Federal Implementation Plans for Iowa, Michigan, Missouri, Oklahoma, and Wisconsin and Determination for Kansas Regarding Interstate Transport of Ozone, 80760-80777 [2011-32821]

Agencies

• ENVIRONMENTAL PROTECTION AGENCY

[Federal Register Volume 76, Number 248 (Tuesday, December 27, 2011)]
[Rules and Regulations]
[Pages 80760-80777]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-32821]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 52 and 97

[EPA-HQ-OAR-2009-0491; FRL-9609-9]
RIN 2060-AR01


Federal Implementation Plans for Iowa, Michigan, Missouri, 
Oklahoma, and Wisconsin and Determination for Kansas Regarding 
Interstate Transport of Ozone

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: In this final rule, EPA is concluding that emissions from 
Iowa, Kansas, Michigan, Missouri, Oklahoma, and Wisconsin significantly 
contribute to downwind nonattainment or interfere with maintenance of 
the 1997 ozone National Ambient Air Quality Standards (NAAQS)in other 
states. Each of these states except Oklahoma is already included in the 
annual NOX program that was finalized in July 2011. However, 
this rule does not affect that program.
    EPA is finalizing Federal Implementation Plans (FIPs) to address 
the emissions in each of these states except for Kansas, for which EPA 
is not finalizing a FIP at this time. The FIPs apply the requirements 
of the ozone season NOX program in the Transport Rule 
(Federal Implementation Plans to Reduce Interstate Transport of Fine 
Particulate Matter and Ozone in 27 States; Correction of SIP Approvals 
for 22 States) to sources in Iowa, Michigan, Missouri, Oklahoma, and 
Wisconsin. In addition, this action finalizes the budgets; associated 
variability limits, new unit set-asides, and Indian country new unit 
set-asides; and unit-level allowance allocations for each state under 
the FIPs.

DATES: This final rule is effective on January 26, 2012.

ADDRESSES: EPA has established a docket for this action under Docket ID 
No. OAR-EPA-HQ-OAR-2009-0491. All documents in the docket are listed on 
the https://www.regulations.gov Web site. Although listed on the index, 
some information is not publicly available, e.g., 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 EPA Docket Center, 
EPA West, Room B102, 1301 Constitution Ave. NW., Washington, DC. 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 
Docket is (202) 566-1742. This Docket Facility is open from 8 a.m. to 
5:30 p.m., Monday through Friday, excluding legal holidays. The Docket 
telephone number is (929) 566-1742, fax (202) 566-1741.

FOR FURTHER INFORMATION CONTACT: For general questions concerning this 
action, contact Ms. Gabrielle Stevens, Clean Air Markets Division, 
Office of Atmospheric Programs, Mail Code 6204J, Environmental 
Protection Agency, 1200 Pennsylvania Avenue NW., Washington, DC 20460; 
telephone number: (202) 343-9252; fax number: (202) 343-2356; email 
address: stevens.gabrielle@epa.gov.

SUPPLEMENTARY INFORMATION:

I. Glossary of Terms and Abbreviations

    The following are abbreviations of terms used in final rule:

CFR Code of Federal Regulations
EGU Electric Generating Unit
FIP Federal Implementation Plan
FR Federal Register
EPA U.S. Environmental Protection Agency
ICR Information Collection Request
NAAQS National Ambient Air Quality Standards
NODA Notice of Data Availability
NOX Nitrogen Oxides
SIP State Implementation Plan
OMB Office of Management and Budget
PM2.5 Fine Particulate Matter, Less Than 2.5 Micrometers
PM Particulate Matter
RIA Regulatory Impact Analysis
SNPR Supplemental Notice of Proposed Rulemaking
SO2 Sulfur Dioxide
TSD Technical Support Document

II. General Information

A. Does this action apply to me?

    Regulated Entities. Entities regulated by this action primarily are 
fossil fuel-

[[Page 80761]]

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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               Category                         NAICS code         Examples of potentially  regulated industries
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Industry..............................  2211, 2212, 2213.........  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 which EPA is now aware 
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 criteria in 
Sec. Sec.  97.404, 97.504, and 97.604 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.

B. Where can I get a copy of this document and other related 
information?

    In addition to being available in the docket, an electronic copy of 
this rule will also be available on the World Wide Web. Following 
signature by the EPA Administrator, a copy of this action will be 
posted on the EPA Web site at https://www.epa.gov/crossstaterule.

C. How is the preamble organized?

I. Glossary of Terms and Abbreviations
II. General Information
III. Executive Summary
    A. EPA's Authority for This Rule
    B. Finalizing FIPs To Address Significant Contribution to 
Nonattainment and Interference With Maintenance in:
    i. Iowa
    ii. Michigan
    iii. Missouri
    iv. Oklahoma
    v. Wisconsin
    C. Kansas
    D. Allegan County, Michigan, Receptor
    E. Ozone Season NOX Emission Budgets for Five States
    F. Implementation of the Transport Rule NOX Ozone 
Season Trading Program
IV. Statutory and Executive Order Reviews
    A. Executive Order 12866: Regulatory Planning and Review and 
Executive Order 13563: Improving Regulation and Regulatory Review
    B. Paperwork Reduction Act
    C. Regulatory Flexibility Act
    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
    L. Judicial Review

III. Summary

    In this final rule, EPA finalizes its conclusion that Iowa, Kansas, 
Michigan, Missouri, Oklahoma, and Wisconsin significantly contribute to 
nonattainment or interfere with maintenance of the 1997 ozone National 
Ambient Air Quality Standards (NAAQS) in other states. These states' 
final ozone-season NOX budgets are presented and discussed 
in section III.E below, and more detailed information can be found in 
the ``Determination of State Budgets for the Final Ozone Supplemental 
of the Transport Rule'' TSD found in the docket for this rulemaking.
    In addition, EPA is finalizing FIPs to address the interstate 
transport requirements of the relevant NAAQS using a program created in 
the Transport Rule\1\ that was finalized on July 6, 2011 (76 FR 48208, 
August 8, 2011). EPA is implementing the ozone season NOX 
program in the Transport Rule (with minor revisions) as the FIPs for 
Iowa, Michigan, Missouri, Oklahoma, and Wisconsin to address the 
emissions identified as significantly contributing to nonattainment or 
interfering with maintenance with respect to the 1997 ozone NAAQS. With 
respect to Kansas, EPA is not finalizing the proposed FIP because we do 
not have the authority to do so at this time, as discussed in section 
III.C below.
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    \1\ Federal Implementation Plans to Reduce Interstate Transport 
of Fine Particulate Matter and Ozone in 27 States; Correction of SIP 
Approvals for 22 States: Final Rule. Available on the Web at https://www.epa.gov/crossstaterule.
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    As explained in the final Transport Rule preamble (76 FR 48208), 
EPA improved and updated both steps of its significant contribution 
analysis from the Transport Rule proposal. EPA updated its modeling 
platforms and modeling inputs in response to public comments received 
on the proposed Transport Rule and subsequent Notices of Data 
Availability (NODAs), and performed other standard updates. It updated 
and improved the modeling platforms and modeling inputs used to 
identify states with contributions to certain downwind receptors that 
meet or exceed specified air quality thresholds. It also updated and 
improved its analysis for identifying any emissions within such states 
that constitute the state's significant contribution to nonattainment 
or interference with maintenance. Therefore, the results of the 
analysis conducted for the final Transport Rule differed somewhat from 
the results of the analysis conducted for the proposal.
    With respect to the 1997 ozone NAAQS, the analysis EPA conducted 
for the Transport Rule proposal did not identify Wisconsin, Iowa, and 
Missouri as states that significantly contribute to nonattainment and/
or interfere with maintenance of the ozone NAAQS in another state. 
However, the analysis conducted for the final Transport Rule showed 
that emissions from these three states interfere with maintenance of 
the ozone NAAQS in another state. The analysis also showed that 
emissions from Missouri significantly contribute to nonattainment in 
another state. Additionally, the analysis identified two ozone 
maintenance receptors that were not identified by the modeling 
conducted for the proposal. These two ozone maintenance receptor sites 
are located in Allegan County, Michigan and Harford County, Maryland. 
Five states (Iowa, Kansas, Michigan, Oklahoma, and Wisconsin), which 
EPA identified as interfering with maintenance problems at the Allegan 
County and/or Harford County receptors, based on modeling for the final 
rule, uniquely contribute to these receptors, i.e., absent these 
receptors the states would not be covered by the Transport Rule ozone-
season program (although the states, except for Oklahoma, are covered 
by the Transport Rule annual programs). EPA did not issue FIPs with 
respect to the 1997 ozone NAAQS or finalize ozone season

[[Page 80762]]

NOX budgets for these states in the final Transport Rule. 
Instead, EPA published a supplemental notice of proposed rulemaking (76 
FR 40662) to provide an opportunity for public comment on our 
conclusion that these states significantly contribute to nonattainment 
or interfere with maintenance of the 1997 ozone NAAQS.
    EPA did not change its methodology between the proposed Transport 
Rule and the final Transport Rule for identifying upwind states that 
significantly contribute to nonattainment or interfere with maintenance 
in other states; nor did EPA change its methodology for identifying 
receptors of concern with respect to maintenance of the 1997 ozone 
NAAQS. The final Transport Rule's air quality modeling identified the 
new states and new receptors described above based on modeling using 
updated input information (including emission inventories), much of 
which was provided to EPA through public comment on the proposal and 
subsequent NODAs.
    In the proposal for this supplemental rulemaking, EPA took comment 
only on (a) its conclusions that the six states identified above have 
emissions that significantly contribute to nonattainment and/or 
interfere with maintenance of the 1997 ozone NAAQS and (b) its decision 
to use the final Transport Rule programs as the FIPs to address these 
emissions in the six states.
    EPA did not reconsider or take comment on any aspect of the final 
Transport Rule, including any aspect of the methodology used to 
identify receptors for nonattainment; the methodology used to identify 
receptors for maintenance; the methodology used to identify any 
specific state's significant contribution and interference with 
maintenance; the methodologies used to establish state budgets, 
variability limits, and state assurance levels; and the methodologies 
used to allocate allowances to existing units, to establish new unit 
set-asides and Indian country new unit set-asides, and to allocate 
allowances in these set-asides. EPA provided an adequate opportunity 
for public comment on all of these issues during the comment period for 
the proposed Transport Rule and during the comment periods for the 
associated NODAs.\2\ EPA received numerous comments on the proposed 
Transport Rule and on the associated NODAs and considered all 
significant comments received during the comment periods for these 
actions before finalizing the Transport Rule. Responses to those 
comments are available in the public docket for the final Transport 
Rule.
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    \2\ Notice of Data Availability Supporting Federal 
Implementation Plans to Reduce Interstate Transport of Fine 
Particulate Matter and Ozone (75 FR 53613; September 1, 2010). This 
NODA provided additional information on an updated version of the 
power sector modeling platform and data inputs EPA proposed to use 
to support the final Transport Rule.
    Notice of Data Availability Supporting Federal Implementation 
Plans to Reduce Interstate Transport of Fine Particulate Matter and 
Ozone: Revisions to Emission Inventories (75 FR 66055; October 27, 
2010).
    Notice of Data Availability for Federal Implementation Plans to 
Reduce Interstate Transport of Fine Particulate Matter and Ozone: 
Request for Comment on Alternative Allocations, Calculation of 
Assurance Provision Allowance Surrender Requirements, New-Unit 
Allocations in Indian Country, and Allocations by States (76 FR 
1109; January 7, 2011).
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    In the proposal for this rulemaking, EPA also did not reconsider or 
take comment on the emission inventories used for the final Transport 
Rule modeling, including the emission inventories for the six states 
identified above. EPA provided ample opportunity for comment on these 
inventories during the comment period for the proposed Transport Rule 
and the comment periods for the NODAs associated with that proposal. 
Inventories for all states included in the modeling domain were made 
available for public comment during that process. The public had ample 
reason to comment on the inventories for these six states, moreover, 
not only because these inventories affect the modeling for all states 
in the modeling domain, but also because EPA was proposing to include 
all six states in at least one of the Transport Rule trading programs 
and the inventories were used in the analysis supporting that proposal. 
For instance, EPA proposed to include Kansas and Michigan in the ozone-
season NOX, annual NOX, and annual SO2 
programs; proposed to include Oklahoma in the ozone-season 
NOX program; and proposed to include Iowa, Missouri, and 
Wisconsin in the SO2 and annual NOX programs. 
Commenters therefore had reason to look closely at all of the emission 
data for all six states that EPA made available in the proposal and the 
NODAs. Ultimately, EPA made numerous changes to these inventories in 
response to public comments.

A. EPA's Authority for this Rule

    The statutory authority for this action is provided by the CAA, as 
amended, 42 U.S.C. 7401 et seq. Section 110(a)(2)(D) of the CAA, often 
referred to as the ``good neighbor'' provision of the Act, requires 
states to prohibit certain emissions because of their impact on air 
quality in downwind states. Specifically, it requires all states, 
within 3 years of promulgation of a new or revised NAAQS, to submit 
SIPs that prohibit certain emissions of air pollutants because of the 
impact they would have on air quality in other states. 42 U.S.C. Sec.  
7410(a)(2)(D). Section 301(a)(1) of the CAA gives the Administrator of 
EPA general authority to prescribe such regulations as are necessary to 
carry out her functions under the Act. 42 U.S.C. 7601(a)(1). Section 
110(c)(1) requires the Administrator to promulgate a FIP at any time 
within 2 years after the Administrator (a) finds that a state has 
failed to make a required SIP submission or that such a submission is 
incomplete or (b) disapproves a SIP submission, unless the state 
corrects the deficiency and the Administrator approves the SIP 
revision. 42 U.S.C. 7410(c)(1). Tribes are not required to submit state 
implementation plans. However, as explained in EPA's regulations 
outlining Tribal Clean Air Act authority, EPA is authorized to 
promulgate FIPs for Indian country as necessary or appropriate to 
protect air quality if a tribe does not submit and obtain EPA approval 
of an implementation plan. See 40 CFR 49.11(a).
    For each FIP in this rule, EPA either (a) found that the state has 
failed to make a required section 110(a)(2)(D)(i)(I) SIP submission or 
(b) disapproved a SIP submission. In addition, EPA has determined, in 
each case, that there has been no approval by the Administrator of a 
SIP submission correcting the deficiency prior to promulgation of the 
FIP. EPA's obligation to promulgate a FIP arose when the finding of 
failure to submit or disapproval was made, and in no case has it been 
relieved of that obligation. (The specific findings made and actions 
taken by EPA are described in greater detail in the TSD entitled 
``Status of CAA 110(a)(2)(D)(i)(I) SIPs Supplemental Rule TSD,'' which 
is available in the public docket for this rule.)
    As noted in the SNPR, EPA proposed a SIP Call under CAA 110(k)(5) 
for Kansas (76 FR 763, January 6, 2011), based on its conclusion that 
Kansas significantly contributes to nonattainment or interferes with 
maintenance of the 1997 ozone NAAQS. On March 9, 2007, EPA approved a 
section 110(a)(2)(D)(i) SIP submission from the state of Kansas for the 
1997 ozone and 1997 PM2.5 NAAQS (72 FR 10608, March 9, 
2007). This SIP submission did not rely on compliance with the Clean 
Air Interstate Rule

[[Page 80763]]

(CAIR) \3\ to satisfy the requirements of section 110(a)(2)(D)(i)(I). 
The analysis for the proposed Transport Rule, however, demonstrated 
that emissions from Kansas significantly contribute to nonattainment or 
interfere with maintenance of the 1997 ozone NAAQS in other states. 
Because the approved Kansas SIP does not prohibit these emissions, EPA 
proposed to find it substantially inadequate to meet the requirements 
of section 110(a)(2)(D)(i)(I) with respect to the 1997 ozone NAAQS. EPA 
intends to take final action on this proposal concurrent with this 
action or shortly thereafter. See section C below for more information 
on Kansas.
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    \3\ 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 promulgated May 
12, 2005 (70 FR 25162).
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    The five states addressed in this final rule for which EPA's 
analysis identifies the state's full reduction responsibility under 
section 110(a)(2)(D)(i)(I) with respect to the 1997 ozone NAAQS are 
Iowa, Kansas, Michigan, Oklahoma, and Wisconsin. The one state 
addressed in this final rule for which EPA's analysis identifies 
reductions that are necessary but may not be sufficient to satisfy 
section 110(a)(2)(D)(i)(I) with respect to the 1997 ozone NAAQS is 
Missouri. This is because, in the final Transport Rule air quality 
modeling control scenario in 2014, Missouri is estimated to be 
significantly contributing to residual nonattainment and/or interfering 
with residual maintenance at receptors in Brazoria and Harris Counties 
(Houston) in Texas, and Houston is the only area projected to remain in 
nonattainment in 2014. As described in the final Transport Rule (TR) 
preamble (e.g., Page 48210) 76 FR 48208, August 8, 2011, only one area 
(Houston) is projected to remain in nonattainment for the 1997 ozone 
NAAQS in 2014 with the Transport Rule in place. For the upwind states 
linked to the receptors in this area (including Missouri), additional 
reductions may be necessary to fully eliminate each state's significant 
contribution to nonattainment and/or interference with maintenance. 
.Missouri was also found to contribute above the threshold to the new 
maintenance receptor, Allegan County, Michigan.\4\
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    \4\ See the Air Quality Modeling Final Rule TSD (EPA-HQ-OAR-
2009-0491-4140). The estimated average and maximum design values for 
the receptors in Brazoria and Harris Counties (monitor 
identification numbers 480391004, 482010051, 482010055) in the final 
air quality modeling of the control scenario were 84.4, 86.5 ppb; 
84.1, 88.6 ppb; and 91.1, 93.2 ppb, respectively. Thus, the first 
two receptors were estimated to have residual maintenance issues, 
while the latter receptor is estimated to have a residual 
nonattainment issue. Missouri contributes at or above the one 
percent contribution threshold to all three of these receptors. 
(Note that average design values are used to assess attainment/
nonattainment and maximum design values are used to assess 
maintenance.)
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    EPA has not yet determined whether additional reductions in ozone-
forming emissions are necessary to address Missouri's significant 
contribution to downwind nonattainment and interference with 
maintenance, which may not be fully quantified in this rulemaking with 
respect to the 1997 ozone NAAQS. Additional technical analysis will be 
necessary to complete this determination. See section B.iii below for 
further discussion.

B. Finalizing FIPs to Address Significant Contribution to Nonattainment 
and Interference with Maintenance

    EPA concludes in this final rule that application of the 
methodologies to identify nonattainment and maintenance receptors and 
to determine significant contribution to nonattainment and interference 
with maintenance with respect to the 1997 ozone NAAQS, as described in 
the final Transport Rule, demonstrates that Iowa, Kansas, Michigan, 
Missouri, Oklahoma, and Wisconsin significantly contribute to 
nonattainment or interfere with maintenance of the 1997 ozone NAAQS in 
other states. EPA also concludes in this final rule that the Transport 
Rule NOX Ozone Season Trading Program set forth in the final 
Transport Rule (with minor revisions discussed in section III.F of this 
preamble) should be used as the FIP for five of the six states with 
regard to the 1997 ozone NAAQS. As discussed below, EPA received 
comments concerning whether, and in what amount, some of the states 
significantly contribute or interfere with maintenance. EPA did not 
receive any comments claiming that EPA should not use the Transport 
Rule NOX Ozone Season Trading Program as the FIP if the 
state is found to significantly contribute or interfere with 
maintenance.
i. Iowa
    EPA is finalizing a FIP for Iowa that, through implementation of 
the Transport Rule ozone season program, limits power plant 
NOX emissions starting in the 2012 ozone season.
    The analysis for the final Transport Rule identified Iowa as a 
state that interferes with maintenance of the 1997 ozone NAAQS only for 
a newly-identified maintenance receptor in Allegan County, Michigan. 
EPA specifically requested comment in the proposed notice for this 
supplemental action on whether there are errors in the Agency's 
application of the Transport Rule methodologies with respect to Iowa's 
significant contribution to nonattainment and/or interference with 
maintenance of the 1997 ozone NAAQS. There were no public comments that 
identified any errors in EPA's determination of state budgets for Iowa, 
which demonstrated EPA's quantification of emission reductions 
necessary to eliminate significant contribution and interference with 
maintenance.
    One commenter noted that inclusion of Iowa is justified. Another 
commenter questioned the Allegan County, Michigan receptor. For more 
information on the Allegan receptor, see section D below in this 
preamble. Other comments concerning the 2005 baseline, and ``sunk 
costs'', are outside the scope of the proposed rule in this rulemaking, 
and, while these issues are not reopened in this rulemaking, EPA notes 
the issues have been addressed in the record of the final Transport 
Rule. See the docket for this rulemaking at www.regulations.gov, EPA-
HQ-OAR-2009-0491.
ii. Michigan
    EPA is finalizing a FIP for Michigan that, through implementation 
of the Transport Rule ozone season program, limits power plant 
NOX emissions starting in the 2012 ozone season.
    In its 2010 Transport Rule proposal, EPA proposed to determine that 
Michigan significantly contributes to nonattainment or interferes with 
maintenance of the 1997 ozone NAAQS and also proposed to include 
Michigan in the Transport Rule ozone-season NOX program. In 
the analysis conducted for the final Transport Rule, Michigan is linked 
only to a newly-identified ozone maintenance receptor in Harford 
County, Maryland. EPA specifically requested comment in the proposed 
notice for this supplemental action on whether there are errors in the 
Agency's application of the Transport Rule methodologies with respect 
to Michigan's interference with maintenance of the 1997 ozone NAAQS.
    There were two major comments relating to Michigan. One comment 
regarded the use of the FIP and requested a delay for a minimum of 18 
months so the state could submit an approvable SIP. The matter of EPA's 
authority under the Clean Air Act is discussed in detail in the final 
Transport Rule and above in section III.A. The second comment addressed 
the Indian country new unit set-aside and suggested that the state is 
the appropriate authority to allocate new source allowances, even to 
units located

[[Page 80764]]

on tribal lands. The comment, concerning the authority to allocate 
allowances from the Indian country new unit set-aside, is outside the 
scope of the proposed rule in this rulemaking, and, while issues 
concerning the Indian country new unit set-aside are not reopened in 
this rulemaking, EPA notes the issues have been addressed in the 
preamble to the final Transport Rule at 76 FR 48317 and 48293.
iii. Missouri
    EPA is finalizing the FIP for Missouri that, through implementation 
of the Transport Rule ozone season program, limits power plant 
NOX emissions starting in the 2012 ozone season.
    The analysis for the final Transport Rule identified Missouri as a 
state that significantly contributes to nonattainment and/or interferes 
with maintenance of the 1997 ozone NAAQS in Harris County, Texas, 
Brazoria County, Texas, and Allegan County, Michigan. EPA requested 
comment in the proposed notice for this supplemental action 
specifically on whether there are errors in the Agency's application of 
the Transport Rule methodologies with respect to Missouri's significant 
contribution to nonattainment and interference of the 1997 ozone NAAQS.
    One commenter challenged the methodology used by EPA to quantify 
significant contribution, arguing that it was flawed because EPA's base 
year does not include CAIR and does not represent current air quality. 
As explained in the proposal, EPA did not reopen for comment the 
methodology developed in the final Transport Rule to quantify emissions 
that significantly contribute to or interfere with maintenance in 
another state. These comments are outside the scope of the proposed 
rule in this rulemaking, and, while these issues are not reopened in 
this rulemaking, the issues have been addressed in the record of the 
final Transport Rule.
    One commenter stated that the proposal for this action would not 
require full elimination of Missouri's significant contribution. EPA 
stated in the preamble to this rule's proposal that for Missouri, our 
analysis identifies reductions that are necessary but may not be 
sufficient to satisfy section 110(a)(2)(D)(i)(I) with respect to the 
1997 ozone NAAQS. This is because Missouri is estimated to be 
significantly contributing to nonattainment and/or interfering with 
maintenance in Brazoria and Harris Counties in Texas, as demonstrated 
in the final Transport Rule air quality modeling of the control 
scenario in 2014 (see the Air Quality Modeling Final Rule TSD in the 
docket to this rulemaking, for additional details).
    EPA intends to conduct further analysis and provide appropriate 
guidance and/or rulemaking to address any remaining significant 
contribution to nonattainment and interference with maintenance with 
respect to the 1997 ozone NAAQS for any state (e.g., Missouri) 
identified in the final Transport Rule and in the associated 
supplemental notice, for which EPA was unable to fully quantify the 
emissions that must be prohibited to satisfy the requirements of 
section 110(a)(2)(D)(i)(I) with respect to the 1997 ozone NAAQS.
    A commenter questioned whether the compliance deadline established 
by EPA in the FIP with regard to the 1997 ozone season NAAQS is 
feasible or valid in light of, among other things, the commenter's 
suggestion that the Transport Rule NOX ozone season 
allowance market will not be viable. EPA has determined it is feasible 
for sources in Missouri to meet the 2012 budget finalized in this rule. 
The 2012 budget relies on control strategies that Missouri sources are 
already preparing to implement for the annual NOX program. 
These include running existing or already planned controls and making 
changes in dispatch (how electricity is distributed across units at a 
facility) that could include shifting generation from higher emitting 
units to lower emitting units. Sources also have further flexibility 
through the opportunity to purchase allowances. Twenty states have 
already been finalized as participants in the Transport Rule ozone 
season program and NOX ozone season allowances have already 
been traded. Trading began prior to the formal distribution of 
allowances, and trading volume has increased since distribution, with 
prices steadily decreasing. This market is following a common pattern 
of emission allowance markets in their introductory stages--prices are 
initially high and then drop as parties become familiar with the 
characteristics of the market through repeated iterations of bids, 
offers, and trades. Observed market allowance prices for the 
NOX ozone season program are trending toward the projected 
equilibrium values included in EPA's analysis of the final Transport 
Rule.\5\
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    \5\ Recent price estimates provided in the subscription 
publication Argus Air Daily, an international provider of price data 
related to the energy sector. Also see the Regulatory Impact 
Assessment for the final Transport Rule at https://www.regulations.gov/#!documentDetail;D=EPA-HQ-OAR-2009-0491-4547.
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 iv. Oklahoma
    EPA is finalizing the FIP for Oklahoma that, through implementation 
of the Transport Rule ozone season program, limits power plant 
NOX emissions starting in the 2012 ozone season.
    In its 2010 Transport Rule proposal, EPA proposed to determine that 
Oklahoma significantly contributes to nonattainment or interferes with 
maintenance of the 1997 ozone NAAQS and also proposed to include 
Oklahoma in the Transport Rule ozone-season program. In the analysis 
conducted for the final Transport Rule, Oklahoma was linked only to a 
newly-identified ozone maintenance receptor in Allegan County, 
Michigan. Oklahoma was not linked to any nonattainment receptors. EPA 
specifically requested comment in the proposed notice for this 
supplemental action on whether there are errors in the Agency's 
application of the Transport Rule methodologies with respect to 
Oklahoma's significant contribution to nonattainment and/or 
interference with maintenance of the 1997 ozone NAAQS.
    Several commenters generally question the validity of EPA's 
conclusion that Oklahoma interferes with maintenance of the 1997 ozone 
NAAQS in downwind states, especially regarding the Allegan County, 
Michigan receptor. See the discussion of the Allegan receptor below in 
section III.D. Other comments regarding the CAMx air quality model, 
emissions inventory data, and choice of base year are outside the scope 
of the proposed rule in this rulemaking, and, while these issues are 
not reopened in this rulemaking, the issues have been addressed in the 
record of the final Transport Rule and this supplemental rule.
    EPA also received comments regarding the size of the proposed ozone 
season NOX budget for Oklahoma. Some commenters argued the 
Oklahoma ozone season budget was incorrectly calculated because it 
assumed reductions that could not be feasibly achieved by the 2012 
ozone season. The analysis conducted for the proposal showed that 
reductions in Oklahoma could be achieved through, among other actions, 
installation of low-NOX burners (LNBs) at about 4.4 
gigawatts (GW) of coal-fired generation capacity in the state, and the 
shifting of dispatch to cleaner generators. Commenters disputed the 
ability of sources in Oklahoma to effect sufficient reductions through 
either of these strategies in time to meet the proposed 2012 state 
budget. Each identified issue is addressed below.

[[Page 80765]]

    As to the LNBs, in the final Transport Rule, EPA found that it is 
technically feasible to install LNBs within a 6-month period. The 
shutdown of a unit and physical installation of LNBs at the unit 
necessarily occurs near the end of the 6-month period. Because of the 
timing of this final action, the units in Oklahoma would have to shut 
down to install the LNBs during the ozone season--the summer peak 
demand period for electricity in Oklahoma. Taking these units off-line 
during the summer peak demand period would reduce the amount of 
available capacity in the reliability subregion of the Southwest Power 
Pool that includes Oklahoma. EPA's policy case modeling suggests that 
this reduction in available capacity could shift this subregion below 
its assured planning reserve margin which is based on North American 
Electricity Reliability Corporation (NERC) planning reserve margins. 
See ``Determination of State Budgets for the Final Ozone Supplemental 
of the Transport Rule'' TSD. Because physical installation of the LNBs 
during the 2012 summer peak on units in Oklahoma could potentially 
cause the region to miss this important reliability target, EPA 
concludes that installation of these LNBs during the ozone season is 
not technically feasible.\6\ Therefore, EPA is assuming that no low-
NOX burners can be installed in Oklahoma prior to or during 
the 2012 ozone-season and is setting the Oklahoma 2012 ozone season 
NOX budget at a level that reflects emission reductions 
achievable through actions (such as changes in generation unit 
dispatch) that do not include additional LNB installations. EPA is 
setting the Oklahoma ozone season NOX budget for 2013 and 
beyond at the level that was proposed, i.e., to reflect NOX 
levels achievable with additional LNB installations that can be 
completed before the 2013 ozone season without necessitating the 
shutdown of units during the summer peak demand period in 2012.
---------------------------------------------------------------------------

    \6\ Because, in the case of Oklahoma, physical installation of 
LNBs during the latter portion of the 6-month period would occur 
during the summer peak demand period, this conclusion concerning 
Oklahoma is distinguishable from EPA's general conclusion that 
installation of LNBs in 6 months is technically feasible. See EPA-
HQ-OAR-2009-0491-4529. Physical installation of LNBs near the end of 
a 6-month period and outside of the summer peak demand period will 
not threaten achievement of target planning reserve margins and, 
thus, electric reliability.
---------------------------------------------------------------------------

    EPA does not believe that this issue relating to LNB installation 
timing applies to the other four states for which EPA is finalizing a 
FIP in this action. Because those four states are already required to 
meet Transport Rule annual NOX reduction requirements (which 
start January 2012), and were notified of that requirement with the 
July 6, 2011 finalization of the Transport Rule, physical installation 
of LNBs near the end of the 6-month period for LNBs are not expected to 
occur during peak electricity demand periods. Moreover, information in 
the record indicates that, for units in Iowa, Michigan, Missouri, and 
Wisconsin, LNBs were already planned and are in the process of being 
installed. Therefore, EPA believes that the issue raised is unique to 
Oklahoma and does not justify adjusting the 2012 ozone season budgets 
for the four other states subject to this final action. As discussed 
below, EPA is finalizing the 2012 ozone season budgets as proposed for 
the four states, except for a few corrections in the Michigan and 
Wisconsin budgets addressed in section III.E, below.
    Some commenters also argued that EPA erred in assuming emissions 
from oil/gas steam units could be significantly reduced by the 2012 
ozone season. Including Oklahoma, there are a total of five ozone-
season-only states subject to the Transport Rule--that is, five states 
that are subject to the ozone-season NOX program without 
also being subject to the annual NOX program. The ozone-
season budgets for the four other states (Mississippi, Arkansas, 
Florida, and Louisiana) were finalized in the final Transport Rule 
which was signed and widely disseminated in July 2011. EPA did not 
finalize an ozone-season budget for Oklahoma at that time. EPA is 
finalizing the ozone-season budget for Oklahoma more than 5 months 
after the budgets for the other states included in the ozone-season 
program were finalized and less than six months before the start of the 
2012 ozone season. In this respect, therefore, Oklahoma is uniquely 
situated.
    EPA believes that units in Oklahoma will have sufficient time for 
compliance planning to include modest adjustments of NOX 
emissions at covered sources in Oklahoma (e.g., fine-tuning of existing 
combustion controls). However, EPA agrees that Oklahoma utilities may 
not have time between finalization of this rule and the 2012 ozone 
season to realign firm power supply to dispatch cleaner, more cost-
effective sources of generation to meet local electricity demand that 
is currently being met by oil/gas steam generators. Therefore, EPA is 
adjusting the Oklahoma state budget for the 2012 ozone season 
specifically on the basis of revised projected emissions at oil/gas 
steam generators reflecting an immediate-term dispatch pattern that 
maintains the firm power supply arrangements already in place to serve 
local electricity demand. In light of Oklahoma's unique situation, EPA 
is assuming for the purposes of this adjustment that projected 2012 
emissions from oil/gas steam units in Oklahoma will be consistent with 
recently observed dispatch of this class of units in the state. EPA 
believes this situation is unique to Oklahoma due to the fact that 
sources in the other states covered by this rulemaking are already 
covered by a pre-existing Transport Rule FIP addressing NOX 
emission control, and that these sources will have had substantially 
more compliance planning time to consider adjustments to dispatch in 
advance of the 2012 ozone season.
    EPA believes that the original projections of Oklahoma EGU 
emissions of ozone-season NOX at the Transport Rule's 
threshold cost-per-ton level remain achievable, through a combination 
of reduction measures, including LNB installations and increased 
dispatch of cleaner generating sources, in time for compliance in the 
2013 ozone season and beyond, under the state budget as proposed. EPA 
is only adjusting the final Oklahoma state budget for the 2012 ozone 
season. See the technical support document, ``Determination of 2012 
Ozone Season State Emission Budgets for the Final Transport Rule Ozone 
Supplemental,'' in the docket to this rulemaking for more details.
v. Wisconsin
    EPA is finalizing the FIP for Wisconsin that, through 
implementation of the Transport Rule ozone season program, limits power 
plant NOX emissions starting in the 2012 ozone season.
    The analysis for the final Transport Rule identified Wisconsin as a 
state that interferes with maintenance only for a newly-identified 1997 
ozone NAAQS maintenance receptor in Allegan County, Michigan. EPA 
specifically requested comment in the proposed notice for this 
supplemental action on whether there are errors in the Agency's 
application of the Transport Rule methodologies with respect to 
Wisconsin's significant contribution to nonattainment and interference 
of the 1997 ozone NAAQS. There were no comments with respect to 
Wisconsin's significant contribution to nonattainment and/or 
interference of the 1997 ozone NAAQS or with respect to EPA's proposed 
use of the Transport Rule ozone season program as the FIP.

C. Kansas

    EPA is finalizing its determination that Kansas significantly 
contributes to

[[Page 80766]]

nonattainment or interferes with maintenance in another state with 
respect to the 1997 ozone NAAQS. EPA is not finalizing the proposed FIP 
for Kansas at this time. As explained below, EPA intends to take final 
action on its proposed SIP Call for Kansas concurrent with this action 
or shortly thereafter. If Kansas fails to submit a SIP that meets the 
requirements of 110(a)(2)(D)(i)(I) with respect to the 1997 ozone 
standards by any deadline established in any final SIP Call, EPA would 
take action as appropriate to satisfy its obligation to promulgate a 
FIP to address the statutory requirements.
    The analysis for the final Transport Rule and the analysis for the 
2010 proposal both identified Kansas as a state that interferes with 
maintenance of the 1997 ozone NAAQS in another state. In its 2010 
Transport Rule proposal, EPA proposed to determine that Kansas 
significantly contributes to nonattainment or interferes with 
maintenance of the 1997 ozone NAAQS and thus proposed to include Kansas 
in the Transport Rule ozone-season NOX program. The analysis 
conducted for the final Transport Rule, demonstrated that Kansas is 
linked only to a newly-identified ozone maintenance receptor in Allegan 
County, Michigan. As noted above, EPA decided to provide an additional 
opportunity to comment on its conclusions with respect to states that 
were linked, in the final Transport Rule analysis, only to receptors 
that were identified for the first time in that analysis. In that 
supplemental proposal, EPA specifically requested comment in the 
proposed notice to this supplemental action on whether there are errors 
in the Agency's application of the Transport Rule methodologies with 
respect to Kansas's significant contribution to nonattainment and 
interference of the 1997 ozone NAAQS. After a review of comments 
received, EPA has concluded that Kansas interferes with maintenance of 
the 1997 ozone NAAQS in Allegan County, Michigan.
    This action does not take final action on the portion of the 
proposal relating to whether to use the Transport Rule ozone season 
program as the FIP for Kansas. In the 2010 Transport Rule proposal, EPA 
summarized the status of the CAA section 110(a)(2)(D)(i)(I) SIP for the 
state of Kansas with regard to the 1997 ozone NAAQS. As explained 
therein, EPA had previously approved a section 110(a)(2)(D)(i) SIP 
submission from the state of Kansas for the 1997 ozone and 1997 
PM2.5 NAAQS on March 9, 2007 (72 FR 10608). That SIP 
submission did not rely on the unlawful CAIR trading programs or rely 
in any way on the conclusion in CAIR that compliance with CAIR was 
sufficient to satisfy a state's 110(a)(2)(D)(i)(I) obligations with 
respect to the 1997 ozone and PM2.5 NAAQS. Kansas is unique 
in this regard because no other state covered by the Transport Rule or 
this action has an approved SIP that did not rely on the CAIR 
requirements, which the DC Circuit held were not sufficient to satisfy 
the requirements of 110(a)(2(D)((I)(I) of the Act. For these reasons, 
EPA does not have an obligation under section 110(c)(1) of the Act to 
promulgate a FIP for Kansas at this time. Therefore, in a separate 
action, EPA proposed a SIP Call under CAA section 110(k)(5) for Kansas 
(76 FR 763, January 6, 2011), and proposed to find the Kansas SIP 
substantially inadequate to meet the requirements of 110(a)(2)(D)(i)(I) 
with respect to the 1997 ozone NAAQS. This proposal was based on the 
proposed conclusion that emissions from Kansas are significantly 
contributing to nonattainment or interfering with maintenance of the 
1997 ozone NAAQS in another state. EPA intends to take final action on 
the proposed SIP Call concurrently with this action or shortly 
thereafter.

D. Allegan County, Michigan, Receptor

    The final Transport Rule air quality modeling identified a new 
maintenance receptor in Allegan County, Michigan, to which upwind 
states interfere with maintenance of the NAAQS.
    Some commenters noted that EPA took final action on September 24, 
2010 to redesignate the Allegan County, Michigan nonattainment area to 
attainment for the 1997 8-hour ozone standard. 75 FR 58312; September 
24, 2010. Moreover, commenters noted that EPA in the same action 
approved Michigan's ``maintenance plan'' for maintaining the 8-hour 
ozone NAAQS through 2021 in the same area. Based on this observation, 
these commenters asserted that EPA should not consider Allegan County 
to be a ``maintenance receptor'' for purposes of the Transport Rule. 
Accordingly, these commenters believed that EPA should not be requiring 
emission reductions from upwind states on the basis of the 
contributions to Allegan County, Michigan.
    EPA agrees that the nonattainment area containing Allegan County, 
Michigan was redesignated by EPA on September 24, 2010, and that EPA 
approved the state of Michigan's maintenance plan for the area. The 
area, therefore, is currently considered to be a maintenance area and 
not a nonattainment area.
    EPA, however, disagrees with commenters' conclusion that a 
maintenance area (i.e., an area that has been redesignated and is thus 
subject to a maintenance plan) should not be considered a maintenance 
receptor in EPA's analysis for a number of reasons. First, EPA notes 
that ozone values at the Allegan location, historically and in the 
future, are strongly influenced by interstate transport. Second, the 
methodology for identifying ``maintenance'' receptors relevant to 
upwind state contributions in the Transport Rule is a unique test 
designed to satisfy the ``interfere with maintenance'' prong of 
110(a)(2)(D)(i)(I); EPA believes this methodology responds to the U.S. 
Court of Appeals for the DC Circuit in the July 20, 2008 decision in 
North Carolina v. EPA, 531 F.3d 896, ruling on the deficiency of CAIR 
with regard to this 110(a)(2)(D)(i) obligation. Finally, as stated in 
the preamble to the final Transport Rule, EPA's test for identifying 
``maintenance receptors'' for the Transport Rule appropriately differs 
from, and is not dependent on, recent monitoring data, including data 
used to re-designate an area as being in attainment.
1. Nature of the Ozone Problem for the Allegan County, Michigan 
Location
    Allegan County is a mostly rural county located in southwestern 
Michigan along Lake Michigan. EPA source apportionment modeling for 
2012 shows that for the ozone monitor in Allegan County, 96 percent of 
ozone is attributable to out-of-state emissions. As such, Allegan 
Country provides a particularly compelling example of the limited 
ability of any individual state to unilaterally control air quality 
outcomes within its borders. See Air Quality Modeling Final Rule TSD, 
EPA-HQ-OAR-2009-0491-4140 for details.
    Table III.D-1 provides more information on the nature of ozone at 
this site. In many years in the available data set, there are a few 
days with markedly higher ozone values than are measured for the 
remainder of the year. Whether those values lead to exceedances of the 
8-hour ozone NAAQS is dependent on whether that phenomenon extends to 
the 4th highest day of the season and on the degree to which this 
occurs in consecutive years. Accordingly, this site's ozone design 
value can experience significant variability from year to year.

[[Page 80767]]



   Table III.D-1--Recent Observed Ozone Concentrations at the Allegan County Ozone Monitor (AIRS ID 260050003)
----------------------------------------------------------------------------------------------------------------
                                                                                                          DV
                                                                                                     (average of
              Year                 1st High     2nd High     3rd High     4th High    Design Value     4th high
                                                                                       (DV) Period    over  3-yr
                                                                                                       period)
----------------------------------------------------------------------------------------------------------------
2003...........................          106          102           97           95  ..............  ...........
2004...........................          107           84           81           79  ..............  ...........
2005...........................          113          107           95           94       2003-2005           89
2006...........................           99           91           91           91       2004-2006           88
2007...........................          109          108           98           94       2005-2007           93
2008...........................          100           77           74           73       2006-2008           86
2009...........................           92           83           79           76       2007-2009           81
2010...........................           77           76           75           73       2008-2010           74
2011...........................           98           96           96           87      *2009-2011          *78
----------------------------------------------------------------------------------------------------------------
* 2011 is based on preliminary data for year to date through 9/5/11; see: https://www.michigan.gov/documents/deq/deq-aqd-mm-ozone-8hrhighestcurrent_256060_7.pdf.

    Table III.D-1 shows that the 1st high annual measured value over 
the last 9 years has ranged from 92-113 ppb, except in 2010 when the 
1st high value was only 77 ppb. The 4th high values have ranged between 
73 and 95 ppb. There were three consecutive years with low 4th high 
values below 80 ppb (2007-2009) and there was one period (2005-2007) 
with consecutive 4th high values greater than 90 ppb. The fact that the 
4th high value dropped from 94 ppb in 2007 to 73 ppb 2008, and then 
increased again from 73 ppb in 2010 to 87 ppb in 2011 shows that the 
pattern of regional transport and meteorology are the primary factors 
in the year to year variability of the observed design value at this 
site. The magnitude of the year-to-year changes is too large to be 
caused solely by emission reductions or increases in Allegan County, or 
even in upwind states. Based on EPA's CAMx source apportionment 
modeling, if emission reductions were solely responsible for the 
improvement in ozone concentrations in Allegan County from 2007 to 
2008, all of the NOX emissions in the upwind states of 
Illinois, Indiana, and Missouri would have to have dropped by greater 
than 50 percent between those years. Since that is clearly not the 
case, the data show that meteorological conditions and regional 
transport patterns may still effect substantial changes in ozone in 
Allegan County, which supports its identification as a receptor whose 
maintenance of the NAAQS may be jeopardized without further emission 
reductions in upwind states.
2. Emission Analysis Conducted in Approving Michigan's Maintenance Plan 
for Allegan
    EPA's rationale for approving the maintenance plan for Allegan 
County is described in the proposed approval notice (75 FR 42018; July 
20, 2010). A number of tables in that proposed approval compared 
current emissions to future emissions for VOC and NOX 
sources located within the Allegan County nonattainment area. The 
analysis concluded that projected emission levels, for sources within 
the nonattainment area, were decreasing throughout the maintenance 
period. The ozone redesignation and maintenance plan analysis completed 
by Michigan meets EPA guidance but uses a different test and data that 
are less current than what were applied in the Transport Rule. The 
maintenance plan test for the local SIP requires an analysis to show 
that emissions in the local area will not increase, thereby showing 
that the area will be able to maintain the ozone NAAQS. The 
redesignation is based on having current air quality data which shows 
that the area is attaining the NAAQS and the area meets all other Clean 
Air Act requirements for redesignation.
3. Maintenance Approach in the Transport Rule
    In the North Carolina decision concerning CAIR, the Court directed 
EPA to give independent meaning to the ``interfere with maintenance'' 
prong of CAA section 110(a)(2)(D)(i)(I) and to separately identify 
upwind sources that interfere with downwind maintenance. In particular, 
the Court expressed concern that CAIR did not adequately protect areas 
that find themselves barely in attainment by the statutory deadline and 
suggested that EPA needed to take into account the historic variability 
of a downwind area's ozone levels in determining whether an upwind 
source would cause that downwind area to have trouble maintaining the 
NAAQS.
    Accordingly, EPA in the Transport Rule explicitly gave independent 
meaning to the ``interfere with maintenance'' prong of section 
110(a)(2)(D)(i)(I) by evaluating contributions to maintenance receptors 
as well as contributions to identified nonattainment receptors. The 
maintenance methodology used an approach that examined multiple design 
value periods (from 2003-2007) projected to 2012. This allowed an 
estimate of variability in future design values, based on past measured 
variability. A detailed discussion of EPA's new approach, rationale, 
and responses to comments on the approach, including the methodology 
for identifying maintenance receptors, is found in section V.C.2 of the 
preamble to the final Transport Rule (76 FR 48227).
    In the application in the final Transport Rule of that approach, 
Allegan County was identified as a maintenance receptor but not as a 
nonattainment receptor. That is, for Allegan County, EPA projected 
that, under ``average'' conditions that would take place in the 
relevant area in the future, Allegan County would not exceed the ozone 
NAAQS in 2012. On the other hand, EPA projected, under conditions 
reflecting the maximum design values in the relevant area during 2003-
2007, that Allegan County could exceed the ozone NAAQS. EPA's analysis 
took into account the fact that previously experienced meteorological 
conditions (e.g., dominant wind direction, temperatures, and air mass 
patterns) promoting ozone formation may reoccur in the relevant area in 
the future. Consistently applying this approach throughout the relevant 
area, EPA found that Allegan County exceeded the threshold for 
inclusion as a maintenance receptor.

[[Page 80768]]

4. Relationship between EPA's ``Maintenance Receptor'' Analysis for the 
Transport Rule and EPA's Approval of Michigan's ``Maintenance Plan''
    EPA's methodology for identifying nonattainment and maintenance 
receptors is based on modeled projections of measured air quality at 
specific monitors, not on the designation status of an area.\7\ EPA 
believes this approach is appropriate for the reasons explained in 
section V.C.2 of the preamble to the final Transport Rule. 76 FR 48230. 
EPA does not believe it would be appropriate to rely on the designation 
status of an area to determine air quality or for determining whether 
one state is contributing significantly to nonattainment or interfering 
with maintenance of another state under CAA section 110(a)(2)(D)(i)(I). 
The CAA does not require EPA to do so. As EPA explained in the proposal 
to designate Allegan County as an attainment area, an area's transport 
requirements under section 110(a)(2)(D) are not linked to an area's 
attainment designation and continue to apply regardless of an area's 
designation status. 75 FR 42018, 42023. The U.S. Court of Appeals for 
the DC Circuit's decision in Michigan v. EPA, 213 F.3d 663 (2000), 
further supports the position that determinations of significant 
contribution or interference with maintenance under CAA section 
110(a)(2)(D)(i)(I) is most appropriately based on current air quality 
and modeling, rather than an area's attainment designation. In fact, it 
would be impractical given the timing of when designations are made and 
nonattainment SIPs due to base such a determination on an area's 
attainment or maintenance designation, suggesting that Congress did not 
intend section 110(a)(2)(D)(i)(I) SIPs to be linked in any way to 
designation status. Further, even areas that have never been in 
nonattainment or have been re-designated to attainment (including those 
where the majority of pollution comes from out of state) continue to be 
at risk for falling into nonattainment as a result of emissions from 
upwind states, as the North Carolina court recognized, 531 F.3d at 910.
---------------------------------------------------------------------------

    \7\ This issue was discussed in the preamble to the 
NOX SIP Call (see 63 FR 57375, October 27, 1998, footnote 
25), and the U.S. Court of Appeals for the DC Circuit's decision in 
Michigan v. EPA, 213 F.3d 663 (2000), further supports the position 
that determinations of significant contribution or interference with 
maintenance under CAA section 110(a)(2)(D)(i)(I) should not be based 
on an area's attainment designation.
---------------------------------------------------------------------------

    Generally, in judging whether to re-designate a given area, EPA 
evaluates local emissions as part of the ``maintenance plan.'' However, 
if EPA proposes to re-designate areas to attainment, this does not 
remove the need to address emissions in upwind states which could 
interfere with the maintenance plan. Without a cap on emissions in 
upwind states with a significant impact, upwind state emissions might 
in fact grow, increasing the possibility that the area being evaluated 
will not be able to maintain attainment. Furthermore, since upwind 
states are not required to have contingency measures under a downwind 
state's SIP, it is incumbent on EPA to ensure that states with 
significant impacts are appropriately controlled.
    Additionally, EPA notes that the Transport Rule was based upon 
newer and more extensive information than was available at the time of 
our approval of Michigan's ``maintenance plan'' for Allegan County, and 
the more recent information suggests Allegan County may have difficulty 
maintaining attainment, notwithstanding its 2010 redesignation. EPA 
believes that the maintenance requirements in the Transport Rule serve 
to reinforce and supplement the state's maintenance plan, providing 
important support by greatly decreasing the probability that emissions 
from upwind states could lead to future nonattainment. As discussed 
above, EPA's projections for 2012 indicate that 96 percent of ozone at 
the Allegan County receptor is created by precursor emissions 
originating from states other than Michigan. Clearly, the ability to 
maintain the ozone NAAQS in Allegan Country is largely influenced by 
upwind state emissions.
5. Recent Air Quality Data
    Commenters in Oklahoma noted that EPA should use actual monitoring 
data, ``which reflects CAIR reductions,'' to demonstrate that Allegan 
County would remain in attainment. They cited ambient measurements of 
74 ppb for the 3-year average for 2008-2010. Recent preliminary air 
quality data for 2011 serve to reinforce EPA's view that the 
variability in meteorology is a significant issue for the Allegan 
receptor's ability to maintain the NAAQS. In 2011, there were four 
ambient values exceeding the 85 ppb level of the 1997 NAAQS, with a 
high value of 98 ppb. In other words, the 4th high value for 2011 
exceeded the NAAQS. These values do not yet lead to a conclusion that 
the area is in nonattainment because the preliminary 2009-2011 design 
value--the average of the 4th high values for 2009, 2010, and 2011 
\8\--remains below 85 ppb. However, if the 4th high ambient values for 
2012 and 2013 were the same as the preliminary values for 2011, the 
area would be in violation of the NAAQS. But even with relatively lower 
ozone concentrations across much of the country in the 2008-2010 
period, the preliminary 2011 data show that Allegan County clearly 
continues to experience high ozone days, suggesting that this location 
may have maintenance problems that may eventually lead to violations of 
the 1997 ozone NAAQS. The data illustrate the highly variable nature of 
ozone at the Allegan location and reinforce the wisdom of taking 
variability into account in our ``maintenance'' analysis.
---------------------------------------------------------------------------

    \8\ Data for 2011 is incomplete at the time of finalization of 
this rulemaking.
---------------------------------------------------------------------------

E. Ozone Season NOX Emission Budgets for Five States

    EPA is finalizing state ozone season NOX emission 
budgets for covered units (generally large electric generating units) 
\9\ in Iowa, Michigan, Missouri, Oklahoma, and Wisconsin under the FIPs 
for the 1997 ozone NAAQS. As noted above, EPA is not taking final 
action on the proposed Kansas FIP at this time.
---------------------------------------------------------------------------

    \9\ The applicability provisions for determining covered units 
in the named six states for the Transport Rule ozone season 
NOX program are the same as those described in se