promulgated certain revisions to 
the rules for the Acid Rain Program (in 40 CFR parts 72 through 78). 
These revisions were finalized in the Federal Register notices that 
also finalized CAIR and the CAIR FIPs. 70 FR 25162 (May 12, 2005); 71 
FR 25328 (Apr. 28, 2006).\1\ Most of these revisions were adopted for 
reasons independent of CAIR and the CAIR FIPs, although some were 
adopted to facilitate coordination of the Acid Rain trading program 
with the trading programs offered by EPA in CAIR and the CAIR FIPs. A 
few additional revisions, which are not being reaffirmed by this rule, 
were adopted to implement CAIR and the CAIR FIPs.
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    \1\ The titles for the May 12, 2005 and April 28, 2006 Federal 
Register notices identify the actions taken in those notices. The 
full title for the May 12, 2005 notice is ``Rule to Reduce 
Interstate Transport of Fine Particulate Matter and Ozone (Clean Air 
Interstate Rule); Revisions to Acid Rain Program; Revisions to the 
NOX SIP Call.'' 70 FR 25162. The full title for the April 
28, 2006 Federal Register notice is ``Rulemaking on Section 126 
Petition from North Carolina to Reduce Interstate Transport of Fine 
Particulate Matter and Ozone; Federal Implementation Plans to Reduce 
Interstate Transport of Fine Particulate Matter and Ozone; Revisions 
to the Acid Rain Program.'' 71 FR 25328.
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    On July 11, 2008, the U.S. Court of Appeals for the District of 
Columbia Circuit issued a decision vacating and remanding CAIR and the 
CAIR FIPs. North Carolina v. EPA, 531 F.3d 896 (D.C. Cir. 2008). EPA 
and other parties in the proceeding have petitioned for rehearing, and 
the Court has not yet issued a mandate in the case. However, depending 
on its response to the petitions, the Court may issue a mandate. While 
the Court's July 11, 2008 decision upheld petitioners' objections 
concerning a number of issues related to CAIR and the CAIR FIPs, none 
of the issues raised by the petitioners, and none of the Court's 
determinations, addressed the Acid Rain Program rule revisions 
reaffirmed by this rule.
    Only a few of the Acid Rain Program rule revisions were adopted to 
implement CAIR and the CAIR FIPs and thus were encompassed by 
petitioners' arguments and the Court's decision: i.e., revisions to 
part 73 providing that SO2 allowances used for compliance 
with CAIR and CAIR FIPs could not be used for compliance in the Acid 
Rain Program and revisions to part 78 providing that final actions of 
the Administrator under the CAIR and CAIR FIP trading programs could be 
appealed under the administrative appeal procedures applicable to the 
Acid Rain Program. See 70 FR 25,335/3 (revision adding Sec.  
73.35(a)(3)) and 25,338-39 (revisions referencing subparts AA through 
IIII of part 96 and the CAIR designated representative and CAIR 
authorized account representative); and 71 FR 25,379-80 (revisions 
referencing subparts AA through IIII of part 97 and the CAIR designated 
representative and CAIR authorized account representative).
    This notice reaffirms the promulgation of only the other Acid Rain 
Program rule revisions--i.e., the revisions that were not necessary for 
implementing CAIR and the CAIR FIPs--finalized in the Federal Register 
notices that also finalized the CAIR and CAIR FIP rules. (These 
revisions are herein referred to as ``non-CAIR- and non-CAIR-FIP-
related Acid Rain Program rule revisions''.) EPA believes it is 
reasonable to view the non-CAIR- and non-CAIR-FIP-related Acid Rain 
Program rule revisions (which are described in detail below) as 
unaffected by the Court's decision, which did not address them. 
However, EPA is concerned that there be no uncertainty about the legal 
status of these rule revisions. Most of them are crucial to the ongoing 
operation of the Acid Rain Program, while the rest of them streamline 
and, in some cases, clarify the requirements of the program, thereby 
facilitating its operation.
    For example, some of the Acid Rain Program rule revisions published 
in the same Federal Register notice as CAIR, require owners and 
operators to meet the requirement to hold SO2 allowances 
covering annual SO2 emissions by maintaining a sufficient 
amount of allowances in an allowance account for each entire plant 
(i.e., source). Consistent with this approach, the rule revisions also 
provide for SO2 allowance transfers to be made from one 
source account to another source account. See 70 FR 25,296-98. Under 
the Acid Rain Program rules in place before these revisions, owners and 
operators were required to have a separate allowance account for each 
unit (e.g., boiler or combustion turbine) and could trade allowances by 
transferring allowances from one unit account to another. (Of course, 
under both the pre-revision Acid Rain Program rules and the revised 
rules, general accounts, which are not associated with a specific unit 
or source, can also be involved in allowance transfers.) The revisions 
requiring source-based compliance were made effective on July 1, 2006 
in order to give EPA time to make the software changes necessary for 
implementing source-based allowance compliance and transfers and to 
conduct the testing to ensure proper operation of the revised allowance 
tracking system and in order to give owners time to adapt to source-
based compliance. Id. at 25,296-97.
    By further example, the Acid Rain Program rule revisions published 
in the same Federal Register notice as the CAIR FIPs, made effective on 
June 27, 2006, expressly allow, and govern, the use of agents by 
designated representatives, authorized account representatives, and 
alternates to make various types of electronic submissions under the 
Acid Rain Program, while preserving the representatives' ultimate 
responsibility for such submissions. 71 FR 25,365. These revisions give 
each regulated company greater flexibility in distributing, among its 
individual employees, the task of making electronic submissions.
    After the non-CAIR- and non-CAIR-FIP-related Acid Rain Program rule 
revisions became final and effective in mid-2006, EPA modified its 
electronic allowance and emissions tracking systems to reflect the 
revisions. For example, EPA removed individual-unit allowance accounts, 
replaced them with source accounts to which previously recorded 
allowance holdings were moved, and established elements in the tracking 
systems for making allowance transfers to and from source accounts 
(instead of unit accounts) and comparing the sum of the annual 
emissions of all regulated units at each source (instead of only an 
individual unit's annual emissions) to the allowances held in the 
source account. See 69 FR 32,684, 32,701 (June 10, 2004). EPA also 
added elements to the tracking systems for designated representatives, 
authorized account representatives, and alternates to create and use 
agents to submit quarterly emissions reports, including the 
resubmissions that are often necessary to correct reporting errors 
found by EPA. The revised Acid Rain Program provisions have been used 
and relied on by most, if not all, regulated companies since mid-2006.

[[Page 75961]]

    EPA is concerned that the non-CAIR- and non-CAIR-FIP-related Acid 
Rain Program revisions are too important to the ongoing operation of 
the Acid Rain Program to allow for any uncertainty concerning their 
legal status, which might result in the event that the Court issues a 
mandate in North Carolina. This is particularly true for the large 
number of revisions that significantly affect how SO2 
allowance transfers are made and recorded, how owners and operators 
submit quarterly emissions reports, and how EPA compares each year the 
amount of allowances held and the amount of SO2 emissions.
    Allowance transfer, emissions reporting, and the comparison of 
emissions and allowances are matters that go to the heart of the Acid 
Rain Program. Under this program, an annual cap (which is about 40% 
lower than historical emissions for utility emissions sources) is set 
on the total amount of allowances issued each year. Each allowance 
authorizes the emission of one ton of SO2 in the year for 
which the allowance is issued or in a later year. Nationwide 
SO2 emissions are reduced through implementation of an 
emissions limitation that requires each utility emissions source to 
have annual SO2 emissions not exceeding the emissions 
authorized by the allowances held for the year and allows for 
compliance through the use of allowances obtained through allocation or 
auction from EPA or transferred from other allowance holders. The 
ability of each utility emissions source to consider potential, 
alternative compliance options involving emission reduction actions 
and/or purchases or sales of SO2 allowances in the 
SO2 allowance market and to choose the option that is the 
most cost-effective for that emissions source results in cost-effective 
achievement of the national SO2 emissions reduction goals of 
the Acid Rain Program. EPA implements the annual SO2 
emissions limitation through electronic allowance and tracking 
emissions systems that incorporate the existing Acid Rain Program rules 
(including rule revisions whose promulgation is reaffirmed in this 
notice).
    If (contrary to EPA's position as discussed above) the rule 
revisions affecting allowance transfer, submission of quarterly 
emissions reports, and comparison of emissions and allowances were 
suddenly to become no longer effective, EPA would likely be unable to 
operate its electronic allowance tracking system, and might be unable 
to operate its electronic emissions tracking system, until extensive 
system modifications were made. Were the rule revisions no longer 
effective, the allowance tracking system would likely have to be 
modified to reinstate unit accounts and unit-based compliance. 
Similarly, the emissions tracking system might have to be modified to 
provide an alternative, workable approach for submission of quarterly 
emissions reports by designated representatives (for whom direct 
involvement in the submission and resubmission process for emissions 
reports is often not practical). Consequently, it is likely that, in 
the near term until the systems were modified, EPA could not record 
allowances transfers, owners and operators could not use transferred 
allowances to comply with the allowance-holding requirement, and EPA 
could not determine if, and owners and operators could not demonstrate 
that, utility emissions sources were in compliance with the 
SO2 emissions limitation. Moreover, the inability--or even 
uncertainty about the ability--to transfer and use allowances for 
compliance in the near term would likely have a significant, adverse 
effect on the SO2 allowance market in the near term. Under 
these circumstances, it is likely that potential market participants 
would be reluctant to rely on allowance purchases for compliance, would 
have difficulty determining the value of allowances that were or might 
be unusable, and so would be reluctant to buy or sell allowances.
    For these reasons and the reasons discussed below, EPA is, in this 
notice, reaffirming--pursuant to its authority under Title IV of the 
Clean Air Act (CAA) and CAA section 301--the promulgation of the non-
CAIR- and non-CAIR-FIP-related revisions to the Acid Rain Program rules 
as an interim final rule, whose effectiveness is immediate upon the 
date of promulgation in the Federal Register. Because it is immediately 
effective, the interim final rule provides no opportunity for hearing 
and comment. This action removes any uncertainty concerning the legal 
status of these non-CAIR- and non-CAIR-FIP-related revisions in the 
event that the Court issues a mandate in North Carolina. Further, 
simultaneously with this notice, EPA is publishing in the Federal 
Register parallel notices of proposed and direct final rules 
reaffirming the promulgation of the non-CAIR- and non-CAIR-FIP-related 
Acid Rain Program rule revisions. As explained in the proposed and 
direct final notices, those notices provide interested persons an 
opportunity for public hearing and comment on the rule revisions. This 
interim final rule will continue in effect until December 15, 2009, 
unless it is withdrawn on an earlier date by the direct final rule or 
(if the direct final rule itself is withdrawn) the final rule 
addressing these rule revisions.
    Under this approach, EPA is ensuring that the public will have an 
opportunity to comment on these Acid Rain Program rule revisions and 
that these revisions will continue in effect in the meantime on an 
interim basis. In the event that any timely adverse comments are 
submitted on any of the revisions whose promulgation is reaffirmed in 
the proposed and direct final rules, EPA will withdraw the direct final 
rule, address the merits of such comments, and finalize, to the extent 
appropriate, any revisions. EPA intends to complete that rulemaking 
process and have any final Acid Rain Program rule revisions in place 
December 15, 2009. If that rulemaking process is completed and the 
resulting direct final rule or final rule is effective before December 
15, 2009, the interim final rule will be withdrawn as of the effective 
date of the direct final rule or final rule.

II. Administrative Procedures Used in This Action

    Under CAA section 307(d)(1)(S), this action revising the Acid Rain 
Program rules is subject to the requirements of CAA section 307(d). 
Section 307(d)(3) provides that a notice of proposed rulemaking, 
providing an opportunity for a public hearing and comment, must be 
published in the Federal Register, except under certain circumstances, 
as provided in the Administrative Procedure Act (5 U.S.C. 553(b)). The 
requirement for such a notice does not apply ``when the agency for good 
cause finds * * * that notice and public procedure thereon are 
impracticable, unnecessary, or contrary to the public interest.'' 5 
U.S.C. 553(b)(3)(B).
    EPA finds, for the following reasons, that providing notice and 
opportunity for public hearing and comment before reaffirming the 
promulgation of the non-CAIR- and non-CAIR-FIP-related revisions of the 
Acid Rain Program rules in the instant rulemaking are impracticable, 
unnecessary, and contrary to the public interest. As discussed above, 
these rule revisions were finalized on May 12, 2005 and April 28, 2006 
and, since mid-2006 when they became effective, have been implemented 
by EPA and utilized by most, if not all, regulated companies and EPA. 
In fact, most of these revisions have been incorporated in the software 
for the allowance tracking system, which likely could not be operated 
without extensive modifications, and for the emissions tracking system, 
which

[[Page 75962]]

might not be operable without extensive modifications, if the 
incorporated revisions were no longer in effect. Consequently, as 
discussed above in Section I of this preamble, the loss of the 
effectiveness of these revisions--or even uncertainty about their 
continuing effectiveness--would likely result in a significant 
disruption of the operation of the Acid Rain Program and the 
SO2 allowance market in the near term, contrary to 
Congressional intent that EPA implement the Acid Rain Program under CAA 
Title IV and contrary to the public interest in continuation of the 
significant, cost-effective emission reductions required, and actually 
achieved, under the Acid Rain Program since its commencement in 1995.
    Moreover, no party petitioned for review of these rule revisions. 
The judicial proceedings involving the rulemaking notices (i.e., the 
May 12, 2005 notice at 70 FR 25162, which also finalized CAIR, and the 
April 28, 2006 notice at 71 FR 25328, which also finalized the CAIR 
FIPs) in which these Acid Rain Program rule revisions were promulgated, 
relate only to Petitions for Review of specific aspects of CAIR and the 
CAIR FIPs. No party to those proceedings asked the Court to review 
these revisions to the Acid Rain Program rules, and no issues 
concerning these revisions were raised or addressed by any petitioners, 
any intervenors, amici, EPA, or the Court.
    Although EPA therefore believes that the Court's July 11, 2008 
decision vacating and remanding of CAIR and the CAIR FIPs in North 
Carolina can reasonably be interpreted as not applying to these 
revisions, it is important that the legal status of these revisions be 
absolutely clear. EPA is concerned that, if and when the Court issues a 
mandate for the North Carolina decision, that might create uncertainty 
about whether these revisions remain in effect, despite EPA's belief 
that the decision does not apply to these revisions.
    For the reasons discussed above, any such uncertainty about their 
continuing effectiveness would likely cause significant disruption in 
the near term to operation of the Acid Rain Program, the SO2 
allowance market, and the achievement of the significant, cost-
effective emission reductions required under the Acid Rain Program. In 
order to avoid such disruption, EPA maintains that it should provide 
certainty about the legal status of these rule revisions as soon as 
possible. However, the delay inherent in providing notice and 
opportunity for hearing and public comment before taking final action 
would prevent EPA from providing this certainty as soon as possible. 
EPA therefore finds that providing notice and opportunity for comment 
in the instant rulemaking before reaffirming the promulgation of the 
revisions incorporated in the electronic allowance and emissions 
tracking systems is impracticable and contrary to the public interest.
    In addition, EPA finds that providing notice and opportunity for 
comment in the instant rulemaking before reaffirming the promulgation 
of the non-CAIR- and non-CAIR-FIP-related revisions of the Acid Rain 
Program rules --including both those revisions incorporated in the 
electronic allowance and emissions tracking systems and the other 
revisions--is unnecessary. No petitions for review of these rule 
revisions were filed. Since, in addition, these rule revisions have 
been in effect since mid-2006 without any indication they have caused 
concern or problems for sources subject to the Acid Rain Program or any 
other members of the public, EPA maintains that it is unlikely that the 
public will be particularly interested in commenting on the revisions.
    Moreover, EPA is limiting the effectiveness of the interim final 
rule reaffirming the promulgation of these rule revisions and, during 
the period of the interim final rule's effectiveness, is providing a 
full opportunity for comment on the rule revisions. Specifically, EPA 
is providing that the interim final rule will be effective for one year 
and, simultaneously with this notice, is publishing in the Federal 
Register parallel notices of direct final and proposed rules that will 
provide the opportunity for comment on these rule revisions. If any 
timely adverse comment is submitted on the direct final rule, EPA will 
withdraw the direct final rule and may issue a final rule that changes 
the revisions and implements any such change in a manner that will not 
disrupt the ongoing operation of the Acid Rain Program and the 
SO2 allowance market. In order to coordinate the interim 
final, direct final, and proposed rulemakings, EPA is making the 
interim final rule effective until December 15, 2009, unless the 
interim final rule is withdrawn on an earlier date by the direct final 
rule, or (if the direct final rule itself is withdrawn) the final rule, 
addressing these revisions.
    For all of the above-discussed reasons, EPA finds, under 5 U.S.C. 
553(b)(3)(B), that providing notice of proposed rulemaking and hearing 
and comment opportunity before making these revisions final on an 
interim basis is impracticable, unnecessary, and/or contrary to the 
public interest.
    In addition, EPA also finds that there is good cause under 5 U.S.C. 
553(d) to make this interim final rule--reaffirming the promulgation of 
the Acid Rain Program rule revisions--immediately effective upon 
publication in the Federal Register. As explained above, operation of 
the Acid Rain Program and the SO2 allowance market in the 
near term would likely be significantly disrupted by any uncertainty 
over the effectiveness of most of the rule revisions. Further, no 
petitions for review of these revisions were filed, and no concerns or 
issues have been raised on the merits of any of the revisions in the 
proceedings concerning CAIR and the CAIR FIPs. EPA therefore finds that 
the effectiveness of the rule revisions should be made clear as soon as 
possible by making the interim final rule immediately effective upon 
publication.

III. Acid Rain Rule Revisions Whose Promulgation Is Reaffirmed

    In this notice, EPA is reaffirming, as an interim final rule, the 
promulgation of the non-CAIR- and non-CAIR-FIP-related revisions of the 
Acid Rain Program rules, which revisions were finalized in the Federal 
Register notices that also finalized CAIR and the CAIR FIPs. EPA is 
reaffirming the following three types of non-CAIR- and non-CAIR-FIP-
related revisions to the Acid Rain Program rules: (1) Revisions that 
implement source-level, rather than unit-level compliance with the 
allowance-holding requirement in the Acid Rain Program, effective on 
July 1, 2006; (2) revisions that expressly allow designated 
representatives, authorized account representatives, and alternates to 
use agents to make electronic submissions to the Administrator, 
effective on June 27, 2006; and (3) revisions making technical changes 
to streamline and, in some cases, clarify the requirements of the Acid 
Rain Program, effective on June 27 and July 1, 2006 depending on the 
specific revision. Out of all the Acid Rain Program rule revisions that 
were finalized in the Federal Register notices that also finalized CAIR 
and the CAIR FIPs, the only revisions whose promulgation EPA is not 
reaffirming are those that are related to CAIR and the CAIR FIPs, i.e., 
those (which are described in detail in Section III.D of this preamble) 
that are necessary for implementation of the CAIR and CAIR FIP trading 
programs. This action will have no impact on those revisions.

[[Page 75963]]

A. Rule Revisions Implementing Source-Level Compliance

    As noted above, on May 12, 2005, EPA finalized revisions to the 
Acid Rain Program rules to implement the allowance-holding requirement 
on a source-by-source, rather than on a unit-by-unit, basis. 
Specifically, these revisions require each source to hold (as of the 
allowance transfer deadline, which is generally March 1) an amount of 
allowances in its allowance tracking system account at least equal to 
the tonnage of SO2 emissions for all Acid Rain Program units 
at the source for the preceding calendar year. These revisions replaced 
earlier Acid Rain Program rule language that instead required each unit 
to hold allowances in its own allowance tracking system account at 
least equal to the tonnage of SO2 emissions for the unit in 
such calendar year.
    For the reasons detailed in the Notice of Supplemental Proposal 
published on June 10, 2004 (69 FR 32,698-701) and adopted in the final 
rule published on May 12, 2005 (70 FR 25,296), EPA reaffirms its 
findings that: (1) Title IV is ambiguous concerning whether the 
allowance-holding requirement must be met on a unit-by-unit basis and 
so EPA has discretion in deciding what approach to adopt in the rules 
implementing Title IV; (2) it is important to provide additional 
compliance flexibility by allowing a unit at a source to use allowances 
from any other unit at the same source; and (3) many non-allowance-
holding provisions of Title IV evidence a unit-by-unit orientation. For 
these reasons, as explained in the final CAIR (id.), EPA reaffirms its 
conclusion that the adoption of source-level compliance with the 
allowance-holding requirement reasonably balances these considerations. 
In balancing these considerations, EPA also reaffirms its conclusion 
that company-level compliance is not appropriate because it represents 
too much of a deviation from the unit-by-unit orientation in the non-
allowance holding provisions of Title IV and is likely to require much 
more dramatic changes in the operation of the Acid Rain Program. See 69 
FR 32,700. For example, company-level compliance would add to the 
compliance determination process complexities such as the need to 
identify the ``company'' in cases where owners or operators are 
organized using complex corporate or other ownership structures and to 
handle cases where ownership structures are changed, or units or 
sources are transferred among corporate or other entities, during the 
year. EPA notes that these conclusions about source-by-source 
compliance address only compliance with the allowance-holding 
requirement, not with the emissions monitoring and reporting 
requirements, which continue to be applied unit by unit.
    Because language reflecting or referencing the unit-by-unit 
compliance approach was included in many provisions throughout the 
earlier Acid Rain Program rules, a significant number of rule revisions 
was necessary to implement source-by-source allowance holding. Other 
than implementing the shift from unit-to source-level compliance, the 
rule revisions did not make any substantive changes to the revised 
provisions. Examples of the revisions necessary to implement source-
based compliance are as follows:
    1. The term ``unit account'' was replaced by ``compliance account'' 
in Sec.  72.2 and, as appropriate, in every other provision of the Acid 
Rain Program rules in which the term appeared. Similarly, references to 
a ``unit's'' account in the allowance tracking system were replaced by 
references to a ``source's'' account. In addition, references to 
allowances held by a ``unit'' were changed to refer to allowances held 
by a ``source.''
    2. References to a ``unit's'' Acid Rain emissions limitation for 
SO2 were replaced by references to a ``source's'' Acid Rain emissions 
limitation for SO2 throughout the Acid Rain Program rules. Similarly, 
references to a ``unit's'' SO2 emissions for purposes of applying the 
SO2 emissions limitation (or a ``unit's'' excess emissions) were 
replaced, where appropriate, by references to the SO2 emissions of the 
``affected units at a source'' (or to a ``source's'' excess emissions).
    3. The provisions in Sec. Sec.  72.90(b)(5) and 73.35(e) concerning 
the assignment of allowance deductions, for compliance with the 
allowance-holding requirement, among units at a common stack were 
removed. These provisions were made unnecessary by the shift from unit-
to source-level compliance because all units at a common stack are 
necessarily at the same source.
    4. The terms ``compliance subaccount'', ``future year subaccount'', 
and ``current year subaccount'' and their definitions were removed or 
replaced, as appropriate, throughout the Acid Rain Program rules. The 
earlier rules distinguished between two subaccounts in each unit 
account, i.e., a ``compliance subaccount'' for allowances usable for 
compliance in a given year and a ``future year subaccount'' for 
allowances not usable until a future year. Similarly, the earlier rules 
referred to a ``current year subaccount'' and a ``future year 
subaccount'' of a general account. However, whether compliance was on a 
unit-or source-level, there was no need to use or refer to the 
subaccounts. In fact, the electronic allowance tracking system has 
never actually used subaccounts. See 69 FR 32,700. Consequently, for 
example, Sec.  73.34(a) and (b)--providing that the allowance tracking 
system show in allowance accounts the holdings of allowances issued for 
30 years and that each year the holdings of allowances issued for the 
new 30th year will be added--were revised to set forth these 
requirements without using the obsolete references to subaccounts.
    5. The provision in Sec.  73.35(b)(3) limiting the use of 
allowances from another unit at the same source for compliance was 
removed. In that provision, a unit that would otherwise have excess 
emissions was allowed to use a limited number of allowances from other 
units at the same source in order to reduce, but not to eliminate, the 
excess emissions. Such a limitation was unnecessary, and indeed was 
inconsistent, with source-based compliance.
    6. The provision in Sec.  74.4(c) allowing two designated 
representatives for the same source under certain circumstances was 
removed.\2\ While it was workable to have one designated representative 
for a non-opt-in unit at a source and a different designated 
representative for an opt-in unit at the same source where compliance 
with the allowance-holding requirement was required on a unit-by-unit 
basis, EPA maintains that this is not workable where compliance is at 
the source-level and one individual must be responsible for compliance 
by all units at the source.
---------------------------------------------------------------------------

    \2\ In the Acid Rain Program rule revisions finalized in May 12, 
2005 Federal Register notice certain language in Sec.  74.4(c) was 
revised. However, in the revisions finalized in the April 28, 2006 
Federal Register notice these Sec.  74.4(c) revisions were 
superseded by entirely removing and reserving Sec.  74.4(c) in light 
of the change from unit-to source-level compliance with the 
allowance-holding requirement. 71 FR 25379/2. While the April 28, 
2006 rule revisions did not also remove all references to Sec.  
74.4(c), EPA is not reaffirming their promulgation since they refer 
to a non-existent provision (i.e., Sec.  74.4(c)).
---------------------------------------------------------------------------

    When EPA first proposed the Acid Rain Program rule revisions to 
implement source-based compliance, some commenters supported, and some 
opposed, the shift to source-by-source allowance holding. EPA addressed 
each of the comments opposing the change and reaffirms, in this notice, 
the responses to those comments. For

[[Page 75964]]

example, a commenter opposed the change claiming that a source-by-
source allowance-holding requirement was ``contrary to market-based 
principles.'' In response, EPA rejected the comment, explaining that 
the adoption of source-by-source compliance preserves market-based 
principles. Whether compliance is unit-by-unit or source-by-source, the 
owner or operators of Acid Rain Program units still have the option to 
change or maintain emissions and/or to retain, purchase, or sell 
allowances and the responsibility to take whatever actions are 
necessary to ensure that enough allowances are held to cover emissions. 
The only difference between the types of actions taken under unit-level 
and source-level compliance is that, under unit-level compliance, the 
owners or operators must transfer an allowance from one unit at a 
source to a second unit at that source (except as discussed above 
concerning the removed Sec.  73.35(b)(3)) in order to use the first 
unit's allowances for compliance by the second unit, while under 
source-level compliance, any allowance held for compliance can be 
used--without a transfer--for compliance by any units at the source. 
While fewer allowance transfers may be needed with source-level 
compliance, the market price of allowances still plays a crucial role 
in owners' or operators' decisions on what actions to take (including 
whether to transfer allowances between sources). See 70 FR 25,296-97.
    As a further example, a commenter opposed a source-level compliance 
because the NOX Budget Trading Program (established under the 
NOX State Implementation Plan Call (NOX SIP Call) 
and aimed at reducing ozone season emissions) uses unit-level 
compliance but allows owners or operators to establish source-level 
overdraft accounts, in which may be held extra allowances usable for 
compliance by any unit at the source. In response, EPA rejected the 
comment, explaining that, based on experience with the Acid Rain and 
the NOX Budget trading programs, EPA concluded that a source-level 
allowance-holding requirement results in a less complicated program and 
a reduced likelihood of owners or operators making inadvertent, minor 
errors that could result in significant excess emissions penalties and 
yet still achieves the trading program's environmental goals. See 69 FR 
32,699-700; and 70 FR 25,297.
    As a further example, a commenter stated that EPA should revise the 
Acid Rain Program rules to allow owners or operators, each year, the 
option of choosing whether to use unit-level or source-level 
compliance. In response, EPA rejected the comment, explaining that such 
an approach would significantly complicate the achievement by owners or 
operators, and the determination by EPA, of compliance. The potential 
for error (e.g., due to erroneous assumptions about whether unit-or 
source-level compliance would be applicable to a particular source for 
a particular year) on the part of owners or EPA would be significantly 
increased. EPA concluded that the only reasonable options for the 
allowance-holding requirement in the Acid Rain Program were to require 
either compliance by all sources each year on a unit-level basis or 
compliance by all sources each year on a source-level basis. See 70 FR 
25,297.
    For the reasons discussed above (including the reasons for 
rejecting the comments opposing source-level compliance), EPA reaffirms 
its promulgation of the revisions implementing source-level compliance.

B. Rule Revisions Allowing use of Agents by Designated Representative 
and Authorized Account Representatives

    As noted above, in the April 28, 2006 Federal Register notice that 
also finalized the CAIR FIPs, EPA finalized revisions to the Acid Rain 
Program rules clarifying that designated representatives, authorized 
account representatives, and alternates may use agents to make 
electronic submissions to the Administrator. The revisions in 
Sec. Sec.  72.26 and 73.33(g) clarified this by making this option 
explicitly available and establishing procedures and requirements for 
such use of agents.
    EPA reaffirms its conclusion that the Acid Rain Program rules, even 
without these revisions, already allowed designated representatives, 
authorized account representatives, and alternates to use agents to 
make electronic submissions. Specifically, the Acid Rain Program rules 
provided before the revisions were adopted, and continue to provide, 
for certain submissions (i.e., certificates of representation, 
applications for general account, allowance transfers, and quarterly 
emissions reports) required to be ``in a format prescribed'' or ``in a 
format specified'' by the Administrator. (The terms ``prescribed'' and 
``specified'' have the identical meaning in these contexts.) These 
submissions may be made, and in the case of quarterly emissions reports 
must be made, electronically. The electronic formats prescribed by the 
Administrator for the Acid Rain Program allowed before the revisions 
were adopted, and continue to allow, the designated representative, 
authorized account representative, or alternate, as appropriate, to 
designate other individuals (``agents'') who may make the electronic 
submissions for him and required that the designated representative, 
authorized account representative, or alternate be fully bound by the 
agent's actions. (EPA notes that the NOX Budget Trading Program 
includes analogous regulatory provisions for electronic submissions to 
the Administrator and prescribes analogous electronic formats.) See 71 
FR 25,363-64 and 25,365.
    Consequently, EPA reaffirms its conclusion that the references in 
the Acid Rain Program (as well as the NOX Budget Trading Program) rules 
to ``prescribed'' or ``specified'' formats, coupled with the existing 
electronic formats, provide the legal authority necessary for 
designated representatives, authorized account representatives, and 
alternates to use agents to make electronic submissions to the 
Administrator. However, in order to remove any uncertainty about such 
legal authority and in order to provide more detail concerning the 
procedures and requirements for using agents, EPA also reaffirms the 
promulgation of the Acid Rain Program rule revisions that explicitly 
authorize, and govern, the use of agents for electronic submissions.

C. Rule Revisions Making Technical Changes

    As noted above, in the May 12, 2005 and April 28, 2006 Federal 
Register notices that also finalized the CAIR and the CAIR FIPs, EPA 
finalized revisions to the Acid Rain Program rules making technical 
changes. In those notices, EPA generally categorized these technical 
revisions as changes that facilitated interaction among the trading 
programs administered by EPA under Title IV, the NOX SIP 
Call, CAIR, and the CAIR FIPs. However, independent of any need to 
coordinate the Acid Rain Program with the CAIR and CAIR FIP trading 
programs, EPA maintains that these technical revisions streamline, and 
in some cases clarify, the requirements of the Acid Rain Program. 
Further, these revisions have been in effect, and used by, source 
owners, operators, designated representatives, and EPA since around 
mid-2006. Based on that experience with these technical revisions, EPA 
finds that they streamline and, in some cases, clarify the Acid Rain 
Program requirements without adversely affecting the achievement of, 
and compliance with, the emissions reductions required under Title IV. 
For reasons independent of CAIR and the

[[Page 75965]]

CAIR FIPs (including the above-stated reasons and the more detailed 
reasons discussed below), EPA reaffirms its promulgation of these 
revisions.
    For example, some of the Acid Rain Program rule revisions clarified 
that EPA intended to use the original definition of ``cogeneration 
unit'' in Sec.  72.2. EPA noted in the May 12, 2005 Federal Register 
notice that the Agency had recently changed the ``cogeneration unit'' 
definition in Sec.  72.2 in June 2002 (67 FR 40394, 40420 (June 12, 
2002)). The original definition in Sec.  72.2 had been used since the 
commencement of the Acid Rain Program. The only significant difference 
between the original and revised definitions was that the former refers 
to a unit ``having the equipment used to produce'' electricity and 
useful thermal energy through sequential use of energy, while the 
latter simply refers to a unit ``that produces'' electricity and useful 
thermal energy in that manner. The reason that EPA gave for revising 
the definition in June 2002 was to conform with the definition in a 
rule issued under CAA section 126 related to the NOX SIP 
Call. However, neither that rule nor the NOX SIP Call 
actually specified a ``cogeneration unit'' definition. Consequently, 
there is no reason to use the June 2002 revised definition. Moreover, 
EPA is concerned that the change in the definition of ``cogeneration 
unit'' as of June 2002 may cause confusion or raise question about what 
units qualify for exemptions for ``cogeneration units'' from the Acid 
Rain Program. Under these circumstances, EPA concludes that the 
definition should be changed back to the original definition in Sec.  
72.2 and, in any event, intends to interpret the June 2002 revised 
definition as having the same meaning as the original definition.
    As a further example, some Acid Rain Program rule revisions 
involved units meeting the requirements for new units and retired units 
exemptions under Sec. Sec.  72.7 and 72.8. The revisions clarify that 
such units are treated as unaffected units under the Acid Rain Program 
but continue to be subject to any permitting requirements under parts 
70 and 71 applicable to unaffected units.
    As a further example, some Acid Rain Program rule revisions 
involved the certification that a designated representative must 
include with each submission made to the Administrator and the 
certificate of representation for a designated representative and an 
authorized account representative. The language in Sec.  72.21(b)(1) 
for the certification of any submission by a designated representative 
and in Sec.  72.24(a) and Sec.  73.31(c)(1) for the certificates of 
representation was streamlined by removing extraneous language. Not 
only does this streamline the language, but also makes the 
certification and certificates of representation essentially the same 
as in the NOX Budget Trading Program under the 
NOX SIP Call, which allows use of essentially the same forms 
for the two trading programs.
    As part of this streamlining of language, Sec.  72.24(a)(5), 
(a)(7), and (a)(10) and an analogous provision in Sec.  73.31(c)(1)(v), 
setting forth certain required provisions for the certificate of 
representation, were removed as unnecessary. Among other things, this 
results in removal of the requirement of 1-day newspaper notice for the 
selection of designated representatives for sources subject to the Acid 
Rain Program, which was required in addition to submission to the 
Administrator of the certification of such selection. EPA believes that 
this notice requirement is unnecessary because information on the 
identity of designated representatives (as well as authorized account 
representatives) for Acid Rain Program sources and allowance accounts 
is already available to the public, as well as State permitting 
authorities, through on-line access to the allowance tracking system. 
This availability 24 hours a day on the allowance tracking system seems 
to be a much better way of ensuring interested persons access to the 
information than publication of a single notice in a local newspaper of 
which interested parties may or may not become aware. Consequently, EPA 
maintains that the newspaper notice requirement is obsolete and 
unnecessary.
    In addition, the provisions listing the content of a certificate of 
representation for a designated representative were revised to clarify 
that the identification of each unit covered by the certificate of 
representation includes identification and nameplate capacity of each 
generator served by the unit. EPA believes that the current rule 
language requiring ``identification'' of each unit subject to the 
trading program is already broad enough to encompass such information 
concerning each generator served by the unit, particularly since the 
nameplate capacity of each generator served by a unit may determine 
whether and to what extent the unit is subject to requirements under 
the Acid Rain Program. However, in order to remove any uncertainty, EPA 
concludes that the revised language should be adopted to make it clear 
that generator information is required in the certificate of 
representation.
    In addition, some of the Acid Rain Program rule revisions were 
technical revisions to the provisions in Sec.  72.23(c) concerning the 
reflection in certificates of representation of the owners and 
operators of the source and units involved. The changes make it clear 
that all owners and operators must be listed and that those that should 
be, but are not, listed are still bound by the certificate of 
representation.
    EPA notes that the revised certification accompanying every 
submission and the revised certificate of representation have been 
widely used since mid-2006 without any adverse consequences. For all of 
the above reasons, EPA concludes that these streamlining and clarifying 
revisions concerning the certification and certificate of 
representation are appropriate for the Acid Rain Program.
    As a further example of Acid Rain Program rule revisions, one 
revision involved elimination of the requirement in Sec. Sec.  72.90 
and 74.43 for owners and operators to submit an annual compliance 
certification report for each source. EPA notes that other provisions 
of the Acid Rain Program rules require designated representatives of 
owners and operators of sources subject to the Acid Rain Program to 
submit, with each quarterly emissions report, a certification that the 
monitoring and reporting requirements under part 75 of the Acid Rain 
Program rules have been met. See 40 CFR 75.64(c). The quarterly 
emissions reports are available on-line to the public and the States. 
In addition, owners and operators of Acid Rain Program sources must 
submit, under title V of the CAA, annual compliance certification 
reports concerning all CAA requirements, including all Acid Rain 
Program requirements. EPA also notes that it appears that, up to the 
time (around mid-2006) that the requirement to submit annual compliance 
certification reports under the Acid Rain Program was removed, few (if 
any) requests for copies of these annual compliance certification 
reports had been made by States or any other persons since the 
commencement of the Acid Rain Program. Apparently, other certifications 
and submissions required of owners and operators have been sufficient. 
Under these circumstances, EPA concludes that the separate Acid Rain 
Program annual compliance certification reports are duplicative and 
unnecessary.
    As further examples of Acid Rain Program rule revisions, several 
involved removal of provisions in part 73 of those rules. One was the 
removal of Sec.  73.32 (prescribing the contents of an allowance 
account), which has proved to be superfluous. Section 73.32 set forth a 
rather self-evident list of

[[Page 75966]]

information to be recorded in an allowance account in the allowance 
tracking system, such as the name of the authorized account 
representative, the persons represented by the authorized account 
representative, and the transfers of allowances in and out of the 
account. This section also stated that an allowance account must 
include a compliance or current year subaccount and a future year 
subaccount, as well as emissions information. Several items on this 
list of informational contents for allowance accounts are obsolete in 
that they do not reflect how the electronic allowance tracking system 
operated or will operate in the near future. As noted above, the 
electronic allowance tracking system has not actually ever used or 
referred to subaccounts. Also, emissions data, which, under Sec.  
73.32, were to be reflected in the allowance tracking system account, 
have always been available instead through the electronic emissions 
tracking system. Because the information list in Sec.  73.32 contains 
either self-evident items or items that are obsolete and because the 
NOX Allowance Tracking System has been operating 
successfully even though the NOX Budget Trading Program 
rules lack a provision analogous to Sec.  73.32, EPA concludes that 
Sec.  73.32 should be removed.
    Another provision removed in part 73 was Sec.  73.33(c) requiring 
that the authorized account representative of a general account (i.e., 
an account for an entity (such as an allowance broker) other than an 
Acid Rain source) notify all owners of allowances in the account of any 
submissions made under the Acid Rain Program, unless the owner waived 
the requirement. EPA believes that, because the establishment of a 
general account (as distinguished from a compliance account) by owners 
of allowances is entirely discretionary, it is reasonable to leave it 
to those owners to determine whether and when they want notification 
from their authorized account representative.
    Other provisions removed in part 73 were Sec.  73.37(a) through (c) 
and (e) through (f). EPA concludes that these provisions should be 
removed because the claim of error procedure has never been used and so 
has proved to be superfluous. The provision in Sec.  73.37(d), setting 
forth the Administrator's ability to correct, on his own motion, any 
type of error that he finds in an allowance tracking system account 
remains, renumbered as Sec.  73.37.
    Another provision removed in part 73 was Sec.  73.51. Section 73.51 
prohibited the transfer of allowances from a future year subaccount to 
a subaccount for an earlier year. The removal of this section is 
consistent with the elimination throughout the rest of the Acid Rain 
Program rules of any references to subaccounts. Further, the 
prohibition on using allowances allocated for a year to meet the 
allowance-holding requirement for a preceding year is retained in other 
provisions of the Acid Rain Program rules, e.g., Sec. Sec.  72.9(c)(5) 
and 73.35(a)(1).
    As further examples, Sec. Sec.  73.50 and 73.52 were revised to 
remove superfluous language. Language referring to ``subaccounts'' was 
removed as obsolete. Language referring to allowance transfers in 
perpetuity was also removed since such transfers can be made under 
these sections without such language. Further, the requirement in Sec.  
73.50(b)(3)--that transfers of allowances, after the allowance transfer 
deadline but before completion of compliance determinations concerning 
the allowance-holding requirement, were not recorded until such 
completion if the transferred allowances were usable for compliance--
was removed and then restated in Sec.  73.52(b) without using the 
obsolete reference to compliance subaccounts.
    EPA notes that these revisions to part 73 have been in effect since 
mid-2006 without any adverse consequences. For all of the above 
reasons, EPA concludes that these streamlining revisions are 
appropriate for the Acid Rain Program.
    As a further example, the Acid Rain Program rule revisions included 
revising Sec.  74.42. This section was revised to remove references of 
subaccounts and still preserve the existing requirement that allowances 
allocated for a future year for an opt-in unit cannot be transferred to 
another unit before completion of the determination of compliance with 
the allowance-holding requirement (including the deduction of 
allowances to account for the opt-in unit's emissions and reduced 
utilization). EPA concludes that these streamlining revisions are 
appropriate for the Acid Rain Program.

D. Identification of Specific Rule Revisions Whose Promulgation is 
Reaffirmed

    In this interim final rule, EPA is reaffirming the promulgation of 
all of the revisions of the Acid Rain Program rules that were finalized 
in the May 12, 2005 final rulemaking notice that also finalized CAIR 
(70 FR 25,333-39) and the April 28, 2006 final rulemaking notice that 
also finalized the CAIR FIPs (71 FR 25,377-80) except the following 
revisions:
    1. For Sec.  72.2, item 2.l (70 FR 25,334/1 (adding language 
referencing Sec.  74.4(c), which is entirely removed and reserved in 
the revisions in the April 28, 2006 notice));
    2. For Sec.  73.35, item 9.f (70 FR 25,335/3 (adding a new 
paragraph providing that an allowance deducted or otherwise permanently 
retired in accordance with CAIR or the CAIR FIPs is not available for 
compliance with the allowance-holding requirement in the Acid Rain 
Program));
    3. For Sec.  74.4, item 2.b (70 FR 25,336/3 (revising Sec.  
74.4(c)(2), which is entirely removed and reserved in the revisions in 
the April 28, 2006 notice));
    4. For Sec.  74.40, in item 4.b, the addition of the language ``or 
the opt-in source has, under Sec.  74.4(c), a different designated 
representative than the designated representative for the source'' (70 
FR 25,336/3 (adding language referencing Sec.  74.4(c), which is 
entirely removed and reserved in the revisions in the April 28, 2006 
notice));
    5. For Sec.  78.1, items 3.a and 3.c (70 FR 25,338/1 (referencing 
the CAIR model trading rules, subparts AA through IIII of part 96));
    6. For Sec.  78.3, items 4.a through 4.d (70 FR 25,338/2-3 and 
25,339/1 (adding language referencing the CAIR designated 
representative, the CAIR authorized account representative, and the 
CAIR model trading rules, subparts AA through IIII of part 96));
    7. For Sec.  78.4, item 5 (70 FR 25,339/1 (adding language 
referencing the CAIR designated representative and the CAIR authorized 
account representative));
    8. For Sec.  78.12 item 7.b (70 FR 25,339/1 (adding language 
referencing the CAIR permit));
    9. For Sec.  78.1, item 2.b (71 FR 25,379/2 (adding language 
referencing the CAIR FIPs trading rules, subparts AA through IIII of 
part 97)); and
    10. For Sec.  78.3, items 3.a through 3.c (71 FR 25,379/3 and 
25,380/1-2 (adding language referencing the CAIR FIPs trading rules, 
subparts AA through IIII of part 97)).

IV. Statutory and Executive Order Reviews

A. Executive Order 12866: Regulatory Planning and Review

    This action is not a ``significant regulatory action'' under the 
terms of Executive Order 12866 (58 FR 51735 (October 4, 1993)) and is 
therefore not subject to review under the Executive Order. In this 
action, EPA is simply reaffirming the promulgation of Acid Rain Program 
rule revisions that were previously issued and are currently in effect 
and have been since mid-2006.

B. Paperwork Reduction Act

    This action does not impose any new information collection burden. 
This rule

[[Page 75967]]

simply reaffirms the promulgation of Acid Rain Program rule revisions 
that were previously issued, does not change the existing requirements 
in 40 CFR Parts 72, 73, 74, 77, and 78, and thus does not change the 
existing information collection burden. Moreover, EPA maintains that 
the effect of these revisions when they were first promulgated was, if 
anything, to reduce somewhat the information collection burden on 
regulated sources, e.g., by requiring compliance with the allowance-
holding requirement at a source, rather than unit, level (thereby 
removing the need to transfer allowances among units at the same 
source) and by making other changes to the rules in place when the rule 
revisions were originally promulgated (such as removing the requirement 
for submission of an annual compliance certification report). However, 
the Office of Management and Budget (OMB) has previously approved the 
information collection requirements in the existing rules under the 
provisions of the Paperwork Reduction Act, 44 U.S.C. 3501, et seq., and 
has assigned OMB control number 2060-0258. OMB control numbers for 
EPA's regulations in 40 CFR are listed in 40 CFR part 9.

C. Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601, et seq.) (RFA) 
generally requires an agency to prepare a regulatory flexibility 
analysis of any rule subject to notice and comment rulemaking 
requirements under the Administrative Procedure Act or any other 
statute unless the agency certifies that the rule will not have a 
significant economic impact on a substantial number of small entities. 
Small entities include small businesses, small organizations, and small 
governmental jurisdictions. For purposes of assessing the impacts of 
today's rule on small entities, small entity is defined as: (1) A small 
business as defined by the Small Business Administration's regulations 
at 13 CFR 121.201; (2) a small governmental jurisdiction that is a 
government of a city, county, town, school district or special district 
with a population of less than 50,000; and (3) a small organization 
that is any not-for-profit enterprise which is independently owned and 
operated and is not dominant in its field.
    Because EPA has made a ``good cause'' finding that this action is 
not subject to notice and comment requirements under the Administrative 
Procedure Act and CAA section 307(d), it is not subject to the 
regulatory flexibility provisions of the RFA.

D. Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public 
Law 104-4, establishes requirements for Federal agencies to assess the 
effects of their regulatory actions on State, local, and tribal 
governments and the private sector. Under section 202 of the UMRA, EPA 
generally must prepare a written statement, including a cost-benefit 
analysis, for proposed and final rules with ``Federal mandates'' that 
may result in expenditures to State, local, and tribal governments, in 
the aggregate, or to the private sector, of $100 million or more in any 
one year. Before promulgating an EPA rule for which a written statement 
is needed, section 205 of the UMRA generally requires EPA to identify 
and consider a reasonable number of regulatory alternatives and adopt 
the least costly, most cost effective or least burdensome alternative 
that achieves the objectives of the rule. The provisions of section 205 
do not apply when they are inconsistent with applicable law. Moreover, 
section 205 allows EPA to adopt an alternative other than the least 
costly, most cost-effective, or least burdensome alternative if the 
Administrator publishes with the fin