Air Plan Approval; Alabama; Cross-State Air Pollution Rule, 39070-39078 [2017-17341]
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Federal Register / Vol. 82, No. 158 / Thursday, August 17, 2017 / Proposed Rules
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ENVIRONMENTAL PROTECTION
AGENCY
40 CFR Part 52
[EPA–R04–OAR–2017–0415; FRL–9966–45–
Region 4]
Air Plan Approval; Alabama; CrossState Air Pollution Rule
Environmental Protection
Agency (EPA).
ACTION: Proposed rule.
AGENCY:
The Environmental Protection
Agency (EPA) is proposing to approve
portions of the October 26, 2015, and
May 19, 2017, State Implementation
Plan (SIP) revisions from Alabama
replacing the Cross-State Air Pollution
Rule (CSAPR) federal implementation
plan (FIP). Under CSAPR, large
electricity generating units (EGUs) in
Alabama are subject to FIP provisions
requiring the units to participate in a
federal allowance trading program for
ozone season emissions of nitrogen
oxides (NOX). This action would
approve into Alabama’s SIP the State’s
regulations requiring Alabama’s affected
units to participate in a new state
allowance trading program for ozone
season NOX emissions integrated with
the CSAPR federal trading programs,
replacing the corresponding CSAPR FIP
requirements for Alabama. This state
trading program is substantively
identical to the federal trading program
except with regard to the provisions
allocating emission allowances among
Alabama units. Under the CSAPR
regulations, final approval of these
portions of the SIP revisions would
automatically eliminate Alabama units’
FIP requirements to participate in
CSAPR’s federal allowance trading
program for ozone season NOX
emissions. Approval would also fully
satisfy Alabama’s good neighbor
obligation under the Clean Air Act
(CAA or Act) to prohibit emissions
which will significantly contribute to
nonattainment or interfere with
maintenance of the 1997 8-hour Ozone
National Ambient Air Quality Standards
(NAAQS) in any other state; and would
partially satisfy Alabama’s good
neighbor obligation under the CAA to
prohibit emissions which will
significantly contribute to
nonattainment or interfere with
maintenance of the 2008 8-hour Ozone
NAAQS in any other state.
DATES: Comments must be received on
or before September 18, 2017.
ADDRESSES: Submit your comments,
identified by Docket ID No. EPA–R04–
OAR–2017–0415 at https://
www.regulations.gov. Follow the online
SUMMARY:
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instructions for submitting comments.
Once submitted, comments cannot be
edited or removed from Regulations.gov.
EPA may publish any comment received
to its public docket. Do not submit
electronically any information you
consider to be Confidential Business
Information (CBI) or other information
whose disclosure is restricted by statute.
Multimedia submissions (audio, video,
etc.) must be accompanied by a written
comment. The written comment is
considered the official comment and
should include discussion of all points
you wish to make. EPA will generally
not consider comments or comment
contents located outside of the primary
submission (i.e., on the web, cloud, or
other file sharing system). For
additional submission methods, the full
EPA public comment policy,
information about CBI or multimedia
submissions, and general guidance on
making effective comments, please visit
https://www2.epa.gov/dockets/
commenting-epa-dockets.
FOR FURTHER INFORMATION CONTACT:
Ashten Bailey, Air Regulatory
Management Section, Air, Pesticides
and Toxics Management Division, U.S.
Environmental Protection Agency,
Region 4, 61 Forsyth Street SW.,
Atlanta, Georgia 30303–8960. Ms. Bailey
can be reached by telephone at (404)
562–9164 or via electronic mail at
bailey.ashten@epa.gov.
SUPPLEMENTARY INFORMATION:
I. Summary
EPA is proposing to approve the
portions of the October 26, 2015, and
May 19, 2017, SIP revisions from
Alabama concerning CSAPR 1 allowance
trading programs for ozone season
emissions of NOX. Large EGUs in
Alabama are currently subject to CSAPR
FIPs that require the units to participate
in the federal CSAPR NOX Group 2
Ozone Season Trading Program. The
CSAPR regulations provide a process for
the submission and approval of SIP
revisions to replace the requirements of
CSAPR FIPs with SIP requirements
under which a state’s units participate
in CSAPR state trading programs that
are integrated with and, with certain
permissible exceptions, substantively
1 Cross-State Air Pollution Rule Update for the
2008 Ozone NAAQS (CSAPR Update), 81 FR 74504
(October 26, 2016) (codified as amended at 40 CFR
52.38 and 52.39 and subparts AAAAA through
EEEEE of 40 CFR part 97); see also Federal
Implementation Plans; Interstate Transport of Fine
Particulate Matter and Ozone and Correction of SIP
Approvals, 76 FR 48208 (August 8, 2011). EPA
previously approved a SIP revision that replaced
the CSAPR FIPs for the annual trading programs in
Alabama. See 81 FR 59869 (Aug. 31, 2016).
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identical to the CSAPR federal trading
programs.
The portions of the SIP revisions
proposed for approval would
incorporate into Alabama’s SIP state
allowance trading program regulations
for ozone season NOX emissions that
would replace EPA’s federal trading
program regulations for those emissions
from Alabama units. EPA is proposing
to approve these portions of the SIP
revisions, as clarified in a letter
provided on August 4, 2017, because
they meet the requirements of the CAA
and EPA’s regulations for approval of a
CSAPR full SIP revision replacing a
federal trading program with a state
trading program that is integrated with
and substantively identical to the
federal trading program except for
permissible differences with respect to
emission allowance allocation
provisions. Under the CSAPR
regulations, approval of these portions
of the SIP revisions would automatically
eliminate the obligations of EGUs in
Alabama (but not any units in Indian
country within Alabama’s borders) to
participate in CSAPR’s federal trading
programs for ozone season NOX
emissions under the corresponding
CSAPR FIPs. EPA proposes to find that
approval of these portions of the SIP
revisions would satisfy Alabama’s
obligation pursuant to CAA section
110(a)(2)(D)(i)(I) to prohibit emissions
which will significantly contribute to
nonattainment or interfere with
maintenance of the 1997 8-hour Ozone
NAAQS in any other state. EPA also
proposes to find that approval of these
portions of the SIP revisions would
partially satisfy Alabama’s obligation
pursuant to CAA section
110(a)(2)(D)(i)(I) to prohibit emissions
which will significantly contribute to
nonattainment or interfere with
maintenance of the 2008 8-hour Ozone
NAAQS in any other state.
Section II of this document
summarizes relevant aspects of the
CSAPR federal trading programs and
FIPs as well as the range of
opportunities states have to submit SIP
revisions to modify or replace the FIP
requirements while continuing to rely
on CSAPR’s trading programs to address
the states’ obligations to mitigate
interstate air pollution. Section III
describes the specific conditions for
approval of such SIP revisions. Section
IV contains EPA’s analysis of Alabama’s
SIP submittal. Section V addresses
incorporation by reference. Section VI
sets forth EPA’s proposed action on the
submittal. Section VII addresses
statutory and Executive Order reviews.
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II. Background on CSAPR and CSAPRRelated SIP Revisions
EPA issued CSAPR in July 2011 and
the CSAPR Update 2 in 2016 to address
the requirements of CAA section
110(a)(2)(D)(i)(I) concerning interstate
transport of air pollution for specific
NAAQS. As amended (including by the
2016 CSAPR Update), CSAPR requires
27 eastern states to limit their statewide
emissions of sulfur dioxide (SO2) and/
or NOX in order to mitigate transported
air pollution unlawfully impacting other
states’ ability to attain or maintain four
NAAQS: the 1997 annual PM2.5
NAAQS, the 2006 24-hour PM2.5
NAAQS, the 1997 8-hour Ozone
NAAQS, and the 2008 8-hour Ozone
NAAQS. The CSAPR emissions
limitations are defined in terms of
maximum statewide ‘‘budgets’’ for
emissions of annual SO2, annual NOX,
and/or ozone season NOX by each
covered state’s large EGUs. The CSAPR
state budgets are implemented in two
phases of generally increasing
stringency: The Phase 1 budgets apply
to emissions in 2015 and 2016; and the
Phase 2 and CSAPR Update budgets
apply to emissions in 2017 and later
years. As a mechanism for achieving
compliance with the emissions
limitations, CSAPR establishes five
federal emissions trading programs: a
program for annual NOX emissions; two
geographically separate programs for
annual SO2 emissions; and two
geographically separate programs for
ozone season NOX emissions. CSAPR
also establishes FIP requirements
applicable to the large EGUs in each
covered state.3 Currently, the CSAPR
2 See 81 FR 74504 (October 26, 2016). The CSAPR
Update was promulgated to address interstate
pollution with respect to the 2008 8-hour Ozone
NAAQS and to address a judicial remand of certain
original CSAPR ozone season NOX budgets
promulgated with respect to the 1997 8-hour Ozone
NAAQS. Id. at 74505. The CSAPR Update
established new emission reduction requirements
addressing the more recent ozone NAAQS and
coordinated them with the remaining emission
reduction requirements addressing the older
NAAQS, so that starting in 2017, CSAPR includes
two geographically separate trading programs for
ozone season NOX emissions covering EGUs in a
total of 23 states. See 40 CFR 52.38(b)(1)–(2).
3 States are required to submit good neighbor SIPs
three years after a NAAQS is promulgated. CAA
section 110(a)(1) and (2). Where EPA finds that a
state fails to submit a required SIP or disapproves
a SIP, EPA is obligated to promulgate a FIP
addressing the deficiency. CAA section 110(c). EPA
found that Alabama failed to make timely
submissions required to address the good neighbor
provision with respect to the 1997 annual PM2.5 and
8-hour ozone NAAQS (70 FR 21147, Apr. 25, 2005),
and the 2008 8-hour ozone NAAQS (80 FR 39961,
June 13, 2015). In addition, EPA disapproved
Alabama’s SIP revision submitted to address the
good neighbor provision with respect to the 2006
24-hour PM2.5 NAAQS. See 76 FR 43128 (July 20,
2011). Accordingly, as a part of CSAPR and the
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FIP provisions require each state’s units
to participate in up to three of the five
CSAPR trading programs.
CSAPR includes provisions under
which states may submit and EPA will
approve SIP revisions to modify or
replace the CSAPR FIP requirements
while allowing states to continue to
meet their transport-related obligations
using either CSAPR’s federal emissions
trading programs or state emissions
trading programs integrated with the
federal programs, provided that the SIP
revisions meet all relevant criteria.4
Through such a SIP revision, a state may
replace EPA’s default provisions for
allocating emission allowances among
the state’s units, employing any stateselected methodology to allocate or
auction the allowances, subject to
timing conditions and limits on overall
allowance quantities. In the case of
CSAPR’s federal trading programs for
ozone season NOX emissions (or an
integrated state trading program), a state
may also expand trading program
applicability to include certain smaller
EGUs.5 If a state wants to replace the
CSAPR FIP requirements with SIP
requirements under which the state’s
units participate in a state trading
program that is integrated with and
identical to the federal trading program
even as to the allocation and
applicability provisions, the state may
submit a SIP revision for that purpose
as well. However, no emissions budget
increases or other substantive changes
to the trading program provisions are
allowed. A state whose units are subject
to multiple CSAPR federal trading
programs may submit SIP revisions to
modify or replace either some or all of
those FIP requirements.
States can submit two basic forms of
CSAPR-related SIP revisions effective
for emissions control periods in 2017 or
later years.6 Specific conditions for
approval of each form of SIP revision
are set forth in the CSAPR regulations,
as described in section III below. Under
CSAPR Update, EPA promulgated FIPs applicable
to sources in Alabama addressing the good neighbor
provision with respect to these standards.
4 See 40 CFR 52.38, 52.39. States also retain the
ability to submit SIP revisions to meet their
transport-related obligations using mechanisms
other than the CSAPR federal trading programs or
integrated state trading programs.
5 States covered by both the CSAPR Update and
the NOX SIP Call have the additional option to
expand applicability under the CSAPR NOX Ozone
Season Group 2 Trading Program to include nonEGUs that would have participated in the NOX
Budget Trading Program.
6 CSAPR also provides for a third, more
streamlined form of SIP revision that is effective
only for control periods in 2016 (or 2018 for CSAPR
NOX Ozone Season Group 2 units) and is not
relevant here. See § 52.38(a)(3), (b)(3), (b)(7);
§ 52.39(d), (g).
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the first alternative—an ‘‘abbreviated’’
SIP revision—a state may submit a SIP
revision that upon approval replaces the
default allowance allocation and/or
applicability provisions of a CSAPR
federal trading program for the state.7
Approval of an abbreviated SIP revision
leaves the corresponding CSAPR FIP
and all other provisions of the relevant
federal trading program in place for the
state’s units.
Under the second alternative—a
‘‘full’’ SIP revision—a state may submit
a SIP revision that upon approval
replaces a CSAPR federal trading
program for the state with a state trading
program integrated with the federal
trading program, so long as the state
trading program is substantively
identical to the federal trading program
or does not substantively differ from the
federal trading program except as
discussed above with regard to the
allowance allocation and/or
applicability provisions.8 For purposes
of a full SIP revision, a state may either
adopt state rules with complete trading
program language, incorporate the
federal trading program language into its
state rules by reference (with
appropriate conforming changes), or
employ a combination of these
approaches.
The CSAPR regulations identify
several important consequences and
limitations associated with approval of
a full SIP revision. First, upon EPA’s
approval of a full SIP revision as
correcting the deficiency in the state’s
SIP that was the basis for a particular set
of CSAPR FIP requirements, the
obligation to participate in the
corresponding CSAPR federal trading
program is automatically eliminated for
units subject to the state’s jurisdiction
without the need for a separate EPA
withdrawal action, so long as EPA’s
approval of the SIP revision as meeting
the requirements of the CSAPR
regulations is full and unconditional.9
Second, approval of a full SIP revision
does not terminate the obligation to
participate in the corresponding CSAPR
federal trading program for any units
located in any Indian country within the
borders of the state, and if and when a
unit is located in Indian country within
a state’s borders, EPA may modify the
SIP approval to exclude from the SIP,
and include in the surviving CSAPR FIP
instead, certain trading program
provisions that apply jointly to units in
the state and to units in Indian country
7 40
CFR 52.38(a)(4), (b)(4), (b)(8); 52.39(e), (h).
CFR 52.38(a)(5), (b)(5), (b)(9); 52.39(f), (i).
9 40 CFR 52.38(a)(6), (b)(10)(i); 52.39(j).
8 40
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within the state’s borders.10 Finally, if at
the time a full SIP revision is approved
EPA has already started recording
allocations of allowances for a given
control period to a state’s units, the
federal trading program provisions
authorizing EPA to complete the process
of allocating and recording allowances
for that control period to those units
will continue to apply, unless EPA’s
approval of the SIP revision provides
otherwise.11
III. Conditions for Approval of CSAPRRelated SIP Revisions
Each CSAPR-related abbreviated or
full SIP revision must meet the
following general submittal conditions:
• Timeliness and completeness of SIP
submittal. If a state wants to replace the
default allowance allocation or
applicability provisions of a CSAPR
federal trading program, the complete
SIP revision must be submitted to EPA
by December 1 of the year before the
deadlines described below for
submitting allocation or auction
amounts to EPA for the first control
period for which the state wants to
replace the default allocation and/or
applicability provisions.12 This SIP
submission deadline is inoperative in
the case of a SIP revision that seeks only
to replace a CSAPR FIP and federal
trading program with a SIP and a
substantively identical state trading
program integrated with the federal
trading program. The SIP submittal
completeness criteria in section 2.1 of
appendix V to 40 CFR part 51 also
apply.
In addition to the general submittal
conditions, a CSAPR-related abbreviated
or full SIP seeking to address the
allocation or auction of emission
allowances must meet the following
further conditions:
• Methodology covering all
allowances potentially requiring
allocation. For each federal trading
program addressed by a SIP revision,
the SIP revision’s allowance allocation
or auction methodology must replace
both the federal program’s default
allocations to existing units 13 at 40 CFR
10 40 CFR 52.38(a)(5)(iv)–(v), (a)(6), (b)(5)(v)–(vi),
(b)(9)(vi)–(vii), (b)(10)(i); 52.39(f)(4)–(5), (i)(4)–(5),
(j).
11 40 CFR 52.38(a)(7), (b)(11); 52.39(k).
12 40 CFR 52.38(a)(4)(ii), (a)(5)(vi), (b)(4)(iii),
(b)(5)(vii), (b)(8)(iv), (b)(9)(viii); 52.39(e)(2), (f)(6),
(h)(2), (i)(6).
13 In the context of the approval conditions for
CSAPR-related SIP revisions, an ‘‘existing unit’’ is
a unit for which EPA has determined default
allowance allocations (which could be allocations
of zero allowances) in the rulemakings establishing
and amending CSAPR. A document describing
EPA’s default allocations to existing units is
available at https://www.epa.gov/sites/production/
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97.411(a), 97.511(a), 97.611(a),
97.711(a), or 97.811(a), as applicable,
and the federal trading program’s
provisions for allocating allowances
from the new unit set-aside (NUSA) for
the state at 40 CFR 97.411(b)(1) and
97.412(a), 97.511(b)(1) and 97.512(a),
97.611(b)(1) and 97.612(a), 97.711(b)(1)
and 97.712(a), or 97.811(b)(1) and
97.812(a), as applicable.14 In the case of
a state with Indian country within its
borders, while the SIP revision may
neither alter nor assume the federal
program’s provisions for administering
the Indian country NUSA for the state,
the SIP revision must include
procedures addressing the disposition of
any otherwise unallocated allowances
from an Indian country NUSA that may
be made available for allocation by the
state after EPA has carried out the
Indian country NUSA allocation
procedures.15
• Assurance that total allocations will
not exceed the state budget. For each
federal trading program addressed by a
SIP revision, the total amount of
allowances auctioned or allocated for
each control period under the SIP
revision (prior to the addition by EPA of
any unallocated allowances from any
Indian country NUSA for the state)
generally may not exceed the state’s
emissions budget for the control period
less the sum of the amount of any
Indian country NUSA for the state for
the control period and any allowances
already allocated to the state’s units for
the control period and recorded by
EPA.16 Under its SIP revision, a state is
free to not allocate allowances to some
or all potentially affected units, to
allocate or auction allowances to
entities other than potentially affected
units, or to allocate or auction fewer
than the maximum permissible quantity
of allowances and retire the remainder.
Under the CSAPR NOX Ozone Season
Group 2 Trading Program only,
additional allowances may be allocated
if the state elects to expand applicability
to non-EGUs that would have been
subject to the NOX Budget Trading
Program established for compliance
with the NOX SIP Call.17
• Timely submission of statedetermined allocations to EPA. The SIP
revision must require the state to submit
files/2017-05/documents/csapr_allowance_
allocations_final_rule_tsd.pdf.
14 40 CFR 52.38(a)(4)(i), (a)(5)(i), (b)(4)(ii),
(b)(5)(ii), (b)(8)(iii), (b)(9)(iii); 52.39(e)(1), (f)(1),
(h)(1), (i)(1).
15 See 40 CFR 97.412(b)(10)(ii), 97.512(b)(10)(ii),
97.612(b)(10)(ii), 97.712(b)(10)(ii), 97.812(b)(10)(ii).
16 40 CFR 52.38(a)(4)(i)(A), (a)(5)(i)(A),
(b)(4)(ii)(A), (b)(5)(ii)(A), (b)(8)(iii)(A), (b)(9)(iii)(A);
52.39(e)(1)(i), (f)(1)(i), (h)(1)(i), (i)(1)(i).
17 40 CFR 52.38(b)(8)(iii)(A), (b)(9)(iii)(A).
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to EPA the amounts of any allowances
allocated or auctioned to each unit for
each control period (other than
allowances initially set aside in the
state’s allocation or auction process and
later allocated or auctioned to such
units from the set-aside amount) by the
following deadlines.18 Note that the
submission deadlines differ for amounts
allocated or auctioned to units
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considered existing units for CSAPR
purposes and amounts allocated or
auctioned to other units.
CSAPR NOX ANNUAL, CSAPR NOX OZONE SEASON GROUP 1, CSAPR SO2 GROUP 1, AND CSAPR SO2 GROUP 2
TRADING PROGRAMS
Units
Year of the control period
Existing ............................................
2017 and 2018 ..............................
2019 and 2020 ..............................
2021 and 2022 ..............................
2023 and later years .....................
All years .........................................
Other ...............................................
Deadline for submission to EPA of allocations or auction results
June 1, 2016.
June 1, 2017.
June 1, 2018.
June 1 of the fourth year before the year of the control period.
July 1 of the year of the control period.
CSAPR NOX OZONE SEASON GROUP 2 TRADING PROGRAM
Units
Year of the control period
Existing ............................................
2019 and 2020 ..............................
2021 and 2022 ..............................
2023 and 2024 ..............................
2025 and later years .....................
All years .........................................
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Other ...............................................
Deadline for submission to EPA of allocations or auction results
June 1, 2018.
June 1, 2019.
June 1, 2020.
June 1 of the fourth year before the year of the control period.
July 1 of the year of the control period.
• No changes to allocations already
submitted to EPA or recorded. The SIP
revision must not provide for any
change to the amounts of allowances
allocated or auctioned to any unit after
those amounts are submitted to EPA or
any change to any allowance allocation
determined and recorded by EPA under
the federal trading program
regulations.19
• No other substantive changes to
federal trading program provisions. The
SIP revision may not substantively
change any other trading program
provisions, except in the case of a SIP
revision that also expands program
applicability as described below.20 Any
new definitions adopted in the SIP
revision (in addition to the federal
trading program’s definitions) may
apply only for purposes of the SIP
revision’s allocation or auction
provisions.21
In addition to the general submittal
conditions, a CSAPR-related abbreviated
or full SIP revision seeking to expand
applicability under the CSAPR NOX
Ozone Season Group 1 or CSAPR NOX
Ozone Season Group 2 Trading
Programs (or an integrated state trading
program) must meet the following
further conditions:
• Only electricity generating units
with nameplate capacity of at least 15
MWe. The SIP revision may expand
applicability only to additional fossil
fuel-fired boilers or combustion turbines
serving generators producing electricity
for sale, and only by lowering the
generator nameplate capacity threshold
used to determine whether a particular
boiler or combustion turbine serving a
particular generator is a potentially
affected unit. The nameplate capacity
threshold adopted in the SIP revision
may not be less than 15 MWe.22 In
addition or alternatively, applicability
under the CSAPR NOX Ozone Season
Group 2 Trading Program may be
expanded to non-EGUs that would have
been subject to the NOX Budget Trading
Program established for compliance
with the NOX SIP Call.23
• No other substantive changes to
federal trading program provisions. The
SIP revision may not substantively
change any other trading program
provisions, except in the case of a SIP
revision that also addresses the
allocation or auction of emission
allowances as described above.24
In addition to the general submittal
conditions and the other applicable
conditions described above, a CSAPRrelated full SIP revision must meet the
following further conditions:
• Complete, substantively identical
trading program provisions. The SIP
18 40 CFR 52.38(a)(4)(i)(B)–(C), (a)(5)(i)(B)–(C),
(b)(4)(ii)(B)–(C), (b)(5)(ii)(B)–(C), (b)(8)(iii)(B)–(C),
(b)(9)(iii)(B)–(C); 52.39(e)(1)(ii)–(iii), (f)(1)(ii)–(iii),
(h)(1)(ii)–(iii), (i)(1)(ii)–(iii).
19 40 CFR 52.38(a)(4)(i)(D), (a)(5)(i)(D),
(b)(4)(ii)(D), (b)(5)(ii)(D), (b)(8)(iii)(D), (b)(9)(iii)(D);
52.39(e)(1)(iv), (f)(1)(iv), (h)(1)(iv), (i)(1)(iv).
20 40 CFR 52.38(a)(4), (a)(5), (b)(4), (b)(5), (b)(8),
(b)(9); 52.39(e), (f), (h), (i).
21 40 CFR 52.38(a)(4)(i), (a)(5)(ii), (b)(4)(ii),
(b)(5)(iii), (b)(8)(iii), (b)(9)(iv); 52.39(e)(1), (f)(2),
(h)(1), (i)(2).
22 40 CFR 52.38(b)(4)(i), (b)(5)(i), (b)(8)(i), (b)(9)(i).
23 40 CFR 52.38(b)(8)(ii), (b)(9)(ii).
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revision must adopt complete state
trading program regulations
substantively identical to the complete
federal trading program regulations at
40 CFR 97.402 through 97.435, 97.502
through 97.535, 97.602 through 97.635,
97.702 through 97.735, or 97.802
through 97.835, as applicable, except as
described above in the case of a SIP
revision that seeks to replace the default
allowance allocation and/or
applicability provisions.25
• Only non-substantive substitutions
for the term ‘‘State.’’ The SIP revision
may substitute the name of the state for
the term ‘‘State’’ as used in the federal
trading program regulations, but only to
the extent that EPA determines that the
substitutions do not substantively
change the trading program
regulations.26
• Exclusion of provisions addressing
units in Indian country. The SIP
revision may not impose requirements
on any unit in any Indian country
within the state’s borders and must not
include the federal trading program
provisions governing allocation of
allowances from any Indian country
NUSA for the state.27
24 40
CFR 52.38(b)(4), (b)(5), (b)(8), (b)(9).
CFR 52.38(a)(5), (b)(5), (b)(9); 52.39(f), (i).
26 40 CFR 52.38(a)(5)(iii), (b)(5)(iv), (b)(9)(v);
52.39(f)(3), (i)(3).
27 40 CFR 52.38(a)(5)(iv), (b)(5)(v), (b)(9)(vi);
52.39(f)(4), (i)(4).
25 40
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IV. Alabama’s SIP Submittal and EPA’s
Analysis
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A. Alabama’s SIP Submittal
In the CSAPR rulemaking, among
other findings, EPA determined that air
pollution transported from Alabama
would unlawfully affect other states’
ability to attain or maintain the 1997 8hour Ozone NAAQS.28 In the CSAPR
Update rulemaking, EPA determined
that air pollution transported from
Alabama would unlawfully affect other
states’ ability to attain or maintain the
2008 8-hour Ozone NAAQS and
established an ozone season NOX budget
for Alabama’s EGUs representing a
partial remedy for the State’s interstate
transport obligations with respect to that
NAAQS; 29 determined that Alabama’s
previous ozone season NOX budget
established in the CSAPR rulemaking as
a partial remedy for the State’s interstate
transport obligations with respect to the
1997 8-hour Ozone NAAQS now
represented a full remedy with respect
to that NAAQS; 30 and coordinated
compliance requirements by allowing
compliance with the new CSAPR
Update budget to serve the purpose of
addressing the State’s obligations with
respect to both NAAQS.31 Alabama
units meeting the CSAPR applicability
criteria are consequently subject to
CSAPR FIP requirements for
participation in the CSAPR NOX Ozone
Season Group 2 Trading Program in
order to address the State’s interstate
transport obligations with respect to
both the 1997 8-hour Ozone NAAQS
(full remedy) and the 2008 8-hour
Ozone NAAQS (partial remedy).32
On October 26, 2015, Alabama
submitted to EPA a SIP revision
including provisions that, if approved,
would incorporate into Alabama’s SIP
state trading program regulations that
would replace the CSAPR federal
trading program regulations with regard
to Alabama units’ ozone season NOX
emissions.33 On May 19, 2017, Alabama
submitted to EPA a SIP revision that
28 See 76 FR 48208, 48210, 48213 (August 8,
2011). EPA also determined in the CSAPR
rulemaking that air pollution transported from
Alabama would unlawfully affect other states’
ability to attain or maintain the 1997 annual PM2.5
NAAQS and the 2006 24-hour PM2.5 NAAQS.
Alabama previously submitted, and EPA previously
approved, a SIP revision that replaces the CSAPR
FIPs for the annual trading programs in Alabama.
See 81 FR 59869 (August 31, 2016).
29 CSAPR Update, 81 FR at 74507–08.
30 Id. at 74525.
31 Id. at 74563 n.169.
32 40 CFR 52.38(b)(2), (b)(2)(iii); 52.54(a), (b).
33 As discussed above, the October 26, 2015
submittal also contained provisions related to the
annual NOX and SO2 trading programs, which EPA
approved in a separate rulemaking. See 81 FR
59869 (August 31, 2016).
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supersedes portions of the October 26,
2015, submittal to reflect changes from
the CSAPR Update.34 On August 4,
2017, Alabama sent a letter clarifying
the State’s interpretation concerning the
allowances for the Indian country
NUSA for Alabama. The Alabama ozone
season submittals include duly adopted
state rules at rules 335–3–8–.39 through
335–3–8–.70, which establish Alabama’s
‘‘TR NOX Ozone Season Group 2
Trading Program.’’ 35 In general, each
individual rule in Alabama’s CSAPR
state trading program rules is designed
to replace one individual section (or in
a few cases two or three sections) of the
corresponding federal trading program
regulations, and the set of rules is
designed to collectively replace all
sections of the corresponding federal
trading program regulations at subpart
EEEEE of 40 CFR part 97 (i.e., 40 CFR
97.801 through 97.835).
With regard to form, some of the
individual rules for each Alabama
CSAPR state trading program are set
forth as full regulatory text—notably the
rules addressing program applicability,
emissions budgets and variability limits,
and allowance allocations—but most of
the rules incorporate the corresponding
federal trading program section or
sections by reference. Several of the
Alabama rules adopt cross-references to
other Alabama rules in place of crossreferences to specific federal trading
program sections that would be replaced
by those other Alabama rules.
With regard to substance, the rules for
the Alabama CSAPR state ozone season
trading program differ from the
corresponding CSAPR federal trading
program regulations in three main ways.
First, the applicability provisions in the
Alabama rules require participation in
Alabama’s CSAPR state trading
programs only for units in Alabama, not
for units in any other state or in Indian
country within the borders of Alabama
or any other state. Second, the Alabama
rules set forth a methodology for
allocating emission allowances among
Alabama units that differs from the
default allowance allocation provisions
in the federal trading program
regulations.36 Finally, the Alabama
34 For the purposes of this rulemaking, the
October 26, 2015, and May 19, 2017, submittals
together may also be referred to as the ‘‘Alabama
ozone season submittals.’’
35 Alabama’s rules use the terms ‘‘Transport Rule’’
and ‘‘TR’’ instead of the updated terms ‘‘Cross-State
Air Pollution Rule’’ and ‘‘CSAPR.’’ For simplicity,
EPA uses the updated terms here except where
otherwise noted.
36 EPA notes that in the CSAPR Update, the
allocations of Alabama’s allowance budget to the
state’s units under the federal CSAPR NOX Ozone
Season Group 2 Trading Program were determined
using a methodology similar to the methodology in
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rules omit a number of federal trading
program provisions not applicable to
Alabama’s state trading programs,
including: provisions setting forth the
amounts of emissions budgets, NUSAs,
Indian country NUSAs, and variability
limits for other states; provisions
addressing EPA’s procedures for
allocating allowances from Indian
country NUSAs; and provisions
addressing EPA’s recordation of certain
allowance allocations.
Each SIP revision was submitted to
EPA by a letter from the Director of the
Alabama Department of Environmental
Management. The letters and enclosures
describe steps taken by Alabama to
provide public notice prior to adoption
of the state rules.
EPA has previously approved
portions of Alabama’s October 26, 2015,
submittal replacing the FIPs for the
CSAPR NOX Annual Trading Program
and the CSAPR SO2 Group 2 Trading
Program for Alabama.37
B. EPA’s Analysis of Alabama’s
Submittals
As described in section IV.A above, at
this time EPA is taking action on the
portions of Alabama’s ozone season
submittals designed to replace the
federal CSAPR NOX Ozone Season
Group 2 Trading Program. The analysis
discussed in this section addresses only
the portions of Alabama’s ozone season
submittals on which EPA is taking
action at this time. For simplicity,
throughout this section EPA refers to the
portions of the submittals on which EPA
is proposing to take action as ‘‘the
Alabama ozone season submittals’’ or
‘‘the SIP revisions’’ without repeating
the qualification that at this time EPA is
analyzing and proposing to act on only
portions of the SIP submittal.
1. Timeliness and Completeness of SIP
Submittal
Together, the Alabama ozone season
submittals seek in part to replace the
default allowance allocation provisions
in the CSAPR federal trading program
regulations for ozone season NOX
emissions as applied to Alabama units
with state regulations establishing a
different state-determined methodology,
starting with the control periods in
2019. Under 40 CFR 52.38(b)(9)(iii)(B),
the deadline for submission of statedetermined allowance allocations for
the 2019 and 2020 control periods is
June 1, 2018, which under
§ 52.38(b)(9)(viii) makes December 1,
2017, the deadline for submission to
Alabama’s October 26, 2015 SIP submittal, 81 FR
at 74564.
37 See 81 FR 59869 (August 31, 2016).
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EPA of a complete SIP revision
establishing state-determined
allocations for those control periods.
Alabama submitted its SIP revisions on
October 26, 2015 and May 19, 2017, and
EPA has determined that the submittals
comply with the applicable minimum
completeness criteria in section 2.1 of
appendix V to 40 CFR part 51. Because
Alabama’s SIP revisions were timely
submitted and meet the applicable
completeness criteria, they meet the
conditions under 40 CFR
52.38(b)(9)(viii) for timely submission of
a complete SIP revision.
sradovich on DSK3GMQ082PROD with PROPOSALS
2. Methodology Covering All
Allowances Potentially Requiring
Allocation
Paragraph 335–3–8–.46(1) of the
Alabama rules sets forth total amounts
of 13,211 CSAPR NOX Ozone Season
Group 2 allowances that would be
allocated to Alabama units for each
control period in 2019 and later years
according to the allocation procedures
set forth under the remaining
paragraphs of Alabama rule 335–3–8–
.46 (Paragraph 335–3–8–.45(1) sets forth
the same amounts as the respective state
emissions budgets, in conjunction with
the corresponding variability limits).
These totals match the amounts of the
Phase 2 emissions budgets for Alabama
established under the federal trading
program regulations for ozone NOX
emissions, thereby addressing the full
quantities of allowances that could be
allocated to Alabama units under the
default allocation provisions for the
federal trading programs.38 In addition,
Alabama’s rule—through provisions that
create an iterative process for allocating
allowances—addresses the disposition
of otherwise unallocated allowances
from an Indian country NUSA. The
allocation provisions in the Alabama
rules therefore enable Alabama’s SIP
revision to meet the condition under 40
CFR 52.38(b)(9)(iii) that the state’s
allocation or auction methodology must
cover all allowances potentially
requiring allocation by the state.
3. Assurance That Total Allocations
Will Not Exceed the State Budget
As discussed in section IV.B.2 above,
paragraph 335–3–8–.46(1) of the
Alabama rules sets forth the total
amount of CSAPR Ozone Season Group
2 NOX allowances to be allocated to
Alabama units for each control period
under the state trading program and this
amount equals the amount of the ozone
season NOX emissions budget
established for Alabama units under the
CSAPR federal trading program
38 40
CFR 97.810(a)(1)(i).
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regulations. Although under the State’s
rules, Alabama will provide EPA with
allocations for allowances equal to the
total amount of the state budget, the
State has clarified in its August 4, 2017,
letter that, under the State’s
interpretation of its rules, the
allocations of a portion of the total state
budget equal to the Indian country
NUSA are to be implemented by EPA
only if and when the total quantity of
allowances in the State’s Indian country
NUSA is released for state allocation
pursuant to 40 CFR 97.812(b)(10)(ii),
and if that total quantity of allowances
is not released for state allocation, then
the State’s allocations of that portion of
the budget are void.39 To clarify the
separate, contingent nature of the State’s
allocations of the Indian country NUSA
allowances, the State will submit its
allocations of those allowances to the
EPA as a separate set of allocations from
the allocations of the remaining
allowances in the state budget.40 EPA
has not yet allocated or recorded CSAPR
allowances for the control periods in
2019 or later years. As interpreted by
the State, the allocation methodology in
Alabama’s SIP revision therefore meets
the condition under 40 CFR
52.38(b)(9)(iii)(A) that the total amount
of allowances allocated under the SIP
revision (before the addition of any
otherwise unallocated allowances from
an Indian country NUSA) may not
exceed the state’s budget for the control
period less the amount of the Indian
country NUSA for the state and any
allowances already allocated and
recorded by EPA.
4. Timely Submission of StateDetermined Allocations to EPA
Paragraphs 335–3–8–.46(2)(a) through
(d) of the Alabama rules provide for all
allowance allocations to Alabama units
established under the Alabama rules to
be submitted to EPA by the following
deadlines: Allocations for the control
periods in 2019 and 2020, by June 1,
2017; allocations for the control periods
in 2021 and 2022, by June 1, 2018; and
allocations for later control periods, by
June 1 of the fourth or fifth year before
the year of the control period. These
submission deadlines match or precede
the submission deadlines discussed in
section III above (specifically, the
deadlines under 40 CFR
52.38(b)(9)(iii)(B) for allocations to units
considered existing units for CSAPR
purposes and the submission deadlines
under § 52.38(b)(9)(iii)(C) for allocations
39 August 4, 2017, Letter from R. Gore (ADEM) to
B. Banister (EPA, Region 4), available in the docket
for this action.
40 Id.
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39075
to other units). Alabama’s SIP revision
therefore meets the conditions under 40
CFR 52.38(b)(9)(iii)(B) and (C) requiring
that the SIP revision provide for
submission of state-determined
allowance allocations to EPA by the
deadlines specified in those provisions.
5. No Changes to Allocations Already
Submitted to EPA or Recorded
The Alabama rules include no
provisions allowing alteration of
allocations after the allocation amounts
have been provided to EPA and no
provisions allowing alteration of any
allocations made and recorded by EPA
under the federal trading program
regulations, thereby meeting the
condition under 40 CFR
52.38(b)(9)(iii)(D).
6. No Other Substantive Changes to
Federal Trading Program Provisions
With the exception of the provisions
addressing the allowance allocation
methodology discussed above, the
Alabama state trading program rules
generally incorporate sections of the
corresponding federal trading program
regulations by reference or set forth full
text that is very similar to the text in the
corresponding federal trading program
regulations.41 Some of the differences
between the Alabama rules and the
corresponding federal trading program
regulations are clearly non-substantive.
For example, in instances where an
Alabama rule contains full text
substituting for the text of a section of
the federal trading program regulations,
the remaining Alabama rules adopt
cross-references to the full-text Alabama
rule in place of cross-references to the
section of the federal trading program
regulations that would be replaced by
the full-text Alabama rule. The Alabama
rules also contain definitions for certain
terms used in the State trading
program’s allocation provisions that are
not used in the federal trading program
regulations, as expressly permitted
under the CSAPR regulations.42 Most of
the remaining differences between the
Alabama rules and the corresponding
sections of the federal trading program
regulations consist of non-substantive
renumbering of the provisions.43
In addition to the clearly nonsubstantive or expressly authorized
41 The CSAPR federal regulations explicitly
provide that terms in the federal CSAPR regulations
that include ‘‘CSAPR’’ are considered synonymous
with otherwise identical terms in approved SIP
revisions that include ‘‘TR’’ instead of ‘‘CSAPR’’. 40
CFR 97.802 (introductory text).
42 40 CFR 52.38(b)(9)(iv).
43 Instances where Alabama’s CSAPR state trading
program rules omit provisions of the CSAPR federal
trading program regulations are discussed in
sections IV.B.7 and 9 below.
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differences summarized above, a few of
Alabama’s rules contain other
differences from the federal trading
program regulations. In each case, EPA
has determined that the changes do not
represent substantive changes to the
federal trading program regulations.
First, paragraphs 335–3–8–.40(1)(c),
335–3–8–.41(1)(a), and 335–3–8–
.66(2)(a), of the Alabama rules require
Alabama units to submit certain
petitions, statements, and notices not
only to EPA but also to the Alabama
Department of Environmental
Management. In addition, paragraph
335–3–8–.42(e) of the Alabama rules
allow the Department to extend on-site
storage of records beyond five years.
Because the additional notification
requirements do not alter the respective
authorities or responsibilities of EPA
and the Department, EPA considers the
requirements to be non-substantive
changes.
Second, paragraphs 335–3–8–
.52(2)(a), and 335–3–8–.55(2)(a) of the
Alabama rules provide that, like EPA,
the Department will not adjudicate
certain private legal disputes. Because
the Department is not required to
adjudicate such disputes under the
federal trading program regulations in
any event, these additions to the text of
the state trading program rules merely
clarify that the Department is not
undertaking a new adjudication
responsibility under the state trading
programs. EPA therefore considers these
additions to be non-substantive changes.
Third, paragraph 335–3–8–.61 of the
Alabama rule substitutes references to
Alabama rule 335–3–8–.46(3)(i) (the
Alabama rule addressing units
incorrectly allocated allowances).
Because the Alabama rule substitution
seeks to replace 40 CFR 97.811(c) with
333–3–8.46(3)(i), which in turn
incorporates by reference 40 CFR
97.811(c), EPA proposes to find that the
provisions are substantively identical.
Fourth, paragraph 335–3–8–.65 of the
Alabama rules substitutes references for
Alabama rule 335–3–8–.41 (the Alabama
rule covering retired unit exemptions).
This substitution is appropriate as it
substitutes Alabama’s retired unit
exemption for the CSAPR retired unit
exemptions at 40 CFR 97.805. With the
exception of the notification required
above and changes related to
identification of the state trading
program instead of the federal trading
program, Alabama has incorporated the
text of 40 CFR 97.805 into Alabama Rule
335–3–8–.41. Because the referenced
provisions are substantively identical,
EPA proposes to determine that these
substitutions have no substantive effect.
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Finally, paragraphs 335–3–8–.42(2)(a)
and (b) of the Alabama rules substitute
references to Alabama rule 335.3.16–
.13(3) (the Alabama rule addressing
minor permit modification procedures)
for references to 40 CFR 70.7(e)(2) (the
minor permit modification procedures
section of the federal regulations
governing state operating permit
programs under CAA title V) in the
federal trading program regulations
regarding title V permit requirements.
As applied to Alabama units only, the
substituted Alabama rule provisions are
substantively identical to the provisions
in 40 CFR 70.7(e)(2) that would be
replaced. Because in the context of
Alabama’s CSAPR state trading
programs these particular provisions
need to address only Alabama units and
not units from other states participating
in the CSAPR trading programs, EPA
proposes to determine that these
substitutions have no substantive effect.
For the reasons discussed above, EPA
has preliminarily determined that none
of the textual additions or substitutions
made to the CSAPR federal trading
program regulations in Alabama’s
corresponding CSAPR state trading
program rules are substantive, and that
Alabama’s SIP revision therefore meets
the condition under 40 CFR 52.38(b)(9)
of making no substantive changes to the
provisions of the federal trading
program regulations beyond the
provisions addressing allowance
allocations.
7. Complete, Substantively Identical
Trading Program Provisions
With the following exceptions, the
Alabama rules comprising Alabama’s
CSAPR state trading program for ozone
season NOx emissions either
incorporate by reference or adopt fulltext replacements for all of the
provisions of 40 CFR 97.802 through
97.835. The first exception is that
Alabama rule 335–3–8–.46, which
generally addresses the amount of
emissions budget and related quantities,
omits the provisions of 40 CFR 97.810
setting forth the amounts of all
emissions budgets, NUSAs, Indian
country NUSAs, and variability limits
for other states. Omission of the budget,
NUSA, Indian country NUSA, and
variability limit provisions for other
states from state trading programs in
which only Alabama units participate
does not undermine the completeness of
the state trading programs.
The second exception is that Alabama
rule 335–3–8–.46, generally addressing
allowance allocations, omits 40 CFR
97.811(b)(2) and 97.812(b), concerning
EPA’s administration of Indian country
NUSAs. Omission of these provisions
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from Alabama’s state trading program
rules is required, as discussed in section
IV.B.9 below.
The third exception is that Alabama
rule 335–3–8–.56, which generally
incorporates by reference the federal
trading programs’ recordation schedule
provisions, excludes from incorporation
by reference 40 CFR 97.821(a), (b), (h),
(i) and (j) concerning EPA’s schedule for
recording certain allowance allocations.
The federal trading program provisions
at § 97.821(a) and (b), which address
recordation of allocations to units
considered existing units for CSAPR
purposes of allowances for the
compliance periods in 2017 and 2018,
do not need to be included in Alabama’s
state trading program rules because
those allocations have already been
recorded. The federal trading program
provision at § 97.821(h), which address
recordation of allocations from Indian
country NUSAs, are appropriately
excluded from state trading programs
because a state may not administer an
Indian country NUSA. The federal
trading program provision at § 97.821(i)
and (j), which address recordation of
second-round NUSA allocations, are not
needed in Alabama’s state trading
program rules because Alabama would
provide EPA the amounts of its NUSA
allocations on the earlier schedule
applicable to allocations to units
considered existing units for CSAPR
purposes.44 Omission of these
provisions from Alabama’s state trading
programs therefore does not undermine
the completeness of the state trading
programs.
Because none of the omissions
undermines the completeness of
Alabama’s state trading programs and
because, as discussed in section IV.B.6
above, EPA has preliminarily
determined that Alabama’s SIP revision
makes no other substantive changes to
the provisions of the federal trading
program regulations beyond the
provisions addressing allowance
allocations, Alabama’s SIP revision
meets the condition under 40 CFR
52.38(b)(9) that the SIP revision must
adopt complete state trading program
regulations substantively identical to
the complete federal trading program
regulations at 40 CFR 97.802 through
44 For the same reason, Alabama’s state rules
could permissibly omit 40 CFR 97.821(g), which
address recordation of first-round NUSA
allocations. Note that notwithstanding the lack of
provisions addressing recordation of NUSA
allocations in Alabama’s state trading program
rules, EPA would retain authority to complete the
recordation of 2017 NUSA allocations to Alabama
units because EPA has already started recording
allocations to Alabama units of allowances for the
compliance periods in 2017. See 40 CFR
52.38(b)(11)(i).
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97.835, except for permissible
differences in allowance allocation and/
or applicability provisions.
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8. Only Non-Substantive Substitutions
for the Term ‘‘State’’
Paragraph 335–3–8–.40(1)(a)1 of the
Alabama rules substitute the term ‘‘the
State of Alabama,’’ and paragraph 335–
3–8–.40(1)(b) of the Alabama rules
similarly substitute the term ‘‘the State’’
(meaning Alabama), for the phrase ‘‘a
State (or Indian country within the
borders of such State)’’ in the
corresponding federal trading program
regulations at 40 CFR 97.810(a)(1) and
(b). These provisions of the Alabama
rules define the units that are required
to participate in Alabama’s CSAPR state
trading programs. The substitutions
appropriately exclude units located in
other states and units located in Indian
country within the borders of Alabama
or any other state, thereby limiting the
applicability of Alabama’s state trading
programs to units that are subject to
Alabama’s jurisdiction. These
substitutions do not substantively
change the provisions of CSAPR’s
federal trading program regulations. The
remaining Alabama rules do not
substitute for the term ‘‘State’’ as used
in the federal trading program
regulations. EPA proposes to find that
Alabama’s SIP revision therefore meets
the condition under 40 CFR
52.38(b)(9)(v) that the SIP revision may
substitute the name of the state for the
term ‘‘State’’ as used in the federal
trading program regulations, but only to
the extent that EPA determines that the
substitutions do not substantively
change the provisions of the federal
trading program regulations.
9. Exclusion of Provisions Addressing
Units in Indian Country
The Alabama rules do not set forth
any full text provisions directly
addressing units in Indian country
within the state’s borders. As discussed
in section IV.B.8 above, paragraph 335–
3–8–.40(1)(a)1 of the Alabama rule
define the units required to participate
in Alabama’s state trading programs in
a manner that appropriately excludes
units located in Indian country within
Alabama’s borders from coverage under
Alabama’s CSAPR state trading
programs. Although various other
provisions of the CSAPR federal trading
program regulations incorporated by
reference into the Alabama rules
without modification refer to units in
Indian country, the clear exclusion of
any such units from coverage under the
state trading program applicability
provisions—in other words, the fact that
such units are not ‘‘TR NOx Ozone
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Season Group 2 units’’ for purposes of
the state trading program—renders the
remaining provisions of Alabama’s state
trading program rules inoperative as to
the units. EPA therefore interprets the
Alabama rules as not imposing any
requirements on units located in Indian
country within the State’s borders.
As discussed in section IV.B.7 above,
Alabama rule 335–3–8–.46, which
addresses allowance allocations under
the state trading programs, contains no
provisions replacing 40 CFR
97.811(b)(2) or 97.812(b), the portions of
the federal trading program regulations
governing allocations of allowances
from Indian country NUSAs. Thus, the
Alabama rules do not include any
express state rule provisions concerning
administration of Indian country
NUSAs. Further, Alabama rules 335–3–
8–.56, which generally incorporate by
reference the federal trading programs’
recordation schedule provisions,
excludes 40 CFR 97.821(h), addressing
recordation of Indian country NUSA
allocations. Similarly, paragraph 335–3–
8–.46(3)(i) of the Alabama rules, which
incorporates by reference the federal
trading program regulations generally
addressing corrections of incorrect
allocations, excludes 40 CFR
97.811(c)(5)(iii), addressing corrections
of certain incorrect Indian country
NUSA allocations. EPA therefore
interprets the Alabama state rules as
sufficiently excluding provisions
addressing administration of the Indian
country NUSA provisions under the
federal trading programs.
In summary, EPA has preliminarily
determined that Alabama’s SIP revision
adequately meets the condition under
40 CFR 52.38(b)(9)(vi) that a SIP
submittal must not impose any
requirement on any unit in Indian
country within the borders of the State
and must exclude certain provisions
related to administration of Indian
country NUSAs.
V. Incorporation by Reference
In this rule, EPA is proposing to
include in a final EPA rule regulatory
text that includes incorporation by
reference. In accordance with
requirements of 1 CFR 51.5, EPA is
proposing to incorporate by reference
ADEM Administrative Code rules 335–
3–8–.39 through 335–3–8–.70, state
effective on June 9, 2017, comprising
Alabama’s TR NOX Ozone Season
Trading Program. EPA has made, and
will continue to make, these materials
generally available through
www.regulations.gov and/or at the EPA
Region 4 office (please contact the
person identified in the FOR FURTHER
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39077
section of this
preamble for more information).
INFORMATION CONTACT
VI. EPA’s Proposed Action on
Alabama’s Submittal
EPA is proposing to approve the
portions the Alabama ozone season
submittals concerning the establishment
for Alabama units of CSAPR state
trading programs for ozone season NOX
emissions for compliance periods in
2019 and later years. The proposed
revision would adopt into the SIP the
state trading program rules codified in
ADEM Administrative Code rules 335–
3–8-.39 through 335–3–8–.70
(establishing Alabama’s ‘‘TR NOX Ozone
Group 2 Trading Program’’), as
interpreted by the State in the August 5,
2017, clarification letter.45 This
Alabama CSAPR state trading program
would be integrated with the federal
CSAPR NOX Ozone Season Group 2
Trading Program and would be
substantively identical to the federal
trading program except with regard to
the allowance allocation provisions. If
EPA approves these portions of the SIP
revisions, Alabama units would
generally be required to meet
requirements under Alabama’s CSAPR
state trading program equivalent to the
requirements the units otherwise would
have been required to meet under the
corresponding CSAPR federal trading
program, but allocations to Alabama
units of CSAPR NOX Ozone Season
Group 2 allowances for compliance
periods in 2019 and later years would
be determined according to the SIP’s
allocation provisions at Alabama rule
335–3–8–.46 instead of EPA’s default
allocation provisions at 40 CFR
97.811(a), 97.811(b)(1), and 97.812(a).
EPA is proposing to approve these
portions of the SIP revisions because, as
clarified by the State’s August 4, 2017,
letter, they meet the requirements of the
CAA and EPA’s regulations for approval
of a CSAPR full SIP revision replacing
a federal trading program with a state
trading program that is integrated with
and substantively identical to the
federal trading program except for
permissible differences with respect to
emission allowance allocation
provisions, as discussed in section IV
above.
EPA promulgated the FIP provisions
requiring Alabama units to participate
in the federal CSAPR NOX Ozone
Season Group 2 Trading Program in
order to address Alabama’s obligations
under CAA section 110(a)(2)(D)(i)(I)
45 The Alabama rules use the terms ‘‘Transport
Rule’’ and ‘‘TR’’ instead of the updated terms
‘‘Cross-State Air Pollution Rule’’ and ‘‘CSAPR,’’
which is permissible under the CSAPR Update. 81
FR at 74579.
E:\FR\FM\17AUP1.SGM
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Federal Register / Vol. 82, No. 158 / Thursday, August 17, 2017 / Proposed Rules
with respect to the 1997 8-hour Ozone
NAAQS and the 2008 8-hour Ozone
NAAQS in the absence of SIP provisions
addressing those requirements. Under
the CSAPR regulations, upon EPA’s full
and unconditional approval of a SIP
revision as correcting the SIP’s
deficiency that is the basis for a
particular CSAPR FIP, the obligation to
participate in the corresponding CSAPR
federal trading program is automatically
eliminated for units subject to the state’s
jurisdiction (but not for any units
located in any Indian country within the
state’s borders).46 Approval of the
portions of Alabama’s SIP submittal
adopting CSAPR state trading program
rules for ozone season NOX
substantively identical to the
corresponding CSAPR federal trading
program regulations (or differing only
with respect to the allowance allocation
methodology) would satisfy Alabama’s
obligation pursuant to CAA section
110(a)(2)(D)(i)(I) to prohibit emissions
which will significantly contribute to
nonattainment or interfere with
maintenance of the 1997 8-hour Ozone
NAAQS in any other state. This
proposed approval would also partially
satisfy Alabama’s obligation pursuant to
CAA section 110(a)(2)(D)(i)(I) to prohibit
emissions which will significantly
contribute to nonattainment or interfere
with maintenance of the 2008 8-hour
Ozone NAAQS in any other state. Thus,
the proposed approval would correct
the same deficiency in the SIP that
otherwise would be corrected by those
CSAPR FIPs. The proposed approval of
the portions of Alabama’s SIP submittal
establishing CSAPR state trading
program rules for ozone season NOX
emissions therefore would result in
automatic termination of the obligations
of Alabama units to participate in the
federal CSAPR NOX Ozone Season
Group 2 Trading Program.
sradovich on DSK3GMQ082PROD with PROPOSALS
VII. Statutory and Executive Order
Reviews
Under the CAA, the Administrator is
required to approve a SIP submission
that complies with the provisions of the
Act and applicable federal regulations.
See 42 U.S.C. 7410(k); 40 CFR 52.02(a).
Thus, in reviewing SIP submissions,
EPA’s role is to approve state choices,
provided that they meet the criteria of
the CAA. Accordingly, this proposed
action merely approves state law as
meeting federal requirements and does
not impose additional requirements
beyond those imposed by state law. For
that reason, this proposed action:
46 40 CFR 52.38(b)(10); see also 40 CFR
52.54(b)(1) & (2).
VerDate Sep<11>2014
17:29 Aug 16, 2017
Jkt 241001
• Is not a significant regulatory action
subject to review by the Office of
Management and Budget under
Executive Orders 12866 (58 FR 51735,
October 4, 1993) and 13563 (76 FR 3821,
January 21, 2011);
• does not impose an information
collection burden under the provisions
of the Paperwork Reduction Act (44
U.S.C. 3501 et seq.);
• is certified as not having a
significant economic impact on a
substantial number of small entities
under the Regulatory Flexibility Act (5
U.S.C. 601 et seq.);
• does not contain any unfunded
mandate or significantly or uniquely
affect small governments, as described
in the Unfunded Mandates Reform Act
of 1995 (Pub. L. 104–4);
• does not have Federalism
implications as specified in Executive
Order 13132 (64 FR 43255, August 10,
1999);
• is not an economically significant
regulatory action based on health or
safety risks subject to Executive Order
13045 (62 FR 19885, April 23, 1997);
• is not a significant regulatory action
subject to Executive Order 13211 (66 FR
28355, May 22, 2001);
• is not subject to requirements of
Section 12(d) of the National
Technology Transfer and Advancement
Act of 1995 (15 U.S.C. 272 note) because
application of those requirements would
be inconsistent with the CAA; and
• does not provide EPA with the
discretionary authority to address, as
appropriate, disproportionate human
health or environmental effects, using
practicable and legally permissible
methods, under Executive Order 12898
(59 FR 7629, February 16, 1994).
The SIP is not approved to apply on
any Indian reservation land or in any
other area where EPA or an Indian tribe
has demonstrated that a tribe has
jurisdiction. In those areas of Indian
country, the rule does not have tribal
implications as specified by Executive
Order 13175 (65 FR 67249, November 9,
2000), nor will it impose substantial
direct costs on tribal governments or
preempt tribal law.
List of Subjects in 40 CFR Part 52
Environmental protection,
Administrative practice and procedure,
Air pollution control, Incorporation by
reference, Intergovernmental relations,
Nitrogen dioxide, Ozone, Reporting and
recordkeeping requirements.
Authority: 42 U.S.C. 7401 et seq.
PO 00000
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Dated: August 7, 2017.
V. Anne Heard,
Acting Regional Administrator, Region 4.
[FR Doc. 2017–17341 Filed 8–16–17; 8:45 am]
BILLING CODE 6560–50–P
ENVIRONMENTAL PROTECTION
AGENCY
40 CFR Part 52
[EPA–R04–OAR–2017–0174; FRL–9966–27–
Region 4]
Air Plan Approval; Alabama;
Transportation Conformity
Environmental Protection
Agency (EPA).
ACTION: Proposed rule.
AGENCY:
The Environmental Protection
Agency (EPA) is proposing to approve
the portion of a revision to the Alabama
State Implementation plan submitted by
the State of Alabama on May 8, 2013, for
the purpose of amending the
transportation conformity rules to be
consistent with Federal requirements.
DATES: Comments must be received on
or before September 18, 2017.
ADDRESSES: Submit your comments,
identified by Docket ID No. EPA–R04–
OAR–2017–0174 at https://
www.regulations.gov. Follow the online
instructions for submitting comments.
Once submitted, comments cannot be
edited or removed from Regulations.gov.
EPA may publish any comment received
to its public docket. Do not submit
electronically any information you
consider to be Confidential Business
Information (CBI) or other information
whose disclosure is restricted by statute.
Multimedia submissions (audio, video,
etc.) must be accompanied by a written
comment. The written comment is
considered the official comment and
should include discussion of all points
you wish to make. EPA will generally
not consider comments or comment
contents located outside of the primary
submission (i.e. on the web, cloud, or
other file sharing system). For
additional submission methods, the full
EPA public comment policy,
information about CBI or multimedia
submissions, and general guidance on
making effective comments, please visit
https://www2.epa.gov/dockets/
commenting-epa-dockets.
FOR FURTHER INFORMATION CONTACT:
Kelly Sheckler, Air Regulatory
Management Section, Air Planning and
Implementation Branch, Air, Pesticides
and Toxics Management Division, U.S.
Environmental Protection Agency,
Region 4, 61 Forsyth Street SW.,
SUMMARY:
E:\FR\FM\17AUP1.SGM
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Agencies
[Federal Register Volume 82, Number 158 (Thursday, August 17, 2017)]
[Proposed Rules]
[Pages 39070-39078]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-17341]
=======================================================================
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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 52
[EPA-R04-OAR-2017-0415; FRL-9966-45-Region 4]
Air Plan Approval; Alabama; Cross-State Air Pollution Rule
AGENCY: Environmental Protection Agency (EPA).
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: The Environmental Protection Agency (EPA) is proposing to
approve portions of the October 26, 2015, and May 19, 2017, State
Implementation Plan (SIP) revisions from Alabama replacing the Cross-
State Air Pollution Rule (CSAPR) federal implementation plan (FIP).
Under CSAPR, large electricity generating units (EGUs) in Alabama are
subject to FIP provisions requiring the units to participate in a
federal allowance trading program for ozone season emissions of
nitrogen oxides (NOX). This action would approve into
Alabama's SIP the State's regulations requiring Alabama's affected
units to participate in a new state allowance trading program for ozone
season NOX emissions integrated with the CSAPR federal
trading programs, replacing the corresponding CSAPR FIP requirements
for Alabama. This state trading program is substantively identical to
the federal trading program except with regard to the provisions
allocating emission allowances among Alabama units. Under the CSAPR
regulations, final approval of these portions of the SIP revisions
would automatically eliminate Alabama units' FIP requirements to
participate in CSAPR's federal allowance trading program for ozone
season NOX emissions. Approval would also fully satisfy
Alabama's good neighbor obligation under the Clean Air Act (CAA or Act)
to prohibit emissions which will significantly contribute to
nonattainment or interfere with maintenance of the 1997 8-hour Ozone
National Ambient Air Quality Standards (NAAQS) in any other state; and
would partially satisfy Alabama's good neighbor obligation under the
CAA to prohibit emissions which will significantly contribute to
nonattainment or interfere with maintenance of the 2008 8-hour Ozone
NAAQS in any other state.
DATES: Comments must be received on or before September 18, 2017.
ADDRESSES: Submit your comments, identified by Docket ID No. EPA-R04-
OAR-2017-0415 at https://www.regulations.gov. Follow the online
instructions for submitting comments. Once submitted, comments cannot
be edited or removed from Regulations.gov. EPA may publish any comment
received to its public docket. Do not submit electronically any
information you consider to be Confidential Business Information (CBI)
or other information whose disclosure is restricted by statute.
Multimedia submissions (audio, video, etc.) must be accompanied by a
written comment. The written comment is considered the official comment
and should include discussion of all points you wish to make. EPA will
generally not consider comments or comment contents located outside of
the primary submission (i.e., on the web, cloud, or other file sharing
system). For additional submission methods, the full EPA public comment
policy, information about CBI or multimedia submissions, and general
guidance on making effective comments, please visit https://www2.epa.gov/dockets/commenting-epa-dockets.
FOR FURTHER INFORMATION CONTACT: Ashten Bailey, Air Regulatory
Management Section, Air, Pesticides and Toxics Management Division,
U.S. Environmental Protection Agency, Region 4, 61 Forsyth Street SW.,
Atlanta, Georgia 30303-8960. Ms. Bailey can be reached by telephone at
(404) 562-9164 or via electronic mail at bailey.ashten@epa.gov.
SUPPLEMENTARY INFORMATION:
I. Summary
EPA is proposing to approve the portions of the October 26, 2015,
and May 19, 2017, SIP revisions from Alabama concerning CSAPR \1\
allowance trading programs for ozone season emissions of
NOX. Large EGUs in Alabama are currently subject to CSAPR
FIPs that require the units to participate in the federal CSAPR
NOX Group 2 Ozone Season Trading Program. The CSAPR
regulations provide a process for the submission and approval of SIP
revisions to replace the requirements of CSAPR FIPs with SIP
requirements under which a state's units participate in CSAPR state
trading programs that are integrated with and, with certain permissible
exceptions, substantively
[[Page 39071]]
identical to the CSAPR federal trading programs.
---------------------------------------------------------------------------
\1\ Cross-State Air Pollution Rule Update for the 2008 Ozone
NAAQS (CSAPR Update), 81 FR 74504 (October 26, 2016) (codified as
amended at 40 CFR 52.38 and 52.39 and subparts AAAAA through EEEEE
of 40 CFR part 97); see also Federal Implementation Plans;
Interstate Transport of Fine Particulate Matter and Ozone and
Correction of SIP Approvals, 76 FR 48208 (August 8, 2011). EPA
previously approved a SIP revision that replaced the CSAPR FIPs for
the annual trading programs in Alabama. See 81 FR 59869 (Aug. 31,
2016).
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The portions of the SIP revisions proposed for approval would
incorporate into Alabama's SIP state allowance trading program
regulations for ozone season NOX emissions that would
replace EPA's federal trading program regulations for those emissions
from Alabama units. EPA is proposing to approve these portions of the
SIP revisions, as clarified in a letter provided on August 4, 2017,
because they meet the requirements of the CAA and EPA's regulations for
approval of a CSAPR full SIP revision replacing a federal trading
program with a state trading program that is integrated with and
substantively identical to the federal trading program except for
permissible differences with respect to emission allowance allocation
provisions. Under the CSAPR regulations, approval of these portions of
the SIP revisions would automatically eliminate the obligations of EGUs
in Alabama (but not any units in Indian country within Alabama's
borders) to participate in CSAPR's federal trading programs for ozone
season NOX emissions under the corresponding CSAPR FIPs. EPA
proposes to find that approval of these portions of the SIP revisions
would satisfy Alabama's obligation pursuant to CAA section
110(a)(2)(D)(i)(I) to prohibit emissions which will significantly
contribute to nonattainment or interfere with maintenance of the 1997
8-hour Ozone NAAQS in any other state. EPA also proposes to find that
approval of these portions of the SIP revisions would partially satisfy
Alabama's obligation pursuant to CAA section 110(a)(2)(D)(i)(I) to
prohibit emissions which will significantly contribute to nonattainment
or interfere with maintenance of the 2008 8-hour Ozone NAAQS in any
other state.
Section II of this document summarizes relevant aspects of the
CSAPR federal trading programs and FIPs as well as the range of
opportunities states have to submit SIP revisions to modify or replace
the FIP requirements while continuing to rely on CSAPR's trading
programs to address the states' obligations to mitigate interstate air
pollution. Section III describes the specific conditions for approval
of such SIP revisions. Section IV contains EPA's analysis of Alabama's
SIP submittal. Section V addresses incorporation by reference. Section
VI sets forth EPA's proposed action on the submittal. Section VII
addresses statutory and Executive Order reviews.
II. Background on CSAPR and CSAPR-Related SIP Revisions
EPA issued CSAPR in July 2011 and the CSAPR Update \2\ in 2016 to
address the requirements of CAA section 110(a)(2)(D)(i)(I) concerning
interstate transport of air pollution for specific NAAQS. As amended
(including by the 2016 CSAPR Update), CSAPR requires 27 eastern states
to limit their statewide emissions of sulfur dioxide (SO2)
and/or NOX in order to mitigate transported air pollution
unlawfully impacting other states' ability to attain or maintain four
NAAQS: the 1997 annual PM2.5 NAAQS, the 2006 24-hour
PM2.5 NAAQS, the 1997 8-hour Ozone NAAQS, and the 2008 8-
hour Ozone NAAQS. The CSAPR emissions limitations are defined in terms
of maximum statewide ``budgets'' for emissions of annual
SO2, annual NOX, and/or ozone season
NOX by each covered state's large EGUs. The CSAPR state
budgets are implemented in two phases of generally increasing
stringency: The Phase 1 budgets apply to emissions in 2015 and 2016;
and the Phase 2 and CSAPR Update budgets apply to emissions in 2017 and
later years. As a mechanism for achieving compliance with the emissions
limitations, CSAPR establishes five federal emissions trading programs:
a program for annual NOX emissions; two geographically
separate programs for annual SO2 emissions; and two
geographically separate programs for ozone season NOX
emissions. CSAPR also establishes FIP requirements applicable to the
large EGUs in each covered state.\3\ Currently, the CSAPR FIP
provisions require each state's units to participate in up to three of
the five CSAPR trading programs.
---------------------------------------------------------------------------
\2\ See 81 FR 74504 (October 26, 2016). The CSAPR Update was
promulgated to address interstate pollution with respect to the 2008
8-hour Ozone NAAQS and to address a judicial remand of certain
original CSAPR ozone season NOX budgets promulgated with
respect to the 1997 8-hour Ozone NAAQS. Id. at 74505. The CSAPR
Update established new emission reduction requirements addressing
the more recent ozone NAAQS and coordinated them with the remaining
emission reduction requirements addressing the older NAAQS, so that
starting in 2017, CSAPR includes two geographically separate trading
programs for ozone season NOX emissions covering EGUs in
a total of 23 states. See 40 CFR 52.38(b)(1)-(2).
\3\ States are required to submit good neighbor SIPs three years
after a NAAQS is promulgated. CAA section 110(a)(1) and (2). Where
EPA finds that a state fails to submit a required SIP or disapproves
a SIP, EPA is obligated to promulgate a FIP addressing the
deficiency. CAA section 110(c). EPA found that Alabama failed to
make timely submissions required to address the good neighbor
provision with respect to the 1997 annual PM2.5 and 8-
hour ozone NAAQS (70 FR 21147, Apr. 25, 2005), and the 2008 8-hour
ozone NAAQS (80 FR 39961, June 13, 2015). In addition, EPA
disapproved Alabama's SIP revision submitted to address the good
neighbor provision with respect to the 2006 24-hour PM2.5
NAAQS. See 76 FR 43128 (July 20, 2011). Accordingly, as a part of
CSAPR and the CSAPR Update, EPA promulgated FIPs applicable to
sources in Alabama addressing the good neighbor provision with
respect to these standards.
---------------------------------------------------------------------------
CSAPR includes provisions under which states may submit and EPA
will approve SIP revisions to modify or replace the CSAPR FIP
requirements while allowing states to continue to meet their transport-
related obligations using either CSAPR's federal emissions trading
programs or state emissions trading programs integrated with the
federal programs, provided that the SIP revisions meet all relevant
criteria.\4\ Through such a SIP revision, a state may replace EPA's
default provisions for allocating emission allowances among the state's
units, employing any state-selected methodology to allocate or auction
the allowances, subject to timing conditions and limits on overall
allowance quantities. In the case of CSAPR's federal trading programs
for ozone season NOX emissions (or an integrated state
trading program), a state may also expand trading program applicability
to include certain smaller EGUs.\5\ If a state wants to replace the
CSAPR FIP requirements with SIP requirements under which the state's
units participate in a state trading program that is integrated with
and identical to the federal trading program even as to the allocation
and applicability provisions, the state may submit a SIP revision for
that purpose as well. However, no emissions budget increases or other
substantive changes to the trading program provisions are allowed. A
state whose units are subject to multiple CSAPR federal trading
programs may submit SIP revisions to modify or replace either some or
all of those FIP requirements.
---------------------------------------------------------------------------
\4\ See 40 CFR 52.38, 52.39. States also retain the ability to
submit SIP revisions to meet their transport-related obligations
using mechanisms other than the CSAPR federal trading programs or
integrated state trading programs.
\5\ States covered by both the CSAPR Update and the
NOX SIP Call have the additional option to expand
applicability under the CSAPR NOX Ozone Season Group 2
Trading Program to include non-EGUs that would have participated in
the NOX Budget Trading Program.
---------------------------------------------------------------------------
States can submit two basic forms of CSAPR-related SIP revisions
effective for emissions control periods in 2017 or later years.\6\
Specific conditions for approval of each form of SIP revision are set
forth in the CSAPR regulations, as described in section III below.
Under
[[Page 39072]]
the first alternative--an ``abbreviated'' SIP revision--a state may
submit a SIP revision that upon approval replaces the default allowance
allocation and/or applicability provisions of a CSAPR federal trading
program for the state.\7\ Approval of an abbreviated SIP revision
leaves the corresponding CSAPR FIP and all other provisions of the
relevant federal trading program in place for the state's units.
---------------------------------------------------------------------------
\6\ CSAPR also provides for a third, more streamlined form of
SIP revision that is effective only for control periods in 2016 (or
2018 for CSAPR NOX Ozone Season Group 2 units) and is not
relevant here. See Sec. 52.38(a)(3), (b)(3), (b)(7); Sec.
52.39(d), (g).
\7\ 40 CFR 52.38(a)(4), (b)(4), (b)(8); 52.39(e), (h).
---------------------------------------------------------------------------
Under the second alternative--a ``full'' SIP revision--a state may
submit a SIP revision that upon approval replaces a CSAPR federal
trading program for the state with a state trading program integrated
with the federal trading program, so long as the state trading program
is substantively identical to the federal trading program or does not
substantively differ from the federal trading program except as
discussed above with regard to the allowance allocation and/or
applicability provisions.\8\ For purposes of a full SIP revision, a
state may either adopt state rules with complete trading program
language, incorporate the federal trading program language into its
state rules by reference (with appropriate conforming changes), or
employ a combination of these approaches.
---------------------------------------------------------------------------
\8\ 40 CFR 52.38(a)(5), (b)(5), (b)(9); 52.39(f), (i).
---------------------------------------------------------------------------
The CSAPR regulations identify several important consequences and
limitations associated with approval of a full SIP revision. First,
upon EPA's approval of a full SIP revision as correcting the deficiency
in the state's SIP that was the basis for a particular set of CSAPR FIP
requirements, the obligation to participate in the corresponding CSAPR
federal trading program is automatically eliminated for units subject
to the state's jurisdiction without the need for a separate EPA
withdrawal action, so long as EPA's approval of the SIP revision as
meeting the requirements of the CSAPR regulations is full and
unconditional.\9\ Second, approval of a full SIP revision does not
terminate the obligation to participate in the corresponding CSAPR
federal trading program for any units located in any Indian country
within the borders of the state, and if and when a unit is located in
Indian country within a state's borders, EPA may modify the SIP
approval to exclude from the SIP, and include in the surviving CSAPR
FIP instead, certain trading program provisions that apply jointly to
units in the state and to units in Indian country within the state's
borders.\10\ Finally, if at the time a full SIP revision is approved
EPA has already started recording allocations of allowances for a given
control period to a state's units, the federal trading program
provisions authorizing EPA to complete the process of allocating and
recording allowances for that control period to those units will
continue to apply, unless EPA's approval of the SIP revision provides
otherwise.\11\
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\9\ 40 CFR 52.38(a)(6), (b)(10)(i); 52.39(j).
\10\ 40 CFR 52.38(a)(5)(iv)-(v), (a)(6), (b)(5)(v)-(vi),
(b)(9)(vi)-(vii), (b)(10)(i); 52.39(f)(4)-(5), (i)(4)-(5), (j).
\11\ 40 CFR 52.38(a)(7), (b)(11); 52.39(k).
---------------------------------------------------------------------------
III. Conditions for Approval of CSAPR-Related SIP Revisions
Each CSAPR-related abbreviated or full SIP revision must meet the
following general submittal conditions:
Timeliness and completeness of SIP submittal. If a state
wants to replace the default allowance allocation or applicability
provisions of a CSAPR federal trading program, the complete SIP
revision must be submitted to EPA by December 1 of the year before the
deadlines described below for submitting allocation or auction amounts
to EPA for the first control period for which the state wants to
replace the default allocation and/or applicability provisions.\12\
This SIP submission deadline is inoperative in the case of a SIP
revision that seeks only to replace a CSAPR FIP and federal trading
program with a SIP and a substantively identical state trading program
integrated with the federal trading program. The SIP submittal
completeness criteria in section 2.1 of appendix V to 40 CFR part 51
also apply.
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\12\ 40 CFR 52.38(a)(4)(ii), (a)(5)(vi), (b)(4)(iii),
(b)(5)(vii), (b)(8)(iv), (b)(9)(viii); 52.39(e)(2), (f)(6), (h)(2),
(i)(6).
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In addition to the general submittal conditions, a CSAPR-related
abbreviated or full SIP seeking to address the allocation or auction of
emission allowances must meet the following further conditions:
Methodology covering all allowances potentially requiring
allocation. For each federal trading program addressed by a SIP
revision, the SIP revision's allowance allocation or auction
methodology must replace both the federal program's default allocations
to existing units \13\ at 40 CFR 97.411(a), 97.511(a), 97.611(a),
97.711(a), or 97.811(a), as applicable, and the federal trading
program's provisions for allocating allowances from the new unit set-
aside (NUSA) for the state at 40 CFR 97.411(b)(1) and 97.412(a),
97.511(b)(1) and 97.512(a), 97.611(b)(1) and 97.612(a), 97.711(b)(1)
and 97.712(a), or 97.811(b)(1) and 97.812(a), as applicable.\14\ In the
case of a state with Indian country within its borders, while the SIP
revision may neither alter nor assume the federal program's provisions
for administering the Indian country NUSA for the state, the SIP
revision must include procedures addressing the disposition of any
otherwise unallocated allowances from an Indian country NUSA that may
be made available for allocation by the state after EPA has carried out
the Indian country NUSA allocation procedures.\15\
---------------------------------------------------------------------------
\13\ In the context of the approval conditions for CSAPR-related
SIP revisions, an ``existing unit'' is a unit for which EPA has
determined default allowance allocations (which could be allocations
of zero allowances) in the rulemakings establishing and amending
CSAPR. A document describing EPA's default allocations to existing
units is available at https://www.epa.gov/sites/production/files/2017-05/documents/csapr_allowance_allocations_final_rule_tsd.pdf.
\14\ 40 CFR 52.38(a)(4)(i), (a)(5)(i), (b)(4)(ii), (b)(5)(ii),
(b)(8)(iii), (b)(9)(iii); 52.39(e)(1), (f)(1), (h)(1), (i)(1).
\15\ See 40 CFR 97.412(b)(10)(ii), 97.512(b)(10)(ii),
97.612(b)(10)(ii), 97.712(b)(10)(ii), 97.812(b)(10)(ii).
---------------------------------------------------------------------------
Assurance that total allocations will not exceed the state
budget. For each federal trading program addressed by a SIP revision,
the total amount of allowances auctioned or allocated for each control
period under the SIP revision (prior to the addition by EPA of any
unallocated allowances from any Indian country NUSA for the state)
generally may not exceed the state's emissions budget for the control
period less the sum of the amount of any Indian country NUSA for the
state for the control period and any allowances already allocated to
the state's units for the control period and recorded by EPA.\16\ Under
its SIP revision, a state is free to not allocate allowances to some or
all potentially affected units, to allocate or auction allowances to
entities other than potentially affected units, or to allocate or
auction fewer than the maximum permissible quantity of allowances and
retire the remainder. Under the CSAPR NOX Ozone Season Group
2 Trading Program only, additional allowances may be allocated if the
state elects to expand applicability to non-EGUs that would have been
subject to the NOX Budget Trading Program established for
compliance with the NOX SIP Call.\17\
---------------------------------------------------------------------------
\16\ 40 CFR 52.38(a)(4)(i)(A), (a)(5)(i)(A), (b)(4)(ii)(A),
(b)(5)(ii)(A), (b)(8)(iii)(A), (b)(9)(iii)(A); 52.39(e)(1)(i),
(f)(1)(i), (h)(1)(i), (i)(1)(i).
\17\ 40 CFR 52.38(b)(8)(iii)(A), (b)(9)(iii)(A).
---------------------------------------------------------------------------
Timely submission of state-determined allocations to EPA.
The SIP revision must require the state to submit
[[Page 39073]]
to EPA the amounts of any allowances allocated or auctioned to each
unit for each control period (other than allowances initially set aside
in the state's allocation or auction process and later allocated or
auctioned to such units from the set-aside amount) by the following
deadlines.\18\ Note that the submission deadlines differ for amounts
allocated or auctioned to units considered existing units for CSAPR
purposes and amounts allocated or auctioned to other units.
---------------------------------------------------------------------------
\18\ 40 CFR 52.38(a)(4)(i)(B)-(C), (a)(5)(i)(B)-(C),
(b)(4)(ii)(B)-(C), (b)(5)(ii)(B)-(C), (b)(8)(iii)(B)-(C),
(b)(9)(iii)(B)-(C); 52.39(e)(1)(ii)-(iii), (f)(1)(ii)-(iii),
(h)(1)(ii)-(iii), (i)(1)(ii)-(iii).
CSAPR NOX Annual, CSAPR NOX Ozone Season Group 1, CSAPR SO2 Group 1, and
CSAPR SO2 Group 2 Trading Programs
------------------------------------------------------------------------
Deadline for
Year of the submission to EPA of
Units control period allocations or
auction results
------------------------------------------------------------------------
Existing...................... 2017 and 2018.... June 1, 2016.
2019 and 2020.... June 1, 2017.
2021 and 2022.... June 1, 2018.
2023 and later June 1 of the fourth
years. year before the year
of the control
period.
Other......................... All years........ July 1 of the year of
the control period.
------------------------------------------------------------------------
CSAPR NOX Ozone Season Group 2 Trading Program
------------------------------------------------------------------------
Deadline for
Year of the submission to EPA of
Units control period allocations or
auction results
------------------------------------------------------------------------
Existing...................... 2019 and 2020.... June 1, 2018.
2021 and 2022.... June 1, 2019.
2023 and 2024.... June 1, 2020.
2025 and later June 1 of the fourth
years. year before the year
of the control
period.
Other......................... All years........ July 1 of the year of
the control period.
------------------------------------------------------------------------
No changes to allocations already submitted to EPA or
recorded. The SIP revision must not provide for any change to the
amounts of allowances allocated or auctioned to any unit after those
amounts are submitted to EPA or any change to any allowance allocation
determined and recorded by EPA under the federal trading program
regulations.\19\
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\19\ 40 CFR 52.38(a)(4)(i)(D), (a)(5)(i)(D), (b)(4)(ii)(D),
(b)(5)(ii)(D), (b)(8)(iii)(D), (b)(9)(iii)(D); 52.39(e)(1)(iv),
(f)(1)(iv), (h)(1)(iv), (i)(1)(iv).
---------------------------------------------------------------------------
No other substantive changes to federal trading program
provisions. The SIP revision may not substantively change any other
trading program provisions, except in the case of a SIP revision that
also expands program applicability as described below.\20\ Any new
definitions adopted in the SIP revision (in addition to the federal
trading program's definitions) may apply only for purposes of the SIP
revision's allocation or auction provisions.\21\
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\20\ 40 CFR 52.38(a)(4), (a)(5), (b)(4), (b)(5), (b)(8), (b)(9);
52.39(e), (f), (h), (i).
\21\ 40 CFR 52.38(a)(4)(i), (a)(5)(ii), (b)(4)(ii), (b)(5)(iii),
(b)(8)(iii), (b)(9)(iv); 52.39(e)(1), (f)(2), (h)(1), (i)(2).
---------------------------------------------------------------------------
In addition to the general submittal conditions, a CSAPR-related
abbreviated or full SIP revision seeking to expand applicability under
the CSAPR NOX Ozone Season Group 1 or CSAPR NOX
Ozone Season Group 2 Trading Programs (or an integrated state trading
program) must meet the following further conditions:
Only electricity generating units with nameplate capacity
of at least 15 MWe. The SIP revision may expand applicability only to
additional fossil fuel-fired boilers or combustion turbines serving
generators producing electricity for sale, and only by lowering the
generator nameplate capacity threshold used to determine whether a
particular boiler or combustion turbine serving a particular generator
is a potentially affected unit. The nameplate capacity threshold
adopted in the SIP revision may not be less than 15 MWe.\22\ In
addition or alternatively, applicability under the CSAPR NOX
Ozone Season Group 2 Trading Program may be expanded to non-EGUs that
would have been subject to the NOX Budget Trading Program
established for compliance with the NOX SIP Call.\23\
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\22\ 40 CFR 52.38(b)(4)(i), (b)(5)(i), (b)(8)(i), (b)(9)(i).
\23\ 40 CFR 52.38(b)(8)(ii), (b)(9)(ii).
---------------------------------------------------------------------------
No other substantive changes to federal trading program
provisions. The SIP revision may not substantively change any other
trading program provisions, except in the case of a SIP revision that
also addresses the allocation or auction of emission allowances as
described above.\24\
---------------------------------------------------------------------------
\24\ 40 CFR 52.38(b)(4), (b)(5), (b)(8), (b)(9).
---------------------------------------------------------------------------
In addition to the general submittal conditions and the other
applicable conditions described above, a CSAPR-related full SIP
revision must meet the following further conditions:
Complete, substantively identical trading program
provisions. The SIP revision must adopt complete state trading program
regulations substantively identical to the complete federal trading
program regulations at 40 CFR 97.402 through 97.435, 97.502 through
97.535, 97.602 through 97.635, 97.702 through 97.735, or 97.802 through
97.835, as applicable, except as described above in the case of a SIP
revision that seeks to replace the default allowance allocation and/or
applicability provisions.\25\
---------------------------------------------------------------------------
\25\ 40 CFR 52.38(a)(5), (b)(5), (b)(9); 52.39(f), (i).
---------------------------------------------------------------------------
Only non-substantive substitutions for the term ``State.''
The SIP revision may substitute the name of the state for the term
``State'' as used in the federal trading program regulations, but only
to the extent that EPA determines that the substitutions do not
substantively change the trading program regulations.\26\
---------------------------------------------------------------------------
\26\ 40 CFR 52.38(a)(5)(iii), (b)(5)(iv), (b)(9)(v);
52.39(f)(3), (i)(3).
---------------------------------------------------------------------------
Exclusion of provisions addressing units in Indian
country. The SIP revision may not impose requirements on any unit in
any Indian country within the state's borders and must not include the
federal trading program provisions governing allocation of allowances
from any Indian country NUSA for the state.\27\
---------------------------------------------------------------------------
\27\ 40 CFR 52.38(a)(5)(iv), (b)(5)(v), (b)(9)(vi); 52.39(f)(4),
(i)(4).
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[[Page 39074]]
IV. Alabama's SIP Submittal and EPA's Analysis
A. Alabama's SIP Submittal
In the CSAPR rulemaking, among other findings, EPA determined that
air pollution transported from Alabama would unlawfully affect other
states' ability to attain or maintain the 1997 8-hour Ozone NAAQS.\28\
In the CSAPR Update rulemaking, EPA determined that air pollution
transported from Alabama would unlawfully affect other states' ability
to attain or maintain the 2008 8-hour Ozone NAAQS and established an
ozone season NOX budget for Alabama's EGUs representing a
partial remedy for the State's interstate transport obligations with
respect to that NAAQS; \29\ determined that Alabama's previous ozone
season NOX budget established in the CSAPR rulemaking as a
partial remedy for the State's interstate transport obligations with
respect to the 1997 8-hour Ozone NAAQS now represented a full remedy
with respect to that NAAQS; \30\ and coordinated compliance
requirements by allowing compliance with the new CSAPR Update budget to
serve the purpose of addressing the State's obligations with respect to
both NAAQS.\31\ Alabama units meeting the CSAPR applicability criteria
are consequently subject to CSAPR FIP requirements for participation in
the CSAPR NOX Ozone Season Group 2 Trading Program in order
to address the State's interstate transport obligations with respect to
both the 1997 8-hour Ozone NAAQS (full remedy) and the 2008 8-hour
Ozone NAAQS (partial remedy).\32\
---------------------------------------------------------------------------
\28\ See 76 FR 48208, 48210, 48213 (August 8, 2011). EPA also
determined in the CSAPR rulemaking that air pollution transported
from Alabama would unlawfully affect other states' ability to attain
or maintain the 1997 annual PM2.5 NAAQS and the 2006 24-
hour PM2.5 NAAQS. Alabama previously submitted, and EPA
previously approved, a SIP revision that replaces the CSAPR FIPs for
the annual trading programs in Alabama. See 81 FR 59869 (August 31,
2016).
\29\ CSAPR Update, 81 FR at 74507-08.
\30\ Id. at 74525.
\31\ Id. at 74563 n.169.
\32\ 40 CFR 52.38(b)(2), (b)(2)(iii); 52.54(a), (b).
---------------------------------------------------------------------------
On October 26, 2015, Alabama submitted to EPA a SIP revision
including provisions that, if approved, would incorporate into
Alabama's SIP state trading program regulations that would replace the
CSAPR federal trading program regulations with regard to Alabama units'
ozone season NOX emissions.\33\ On May 19, 2017, Alabama
submitted to EPA a SIP revision that supersedes portions of the October
26, 2015, submittal to reflect changes from the CSAPR Update.\34\ On
August 4, 2017, Alabama sent a letter clarifying the State's
interpretation concerning the allowances for the Indian country NUSA
for Alabama. The Alabama ozone season submittals include duly adopted
state rules at rules 335-3-8-.39 through 335-3-8-.70, which establish
Alabama's ``TR NOX Ozone Season Group 2 Trading Program.''
\35\ In general, each individual rule in Alabama's CSAPR state trading
program rules is designed to replace one individual section (or in a
few cases two or three sections) of the corresponding federal trading
program regulations, and the set of rules is designed to collectively
replace all sections of the corresponding federal trading program
regulations at subpart EEEEE of 40 CFR part 97 (i.e., 40 CFR 97.801
through 97.835).
---------------------------------------------------------------------------
\33\ As discussed above, the October 26, 2015 submittal also
contained provisions related to the annual NOX and
SO2 trading programs, which EPA approved in a separate
rulemaking. See 81 FR 59869 (August 31, 2016).
\34\ For the purposes of this rulemaking, the October 26, 2015,
and May 19, 2017, submittals together may also be referred to as the
``Alabama ozone season submittals.''
\35\ Alabama's rules use the terms ``Transport Rule'' and ``TR''
instead of the updated terms ``Cross-State Air Pollution Rule'' and
``CSAPR.'' For simplicity, EPA uses the updated terms here except
where otherwise noted.
---------------------------------------------------------------------------
With regard to form, some of the individual rules for each Alabama
CSAPR state trading program are set forth as full regulatory text--
notably the rules addressing program applicability, emissions budgets
and variability limits, and allowance allocations--but most of the
rules incorporate the corresponding federal trading program section or
sections by reference. Several of the Alabama rules adopt cross-
references to other Alabama rules in place of cross-references to
specific federal trading program sections that would be replaced by
those other Alabama rules.
With regard to substance, the rules for the Alabama CSAPR state
ozone season trading program differ from the corresponding CSAPR
federal trading program regulations in three main ways. First, the
applicability provisions in the Alabama rules require participation in
Alabama's CSAPR state trading programs only for units in Alabama, not
for units in any other state or in Indian country within the borders of
Alabama or any other state. Second, the Alabama rules set forth a
methodology for allocating emission allowances among Alabama units that
differs from the default allowance allocation provisions in the federal
trading program regulations.\36\ Finally, the Alabama rules omit a
number of federal trading program provisions not applicable to
Alabama's state trading programs, including: provisions setting forth
the amounts of emissions budgets, NUSAs, Indian country NUSAs, and
variability limits for other states; provisions addressing EPA's
procedures for allocating allowances from Indian country NUSAs; and
provisions addressing EPA's recordation of certain allowance
allocations.
---------------------------------------------------------------------------
\36\ EPA notes that in the CSAPR Update, the allocations of
Alabama's allowance budget to the state's units under the federal
CSAPR NOX Ozone Season Group 2 Trading Program were
determined using a methodology similar to the methodology in
Alabama's October 26, 2015 SIP submittal, 81 FR at 74564.
---------------------------------------------------------------------------
Each SIP revision was submitted to EPA by a letter from the
Director of the Alabama Department of Environmental Management. The
letters and enclosures describe steps taken by Alabama to provide
public notice prior to adoption of the state rules.
EPA has previously approved portions of Alabama's October 26, 2015,
submittal replacing the FIPs for the CSAPR NOX Annual
Trading Program and the CSAPR SO2 Group 2 Trading Program
for Alabama.\37\
---------------------------------------------------------------------------
\37\ See 81 FR 59869 (August 31, 2016).
---------------------------------------------------------------------------
B. EPA's Analysis of Alabama's Submittals
As described in section IV.A above, at this time EPA is taking
action on the portions of Alabama's ozone season submittals designed to
replace the federal CSAPR NOX Ozone Season Group 2 Trading
Program. The analysis discussed in this section addresses only the
portions of Alabama's ozone season submittals on which EPA is taking
action at this time. For simplicity, throughout this section EPA refers
to the portions of the submittals on which EPA is proposing to take
action as ``the Alabama ozone season submittals'' or ``the SIP
revisions'' without repeating the qualification that at this time EPA
is analyzing and proposing to act on only portions of the SIP
submittal.
1. Timeliness and Completeness of SIP Submittal
Together, the Alabama ozone season submittals seek in part to
replace the default allowance allocation provisions in the CSAPR
federal trading program regulations for ozone season NOX
emissions as applied to Alabama units with state regulations
establishing a different state-determined methodology, starting with
the control periods in 2019. Under 40 CFR 52.38(b)(9)(iii)(B), the
deadline for submission of state-determined allowance allocations for
the 2019 and 2020 control periods is June 1, 2018, which under Sec.
52.38(b)(9)(viii) makes December 1, 2017, the deadline for submission
to
[[Page 39075]]
EPA of a complete SIP revision establishing state-determined
allocations for those control periods. Alabama submitted its SIP
revisions on October 26, 2015 and May 19, 2017, and EPA has determined
that the submittals comply with the applicable minimum completeness
criteria in section 2.1 of appendix V to 40 CFR part 51. Because
Alabama's SIP revisions were timely submitted and meet the applicable
completeness criteria, they meet the conditions under 40 CFR
52.38(b)(9)(viii) for timely submission of a complete SIP revision.
2. Methodology Covering All Allowances Potentially Requiring Allocation
Paragraph 335-3-8-.46(1) of the Alabama rules sets forth total
amounts of 13,211 CSAPR NOX Ozone Season Group 2 allowances
that would be allocated to Alabama units for each control period in
2019 and later years according to the allocation procedures set forth
under the remaining paragraphs of Alabama rule 335-3-8-.46 (Paragraph
335-3-8-.45(1) sets forth the same amounts as the respective state
emissions budgets, in conjunction with the corresponding variability
limits). These totals match the amounts of the Phase 2 emissions
budgets for Alabama established under the federal trading program
regulations for ozone NOX emissions, thereby addressing the
full quantities of allowances that could be allocated to Alabama units
under the default allocation provisions for the federal trading
programs.\38\ In addition, Alabama's rule--through provisions that
create an iterative process for allocating allowances--addresses the
disposition of otherwise unallocated allowances from an Indian country
NUSA. The allocation provisions in the Alabama rules therefore enable
Alabama's SIP revision to meet the condition under 40 CFR
52.38(b)(9)(iii) that the state's allocation or auction methodology
must cover all allowances potentially requiring allocation by the
state.
---------------------------------------------------------------------------
\38\ 40 CFR 97.810(a)(1)(i).
---------------------------------------------------------------------------
3. Assurance That Total Allocations Will Not Exceed the State Budget
As discussed in section IV.B.2 above, paragraph 335-3-8-.46(1) of
the Alabama rules sets forth the total amount of CSAPR Ozone Season
Group 2 NOX allowances to be allocated to Alabama units for
each control period under the state trading program and this amount
equals the amount of the ozone season NOX emissions budget
established for Alabama units under the CSAPR federal trading program
regulations. Although under the State's rules, Alabama will provide EPA
with allocations for allowances equal to the total amount of the state
budget, the State has clarified in its August 4, 2017, letter that,
under the State's interpretation of its rules, the allocations of a
portion of the total state budget equal to the Indian country NUSA are
to be implemented by EPA only if and when the total quantity of
allowances in the State's Indian country NUSA is released for state
allocation pursuant to 40 CFR 97.812(b)(10)(ii), and if that total
quantity of allowances is not released for state allocation, then the
State's allocations of that portion of the budget are void.\39\ To
clarify the separate, contingent nature of the State's allocations of
the Indian country NUSA allowances, the State will submit its
allocations of those allowances to the EPA as a separate set of
allocations from the allocations of the remaining allowances in the
state budget.\40\ EPA has not yet allocated or recorded CSAPR
allowances for the control periods in 2019 or later years. As
interpreted by the State, the allocation methodology in Alabama's SIP
revision therefore meets the condition under 40 CFR 52.38(b)(9)(iii)(A)
that the total amount of allowances allocated under the SIP revision
(before the addition of any otherwise unallocated allowances from an
Indian country NUSA) may not exceed the state's budget for the control
period less the amount of the Indian country NUSA for the state and any
allowances already allocated and recorded by EPA.
---------------------------------------------------------------------------
\39\ August 4, 2017, Letter from R. Gore (ADEM) to B. Banister
(EPA, Region 4), available in the docket for this action.
\40\ Id.
---------------------------------------------------------------------------
4. Timely Submission of State-Determined Allocations to EPA
Paragraphs 335-3-8-.46(2)(a) through (d) of the Alabama rules
provide for all allowance allocations to Alabama units established
under the Alabama rules to be submitted to EPA by the following
deadlines: Allocations for the control periods in 2019 and 2020, by
June 1, 2017; allocations for the control periods in 2021 and 2022, by
June 1, 2018; and allocations for later control periods, by June 1 of
the fourth or fifth year before the year of the control period. These
submission deadlines match or precede the submission deadlines
discussed in section III above (specifically, the deadlines under 40
CFR 52.38(b)(9)(iii)(B) for allocations to units considered existing
units for CSAPR purposes and the submission deadlines under Sec.
52.38(b)(9)(iii)(C) for allocations to other units). Alabama's SIP
revision therefore meets the conditions under 40 CFR
52.38(b)(9)(iii)(B) and (C) requiring that the SIP revision provide for
submission of state-determined allowance allocations to EPA by the
deadlines specified in those provisions.
5. No Changes to Allocations Already Submitted to EPA or Recorded
The Alabama rules include no provisions allowing alteration of
allocations after the allocation amounts have been provided to EPA and
no provisions allowing alteration of any allocations made and recorded
by EPA under the federal trading program regulations, thereby meeting
the condition under 40 CFR 52.38(b)(9)(iii)(D).
6. No Other Substantive Changes to Federal Trading Program Provisions
With the exception of the provisions addressing the allowance
allocation methodology discussed above, the Alabama state trading
program rules generally incorporate sections of the corresponding
federal trading program regulations by reference or set forth full text
that is very similar to the text in the corresponding federal trading
program regulations.\41\ Some of the differences between the Alabama
rules and the corresponding federal trading program regulations are
clearly non-substantive. For example, in instances where an Alabama
rule contains full text substituting for the text of a section of the
federal trading program regulations, the remaining Alabama rules adopt
cross-references to the full-text Alabama rule in place of cross-
references to the section of the federal trading program regulations
that would be replaced by the full-text Alabama rule. The Alabama rules
also contain definitions for certain terms used in the State trading
program's allocation provisions that are not used in the federal
trading program regulations, as expressly permitted under the CSAPR
regulations.\42\ Most of the remaining differences between the Alabama
rules and the corresponding sections of the federal trading program
regulations consist of non-substantive renumbering of the
provisions.\43\
---------------------------------------------------------------------------
\41\ The CSAPR federal regulations explicitly provide that terms
in the federal CSAPR regulations that include ``CSAPR'' are
considered synonymous with otherwise identical terms in approved SIP
revisions that include ``TR'' instead of ``CSAPR''. 40 CFR 97.802
(introductory text).
\42\ 40 CFR 52.38(b)(9)(iv).
\43\ Instances where Alabama's CSAPR state trading program rules
omit provisions of the CSAPR federal trading program regulations are
discussed in sections IV.B.7 and 9 below.
---------------------------------------------------------------------------
In addition to the clearly non-substantive or expressly authorized
[[Page 39076]]
differences summarized above, a few of Alabama's rules contain other
differences from the federal trading program regulations. In each case,
EPA has determined that the changes do not represent substantive
changes to the federal trading program regulations. First, paragraphs
335-3-8-.40(1)(c), 335-3-8-.41(1)(a), and 335-3-8-.66(2)(a), of the
Alabama rules require Alabama units to submit certain petitions,
statements, and notices not only to EPA but also to the Alabama
Department of Environmental Management. In addition, paragraph 335-3-
8-.42(e) of the Alabama rules allow the Department to extend on-site
storage of records beyond five years. Because the additional
notification requirements do not alter the respective authorities or
responsibilities of EPA and the Department, EPA considers the
requirements to be non-substantive changes.
Second, paragraphs 335-3-8-.52(2)(a), and 335-3-8-.55(2)(a) of the
Alabama rules provide that, like EPA, the Department will not
adjudicate certain private legal disputes. Because the Department is
not required to adjudicate such disputes under the federal trading
program regulations in any event, these additions to the text of the
state trading program rules merely clarify that the Department is not
undertaking a new adjudication responsibility under the state trading
programs. EPA therefore considers these additions to be non-substantive
changes.
Third, paragraph 335-3-8-.61 of the Alabama rule substitutes
references to Alabama rule 335-3-8-.46(3)(i) (the Alabama rule
addressing units incorrectly allocated allowances). Because the Alabama
rule substitution seeks to replace 40 CFR 97.811(c) with 333-3-
8.46(3)(i), which in turn incorporates by reference 40 CFR 97.811(c),
EPA proposes to find that the provisions are substantively identical.
Fourth, paragraph 335-3-8-.65 of the Alabama rules substitutes
references for Alabama rule 335-3-8-.41 (the Alabama rule covering
retired unit exemptions). This substitution is appropriate as it
substitutes Alabama's retired unit exemption for the CSAPR retired unit
exemptions at 40 CFR 97.805. With the exception of the notification
required above and changes related to identification of the state
trading program instead of the federal trading program, Alabama has
incorporated the text of 40 CFR 97.805 into Alabama Rule 335-3-8-.41.
Because the referenced provisions are substantively identical, EPA
proposes to determine that these substitutions have no substantive
effect.
Finally, paragraphs 335-3-8-.42(2)(a) and (b) of the Alabama rules
substitute references to Alabama rule 335.3.16-.13(3) (the Alabama rule
addressing minor permit modification procedures) for references to 40
CFR 70.7(e)(2) (the minor permit modification procedures section of the
federal regulations governing state operating permit programs under CAA
title V) in the federal trading program regulations regarding title V
permit requirements. As applied to Alabama units only, the substituted
Alabama rule provisions are substantively identical to the provisions
in 40 CFR 70.7(e)(2) that would be replaced. Because in the context of
Alabama's CSAPR state trading programs these particular provisions need
to address only Alabama units and not units from other states
participating in the CSAPR trading programs, EPA proposes to determine
that these substitutions have no substantive effect.
For the reasons discussed above, EPA has preliminarily determined
that none of the textual additions or substitutions made to the CSAPR
federal trading program regulations in Alabama's corresponding CSAPR
state trading program rules are substantive, and that Alabama's SIP
revision therefore meets the condition under 40 CFR 52.38(b)(9) of
making no substantive changes to the provisions of the federal trading
program regulations beyond the provisions addressing allowance
allocations.
7. Complete, Substantively Identical Trading Program Provisions
With the following exceptions, the Alabama rules comprising
Alabama's CSAPR state trading program for ozone season NOx emissions
either incorporate by reference or adopt full-text replacements for all
of the provisions of 40 CFR 97.802 through 97.835. The first exception
is that Alabama rule 335-3-8-.46, which generally addresses the amount
of emissions budget and related quantities, omits the provisions of 40
CFR 97.810 setting forth the amounts of all emissions budgets, NUSAs,
Indian country NUSAs, and variability limits for other states. Omission
of the budget, NUSA, Indian country NUSA, and variability limit
provisions for other states from state trading programs in which only
Alabama units participate does not undermine the completeness of the
state trading programs.
The second exception is that Alabama rule 335-3-8-.46, generally
addressing allowance allocations, omits 40 CFR 97.811(b)(2) and
97.812(b), concerning EPA's administration of Indian country NUSAs.
Omission of these provisions from Alabama's state trading program rules
is required, as discussed in section IV.B.9 below.
The third exception is that Alabama rule 335-3-8-.56, which
generally incorporates by reference the federal trading programs'
recordation schedule provisions, excludes from incorporation by
reference 40 CFR 97.821(a), (b), (h), (i) and (j) concerning EPA's
schedule for recording certain allowance allocations. The federal
trading program provisions at Sec. 97.821(a) and (b), which address
recordation of allocations to units considered existing units for CSAPR
purposes of allowances for the compliance periods in 2017 and 2018, do
not need to be included in Alabama's state trading program rules
because those allocations have already been recorded. The federal
trading program provision at Sec. 97.821(h), which address recordation
of allocations from Indian country NUSAs, are appropriately excluded
from state trading programs because a state may not administer an
Indian country NUSA. The federal trading program provision at Sec.
97.821(i) and (j), which address recordation of second-round NUSA
allocations, are not needed in Alabama's state trading program rules
because Alabama would provide EPA the amounts of its NUSA allocations
on the earlier schedule applicable to allocations to units considered
existing units for CSAPR purposes.\44\ Omission of these provisions
from Alabama's state trading programs therefore does not undermine the
completeness of the state trading programs.
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\44\ For the same reason, Alabama's state rules could
permissibly omit 40 CFR 97.821(g), which address recordation of
first-round NUSA allocations. Note that notwithstanding the lack of
provisions addressing recordation of NUSA allocations in Alabama's
state trading program rules, EPA would retain authority to complete
the recordation of 2017 NUSA allocations to Alabama units because
EPA has already started recording allocations to Alabama units of
allowances for the compliance periods in 2017. See 40 CFR
52.38(b)(11)(i).
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Because none of the omissions undermines the completeness of
Alabama's state trading programs and because, as discussed in section
IV.B.6 above, EPA has preliminarily determined that Alabama's SIP
revision makes no other substantive changes to the provisions of the
federal trading program regulations beyond the provisions addressing
allowance allocations, Alabama's SIP revision meets the condition under
40 CFR 52.38(b)(9) that the SIP revision must adopt complete state
trading program regulations substantively identical to the complete
federal trading program regulations at 40 CFR 97.802 through
[[Page 39077]]
97.835, except for permissible differences in allowance allocation and/
or applicability provisions.
8. Only Non-Substantive Substitutions for the Term ``State''
Paragraph 335-3-8-.40(1)(a)1 of the Alabama rules substitute the
term ``the State of Alabama,'' and paragraph 335-3-8-.40(1)(b) of the
Alabama rules similarly substitute the term ``the State'' (meaning
Alabama), for the phrase ``a State (or Indian country within the
borders of such State)'' in the corresponding federal trading program
regulations at 40 CFR 97.810(a)(1) and (b). These provisions of the
Alabama rules define the units that are required to participate in
Alabama's CSAPR state trading programs. The substitutions appropriately
exclude units located in other states and units located in Indian
country within the borders of Alabama or any other state, thereby
limiting the applicability of Alabama's state trading programs to units
that are subject to Alabama's jurisdiction. These substitutions do not
substantively change the provisions of CSAPR's federal trading program
regulations. The remaining Alabama rules do not substitute for the term
``State'' as used in the federal trading program regulations. EPA
proposes to find that Alabama's SIP revision therefore meets the
condition under 40 CFR 52.38(b)(9)(v) that the SIP revision may
substitute the name of the state for the term ``State'' as used in the
federal trading program regulations, but only to the extent that EPA
determines that the substitutions do not substantively change the
provisions of the federal trading program regulations.
9. Exclusion of Provisions Addressing Units in Indian Country
The Alabama rules do not set forth any full text provisions
directly addressing units in Indian country within the state's borders.
As discussed in section IV.B.8 above, paragraph 335-3-8-.40(1)(a)1 of
the Alabama rule define the units required to participate in Alabama's
state trading programs in a manner that appropriately excludes units
located in Indian country within Alabama's borders from coverage under
Alabama's CSAPR state trading programs. Although various other
provisions of the CSAPR federal trading program regulations
incorporated by reference into the Alabama rules without modification
refer to units in Indian country, the clear exclusion of any such units
from coverage under the state trading program applicability
provisions--in other words, the fact that such units are not ``TR NOx
Ozone Season Group 2 units'' for purposes of the state trading
program--renders the remaining provisions of Alabama's state trading
program rules inoperative as to the units. EPA therefore interprets the
Alabama rules as not imposing any requirements on units located in
Indian country within the State's borders.
As discussed in section IV.B.7 above, Alabama rule 335-3-8-.46,
which addresses allowance allocations under the state trading programs,
contains no provisions replacing 40 CFR 97.811(b)(2) or 97.812(b), the
portions of the federal trading program regulations governing
allocations of allowances from Indian country NUSAs. Thus, the Alabama
rules do not include any express state rule provisions concerning
administration of Indian country NUSAs. Further, Alabama rules 335-3-
8-.56, which generally incorporate by reference the federal trading
programs' recordation schedule provisions, excludes 40 CFR 97.821(h),
addressing recordation of Indian country NUSA allocations. Similarly,
paragraph 335-3-8-.46(3)(i) of the Alabama rules, which incorporates by
reference the federal trading program regulations generally addressing
corrections of incorrect allocations, excludes 40 CFR
97.811(c)(5)(iii), addressing corrections of certain incorrect Indian
country NUSA allocations. EPA therefore interprets the Alabama state
rules as sufficiently excluding provisions addressing administration of
the Indian country NUSA provisions under the federal trading programs.
In summary, EPA has preliminarily determined that Alabama's SIP
revision adequately meets the condition under 40 CFR 52.38(b)(9)(vi)
that a SIP submittal must not impose any requirement on any unit in
Indian country within the borders of the State and must exclude certain
provisions related to administration of Indian country NUSAs.
V. Incorporation by Reference
In this rule, EPA is proposing to include in a final EPA rule
regulatory text that includes incorporation by reference. In accordance
with requirements of 1 CFR 51.5, EPA is proposing to incorporate by
reference ADEM Administrative Code rules 335-3-8-.39 through 335-3-
8-.70, state effective on June 9, 2017, comprising Alabama's TR
NOX Ozone Season Trading Program. EPA has made, and will
continue to make, these materials generally available through
www.regulations.gov and/or at the EPA Region 4 office (please contact
the person identified in the FOR FURTHER INFORMATION CONTACT section of
this preamble for more information).
VI. EPA's Proposed Action on Alabama's Submittal
EPA is proposing to approve the portions the Alabama ozone season
submittals concerning the establishment for Alabama units of CSAPR
state trading programs for ozone season NOX emissions for
compliance periods in 2019 and later years. The proposed revision would
adopt into the SIP the state trading program rules codified in ADEM
Administrative Code rules 335-3-8-.39 through 335-3-8-.70 (establishing
Alabama's ``TR NOX Ozone Group 2 Trading Program''), as
interpreted by the State in the August 5, 2017, clarification
letter.\45\ This Alabama CSAPR state trading program would be
integrated with the federal CSAPR NOX Ozone Season Group 2
Trading Program and would be substantively identical to the federal
trading program except with regard to the allowance allocation
provisions. If EPA approves these portions of the SIP revisions,
Alabama units would generally be required to meet requirements under
Alabama's CSAPR state trading program equivalent to the requirements
the units otherwise would have been required to meet under the
corresponding CSAPR federal trading program, but allocations to Alabama
units of CSAPR NOX Ozone Season Group 2 allowances for
compliance periods in 2019 and later years would be determined
according to the SIP's allocation provisions at Alabama rule 335-3-
8-.46 instead of EPA's default allocation provisions at 40 CFR
97.811(a), 97.811(b)(1), and 97.812(a). EPA is proposing to approve
these portions of the SIP revisions because, as clarified by the
State's August 4, 2017, letter, they meet the requirements of the CAA
and EPA's regulations for approval of a CSAPR full SIP revision
replacing a federal trading program with a state trading program that
is integrated with and substantively identical to the federal trading
program except for permissible differences with respect to emission
allowance allocation provisions, as discussed in section IV above.
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\45\ The Alabama rules use the terms ``Transport Rule'' and
``TR'' instead of the updated terms ``Cross-State Air Pollution
Rule'' and ``CSAPR,'' which is permissible under the CSAPR Update.
81 FR at 74579.
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EPA promulgated the FIP provisions requiring Alabama units to
participate in the federal CSAPR NOX Ozone Season Group 2
Trading Program in order to address Alabama's obligations under CAA
section 110(a)(2)(D)(i)(I)
[[Page 39078]]
with respect to the 1997 8-hour Ozone NAAQS and the 2008 8-hour Ozone
NAAQS in the absence of SIP provisions addressing those requirements.
Under the CSAPR regulations, upon EPA's full and unconditional approval
of a SIP revision as correcting the SIP's deficiency that is the basis
for a particular CSAPR FIP, the obligation to participate in the
corresponding CSAPR federal trading program is automatically eliminated
for units subject to the state's jurisdiction (but not for any units
located in any Indian country within the state's borders).\46\ Approval
of the portions of Alabama's SIP submittal adopting CSAPR state trading
program rules for ozone season NOX substantively identical
to the corresponding CSAPR federal trading program regulations (or
differing only with respect to the allowance allocation methodology)
would satisfy Alabama's obligation pursuant to CAA section
110(a)(2)(D)(i)(I) to prohibit emissions which will significantly
contribute to nonattainment or interfere with maintenance of the 1997
8-hour Ozone NAAQS in any other state. This proposed approval would
also partially satisfy Alabama's obligation pursuant to CAA section
110(a)(2)(D)(i)(I) to prohibit emissions which will significantly
contribute to nonattainment or interfere with maintenance of the 2008
8-hour Ozone NAAQS in any other state. Thus, the proposed approval
would correct the same deficiency in the SIP that otherwise would be
corrected by those CSAPR FIPs. The proposed approval of the portions of
Alabama's SIP submittal establishing CSAPR state trading program rules
for ozone season NOX emissions therefore would result in
automatic termination of the obligations of Alabama units to
participate in the federal CSAPR NOX Ozone Season Group 2
Trading Program.
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\46\ 40 CFR 52.38(b)(10); see also 40 CFR 52.54(b)(1) & (2).
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VII. Statutory and Executive Order Reviews
Under the CAA, the Administrator is required to approve a SIP
submission that complies with the provisions of the Act and applicable
federal regulations. See 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in
reviewing SIP submissions, EPA's role is to approve state choices,
provided that they meet the criteria of the CAA. Accordingly, this
proposed action merely approves state law as meeting federal
requirements and does not impose additional requirements beyond those
imposed by state law. For that reason, this proposed action:
Is not a significant regulatory action subject to review
by the Office of Management and Budget under Executive Orders 12866 (58
FR 51735, October 4, 1993) and 13563 (76 FR 3821, January 21, 2011);
does not impose an information collection burden under the
provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.);
is certified as not having a significant economic impact
on a substantial number of small entities under the Regulatory
Flexibility Act (5 U.S.C. 601 et seq.);
does not contain any unfunded mandate or significantly or
uniquely affect small governments, as described in the Unfunded
Mandates Reform Act of 1995 (Pub. L. 104-4);
does not have Federalism implications as specified in
Executive Order 13132 (64 FR 43255, August 10, 1999);
is not an economically significant regulatory action based
on health or safety risks subject to Executive Order 13045 (62 FR
19885, April 23, 1997);
is not a significant regulatory action subject to
Executive Order 13211 (66 FR 28355, May 22, 2001);
is not subject to requirements of Section 12(d) of the
National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272
note) because application of those requirements would be inconsistent
with the CAA; and
does not provide EPA with the discretionary authority to
address, as appropriate, disproportionate human health or environmental
effects, using practicable and legally permissible methods, under
Executive Order 12898 (59 FR 7629, February 16, 1994).
The SIP is not approved to apply on any Indian reservation land or
in any other area where EPA or an Indian tribe has demonstrated that a
tribe has jurisdiction. In those areas of Indian country, the rule does
not have tribal implications as specified by Executive Order 13175 (65
FR 67249, November 9, 2000), nor will it impose substantial direct
costs on tribal governments or preempt tribal law.
List of Subjects in 40 CFR Part 52
Environmental protection, Administrative practice and procedure,
Air pollution control, Incorporation by reference, Intergovernmental
relations, Nitrogen dioxide, Ozone, Reporting and recordkeeping
requirements.
Authority: 42 U.S.C. 7401 et seq.
Dated: August 7, 2017.
V. Anne Heard,
Acting Regional Administrator, Region 4.
[FR Doc. 2017-17341 Filed 8-16-17; 8:45 am]
BILLING CODE 6560-50-P