Air Plan Approval; Indiana; Cross-State Air Pollution Rule, 40184-40192 [2018-17357]
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Federal Register / Vol. 83, No. 157 / Tuesday, August 14, 2018 / Proposed Rules
requirement implicates the price cap;
and (2) show by a preponderance of the
evidence, if the designation is
challenged, that the price cap does not
apply to the change. The Postal Service
also petitioned the Court for review of
this final rule.7
Shortly after the Commission adopted
the final rule in this docket, the Court
issued its decision in United States
Postal Serv. v. Postal Reg. Comm’n, 886
F.3d 1253 (D.C. Cir. 2018), vacating the
Commission’s standard in Order No.
3047. As a result of this decision, the
Commission and the Postal Service filed
a joint motion to remand the appeal of
the final rule back to the Commission
for further proceedings.8 The
Commission institutes this NPR in
response to the Court’s order granting
the motion for remand.9
As indicated in Order No. 4393, in
addition to the reporting requirement,
the procedural rule set forth
requirements designed to ensure
compliance with the price cap based on
the Commission’s standard articulated
in Order No. 3047. Because the
substantive standard established in
Order No. 3047 was vacated by the
Court, the Commission proposes to
rescind part of the final rule that relies
upon the standard. The Commission
intends to develop an appropriate
standard and propose other appropriate
rules implementing that standard in due
course.
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III. Description of the Proposed Rule
The proposed rule revises
§ 3010.23(d)(5). As described above,
§ 3010.23(d)(5) institutes a reporting
requirement whereby the Postal Service
must provide published notice of all
mail preparation changes in a single
source. The Postal Service began
complying with the reporting
requirement on March 22, 2018.10 The
rule also requires the Postal Service to
(1) affirmatively designate whether or
not an individual mail preparation
change requires compliance with
§ 3010.23(d)(2) in accordance with the
standard set forth in Order No. 3047;
and (2) demonstrate by a preponderance
of the evidence, in response to a
challenge, that a mail preparation
change does not require compliance
with § 3010.23(d)(2). Both the
7 See
Petition for Review, United States Postal
Serv. v. Postal Reg. Comm’n, No. 18–1059 (D.C. Cir.
February 26, 2018).
8 See Unopposed Motion to Remand Case, United
States Postal Serv. v. Postal Reg. Comm’n, No. 18–
1059 (D.C. Cir. May 10, 2018).
9 See Order, United States Postal Serv. v. Postal
Reg. Comm’n, No. 18–1059 (D.C. Cir. May 30, 2018).
10 See Updated Notice Under Rule 3010.23(d)(5),
March 22, 2018.
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designation and evidentiary burden
parts of the rule require a substantive
standard. Because that standard was
vacated and a new standard has yet to
be developed, the proposed rule revises
paragraph (d)(5) and removes the
affirmative designation requirement and
evidentiary burden. The reporting
requirement will remain in the rule and
exists independent of any standard as it
is necessary to provide standardized,
transparent reporting of mail
preparation changes.11
Although the Commission is
instituting a new proceeding to seek
comment on an appropriate standard to
determine when mail preparation
changes are ‘‘changes in rates’’ under 39
U.S.C. 3622, the absence of an
immediate standard necessitates partial
rescission of the rule.
IV. Comments Requested
By the Commission.
Stacy L. Ruble,
Secretary.
List of Subjects in 39 CFR Part 3010
Administrative practice and
procedure, Postal Service.
For the reasons discussed in the
preamble, the Commission proposes to
amend chapter III of title 39 of the Code
of Federal Regulations as follows:
11 See Order No. 4393 at 8–10 (justification for the
reporting requirement).
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1. The authority citation of part 3010
continues to read as follows:
■
Authority: 39 U.S.C. 503; 3662.
2. Amend § 3010.23 by revising
paragraph (d)(5) to read as follows:
■
§ 3010.23 Calculation of percentage
change in rates.
*
*
*
*
*
(d) * * *
(5) Procedures for mail preparation
changes. The Postal Service shall
provide published notice of all mail
preparation changes in a single, publicly
available source. The Postal Service
shall file notice with the Commission of
the single source it will use to provide
published notice of all mail preparation
changes.
*
*
*
*
*
[FR Doc. 2018–17499 Filed 8–13–18; 8:45 am]
Interested persons are invited to
provide written comments concerning
the proposed rule. As the Commission
is instituting a separate proceeding for
comments on a new standard, the
comments should be limited to the
revised procedural rule.
Comments are due no later than 30
days after the date of publication of this
notice in the Federal Register. All
comments and suggestions received will
be available for review on the
Commission’s website, https://
www.prc.gov.
It is ordered:
1. Interested persons may submit
comments no later than 30 days from
the date of the publication of this notice
in the Federal Register.
2. Kenneth E. Richardson will
continue to serve as an officer of the
Commission (Public Representative) to
represent the interests of the general
public in this proceeding.
3. The Secretary shall arrange for
publication of this order in the Federal
Register.
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PART 3010—REGULATION OF RATES
FOR MARKET DOMINANT PRODUCTS
BILLING CODE 7710–FW–P
ENVIRONMENTAL PROTECTION
AGENCY
40 CFR Part 52
[EPA–R05–OAR–2017–0700; FRL–9982–
10—Region 5]
Air Plan Approval; Indiana; CrossState Air Pollution Rule
Environmental Protection
Agency (EPA).
ACTION: Proposed rule.
AGENCY:
The Environmental Protection
Agency (EPA) is proposing to approve a
state submission concerning the CrossState Air Pollution Rule (CSAPR) that
was submitted by Indiana on November
27, 2017 as a revision to the Indiana
State Implementation Plan (SIP). Under
CSAPR, large electricity generating units
(EGUs) in Indiana are subject to Federal
Implementation Plans (FIPs) requiring
the units to participate in CSAPR’s
Federal trading program for annual
emissions of nitrogen oxides (NOX), one
of CSAPR’s two Federal trading
programs for annual emissions of sulfur
dioxide (SO2), and one of CSAPR’s two
Federal trading programs for ozone
season emissions of NOX. This action
would approve the State’s regulations
requiring large Indiana EGUs to
participate in new CSAPR state trading
programs for annual NOX, annual SO2,
and ozone season NOX emissions
integrated with the CSAPR Federal
trading programs, replacing the
corresponding FIP requirements. EPA is
proposing to approve the SIP revision
because the submittal meets the
SUMMARY:
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Federal Register / Vol. 83, No. 157 / Tuesday, August 14, 2018 / Proposed Rules
requirements of the Clean Air Act (CAA
or Act) and EPA’s regulations for
approval of a CSAPR full SIP revision
replacing the requirements of a CSAPR
FIP. Under the CSAPR regulations,
approval of the SIP revision would
automatically eliminate Indiana’s units’
requirements under the corresponding
CSAPR FIPs addressing Indiana’s
interstate transport (or ‘‘good neighbor’’)
obligations for the 1997 fine particulate
matter (PM2.5) national ambient air
quality standard (NAAQS), the 2006
PM2.5 NAAQS, the 1997 ozone NAAQS,
and the 2008 ozone NAAQS. Like the
CSAPR FIP requirements that would be
replaced, approval of the SIP revision
would fully satisfy Indiana’s good
neighbor obligations for the 1997 PM2.5
NAAQS, the 2006 PM2.5 NAAQS, and
the 1997 ozone NAAQS and would
partially satisfy Indiana’s good neighbor
obligation for the 2008 ozone NAAQS.
DATES: Comments must be received on
or before September 13, 2018.
ADDRESSES: Submit your comments,
identified by Docket ID No. EPA–R05–
OAR–2017–0700 at https://
www.regulations.gov, or via email to
aburano.douglas@epa.gov. For
comments submitted at Regulations.gov,
follow the online instructions for
submitting comments. Once submitted,
comments cannot be edited or removed
from Regulations.gov. For either manner
of submission, 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, please contact the person
identified in the FOR FURTHER
INFORMATION CONTACT section. For 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.
Chicago, Illinois 60604, (312) 886–9401,
arra.sarah@epa.gov.
SUPPLEMENTARY INFORMATION:
Throughout this document whenever
‘‘we,’’ ‘‘us,’’ or ‘‘our’’ is used, we mean
EPA. This SUPPLEMENTARY INFORMATION
section is arranged as follows:
I. Overview
II. Background on CSAPR and CSAPRRelated SIP Revisions
III. Conditions for Approval of CSAPRRelated SIP Revisions
IV. Indiana’s SIP Submittal and EPA’s
Analysis
V. What action is EPA taking?
VI. Incorporation by Reference
VII. Statutory and Executive Order Reviews
I. Overview
EPA is proposing to approve the
November 27, 2017 submittal as a
revision to the Indiana SIP to include
CSAPR 1 state trading programs for
annual emissions of NOX and SO2 and
ozone season emissions of NOX. Large
EGUs in Indiana are subject to CSAPR
FIPs that require the units to participate
in the Federal CSAPR NOX Annual
Trading Program, the Federal CSAPR
SO2 Group 1 Trading Program, and the
Federal CSAPR NOX Ozone Season
Group 2 Trading Program. CSAPR also
provides 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 identical to the CSAPR
Federal trading programs.
The SIP revision proposed for
approval would incorporate into
Indiana’s SIP state trading program
regulations for annual NOX, annual SO2,
and ozone season NOX emissions that
would replace EPA’s Federal trading
program regulations for those emissions
from Indiana units. EPA is proposing to
approve the SIP revision because it
meets 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. Under the
CSAPR regulations, approval of the SIP
revision would automatically eliminate
the obligations of large EGUs in Indiana
to participate in CSAPR’s Federal
trading programs for annual NOX,
annual SO2, and ozone season NOX
FOR FURTHER INFORMATION CONTACT:
Sarah Arra, Environmental Scientist,
Attainment Planning and Maintenance
Section, Air Programs Branch (AR–18J),
Environmental Protection Agency,
Region 5, 77 West Jackson Boulevard,
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1 Federal Implementation Plans; Interstate
Transport of Fine Particulate Matter and Ozone and
Correction of SIP Approvals, 76 FR 48208 (August
8, 2011) (codified as amended at 40 CFR 52.38 and
52.39 and subparts AAAAA through EEEEE of 40
CFR part 97).
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40185
emissions under the corresponding
CSAPR FIPs. EPA proposes to find that
approval of the SIP revision would fully
satisfy Indiana’s obligations pursuant to
the ‘‘good neighbor’’ provisions of CAA
section 110(a)(2)(D)(i)(I) to prohibit
emissions which will significantly
contribute to nonattainment or interfere
with maintenance of the 1997 PM2.5
NAAQS, the 2006 PM2.5 NAAQS, and
the 1997 ozone NAAQS in any other
state and would partially satisfy
Indiana’s corresponding obligation with
respect to the 2008 ozone NAAQS.2
II. Background on CSAPR and CSAPRRelated SIP Revisions
EPA issued CSAPR in July 2011 to
address the requirements of CAA
section 110(a)(2)(D)(i)(I) concerning
interstate transport of air pollution. As
amended (including the 2016 CSAPR
Update 3), CSAPR requires 27 Eastern
states to limit their statewide emissions
of SO2 and/or NOX in order to mitigate
transported air pollution unlawfully
impacting other states’ ability to attain
or maintain four NAAQS: The 1997
PM2.5 NAAQS, the 2006 PM2.5 NAAQS,
the 1997 ozone NAAQS, and the 2008
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, with the Phase 1 budgets
applying to emissions in 2015 and 2016
and the Phase 2 (and CSAPR Update)
budgets applying to emissions in 2017
and later years. As a mechanism for
achieving compliance with the
emissions limitations, CSAPR
establishes five Federal emissions
2 In a separate action, EPA has proposed to
determine that the emission reductions required
under the FIPs promulgated in the CSAPR Update
(see the next footnote) fully address the respective
states’ good neighbor obligations with respect to the
2008 ozone NAAQS. 83 FR 31915 (July 10, 2018).
If that separate action is finalized as proposed,
approval of Indiana’s SIP replacing the CSAPR
Update FIP for the state’s sources as proposed in
this action would fully address Indiana’s good
neighbor obligation with respect to the 2008 ozone
NAAQS.
3 See 81 FR 74504 (October 26, 2016). The CSAPR
Update was promulgated to address interstate
pollution with respect to the 2008 ozone NAAQS
and to address a judicial remand of certain original
CSAPR ozone season NOX budgets promulgated
with respect to the 1997 ozone NAAQS. See 81 FR
at 74505. The CSAPR Update established new
emission reduction requirements addressing the
more recent NAAQS and coordinated them with the
remaining emission reduction requirements
addressing the older ozone 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).
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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.4 Currently,
the CSAPR 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.5
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.6 If a state wants to replace
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 FIPs and Federal
trading programs may submit SIP
revisions to modify or replace either
some or all of those FIP requirements.
4 States must submit good neighbor SIPs within
three years (or less, if the Administrator so
prescribes) 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).
5 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.
6 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 former
NOX Budget Trading Program.
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States can submit two basic forms of
CSAPR-related SIP revisions effective
for emissions control periods in 2017 or
later years.7 Specific conditions for
approval of each form of SIP revision
are set forth in the CSAPR regulations,
as described in section III below. Under
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.8
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.9 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
implementation plan 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 is full and
unconditional.10 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
7 CSAPR also provides for a third, more
streamlined form of SIP revision that is effective
only for control periods in 2016 or 2018 (depending
on the trading program) and is not relevant here.
See 40 CFR 52.38(a)(3), (b)(3), (b)(7); 52.39(d), (g).
8 40 CFR 52.38(a)(4), (b)(4), (b)(8); 52.39(e), (h).
9 40 CFR 52.38(a)(5), (b)(5), (b)(9); 52.39(f), (i).
10 40 CFR 52.38(a)(6), (b)(10)(i); 52.39(j).
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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.11 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.12
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. The SIP submittal
completeness criteria in section 2.1 of
appendix V to 40 CFR part 51 apply. In
addition, 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.13 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.
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
11 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).
12 40 CFR 52.38(a)(7), (b)(11)(i); 52.39(k).
13 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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both the Federal program’s default
allocations to existing units 14 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.15 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.16
• 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.17 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
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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.18
• Timely submission of statedetermined allocations to EPA. The SIP
revision must require the state to submit
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.19 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.
CSAPR NOX ANNUAL, CSAPR NOX OZONE SEASON GROUP 1, CSAPR SO2 GROUP 1, AND CSAPR SO2 GROUP 2
TRADING PROGRAMS
Units
Deadline for submission to EPA of allocations or
auction results
Year of the control period
Existing .................................
2017
2019
2021
2023
and
and
and
and
2018 ................................................................
2020 ................................................................
2022 ................................................................
later years .......................................................
Other ....................................
All years ..........................................................................
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
Deadline for submission to EPA of allocations or
auction results
Year of the control period
Existing .................................
2019
2021
2023
2025
and
and
and
and
2020 ................................................................
2022 ................................................................
2024 ................................................................
later years .......................................................
Other ....................................
All years ..........................................................................
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.
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• 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.20
• 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.21 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.22
14 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.
15 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).
16 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).
17 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).
18 40 CFR 52.38(b)(8)(iii)(A), (b)(9)(iii)(A).
19 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).
20 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).
21 40 CFR 52.38(a)(4), (a)(5), (b)(4), (b)(5), (b)(8),
(b)(9); 52.39(e), (f), (h), (i).
22 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).
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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.23 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.24
• 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.25
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
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.26
• 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
23 40
CFR 52.38(b)(4)(i), (b)(5)(i), (b)(8)(i), (b)(9)(i).
CFR 52.38(b)(8)(ii), (b)(9)(ii).
25 40 CFR 52.38(b)(4), (b)(5), (b)(8), (b)(9).
26 40 CFR 52.38(a)(5), (b)(5), (b)(9); 52.39(f), (i).
24 40
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change the trading program
regulations.27
• 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.28
IV. Indiana’s SIP Submittal and EPA’s
Analysis
A. Indiana’s SIP Submittal
In the CSAPR rulemaking, EPA
determined that air pollution
transported from EGUs in Indiana
would unlawfully affect other states’
ability to attain or maintain the 1997
Ozone NAAQS, the 1997 PM2.5 NAAQS,
and the 2006 PM2.5 NAAQS, and
included Indiana in the CSAPR ozone
season NOX trading program and the
annual SO2 and NOX trading
programs.29 In the CSAPR Update
rulemaking, EPA determined that air
pollution transported from EGUs in
Indiana would unlawfully affect other
states’ ability to attain or maintain the
2008 Ozone NAAQS.30 Indiana’s units
meeting the CSAPR applicability criteria
are consequently currently subject to
CSAPR FIPs that require participation in
the CSAPR NOX Annual Trading
Program, the CSAPR SO2 Group 1
Trading Program, and the CSAPR NOX
Ozone Season Group 2 Trading
Program.31
Indiana’s November 27, 2017 SIP
submittal would incorporate into the
SIP CSAPR state trading program
regulations that would replace the
CSAPR Federal trading program
regulations with regard to Indiana units’
SO2 and NOX emissions. The SIP
submittal includes Indiana Rules 326
IAC 24–5, 24–6, and 24–7. In general,
each of Indiana’s CSAPR state trading
program rules is designed to replace the
corresponding Federal trading program
regulations. For example, Indiana Rule
326 IAC 24–5, NOX Annual Trading
Program, is designed to replace subpart
AAAAA of 40 CFR part 97 (i.e., 40 CFR
97.401 through 97.435).
With regard to form, some of the
individual rules for each Indiana
CSAPR state trading program are set
forth as full regulatory text—notably the
27 40 CFR 52.38(a)(5)(iii), (b)(5)(iv), (b)(9)(v);
52.39(f)(3), (i)(3).
28 40 CFR 52.38(a)(5)(iv), (b)(5)(v), (b)(9)(vi);
52.39(f)(4), (i)(4).
29 76 FR 48208, 48213 (August 8, 2011).
30 81 FR 74504, 74506 (October 26, 2016).
31 40 CFR 52.38(a)(2), (b)(2); 52.39(b); 52.789(a),
(b); 52.790.
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rules governing allocation of the state
trading budgets among the state’s
EGUs—but most of the rules incorporate
the corresponding Federal trading
program section or sections by
reference.
With regard to substance, the rules for
each Indiana CSAPR state trading
program differ from the corresponding
CSAPR Federal trading program
regulations in two main ways. First, the
Indiana rules omit some Federal trading
program provisions not applicable to
Indiana’s state trading programs,
including provisions setting forth the
amounts of emissions budgets, NUSAs,
Indian country NUSAs, and variability
limits for other states and provisions
relating to EPA’s administration of
Indian country NUSAs. Second, the
Indiana rules contain provisions that
replace the default allowance allocation
methodology and process from the FIPs
with Indiana’s own state-administered
process. Indiana’s methodology for
determining allocations to existing units
generally provides for allocations based
on each unit’s historical heat input
subject to caps based on each unit’s
historical maximum emissions.
Indiana’s methodology for allocating
NUSA allowances provides for
allocations to new units based on each
unit’s recent historical emissions
followed by allocations to existing units
of any allowances not allocated to new
units. These methodologies are similar
to the methodologies used by EPA to
determine the default allocations to
existing units and to annually allocate
NUSA allowances under the Federal
trading programs. However, while EPA’s
default allocations to existing units are
fixed for all future control periods,
Indiana’s methodology calls for
allocations for each successive control
period to be calculated using more
recent data on the units’ historical heat
input and maximum emissions.
The Indiana rules adopt the Phase 2
NOX Annual, SO2 Group 1, and NOX
Ozone Season Group 2 budgets found at
40 CFR 97.410(a)(4)(iv), 97.610(a)(2)(iv),
and 97.810(a)(5)(i), respectively.
Accordingly, EPA will evaluate the
approvability of the Indiana SIP
submission consistent with these
budgets.
B. EPA’s Analysis of Indiana’s SIP
Submittal
1. Timeliness and Completeness of SIP
Submittal
Indiana is seeking to replace EPAdetermined allowance allocations with
state-determined allocations starting
with the 2021 control periods for all
three CSAPR trading programs. For the
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326 IAC 24–7–2(a). Because there are no
Indian country NUSAs for Indiana,
there is no possibility that additional
allowances will be made available for
allocation under the state’s
methodology, and EPA has not yet
allocated or recorded CSAPR
allowances for the control periods in
2021 or later years for Indiana units.
Indiana’s rules therefore meet the
condition under 40 CFR
52.38(a)(5)(i)(A), 52.38(b)(9)(iii)(A), and
52.39(f)(1)(i) that, for each trading
program, 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.
2. Methodology Covering All
Allowances Potentially Requiring
Allocation
In the rules for each Indiana trading
program, section 2 adopts the full
amount of the state’s budget under the
corresponding Federal program,
sections 4 and 5 contain provisions
replacing the corresponding Federal
program’s default allocations to existing
units, and sections 6 and 7 contain
provisions replacing the corresponding
Federal program’s provisions for
allocating allowances from the NUSAs.
There are no Indian country NUSAs for
Indiana, making it unnecessary for
Indiana’s rules to contain provisions
addressing the disposition of otherwise
unallocated allowances from an Indian
country NUSA after EPA has carried out
the Indiana country NUSA allocation
procedures. Indiana’s rules therefore
meet the condition under 40 CFR
52.38(a)(5)(i), 52.38(b)(9)(iii), and
52.39(f)(1) that the state’s allocation
methodology must cover all allowances
potentially requiring allocation by the
state.
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NOX Annual and SO2 Group 1 trading
programs, under 40 CFR 52.38(a)(5)(i)(B)
and 52.39(f)(1)(ii), the deadline for
submission of state-determined
allocations for the 2021 control periods
is June 1, 2018, triggering a December 1,
2017 SIP submittal deadline for these
programs under 40 CFR 52.38(a)(5)(vi)
and 52.39(f)(6). For the NOX Ozone
Season Group 2 trading program, under
40 CFR 52.38(b)(9)(iii)(B), the allocation
submission deadline for the 2021
control period is June 1, 2019, triggering
a December 1, 2018 SIP submittal
deadline for this program under 40 CFR
52.38(b)(9)(viii). Indiana submitted its
SIP revision to EPA on November 27,
2017, and EPA has determined that the
submittal complies with the applicable
minimum completeness criteria in
section 2.1 of appendix V to 40 CFR part
51. Indiana has therefore met the
requirements for timeliness and
completeness of its CSAPR SIP
submittal for all three programs.
In the rules for each trading program,
section 3 sets out the dates by which the
state will submit state-determined
allowance allocations to EPA. For
existing units, by June 1, 2018, the state
will submit allocations for the control
periods in 2021 and 2022, and then,
starting in 2019, by June 1 of every
second year the state will submit
allocations for the two control periods
that are four and five years after the year
of the submittal (for example, the
submittal due by June 1, 2019 will
include allocations for the 2023 and
2024 control periods). For NUSA
allowances, for each control period the
state will submit first-round allocations
by July 1 of the year of the control
period and second-round allocations by
February 6 of the year after the control
period. These dates match or precede
the applicable deadlines for submittal of
existing unit allocations in 40 CFR
52.38(a)(5)(i)(B), 52.38(b)(9)(iii)(B), and
52.39(f)(1)(ii) and the applicable
deadlines for submittal of NUSA
allocations in 40 CFR 52.38(a)(5)(i)(C),
52.38(b)(9)(iii)(C), and 52.39(f)(1)(iii),
thereby meeting the conditions
requiring allocations to be submitted
before these deadlines.
3. Assurance That Total Allocations
Will Not Exceed the State Budget
Indiana’s rules provide for allocation
of total amounts of allowances equal to
the emissions budgets set for Indiana for
the control periods in 2017 and
subsequent years under the three
CSAPR trading programs. Indiana’s NOX
Annual trading budget is incorporated
by reference in 326 IAC 24–5–2(a),
Indiana’s NOX Ozone Season Group 2
budget is incorporated in 326 IAC 24–
6–2(a), and Indiana’s SO2 Group 1
budget is incorporated by reference in
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4. Timely Submission of StateDetermined Allocations to EPA
5. No Changes to Allocations Already
Submitted to EPA or Recorded
The Indiana rules do not include any
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
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40189
52.38(a)(5)(i)(D), 52.38(b)(9)(iii)(D), and
52.39(f)(1)(iv).
6. No Other Substantive Changes to
Federal Trading Program Provisions
As discussed above, Indiana’s rules
generally incorporate by reference the
corresponding provisions (including the
definitions) of the Federal trading
programs, except for the default Federal
provisions addressing allowance
allocations. The state has broad
discretion to adopt any allowance
allocation methodology, subject to
limits on the total quantities of
allowances allocated and the timing of
submissions of allocation information to
EPA. EPA believes that Indiana intends
for the allocation provisions in its rules
to adhere to the limits just noted, but
EPA also identified several issues
concerning provisions of the state rules
that may not accurately reflect the
state’s intent in adopting the provisions,
as discussed below. By letter to EPA
dated June 11, 2018, the state has
clarified its interpretation of these rule
provisions.32 EPA has confirmed that, as
clarified, the only substantive changes
in Indiana’s rules concern allowance
allocations, and that these changes do
not exceed the state’s broad discretion
with regard to allowance allocations.
The first issue concerns instances
where the text of two of Indiana’s
CSAPR rules indicates that references to
the rules’ allocation provisions should
be substituted for certain references to
the default Federal allocation
provisions, but the state rule text does
not accurately identify the default
Federal provisions being replaced.
Indiana has clarified that, in the state’s
NOX Ozone Season Group 2 rule at 326
IAC 24–6–1(d)(3), the state interprets
the rule text as replacing a reference to
the default Federal allocation provisions
at ‘‘40 CFR 97.811(a)(2) and (b) and
97.812’’, not ‘‘40 CFR 97.811(a)(2) and
(b) 97.812’’ as currently written in the
rule text, and that in the state’s SO2
Group 1 rule at 326 IAC 24–7–1(d)(3),
the state interprets the rule text as
replacing the default Federal allocation
provisions at ‘‘40 CFR 97.611(a)(2) and
(b) and 97.612’’, not ‘‘40 CFR
97.611(a)(2) and 97.611(b)’’ as currently
written in the rule text. EPA agrees that
the meaning of the rule text, as
interpreted by the state, is clear from
context.
The second issue concerns an
inaccurate terminology definition that
appears in all three of Indiana’s CSAPR
rules. In the nomenclature for the
32 See the June 11, 2018 letter from Assistant
Commissioner Keith Bauges to Regional
Administrator Cathy Stepp, available in the docket.
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equation to calculate second-round
NUSA allocations at 326 IAC
24.5.7(a)(2)(B), 326 IAC 24.6.7(a)(2)(B),
and 326 IAC 24.7.7(a)(2)(B), the rule text
defines the term ‘‘sum’’ as ‘‘the total
amount of allocations under this
subdivision’’. In context, the definition
of ‘‘sum’’ as written cannot be correct
because it is circular with the term ‘‘unit
allowance’’ in the same equation, and if
the definition were correct, the only
situation in which the two sides of the
equation could be equal—i.e., where the
total number of allowances available for
second-round NUSA allocations equals
the sum of the eligible units’ historical
emissions less the sum of the eligible
units’ first-round NUSA allocations—is
a situation in which the equation is not
supposed to be used. In its letter,
Indiana has clarified that the state
interprets the term ‘‘sum’’ instead to
mean ‘‘the sum under this
subdivision’’—that is, subdivision (2)—
which elsewhere in subdivision (2) is
further defined as the ‘‘the sum of the
positive differences determined under
subdivision (1)’’. EPA agrees that the
state’s interpretation of the rule text is
reasonable in context and notes that it
causes the equation to allocate
allowances in the same manner as EPA’s
default NUSA allocation methodology
would allocate allowances in an
analogous situation.
The third issue also arises in all three
of Indiana’s CSAPR rules and concerns
a potential conflict between two
requirements of the state’s allocation
methodology. The first requirement, set
forth at 326 IAC 24–5–5(d)(3) and (e)(1),
326 IAC 24–6–5(d)(3) and (e)(1), and
326 IAC 24–7–5(d)(3) and (e)(1), caps
the allocation from the state’s ‘‘existing
unit budget’’ to each individual existing
unit at an amount based on the unit’s
historical emissions. The second
requirement, set forth at 326 IAC 24–5–
5(e)(3), 326 IAC 24–6–5(e)(3), and 326
IAC 24–7–5(e)(3), directs the state to
repeat its allocation calculations ‘‘until
the entire existing unit budget is
allocated.’’ Under Indiana’s allocation
methodology, unlike EPA’s default
allocation methodology, the set of
historical emissions data used to
determine the caps on individual units’
allocations is periodically updated,
creating the possibility that for some
future control period, the sum of the
individual units’ applicable caps will be
less than the total amount of the existing
unit budget, causing a conflict between
these two requirements. In the
clarification letter, Indiana
acknowledges the potential for the
conflict of the two requirements,
however did not find this to be an issue
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for the 2021 and 2022 allocation cycles.
Indiana will watch for this issue with
future allocation cycles and will revise
the SIP in a timely matter if it becomes
necessary. This would include the
possibility of an emergency rule if the
normal rule process was not expeditious
enough. EPA agrees that this is a
reasonable approach if this becomes an
issue in future allocation cycles.
EPA concludes that the state’s
allocation methodology, as clarified
above, does not exceed the state’s broad
discretion regarding allowance
allocations and that the state’s rules
make no other substantive changes to
the Federal trading program provisions,
thereby meeting the condition in 40 CFR
52.38(a)(5), 52.39(f), and 52.38(b)(9).
7. Complete, Substantively Identical
Trading Program Provisions
As discussed above, the Indiana SIP
revision adopts state budgets identical
to the Phase 2 budgets for Indiana under
the Federal trading programs and adopts
almost all of the provisions of the
Federal CSAPR NOX Annual Trading
Program, CSAPR SO2 Group 1 Trading
Program, and CSAPR NOX Ozone
Season Group 2 Trading Program, with
the exception of differences in the
allocation methodology. Under the
state’s rules, Indiana will determine
allowance allocations beginning with
the 2021 control periods.
With a few exceptions, the rules
comprising Indiana’s CSAPR state
trading program for annual NOX
emissions either incorporate by
reference or adopt full-text replacements
for all of the provisions of 40 CFR
97.402 through 97.435; the rules
comprising Indiana’s CSAPR state
trading program for NOX ozone season
emissions either incorporate by
reference or adopt full-text replacements
for all of the provisions of 40 CFR
97.802 through 97.835; and the rules
comprising Indiana’s CSAPR state
trading program for SO2 emissions
either incorporate by reference or adopt
full-text replacements for all of the
provisions of 40 CFR 97.602 through
97.635. The major exception, which as
discussed above is a permissible
substantive change, is that Indiana has
adopted rule provisions for a stateadministered allocation methodology
replacing the default EPA-administered
allocation methodology. The additional
minor exceptions discussed below are
likewise either permissible or required.
The first additional exception is that
the Indiana rules do not incorporate the
provisions of 40 CFR 97.410(a) and (b),
97.810(a) and (b), and 97.610(a) and (b)
setting forth the amounts of the Phase 1
emissions budgets, NUSAs, and
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variability limits for Indiana and the
amounts of the Phase 1 and Phase 2
emissions budgets, NUSAs, Indian
country NUSAs, and variability limits
for other states. Omission of the Indiana
Phase 1 emissions budget, NUSA, and
variability limit amounts is appropriate
because Indiana’s state trading programs
do not apply to emissions occurring in
Phase 1 of CSAPR. Omission of the
Phase 1 and Phase 2 budget, NUSA,
Indian country NUSA, and variability
limit amounts for other states from state
trading programs in which only Indiana
units participate does not undermine
the completeness of Indiana’s state
trading programs. Indiana’s rules
incorporate or include full-text
replacement provisions for the
remaining provisions of 40 CFR 97.410,
97.810, and 97.610 that are relevant to
trading programs applicable only to
Indiana units during the control periods
in 2021 and later years.
The second additional exception is
that the Indiana rules do not incorporate
40 CFR 97.421(a) through (d), 97.821(a)
through (c), and 97.621(a) through (d)
setting forth the recordation schedules
for allowance allocations for control
periods in years before 2021. Omission
of these provisions is non-substantive
because Indiana’s rules apply only to
allocations for control periods in 2021
and later years.
The third additional exception is that
the Indiana rules do not incorporate
certain provisions of the Federal
program regulations concerning EPA’s
administration of Indian country
NUSAs. Omission of these provisions
from Indiana’s state trading program
rules is required, as discussed below.
None of the omissions undermines
the completeness of Indiana’s state
trading programs, and EPA has
preliminarily determined that Indiana’s
SIP revision makes no substantive
changes to the provisions of the Federal
trading program regulations. Thus,
Indiana’s SIP revision meets the
condition under 40 CFR 52.38(a)(5),
52.38(b)(9), and 52.39(f) that 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, 97.802
through 97.835, and 97.602 through
97.635, respectively, except to the
extent permitted in the case of a SIP
revision that seeks to replace the default
allowance allocation and/or
applicability provisions.
8. Only Non-Substantive Substitutions
for the Term ‘‘State’’
Indiana’s CSAPR program rules do
not make any substitutions for the term
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’’State,’’ rendering moot the condition in
40 CFR 52.38(a)(5)(iii), 52.38(b)(9)(v),
and 52.39(f)(3) that any such
substitutions must be non-substantive.
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9. Exclusion of Provisions Addressing
Units in Indian Country
Indiana Rules 326 IAC 24–5–1(a), 326
IAC 24–6–1(a), and 326 IAC 24–7–1(a)
incorporate by reference the
applicability provisions of the Federal
trading program rules at 40 CFR 97.404,
97.804, and 97.604, respectively. There
is no Indian country (as defined for
purposes of CSAPR) within Indiana’s
borders, so the applicability provisions
of the Indiana rules necessarily do not
extend to any units in Indian country.
In addition, Indiana’s SIP revision
excludes the Federal trading program
provisions related to EPA’s process for
allocating and recording allowances
from Indian country NUSAs (i.e., 40
CFR 97.411(b)(2), 97.411(c)(5)(iii),
97.412(b), 97.421(h), and 97.421(j) for
the NOX Annual program; 40 CFR
97.811(b)(2), 97.811(c)(5)(iii), 97.812(b),
97.821(h), and 97.821(j) for the NOX
Ozone Season Group 2 program; and 40
CFR 97.611(b)(2), 97.611(c)(5)(iii),
97.612(b), 97.621(h), and 97.621(j) for
the SO2 Group 1 program). Indiana’s SIP
revision therefore meets the conditions
under 52.38(a)(5)(iv), 52.38(b)(9)(vi),
and 52.39(f)(4) 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. What action is EPA taking?
EPA is proposing to approve Indiana’s
November 27, 2017, submittal,
incorporating Indiana CSAPR rules in
326 IAC 24–5, 24–6, and 24–7, as a
revision to Indiana’s SIP. These state
rules establish Indiana CSAPR state
trading programs for annual NOX, ozone
season NOX, and annual SO2 emissions
for units in the state. The Indiana
CSAPR state trading programs would be
integrated with the Federal CSAPR NOX
Annual Trading Program, the Federal
CSAPR NOX Ozone Season Group 2
Trading Program, and the Federal
CSAPR SO2 Group 1 Trading Program,
respectively, and would be
substantively identical to the Federal
trading programs except for the
allowance allocation provisions. If EPA
approves the SIP revision, Indiana units
would generally be required to meet
requirements under Indiana’s CSAPR
state trading programs equivalent to the
requirements the units otherwise would
have been required to meet under the
corresponding CSAPR Federal trading
programs. This proposed approval also
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includes the repeal of Indiana CAIR
rules which have been replaced by
CSAPR for applicable EGUs. The rules
being repealed from the SIP are 326 IAC
24–1, 24–2, and 24–3 (except 3–1, 3–2,
3–4, and 3–11). EPA is proposing to
approve the SIP revision because it
meets 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, as discussed in
section IV above.
EPA promulgated FIPs requiring
Indiana units to participate in the
Federal CSAPR NOX Annual Trading
Program, the Federal CSAPR SO2 Group
1 Trading Program, and the Federal
CSAPR NOX Ozone Season Group 2
Trading Program in order to address
Indiana’s obligations under CAA section
110(a)(2)(D)(i)(I) with respect to the
1997 PM2.5 NAAQS, the 2006 PM2.5
NAAQS, the 1997 ozone NAAQS, and
the 2008 ozone NAAQS in the absence
of SIP provisions addressing those
requirements. Approval of Indiana’s SIP
submittal adopting CSAPR state trading
program rules for annual NOX, annual
SO2, and ozone season NOX
substantively identical to the
corresponding CSAPR Federal trading
program regulations (or differing only
with respect to the allowance allocation
methodology) would fully satisfy
Indiana’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 PM2.5
NAAQS, the 2006 PM2.5 NAAQS, and
the 1997 ozone NAAQS in any other
state and partially satisfy Indiana’s
corresponding obligation with respect to
the 2008 ozone NAAQS.33 Approval of
the SIP submittal therefore would
correct the same deficiency in the SIP
that otherwise would be corrected by
those CSAPR FIPs. 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
requirement 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
33 As noted in footnote 2 above, in a separate
action EPA has proposed to make a determination
that, if finalized, would cause approval of this SIP
revision to also fully satisfy Indiana’s good neighbor
obligation with respect to the 2008 ozone NAAQS.
PO 00000
Frm 00033
Fmt 4702
Sfmt 4702
40191
borders).34 Approval of Indiana’s SIP
submittal establishing CSAPR state
trading program rules for annual NOX,
annual SO2, and ozone season NOX
emissions therefore would result in
automatic termination of the
requirements of Indiana units to
participate in the Federal CSAPR NOX
Annual Trading Program, the Federal
CSAPR SO2 Group 1 Trading Program,
and the Federal CSAPR NOX Ozone
Season Group 2 Trading Program.
In the SIP submittal, IDEM also
requested approval of a revision to 326
IAC 26–1–5 replacing reliance on CAIR
in the state’s Regional Haze program
with reliance on CSAPR. EPA will act
on this request in a separate rulemaking.
VI. Incorporation by Reference
In this document, 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
Indiana rules 326 IAC 24–5, 326 IAC
24–6, and 326 IAC 24–7, effective
November 24, 2017. EPA has made, and
will continue to make, these materials
generally available through
www.regulations.gov and at the EPA
Region 5 office (please contact the
person identified in the FOR FURTHER
INFORMATION CONTACT section of this
preamble for more information).
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
CAA and applicable Federal regulations.
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 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 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);
• Is not an Executive Order 13771 (82
FR 9339, February 2, 2017) regulatory
action because SIP approvals are
exempted under Executive Order 12866;
• Does not impose an information
collection burden under the provisions
34 40 CFR 52.38(a)(6), (b)(10)(i), 52.39(j); see also
52.789(a)(1), 52.789(b)(2); 52.790(a).
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Federal Register / Vol. 83, No. 157 / Tuesday, August 14, 2018 / Proposed Rules
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).
In addition, 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 and will not impose
substantial direct costs on tribal
governments or preempt tribal law as
specified by Executive Order 13175 (65
FR 67249, November 9, 2000).
List of Subjects in 40 CFR Part 52
amozie on DSK3GDR082PROD with PROPOSALS1
Environmental protection, Air
pollution control, Incorporation by
reference, Intergovernmental relations,
Nitrogen dioxide, Ozone, Particulate
matter, Reporting and recordkeeping
requirements, Sulfur oxides.
Dated: July 30, 2018.
Cathy Stepp,
Regional Administrator, Region 5.
[FR Doc. 2018–17357 Filed 8–13–18; 8:45 am]
BILLING CODE 6560–50–P
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17:23 Aug 13, 2018
Jkt 244001
DEPARTMENT OF COMMERCE
National Oceanic and Atmospheric
Administration
50 CFR Part 216
[Docket No. 170908881–8680–01]
RIN 0648–BH25
Subsistence Taking of Northern Fur
Seals on the Pribilof Islands
National Marine Fisheries
Service (NMFS), National Oceanic and
Atmospheric Administration (NOAA),
Commerce.
ACTION: Proposed rule; request for
comments.
AGENCY:
NMFS proposes to modify the
subsistence use regulations for the
Eastern Pacific stock of northern fur
seals (Callorhinus ursinus) in response
to a petition from the Aleut Community
of St. Paul Island, Tribal Government
(ACSPI). The Fur Seal Act (FSA)
prohibits all taking of northern fur seals
except in accordance with regulations
authorizing Alaska Natives who reside
on the Pribilof Islands (Pribilovians) to
take northern fur seals for subsistence
uses in compliance with a number of
explicit regulatory restrictions. The
proposed rule would simplify the
existing regulations and would enable
Pribilovians on St. Paul Island to
resume traditional cultural practices
that are prohibited by existing
regulations, with no adverse
consequences to northern fur seals at
the population level. The proposed rule
would streamline and simplify the
regulations and otherwise eliminate
several duplicative and unnecessary
regulations governing St. Paul and St.
George Islands.
DATES: Comments must be received no
later than September 13, 2018.
ADDRESSES: You may submit comments
on this document, identified by NOAA–
NMFS–2017–0117 by either of the
following methods:
• Electronic Submission: Submit all
electronic public comments via the
Federal e-Rulemaking Portal. Go to
www.regulations.gov/#!docket
Detail;D=NOAA-NMFS-2017-0117, click
the ‘‘Comment Now!’’ icon, complete
the required fields, and enter or attach
your comments.
• Mail: Submit written comments to
Jon Kurland, Assistant Regional
Administrator for Protected Resources,
Alaska Region NMFS, Attn: Ellen
Sebastian. Mail comments to P.O. Box
21668, Juneau, AK 99802–1668.
Instructions: Comments sent by any
other method, to any other address or
SUMMARY:
PO 00000
Frm 00034
Fmt 4702
Sfmt 4702
individual, or received after the end of
the comment period may not be
considered by NMFS. All comments
received are a part of the public record
and will generally be posted for public
viewing on www.regulations.gov
without change. All personal identifying
information (e.g., name, address),
confidential business information, or
otherwise sensitive information
submitted voluntarily by the sender will
be publicly accessible. NMFS will
accept anonymous comments (enter
‘‘N/A’’ in the required fields if you wish
to remain anonymous).
A 2005 Final Environmental Impact
Statement for Setting Annual
Subsistence Harvest of Northern Fur
Seals on the Pribilof Islands (EIS), 2014
Final Supplemental EIS for Management
of Subsistence Harvest of Northern Fur
Seals on St. George Island (SEIS), and
2017 Draft Supplemental EIS for
Management of Subsistence Harvest of
Northern Fur Seals on St. Paul Island
(DSEIS) are available on the internet at
the following address under the NEPA
Analyses tab: https://alaskafisheries.
noaa.gov/pr/fur-seal.
Electronic copies of the Regulatory
Impact Review (RIR) prepared for this
proposed action are available at: https://
alaskafisheries.noaa.gov/pr/fur-seal.
A list of all the references cited in this
proposed rule may be found on
www.alaskafisheries.noaa.gov/
protectedresources/seals/fur.htm.
Written comments regarding the
burden-hour estimates or other aspects
of the collection-of-information
requirements contained in this proposed
rule may be submitted to NMFS at the
above address and by email to Error!
Hyperlink reference not valid.OIRA_
Submission@omb.eop.gov, or fax to
(202) 395–5806.
FOR FURTHER INFORMATION CONTACT:
Michael Williams, NMFS Alaska
Region, (907) 271–5117,
michael.williams@noaa.gov.
SUPPLEMENTARY INFORMATION:
Background
St. Paul Island and St. George Island
are remote islands located in the Bering
Sea populated by Alaska Native
residents who rely upon marine
mammals as a major food source and
cornerstone of their culture. The taking
of North Pacific fur seals (northern fur
seals) is prohibited by the FSA unless
expressly authorized by the Secretary of
Commerce through regulation. Pursuant
to the FSA (16 U.S.C. 1151–1175), it is
unlawful, except as provided in the
chapter or by regulation of the Secretary
of Commerce, for any person or vessel
subject to the jurisdiction of the United
E:\FR\FM\14AUP1.SGM
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]]>Agencies
[Federal Register Volume 83, Number 157 (Tuesday, August 14, 2018)]
[Proposed Rules]
[Pages 40184-40192]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-17357]
=======================================================================
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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 52
[EPA-R05-OAR-2017-0700; FRL-9982-10--Region 5]
Air Plan Approval; Indiana; Cross-State Air Pollution Rule
AGENCY: Environmental Protection Agency (EPA).
ACTION: Proposed rule.
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SUMMARY: The Environmental Protection Agency (EPA) is proposing to
approve a state submission concerning the Cross-State Air Pollution
Rule (CSAPR) that was submitted by Indiana on November 27, 2017 as a
revision to the Indiana State Implementation Plan (SIP). Under CSAPR,
large electricity generating units (EGUs) in Indiana are subject to
Federal Implementation Plans (FIPs) requiring the units to participate
in CSAPR's Federal trading program for annual emissions of nitrogen
oxides (NOX), one of CSAPR's two Federal trading programs
for annual emissions of sulfur dioxide (SO2), and one of
CSAPR's two Federal trading programs for ozone season emissions of
NOX. This action would approve the State's regulations
requiring large Indiana EGUs to participate in new CSAPR state trading
programs for annual NOX, annual SO2, and ozone
season NOX emissions integrated with the CSAPR Federal
trading programs, replacing the corresponding FIP requirements. EPA is
proposing to approve the SIP revision because the submittal meets the
[[Page 40185]]
requirements of the Clean Air Act (CAA or Act) and EPA's regulations
for approval of a CSAPR full SIP revision replacing the requirements of
a CSAPR FIP. Under the CSAPR regulations, approval of the SIP revision
would automatically eliminate Indiana's units' requirements under the
corresponding CSAPR FIPs addressing Indiana's interstate transport (or
``good neighbor'') obligations for the 1997 fine particulate matter
(PM2.5) national ambient air quality standard (NAAQS), the
2006 PM2.5 NAAQS, the 1997 ozone NAAQS, and the 2008 ozone
NAAQS. Like the CSAPR FIP requirements that would be replaced, approval
of the SIP revision would fully satisfy Indiana's good neighbor
obligations for the 1997 PM2.5 NAAQS, the 2006
PM2.5 NAAQS, and the 1997 ozone NAAQS and would partially
satisfy Indiana's good neighbor obligation for the 2008 ozone NAAQS.
DATES: Comments must be received on or before September 13, 2018.
ADDRESSES: Submit your comments, identified by Docket ID No. EPA-R05-
OAR-2017-0700 at https://www.regulations.gov, or via email to
[email protected]. For comments submitted at Regulations.gov,
follow the online instructions for submitting comments. Once submitted,
comments cannot be edited or removed from Regulations.gov. For either
manner of submission, 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, please contact the person
identified in the FOR FURTHER INFORMATION CONTACT section. For 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: Sarah Arra, Environmental Scientist,
Attainment Planning and Maintenance Section, Air Programs Branch (AR-
18J), Environmental Protection Agency, Region 5, 77 West Jackson
Boulevard, Chicago, Illinois 60604, (312) 886-9401, [email protected].
SUPPLEMENTARY INFORMATION: Throughout this document whenever ``we,''
``us,'' or ``our'' is used, we mean EPA. This SUPPLEMENTARY INFORMATION
section is arranged as follows:
I. Overview
II. Background on CSAPR and CSAPR-Related SIP Revisions
III. Conditions for Approval of CSAPR-Related SIP Revisions
IV. Indiana's SIP Submittal and EPA's Analysis
V. What action is EPA taking?
VI. Incorporation by Reference
VII. Statutory and Executive Order Reviews
I. Overview
EPA is proposing to approve the November 27, 2017 submittal as a
revision to the Indiana SIP to include CSAPR \1\ state trading programs
for annual emissions of NOX and SO2 and ozone
season emissions of NOX. Large EGUs in Indiana are subject
to CSAPR FIPs that require the units to participate in the Federal
CSAPR NOX Annual Trading Program, the Federal CSAPR
SO2 Group 1 Trading Program, and the Federal CSAPR
NOX Ozone Season Group 2 Trading Program. CSAPR also
provides 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 identical to the CSAPR Federal trading programs.
---------------------------------------------------------------------------
\1\ Federal Implementation Plans; Interstate Transport of Fine
Particulate Matter and Ozone and Correction of SIP Approvals, 76 FR
48208 (August 8, 2011) (codified as amended at 40 CFR 52.38 and
52.39 and subparts AAAAA through EEEEE of 40 CFR part 97).
---------------------------------------------------------------------------
The SIP revision proposed for approval would incorporate into
Indiana's SIP state trading program regulations for annual
NOX, annual SO2, and ozone season NOX
emissions that would replace EPA's Federal trading program regulations
for those emissions from Indiana units. EPA is proposing to approve the
SIP revision because it meets 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. Under
the CSAPR regulations, approval of the SIP revision would automatically
eliminate the obligations of large EGUs in Indiana to participate in
CSAPR's Federal trading programs for annual NOX, annual
SO2, and ozone season NOX emissions under the
corresponding CSAPR FIPs. EPA proposes to find that approval of the SIP
revision would fully satisfy Indiana's obligations pursuant to the
``good neighbor'' provisions of CAA section 110(a)(2)(D)(i)(I) to
prohibit emissions which will significantly contribute to nonattainment
or interfere with maintenance of the 1997 PM2.5 NAAQS, the
2006 PM2.5 NAAQS, and the 1997 ozone NAAQS in any other
state and would partially satisfy Indiana's corresponding obligation
with respect to the 2008 ozone NAAQS.\2\
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\2\ In a separate action, EPA has proposed to determine that the
emission reductions required under the FIPs promulgated in the CSAPR
Update (see the next footnote) fully address the respective states'
good neighbor obligations with respect to the 2008 ozone NAAQS. 83
FR 31915 (July 10, 2018). If that separate action is finalized as
proposed, approval of Indiana's SIP replacing the CSAPR Update FIP
for the state's sources as proposed in this action would fully
address Indiana's good neighbor obligation with respect to the 2008
ozone NAAQS.
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II. Background on CSAPR and CSAPR-Related SIP Revisions
EPA issued CSAPR in July 2011 to address the requirements of CAA
section 110(a)(2)(D)(i)(I) concerning interstate transport of air
pollution. As amended (including the 2016 CSAPR Update \3\), CSAPR
requires 27 Eastern states to limit their statewide emissions of
SO2 and/or NOX in order to mitigate transported
air pollution unlawfully impacting other states' ability to attain or
maintain four NAAQS: The 1997 PM2.5 NAAQS, the 2006
PM2.5 NAAQS, the 1997 ozone NAAQS, and the 2008 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, with the Phase 1 budgets
applying to emissions in 2015 and 2016 and the Phase 2 (and CSAPR
Update) budgets applying to emissions in 2017 and later years. As a
mechanism for achieving compliance with the emissions limitations,
CSAPR establishes five Federal emissions
[[Page 40186]]
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.\4\ Currently, the
CSAPR FIP provisions require each state's units to participate in up to
three of the five CSAPR trading programs.
---------------------------------------------------------------------------
\3\ See 81 FR 74504 (October 26, 2016). The CSAPR Update was
promulgated to address interstate pollution with respect to the 2008
ozone NAAQS and to address a judicial remand of certain original
CSAPR ozone season NOX budgets promulgated with respect
to the 1997 ozone NAAQS. See 81 FR at 74505. The CSAPR Update
established new emission reduction requirements addressing the more
recent NAAQS and coordinated them with the remaining emission
reduction requirements addressing the older ozone 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).
\4\ States must submit good neighbor SIPs within three years (or
less, if the Administrator so prescribes) 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).
---------------------------------------------------------------------------
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.\5\ 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.\6\ If a state wants to replace 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 FIPs and Federal
trading programs may submit SIP revisions to modify or replace either
some or all of those FIP requirements.
---------------------------------------------------------------------------
\5\ 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.
\6\ 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 former NOX Budget Trading Program.
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States can submit two basic forms of CSAPR-related SIP revisions
effective for emissions control periods in 2017 or later years.\7\
Specific conditions for approval of each form of SIP revision are set
forth in the CSAPR regulations, as described in section III below.
Under 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.\8\ 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.
---------------------------------------------------------------------------
\7\ CSAPR also provides for a third, more streamlined form of
SIP revision that is effective only for control periods in 2016 or
2018 (depending on the trading program) and is not relevant here.
See 40 CFR 52.38(a)(3), (b)(3), (b)(7); 52.39(d), (g).
\8\ 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.\9\ 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.
---------------------------------------------------------------------------
\9\ 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 implementation plan 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 is
full and unconditional.\10\ 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.\11\ 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.\12\
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\10\ 40 CFR 52.38(a)(6), (b)(10)(i); 52.39(j).
\11\ 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).
\12\ 40 CFR 52.38(a)(7), (b)(11)(i); 52.39(k).
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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. The SIP
submittal completeness criteria in section 2.1 of appendix V to 40 CFR
part 51 apply. In addition, 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.\13\ 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.
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\13\ 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).
---------------------------------------------------------------------------
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
[[Page 40187]]
both the Federal program's default allocations to existing units \14\
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.\15\ 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.\16\
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\14\ 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.
\15\ 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).
\16\ 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).
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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.\17\ 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.\18\
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\17\ 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).
\18\ 40 CFR 52.38(b)(8)(iii)(A), (b)(9)(iii)(A).
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Timely submission of state-determined allocations to EPA.
The SIP revision must require the state to submit 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.\19\ 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.
---------------------------------------------------------------------------
\19\ 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 control submission to EPA of
Units 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 years June 1 of the fourth
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 control submission to EPA of
Units 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 years June 1 of the fourth
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.\20\
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\20\ 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.\21\ 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.\22\
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\21\ 40 CFR 52.38(a)(4), (a)(5), (b)(4), (b)(5), (b)(8), (b)(9);
52.39(e), (f), (h), (i).
\22\ 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).
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[[Page 40188]]
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.\23\ 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.\24\
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\23\ 40 CFR 52.38(b)(4)(i), (b)(5)(i), (b)(8)(i), (b)(9)(i).
\24\ 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.\25\
---------------------------------------------------------------------------
\25\ 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.\26\
---------------------------------------------------------------------------
\26\ 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.\27\
---------------------------------------------------------------------------
\27\ 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.\28\
---------------------------------------------------------------------------
\28\ 40 CFR 52.38(a)(5)(iv), (b)(5)(v), (b)(9)(vi); 52.39(f)(4),
(i)(4).
---------------------------------------------------------------------------
IV. Indiana's SIP Submittal and EPA's Analysis
A. Indiana's SIP Submittal
In the CSAPR rulemaking, EPA determined that air pollution
transported from EGUs in Indiana would unlawfully affect other states'
ability to attain or maintain the 1997 Ozone NAAQS, the 1997
PM2.5 NAAQS, and the 2006 PM2.5 NAAQS, and
included Indiana in the CSAPR ozone season NOX trading
program and the annual SO2 and NOX trading
programs.\29\ In the CSAPR Update rulemaking, EPA determined that air
pollution transported from EGUs in Indiana would unlawfully affect
other states' ability to attain or maintain the 2008 Ozone NAAQS.\30\
Indiana's units meeting the CSAPR applicability criteria are
consequently currently subject to CSAPR FIPs that require participation
in the CSAPR NOX Annual Trading Program, the CSAPR
SO2 Group 1 Trading Program, and the CSAPR NOX
Ozone Season Group 2 Trading Program.\31\
---------------------------------------------------------------------------
\29\ 76 FR 48208, 48213 (August 8, 2011).
\30\ 81 FR 74504, 74506 (October 26, 2016).
\31\ 40 CFR 52.38(a)(2), (b)(2); 52.39(b); 52.789(a), (b);
52.790.
---------------------------------------------------------------------------
Indiana's November 27, 2017 SIP submittal would incorporate into
the SIP CSAPR state trading program regulations that would replace the
CSAPR Federal trading program regulations with regard to Indiana units'
SO2 and NOX emissions. The SIP submittal includes
Indiana Rules 326 IAC 24-5, 24-6, and 24-7. In general, each of
Indiana's CSAPR state trading program rules is designed to replace the
corresponding Federal trading program regulations. For example, Indiana
Rule 326 IAC 24-5, NOX Annual Trading Program, is designed
to replace subpart AAAAA of 40 CFR part 97 (i.e., 40 CFR 97.401 through
97.435).
With regard to form, some of the individual rules for each Indiana
CSAPR state trading program are set forth as full regulatory text--
notably the rules governing allocation of the state trading budgets
among the state's EGUs--but most of the rules incorporate the
corresponding Federal trading program section or sections by reference.
With regard to substance, the rules for each Indiana CSAPR state
trading program differ from the corresponding CSAPR Federal trading
program regulations in two main ways. First, the Indiana rules omit
some Federal trading program provisions not applicable to Indiana's
state trading programs, including provisions setting forth the amounts
of emissions budgets, NUSAs, Indian country NUSAs, and variability
limits for other states and provisions relating to EPA's administration
of Indian country NUSAs. Second, the Indiana rules contain provisions
that replace the default allowance allocation methodology and process
from the FIPs with Indiana's own state-administered process. Indiana's
methodology for determining allocations to existing units generally
provides for allocations based on each unit's historical heat input
subject to caps based on each unit's historical maximum emissions.
Indiana's methodology for allocating NUSA allowances provides for
allocations to new units based on each unit's recent historical
emissions followed by allocations to existing units of any allowances
not allocated to new units. These methodologies are similar to the
methodologies used by EPA to determine the default allocations to
existing units and to annually allocate NUSA allowances under the
Federal trading programs. However, while EPA's default allocations to
existing units are fixed for all future control periods, Indiana's
methodology calls for allocations for each successive control period to
be calculated using more recent data on the units' historical heat
input and maximum emissions.
The Indiana rules adopt the Phase 2 NOX Annual,
SO2 Group 1, and NOX Ozone Season Group 2 budgets
found at 40 CFR 97.410(a)(4)(iv), 97.610(a)(2)(iv), and
97.810(a)(5)(i), respectively. Accordingly, EPA will evaluate the
approvability of the Indiana SIP submission consistent with these
budgets.
B. EPA's Analysis of Indiana's SIP Submittal
1. Timeliness and Completeness of SIP Submittal
Indiana is seeking to replace EPA-determined allowance allocations
with state-determined allocations starting with the 2021 control
periods for all three CSAPR trading programs. For the
[[Page 40189]]
NOX Annual and SO2 Group 1 trading programs,
under 40 CFR 52.38(a)(5)(i)(B) and 52.39(f)(1)(ii), the deadline for
submission of state-determined allocations for the 2021 control periods
is June 1, 2018, triggering a December 1, 2017 SIP submittal deadline
for these programs under 40 CFR 52.38(a)(5)(vi) and 52.39(f)(6). For
the NOX Ozone Season Group 2 trading program, under 40 CFR
52.38(b)(9)(iii)(B), the allocation submission deadline for the 2021
control period is June 1, 2019, triggering a December 1, 2018 SIP
submittal deadline for this program under 40 CFR 52.38(b)(9)(viii).
Indiana submitted its SIP revision to EPA on November 27, 2017, and EPA
has determined that the submittal complies with the applicable minimum
completeness criteria in section 2.1 of appendix V to 40 CFR part 51.
Indiana has therefore met the requirements for timeliness and
completeness of its CSAPR SIP submittal for all three programs.
2. Methodology Covering All Allowances Potentially Requiring Allocation
In the rules for each Indiana trading program, section 2 adopts the
full amount of the state's budget under the corresponding Federal
program, sections 4 and 5 contain provisions replacing the
corresponding Federal program's default allocations to existing units,
and sections 6 and 7 contain provisions replacing the corresponding
Federal program's provisions for allocating allowances from the NUSAs.
There are no Indian country NUSAs for Indiana, making it unnecessary
for Indiana's rules to contain provisions addressing the disposition of
otherwise unallocated allowances from an Indian country NUSA after EPA
has carried out the Indiana country NUSA allocation procedures.
Indiana's rules therefore meet the condition under 40 CFR
52.38(a)(5)(i), 52.38(b)(9)(iii), and 52.39(f)(1) that the state's
allocation methodology must cover all allowances potentially requiring
allocation by the state.
3. Assurance That Total Allocations Will Not Exceed the State Budget
Indiana's rules provide for allocation of total amounts of
allowances equal to the emissions budgets set for Indiana for the
control periods in 2017 and subsequent years under the three CSAPR
trading programs. Indiana's NOX Annual trading budget is
incorporated by reference in 326 IAC 24-5-2(a), Indiana's
NOX Ozone Season Group 2 budget is incorporated in 326 IAC
24-6-2(a), and Indiana's SO2 Group 1 budget is incorporated
by reference in 326 IAC 24-7-2(a). Because there are no Indian country
NUSAs for Indiana, there is no possibility that additional allowances
will be made available for allocation under the state's methodology,
and EPA has not yet allocated or recorded CSAPR allowances for the
control periods in 2021 or later years for Indiana units. Indiana's
rules therefore meet the condition under 40 CFR 52.38(a)(5)(i)(A),
52.38(b)(9)(iii)(A), and 52.39(f)(1)(i) that, for each trading program,
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 State-Determined Allocations to EPA
In the rules for each trading program, section 3 sets out the dates
by which the state will submit state-determined allowance allocations
to EPA. For existing units, by June 1, 2018, the state will submit
allocations for the control periods in 2021 and 2022, and then,
starting in 2019, by June 1 of every second year the state will submit
allocations for the two control periods that are four and five years
after the year of the submittal (for example, the submittal due by June
1, 2019 will include allocations for the 2023 and 2024 control
periods). For NUSA allowances, for each control period the state will
submit first-round allocations by July 1 of the year of the control
period and second-round allocations by February 6 of the year after the
control period. These dates match or precede the applicable deadlines
for submittal of existing unit allocations in 40 CFR 52.38(a)(5)(i)(B),
52.38(b)(9)(iii)(B), and 52.39(f)(1)(ii) and the applicable deadlines
for submittal of NUSA allocations in 40 CFR 52.38(a)(5)(i)(C),
52.38(b)(9)(iii)(C), and 52.39(f)(1)(iii), thereby meeting the
conditions requiring allocations to be submitted before these
deadlines.
5. No Changes to Allocations Already Submitted to EPA or Recorded
The Indiana rules do not include any 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(a)(5)(i)(D),
52.38(b)(9)(iii)(D), and 52.39(f)(1)(iv).
6. No Other Substantive Changes to Federal Trading Program Provisions
As discussed above, Indiana's rules generally incorporate by
reference the corresponding provisions (including the definitions) of
the Federal trading programs, except for the default Federal provisions
addressing allowance allocations. The state has broad discretion to
adopt any allowance allocation methodology, subject to limits on the
total quantities of allowances allocated and the timing of submissions
of allocation information to EPA. EPA believes that Indiana intends for
the allocation provisions in its rules to adhere to the limits just
noted, but EPA also identified several issues concerning provisions of
the state rules that may not accurately reflect the state's intent in
adopting the provisions, as discussed below. By letter to EPA dated
June 11, 2018, the state has clarified its interpretation of these rule
provisions.\32\ EPA has confirmed that, as clarified, the only
substantive changes in Indiana's rules concern allowance allocations,
and that these changes do not exceed the state's broad discretion with
regard to allowance allocations.
---------------------------------------------------------------------------
\32\ See the June 11, 2018 letter from Assistant Commissioner
Keith Bauges to Regional Administrator Cathy Stepp, available in the
docket.
---------------------------------------------------------------------------
The first issue concerns instances where the text of two of
Indiana's CSAPR rules indicates that references to the rules'
allocation provisions should be substituted for certain references to
the default Federal allocation provisions, but the state rule text does
not accurately identify the default Federal provisions being replaced.
Indiana has clarified that, in the state's NOX Ozone Season
Group 2 rule at 326 IAC 24-6-1(d)(3), the state interprets the rule
text as replacing a reference to the default Federal allocation
provisions at ``40 CFR 97.811(a)(2) and (b) and 97.812'', not ``40 CFR
97.811(a)(2) and (b) 97.812'' as currently written in the rule text,
and that in the state's SO2 Group 1 rule at 326 IAC 24-7-
1(d)(3), the state interprets the rule text as replacing the default
Federal allocation provisions at ``40 CFR 97.611(a)(2) and (b) and
97.612'', not ``40 CFR 97.611(a)(2) and 97.611(b)'' as currently
written in the rule text. EPA agrees that the meaning of the rule text,
as interpreted by the state, is clear from context.
The second issue concerns an inaccurate terminology definition that
appears in all three of Indiana's CSAPR rules. In the nomenclature for
the
[[Page 40190]]
equation to calculate second-round NUSA allocations at 326 IAC
24.5.7(a)(2)(B), 326 IAC 24.6.7(a)(2)(B), and 326 IAC 24.7.7(a)(2)(B),
the rule text defines the term ``sum'' as ``the total amount of
allocations under this subdivision''. In context, the definition of
``sum'' as written cannot be correct because it is circular with the
term ``unit allowance'' in the same equation, and if the definition
were correct, the only situation in which the two sides of the equation
could be equal--i.e., where the total number of allowances available
for second-round NUSA allocations equals the sum of the eligible units'
historical emissions less the sum of the eligible units' first-round
NUSA allocations--is a situation in which the equation is not supposed
to be used. In its letter, Indiana has clarified that the state
interprets the term ``sum'' instead to mean ``the sum under this
subdivision''--that is, subdivision (2)--which elsewhere in subdivision
(2) is further defined as the ``the sum of the positive differences
determined under subdivision (1)''. EPA agrees that the state's
interpretation of the rule text is reasonable in context and notes that
it causes the equation to allocate allowances in the same manner as
EPA's default NUSA allocation methodology would allocate allowances in
an analogous situation.
The third issue also arises in all three of Indiana's CSAPR rules
and concerns a potential conflict between two requirements of the
state's allocation methodology. The first requirement, set forth at 326
IAC 24-5-5(d)(3) and (e)(1), 326 IAC 24-6-5(d)(3) and (e)(1), and 326
IAC 24-7-5(d)(3) and (e)(1), caps the allocation from the state's
``existing unit budget'' to each individual existing unit at an amount
based on the unit's historical emissions. The second requirement, set
forth at 326 IAC 24-5-5(e)(3), 326 IAC 24-6-5(e)(3), and 326 IAC 24-7-
5(e)(3), directs the state to repeat its allocation calculations
``until the entire existing unit budget is allocated.'' Under Indiana's
allocation methodology, unlike EPA's default allocation methodology,
the set of historical emissions data used to determine the caps on
individual units' allocations is periodically updated, creating the
possibility that for some future control period, the sum of the
individual units' applicable caps will be less than the total amount of
the existing unit budget, causing a conflict between these two
requirements. In the clarification letter, Indiana acknowledges the
potential for the conflict of the two requirements, however did not
find this to be an issue for the 2021 and 2022 allocation cycles.
Indiana will watch for this issue with future allocation cycles and
will revise the SIP in a timely matter if it becomes necessary. This
would include the possibility of an emergency rule if the normal rule
process was not expeditious enough. EPA agrees that this is a
reasonable approach if this becomes an issue in future allocation
cycles.
EPA concludes that the state's allocation methodology, as clarified
above, does not exceed the state's broad discretion regarding allowance
allocations and that the state's rules make no other substantive
changes to the Federal trading program provisions, thereby meeting the
condition in 40 CFR 52.38(a)(5), 52.39(f), and 52.38(b)(9).
7. Complete, Substantively Identical Trading Program Provisions
As discussed above, the Indiana SIP revision adopts state budgets
identical to the Phase 2 budgets for Indiana under the Federal trading
programs and adopts almost all of the provisions of the Federal CSAPR
NOX Annual Trading Program, CSAPR SO2 Group 1
Trading Program, and CSAPR NOX Ozone Season Group 2 Trading
Program, with the exception of differences in the allocation
methodology. Under the state's rules, Indiana will determine allowance
allocations beginning with the 2021 control periods.
With a few exceptions, the rules comprising Indiana's CSAPR state
trading program for annual NOX emissions either incorporate
by reference or adopt full-text replacements for all of the provisions
of 40 CFR 97.402 through 97.435; the rules comprising Indiana's CSAPR
state trading program for NOX ozone season emissions either
incorporate by reference or adopt full-text replacements for all of the
provisions of 40 CFR 97.802 through 97.835; and the rules comprising
Indiana's CSAPR state trading program for SO2 emissions
either incorporate by reference or adopt full-text replacements for all
of the provisions of 40 CFR 97.602 through 97.635. The major exception,
which as discussed above is a permissible substantive change, is that
Indiana has adopted rule provisions for a state-administered allocation
methodology replacing the default EPA-administered allocation
methodology. The additional minor exceptions discussed below are
likewise either permissible or required.
The first additional exception is that the Indiana rules do not
incorporate the provisions of 40 CFR 97.410(a) and (b), 97.810(a) and
(b), and 97.610(a) and (b) setting forth the amounts of the Phase 1
emissions budgets, NUSAs, and variability limits for Indiana and the
amounts of the Phase 1 and Phase 2 emissions budgets, NUSAs, Indian
country NUSAs, and variability limits for other states. Omission of the
Indiana Phase 1 emissions budget, NUSA, and variability limit amounts
is appropriate because Indiana's state trading programs do not apply to
emissions occurring in Phase 1 of CSAPR. Omission of the Phase 1 and
Phase 2 budget, NUSA, Indian country NUSA, and variability limit
amounts for other states from state trading programs in which only
Indiana units participate does not undermine the completeness of
Indiana's state trading programs. Indiana's rules incorporate or
include full-text replacement provisions for the remaining provisions
of 40 CFR 97.410, 97.810, and 97.610 that are relevant to trading
programs applicable only to Indiana units during the control periods in
2021 and later years.
The second additional exception is that the Indiana rules do not
incorporate 40 CFR 97.421(a) through (d), 97.821(a) through (c), and
97.621(a) through (d) setting forth the recordation schedules for
allowance allocations for control periods in years before 2021.
Omission of these provisions is non-substantive because Indiana's rules
apply only to allocations for control periods in 2021 and later years.
The third additional exception is that the Indiana rules do not
incorporate certain provisions of the Federal program regulations
concerning EPA's administration of Indian country NUSAs. Omission of
these provisions from Indiana's state trading program rules is
required, as discussed below.
None of the omissions undermines the completeness of Indiana's
state trading programs, and EPA has preliminarily determined that
Indiana's SIP revision makes no substantive changes to the provisions
of the Federal trading program regulations. Thus, Indiana's SIP
revision meets the condition under 40 CFR 52.38(a)(5), 52.38(b)(9), and
52.39(f) that 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, 97.802
through 97.835, and 97.602 through 97.635, respectively, except to the
extent permitted in the case of a SIP revision that seeks to replace
the default allowance allocation and/or applicability provisions.
8. Only Non-Substantive Substitutions for the Term ``State''
Indiana's CSAPR program rules do not make any substitutions for the
term
[[Page 40191]]
''State,'' rendering moot the condition in 40 CFR 52.38(a)(5)(iii),
52.38(b)(9)(v), and 52.39(f)(3) that any such substitutions must be
non-substantive.
9. Exclusion of Provisions Addressing Units in Indian Country
Indiana Rules 326 IAC 24-5-1(a), 326 IAC 24-6-1(a), and 326 IAC 24-
7-1(a) incorporate by reference the applicability provisions of the
Federal trading program rules at 40 CFR 97.404, 97.804, and 97.604,
respectively. There is no Indian country (as defined for purposes of
CSAPR) within Indiana's borders, so the applicability provisions of the
Indiana rules necessarily do not extend to any units in Indian country.
In addition, Indiana's SIP revision excludes the Federal trading
program provisions related to EPA's process for allocating and
recording allowances from Indian country NUSAs (i.e., 40 CFR
97.411(b)(2), 97.411(c)(5)(iii), 97.412(b), 97.421(h), and 97.421(j)
for the NOX Annual program; 40 CFR 97.811(b)(2),
97.811(c)(5)(iii), 97.812(b), 97.821(h), and 97.821(j) for the
NOX Ozone Season Group 2 program; and 40 CFR 97.611(b)(2),
97.611(c)(5)(iii), 97.612(b), 97.621(h), and 97.621(j) for the
SO2 Group 1 program). Indiana's SIP revision therefore meets
the conditions under 52.38(a)(5)(iv), 52.38(b)(9)(vi), and 52.39(f)(4)
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. What action is EPA taking?
EPA is proposing to approve Indiana's November 27, 2017, submittal,
incorporating Indiana CSAPR rules in 326 IAC 24-5, 24-6, and 24-7, as a
revision to Indiana's SIP. These state rules establish Indiana CSAPR
state trading programs for annual NOX, ozone season
NOX, and annual SO2 emissions for units in the
state. The Indiana CSAPR state trading programs would be integrated
with the Federal CSAPR NOX Annual Trading Program, the
Federal CSAPR NOX Ozone Season Group 2 Trading Program, and
the Federal CSAPR SO2 Group 1 Trading Program, respectively,
and would be substantively identical to the Federal trading programs
except for the allowance allocation provisions. If EPA approves the SIP
revision, Indiana units would generally be required to meet
requirements under Indiana's CSAPR state trading programs equivalent to
the requirements the units otherwise would have been required to meet
under the corresponding CSAPR Federal trading programs. This proposed
approval also includes the repeal of Indiana CAIR rules which have been
replaced by CSAPR for applicable EGUs. The rules being repealed from
the SIP are 326 IAC 24-1, 24-2, and 24-3 (except 3-1, 3-2, 3-4, and 3-
11). EPA is proposing to approve the SIP revision because it meets 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, as
discussed in section IV above.
EPA promulgated FIPs requiring Indiana units to participate in the
Federal CSAPR NOX Annual Trading Program, the Federal CSAPR
SO2 Group 1 Trading Program, and the Federal CSAPR
NOX Ozone Season Group 2 Trading Program in order to address
Indiana's obligations under CAA section 110(a)(2)(D)(i)(I) with respect
to the 1997 PM2.5 NAAQS, the 2006 PM2.5 NAAQS,
the 1997 ozone NAAQS, and the 2008 ozone NAAQS in the absence of SIP
provisions addressing those requirements. Approval of Indiana's SIP
submittal adopting CSAPR state trading program rules for annual
NOX, annual SO2, and ozone season NOX
substantively identical to the corresponding CSAPR Federal trading
program regulations (or differing only with respect to the allowance
allocation methodology) would fully satisfy Indiana'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 PM2.5 NAAQS, the 2006
PM2.5 NAAQS, and the 1997 ozone NAAQS in any other state and
partially satisfy Indiana's corresponding obligation with respect to
the 2008 ozone NAAQS.\33\ Approval of the SIP submittal therefore would
correct the same deficiency in the SIP that otherwise would be
corrected by those CSAPR FIPs. 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
requirement 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).\34\ Approval of Indiana's SIP submittal
establishing CSAPR state trading program rules for annual
NOX, annual SO2, and ozone season NOX
emissions therefore would result in automatic termination of the
requirements of Indiana units to participate in the Federal CSAPR
NOX Annual Trading Program, the Federal CSAPR SO2
Group 1 Trading Program, and the Federal CSAPR NOX Ozone
Season Group 2 Trading Program.
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\33\ As noted in footnote 2 above, in a separate action EPA has
proposed to make a determination that, if finalized, would cause
approval of this SIP revision to also fully satisfy Indiana's good
neighbor obligation with respect to the 2008 ozone NAAQS.
\34\ 40 CFR 52.38(a)(6), (b)(10)(i), 52.39(j); see also
52.789(a)(1), 52.789(b)(2); 52.790(a).
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In the SIP submittal, IDEM also requested approval of a revision to
326 IAC 26-1-5 replacing reliance on CAIR in the state's Regional Haze
program with reliance on CSAPR. EPA will act on this request in a
separate rulemaking.
VI. Incorporation by Reference
In this document, 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 Indiana rules 326 IAC 24-5, 326 IAC 24-6, and 326 IAC 24-7,
effective November 24, 2017. EPA has made, and will continue to make,
these materials generally available through www.regulations.gov and at
the EPA Region 5 office (please contact the person identified in the
FOR FURTHER INFORMATION CONTACT section of this preamble for more
information).
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 CAA and applicable
Federal regulations. 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
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 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);
Is not an Executive Order 13771 (82 FR 9339, February 2,
2017) regulatory action because SIP approvals are exempted under
Executive Order 12866;
Does not impose an information collection burden under the
provisions
[[Page 40192]]
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).
In addition, 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 and will not impose
substantial direct costs on tribal governments or preempt tribal law as
specified by Executive Order 13175 (65 FR 67249, November 9, 2000).
List of Subjects in 40 CFR Part 52
Environmental protection, Air pollution control, Incorporation by
reference, Intergovernmental relations, Nitrogen dioxide, Ozone,
Particulate matter, Reporting and recordkeeping requirements, Sulfur
oxides.
Dated: July 30, 2018.
Cathy Stepp,
Regional Administrator, Region 5.
[FR Doc. 2018-17357 Filed 8-13-18; 8:45 am]
BILLING CODE 6560-50-P
