Promulgation of Air Quality Implementation Plans; State of Texas; Regional Haze and Interstate Visibility Transport Federal Implementation Plan, 49170-49220 [2020-14408]
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Federal Register / Vol. 85, No. 156 / Wednesday, August 12, 2020 / Rules and Regulations
ENVIRONMENTAL PROTECTION
AGENCY
‘‘we,’’ ‘‘us,’’ or ‘‘our’’ is used, we mean
the EPA.
40 CFR Part 97
Table of Contents
[EPA–R06–OAR–2016–0611; FRL–10010–
52–Region 6]
Promulgation of Air Quality
Implementation Plans; State of Texas;
Regional Haze and Interstate Visibility
Transport Federal Implementation Plan
Environmental Protection
Agency (EPA).
ACTION: Final rule.
AGENCY:
Pursuant to the federal Clean
Air Act (CAA or Act), the
Environmental Protection Agency (EPA)
is finalizing its affirmation, with
amendments, of an intrastate sulfur
dioxide (SO2) trading program as an
alternative to best available retrofit
technology (BART) requirements for
certain sources in Texas. This action
finalizes the August 2018 proposed
affirmation and November 2019
supplemental notice of proposed
rulemaking (SNPRM) concerning certain
aspects of a final rule published on
October 17, 2017, partially approving
the 2009 Texas Regional Haze State
Implementation Plan (SIP) submission
and promulgating a Federal
Implementation Plan (FIP) for Texas to
address certain outstanding CAA
regional haze requirements for the first
implementation period.
DATES: This final rule is effective on
September 11, 2020.
ADDRESSES: The EPA has established a
docket for this action under Docket ID
No. EPA–R06–OAR–2016–0611. All
documents in the docket are listed on
the https://www.regulations.gov website.
Although listed in the index, some
information is not publicly available,
e.g., Confidential Business Information
(CBI) or other information whose
disclosure is restricted by statute
therefore is not posted to
regulations.gov. Certain other material,
such as copyrighted material, is not
placed on the internet and will be
publicly available only in hard copy.
Publicly available docket materials are
available either electronically through
https://www.regulations.gov or in hard
copy at EPA Region 6, 1201 Elm Street,
Suite 500, Dallas, Texas 75270.
FOR FURTHER INFORMATION CONTACT:
Jennifer Huser, Air and Radiation
Division, Environmental Protection
Agency, Region 6, 1201 Elm Street,
Suite 500, Dallas, Texas 75270,
telephone 214–665–7347; email address
Huser.Jennifer@epa.gov.
SUPPLEMENTARY INFORMATION:
Throughout this document wherever
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SUMMARY:
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I. Background
A. Regional Haze
B. Interstate Transport of Pollutants That
Affect Visibility
C. Previous Actions Related to Texas
Regional Haze
D. EPA’s Denial of the Petition for
Reconsideration of CSAPR as a BART
Alternative and its Relationship to This
Final Action
II. Our Proposed Actions
A. Proposed Rule Affirming the October
2017 Final Action
B. Supplemental Notice of Proposed
Rulemaking
III. Summary of Our Final Decisions
A. Regional Haze
1. Amendments to the Texas SO2 Trading
Program
2. Analysis of Texas SO2 Trading Program
as a BART Alternative
3. PM BART
4. Reasonable Progress
B. Interstate Transport of Pollutants That
Affect Visibility
IV. Summary and Responses to Significant
Issues Raised by Commenters
A. Texas SO2 Trading Program as a BART
Alternative
B. PM BART
C. Appropriateness of the Texas SO2
Trading Program vs. Source-Specific
BART FIP
D. Statutory Requirements for FIP
Promulgation and Implementation
E. Timing of the Plan for the First
Implementation Period
F. Notice and Comment Requirements
G. Subject-to-BART Determinations
H. Visibility Transport
I. Reasonable Progress
J. Coleto Creek
K. Assurance Provisions and the
Variability Limit
L. Venue
M. Other
V. Final Action
A. Regional Haze
B. Interstate Visibility Transport
VI. Statutory and Executive Order Reviews
I. Background
A. Regional Haze
Regional haze is visibility impairment
that is produced by a multitude of
sources and activities that are located
across a broad geographic area. These
sources—both human-caused
(anthropogenic) and naturally
occurring—emit or otherwise introduce
into the atmosphere PM, including fine
PM (PM2.5) (e.g., sulfates, nitrates,
organic carbon (OC), elemental carbon
(EC), and soil dust), or pollutants that
are precursors to the formation of PM2.5
(e.g., SO2, NOX, and, in some cases,
ammonia (NH3) and volatile organic
compounds (VOCs)). Fine-particle
precursors react in the atmosphere to
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form PM2.5, which impairs visibility by
scattering and absorbing light. Visibility
impairment limits visual distance and
reduces color, clarity, and contrast of
view. Reducing PM2.5 and its precursor
gases in the atmosphere is an effective
method of improving visibility. PM2.5
can also cause serious health effects and
mortality in humans and contributes to
environmental effects, such as acid
deposition and eutrophication.
Data from the existing visibility
monitoring network, the ‘‘Interagency
Monitoring of Protected Visual
Environments’’ (IMPROVE) monitoring
network, show that visibility
impairment caused by air pollution
occurs virtually all the time at most
national parks and wilderness areas. In
1999, the average visual range 1 in many
mandatory Class I areas 2 (i.e., national
parks and memorial parks, wilderness
areas, and international parks meeting
certain size criteria) in the western
United States was 100–150 kilometers,
or about one-half to two-thirds of the
visual range that would exist without
anthropogenic air pollution. In most of
the eastern Class I areas of the United
States, the average visual range was less
than 30 kilometers, or about one-fifth of
the visual range that would exist under
estimated natural conditions.3 Since the
promulgation of the original Regional
Haze Rule in 1999, CAA programs have
reduced emissions of haze-causing
pollution, lessening visibility
impairment and resulting in improved
average visual ranges.4
In Section 169A of the 1977
Amendments to the CAA, Congress
created a program for protecting
visibility in the nation’s national parks
1 Visual range is the greatest distance, in
kilometers or miles, at which a dark object can be
viewed against the sky.
2 Areas designated as mandatory Class I Federal
areas consist of National Parks exceeding 6,000
acres, wilderness areas and national memorial parks
exceeding 5,000 acres, and all international parks
that were in existence on August 7, 1977. 42 U.S.C.
7472(a). In accordance with section 169A of the
CAA, EPA, in consultation with the Department of
Interior, promulgated a list of 156 areas where
visibility is identified as an important value. 44 FR
69122 (November 30, 1979). The extent of a
mandatory Class I area includes subsequent changes
in boundaries, such as park expansions. 42 U.S.C.
7472(a). Although states and tribes may designate
as Class I additional areas which they consider to
have visibility as an important value, the
requirements of the visibility program set forth in
section 169A of the CAA apply only to ‘‘mandatory
Class I Federal areas.’’ Each mandatory Class I
Federal area is the responsibility of a ‘‘Federal Land
Manager.’’ 42 U.S.C. 7602(i). When we use the term
‘‘Class I area’’ in this action, we mean a ‘‘mandatory
Class I Federal area.’’
3 64 FR 35714 (July 1, 1999).
4 An interactive ‘‘story map’’ depicting efforts and
recent progress by EPA and states to improve
visibility at national parks and wilderness areas
may be visited at: https://arcg.is/29tAbS3.
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and wilderness areas. This section of the
CAA establishes as a national goal the
prevention of any future, and the
remedying of any existing, man-made
impairment of visibility in 156 national
parks and wilderness areas designated
as mandatory Class I Federal areas. On
December 2, 1980, EPA promulgated
regulations to address visibility
impairment in Class I areas that is
‘‘reasonably attributable’’ to a single
source or small group of sources, i.e.,
‘‘reasonably attributable visibility
impairment.’’ 5 These regulations
represented the first phase in addressing
visibility impairment. EPA deferred
action on regional haze that emanates
from a variety of sources until
monitoring, modeling, and scientific
knowledge about the relationships
between pollutants and visibility
impairment were improved.
Congress added section 169B to the
CAA in 1990 to address regional haze
issues, and we promulgated regulations
addressing regional haze in 1999.6 The
Regional Haze Rule revised the existing
visibility regulations to integrate into
the regulations provisions addressing
regional haze impairment and
established a comprehensive visibility
protection program for Class I areas.
EPA’s focus, following congressional
direction, continued to be on three
important visibility-impairing
pollutants from relatively uncontrolled
anthropogenic sources: Oxides of
nitrogen (NOX), sulfur dioxide (SO2),
and particulate matter (PM).7 The
requirements for regional haze, found at
40 CFR 51.308 and 51.309, are included
in our visibility protection regulations at
40 CFR 51.300–309. The requirement to
submit a regional haze SIP applies to all
50 states, the District of Columbia, and
the Virgin Islands (referred to
collectively hereafter as ‘‘states’’). States
were required to submit their first SIP
addressing regional haze visibility
impairment no later than December 17,
2007.8
Section 169A(b)(2)(A) of the CAA
directs states to evaluate the use of
retrofit controls at certain larger, often
under-controlled, older stationary
sources in order to address visibility
impacts from these sources.
Specifically, section 169A(b)(2)(A) of
the CAA requires states to revise their
SIPs to contain such measures as may be
necessary to make reasonable progress
toward the natural visibility goal,
5 45
FR 80084 (Dec. 2, 1980).
6 64 FR 35714 (July 1, 1999), codified at 40 CFR
part 51, subpart P (Regional Haze Rule).
7 Id. 35715.
8 See 40 CFR 51.308(b). EPA’s regional haze
regulations require subsequent updates to the
regional haze SIPs. 40 CFR 51.308(g)–(i).
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including a requirement that certain
categories of existing major stationary
sources 9 built between 1962 and 1977
procure, install and operate best
available retrofit technology (BART).
Larger ‘‘fossil-fuel fired steam electric
plants’’ are included among the
statutory list of BART source categories
at section 169A(g)(7). Under the
Regional Haze Rule, states are directed
to conduct BART determinations for
‘‘BART-eligible’’ sources that may be
anticipated to cause or contribute to any
visibility impairment in a Class I area.
The evaluation of BART for EGUs that
are located at fossil-fuel-fired power
plants having a generating capacity in
excess of 750 megawatts must follow the
‘‘Guidelines for BART Determinations
Under the Regional Haze Rule’’ at
appendix Y to 40 CFR part 51
(hereinafter referred to as the ‘‘BART
Guidelines’’). States are required to
identify the level of control representing
BART after considering the five
statutory factors set out in section
169A(g)(2).10 States must establish
emission limits, a schedule of
compliance, and other measures
consistent with the BART determination
process for each source subject-toBART.
Rather than requiring source-specific
BART controls, states also have the
flexibility to adopt an emissions trading
program or alternative program as long
as the alternative provides greater
reasonable progress towards improving
visibility than BART. 40 CFR
51.308(e)(2) specifies how a state must
conduct the demonstration to show that
an alternative program will achieve
greater reasonable progress than the
installation and operation of BART. 40
CFR 51.308(e)(2)(i)(E) requires a
determination under 40 CFR
51.308(e)(3) or otherwise based on the
clear weight of evidence that the trading
program or other alternative measure
achieves greater reasonable progress
than would be achieved through the
installation and operation of BART at
the covered sources. Specific criteria for
determining if an alternative measure
achieves greater reasonable progress
than source-specific BART are set out in
40 CFR 51.308(e)(3); however, as noted
above, under 40 CFR 51.308(e)(2)(i)(E)
states have the flexibility to develop
9 See
42 U.S.C. 7491(g)(7) (listing the set of
‘‘major stationary sources’’ potentially subject-toBART).
10 The State must take into consideration the five
statutory factors: (1) The costs of compliance, (2)
the energy and non-air quality environmental
impacts of compliance, (3) any existing control
technology in use at the source, (4) the remaining
useful life of the source, and (5) the degree of
visibility improvement which may reasonably be
anticipated to result.
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49171
their own criteria to establish greater
reasonable progress based on the ‘‘clear
weight of the evidence.’’ Finally, 40 CFR
51.308(e)(4) provides that states whose
sources participate in the Cross-State
Air Pollution Rule (CSAPR) trading
programs need not require the BARTeligible fossil fuel-fired steam electric
plants subject to those programs to
install, operate, and maintain BART for
the pollutant covered by the CSAPR
trading program.
Regional haze requirements are
generally implemented through the
cooperative-federalism framework of
section 110 of the Act, in which states
are given the primary opportunity to
meet the requirements through state
implementation plans (SIPs). Under
section 110(c) of the CAA, whenever we
disapprove a mandatory SIP submission
in whole or in part, or make a finding
that a state has failed to make such a
submission, we are required to
promulgate a federal implementation
plan (FIP) within two years unless the
state corrects the deficiency and we
approve the new SIP submittal.
B. Interstate Transport of Pollutants
That Affect Visibility
Section 110(a) of the CAA directs
states to submit a SIP that provides for
the implementation, maintenance, and
enforcement of each NAAQS. This is
commonly referred to as an
‘‘infrastructure SIP.’’ CAA section
110(a)(2)(D)(i)(II) requires that
infrastructure SIPs contain adequate
provisions to prohibit interference with
measures required to protect visibility
in other states. This is referred to as
‘‘interstate visibility transport’’ (or
‘‘prong 4’’ of the four requirements or
‘‘prongs’’ found in section
110(a)(2)(D)(i)). Infrastructure SIPs are
due to the EPA within three years after
the promulgation of a new or revised
NAAQS (or within such shorter period
as we may prescribe). A state’s failure to
submit a complete, approvable
infrastructure SIP, including one that
meets the requirements for interstate
visibility transport, creates an obligation
for the EPA to address this requirement
pursuant to section 110(c).
C. Previous Actions Related to Texas
Regional Haze
On March 31, 2009, Texas submitted
a regional haze SIP (the 2009 Regional
Haze SIP) to the EPA that included
reliance on Texas’ participation in
trading programs under the Clean Air
Interstate Rule (CAIR) as an alternative
to BART for SO2 and NOX emissions
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from EGUs.11 This reliance was
consistent with the EPA’s regulations at
the time that Texas developed its 2009
Regional Haze SIP.12 However, at the
time that Texas submitted this SIP to the
EPA, the D.C. Circuit had remanded
CAIR (without vacatur).13 The court left
CAIR and our CAIR FIPs in place in
order to ‘‘temporarily preserve the
environmental values covered by CAIR’’
until we could, by rulemaking, replace
CAIR consistent with the court’s
opinion. The EPA promulgated the
Cross-State Air Pollution Rule (CSAPR)
to replace CAIR in 2011 14 (and revised
it in 2012).15 CSAPR established FIP
requirements for sources in a number of
states, including Texas, to address the
states’ interstate transport obligation
under CAA section 110(a)(2)(D)(i)(I).
CSAPR addresses interstate transport of
fine particulate matter and ozone by
requiring affected EGUs in these states
to participate in one or more of the
CSAPR trading programs, which
establish emissions budgets that apply
to the EGUs’ collective annual
emissions of SO2 and NOX, as well as
emissions of NOX during ozone
season.16
Following issuance of CSAPR, the
EPA determined that CSAPR would
achieve greater reasonable progress
towards improving visibility than would
source-specific BART in CSAPR states
(a determination often referred to as
‘‘CSAPR Better-than-BART’’).17 In the
same action, we revised the Regional
Haze Rule to allow states whose sources
participate in the CSAPR trading
programs to rely on such participation
in lieu of requiring BART-eligible EGUs
in the state to install BART controls as
to the relevant pollutant.
In the same action that EPA
determined that states could rely on
CSAPR to address the BART
requirements for EGUs, EPA issued a
limited disapproval of a number of
11 CAIR required certain states, including Texas,
to reduce emissions of SO2 and NOX that
significantly contribute to downwind
nonattainment of the 1997 NAAQS for fine
particulate matter and ozone. See 70 FR 25152 (May
12, 2005).
12 See 70 FR 39104 (July 6, 2005).
13 See North Carolina v. EPA, 531 F.3d 896 (D.C.
Cir. 2008), as modified, 550 F.3d 1176 (D.C. Cir.
2008).
14 76 FR 48207 (Aug. 8, 2011).
15 CSAPR was amended three times in 2011 and
2012 to add five states to the seasonal NOX program
and to increase certain state budgets. 76 FR 80760
(December 27, 2011); 77 FR 10324 (February 21,
2012); 77 FR 34830 (June 12, 2012).
16 The ozone season for CSAPR purposes is May
1 through September 30.
17 77 FR 33641 (June 7, 2012). This determination
was recently upheld by the D.C. Circuit. See Util.
Air Regulatory Grp. v. EPA, 885 F.3d 714 (D.C. Cir.
2018).
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states’ regional haze SIPs, including the
2009 Regional Haze SIP submittal from
Texas, due to the states’ reliance on
CAIR, which had been replaced by
CSAPR.18 The EPA did not immediately
promulgate a FIP to address those
aspects of the 2009 Regional Haze SIP
submittal subject to the limited
disapproval of Texas’ regional haze SIP
to allow more time for the EPA to assess
the remaining elements of the 2009
Texas SIP submittal.
In December 2014, we proposed an
action to address the remaining regional
haze obligations for Texas.19 In that
action, we proposed, among other
things, to rely on our CSAPR FIP
requiring Texas sources’ participation in
the CSAPR trading programs to satisfy
the NOX and SO2 BART requirements
for Texas’ BART-eligible EGUs; we also
proposed to approve the portions of the
2009 Regional Haze SIP addressing PM
BART requirements for the state’s EGUs.
Before that rule was finalized, however,
the D.C. Circuit issued a decision on a
number of challenges to CSAPR,
denying most claims, but remanding the
CSAPR SO2 and/or seasonal NOX
emissions budgets of several states to
the EPA for reconsideration, including
the Phase 2 SO2 and seasonal NOX
budgets for Texas.20 Due to the
uncertainty arising from the remand of
Texas’ CSAPR budgets, we did not
finalize our December 2014 proposal to
rely on CSAPR to satisfy the SO2 and
NOX BART requirements for Texas
EGUs.21 Additionally, because our
proposed action on the PM BART
provisions for EGUs was dependent on
how SO2 and NOX BART were satisfied,
we did not take final action on the PM
BART elements of the 2009 Texas’
Regional Haze SIP.22 In January 2016,
we finalized action on the remaining
aspects of the December 2014
proposal.23 This final action
disapproved, among other things, Texas’
Reasonable Progress Goals for the Big
Bend and Guadalupe Mountains Class I
areas in Texas, Texas’s reasonable
progress analysis and Texas’s long-term
strategy. EPA promulgated a FIP
establishing a new long-term strategy
that consisted of SO2 emission limits for
15 coal-fired EGUs at eight power
plants. That rulemaking was judicially
challenged, however, and in July 2016,
the Fifth Circuit granted the petitioners’
motion to stay the rule pending
18 Id.
19 79
FR 74818 (Dec. 16, 2014).
Homer City Generation, L.P. v. EPA (EME
Homer City II), 795 F.3d 118, 132 (D.C. Cir. 2015).
21 See 81 FR 296, 301–02 (Jan. 5, 2016).
22 Id.
23 81 FR 296 (Jan. 5, 2016).
20 EME
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review.24 On March 22, 2017, following
the submittal of a request by the EPA for
a voluntary remand of the parts of the
rule under challenge, the Fifth Circuit
Court of Appeals remanded the rule in
its entirety.25
On October 26, 2016, the EPA
finalized an update to CSAPR to address
the interstate transport requirements of
CAA section 110(a)(2)(D)(i)(I) with
respect to the 2008 ozone NAAQS
(CSAPR Update).26 The EPA also
responded to the D.C. Circuit’s remand
in EME Homer City II of certain CSAPR
seasonal NOX budgets in that action. As
to Texas, the EPA withdrew Texas’
seasonal NOX budget finalized in
CSAPR to address the 1997 ozone
NAAQS. However, in that same action,
the EPA promulgated a FIP with a
revised seasonal NOX budget for Texas
to address the 2008 ozone NAAQS.27
Accordingly, Texas sources remain
subject to CSAPR seasonal NOX
requirements.
On November 10, 2016, in response to
the D.C. Circuit’s remand of Texas’s
CSAPR SO2 budget, we proposed to
withdraw the FIP provisions that
required EGUs in Texas to participate in
the CSAPR trading programs for annual
emissions of SO2 and NOX.28 We also
proposed to reaffirm the EPA’s 2012
analytical demonstration that CSAPR
provides greater reasonable progress
than BART, despite changes in CSAPR’s
geographic scope to address the EME
Homer City II remand, including
removal of Texas’ EGUs from the
CSAPR trading program for SO2
emissions. On September 29, 2017, we
finalized the withdrawal of the FIP
provisions for annual emissions of SO2
and NOX for EGUs in Texas 29 and
affirmed our proposed finding that the
EPA’s 2012 analytical demonstration
remains valid and that participation in
the CSAPR trading programs as they
now exist meets the Regional Haze
Rule’s criteria for an alternative to
BART. (We refer to this as the ‘‘2017
CSAPR Better-than-BART affirmation
finding’’ throughout this notice.) As
discussed in Section I.D below, certain
environmental organizations filed a
petition for reconsideration of this
finding in November 2017.
On January 4, 2017, we proposed a
FIP to address the EGU BART
24 Texas
25 Order,
v. EPA, 829 F.3d 405 (5th Cir. 2016).
Texas v. EPA, 16–60118 (5th Cir. Mar.
22, 2017).
26 81 FR 74504 (Oct. 26, 2016).
27 Id. 74524–25.
28 81 FR 78954 (Nov. 10, 2016).
29 82 FR 45481 (Sept. 29, 2017). As explained
above, Texas sources continue to be subject to the
CSAPR Update FIP, under which they participate
in a CSAPR trading program for ozone season NOX.
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requirements for Texas’ EGUs. With
respect to NOX, we proposed to replace
the 2009 Regional Haze SIP’s reliance
on CAIR with reliance on our CSAPR
FIP to address the NOX BART
requirements for EGUs.30 This portion
of our proposal was based on the
CSAPR Update and our separate
November 10, 2016 proposed finding,
described above, that the EPA’s actions
in response to the D.C. Circuit’s remand
would not adversely impact our 2012
demonstration that participation in the
CSAPR trading programs meets the
Regional Haze Rule’s criteria for
alternatives to BART. We noted that we
could not finalize this portion of our
proposed FIP to address the NOX BART
requirements for EGUs unless and until
we finalized our proposed finding that
CSAPR was still better than BART.31
(This predicate finding was finalized on
September 29, 2017, as described
above.)
With respect to SO2, our January 4,
2017 proposed action addressing the
BART requirements for Texas EGUs
acknowledged that because Texas
sources would no longer be
participating in the CSAPR program for
SO2, Texas would no longer be eligible
to rely on participation in CSAPR as an
alternative to source-specific EGU BART
for SO2 under 40 CFR 51.308(e)(4). As
a result, there were BART requirements
that were left unfulfilled with respect to
Texas’s BART-eligible EGU emissions of
SO2 that would need to be fulfilled by
either an approved SIP or an EPA-issued
FIP that satisfied the BART
requirements under 40 CFR 51.308(e)(1)
or constituted a viable BART alternative
under 40 CFR 51.308(e)(2) for those
emissions. EPA proposed to satisfy
these requirements through a BART FIP,
entailing the identification of BARTeligible EGU sources, screening to
identify which BART-eligible sources
are ‘‘subject-to-BART’’ (i.e., may
reasonably be anticipated to cause or
contribute to any impairment of
visibility in any Class I area), and
source-by-source determinations of SO2
BART controls as appropriate. For those
EGU sources we proposed to find
subject to BART, we proposed to
promulgate source-specific SO2
requirements. We proposed SO2
emission limits on 29 EGUs located at
14 facilities.
With respect to PM, in the January
2017 proposal, we proposed to
disapprove the portion of the 2009
Regional Haze SIP that made BART
determinations for PM from EGUs, on
the grounds that the demonstration in
30 82
31 Id.
FR 912, 914–15 (Jan. 4, 2017).
915.
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the 2009 Texas Regional Haze SIP relied
on underlying assumptions as to how
the SO2 and NOX BART requirements
for EGUs were being met that were no
longer valid with the proposed sourcespecific SO2 requirements.32 In place of
these determinations, we proposed to
promulgate source-specific PM BART
requirements based on existing practices
and control capabilities for those EGUs
that we proposed to find subject to
BART. Previously, we had proposed to
approve the EGU BART determinations
for PM in the 2009 Texas Regional Haze
SIP, and this proposal had never been
withdrawn.33 At that time, CSAPR was
an appropriate alternative for SO2 and
NOX BART for EGUs. The 2009 Texas
Regional Haze SIP included a pollutantspecific screening analysis for PM to
demonstrate that Texas EGUs were not
subject to BART for PM. In a 2006
guidance document,34 the EPA stated
that pollutant-specific screening can be
appropriate where a state is relying on
a BART alternative to address both NOX
and SO2 BART. However, in the January
2017 proposal, we proposed to
disapprove the PM BART determination
since SO2 BART was no longer
addressed by a BART alternative. For
coal-fired units, we proposed PM BART
limits consistent with PM emission
limits in the Mercury and Air Toxics
Standards (MATS) rule; for gas-fired
units, we proposed PM BART would be
satisfied by making burning pipelinequality gas federally enforceable; and for
oil-fired units, we proposed that fuelcontent requirements for SO2 BART
would also satisfy PM BART.35
In our final action addressing BART
for Texas published on October 17,
2017, we finalized our January 2017
proposed determination that Texas’
participation in CSAPR’s trading
32 In the 2009 Regional Haze Texas SIP, for EGU
BART, Texas’ BART-eligible EGUs’ emissions of
both SO2 and NOX were covered by participation
in trading programs, which allowed Texas to
conduct a screening analysis of the visibility
impacts from PM emissions from such units in
isolation. However, modeling on a pollutantspecific basis for PM is appropriate only in the
narrow circumstance of reliance on BART
alternatives to satisfy both NOX and SO2 BART. Due
to the complexity and nonlinear nature of
atmospheric chemistry and chemical transformation
among pollutants, EPA has not recommended
performing modeling on a pollutant-specific basis
to determine whether a source is subject to BART,
except in the unique situation described above. See
discussion in Memorandum from Joseph Paisie to
Kay Prince, ‘‘Regional Haze Regulations and
Guidelines for Best Available Retrofit Technology
(BART) Determinations,’’ July 19, 2006.
33 79 FR 74817, 74853–54 (Dec. 16, 2014).
34 See discussion in Memorandum from Joseph
Paisie to Kay Prince, ‘‘Regional Haze Regulations
and Guidelines for Best Available Retrofit
Technology (BART) Determinations,’’ July 19, 2006.
35 82 FR 936.
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49173
program for ozone-season NOX qualifies
as an alternative to source-specific NOX
BART. We determined that the SO2
BART requirements for all BARTeligible coal-fired units and a number of
BART-eligible gas- or gas/fuel oil-fired
units are satisfied by a BART alternative
for SO2—specifically, a new intrastate
trading program that we established
addressing emissions of SO2 from
certain EGUs in Texas. The remaining
BART-eligible EGUs not covered by the
SO2 BART alternative were previously
determined to be not subject to BART
based on screening methods using
model plants and CALPUFF 36 modeling
as described in our proposed rule and
BART Screening technical support
document (TSD).37 Finally, because
both NOX and SO2 were now being
addressed by a BART alternative, we
approved the 2009 Regional Haze SIP’s
determination, based on a pollutantspecific screening analysis, that Texas’
EGUs are not subject to BART for PM.
With respect to visibility transport
obligations, we determined that the
BART alternative to address SO2 and
Texas sources’ participation in CSAPR’s
trading program for ozone-season NOX
to address NOX BART at Texas’ EGUs
fully addresses Texas’ obligations for six
NAAQS.
D. EPA’s Denial of the Petition for
Reconsideration of CSAPR as a BART
Alternative and its Relationship to This
Final Action
As explained in the section above, on
September 29, 2017, we finalized the
withdrawal of the CSAPR FIP
provisions for annual emissions of SO2
and NOX for EGUs in Texas.38 We also
finalized our November 2016 proposed
finding affirming that the EPA’s 2012
analytical demonstration remains valid
and that participation in the CSAPR
36 CALPUFF (California Puff Model) is a multilayer, multi-species non-steady-state puff
dispersion modeling system that simulates the
effects of time- and space-varying meteorological
conditions on pollutant transport, transformation,
and removal. CALPUFF is intended for use in
assessing pollutant impacts at distances greater than
50 kilometers to several hundreds of kilometers. It
includes algorithms for calculating visibility effects
from long range transport of pollutants and their
impacts on Federal Class I areas. EPA previously
approved the use of the CALPUFF model in BART
related analyses (40 CFR part 51 Regional Haze
Regulations and Guidelines for Best Available
Retrofit Technology (BART) Determinations; Final
Rule; 70 FR 39104—39172; July 6, 2005). For
instructions on how to download the appropriate
model code and documentation that are available
from Exponent (Model Developer/Owner) at no cost
for download, see EPA’s website: https://
www.epa.gov/scram/air-quality-dispersionmodeling-preferred-and-recommendedmodels#calpuff.
37 See document at docket identification number
EPA–R06–OAR–2016–0611–0005.
38 82 FR 45481 (Sept. 29, 2017).
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trading programs continues to meet the
Regional Haze Rule’s criteria for an
alternative to BART. In our October 17,
2017, action promulgating the Texas
intrastate SO2 trading program, we
relied on that determination and the fact
that the Texas program would achieve
SO2 emission reductions similar to what
CSAPR would have achieved in Texas
to conclude that the Texas program
satisfies the requirements for a BART
alternative under 40 CFR 51.308(e)(2).39
On November 28, 2017, Sierra Club
and the National Parks Conservation
Association submitted a petition for
partial reconsideration of our September
2017 finding affirming that CSAPR
continues to satisfy requirements as a
BART alternative.40 Among other
things, these petitioners alleged that our
analysis was materially flawed and must
be reconsidered to the extent that it
rested on an assumption that EGU
BART sources in Texas would be
subject to source-specific BART controls
for SO2 rather than the intrastate SO2
trading program.41 Petitioners alleged in
particular that EPA’s emissions shifting
analysis accounted for potential
increases in emissions in remaining
CSAPR states of between 22,300 to
53,000 tons by assuming these
emissions would be offset by an
estimated 127,300 tons of SO2 emission
reductions in Texas due to sourcespecific BART controls.42 However,
these petitioners alleged that this
assumption was proven false when EPA
promulgated the Texas intrastate trading
program rather than source-specific
BART.43 On this basis, among other
things, petitioners sought mandatory
reconsideration of the September 29,
2017 action under CAA section
307(d)(7)(B).
In a separate action, EPA is denying
this petition for reconsideration.44 That
action, and the basis for that action as
it relates to the determination that
CSAPR remains a valid BART
39 82
FR 48324, 48330, 48357 (Oct. 17, 2017).
Club and National Parks Conservation
Association, Petition for Partial Reconsideration of
Interstate Transport of Fine Particulate Matter:
Revision of Federal Implementation Plan
Requirements for Texas; Final Rule; 82 FR 45,481
(Sept. 29, 2017); EPA–HQ–OAR–2016–0598; FRL–
9968–46–OAR (Nov. 28, 2017).
41 See, e.g., id. 6 (citing 82 FR 45494).
42 Id. 13–14 (citing 82 FR 45493–94).
43 Id.
44 See U.S. EPA, Denial of Petition for Partial
Reconsideration of ‘‘Interstate Transport of Fine
Particulate Matter: Revision of Federal
Implementation Plan Requirements for Texas’’ (82
FR 45481; Sept. 29, 2017) (EPA–HQ–OAR–2016–
0598). A copy of the denial of petition letter sent
to the petitioners and the denial of petition Notice
of Availability (NOA) published in the Federal
Register are available at Docket ID EPA–HQ–OAR–
2016–0598.
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alternative, are beyond the scope of this
action. With the denial of the petition
for reconsideration of our 2017
affirmation in that separate action, EPA
has made a final determination that the
objections raised by the petitioners on
the 2017 affirmation of CSAPR as a
BART alternative are not of central
relevance.45 As such, there is no longer
any outstanding question whether
CSAPR is a satisfactory BART
alternative. Therefore, as discussed in
Section III.A.2 below, in this action EPA
is finalizing its affirmation that it may
rely on the CSAPR BART-alternative
analysis as a part of its ‘‘clear weight of
the evidence’’ demonstration that the
Texas intrastate trading program
achieves greater reasonable progress
than BART.
II. Our Proposed Actions
A. Proposed Rule Affirming the October
2017 Final Action
On December 15, 2017, EPA received
a petition for reconsideration of the
October 2017 final rule addressing
BART in Texas requesting that the
Administrator reconsider certain aspects
of the FIP related to the intrastate
trading program promulgated to address
the SO2 BART requirement for Texas
EGUs. In our April 30, 2018 letter in
response to that petition, we stated that
we believed that certain aspects of the
federal plan could benefit from further
public comment. Accordingly, in a
notice published on August 27, 2018,
we proposed to affirm certain aspects of
our SIP approval and of the FIP, and we
provided the public with an opportunity
to comment on those aspects, as well as
other specified related issues.46
Specifically, we took comment on the
following elements, which effectively
covered all of petitioners’ central
objections: (1) The proposal to affirm
the October 2017 FIP establishing an
intrastate trading program addressing
emissions of SO2 from certain EGUs in
Texas as a BART alternative and the
determination that this program satisfies
the requirements for BART alternatives;
(2) the proposal to affirm the finding
that the BART alternatives in the
October 2017 rulemaking to address SO2
and NOX BART at Texas’ EGUs result in
emission reductions adequate to satisfy
the requirements of CAA section
110(a)(2)(D)(i)(II) with respect to
visibility for the following NAAQS:
1997 8-hour ozone, 1997 PM2.5 (annual
and 24-hour), 2006 PM2.5 (24-hour),
2008 8-hour ozone, 2010 1-hour NO2,
and 2010 1-hour SO2 NAAQS; and (3)
the proposal to affirm our October 2017
approval of Texas’ SIP determination
that no sources are subject to BART for
PM. The August 2018 affirmation
proposed rule also solicited comment
on the specific issues of whether recent
shutdowns of sources included in the
trading program and the merger of two
owners of affected EGUs should impact
the allocation methodology for certain
SO2 allowances. In addition to soliciting
comment on the above elements and
aforementioned specific issues, the
August 2018 affirmation proposal also
invited comment on additional issues
that could inform our decision making
with regard to the SO2 BART obligations
for Texas. First, we sought input on
whether SO2 BART would be better
addressed through a source-by-source
approach (source-specific BART), the
October 2017 SO2 trading program, or
some other appropriate BART
alternative. Second, EPA requested
comment on whether a SIP-based
program would serve Texas better than
a FIP. Third, we requested public input
on whether and how the SO2 trading
program finalized in the October 2017
final rule addresses the long-term
strategy and reasonable progress
requirements for Texas.
B. Supplemental Notice of Proposed
Rulemaking
In response to certain comments
received during the public comment
period for the August 2018 proposal to
affirm the October 2017 FIP, we
proposed revisions to the Texas SO2
Trading Program in a supplemental
proposal published on November 14,
2019.47 In the supplemental proposal,
we proposed to make four sets of
amendments to the Texas SO2 Trading
Program: (1) The addition of assurance
provisions; (2) revisions to the
Supplemental Allowance Pool
allocation provisions; (3) termination of
the opt-in provisions; and (4) revision of
the allowance recordation provisions.
(1) Addition of Assurance Provisions.
The Texas SO2 Trading Program, as
promulgated in October 2017, did not
include an assurance level. In contrast
to CSAPR, the Texas SO2 Trading
Program does not allow for sources to
purchase allowances from sources in
other states. Therefore, the number of
allowances available to the Texas
sources under the SO2 trading program,
as promulgated in October 2017, is
limited by the total number of
allowances allocated under the program.
While this limits the average annual
emissions under the program, we
recognized that the potential use of
45 Id.
46 83
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banked allowances and allowances
allocated from the Supplemental
Allowance Pool could allow for
potentially significant year-to-year
variability in emissions. In each of the
CSAPR trading programs, EPA set an
assurance level for each state in order to
ensure that, despite the broad, interstate
trading region, emissions reductions
would be achieved appropriately in a
geographically distributed way
commensurate with states’ ‘‘good
neighbor’’ obligations as determined by
EPA through its analysis under CAA
section 110(a)(2)(D)(i)(I).48 In order to
maintain consistency with the CSAPR
program and to provide additional
support for our determination that SO2
emissions under the Texas SO2 Trading
Program will remain below the requisite
level on an annual basis, the EPA
proposed to add assurance provisions to
the Texas SO2 Trading Program in the
November 2019 supplemental proposal,
setting the assurance level by relying on
the same analysis and methodology that
were used to set assurance levels in the
original CSAPR rulemaking while
accounting for the fact that the Texas
SO2 Trading Program is intrastate-only
(i.e., does not permit interstate trading).
EPA proposed to set an assurance level
for the Texas SO2 Trading Program of
255,081 tons and proposed to impose a
penalty surrender ratio of three
allowances for each ton of emissions in
any year in excess of the 255,081-ton
assurance level.
EPA further proposed that this
assurance level would strengthen our
determination that the Texas program
compares favorably to CSAPR in terms
of stringency. EPA noted that its
previous CSAPR Better-than-BART
analysis relied on assuming annual SO2
emissions from Texas EGUs of 317,100
tons. For certain EGUs not covered by
the Texas program but that would have
been subject to CSAPR, EPA made a
conservative estimate of 35,000 tons of
annual emissions. Adding this to the
255,081 ton assurance level produced
an upper bound estimate of 290,081
tons of emissions, which EPA noted is
below the 317,100 ton assumption used
for CSAPR.49
(2) Revisions to the Supplemental
Allowance Pool Allocation Provisions.
40 CFR 97.912 of the existing Texas SO2
Trading Program regulations establishes
how allowances are allocated from the
Supplemental Allowance Pool to
sources (collections of participating
units at a facility) that have reported
total emissions for that control period
exceeding the total amounts of
48 76
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allowances allocated to the participating
units at the source for that control
period (before any allocation from the
Supplemental Allowance Pool). While
all other sources required to participate
in the trading program have flexibility
to transfer allowances among multiple
participating units under the same
owner/operator when planning
operations, Coleto Creek consists of only
one coal-fired unit, and at the time of
our October 2017 FIP, was the only coalfired unit in Texas owned and operated
by Dynegy. To provide this source
additional flexibility, in the trading
program as it was promulgated in
October 2017, Coleto Creek was
allocated its maximum supplemental
allocation from the Supplemental
Allowance Pool as long as there are
sufficient allowances in the
Supplemental Allowance Pool available
for allocation, and its actual allocation
would not be reduced in proportion
with any reductions made to the
supplemental allocations to other
sources. In our August 2018 proposal,
we noted that Dynegy has merged with
Vistra, which owns other units that are
subject to the trading program. In the
August 2018 proposal, we solicited
comment on eliminating this additional
flexibility for Coleto Creek in light of the
recent change in ownership, and we
received no adverse comments on such
a change. Therefore, in the November
2019 supplemental proposal, we
proposed to make this change to the
regulations.50
Some comments on our August 2018
proposal also expressed the view that it
would be more equitable to make
allocations from the Supplemental
Allowance Pool in proportion to each
owner’s total emissions in excess of the
owner’s total base allowance allocations
instead of in proportion to each
individual source’s emissions in excess
of the individual source’s base
allowance allocation. In the November
2019 supplemental proposal, EPA
proposed to agree that this change
would be equitable and noted that it
would also be consistent with the
rationale for proposing to eliminate the
special flexibility in the existing
regulations for Coleto Creek.
Accordingly, EPA proposed to amend
the Supplemental Allowance Pool
allocation provisions to reflect this
further change in the allocation
methodology. EPA specifically
requested comment on the proposed
revisions to the Supplemental
Allowance Pool allocation provisions.51
50 Id.
61855.
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(3) Termination of the Opt-in
Provisions. In response to a comment on
the August 2018 proposal that asserted
that the opt-in provisions weakened the
functional equivalence of the Texas SO2
Trading Program to CSAPR, EPA
proposed to terminate the opt-in
provisions in the Texas SO2 Trading
Program in the November 2019
supplemental proposal. We noted that
our proposal to terminate the opt-in
provisions is consistent with the
supplemental proposal’s overall
objective of strengthening our finding
that the Texas SO2 Trading Program will
result in SO2 emission levels from Texas
EGUs that are similar to or less than the
emission levels from Texas EGUs that
would have been realized from
participation in the SO2 trading program
under CSAPR. EPA also specifically
requested comment on the proposed
termination of the opt-in provisions and
solicited comment as to what other
relevant provisions in the Texas SO2
Trading Program may offset the
commenter’s concerns with the opt-in
provisions.52
(4) Revision of the Allowance
Recordation Provisions. In the
November 2019 supplemental proposal,
we also proposed to amend the language
in the recordation provisions such that
the Administrator can delay recordation
of Texas SO2 Trading Program
allowances for the specified control
periods only in the event that Texas
submits a SIP revision and EPA takes
final action to approve it. Under 40 CFR
97.921(a) of the Texas SO2 Trading
Program regulations as originally
promulgated in October 2017, ‘‘[t]he
Administrator may delay recordation of
Texas SO2 Trading Program allowances
for the specified control periods if the
State of Texas submits a SIP revision
before the recordation deadline.’’
Similarly, under § 97.921(b), ‘‘[t]he
Administrator may delay recordation of
the Texas SO2 Trading Program
allowances for the applicable control
periods if the State of Texas submits a
SIP revision by May 1 of the year of the
applicable recordation deadline under
this paragraph.’’ The revisions we
proposed in the November 2019
supplemental proposal are necessary to
ensure that the program remains fully
operational unless it is replaced by a SIP
revision that is approved by EPA as
meeting the SO2 BART requirements for
the covered units. EPA specifically
requested comment on the proposed
revisions to the allowance recordation
provisions.53
52 Id.
51 Id.
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Finally, the EPA noted that the
proposed revisions to the Texas SO2
Trading Program would strengthen the
program in a manner that provides
further support that it will achieve
greater emission reductions than Texas
had agreed to in consultations with
other states in setting reasonable
progress goals for Class I areas outside
Texas for the first implementation
period of the Regional Haze Rule. As a
result, the EPA believed the proposed
changes strengthened its conclusion that
the Texas trading program, in
conjunction with Texas’ participation in
the CSAPR ozone-season NOX trading
program, satisfies interstate visibility
transport obligations under section
110(a)(2)(D)(i)(II) as to the six NAAQS
identified above. The EPA solicited
comment on this relationship.54
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III. Summary of Our Final Decisions
A. Regional Haze
After carefully considering the
comments we received on our August
27, 2018 proposed rule and our
November 14, 2019 supplemental
proposal, we are taking final action to
affirm our determination that our
October 2017 FIP that established an
intrastate trading program addressing
emissions of SO2 from certain EGUs in
Texas, as amended in this final action
as described in section III.A.1 below,
satisfies the Regional Haze Rule
requirements for a BART alternative
under 40 CFR 51.308(e)(2). We are
taking final action to affirm our
determination that the BART
alternatives addressing SO2 BART, as
amended in this final action, and NOX
BART at Texas’ EGUs are adequate to
satisfy the interstate visibility transport
requirements for six NAAQS. We are
also taking final action to affirm our
October 2017 approval of Texas’ SIP
determination that no sources are
subject to BART for PM. A discussion of
the amendments to the Texas SO2
Trading Program we are finalizing in
today’s final action and explanation of
how the trading program satisfies the
regulatory requirements for BART
alternatives are discussed below in
sections III.A.1 and III.A.2, respectively.
This final rule is promulgated pursuant
to CAA section 307(d). This includes
our affirmation of the several aspects of
the FIP promulgating the Texas SO2
Trading Program, amendments to
certain provisions of the FIP, which are
307(d)-listed actions, see 307(d)(1)(B). In
addition, EPA exercises its discretion
under 307(d)(1)(V) to treat the
affirmation of our approval of parts of
the 2009 Texas Regional Haze SIP as
also an action subject to 307(d)
requirements and procedural
protections.
1. Amendments to the Texas SO2
Trading Program
In response to certain comments we
received during the public comment
period for the August 2018 proposal to
affirm the October 2017 FIP, we
proposed revisions to the Texas SO2
Trading Program in a supplemental
proposal published on November 14,
2019.55 We proposed to make four sets
of amendments to the Texas SO2
Trading Program: (1) The addition of
assurance provisions; (2) revisions to
the Supplemental Allowance Pool
allocation provisions; (3) termination of
the opt-in provisions; and (4) revision of
the allowance recordation provisions.
We are finalizing these amendments to
the Texas SO2 Trading Program, with
certain modifications. We are also
correcting a 2-ton error we made in the
allowance allocation for El Paso
Electric’s Newman Plant due to a unitidentification error, thereby increasing
the trading program budget from
238,393 tons to 238,395 tons. The
amendments we are finalizing in today’s
action strengthen the Texas SO2 Trading
Program and increase its consistency
with CSAPR. These amendments are
discussed in the paragraphs that follow.
Addition of Assurance Provisions. In
order to maintain consistency with the
CSAPR program and to provide
additional support for our
determination that SO2 emissions under
the Texas SO2 Trading Program will
remain below the requisite level on an
annual basis, we are taking final action
to add assurance provisions to the Texas
SO2 Trading Program. To set the
assurance level, we are relying on the
same analysis and methodology that
were used to set assurance levels in the
original CSAPR rulemaking while
accounting for the fact that the Texas
SO2 Trading Program is intrastate-only
(i.e., does not permit interstate trading).
As discussed in our supplemental
proposal, EPA determined in the CSAPR
rulemaking that, on a state-specific basis
for Texas, the statistical percentage
measure representing the maximum
expected one-year deviation from the
state’s average annual fossil fuel
consumption for electricity generation
was seven percent.56 Applying that
same percentage to the current Texas
SO2 Trading Program budget, EPA is
finalizing a variability limit for Texas at
16,688 tons, which is seven percent of
55 84
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the corrected trading budget of 238,395
tons. The assurance level we are
finalizing is the sum of the budget and
the variability limit, or 255,083 tons,
and we are making this assurance level
effective beginning with the 2021
compliance period and for each period
thereafter. We are also taking final
action to amend the Texas SO2 Trading
Program’s regulations to impose a
penalty surrender ratio of three
allowances for each ton of emissions in
any year in excess of the 255,083-ton
assurance level. We are taking final
action to impose the penalty
proportionately to emissions from those
groups of sources represented by a
common designated representative that
emit in excess of the groups’ annual
allocations of allowances. Thus, if the
total emissions of all sources in the
program in any year exceed the annual
program budget by more than a
variability limit of 16,688 tons, the
emissions over the assurance level will
trigger a requirement for some sources
to surrender three allowances for each
ton of emissions over the assurance
level, providing a strong disincentive
against emissions exceeding the
assurance level.
We are taking final action to add new
provisions at multiple locations in the
Texas SO2 Trading Program regulations
at 40 CFR part 97, subpart FFFFF (40
CFR 97.901 through 97.935) to add these
assurance provisions. In § 97.902, new
definitions of several terms used in the
assurance provisions (‘‘assurance
account,’’ ‘‘common designated
representative,’’ ‘‘common designated
representative’s assurance level,’’ and
‘‘common designated representative’s
share’’) are being added in this final
action. New § 97.906(c)(2) and(c)(3)(ii)
set forth the central requirement of the
assurance provisions—namely, that if
SO2 emissions from all covered sources
in 2021 or any subsequent year
collectively exceed the program’s
assurance level, then the owners and
operators of the groups of sources
determined to be responsible for the
collective exceedance would be
required to surrender allowances
totaling twice the amount of the
exceedance by a specified deadline, in
addition to the allowances surrendered
to account for the sources’ total
emissions. New § 97.910(b) and (c)
establish the variability limit that would
be added to the trading program budget
to determine the amount of the
assurance level. New § 97.920(b)
provides for the establishment of
assurance accounts, when appropriate,
to hold the additional allowances to be
surrendered. New § 97.925 sets forth
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additional procedures for EPA’s
administration of and sources’
compliance with the assurance
provisions. In addition to adding the
provisions discussed above, in §§ 97.906
and 97.920, we are also taking final
action to renumber and update internal
cross-references to reflect the added and
renumbered paragraphs. Finally, we are
making revisions to existing language at
§§ 97.902 (definitions of ‘‘general
account’’ and ‘‘Texas SO2 Trading
Program allowance deduction’’),
97.906(b)(2), 97.913(c), 97.926(b),
97.928(b), and renumbered
97.906(c)(4)(ii) to integrate the new
assurance provisions with various
existing provisions of the Texas program
regulations.
As discussed in our November 2019
supplemental proposal, in addition to
being consistent with the original
CSAPR methodology for setting
assurance levels, an assurance level set
at 255,083 tons is appropriate for the
Texas SO2 Trading Program because it
provides further support for our October
2017 finding that the Texas SO2 Trading
Program will result in SO2 emission
levels from Texas EGUs that are similar
to or less than the emission levels from
Texas EGUs that would have been
realized from participation in the SO2
trading program under CSAPR.
Additionally, at an assurance level of
255,083 tons of emissions annually,
EPA has high confidence that emissions
will be below the amount assumed in
the BART-alternative sensitivity
analysis utilized for the 2012 CSAPR
Better-than-BART determination (i.e.,
317,100 tons), and thus visibility levels
at Class I areas impacted by sources in
Texas are anticipated to be at least as
good as the levels projected in the 2012
analysis that assumed Texas would be
in the larger CSAPR SO2 trading
program.57
The language of the revisions to the
Texas SO2 Trading Program regulations
we are finalizing in this final
rulemaking would generally parallel the
analogous language from the CSAPR
regulations at 40 CFR part 97, subparts
AAAAA through EEEEE, streamlined to
reflect the Texas program’s narrower
applicability (i.e., specific units located
only in Texas, excluding any new units
built either in Texas or in Indian
country within Texas’ borders). The
only substantive differences from the
analogous CSAPR assurance provisions
concern the approach used to impute
allocation amounts—for use in
apportioning responsibility for any
collective exceedance of the assurance
level—to any units that do not receive
57 Id.
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actual allowance allocations from the
trading program budget. Under CSAPR,
the only units potentially in this
situation are new units that do not
receive allowance allocations from the
CSAPR new unit set-asides. The CSAPR
regulations include a methodology for
computing unit-specific imputed
allocation amounts based on several
data elements relating to the new units’
design and potential operation.58 In
contrast, under the Texas SO2 Trading
Program, the only units potentially in
this situation would be existing units
that have ceased operation for an
extended period, thereby losing their
allocations from the trading budget
under § 97.911(a), and that subsequently
resume operation.59 Because the Texas
SO2 Trading Program regulations
already identify the unit-specific
allowance allocations that these units
would formerly have received from the
trading budget, the Texas SO2 Trading
Program assurance provisions we are
finalizing in this final rulemaking
would use these previously established
amounts for purposes of assurance
provision calculations instead of
requiring new imputed allocation
amounts to be computed according to
the more complex methodology in the
CSAPR assurance provisions. The
simpler approach we are finalizing for
the Texas SO2 Trading Program
assurance provisions appears at
paragraph (2) of the new definition of
‘‘common designated representative’s
assurance level’’ we are finalizing in
§ 97.902.
Revisions to the Supplemental
Allowance Pool Allocation Provisions.
All sources required to participate in the
Texas SO2 Trading Program have the
flexibility to transfer allowances among
multiple participating units under the
same owner/operator when planning
operations. As discussed in section II.B
of this final action, the October 2017
final rule included additional flexibility
to transfer allowances for Coleto Creek,
but given the subsequent merger of
Dynegy with Vistra, which owns other
units that are subject to the trading
program, Coleto Creek now has the same
flexibility as other sources required to
participate in the trading program to
58 See, e.g., paragraph (3) of the definition of
‘‘common designated representative’s share’’ at 40
CFR 97.702.
59 Although the owners and operators of a unit in
this situation might receive an allocation of
allowances from the Supplemental Allowance Pool
under § 97.912 based in part on the unit’s emissions
following resumption of operations, under the
Texas program assurance provisions, any
allocations of allowances from the Supplemental
Allowance Pool would not be considered when
apportioning responsibility for a collective
exceedance of the assurance level.
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transfer allowances among multiple
participating units under the same
ownership when planning operations.
In light of this, we are taking final action
to eliminate the additional flexibility
originally offered under the trading
program for Coleto Creek.
We are also finalizing amendments to
the methodology for allocating
allowances from the Supplemental
Allowance Pool such that allowance
allocations are in proportion to each
owner’s total emissions in excess of the
owner’s total base allowance allocations
instead of in proportion to each
individual source’s emissions in excess
of the individual source’s base
allowance allocation. Comments we
received on our August 2018 proposal
and our November 2019 supplemental
proposal generally indicated support for
this change.60 We find that this change
would make the methodology for
allocating allowances more equitable
and is also consistent with the rationale
for eliminating the special flexibility in
the existing regulations for Coleto Creek.
For consistency with the new variability
limit of 16,688 tons, we are also
reducing the number of allowances that
can be allocated from the Supplemental
Allowance Pool in any year to 16,688
tons plus any allowances added to the
pool in that year from retired units. The
effect of this revision is that the total
number of allowances that can be issued
in any year, considering both initial
allocations and allowances issued from
the Supplemental Allowance Pool, will
not exceed the program’s assurance
level of 255,083 tons. This revision to
the Supplemental Allowance Pool
provisions is consistent with and
reinforces the disincentive created by
the assurance provisions against
emissions exceeding the assurance
level.
To implement these modifications to
the Supplemental Allowance Pool, we
are finalizing several revisions to
§§ 97.911 and 97.912. In § 97.912, we
are editing paragraph (a) to limit
applicability of the current allocation
methodology to the 2019 and 2020
control periods, and we are adding a
new paragraph (b) that sets forth the
revised allocation methodology for the
control periods in 2021 and subsequent
years. We are also renumbering two
60 Supportive comments were submitted by most
of the sources covered by the Texas SO2 Trading
Program, except for LCRA who did not specifically
comment on the reduction in the number of
allowances that can be allocated from the
Supplemental Allowance Pool. Supportive
comments can be found in the docket for this action
at Document IDs EPA–R06–OAR–2016–0611–0157,
EPA–R06–OAR–2016–0611–0127, EPA–R06–OAR–
2016–0611–0163, EPA–R06–OAR–2016–0611–
0156.
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existing paragraphs of the section to
accommodate the new paragraph (b) and
are updating internal cross-references to
reflect the renumbering and to integrate
the provisions of the revised allocation
methodology with other existing
provisions. We are adding new
§ 97.912(b)(1) that addresses the revised
allocation methodology and sets forth a
procedure for assigning units into
groups under common ownership called
‘‘affiliated ownership groups.’’ Under
the new procedure, the group
assignments will remain constant unless
and until revised by EPA to reflect an
ownership transfer. The initial group
assignments for all covered units are
specified in a new column that we are
adding to the existing allowance
allocation table in § 97.911(a)(1).
Renumbered § 97.912(d) is revised to
reduce the cap on the number of
allowances that can be allocated from
the Supplemental Allowance Pool for
any given control period starting in
2021 to 16,688 tons plus any allowances
added to the pool in that year from
retired units. Existing
§ 97.912(a)(3)(ii)(B) is revised to add the
same procedure included in new
§ 97.912(b)(4)(i)(C) for adjusting
allocation amounts up or down by one
allowance as needed to address
rounding errors. Finally, we are
finalizing non-substantive revisions to
§ 97.911(a)(2) and (c)(5) that clarify that
allowances from the trading budget that
are transferred to the Supplemental
Allowance Pool are not necessarily
‘‘allocated under’’ § 97.912, but instead
are made available for ‘‘potential
allocation in accordance with’’ § 97.912.
Termination of Opt-in Provisions. To
address concerns that the opt-in
provisions weakened the functional
equivalence of the Texas SO2 Trading
Program to CSAPR and to be consistent
with EPA’s determination not to include
opt-in provisions in the CSAPR trading
programs on the basis that opt-in
provisions would undermine
achievement of the CSAPR program’s
emission reduction objectives, we are
taking final action to terminate the optin provisions in the Texas SO2 Trading
Program. As we discuss in the response
to comments below, we find that this
termination of the opt-in provisions will
address concerns about the difficulty of
distinguishing new emission reductions
from reductions that opt-in sources
would have made anyway, and the
consequent likelihood that the amounts
of allowances allocated to the sources
would exceed their starting emissions
levels and thus introduce ‘‘extra’’
allowances available to be traded to
other sources. Our final action to
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terminate the opt-in provisions
strengthens our finding that the Texas
SO2 Trading Program will result in SO2
emission levels from Texas EGUs that
are similar to or less than the emission
levels from Texas EGUs that would have
been realized from participation in the
SO2 trading program under CSAPR.
Because no units opted into the Texas
SO2 Trading Program for the 2019 or
2020 control periods and opting in is
not allowed for any future control
period, we are implementing our final
action to terminate the opt-in provisions
by removing the provisions from the
regulations in their entirety.
Specifically, §§ 97.904(b), 97.911(b), and
97.921(d), which concerned the
procedure for opting in, allowance
allocations for opt-in units, and
recordation for opt-in units,
respectively, are being removed. In
addition, conforming revisions to reflect
removal of the opt-in provisions are
being made to the existing provisions at
§§ 97.911(c)(5), 97.915(d), 97.930(b),
97.934(d)(1), and renumbered
§ 97.906(c)(3)(i).
Revision of Allowance Recordation
Provisions. We are taking final action to
condition any exceptions to scheduled
allowance recordation activities on
Texas’ submission and EPA’s approval
of a SIP revision, rather than just on
Texas’ submission of a SIP revision.
This revision will ensure that the
program remains fully operational
unless it is replaced by a SIP revision
that is approved by EPA as meeting the
SO2 BART requirements for the covered
units. To implement our final revision
to the allowance recordation provisions,
we are amending three paragraphs of
§ 97.921. In § 97.921(a), we are deleting
without replacement the language
providing for a possible delay of
recordation activities scheduled for
November 1, 2018; the language is moot
because the recordation date has already
passed. In § 97.921(b), which governs
future recordation of allowances
allocated from the trading budget under
§ 97.911(a), we are revising the existing
language to provide that future
recordation activities will take place as
scheduled unless provided otherwise in
EPA’s approval of a SIP revision
replacing the provisions of subpart
FFFFF. We are also adding the same
revised condition to § 97.921(c), which
governs future recordation of
allowances allocated from the
Supplemental Allowance Pool under
§ 97.912.
Error Correction Adjusting the
Allocation for El Paso Electric’s
Newman Plant. Our last amendment to
the Texas SO2 Trading Program
regulations in this action corrects a
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small error in the allowance allocations
and budget established in the October
2017 FIP. In our October 2017 action,
we determined that several units at El
Paso Electric’s Newman plant (ORIS
3456) should be included in the Texas
SO2 Trading Program, including
‘‘Newman unit 4.’’ This ‘‘unit’’ is
actually a multi-unit combined cycle
system consisting of two gas- and oilfired combustion turbine units serving a
common steam turbine-generator. The
combustion turbine units are identified
in the databases used for the CSAPR
SO2 program as ‘‘Newman unit **4’’
and ‘‘Newman unit **5.’’ Both of these
combustion turbine units are BARTeligible and both are properly included
in the Texas SO2 Trading Program
pursuant to the evaluation of ‘‘Newman
unit 4’’ set forth in our October 2017
action.61 However, in establishing the
allowance allocations and budgets in
our October 2017 action, while we
correctly accounted for the 2-ton CSAPR
allocation to Newman unit **4, we
mistakenly omitted the 2-ton CSAPR
allocation to Newman unit **5. We are
correcting our omission in this action.
Specifically, in Table 1 in § 97.911(a)(1),
we are relabeling the existing entry for
‘‘Newman unit 4’’ as ‘‘Newman unit
**4’’ and adding a new entry for
‘‘Newman unit **5’’ with an additional
2-ton allocation, and in § 97.910(a)(1),
we are increasing the Texas SO2 Trading
Program budget by 2 tons to 238,395
tons.62 We find that these corrections
are entirely consistent with the
methodology and rationale we set forth
when establishing the allocations and
budget in our October 2017 action.
Because the otherwise applicable
recordation deadlines for the allowances
allocated to Newman unit **5 for the
control periods from 2019 through 2024
will have already passed by the effective
date of this action, new § 97.921(f)
establishes December 31, 2020 as the
delayed recordation deadline for these
allocations. Finally, language is added
to § 97.912(a)(1) and (2) clarifying that
allocations under § 97.911 are not
considered in determining a source’s
eligibility to receive allocations from the
Supplemental Allowance Pool unless
the allocations have actually been
recorded in the source’s compliance
account under § 97.921.
61 See 82 FR at 48354–57, where we identify
‘‘Newman unit 4’’ as a BART-eligible source and
discuss our evaluation for determining the
inclusion of units in the Texas SO2 Trading
Program.
62 Both Newman unit **4 and Newman unit **5
have participated in the Texas SO2 Trading Program
since January 1, 2019. El Paso Electric has
monitored and reported the SO2 emissions for both
units under the program.
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2. Analysis of Texas SO2 Trading
Program as a BART Alternative
We are taking final action to affirm
our October 17, 2017 final action
promulgating the Texas SO2 Trading
Program under 40 CFR 52.2312 and
subpart FFFFF of part 97 as a BART
alternative, with the amendments
discussed in Section III.A.1. We are
affirming our determination that the
Texas SO2 Trading Program, including
the addition of the assurance provisions
and other amendments to the program
we are finalizing in this action, will
result in future EGU emissions in Texas
that will be less than the SO2 emission
levels used in the 2012 Better-thanBART demonstration for Texas EGU
emissions assuming CSAPR
participation.63 Additionally, the
aggregate visibility impact from Texas
EGU emissions under the trading
program will be similar to or less than
what would have been realized from
Texas participation in the CSAPR SO2
trading program.64 Further, on the basis
of EPA’s denial of a petition for
reconsideration of the 2017 CSAPR
Better-than-BART affirmation finding in
a separate action,65 EPA can now affirm
that it has fully accounted for the
stringency of the Texas program in the
CSAPR Better-than-BART analysis
(including accounting for the effects of
Texas no longer being a part of the
interstate trading region of CSAPR). We
are taking final action to affirm our
determination that the Texas SO2
Trading Program satisfies the Regional
Haze Rule requirements for BART
alternatives, and therefore satisfies the
SO2 BART requirements for the BARTeligible coal-fired EGUs and gas- and
gas/fuel oil-fired EGUs identified in the
table below.
TABLE 1—TEXAS EGUS SUBJECT TO THE FIP SO2 TRADING PROGRAM
Owner/operator
Units
AEP .................................
Welsh Power Plant Unit 1 ........................................................................................................................
Welsh Power Plant Unit 2 ........................................................................................................................
Welsh Power Plant Unit 3 ........................................................................................................................
H W Pirkey Power Plant Unit 1 ...............................................................................................................
Wilkes Unit 1 † .........................................................................................................................................
Wilkes Unit 2 † .........................................................................................................................................
Wilkes Unit 3 † .........................................................................................................................................
JT Deely Unit 1 ........................................................................................................................................
JT Deely Unit 2 ........................................................................................................................................
Sommers Unit 1 † .....................................................................................................................................
Sommers Unit 2 † .....................................................................................................................................
Fayette/Sam Seymour Unit 1 ...................................................................................................................
Fayette/Sam Seymour Unit 2 ...................................................................................................................
Big Brown Unit 1 ......................................................................................................................................
Big Brown Unit 2 ......................................................................................................................................
Coleto Creek Unit 1 .................................................................................................................................
Martin Lake Unit 1 ....................................................................................................................................
Martin Lake Unit 2 ....................................................................................................................................
Martin Lake Unit 3 ....................................................................................................................................
Monticello Unit 1 ......................................................................................................................................
Monticello Unit 2 ......................................................................................................................................
Monticello Unit 3 ......................................................................................................................................
Sandow Unit 4 .........................................................................................................................................
Stryker Unit ST2 † ....................................................................................................................................
Graham Unit 2 † .......................................................................................................................................
Limestone Unit 1 ......................................................................................................................................
Limestone Unit 2 ......................................................................................................................................
WA Parish Unit WAP4 † ...........................................................................................................................
WA Parish Unit WAP5 .............................................................................................................................
WA Parish Unit WAP6 .............................................................................................................................
WA Parish Unit WAP7 .............................................................................................................................
Tolk Station Unit 171B .............................................................................................................................
Tolk Station Unit 172B .............................................................................................................................
Harrington Unit 061B ...............................................................................................................................
Harrington Unit 062B ...............................................................................................................................
Harrington Unit 063B ...............................................................................................................................
Newman Unit 2† ......................................................................................................................................
Newman Unit 3 † ......................................................................................................................................
Newman Unit **4 † ...................................................................................................................................
Newman Unit **5 † ...................................................................................................................................
CPS Energy ....................
LCRA ..............................
Vistra ...............................
NRG ................................
Xcel .................................
El Paso Electric ..............
BART-eligible
Yes.
Yes.
No.
No.
Yes.
Yes.
Yes.
Yes.
Yes.
Yes.
Yes.
Yes.
Yes.
Yes.
Yes.
Yes.
Yes.
Yes.
Yes.
Yes.
Yes.
Yes.
No.
Yes.
Yes.
No.
No.
Yes.
Yes.
Yes.
No.
No.
No.
Yes.
Yes.
No.
Yes.
Yes.
Yes.
Yes.
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† Gas-fired or gas/fuel oil-fired units.
Under 40 CFR 51.308(e)(2), a State
may opt to implement or require
participation in an emissions trading
program or other alternative measure
63 83
FR 43586, 43591 (Aug. 27, 2018).
43592.
65 See U.S. EPA, Denial of Petition for Partial
Reconsideration of ‘‘Interstate Transport of Fine
64 Id.
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rather than to require sources subject to
BART to install, operate, and maintain
BART. Among other things, such an
emissions trading program or other
alternative measure must achieve
greater reasonable progress than would
be achieved through the installation and
operation of BART. In the paragraphs
Particulate Matter: Revision of Federal
Implementation Plan Requirements for Texas’’ (82
FR 45481; Sept. 29, 2017) (EPA–HQ–OAR–2016–
0598). A copy of the denial of petition letter sent
to the petitioners and the denial of petition Notice
of Availability (NOA) published in the Federal
Register are available at Docket ID EPA–HQ–OAR–
2016–0598.
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that follow, we summarize the BART
alternative requirements under
§ 51.308(e)(2) and explain how the
Texas SO2 Trading Program satisfies
each requirement.
Section 51.308(e)(2)(i) requires a
demonstration that the emissions
trading program or other alternative
measure will achieve greater reasonable
progress than would have resulted from
the installation and operation of BART
at all sources subject to BART in the
State and covered by the alternative
program. This demonstration must be
based on the criteria listed under
§ 51.308(e)(2)(i)(A) through (E).
Section 51.308(e)(2)(i)(A). As part of
the demonstration that the emissions
trading program or other alternative
measure will achieve greater reasonable
progress than BART, the Regional Haze
Rule requires that a list of all BARTeligible sources within the state be
provided. In our October 2017 final
action, we finalized our list of all BARTeligible sources in Texas,66 which serves
to satisfy 51.308(e)(2)(i)(A). As
explained in our August 27, 2018
affirmation proposal,67 we did not
reopen the identification of BARTeligible sources and thus did not request
comment on this element.
Section 51.308(e)(2)(i)(B). This
provision requires that a list of all
BART-eligible sources and all BART
source categories covered by the
alternative program be provided. The
regulations do not require inclusion of
every BART source category or every
BART-eligible source within a BART
source category in an alternative
program, but each BART-eligible source
in the state must be subject to the
requirements of the alternative program,
have a federally enforceable emission
limitation determined by the state and
approved by EPA as meeting BART in
accordance with section 302(c) or
§ 51.308(e)(1), or be otherwise addressed
under § 51.308(e)(1) or (e)(4). Our
October 2017 final action and our
August 2018 affirmation proposal
included a list of all EGUs covered by
the trading program. We are finalizing
our affirmation of the list of BARTeligible EGUs in Texas covered by the
alternative program with one minor
non-substantive change,68 satisfying the
66 See 82 FR at 48356 (final action) and 82 FR at
918 (proposed action).
67 83 FR at 43598.
68 As discussed in section III.A.2, ‘‘Newman unit
4’’ at the El Paso Electric Newman plant (ORIS
3456), which is included in the Texas SO2 Trading
Program, is actually a multi-unit combined cycle
system consisting of two gas- and oil-fired
combustion turbine units (Newman unit **4 and
Newman unit **5) serving a common steam
turbine-generator. Both of these combustion turbine
units are BART-eligible, and both are properly
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first requirement of 51.308(e)(2)(i)(B).
Table 1 above lists all participating
units and identification of BARTeligible participating units. All BARTeligible coal-fired units, some additional
coal-fired EGUs, and some BARTeligible gas-fired and oil-and-gas-fired
units are covered by the alternative
program. This coverage and our
determination in a previous final action
that the BART-eligible gas-fired and oiland-gas-fired EGUs not covered by the
program are not subject-to-BART for
NOX, SO2 and PM satisfy the second
requirement of 51.308(e)(2)(i)(B). We
note that EPA’s determination that these
EGU units not covered by the program
are not subject to BART was finalized in
our October 2017 final action,69 and we
did not reopen that determination in the
August 2018 proposal.70
Section 51.308(e)(2)(i)(C). This
provision requires an analysis of the
best system of continuous emission
control technology available and
associated emission reductions
achievable for each source within the
state subject to BART and covered by
the alternative program. This analysis
must be conducted by making a
determination of BART for each source
subject to BART and covered by the
alternative program as provided for
under § 51.308(e)(1), unless the
emissions trading program or other
alternative measure has been designed
to meet a requirement other than BART.
In such a case, the state may determine
the best system of continuous emission
control technology and associated
emission reductions for similar types of
sources within a source category based
on both source-specific and categorywide information, as appropriate. As
discussed in our August 2018 proposal,
we considered the question of whether,
in applying this portion of the Regional
Haze Rule, we should take as the
baseline the application of sourcespecific BART at the covered sources.71
We have determined not to take this
approach here, given that
51.308(e)(2)(i)(C) provides for an
exception (which we are exercising) to
the requirement for source-specific
BART determinations for the covered
sources. The regulations allow for the
BART ‘‘benchmark’’ to be set using
‘‘category-wide’’ information when the
included in the Texas SO2 Trading Program. In this
final action, we are not identifying any new units
as BART-eligible, we are merely relabeling the
already-identified BART-eligible ‘‘Newman unit 4’’
as its components: ‘‘Newman unit **4’’ and
‘‘Newman unit **5.’’ Thus, we do not consider this
change to be substantive.
69 82 FR at 48328.
70 83 FR at 43598, footnote 80.
71 83 FR at 43599.
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alternative measure ‘‘has been designed
to meet a requirement other than BART
(such as the core requirement to have a
long-term strategy to achieve the
reasonable progress goals established by
States).’’ See 40 CFR 51.308(e)(2)(i)(C).
As discussed below, category-wide
information may include, for example,
the use of ‘‘presumptive’’ BART
emission limits for a particular source
category, such as coal-fired EGUs. The
Texas SO2 Trading Program meets the
conditions of the exception allowed
under § 51.308(e)(2)(i)(C), as discussed
in sections III.B and V.B of this final
notice, because it has been designed to
meet Texas’ interstate visibility
transport requirements under CAA
section 110(a)(2)(D)(i)(II). This BART
alternative extends beyond all BARTeligible coal-fired units to include a
number of additional coal-fired EGUs,
and some BART-eligible gas-fired and
oil-and-gas-fired units, capturing the
majority of emissions from EGUs in the
state, and is designed to provide the
measures that are needed to address
interstate visibility transport
requirements for several NAAQS. This
is because for all sources covered by the
Texas SO2 Trading Program, those
sources’ CSAPR allocations for SO2 are
incorporated into the BART alternative,
and the Texas SO2 Trading Program
ensures more emission reductions of
SO2 than the level of emissions
reductions relied upon by other states
during consultation and assumed by
other states in their own regional haze
SIPs, including their reasonable
progress goals for their Class I areas.
As allowed under § 51.308(e)(2)(i)(C),
rather than using source-specific BART
at the covered sources, we are relying on
the determinations of BART and
associated emission reductions for EGUs
that were used in our 2012
determination that showed that CSAPR
as finalized and amended in 2011 and
2012 achieves more reasonable progress
than BART (‘‘CSAPR Better-thanBART’’). This analysis establishes by the
clear weight of evidence that the Texas
SO2 Trading Program, which is modeled
on the CSAPR trading programs, will
provide for greater reasonable progress
than BART in Texas. These
determinations of the best system of
continuous emission control technology
and associated emission reductions for
EGUs that were used in our 2012
CSAPR Better-than-BART
demonstration were based largely on
category-wide information, including
the use of ‘‘presumptive’’ BART
limits.72 EPA finds that reliance on the
category-wide BART analysis from the
72 77
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2012 CSAPR Better-than-BART
demonstration is appropriate here and
that the BART determinations derived
from that CSAPR Better-than-BART
demonstration are an appropriate BART
benchmark for comparison against the
Texas SO2 Trading Program given that
the Texas SO2 Trading Program is
modeled on the CSAPR trading
programs.
We note that in our August 2018
proposal, we proposed to affirm our
finding that the Texas SO2 trading
program is also designed to be part of
the long-term strategy needed to meet
the reasonable progress requirements of
the Regional Haze Rule, which remain
outstanding after the remand of our
January 2016 FIP addressing Texas’
reasonable progress obligations by the
Fifth Circuit Court of Appeals. After
consideration of the comments we
received addressing this issue during
the public comment period for our
August 2018 proposal, we are not
finalizing our affirmation of the finding
that the Texas SO2 trading program is
also designed to be part of the long-term
strategy needed to meet the reasonable
progress requirements of the Regional
Haze Rule at this time. While the Texas
SO2 trading program certainly
contributes to reasonable progress
toward meeting the visibility goals of
the regional haze program through
enforceable reductions of a visibility
pollutant from baseline emission levels,
EPA has made clear that it intends to
address the specific regulatory
requirements for the long-term strategy
for Texas through a separate action.73
However, this does not impact our
determination that the Texas SO2
trading program satisfies the
requirements of
section 51.308(e)(2)(i)(C) given that the
trading program is designed to provide
the measures that are needed to address
interstate visibility transport
requirements for several NAAQS, and
this sufficiently meets the criteria under
§ 51.308(e)(2)(i)(C) allowing us to
exercise the exception allowed under
the provision. Thus, we have met the
requirements of § 51.308(e)(2)(i)(C).
Section 51.308(e)(2)(i)(D). This
provision requires an analysis of the
projected emissions reductions
achievable through the trading program
or other alternative measure. Our
analysis is that the Texas trading
program will effectively limit the
aggregate annual SO2 emissions of the
covered EGUs to be no higher than the
assurance level of 255,083 tons. The
Texas SO2 Trading Program is an
intrastate cap-and-trade program for
73 83
FR at 43596 n.63.
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listed covered sources in the State of
Texas modeled after the EPA’s CSAPR
SO2 Group 2 Trading Program.
Authorizations to emit SO2, known as
allowances, are allocated to the affected
units as listed in Table 1 above. As
discussed elsewhere, the program
includes a Supplemental Allowance
Pool, as revised in this final action, with
additional allowances that may be
allocated to subject units and sources to
provide compliance assistance. The
average total annual allowance
allocation for all covered sources is
238,395 tons, with an additional 10,000
tons allocated to the Supplemental
Allowance Pool. In addition, while the
Supplemental Allowance Pool may
grow over time as unused supplemental
allowances remain available and
allocations from retired units are placed
in the pool, the total number of
allowances that can be allocated to
sources in a control period from the
supplemental pool beginning with the
2021 compliance period and for each
period thereafter is limited to a
maximum 16,688 tons plus the amount
of any allowances placed in the pool
that year from retired units and
corrections. Therefore, the total annual
average emissions for the covered
sources will be less than or equal to
248,395 tons. Although there will be
some year-to-year variability, that
variability will be constrained by the
addition of an assurance level in this
final action. We are finalizing an
assurance level of 255,083 tons per year
for the Texas SO2 Trading Program,
which, in light of the three-for-one
penalty surrender ratio imposed on
emissions exceeding that level,
represents the highest annual SO2
emissions anticipated from units subject
to the Texas program. In reality, there is
no reasonable expectation that actual
emissions would even approach this
level in light of ongoing changes in the
electric-generating sector in Texas.
Further, the projected average SO2
emission reduction that will be
achieved by the program in any given
year, relative to any selected historical
baseline year, would be the difference
between the aggregate historical
baseline emissions of the covered units
and the average total annual allocation
of 238,395 SO2 tons plus a
Supplemental Allowance Pool budget of
10,000 tons, or 248,395. As detailed in
our October 2017 final rule, for the
purpose of this analysis, we selected
2014 as the baseline year.74 The
74 Texas sources were subject to the CSAPR SO
2
trading program in 2015 and 2016 but are no longer
subject to that program. We therefore select 2014 as
the appropriate most recent year for comparing the
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aggregate 2014 SO2 emissions of the
covered EGUs were 309,298 tons per
year, while the average total annual
allocation for the covered EGUs is
238,395 SO2 tons plus a Supplemental
Allowance Pool budget of 10,000 tons,
or 248,395 tons per year. Therefore,
compared to 2014 emissions, the Texas
trading program is projected to achieve
an average reduction of approximately
60,903 tons per year from the covered
units.75 (We note that with the
termination of the opt-in provisions in
this final action, there is no need for this
comparison to include consideration of
the 2014 emissions from those units
formerly eligible to opt into the trading
program.)
We also note that the Regional Haze
Rule provides that the baseline period
for the first planning period is 2000–
2004.76 The Texas SO2 Trading
Program, with the assurance level we
are finalizing in this action, achieves
significantly lower emissions relative to
the baseline period using 2002 as the
baseline. As shown in Table 2, the total
combined SO2 emissions from Texas
EGUs participating in the Texas SO2
Trading Program were 515,526 tons in
2002. The combined actual SO2
emissions from all Texas EGUs (both
those in the Texas SO2 Trading Program
and those not in the program) were
562,516 tons in 2002.77 By comparison,
the Texas SO2 Trading Program budget
is 238,395 SO2 tons (plus a
Supplemental Allowance Pool budget of
10,000 tons). Thus for the covered units,
the program achieves average annual
emissions from the covered units of
248,395 tons. Compared with the 2002
baseline for these units, the program
achieves 267,131 tons of reductions.
When we account for Texas units that
were in CSAPR but not in the current
program, we see a similar result using
a conservative assumption about those
units’ emissions going forward. (As we
explained in our supplemental
proposal, our comparison of the Texas
program to CSAPR should take account
aggregate historical baseline emissions of the
covered units to the average total annual allocation
for purposes of estimating the SO2 emission
reduction that will be achieved by the program.
75 We note that for other types of alternative
programs that might be adopted under 40 CFR
51.308(e)(2), the analysis of achievable emission
reductions could be more complicated. For
example, a program that involved economic
incentives instead of allowances or that involved
interstate allowance trading would present a more
complex situation in which achievable emission
reductions could not be calculated simply by
comparing aggregate baseline emissions to aggregate
allowances.
76 See 40 CFR 51.308(d)(2)(i).
77 See Excel spreadsheet file ‘‘Texas EGU 2002
SO2 Emissions.xlsx,’’ which is available in the
docket for this action.
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of emissions from these units.78) For
illustrative purposes, in this comparison
we will also use the higher figure of the
assurance level for the Texas program
rather than the average annual
allocation. When our conservative
assumption of 35,000 tons as the future
combined SO2 emissions for units that
were in the CSAPR program but not
covered by the Texas SO2 Trading
Program is added to the highest annual
SO2 emissions anticipated from units
under the Texas SO2 Trading Program,
255,083 tons per year (i.e., the assurance
level for the program), the total figure is
290,083 tons per year. A comparison of
these figures reveals that the combined
actual SO2 emissions from all Texas
EGUs in 2002 during the baseline period
(562,516 tons) were considerably higher
than the highest annual SO2 emissions
anticipated from all Texas EGUs
anticipated from operation of the Texas
SO2 Trading Program (290,083 tons),
including the CSAPR units not included
in that program—a difference of 272,433
tons. The emission reductions that are
secured by the Trading Program
contribute to improvements in visibility
from the baseline period and are
permanent and enforceable as part of
the long-term strategy for the State of
Texas.
TABLE 2—2002 SO2 EMISSIONS FROM TEXAS EGUS SUBJECT TO THE FIP SO2 TRADING PROGRAM †
SO2
emissions
(tons)
Owner/operator
Units
AEP .................................
Welsh Power Plant Unit 1 ........................................................................................................................
Welsh Power Plant Unit 2 ........................................................................................................................
Welsh Power Plant Unit 3 ........................................................................................................................
H W Pirkey Power Plant Unit 1 ...............................................................................................................
Wilkes Unit 1 ............................................................................................................................................
Wilkes Unit 2 ............................................................................................................................................
Wilkes Unit 3 ............................................................................................................................................
J T Deely Unit 1 .......................................................................................................................................
J T Deely Unit 2 .......................................................................................................................................
Sommers Unit 1 .......................................................................................................................................
Sommers Unit 2 .......................................................................................................................................
Fayette/Sam Seymour Unit 1 ...................................................................................................................
Fayette/Sam Seymour Unit 2 ...................................................................................................................
Coleto Creek Unit 1 .................................................................................................................................
Big Brown Unit 1 ......................................................................................................................................
Big Brown Unit 2 ......................................................................................................................................
Martin Lake Unit 1 ....................................................................................................................................
Martin Lake Unit 2 ....................................................................................................................................
Martin Lake Unit 3 ....................................................................................................................................
Monticello Unit 1 ......................................................................................................................................
Monticello Unit 2 ......................................................................................................................................
Monticello Unit 3 ......................................................................................................................................
Sandow Unit 4 .........................................................................................................................................
Stryker ST2 ..............................................................................................................................................
Graham Unit 2 ..........................................................................................................................................
Limestone Unit 1 ......................................................................................................................................
Limestone Unit 2 ......................................................................................................................................
W A Parish Unit WAP4 ............................................................................................................................
W A Parish Unit WAP5 ............................................................................................................................
W A Parish Unit WAP6 ............................................................................................................................
W A Parish Unit WAP7 ............................................................................................................................
Tolk Station Unit 171B .............................................................................................................................
Tolk Station Unit 172B .............................................................................................................................
Harrington Station Unit 061B ...................................................................................................................
Harrington Station Unit 062B ...................................................................................................................
Harrington Station Unit 063B ...................................................................................................................
Newman Unit 2 ........................................................................................................................................
Newman Unit 3 ........................................................................................................................................
Newman Unit **4 ......................................................................................................................................
Newman Unit **5 ......................................................................................................................................
..................................................................................................................................................................
CPS Energy ....................
LCRA ..............................
Vistra ...............................
NRG ................................
Xcel .................................
El Paso Electric ..............
Total Combined 2002
SO2 Emissions.
12,259
11,937
11,584
19,476
1
2
3
9,936
11,577
1
2
13,617
16,401
14,288
43,413
34,448
24,837
22,539
19,023
28,643
34,700
22,976
23,330
43
23
17,009
13,830
4
21,310
18,006
18,459
12,703
12,171
9,197
8,927
8,844
1
1
1
1
515,526
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† Based on 2002 Clean Air Markets Division (CAMD) data.
Section 51.308(e)(2)(i)(E). This
provision requires a determination,
under the specific criteria laid out at 40
CFR 51.308(e)(3) or otherwise based on
the clear weight of evidence, that the
trading program or other alternative
measure achieves greater reasonable
progress than would be achieved
78 84
through the installation and operation of
BART at the covered sources. The BART
alternative EPA is taking final action to
affirm here is supported by the clear
weight of the evidence. Specifically,
with respect to SO2 emissions from the
covered BART-eligible units, because
the Texas SO2 trading program, as
amended, is designed to ensure that
emissions levels in each year under the
trading program are similar to or less
than what would have been realized
from Texas EGUs from participation in
the SO2 trading program under CSAPR,
EPA can rely on the 2012 and 2017
findings that CSAPR achieves greater
FR at 61853.
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reasonable progress than BART as
evidence that the Texas program
achieves greater reasonable progress
than BART, in the context of the
continued operation of the CSAPR
ozone-season NOX trading program (to
which units in Texas remain subject)
and the CSAPR annual NOX and SO2
trading programs.79 As used in our
51.308(e)(2)(i)(D) analysis above and
laid out in more detail below, a
conservative estimate for the maximum
total annual emissions from all EGUs in
Texas that can be anticipated with the
Texas program in place is 290,083 tons.
As explained below, this is less than the
maximum total annual emissions
assumed for Texas under CSAPR in the
CSAPR Better-than-BART analysis,
which is 317,100 tons. Thus, we are
relying on the demonstration in the
2012 and 2017 CSAPR Better-thanBART rules (as reaffirmed in the
separate denial of petition for
reconsideration of the 2017 rule) to
show that the clear weight of evidence
demonstrates that the Texas SO2
Trading Program, which is modeled on
the CSAPR trading programs, provides
for greater reasonable progress than
BART in Texas.
Because the Texas program is
designed to achieve greater SO2
emission reductions than CSAPR in
Texas, we are finalizing our affirmation
that it is appropriate to continue to rely
on the 2012 CSAPR Better-than-BART
demonstration, which includes the
treatment of Texas as a CSAPR state, as
reaffirmed in September 2017 (and
again affirmed in EPA’s denial of the
November 28, 2017 petition for
reconsideration, as discussed under
section I.D of this final action 80). That
analysis compared CSAPR in Texas and
elsewhere in the country to presumptive
BART emission limits for the sources in
Texas (as elsewhere) and is described in
greater detail in our August 2018
proposed affirmation. See 83 FR 43586,
at 43594–95. While Texas is no longer
in the CSAPR trading program for SO2
itself, we find that it is appropriate for
us to continue relying here on the
CSAPR Better-than-BART analysis for
79 EPA’s determination that Texas’ participation
in CSAPR for ozone-season NOX satisfies NOX
BART for EGUs is final and we did not reopen that
determination in our August 2018 proposal or our
November 2019 supplemental proposal.
80 See U.S. EPA, Denial of Petition for Partial
Reconsideration of ‘‘Interstate Transport of Fine
Particulate Matter: Revision of Federal
Implementation Plan Requirements for Texas’’ (82
FR 45481; Sept. 29, 2017) (EPA–HQ–OAR–2016–
0598). A copy of the denial of petition letter sent
to the petitioners and the denial of petition Notice
of Availability (NOA) published in the Federal
Register are available at Docket ID EPA–HQ–OAR–
2016–0598.
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Texas given that the Texas SO2 Trading
Program is specifically designed to
mimic the CSAPR program and the
amendments to the Texas trading
program EPA is finalizing in this action
allow EPA to affirm that the Texas
program is similar to or more stringent
than CSAPR in Texas. As such, the
stringency of the Texas program is
sufficient to allow for the continued use
of the CSAPR Better-than-BART
analysis for Texas.
Although it is not within the scope of
this action, EPA notes that the 2017
CSAPR Better-than-BART finding has
been reaffirmed through the denial of a
petition for reconsideration.81 In our
response to the petition for
reconsideration, EPA explains that it
has fully accounted for the stringency of
the Texas trading program as well as the
potential for emission shifting back into
the remaining CSAPR region with the
removal of Texas into its own intrastate
trading region.82 To the extent that this
potential for emission shifting posed
any concern that the CSAPR Betterthan-BART analysis could not be relied
upon by Texas or other states, this issue
has been resolved through the analysis
set forth in that denial.
We are finalizing our determination
that anticipated maximum potential SO2
emissions in Texas under the Texas SO2
Trading Program BART alternative are
less than the SO2 emission levels from
Texas EGUs that were forecast in the
CSAPR Better-than-BART
demonstration assuming their
participation in the CSAPR SO2 trading
program.83 In our October 2017 final
rule and the August 2018 proposal to
affirm that rule, we noted the results of
the sensitivity analysis 84 for the 2012
final ‘‘CSAPR Better-than-BART’’
rulemaking, namely that CSAPR was
expected to provide for greater
reasonable progress than BART
nationwide even with potential SO2
emissions from Texas EGUs under
81 See U.S. EPA, Denial of Petition for Partial
Reconsideration of ‘‘Interstate Transport of Fine
Particulate Matter: Revision of Federal
Implementation Plan Requirements for Texas’’ (82
FR 45481; Sept. 29, 2017) (EPA–HQ–OAR–2016–
0598). A copy of the denial of petition letter sent
to the petitioners and the denial of petition Notice
of Availability (NOA) published in the Federal
Register are available at Docket ID EPA–HQ–OAR–
2016–0598.
82 Id.
83 See Technical Support Document for
Demonstration of the Transport Rule as a BART
Alternative, Docket ID No. EPA–HQ–OAR–2011–
0729–0014 (December 2011), available in the docket
for this action.
84 See Sensitivity Analysis Accounting for
Increases in Texas and Georgia Transport Rule State
Emissions Budgets, Docket ID No. EPA–HQ–OAR–
2011–0729–0323 (May 29, 2012), available in the
docket for this action.
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CSAPR as high as 317,100 tons.85 In our
October 2017 final rule and the August
2018 proposal to affirm that rule, EPA
used this benchmark (317,100 tons of
SO2 emissions per year) to gauge
whether the Texas SO2 Trading Program
was sufficiently stringent for EPA to
continue to rely on the BARTalternative analysis we conducted in the
2012 ‘‘CSAPR Better-than-BART’’
rulemaking. In the August 2018
proposal, EPA proposed to affirm that
the weight of evidence supported the
conclusion that the Texas SO2 Trading
Program met the requirements of a
BART alternative.86 Informed by
comments we received on the August
2018 proposal, we issued a
supplemental proposal in November
2019 that proposed to amend a number
of provisions of the Texas SO2 Trading
Program, including the addition of an
assurance level. EPA’s proposed
analysis in November of 2019
accompanying those amendments,
updates in certain respects and replaces
the analysis of the Texas program’s
stringency for purposes of determining
the appropriateness of relying on the
CSAPR Better-than-BART findings for
the Texas BART-alternative program.
As explained in the November 2019
supplemental proposal and in Section
III.A.I above, an assurance level
represents the total level of annual
emissions above which units
participating in the program will be
penalized with a higher allowance
surrender ratio than the one-to-one ratio
that applies to emissions below the
assurance level. The assurance level we
proposed was determined by relying on
the same analysis and methodology that
were used to set assurance levels in the
original CSAPR rulemaking.87 Using
this methodology, EPA proposed a
variability limit for Texas set at 16,688
tons, which is seven percent of the
original trading budget of 238,393 tons.
We are finalizing the variability limits
set at 16,688 tons with no change from
proposal and in light of the minor
correction to the trading program
budget, as discussed in section III.A.1,
we are finalizing an assurance level of
255,083 tons rather than the 255,081-ton
assurance level we proposed in the
November 2019 supplemental proposal.
This 255,083-ton assurance level
represents the highest annual SO2
emissions anticipated from units subject
to the Texas program.
85 83
FR at 43595.
FR at 43602.
87 See Power Sector Variability Final Rule TSD
(July 2011), available at https://www.epa.gov/csapr/
power-sector-variability-final-rule-tsd and in the
docket for this action.
86 83
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In addition to being consistent with
the original CSAPR methodology for
setting assurance levels, EPA also
believes that an assurance level set at
255,083 tons is appropriate for the
Texas SO2 Trading Program because it
will strengthen the stringency of the
Texas SO2 Trading Program in terms of
ensuring that annual emissions from
participating units will remain below
that level. This allows EPA to project
with confidence emissions under the
Texas SO2 Trading Program for
purposes of determining whether the
trading program meets the requirements
of a BART alternative.
In the modeling conducted for the
proposed CSAPR Better-than-BART
determination in 2011, projected SO2
emissions from Texas’ EGUs under
CSAPR were 266,600 tons. Subsequent
to performance of that modeling, the
CSAPR SO2 budget for Texas was
increased by 50,517 tons. In the BARTalternative sensitivity analysis utilized
for the final 2012 CSAPR Better-thanBART determination, EPA made the
conservative assumption that SO2
emissions from Texas EGUs under
CSAPR could potentially increase by the
full amount of the Texas budget
increase, or up to 317,100 tons per year
(266,600 + 50,517). (While this level of
emissions would have exceeded Texas’
CSAPR budget, it would not have been
in excess of Texas’ amended assurance
level under the CSAPR program of
347,476 tons. In any case, the figure was
solely intended to represent a
conservative assumption that all
allowances allocated under Texas’
amended CSAPR budget would be
emitted.) In that BART-alternative
sensitivity analysis, EPA demonstrated
that CSAPR was expected to provide for
greater reasonable progress than BART
nationwide even with potential SO2
emissions from Texas EGUs under
CSAPR as high as 317,100 tons.88 By
comparison, the Texas SO2 Trading
Program has a budget of 238,395 SO2
tons (plus 10,000 tons in the
Supplemental Allowance Pool), and we
are finalizing an assurance level of
255,083 tons in this final action.
In determining that the Texas program
will perform at least as stringently as
CSAPR would have, EPA also must
account for the emissions from certain
EGUs that would have been subject to
CSAPR but are not included in the
Texas program. Even with these
emissions factored in, the Texas
program is designed to ensure
reductions similar to or greater than
CSAPR. In our analysis in this final
action, we are finalizing the more
88 83
FR at 43595.
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conservative emissions assumptions for
these units provided in our November
2019 supplemental proposal. In our
August 2018 proposal, we had used an
assumption that emissions from these
units could be as high as 27,500 tons per
year.89 As proposed in our November
2019 supplemental proposal,90 we are
updating our analysis by adjusting this
assumption to 35,000 tons per year.
Given that Texas units that were in the
CSAPR program but not covered by the
Texas SO2 Trading Program had a
combined maximum annual emission
level of 34,129 tons over the past five
years (2014–2018) and considering that
several of these units have recently shut
down or have been announced for
shutdown in the near future,91 EPA
regards this as a conservative
assumption for emissions performance
from these units. Even when this
conservative figure is added to the
highest annual SO2 emissions
anticipated from units under the Texas
program, 255,083 tons per year (i.e., the
assurance level for the program), the
total figure is 290,083 tons per year.
This figure is still 27,017 tons below the
317,100 ton per year emissions level
EPA had used in the CSAPR Betterthan-BART analysis.
In addition to finding that the
differences in source coverage between
the two trading programs do not affect
EPA’s determination, we also find that
the relative stringency of the Texas SO2
Trading Program as compared to CSAPR
is further demonstrated in the following
points, as discussed in our August 27,
2018 affirmation proposal:
• This BART alternative includes all
BART-eligible coal-fired units in Texas,
additional coal-fired EGUs, and some
additional BART-eligible gas and gas/
fuel oil-fired units.
• Covered sources under the Texas
SO2 Trading Program we are taking final
action to affirm represent 89% 92 of all
SO2 emissions from all Texas EGUs in
both 2016 and 2017, and approximately
85% of CSAPR allocations for existing
units in Texas.
• The remaining 11% (100 minus 89)
of 2016 and 2017 emissions from
89 83
FR 43602.
90 84 FR at 61853.
91 See ‘‘Texas EGU SO emissions, 2014–
2
2018.xlsx’’, available in the docket for this action.
Sandow Station units 5A and 5B have been
permanently retired. AEP has announced retirement
of Oklaunion by September 2020. Gibbons Creek is
currently not operating although it has not been
officially retired.
92 In 2016, EGUs included in the program emitted
218,292 tons of SO2, and other EGUs emitted 27,507
tons (11.2% of the total emitted by Texas EGUs).
In 2017, sources included in the program emitted
245,871 tons of SO2, and other EGUs emitted 30,122
(10.9%).
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sources not covered by the Texas SO2
Trading Program come from gas units
that rarely burn fuel oil or from coalfired units that on average are better
controlled for SO2 than the covered
sources and generally are less relevant
to visibility impairment. As such, any
shifting of generation to non-covered
sources, as might occur if a covered
source were to reduce its operation in
order to remain within its SO2
emissions allowance allocation, would
result in fewer emissions to generate the
same amount of electricity.
• Furthermore, the non-inclusion of a
large number of gas-fired units that
rarely burn fuel oil reduces the amount
of available allowances for such units
that would typically and collectively be
expected to use only a fraction of their
CSAPR emissions allowances. Many of
these sources typically emit at levels
much lower than their allocation level.
• The BART alternative does not
allow purchasing of allowances from
out-of-state sources. Emission
projections under CAIR and CSAPR
showed that Texas sources were
anticipated to purchase allowances from
out-of-state sources.93 94
Based on our quantitative and
qualitative assessment of the operation
of the BART alternative as presented
here, we are taking final action to affirm
our determination that the Texas SO2
Trading Program as amended in this
final action through the addition of the
255,083-ton assurance level and other
amendments discussed in section
III.A.1, will result in annual emissions
from the covered EGUs and other EGUs
in Texas that are lower than what was
required under Texas participation in
CSAPR’s SO2 trading program. Because
this is the case, EPA can rely on the
CSAPR Better-than-BART analysis to
demonstrate, by the clear weight of the
evidence, that the Texas SO2 Trading
Program, in conjunction with continued
implementation of CSAPR in other
states, provides greater reasonable
progress than BART. Accordingly, we
are taking final action to affirm that the
Texas SO2 Trading Program, as
93 See section 10 of the 2009 Texas Regional Haze
SIP. Table 10–7 shows CAIR 2018 emission
projections of approximately 350,000 tons SO2
emitted from Texas EGUs compared to CAIR budget
for Texas of 225,000 tons. Thus, Texas was
projected to purchase 125,000 tons of allowances
(350,000¥225,000) from out-of-state sources. The
SIP submittal can be found in www.regulations.gov,
docket ID EPA–R06–OAR–2016–0611, document
EPA–R06–OAR–2016–0611–0002.
94 For the projected annual SO emissions from
2
Texas EGUs under CSAPR, see Technical Support
Document for Demonstration of the Transport Rule
as a BART Alternative, Docket ID No. EPA–HQ–
OAR–2011– 0729–0014 (December 2011) (2011
CSAPR/BART Technical Support Document),
available in the docket for this action at table 2–4.
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amended in today’s final action,
satisfies the requirements for a BART
alternative under 40 CFR
51.308(e)(2)(i)(E).
Section 51.308(e)(2)(iii). This
provision requires that the emission
reductions from BART alternatives
occur ‘‘during the period of the first
long-term strategy for regional haze.’’
The Texas SO2 BART alternative was
implemented beginning in January
2019, and thus emission reductions
needed to comply with the BART
alternative were required to take place
by the end of 2019. In our August 2018
proposal,95 we proposed to affirm our
determination that for the purpose of
evaluating Texas’ BART alternative, the
end of the period of the first long-term
strategy for Texas is 2021, consistent
with the requirement that states submit
revisions to their long-term strategy to
address the second planning period by
July 31, 2021.96 We also proposed to
affirm our determination that because
the emission reductions from the Texas
SO2 Trading Program will be realized
prior to that date, the necessary
emission reductions will take place
within the period of Texas’ first longterm strategy for regional haze. We
received a comment raising the concern
that this determination we proposed to
affirm would be at odds with the
national finding in the January 2017
action that our amendments there ‘‘do
not affect the development and review
of state plans for the first
implementation period. . . .’’ 82 FR at
3080. After further review of our
discussion in the January 2017 final rule
making amendments to the Regional
Haze Rule and consideration of the
comments we received pertaining to this
issue, we are not finalizing a position in
this action that the first planning period
has been extended to July 31, 2021.
Nonetheless, we are finalizing our
determination that the Texas SO2
Trading Program satisfies the timing
requirements of 51.308(e)(2)(iii),
because the level of emissions achieved
by the covered Texas units was below
the budget of the Texas program prior to
the end of 2018 and the program took
effect immediately at the beginning of
2019. This meets the requirement at
(e)(2)(iii) that the emission reductions
called for by the BART alternative occur
before the end of the period for the first
long-term strategy. As discussed in our
November 2019 supplemental proposal,
the combined SO2 emissions from Texas
EGUs participating in the intrastate
trading program were 179,630 SO2 tons
in 2018, which is well below the Texas
95 83
96 40
FR 43592.
CFR 51.308(f).
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SO2 Trading Program budget of 238,395
tons (as well as the assurance level of
255,083 tons we are finalizing in this
action).97 Therefore, the emissions
reductions secured under the Texas SO2
Trading Program occurred prior to the
end of the period of the first long-term
strategy for regional haze. EPA has
previously proposed a view that where
emission reductions required by a BART
alternative are already achieved in
practice during the first planning
period, even though the enforceable
requirement was not mandated until
after the planning period, this can
satisfy 40 CFR 51.308(e)(2)(iii). This was
our position in our action proposing to
approve a SIP revision from the State of
Arkansas establishing a BARTalternative for the Domtar Ashdown
Mill.98 There, we explained that even
though the BART alternative emission
limits for the Domtar Ashdown Mill
became enforceable by the State on
February 28, 2019, the SIP revision
submitted by Arkansas provided
adequate documentation demonstrating
that the two subject-to-BART units at
the Domtar Ashdown Mill have actually
been operating at emission levels below
the BART alternative emission limits
since December 2016.99 Based on the
documentation provided in the
Arkansas SIP revision, we proposed to
find that the subject-to-BART units at
the Domtar Ashdown Mill satisfy the
timing requirements of 40 CFR 51.308(e)
that the necessary emission reductions
associated with the BART alternative
occur during the first long-term strategy
for regional haze.100 Consistent with
that proposed action, we do not
interpret § 51.308(e)(2)(iii) as requiring
that all enforceable limits on annual
emissions under the Texas SO2 Trading
Program be in place by December 31,
2018, or that the Trading Program itself
must be implemented by December 31,
2018, if the emission levels called for by
the BART alternative are achieved prior
to that date and remain at or below that
level until the alternative becomes
enforceable (which in this case, is
immediately following 2018). We are
taking final action that the Trading
Program satisfies the timing
requirements of § 51.308(e)(2)(iii).
Section 51.308(e)(2)(iv). This
provision requires a demonstration that
the emission reductions resulting from
the emissions trading program or other
alternative measure will be surplus to
those reductions resulting from
measures adopted to meet requirements
97 84
FR 61853.
98 See 85 FR 14847 (March 16, 2020).
99 85 FR 14861.
100 85 FR 14861.
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49185
of the CAA as of the baseline date of the
SIP. When promulgating this
requirement in 1999, the EPA explained
that emission reductions must be
‘‘surplus to other Federal requirements
as of the baseline date of the SIP, that
is, the date of the emission inventories
on which the SIP relies.’’ 101 The
baseline date for the 2009 Texas
Regional Haze SIP emission inventory
was previously established as 2002
during SIP planning stages for the first
implementation period.102 The emission
reductions secured under the Texas SO2
Trading Program are additional and will
not result in double-counting of
reductions from other Federal
requirements since they will occur after
the original 2002 emission inventory.
Thus, this BART alternative satisfies the
requirements of § 51.308(e)(2)(iv).
Section 51.308(e)(2)(vi). For plans that
include an emissions trading program
that establishes a cap on total annual
emissions of SO2 or NOX from sources
subject to the program, this provision
requires the owners and operators of
sources to hold allowances or
authorizations to emit equal to
emissions, and allows the owners and
operators of sources and other entities to
purchase, sell, and transfer allowances.
The Texas SO2 Trading Program is
modeled after the EPA’s CSAPR SO2
Group 2 Trading Program, and we are
taking final action to affirm that the
Program satisfies the requirements of
51.308(e)(2)(vi). Similar to the CSAPR
SO2 Group 2 Trading Program, the
Texas SO2 Trading Program sets an SO2
emission budget for affected units and
sources in the State of Texas.
Authorizations to emit SO2, known as
allowances, are allocated to affected
units. The Texas SO2 Trading Program
provides flexibility to affected units and
sources by allowing units and sources to
determine their own compliance path;
this includes adding or operating
control technologies, upgrading or
improving controls, switching fuels, and
using allowances. Sources can buy and
sell allowances and bank (save)
allowances for future use so long as
each source holds enough allowances to
account for its emissions of SO2 by the
allowance transfer deadline shortly after
the end of the compliance period.
Section 51.308(e)(2)(vi)(A). This
provision requires applicability
provisions defining the sources subject
to the program. The State (or EPA) must
demonstrate that the applicability
101 See 64 FR 35714, 35742 (July 1, 1999); see also
70 FR 39104, 39143 (July 6, 2005).
102 See Memorandum from Lydia Wegman and
Peter Tsirigotis, 2002 Base Year Emission Inventory
SIP Planning: 8-hr Ozone, PM2.5, and Regional Haze
Programs, November 8, 2002.
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provisions (including the size criteria
for including sources in the program)
are designed to prevent any significant
potential shifting within the State of
production and emissions from sources
in the program to sources outside the
program. The October 2017 final rule
and the August 2018 proposal affirming
that rule discuss the provisions of the
Texas SO2 Trading Program that satisfy
§ 51.308(e)(2)(vi)(A).103 In this final
action, we are making amendments to
some of these provisions, as discussed
in section III.A.1. We are terminating
the opt-in provisions by removing
sections 97.904(b), 97.911(b), and
97.921(d) from the regulations, and we
are making a minor correction to the
Texas SO2 Trading Program to relabel
‘‘Newman unit 4,’’ which is already
participating in the Texas SO2 Trading
Program, as its components: ‘‘Newman
unit **4’’ and ‘‘Newman unit **5.’’ We
are taking final action to find that with
these amendments, the Texas SO2
Trading Program continues to have
applicability provisions that satisfy
§ 51.308(e)(2)(vi)(A).
Section 51.308(e)(2)(vi)(B). This
provision requires allowance provisions
ensuring that the total value of
allowances (in tons) issued each year
under the program will not exceed the
emissions cap (in tons) on total annual
emissions from the sources in the
program. 40 CFR Section 97.921
establishes how the Administrator will
record the allowances for the Texas SO2
Trading Program and ensures that the
Administrator will not record more
allowances than are available under the
program consistent with 40 CFR
51.308(e)(2)(vi)(B).
Sections 51.308(e)(2)(vi)(C)–(E). The
provisions of sections
51.308(e)(2)(vi)(C)–(E) require
monitoring provisions providing for
consistent and accurate measurements
of emissions from sources in the
program to ensure that each allowance
actually represents the same specified
tonnage of emissions and that emissions
are measured with similar accuracy at
all sources in the program;
recordkeeping provisions that ensure
the enforceability of the emissions
monitoring provisions and other
program requirements; and reporting
provisions requiring timely reporting of
monitoring data with sufficient
frequency to ensure the enforceability of
the emissions monitoring provisions
and other program requirements and the
ability to audit the program. The
monitoring, recordkeeping, and
reporting provisions for the Texas SO2
Trading Program at 40 CFR 97.930–
103 See
82 FR at 48360 and 83 FR at 43602.
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97.935 are consistent with those
requirements in the CSAPR SO2 Group
2 Trading Program. The provisions in 40
CFR 97.930–97.935 require the subject
units to comply with the monitoring,
recordkeeping, and reporting
requirements for SO2 emissions in 40
CFR part 75, thereby satisfying the
requirements of 51.308(e)(2)(vi)(C)–(E).
Section 51.308(e)(2)(vi)(F). This
provision requires tracking system
provisions which provide for a tracking
system that is publicly available in a
secure, centralized database to track in
a consistent manner all allowances and
emissions in the program. The EPA is
implementing the Texas SO2 Trading
Program using the Allowance
Management System, which provides a
consistent approach to implementation
and tracking of allowances and
emissions for the EPA, subject sources,
and the public consistent with the
requirements of 40 CFR
51.308(e)(2)(vi)(F).
Section 51.308(e)(2)(vi)(G). This
provision requires authorized account
representative provisions ensuring that
the owners and operators of a source
designate one individual who is
authorized to represent the owners and
operators in all matters pertaining to the
trading program. The requirements at 40
CFR 97.913–97.918 for designated and
alternate designated representatives are
consistent with the requirements of 40
CFR 51.308(e)(2)(vi)(G) and are also
consistent with the EPA’s other trading
programs under 40 CFR part 97.
Section 51.308(e)(2)(vi)(H). This
provision requires allowance transfer
provisions providing procedures that
allow timely transfer and recording of
allowances, minimize administrative
barriers to the operation of the
allowance market, and ensure that such
procedures apply uniformly to all
sources and other potential participants
in the allowance market. Allowance
transfer provisions for the Texas SO2
Trading Program at 40 CFR 97.922 and
97.923 provide procedures that allow
timely transfer and recording of
allowances; these provisions will
minimize administrative barriers to the
operation of the allowance market and
ensure that such procedures apply
uniformly to all sources and other
potential participants in the allowance
market, consistent with 40 CFR
51.308(e)(2)(vi)(H).
Section 51.308(e)(2)(vi)(I). This
provision requires compliance
provisions prohibiting a source from
emitting a total tonnage of a pollutant
that exceeds the tonnage value of its
allowance holdings, including the
methods and procedures for
determining whether emissions exceed
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allowance holdings. The provision
requires that such method and
procedures apply consistently from
source to source. Compliance provisions
for the Texas SO2 Trading Program at 40
CFR 97.924 prohibit a source from
emitting a total tonnage of SO2 that
exceeds the tonnage value of its SO2
allowance holdings as required by 40
CFR 51.308(e)(2)(vi)(I).
Section 51.308(e)(2)(vi)(J). This
provision requires penalty provisions
providing for mandatory allowance
deductions for excess emissions that
apply consistently from source to
source. Additionally, the tonnage value
of the allowances deducted must equal
at least three times the tonnage of the
excess emissions. The Texas SO2
Trading Program includes automatic
allowance surrender provisions at 40
CFR 97.924(d) that apply consistently
from source to source and the tonnage
value of the allowances deducted shall
equal at least three times the tonnage of
the excess emissions, consistent with
the penalty provisions at 40 CFR
51.308(e)(2)(vi)(J).
Section 51.308(e)(2)(vi)(K). For a
trading program that allows banking of
allowances, this provision requires
provisions clarifying any restrictions on
the use of these banked allowances. The
Texas SO2 Trading Program provides for
banking of allowances under 40 CFR
97.926; Texas SO2 Trading Program
allowances are valid for compliance in
the control period of issuance or may be
banked for use in future control periods,
consistent with 40 CFR
51.308(e)(2)(vi)(K).
Section 51.308(e)(2)(vi)(L). This
provision requires program assessment
provisions providing for periodic
program evaluation to assess whether
the program is accomplishing its goals
and whether modifications to the
program are needed to enhance
performance of the program. The CAA
and EPA’s implementing regulations
require comprehensive periodic
revisions of implementation plans for
regional haze under 40 CFR 51.308(f)
and periodic review of the state’s
regional haze approach under 40 CFR
51.308(g) to evaluate progress towards
the reasonable progress goals for Class I
areas located within the state and Class
I areas located outside the State affected
by emissions from within the state.
Because the Texas SO2 Trading Program
is a BART-alternative and part of the
long-term strategy for Texas’ Regional
Haze obligations, this program will be
reviewed in each comprehensive
periodic revision and progress report.
We anticipate these revisions and
progress reports will provide the
information needed to assess program
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performance, as required by 40 CFR
51.308(e)(2)(vi)(L).
Based on the analysis presented here,
EPA is taking final action to affirm our
determination that the Texas SO2
Trading Program, as amended in this
final action, meets the requirements of
40 CFR 51.308(e)(2) as a BART
alternative for SO2 to satisfy Texas’
Regional Haze obligations.
3. PM BART
We are taking final action to affirm
our October 2017 approval of the
portion of the Texas Regional Haze SIP
that determined that PM BART emission
limits are not required for any Texas
EGUs. The majority of Texas’ BARTeligible EGUs rely on BART alternatives
for both SO2 and NOX emissions (or
have otherwise been determined to be
not subject to BART). We approved
Texas’ pollutant-specific screening
analysis for PM as appropriate and
consistent with a 2006 guidance
document in which the EPA stated that
pollutant-specific screening can be
appropriate where a state is relying on
a trading program as a BART alternative
to address both NOX and SO2 BART.104
All of the BART-eligible sources
participating in the SO2 intrastate
trading program have visibility impacts
from PM alone below the subject-toBART threshold of 0.5 deciviews
(dv).105 106 Furthermore, the BARTeligible sources not participating in the
intrastate trading program were
screened out of BART for all visibility
impairing pollutants. Therefore, we are
finalizing our affirmation of our prior
approval that no Texas EGUs are subject
to PM BART and that PM BART
emission limits are not required for any
Texas EGUs under EPA’s 2006
guidance.
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104 See
discussion in Memorandum from Joseph
Paisie to Kay Prince, ‘‘Regional Haze Regulations
and Guidelines for Best Available Retrofit
Technology (BART) Determinations,’’ July 19, 2006.
105 Our technical evaluation of Texas’ PM
screening approach in the 2009 Texas Regional
Haze SIP submittal was originally presented in a
December 16, 2014 proposal. See 79 FR 74817,
74848–49 (Dec. 16, 2014). As noted in our August
2018 proposal, the basis of our affirmation of our
approval of Texas’ PM screening approach remains
consistent with the technical evaluation we
provided at the time. See 83 FR 43586, at 43593.
106 Stryker Creek Unit ST2 is covered by CSAPR
for NOX and by the SO2 trading program but was
not included in the 2009 Regional Haze SIP. In our
August 2018 proposal, we explained that based on
our own evaluation in the January 2017 proposal
and October 2017 final rule, we determined that the
visibility impact attributable to PM emissions from
Stryker Creek Unit ST2 is a small fraction (roughly
1%) of the 0.786 dv aggregate impact of the unit’s
emissions from all pollutants. This is well below
the subject-to-BART threshold of 0.5 dv. See 83 FR
43586, at 43593.
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4. Reasonable Progress
This final action addressing the BART
requirements is part of the long-term
strategy for Texas and will contribute to
making reasonable progress toward the
goal of natural visibility conditions at
Texas’ and downwind Class I areas.
However, the EPA is not determining at
this time that this final action fully
resolves the EPA’s outstanding
obligations with respect to reasonable
progress that resulted from the Fifth
Circuit’s remand of our reasonable
progress FIP.107 We intend to take a
separate, future action to address the
Fifth Circuit’s remand.
B. Interstate Transport of Pollutants
That Affect Visibility
We are taking final action to affirm
our finding that Texas’ participation in
CSAPR to satisfy NOX BART and our
SO2 intrastate trading program, as
amended in today’s final action, fully
addresses Texas’ interstate visibility
transport obligations for the following
six NAAQS: (1) 1997 8-hour ozone; (2)
1997 PM2.5 (annual and 24 hour); (3)
2006 PM2.5 (24-hour); (4) 2008 8-hour
ozone; (5) 2010 1-hour NO2; and (6)
2010 1-hour SO2. The basis for this final
action is our determination in the
October 2017 FIP that the regional haze
measures in place for Texas are
adequate to ensure that emissions from
the State do not interfere with measures
to protect visibility in nearby states,
because the emission reductions are
consistent with the level of emissions
reductions relied upon by other states
during interstate consultation under 40
CFR 51.308(d)(3)(i)–(iii) and when
setting their reasonable progress
goals.108 As discussed in our August
2018 affirmation proposal, the 2009
Texas Regional Haze SIP relied on
participation in CAIR to meet SO2 and
NOX BART requirements for Texas
EGUs. Under CAIR, Texas EGU sources
were projected to emit approximately
350,000 tons of SO2 annually.109 These
are the 2018 EGU emission projections
used by CENRAP for Texas that other
states potentially impacted by emissions
from Texas sources agreed upon during
107 Order,
Texas v. EPA, 16–60118 (5th Cir. Mar.
22, 2017).
108 See 2009 Texas Regional Haze SIP, section 4.3
titled ‘‘Consultations On Class I Areas In Other
States.’’ The submittal can be found at
www.regulations.gov, Docket ID EPA–R06–OAR–
2016–0611, Document ID EPA–R06–OAR–2016–
0611–0002.
109 See section 10 of the 2009 Texas Regional
Haze SIP. Table 10–7 shows that under CAIR, the
2018 emission from Texas EGUs were projected to
be approximately 350,000 tons SO2. The SIP
submittal can be found in www.regulations.gov,
Docket ID EPA–R06–OAR–2016–0611, Document
ID EPA–R06–OAR–2016–0611–0002.
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49187
interstate consultation and relied on in
their regional haze SIPs. In today’s final
action, we are finalizing four revisions
to strengthen the Texas SO2 Trading
Program and increase its consistency
with CSAPR, including the addition of
an assurance level consistent with the
2012 CSAPR demonstration. As
discussed elsewhere in today’s final
action, Texas EGU annual SO2
emissions for sources covered by the
trading program will be constrained by
the assurance level of 255,083 tons.
Including an estimated 35,000 tons per
year of emissions from units not covered
by the Texas SO2 Trading Program
yields 290,083 tons of SO2, which is
well below the 350,000-ton emissions
projection for 2018 for Texas sources
under CAIR or the 317,100-ton
emissions level assumed for Texas
sources under CSAPR participation in
the BART-alternative sensitivity
analysis utilized for the 2012 CSAPR
Better-than-BART determination.
Additionally, the October 2017 FIP
relies on CSAPR for ozone season NOX
as an alternative to EGU BART for NOX,
which exceeds the NOX emission
reductions that would have been
realized from Texas EGUs under CAIR
and that other states relied upon during
interstate consultation for the first
planning period.110 Because the
revisions to the Texas SO2 Trading
Program we are finalizing in today’s
final action ensure emission reductions
consistent with and below the emission
levels relied upon by other states during
interstate consultation, we find that
these revisions provide further support
for our earlier finding that the BART
alternative in the October 2017 FIP
results in emission reductions adequate
to satisfy the requirements of CAA
section 110(a)(2)(D)(i)(II) with respect to
visibility for the six identified NAAQS.
IV. Summary and Responses to
Significant Issues Raised by
Commenters
We received both written and oral
comments at the public hearings we
held in Austin and Dallas. We also
110 Under CAIR, Texas had an annual 2009 CAIR
Phase 1 budget of 181,017 tons of NOX and an
annual 2015 CAIR Phase 2 budget of 150,845 tons
of NOX. See Section 11, Table 11–15 of the 2009
Texas Regional Haze SIP. The SIP submittal can be
found at www.regulations.gov, Docket ID EPA–R06–
OAR–2016–0611, document ID EPA–R06–OAR–
2016–0611–0002. The 2018 EGU emission
projections for NOX used by CENRAP for Texas,
which other states potentially impacted by
emissions from Texas sources agreed upon during
interstate consultation and relied on in their
regional haze SIPs, were approximately 160,000
tons. In contrast, under the CSAPR ozone season
NOX trading program, Texas’ 2017 NOX ozone
season budget is 52,301 tons of NOX. See 81 FR
74504, 74508 (Oct. 26, 2016).
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received written comments on the
August 27, 2018 affirmation proposed
action and the November 14, 2019
supplemental proposed action. The full
text of comments received is included
in the publicly posted docket associated
with this action at www.regulations.gov.
We reviewed all public comments that
we received. Below we provide a
summary of the most significant
comments and our responses. A
complete summary of all of the
comments we received, and our
responses thereto are contained in a
separate document titled Response to
Comments, which is found in the docket
associated with this final action.
A. Texas SO2 Trading Program as a
BART Alternative
Comment: We received one comment
asserting that in promulgating the Texas
SO2 Trading Program as a BART
alternative in our October 2017 FIP and
in affirming the trading program in our
August 2018 proposal, EPA did not
properly demonstrate that the trading
program meets the requirements for an
alternative to BART for SO2 because
EPA did not compare the alternative to
source-specific BART in Texas. The
commenter asserted that the Regional
Haze Rule at 40 CFR 51.308(e)(2)
specifies that BART and associated
emission reductions achievable for each
source within the State subject to BART
and covered by the alternative program
must be evaluated first for the purpose
of comparing to the BART alternative
and determining whether the alternative
makes greater reasonable progress than
BART. The commenter also noted that
the Regional Haze Rule at
§ 51.308(e)(2)(i)(C) provides that the
only exception to this requirement is
when the emissions trading program or
other alternative measure has been
designed to meet a requirement other
than BART and that in such cases, EPA
may analyze BART for similar types of
sources within a source category instead
of on a source-specific basis. The
commenter asserted that in
promulgating the Texas SO2 Trading
Program, EPA did not properly
demonstrate that the trading program is
better than BART and meets the
requirements for an alternative to BART
because EPA has not determined which
units are subject to BART, and did not
provide an analysis of BART at each
source subject to BART and covered by
the trading program to compare against
the trading program. According to the
commenter, even if presumptive BART
levels were an appropriate assumption
that is not outdated, EPA would still be
required to compare the trading program
directly to presumptive BART, which it
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has not done. The commenter also
contended that EPA’s approach of
comparing the intrastate trading
program to Texas’ participation in the
SO2 trading program under CSAPR is
not appropriate because EPA withdrew
Texas from the CSAPR program for SO2
and thus CSAPR cannot lawfully be
BART for SO2 for Texas EGUs.
The commenter also disagreed with
EPA’s position that the trading program
was designed to meet requirements
other than BART, namely the interstate
transport requirements and the longterm strategy provisions. The
commenter asserted that even if the
trading program had indeed been
designed to meet requirements other
than BART, this would still not
authorize EPA to completely forego
analyzing BART for the sources subject
to BART and covered by the trading
program.
Response: As explained in our August
27, 2018 proposal, in addition to being
a sufficient alternative to BART, the
trading program is designed to secure
reductions consistent with visibility
transport requirements.111 As allowed
by the requirements for a BART
alternative in § 51.308(e)(2)(i)(C), we are
exercising the exception allowed when
the alternative measure ‘‘has been
designed to meet a requirement other
than BART (such as the core
requirement to have a long-term strategy
to achieve the reasonable progress goals
established by States).’’ See 40 CFR
51.308(e)(2)(i)(C). In such
circumstances, BART and associated
emission reductions may be analyzed
for similar sources ‘‘based on both
source-specific and category-wide
information, as appropriate.’’ When
promulgating the 2012 CSAPR Betterthan-BART rule, the EPA relied on an
analysis of BART in CSAPR states and
a demonstration showing that CSAPR
would result in greater reasonable
progress than BART under the test in 40
CFR 51.308(e)(3). In that analysis, EPA
utilized simplified assumptions
regarding ‘‘presumptive’’ BART limits at
BART-eligible sources. This analysis
was conducted on a category-wide basis
(all fossil fuel-fired EGUs). See 77 FR
33642, 33649–50 (June 7, 2012). This
analysis satisfied 51.308(e)(2)(i)(C)
because CSAPR was designed to meet
the requirements of CAA section
110(a)(2)(D)(i)(I) (sometimes referred to
as ‘‘good neighbor’’ obligations) for
certain NAAQS pollutants. EPA finds
that reliance on the category-wide BART
analysis from the 2012 CSAPR Betterthan-BART demonstration is
appropriate here, because, although the
111 83
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Texas program is not designed to meet
good neighbor obligations under section
110(a)(2)(D)(i)(I), it is designed to meet
separate CAA requirements for
interstate visibility transport, as
explained in section III.B above. This
satisfies the condition in
51.308(e)(2)(i)(C) for using categorywide information such as presumptive
BART limits in analyzing the Texas SO2
Trading Program. Thus, the BART
determinations derived from that
CSAPR Better-than-BART
demonstration are an appropriate BART
benchmark for comparison against the
Texas SO2 Trading Program given that
the Texas SO2 Trading Program is
modeled on the CSAPR trading
programs. In this action, we are relying,
in part, on that same 2012 CSAPR
Better-than-BART demonstration to
show that the clear weight of evidence
demonstrates that the Texas SO2
Trading Program, which is modeled on
the CSAPR trading programs, will
provide for greater reasonable progress
than BART in Texas. Indeed, the
anticipated maximum potential SO2
emissions in Texas under the Texas SO2
Trading Program BART alternative are
less than the SO2 emission levels from
Texas EGUs that were forecast in the
demonstration for Texas EGU emissions
assuming their participation in the
CSAPR SO2 trading program. Under
CSAPR, the total allocations for all
existing EGUs in Texas were 279,740
SO2 tons, the total state budget
including the amounts of allowances set
aside for potential allocation to new
units was 294,471 tons, and the
assurance level was 347,476 tons. The
level of emissions assumed for Texas
EGUs in the BART alternative
sensitivity analysis utilized for the 2012
CSAPR Better-than-BART determination
is 317,100 SO2 tons.112 By comparison,
the Texas SO2 Trading Program has a
budget of 238,395 SO2 tons, and we are
finalizing an assurance level of 255,083
tons in this action. In light of the three112 For the projected annual SO emissions from
2
Texas EGUs, see Technical Support Document for
Demonstration of the Transport Rule as a BART
Alternative, Docket ID No. EPA–HQ–OAR–2011–
0729–0014 (December 2011) (2011 CSAPR/BART
Technical Support Document at Table 2–4,),
available in the docket for this action. Certain
CSAPR budgets were increased after promulgation
of the CSAPR final rule (and the increases were
addressed in the 2012 CSAPR/BART sensitivity
analysis memo. See memo entitled ‘‘Sensitivity
Analysis Accounting for Increases in Texas and
Georgia Transport Rule State Emissions Budgets,’’
Docket ID No. EPA–HQ–OAR–2011–0729–0323
(May 29, 2012), available in the docket for this
action. The increase in the Texas SO2 budget was
50,517 tons which, when added to the Texas SO2
emissions projected in the CSAPR + BARTelsewhere scenario of 266,600 tons, yields total
potential SO2 emissions from Texas EGUs of
approximately 317,100 tons.
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for-one penalty surrender ratio imposed
on emissions exceeding the 255,083-ton
assurance level, the assurance level
represents the highest annual SO2
emissions anticipated from units subject
to the Texas program. In reality, in light
of ongoing changes in the electricgenerating sector in Texas, there is a
reasonable expectation that actual
emissions under the Texas program
would remain well below the assurance
level. We are also finalizing a more
conservative (i.e., higher) estimate of
35,000 annual SO2 tons as the projected
emissions from Texas units that would
have been in the CSAPR program but
are not in the Texas SO2 Trading
Program. This more conservative
estimate is based on these units’
maximum annual emission level of
34,129 tons over the past five years
(2014–2018) and taking into
consideration that several of these units
have recently shut down or have been
announced for shutdown in the near
future.113 Adding that amount to the
Texas SO2 Trading Program’s assurance
level of 255,083 tons yields 290,083
tons. Assuming this figure represents a
firm upper bound on annual SO2
emissions from the relevant EGUs in
Texas under the Texas SO2 Trading
Program, this is less than the 317,100ton figure EPA had demonstrated was
acceptable in the original 2012 CSAPR
Better-than-BART analysis.
Comment: The commenter asserted
that it was not appropriate for EPA to
conclude that because CSAPR achieves
greater reasonable progress than BART
when averaged across all affected states
that this necessarily means that CSAPR
achieves greater reasonable progress
than BART in Texas. The commenter
asserted that the legal test that EPA used
during the original ‘‘CSAPR Better-thanBART’’ rulemaking is fundamentally
different than the test EPA must use in
assessing whether the Texas SO2
Trading Program is better than BART.
The commenter asserted that in making
its determination that CSAPR achieves
greater reasonable progress than BART
under 40 CFR 51.308(e)(3), EPA was
required to demonstrate that visibility
does not decline in any Class I area and
that there is an overall improvement in
visibility, determined by comparing the
average differences between BART and
the alternative over all affected Class I
areas. The commenter argued that since
EPA averaged the visibility
improvement from CSAPR over all the
affected Class I areas in the eastern half
of the country in the CSAPR Betterthan-BART determination, Texas was
able to take advantage of reductions
113 84
FR 61853.
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from other states without having to
reduce its SO2 emissions as much as it
would have had to do under source-bysource BART. The commenter argued
that in contrast to the CSAPR Betterthan-BART determination, the legal test
required under §§ 51.308(e)(2)(i) and
51.308(e)(3) to demonstrate that the
Texas SO2 Trading Program is better
than BART cannot rest on
improvements from CSAPR in other
states. The commenter argued that EPA
must instead demonstrate that the Texas
SO2 Trading Program is better than
BART in Texas alone by examining the
visibility improvement at only the Class
I areas affected by Texas sources.
Response: We disagree that EPA must
demonstrate that the Texas SO2 Trading
Program is better than BART by
examining visibility improvement at
only Class I areas in Texas and Class I
areas in other states affected by Texas
sources. As explained in our proposal
affirming the Texas SO2 Trading
Program, the 2012 demonstration that
CSAPR, as finalized and amended in
2011 and 2012, meets the Regional Haze
Rule’s criteria for a demonstration of
greater reasonable progress than BART
is also the primary evidence that the
Texas trading program achieves greater
reasonable progress than BART.114 In
the 2012 CSAPR Better-than-BART rule,
the EPA relied on an analytic
demonstration that included an air
quality modeling study showing that
CSAPR results in greater improvements
in average visibility across all affected
Class I areas as compared to adopting
source-specific BART. Our finding with
respect to the Texas program relies on
the demonstration underlying our
CSAPR Better-than-BART Rule and our
2017 CSAPR Better-than-BART
affirmation (including the basis for our
denial of a petition for reconsideration
in the latter,115 as discussed in section
I.D of the preamble). Thus, we find that
given the particular circumstances in
this case, we are not required to focus
only on Class I areas in Texas and Class
I areas in other states affected by Texas
sources. Rather, we are assessing the
Texas program in the context of the
larger CSAPR Better-than-BART
analysis. We find that due to the
specific circumstances in this case, as
described above, it is reasonable and
114 83
FR 43586, at 43599.
U.S. EPA, Denial of Petition for Partial
Reconsideration of ‘‘Interstate Transport of Fine
Particulate Matter: Revision of Federal
Implementation Plan Requirements for Texas’’ (82
FR 45481; Sept. 29, 2017) (EPA–HQ–OAR–2016–
0598). A copy of the denial of petition letter sent
to the petitioners and the denial of petition Notice
of Availability (NOA) published in the Federal
Register are available at Docket ID EPA–HQ–OAR–
2016–0598.
115 See
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49189
appropriate to consider improvements
in average visibility across all affected
Class I areas in our assessment of the
Texas SO2 Trading Program to
demonstrate that it is better than BART.
The amendments to the Texas SO2
Trading Program we are finalizing in
this action ensure that EGU emissions
under the Texas program will remain
well below the amount assumed in the
BART-alternative sensitivity analysis
utilized for the 2012 CSAPR Better-thanBART determination (i.e., 317,100 tons),
and thus visibility levels at Class I areas
impacted by sources in Texas are
anticipated to be at least as good as (and
likely better than) the levels projected
under Texas participation in the larger
CSAPR SO2 trading program.
Comment: We received one comment
that asserted that EPA’s reliance on
CSAPR to design the Texas SO2 Trading
Program as a BART alternative is not
appropriate because in doing so, EPA
did not account for new circumstances
or update emissions and other data,
which the commenter claimed EPA
typically does when evaluating BART.
The commenter asserted that if EPA had
taken the same technical approach it has
taken in other regional haze actions of
using the most up-to-date data, this
would have changed the allowance
distribution of the Texas SO2 Trading
Program. For instance, the commenter
argued that in developing the Texas SO2
Trading Program, EPA should have
taken into account the retirements of
Welsh 2, Big Brown Units 1 and 2,
Monticello Units 1, 2, and 3, and
Sandow 4 and 5. Similarly, the
commenter asserted the Texas SO2
Trading Program should have included
rule provisions for properly dealing
with the impending retirement of the
two JT Deely units instead of the current
method of addressing retired
allowances, which the commenter
claimed provides no incentive to reduce
SO2 emissions. Additionally, the
commenter noted that EPA assigned
allocations under CSAPR on the basis of
a unit’s heat input from 2006–2010 and
its emissions from 2003–2010 utilizing
a detailed ten-step approach based on
the heat input and emissions from those
periods. The commenter claimed that
EPA should have re-applied the same
allocation methodology it used for
CSAPR using updated information, and
that if EPA had done so, the allocations
in many instances would have changed
significantly. In support of this
argument, the commenter performed
this analysis using the same number of
years as in the original CSAPR
methodology but shifted the year ranges
forward to include updated information.
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The commenter asserted that two cases
were analyzed. In the first case, the
commenter did not remove retired units
and used the original CSAPR
methodology to revise the CSAPR
allocations while using updated data. In
this case, because none of the retired
units were removed, the total
allocations remained at 238,393 tons.
However, the commenter asserted that
because the emissions and heat inputs
changed with the updated data, almost
every unit’s allocations changed, in
some cases by more than 3,000 tons. In
the second case, the commenter asserted
that retired units were removed, but the
JT Deely units were retained. The
commenter asserted that because of the
removal of retired units and because of
the updated emissions and heat inputs,
almost every unit’s allocations changed,
resulting in a reduction of allocations
from 238,393 tons to 176,332 tons. The
commenter noted that these additional
62,061 tons in unit allocations that
resulted from EPA not using the most
updated data in the allocation
methodology and not removing retired
units should not be moved into the
Supplemental Allowance Pool as
Section 97.911(a)(2) of the Texas SO2
Trading Program provides. The
commenter argued that these allowances
should never have been in the
allowance pool in the first place. The
commenter concluded that the analysis
performed by the commenter
demonstrates that if EPA had updated
the emissions data and heat input data
using the original CSAPR methodology
and removed the retired units’
allocations, the Texas SO2 Trading
Program would not include excess
allowances, which the commenter
claimed disincentivizes SO2 emissions
reductions.
Response: As stated in responses to
several other comments in this final
action and in our Response to
Comments document found in the
docket for this action, we disagree that
in developing a specific trading
program, EPA must incorporate new
design features, particularly when other
legal and policy considerations weigh in
favor of making the program similar in
design to a specific previous program
that does not include those design
features. Likewise, EPA is not required
to incorporate new design features that
may be suggested by a commenter and
is not required to update every data
element used in the rulemaking. In this
instance, the Texas SO2 Trading
Program was designed to qualify as a
BART alternative in light of EPA’s
previous determinations regarding
permissible BART alternatives, and for
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that reason was designed to be as
similar as possible to the CSAPR SO2
program. Both the amounts of the initial
allocations to units under the Texas SO2
Trading Program and the treatment of
the allocations to units that have been
retired for at least five years are directly
based on the analogous provisions in
the CSAPR SO2 program. As discussed
in response to another comment on the
Texas SO2 Trading Program’s
Supplemental Allowance Pool, in those
aspects of the overall allocation
methodology where the Texas SO2
Trading Program allowance allocation
provisions deviate from the CSAPR SO2
program allowance allocation
provisions, the Texas SO2 Trading
Program is generally more, not less,
stringent.
With respect to the commenter’s point
that the amount of the CSAPR SO2
program budget for Texas was initially
determined based on our assessments of
the state’s interstate transport
obligations at the time of the CSAPR
rulemaking, we agree with the statement
but do not consider the point relevant
to this final action. The origins of the
CSAPR budgets are immaterial to this
action. Along with certain budget
adjustments that were addressed
through sensitivity analyses, the CSAPR
budgets were used in our 2012 CSAPR
Better-than-BART determination and
therefore remain relevant for purposes
of our determination in this action that
the Texas SO2 Trading Program qualifies
as a BART alternative in the context of
the 2012 CSAPR Better-than-BART
determination.
With respect to the commenter’s
identification of alternative possible
distributions of allowances among the
units covered by the program, we do not
believe that altering the distribution of
allowances while leaving the total
number of allowances the same would
change the stringency of the program,
although it could address concerns
regarding whether the distribution
among the sources is equitable. As none
of the sources covered by the program
have raised equity concerns about the
initial allocations, and given that we do
not understand the commenter to be
raising such concerns, we see no reason
to redistribute the initial allocations. We
address the comments regarding the
stringency of the program cap
elsewhere.
With regard to the commenter’s
position that allowances allocated to
units that retire should be eliminated
from the budget instead of being
reallocated, that is of course an option
in designing a trading program, but it is
not a requirement, and it is not a feature
of the CSAPR SO2 program on which
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the Texas SO2 Trading Program was
modeled. We were not required and did
not find it necessary to take such an
approach in the Texas SO2 Trading
Program in order to ensure that the
program qualifies as a BART alternative
in the context of the 2012 and 2017
CSAPR Better-than-BART
determinations.
Comment: We received comments
from the State and affected sources in
support of our affirmation that the
October 2017 Regional Haze FIP
satisfies Texas’ obligations for BART
and in support of our determination that
the intrastate SO2 trading program for
certain EGUs in Texas is an appropriate
BART alternative and satisfies all SO2
BART requirements. Several affected
sources also provided comments in
support of the October 2017 SO2 trading
program over the adoption of a sourceby-source approach to address the
BART requirements for units subject to
BART in Texas. One affected source
asserted that the trading program will
allow operational flexibility in
complying with BART obligations and
another affected source asserted that it
is appropriate for EPA to respect Texas’
preference to meet BART compliance
through a BART alternative rather than
source-specific BART.
Response: We appreciate the
commenter’s support of our FIP that
establishes an intrastate trading program
that caps emissions of SO2 from certain
EGUs in Texas and includes the
determination that this program meets
the requirements for an alternative to
BART for SO2.
Comment: We received one comment
that argued that EPA’s reliance on the
CSAPR Better-than-BART
demonstration is based on the false
premise that the Texas SO2 Trading
Program is functionally equivalent to
CSAPR. The commenter asserted that
the Texas SO2 Trading Program is not
sufficiently similar to CSAPR for a
comparison between Texas’ overall
emissions under the Texas SO2 Trading
Program versus CSAPR to suffice for a
weight of evidence determination. In
support of the claim that the Texas SO2
Trading Program and CSAPR are not
sufficiently similar, the commenter
pointed to the exclusion from the Texas
SO2 Trading Program of a number of
Texas EGUs that were covered under
CSAPR and argued that EPA presented
no real analysis of the visibility impacts
of these excluded units. The commenter
asserted that for some of these excluded
units that have existing scrubbers or
other types of SO2 control, such as
Oklaunion, W.A. Parish 8, Oak Grove
Units 1 and 2, Twin Oaks Units 1 and
2, and Sandy Creek, EPA should have
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evaluated possible upgrades to existing
SO2 controls.
The commenter also argued that there
are flaws in how EPA performed its Q/
d analysis that constitute arbitrary
deviations from EPA’s Q/d testing
methodology in past regional haze
actions and claimed that the deviations
were made in order to exclude certain
units from the Texas SO2 Trading
Program. For instance, the commenter
asserted that EPA’s decision to base the
Q/d analysis on 2009 emissions was
arbitrary and claimed that no rationale
was provided for selecting that year of
data other than EPA noting that it
already had this emissions data
available from a previous analysis. The
commenter asserted that in contrast to
the Q/d analysis EPA used to identify
sources to include in the Texas SO2
Trading Program, in past regional haze
actions, EPA has typically considered a
3–5 year range of data to account for
data variability from year to year. The
commenter also asserted that the Twin
Oaks facility had a Q/d greater than
EPA’s stated threshold of 10 but it was
nonetheless excluded on the basis that
EPA estimated that the Q/d of each of
its individual units were likely less than
10. The commenter claimed that EPA’s
decision to deviate from its approach is
arbitrary and was made in order to
exclude the Twin Oaks facility from the
trading program. Similarly, the
commenter asserted that EPA’s decision
to exclude Oklaunion from the trading
program even though its Q/d was 85,
which is much higher than the EPA’s
stated threshold of 10, is arbitrary. The
commenter asserted that EPA’s decision
to exclude units that came online after
2009 on the basis that these units would
be permitted and constructed using
emission control technology determined
under either BACT or LAER review, was
inappropriate given that EPA made no
comparison between the levels of
control under BACT or LAER versus
BART for these units. The commenter
argued that this comparison was
necessary given that, according to the
commenter, BART has been
demonstrably more stringent than either
BACT or LAER. The commenter also
asserted that the opt-in provision is yet
another feature of the Texas SO2
Trading Program that makes the trading
program not functionally equivalent to
CSAPR, as EPA removed the opt-in
provision in CSAPR.
Response: We continue to believe that
the Texas SO2 Trading Program will
achieve SO2 emission levels that are
functionally equivalent to those that had
been previously projected for Texas’
participation in the original CSAPR
program and that our reliance on the
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original CSAPR Better-than-BART
determination for the clear weight of
evidence demonstration required under
§ 51.308(e)(2)(i)(E) was thus appropriate
in this case. What we mean by the
phrase ‘‘functionally equivalent’’ is that
while the two programs are not
identical, the differences between the
Texas SO2 Trading Program and CSAPR
are either not significant or work to
demonstrate the relatively greater
stringency of the Texas SO2 Trading
Program as compared to CSAPR. As the
commenter notes, in our August 27,
2018 proposal affirming the Texas SO2
Trading Program, we listed several
points that help demonstrate the relative
stringency of the Texas SO2 Trading
Program as compared to CSAPR.116
These points are summarized below:
• Covered sources under the Texas
SO2 Trading Program represent
approximately 85% of CSAPR
allocations for existing units in Texas.
Covered sources under the Texas SO2
Trading Program represent 89% of all
SO2 emissions from all Texas EGUs in
both 2016 and 2017.
• The remaining 11% of 2016 and
2017 emissions from Texas EGUs not
covered by the BART alternative come
from gas units that rarely burn fuel oil
or from coal-fired units that on average
are better controlled for SO2 than the
covered sources and generally are less
relevant to visibility impairment.117 As
a result, any shifting of generation to
non-covered sources, as might occur if
a covered source were to reduce its
operation in order to remain within its
SO2 emissions allowance allocation, is
expected to result in fewer emissions to
generate the same amount of electricity.
• We also noted that the noninclusion of a large number of gas-fired
units that rarely burn fuel oil reduces
the amount of available allowances for
such units that would typically and
collectively be expected to use only a
fraction of their CSAPR allowance
allocations. Many of these sources
typically emit at levels much lower than
their allocation level.
• Emissions projections under CAIR
and CSAPR showed that Texas sources
were anticipated to purchase allowances
from out-of-state sources. In contrast to
CSAPR, the Texas SO2 Trading Program
does not allow purchasing of allowances
from out-of-state sources. This will
ensure that emissions reductions
resulting from implementation of the
Texas SO2 Trading Program will take
place in Texas instead of a neighboring
state. In this respect, implementation of
the Texas SO2 Trading Program can be
116 83
FR 43586, at 43591.
117 Id.
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expected to result in greater visibility
benefits at Texas Class I areas than
CSAPR.
Furthermore, in the final analysis for
this action, we have updated our
emissions assumptions to be even more
conservative (i.e., we assume the
potential for higher emissions) for units
that were in the CSAPR program but not
covered by the Texas SO2 Trading
Program. In the August 2018 proposal,
we had used an assumption that
emissions from these units could be as
high as 27,500 tons per year.118
However, in the updated analysis
presented for comment in the November
2019 SNPRM, we adjusted this
assumption to 35,000 tons per year. This
number reflects emissions for the past
five years (2014–2018), which EPA
regards as a conservative assumption for
emissions performance from these units.
Even when this conservative figure is
added to the highest annual emissions
anticipated from units under the Texas
program, 255,083 tons per year (i.e., the
assurance level for the program), the
total figure is 290,083 tons per year. As
EPA explains in section III.A.2 of the
preamble for this action, that figure is
still 27,019 tons below the 317,100 ton
per year emissions level for Texas that
EPA assumed in the BART-alternative
sensitivity analysis utilized for the 2012
CSAPR Better-than BART
determination.
Based on the above points and the fact
that the combination of (1) the source
coverage for the Texas SO2 Trading
Program, (2) the total allocations for
EGUs covered by the program, and (3)
recent and foreseeable emissions trends
from those EGUs both covered and not
covered by the program will result in
future EGU emissions in Texas that are
less than the SO2 emission levels
forecast in the 2012 Better-than-BART
demonstration for Texas EGU emissions
assuming CSAPR participation,119 it is
not reasonable to expect that the Texas
SO2 Trading Program would result in
less visibility benefit in Texas Class I
areas compared to Texas’ participation
in CSAPR. Thus, we continue to believe
that we have sufficiently demonstrated
that differences in source coverage
between the Texas SO2 Trading Program
as amended in this final action and
CSAPR are either not significant or work
to demonstrate the relative stringency of
the Texas SO2 Trading Program as
compared to CSAPR.
Our decision to exclude from the
Texas SO2 Trading Program certain
units that were covered under CSAPR
was not arbitrary as the commenter
118 83
119 83
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contends, but rather was generally based
on both the results of a Q/d analysis as
well as the units’ potential to impact
visibility at Class I areas based on our
consideration of certain circumstances
specific to each unit. Based on our
consideration of the above, we found it
appropriate to exclude certain units that
were previously covered under CSAPR
from the Texas SO2 Trading Program.
For example, some units are already
operating SO2 controls and we thus do
not consider the potential visibility
impacts from these units to be
significant relative to those coal-fired
EGUs participating in the program, and
we therefore excluded them from the
Texas SO2 Trading Program. In some
cases, relatively new units that began
operation after 2009 and have been
permitted and constructed using
emission control technology determined
under either Best Available Control
Technology (BACT) or Lowest
Achievable Emission Rate (LAER)
review, as applicable. As we explained
in our proposal affirming the Texas SO2
Trading Program, because these newer
units are already operating BACT or
LAER controls, we do not consider the
potential visibility impacts from these
units to be significant relative to those
coal-fired EGUs participating in the
program. The commenter contends that
in these cases, we should have
compared the levels of control under
BACT or LAER versus BART for these
units because BART can in some cases
be more stringent than either BACT or
LAER. However, given the much greater
anticipated visibility impact from
uncontrolled coal-fired EGUs
participating in the program, we
continue to believe that it is reasonable
for us to focus our efforts on these
uncontrolled coal-fired EGUs while
excluding the newer, already controlled
EGUs from the Texas SO2 Trading
Program.
The commenter specifically identifies
Oklaunion, W.A. Parish Unit 8, Oak
Grove Units 1 and 2, Sandy Creek Unit
1, and the Twin Oaks facility as units
that were covered under CSAPR, but
which were excluded from the Texas
SO2 Trading Program. Although
Oklaunion has a Q/d greater than 10, we
ultimately excluded Oklaunion from the
Texas SO2 Trading Program based on
our consideration that the facility
consists of one coal-fired unit that is not
BART-eligible; annual emissions of SO2
in 2016 from this source were 1,530
tons, which is less than 1% of the total
annual emissions for EGUs in the state;
and annual SO2 emissions were only
933 tons in 2017. In short, the most
recent emissions from this facility are
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small relative to other non-BART units
included in the program.120 And as
noted in our November 2019
supplemental proposal, American
Electric Power announced in 2018 its
plans to shut down the Oklaunion
Power Plant by September 2020.121
With regard to W.A. Parish Unit 8, this
unit is not BART-eligible, but is colocated with BART-eligible units.
Although we decided to include most
coal-fired units that are not BARTeligible but are co-located with BARTeligible EGUs in the Texas SO2 Trading
Program to prevent any significant
shifting of generation and SO2 emissions
from participating sources to nonparticipating sources within the same
facility, we decided not to include W.A.
Parish Unit 8 because this unit has a
scrubber installed that maintains an SO2
emission rate four to five times lower
than the emission rate of the other coalfired units at the facility that are
uncontrolled and are participating in
the Texas SO2 Trading Program (Parish
Units 5, 6, and 7).122 Therefore, we
expect that any shifting of generation
from the participating units at the Parish
facility to Parish Unit 8 would not
present a problem, and instead would
result in a decrease in overall emissions
from the source. Similarly, with regard
to Oak Grove Units 1 and 2, and Sandy
Creek Unit 1, these are relatively newer
coal fired units that began operation in
late 2009 or after, are not BART eligible
and have scrubbers installed that
maintain SO2 emission rates much
lower than the uncontrolled units
included in the program.123 Thus, we
did not include Oak Grove Units 1 and
2, and Sandy Creek Unit 1 for
participation in the Texas SO2 Trading
Program. Although the Twin Oaks
facility was identified as having a Q/d
greater than 10, we did not include it in
the trading program based on its
relatively low potential to impact
visibility at Class I areas. For instance,
the facility does not include any BARTeligible EGUs; the Q/d for this facility is
14.2, which is significantly lower than
that of other Texas facilities on our list
with a Q/d value over 10; 124 and the
120 83
FR 43597.
84 FR at 61853, footnote 20.
122 83 FR 43596.
123 Id. 43601.
124 Id. FR 43596–97. As discussed in our August
2018 proposal, after identifying the BART-eligible
sources included in the Texas SO2 Trading
Program, we evaluated additional sources for
potential inclusion in the trading program based on
their potential to impact visibility at Class I areas.
We used a Q/d value of 10 as a threshold for
identification of facilities that may impact visibility
at Class I areas and could be included in the trading
program. We identified a total of 17 facilities in
Texas with Q/d values greater than 10, some of
121 See
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estimated Q/d for each individual unit
(Units 1 and 2) is less than 10.
Considering the above, we do not
consider the potential visibility impacts
from Twin Oaks Units 1 and 2 to be
significant relative to the other coalfired EGUs in Texas with Q/d’s much
greater than 10 and therefore did not
include them in the program.125 We also
note that annual SO2 emissions from
Twin Oaks Units 1 and 2 in 2017–2019,
which are the three most recent years
for which annual emissions data are
available, have been well below the
2009 emissions level of 4,707 tons of
SO2.126 Thus, we believe the results of
the Q/d analysis as well as our
consideration of unique circumstances
specific to each unit are sufficient
information to justify excluding certain
units from the Texas SO2 Trading
Program that were included under
CSAPR, without necessitating a
quantitative examination of the
visibility impact of excluding these
units.
With regard to the comment
contending that we arbitrarily selected
2009 as the emissions year in our Q/d
analysis, we note that to identify
facilities that may impact visibility at
Class I areas in our October 2017 final
rule, we relied on an already existing Q/
d analysis that we prepared as part of
the December 2014 proposal to address
Texas’ reasonable progress
requirements, and which was based on
2009 emissions.127 In that proposed
action, we also reviewed 2010 and 2011
emission data that became available as
we were developing that proposed rule.
We determined that the only EGU
facility that was above the Q/d for 2010
and 2011 compared to the 2009 analysis
was the Oak Grove facility, which came
online in late 2009. As we discuss
above, this is a new facility that is
equipped with scrubbers and we
determined it was not necessary to
include them in the Trading Program.
The Regional Haze Rule does not
require us to select a range of years for
the emissions data for our Q/d analysis
which are not BART-eligible and had not already
been identified for inclusion in the program. The
Q/d values for these 17 facilities range from 14.2
(for Twin Oaks) to 425.4 (for Monticello).
125 Id. FR 43597.
126 Annual SO emissions from Twin Oaks Units
2
1 and 2 were 2,472 tons in 2017; 2,523 tons in 2018;
and 2,408 tons in 2019. See excel spreadsheet
‘‘Twin Oaks- SO2 annual emissions_2009 and 2017–
2019.xlsx,’’ available in the docket for this action.
127 See the TX RH FIP TSD that accompanied our
December 2014 proposal to address reasonable
progress requirements for Texas (79 FR 74818 (Dec
16, 2014)), and the Excel file ‘‘2009statesum_Q_
D.xlsx.’’ These files are available in Docket ID EPA–
R06–OAR–2014–0754, see Document ID EPA–R06–
OAR–2014–0754–0007 and EPA–R06–OAR–2014–
0754–0007–05.
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nor does it identify a particular year that
must be used for the emissions data. We
have the discretion to select the
emissions data year as long as we
provide a reasonable justification for our
selection, as we have done in this
case.128
With regard to the comment regarding
the opt-in provision, we appreciate the
commenter’s input on whether that
provision differs from the provisions of
the CSAPR SO2 program in a manner
that could decrease the relative overall
stringency of the Texas SO2 Trading
Program. In our November 2019
supplemental proposal, we proposed to
modify the regulations to terminate the
opt-in provision, and we are adopting
that proposed modification in this final
action.
Comment: One commenter asserted
that the Texas SO2 Trading Program is
arbitrary, capricious, and unlawful
because EPA did not follow its own
policies and regulations in the ‘‘clear
weight of evidence’’ approach taken
under § 51.308(e)(2)(i)(E) to demonstrate
that the trading program achieves
greater reasonable progress than BART.
The commenter pointed to EPA’s action
on the Utah Regional Haze SIP, in
which EPA stated that pursuant to the
Regional Haze Rule requirements for a
BART alternative, the clear weight-ofevidence test requires three steps that
can generally be summarized as follows:
(1) Use information and data that can
inform the decision . . . ; (2) Evaluate
the information and recognize the
relative strengths and weaknesses of the
metrics used, including assigning
weights to each piece of information
that indicate the degree to which it
supports a finding that the alternative
program will achieve greater visibility
benefits; and (3) Collectively consider
the weights assigned to the individual
pieces of information and consider the
total weight of all the information to
determine whether the proposed BART
alternative will clearly provide for
greater reasonable progress than BART
at the impacted Class I areas. The
commenter asserted that in contrast to
our evaluation of Utah’s BART
alternative, EPA did not follow the
three-step process for making a clear
weight of the evidence demonstration
under 40 CFR 51.308(e)(2) to
demonstrate that the Texas SO2 Trading
Program achieves greater reasonable
progress than BART. The commenter
asserted that EPA should have
identified, weighed and carefully
considered certain information the
commenter considers to be relevant and
easily available to inform EPA’s clear
128 83
FR 43597.
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weight of evidence approach and
decision regarding the Texas SO2
Trading Program, including EPA’s
January 2017 Texas BART proposal,
recent emissions data, presumptive
BART emission rates and emission
reductions, the weaknesses of the
outdated CSAPR evaluations, significant
differences between the Texas SO2
Trading Program and CSAPR, and EPA’s
own previous evaluation when
withdrawing Texas from CSAPR
showing greater emission reductions
under BART.
The commenter further asserted that
the clear weight of evidence
demonstrates that the trading program
will not make greater reasonable
progress than BART based on EPA’s
prior determination that CSAPR would
achieve lower emissions reductions
than source-specific BART for Texas
EGUs. The commenter cited to three
prior rulemakings in which, according
to the commenter, the EPA has
concluded that CSAPR would achieve
less reasonable progress than sourcespecific BART in Texas: (1) The January
2017 BART proposal; (2) the original
CSAPR Better-than-BART rulemaking;
and (3) the 2017 rulemaking to remove
Texas from CSAPR’s SO2 trading
program. The commenter asserted that
since the Texas SO2 Trading Program is
intended to mimic the effect of CSAPR,
and CSAPR would achieve less
reasonable progress than BART in
Texas, it follows that the Texas SO2
Trading Program would also achieve
less reasonable progress than BART, and
therefore would not satisfy the
requirements of the Regional Haze Rule
at 40 CFR 51.308(e)(2), (e)(2)(i)(E), and
(e)(3).
Response: EPA disagrees that we are
applying a different standard for ‘‘clear
weight of evidence’’ than we have in
other cases. The specific circumstances
of Texas as compared to Utah are
readily distinguishable. Specifically, the
Better-than-BART demonstration for our
Texas SO2 Trading Program relies on the
quantitative modeling, analyses and
demonstrations supporting our June
2012 ‘‘CSAPR Better-than-BART’’
determination and September 2017
‘‘CSAPR Better-than-BART affirmation
finding’’ (as recently reaffirmed by our
denial of a petition for reconsideration
on the latter). This analysis follows the
two-part quantitative test of
§ 51.308(e)(3), and in our weight of
evidence approach, we rely on that
technical analysis, as supplemented by
additional evidence that the Texas
intrastate trading program achieves at
least the same amount of emission
reductions as were projected for Texas
in the CSAPR analysis (including
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accounting for potential shifting in
emissions to CSAPR states with the
removal of Texas from the program).
The commenter attempts to elevate
EPA’s general guidance on conducting a
clear weight of evidence analysis, set
forth in a separate regional action, into
a mandatory test that states or the
agency must always adhere to. However,
the evidence-based inquiry called for
under § 51.308(e)(2)(i)(E) is inherently
fact-specific, and EPA has set forth why
information in this record supports its
findings. The State of Utah, in a far
different context, had attempted to show
by a series of metrics (many of which
were novel and unique to that SIP
submittal) that a BART alternative
achieved greater reasonable progress
than BART, but the state failed to
explain how it weighed these metrics,
and EPA found that one of the most
important metrics in that instance
(visibility impact on the 98th percentile
day) did not actually support the
alternative.129 Here, rather than setting
out a list of factors to evaluate, EPA is
primarily relying on the CSAPR Betterthan-BART analysis under the
quantitative test of § 51.308(e)(3) (in
addition to showing that other
§ 51.308(e)(2) requirements are met), as
explained elsewhere in the record.
Comment: One commenter asserted
that the Texas SO2 Trading Program is
not an adequate SO2 BART alternative
because it is not a cap and trade
program that might actually reduce SO2
emissions beyond the overall cap.
Further, the commenter argues that the
cap set by EPA in the trading program
is too high and actually allows the
participating units to increase their SO2
emissions. The commenter stated that in
upholding EPA’s authority to select an
alternative to source-specific BART, the
D.C. Circuit has held that the overriding
requirement for each regional haze plan
is that it make reasonable progress
toward eliminating haze pollution. The
commenter asserted that the Texas SO2
Trading Program does not satisfy this
overriding requirement since, according
to the commenter, it would not result in
any progress because it does not require
any emissions reductions relative to
actual emissions from covered sources
in 2015, 2016, and 2017. The
commenter argued that the Texas SO2
Trading Program actually authorizes
covered sources to increase emissions
relative to actual emissions in 2015,
2016, and 2017, and that it therefore
does not achieve greater reasonable
progress than source-specific BART and
is not an appropriate BART alternative.
The commenter also claimed that by
129 81
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authorizing even higher emissions than
seen in 2015–2017, the Texas SO2
Trading Program would likely further
erode whatever gains were made post2014. The commenter asserted that the
Texas SO2 Trading Program authorizes
sources to emit as much as 293,104 SO2
tons considering that the Supplemental
Allowance Pool may grow over time,
which would equate to a 47,234 ton
increase over 2017 emissions, and a
74,813 ton increase over 2016
emissions. The commenter argued that
even if the potential growth in the
Supplemental Allowance Pool (from an
initial 10,000 tons to 54,711 tons) is
ignored, and one uses 248,393 tons as
the total number of allowances, the
Texas SO2 Trading Program would still
authorize an increase in emissions over
actual emissions in 2015, 2016, and
2017. The commenter asserted that the
Texas SO2 Trading Program would thus
fail to require greater reasonable
progress than BART and would actually
authorize greater pollution than the
status quo. Furthermore, the commenter
asserted that source-specific BART is
the only option EPA has proposed that
is consistent with statutory
requirements and goals. According to
the commenter, the January 2017
source-specific BART proposal, or even
presumptive BART, would reduce
emissions and improve visibility far
more than the Texas SO2 Trading
Program, and should be finalized in
place of the trading program.
Additionally, the commenter argued
that in EPA’s determination that the
Texas SO2 Trading Program will
decrease SO2 emissions relative to 2014
emission levels, EPA’s selection of 2014
as the baseline year for determining
whether the Texas SO2 Trading Program
would reduce emissions and improve
visibility was arbitrary. The commenter
asserted that EPA should have instead
selected 2017 as the baseline year
because that is the most recent year for
which annual emissions data is
available and in which Texas sources
were not part of CSAPR for SO2. The
commenter claimed that the Texas SO2
Trading Program will result in no
progress toward the goal of eliminating
haze pollution and will therefore be in
direct violation of the Clean Air Act’s
visibility mandate.
Response: We do not agree that
addressing Texas’ SO2 BART
requirements through a source-specific
BART FIP is the only option that meets
the regulatory and statutory
requirements. Our October 2017 final
rule fulfilled our mandatory duty to
address the BART requirements for
Texas EGUs through the promulgation
of a FIP containing a BART alternative
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in the form of an intrastate trading
program. The Texas SO2 Trading
Program, as amended in this final action
through the addition of the 255,083-ton
assurance level and other amendments
discussed in section III.A.1 of this final
action, will result in annual emissions
from the covered EGUs and other EGUs
in Texas that are lower than what was
required under Texas participation in
CSAPR’s SO2 trading program. Thus, the
clear weight of evidence is that, overall,
the Texas trading program (considered
in the larger context of CSAPR) will
provide greater reasonable progress than
BART at the covered sources and
satisfies the requirements for a BART
alternative under 40 CFR
51.308(e)(2)(i)(E).
The comment contending that we
arbitrarily elected not to use 2017 as the
baseline emissions year for comparing
the Texas SO2 Trading Program to BART
is incorrect. We considered 2014 as the
appropriate most recent year for
comparing the Texas SO2 Trading
Program to BART for the purposes of
meeting the requirement of 40 CFR
51.308(e)(2)(i)(D) given that Texas
sources were subject to the CSAPR SO2
trading program in 2015 and 2016 but
are no longer subject to that program.130
This analysis was included in our
October 2017 final rule, at a time when
2017 emissions data were not yet
available. The Regional Haze Rule does
not require us to select 2017 or any
specific year as the baseline year for our
assessment under 40 CFR
51.308(e)(2)(i)(D) of emission reductions
achievable by the trading program, and
commenter establishes no basis why we
should have been required to update
this analysis in our August 2018
proposal to affirm the rule. Our BART
alternative analysis for Texas relied on
2014 data to be consistent with the
CSAPR Better-than-BART analysis given
that we are relying on the demonstration
in the 2012 CSAPR Better-than-BART
rule (as affirmed in 2017) to show that
the clear weight of evidence
demonstrates that the Texas SO2
Trading Program, which is modeled on
the CSAPR trading programs, will
provide for greater reasonable progress
than BART in Texas as required under
40 CFR 51.308(e)(2)(i)(E).131 We have
provided a reasonable explanation for
our selection of 2014 as the historical
baseline year for the purposes of
130 83
FR 43598.
that the year 2014 is not relevant to the
question of whether emissions achieved by the
program are surplus to the baseline date for
purposes of 40 CFR 51.308(e)(2)(iv). For purposes
of meeting the requirements of 40 CFR
51.308(e)(2)(iv), the baseline date is 2000–2004.
131 Note
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meeting the requirement of 40 CFR
51.308(e)(2)(i)(D).
The commenter’s suggestion that the
Texas SO2 Trading Program should be
structured to achieve additional
emission reductions beyond the cap is
effectively similar to other comments
advocating for a lower cap or a more
stringent program generally. As
discussed elsewhere in this document,
we continue to believe that the Texas
SO2 Trading Program is sufficiently
stringent to meet the requirements to
qualify as a BART alternative in the
context of the 2012 CSAPR Better-thanBART rule and the 2017 CSAPR Betterthan-BART affirmation finding. The
comment contending that the Texas SO2
Trading Program authorizes sources to
increase emissions relative to actual
emissions in 2015, 2016, and 2017, and
authorizes greater pollution than the
status quo mischaracterizes the Texas
SO2 Trading Program and reflects a
misunderstanding of its purpose. First,
we note that the Texas SO2 Trading
Program will achieve an average
reduction of at least 54,213 tons per year
over the 2014 emissions, which is the
difference between the aggregate 2014
SO2 emissions of the covered Texas
EGUs (309,296 tons per year) 132 and the
assurance level of 255,083 tons we are
finalizing in this action. The assurance
level represents the highest annual SO2
emissions anticipated from units subject
to the Texas SO2 Trading Program in
light of the three-for-one penalty
surrender ratio imposed on emissions
exceeding that level, and is therefore a
conservatively high figure to compare
against 2014 actual emissions levels.
Second, and notwithstanding our
position that we appropriately selected
2014 as the baseline year for the
purpose of this analysis, we note that
even if we had selected 2017 as the
baseline year, we disagree that the Texas
SO2 Trading Program would authorize
greater pollution than the status quo
given that the trading program now
contains an assurance level limiting SO2
emissions from Texas EGUs
participating in the trading program
where no prior SO2 emission limits
under the regional haze program existed
for these sources. Therefore, we disagree
that the Texas SO2 Trading Program
authorizes greater pollution than the
status quo even under the assumption of
2017 as the baseline year for comparison
against the Texas SO2 Trading Program
as the status quo ‘‘authorizes’’ much
higher emissions (due to there being no
enforceable program at all and the only
limitations being the facilities’ current
permit limits), even if actual emissions
132 84
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happened to be below that level. As
discussed in section III.A.2 of this final
action, we note that the Texas SO2
Trading Program with the added
assurance level we are finalizing in this
action, also achieves significantly lower
emissions relative to the year 2002.133
These emission reductions that are
secured by the Trading Program
contribute to improvements in visibility
from the baseline period for the first
planning period and are permanent and
enforceable as part of the long-term
strategy for the State of Texas.
Further, the purpose of the program is
not to achieve some particular quantum,
much less a maximum quantum, of
emission reductions as compared to
some reference point for ‘‘current’’
emission levels. In fact, whether the
Texas SO2 Trading Program allows for a
potential increase in emissions from
recent or current emission levels is not
the relevant question under the BART
alternative provisions of the Regional
Haze Rule. In order to satisfy the BART
alternative test of 40 CFR
51.308(e)(2)(i)(E), the alternative must,
on the clear weight of evidence, achieve
greater reasonable progress in visibility
improvements than would be achieved
through the installation and operation of
BART at the covered sources. This test
calls for a comparison in stringency
between two regulatory regimes, BART
and the BART alternative. The Texas
SO2 Trading Program is modeled on and
set at a stringency level comparable to
CSAPR in Texas, such that the CSAPR
Better-than-BART analysis may be
relied upon in determining the
adequacy of this program. As discussed
in section III.A.2, we find that we have
satisfied the BART alternative test of 40
CFR 51.308(e)(2)(i)(E). Whether actual
emissions may increase or decrease
from some particular historical level
under the program is immaterial so long
as emissions remain below the level
requisite to make the ‘‘greater
reasonable progress’’ showing.
To the extent the commenter is
asserting that certain aspects of the
program, such as allocations to retired
units, the availability of banking, and
allocations from the Supplemental
Allowance Pool, pose a risk that the
program will fail to achieve the
emission levels assumed in our analysis,
this theoretical concern is addressed by
amendments to the program finalized in
this action. To address concerns
regarding potentially higher SO2
emissions in individual years from
Texas EGUs participating in the trading
133 The Regional Haze Rule provides that the
baseline period for the first planning period is
2000–2004. See 40 CFR 51.308(d)(2)(i).
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program, on November 1, 2019, we
signed a supplemental notice of
proposed rulemaking that proposed to
add assurance provisions to the Texas
SO2 Trading Program. Under the
assurance provisions, if the total
emissions of the sources in the program
in any year exceed the annual program
budget by more than a variability limit
of 16,688 tons, the emissions over that
‘‘assurance level’’ will trigger a
requirement for some sources to
surrender three allowances for each ton
of emissions, providing a strong
disincentive against emissions
exceeding the assurance level. We are
finalizing that supplemental proposal in
this action.134 As we explained in the
supplemental proposal, the assurance
level effectively moots any concerns
regarding annual emission performance
under the program by establishing a cap
implemented via the penalty surrender
ratio. This is because when a massbased trading program includes a ‘‘cap’’
on overall annual emissions, as the
Texas SO2 Trading Program now does
with the addition of the assurance
provisions, that overall ‘‘cap’’ on
emissions set by the program (here, the
assurance level) effectively determines
the stringency of the program in each
year. With the addition of an assurance
level, the potential risk of an undue
relaxation of the annual stringency in
the program is minimized given that
sources will remain strongly
incentivized to keep annual emissions
below the level at which the three-forone surrender penalty is imposed. Thus,
how allowances are allocated or banked
within that cap does not affect the
overall stringency of the program.135
Comment: The commenter asserted
that even a ‘‘successful’’ cap and trade
program cannot avoid localized impacts
to particular Class I Areas, much less to
local communities most impacted by
large pollution sources, and that the
Trading Program is therefore not an
adequate BART alternative.
Response: The Regional Haze Rule
does not require that a BART alternative
achieve greater visibility improvements
than BART at each particular Class I
area, and only requires that a BART
alternative does not result in declines in
visibility compared to the baseline in
134 The final ‘‘assurance level’’ is 255,083 tons,
which is the sum of the revised annual program
budget of 238,395 tons plus the variability limit of
16,688 tons. As discussed in section III.A.1 of the
preamble for this action, for consistency with the
assurance provisions, EPA is also making revisions
to the Supplemental Allowance Pool provisions
that will limit the combined total quantity of
allowances issued in any year from the program
budget and the Supplemental Allowance Pool to
this same level of 255,083 tons.
135 See 84 FR 61854.
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any class I area. EPA’s decision to
authorize alternative measures,
including emissions trading programs,
subject to those requirements, in the
original 1999 Regional Haze Rule is
beyond the scope of this action. Further,
the test EPA devised under 51.308(e)(3)
for evaluating whether a BART
alternative makes greater reasonable
progress calls for an evaluation of
whether there could be unacceptable
localized visibility impacts under a
BART alternative. In particular, the
analysis asks whether visibility will
decline in any class I area under the
BART alternative as compared with the
baseline scenario. This evaluation was
done as part of the 2012 CSAPR Betterthan-BART analytic demonstration,
which was relied upon in developing
the Texas SO2 Trading Program. That
analysis showed no decline in visibility
in any Class I area compared to the
baseline emissions scenario.
B. PM BART
Comment: We received one comment
raising several objections to EPA’s
proposal to affirm approval of Texas’
finding that no PM BART controls are
necessary for EGUs based on Texas’
pollutant-specific screening analysis for
PM. The commenter asserted that the
Regional Haze Rule and the BART
Guidelines require that the BART
screening analysis evaluate the impacts
of all pollutants together, not just PM,
and that a source-specific, five-factor
analysis of PM BART must then be
conducted for each EGU found to be
subject to BART. The commenter
asserted that Texas’ pollutant-specific
screening analysis did not meet these
requirements and that EPA’s proposed
approval of Texas’ finding that its
sources are exempt from PM BART is
thus inappropriate. The commenter also
argued that EPA’s proposal to affirm
approval of Texas’ pollutant-specific
screening analysis for PM BART is
arbitrary and capricious for several
reasons, including the following: (1)
Approval of Texas’ screening approach
is contrary to the plain language of the
Clean Air Act; (2) Texas’ screening
approach is directly contrary to the
agency’s regional haze regulations and
mandatory BART guidelines; (3) EPA’s
approval of a pollutant-specific
screening approach arbitrarily departs
from the agency’s past practice; and (4)
EPA failed to provide a rational
explanation for proposing to approve
Texas’ application of a pollutantspecific screening analysis in this case.
Specifically, the commenter claimed
that approval of Texas’ screening
approach is contrary to the plain
language of the Clean Air Act because
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the commenter believes this effectively
exempts sources from installing PM
BART controls without going through
the statutory exemption process
Congress prescribed. The commenter
asserted that Congress specifically
provided that sources could be
exempted from the BART requirements
only if the Administrator determines
that a source does not or will not, by
itself or in combination with other
sources, emit any air pollutant which
may reasonably be anticipated to cause
or contribute to a significant impairment
of visibility in any Class I area, and that
the FLMs must concur with any
proposed exemption. The commenter
argued that EPA has not demonstrated
that any of the BART-eligible Texas
EGUs meet the statutory requirements
for an exemption and EPA has not
obtained the concurrence of federal land
managers for exempting sources for PM
BART.
The commenter asserted that Texas’
screening approach is directly contrary
to the agency’s regional haze regulations
and mandatory BART guidelines. The
commenter asserted that the Regional
Haze Rule and BART guidelines do not
provide for any exemptions from a fivefactor BART analysis for specific
pollutant, with the exception of a de
minimis exemption under
§ 308(e)(1)(ii)(C) for sources that emit
less than 15 tons per year of particulate
matter. The commenter argued that
neither EPA nor Texas attempted to
demonstrate that this de minimis
exemption applies to any of Texas’
EGUs.
The commenter also argued that
EPA’s approval of a pollutant-specific
screening approach arbitrarily departs
from the agency’s past practice.
Specifically, the commenter claimed
that EPA has rejected similar pollutantspecific approaches to BART
determinations in past regional haze
actions. For instance, the commenter
asserted that in a prior regional haze
action where EPA partially disapproved
the Arizona Regional Haze SIP (78 FR
46142 (July 30, 2013)), EPA stated that
under the Regional Haze Rule, the
determination of whether a source
causes or contributes to visibility
impairment is not made on a pollutantby-pollutant basis and that once a
source is determined to be subject to
BART, the Regional Haze Rule allows
for the exemption of specific pollutants
from a BART analysis only if they are
below specified de minimis levels.
The commenter also raised an
objection to EPA’s reliance on a 2006
guidance document in proposing to
approve Texas’ application of a
pollutant-specific screening analysis for
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PM BART. The commenter argued that
the EPA’s 2006 guidance document on
which EPA based its proposed approval
of Texas’ pollutant-specific screening
analysis was never subject to notice and
comment and is therefore not binding.
Furthermore, the commenter asserted
that EPA did not explain how the 2006
guidance document is applicable in this
case given that the guidance document
does not contain an analysis or rationale
and does not cite or incorporate any
technical justification for allowing the
use of a pollutant-specific screening
approach. The commenter also argued
that the guidance document
contemplates the use of a pollutantspecific screening analysis in situations
where a state is subject to both SO2 and
NOX emission reductions under the
Clean Air Interstate Rule, not CSAPR or
some other trading program as in this
case. The commenter also argued that
reliance on the 2006 guidance document
is not appropriate in this case because
Texas participates in CSAPR for ozone
season NOX and is therefore not subject
to annual NOX emission limits.
The commenter also asserted that in
its screening analysis, Texas did not
provide a rationale or justification for its
selection of 0.5 dv as the threshold for
contribution to visibility impairment.
The commenter argued that EPA’s
BART Guidelines do not authorize
states or EPA automatically to use a 0.5
dv contribution threshold, but instead
provide that any threshold states use for
determining whether a source
contributes to visibility impairment
should not be higher than 0.5 dv. The
commenter claimed that given the
number of Texas sources and the
magnitude of their impact at affected
Class I areas, a contribution threshold
lower than 0.5 dv may be appropriate.
Response: We are affirming our
approval of Texas’ pollutant-specific PM
screening analysis and determination
that PM BART emission limits are not
required for any Texas EGUs as in
accordance with EPA guidance and the
Regional Haze Rule. As we explained in
our August 27, 2018 affirmation
proposal, in a 2006 EPA memorandum
titled ‘‘Regional Haze Regulations and
Guidelines for Best Available Retrofit
Technology (BART) Determinations,’’
EPA stated that pollutant-specific
screening can be appropriate where a
state is relying on a trading program as
a BART alternative to address both NOX
and SO2 BART.136 As discussed in the
136 See discussion in Memorandum from Joseph
Paisie to Kay Prince, ‘‘Regional Haze Regulations
and Guidelines for Best Available Retrofit
Technology (BART) Determinations,’’ July 19, 2006.
While the memorandum specifies that pollutantspecific screening is appropriate for states relying
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2006 guidance, for EGU sources that are
addressing the NOX and SO2 BART
requirements by participation in a
trading program as a BART alternative,
such as CAIR, the state must still
determine whether its BART-eligible
EGUs are subject to review under BART
for PM. In this situation, as this is the
only determination that remains and
because the task of predicting the
impacts of PM on visibility is a
relatively straight-forward exercise,
unlike predicting the impacts of the
non-linear reacting pollutants SO2 and
NOX, a pollutant-specific basis to model
only the impact of PM emissions on
visibility is recommended to determine
whether a source is subject to BART for
PM. We note that the 2006
memorandum is consistent with the
BART Guidelines, which provide that a
state ‘‘may choose to perform an initial
examination to determine whether a
particular BART-eligible source or
group of sources causes or contributes to
visibility impairment in nearby Class I
areas. If your analysis, or information
submitted by the sources, shows that an
individual source or group of sources
(or certain pollutants from those
sources) is not reasonably anticipated to
cause or contribute to any visibility
impairment in a Class I area, then you
do not need to make BART
determinations for that source or group
of sources (or for certain pollutants from
those sources).’’ 137 In sum, the 2006
EPA memorandum is consistent with
the BART Guidelines and clearly states
that a pollutant-specific analysis for PM
emissions is an appropriate approach in
certain carefully circumscribed
circumstances, such as are present here.
While the commenter is correct that
in our January 4, 2017 BART FIP
proposal,138 we initially proposed to
disapprove Texas’ technical evaluation
and determination in the 2009 Regional
Haze SIP that PM BART emission limits
are not required for any of Texas’ EGUs,
this was because Texas was not
participating in CSAPR for SO2 or in
any other SO2 emissions trading
program or BART alternative at the time
and thus did not meet the criteria
described in our 2006 guidance. In our
October 2017 final action, we addressed
the SO2 BART requirements for Texas
EGUs under a BART alternative
consisting of an intrastate trading
program. Given that Texas is relying on
participation in the CSAPR ozone
season trading program for NOX to
on CAIR, it is reasonable to infer that other trading
programs, such as CSAPR and the Texas SO2
Trading Program, also qualify to use this approach.
137 40 CFR part 51 Appendix Y, Section III.
138 82 FR 912.
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satisfy NOX BART for Texas EGUs and
is now also subject to a BART
alternative consisting of an SO2
intrastate trading program to satisfy the
SO2 BART requirements for Texas
EGUs, Texas is relying on a trading
program as a BART alternative to
address both NOX and SO2 BART. Thus,
pollutant-specific screening for PM as
performed by Texas in its 2009 SIP
submittal was appropriate, consistent
with the BART Guidelines 139 and the
2006 EPA memorandum.140
We disagree with the commenter’s
assertion that EPA’s approval of a
pollutant-specific screening approach
arbitrarily departs from the agency’s
past practice. EPA has previously
determined that this approach is
appropriate for EGUs where a State
relied on CAIR or CSAPR to satisfy the
BART requirements for SO2 and NOX
and has approved SIPs where the State
required its BART-eligible EGUs to only
evaluate PM emissions for determining
whether they are subject to BART, and,
if applicable, for performing a BART
control assessment. We also note that in
these analyses EPA approved a
threshold of 0.5 dv for determining
which sources were subject to BART.141
With regard to the commenter’s
assertion that our approval of Texas’
selection of 0.5 dv as the threshold for
visibility impairment for PM was
improper, as an initial matter, as
explained in our August 2018 proposal
to affirm the October 2017 final rule
promulgating the Texas SO2 Trading
Program, we did not reopen the subjectto-BART determinations for sources not
covered by the trading program, which
screened out of the BART program
based on consideration of all visibility
pollutants.142 With respect to the BART
sources included in the trading
program, EPA requested comment on its
PM-specific screening analysis.143 EPA’s
basis for approving the 0.5 dv value for
screening purposes was that EPA’s
BART Guidelines allow states
conducting source-by-source BART
determinations to exempt sources with
visibility impacts as high as 0.5 dv.144 145
139 40
CFR part 51 Appendix Y, Section III.
Memorandum from Joseph Paisie to Kay
Prince, ‘‘Regional Haze Regulations and Guidelines
for Best Available Retrofit Technology (BART)
Determinations,’’ July 19, 2006.
141 See for example the approval of Regional haze
SIPs for Georgia (77 FR 11452 for proposed rule and
77 FR 38501 for final rule), South Carolina (77 FR
11894 for proposed rule and 77 FR 38509 for final
rule), and Kentucky (76 FR 78194 for proposed rule
and 77 FR 19098 for final rule).
142 83 FR 43598 n. 80.
143 Id. 43592–93.
144 70 FR 39104, 39161 (July 6, 2005) and 40 CFR
part 51 Appendix Y, Section III.A.1.
145 82 FR at 48346 and 79 FR at 74848.
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Further, the BART Guidelines provide
that in setting a contribution threshold,
states should ‘‘consider the number of
emissions sources affecting the Class I
areas at issue and the magnitude of the
individual sources’ impacts.’’ States
have the discretion within the Clean Air
Act, Regional Haze Rule, and BART
Guidelines to set an appropriate
contribution threshold and are free to
use a threshold lower than 0.5 dv if they
conclude that the location of a large
number of BART-eligible sources in
proximity of a Class I area justifies this
approach. Texas did not determine in its
2009 Regional Haze SIP that there were
circumstances in this case to justify the
selection of a lower threshold. EPA
continues to find that Texas was within
its discretion to select a threshold of 0.5
dv in its BART screening analysis. In
light of the above-referenced 2006
memorandum recognizing the
availability of a pollutant-specific
approach to BART where BART sources
are already separately controlled for SO2
and NOX by one or more BART
alternative trading programs, we are
finalizing our proposed affirmation that
no BART-eligible source in Texas is
subject to BART for PM on a pollutantspecific basis. In finalizing an
affirmation of our approval of Texas’
determinations regarding PM BART, we
offer one additional note. We originally
proposed to approve Texas’ screening
approach in 2014,146 and our October
2017 final action again relied on our
technical evaluation in that proposal for
the basis of our approval. We therefore
incorporate by reference the technical
evaluation regarding this issue from our
2014 proposal into the record for this
action.147
Comment: We received a comment
asserting that the 2006 intra-agency
memorandum on which EPA relies to
propose approval of Texas’ pollutantspecific screening approach is
inconsistent with the Clean Air Act and
the Regional Haze Rule, and EPA’s
interpretation of its regulations is
therefore not entitled to deference.
Bowles v. Seminole Rock & Sand Co.,
325 U.S. 410, 414 (1945) (agency
interpretation of its regulation is not
controlling where ‘‘it is plainly
erroneous or inconsistent with the
regulation’’); see also Auer v. Robbins,
519 U.S. 452, 461 (1997) (same). The
commenter further asserted that courts
have repeatedly criticized agency use of
guidance documents in the form of
interpretive rules and policy statements
to reinterpret regulations, recognizing
the potential problem that ‘‘[l]aw is
146 See
147 79
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FR 74817, 74848.
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49197
made, without notice and comment,
without public participation, and
without publication in the Federal
Register or the Code of Federal
Regulations.’’ Decker v. Northwest
Envtl. Def. Ctr., 133 S. Ct. 1326, 1341
(2013); Perez v. Mortgage Bankers Ass’n,
135 S. Ct. 1199, 1213–14 (Mar. 9, 2015);
see also Appalachian Power Co. v. EPA,
208 F.3d 1015, 1020 (D.C. Cir. 2000)
(criticizing agency use of guidance
documents in the form of interpretive
rules and policy statements, recognizing
the potential problem that ‘‘[l]aw is
made, without notice and comment,
without public participation, and
without publication in the Federal
Register or the Code of Federal
Regulations.’’).
Response: EPA has the authority to
develop and implement policies and
guidance. EPA sometimes issues policy
or guidance to encourage compliance
with environmental requirements.
Policy documents may represent EPA’s
official interpretation or view of specific
issues. However, ultimately, EPA’s
actions with regards to guidance
documents must be consistent with
applicable statutory and regulatory
requirements. The EPA disagrees that its
reference to the 2006 guidance is
inconsistent with the CAA or
constitutes a legislative or interpretive
rule, and we have reasonably relied, in
part, on this guidance document in our
approval of Texas’ determination that
no BART-eligible sources in Texas are
subject to BART for PM on a pollutantspecific basis. As explained in response
to similar comments above, application
of pollutant-specific screening for PM is
appropriate in Texas and is not
inconsistent or at odds with either the
CAA statute or applicable EPA
regulations, for the reasons explained in
response to those comments. We,
therefore, disagree that our
interpretation of the 2006 memorandum
here is inconsistent with the Clean Air
Act regarding a pollutant-specific
screening approach for PM BART.
C. Appropriateness of the Texas SO2
Trading Program vs. Source-Specific
BART FIP
Comment: One commenter raised
objections to EPA’s finalization of the
October 17, 2017 final rule
promulgating the Texas SO2 Trading
Program, asserting that EPA provided no
rational basis for finalizing a FIP
promulgating an intrastate trading
program in place of the source-specific
BART FIP proposal that was proposed
by EPA in January 2017. The commenter
asserted that the January 2017 BART FIP
proposal was supported by detailed,
source-specific analyses of the cost of
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SO2 controls, the level of control
achievable by different technologies,
estimated emissions reductions, and
projected visibility improvement from
operation of such controls, and that this
administrative record demonstrated that
the 2017 BART FIP proposal meets the
requirements of the Regional Haze Rule
and CAA and should have been
finalized by EPA.
Response: While EPA proposed
source-specific BART emission limits in
the January 2017 proposal, under the
notice and comment rulemaking
process, EPA may decline to finalize a
proposed rule or may finalize a rule
with changes from proposal based on
consideration of additional information
received during the comment period.
Additionally, EPA may also propose a
rule and rationale that differs from its
original proposal and does not have an
obligation to finalize the initial
proposed rule as is the case here. We
also note that the Regional Haze Rule
does not require source-specific BART
determinations, as the regulations at 40
CFR 51.308(e)(2)–(5) allow states, or
EPA if promulgating a FIP, to adopt a
BART alternative in place of sourcespecific BART provided that all
applicable regulatory requirements
related to the BART alternative are
satisfied. EPA’s obligations are to
promulgate a final rule that meets the
requirements of the CAA and the
Regional Haze Rule, consider and
respond to all relevant comments to the
final rule, and provide a record of
decision-making for its action that is not
arbitrary and capricious. In this case,
informed by comments we received
during the public comment period for
the January 2017 proposal from the
Texas Commission on Environmental
Quality (TCEQ), the Public Utility
Commission of Texas (PUC), Luminant,
and American Electric Power (AEP),
urging us to consider as a BART
alternative the concept of emission caps
using CSAPR allocations,148 and based
on our independent determination that
a BART alternative approach under 40
CFR 51.308(e)(2) would meet all
statutory and regulatory requirements
and thus be viable for Texas, we did not
finalize the source-specific BART
emission limits we had proposed and
instead we addressed the SO2 BART
requirement for Texas EGUs under a
BART alternative consisting of an
intrastate trading program in our
October 2017 final rule. Having made
the determination (in part through
reliance on the analysis of CSAPR as a
BART alternative as explained
elsewhere in the record) that the BART148 82
FR 48324 at 48327.
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alternative program satisfies 40 CFR
51.308(e)(2) under the clear weight of
evidence test of 40 CFR
51.308(e)(2)(i)(E), EPA need not further
explain or justify the program based on
a comparison of emission reductions,
costs, or visibility improvements that
may have been potentially achieved had
EPA finalized the source-specific
controls we proposed in January 2017.
The statute and applicable regulations
do not mandate that states, or EPA when
it is promulgating a FIP, reach a
particular conclusion or outcome
regarding cost-effectiveness or emission
reductions when applying the fivefactor BART analysis, or in designing a
BART-alternative program under 40
CFR 51.308(e).
Comment: We received one comment
asserting that EPA never identified any
errors in the January 2017 BART FIP
proposal and that EPA never responded
to certain comments submitted on that
proposal. The commenter claimed that
EPA did not demonstrate that the
intrastate trading program would
achieve greater reasonable progress than
the January 2017 source-specific BART
proposal to justify finalizing the
intrastate trading program in place of
the source-specific BART FIP and that
EPA cannot ignore the findings it
previously made in the January 2017
BART FIP proposal.
Response: Under the notice and
comment rulemaking process, EPA may
decline to finalize a proposed rule or
may finalize a rule with changes from
the proposal based on consideration of
additional information received during
the comment period. As a general
matter, EPA may publish a new
proposed rule that supersedes a
previously proposed rule in order to
take into account newly available
information or changes in circumstances
that would affect the outcome of the
final rule, with no obligation to finalize
the originally proposed rule. EPA’s
obligations are to promulgate a final rule
that meets the requirements of the Clean
Air Act and the Regional Haze Rule,
consider and respond to all relevant
comments that are germane to the final
rule, and provide a record of decisionmaking for its action that is not arbitrary
and capricious. In this case, informed by
comments we received during the
public comment period for the January
2017 proposal, and based on our
independent determination that this
BART alternative approach under 40
CFR 51.308(e)(2) would meet all
regulatory requirements and thus be a
viable approach for Texas, we addressed
the SO2 BART requirement for Texas
EGUs under a BART alternative
consisting of an intrastate trading
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program in our October 2017 final rule
instead of finalizing the source-specific
BART emission limits we had proposed.
In the October 2017 final rule, EPA
considered and responded to all
comments germane to the final rule and
provided a record of decision-making
for the final action. We note that some
of the comments we received on the
January 2017 proposal raised specific
issues related to the analyses for the
source-specific BART emission limits
we proposed, and those comments were
no longer relevant once we determined
not to promulgate the proposed sourcespecific BART emission limits in our
final action. Therefore, a response to
those comments was unnecessary.
While in this case, EPA did not publish
a new proposal before issuing the
October 2017 final rule, we explained
the basis for our finalization of the
BART alternative in that final action,
and we subsequently published a
proposal in August 2018 to affirm our
October 2017 final rule and solicited
comment on important aspects of the
rule, as discussed in section II.A of this
final action. Informed by comments we
received on the August 2018 proposed
rule, we issued a supplemental proposal
that proposed changes to the Texas SO2
Trading Program, as discussed in
section II.B of this final action. Having
made the determination in the October
2017 final action, as further affirmed in
today’s final action, that the BARTalternative program, as amended in this
final action, satisfies 40 CFR
51.308(e)(2) under the clear weight of
evidence test of 40 CFR
51.308(e)(2)(i)(E), EPA need not further
explain or justify the Texas SO2 Trading
Program based on a comparison of
emission reductions, costs, or visibility
improvements that may have been
potentially achieved had EPA finalized
the source-specific controls we
proposed in January 2017. Further, in
response to the statement contending
that EPA cannot ignore the findings it
previously made in the January 2017
proposed rule, we note that those
proposed source-specific BART analyses
and control determinations do not
constitute final findings or final Agency
action, as they were proposed by EPA
but not finalized.
Comment: We received one comment
asserting that the only justification EPA
provided for finalizing the intrastate
trading program in place of the sourcespecific BART FIP is that the state made
this request during the public comment
period for the January 2017 BART FIP
proposal, and that this justification is
inappropriate. The commenter claimed
that while the CAA does establish a
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cooperative state-federal framework,
this does not justify EPA deferring to a
State’s expressed preferences without
providing a valid justification.
Response: This comment
mischaracterizes the basis for our
finalization of the Texas SO2 Trading
Program in place of source-specific
BART controls in the October 2017 final
action. While we did explain in the
October 2017 final action that we
received comments during the public
comment period for the January 2017
proposal from the Texas Commission on
Environmental Quality (TCEQ), the
Public Utility Commission of Texas
(PUC), Luminant, and American Electric
Power (AEP), urging us to consider as a
BART alternative, the concept of
emission caps using CSAPR
allocations,149 this was not the sole
basis for our finalization of the Texas
SO2 Trading Program in place of sourcespecific BART controls. Our October
2017 final action promulgating the
Texas SO2 Trading Program was
informed by comments we received
during the public comment period for
the January 2017 proposal, and was
based on our independent
determination that a BART-alternative
approach under 40 CFR 51.308(e)(2)
meets all statutory and regulatory
requirements and is thus an appropriate
approach for addressing the SO2 BART
requirement for Texas EGUs. In addition
to meeting all Clean Air Act and
Regional Haze Rule requirements, we
also explained in the October 2017 final
action that the Texas SO2 Trading
Program would result in lower costs and
added flexibility for affected sources
compared to source-specific SO2 BART
controls.
D. Statutory Requirements for FIP
Promulgation and Implementation
Comment: We received one comment
asserting that the FIP promulgating the
Texas SO2 Trading Program is arbitrary,
capricious, and unlawful because it
allows EPA to suspend key provisions
of the intrastate trading program if
Texas submits a SIP revision, without
the need for EPA to approve the SIP
before those key provisions of the
trading program are suspended.
Specifically, the commenter referred to
a provision of the Texas SO2 Trading
Program that provides that the
‘‘Administrator may delay recordation
of Texas SO2 Trading Program
allowances for the specified control
periods if the State of Texas submits a
SIP revision before the recordation
deadline.’’ 40 CFR 97.921(a). Similarly,
the trading program includes a
149 82
FR 48324 at 48327.
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provision that provides that the
‘‘Administrator may delay recordation
of the Texas SO2 Trading Program
allowances for the applicable control
periods if the State of Texas submits a
SIP revision by May 1 of the year of the
applicable recordation deadline under
this paragraph.’’ Id. § 97.921(b). The
commenter claimed that these
provisions at 40 CFR 97.921(a) and (b)
are arbitrary and capricious and
otherwise unlawful because they are
counter to the CAA’s rulemaking
requirements given that no provision of
the CAA allows the submission of a SIP
to suspend implementation of a FIP.
The commenter also asserted that these
provisions of the trading program
violate the CAA and the Regional Haze
Rule because suspension of the trading
program would mean that there is no
functioning BART alternative in place
in the interim period between state
submission of the SIP and EPA approval
of that SIP. Furthermore, the commenter
expressed concern that the Texas SO2
Trading Program does not include any
provision that would resume the
intrastate trading program if the
submitted SIP was subsequently found
to be deficient.
Response: After considering this
comment, we proposed in our
November 2019 supplemental proposal
to modify the Texas SO2 Trading
Program recordation provisions at 40
CFR 97.921 to make clear that
submission of a SIP revision by the state
does not cause any change in
implementation of those provisions
unless and until the SIP revision is
approved by EPA. We are adopting that
proposed modification in this final
action. As explained in section III.A.1 of
this final notice, we are taking final
action to revise 40 CFR 97.921(a), (b),
and (c) of the Texas SO2 Trading
Program to condition any exceptions to
scheduled allowance recordation
activities on Texas’ submission and
EPA’s approval of a SIP revision, rather
than just on Texas’ submission of a SIP
revision. This revision will ensure that
the program remains fully operational
unless it is replaced by a SIP revision
that is approved by EPA as meeting SO2
BART requirements for the covered
BART-eligible units.
E. Timing of the Plan for the First
Implementation Period
Comment: We received a comment
that asserted that the first planning
period for regional haze ends in 2018
and given that the Texas SO2 Trading
Program would not be implemented
until the beginning of 2019, it followed
that the Texas SO2 Trading Program and
any other BART alternative for Texas
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49199
would not meet the timing requirement
for a BART alternative at 40 CFR
51.308(e)(2)(iii). The commenter also
argued that EPA’s position in the
October 2017 final rule that the end of
the first planning period of the first
long-term strategy for Texas is 2021 and
thus the Texas SO2 Trading Program
meets the timing requirement for a
BART alternative is unsupported and is
inconsistent with EPA’s prior
statements identifying 2018 as the close
of the first planning period. The
commenter asserted that EPA’s position
that the January 2017 revisions to the
Regional Haze Rule extended the first
planning period contradicts EPA’s
statements in the January 2017
rulemaking that the revisions to the
Regional Haze Rule did not alter the
requirements for the first planning
period. Additionally, the commenter
later asserted, in response to our
supplemental proposal to add an
assurance level to the Texas SO2
Trading Program, that EPA cannot
guarantee the trading program will
actually achieve emissions reductions
until the addition of the assurance
provisions becomes effective and that
given that the limitations imposed by
the assurance level would not be
implemented until the 2021 compliance
period, EPA cannot guarantee that
emission reductions under the trading
program will actually take place during
the first planning period.
A similar comment submitted by New
Jersey asserted that the 2017 Regional
Haze Rule revisions extended the time
to submit Regional Haze plan revisions
for the second planning period from
2018 to 2021, but did not extend the
date for implementation of BART
requirements associated with the first
planning period. New Jersey asserted
that under the Regional Haze Rule,
emission reductions needed in the first
planning period are still due by
December 31, 2018 and that allowing
Texas to obtain the reductions by the
end of 2019, as allowed under the Texas
SO2 Trading Program, negates the intent
of the CAA (specifically the 10-year
planning period to assure incremental
progress) and puts additional burden on
other contributing states to maintain
progress.
Response: After reviewing the
Agency’s position in the January 2017
final rule making amendments to the
Regional Haze Rule, we are not
finalizing a position in this action that
the first planning period has been
extended to July 31, 2021. We agree
with the commenter that this position
would be at odds with the national
finding in the January 2017 action that
our amendments there ‘‘do not affect the
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development and review of state plans
for the first implementation period
. . . .’’ 82 FR at 3080. Nonetheless, the
Texas SO2 Trading Program satisfies the
requirement of 51.308(e)(2)(iii), because,
as discussed in section III.A.2 above, the
program ensures that emission
reductions that were achieved prior to
the end of 2018, sufficient to meet the
requirements of the BART alternative,
will be maintained through an
enforceable program.
Actual emission levels from the
sources covered by the BART alternative
were below the levels mandated by the
alternative by the end of the first
planning period. In the case of the Texas
SO2 Trading Program, sources subject to
the trading program were already
emitting SO2 at levels below the
program budget prior to December 31,
2018. As discussed in our November
2019 supplemental proposal, the
combined SO2 emissions from Texas
EGUs participating in the intrastate
trading program were 179,630 SO2 tons
in 2018, which is well below the Texas
SO2 Trading Program budget of 238,395
tons (as well as the assurance level of
255,083 tons we are finalizing in this
action).150 Therefore, the emissions
reductions secured under the trading
program occurred prior to the end of the
period of the first long-term strategy for
regional haze. With the trading program
taking effect with the start of the 2019
calendar year, actual emissions were
never allowed to exceed the amounts
called for by the BART alternative. This
issue is further discussed above in
section III.A.2. We also note that we
have never stated and do not agree that
the existing Texas SO2 Trading Program
fails to ensure that all necessary
emission reductions will occur by the
end of the first planning period even
without the addition of the assurance
provisions. Our purpose in proposing to
add the assurance provisions was
merely to further ensure that the
program’s design is at least as stringent
as the CSAPR SO2 program as applied
to Texas, not only on an average annual
basis but also in individual years. Given
that actual emission levels from the
sources covered by the BART alternative
were below the levels mandated by the
alternative by the end of the first
planning period, even before the
addition of the assurance level, we are
determining that the Texas SO2 Trading
Program meets the timing requirement
for a BART alternative at 40 CFR
51.308(e)(2)(iii).
150 84
FR 61853.
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F. Notice and Comment Requirements
Comment: We received a comment
that the FIP promulgating the Texas SO2
Trading Program did not follow the
Clean Air Act’s procedural requirements
for promulgating a FIP. The commenter
claimed that EPA promulgated the FIP
without following the public notice and
comment procedures set forth in 42
U.S.C. 7607(d)(1)(B), (d)(2)–(6), which
the commenter contended violates the
Clean Air Act. The commenter
contended that the Clean Air Act’s
public notice and comment procedures
at U.S.C. 7607(d)(3) require that EPA
first publish in the Federal Register a
proposed rule that includes a statement
of basis and purpose and specifies a
comment period. The commenter
claimed that this statement of basis and
purpose must include a summary of the
factual data on which the proposed rule
is based, the methodology used in
obtaining and analyzing the data, and
the major legal interpretations and
policy considerations underlying the
proposed rule, and that EPA must allow
any person to submit comments as well
as give interested persons an
opportunity for the oral presentation of
data, views, or arguments. The
commenter asserted that these and other
public participation requirements in
§ 7607(d) build on those in the
Administrative Procedure Act and are
even more protective of the public’s
right to notice and comment. The
commenter asserted that EPA’s January
2017 proposed rule ‘‘established’’
source-specific SO2 emission limits that
would have required the installation
and operation of modern SO2 controls or
upgraded controls for subject to BART
Texas EGUs, and that in contrast to this,
the Trading Program in the final rule
consisted of an intrastate emissions
trading program that was not presented
in the proposal. The commenter
contended that EPA did not follow the
rulemaking procedures required by the
CAA given that EPA never proposed the
adoption of a trading program nor did
it discuss that it might consider
adopting an intrastate trading program
for Texas in lieu of the source-specific
retrofit controls proposed in the January
2017 proposal. Additionally, the
commenter asserted that the FIP
promulgating the Texas SO2 Trading
Program does not qualify as a logical
outgrowth of the January 2017 proposal.
The commenter contended that the
logical outgrowth doctrine applies
where a rule merely clarifies its
proposal, or where the agency put
commenters on notice that it was
considering approaches different from
the proposal. According to the
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commenter, the logical outgrowth
doctrine does not apply in this case
because (i) the intrastate trading scheme
is different than the January 2017 BART
proposal, and (ii) EPA did not provide
notice that it was considering an
intrastate trading program instead of
source specific SO2 emission limits.
Response: We explained in our
October 17, 2017 final rule that during
the comment period for our January
2017 proposed rule, we received a
comment letter from the Texas
Commission on Environmental Quality
(TCEQ) and the Public Utility
Commission of Texas (PUC),151 urging
us to consider as a BART alternative the
concept of emission caps using CSAPR
allocations. We also received similar
comments from Luminant and
American Electric Power (AEP). Based
on our consideration of these comments
and our independent determination that
a BART alternative approach under 40
CFR 51.308(e)(2) would meet all
regulatory requirements and thus be a
viable approach for Texas, we
proceeded to address the SO2 BART
requirement for Texas EGUs under a
BART alternative consisting of an
intrastate trading program in our
October 2017 final rule. In response to
a petition for reconsideration of the
October 2017 final rule requesting that
the Administrator reconsider certain
aspects of the FIP related to the Texas
SO2 Trading Program, we decided that
the October 2017 federal plan could
benefit from further public comment.152
As a result, in our August 27, 2018
proposed rule, we proposed to affirm
our October 2017 final rule that
approved a portion of the 2009 Texas
Regional Haze SIP and promulgated the
intrastate trading program FIP. In doing
so, we provided the public with an
opportunity to comment on all centrally
relevant aspects of our Texas SIP
approval and of the FIP that
promulgated the Texas SO2 Trading
Program, including our proposal to
affirm the October 2017 FIP establishing
an intrastate trading program capping
emissions of SO2 from certain EGUs in
Texas as a BART alternative and our
determination that this program satisfies
the requirements for a BART alternative.
We provided a 60-day public comment
period that ended on October 26, 2018,
and held a public hearing on September
26, 2018. Following that notice and
comment opportunity, the EPA
determined that certain additional
changes to the program not included in
the August 2018 proposal could be
warranted. Therefore, we issued a
151 82
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supplemental notice of proposed
rulemaking on November 14, 2019,
providing a 60-day comment period and
a public hearing on December 9, 2019.
In the November 2019 supplemental
proposal,153 we proposed to amend
several provisions of the Texas SO2
Trading Program with the overall
objective of strengthening our finding in
the October 2017 final rule,154 which we
proposed to affirm in August 2018,155
that the Texas SO2 Trading Program will
result in SO2 emission levels from Texas
EGUs that are similar to or less than the
emission levels from Texas EGUs that
would have been realized had Texas
continued to participate in the SO2
trading program under CSAPR.156 The
amendments to the Texas SO2 Trading
Program we are finalizing in this action
are designed to ensure that emission
levels in each year under the intrastate
trading program, and their aggregate
impact on visibility, will be similar to
or less than what would have been
realized from Texas EGUs from
participation in the SO2 trading program
under CSAPR,157 thus providing further
support to our determination that the
trading program meets the requirements
for a BART alternative. In finalizing our
action affirming the intrastate trading
program as amended in this final action,
the EPA is addressing all in-scope
comments we have received on both the
August 2018 and November 2019
proposal notices, including, as
discussed elsewhere in this final action
and in our separate Response to
Comments document, comments
regarding the lawfulness and basis for
the intrastate trading program under the
CAA and the Regional Haze Rule, and
other related comments. Therefore, to
the extent the commenter is alleging
that the intrastate trading program in
our October 2017 FIP was promulgated
without following the public notice and
comment procedures and public
participation requirements set forth in
42 U.S.C. 7607(d), the agency has cured
any such alleged procedural defect.
Comment: We received one comment
asserting that EPA cannot claim that the
October 2017 trading program was a
clarification of the January 2017
proposed rule. The commenter asserted
that the Texas SO2 Trading Program
finalized by EPA in the October 2017
final rule differs in substance from the
BART proposal, which the commenter
claimed is evidenced by EPA’s addition
in the final action of dozens of pages of
153 84
FR 61850, 61851.
FR 48324, 48329.
155 83 FR 43591.
156 See 83 FR at 43599.
157 83 FR 43592.
154 82
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regulatory and explanatory text that was
not included in the 2017 BART
proposal.
Response: We agree that our October
17, 2017 final rule that promulgated an
intrastate trading program to address the
SO2 BART requirement for Texas EGUs
cannot be characterized as merely a
clarification of our January 4, 2017
proposed rule, nor has the Agency made
this claim. Based on our consideration
of comments we received on the January
2017 proposal urging us to consider as
a BART alternative the concept of
emission caps using CSAPR allocations,
and based on our independent
determination that a BART alternative
approach under 40 CFR 51.308(e)(2)
would meet all regulatory requirements
and thus be a viable approach for Texas,
we proceeded to address the SO2 BART
requirement for Texas EGUs under a
BART alternative consisting of an
intrastate trading program in our
October 2017 final rule. In that final
rule, EPA considered and responded to
all relevant comments germane to the
final rule and provided a record of
decision-making for the final action. We
note that some of the comments we
received on the January 2017 proposal
raised specific issues related to our
proposed analyses for the sourcespecific BART emission limits we
proposed. Given that those sourcespecific emission limits were not part of
our final action, providing substantive
responses to such comments was not
required as they were no longer
relevant. As discussed in several places
throughout this final action, in response
to a petition for reconsideration of the
October 2017 final rule requesting that
the Administrator reconsider certain
aspects of the FIP related to the Texas
SO2 Trading Program, we provided an
opportunity for further public comment
on all centrally relevant aspects of the
Trading Program in a proposal
published on August 27, 2018, and
provided an opportunity for public
comment on proposed amendments to
certain provisions of the Trading
Program in a supplemental proposal
published on November 14, 2019. The
amendments to the Texas SO2 Trading
Program we are finalizing in this final
action, which include minor changes
from what we proposed in the
November 2019 proposal, are designed
to ensure that emission levels in each
year under the intrastate trading
program, and their aggregate impact on
visibility, will be similar to or less than
what would have been realized from
Texas EGUs from participation in the
SO2 trading program under CSAPR,158
thus providing further support to our
determination that the Texas SO2
Trading Program meets the regulatory
requirements for a BART alternative and
is an appropriate approach for
addressing Texas’ SO2 BART
obligations.
Comment: We received one comment
contending that the Texas SO2 Trading
Program cannot be characterized as a
logical outgrowth of the December 2014
proposed rule given that the BART
provisions in the December 2014
proposed rule were abandoned due to
Homer City II, and that EPA otherwise
took final action on that proposed rule
in a final action published in January
2016. The commenter also asserted that
further confirmation that the December
2014 proposal was part of a different
rulemaking process is provided by the
fact that in the January 2017 BART
proposal, EPA did not invite comments
on the December 2014 proposal and also
that EPA did not include the December
2014 proposal or any of the supporting
technical analysis for the December
2014 proposal in the docket for the
January 2017 proposal on the date of the
publication of the proposed rule, as
required by the CAA at 42 U.S.C.
7607(d)(3).
Response: This commenter is referring
to our December 16, 2014 proposed rule
in which we proposed, among other
things, to rely on our CSAPR FIP
requiring Texas sources’ participation in
the CSAPR trading programs to satisfy
the NOX and SO2 BART requirements
for Texas’ BART-eligible EGUs.159 Due
to the uncertainty arising from the D.C.
Circuit’s remand of Texas’ CSAPR
budgets, when we finalized the
December 2014 proposal in an action
published in January 2016, we did not
finalize our proposal to rely on CSAPR
to satisfy the SO2 and NOX BART
requirements for Texas EGUs.160 We
note that we did not attempt to
characterize the Texas SO2 Trading
Program as a logical outgrowth of the
December 2014 proposed rule. We agree
that the December 2014 proposed rule
was a part of a different rulemaking
process, which is supported by the fact
that we did not reference that proposed
rule in developing the intrastate trading
program that was finalized in October
2017. We also did not reference the
December 2014 proposal in our August
2018 proposal to affirm the October
2017 final rule.
Comment: We received a comment
from environmental groups asserting
that the fact that Texas state agencies
and industry submitted comments in
159 79
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81 FR 296, 301–02 (Jan. 5, 2016).
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support of a trading program does not
make the October 2017 final rule
promulgating the Texas SO2 Trading
Program a ‘‘logical outgrowth’’ of EPA’s
2014 proposal given that EPA did not
provide notice to the public that it was
proposing or even considering a trading
program. The commenter asserted that
the D.C. Circuit has ‘‘made clear that the
fact that some commenters actually
submitted comments addressing the
final rule is of little significance. The
agency must itself provide notice of a
regulatory proposal,’’ citing Ass’n of
Private Sector Colls. v. Duncan, 681
F.3d 427, 462 (D.C. Cir. 2012) (citation
omitted) (internal quotation marks
omitted). The same environmental
groups asserted that they did not have
an opportunity to comment on
information that arose in the October
2017 final rule promulgating the
Trading Program, including the
consideration of a trading program as a
BART alternative to satisfy BART, the
specifics of EPA’s intrastate trading
program, or the rationale for adopting
that program. The environmental groups
asserted that while they submitted
comments on BART alternatives in
response to the comments submitted by
industry—those comments were not
based on, or responding to, any actual
or implied proposal by EPA to adopt
such an alternative. The environmental
groups contended that their response to
industry comments about industry’s
desire for a trading program is not a
substitute for having notice and
opportunity to comment on EPA’s
decision to promulgate a trading
program.
Response: We do not take the position
that any comments on the January 2017
proposal could have or did provide a
basis for treating the October 2017 final
rule as a ‘‘logical outgrowth’’ of the
December 2014 proposal, so the premise
of this comment is incorrect.
Furthermore, the case cited by
commenter is inapposite as it does not
arise under the CAA. The CAA
contemplates circumstances in which
the Agency may finalize rules under
section 307(d) that reflect changes from
proposal that a commenter is unable to
comment on. The appropriate remedy,
when circumstances warrant, is
administrative reconsideration, so that
the agency is able to provide the public
the opportunity to comment on those
matters (or ‘‘objections’’) that are of
‘‘central relevance’’ to the outcome of
the rule. See Wisconsin v. EPA, 938 F.3d
303, 331–32 (D.C. Cir. 2019). The
commenter’s concerns regarding logical
outgrowth have now been addressed by
our August 27, 2018 proposal that
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specifically solicited comment on all
key aspects of the Texas SO2 Trading
Program. We are finalizing that proposal
with amendments to certain provisions
of the Trading Program after considering
and responding to all comments within
scope that we received during the
public comment periods for the August
2018 proposal and the November 2019
supplemental proposal.
Comment: We received comments
from environmental groups asserting
that EPA did not provide responses to
certain comments they submitted during
the public comment period for our
January 2017 proposal. Those particular
comments submitted by the
environmental groups were a reaction to
comments submitted by industry to
EPA—also during the public comment
period for our January 2017 proposal—
urging us to consider as a BART
alternative the concept of emission caps
using CSAPR allocations in place of
source-specific SO2 BART controls.
Specifically, the comments the
environmental groups claim EPA did
not respond to asserted that CSAPR is
not better than BART. The commenters
contended that EPA had an obligation to
respond to those comments given EPA’s
reliance on CSAPR to justify the Texas
SO2 Trading Program, and that in not
providing a response, EPA violated the
CAA’s requirement that a rule ‘‘be
accompanied by a response to each of
the significant comments, criticisms,
and new data submitted in written or
oral presentations during the comment
period.’’ 42 U.S.C. 7607(d)(6)(B).
Response: We provided responses in
the October 2017 final rule to each of
the in-scope significant comments,
criticisms, and new data submitted in
written or oral presentations during the
comment period. We continue to hold
the position that comments alleging that
CSAPR is not better than BART were
beyond the scope of our January 4, 2017
proposed rule, and they are beyond the
scope of our final action now. We
continue to believe that such comments
raise issues that are appropriately
addressed in the record of the 2012
CSAPR Better-than-BART rule 161 and
our 2017 affirmation of CSAPR Betterthan-BART.162 In this action, the EPA is
relying on the conclusion reached in
those actions, without reopening them
or having any intention to reopen them,
that CSAPR remains a valid BARTalternative, including after taking
account of geographic changes in the
scope of CSAPR’s coverage since 2012.
In particular, because the Texas SO2
Trading Program, as amended in this
161 77
162 81
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final action, has been designed to
achieve SO2 emission levels from Texas
EGUs that are similar to or less than
what would have been realized from
Texas EGUs’ participation in the CSAPR
SO2 trading program, we are making the
determination that the Texas SO2
Trading Program is an appropriate
BART alternative for addressing Texas’
SO2 BART obligations. Because the
Texas SO2 Trading Program will result
in SO2 emissions from Texas EGUs
similar to or less than emissions
anticipated under CSAPR, this
alternative is an appropriate approach
for addressing Texas’ SO2 BART
obligations and, in the context of the
operation of the CSAPR ozone-season
NOX trading program and the operation
of the CSAPR annual NOX and SO2
trading programs, will achieve greater
reasonable progress than BART towards
restoring visibility, consistent with the
June 2012 ‘‘CSAPR Better-than-BART’’
determination and September 2017
‘‘CSAPR Better-than-BART affirmation
finding.’’ As discussed in section I.D of
this final action, EPA has denied a
petition for reconsideration of the 2017
CSAPR Better-than-BART affirmation
that was based in part on an objection
that the Texas program is not of
sufficient stringency to satisfy the
analysis for CSAPR. Although our
determination in that action is also
beyond the scope of this action here, it
means that EPA here can continue to
rely on the CSAPR ‘‘Better-than-BART’’
finding in conducting its analysis of
whether the Texas intrastate trading
program satisfies the requirements of 40
CFR 51.308(e)(2).
Comment: One commenter asserted
that EPA’s August 2018 proposal
affirming the October 2017 final rule
promulgating the Texas SO2 Trading
Program and solicitation of comments
on only some elements of the Texas SO2
Trading Program cannot cure the rule’s
procedural deficiencies in finalizing the
trading program because the
opportunity for public comment is both
insufficient and too late. The
commenter contended that based on
case law, the purpose of notice and
comment is to provide the public with
an opportunity to influence agency
rulemaking, citing U.S. Steel Corp. v.
EPA, 595 F.2d 207, 215 (5th Cir. 1979);
Nat’l Tour Brokers Ass’n v. U.S., 591
F.2d 896, 902 (D.C. Cir. 1978). The
commenter claimed that this
opportunity to influence agency
rulemaking is meaningful only when
rules remain in the formative stage and
agencies are more likely to give real
consideration to alternative ideas.
Furthermore, the commenter asserted
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that agencies do not provide an
adequate opportunity to influence the
rulemaking process when they solicit
public comment on rules that they have
already labeled as final, as in the case
of the Texas SO2 Trading Program. The
commenters stated that the October
2017 FIP promulgating the Texas SO2
Trading Program remained in effect
even while it was open to public
comment, thus not providing the public
with a meaningful opportunity to
influence the trading program.
Additionally, the commenter noted that
EPA has not yet rescinded or withdrawn
the FIP promulgating the Texas SO2
Trading Program even though
environmental groups filed a petition
for reconsideration arguing that the
Texas SO2 Trading Program did not
follow notice and comment
requirements. According to the
commenters, in having the Texas SO2
Trading Program remain in effect, EPA
has continued to violate the CAA’s
notice and comment provisions.
The commenter asserted that the D.C.
Circuit explained in Nat’l Tour Brokers
Ass’n, 591 F.2d at 902, that agencies are
likely to become more close-minded and
defensive once they put their credibility
on the line in the form of final rules.
Furthermore, the commenter argued that
agencies cannot cure notice and
comment defects by merely soliciting
comments after the promulgation of a
final rule. The commenter asserted that
when an agency seeks to save a rule that
suffers from a notice and comment
violation, that agency bears the burden
of proving that the violation did not
prejudice the public and that the
absence of such prejudice must be clear
for the violation to be considered
‘‘harmless’’ and the rule to be upheld.
The commenter claimed that at this
point, the only legal remedy is for EPA
to withdraw the Texas SO2 Trading
Program and replace it with a FIP that
satisfies the statutory and regulatory
requirements.
Response: In response to the petition
for reconsideration referenced by the
commenters, we decided that the
October 2017 final rule could benefit
from further public comment.163 As a
result, in our August 2018 proposed
rule, we proposed to affirm our FIP
promulgating the Texas SO2 Trading
Program and in doing so, we provided
the public with an opportunity to
comment on all centrally relevant
aspects of the October 2017 final rule,
including our promulgation of the Texas
SO2 Trading Program and our
determination that this program satisfies
the requirements for a BART
alternative.164 We disagree with the
commenter that the opportunity for
public comment provided by our
August 27, 2018 proposed rule is
insufficient and too late. While the
October 2017 final rule remained in
effect when we proposed the August 27,
2018 proposal, in that proposal we also
sought input on whether SO2 BART
would be better addressed through a
source-by-source approach (sourcespecific BART), the October 2017 SO2
trading program, or some other
appropriate BART alternative. We stated
in the August 27, 2018 proposal that if
we were to decide to act pursuant to any
comments we receive, we may initiate a
new rulemaking process with a new
proposed rule.165 We provided a 60-day
public comment period that ended on
October 26, 2018 and held a public
hearing on September 26, 2018, to
receive public comment on our August
27, 2018 proposed rule. As a result of
comments received during that
comment period, we subsequently
published and took further comment on
a supplemental proposal in November
2019 to make changes to certain
provisions of the Texas SO2 Trading
Program. Our November 2019
supplemental proposal and the
amendments to the trading program we
are finalizing in this action are evidence
that our intent was to be open to further
comment and that we ultimately gave
real consideration and were influenced
by the comments we received.
Therefore, we disagree that we have not
provided the public a fully adequate
opportunity to influence the agency’s
rulemaking or that the public notice and
opportunity to comment on our
proposals was not meaningful.
In this respect, our actions are
consistent with the requirements of the
CAA under section 307(d). The CAA
contemplates that in some
circumstances the public may not be
able to comment on important aspects of
a final rule. The appropriate remedy is
reconsideration to afford that
opportunity for comment, and thus
provide for administrative exhaustion
prior to judicial review, with respect to
all ‘‘centrally relevant’’ objections to the
final rule. The August 2018 proposal
afforded the opportunity to comment on
all such objections with respect to the
October 2017 final action.
The CAA also contemplates that a
final rule may remain in effect while the
EPA undertakes that reconsideration.
Even when the EPA is undertaking a
mandatory reconsideration process
under section 307(d)(7)(B), the statute
164 83
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provides that the rule ‘‘may be stayed’’
(emphasis added) by the Administrator
or a court for a period not to exceed
three months. The fact that the Texas
SO2 Trading Program remained in effect
and went into operation during the
pendency of the public notice and
comment periods in this instance does
not in any manner establish that the
agency’s notice and comment process
on the August 2018 proposal to reaffirm
the final rule is somehow infirm, or that
any alleged defects in the procedure for
the October 2017 final rule are somehow
incurable.
Further, the cases cited by commenter
are inapposite because they were not
subject to the provisions of CAA section
307(d). In U.S. Steel Corp. v. EPA, 595
F.2d 207 (5th Cir. 1979), for instance,
the court reviewed EPA’s designation of
nonattainment areas under section 107
of the Act. Designations under section
107 are not amongst the enumerated
actions in section 307(d) of the Act that
are governed by the administrative
rulemaking procedures of subsection
(d), including the provision for
mandatory reconsideration under
section 307(d)(7)(B). Thus, the court in
U.S. Steel Corp. was reviewing EPA’s
action under the Administrative
Procedure Act. See 595 F.2d at 210. The
Texas SO2 Trading Program is a federal
implementation plan promulgated
under section 110(c) of the CAA, and
thus subject to section 307(d), pursuant
to section 307(d)(1)(B). The court in U.S.
Steel was not confronted with a
circumstance in which the agency
promulgated a final rule subject to the
provisions of CAA section 307(d) that
was substantially different from the
proposal, but then took the necessary
steps to provide the opportunity for
comment on all centrally relevant
issues, consistent with the process
contemplated in section 307(d)(7)(B).
Thus, the U.S. Steel Corp. case cited by
the commenter is not relevant to our
final action on the Texas SO2 Trading
Program here.
Comment: One commenter expressed
general concern that EPA proposed to
affirm the October 2017 final rule that
promulgated the Texas SO2 Trading
Program in the August 2018 proposal
without soliciting comments on certain
sections of the final rule.
Response: In response to a petition for
reconsideration of the October 2017
final rule requesting that the
Administrator reconsider certain aspects
of the FIP related to the Texas SO2
Trading Program, we decided that
important aspects of the October 2017
federal plan could benefit from further
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public comment.166 Accordingly, in a
notice published on August 27, 2018,
we proposed to affirm certain aspects of
the October 2017 final rule, and thus
opened for comment the following
elements, which effectively covered all
of the central objections in the petition
for reconsideration: (1) The proposal to
affirm the October 2017 FIP establishing
an intrastate trading program addressing
emissions of SO2 from certain EGUs in
Texas as a BART alternative and the
determination that this program satisfies
the requirements for BART alternatives;
(2) the proposal to affirm the finding
that the BART alternatives in the
October 2017 rulemaking to address SO2
and NOX BART at Texas’ EGUs result in
emission reductions adequate to satisfy
the requirements of CAA section
110(a)(2)(D)(i)(II) with respect to
visibility for the following NAAQS:
1997 8-hour ozone, 1997 PM2.5 (annual
and 24-hour), 2006 PM2.5 (24-hour),
2008 8-hour ozone, 2010 1-hour NO2,
and 2010 1-hour SO2 NAAQS; and (3)
the proposal to affirm our October 2017
approval of Texas’ SIP determination
that no sources are subject to BART for
PM. The August 2018 affirmation
proposed rule also solicited comment
on the specific issues of whether recent
shutdowns of sources included in the
trading program and the merger of two
owners of affected EGUs should impact
the allocation methodology for certain
SO2 allowances. In addition to soliciting
comment on the above elements and
aforementioned specific issues, the
August 2018 affirmation proposal also
invited comment on additional issues
that could inform our decision making
with regard to the SO2 BART obligations
for Texas. First, we sought input on
whether SO2 BART would be better
addressed through a source-by-source
approach (source-specific BART), the
October 2017 SO2 trading program, or
some other appropriate BART
alternative. Second, EPA requested
comment on whether a SIP-based
program would serve Texas better than
a FIP. Third, we requested public input
on whether and how the SO2 trading
program finalized in the October 2017
final rule addresses the long-term
strategy and reasonable progress
requirements for Texas. We find that the
issues that EPA enumerated for
reconsideration and solicitation of
public comment covered all centrally
relevant aspects of the October 2017
rule. See 83 FR at 43587. As noted by
the commenter, we recognize that there
were certain aspects of our October 2017
final rule that we did not reopen and
thus did not solicit further comment on
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in our August 2018 proposal. We did
not reopen or solicit comment on the
following: our October 2017 final
determination that CSAPR addresses the
NOX BART requirements for EGUs in
Texas; identification of BART-eligible
sources; and our determination that the
BART-eligible EGUs not participating in
the Texas SO2 Trading Program were
not causing or contributing to visibility
impairment, and were therefore not
subject to BART. We did not reopen and
solicit further comment on these
determinations made in the October
2017 final rule because these aspects of
our final rule were finalized as proposed
in the January 2017 proposal after
carefully considering and responding to
all comments within scope that we
received during the public comment
period.
G. Subject-to-BART Determinations
Comment: We received a comment
from Lower Colorado River Authority
(LCRA) stating their Fayette Power Plant
Units 1 & 2 (FPP U1 & U2) are not
subject to BART, contrary to the
determination made by EPA in the
January 2017 FIP proposal. The
commenter asserted that EPA
improperly used data from 2000–2004,
which pre-dated the installation of wet
flue gas desulfurization scrubbers at the
units, to assess visibility impacts of FPP
U1 & U2. Although the commenter did
not request that EPA remove FPP U1 &
U2 from the Texas SO2 Trading Program
at this time, and actually expressed
support of the Texas FIP and the
inclusions of FPP U1 & U2 in the
trading program, the commenter
requested that EPA concur that the most
currently available data must be used
for visibility impact determinations
under the regional haze program.
Response: We appreciate LCRA’s
concerns regarding Fayette Power Plant
Units 1 and 2, and we agree that Fayette
Units 1 and 2 are currently equipped
with high performing wet FGDs. We
note that, as discussed in our October
2017 final rule and as affirmed in this
rulemaking, we are not making a
subject-to-BART determination for those
sources covered by the Texas SO2
Trading Program. The relevant BART
requirement for the participating BARTeligible units are encompassed by BART
alternatives for NOX and SO2 such that
we did not deem it necessary to finalize
subject-to-BART findings for these
EGUs. In addition, we are affirming our
approval of the determination in the
2009 Texas Regional Haze SIP that none
of these sources are subject to BART for
PM. Therefore, comments concerning
the emissions utilized in our subject-toBART modeling for the sources
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participating in the SO2 trading program
are no longer relevant.
H. Visibility Transport
Comment: One commenter asserted
that EPA’s reliance on the Texas SO2
Trading Program to satisfy section
110(a)(2)(D)(i)(II) is arbitrary and
capricious both because the Texas SO2
Trading Program itself is unlawful and
because EPA’s reliance on the Texas
SO2 Trading Program here is based on
EPA’s claims that the Texas SO2 Trading
Program reduces emissions as much as
CAIR would have. According to the
commenter, this is problematic because
EPA cannot use CAIR, given that CAIR
was invalidated years ago by the D.C.
Circuit, citing North Carolina, 531 F.3d
at 903, and has been replaced by
CSAPR. Thus, the commenter
contended that EPA cannot use CAIR as
the benchmark for whether the
interstate visibility transport
requirements are met. The commenter
also asserted that EPA disapproved
Texas’ regional haze plan precisely
because it relied on CAIR and that it is
arbitrary and capricious for EPA to now
turn around and claim that interstate
visibility transport requirements are
satisfied because the emissions
reductions in CAIR will be achieved.
The commenter also asserted that
EPA’s new rationale of relying on the
emission levels assumed in the CENRAP
modeling as a basis for finding that
Texas’ emissions will not interfere with
other states’ visibility plans is not
appropriate given that there is no
demonstration provided to show that
the emission assumptions used by
CENRAP in its visibility modeling are in
fact sufficient to assure that Texas
emissions do not interfere with
measures required to protect visibility
in other states. The commenter also
expressed concern that certain states,
such as New Mexico and Colorado,
impacted by Texas emissions are not
members of CENRAP, and therefore, the
CENRAP process could not have
determined what emissions limits were
necessary to satisfy Texas’ visibility
transport obligations with respect to
New Mexico and Colorado.
Response: First, we address comments
regarding the Texas SO2 Trading
Program as being unlawful, arbitrary, or
capricious, elsewhere in this document.
Second, the Texas SO2 Trading Program,
as promulgated in October 2017 and
with the amendments promulgated in
this final rule, results in emission
reductions that are adequate to satisfy
Texas’ visibility transport obligations
under CAA section 110(a)(2)(D)(i)(II) for
the following six NAAQS: (1) 1997 8hour ozone; (2) 1997 PM2.5 (annual and
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24 hour); (3) 2006 PM2.5 (24-hour); (4)
2008 8-hour ozone; (5) 2010 1-hour NO2;
and (6) 2010 1-hour SO2. The 2009
Texas Regional Haze SIP relied on
participation in CAIR to meet the SO2
BART requirements for Texas EGUs,
and this level of emissions reductions
from Texas is what other states relied
upon and assumed during interstate
consultation and in the development of
their long-term strategies and reasonable
progress goals for their own Class I areas
in their regional haze SIPs. As discussed
in section III.B of this notice, Texas EGU
sources were projected to emit
approximately 350,000 tons of SO2
annually under CAIR participation. By
comparison, Texas EGUs are anticipated
to emit no more than approximately
290,083 tons of SO2 annually under the
Texas SO2 Trading Program (i.e.,
255,083-ton assurance level + estimated
35,000 tons per year of emissions from
units not covered by the Texas SO2
Trading Program), which is well below
the 350,000-ton emissions projection for
Texas sources under CAIR and well
below the maximum total annual SO2
emissions assumed for Texas under
CSAPR (i.e., 317,000 tons) in the CSAPR
Better-than-BART analysis. Thus, the
Texas SO2 Trading Program as amended
in this final action, ensures SO2
emission reductions from Texas that are
consistent with, and indeed greater
than, the level of emission reductions
relied upon by other states during
interstate consultation and thus this
level of emissions reductions is
adequate to satisfy the requirements of
CAA section 110(a)(2)(D)(i)(II) with
respect to visibility for the six identified
NAAQS.167
The commenter makes the claim that
CENRAP’s modeling of emission
assumptions does not necessarily
demonstrate that those assumptions
were in fact sufficient to assure noninterference by Texas’ emissions with
measures required to protect visibility
in other states. We note that our 2013
infrastructure-SIP guidance addressing
the interstate visibility transport
requirements of the Act (also sometimes
referred to as ‘‘prong 4’’) lays out two
ways in which a state’s infrastructure
SIP submittal may satisfy these
requirements.168 One way is through a
state’s confirmation in its infrastructure
SIP submittal that it has an EPAapproved regional haze SIP in place. In
the absence of a fully approved regional
haze SIP, the second method to meet
167 83
FR 43605.
‘‘Guidance on Infrastructure State
Implementation Plan (SIP) Elements under CAA
sections 110(a)(1) and 110(a)(2)’’ (September 13,
2013).
168 See
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these requirements is a demonstration
that emissions within a state’s
jurisdiction do not interfere with other
states’ plans to protect visibility. Such a
demonstration should point to measures
that limit visibility-impairing pollutants
and ensure that the resulting reductions
conform with any mutually agreed
emission reductions under the relevant
regional haze regional planning
organization (RPO) process.169 Given
that the emissions under the Texas SO2
Trading Program—including the
assurance provisions—are less than the
level of Texas emissions reductions
agreed upon by Texas and other states
during consultation and assumed and
relied upon in those other states’
regional haze SIPs, we continue to find
that the FIP is adequate to ensure that
emissions from Texas do not interfere
with measures to protect visibility in
nearby states.
The commenter also makes the claim
that there is no rational basis for EPA’s
reliance on the emission levels assumed
in CENRAP modeling as a basis for
finding that Texas’ emissions will not
interfere with other states’ visibility
plans given that there are states whose
visibility is impacted by Texas that are
not members of CENRAP. Our basis for
determining that the FIP is adequate to
ensure that emissions from Texas do not
interfere with measures to protect
visibility in nearby states is that the
emissions reductions secured under the
Texas SO2 Trading Program are
consistent with the level of emissions
reductions relied upon by other states
during consultation, which is not
limited to consultation amongst
CENRAP states.170 The Regional Haze
Rule requires that ‘‘Where a state has
emissions that are reasonably
anticipated to contribute to visibility
impairment in any mandatory Class I
Federal area located in another State or
States, the State must consult with the
other State(s) in order to develop
coordinated emission management
strategies.’’ 171 Clearly, this requirement
applies regardless of whether the
impacted states are members of the
same regional planning organization
(RPO) or not. Thus, Texas had an
obligation to consult with states, both in
and outside of CENRAP, whose Class I
areas are potentially impacted by Texas
169 See id. ‘‘Guidance on Infrastructure State
Implementation Plan (SIP) Elements under CAA
sections 110(a)(1) and 110(a)(2),’’ at 34 (September
13, 2013). See also 76 FR 22036 (April 20, 2011)
(containing EPA’s approval of the visibility
requirement of 110(a)(2)(D)(i)(II) based on a
demonstration by Colorado that did not rely on the
Colorado Regional Haze SIP).
170 See CFR 51.308(d)(3)(i)–(iii) addressing the
requirements for consultation with other states.
171 40 CFR 51.308(d)(3)(i).
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49205
emissions. As documented in the 2009
Texas Regional Haze SIP,172 Texas
participated in inter-regional planning
organization calls during the SIP
development process for the first
planning period. Texas also sent
consultation letters to Oklahoma,
Louisiana, Missouri, Arkansas, Colorado
and New Mexico. Included with each
letter was a discussion of the CENRAP
Particulate Matter Source
Apportionment Technology (PSAT)
modeling determining the contribution
from each Texas source area to visibility
impairment at Class I areas in the given
state. In the 2009 SIP, Texas asserted
that it participated fully in the analysis
of this data, including estimation of the
base period visibility impairment,
natural visibility condition estimates,
and 2018 projections based on current
(at that time) and anticipated future
state and federal controls. For states
outside of CENRAP, Texas documented
in its 2009 SIP that Colorado’s
Department of Public Health and
Environment confirmed in a letter dated
June 24, 2008, that no further emissions
reductions were requested of Texas at
that time. Texas also documented that
as of December 2008, shortly before its
submission of the final SIP to EPA on
March 19, 2009, New Mexico had not
responded to Texas’ letter to confirm
whether or not New Mexico was
expecting any additional emission
reductions from Texas sources.
Furthermore, New Mexico did not
include in its Regional Haze SIP any
additional emission reductions expected
from Texas sources. The Texas
emissions reductions that will result
from the Texas SO2 Trading Program
and Texas’ participation in CSAPR for
ozone season NOX are consistent with
the level of Texas emissions reductions
relied upon by other states both in and
outside CENRAP during consultation
with Texas.
It is incorrect to claim that because
CAIR was invalidated, EPA and the
states can no longer use the anticipated
emissions and reasonable progress goals
established through the consultation
process for the first planning period.
Those goals may have been established
in part based on expectations of
emissions performance under CAIR, but
the anticipated emissions reductions
and the goals for regional haze purposes
remain in effect (though we note that
reasonable progress goals are not
binding). Thus, this level of emissions
172 See 2009 Texas Regional Haze SIP, section 4.3
titled ‘‘Consultations On Class I Areas In Other
States.’’ The submittal can be found in
Regulations.gov docket ID EPA–R06–OAR–2016–
0611, document EPA–R06–OAR–2016–0611–0002.
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provides an appropriate benchmark for
assessing whether states are adequately
addressing interstate visibility transport
(when such a demonstration is
necessary). We note that this is different
than situations in which states have
attempted to rely on CAIR as a BART
alternative despite the fact that CAIR is
no longer in operation. Here, the fact
that CAIR no longer exists and has been
replaced by CSAPR does not impact the
legitimacy of the level of emission
reductions agreed upon through the
consultation process among states,
particularly given that CSAPR is
generally more stringent than CAIR.
And here, the Texas program is
designed to be more stringent than
CSAPR would have been for SO2
emissions in Texas. See section III.B
where we provided detailed analysis of
anticipated emissions under CAIR and
the Texas program. Therefore, we find
that Texas’ visibility transport
obligations under CAA section
110(a)(2)(D)(i)(II) for the six NAAQS
listed above are satisfied.
Comment: We received one comment
asserting that since EPA has not made
any determination of the trading
program’s visibility impacts on other
states, we cannot make the claim that
the Texas SO2 Trading Program was
designed to meet the CAA’s visibility
transport requirements. The commenter
claimed that EPA cannot lawfully claim
that the Texas SO2 Trading Program was
designed to meet the visibility transport
requirements of the CAA because the
CAA’s visibility good neighbor
provision requires and authorizes EPA
to prohibit only those upwind emissions
that interfere with measures required to
be included in the applicable
implementation plan for any other State.
The commenter cited 42 U.S.C.
7410(a)(2)(D)(i)(II), as well as E.P.A. v.
EME Homer City Generation, L.P., 134
S.Ct. 1584, 1604 (2014) and EME Homer
City II, 795 F.3d at 127. The commenter
asserted that if one applies to this case
the Supreme Court’s precedent
interpreting the analogous good
neighbor provision under Section
7410(a)(2)(D)(i)(I), EPA is not required
and does not have authority to regulate
upwind emissions unless it first makes
the predicate finding that those upwind
emissions interfere with downwind
visibility. The commenter further
asserted that if the EPA makes that
finding, even then it may only regulate
upwind emissions up to the amounts of
pollution that actually interfere with
downwind visibility, again citing EPA v.
EME Homer City Generation, L.P., 134
S.Ct. 1584, 1603 (U.S. 2014) and EME
Homer City II, 795 F.3d at 127. The
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commenter contended that in affirming
its October 2017 final rule that
promulgated the Texas SO2 Trading
Program, EPA failed to make the
predicate finding that emissions from
Texas are interfering with downwind
states’ attainment of the NAAQS and
that EPA, therefore, cannot properly
claim that the Texas SO2 Trading
Program was designed to meet the
agency’s good neighbor ‘‘requirement’’
to protect downwind visibility from
‘‘interfere[nce].’’
Response: We disagree that the Texas
SO2 Trading Program cannot be viewed
as a program ‘‘designed to meet a
requirement other than BART’’ for
purposes of the BART alternative
analysis under 40 CFR 51.308(e)(2)(i)(C).
As relevant to this comment, the Texas
program is designed, among other
things, to ensure reductions of SO2
emissions from EGU sources in Texas
that meet (and indeed are more stringent
than) the reductions agreed to in the
interstate consultation process for
setting RPGs for Class I areas in other
states. See section III.B of this notice,
where we explain that the Texas SO2
Trading Program as amended in today’s
final action ensures emission reductions
in Texas that are adequate to satisfy the
requirements of CAA section
110(a)(2)(D)(i)(II) with respect to
visibility for six NAAQS.
We disagree with the commenter that
EPA has not made allegedly necessary
predicate findings under prong 4 in
order to claim that the Texas program is
designed to meet prong 4 requirements.
The commenter incorrectly attempts to
import into the interstate visibility
transport analysis under prong 4 the
policy determinations, regulatory
design, and associated case law of the
‘‘good neighbor provision’’ at
110(a)(2)(D)(i)(I), related to addressing
significant contribution to
nonattainment and interference with
maintenance of the NAAQS in other
states, which we commonly refer to as
prongs 1 and 2. Those precedents are
not necessarily applicable given that the
agency has long had a different
framework for analysis under prong 4,
with an entirely different set of policy
guidance and administrative precedents.
As explained above, our interpretation
of section 110(a)(2)(D)(i)(II) with respect
to visibility transport is that one of the
pathways by which a state can meet its
visibility transport obligations is
through a demonstration that emissions
within a state’s jurisdiction do not
interfere with other states’ plans to
protect visibility. EPA’s September 13,
2013 guidance explains that such a
demonstration should point to measures
that limit visibility-impairing pollutants
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and ensure that the resulting reductions
conform with any mutually agreed
emission reductions under the relevant
regional haze regional planning
organization (RPO) process.173 This has
been EPA’s long-standing interpretation
of how a state’s visibility transport
obligations can be satisfied, and we
have since approved many SIPs and
promulgated FIPs that address CAA
section 110(a)(2)(D)(i)(II) with respect to
visibility transport through this
pathway. Texas participated in the
CENRAP process in developing its SIP
for the first planning period and relying
on the technical work developed
through that process, Texas identified
states with Class I areas impacted by
Texas emissions and those states agreed
that they are being impacted by
emissions from Texas sources.
Furthermore, through the consultation
process, Texas made a commitment to
states with Class I areas impacted by
emissions from Texas sources that it
would implement CAIR to satisfy its
BART requirements and those states
agreed with Texas that anticipated
emission reductions due to the
implementation of CAIR would be
sufficient to address Texas’ impacts at
their Class I areas. The impacted states
relied on this level of emission
reductions from Texas sources in
developing their SIPs and establishing
their RPGs. As discussed in section
III.B. of this action, given that the
revisions to the Texas SO2 Trading
Program we are finalizing in today’s
final action ensure emission reductions
consistent with and below the emission
levels agreed upon by all states during
interstate consultation under 40 CFR
51.308(d)(3)(i)–(iii) and relied upon by
states impacted by Texas emissions, we
find that these revisions provide further
support for our earlier finding that the
BART alternative in the October 2017
FIP results in emission reductions
adequate to satisfy the requirements of
CAA section 110(a)(2)(D)(i)(II) with
respect to visibility for the six identified
NAAQS.174
Further, EPA has requisite FIP
authority under CAA section 110(c) to
address prong 4 for the six NAAQS for
173 See ‘‘Guidance on Infrastructure State
Implementation Plan (SIP) Elements under CAA
sections 110(a)(1) and 110(a)(2),’’ at 34 (September
13, 2013). See also 76 FR 22036 (April 20, 2011)
containing EPA’s approval of the visibility
requirement of 110(a)(2)(D)(i)(II) based on a
demonstration by Colorado that did not rely on the
Colorado Regional Haze SIP.
174 See 2009 Texas Regional Haze SIP, section 4.3
titled ‘‘Consultations On Class I Areas In Other
States.’’ The submittal can be found at
www.regulations.gov, Docket ID EPA–R06–OAR–
2016–0611, Document ID EPA–R06–OAR–2016–
0611–0002.
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Texas, given our disapproval of the
state’s prong 4 submittals. See 82 FR at
48332. Thus, our position is that we
have the obligation and authority to
address Texas’ interstate visibility
transport obligations. With the emission
levels established by the Texas SO2
Trading Program, as promulgated in
October 2017 and amended by this final
rule, we affirm our finding that the
emission levels assumed in the CENRAP
modeling are in fact sufficient to assure
that Texas’ emissions do not interfere
with other states’ visibility plans, and
that Texas is achieving emission
reductions that satisfy prong 4
obligations with respect to the six
aforementioned NAAQS. For the
reasons just discussed, we can also
determine that the intrastate program is
‘‘designed to meet a requirement other
than BART’’ for purposes of
51.308(e)(2)(i)(C).
We also disagree with the comment
that EPA does not have the authority to
regulate Texas’ emissions with respect
to visibility without first making the
finding that emissions from Texas are
interfering with downwind states’
attainment of the NAAQS. The visibility
prong (or ‘‘prong 4’’) of CAA section
110(a)(2)(D)(i)(II) requires that the
implementation plan submitted by a
state contain adequate provisions
prohibiting any source or other type of
emissions activity within the State from
emitting any air pollutant in amounts
that will interfere with measures
required to be included in the
applicable implementation plan for any
other state to protect visibility. Prong 4
is concerned with visibility and there is
no requirement that EPA first make a
finding that a state is interfering with
downwind states’ attainment of the
NAAQS before approving a SIP or
promulgating a FIP that addresses CAA
section 110(a)(2)(D)(i)(II) with respect to
visibility transport.
While the commenter is correct that
the regional planning process by which
Texas and surrounding states developed
their regional haze SIPs took place more
than a decade ago and in the interim
CAIR has been invalidated and replaced
by CSAPR, given that the
implementation of CAIR in Texas is
what Texas committed to and what
impacted states agreed with and relied
upon in developing their own regional
haze SIPs, we continue to find that it is
appropriate to compare the emissions
reductions anticipated from CAIR to the
Texas SO2 Trading Program to
determine whether the FIP is adequate
to ensure that emissions from Texas do
not interfere with measures to protect
visibility in nearby states as required
under CAA section 110(a)(2)(D)(i)(II).
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We recognize that the process of taking
action on certain SIPs related to regional
haze for the first planning period and
interstate visibility transport has taken
longer than EPA originally anticipated
when it first promulgated the Regional
Haze Rule in 1999. Notwithstanding this
delay, we do not believe it would be
reasonable or practical at this time to
require states with outstanding visibility
transport obligations to revisit and/or
update their emission reduction
commitments to impacted states for the
first implementation period. Such a
process could potentially be time and
resource intensive at a time when states
are currently focusing their attention on
developing regional haze
implementation plans for the second
implementation period. Thus, we do not
believe it would not be reasonable or
practical at this time to require Texas to
revisit its emission reduction
commitments to states with Class I areas
impacted by Texas emissions for the
first implementation period.
We address other comments that EPA
must analyze BART on a source-bysource basis elsewhere in this
document.
because EPA did not consider the four
statutory factors for reasonable progress.
The commenter asserted that EPA must
conduct a four-factor analysis of
whether pollution controls are needed
at individual sources—whether subject
to BART or not—to make reasonable
progress and that the Texas SO2 Trading
Program and the Q/d analysis that
helped inform the trading program
cannot act as a substitute for a fourfactor reasonable progress analysis given
that there are no statutory or regulatory
exemptions that authorize EPA to forego
conducting a separate reasonable
progress analysis or that authorize a
reasonable progress alternative program
comparable to a BART alternative.
Response: As discussed in Section
III.A.2 above, we are not finalizing a
position that the Texas SO2 Trading
Program is designed to meet reasonable
progress requirements. While the
program will contribute to meeting
Texas’ reasonable progress
requirements, the necessary analysis,
and potentially, emission controls, to
fully address reasonable progress for
Texas will take place in a separate,
future action.
I. Reasonable Progress
Comment: We received a comment
asserting that the Texas SO2 Trading
Program cannot possibly be designed to
satisfy the reasonable progress
requirements for several reasons. As an
initial matter, the commenter claimed
that EPA was attempting to bypass the
source-specific analyses required under
§ 51.308(e)(2)(i)(C) by simply asserting
that the trading program was designed
to be part of the long-term strategy to
meet reasonable progress requirements.
Additionally, the commenter asserted
that EPA’s claim that the Texas SO2
Trading Program is somehow designed
to meet the reasonable progress
requirements is contradicted by EPA’s
statement elsewhere in the August 2018
affirmation proposal that it is not taking
action on the reasonable progress
elements that the Fifth Circuit
remanded to the agency. The
commenter also claimed that setting
aside this inconsistency, the Texas SO2
Trading Program cannot be designed to
satisfy the reasonable progress
requirements given that it makes no
progress at all as the allowances
available under the trading program
exceed the covered sources’ emissions
in 2015, 2016, and 2017, and thus the
Texas SO2 Trading Program will not
reduce emissions or improve visibility.
Furthermore, the commenter asserted
that the Texas SO2 Trading Program
cannot possibly be designed to satisfy
the reasonable progress requirements
J. Coleto Creek
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Comment: We received comments in
support of our proposed removal of the
special provisions in the Supplemental
Allowance Pool for Coleto Creek.175 We
also received a comment stating that the
Supplemental Allowance Pool’s
treatment of Coleto Creek is unlawful,
arbitrary, and capricious because this
provision would allow SO2 emissions to
increase over time. Under
§ 97.912(a)(3)(i), if Coleto Creek requires
more allowances to be in compliance,
those allowances will be provided up to
the amount held in the Supplemental
Allowance Pool. Because that pool’s
starting balance is 10,000 tons and given
that Coleto Creek’s 2016 SO2 emissions
totaled 8,231 tons, § 97.912(a)(3)(i)
would allow this unit to more than
double its 2016 SO2 emissions. Nothing
in the Texas SO2 Trading Program
would prevent Coleto Creek from
increasing its SO2 emissions to even
higher levels, if and when the
Supplemental Allowance Pool has
accumulated allowances in excess of
10,000 tons.
175 We note that TCEQ commented in support of
removing the special provisions for Coleto Creek
but suggested that implementing changes to the
program is a potential concern given that the
program began in January 2019. TCEQ encourages
the EPA to discuss with program stakeholders
appropriate timing for making a change to the
Supplemental Allowance Pool. Our final rule sets
the effective date of the rule changes for program
year 2021.
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The commenter further asserts that
because Vistra and Dynegy have
merged, the rationale for having special
provisions for Coleto Creek are longer
true, with the combined Dynegy-Vistra
company owning several units other
than Coleto Creek covered by the Texas
SO2 Trading Program. Given that the
factual basis for this provision
concerning Coleto Creek is no longer
true, the commenter suggests that EPA
must eliminate 40 CFR 97.912(a)(3)(i).
We also received comments
suggesting that we should eliminate the
additional flexibility afforded to Coleto
Creek’s owner in the Supplemental
Allowance Pool of the SO2 trading
program FIP because Coleto Creek is no
longer an isolated unit in the program.
Given the recent merger between
Dynegy and Vistra Energy, which owns
or operates several other Texas EGUs
that are subject to the Texas intrastate
trading program for SO2, Coleto Creek
will now be part of a larger set of
participating units under the same
owner/operator. Because Coleto Creek is
no longer at a disadvantage as it was
before, the flexibility afforded to Coleto
Creek under the Supplemental
Allowance Pool is no longer necessary.
Vistra Energy will be able to transfer
allowances among the multiple
participating units should any one
source require additional allowances
during any control period greater than
its allocation, including Coleto Creek.
Eliminating the flexibility directly
afforded to Coleto Creek under 40 CFR
97.912(a)(3) as a result of the merger
will provide an equal opportunity
among the participating sources for
access to the Supplemental Allowance
Pool.
Response: When we finalized our
Texas SO2 Trading Program FIP in
October 2017, all sources required to
participate in the trading program had
the flexibility to transfer allowances
among multiple participating units
under the same owner/operator when
planning operations, with the exception
of Coleto Creek, which consists of only
one coal-fired unit, and at the time of
our October 2017 FIP, this was the only
coal-fired unit in Texas owned and
operated by Dynegy. In light of this, in
our October 2017 FIP, we provided
Coleto Creek with additional flexibility
by allocating its maximum
supplemental allocation from the
Supplemental Allowance Pool as long
as there were sufficient allowances in
the Supplemental Allowance Pool
available for allocation, and its actual
allocation would not be reduced in
proportion with any reductions made to
the supplemental allocations to other
sources. In our August 2018 proposal,
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we noted that Dynegy had merged with
Vistra, which owns other units that are
subject to the trading program. In the
August 2018 proposal, we solicited
comment on eliminating this additional
flexibility for Coleto Creek in light of the
recent change in ownership, and we
received no adverse comments on such
a change. Therefore, on November 14,
2019, we published a supplemental
notice of proposed rulemaking that
proposed to make this change to the
regulations.176 After considering all
comments we received on our
supplemental proposal, we are
finalizing the removal of the special
provisions for Coleto Creek, thus
making moot the comments concerning
Coleto Creek’s treatment under the
Supplemental Allowance Pool.
We disagree with the commenter’s
additional statements that, aside from
the treatment of Coleto Creek just
discussed, the Supplemental Allowance
Pool is arbitrary and capricious because
it would allow emissions to increase
over time. We have responded
elsewhere to the commenter’s similar
assertion that the Supplemental
Allowance Pool would ‘‘inflate the cap’’
in sections IV.A and IV.K of this final
action.
Comment: We also received
comments from AEP, NRG Texas, SPS,
and Vistra that side with eliminating the
additional flexibility to Coleto Creek
due to the recent change in ownership.
The additional flexibility would give
Coleto Creek priority for allocations
from the Supplemental Allowance Pool.
AEP states that retaining this flexibility
would place Coleto Creek and its owner
in a favorable position in comparison to
other utilities operating in the ERCOT,
which would unfairly impact other
EGUs. NRG Texas similarly states this
additional flexibility would
significantly reduce the allowances
available to other sources. SPS explains
that eliminating the additional
flexibility will ensure a more equitable
distribution of allowances for EGUs
needing compliance assistance. Vistra
submitted comments on both the August
2018 proposal and the November 2019
supplemental proposal in support of
eliminating the priority given in the
October 2017 final rule to Coleto Creek
for allocations from the Supplemental
Allowance Pool given that this priority
is no longer necessary in light of the
facility’s change in ownership.
Response: As explained elsewhere in
this document, in our August 2018
proposal, we solicited comment on
eliminating the additional flexibility for
Coleto Creek in light of the recent
change in ownership, and we received
no adverse comments on such a change.
Thereafter, on November 14, 2019, we
published a supplemental notice of
proposed rulemaking that proposed to
make this change to the regulations.177
After considering all comments we
received, we are finalizing the removal
of the special provisions for Coleto
Creek, thus addressing the comments
concerning Coleto Creek’s treatment
under the Supplemental Allowance
Pool.
K. Assurance Provisions and the
Variability Limit
Comment: One commenter asserted
that EPA’s proposed assurance
provisions are arbitrary and capricious.
Assurance levels, like those established
in CSAPR, are designed to account for
year-to-year variability in each state’s
EGU emissions. EPA concluded that
these emissions could vary from year to
year due to normal fluctuations in
electricity demand, weather, economic
considerations, etc., and in an interstate
trading program, state-level budgets
would not necessarily ensure emissions
outcomes commensurate with each
state’s good neighbor obligations. To
address this issue, EPA added
‘‘variability limits’’, which provide
additional headroom in the states’
budgets. In CSAPR, these variability
limits were based on the maximum
historical percentage coal usage (heat
input) variability during 2000–2010
experienced by any CSAPR state. The
state budget plus the variability limit
equals the ‘‘state assurance level.’’ 178
The commenter asserted that EPA
states that the addition of an assurance
limit was the result of comments that
EPA’s Texas SO2 Trading Program
would (1) not provide any regulatory
pressure on EGUs to reduce their
emissions and would actually allow
emissions to increase, and (2) would
undermine the stringency of the
program based on the availability of
supplemental allowances, the issuance
of allocations to already-retired units,
the general method of allocating
allowances, and the availability of
unlimited allowance banking.179 The
commenter asserted that to address
these concerns, EPA proposed to add an
assurance level using the same
methodology the agency used in
CSAPR. EPA claims, ‘‘to the extent that
commenters claimed the program would
be inadequately stringent due to the
allowance allocation methodology,
including allocations to retired units, or
177 84
FR 61850.
generally 76 FR 42866 (July 19, 2011).
179 84 FR at 61852.
178 See
176 84
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due to the Supplemental Allowance
Pool or allowance banking, these
concerns are effectively rendered moot
by the addition of the assurance
level.’’ 180 The commenter contends,
however, that a cap on the Texas SO2
Trading Program does not mitigate the
errors concerning EPA’s rules governing
its Supplemental Allowance Pool,
banking, and related issues. Were that
the case, EPA could simply promulgate
any trading program rule it desired,
using any reasoning or allocation
methodology, as long as the end result
equaled some desired total emissions
goal.
The commenter further asserts that
none of the references pointing to the
CSAPR Update Final Rule to support
the notion that allocations to retired
units and the availability of banking are
important to ensure market stability
provide any rationale or support for
allocating emission credits to already
retired EGUs. Allocating allowances to
already retired units only serves to
inflate the SO2 budget, thereby reducing
the value of the allowances, which
disincentivizes SO2 reduction.
Moreover, the commenter asserts that
the Texas SO2 Trading Program
arbitrarily creates a windfall to
operators that have independently
chosen to cease operations or relinquish
their permit rights to emit any pollution.
Giving permanently-retired sources and
their operators a free pass to emit more
haze-causing pollution than they are
legally allowed to emit under the Clean
Air Act cannot comply with the
Regional Haze Rule’s requirement that
any trading program ‘‘achieve greater
reasonable progress’’ than sourcespecific BART. 40 CFR 51.308(e), (e)(2);
see also 40 CFR 51.308(d)(vi). In a
comment submitted following the
supplemental proposal adding an
assurance level to the Texas SO2
Trading Program, the commenter further
emphasized that the agency proposed to
give the owners of those already-retired
sources an even bigger emissions
‘‘variability’’ cushion, effectively
ensuring that those companies will have
no incentive or need to reduce
emissions at any other source. The
commenter goes further stating that the
assurance level and variability limit
virtually ensure that certain utilities
holding emission credits for alreadyretired sources will be allowed to
continue polluting at the same or greater
levels than before.
Response: As an initial matter, this
action does not reopen any aspect of the
CSAPR regulations. However, in order
to facilitate our response to comments
180 84
FR at 61854.
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on the proposed amendments to the
Texas SO2 Trading Program, we first
respond to the commenter’s statements
concerning the CSAPR programs as
necessary to correct errors in the
commenter’s statements that may also
implicate the commenter’s statements
concerning the Texas SO2 Trading
Program. Contrary to the commenter’s
statements, the CSAPR variability limits
do not ‘‘provide headroom in’’ or
otherwise alter the CSAPR state budgets,
which are fixed amounts for all years
from 2017 forward. Rather, a state’s
CSAPR variability limit is a defined
increment by which the state’s total
emissions in a given year may exceed
the underlying fixed CSAPR state
budget before any incremental
emissions trigger requirements to
surrender more than one allowance per
ton of emissions. Also, the amounts of
the CSAPR variability limits were
determined based on an analysis of
historical variability in states’
consumption of all fossil fuels for
electricity generation, not states’
consumption of only coal for electricity
generation.
Turning to the substance of these
comments, we continue to believe that
the addition of assurance provisions to
the Texas SO2 Trading Program will
provide further support for our
determination that the Texas SO2
Trading Program is at least as stringent
as the CSAPR SO2 trading program as
applied to Texas and for that reason is
sufficiently stringent to meet the
requirements for a BART alternative
under 40 CFR 51.308(e)(2). When
promulgating the Texas SO2 Trading
Program, we found that the average
annual emissions authorized by the
program’s design would be similar to
the emissions authorized under CSAPR
and well below the 317,100 tons-peryear benchmark established by the
sensitivity analysis performed in the
2012 ‘‘CSAPR Better-than-BART’’
rulemaking. In the supplemental
proposal for this action, in response to
comments raising concerns that the
program as originally promulgated in
fact might not constrain emissions in
individual years as effectively as
CSAPR, we reiterated these conclusions
regarding the program’s average annual
emissions but also acknowledged that
the program’s design might not
constrain emissions in individual years
as effectively as CSAPR because of the
lack of provisions comparable to
CSAPR’s ‘‘assurance provisions.’’ We
therefore proposed and in this action are
now finalizing the addition of assurance
provisions to the Texas SO2 Trading
Program in order to further ensure that
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the program’s design is at least as
stringent as the CSAPR SO2 program as
applied to Texas, not only on an average
annual basis but also in individual
years.
The commenter suggests that even
where revisions to a trading program
have been specifically designed to
achieve a desired total emissions goal—
in this instance, ensuring that statewide
emissions levels in individual years do
not exceed the 317,100 tons-per-year
benchmark—the ability of the revisions
to in fact achieve that goal is not the
relevant criterion by which we should
evaluate the appropriateness of the
revisions, and that we should instead
evaluate the revisions (and the program
as a whole) based on whether or not the
revised program also addresses other
concerns raised by the commenter. We
disagree with this suggestion. In noting
the list of program design features that
the commenter considers problematic,
we did not endorse the full set of
concerns that the commenter asserts
these design features raise. Rather, we
acknowledged the specific concern as to
whether the program is or is not at least
as stringent in individual years as the
CSAPR SO2 trading program, and we
proposed amendments to address that
specific concern. While the commenter
asserts that the identified design
features raise additional concerns and
believes that we should evaluate the
program according to different criteria,
we do not agree. We have addressed the
commenter’s assertions regarding the
identified design features and additional
evaluation criteria in response to other
comments. In general, the commenter
provides no cogent explanation why the
addition of an assurance level (which
effectively functions as a ‘‘cap’’ as their
own language concedes) would not
ensure emissions performance of the
program on an annual basis below that
level. Nor has the commenter explained
why, if that is the case, the other
objections they raise with respect to
allocations or banking of allowances are
of relevance to EPA’s determination that
the program achieves the necessary
level of stringency for a BART
alternative under 51.308(e)(2).
The commenter’s criticism of the
discussion in the supplemental proposal
concerning our general rationale for not
immediately discontinuing allocations
to retired units has no relevance to the
proposed addition of assurance
provisions to the Texas SO2 Trading
Program or any of the other proposed
amendments in the supplemental
proposal. We have addressed the
commenter’s assertions regarding the
permissibility of allocating allowances
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to retired units in response to other
comments.
Comment: One commenter asserts
that EPA’s calculation of its proposed
variability limit uses out-of-date data,
rather than the most recent data as used
in CSAPR. In promulgating CSAPR,
EPA’s original stated reasoning for the
need for a variability limit was to
account for ‘‘weather, economic activity,
the portion of electric generation that is
fossil fuel fired, and the length and
number of outages at power generation
units, which vary over time.’’ 181 The
commenter asserts that in its
supplemental proposal for its Texas SO2
Trading Program, EPA simply adopts
the variability for Texas (7%) that was
calculated in the CSAPR rulemaking,
instead of updating it to account for
more recent data and the units that are
actually participating in the Texas SO2
Trading Program. The CSAPR heat input
data from 2000–2010 are now eight
years out of date. Thus, this data set is
no longer suitable for its originally
intended purpose––to account for
variations in weather, economic
activity, etc., that influence electricity
generation.
The commenter asserts that EPA
must, at a minimum, update the
technical analysis underlying its
variability limits, as the agency has
done in other contexts, such as its
recent update to CSAPR, for example,
where EPA relied on updated Integrated
Planning Model data to analyze the
impact of the updated Transport Rule
on the U.S. electric power sector, as
well as its preliminary transport
modeling data for the 2015 ozone
NAAQS. In so doing, EPA recognized
the many changes to the distribution
and magnitude of electric sector
emissions, including the significant
expansion of renewable energy
generation resources, recent EGU
retirements and control additions,
changes in the cost and efficacy of
pollution control technologies,
reductions in electricity demand,
electric system transmission changes,
and persistently low natural gas
prices.182 In the supplemental proposal
for its Texas SO2 Trading Program, EPA
181 See 76 FR 48,208, 48,265 (Aug. 8, 2011). EPA
specifically notes that the factors that contribute to
power sector variability change with time. Also,
note that EPA updated its previous variability
calculations, based on 2002–2008, in part to utilize
the more recent data available to it. EPA should
have taken the same approach in its supplemental
proposal.
182 See generally Ex. 1, EPA, ‘‘Documentation for
EPA’s Power Sector Modeling Platform v6—
November 2018 Reference Case,’’ available at
https://www.epa.gov/airmarkets/documentationepas-power-sector-modeling-platform-v6-november2018-reference-case.
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arbitrarily fails to acknowledge—let
alone address—the numerous changes
to the electric sector since the agency
adopted its CSAPR variability limits in
2011.183
The commenter states that in
addition, the obsoleteness of the heat
input data aside, given the EGU
retirements that have occurred since
2010, that data set is much different
than what would be calculated based on
the units that would actually participate
in EPA’s Texas SO2 Trading Program.
The commenter purported to illustrate
this via a table comparing historical heat
inputs from 2000–2010 for units under
original CSAPR, units in the Texas
trading program, and units in the Texas
program minus retired units. Comparing
the columns showing these heat inputs,
commenter asserts that the magnitudes
of the data sets indicate that despite
being of the same years, they are
composed of different units. In fact, the
heat input data set composed of only the
unretired units that would actually
participate in the Texas SO2 trading
program is approximately one third the
size of the data set that EPA is basing
its variability analysis on. In its
continued strained attempt to justify its
inadequate Texas SO2 trading program
by comparison to CSAPR, commenter
claims EPA ignores its earlier decision
to base its variability calculation on
only the units that actually participate
in the trading program.
Response: In the supplemental
proposal, we proposed to adopt a
variability limit of 7% for the Texas SO2
Trading Program, where the proposed
limit was calculated based on the
annual heat input values for Texas in
the same overall data set used to
calculate the analogous variability limit
of 18% for the CSAPR SO2 program. In
most respects, the Texas SO2 Trading
Program has been designed to replicate
relevant aspects of the CSAPR SO2
program. We do not dispute that the
Texas electricity sector has evolved in
the years since the CSAPR rulemaking
and we agree with the general principle
that the most current data of sufficient
quality and representativeness should
be used when conducting new
rulemaking activities. However, we do
not believe that acceptance of the
183 Motor Vehicle Mfrs. Assn. of United States,
Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29,
43 (1983) (‘‘The agency must examine the relevant
data and articulate a satisfactory explanation for its
action including a ‘rational connection between the
facts found and the choice made.’ ’’); Sierra Club v.
EPA, 671 F.3d 955, 967 (9th Cir. 2012) (‘‘[I]f new
information indicates to EPA that [a proposed rule]
awaiting approval is inaccurate or not current, . . .
EPA should properly evaluate the new information
and may not simply ignore it without reasoned
explanation of its choice.’’).
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general principle in favor of using more
recent data when available necessarily
requires that the principle be applied to
every detail of a rulemaking, such as
this one, that is being conducted with
an overall purpose of closely replicating
the structure of a previous rulemaking.
Nevertheless, in order to assess the
potential impacts of using more recent
data instead of the CSAPR rulemaking
data set specifically for purposes of
establishing the amount of the
variability limit for the Texas SO2
Trading Program, we have calculated
what the variability limit would be if it
were calculated using the more recent
data set suggested by the commenter. In
the following comment, the commenter
states that this calculation would result
in a variability limit of 2%, but as
discussed in greater detail in our
response to that comment, the
commenter did not actually use the
more recent data set and furthermore
made a material error in the calculation
procedure. When the calculation
procedure is applied to the more recent
data set and the procedural error is
corrected, the result would be a higher
variability limit than we proposed—
specifically, 12% instead of 7%.
Because neither this commenter nor any
other commenter advocates using a
variability limit higher than 7%, and
some other commenters specifically
support use of the variability limit and
resulting assurance level calculated
based on values for Texas in the data set
used in the CSAPR rulemaking, we do
not find it necessary to use an updated
data set in this instance.
Comment: We received a comment
that disagreed with the computational
methodology EPA used to calculate the
variability limit of 7%, arguing that the
limit should instead be 2%. The
commenter purported to recalculate
what a Texas SO2 Trading Program
variability limit would be if it were
based on EPA’s original methodology
used in CSAPR. The commenter
purported to follow the CSAPR
methodology and use up-to-date data
and include only those units that are
expected to be covered by the program.
Response: In this proceeding, we did
not seek comment on or reopen any
aspect of the CSAPR regulations.
However, in order to facilitate our
response to comments on the proposed
amendments to the Texas SO2 Trading
Program, we are responding to the
commenter’s statements concerning the
CSAPR programs as necessary to correct
errors in the commenter’s statements
that may also implicate the commenter’s
statements concerning the Texas SO2
Trading Program.
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We disagree with the commenter’s
assertions that we made an error in the
statistical procedure for calculating the
variability limits used in the CSAPR
trading programs and the variability
limit proposed for the Texas SO2
Trading Program. In fact, the commenter
made a mistake in the calculation of the
variability limits. We have added to the
docket for this action a spreadsheet that
is a modified version of the spreadsheet
the commenter submitted to the docket
as Exhibit 3 to the comments on the
supplemental proposal.184 See the
spreadsheet and the Response to
Comments document found in the
docket associated with this final action
for a detailed explanation of the
calculation and discussion of how
correction of one of the values in the
spreadsheet submitted by the
commenter yields values that confirm
the correctness of our calculations.
The results of the calculations in this
section confirm a CSAPR SO2 variability
limit of 18%. The CSAPR SO2 5%
variability limit asserted by the
commenter results only from using the
incorrect value of 11 for the ‘‘size’’
variable in the CONFIDENCE function.
Comment: We received a comment
stating that EPA’s proposed assurance
level is incorrect because the assurance
level EPA borrows from CSAPR is
simply the sum of the SO2 budget and
the variability limit. Because the EPA
incorrectly incorporated the Texas
variability limit from CSAPR into its
Texas SO2 trading program, and because
EPA’s trading budget of 238,393 tons
itself is based on out-of-date and
inappropriate data, consequently, EPA’s
calculation of its variability limit, which
is simply a percentage of this budget, is
flawed. The commenter argues that had
EPA re-applied the original CSAPR
allocation methodology using updated
information, and removed retired units,
it would have discovered that the
individual allocations in many
instances would have changed
significantly and the overall budget
would have been reduced significantly.
The commenter asserts that the trading
budget would have been reduced from
238,393 tons to 176,332 tons. This
represents a decrease of 62,061 tons or
an approximately 26% change. Adding
a 2% variability to the revised trading
budget of 176,332 tons would result in
an assurance limit of 179,859 tons.
Furthermore, the commenter asserts
that even at this lower emissions level,
the Texas SO2 Trading Program will not
184 See
‘‘EPA modified version of commenters Ex_
3_-_Recalculate_TX_SO2_Trading _
Variability.xlsx,’’ available in the docket for this
action.
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serve to place any regulatory pressure
on Texas SO2 sources to reduce their
emissions because the 2018 SO2
emissions of the participating nonretired units––which should be the only
units participating in the program––
total 157,119 tons. These emissions are
already below the reduced assurance
limit of 179,859 tons commenter
calculated above.
Finally, the commenter states that
because the Texas SO2 Trading Program
does not provide for a declining cap
over time, in comparison to actual
source-by-source BART, even if
corrected to remove retired units it
merely preserves the status quo. As
such, it violates the primary objective of
the national goal of the visibility
program, which is ‘‘the prevention of
any future, and the remedying of any
existing, impairment of visibility in
mandatory class I Federal areas which
impairment results from manmade air
pollution.’’
Response: We disagree with this
comment. The commenter correctly
notes that the proposed assurance level
for the Texas SO2 Trading Program is
derived from the proposed 7%
variability limit and the existing budget
for the Texas SO2 Trading Program.
Based on the commenter’s beliefs that
the variability limit should be 2% and
that the existing budget is unlawfully
high, the commenter asserts that the
proposed assurance level is
consequently also too high. We disagree
both that the variability limit should be
2% and that the existing budget is
unlawfully high. Accordingly, we also
disagree with the commenter’s resulting
assertion that the proposed assurance
level is too high. We have addressed the
commenter’s assertions regarding the
proposed variability limit in response to
other comments. As indicated in those
responses, we continue to believe that
7% is an appropriate value to establish
as the variability limit for the Texas SO2
Trading Program. Likewise, we have
also addressed the commenter’s
assertions regarding the lawfulness of
the existing budget for the Texas SO2
Trading Program in response to other
comments, and the commenter offers no
new criticism of the existing budget that
was not already raised in those previous
comments and addressed in our
responses to those comments.
L. Venue
Comment: We received a comment
asserting that if EPA retains the
intrastate trading program, the agency
must publish a finding that the Texas
SO2 Trading Program ‘‘is based on a
determination of nationwide scope or
effect.’’ 42 U.S.C. 7607(b)(1). The
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commenter asserted that such a finding
is necessary because the Texas SO2
Trading Program is plainly based on
such a determination and should be
reviewed in the United States Court of
Appeals for the District of Columbia.
The commenter claimed that this is for
two reasons. First, in comparing the
Texas SO2 Trading Program to the
Better-than-BART rule to satisfy the
requirements of 40 CFR 51.308(e), EPA
reinterpreted an established and
nationally applicable law. Second, the
commenter claimed that EPA’s unlawful
interpretation of 40 CFR 51.308(e)
amounts to a revision of a nationally
applicable regulation. The commenter
noted that in this comment, the
commenter does not challenge CSAPR
itself or EPA’s CSAPR Better-than-BART
determination, but is instead asserting
that the Texas SO2 Trading Program is
based on those rules, which are
nationally applicable and contain
determinations of nationwide scope and
effect. The commenter asserted that
even if EPA does not publish a finding
that the Texas SO2 Trading Program is
based on a determination of nationwide
scope or effect (and does not withdraw
the FIP promulgating the Texas SO2
Trading Program), subsequent legal
challenges will still be properly venued
in the D.C. Circuit pursuant to 42 U.S.C.
7607(b)(1).
Response: To the extent commenter is
asserting that this action is ‘‘nationally
applicable’’ for purposes of section
307(b), that claim is clearly incorrect. As
the D.C. Circuit has recently explained,
‘‘[t]he court need look only to the face
of the agency action, not its practical
effects, to determine whether an action
is nationally applicable.’’ 185 On its face,
this action is locally applicable because
it applies in only a single state, Texas.
This action has immediate, legal effect
only for certain sources within Texas.
Furthermore, EPA is not adopting a new
interpretation of its regulations at 40
CFR 51.308(e)(2); nor is it correct to
characterize EPA’s application of those
regulations as a revision necessitating
national rulemaking.
EPA also disagrees that this action
must be challenged in the D.C. Circuit
under the ‘‘nationwide scope or effect’’
portion of the venue provision of CAA
section 307(b). In general under section
307(b), an EPA action ‘‘which is locally
or regionally applicable’’ may be filed
‘‘only in the United States Court of
185 Sierra Club v. EPA, 926 F.3d 844, 849 (D.C.
Cir. 2019) (citing Dalton Trucking, 808 F.3d 875,
881 (D.C. Cir. 2015) and Am. Road & Transp.
Builders Ass’n v. EPA, 705 F.3d 453, 456 (D.C. Cir.
2013)).
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Appeals’’ covering that area.186 The
only exception to this mandate is where
the Administrator expressly finds that
the locally or regionally applicable
action is based on a determination of
nationwide scope or effect and
publishes such a finding. The
requirement that the Administrator find
and publish that an otherwise locally or
regionally applicable action is based on
a determination of nationwide scope or
effect is an express statutory
requirement for application of this
venue exception; this exception is not
being invoked by EPA in this action.
EPA has made no finding in this action
and is not publishing any finding that
this action is based on a determination
of nationwide scope or effect. The
absence of either such a finding or
publication of such a finding makes this
venue exception in CAA section 307(b)
inapplicable. Absent an express
statement—and publication—that such
a finding has been made, thus invoking
the venue exception, there can be no
application of that exception.187 CAA
section 307 expressly provides the
Agency full discretion to make its own
determination of whether to invoke the
exception in the Congressionallydictated venue provision.188
Even assuming that a court could
review the lack of such a finding, and
lack of publication of such a finding,
under the arbitrary and capricious
standard,189 the EPA’s decision not to
do so is not unreasonable in this case.
As an initial matter, this action does not
apply to any sources other than those
covered by the program in the State of
Texas. By the same token, the
applicability of the action does not span
multiple federal judicial circuits.
Further, EPA is not proposing or
adopting a new or different
interpretation of its regulations at 40
CFR 51.308(e)(2), nor is it correct to
characterize EPA’s application of those
regulations as a revision necessitating
186 See
42 U.S.C. 7607(b)(1) (emphasis added).
e.g., Lion Oil v. EPA, 792 F.3d 978, 984
n.1 (8th Cir. 2015) (even where EPA, unlike here,
made the necessary finding, the court found no
need to decide application of the venue exception
absent publication of that finding); Texas v. EPA,
829 F.3d 405, 419 (5th Cir. 2016) (‘‘This finding is
an independent, post hoc, conclusion by the agency
about the nature of the determinations; the finding
is not, itself, the determination.’’). See also Dalton
Trucking v. EPA, 808 F.3d 875 (D.C. Cir. 2015).
188 See, e.g., Texas v. EPA, 829 F.3d at 419–20
(the venue exception ‘‘gives the Administrator the
discretion to move venue to the D.C. Circuit by
publishing a finding declaring the Administrator’s
belief that the action is based on a determination
of nationwide scope or effect.’’) (emphasis added).
189 Cf. Sierra Club v. EPA, 926 F.3d 844, 850 (D.C.
Cir. 2019) (declining to resolve whether failure to
make a finding is reviewable but concluding the
absence of such a finding was not arbitrary and
capricious under the facts of the case).
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187 See,
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national rulemaking. The commenter’s
characterization of EPA’s analysis as
conducting a novel comparison of the
Texas program to CSAPR as a BART
alternative is incorrect. In the final
action, EPA is making no such
interpretation that 51.308(e)(2)
authorizes a comparison between two
BART alternatives. Rather, in this final
action, EPA has determined it is
acceptable to continue to rely on the
CSAPR-Better-than-BART analysis
(which included Texas) under the
unique, state-specific circumstances
presented here: That the intrastate
trading program in Texas achieves the
same or better emissions outcomes as
the CSAPR program would have. The
CSAPR Better-than-BART analysis on
which EPA is relying uses presumptive
BART limits—in compliance with
51.308(e)(2)(i)(C)—to demonstrate
greater reasonable progress.
Further, the application of the
nationally applicable 2012 and 2017
CSAPR findings in Texas is a ‘‘locally or
regionally applicable’’ action; that
application does not in itself make the
lack of EPA invoking the exception
unreasonable. While the 2012 finding
was appropriately reviewed (and
upheld) in the D.C. Circuit, and the
2017 finding is currently being reviewed
in the D.C. Circuit, see NPCA v. EPA,
17–1253 (D.C. Cir.), the application of
those findings in Texas is merely one
aspect of this ‘‘locally or regionally
applicable’’ action. In any future action
that may raise similar circumstances as
Texas (and EPA is aware of no such
situation at this time), EPA’s
determination whether to promulgate an
intrastate trading program as a BART
alternative would be based on a record
and analysis specific to the sources in
that state at that time. EPA has
announced no national policy or
interpretation that the decisions in this
action are, or would necessarily be,
applicable in any future action. Thus,
EPA has not reinterpreted or revised its
Regional Haze Rule regulations in this
action, and it is inaccurate to
characterize the mere application of
regulations in a case-specific
circumstance as a revision of those
regulations. Under such circumstances,
EPA’s lack of a finding or publication of
such a finding here is hardly
unreasonable.
Finally, we note that EPA did not
make a finding in the October 17, 2017
final action originally promulgating the
Texas SO2 Trading Program that such
action was based on a determination of
nationwide scope or effect. This action
merely affirms the 2017 action with
certain amendments. Petitioners seeking
judicial review of that action correctly
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filed for review in the Fifth Circuit, see
NPCA v. EPA, No. 17–60828 (5th Cir.),
and that case is being held in abeyance
pending the completion of this action.
No petitions for review of the original
FIP action were filed in the D.C. Circuit,
nor would it have been appropriate to
do so.
M. Other
Comment: One commenter, while
appreciative of the revisions made to the
program by the EPA, expressed concern
that without decreasing emissions
assurance limitations or source-specific
SO2 limits, improved visibility in
protected areas such as the Wichita
Mountains National Wildlife Refuge and
Guadalupe Mountains National Park
will not come to fruition as a result of
more concentrated emissions, even if
they come from fewer sources.
The commenter also expressed
concern for potential impacts to local air
quality. While SO2 emissions from
individual sources may technically meet
state-wide air quality targets, there
remains a potential to negatively impact
local air quality, damaging both
visibility and human health. The
commenter proposed two potential
options that the EPA might consider.
The first is to examine historic
emissions by source and define new
limits on a per-facility basis informed by
historic emissions that met CSAPR for
SO2. This would ensure that even if
some facilities closed, those that
remained operational would not be able
to increase their SO2 emissions. The
second suggested option would be to
implement emission limits that decline
annually. Under a declining emissionslimit scenario, if plants did close,
operational facilities would potentially
still be able to emit more, but to a lesser
extent than if the cap stayed constant.
If all regulated facilities stayed open,
each polluter would have to find
additional methods to decrease SO2
emissions, further improving visibility
and human health.
The commenter also expressed
concern in consideration of units not
participating in the program and their
contribution to the total assurance
provisions. The Texas SO2 Trading
Program will allot 35,000 tons per year
to non-participating sources, effectively
increasing the assurance provision to
290,081 tons per year. While SO2
emissions in Texas have steadily
declined, the Texas SO2 Trading
Program would nearly allow emissions
to return to 2014 levels. The commenter
asserts that it is nonsensical to place a
limit on SO2 emissions that does not
pressure polluters to reduce emissions.
Previously discussed comments argue
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that unlike source-specific BART
control requirements, the Texas SO2
Trading Program allows for emission to
increase compared to recent emission
levels. The state of Texas has clearly
made great strides in decreasing sulfur
emissions from coal-fired powerplants
and the EPA has a responsibility to
Texans and residents of neighboring
states to maintain that progress, not
reverse it.
Response: We appreciate the
commenter’s concerns and suggestions.
With regards to localized impacts, as
previously discussed in response to
other comments, the analysis EPA is
relying on does not show visibility
declines compared to the baseline in
any Class I area under the BART
alternative. Under the Regional Haze
Rule, states are directed to conduct
BART determinations for ‘‘BARTeligible’’ sources that may be
anticipated to cause or contribute to any
visibility impairment in a Class I area.
States are required to identify the level
of control representing BART after
considering the five statutory factors set
out in section 169A(g)(2) for each source
subject-to-BART.190 However, the
Regional Haze Rule also gives states the
flexibility to adopt an emissions trading
program or alternative program in place
of requiring source-specific BART
controls, as long as the alternative
provides greater reasonable progress
towards improving visibility than
BART. As discussed in section I.A. of
this final action, 40 CFR 51.308(e)(2)
specifies how a state must conduct the
demonstration to show that an
alternative program will achieve greater
reasonable progress than the installation
and operation of BART. As discussed in
section III.A.2, we are taking final action
to affirm our determination that the
Texas SO2 Trading Program, as
amended in this final action, meets the
requirements of 40 CFR 51.308(e)(2) as
a BART alternative for SO2 to satisfy
Texas’ Regional Haze obligations.
Comments on EPA’s decision to
authorize alternative measures,
including emissions trading programs,
in the original 1999 Regional Haze Rule
are beyond the scope of this action.
The comment that we have ‘‘allotted’’
35,000 tons to non-participating units is
incorrect. The Texas SO2 Trading
Program only pertains to the particular
set of EGUs specified in Table 1 of this
190 The State must take into consideration the five
statutory factors: (1) The costs of compliance, (2)
the energy and non-air quality environmental
impacts of compliance, (3) any existing control
technology in use at the source, (4) the remaining
useful life of the source, and (5) the degree of
visibility improvement which may reasonably be
anticipated to result.
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final rule. The estimate of emissions
from non-participating units is used as
a conservative assumption to allow for
a comparison of SO2 emissions from
EGUs in Texas under the Texas program
with emissions under CSAPR.
V. Final Action
A. Regional Haze
We are taking final action to affirm
our October 2017 FIP that established
the Texas SO2 intrastate trading program
addressing emissions of SO2 from
certain EGUs in Texas as a BART
alternative, with certain amendments to
the trading program. These amendments
consist of (1) the addition of assurance
provisions; (2) revisions to the
Supplemental Allowance Pool
allocation provisions, including
amendments to the allocation
methodology such that allowance
allocations are in proportion to each
owner’s total emissions in excess of the
owner’s total base allowance
allocations, elimination of the
additional flexibility to transfer
allowances originally offered under the
trading program for Coleto Creek, and
reduction in the number of allowances
that can be allocated from the
Supplemental Allowance Pool in any
year to 16,688 tons plus any allowances
added to the pool in that year from
retired units; (3) termination of the optin provisions; and (4) revision of the
allowance recordation provisions. We
are also correcting a 2-ton error we
made in the allowance allocation for El
Paso Electric’s Newman Plant due to a
unit-identification error, thereby
increasing the trading program budget
from 238,393 tons to 238,395 tons. We
are taking final action to affirm our
determination that the Texas SO2
intrastate trading program, as amended
in this final rulemaking, satisfies the
Regional Haze Rule requirements for
BART alternatives at 40 CFR
51.308(e)(2). We are also taking final
action to affirm our October 2017
approval of Texas’ SIP determination
that no Texas sources are subject to
BART for PM.
B. Interstate Visibility Transport
We are taking final action to affirm
our finding that Texas’ participation in
CSAPR to satisfy NOX BART and our
SO2 intrastate trading program, as
amended in this final rulemaking, fully
address Texas’ interstate visibility
transport obligations for the following
six NAAQS: (1) 1997 8-hour ozone; (2)
1997 PM2.5 (annual and 24 hour); (3)
2006 PM2.5 (24-hour); (4) 2008 8-hour
ozone; (5) 2010 1-hour NO2; and (6)
2010 1-hour SO2. Texas’ SO2 emission
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49213
reductions under the Texas SO2
intrastate trading program, as amended
in today’s final rulemaking, are
consistent with the level of emission
reductions relied upon by other states
during Regional Haze consultation, and
the intrastate trading program is
therefore adequate to ensure that
emissions from Texas do not interfere
with measures to protect visibility in
nearby states in accordance with CAA
section 110(a)(2)(D)(i)(II).
VI. Statutory and Executive Order
Reviews
Additional information about these
statutes and Executive Orders can be
found at https://www2.epa.gov/lawsregulations/laws-and-executive-orders.
A. Executive Order 12866: Regulatory
Planning and Review and Executive
Order 13563: Improving Regulation and
Regulatory Review
This action is not a significant
regulatory action and was therefore not
submitted to the Office of Management
and Budget (OMB) for review.
B. Executive Order 13771: Reducing
Regulations and Controlling Regulatory
Costs
This action is not an Executive Order
13771 regulatory action because this
action is not significant under Executive
Order 12866.
C. Paperwork Reduction Act
This action does not impose any new
information collection burden under the
PRA. The Office of Management and
Budget (OMB) has previously approved
the information collection activities
contained in the existing Texas SO2
Trading Program regulations as part of
the most recent information collection
request (ICR) renewal for the CSAPR
trading programs and has assigned OMB
control number 2060–0667. The
revisions approved in this action do not
alter the information collection
activities contained in the existing
regulations.
D. Regulatory Flexibility Act
I certify that this action will not have
a significant impact on a substantial
number of small entities. In making this
determination, the impact of concern is
any significant adverse economic
impact on small entities. An agency may
certify that a rule will not have a
significant economic impact on a
substantial number of small entities if
the rule relieves regulatory burden, has
no net burden or otherwise has a
positive economic effect on the small
entities subject to the rule. This rule
does not impose any requirements or
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create impacts on small entities. This
FIP action under Section 110 of the
CAA will not create any new
requirement with which small entities
must comply. Accordingly, it affords no
opportunity for the EPA to fashion for
small entities less burdensome
compliance or reporting requirements or
timetables or exemptions from all or
part of the rule. We have therefore
concluded that, this action will have no
net regulatory burden for all directly
regulated small entities.
E. Unfunded Mandates Reform Act
(UMRA)
This action does not contain an
unfunded mandate of $100 million or
more as described in UMRA, 2 U.S.C.
1531–1538, and does not significantly or
uniquely affect small governments.
F. Executive Order 13132: Federalism
This action does not have federalism
implications. It will not have substantial
direct effects on the states, on the
relationship between the national
government and the states, or on the
distribution of power and
responsibilities among the various
levels of government.
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G. Executive Order 13175: Consultation
and Coordination With Indian Tribal
Governments
This rule does not have tribal
implications, as specified in Executive
Order 13175. It will not have substantial
direct effects on tribal governments.
Thus, Executive Order 13175 does not
apply to this rule.
H. Executive Order 13045: Protection of
Children From Environmental Health
Risks and Safety Risks
Executive Order 13045: Protection of
Children From Environmental Health
Risks and Safety Risks 191 applies to any
rule that: (1) Is determined to be
economically significant as defined
under Executive Order 12866; and (2)
concerns an environmental health or
safety risk that we have reason to
believe may have a disproportionate
effect on children. EPA interprets E.O.
13045 as applying only to those
regulatory actions that concern health or
safety risks, such that the analysis
required under Section 5–501 of the
E.O. has the potential to influence the
regulation. This action is not subject to
Executive Order 13045 because it is not
economically significant as defined in
Executive Order 12866, and because the
EPA does not believe the environmental
health or safety risks addressed by this
action present a disproportionate risk to
191 62
FR 19885 (Apr. 23, 1997).
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children. This action is not subject to
E.O. 13045 because it implements
specific standards established by
Congress in statutes. However, to the
extent this rule will limit emissions of
SO2, the rule will have a beneficial
effect on children’s health by reducing
air pollution.
PART 97—FEDERAL NOX BUDGET
TRADING PROGRAM, CAIR NOX AND
SO2 TRADING PROGRAMS, CSAPR
NOX AND SO2 TRADING PROGRAMS,
AND TEXAS SO2 TRADING PROGRAM
I. Executive Order 13211: Actions That
Significantly Affect Energy Supply,
Distribution, or Use
Authority: 42 U.S.C. 7401, 7403, 7410,
7426, 7491, 7601, and 7651, et seq.
This action is not subject to Executive
Order 13211 (66 FR 28355 (May 22,
2001)), because it is not a significant
regulatory action under Executive Order
12866.
J. National Technology Transfer and
Advancement Act (NTTAA)
This rulemaking does not involve
technical standards.
K. Executive Order 12898: Federal
Actions To Address Environmental
Justice in Minority Populations and
Low-Income Populations
The EPA believes that this action does
not have disproportionately high and
adverse human health or environmental
effects on minority populations, lowincome populations and/or indigenous
peoples, as specified in Executive Order
12898 (59 FR 7629, February 16, 1994).
We have determined that this rule will
not have disproportionately high and
adverse human health or environmental
effects on minority or low-income
populations because it increases the
level of environmental protection for all
affected populations without having any
disproportionately high and adverse
human health or environmental effects
on any population, including any
minority or low-income population. The
rule limits emissions of SO2 from
certain facilities in Texas.
L. Congressional Review Act (CRA)
This rule is exempt from the CRA
because it is a rule of particular
applicability.
List of Subjects in 40 CFR Part 97
Environmental protection,
Administrative practice and procedure,
Air pollution control, Incorporation by
reference, Nitrogen dioxide, Reporting
and recordkeeping requirements, Sulfur
oxides.
Andrew Wheeler,
Administrator.
For the reasons stated in the
preamble, part 97 of chapter I of title 40
of the Code of Federal Regulations is
amended as follows:
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1. The authority citation for part 97 is
revised to read as follows:
■
Subpart FFFFF—TEXAS SO2 TRADING
PROGRAM
2. Amend § 97.902 by:
a. In the definitions of ‘‘Acid Rain
Program’’, ‘‘Allowance Management
System’’, and ‘‘Allowance Management
System account’’, capitalizing the first
three words;
■ b. Adding in alphabetical order a
definition of ‘‘Assurance account’’;
■ c. In the definition of ‘‘Authorized
account representative’’, capitalizing the
word ‘‘trading’’ the first time it appears;
■ d. Adding in alphabetical order
definitions of ‘‘Common designated
representative’’, ‘‘Common designated
representative’s assurance level’’, and
‘‘Common designated representative’s
share’’; and
■ e. Revising the definitions of ‘‘General
account’’ and ‘‘Texas SO2 Trading
Program allowance deduction’’.
The additions and revisions read as
follows:
■
■
§ 97.902
Definitions.
*
*
*
*
*
Assurance account means an
Allowance Management System
account, established by the
Administrator under § 97.925(b)(3) for
certain owners and operators of a group
of one or more Texas SO2 Trading
Program sources and units, in which are
held Texas SO2 Trading Program
allowances available for use for a
control period in a given year in
complying with the Texas SO2 Trading
Program assurance provisions in
accordance with §§ 97.906 and 97.925.
*
*
*
*
*
Common designated representative
means, with regard to a control period
in a given year, a designated
representative where, as of April 1
immediately after the allowance transfer
deadline for such control period, the
same natural person is authorized under
§§ 97.913(a) and 97.915(a) as the
designated representative for a group of
one or more Texas SO2 Trading Program
sources and units.
Common designated representative’s
assurance level means, with regard to a
specific common designated
representative and control period in a
given year for which the State assurance
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level is exceeded as described in
§ 97.906(c)(2)(iii):
(1) The amount (rounded to the
nearest allowance) equal to the sum of
the total amount of Texas SO2 Trading
Program allowances allocated for such
control period under § 97.911, or
deemed to have been allocated under
paragraph (2) of this definition, to the
group of one or more Texas SO2 Trading
Program units having the common
designated representative for such
control period multiplied by the sum for
such control period of the Texas SO2
Trading Program budget under
§ 97.910(a)(1) and the variability limit
under § 97.910(b) and divided by the
sum of the total amount of Texas SO2
Trading Program allowances allocated
for such control period under § 97.911,
or deemed to have been allocated under
paragraph (2) of this definition, to all
Texas SO2 Trading Program units;
(2) Provided that, in the case of a
Texas SO2 Trading Program unit that
operates during, but has no amount of
Texas SO2 Trading Program allowances
allocated under § 97.911 for, such
control period, the unit shall be treated,
solely for purposes of this definition, as
being allocated the amount of Texas SO2
Trading Program allowances shown for
the unit in § 97.911(a)(1).
Common designated representative’s
share means, with regard to a specific
common designated representative for a
control period in a given year and the
total amount of SO2 emissions from all
Texas SO2 Trading Program units during
such control period, the total tonnage of
SO2 emissions during such control
period from the group of one or more
Texas SO2 Trading Program units
having the common designated
representative for such control period.
*
*
*
*
*
General account means an Allowance
Management System account,
established under this subpart, that is
not a compliance account or an
assurance account.
*
*
*
*
*
Texas SO2 Trading Program
allowance deduction or deduct Texas
SO2 Trading Program allowances means
the permanent withdrawal of Texas SO2
Trading Program allowances by the
Administrator from a compliance
account (e. g., in order to account for
compliance with the Texas SO2 Trading
Program emissions limitation) or from
an assurance account (e. g., in order to
account for compliance with the
assurance provisions under §§ 97.906
and 97.925).
*
*
*
*
*
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§ 97.904
[Amended]
3. Amend § 97.904 by removing and
reserving paragraph (b).
■ 4. Amend § 97.906 by:
■ a. In paragraph (b)(2), adding the
words ‘‘and assurance provisions’’ after
the words ‘‘emissions limitation’’;
■ b. Redesignating paragraphs (c)(2)
through (6) as paragraphs (c)(3) through
(7) and adding a new paragraph (c)(2);
■ c. Revising newly redesignated
paragraph (c)(3); and
■ d. In newly redesignated paragraph
(c)(4)(ii), removing the text ‘‘paragraph
(c)(1)(ii)(A)’’ and adding in its place the
text ‘‘paragraphs (c)(1)(ii)(A) and
(c)(2)(i) through (iii)’’.
The additions and revision read as
follows:
■
§ 97.906
General provisions.
*
*
*
*
*
(c) * * *
(2) Texas SO2 Trading Program
assurance provisions. (i) If total SO2
emissions during a control period in a
given year from all Texas SO2 Trading
Program units at Texas SO2 Trading
Program sources exceed the State
assurance level, then the owners and
operators of such sources and units in
each group of one or more sources and
units having a common designated
representative for such control period,
where the common designated
representative’s share of such SO2
emissions during such control period
exceeds the common designated
representative’s assurance level for such
control period, shall hold (in the
assurance account established for the
owners and operators of such group)
Texas SO2 Trading Program allowances
available for deduction for such control
period under § 97.925(a) in an amount
equal to two times the product (rounded
to the nearest whole number), as
determined by the Administrator in
accordance with § 97.925(b), of
multiplying—
(A) The quotient of the amount by
which the common designated
representative’s share of such SO2
emissions exceeds the common
designated representative’s assurance
level divided by the sum of the
amounts, determined for all common
designated representatives for such
sources and units for such control
period, by which each common
designated representative’s share of
such SO2 emissions exceeds the
respective common designated
representative’s assurance level; and
(B) The amount by which total SO2
emissions from all Texas SO2 Trading
Program units at Texas SO2 Trading
Program sources for such control period
exceed the State assurance level.
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(ii) The owners and operators shall
hold the Texas SO2 Trading Program
allowances required under paragraph
(c)(2)(i) of this section, as of midnight of
November 1 (if it is a business day), or
midnight of the first business day
thereafter (if November 1 is not a
business day), immediately after the
year of such control period.
(iii) Total SO2 emissions from all
Texas SO2 Trading Program units at
Texas SO2 Trading Program sources
during a control period in a given year
exceed the State assurance level if such
total SO2 emissions exceed the sum, for
such control period, of the Texas SO2
Trading Program budget under
§ 97.910(a)(1) and the variability limit
under § 97.910(b).
(iv) It shall not be a violation of this
subpart or of the Clean Air Act if total
SO2 emissions from all Texas SO2
Trading Program units at Texas SO2
Trading Program sources during a
control period exceed the State
assurance level or if a common
designated representative’s share of total
SO2 emissions from the Texas SO2
Trading Program units at Texas SO2
Trading Program sources during a
control period exceeds the common
designated representative’s assurance
level.
(v) To the extent the owners and
operators fail to hold Texas SO2 Trading
Program allowances for a control period
in a given year in accordance with
paragraphs (c)(2)(i) through (iii) of this
section,
(A) The owners and operators shall
pay any fine, penalty, or assessment or
comply with any other remedy imposed
under the Clean Air Act; and
(B) Each Texas SO2 Trading Program
allowance that the owners and operators
fail to hold for such control period in
accordance with paragraphs (c)(2)(i)
through (iii) of this section and each day
of such control period shall constitute a
separate violation of this subpart and
the Clean Air Act.
(3) Compliance periods. (i) A Texas
SO2 Trading Program unit shall be
subject to the requirements under
paragraph (c)(1) of this section for the
control period starting on January 1,
2019 and for each control period
thereafter.
(ii) A Texas SO2 Trading Program unit
shall be subject to the requirements
under paragraph (c)(2) of this section for
the control period starting on January 1,
2021 and for each control period
thereafter.
*
*
*
*
*
■ 5. Amend § 97.910 by:
■ a. Revising the section heading;
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b. In paragraph (a)(1), removing
‘‘238,393’’ and adding in its place
‘‘238,395’’; and
■ c. Adding paragraphs (b) and (c).
The revision and additions read as
follows:
■
§ 97.910 Texas SO2 Trading Program
budget, Supplemental Allowance Pool
budget, and variability limit.
*
*
*
*
*
(b) The variability limit for the Texas
SO2 Trading Program budget for the
control periods in 2021 and thereafter is
16,688 tons.
(c) The Texas SO2 Trading Program
budget in paragraph (a)(1) of this section
does not include any tons in the
Supplemental Allowance Pool budget in
paragraph (a)(2) of this section or the
variability limit in paragraph (b) of this
section.
■ 6. Amend § 97.911 by:
■ a. Revising paragraph (a)(1);
■ b. In paragraph (a)(2), removing the
text ‘‘allocated under the Texas
Supplemental Allowance Pool under 40
CFR 97.912.’’ and adding in its place the
text ‘‘transferred to the Supplemental
Allowance Pool for potential allocation
in accordance with § 97.912.’’;
■ c. Removing and reserving paragraph
(b);
d. In paragraph (c)(1), removing the
text ‘‘paragraph (a) or (b)’’ and adding in
its place the text ‘‘paragraph (a)’’; and
■ e. Revising paragraph (c)(5).
The revisions read as follows:
■
§ 97.911 Texas SO2 Trading Program
allowance allocations.
(a)(1) Except as provided in paragraph
(a)(2) of this section, Texas SO2 Trading
Program allowances from the Texas SO2
Trading Program budget will be
allocated, for the control periods in
2019 and each year thereafter, as
provided in Table 1 to this paragraph
(a)(1):
TABLE 1 TO PARAGRAPH (a)(1)—TEXAS SO2 TRADING PROGRAM ALLOCATIONS
Texas SO2 trading program units
ORIS code
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Big Brown Unit 1 ..........................................................
Big Brown Unit 2 ..........................................................
Coleto Creek Unit 1 ......................................................
Fayette (Sam Seymour) Unit 1 ....................................
Fayette (Sam Seymour) Unit 2 ....................................
Graham Unit 2 ..............................................................
HW Pirkey Unit 1 ..........................................................
Harrington Unit 061B ....................................................
Harrington Unit 062B ....................................................
Harrington Unit 063B ....................................................
JT Deely Unit 1 .............................................................
JT Deely Unit 2 .............................................................
Limestone Unit 1 ..........................................................
Limestone Unit 2 ..........................................................
Martin Lake Unit 1 ........................................................
Martin Lake Unit 2 ........................................................
Martin Lake Unit 3 ........................................................
Monticello Unit 1 ...........................................................
Monticello Unit 2 ...........................................................
Monticello Unit 3 ...........................................................
Newman Unit 2 .............................................................
Newman Unit 3 .............................................................
Newman Unit **4 ..........................................................
Newman Unit **5 ..........................................................
Sandow Unit 4 ..............................................................
Sommers Unit 1 ............................................................
Sommers Unit 2 ............................................................
Stryker Unit ST2 ...........................................................
Tolk Unit 171B ..............................................................
Tolk Unit 172B ..............................................................
WA Parish Unit WAP4 ..................................................
WA Parish Unit WAP5 ..................................................
WA Parish Unit WAP6 ..................................................
WA Parish Unit WAP7 ..................................................
Welsh Unit 1 .................................................................
Welsh Unit 2 .................................................................
Welsh Unit 3 .................................................................
Wilkes Unit 1 ................................................................
Wilkes Unit 2 ................................................................
Wilkes Unit 3 ................................................................
*
*
*
*
*
(c) * * *
(5) With regard to the Texas SO2
Trading Program allowances that are not
recorded, or that are deducted as an
incorrect allocation, in accordance with
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3497
3497
6178
6179
6179
3490
7902
6193
6193
6193
6181
6181
298
298
6146
6146
6146
6147
6147
6147
3456
3456
3456
3456
6648
3611
3611
3504
6194
6194
3470
3470
3470
3470
6139
6139
6139
3478
3478
3478
Texas SO2
trading
program
allocation
(tons)
8,473
8,559
9,057
7,979
8,019
226
8,882
5,361
5,255
5,055
6,170
6,082
12,081
12,293
12,024
11,580
12,236
8,598
8,795
12,216
1
1
2
2
8,370
55
7
145
6,900
7,062
3
9,580
8,900
7,653
6,496
7,050
7,208
14
2
3
Affiliated
ownership group
Vistra Energy..
Vistra Energy.
Vistra Energy.
Lower Colorado River Authority/City of Austin.
Lower Colorado River Authority/City of Austin.
Vistra Energy.
American Electric Power.
Xcel Energy.
Xcel Energy.
Xcel Energy.
City of San Antonio.
City of San Antonio.
NRG Energy.
NRG Energy.
Vistra Energy.
Vistra Energy.
Vistra Energy.
Vistra Energy.
Vistra Energy.
Vistra Energy.
El Paso Electric.
El Paso Electric.
El Paso Electric.
El Paso Electric.
Vistra Energy.
City of San Antonio.
City of San Antonio.
Vistra Energy.
Xcel Energy.
Xcel Energy.
NRG Energy.
NRG Energy.
NRG Energy.
NRG Energy.
American Electric Power.
American Electric Power.
American Electric Power.
American Electric Power.
American Electric Power.
American Electric Power.
paragraphs (c)(2) and (3) of this section,
the Administrator will transfer such
Texas SO2 Trading Program allowances
to the Supplemental Allowance Pool for
potential allocation in accordance with
§ 97.912.
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7. Amend § 97.912 by:
a. In paragraph (a) introductory text,
removing the text ‘‘each control period
in 2019 and thereafter,’’ and adding in
its place the text ‘‘the control periods in
2019 and 2020,’’;
■
■
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b. In paragraph (a)(1), removing the
text ‘‘each subsequent February 15,’’
and adding in its place the text
‘‘February 15, 2021,’’, and removing the
second period and adding in its place
the text ‘‘and recorded under § 97.921.’’;
■ c. In paragraph (a)(2), removing the
period and adding in its place the text
‘‘and recorded under § 97.921.’’;
■ d. In paragraph (a)(3)(ii)(A), removing
the text ‘‘paragraph (b)’’ and adding in
its place the text ‘‘paragraph (d)’’;
■ e. In paragraph (a)(3)(ii)(B), removing
the text ‘‘paragraph (b)’’ wherever it
appears and adding in its place the text
‘‘paragraph (d)’’, and adding a new
sentence between the existing first and
second sentences;
■ f. In paragraph (a)(3)(iii), removing the
text ‘‘paragraph (b)’’ and adding in its
place the text ‘‘paragraph (d)’’;
■ g. Redesignating paragraphs (a)(4) and
(b) as paragraphs (c) and (d) and adding
a new paragraph (b); and
■ h. Revising newly redesignated
paragraph (d).
The addition and revision read as
follows:
■
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§ 97.912 Texas SO2 Trading Program
Supplemental Allowance Pool.
(a) * * *
(3) * * *
(ii) * * *
(B) * * * The Administrator will
adjust the sources’ allocations up or
down by one allowance, starting with
the largest allocation and continuing in
descending order, as necessary to cause
the sum of the sources’ allocations to
equal the total number of allowances in
the Supplemental Allowance Pool
available for allocation under paragraph
(d) of this section that remain after any
allocation under paragraph (a)(3)(i) of
this section. * * *
*
*
*
*
*
(b) For each control period in 2021
and thereafter, the Administrator will
allocate Texas SO2 Trading Program
allowances from the Texas SO2 Trading
Program Supplemental Allowance Pool
as follows:
(1) For each control period, the
Administrator will assign each Texas
SO2 Trading Program unit to an
affiliated ownership group reflecting the
unit’s ownership as of December 31 of
the control period. The affiliated
ownership group assignments for each
control period will be as shown in
§ 97.911(a)(1) except that the
Administrator will revise the
assignments, based on the information
required to be submitted in accordance
with § 97.915(c) and any other
information available to the
Administrator, as necessary to reflect
any ownership transfer resulting in a
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50% or greater ownership share of a
unit being held by a new owner that the
Administrator determines is not
affiliated with the previous holder of a
50% or greater ownership share of the
unit.
(2) No later than February 15, 2022
and each subsequent February 15, the
Administrator will review all the
quarterly SO2 emissions reports
provided under § 97.934(d) for each
Texas SO2 Trading Program unit for the
previous control period. The
Administrator will identify each
affiliated ownership group of Texas SO2
Trading Program units as of December
31 of such control period for which the
total amount of emissions reported for
the units in the group for that control
period exceeds the total amount of
allowances allocated to the units in the
group for that control period under
§ 97.911 and recorded under § 97.921.
(3) For each affiliated ownership
group of Texas SO2 Trading Program
units identified under paragraph (b)(2)
of this section, the Administrator will
calculate the amount by which the total
amount of reported emissions for that
control period exceeds the total amount
of allowances allocated for that control
period under § 97.911 and recorded
under § 97.921.
(4)(i) The Administrator will allocate
and record allowances from the
Supplemental Allowance Pool as
follows:
(A) If the total for all such affiliated
ownership groups of the amounts
calculated under paragraph (b)(3) of this
section is less than or equal to the total
number of allowances in the
Supplemental Allowance Pool available
for allocation under paragraph (d) of
this section, then each such group’s
allocation of allowances from the
Supplemental Allowance Pool shall
equal to the amount calculated for the
group under paragraph (b)(3) of this
section.
(B) If the total for all such affiliated
ownership groups of the amounts
calculated under paragraph (b)(3) of this
section is greater than the total number
of allowances in the Supplemental
Allowance Pool available for allocation
under paragraph (d) of this section, then
the Administrator will calculate each
such group’s allocation of allowances
from the Supplemental Allowance Pool
by dividing the amount calculated
under paragraph (b)(3) of this section for
the group by the sum of the amounts
calculated under paragraph (b)(3) of this
section for all such groups, then
multiplying by the number of
allowances in the Supplemental
Allowance Pool available for allocation
under paragraph (d) of this section and
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49217
rounding to the nearest allowance. The
Administrator will adjust the groups’
allocations up or down by one
allowance, starting with the largest
allocation and continuing in descending
order, as necessary to cause the sum of
the groups’ allocations to equal the total
number of allowances in the
Supplemental Allowance Pool available
for allocation under paragraph (d) of
this section.
(C) When an affiliated ownership
group receives an allocation of
allowances under paragraph (b)(4)(i)(A)
or (B) of this section, each source in the
group whose emissions during the
control period for which allowances are
being allocated exceed the amount of
allowances allocated to the source
under § 97.911 and recorded under
§ 97.921 will receive a share of the
group’s allocation. The Administrator
will compute each such source’s share
by dividing the amount of the source’s
emissions during the control period
exceeding the source’s allocation under
§ 97.911 by the sum for all such sources
of the amounts of the sources’ emissions
during the control period exceeding the
sources’ allocations under § 97.911, then
multiplying by the group’s allocation
under paragraph (b)(4)(i)(A) or (B) of
this section and rounding to the nearest
allowance. The Administrator will
adjust the sources’ allocations up or
down by one allowance, starting with
the largest allocation and continuing in
descending order, as necessary to cause
the sum of the sources’ allocations to
equal the group’s allocation. The
Administrator will then record the
calculated allocations of allowances in
the applicable sources’ compliance
accounts.
(ii) Any unallocated allowances
remaining in the Supplemental
Allowance Pool after the allocations
determined under paragraph (b)(4)(i) of
this section will be maintained in the
Supplemental Allowance Pool. These
allowances will be available for
allocation by the Administrator in
subsequent control periods to the extent
consistent with paragraph (d) of this
section.
*
*
*
*
*
(d) The total amount of allowances in
the Supplemental Allowance Pool
available for allocation for a control
period is equal to the sum of the
Supplemental Allowance Pool budget
under § 97.910(a)(2), any allowances
from retired units pursuant to
§ 97.911(a)(2) and from corrections
pursuant to § 97.911(c)(5), and any
allowances maintained in the
Supplemental Allowance Pool pursuant
to paragraph (a)(3)(iii) or (b)(4)(ii) of this
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Federal Register / Vol. 85, No. 156 / Wednesday, August 12, 2020 / Rules and Regulations
section, provided that if the number of
allowances in the Supplemental
Allowance Pool exceeds the applicable
limit for the control period under
paragraph (d)(1) or (d)(2) of this section,
then the Administrator may only
allocate allowances up to such
applicable limit.
(1) For the control periods in 2019
and 2020, the total amount of
allowances allocated from the
Supplemental Allowance Pool for a
control period may not exceed by more
than 44,711 tons the sum of the
Supplemental Allowance Pool budget
under § 97.910(a)(2) and any portion of
the Texas SO2 Trading Program budget
under § 97.910(a)(1) not otherwise
allocated for that control period under
§ 97.911(a)(1).
(2) For each control period in 2021
and thereafter, the total amount of
allowances allocated from the
Supplemental Allowance Pool for a
control period may not exceed the sum
of the variability limit under § 97.910(b)
and any portion of the Texas SO2
Trading Program budget under
§ 97.910(a)(1) not otherwise allocated
for that control period under
§ 97.911(a)(1).
■ 8. Amend § 97.913 by revising
paragraph (c) to read as follows:
§ 97.913 Authorization of designated
representative and alternate designated
representative.
*
*
*
*
*
(c) Except in this section, § 97.902,
and §§ 97.914 through 97.918, whenever
the term ‘‘designated representative’’ (as
distinguished from the term ‘‘common
designated representative’’) is used in
this subpart, the term shall be construed
to include the designated representative
or any alternate designated
representative.
§ 97.915
[Amended]
9. Amend § 97.915 paragraph (d)
introductory text and paragraph (d)(1)
by removing the text ‘‘(see § 97.904(b))’’.
■ 10. Amend § 97.920 by:
■ a. Revising the section heading;
■ b. Redesignating paragraphs (b)
through (d) as paragraphs (c) through (e)
and adding a new paragraph (b);
■ c. In newly redesignated paragraph
(c)(2)(i) introductory text, removing the
text ‘‘paragraph (b)(1)’’ and adding in its
place the text ‘‘paragraph (c)(1)’’;
■ d. In newly redesignated paragraph
(c)(2)(ii), removing the text ‘‘paragraph
(b)(5)’’ and adding in its place the text
‘‘paragraph (c)(5)’’;
■ e. In newly redesignated paragraphs
(c)(3)(i) and (ii), removing the text
‘‘paragraph (b)(1)’’ and adding in its
place the text ‘‘paragraph (c)(1)’’;
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■
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f. In newly redesignated paragraph
(c)(4)(i), removing the text ‘‘paragraph
(b)(1)’’ wherever it appears and adding
in its place the text ‘‘paragraph (c)(1)’’;
■ g. In newly redesignated paragraph
(c)(4)(ii), removing the text ‘‘paragraph
(b)(4)(i)’’ and adding in its place the text
‘‘paragraph (c)(4)(i)’’;
■ h. In newly redesignated paragraph
(c)(5)(iii) introductory text and
paragraph (c)(5)(iii)(C), removing the
text ‘‘paragraph (b)(5)(i)’’ and adding in
its place the text ‘‘paragraph (c)(5)(i)’’;
■ i. In newly redesignated paragraph
(c)(5)(iii)(D), removing the text
‘‘97.920(b)(5)(iv)’’ and adding in its
place the text ‘‘97.920(c)(5)(iv)’’;
■ j. In newly redesignated paragraph
(c)(5)(iii)(E), removing the text
‘‘97.920(b)(5)(iv),’’ and adding in its
place the text ‘‘97.920(c)(5)(iv),’’, and
removing the text ‘‘97.920(b)(5)’’ and
adding in its place the text
‘‘97.920(c)(5)’’;
■ k. In newly redesignated paragraph
(c)(5)(iv), removing the text ‘‘paragraph
(b)(5)(iii)’’ and adding in its place the
text ‘‘paragraph (c)(5)(iii)’’;
■ l. In newly redesignated paragraph
(c)(5)(v), removing the text ‘‘paragraph
(b)(5)(iii)(D)’’ and adding in its place the
text ‘‘paragraph (c)(5)(iii)(D)’’, and
removing the text ‘‘paragraph (b)(5)(iv)’’
and adding in its place the text
‘‘paragraph (c)(5)(iv)’’;
■ m. In newly redesignated paragraph
(d), removing the text ‘‘paragraphs (a)
and (b)’’ and adding in its place the text
‘‘paragraphs (a), (b), and (c)’’; and
■ n. In newly redesignated paragraph
(e), removing the text ‘‘paragraphs
(b)(2)(ii) and (b)(5)’’ and adding in its
place the text ‘‘paragraphs (c)(2)(ii) and
(c)(5)’’.
The revision and addition read as
follows:
(b) By July 1, 2019, the Administrator
will record in each Texas SO2 Trading
Program source’s compliance account
the Texas SO2 Trading Program
allowances allocated to the Texas SO2
Trading Program units at the source in
accordance with § 97.911(a) for the
control period in the fourth year after
the year of the applicable recordation
deadline under this paragraph, unless
provided otherwise in the
Administrator’s approval of a SIP
revision replacing the provisions of this
subpart.
(c) By February 15, 2020, and
February 15 of each year thereafter, the
Administrator will record in each Texas
SO2 Trading Program source’s
compliance account the allowances
allocated from the Texas SO2 Trading
Program Supplemental Allowance Pool
in accordance with § 97.912 for the
control period in the year of the
applicable recordation deadline under
this paragraph, unless provided
otherwise in the Administrator’s
approval of a SIP revision replacing the
provisions of this subpart.
*
*
*
*
*
(f) Notwithstanding paragraphs (a)
and (b) of this section, with respect to
the Texas SO2 Trading Program
allowances allocated to Newman Unit
**5 in accordance with § 97.911(a) for
the control periods in 2019, 2020, 2021,
2022, 2023, and 2024, the Administrator
will record the allowances in the
source’s compliance account by
December 31, 2020, unless provided
otherwise in the Administrator’s
approval of a SIP revision replacing the
provisions of this subpart.
■ 12. Add § 97.925 to read as follows:
§ 97.920 Establishment of compliance
accounts, assurance accounts, and general
accounts.
(a) Availability for deduction. Texas
SO2 Trading Program allowances are
available to be deducted for compliance
with the Texas SO2 Trading Program
assurance provisions for a control
period in a given year by the owners
and operators of a group of one or more
Texas SO2 Trading Program sources and
units only if the Texas SO2 Trading
Program allowances:
(1) Were allocated for a control period
in a prior year or the control period in
the given year or in the immediately
following year; and
(2) Are held in the assurance account,
established by the Administrator for
such owners and operators of such
group of Texas SO2 Trading Program
sources and units under paragraph (b)(3)
of this section, as of the deadline
established in paragraph (b)(4) of this
section.
■
*
*
*
*
*
(b) Assurance accounts. The
Administrator will establish assurance
accounts for certain owners and
operators and States in accordance with
§ 97.925(b)(3).
*
*
*
*
*
■ 11. Amend § 97.921 by:
■ a. In paragraph (a), removing the
second sentence;
■ b. Revising paragraphs (b) and (c);
■ c. Removing and reserving paragraph
(d); and
■ d. Adding paragraph (f).
The revisions and addition read as
follows:
§ 97.921 Recordation of Texas SO2
Trading Program allowance allocations.
*
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*
*
Frm 00050
*
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*
Sfmt 4700
§ 97.925 Compliance with Texas SO2
Trading Program assurance provisions.
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(b) Deductions for compliance. The
Administrator will deduct Texas SO2
Trading Program allowances available
under paragraph (a) of this section for
compliance with the Texas SO2 Trading
Program assurance provisions for a
control period in a given year in
accordance with the following
procedures:
(1) By June 1, 2022 and June 1 of each
year thereafter, the Administrator will:
(i) Calculate the total SO2 emissions
from all Texas SO2 Trading Program
units at Texas SO2 Trading Program
sources during the control period in the
year before the year of this calculation
deadline and the amount, if any, by
which such total SO2 emissions exceed
the State assurance level as described in
§ 97.906(c)(2)(iii).
(ii) [Reserved]
(2) If the calculations under paragraph
(b)(1)(i) of this section indicate that the
total SO2 emissions from all Texas SO2
Trading Program units at Texas SO2
Trading Program sources during such
control period exceed the State
assurance level as described in
§ 97.906(c)(2)(iii):
(i) [Reserved]
(ii) By August 1 immediately after the
deadline for the calculations under
paragraph (b)(1)(i) of this section, the
Administrator will calculate, for such
control period and each common
designated representative for such
control period for a group of one or
more Texas SO2 Trading Program
sources and units, the common
designated representative’s share of the
total SO2 emissions from all Texas SO2
Trading Program units at Texas SO2
Trading Program sources, the common
designated representative’s assurance
level, and the amount (if any) of Texas
SO2 Trading Program allowances that
the owners and operators of such group
of sources and units must hold in
accordance with the calculation formula
in § 97.906(c)(2)(i). By each such August
1, the Administrator will promulgate a
notice of data availability of the results
of the calculations under this paragraph
and paragraph (b)(1)(i) of this section,
including separate calculations of the
SO2 emissions from each Texas SO2
Trading Program source.
(iii) The Administrator will provide
an opportunity for submission of
objections to the calculations referenced
by the notice of data availability
required in paragraph (b)(2)(ii) of this
section.
(A) Objections shall be submitted by
the deadline specified in such notice
and shall be limited to addressing
whether the calculations referenced in
the notice required under paragraph
(b)(2)(ii) of this section are in
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accordance with § 97.906(c)(2)(iii),
§§ 97.906(b) and 97.930 through 97.935,
the definitions of ‘‘common designated
representative’’, ‘‘common designated
representative’s assurance level’’, and
‘‘common designated representative’s
share’’ in § 97.902, and the calculation
formula in § 97.906(c)(2)(i).
(B) The Administrator will adjust the
calculations to the extent necessary to
ensure that they are in accordance with
the provisions referenced in paragraph
(b)(2)(iii)(A) of this section. By October
1 immediately after the promulgation of
such notice, the Administrator will
promulgate a notice of data availability
of the calculations incorporating any
adjustments that the Administrator
determines to be necessary and the
reasons for accepting or rejecting any
objections submitted in accordance with
paragraph (b)(2)(iii)(A) of this section.
(3) The Administrator will establish
one assurance account for each set of
owners and operators referenced, in the
notice of data availability required
under paragraph (b)(2)(iii)(B) of this
section, as all of the owners and
operators of a group of Texas SO2
Trading Program sources and units
having a common designated
representative for such control period
and as being required to hold Texas SO2
Trading Program allowances.
(4)(i) As of midnight of November 1
immediately after the promulgation of
each notice of data availability required
in paragraph (b)(2)(iii)(B) of this section,
the owners and operators described in
paragraph (b)(3) of this section shall
hold in the assurance account
established for them and for the
appropriate Texas SO2 Trading Program
sources and Texas SO2 Trading Program
units under paragraph (b)(3) of this
section a total amount of Texas SO2
Trading Program allowances, available
for deduction under paragraph (a) of
this section, equal to the amount such
owners and operators are required to
hold with regard to such sources and
units as calculated by the Administrator
and referenced in such notice.
(ii) Notwithstanding the allowanceholding deadline specified in paragraph
(b)(4)(i) of this section, if November 1 is
not a business day, then such
allowance-holding deadline shall be
midnight of the first business day
thereafter.
(5) After November 1 (or the date
described in paragraph (b)(4)(ii) of this
section) immediately after the
promulgation of each notice of data
availability required in paragraph
(b)(2)(iii)(B) of this section and after the
recordation, in accordance with
§ 97.923, of Texas SO2 Trading Program
allowance transfers submitted by
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49219
midnight of such date, the
Administrator will determine whether
the owners and operators described in
paragraph (b)(3) of this section hold, in
the assurance account for the
appropriate Texas SO2 Trading Program
sources and Texas SO2 Trading Program
units established under paragraph (b)(3)
of this section, the amount of Texas SO2
Trading Program allowances available
under paragraph (a) of this section that
the owners and operators are required to
hold with regard to such sources and
units as calculated by the Administrator
and referenced in the notice required in
paragraph (b)(2)(iii)(B) of this section.
(6) Notwithstanding any other
provision of this subpart and any
revision, made by or submitted to the
Administrator after the promulgation of
the notice of data availability required
in paragraph (b)(2)(iii)(B) of this section
for a control period in a given year, of
any data used in making the
calculations referenced in such notice,
the amounts of Texas SO2 Trading
Program allowances that the owners and
operators are required to hold in
accordance with § 97.906(c)(2)(i) for
such control period shall continue to be
such amounts as calculated by the
Administrator and referenced in such
notice required in paragraph
(b)(2)(iii)(B) of this section, except as
follows:
(i) If any such data are revised by the
Administrator as a result of a decision
in or settlement of litigation concerning
such data on appeal under part 78 of
this chapter of such notice, or on appeal
under section 307 of the Clean Air Act
of a decision rendered under part 78 of
this chapter on appeal of such notice,
then the Administrator will use the data
as so revised to recalculate the amounts
of Texas SO2 Trading Program
allowances that owners and operators
are required to hold in accordance with
the calculation formula in
§ 97.906(c)(2)(i) for such control period
with regard to the Texas SO2 Trading
Program sources and Texas SO2 Trading
Program units involved, provided that
such litigation under part 78 of this
chapter, or the proceeding under part 78
of this chapter that resulted in the
decision appealed in such litigation
under section 307 of the Clean Air Act,
was initiated no later than 30 days after
promulgation of such notice required in
paragraph (b)(2)(iii)(B) of this section.
(ii) [Reserved]
(iii) If the revised data are used to
recalculate, in accordance with
paragraph (b)(6)(i) of this section, the
amount of Texas SO2 Trading Program
allowances that the owners and
operators are required to hold for such
control period with regard to the Texas
E:\FR\FM\12AUR3.SGM
12AUR3
49220
Federal Register / Vol. 85, No. 156 / Wednesday, August 12, 2020 / Rules and Regulations
khammond on DSKJM1Z7X2PROD with RULES3
SO2 Trading Program sources and Texas
SO2 Trading Program units involved—
(A) Where the amount of Texas SO2
Trading Program allowances that the
owners and operators are required to
hold increases as a result of the use of
all such revised data, the Administrator
will establish a new, reasonable
deadline on which the owners and
operators shall hold the additional
amount of Texas SO2 Trading Program
allowances in the assurance account
established by the Administrator for the
appropriate Texas SO2 Trading Program
sources and Texas SO2 Trading Program
units under paragraph (b)(3) of this
section. The owners’ and operators’
failure to hold such additional amount,
as required, before the new deadline
shall not be a violation of the Clean Air
Act. The owners’ and operators’ failure
to hold such additional amount, as
required, as of the new deadline shall be
a violation of the Clean Air Act. Each
Texas SO2 Trading Program allowance
that the owners and operators fail to
hold as required as of the new deadline,
and each day in such control period,
shall be a separate violation of the Clean
Air Act.
(B) For the owners and operators for
which the amount of Texas SO2 Trading
Program allowances required to be held
decreases as a result of the use of all
such revised data, the Administrator
will record, in all accounts from which
Texas SO2 Trading Program allowances
were transferred by such owners and
VerDate Sep<11>2014
18:50 Aug 11, 2020
Jkt 250001
operators for such control period to the
assurance account established by the
Administrator for the appropriate Texas
SO2 Trading Program sources and Texas
SO2 Trading Program units under
paragraph (b)(3) of this section, a total
amount of the Texas SO2 Trading
Program allowances held in such
assurance account equal to the amount
of the decrease. If Texas SO2 Trading
Program allowances were transferred to
such assurance account from more than
one account, the amount of Texas SO2
Trading Program allowances recorded in
each such transferor account will be in
proportion to the percentage of the total
amount of Texas SO2 Trading Program
allowances transferred to such
assurance account for such control
period from such transferor account.
(C) Each Texas SO2 Trading Program
allowance held under paragraph
(b)(6)(iii)(A) of this section as a result of
recalculation of requirements under the
Texas SO2 Trading Program assurance
provisions for such control period must
be a Texas SO2 Trading Program
allowance allocated for a control period
in a year before or the year immediately
following, or in the same year as, the
year of such control period.
§ 97.926
[Amended]
13. Amend § 97.926 paragraph (b) by
adding the text ‘‘§ 97.925,’’after the text
‘‘§ 97.924,’’.
■
PO 00000
Frm 00052
Fmt 4701
Sfmt 9990
§ 97.928
[Amended]
14. Amend § 97.928 paragraph (b) by
removing the text ‘‘a compliance
account,’’ and adding in its place the
text ‘‘a compliance account or an
assurance account,’’.
■
§ 97.930
[Amended]
15. Amend § 97.930 by:
a. In paragraph (b) introductory text,
removing the colon and adding in its
place the text ‘‘January 1, 2019.’’;
■ b. Removing and reserving paragraphs
(b)(1) and (2); and
■ c. In paragraph (b)(3) introductory
text, removing the text ‘‘the applicable
deadline under paragraph (b)(1) or (2) of
this section’’ and adding in its place the
text ‘‘January 1, 2019’’.
■
■
§ 97.931
[Amended]
16. In § 97.931 amend paragraph (d)(3)
introductory text by removing in the last
sentence the word ‘‘with’’ after the text
‘‘is replaced by’’.
■
§ 97.934
[Amended]
17. Amend § 97.934 by:
a. In paragraph (d)(1) introductory
text, removing the text ‘‘the later of:’’
and adding in its place the text ‘‘the
calendar quarter covering January 1,
2019 through March 31, 2019.’’; and
■ b. Removing paragraphs (d)(1)(i) and
(ii).
■
■
[FR Doc. 2020–14408 Filed 8–11–20; 8:45 am]
BILLING CODE 6560–50–P
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]]>Agencies
[Federal Register Volume 85, Number 156 (Wednesday, August 12, 2020)]
[Rules and Regulations]
[Pages 49170-49220]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-14408]
[[Page 49169]]
Vol. 85
Wednesday,
No. 156
August 12, 2020
Part IV
Environmental Protection Agency
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40 CFR Part 97
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Promulgation of Air Quality Implementation Plans; State of Texas;
Regional Haze and Interstate Visibility Transport Federal
Implementation Plan; Final Rule
Federal Register / Vol. 85, No. 156 / Wednesday, August 12, 2020 /
Rules and Regulations
[[Page 49170]]
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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 97
[EPA-R06-OAR-2016-0611; FRL-10010-52-Region 6]
Promulgation of Air Quality Implementation Plans; State of Texas;
Regional Haze and Interstate Visibility Transport Federal
Implementation Plan
AGENCY: Environmental Protection Agency (EPA).
ACTION: Final rule.
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SUMMARY: Pursuant to the federal Clean Air Act (CAA or Act), the
Environmental Protection Agency (EPA) is finalizing its affirmation,
with amendments, of an intrastate sulfur dioxide (SO2)
trading program as an alternative to best available retrofit technology
(BART) requirements for certain sources in Texas. This action finalizes
the August 2018 proposed affirmation and November 2019 supplemental
notice of proposed rulemaking (SNPRM) concerning certain aspects of a
final rule published on October 17, 2017, partially approving the 2009
Texas Regional Haze State Implementation Plan (SIP) submission and
promulgating a Federal Implementation Plan (FIP) for Texas to address
certain outstanding CAA regional haze requirements for the first
implementation period.
DATES: This final rule is effective on September 11, 2020.
ADDRESSES: The EPA has established a docket for this action under
Docket ID No. EPA-R06-OAR-2016-0611. All documents in the docket are
listed on the https://www.regulations.gov website. Although listed in
the index, some information is not publicly available, e.g.,
Confidential Business Information (CBI) or other information whose
disclosure is restricted by statute therefore is not posted to
regulations.gov. Certain other material, such as copyrighted material,
is not placed on the internet and will be publicly available only in
hard copy. Publicly available docket materials are available either
electronically through https://www.regulations.gov or in hard copy at
EPA Region 6, 1201 Elm Street, Suite 500, Dallas, Texas 75270.
FOR FURTHER INFORMATION CONTACT: Jennifer Huser, Air and Radiation
Division, Environmental Protection Agency, Region 6, 1201 Elm Street,
Suite 500, Dallas, Texas 75270, telephone 214-665-7347; email address
[email protected].
SUPPLEMENTARY INFORMATION: Throughout this document wherever ``we,''
``us,'' or ``our'' is used, we mean the EPA.
Table of Contents
I. Background
A. Regional Haze
B. Interstate Transport of Pollutants That Affect Visibility
C. Previous Actions Related to Texas Regional Haze
D. EPA's Denial of the Petition for Reconsideration of CSAPR as
a BART Alternative and its Relationship to This Final Action
II. Our Proposed Actions
A. Proposed Rule Affirming the October 2017 Final Action
B. Supplemental Notice of Proposed Rulemaking
III. Summary of Our Final Decisions
A. Regional Haze
1. Amendments to the Texas SO2 Trading Program
2. Analysis of Texas SO2 Trading Program as a BART
Alternative
3. PM BART
4. Reasonable Progress
B. Interstate Transport of Pollutants That Affect Visibility
IV. Summary and Responses to Significant Issues Raised by Commenters
A. Texas SO2 Trading Program as a BART Alternative
B. PM BART
C. Appropriateness of the Texas SO2 Trading Program
vs. Source-Specific BART FIP
D. Statutory Requirements for FIP Promulgation and
Implementation
E. Timing of the Plan for the First Implementation Period
F. Notice and Comment Requirements
G. Subject-to-BART Determinations
H. Visibility Transport
I. Reasonable Progress
J. Coleto Creek
K. Assurance Provisions and the Variability Limit
L. Venue
M. Other
V. Final Action
A. Regional Haze
B. Interstate Visibility Transport
VI. Statutory and Executive Order Reviews
I. Background
A. Regional Haze
Regional haze is visibility impairment that is produced by a
multitude of sources and activities that are located across a broad
geographic area. These sources--both human-caused (anthropogenic) and
naturally occurring--emit or otherwise introduce into the atmosphere
PM, including fine PM (PM2.5) (e.g., sulfates, nitrates,
organic carbon (OC), elemental carbon (EC), and soil dust), or
pollutants that are precursors to the formation of PM2.5
(e.g., SO2, NOX, and, in some cases, ammonia
(NH3) and volatile organic compounds (VOCs)). Fine-particle
precursors react in the atmosphere to form PM2.5, which
impairs visibility by scattering and absorbing light. Visibility
impairment limits visual distance and reduces color, clarity, and
contrast of view. Reducing PM2.5 and its precursor gases in
the atmosphere is an effective method of improving visibility.
PM2.5 can also cause serious health effects and mortality in
humans and contributes to environmental effects, such as acid
deposition and eutrophication.
Data from the existing visibility monitoring network, the
``Interagency Monitoring of Protected Visual Environments'' (IMPROVE)
monitoring network, show that visibility impairment caused by air
pollution occurs virtually all the time at most national parks and
wilderness areas. In 1999, the average visual range \1\ in many
mandatory Class I areas \2\ (i.e., national parks and memorial parks,
wilderness areas, and international parks meeting certain size
criteria) in the western United States was 100-150 kilometers, or about
one-half to two-thirds of the visual range that would exist without
anthropogenic air pollution. In most of the eastern Class I areas of
the United States, the average visual range was less than 30
kilometers, or about one-fifth of the visual range that would exist
under estimated natural conditions.\3\ Since the promulgation of the
original Regional Haze Rule in 1999, CAA programs have reduced
emissions of haze-causing pollution, lessening visibility impairment
and resulting in improved average visual ranges.\4\
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\1\ Visual range is the greatest distance, in kilometers or
miles, at which a dark object can be viewed against the sky.
\2\ Areas designated as mandatory Class I Federal areas consist
of National Parks exceeding 6,000 acres, wilderness areas and
national memorial parks exceeding 5,000 acres, and all international
parks that were in existence on August 7, 1977. 42 U.S.C. 7472(a).
In accordance with section 169A of the CAA, EPA, in consultation
with the Department of Interior, promulgated a list of 156 areas
where visibility is identified as an important value. 44 FR 69122
(November 30, 1979). The extent of a mandatory Class I area includes
subsequent changes in boundaries, such as park expansions. 42 U.S.C.
7472(a). Although states and tribes may designate as Class I
additional areas which they consider to have visibility as an
important value, the requirements of the visibility program set
forth in section 169A of the CAA apply only to ``mandatory Class I
Federal areas.'' Each mandatory Class I Federal area is the
responsibility of a ``Federal Land Manager.'' 42 U.S.C. 7602(i).
When we use the term ``Class I area'' in this action, we mean a
``mandatory Class I Federal area.''
\3\ 64 FR 35714 (July 1, 1999).
\4\ An interactive ``story map'' depicting efforts and recent
progress by EPA and states to improve visibility at national parks
and wilderness areas may be visited at: https://arcg.is/29tAbS3.
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In Section 169A of the 1977 Amendments to the CAA, Congress created
a program for protecting visibility in the nation's national parks
[[Page 49171]]
and wilderness areas. This section of the CAA establishes as a national
goal the prevention of any future, and the remedying of any existing,
man-made impairment of visibility in 156 national parks and wilderness
areas designated as mandatory Class I Federal areas. On December 2,
1980, EPA promulgated regulations to address visibility impairment in
Class I areas that is ``reasonably attributable'' to a single source or
small group of sources, i.e., ``reasonably attributable visibility
impairment.'' \5\ These regulations represented the first phase in
addressing visibility impairment. EPA deferred action on regional haze
that emanates from a variety of sources until monitoring, modeling, and
scientific knowledge about the relationships between pollutants and
visibility impairment were improved.
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\5\ 45 FR 80084 (Dec. 2, 1980).
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Congress added section 169B to the CAA in 1990 to address regional
haze issues, and we promulgated regulations addressing regional haze in
1999.\6\ The Regional Haze Rule revised the existing visibility
regulations to integrate into the regulations provisions addressing
regional haze impairment and established a comprehensive visibility
protection program for Class I areas. EPA's focus, following
congressional direction, continued to be on three important visibility-
impairing pollutants from relatively uncontrolled anthropogenic
sources: Oxides of nitrogen (NOX), sulfur dioxide
(SO2), and particulate matter (PM).\7\ The requirements for
regional haze, found at 40 CFR 51.308 and 51.309, are included in our
visibility protection regulations at 40 CFR 51.300-309. The requirement
to submit a regional haze SIP applies to all 50 states, the District of
Columbia, and the Virgin Islands (referred to collectively hereafter as
``states''). States were required to submit their first SIP addressing
regional haze visibility impairment no later than December 17, 2007.\8\
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\6\ 64 FR 35714 (July 1, 1999), codified at 40 CFR part 51,
subpart P (Regional Haze Rule).
\7\ Id. 35715.
\8\ See 40 CFR 51.308(b). EPA's regional haze regulations
require subsequent updates to the regional haze SIPs. 40 CFR
51.308(g)-(i).
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Section 169A(b)(2)(A) of the CAA directs states to evaluate the use
of retrofit controls at certain larger, often under-controlled, older
stationary sources in order to address visibility impacts from these
sources. Specifically, section 169A(b)(2)(A) of the CAA requires states
to revise their SIPs to contain such measures as may be necessary to
make reasonable progress toward the natural visibility goal, including
a requirement that certain categories of existing major stationary
sources \9\ built between 1962 and 1977 procure, install and operate
best available retrofit technology (BART). Larger ``fossil-fuel fired
steam electric plants'' are included among the statutory list of BART
source categories at section 169A(g)(7). Under the Regional Haze Rule,
states are directed to conduct BART determinations for ``BART-
eligible'' sources that may be anticipated to cause or contribute to
any visibility impairment in a Class I area. The evaluation of BART for
EGUs that are located at fossil-fuel-fired power plants having a
generating capacity in excess of 750 megawatts must follow the
``Guidelines for BART Determinations Under the Regional Haze Rule'' at
appendix Y to 40 CFR part 51 (hereinafter referred to as the ``BART
Guidelines''). States are required to identify the level of control
representing BART after considering the five statutory factors set out
in section 169A(g)(2).\10\ States must establish emission limits, a
schedule of compliance, and other measures consistent with the BART
determination process for each source subject-to-BART.
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\9\ See 42 U.S.C. 7491(g)(7) (listing the set of ``major
stationary sources'' potentially subject-to-BART).
\10\ The State must take into consideration the five statutory
factors: (1) The costs of compliance, (2) the energy and non-air
quality environmental impacts of compliance, (3) any existing
control technology in use at the source, (4) the remaining useful
life of the source, and (5) the degree of visibility improvement
which may reasonably be anticipated to result.
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Rather than requiring source-specific BART controls, states also
have the flexibility to adopt an emissions trading program or
alternative program as long as the alternative provides greater
reasonable progress towards improving visibility than BART. 40 CFR
51.308(e)(2) specifies how a state must conduct the demonstration to
show that an alternative program will achieve greater reasonable
progress than the installation and operation of BART. 40 CFR
51.308(e)(2)(i)(E) requires a determination under 40 CFR 51.308(e)(3)
or otherwise based on the clear weight of evidence that the trading
program or other alternative measure achieves greater reasonable
progress than would be achieved through the installation and operation
of BART at the covered sources. Specific criteria for determining if an
alternative measure achieves greater reasonable progress than source-
specific BART are set out in 40 CFR 51.308(e)(3); however, as noted
above, under 40 CFR 51.308(e)(2)(i)(E) states have the flexibility to
develop their own criteria to establish greater reasonable progress
based on the ``clear weight of the evidence.'' Finally, 40 CFR
51.308(e)(4) provides that states whose sources participate in the
Cross-State Air Pollution Rule (CSAPR) trading programs need not
require the BART-eligible fossil fuel-fired steam electric plants
subject to those programs to install, operate, and maintain BART for
the pollutant covered by the CSAPR trading program.
Regional haze requirements are generally implemented through the
cooperative-federalism framework of section 110 of the Act, in which
states are given the primary opportunity to meet the requirements
through state implementation plans (SIPs). Under section 110(c) of the
CAA, whenever we disapprove a mandatory SIP submission in whole or in
part, or make a finding that a state has failed to make such a
submission, we are required to promulgate a federal implementation plan
(FIP) within two years unless the state corrects the deficiency and we
approve the new SIP submittal.
B. Interstate Transport of Pollutants That Affect Visibility
Section 110(a) of the CAA directs states to submit a SIP that
provides for the implementation, maintenance, and enforcement of each
NAAQS. This is commonly referred to as an ``infrastructure SIP.'' CAA
section 110(a)(2)(D)(i)(II) requires that infrastructure SIPs contain
adequate provisions to prohibit interference with measures required to
protect visibility in other states. This is referred to as ``interstate
visibility transport'' (or ``prong 4'' of the four requirements or
``prongs'' found in section 110(a)(2)(D)(i)). Infrastructure SIPs are
due to the EPA within three years after the promulgation of a new or
revised NAAQS (or within such shorter period as we may prescribe). A
state's failure to submit a complete, approvable infrastructure SIP,
including one that meets the requirements for interstate visibility
transport, creates an obligation for the EPA to address this
requirement pursuant to section 110(c).
C. Previous Actions Related to Texas Regional Haze
On March 31, 2009, Texas submitted a regional haze SIP (the 2009
Regional Haze SIP) to the EPA that included reliance on Texas'
participation in trading programs under the Clean Air Interstate Rule
(CAIR) as an alternative to BART for SO2 and NOX
emissions
[[Page 49172]]
from EGUs.\11\ This reliance was consistent with the EPA's
regulations at the time that Texas developed its 2009 Regional Haze
SIP.\12\ However, at the time that Texas submitted this SIP to the EPA,
the D.C. Circuit had remanded CAIR (without vacatur).\13\ The court
left CAIR and our CAIR FIPs in place in order to ``temporarily preserve
the environmental values covered by CAIR'' until we could, by
rulemaking, replace CAIR consistent with the court's opinion. The EPA
promulgated the Cross-State Air Pollution Rule (CSAPR) to replace CAIR
in 2011 \14\ (and revised it in 2012).\15\ CSAPR established FIP
requirements for sources in a number of states, including Texas, to
address the states' interstate transport obligation under CAA section
110(a)(2)(D)(i)(I). CSAPR addresses interstate transport of fine
particulate matter and ozone by requiring affected EGUs in these states
to participate in one or more of the CSAPR trading programs, which
establish emissions budgets that apply to the EGUs' collective annual
emissions of SO2 and NOX, as well as emissions of
NOX during ozone season.\16\
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\11\ CAIR required certain states, including Texas, to reduce
emissions of SO2 and NOX that significantly
contribute to downwind nonattainment of the 1997 NAAQS for fine
particulate matter and ozone. See 70 FR 25152 (May 12, 2005).
\12\ See 70 FR 39104 (July 6, 2005).
\13\ See North Carolina v. EPA, 531 F.3d 896 (D.C. Cir. 2008),
as modified, 550 F.3d 1176 (D.C. Cir. 2008).
\14\ 76 FR 48207 (Aug. 8, 2011).
\15\ CSAPR was amended three times in 2011 and 2012 to add five
states to the seasonal NOX program and to increase
certain state budgets. 76 FR 80760 (December 27, 2011); 77 FR 10324
(February 21, 2012); 77 FR 34830 (June 12, 2012).
\16\ The ozone season for CSAPR purposes is May 1 through
September 30.
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Following issuance of CSAPR, the EPA determined that CSAPR would
achieve greater reasonable progress towards improving visibility than
would source-specific BART in CSAPR states (a determination often
referred to as ``CSAPR Better-than-BART'').\17\ In the same action, we
revised the Regional Haze Rule to allow states whose sources
participate in the CSAPR trading programs to rely on such participation
in lieu of requiring BART-eligible EGUs in the state to install BART
controls as to the relevant pollutant.
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\17\ 77 FR 33641 (June 7, 2012). This determination was recently
upheld by the D.C. Circuit. See Util. Air Regulatory Grp. v. EPA,
885 F.3d 714 (D.C. Cir. 2018).
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In the same action that EPA determined that states could rely on
CSAPR to address the BART requirements for EGUs, EPA issued a limited
disapproval of a number of states' regional haze SIPs, including the
2009 Regional Haze SIP submittal from Texas, due to the states'
reliance on CAIR, which had been replaced by CSAPR.\18\ The EPA did not
immediately promulgate a FIP to address those aspects of the 2009
Regional Haze SIP submittal subject to the limited disapproval of
Texas' regional haze SIP to allow more time for the EPA to assess the
remaining elements of the 2009 Texas SIP submittal.
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\18\ Id.
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In December 2014, we proposed an action to address the remaining
regional haze obligations for Texas.\19\ In that action, we proposed,
among other things, to rely on our CSAPR FIP requiring Texas sources'
participation in the CSAPR trading programs to satisfy the
NOX and SO2 BART requirements for Texas' BART-
eligible EGUs; we also proposed to approve the portions of the 2009
Regional Haze SIP addressing PM BART requirements for the state's EGUs.
Before that rule was finalized, however, the D.C. Circuit issued a
decision on a number of challenges to CSAPR, denying most claims, but
remanding the CSAPR SO2 and/or seasonal NOX
emissions budgets of several states to the EPA for reconsideration,
including the Phase 2 SO2 and seasonal NOX
budgets for Texas.\20\ Due to the uncertainty arising from the remand
of Texas' CSAPR budgets, we did not finalize our December 2014 proposal
to rely on CSAPR to satisfy the SO2 and NOX BART
requirements for Texas EGUs.\21\ Additionally, because our proposed
action on the PM BART provisions for EGUs was dependent on how
SO2 and NOX BART were satisfied, we did not take
final action on the PM BART elements of the 2009 Texas' Regional Haze
SIP.\22\ In January 2016, we finalized action on the remaining aspects
of the December 2014 proposal.\23\ This final action disapproved, among
other things, Texas' Reasonable Progress Goals for the Big Bend and
Guadalupe Mountains Class I areas in Texas, Texas's reasonable progress
analysis and Texas's long-term strategy. EPA promulgated a FIP
establishing a new long-term strategy that consisted of SO2
emission limits for 15 coal-fired EGUs at eight power plants. That
rulemaking was judicially challenged, however, and in July 2016, the
Fifth Circuit granted the petitioners' motion to stay the rule pending
review.\24\ On March 22, 2017, following the submittal of a request by
the EPA for a voluntary remand of the parts of the rule under
challenge, the Fifth Circuit Court of Appeals remanded the rule in its
entirety.\25\
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\19\ 79 FR 74818 (Dec. 16, 2014).
\20\ EME Homer City Generation, L.P. v. EPA (EME Homer City II),
795 F.3d 118, 132 (D.C. Cir. 2015).
\21\ See 81 FR 296, 301-02 (Jan. 5, 2016).
\22\ Id.
\23\ 81 FR 296 (Jan. 5, 2016).
\24\ Texas v. EPA, 829 F.3d 405 (5th Cir. 2016).
\25\ Order, Texas v. EPA, 16-60118 (5th Cir. Mar. 22, 2017).
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On October 26, 2016, the EPA finalized an update to CSAPR to
address the interstate transport requirements of CAA section
110(a)(2)(D)(i)(I) with respect to the 2008 ozone NAAQS (CSAPR
Update).\26\ The EPA also responded to the D.C. Circuit's remand in EME
Homer City II of certain CSAPR seasonal NOX budgets in that
action. As to Texas, the EPA withdrew Texas' seasonal NOX
budget finalized in CSAPR to address the 1997 ozone NAAQS. However, in
that same action, the EPA promulgated a FIP with a revised seasonal
NOX budget for Texas to address the 2008 ozone NAAQS.\27\
Accordingly, Texas sources remain subject to CSAPR seasonal
NOX requirements.
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\26\ 81 FR 74504 (Oct. 26, 2016).
\27\ Id. 74524-25.
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On November 10, 2016, in response to the D.C. Circuit's remand of
Texas's CSAPR SO2 budget, we proposed to withdraw the FIP
provisions that required EGUs in Texas to participate in the CSAPR
trading programs for annual emissions of SO2 and
NOX.\28\ We also proposed to reaffirm the EPA's 2012
analytical demonstration that CSAPR provides greater reasonable
progress than BART, despite changes in CSAPR's geographic scope to
address the EME Homer City II remand, including removal of Texas' EGUs
from the CSAPR trading program for SO2 emissions. On
September 29, 2017, we finalized the withdrawal of the FIP provisions
for annual emissions of SO2 and NOX for EGUs in
Texas \29\ and affirmed our proposed finding that the EPA's 2012
analytical demonstration remains valid and that participation in the
CSAPR trading programs as they now exist meets the Regional Haze Rule's
criteria for an alternative to BART. (We refer to this as the ``2017
CSAPR Better-than-BART affirmation finding'' throughout this notice.)
As discussed in Section I.D below, certain environmental organizations
filed a petition for reconsideration of this finding in November 2017.
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\28\ 81 FR 78954 (Nov. 10, 2016).
\29\ 82 FR 45481 (Sept. 29, 2017). As explained above, Texas
sources continue to be subject to the CSAPR Update FIP, under which
they participate in a CSAPR trading program for ozone season
NOX.
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On January 4, 2017, we proposed a FIP to address the EGU BART
[[Page 49173]]
requirements for Texas' EGUs. With respect to NOX, we
proposed to replace the 2009 Regional Haze SIP's reliance on CAIR with
reliance on our CSAPR FIP to address the NOX BART
requirements for EGUs.\30\ This portion of our proposal was based on
the CSAPR Update and our separate November 10, 2016 proposed finding,
described above, that the EPA's actions in response to the D.C.
Circuit's remand would not adversely impact our 2012 demonstration that
participation in the CSAPR trading programs meets the Regional Haze
Rule's criteria for alternatives to BART. We noted that we could not
finalize this portion of our proposed FIP to address the NOX
BART requirements for EGUs unless and until we finalized our proposed
finding that CSAPR was still better than BART.\31\ (This predicate
finding was finalized on September 29, 2017, as described above.)
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\30\ 82 FR 912, 914-15 (Jan. 4, 2017).
\31\ Id. 915.
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With respect to SO2, our January 4, 2017 proposed action
addressing the BART requirements for Texas EGUs acknowledged that
because Texas sources would no longer be participating in the CSAPR
program for SO2, Texas would no longer be eligible to rely
on participation in CSAPR as an alternative to source-specific EGU BART
for SO2 under 40 CFR 51.308(e)(4). As a result, there were
BART requirements that were left unfulfilled with respect to Texas's
BART-eligible EGU emissions of SO2 that would need to be
fulfilled by either an approved SIP or an EPA-issued FIP that satisfied
the BART requirements under 40 CFR 51.308(e)(1) or constituted a viable
BART alternative under 40 CFR 51.308(e)(2) for those emissions. EPA
proposed to satisfy these requirements through a BART FIP, entailing
the identification of BART-eligible EGU sources, screening to identify
which BART-eligible sources are ``subject-to-BART'' (i.e., may
reasonably be anticipated to cause or contribute to any impairment of
visibility in any Class I area), and source-by-source determinations of
SO2 BART controls as appropriate. For those EGU sources we
proposed to find subject to BART, we proposed to promulgate source-
specific SO2 requirements. We proposed SO2
emission limits on 29 EGUs located at 14 facilities.
With respect to PM, in the January 2017 proposal, we proposed to
disapprove the portion of the 2009 Regional Haze SIP that made BART
determinations for PM from EGUs, on the grounds that the demonstration
in the 2009 Texas Regional Haze SIP relied on underlying assumptions as
to how the SO2 and NOX BART requirements for EGUs
were being met that were no longer valid with the proposed source-
specific SO2 requirements.\32\ In place of these
determinations, we proposed to promulgate source-specific PM BART
requirements based on existing practices and control capabilities for
those EGUs that we proposed to find subject to BART. Previously, we had
proposed to approve the EGU BART determinations for PM in the 2009
Texas Regional Haze SIP, and this proposal had never been
withdrawn.\33\ At that time, CSAPR was an appropriate alternative for
SO2 and NOX BART for EGUs. The 2009 Texas
Regional Haze SIP included a pollutant-specific screening analysis for
PM to demonstrate that Texas EGUs were not subject to BART for PM. In a
2006 guidance document,\34\ the EPA stated that pollutant-specific
screening can be appropriate where a state is relying on a BART
alternative to address both NOX and SO2 BART.
However, in the January 2017 proposal, we proposed to disapprove the PM
BART determination since SO2 BART was no longer addressed by
a BART alternative. For coal-fired units, we proposed PM BART limits
consistent with PM emission limits in the Mercury and Air Toxics
Standards (MATS) rule; for gas-fired units, we proposed PM BART would
be satisfied by making burning pipeline-quality gas federally
enforceable; and for oil-fired units, we proposed that fuel-content
requirements for SO2 BART would also satisfy PM BART.\35\
---------------------------------------------------------------------------
\32\ In the 2009 Regional Haze Texas SIP, for EGU BART, Texas'
BART-eligible EGUs' emissions of both SO2 and
NOX were covered by participation in trading programs,
which allowed Texas to conduct a screening analysis of the
visibility impacts from PM emissions from such units in isolation.
However, modeling on a pollutant-specific basis for PM is
appropriate only in the narrow circumstance of reliance on BART
alternatives to satisfy both NOX and SO2 BART.
Due to the complexity and nonlinear nature of atmospheric chemistry
and chemical transformation among pollutants, EPA has not
recommended performing modeling on a pollutant-specific basis to
determine whether a source is subject to BART, except in the unique
situation described above. See discussion in Memorandum from Joseph
Paisie to Kay Prince, ``Regional Haze Regulations and Guidelines for
Best Available Retrofit Technology (BART) Determinations,'' July 19,
2006.
\33\ 79 FR 74817, 74853-54 (Dec. 16, 2014).
\34\ See discussion in Memorandum from Joseph Paisie to Kay
Prince, ``Regional Haze Regulations and Guidelines for Best
Available Retrofit Technology (BART) Determinations,'' July 19,
2006.
\35\ 82 FR 936.
---------------------------------------------------------------------------
In our final action addressing BART for Texas published on October
17, 2017, we finalized our January 2017 proposed determination that
Texas' participation in CSAPR's trading program for ozone-season
NOX qualifies as an alternative to source-specific
NOX BART. We determined that the SO2 BART
requirements for all BART-eligible coal-fired units and a number of
BART-eligible gas- or gas/fuel oil-fired units are satisfied by a BART
alternative for SO2--specifically, a new intrastate trading
program that we established addressing emissions of SO2 from
certain EGUs in Texas. The remaining BART-eligible EGUs not covered by
the SO2 BART alternative were previously determined to be
not subject to BART based on screening methods using model plants and
CALPUFF \36\ modeling as described in our proposed rule and BART
Screening technical support document (TSD).\37\ Finally, because both
NOX and SO2 were now being addressed by a BART
alternative, we approved the 2009 Regional Haze SIP's determination,
based on a pollutant-specific screening analysis, that Texas' EGUs are
not subject to BART for PM. With respect to visibility transport
obligations, we determined that the BART alternative to address
SO2 and Texas sources' participation in CSAPR's trading
program for ozone-season NOX to address NOX BART
at Texas' EGUs fully addresses Texas' obligations for six NAAQS.
---------------------------------------------------------------------------
\36\ CALPUFF (California Puff Model) is a multi-layer, multi-
species non-steady-state puff dispersion modeling system that
simulates the effects of time- and space-varying meteorological
conditions on pollutant transport, transformation, and removal.
CALPUFF is intended for use in assessing pollutant impacts at
distances greater than 50 kilometers to several hundreds of
kilometers. It includes algorithms for calculating visibility
effects from long range transport of pollutants and their impacts on
Federal Class I areas. EPA previously approved the use of the
CALPUFF model in BART related analyses (40 CFR part 51 Regional Haze
Regulations and Guidelines for Best Available Retrofit Technology
(BART) Determinations; Final Rule; 70 FR 39104--39172; July 6,
2005). For instructions on how to download the appropriate model
code and documentation that are available from Exponent (Model
Developer/Owner) at no cost for download, see EPA's website: https://www.epa.gov/scram/air-quality-dispersion-modeling-preferred-and-recommended-models#calpuff.
\37\ See document at docket identification number EPA-R06-OAR-
2016-0611-0005.
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D. EPA's Denial of the Petition for Reconsideration of CSAPR as a BART
Alternative and its Relationship to This Final Action
As explained in the section above, on September 29, 2017, we
finalized the withdrawal of the CSAPR FIP provisions for annual
emissions of SO2 and NOX for EGUs in Texas.\38\
We also finalized our November 2016 proposed finding affirming that the
EPA's 2012 analytical demonstration remains valid and that
participation in the CSAPR
[[Page 49174]]
trading programs continues to meet the Regional Haze Rule's criteria
for an alternative to BART. In our October 17, 2017, action
promulgating the Texas intrastate SO2 trading program, we
relied on that determination and the fact that the Texas program would
achieve SO2 emission reductions similar to what CSAPR would
have achieved in Texas to conclude that the Texas program satisfies the
requirements for a BART alternative under 40 CFR 51.308(e)(2).\39\
---------------------------------------------------------------------------
\38\ 82 FR 45481 (Sept. 29, 2017).
\39\ 82 FR 48324, 48330, 48357 (Oct. 17, 2017).
---------------------------------------------------------------------------
On November 28, 2017, Sierra Club and the National Parks
Conservation Association submitted a petition for partial
reconsideration of our September 2017 finding affirming that CSAPR
continues to satisfy requirements as a BART alternative.\40\ Among
other things, these petitioners alleged that our analysis was
materially flawed and must be reconsidered to the extent that it rested
on an assumption that EGU BART sources in Texas would be subject to
source-specific BART controls for SO2 rather than the
intrastate SO2 trading program.\41\ Petitioners alleged in
particular that EPA's emissions shifting analysis accounted for
potential increases in emissions in remaining CSAPR states of between
22,300 to 53,000 tons by assuming these emissions would be offset by an
estimated 127,300 tons of SO2 emission reductions in Texas
due to source-specific BART controls.\42\ However, these petitioners
alleged that this assumption was proven false when EPA promulgated the
Texas intrastate trading program rather than source-specific BART.\43\
On this basis, among other things, petitioners sought mandatory
reconsideration of the September 29, 2017 action under CAA section
307(d)(7)(B).
---------------------------------------------------------------------------
\40\ Sierra Club and National Parks Conservation Association,
Petition for Partial Reconsideration of Interstate Transport of Fine
Particulate Matter: Revision of Federal Implementation Plan
Requirements for Texas; Final Rule; 82 FR 45,481 (Sept. 29, 2017);
EPA-HQ-OAR-2016-0598; FRL-9968-46-OAR (Nov. 28, 2017).
\41\ See, e.g., id. 6 (citing 82 FR 45494).
\42\ Id. 13-14 (citing 82 FR 45493-94).
\43\ Id.
---------------------------------------------------------------------------
In a separate action, EPA is denying this petition for
reconsideration.\44\ That action, and the basis for that action as it
relates to the determination that CSAPR remains a valid BART
alternative, are beyond the scope of this action. With the denial of
the petition for reconsideration of our 2017 affirmation in that
separate action, EPA has made a final determination that the objections
raised by the petitioners on the 2017 affirmation of CSAPR as a BART
alternative are not of central relevance.\45\ As such, there is no
longer any outstanding question whether CSAPR is a satisfactory BART
alternative. Therefore, as discussed in Section III.A.2 below, in this
action EPA is finalizing its affirmation that it may rely on the CSAPR
BART-alternative analysis as a part of its ``clear weight of the
evidence'' demonstration that the Texas intrastate trading program
achieves greater reasonable progress than BART.
---------------------------------------------------------------------------
\44\ See U.S. EPA, Denial of Petition for Partial
Reconsideration of ``Interstate Transport of Fine Particulate
Matter: Revision of Federal Implementation Plan Requirements for
Texas'' (82 FR 45481; Sept. 29, 2017) (EPA-HQ-OAR-2016-0598). A copy
of the denial of petition letter sent to the petitioners and the
denial of petition Notice of Availability (NOA) published in the
Federal Register are available at Docket ID EPA-HQ-OAR-2016-0598.
\45\ Id.
---------------------------------------------------------------------------
II. Our Proposed Actions
A. Proposed Rule Affirming the October 2017 Final Action
On December 15, 2017, EPA received a petition for reconsideration
of the October 2017 final rule addressing BART in Texas requesting that
the Administrator reconsider certain aspects of the FIP related to the
intrastate trading program promulgated to address the SO2
BART requirement for Texas EGUs. In our April 30, 2018 letter in
response to that petition, we stated that we believed that certain
aspects of the federal plan could benefit from further public comment.
Accordingly, in a notice published on August 27, 2018, we proposed to
affirm certain aspects of our SIP approval and of the FIP, and we
provided the public with an opportunity to comment on those aspects, as
well as other specified related issues.\46\ Specifically, we took
comment on the following elements, which effectively covered all of
petitioners' central objections: (1) The proposal to affirm the October
2017 FIP establishing an intrastate trading program addressing
emissions of SO2 from certain EGUs in Texas as a BART
alternative and the determination that this program satisfies the
requirements for BART alternatives; (2) the proposal to affirm the
finding that the BART alternatives in the October 2017 rulemaking to
address SO2 and NOX BART at Texas' EGUs result in
emission reductions adequate to satisfy the requirements of CAA section
110(a)(2)(D)(i)(II) with respect to visibility for the following NAAQS:
1997 8-hour ozone, 1997 PM2.5 (annual and 24-hour), 2006
PM2.5 (24-hour), 2008 8-hour ozone, 2010 1-hour
NO2, and 2010 1-hour SO2 NAAQS; and (3) the
proposal to affirm our October 2017 approval of Texas' SIP
determination that no sources are subject to BART for PM. The August
2018 affirmation proposed rule also solicited comment on the specific
issues of whether recent shutdowns of sources included in the trading
program and the merger of two owners of affected EGUs should impact the
allocation methodology for certain SO2 allowances. In
addition to soliciting comment on the above elements and aforementioned
specific issues, the August 2018 affirmation proposal also invited
comment on additional issues that could inform our decision making with
regard to the SO2 BART obligations for Texas. First, we
sought input on whether SO2 BART would be better addressed
through a source-by-source approach (source-specific BART), the October
2017 SO2 trading program, or some other appropriate BART
alternative. Second, EPA requested comment on whether a SIP-based
program would serve Texas better than a FIP. Third, we requested public
input on whether and how the SO2 trading program finalized
in the October 2017 final rule addresses the long-term strategy and
reasonable progress requirements for Texas.
---------------------------------------------------------------------------
\46\ 83 FR 43586.
---------------------------------------------------------------------------
B. Supplemental Notice of Proposed Rulemaking
In response to certain comments received during the public comment
period for the August 2018 proposal to affirm the October 2017 FIP, we
proposed revisions to the Texas SO2 Trading Program in a
supplemental proposal published on November 14, 2019.\47\ In the
supplemental proposal, we proposed to make four sets of amendments to
the Texas SO2 Trading Program: (1) The addition of assurance
provisions; (2) revisions to the Supplemental Allowance Pool allocation
provisions; (3) termination of the opt-in provisions; and (4) revision
of the allowance recordation provisions.
---------------------------------------------------------------------------
\47\ 84 FR 61850.
---------------------------------------------------------------------------
(1) Addition of Assurance Provisions. The Texas SO2
Trading Program, as promulgated in October 2017, did not include an
assurance level. In contrast to CSAPR, the Texas SO2 Trading
Program does not allow for sources to purchase allowances from sources
in other states. Therefore, the number of allowances available to the
Texas sources under the SO2 trading program, as promulgated
in October 2017, is limited by the total number of allowances allocated
under the program. While this limits the average annual emissions under
the program, we recognized that the potential use of
[[Page 49175]]
banked allowances and allowances allocated from the Supplemental
Allowance Pool could allow for potentially significant year-to-year
variability in emissions. In each of the CSAPR trading programs, EPA
set an assurance level for each state in order to ensure that, despite
the broad, interstate trading region, emissions reductions would be
achieved appropriately in a geographically distributed way commensurate
with states' ``good neighbor'' obligations as determined by EPA through
its analysis under CAA section 110(a)(2)(D)(i)(I).\48\ In order to
maintain consistency with the CSAPR program and to provide additional
support for our determination that SO2 emissions under the
Texas SO2 Trading Program will remain below the requisite
level on an annual basis, the EPA proposed to add assurance provisions
to the Texas SO2 Trading Program in the November 2019
supplemental proposal, setting the assurance level by relying on the
same analysis and methodology that were used to set assurance levels in
the original CSAPR rulemaking while accounting for the fact that the
Texas SO2 Trading Program is intrastate-only (i.e., does not
permit interstate trading). EPA proposed to set an assurance level for
the Texas SO2 Trading Program of 255,081 tons and proposed
to impose a penalty surrender ratio of three allowances for each ton of
emissions in any year in excess of the 255,081-ton assurance level.
---------------------------------------------------------------------------
\48\ 76 FR 48208, 48265-66 (Aug. 8, 2011).
---------------------------------------------------------------------------
EPA further proposed that this assurance level would strengthen our
determination that the Texas program compares favorably to CSAPR in
terms of stringency. EPA noted that its previous CSAPR Better-than-BART
analysis relied on assuming annual SO2 emissions from Texas
EGUs of 317,100 tons. For certain EGUs not covered by the Texas program
but that would have been subject to CSAPR, EPA made a conservative
estimate of 35,000 tons of annual emissions. Adding this to the 255,081
ton assurance level produced an upper bound estimate of 290,081 tons of
emissions, which EPA noted is below the 317,100 ton assumption used for
CSAPR.\49\
---------------------------------------------------------------------------
\49\ 84 FR 61850, 61853.
---------------------------------------------------------------------------
(2) Revisions to the Supplemental Allowance Pool Allocation
Provisions. 40 CFR 97.912 of the existing Texas SO2 Trading
Program regulations establishes how allowances are allocated from the
Supplemental Allowance Pool to sources (collections of participating
units at a facility) that have reported total emissions for that
control period exceeding the total amounts of allowances allocated to
the participating units at the source for that control period (before
any allocation from the Supplemental Allowance Pool). While all other
sources required to participate in the trading program have flexibility
to transfer allowances among multiple participating units under the
same owner/operator when planning operations, Coleto Creek consists of
only one coal-fired unit, and at the time of our October 2017 FIP, was
the only coal-fired unit in Texas owned and operated by Dynegy. To
provide this source additional flexibility, in the trading program as
it was promulgated in October 2017, Coleto Creek was allocated its
maximum supplemental allocation from the Supplemental Allowance Pool as
long as there are sufficient allowances in the Supplemental Allowance
Pool available for allocation, and its actual allocation would not be
reduced in proportion with any reductions made to the supplemental
allocations to other sources. In our August 2018 proposal, we noted
that Dynegy has merged with Vistra, which owns other units that are
subject to the trading program. In the August 2018 proposal, we
solicited comment on eliminating this additional flexibility for Coleto
Creek in light of the recent change in ownership, and we received no
adverse comments on such a change. Therefore, in the November 2019
supplemental proposal, we proposed to make this change to the
regulations.\50\
---------------------------------------------------------------------------
\50\ Id. 61855.
---------------------------------------------------------------------------
Some comments on our August 2018 proposal also expressed the view
that it would be more equitable to make allocations from the
Supplemental Allowance Pool in proportion to each owner's total
emissions in excess of the owner's total base allowance allocations
instead of in proportion to each individual source's emissions in
excess of the individual source's base allowance allocation. In the
November 2019 supplemental proposal, EPA proposed to agree that this
change would be equitable and noted that it would also be consistent
with the rationale for proposing to eliminate the special flexibility
in the existing regulations for Coleto Creek. Accordingly, EPA proposed
to amend the Supplemental Allowance Pool allocation provisions to
reflect this further change in the allocation methodology. EPA
specifically requested comment on the proposed revisions to the
Supplemental Allowance Pool allocation provisions.\51\
---------------------------------------------------------------------------
\51\ Id.
---------------------------------------------------------------------------
(3) Termination of the Opt-in Provisions. In response to a comment
on the August 2018 proposal that asserted that the opt-in provisions
weakened the functional equivalence of the Texas SO2 Trading
Program to CSAPR, EPA proposed to terminate the opt-in provisions in
the Texas SO2 Trading Program in the November 2019
supplemental proposal. We noted that our proposal to terminate the opt-
in provisions is consistent with the supplemental proposal's overall
objective of strengthening our finding that the Texas SO2
Trading Program will result in SO2 emission levels from
Texas EGUs that are similar to or less than the emission levels from
Texas EGUs that would have been realized from participation in the
SO2 trading program under CSAPR. EPA also specifically
requested comment on the proposed termination of the opt-in provisions
and solicited comment as to what other relevant provisions in the Texas
SO2 Trading Program may offset the commenter's concerns with
the opt-in provisions.\52\
---------------------------------------------------------------------------
\52\ Id. 61855-56.
---------------------------------------------------------------------------
(4) Revision of the Allowance Recordation Provisions. In the
November 2019 supplemental proposal, we also proposed to amend the
language in the recordation provisions such that the Administrator can
delay recordation of Texas SO2 Trading Program allowances
for the specified control periods only in the event that Texas submits
a SIP revision and EPA takes final action to approve it. Under 40 CFR
97.921(a) of the Texas SO2 Trading Program regulations as
originally promulgated in October 2017, ``[t]he Administrator may delay
recordation of Texas SO2 Trading Program allowances for the
specified control periods if the State of Texas submits a SIP revision
before the recordation deadline.'' Similarly, under Sec. 97.921(b),
``[t]he Administrator may delay recordation of the Texas SO2
Trading Program allowances for the applicable control periods if the
State of Texas submits a SIP revision by May 1 of the year of the
applicable recordation deadline under this paragraph.'' The revisions
we proposed in the November 2019 supplemental proposal are necessary to
ensure that the program remains fully operational unless it is replaced
by a SIP revision that is approved by EPA as meeting the SO2
BART requirements for the covered units. EPA specifically requested
comment on the proposed revisions to the allowance recordation
provisions.\53\
---------------------------------------------------------------------------
\53\ Id. 61856.
---------------------------------------------------------------------------
[[Page 49176]]
Finally, the EPA noted that the proposed revisions to the Texas
SO2 Trading Program would strengthen the program in a manner
that provides further support that it will achieve greater emission
reductions than Texas had agreed to in consultations with other states
in setting reasonable progress goals for Class I areas outside Texas
for the first implementation period of the Regional Haze Rule. As a
result, the EPA believed the proposed changes strengthened its
conclusion that the Texas trading program, in conjunction with Texas'
participation in the CSAPR ozone-season NOX trading program,
satisfies interstate visibility transport obligations under section
110(a)(2)(D)(i)(II) as to the six NAAQS identified above. The EPA
solicited comment on this relationship.\54\
---------------------------------------------------------------------------
\54\ Id. 61856-57.
---------------------------------------------------------------------------
III. Summary of Our Final Decisions
A. Regional Haze
After carefully considering the comments we received on our August
27, 2018 proposed rule and our November 14, 2019 supplemental proposal,
we are taking final action to affirm our determination that our October
2017 FIP that established an intrastate trading program addressing
emissions of SO2 from certain EGUs in Texas, as amended in
this final action as described in section III.A.1 below, satisfies the
Regional Haze Rule requirements for a BART alternative under 40 CFR
51.308(e)(2). We are taking final action to affirm our determination
that the BART alternatives addressing SO2 BART, as amended
in this final action, and NOX BART at Texas' EGUs are
adequate to satisfy the interstate visibility transport requirements
for six NAAQS. We are also taking final action to affirm our October
2017 approval of Texas' SIP determination that no sources are subject
to BART for PM. A discussion of the amendments to the Texas
SO2 Trading Program we are finalizing in today's final
action and explanation of how the trading program satisfies the
regulatory requirements for BART alternatives are discussed below in
sections III.A.1 and III.A.2, respectively. This final rule is
promulgated pursuant to CAA section 307(d). This includes our
affirmation of the several aspects of the FIP promulgating the Texas
SO2 Trading Program, amendments to certain provisions of the
FIP, which are 307(d)-listed actions, see 307(d)(1)(B). In addition,
EPA exercises its discretion under 307(d)(1)(V) to treat the
affirmation of our approval of parts of the 2009 Texas Regional Haze
SIP as also an action subject to 307(d) requirements and procedural
protections.
1. Amendments to the Texas SO2 Trading Program
In response to certain comments we received during the public
comment period for the August 2018 proposal to affirm the October 2017
FIP, we proposed revisions to the Texas SO2 Trading Program
in a supplemental proposal published on November 14, 2019.\55\ We
proposed to make four sets of amendments to the Texas SO2
Trading Program: (1) The addition of assurance provisions; (2)
revisions to the Supplemental Allowance Pool allocation provisions; (3)
termination of the opt-in provisions; and (4) revision of the allowance
recordation provisions. We are finalizing these amendments to the Texas
SO2 Trading Program, with certain modifications. We are also
correcting a 2-ton error we made in the allowance allocation for El
Paso Electric's Newman Plant due to a unit-identification error,
thereby increasing the trading program budget from 238,393 tons to
238,395 tons. The amendments we are finalizing in today's action
strengthen the Texas SO2 Trading Program and increase its
consistency with CSAPR. These amendments are discussed in the
paragraphs that follow.
---------------------------------------------------------------------------
\55\ 84 FR 61850 (Nov. 14, 2019).
---------------------------------------------------------------------------
Addition of Assurance Provisions. In order to maintain consistency
with the CSAPR program and to provide additional support for our
determination that SO2 emissions under the Texas
SO2 Trading Program will remain below the requisite level on
an annual basis, we are taking final action to add assurance provisions
to the Texas SO2 Trading Program. To set the assurance
level, we are relying on the same analysis and methodology that were
used to set assurance levels in the original CSAPR rulemaking while
accounting for the fact that the Texas SO2 Trading Program
is intrastate-only (i.e., does not permit interstate trading). As
discussed in our supplemental proposal, EPA determined in the CSAPR
rulemaking that, on a state-specific basis for Texas, the statistical
percentage measure representing the maximum expected one-year deviation
from the state's average annual fossil fuel consumption for electricity
generation was seven percent.\56\ Applying that same percentage to the
current Texas SO2 Trading Program budget, EPA is finalizing
a variability limit for Texas at 16,688 tons, which is seven percent of
the corrected trading budget of 238,395 tons. The assurance level we
are finalizing is the sum of the budget and the variability limit, or
255,083 tons, and we are making this assurance level effective
beginning with the 2021 compliance period and for each period
thereafter. We are also taking final action to amend the Texas
SO2 Trading Program's regulations to impose a penalty
surrender ratio of three allowances for each ton of emissions in any
year in excess of the 255,083-ton assurance level. We are taking final
action to impose the penalty proportionately to emissions from those
groups of sources represented by a common designated representative
that emit in excess of the groups' annual allocations of allowances.
Thus, if the total emissions of all sources in the program in any year
exceed the annual program budget by more than a variability limit of
16,688 tons, the emissions over the assurance level will trigger a
requirement for some sources to surrender three allowances for each ton
of emissions over the assurance level, providing a strong disincentive
against emissions exceeding the assurance level.
---------------------------------------------------------------------------
\56\ Id. 61853.
---------------------------------------------------------------------------
We are taking final action to add new provisions at multiple
locations in the Texas SO2 Trading Program regulations at 40
CFR part 97, subpart FFFFF (40 CFR 97.901 through 97.935) to add these
assurance provisions. In Sec. 97.902, new definitions of several terms
used in the assurance provisions (``assurance account,'' ``common
designated representative,'' ``common designated representative's
assurance level,'' and ``common designated representative's share'')
are being added in this final action. New Sec. 97.906(c)(2)
and(c)(3)(ii) set forth the central requirement of the assurance
provisions--namely, that if SO2 emissions from all covered
sources in 2021 or any subsequent year collectively exceed the
program's assurance level, then the owners and operators of the groups
of sources determined to be responsible for the collective exceedance
would be required to surrender allowances totaling twice the amount of
the exceedance by a specified deadline, in addition to the allowances
surrendered to account for the sources' total emissions. New Sec.
97.910(b) and (c) establish the variability limit that would be added
to the trading program budget to determine the amount of the assurance
level. New Sec. 97.920(b) provides for the establishment of assurance
accounts, when appropriate, to hold the additional allowances to be
surrendered. New Sec. 97.925 sets forth
[[Page 49177]]
additional procedures for EPA's administration of and sources'
compliance with the assurance provisions. In addition to adding the
provisions discussed above, in Sec. Sec. 97.906 and 97.920, we are
also taking final action to renumber and update internal cross-
references to reflect the added and renumbered paragraphs. Finally, we
are making revisions to existing language at Sec. Sec. 97.902
(definitions of ``general account'' and ``Texas SO2 Trading
Program allowance deduction''), 97.906(b)(2), 97.913(c), 97.926(b),
97.928(b), and renumbered 97.906(c)(4)(ii) to integrate the new
assurance provisions with various existing provisions of the Texas
program regulations.
As discussed in our November 2019 supplemental proposal, in
addition to being consistent with the original CSAPR methodology for
setting assurance levels, an assurance level set at 255,083 tons is
appropriate for the Texas SO2 Trading Program because it
provides further support for our October 2017 finding that the Texas
SO2 Trading Program will result in SO2 emission
levels from Texas EGUs that are similar to or less than the emission
levels from Texas EGUs that would have been realized from participation
in the SO2 trading program under CSAPR. Additionally, at an
assurance level of 255,083 tons of emissions annually, EPA has high
confidence that emissions will be below the amount assumed in the BART-
alternative sensitivity analysis utilized for the 2012 CSAPR Better-
than-BART determination (i.e., 317,100 tons), and thus visibility
levels at Class I areas impacted by sources in Texas are anticipated to
be at least as good as the levels projected in the 2012 analysis that
assumed Texas would be in the larger CSAPR SO2 trading
program.\57\
---------------------------------------------------------------------------
\57\ Id.
---------------------------------------------------------------------------
The language of the revisions to the Texas SO2 Trading
Program regulations we are finalizing in this final rulemaking would
generally parallel the analogous language from the CSAPR regulations at
40 CFR part 97, subparts AAAAA through EEEEE, streamlined to reflect
the Texas program's narrower applicability (i.e., specific units
located only in Texas, excluding any new units built either in Texas or
in Indian country within Texas' borders). The only substantive
differences from the analogous CSAPR assurance provisions concern the
approach used to impute allocation amounts--for use in apportioning
responsibility for any collective exceedance of the assurance level--to
any units that do not receive actual allowance allocations from the
trading program budget. Under CSAPR, the only units potentially in this
situation are new units that do not receive allowance allocations from
the CSAPR new unit set-asides. The CSAPR regulations include a
methodology for computing unit-specific imputed allocation amounts
based on several data elements relating to the new units' design and
potential operation.\58\ In contrast, under the Texas SO2
Trading Program, the only units potentially in this situation would be
existing units that have ceased operation for an extended period,
thereby losing their allocations from the trading budget under Sec.
97.911(a), and that subsequently resume operation.\59\ Because the
Texas SO2 Trading Program regulations already identify the
unit-specific allowance allocations that these units would formerly
have received from the trading budget, the Texas SO2 Trading
Program assurance provisions we are finalizing in this final rulemaking
would use these previously established amounts for purposes of
assurance provision calculations instead of requiring new imputed
allocation amounts to be computed according to the more complex
methodology in the CSAPR assurance provisions. The simpler approach we
are finalizing for the Texas SO2 Trading Program assurance
provisions appears at paragraph (2) of the new definition of ``common
designated representative's assurance level'' we are finalizing in
Sec. 97.902.
---------------------------------------------------------------------------
\58\ See, e.g., paragraph (3) of the definition of ``common
designated representative's share'' at 40 CFR 97.702.
\59\ Although the owners and operators of a unit in this
situation might receive an allocation of allowances from the
Supplemental Allowance Pool under Sec. 97.912 based in part on the
unit's emissions following resumption of operations, under the Texas
program assurance provisions, any allocations of allowances from the
Supplemental Allowance Pool would not be considered when
apportioning responsibility for a collective exceedance of the
assurance level.
---------------------------------------------------------------------------
Revisions to the Supplemental Allowance Pool Allocation Provisions.
All sources required to participate in the Texas SO2 Trading
Program have the flexibility to transfer allowances among multiple
participating units under the same owner/operator when planning
operations. As discussed in section II.B of this final action, the
October 2017 final rule included additional flexibility to transfer
allowances for Coleto Creek, but given the subsequent merger of Dynegy
with Vistra, which owns other units that are subject to the trading
program, Coleto Creek now has the same flexibility as other sources
required to participate in the trading program to transfer allowances
among multiple participating units under the same ownership when
planning operations. In light of this, we are taking final action to
eliminate the additional flexibility originally offered under the
trading program for Coleto Creek.
We are also finalizing amendments to the methodology for allocating
allowances from the Supplemental Allowance Pool such that allowance
allocations are in proportion to each owner's total emissions in excess
of the owner's total base allowance allocations instead of in
proportion to each individual source's emissions in excess of the
individual source's base allowance allocation. Comments we received on
our August 2018 proposal and our November 2019 supplemental proposal
generally indicated support for this change.\60\ We find that this
change would make the methodology for allocating allowances more
equitable and is also consistent with the rationale for eliminating the
special flexibility in the existing regulations for Coleto Creek. For
consistency with the new variability limit of 16,688 tons, we are also
reducing the number of allowances that can be allocated from the
Supplemental Allowance Pool in any year to 16,688 tons plus any
allowances added to the pool in that year from retired units. The
effect of this revision is that the total number of allowances that can
be issued in any year, considering both initial allocations and
allowances issued from the Supplemental Allowance Pool, will not exceed
the program's assurance level of 255,083 tons. This revision to the
Supplemental Allowance Pool provisions is consistent with and
reinforces the disincentive created by the assurance provisions against
emissions exceeding the assurance level.
---------------------------------------------------------------------------
\60\ Supportive comments were submitted by most of the sources
covered by the Texas SO2 Trading Program, except for LCRA
who did not specifically comment on the reduction in the number of
allowances that can be allocated from the Supplemental Allowance
Pool. Supportive comments can be found in the docket for this action
at Document IDs EPA-R06-OAR-2016-0611-0157, EPA-R06-OAR-2016-0611-
0127, EPA-R06-OAR-2016-0611-0163, EPA-R06-OAR-2016-0611-0156.
---------------------------------------------------------------------------
To implement these modifications to the Supplemental Allowance
Pool, we are finalizing several revisions to Sec. Sec. 97.911 and
97.912. In Sec. 97.912, we are editing paragraph (a) to limit
applicability of the current allocation methodology to the 2019 and
2020 control periods, and we are adding a new paragraph (b) that sets
forth the revised allocation methodology for the control periods in
2021 and subsequent years. We are also renumbering two
[[Page 49178]]
existing paragraphs of the section to accommodate the new paragraph (b)
and are updating internal cross-references to reflect the renumbering
and to integrate the provisions of the revised allocation methodology
with other existing provisions. We are adding new Sec. 97.912(b)(1)
that addresses the revised allocation methodology and sets forth a
procedure for assigning units into groups under common ownership called
``affiliated ownership groups.'' Under the new procedure, the group
assignments will remain constant unless and until revised by EPA to
reflect an ownership transfer. The initial group assignments for all
covered units are specified in a new column that we are adding to the
existing allowance allocation table in Sec. 97.911(a)(1). Renumbered
Sec. 97.912(d) is revised to reduce the cap on the number of
allowances that can be allocated from the Supplemental Allowance Pool
for any given control period starting in 2021 to 16,688 tons plus any
allowances added to the pool in that year from retired units. Existing
Sec. 97.912(a)(3)(ii)(B) is revised to add the same procedure included
in new Sec. 97.912(b)(4)(i)(C) for adjusting allocation amounts up or
down by one allowance as needed to address rounding errors. Finally, we
are finalizing non-substantive revisions to Sec. 97.911(a)(2) and
(c)(5) that clarify that allowances from the trading budget that are
transferred to the Supplemental Allowance Pool are not necessarily
``allocated under'' Sec. 97.912, but instead are made available for
``potential allocation in accordance with'' Sec. 97.912.
Termination of Opt-in Provisions. To address concerns that the opt-
in provisions weakened the functional equivalence of the Texas
SO2 Trading Program to CSAPR and to be consistent with EPA's
determination not to include opt-in provisions in the CSAPR trading
programs on the basis that opt-in provisions would undermine
achievement of the CSAPR program's emission reduction objectives, we
are taking final action to terminate the opt-in provisions in the Texas
SO2 Trading Program. As we discuss in the response to
comments below, we find that this termination of the opt-in provisions
will address concerns about the difficulty of distinguishing new
emission reductions from reductions that opt-in sources would have made
anyway, and the consequent likelihood that the amounts of allowances
allocated to the sources would exceed their starting emissions levels
and thus introduce ``extra'' allowances available to be traded to other
sources. Our final action to terminate the opt-in provisions
strengthens our finding that the Texas SO2 Trading Program
will result in SO2 emission levels from Texas EGUs that are
similar to or less than the emission levels from Texas EGUs that would
have been realized from participation in the SO2 trading
program under CSAPR.
Because no units opted into the Texas SO2 Trading
Program for the 2019 or 2020 control periods and opting in is not
allowed for any future control period, we are implementing our final
action to terminate the opt-in provisions by removing the provisions
from the regulations in their entirety. Specifically, Sec. Sec.
97.904(b), 97.911(b), and 97.921(d), which concerned the procedure for
opting in, allowance allocations for opt-in units, and recordation for
opt-in units, respectively, are being removed. In addition, conforming
revisions to reflect removal of the opt-in provisions are being made to
the existing provisions at Sec. Sec. 97.911(c)(5), 97.915(d),
97.930(b), 97.934(d)(1), and renumbered Sec. 97.906(c)(3)(i).
Revision of Allowance Recordation Provisions. We are taking final
action to condition any exceptions to scheduled allowance recordation
activities on Texas' submission and EPA's approval of a SIP revision,
rather than just on Texas' submission of a SIP revision. This revision
will ensure that the program remains fully operational unless it is
replaced by a SIP revision that is approved by EPA as meeting the
SO2 BART requirements for the covered units. To implement
our final revision to the allowance recordation provisions, we are
amending three paragraphs of Sec. 97.921. In Sec. 97.921(a), we are
deleting without replacement the language providing for a possible
delay of recordation activities scheduled for November 1, 2018; the
language is moot because the recordation date has already passed. In
Sec. 97.921(b), which governs future recordation of allowances
allocated from the trading budget under Sec. 97.911(a), we are
revising the existing language to provide that future recordation
activities will take place as scheduled unless provided otherwise in
EPA's approval of a SIP revision replacing the provisions of subpart
FFFFF. We are also adding the same revised condition to Sec.
97.921(c), which governs future recordation of allowances allocated
from the Supplemental Allowance Pool under Sec. 97.912.
Error Correction Adjusting the Allocation for El Paso Electric's
Newman Plant. Our last amendment to the Texas SO2 Trading
Program regulations in this action corrects a small error in the
allowance allocations and budget established in the October 2017 FIP.
In our October 2017 action, we determined that several units at El Paso
Electric's Newman plant (ORIS 3456) should be included in the Texas
SO2 Trading Program, including ``Newman unit 4.'' This
``unit'' is actually a multi-unit combined cycle system consisting of
two gas- and oil-fired combustion turbine units serving a common steam
turbine-generator. The combustion turbine units are identified in the
databases used for the CSAPR SO2 program as ``Newman unit
**4'' and ``Newman unit **5.'' Both of these combustion turbine units
are BART-eligible and both are properly included in the Texas
SO2 Trading Program pursuant to the evaluation of ``Newman
unit 4'' set forth in our October 2017 action.\61\ However, in
establishing the allowance allocations and budgets in our October 2017
action, while we correctly accounted for the 2-ton CSAPR allocation to
Newman unit **4, we mistakenly omitted the 2-ton CSAPR allocation to
Newman unit **5. We are correcting our omission in this action.
Specifically, in Table 1 in Sec. 97.911(a)(1), we are relabeling the
existing entry for ``Newman unit 4'' as ``Newman unit **4'' and adding
a new entry for ``Newman unit **5'' with an additional 2-ton
allocation, and in Sec. 97.910(a)(1), we are increasing the Texas
SO2 Trading Program budget by 2 tons to 238,395 tons.\62\ We
find that these corrections are entirely consistent with the
methodology and rationale we set forth when establishing the
allocations and budget in our October 2017 action. Because the
otherwise applicable recordation deadlines for the allowances allocated
to Newman unit **5 for the control periods from 2019 through 2024 will
have already passed by the effective date of this action, new Sec.
97.921(f) establishes December 31, 2020 as the delayed recordation
deadline for these allocations. Finally, language is added to Sec.
97.912(a)(1) and (2) clarifying that allocations under Sec. 97.911 are
not considered in determining a source's eligibility to receive
allocations from the Supplemental Allowance Pool unless the allocations
have actually been recorded in the source's compliance account under
Sec. 97.921.
---------------------------------------------------------------------------
\61\ See 82 FR at 48354-57, where we identify ``Newman unit 4''
as a BART-eligible source and discuss our evaluation for determining
the inclusion of units in the Texas SO2 Trading Program.
\62\ Both Newman unit **4 and Newman unit **5 have participated
in the Texas SO2 Trading Program since January 1, 2019.
El Paso Electric has monitored and reported the SO2
emissions for both units under the program.
---------------------------------------------------------------------------
[[Page 49179]]
2. Analysis of Texas SO2 Trading Program as a BART
Alternative
We are taking final action to affirm our October 17, 2017 final
action promulgating the Texas SO2 Trading Program under 40
CFR 52.2312 and subpart FFFFF of part 97 as a BART alternative, with
the amendments discussed in Section III.A.1. We are affirming our
determination that the Texas SO2 Trading Program, including
the addition of the assurance provisions and other amendments to the
program we are finalizing in this action, will result in future EGU
emissions in Texas that will be less than the SO2 emission
levels used in the 2012 Better-than-BART demonstration for Texas EGU
emissions assuming CSAPR participation.\63\ Additionally, the aggregate
visibility impact from Texas EGU emissions under the trading program
will be similar to or less than what would have been realized from
Texas participation in the CSAPR SO2 trading program.\64\
Further, on the basis of EPA's denial of a petition for reconsideration
of the 2017 CSAPR Better-than-BART affirmation finding in a separate
action,\65\ EPA can now affirm that it has fully accounted for the
stringency of the Texas program in the CSAPR Better-than-BART analysis
(including accounting for the effects of Texas no longer being a part
of the interstate trading region of CSAPR). We are taking final action
to affirm our determination that the Texas SO2 Trading
Program satisfies the Regional Haze Rule requirements for BART
alternatives, and therefore satisfies the SO2 BART
requirements for the BART-eligible coal-fired EGUs and gas- and gas/
fuel oil-fired EGUs identified in the table below.
---------------------------------------------------------------------------
\63\ 83 FR 43586, 43591 (Aug. 27, 2018).
\64\ Id. 43592.
\65\ See U.S. EPA, Denial of Petition for Partial
Reconsideration of ``Interstate Transport of Fine Particulate
Matter: Revision of Federal Implementation Plan Requirements for
Texas'' (82 FR 45481; Sept. 29, 2017) (EPA-HQ-OAR-2016-0598). A copy
of the denial of petition letter sent to the petitioners and the
denial of petition Notice of Availability (NOA) published in the
Federal Register are available at Docket ID EPA-HQ-OAR-2016-0598.
Table 1--Texas EGUs Subject to the FIP SO2 Trading Program
------------------------------------------------------------------------
Owner/operator Units BART-eligible
------------------------------------------------------------------------
AEP........................... Welsh Power Plant Yes.
Unit 1.
Welsh Power Plant Yes.
Unit 2.
Welsh Power Plant No.
Unit 3.
H W Pirkey Power No.
Plant Unit 1.
Wilkes Unit 1 Yes.
[dagger].
Wilkes Unit 2 Yes.
[dagger].
Wilkes Unit 3 Yes.
[dagger].
CPS Energy.................... JT Deely Unit 1...... Yes.
JT Deely Unit 2...... Yes.
Sommers Unit 1 Yes.
[dagger].
Sommers Unit 2 Yes.
[dagger].
LCRA.......................... Fayette/Sam Seymour Yes.
Unit 1.
Fayette/Sam Seymour Yes.
Unit 2.
Vistra........................ Big Brown Unit 1..... Yes.
Big Brown Unit 2..... Yes.
Coleto Creek Unit 1.. Yes.
Martin Lake Unit 1... Yes.
Martin Lake Unit 2... Yes.
Martin Lake Unit 3... Yes.
Monticello Unit 1.... Yes.
Monticello Unit 2.... Yes.
Monticello Unit 3.... Yes.
Sandow Unit 4........ No.
Stryker Unit ST2 Yes.
[dagger].
Graham Unit 2 Yes.
[dagger].
NRG........................... Limestone Unit 1..... No.
Limestone Unit 2..... No.
WA Parish Unit WAP4 Yes.
[dagger].
WA Parish Unit WAP5.. Yes.
WA Parish Unit WAP6.. Yes.
WA Parish Unit WAP7.. No.
Xcel.......................... Tolk Station Unit No.
171B.
Tolk Station Unit No.
172B.
Harrington Unit 061B. Yes.
Harrington Unit 062B. Yes.
Harrington Unit 063B. No.
El Paso Electric.............. Newman Unit 2[dagger] Yes.
Newman Unit 3 Yes.
[dagger].
Newman Unit **4 Yes.
[dagger].
Newman Unit **5 Yes.
[dagger].
------------------------------------------------------------------------
[dagger] Gas-fired or gas/fuel oil-fired units.
Under 40 CFR 51.308(e)(2), a State may opt to implement or require
participation in an emissions trading program or other alternative
measure rather than to require sources subject to BART to install,
operate, and maintain BART. Among other things, such an emissions
trading program or other alternative measure must achieve greater
reasonable progress than would be achieved through the installation and
operation of BART. In the paragraphs
[[Page 49180]]
that follow, we summarize the BART alternative requirements under Sec.
51.308(e)(2) and explain how the Texas SO2 Trading Program
satisfies each requirement.
Section 51.308(e)(2)(i) requires a demonstration that the emissions
trading program or other alternative measure will achieve greater
reasonable progress than would have resulted from the installation and
operation of BART at all sources subject to BART in the State and
covered by the alternative program. This demonstration must be based on
the criteria listed under Sec. 51.308(e)(2)(i)(A) through (E).
Section 51.308(e)(2)(i)(A). As part of the demonstration that the
emissions trading program or other alternative measure will achieve
greater reasonable progress than BART, the Regional Haze Rule requires
that a list of all BART-eligible sources within the state be provided.
In our October 2017 final action, we finalized our list of all BART-
eligible sources in Texas,\66\ which serves to satisfy
51.308(e)(2)(i)(A). As explained in our August 27, 2018 affirmation
proposal,\67\ we did not reopen the identification of BART-eligible
sources and thus did not request comment on this element.
---------------------------------------------------------------------------
\66\ See 82 FR at 48356 (final action) and 82 FR at 918
(proposed action).
\67\ 83 FR at 43598.
---------------------------------------------------------------------------
Section 51.308(e)(2)(i)(B). This provision requires that a list of
all BART-eligible sources and all BART source categories covered by the
alternative program be provided. The regulations do not require
inclusion of every BART source category or every BART-eligible source
within a BART source category in an alternative program, but each BART-
eligible source in the state must be subject to the requirements of the
alternative program, have a federally enforceable emission limitation
determined by the state and approved by EPA as meeting BART in
accordance with section 302(c) or Sec. 51.308(e)(1), or be otherwise
addressed under Sec. 51.308(e)(1) or (e)(4). Our October 2017 final
action and our August 2018 affirmation proposal included a list of all
EGUs covered by the trading program. We are finalizing our affirmation
of the list of BART-eligible EGUs in Texas covered by the alternative
program with one minor non-substantive change,\68\ satisfying the first
requirement of 51.308(e)(2)(i)(B). Table 1 above lists all
participating units and identification of BART-eligible participating
units. All BART-eligible coal-fired units, some additional coal-fired
EGUs, and some BART-eligible gas-fired and oil-and-gas-fired units are
covered by the alternative program. This coverage and our determination
in a previous final action that the BART-eligible gas-fired and oil-
and-gas-fired EGUs not covered by the program are not subject-to-BART
for NOX, SO2 and PM satisfy the second
requirement of 51.308(e)(2)(i)(B). We note that EPA's determination
that these EGU units not covered by the program are not subject to BART
was finalized in our October 2017 final action,\69\ and we did not
reopen that determination in the August 2018 proposal.\70\
---------------------------------------------------------------------------
\68\ As discussed in section III.A.2, ``Newman unit 4'' at the
El Paso Electric Newman plant (ORIS 3456), which is included in the
Texas SO2 Trading Program, is actually a multi-unit
combined cycle system consisting of two gas- and oil-fired
combustion turbine units (Newman unit **4 and Newman unit **5)
serving a common steam turbine-generator. Both of these combustion
turbine units are BART-eligible, and both are properly included in
the Texas SO2 Trading Program. In this final action, we
are not identifying any new units as BART-eligible, we are merely
relabeling the already-identified BART-eligible ``Newman unit 4'' as
its components: ``Newman unit **4'' and ``Newman unit **5.'' Thus,
we do not consider this change to be substantive.
\69\ 82 FR at 48328.
\70\ 83 FR at 43598, footnote 80.
---------------------------------------------------------------------------
Section 51.308(e)(2)(i)(C). This provision requires an analysis of
the best system of continuous emission control technology available and
associated emission reductions achievable for each source within the
state subject to BART and covered by the alternative program. This
analysis must be conducted by making a determination of BART for each
source subject to BART and covered by the alternative program as
provided for under Sec. 51.308(e)(1), unless the emissions trading
program or other alternative measure has been designed to meet a
requirement other than BART. In such a case, the state may determine
the best system of continuous emission control technology and
associated emission reductions for similar types of sources within a
source category based on both source-specific and category-wide
information, as appropriate. As discussed in our August 2018 proposal,
we considered the question of whether, in applying this portion of the
Regional Haze Rule, we should take as the baseline the application of
source-specific BART at the covered sources.\71\ We have determined not
to take this approach here, given that 51.308(e)(2)(i)(C) provides for
an exception (which we are exercising) to the requirement for source-
specific BART determinations for the covered sources. The regulations
allow for the BART ``benchmark'' to be set using ``category-wide''
information when the alternative measure ``has been designed to meet a
requirement other than BART (such as the core requirement to have a
long-term strategy to achieve the reasonable progress goals established
by States).'' See 40 CFR 51.308(e)(2)(i)(C). As discussed below,
category-wide information may include, for example, the use of
``presumptive'' BART emission limits for a particular source category,
such as coal-fired EGUs. The Texas SO2 Trading Program meets
the conditions of the exception allowed under Sec. 51.308(e)(2)(i)(C),
as discussed in sections III.B and V.B of this final notice, because it
has been designed to meet Texas' interstate visibility transport
requirements under CAA section 110(a)(2)(D)(i)(II). This BART
alternative extends beyond all BART-eligible coal-fired units to
include a number of additional coal-fired EGUs, and some BART-eligible
gas-fired and oil-and-gas-fired units, capturing the majority of
emissions from EGUs in the state, and is designed to provide the
measures that are needed to address interstate visibility transport
requirements for several NAAQS. This is because for all sources covered
by the Texas SO2 Trading Program, those sources' CSAPR
allocations for SO2 are incorporated into the BART
alternative, and the Texas SO2 Trading Program ensures more
emission reductions of SO2 than the level of emissions
reductions relied upon by other states during consultation and assumed
by other states in their own regional haze SIPs, including their
reasonable progress goals for their Class I areas.
---------------------------------------------------------------------------
\71\ 83 FR at 43599.
---------------------------------------------------------------------------
As allowed under Sec. 51.308(e)(2)(i)(C), rather than using
source-specific BART at the covered sources, we are relying on the
determinations of BART and associated emission reductions for EGUs that
were used in our 2012 determination that showed that CSAPR as finalized
and amended in 2011 and 2012 achieves more reasonable progress than
BART (``CSAPR Better-than-BART''). This analysis establishes by the
clear weight of evidence that the Texas SO2 Trading Program,
which is modeled on the CSAPR trading programs, will provide for
greater reasonable progress than BART in Texas. These determinations of
the best system of continuous emission control technology and
associated emission reductions for EGUs that were used in our 2012
CSAPR Better-than-BART demonstration were based largely on category-
wide information, including the use of ``presumptive'' BART limits.\72\
EPA finds that reliance on the category-wide BART analysis from the
[[Page 49181]]
2012 CSAPR Better-than-BART demonstration is appropriate here and that
the BART determinations derived from that CSAPR Better-than-BART
demonstration are an appropriate BART benchmark for comparison against
the Texas SO2 Trading Program given that the Texas
SO2 Trading Program is modeled on the CSAPR trading
programs.
---------------------------------------------------------------------------
\72\ 77 FR at 33649-50.
---------------------------------------------------------------------------
We note that in our August 2018 proposal, we proposed to affirm our
finding that the Texas SO2 trading program is also designed
to be part of the long-term strategy needed to meet the reasonable
progress requirements of the Regional Haze Rule, which remain
outstanding after the remand of our January 2016 FIP addressing Texas'
reasonable progress obligations by the Fifth Circuit Court of Appeals.
After consideration of the comments we received addressing this issue
during the public comment period for our August 2018 proposal, we are
not finalizing our affirmation of the finding that the Texas
SO2 trading program is also designed to be part of the long-
term strategy needed to meet the reasonable progress requirements of
the Regional Haze Rule at this time. While the Texas SO2
trading program certainly contributes to reasonable progress toward
meeting the visibility goals of the regional haze program through
enforceable reductions of a visibility pollutant from baseline emission
levels, EPA has made clear that it intends to address the specific
regulatory requirements for the long-term strategy for Texas through a
separate action.\73\ However, this does not impact our determination
that the Texas SO2 trading program satisfies the
requirements of section 51.308(e)(2)(i)(C) given that the trading
program is designed to provide the measures that are needed to address
interstate visibility transport requirements for several NAAQS, and
this sufficiently meets the criteria under Sec. 51.308(e)(2)(i)(C)
allowing us to exercise the exception allowed under the provision.
Thus, we have met the requirements of Sec. 51.308(e)(2)(i)(C).
---------------------------------------------------------------------------
\73\ 83 FR at 43596 n.63.
---------------------------------------------------------------------------
Section 51.308(e)(2)(i)(D). This provision requires an analysis of
the projected emissions reductions achievable through the trading
program or other alternative measure. Our analysis is that the Texas
trading program will effectively limit the aggregate annual
SO2 emissions of the covered EGUs to be no higher than the
assurance level of 255,083 tons. The Texas SO2 Trading
Program is an intrastate cap-and-trade program for listed covered
sources in the State of Texas modeled after the EPA's CSAPR
SO2 Group 2 Trading Program. Authorizations to emit
SO2, known as allowances, are allocated to the affected
units as listed in Table 1 above. As discussed elsewhere, the program
includes a Supplemental Allowance Pool, as revised in this final
action, with additional allowances that may be allocated to subject
units and sources to provide compliance assistance. The average total
annual allowance allocation for all covered sources is 238,395 tons,
with an additional 10,000 tons allocated to the Supplemental Allowance
Pool. In addition, while the Supplemental Allowance Pool may grow over
time as unused supplemental allowances remain available and allocations
from retired units are placed in the pool, the total number of
allowances that can be allocated to sources in a control period from
the supplemental pool beginning with the 2021 compliance period and for
each period thereafter is limited to a maximum 16,688 tons plus the
amount of any allowances placed in the pool that year from retired
units and corrections. Therefore, the total annual average emissions
for the covered sources will be less than or equal to 248,395 tons.
Although there will be some year-to-year variability, that variability
will be constrained by the addition of an assurance level in this final
action. We are finalizing an assurance level of 255,083 tons per year
for the Texas SO2 Trading Program, which, in light of the
three-for-one penalty surrender ratio imposed on emissions exceeding
that level, represents the highest annual SO2 emissions
anticipated from units subject to the Texas program. In reality, there
is no reasonable expectation that actual emissions would even approach
this level in light of ongoing changes in the electric-generating
sector in Texas.
Further, the projected average SO2 emission reduction
that will be achieved by the program in any given year, relative to any
selected historical baseline year, would be the difference between the
aggregate historical baseline emissions of the covered units and the
average total annual allocation of 238,395 SO2 tons plus a
Supplemental Allowance Pool budget of 10,000 tons, or 248,395. As
detailed in our October 2017 final rule, for the purpose of this
analysis, we selected 2014 as the baseline year.\74\ The aggregate 2014
SO2 emissions of the covered EGUs were 309,298 tons per
year, while the average total annual allocation for the covered EGUs is
238,395 SO2 tons plus a Supplemental Allowance Pool budget
of 10,000 tons, or 248,395 tons per year. Therefore, compared to 2014
emissions, the Texas trading program is projected to achieve an average
reduction of approximately 60,903 tons per year from the covered
units.\75\ (We note that with the termination of the opt-in provisions
in this final action, there is no need for this comparison to include
consideration of the 2014 emissions from those units formerly eligible
to opt into the trading program.)
---------------------------------------------------------------------------
\74\ Texas sources were subject to the CSAPR SO2
trading program in 2015 and 2016 but are no longer subject to that
program. We therefore select 2014 as the appropriate most recent
year for comparing the aggregate historical baseline emissions of
the covered units to the average total annual allocation for
purposes of estimating the SO2 emission reduction that
will be achieved by the program.
\75\ We note that for other types of alternative programs that
might be adopted under 40 CFR 51.308(e)(2), the analysis of
achievable emission reductions could be more complicated. For
example, a program that involved economic incentives instead of
allowances or that involved interstate allowance trading would
present a more complex situation in which achievable emission
reductions could not be calculated simply by comparing aggregate
baseline emissions to aggregate allowances.
---------------------------------------------------------------------------
We also note that the Regional Haze Rule provides that the baseline
period for the first planning period is 2000-2004.\76\ The Texas
SO2 Trading Program, with the assurance level we are
finalizing in this action, achieves significantly lower emissions
relative to the baseline period using 2002 as the baseline. As shown in
Table 2, the total combined SO2 emissions from Texas EGUs
participating in the Texas SO2 Trading Program were 515,526
tons in 2002. The combined actual SO2 emissions from all
Texas EGUs (both those in the Texas SO2 Trading Program and
those not in the program) were 562,516 tons in 2002.\77\ By comparison,
the Texas SO2 Trading Program budget is 238,395
SO2 tons (plus a Supplemental Allowance Pool budget of
10,000 tons). Thus for the covered units, the program achieves average
annual emissions from the covered units of 248,395 tons. Compared with
the 2002 baseline for these units, the program achieves 267,131 tons of
reductions.
---------------------------------------------------------------------------
\76\ See 40 CFR 51.308(d)(2)(i).
\77\ See Excel spreadsheet file ``Texas EGU 2002 SO2
Emissions.xlsx,'' which is available in the docket for this action.
---------------------------------------------------------------------------
When we account for Texas units that were in CSAPR but not in the
current program, we see a similar result using a conservative
assumption about those units' emissions going forward. (As we explained
in our supplemental proposal, our comparison of the Texas program to
CSAPR should take account
[[Page 49182]]
of emissions from these units.\78\) For illustrative purposes, in this
comparison we will also use the higher figure of the assurance level
for the Texas program rather than the average annual allocation. When
our conservative assumption of 35,000 tons as the future combined
SO2 emissions for units that were in the CSAPR program but
not covered by the Texas SO2 Trading Program is added to the
highest annual SO2 emissions anticipated from units under
the Texas SO2 Trading Program, 255,083 tons per year (i.e.,
the assurance level for the program), the total figure is 290,083 tons
per year. A comparison of these figures reveals that the combined
actual SO2 emissions from all Texas EGUs in 2002 during the
baseline period (562,516 tons) were considerably higher than the
highest annual SO2 emissions anticipated from all Texas EGUs
anticipated from operation of the Texas SO2 Trading Program
(290,083 tons), including the CSAPR units not included in that
program--a difference of 272,433 tons. The emission reductions that are
secured by the Trading Program contribute to improvements in visibility
from the baseline period and are permanent and enforceable as part of
the long-term strategy for the State of Texas.
---------------------------------------------------------------------------
\78\ 84 FR at 61853.
Table 2--2002 SO2 Emissions From Texas EGUs Subject to the FIP SO2
Trading Program [dagger]
------------------------------------------------------------------------
SO2 emissions
Owner/operator Units (tons)
------------------------------------------------------------------------
AEP........................... Welsh Power Plant 12,259
Unit 1.
Welsh Power Plant 11,937
Unit 2.
Welsh Power Plant 11,584
Unit 3.
H W Pirkey Power 19,476
Plant Unit 1.
Wilkes Unit 1........ 1
Wilkes Unit 2........ 2
Wilkes Unit 3........ 3
CPS Energy.................... J T Deely Unit 1..... 9,936
J T Deely Unit 2..... 11,577
Sommers Unit 1....... 1
Sommers Unit 2....... 2
LCRA.......................... Fayette/Sam Seymour 13,617
Unit 1.
Fayette/Sam Seymour 16,401
Unit 2.
Vistra........................ Coleto Creek Unit 1.. 14,288
Big Brown Unit 1..... 43,413
Big Brown Unit 2..... 34,448
Martin Lake Unit 1... 24,837
Martin Lake Unit 2... 22,539
Martin Lake Unit 3... 19,023
Monticello Unit 1.... 28,643
Monticello Unit 2.... 34,700
Monticello Unit 3.... 22,976
Sandow Unit 4........ 23,330
Stryker ST2.......... 43
Graham Unit 2........ 23
NRG........................... Limestone Unit 1..... 17,009
Limestone Unit 2..... 13,830
W A Parish Unit WAP4. 4
W A Parish Unit WAP5. 21,310
W A Parish Unit WAP6. 18,006
W A Parish Unit WAP7. 18,459
Xcel.......................... Tolk Station Unit 12,703
171B.
Tolk Station Unit 12,171
172B.
Harrington Station 9,197
Unit 061B.
Harrington Station 8,927
Unit 062B.
Harrington Station 8,844
Unit 063B.
El Paso Electric.............. Newman Unit 2........ 1
Newman Unit 3........ 1
Newman Unit **4...... 1
Newman Unit **5...... 1
Total Combined 2002 SO2 ..................... 515,526
Emissions.
------------------------------------------------------------------------
[dagger] Based on 2002 Clean Air Markets Division (CAMD) data.
Section 51.308(e)(2)(i)(E). This provision requires a
determination, under the specific criteria laid out at 40 CFR
51.308(e)(3) or otherwise based on the clear weight of evidence, that
the trading program or other alternative measure achieves greater
reasonable progress than would be achieved through the installation and
operation of BART at the covered sources. The BART alternative EPA is
taking final action to affirm here is supported by the clear weight of
the evidence. Specifically, with respect to SO2 emissions
from the covered BART-eligible units, because the Texas SO2
trading program, as amended, is designed to ensure that emissions
levels in each year under the trading program are similar to or less
than what would have been realized from Texas EGUs from participation
in the SO2 trading program under CSAPR, EPA can rely on the
2012 and 2017 findings that CSAPR achieves greater
[[Page 49183]]
reasonable progress than BART as evidence that the Texas program
achieves greater reasonable progress than BART, in the context of the
continued operation of the CSAPR ozone-season NOX trading
program (to which units in Texas remain subject) and the CSAPR annual
NOX and SO2 trading programs.\79\ As used in our
51.308(e)(2)(i)(D) analysis above and laid out in more detail below, a
conservative estimate for the maximum total annual emissions from all
EGUs in Texas that can be anticipated with the Texas program in place
is 290,083 tons. As explained below, this is less than the maximum
total annual emissions assumed for Texas under CSAPR in the CSAPR
Better-than-BART analysis, which is 317,100 tons. Thus, we are relying
on the demonstration in the 2012 and 2017 CSAPR Better-than-BART rules
(as reaffirmed in the separate denial of petition for reconsideration
of the 2017 rule) to show that the clear weight of evidence
demonstrates that the Texas SO2 Trading Program, which is
modeled on the CSAPR trading programs, provides for greater reasonable
progress than BART in Texas.
---------------------------------------------------------------------------
\79\ EPA's determination that Texas' participation in CSAPR for
ozone-season NOX satisfies NOX BART for EGUs
is final and we did not reopen that determination in our August 2018
proposal or our November 2019 supplemental proposal.
---------------------------------------------------------------------------
Because the Texas program is designed to achieve greater
SO2 emission reductions than CSAPR in Texas, we are
finalizing our affirmation that it is appropriate to continue to rely
on the 2012 CSAPR Better-than-BART demonstration, which includes the
treatment of Texas as a CSAPR state, as reaffirmed in September 2017
(and again affirmed in EPA's denial of the November 28, 2017 petition
for reconsideration, as discussed under section I.D of this final
action \80\). That analysis compared CSAPR in Texas and elsewhere in
the country to presumptive BART emission limits for the sources in
Texas (as elsewhere) and is described in greater detail in our August
2018 proposed affirmation. See 83 FR 43586, at 43594-95. While Texas is
no longer in the CSAPR trading program for SO2 itself, we
find that it is appropriate for us to continue relying here on the
CSAPR Better-than-BART analysis for Texas given that the Texas
SO2 Trading Program is specifically designed to mimic the
CSAPR program and the amendments to the Texas trading program EPA is
finalizing in this action allow EPA to affirm that the Texas program is
similar to or more stringent than CSAPR in Texas. As such, the
stringency of the Texas program is sufficient to allow for the
continued use of the CSAPR Better-than-BART analysis for Texas.
---------------------------------------------------------------------------
\80\ See U.S. EPA, Denial of Petition for Partial
Reconsideration of ``Interstate Transport of Fine Particulate
Matter: Revision of Federal Implementation Plan Requirements for
Texas'' (82 FR 45481; Sept. 29, 2017) (EPA-HQ-OAR-2016-0598). A copy
of the denial of petition letter sent to the petitioners and the
denial of petition Notice of Availability (NOA) published in the
Federal Register are available at Docket ID EPA-HQ-OAR-2016-0598.
---------------------------------------------------------------------------
Although it is not within the scope of this action, EPA notes that
the 2017 CSAPR Better-than-BART finding has been reaffirmed through the
denial of a petition for reconsideration.\81\ In our response to the
petition for reconsideration, EPA explains that it has fully accounted
for the stringency of the Texas trading program as well as the
potential for emission shifting back into the remaining CSAPR region
with the removal of Texas into its own intrastate trading region.\82\
To the extent that this potential for emission shifting posed any
concern that the CSAPR Better-than-BART analysis could not be relied
upon by Texas or other states, this issue has been resolved through the
analysis set forth in that denial.
---------------------------------------------------------------------------
\81\ See U.S. EPA, Denial of Petition for Partial
Reconsideration of ``Interstate Transport of Fine Particulate
Matter: Revision of Federal Implementation Plan Requirements for
Texas'' (82 FR 45481; Sept. 29, 2017) (EPA-HQ-OAR-2016-0598). A copy
of the denial of petition letter sent to the petitioners and the
denial of petition Notice of Availability (NOA) published in the
Federal Register are available at Docket ID EPA-HQ-OAR-2016-0598.
\82\ Id.
---------------------------------------------------------------------------
We are finalizing our determination that anticipated maximum
potential SO2 emissions in Texas under the Texas
SO2 Trading Program BART alternative are less than the
SO2 emission levels from Texas EGUs that were forecast in
the CSAPR Better-than-BART demonstration assuming their participation
in the CSAPR SO2 trading program.\83\ In our October 2017
final rule and the August 2018 proposal to affirm that rule, we noted
the results of the sensitivity analysis \84\ for the 2012 final ``CSAPR
Better-than-BART'' rulemaking, namely that CSAPR was expected to
provide for greater reasonable progress than BART nationwide even with
potential SO2 emissions from Texas EGUs under CSAPR as high
as 317,100 tons.\85\ In our October 2017 final rule and the August 2018
proposal to affirm that rule, EPA used this benchmark (317,100 tons of
SO2 emissions per year) to gauge whether the Texas
SO2 Trading Program was sufficiently stringent for EPA to
continue to rely on the BART-alternative analysis we conducted in the
2012 ``CSAPR Better-than-BART'' rulemaking. In the August 2018
proposal, EPA proposed to affirm that the weight of evidence supported
the conclusion that the Texas SO2 Trading Program met the
requirements of a BART alternative.\86\ Informed by comments we
received on the August 2018 proposal, we issued a supplemental proposal
in November 2019 that proposed to amend a number of provisions of the
Texas SO2 Trading Program, including the addition of an
assurance level. EPA's proposed analysis in November of 2019
accompanying those amendments, updates in certain respects and replaces
the analysis of the Texas program's stringency for purposes of
determining the appropriateness of relying on the CSAPR Better-than-
BART findings for the Texas BART-alternative program.
---------------------------------------------------------------------------
\83\ See Technical Support Document for Demonstration of the
Transport Rule as a BART Alternative, Docket ID No. EPA-HQ-OAR-2011-
0729-0014 (December 2011), available in the docket for this action.
\84\ See Sensitivity Analysis Accounting for Increases in Texas
and Georgia Transport Rule State Emissions Budgets, Docket ID No.
EPA-HQ-OAR-2011-0729-0323 (May 29, 2012), available in the docket
for this action.
\85\ 83 FR at 43595.
\86\ 83 FR at 43602.
---------------------------------------------------------------------------
As explained in the November 2019 supplemental proposal and in
Section III.A.I above, an assurance level represents the total level of
annual emissions above which units participating in the program will be
penalized with a higher allowance surrender ratio than the one-to-one
ratio that applies to emissions below the assurance level. The
assurance level we proposed was determined by relying on the same
analysis and methodology that were used to set assurance levels in the
original CSAPR rulemaking.\87\ Using this methodology, EPA proposed a
variability limit for Texas set at 16,688 tons, which is seven percent
of the original trading budget of 238,393 tons. We are finalizing the
variability limits set at 16,688 tons with no change from proposal and
in light of the minor correction to the trading program budget, as
discussed in section III.A.1, we are finalizing an assurance level of
255,083 tons rather than the 255,081-ton assurance level we proposed in
the November 2019 supplemental proposal. This 255,083-ton assurance
level represents the highest annual SO2 emissions
anticipated from units subject to the Texas program.
---------------------------------------------------------------------------
\87\ See Power Sector Variability Final Rule TSD (July 2011),
available at https://www.epa.gov/csapr/power-sector-variability-final-rule-tsd and in the docket for this action.
---------------------------------------------------------------------------
[[Page 49184]]
In addition to being consistent with the original CSAPR methodology
for setting assurance levels, EPA also believes that an assurance level
set at 255,083 tons is appropriate for the Texas SO2 Trading
Program because it will strengthen the stringency of the Texas
SO2 Trading Program in terms of ensuring that annual
emissions from participating units will remain below that level. This
allows EPA to project with confidence emissions under the Texas
SO2 Trading Program for purposes of determining whether the
trading program meets the requirements of a BART alternative.
In the modeling conducted for the proposed CSAPR Better-than-BART
determination in 2011, projected SO2 emissions from Texas'
EGUs under CSAPR were 266,600 tons. Subsequent to performance of that
modeling, the CSAPR SO2 budget for Texas was increased by
50,517 tons. In the BART-alternative sensitivity analysis utilized for
the final 2012 CSAPR Better-than-BART determination, EPA made the
conservative assumption that SO2 emissions from Texas EGUs
under CSAPR could potentially increase by the full amount of the Texas
budget increase, or up to 317,100 tons per year (266,600 + 50,517).
(While this level of emissions would have exceeded Texas' CSAPR budget,
it would not have been in excess of Texas' amended assurance level
under the CSAPR program of 347,476 tons. In any case, the figure was
solely intended to represent a conservative assumption that all
allowances allocated under Texas' amended CSAPR budget would be
emitted.) In that BART-alternative sensitivity analysis, EPA
demonstrated that CSAPR was expected to provide for greater reasonable
progress than BART nationwide even with potential SO2
emissions from Texas EGUs under CSAPR as high as 317,100 tons.\88\ By
comparison, the Texas SO2 Trading Program has a budget of
238,395 SO2 tons (plus 10,000 tons in the Supplemental
Allowance Pool), and we are finalizing an assurance level of 255,083
tons in this final action.
---------------------------------------------------------------------------
\88\ 83 FR at 43595.
---------------------------------------------------------------------------
In determining that the Texas program will perform at least as
stringently as CSAPR would have, EPA also must account for the
emissions from certain EGUs that would have been subject to CSAPR but
are not included in the Texas program. Even with these emissions
factored in, the Texas program is designed to ensure reductions similar
to or greater than CSAPR. In our analysis in this final action, we are
finalizing the more conservative emissions assumptions for these units
provided in our November 2019 supplemental proposal. In our August 2018
proposal, we had used an assumption that emissions from these units
could be as high as 27,500 tons per year.\89\ As proposed in our
November 2019 supplemental proposal,\90\ we are updating our analysis
by adjusting this assumption to 35,000 tons per year. Given that Texas
units that were in the CSAPR program but not covered by the Texas
SO2 Trading Program had a combined maximum annual emission
level of 34,129 tons over the past five years (2014-2018) and
considering that several of these units have recently shut down or have
been announced for shutdown in the near future,\91\ EPA regards this as
a conservative assumption for emissions performance from these units.
Even when this conservative figure is added to the highest annual
SO2 emissions anticipated from units under the Texas
program, 255,083 tons per year (i.e., the assurance level for the
program), the total figure is 290,083 tons per year. This figure is
still 27,017 tons below the 317,100 ton per year emissions level EPA
had used in the CSAPR Better-than-BART analysis.
---------------------------------------------------------------------------
\89\ 83 FR 43602.
\90\ 84 FR at 61853.
\91\ See ``Texas EGU SO2 emissions, 2014-2018.xlsx'',
available in the docket for this action. Sandow Station units 5A and
5B have been permanently retired. AEP has announced retirement of
Oklaunion by September 2020. Gibbons Creek is currently not
operating although it has not been officially retired.
---------------------------------------------------------------------------
In addition to finding that the differences in source coverage
between the two trading programs do not affect EPA's determination, we
also find that the relative stringency of the Texas SO2
Trading Program as compared to CSAPR is further demonstrated in the
following points, as discussed in our August 27, 2018 affirmation
proposal:
This BART alternative includes all BART-eligible coal-
fired units in Texas, additional coal-fired EGUs, and some additional
BART-eligible gas and gas/fuel oil-fired units.
Covered sources under the Texas SO2 Trading
Program we are taking final action to affirm represent 89% \92\ of all
SO2 emissions from all Texas EGUs in both 2016 and 2017, and
approximately 85% of CSAPR allocations for existing units in Texas.
---------------------------------------------------------------------------
\92\ In 2016, EGUs included in the program emitted 218,292 tons
of SO2, and other EGUs emitted 27,507 tons (11.2% of the
total emitted by Texas EGUs). In 2017, sources included in the
program emitted 245,871 tons of SO2, and other EGUs
emitted 30,122 (10.9%).
---------------------------------------------------------------------------
The remaining 11% (100 minus 89) of 2016 and 2017
emissions from sources not covered by the Texas SO2 Trading
Program come from gas units that rarely burn fuel oil or from coal-
fired units that on average are better controlled for SO2
than the covered sources and generally are less relevant to visibility
impairment. As such, any shifting of generation to non-covered sources,
as might occur if a covered source were to reduce its operation in
order to remain within its SO2 emissions allowance
allocation, would result in fewer emissions to generate the same amount
of electricity.
Furthermore, the non-inclusion of a large number of gas-
fired units that rarely burn fuel oil reduces the amount of available
allowances for such units that would typically and collectively be
expected to use only a fraction of their CSAPR emissions allowances.
Many of these sources typically emit at levels much lower than their
allocation level.
The BART alternative does not allow purchasing of
allowances from out-of-state sources. Emission projections under CAIR
and CSAPR showed that Texas sources were anticipated to purchase
allowances from out-of-state sources.93 94
---------------------------------------------------------------------------
\93\ See section 10 of the 2009 Texas Regional Haze SIP. Table
10-7 shows CAIR 2018 emission projections of approximately 350,000
tons SO2 emitted from Texas EGUs compared to CAIR budget
for Texas of 225,000 tons. Thus, Texas was projected to purchase
125,000 tons of allowances (350,000-225,000) from out-of-state
sources. The SIP submittal can be found in www.regulations.gov,
docket ID EPA-R06-OAR-2016-0611, document EPA-R06-OAR-2016-0611-
0002.
\94\ For the projected annual SO2 emissions from
Texas EGUs under CSAPR, see Technical Support Document for
Demonstration of the Transport Rule as a BART Alternative, Docket ID
No. EPA-HQ-OAR-2011- 0729-0014 (December 2011) (2011 CSAPR/BART
Technical Support Document), available in the docket for this action
at table 2-4.
---------------------------------------------------------------------------
Based on our quantitative and qualitative assessment of the
operation of the BART alternative as presented here, we are taking
final action to affirm our determination that the Texas SO2
Trading Program as amended in this final action through the addition of
the 255,083-ton assurance level and other amendments discussed in
section III.A.1, will result in annual emissions from the covered EGUs
and other EGUs in Texas that are lower than what was required under
Texas participation in CSAPR's SO2 trading program. Because
this is the case, EPA can rely on the CSAPR Better-than-BART analysis
to demonstrate, by the clear weight of the evidence, that the Texas
SO2 Trading Program, in conjunction with continued
implementation of CSAPR in other states, provides greater reasonable
progress than BART. Accordingly, we are taking final action to affirm
that the Texas SO2 Trading Program, as
[[Page 49185]]
amended in today's final action, satisfies the requirements for a BART
alternative under 40 CFR 51.308(e)(2)(i)(E).
Section 51.308(e)(2)(iii). This provision requires that the
emission reductions from BART alternatives occur ``during the period of
the first long-term strategy for regional haze.'' The Texas
SO2 BART alternative was implemented beginning in January
2019, and thus emission reductions needed to comply with the BART
alternative were required to take place by the end of 2019. In our
August 2018 proposal,\95\ we proposed to affirm our determination that
for the purpose of evaluating Texas' BART alternative, the end of the
period of the first long-term strategy for Texas is 2021, consistent
with the requirement that states submit revisions to their long-term
strategy to address the second planning period by July 31, 2021.\96\ We
also proposed to affirm our determination that because the emission
reductions from the Texas SO2 Trading Program will be
realized prior to that date, the necessary emission reductions will
take place within the period of Texas' first long-term strategy for
regional haze. We received a comment raising the concern that this
determination we proposed to affirm would be at odds with the national
finding in the January 2017 action that our amendments there ``do not
affect the development and review of state plans for the first
implementation period. . . .'' 82 FR at 3080. After further review of
our discussion in the January 2017 final rule making amendments to the
Regional Haze Rule and consideration of the comments we received
pertaining to this issue, we are not finalizing a position in this
action that the first planning period has been extended to July 31,
2021.
---------------------------------------------------------------------------
\95\ 83 FR 43592.
\96\ 40 CFR 51.308(f).
---------------------------------------------------------------------------
Nonetheless, we are finalizing our determination that the Texas
SO2 Trading Program satisfies the timing requirements of
51.308(e)(2)(iii), because the level of emissions achieved by the
covered Texas units was below the budget of the Texas program prior to
the end of 2018 and the program took effect immediately at the
beginning of 2019. This meets the requirement at (e)(2)(iii) that the
emission reductions called for by the BART alternative occur before the
end of the period for the first long-term strategy. As discussed in our
November 2019 supplemental proposal, the combined SO2
emissions from Texas EGUs participating in the intrastate trading
program were 179,630 SO2 tons in 2018, which is well below
the Texas SO2 Trading Program budget of 238,395 tons (as
well as the assurance level of 255,083 tons we are finalizing in this
action).\97\ Therefore, the emissions reductions secured under the
Texas SO2 Trading Program occurred prior to the end of the
period of the first long-term strategy for regional haze. EPA has
previously proposed a view that where emission reductions required by a
BART alternative are already achieved in practice during the first
planning period, even though the enforceable requirement was not
mandated until after the planning period, this can satisfy 40 CFR
51.308(e)(2)(iii). This was our position in our action proposing to
approve a SIP revision from the State of Arkansas establishing a BART-
alternative for the Domtar Ashdown Mill.\98\ There, we explained that
even though the BART alternative emission limits for the Domtar Ashdown
Mill became enforceable by the State on February 28, 2019, the SIP
revision submitted by Arkansas provided adequate documentation
demonstrating that the two subject-to-BART units at the Domtar Ashdown
Mill have actually been operating at emission levels below the BART
alternative emission limits since December 2016.\99\ Based on the
documentation provided in the Arkansas SIP revision, we proposed to
find that the subject-to-BART units at the Domtar Ashdown Mill satisfy
the timing requirements of 40 CFR 51.308(e) that the necessary emission
reductions associated with the BART alternative occur during the first
long-term strategy for regional haze.\100\ Consistent with that
proposed action, we do not interpret Sec. 51.308(e)(2)(iii) as
requiring that all enforceable limits on annual emissions under the
Texas SO2 Trading Program be in place by December 31, 2018,
or that the Trading Program itself must be implemented by December 31,
2018, if the emission levels called for by the BART alternative are
achieved prior to that date and remain at or below that level until the
alternative becomes enforceable (which in this case, is immediately
following 2018). We are taking final action that the Trading Program
satisfies the timing requirements of Sec. 51.308(e)(2)(iii).
---------------------------------------------------------------------------
\97\ 84 FR 61853.
\98\ See 85 FR 14847 (March 16, 2020).
\99\ 85 FR 14861.
\100\ 85 FR 14861.
---------------------------------------------------------------------------
Section 51.308(e)(2)(iv). This provision requires a demonstration
that the emission reductions resulting from the emissions trading
program or other alternative measure will be surplus to those
reductions resulting from measures adopted to meet requirements of the
CAA as of the baseline date of the SIP. When promulgating this
requirement in 1999, the EPA explained that emission reductions must be
``surplus to other Federal requirements as of the baseline date of the
SIP, that is, the date of the emission inventories on which the SIP
relies.'' \101\ The baseline date for the 2009 Texas Regional Haze SIP
emission inventory was previously established as 2002 during SIP
planning stages for the first implementation period.\102\ The emission
reductions secured under the Texas SO2 Trading Program are
additional and will not result in double-counting of reductions from
other Federal requirements since they will occur after the original
2002 emission inventory. Thus, this BART alternative satisfies the
requirements of Sec. 51.308(e)(2)(iv).
---------------------------------------------------------------------------
\101\ See 64 FR 35714, 35742 (July 1, 1999); see also 70 FR
39104, 39143 (July 6, 2005).
\102\ See Memorandum from Lydia Wegman and Peter Tsirigotis,
2002 Base Year Emission Inventory SIP Planning: 8-hr Ozone,
PM2.5, and Regional Haze Programs, November 8, 2002.
---------------------------------------------------------------------------
Section 51.308(e)(2)(vi). For plans that include an emissions
trading program that establishes a cap on total annual emissions of
SO2 or NOX from sources subject to the program,
this provision requires the owners and operators of sources to hold
allowances or authorizations to emit equal to emissions, and allows the
owners and operators of sources and other entities to purchase, sell,
and transfer allowances. The Texas SO2 Trading Program is
modeled after the EPA's CSAPR SO2 Group 2 Trading Program,
and we are taking final action to affirm that the Program satisfies the
requirements of 51.308(e)(2)(vi). Similar to the CSAPR SO2
Group 2 Trading Program, the Texas SO2 Trading Program sets
an SO2 emission budget for affected units and sources in the
State of Texas. Authorizations to emit SO2, known as
allowances, are allocated to affected units. The Texas SO2
Trading Program provides flexibility to affected units and sources by
allowing units and sources to determine their own compliance path; this
includes adding or operating control technologies, upgrading or
improving controls, switching fuels, and using allowances. Sources can
buy and sell allowances and bank (save) allowances for future use so
long as each source holds enough allowances to account for its
emissions of SO2 by the allowance transfer deadline shortly
after the end of the compliance period.
Section 51.308(e)(2)(vi)(A). This provision requires applicability
provisions defining the sources subject to the program. The State (or
EPA) must demonstrate that the applicability
[[Page 49186]]
provisions (including the size criteria for including sources in the
program) are designed to prevent any significant potential shifting
within the State of production and emissions from sources in the
program to sources outside the program. The October 2017 final rule and
the August 2018 proposal affirming that rule discuss the provisions of
the Texas SO2 Trading Program that satisfy Sec.
51.308(e)(2)(vi)(A).\103\ In this final action, we are making
amendments to some of these provisions, as discussed in section
III.A.1. We are terminating the opt-in provisions by removing sections
97.904(b), 97.911(b), and 97.921(d) from the regulations, and we are
making a minor correction to the Texas SO2 Trading Program
to relabel ``Newman unit 4,'' which is already participating in the
Texas SO2 Trading Program, as its components: ``Newman unit
**4'' and ``Newman unit **5.'' We are taking final action to find that
with these amendments, the Texas SO2 Trading Program
continues to have applicability provisions that satisfy Sec.
51.308(e)(2)(vi)(A).
---------------------------------------------------------------------------
\103\ See 82 FR at 48360 and 83 FR at 43602.
---------------------------------------------------------------------------
Section 51.308(e)(2)(vi)(B). This provision requires allowance
provisions ensuring that the total value of allowances (in tons) issued
each year under the program will not exceed the emissions cap (in tons)
on total annual emissions from the sources in the program. 40 CFR
Section 97.921 establishes how the Administrator will record the
allowances for the Texas SO2 Trading Program and ensures
that the Administrator will not record more allowances than are
available under the program consistent with 40 CFR 51.308(e)(2)(vi)(B).
Sections 51.308(e)(2)(vi)(C)-(E). The provisions of sections
51.308(e)(2)(vi)(C)-(E) require monitoring provisions providing for
consistent and accurate measurements of emissions from sources in the
program to ensure that each allowance actually represents the same
specified tonnage of emissions and that emissions are measured with
similar accuracy at all sources in the program; recordkeeping
provisions that ensure the enforceability of the emissions monitoring
provisions and other program requirements; and reporting provisions
requiring timely reporting of monitoring data with sufficient frequency
to ensure the enforceability of the emissions monitoring provisions and
other program requirements and the ability to audit the program. The
monitoring, recordkeeping, and reporting provisions for the Texas
SO2 Trading Program at 40 CFR 97.930-97.935 are consistent
with those requirements in the CSAPR SO2 Group 2 Trading
Program. The provisions in 40 CFR 97.930-97.935 require the subject
units to comply with the monitoring, recordkeeping, and reporting
requirements for SO2 emissions in 40 CFR part 75, thereby
satisfying the requirements of 51.308(e)(2)(vi)(C)-(E).
Section 51.308(e)(2)(vi)(F). This provision requires tracking
system provisions which provide for a tracking system that is publicly
available in a secure, centralized database to track in a consistent
manner all allowances and emissions in the program. The EPA is
implementing the Texas SO2 Trading Program using the
Allowance Management System, which provides a consistent approach to
implementation and tracking of allowances and emissions for the EPA,
subject sources, and the public consistent with the requirements of 40
CFR 51.308(e)(2)(vi)(F).
Section 51.308(e)(2)(vi)(G). This provision requires authorized
account representative provisions ensuring that the owners and
operators of a source designate one individual who is authorized to
represent the owners and operators in all matters pertaining to the
trading program. The requirements at 40 CFR 97.913-97.918 for
designated and alternate designated representatives are consistent with
the requirements of 40 CFR 51.308(e)(2)(vi)(G) and are also consistent
with the EPA's other trading programs under 40 CFR part 97.
Section 51.308(e)(2)(vi)(H). This provision requires allowance
transfer provisions providing procedures that allow timely transfer and
recording of allowances, minimize administrative barriers to the
operation of the allowance market, and ensure that such procedures
apply uniformly to all sources and other potential participants in the
allowance market. Allowance transfer provisions for the Texas
SO2 Trading Program at 40 CFR 97.922 and 97.923 provide
procedures that allow timely transfer and recording of allowances;
these provisions will minimize administrative barriers to the operation
of the allowance market and ensure that such procedures apply uniformly
to all sources and other potential participants in the allowance
market, consistent with 40 CFR 51.308(e)(2)(vi)(H).
Section 51.308(e)(2)(vi)(I). This provision requires compliance
provisions prohibiting a source from emitting a total tonnage of a
pollutant that exceeds the tonnage value of its allowance holdings,
including the methods and procedures for determining whether emissions
exceed allowance holdings. The provision requires that such method and
procedures apply consistently from source to source. Compliance
provisions for the Texas SO2 Trading Program at 40 CFR
97.924 prohibit a source from emitting a total tonnage of
SO2 that exceeds the tonnage value of its SO2
allowance holdings as required by 40 CFR 51.308(e)(2)(vi)(I).
Section 51.308(e)(2)(vi)(J). This provision requires penalty
provisions providing for mandatory allowance deductions for excess
emissions that apply consistently from source to source. Additionally,
the tonnage value of the allowances deducted must equal at least three
times the tonnage of the excess emissions. The Texas SO2
Trading Program includes automatic allowance surrender provisions at 40
CFR 97.924(d) that apply consistently from source to source and the
tonnage value of the allowances deducted shall equal at least three
times the tonnage of the excess emissions, consistent with the penalty
provisions at 40 CFR 51.308(e)(2)(vi)(J).
Section 51.308(e)(2)(vi)(K). For a trading program that allows
banking of allowances, this provision requires provisions clarifying
any restrictions on the use of these banked allowances. The Texas
SO2 Trading Program provides for banking of allowances under
40 CFR 97.926; Texas SO2 Trading Program allowances are
valid for compliance in the control period of issuance or may be banked
for use in future control periods, consistent with 40 CFR
51.308(e)(2)(vi)(K).
Section 51.308(e)(2)(vi)(L). This provision requires program
assessment provisions providing for periodic program evaluation to
assess whether the program is accomplishing its goals and whether
modifications to the program are needed to enhance performance of the
program. The CAA and EPA's implementing regulations require
comprehensive periodic revisions of implementation plans for regional
haze under 40 CFR 51.308(f) and periodic review of the state's regional
haze approach under 40 CFR 51.308(g) to evaluate progress towards the
reasonable progress goals for Class I areas located within the state
and Class I areas located outside the State affected by emissions from
within the state. Because the Texas SO2 Trading Program is a
BART-alternative and part of the long-term strategy for Texas' Regional
Haze obligations, this program will be reviewed in each comprehensive
periodic revision and progress report. We anticipate these revisions
and progress reports will provide the information needed to assess
program
[[Page 49187]]
performance, as required by 40 CFR 51.308(e)(2)(vi)(L).
Based on the analysis presented here, EPA is taking final action to
affirm our determination that the Texas SO2 Trading Program,
as amended in this final action, meets the requirements of 40 CFR
51.308(e)(2) as a BART alternative for SO2 to satisfy Texas'
Regional Haze obligations.
3. PM BART
We are taking final action to affirm our October 2017 approval of
the portion of the Texas Regional Haze SIP that determined that PM BART
emission limits are not required for any Texas EGUs. The majority of
Texas' BART-eligible EGUs rely on BART alternatives for both
SO2 and NOX emissions (or have otherwise been
determined to be not subject to BART). We approved Texas' pollutant-
specific screening analysis for PM as appropriate and consistent with a
2006 guidance document in which the EPA stated that pollutant-specific
screening can be appropriate where a state is relying on a trading
program as a BART alternative to address both NOX and
SO2 BART.\104\ All of the BART-eligible sources
participating in the SO2 intrastate trading program have
visibility impacts from PM alone below the subject-to-BART threshold of
0.5 deciviews (dv).105 106 Furthermore, the BART-eligible
sources not participating in the intrastate trading program were
screened out of BART for all visibility impairing pollutants.
Therefore, we are finalizing our affirmation of our prior approval that
no Texas EGUs are subject to PM BART and that PM BART emission limits
are not required for any Texas EGUs under EPA's 2006 guidance.
---------------------------------------------------------------------------
\104\ See discussion in Memorandum from Joseph Paisie to Kay
Prince, ``Regional Haze Regulations and Guidelines for Best
Available Retrofit Technology (BART) Determinations,'' July 19,
2006.
\105\ Our technical evaluation of Texas' PM screening approach
in the 2009 Texas Regional Haze SIP submittal was originally
presented in a December 16, 2014 proposal. See 79 FR 74817, 74848-49
(Dec. 16, 2014). As noted in our August 2018 proposal, the basis of
our affirmation of our approval of Texas' PM screening approach
remains consistent with the technical evaluation we provided at the
time. See 83 FR 43586, at 43593.
\106\ Stryker Creek Unit ST2 is covered by CSAPR for
NOX and by the SO2 trading program but was not
included in the 2009 Regional Haze SIP. In our August 2018 proposal,
we explained that based on our own evaluation in the January 2017
proposal and October 2017 final rule, we determined that the
visibility impact attributable to PM emissions from Stryker Creek
Unit ST2 is a small fraction (roughly 1%) of the 0.786 dv aggregate
impact of the unit's emissions from all pollutants. This is well
below the subject-to-BART threshold of 0.5 dv. See 83 FR 43586, at
43593.
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4. Reasonable Progress
This final action addressing the BART requirements is part of the
long-term strategy for Texas and will contribute to making reasonable
progress toward the goal of natural visibility conditions at Texas' and
downwind Class I areas. However, the EPA is not determining at this
time that this final action fully resolves the EPA's outstanding
obligations with respect to reasonable progress that resulted from the
Fifth Circuit's remand of our reasonable progress FIP.\107\ We intend
to take a separate, future action to address the Fifth Circuit's
remand.
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\107\ Order, Texas v. EPA, 16-60118 (5th Cir. Mar. 22, 2017).
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B. Interstate Transport of Pollutants That Affect Visibility
We are taking final action to affirm our finding that Texas'
participation in CSAPR to satisfy NOX BART and our
SO2 intrastate trading program, as amended in today's final
action, fully addresses Texas' interstate visibility transport
obligations for the following six NAAQS: (1) 1997 8-hour ozone; (2)
1997 PM2.5 (annual and 24 hour); (3) 2006 PM2.5
(24-hour); (4) 2008 8-hour ozone; (5) 2010 1-hour NO2; and
(6) 2010 1-hour SO2. The basis for this final action is our
determination in the October 2017 FIP that the regional haze measures
in place for Texas are adequate to ensure that emissions from the State
do not interfere with measures to protect visibility in nearby states,
because the emission reductions are consistent with the level of
emissions reductions relied upon by other states during interstate
consultation under 40 CFR 51.308(d)(3)(i)-(iii) and when setting their
reasonable progress goals.\108\ As discussed in our August 2018
affirmation proposal, the 2009 Texas Regional Haze SIP relied on
participation in CAIR to meet SO2 and NOX BART
requirements for Texas EGUs. Under CAIR, Texas EGU sources were
projected to emit approximately 350,000 tons of SO2
annually.\109\ These are the 2018 EGU emission projections used by
CENRAP for Texas that other states potentially impacted by emissions
from Texas sources agreed upon during interstate consultation and
relied on in their regional haze SIPs. In today's final action, we are
finalizing four revisions to strengthen the Texas SO2
Trading Program and increase its consistency with CSAPR, including the
addition of an assurance level consistent with the 2012 CSAPR
demonstration. As discussed elsewhere in today's final action, Texas
EGU annual SO2 emissions for sources covered by the trading
program will be constrained by the assurance level of 255,083 tons.
Including an estimated 35,000 tons per year of emissions from units not
covered by the Texas SO2 Trading Program yields 290,083 tons
of SO2, which is well below the 350,000-ton emissions
projection for 2018 for Texas sources under CAIR or the 317,100-ton
emissions level assumed for Texas sources under CSAPR participation in
the BART-alternative sensitivity analysis utilized for the 2012 CSAPR
Better-than-BART determination. Additionally, the October 2017 FIP
relies on CSAPR for ozone season NOX as an alternative to
EGU BART for NOX, which exceeds the NOX emission
reductions that would have been realized from Texas EGUs under CAIR and
that other states relied upon during interstate consultation for the
first planning period.\110\ Because the revisions to the Texas
SO2 Trading Program we are finalizing in today's final
action ensure emission reductions consistent with and below the
emission levels relied upon by other states during interstate
consultation, we find that these revisions provide further support for
our earlier finding that the BART alternative in the October 2017 FIP
results in emission reductions adequate to satisfy the requirements of
CAA section 110(a)(2)(D)(i)(II) with respect to visibility for the six
identified NAAQS.
---------------------------------------------------------------------------
\108\ See 2009 Texas Regional Haze SIP, section 4.3 titled
``Consultations On Class I Areas In Other States.'' The submittal
can be found at www.regulations.gov, Docket ID EPA-R06-OAR-2016-
0611, Document ID EPA-R06-OAR-2016-0611-0002.
\109\ See section 10 of the 2009 Texas Regional Haze SIP. Table
10-7 shows that under CAIR, the 2018 emission from Texas EGUs were
projected to be approximately 350,000 tons SO2. The SIP
submittal can be found in www.regulations.gov, Docket ID EPA-R06-
OAR-2016-0611, Document ID EPA-R06-OAR-2016-0611-0002.
\110\ Under CAIR, Texas had an annual 2009 CAIR Phase 1 budget
of 181,017 tons of NOX and an annual 2015 CAIR Phase 2
budget of 150,845 tons of NOX. See Section 11, Table 11-
15 of the 2009 Texas Regional Haze SIP. The SIP submittal can be
found at www.regulations.gov, Docket ID EPA-R06-OAR-2016-0611,
document ID EPA-R06-OAR-2016-0611-0002. The 2018 EGU emission
projections for NOX used by CENRAP for Texas, which other
states potentially impacted by emissions from Texas sources agreed
upon during interstate consultation and relied on in their regional
haze SIPs, were approximately 160,000 tons. In contrast, under the
CSAPR ozone season NOX trading program, Texas' 2017
NOX ozone season budget is 52,301 tons of NOX.
See 81 FR 74504, 74508 (Oct. 26, 2016).
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IV. Summary and Responses to Significant Issues Raised by Commenters
We received both written and oral comments at the public hearings
we held in Austin and Dallas. We also
[[Page 49188]]
received written comments on the August 27, 2018 affirmation proposed
action and the November 14, 2019 supplemental proposed action. The full
text of comments received is included in the publicly posted docket
associated with this action at www.regulations.gov. We reviewed all
public comments that we received. Below we provide a summary of the
most significant comments and our responses. A complete summary of all
of the comments we received, and our responses thereto are contained in
a separate document titled Response to Comments, which is found in the
docket associated with this final action.
A. Texas SO2 Trading Program as a BART Alternative
Comment: We received one comment asserting that in promulgating the
Texas SO2 Trading Program as a BART alternative in our
October 2017 FIP and in affirming the trading program in our August
2018 proposal, EPA did not properly demonstrate that the trading
program meets the requirements for an alternative to BART for
SO2 because EPA did not compare the alternative to source-
specific BART in Texas. The commenter asserted that the Regional Haze
Rule at 40 CFR 51.308(e)(2) specifies that BART and associated emission
reductions achievable for each source within the State subject to BART
and covered by the alternative program must be evaluated first for the
purpose of comparing to the BART alternative and determining whether
the alternative makes greater reasonable progress than BART. The
commenter also noted that the Regional Haze Rule at Sec.
51.308(e)(2)(i)(C) provides that the only exception to this requirement
is when the emissions trading program or other alternative measure has
been designed to meet a requirement other than BART and that in such
cases, EPA may analyze BART for similar types of sources within a
source category instead of on a source-specific basis. The commenter
asserted that in promulgating the Texas SO2 Trading Program,
EPA did not properly demonstrate that the trading program is better
than BART and meets the requirements for an alternative to BART because
EPA has not determined which units are subject to BART, and did not
provide an analysis of BART at each source subject to BART and covered
by the trading program to compare against the trading program.
According to the commenter, even if presumptive BART levels were an
appropriate assumption that is not outdated, EPA would still be
required to compare the trading program directly to presumptive BART,
which it has not done. The commenter also contended that EPA's approach
of comparing the intrastate trading program to Texas' participation in
the SO2 trading program under CSAPR is not appropriate
because EPA withdrew Texas from the CSAPR program for SO2
and thus CSAPR cannot lawfully be BART for SO2 for Texas
EGUs.
The commenter also disagreed with EPA's position that the trading
program was designed to meet requirements other than BART, namely the
interstate transport requirements and the long-term strategy
provisions. The commenter asserted that even if the trading program had
indeed been designed to meet requirements other than BART, this would
still not authorize EPA to completely forego analyzing BART for the
sources subject to BART and covered by the trading program.
Response: As explained in our August 27, 2018 proposal, in addition
to being a sufficient alternative to BART, the trading program is
designed to secure reductions consistent with visibility transport
requirements.\111\ As allowed by the requirements for a BART
alternative in Sec. 51.308(e)(2)(i)(C), we are exercising the
exception allowed when the alternative measure ``has been designed to
meet a requirement other than BART (such as the core requirement to
have a long-term strategy to achieve the reasonable progress goals
established by States).'' See 40 CFR 51.308(e)(2)(i)(C). In such
circumstances, BART and associated emission reductions may be analyzed
for similar sources ``based on both source-specific and category-wide
information, as appropriate.'' When promulgating the 2012 CSAPR Better-
than-BART rule, the EPA relied on an analysis of BART in CSAPR states
and a demonstration showing that CSAPR would result in greater
reasonable progress than BART under the test in 40 CFR 51.308(e)(3). In
that analysis, EPA utilized simplified assumptions regarding
``presumptive'' BART limits at BART-eligible sources. This analysis was
conducted on a category-wide basis (all fossil fuel-fired EGUs). See 77
FR 33642, 33649-50 (June 7, 2012). This analysis satisfied
51.308(e)(2)(i)(C) because CSAPR was designed to meet the requirements
of CAA section 110(a)(2)(D)(i)(I) (sometimes referred to as ``good
neighbor'' obligations) for certain NAAQS pollutants. EPA finds that
reliance on the category-wide BART analysis from the 2012 CSAPR Better-
than-BART demonstration is appropriate here, because, although the
Texas program is not designed to meet good neighbor obligations under
section 110(a)(2)(D)(i)(I), it is designed to meet separate CAA
requirements for interstate visibility transport, as explained in
section III.B above. This satisfies the condition in 51.308(e)(2)(i)(C)
for using category-wide information such as presumptive BART limits in
analyzing the Texas SO2 Trading Program. Thus, the BART
determinations derived from that CSAPR Better-than-BART demonstration
are an appropriate BART benchmark for comparison against the Texas
SO2 Trading Program given that the Texas SO2
Trading Program is modeled on the CSAPR trading programs. In this
action, we are relying, in part, on that same 2012 CSAPR Better-than-
BART demonstration to show that the clear weight of evidence
demonstrates that the Texas SO2 Trading Program, which is
modeled on the CSAPR trading programs, will provide for greater
reasonable progress than BART in Texas. Indeed, the anticipated maximum
potential SO2 emissions in Texas under the Texas
SO2 Trading Program BART alternative are less than the
SO2 emission levels from Texas EGUs that were forecast in
the demonstration for Texas EGU emissions assuming their participation
in the CSAPR SO2 trading program. Under CSAPR, the total
allocations for all existing EGUs in Texas were 279,740 SO2
tons, the total state budget including the amounts of allowances set
aside for potential allocation to new units was 294,471 tons, and the
assurance level was 347,476 tons. The level of emissions assumed for
Texas EGUs in the BART alternative sensitivity analysis utilized for
the 2012 CSAPR Better-than-BART determination is 317,100 SO2
tons.\112\ By comparison, the Texas SO2 Trading Program has
a budget of 238,395 SO2 tons, and we are finalizing an
assurance level of 255,083 tons in this action. In light of the three-
[[Page 49189]]
for-one penalty surrender ratio imposed on emissions exceeding the
255,083-ton assurance level, the assurance level represents the highest
annual SO2 emissions anticipated from units subject to the
Texas program. In reality, in light of ongoing changes in the electric-
generating sector in Texas, there is a reasonable expectation that
actual emissions under the Texas program would remain well below the
assurance level. We are also finalizing a more conservative (i.e.,
higher) estimate of 35,000 annual SO2 tons as the projected
emissions from Texas units that would have been in the CSAPR program
but are not in the Texas SO2 Trading Program. This more
conservative estimate is based on these units' maximum annual emission
level of 34,129 tons over the past five years (2014-2018) and taking
into consideration that several of these units have recently shut down
or have been announced for shutdown in the near future.\113\ Adding
that amount to the Texas SO2 Trading Program's assurance
level of 255,083 tons yields 290,083 tons. Assuming this figure
represents a firm upper bound on annual SO2 emissions from
the relevant EGUs in Texas under the Texas SO2 Trading
Program, this is less than the 317,100-ton figure EPA had demonstrated
was acceptable in the original 2012 CSAPR Better-than-BART analysis.
---------------------------------------------------------------------------
\111\ 83 FR 43586, at 43597.
\112\ For the projected annual SO2 emissions from
Texas EGUs, see Technical Support Document for Demonstration of the
Transport Rule as a BART Alternative, Docket ID No. EPA-HQ-OAR-2011-
0729-0014 (December 2011) (2011 CSAPR/BART Technical Support
Document at Table 2-4,), available in the docket for this action.
Certain CSAPR budgets were increased after promulgation of the CSAPR
final rule (and the increases were addressed in the 2012 CSAPR/BART
sensitivity analysis memo. See memo entitled ``Sensitivity Analysis
Accounting for Increases in Texas and Georgia Transport Rule State
Emissions Budgets,'' Docket ID No. EPA-HQ-OAR-2011-0729-0323 (May
29, 2012), available in the docket for this action. The increase in
the Texas SO2 budget was 50,517 tons which, when added to
the Texas SO2 emissions projected in the CSAPR + BART-
elsewhere scenario of 266,600 tons, yields total potential
SO2 emissions from Texas EGUs of approximately 317,100
tons.
\113\ 84 FR 61853.
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Comment: The commenter asserted that it was not appropriate for EPA
to conclude that because CSAPR achieves greater reasonable progress
than BART when averaged across all affected states that this
necessarily means that CSAPR achieves greater reasonable progress than
BART in Texas. The commenter asserted that the legal test that EPA used
during the original ``CSAPR Better-than-BART'' rulemaking is
fundamentally different than the test EPA must use in assessing whether
the Texas SO2 Trading Program is better than BART. The
commenter asserted that in making its determination that CSAPR achieves
greater reasonable progress than BART under 40 CFR 51.308(e)(3), EPA
was required to demonstrate that visibility does not decline in any
Class I area and that there is an overall improvement in visibility,
determined by comparing the average differences between BART and the
alternative over all affected Class I areas. The commenter argued that
since EPA averaged the visibility improvement from CSAPR over all the
affected Class I areas in the eastern half of the country in the CSAPR
Better-than-BART determination, Texas was able to take advantage of
reductions from other states without having to reduce its
SO2 emissions as much as it would have had to do under
source-by-source BART. The commenter argued that in contrast to the
CSAPR Better-than-BART determination, the legal test required under
Sec. Sec. 51.308(e)(2)(i) and 51.308(e)(3) to demonstrate that the
Texas SO2 Trading Program is better than BART cannot rest on
improvements from CSAPR in other states. The commenter argued that EPA
must instead demonstrate that the Texas SO2 Trading Program
is better than BART in Texas alone by examining the visibility
improvement at only the Class I areas affected by Texas sources.
Response: We disagree that EPA must demonstrate that the Texas
SO2 Trading Program is better than BART by examining
visibility improvement at only Class I areas in Texas and Class I areas
in other states affected by Texas sources. As explained in our proposal
affirming the Texas SO2 Trading Program, the 2012
demonstration that CSAPR, as finalized and amended in 2011 and 2012,
meets the Regional Haze Rule's criteria for a demonstration of greater
reasonable progress than BART is also the primary evidence that the
Texas trading program achieves greater reasonable progress than
BART.\114\ In the 2012 CSAPR Better-than-BART rule, the EPA relied on
an analytic demonstration that included an air quality modeling study
showing that CSAPR results in greater improvements in average
visibility across all affected Class I areas as compared to adopting
source-specific BART. Our finding with respect to the Texas program
relies on the demonstration underlying our CSAPR Better-than-BART Rule
and our 2017 CSAPR Better-than-BART affirmation (including the basis
for our denial of a petition for reconsideration in the latter,\115\ as
discussed in section I.D of the preamble). Thus, we find that given the
particular circumstances in this case, we are not required to focus
only on Class I areas in Texas and Class I areas in other states
affected by Texas sources. Rather, we are assessing the Texas program
in the context of the larger CSAPR Better-than-BART analysis. We find
that due to the specific circumstances in this case, as described
above, it is reasonable and appropriate to consider improvements in
average visibility across all affected Class I areas in our assessment
of the Texas SO2 Trading Program to demonstrate that it is
better than BART. The amendments to the Texas SO2 Trading
Program we are finalizing in this action ensure that EGU emissions
under the Texas program will remain well below the amount assumed in
the BART-alternative sensitivity analysis utilized for the 2012 CSAPR
Better-than-BART determination (i.e., 317,100 tons), and thus
visibility levels at Class I areas impacted by sources in Texas are
anticipated to be at least as good as (and likely better than) the
levels projected under Texas participation in the larger CSAPR
SO2 trading program.
---------------------------------------------------------------------------
\114\ 83 FR 43586, at 43599.
\115\ See U.S. EPA, Denial of Petition for Partial
Reconsideration of ``Interstate Transport of Fine Particulate
Matter: Revision of Federal Implementation Plan Requirements for
Texas'' (82 FR 45481; Sept. 29, 2017) (EPA-HQ-OAR-2016-0598). A copy
of the denial of petition letter sent to the petitioners and the
denial of petition Notice of Availability (NOA) published in the
Federal Register are available at Docket ID EPA-HQ-OAR-2016-0598.
---------------------------------------------------------------------------
Comment: We received one comment that asserted that EPA's reliance
on CSAPR to design the Texas SO2 Trading Program as a BART
alternative is not appropriate because in doing so, EPA did not account
for new circumstances or update emissions and other data, which the
commenter claimed EPA typically does when evaluating BART. The
commenter asserted that if EPA had taken the same technical approach it
has taken in other regional haze actions of using the most up-to-date
data, this would have changed the allowance distribution of the Texas
SO2 Trading Program. For instance, the commenter argued that
in developing the Texas SO2 Trading Program, EPA should have
taken into account the retirements of Welsh 2, Big Brown Units 1 and 2,
Monticello Units 1, 2, and 3, and Sandow 4 and 5. Similarly, the
commenter asserted the Texas SO2 Trading Program should have
included rule provisions for properly dealing with the impending
retirement of the two JT Deely units instead of the current method of
addressing retired allowances, which the commenter claimed provides no
incentive to reduce SO2 emissions. Additionally, the
commenter noted that EPA assigned allocations under CSAPR on the basis
of a unit's heat input from 2006-2010 and its emissions from 2003-2010
utilizing a detailed ten-step approach based on the heat input and
emissions from those periods. The commenter claimed that EPA should
have re-applied the same allocation methodology it used for CSAPR using
updated information, and that if EPA had done so, the allocations in
many instances would have changed significantly. In support of this
argument, the commenter performed this analysis using the same number
of years as in the original CSAPR methodology but shifted the year
ranges forward to include updated information.
[[Page 49190]]
The commenter asserted that two cases were analyzed. In the first case,
the commenter did not remove retired units and used the original CSAPR
methodology to revise the CSAPR allocations while using updated data.
In this case, because none of the retired units were removed, the total
allocations remained at 238,393 tons. However, the commenter asserted
that because the emissions and heat inputs changed with the updated
data, almost every unit's allocations changed, in some cases by more
than 3,000 tons. In the second case, the commenter asserted that
retired units were removed, but the JT Deely units were retained. The
commenter asserted that because of the removal of retired units and
because of the updated emissions and heat inputs, almost every unit's
allocations changed, resulting in a reduction of allocations from
238,393 tons to 176,332 tons. The commenter noted that these additional
62,061 tons in unit allocations that resulted from EPA not using the
most updated data in the allocation methodology and not removing
retired units should not be moved into the Supplemental Allowance Pool
as Section 97.911(a)(2) of the Texas SO2 Trading Program
provides. The commenter argued that these allowances should never have
been in the allowance pool in the first place. The commenter concluded
that the analysis performed by the commenter demonstrates that if EPA
had updated the emissions data and heat input data using the original
CSAPR methodology and removed the retired units' allocations, the Texas
SO2 Trading Program would not include excess allowances,
which the commenter claimed disincentivizes SO2 emissions
reductions.
Response: As stated in responses to several other comments in this
final action and in our Response to Comments document found in the
docket for this action, we disagree that in developing a specific
trading program, EPA must incorporate new design features, particularly
when other legal and policy considerations weigh in favor of making the
program similar in design to a specific previous program that does not
include those design features. Likewise, EPA is not required to
incorporate new design features that may be suggested by a commenter
and is not required to update every data element used in the
rulemaking. In this instance, the Texas SO2 Trading Program
was designed to qualify as a BART alternative in light of EPA's
previous determinations regarding permissible BART alternatives, and
for that reason was designed to be as similar as possible to the CSAPR
SO2 program. Both the amounts of the initial allocations to
units under the Texas SO2 Trading Program and the treatment
of the allocations to units that have been retired for at least five
years are directly based on the analogous provisions in the CSAPR
SO2 program. As discussed in response to another comment on
the Texas SO2 Trading Program's Supplemental Allowance Pool,
in those aspects of the overall allocation methodology where the Texas
SO2 Trading Program allowance allocation provisions deviate
from the CSAPR SO2 program allowance allocation provisions,
the Texas SO2 Trading Program is generally more, not less,
stringent.
With respect to the commenter's point that the amount of the CSAPR
SO2 program budget for Texas was initially determined based
on our assessments of the state's interstate transport obligations at
the time of the CSAPR rulemaking, we agree with the statement but do
not consider the point relevant to this final action. The origins of
the CSAPR budgets are immaterial to this action. Along with certain
budget adjustments that were addressed through sensitivity analyses,
the CSAPR budgets were used in our 2012 CSAPR Better-than-BART
determination and therefore remain relevant for purposes of our
determination in this action that the Texas SO2 Trading
Program qualifies as a BART alternative in the context of the 2012
CSAPR Better-than-BART determination.
With respect to the commenter's identification of alternative
possible distributions of allowances among the units covered by the
program, we do not believe that altering the distribution of allowances
while leaving the total number of allowances the same would change the
stringency of the program, although it could address concerns regarding
whether the distribution among the sources is equitable. As none of the
sources covered by the program have raised equity concerns about the
initial allocations, and given that we do not understand the commenter
to be raising such concerns, we see no reason to redistribute the
initial allocations. We address the comments regarding the stringency
of the program cap elsewhere.
With regard to the commenter's position that allowances allocated
to units that retire should be eliminated from the budget instead of
being reallocated, that is of course an option in designing a trading
program, but it is not a requirement, and it is not a feature of the
CSAPR SO2 program on which the Texas SO2 Trading
Program was modeled. We were not required and did not find it necessary
to take such an approach in the Texas SO2 Trading Program in
order to ensure that the program qualifies as a BART alternative in the
context of the 2012 and 2017 CSAPR Better-than-BART determinations.
Comment: We received comments from the State and affected sources
in support of our affirmation that the October 2017 Regional Haze FIP
satisfies Texas' obligations for BART and in support of our
determination that the intrastate SO2 trading program for
certain EGUs in Texas is an appropriate BART alternative and satisfies
all SO2 BART requirements. Several affected sources also
provided comments in support of the October 2017 SO2 trading
program over the adoption of a source-by-source approach to address the
BART requirements for units subject to BART in Texas. One affected
source asserted that the trading program will allow operational
flexibility in complying with BART obligations and another affected
source asserted that it is appropriate for EPA to respect Texas'
preference to meet BART compliance through a BART alternative rather
than source-specific BART.
Response: We appreciate the commenter's support of our FIP that
establishes an intrastate trading program that caps emissions of
SO2 from certain EGUs in Texas and includes the
determination that this program meets the requirements for an
alternative to BART for SO2.
Comment: We received one comment that argued that EPA's reliance on
the CSAPR Better-than-BART demonstration is based on the false premise
that the Texas SO2 Trading Program is functionally
equivalent to CSAPR. The commenter asserted that the Texas
SO2 Trading Program is not sufficiently similar to CSAPR for
a comparison between Texas' overall emissions under the Texas
SO2 Trading Program versus CSAPR to suffice for a weight of
evidence determination. In support of the claim that the Texas
SO2 Trading Program and CSAPR are not sufficiently similar,
the commenter pointed to the exclusion from the Texas SO2
Trading Program of a number of Texas EGUs that were covered under CSAPR
and argued that EPA presented no real analysis of the visibility
impacts of these excluded units. The commenter asserted that for some
of these excluded units that have existing scrubbers or other types of
SO2 control, such as Oklaunion, W.A. Parish 8, Oak Grove
Units 1 and 2, Twin Oaks Units 1 and 2, and Sandy Creek, EPA should
have
[[Page 49191]]
evaluated possible upgrades to existing SO2 controls.
The commenter also argued that there are flaws in how EPA performed
its Q/d analysis that constitute arbitrary deviations from EPA's Q/d
testing methodology in past regional haze actions and claimed that the
deviations were made in order to exclude certain units from the Texas
SO2 Trading Program. For instance, the commenter asserted
that EPA's decision to base the Q/d analysis on 2009 emissions was
arbitrary and claimed that no rationale was provided for selecting that
year of data other than EPA noting that it already had this emissions
data available from a previous analysis. The commenter asserted that in
contrast to the Q/d analysis EPA used to identify sources to include in
the Texas SO2 Trading Program, in past regional haze
actions, EPA has typically considered a 3-5 year range of data to
account for data variability from year to year. The commenter also
asserted that the Twin Oaks facility had a Q/d greater than EPA's
stated threshold of 10 but it was nonetheless excluded on the basis
that EPA estimated that the Q/d of each of its individual units were
likely less than 10. The commenter claimed that EPA's decision to
deviate from its approach is arbitrary and was made in order to exclude
the Twin Oaks facility from the trading program. Similarly, the
commenter asserted that EPA's decision to exclude Oklaunion from the
trading program even though its Q/d was 85, which is much higher than
the EPA's stated threshold of 10, is arbitrary. The commenter asserted
that EPA's decision to exclude units that came online after 2009 on the
basis that these units would be permitted and constructed using
emission control technology determined under either BACT or LAER
review, was inappropriate given that EPA made no comparison between the
levels of control under BACT or LAER versus BART for these units. The
commenter argued that this comparison was necessary given that,
according to the commenter, BART has been demonstrably more stringent
than either BACT or LAER. The commenter also asserted that the opt-in
provision is yet another feature of the Texas SO2 Trading
Program that makes the trading program not functionally equivalent to
CSAPR, as EPA removed the opt-in provision in CSAPR.
Response: We continue to believe that the Texas SO2
Trading Program will achieve SO2 emission levels that are
functionally equivalent to those that had been previously projected for
Texas' participation in the original CSAPR program and that our
reliance on the original CSAPR Better-than-BART determination for the
clear weight of evidence demonstration required under Sec.
51.308(e)(2)(i)(E) was thus appropriate in this case. What we mean by
the phrase ``functionally equivalent'' is that while the two programs
are not identical, the differences between the Texas SO2
Trading Program and CSAPR are either not significant or work to
demonstrate the relatively greater stringency of the Texas
SO2 Trading Program as compared to CSAPR. As the commenter
notes, in our August 27, 2018 proposal affirming the Texas
SO2 Trading Program, we listed several points that help
demonstrate the relative stringency of the Texas SO2 Trading
Program as compared to CSAPR.\116\ These points are summarized below:
---------------------------------------------------------------------------
\116\ 83 FR 43586, at 43591.
---------------------------------------------------------------------------
Covered sources under the Texas SO2 Trading
Program represent approximately 85% of CSAPR allocations for existing
units in Texas. Covered sources under the Texas SO2 Trading
Program represent 89% of all SO2 emissions from all Texas
EGUs in both 2016 and 2017.
The remaining 11% of 2016 and 2017 emissions from Texas
EGUs not covered by the BART alternative come from gas units that
rarely burn fuel oil or from coal-fired units that on average are
better controlled for SO2 than the covered sources and
generally are less relevant to visibility impairment.\117\ As a result,
any shifting of generation to non-covered sources, as might occur if a
covered source were to reduce its operation in order to remain within
its SO2 emissions allowance allocation, is expected to
result in fewer emissions to generate the same amount of electricity.
---------------------------------------------------------------------------
\117\ Id.
---------------------------------------------------------------------------
We also noted that the non-inclusion of a large number of
gas-fired units that rarely burn fuel oil reduces the amount of
available allowances for such units that would typically and
collectively be expected to use only a fraction of their CSAPR
allowance allocations. Many of these sources typically emit at levels
much lower than their allocation level.
Emissions projections under CAIR and CSAPR showed that
Texas sources were anticipated to purchase allowances from out-of-state
sources. In contrast to CSAPR, the Texas SO2 Trading Program
does not allow purchasing of allowances from out-of-state sources. This
will ensure that emissions reductions resulting from implementation of
the Texas SO2 Trading Program will take place in Texas
instead of a neighboring state. In this respect, implementation of the
Texas SO2 Trading Program can be expected to result in
greater visibility benefits at Texas Class I areas than CSAPR.
Furthermore, in the final analysis for this action, we have updated
our emissions assumptions to be even more conservative (i.e., we assume
the potential for higher emissions) for units that were in the CSAPR
program but not covered by the Texas SO2 Trading Program. In
the August 2018 proposal, we had used an assumption that emissions from
these units could be as high as 27,500 tons per year.\118\ However, in
the updated analysis presented for comment in the November 2019 SNPRM,
we adjusted this assumption to 35,000 tons per year. This number
reflects emissions for the past five years (2014-2018), which EPA
regards as a conservative assumption for emissions performance from
these units. Even when this conservative figure is added to the highest
annual emissions anticipated from units under the Texas program,
255,083 tons per year (i.e., the assurance level for the program), the
total figure is 290,083 tons per year. As EPA explains in section
III.A.2 of the preamble for this action, that figure is still 27,019
tons below the 317,100 ton per year emissions level for Texas that EPA
assumed in the BART-alternative sensitivity analysis utilized for the
2012 CSAPR Better-than BART determination.
---------------------------------------------------------------------------
\118\ 83 FR 43586, at 43602.
---------------------------------------------------------------------------
Based on the above points and the fact that the combination of (1)
the source coverage for the Texas SO2 Trading Program, (2)
the total allocations for EGUs covered by the program, and (3) recent
and foreseeable emissions trends from those EGUs both covered and not
covered by the program will result in future EGU emissions in Texas
that are less than the SO2 emission levels forecast in the
2012 Better-than-BART demonstration for Texas EGU emissions assuming
CSAPR participation,\119\ it is not reasonable to expect that the Texas
SO2 Trading Program would result in less visibility benefit
in Texas Class I areas compared to Texas' participation in CSAPR. Thus,
we continue to believe that we have sufficiently demonstrated that
differences in source coverage between the Texas SO2 Trading
Program as amended in this final action and CSAPR are either not
significant or work to demonstrate the relative stringency of the Texas
SO2 Trading Program as compared to CSAPR.
---------------------------------------------------------------------------
\119\ 83 FR 43586, at 43591.
---------------------------------------------------------------------------
Our decision to exclude from the Texas SO2 Trading
Program certain units that were covered under CSAPR was not arbitrary
as the commenter
[[Page 49192]]
contends, but rather was generally based on both the results of a Q/d
analysis as well as the units' potential to impact visibility at Class
I areas based on our consideration of certain circumstances specific to
each unit. Based on our consideration of the above, we found it
appropriate to exclude certain units that were previously covered under
CSAPR from the Texas SO2 Trading Program. For example, some
units are already operating SO2 controls and we thus do not
consider the potential visibility impacts from these units to be
significant relative to those coal-fired EGUs participating in the
program, and we therefore excluded them from the Texas SO2
Trading Program. In some cases, relatively new units that began
operation after 2009 and have been permitted and constructed using
emission control technology determined under either Best Available
Control Technology (BACT) or Lowest Achievable Emission Rate (LAER)
review, as applicable. As we explained in our proposal affirming the
Texas SO2 Trading Program, because these newer units are
already operating BACT or LAER controls, we do not consider the
potential visibility impacts from these units to be significant
relative to those coal-fired EGUs participating in the program. The
commenter contends that in these cases, we should have compared the
levels of control under BACT or LAER versus BART for these units
because BART can in some cases be more stringent than either BACT or
LAER. However, given the much greater anticipated visibility impact
from uncontrolled coal-fired EGUs participating in the program, we
continue to believe that it is reasonable for us to focus our efforts
on these uncontrolled coal-fired EGUs while excluding the newer,
already controlled EGUs from the Texas SO2 Trading Program.
The commenter specifically identifies Oklaunion, W.A. Parish Unit
8, Oak Grove Units 1 and 2, Sandy Creek Unit 1, and the Twin Oaks
facility as units that were covered under CSAPR, but which were
excluded from the Texas SO2 Trading Program. Although
Oklaunion has a Q/d greater than 10, we ultimately excluded Oklaunion
from the Texas SO2 Trading Program based on our
consideration that the facility consists of one coal-fired unit that is
not BART-eligible; annual emissions of SO2 in 2016 from this
source were 1,530 tons, which is less than 1% of the total annual
emissions for EGUs in the state; and annual SO2 emissions
were only 933 tons in 2017. In short, the most recent emissions from
this facility are small relative to other non-BART units included in
the program.\120\ And as noted in our November 2019 supplemental
proposal, American Electric Power announced in 2018 its plans to shut
down the Oklaunion Power Plant by September 2020.\121\ With regard to
W.A. Parish Unit 8, this unit is not BART-eligible, but is co-located
with BART-eligible units. Although we decided to include most coal-
fired units that are not BART-eligible but are co-located with BART-
eligible EGUs in the Texas SO2 Trading Program to prevent
any significant shifting of generation and SO2 emissions
from participating sources to non-participating sources within the same
facility, we decided not to include W.A. Parish Unit 8 because this
unit has a scrubber installed that maintains an SO2 emission
rate four to five times lower than the emission rate of the other coal-
fired units at the facility that are uncontrolled and are participating
in the Texas SO2 Trading Program (Parish Units 5, 6, and
7).\122\ Therefore, we expect that any shifting of generation from the
participating units at the Parish facility to Parish Unit 8 would not
present a problem, and instead would result in a decrease in overall
emissions from the source. Similarly, with regard to Oak Grove Units 1
and 2, and Sandy Creek Unit 1, these are relatively newer coal fired
units that began operation in late 2009 or after, are not BART eligible
and have scrubbers installed that maintain SO2 emission
rates much lower than the uncontrolled units included in the
program.\123\ Thus, we did not include Oak Grove Units 1 and 2, and
Sandy Creek Unit 1 for participation in the Texas SO2
Trading Program. Although the Twin Oaks facility was identified as
having a Q/d greater than 10, we did not include it in the trading
program based on its relatively low potential to impact visibility at
Class I areas. For instance, the facility does not include any BART-
eligible EGUs; the Q/d for this facility is 14.2, which is
significantly lower than that of other Texas facilities on our list
with a Q/d value over 10; \124\ and the estimated Q/d for each
individual unit (Units 1 and 2) is less than 10. Considering the above,
we do not consider the potential visibility impacts from Twin Oaks
Units 1 and 2 to be significant relative to the other coal-fired EGUs
in Texas with Q/d's much greater than 10 and therefore did not include
them in the program.\125\ We also note that annual SO2
emissions from Twin Oaks Units 1 and 2 in 2017-2019, which are the
three most recent years for which annual emissions data are available,
have been well below the 2009 emissions level of 4,707 tons of
SO2.\126\ Thus, we believe the results of the Q/d analysis
as well as our consideration of unique circumstances specific to each
unit are sufficient information to justify excluding certain units from
the Texas SO2 Trading Program that were included under
CSAPR, without necessitating a quantitative examination of the
visibility impact of excluding these units.
---------------------------------------------------------------------------
\120\ 83 FR 43597.
\121\ See 84 FR at 61853, footnote 20.
\122\ 83 FR 43596.
\123\ Id. 43601.
\124\ Id. FR 43596-97. As discussed in our August 2018 proposal,
after identifying the BART-eligible sources included in the Texas
SO2 Trading Program, we evaluated additional sources for
potential inclusion in the trading program based on their potential
to impact visibility at Class I areas. We used a Q/d value of 10 as
a threshold for identification of facilities that may impact
visibility at Class I areas and could be included in the trading
program. We identified a total of 17 facilities in Texas with Q/d
values greater than 10, some of which are not BART-eligible and had
not already been identified for inclusion in the program. The Q/d
values for these 17 facilities range from 14.2 (for Twin Oaks) to
425.4 (for Monticello).
\125\ Id. FR 43597.
\126\ Annual SO2 emissions from Twin Oaks Units 1 and
2 were 2,472 tons in 2017; 2,523 tons in 2018; and 2,408 tons in
2019. See excel spreadsheet ``Twin Oaks- SO2 annual
emissions_2009 and 2017-2019.xlsx,'' available in the docket for
this action.
---------------------------------------------------------------------------
With regard to the comment contending that we arbitrarily selected
2009 as the emissions year in our Q/d analysis, we note that to
identify facilities that may impact visibility at Class I areas in our
October 2017 final rule, we relied on an already existing Q/d analysis
that we prepared as part of the December 2014 proposal to address
Texas' reasonable progress requirements, and which was based on 2009
emissions.\127\ In that proposed action, we also reviewed 2010 and 2011
emission data that became available as we were developing that proposed
rule. We determined that the only EGU facility that was above the Q/d
for 2010 and 2011 compared to the 2009 analysis was the Oak Grove
facility, which came online in late 2009. As we discuss above, this is
a new facility that is equipped with scrubbers and we determined it was
not necessary to include them in the Trading Program. The Regional Haze
Rule does not require us to select a range of years for the emissions
data for our Q/d analysis
[[Page 49193]]
nor does it identify a particular year that must be used for the
emissions data. We have the discretion to select the emissions data
year as long as we provide a reasonable justification for our
selection, as we have done in this case.\128\
---------------------------------------------------------------------------
\127\ See the TX RH FIP TSD that accompanied our December 2014
proposal to address reasonable progress requirements for Texas (79
FR 74818 (Dec 16, 2014)), and the Excel file
``2009statesum_Q_D.xlsx.'' These files are available in Docket ID
EPA-R06-OAR-2014-0754, see Document ID EPA-R06-OAR-2014-0754-0007
and EPA-R06-OAR-2014-0754-0007-05.
\128\ 83 FR 43597.
---------------------------------------------------------------------------
With regard to the comment regarding the opt-in provision, we
appreciate the commenter's input on whether that provision differs from
the provisions of the CSAPR SO2 program in a manner that
could decrease the relative overall stringency of the Texas
SO2 Trading Program. In our November 2019 supplemental
proposal, we proposed to modify the regulations to terminate the opt-in
provision, and we are adopting that proposed modification in this final
action.
Comment: One commenter asserted that the Texas SO2
Trading Program is arbitrary, capricious, and unlawful because EPA did
not follow its own policies and regulations in the ``clear weight of
evidence'' approach taken under Sec. 51.308(e)(2)(i)(E) to demonstrate
that the trading program achieves greater reasonable progress than
BART. The commenter pointed to EPA's action on the Utah Regional Haze
SIP, in which EPA stated that pursuant to the Regional Haze Rule
requirements for a BART alternative, the clear weight-of-evidence test
requires three steps that can generally be summarized as follows: (1)
Use information and data that can inform the decision . . . ; (2)
Evaluate the information and recognize the relative strengths and
weaknesses of the metrics used, including assigning weights to each
piece of information that indicate the degree to which it supports a
finding that the alternative program will achieve greater visibility
benefits; and (3) Collectively consider the weights assigned to the
individual pieces of information and consider the total weight of all
the information to determine whether the proposed BART alternative will
clearly provide for greater reasonable progress than BART at the
impacted Class I areas. The commenter asserted that in contrast to our
evaluation of Utah's BART alternative, EPA did not follow the three-
step process for making a clear weight of the evidence demonstration
under 40 CFR 51.308(e)(2) to demonstrate that the Texas SO2
Trading Program achieves greater reasonable progress than BART. The
commenter asserted that EPA should have identified, weighed and
carefully considered certain information the commenter considers to be
relevant and easily available to inform EPA's clear weight of evidence
approach and decision regarding the Texas SO2 Trading
Program, including EPA's January 2017 Texas BART proposal, recent
emissions data, presumptive BART emission rates and emission
reductions, the weaknesses of the outdated CSAPR evaluations,
significant differences between the Texas SO2 Trading
Program and CSAPR, and EPA's own previous evaluation when withdrawing
Texas from CSAPR showing greater emission reductions under BART.
The commenter further asserted that the clear weight of evidence
demonstrates that the trading program will not make greater reasonable
progress than BART based on EPA's prior determination that CSAPR would
achieve lower emissions reductions than source-specific BART for Texas
EGUs. The commenter cited to three prior rulemakings in which,
according to the commenter, the EPA has concluded that CSAPR would
achieve less reasonable progress than source-specific BART in Texas:
(1) The January 2017 BART proposal; (2) the original CSAPR Better-than-
BART rulemaking; and (3) the 2017 rulemaking to remove Texas from
CSAPR's SO2 trading program. The commenter asserted that
since the Texas SO2 Trading Program is intended to mimic the
effect of CSAPR, and CSAPR would achieve less reasonable progress than
BART in Texas, it follows that the Texas SO2 Trading Program
would also achieve less reasonable progress than BART, and therefore
would not satisfy the requirements of the Regional Haze Rule at 40 CFR
51.308(e)(2), (e)(2)(i)(E), and (e)(3).
Response: EPA disagrees that we are applying a different standard
for ``clear weight of evidence'' than we have in other cases. The
specific circumstances of Texas as compared to Utah are readily
distinguishable. Specifically, the Better-than-BART demonstration for
our Texas SO2 Trading Program relies on the quantitative
modeling, analyses and demonstrations supporting our June 2012 ``CSAPR
Better-than-BART'' determination and September 2017 ``CSAPR Better-
than-BART affirmation finding'' (as recently reaffirmed by our denial
of a petition for reconsideration on the latter). This analysis follows
the two-part quantitative test of Sec. 51.308(e)(3), and in our weight
of evidence approach, we rely on that technical analysis, as
supplemented by additional evidence that the Texas intrastate trading
program achieves at least the same amount of emission reductions as
were projected for Texas in the CSAPR analysis (including accounting
for potential shifting in emissions to CSAPR states with the removal of
Texas from the program). The commenter attempts to elevate EPA's
general guidance on conducting a clear weight of evidence analysis, set
forth in a separate regional action, into a mandatory test that states
or the agency must always adhere to. However, the evidence-based
inquiry called for under Sec. 51.308(e)(2)(i)(E) is inherently fact-
specific, and EPA has set forth why information in this record supports
its findings. The State of Utah, in a far different context, had
attempted to show by a series of metrics (many of which were novel and
unique to that SIP submittal) that a BART alternative achieved greater
reasonable progress than BART, but the state failed to explain how it
weighed these metrics, and EPA found that one of the most important
metrics in that instance (visibility impact on the 98th percentile day)
did not actually support the alternative.\129\ Here, rather than
setting out a list of factors to evaluate, EPA is primarily relying on
the CSAPR Better-than-BART analysis under the quantitative test of
Sec. 51.308(e)(3) (in addition to showing that other Sec.
51.308(e)(2) requirements are met), as explained elsewhere in the
record.
---------------------------------------------------------------------------
\129\ 81 FR at 43898.
---------------------------------------------------------------------------
Comment: One commenter asserted that the Texas SO2
Trading Program is not an adequate SO2 BART alternative
because it is not a cap and trade program that might actually reduce
SO2 emissions beyond the overall cap. Further, the commenter
argues that the cap set by EPA in the trading program is too high and
actually allows the participating units to increase their
SO2 emissions. The commenter stated that in upholding EPA's
authority to select an alternative to source-specific BART, the D.C.
Circuit has held that the overriding requirement for each regional haze
plan is that it make reasonable progress toward eliminating haze
pollution. The commenter asserted that the Texas SO2 Trading
Program does not satisfy this overriding requirement since, according
to the commenter, it would not result in any progress because it does
not require any emissions reductions relative to actual emissions from
covered sources in 2015, 2016, and 2017. The commenter argued that the
Texas SO2 Trading Program actually authorizes covered
sources to increase emissions relative to actual emissions in 2015,
2016, and 2017, and that it therefore does not achieve greater
reasonable progress than source-specific BART and is not an appropriate
BART alternative. The commenter also claimed that by
[[Page 49194]]
authorizing even higher emissions than seen in 2015-2017, the Texas
SO2 Trading Program would likely further erode whatever
gains were made post-2014. The commenter asserted that the Texas
SO2 Trading Program authorizes sources to emit as much as
293,104 SO2 tons considering that the Supplemental Allowance
Pool may grow over time, which would equate to a 47,234 ton increase
over 2017 emissions, and a 74,813 ton increase over 2016 emissions. The
commenter argued that even if the potential growth in the Supplemental
Allowance Pool (from an initial 10,000 tons to 54,711 tons) is ignored,
and one uses 248,393 tons as the total number of allowances, the Texas
SO2 Trading Program would still authorize an increase in
emissions over actual emissions in 2015, 2016, and 2017. The commenter
asserted that the Texas SO2 Trading Program would thus fail
to require greater reasonable progress than BART and would actually
authorize greater pollution than the status quo. Furthermore, the
commenter asserted that source-specific BART is the only option EPA has
proposed that is consistent with statutory requirements and goals.
According to the commenter, the January 2017 source-specific BART
proposal, or even presumptive BART, would reduce emissions and improve
visibility far more than the Texas SO2 Trading Program, and
should be finalized in place of the trading program.
Additionally, the commenter argued that in EPA's determination that
the Texas SO2 Trading Program will decrease SO2
emissions relative to 2014 emission levels, EPA's selection of 2014 as
the baseline year for determining whether the Texas SO2
Trading Program would reduce emissions and improve visibility was
arbitrary. The commenter asserted that EPA should have instead selected
2017 as the baseline year because that is the most recent year for
which annual emissions data is available and in which Texas sources
were not part of CSAPR for SO2. The commenter claimed that
the Texas SO2 Trading Program will result in no progress
toward the goal of eliminating haze pollution and will therefore be in
direct violation of the Clean Air Act's visibility mandate.
Response: We do not agree that addressing Texas' SO2
BART requirements through a source-specific BART FIP is the only option
that meets the regulatory and statutory requirements. Our October 2017
final rule fulfilled our mandatory duty to address the BART
requirements for Texas EGUs through the promulgation of a FIP
containing a BART alternative in the form of an intrastate trading
program. The Texas SO2 Trading Program, as amended in this
final action through the addition of the 255,083-ton assurance level
and other amendments discussed in section III.A.1 of this final action,
will result in annual emissions from the covered EGUs and other EGUs in
Texas that are lower than what was required under Texas participation
in CSAPR's SO2 trading program. Thus, the clear weight of
evidence is that, overall, the Texas trading program (considered in the
larger context of CSAPR) will provide greater reasonable progress than
BART at the covered sources and satisfies the requirements for a BART
alternative under 40 CFR 51.308(e)(2)(i)(E).
The comment contending that we arbitrarily elected not to use 2017
as the baseline emissions year for comparing the Texas SO2
Trading Program to BART is incorrect. We considered 2014 as the
appropriate most recent year for comparing the Texas SO2
Trading Program to BART for the purposes of meeting the requirement of
40 CFR 51.308(e)(2)(i)(D) given that Texas sources were subject to the
CSAPR SO2 trading program in 2015 and 2016 but are no longer
subject to that program.\130\ This analysis was included in our October
2017 final rule, at a time when 2017 emissions data were not yet
available. The Regional Haze Rule does not require us to select 2017 or
any specific year as the baseline year for our assessment under 40 CFR
51.308(e)(2)(i)(D) of emission reductions achievable by the trading
program, and commenter establishes no basis why we should have been
required to update this analysis in our August 2018 proposal to affirm
the rule. Our BART alternative analysis for Texas relied on 2014 data
to be consistent with the CSAPR Better-than-BART analysis given that we
are relying on the demonstration in the 2012 CSAPR Better-than-BART
rule (as affirmed in 2017) to show that the clear weight of evidence
demonstrates that the Texas SO2 Trading Program, which is
modeled on the CSAPR trading programs, will provide for greater
reasonable progress than BART in Texas as required under 40 CFR
51.308(e)(2)(i)(E).\131\ We have provided a reasonable explanation for
our selection of 2014 as the historical baseline year for the purposes
of meeting the requirement of 40 CFR 51.308(e)(2)(i)(D).
---------------------------------------------------------------------------
\130\ 83 FR 43598.
\131\ Note that the year 2014 is not relevant to the question of
whether emissions achieved by the program are surplus to the
baseline date for purposes of 40 CFR 51.308(e)(2)(iv). For purposes
of meeting the requirements of 40 CFR 51.308(e)(2)(iv), the baseline
date is 2000-2004.
---------------------------------------------------------------------------
The commenter's suggestion that the Texas SO2 Trading
Program should be structured to achieve additional emission reductions
beyond the cap is effectively similar to other comments advocating for
a lower cap or a more stringent program generally. As discussed
elsewhere in this document, we continue to believe that the Texas
SO2 Trading Program is sufficiently stringent to meet the
requirements to qualify as a BART alternative in the context of the
2012 CSAPR Better-than-BART rule and the 2017 CSAPR Better-than-BART
affirmation finding. The comment contending that the Texas
SO2 Trading Program authorizes sources to increase emissions
relative to actual emissions in 2015, 2016, and 2017, and authorizes
greater pollution than the status quo mischaracterizes the Texas
SO2 Trading Program and reflects a misunderstanding of its
purpose. First, we note that the Texas SO2 Trading Program
will achieve an average reduction of at least 54,213 tons per year over
the 2014 emissions, which is the difference between the aggregate 2014
SO2 emissions of the covered Texas EGUs (309,296 tons per
year) \132\ and the assurance level of 255,083 tons we are finalizing
in this action. The assurance level represents the highest annual
SO2 emissions anticipated from units subject to the Texas
SO2 Trading Program in light of the three-for-one penalty
surrender ratio imposed on emissions exceeding that level, and is
therefore a conservatively high figure to compare against 2014 actual
emissions levels. Second, and notwithstanding our position that we
appropriately selected 2014 as the baseline year for the purpose of
this analysis, we note that even if we had selected 2017 as the
baseline year, we disagree that the Texas SO2 Trading
Program would authorize greater pollution than the status quo given
that the trading program now contains an assurance level limiting
SO2 emissions from Texas EGUs participating in the trading
program where no prior SO2 emission limits under the
regional haze program existed for these sources. Therefore, we disagree
that the Texas SO2 Trading Program authorizes greater
pollution than the status quo even under the assumption of 2017 as the
baseline year for comparison against the Texas SO2 Trading
Program as the status quo ``authorizes'' much higher emissions (due to
there being no enforceable program at all and the only limitations
being the facilities' current permit limits), even if actual emissions
[[Page 49195]]
happened to be below that level. As discussed in section III.A.2 of
this final action, we note that the Texas SO2 Trading
Program with the added assurance level we are finalizing in this
action, also achieves significantly lower emissions relative to the
year 2002.\133\ These emission reductions that are secured by the
Trading Program contribute to improvements in visibility from the
baseline period for the first planning period and are permanent and
enforceable as part of the long-term strategy for the State of Texas.
---------------------------------------------------------------------------
\132\ 84 FR at 61854.
\133\ The Regional Haze Rule provides that the baseline period
for the first planning period is 2000-2004. See 40 CFR
51.308(d)(2)(i).
---------------------------------------------------------------------------
Further, the purpose of the program is not to achieve some
particular quantum, much less a maximum quantum, of emission reductions
as compared to some reference point for ``current'' emission levels. In
fact, whether the Texas SO2 Trading Program allows for a
potential increase in emissions from recent or current emission levels
is not the relevant question under the BART alternative provisions of
the Regional Haze Rule. In order to satisfy the BART alternative test
of 40 CFR 51.308(e)(2)(i)(E), the alternative must, on the clear weight
of evidence, achieve greater reasonable progress in visibility
improvements than would be achieved through the installation and
operation of BART at the covered sources. This test calls for a
comparison in stringency between two regulatory regimes, BART and the
BART alternative. The Texas SO2 Trading Program is modeled
on and set at a stringency level comparable to CSAPR in Texas, such
that the CSAPR Better-than-BART analysis may be relied upon in
determining the adequacy of this program. As discussed in section
III.A.2, we find that we have satisfied the BART alternative test of 40
CFR 51.308(e)(2)(i)(E). Whether actual emissions may increase or
decrease from some particular historical level under the program is
immaterial so long as emissions remain below the level requisite to
make the ``greater reasonable progress'' showing.
To the extent the commenter is asserting that certain aspects of
the program, such as allocations to retired units, the availability of
banking, and allocations from the Supplemental Allowance Pool, pose a
risk that the program will fail to achieve the emission levels assumed
in our analysis, this theoretical concern is addressed by amendments to
the program finalized in this action. To address concerns regarding
potentially higher SO2 emissions in individual years from
Texas EGUs participating in the trading program, on November 1, 2019,
we signed a supplemental notice of proposed rulemaking that proposed to
add assurance provisions to the Texas SO2 Trading Program.
Under the assurance provisions, if the total emissions of the sources
in the program in any year exceed the annual program budget by more
than a variability limit of 16,688 tons, the emissions over that
``assurance level'' will trigger a requirement for some sources to
surrender three allowances for each ton of emissions, providing a
strong disincentive against emissions exceeding the assurance level. We
are finalizing that supplemental proposal in this action.\134\ As we
explained in the supplemental proposal, the assurance level effectively
moots any concerns regarding annual emission performance under the
program by establishing a cap implemented via the penalty surrender
ratio. This is because when a mass-based trading program includes a
``cap'' on overall annual emissions, as the Texas SO2
Trading Program now does with the addition of the assurance provisions,
that overall ``cap'' on emissions set by the program (here, the
assurance level) effectively determines the stringency of the program
in each year. With the addition of an assurance level, the potential
risk of an undue relaxation of the annual stringency in the program is
minimized given that sources will remain strongly incentivized to keep
annual emissions below the level at which the three-for-one surrender
penalty is imposed. Thus, how allowances are allocated or banked within
that cap does not affect the overall stringency of the program.\135\
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\134\ The final ``assurance level'' is 255,083 tons, which is
the sum of the revised annual program budget of 238,395 tons plus
the variability limit of 16,688 tons. As discussed in section
III.A.1 of the preamble for this action, for consistency with the
assurance provisions, EPA is also making revisions to the
Supplemental Allowance Pool provisions that will limit the combined
total quantity of allowances issued in any year from the program
budget and the Supplemental Allowance Pool to this same level of
255,083 tons.
\135\ See 84 FR 61854.
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Comment: The commenter asserted that even a ``successful'' cap and
trade program cannot avoid localized impacts to particular Class I
Areas, much less to local communities most impacted by large pollution
sources, and that the Trading Program is therefore not an adequate BART
alternative.
Response: The Regional Haze Rule does not require that a BART
alternative achieve greater visibility improvements than BART at each
particular Class I area, and only requires that a BART alternative does
not result in declines in visibility compared to the baseline in any
class I area. EPA's decision to authorize alternative measures,
including emissions trading programs, subject to those requirements, in
the original 1999 Regional Haze Rule is beyond the scope of this
action. Further, the test EPA devised under 51.308(e)(3) for evaluating
whether a BART alternative makes greater reasonable progress calls for
an evaluation of whether there could be unacceptable localized
visibility impacts under a BART alternative. In particular, the
analysis asks whether visibility will decline in any class I area under
the BART alternative as compared with the baseline scenario. This
evaluation was done as part of the 2012 CSAPR Better-than-BART analytic
demonstration, which was relied upon in developing the Texas
SO2 Trading Program. That analysis showed no decline in
visibility in any Class I area compared to the baseline emissions
scenario.
B. PM BART
Comment: We received one comment raising several objections to
EPA's proposal to affirm approval of Texas' finding that no PM BART
controls are necessary for EGUs based on Texas' pollutant-specific
screening analysis for PM. The commenter asserted that the Regional
Haze Rule and the BART Guidelines require that the BART screening
analysis evaluate the impacts of all pollutants together, not just PM,
and that a source-specific, five-factor analysis of PM BART must then
be conducted for each EGU found to be subject to BART. The commenter
asserted that Texas' pollutant-specific screening analysis did not meet
these requirements and that EPA's proposed approval of Texas' finding
that its sources are exempt from PM BART is thus inappropriate. The
commenter also argued that EPA's proposal to affirm approval of Texas'
pollutant-specific screening analysis for PM BART is arbitrary and
capricious for several reasons, including the following: (1) Approval
of Texas' screening approach is contrary to the plain language of the
Clean Air Act; (2) Texas' screening approach is directly contrary to
the agency's regional haze regulations and mandatory BART guidelines;
(3) EPA's approval of a pollutant-specific screening approach
arbitrarily departs from the agency's past practice; and (4) EPA failed
to provide a rational explanation for proposing to approve Texas'
application of a pollutant-specific screening analysis in this case.
Specifically, the commenter claimed that approval of Texas'
screening approach is contrary to the plain language of the Clean Air
Act because
[[Page 49196]]
the commenter believes this effectively exempts sources from installing
PM BART controls without going through the statutory exemption process
Congress prescribed. The commenter asserted that Congress specifically
provided that sources could be exempted from the BART requirements only
if the Administrator determines that a source does not or will not, by
itself or in combination with other sources, emit any air pollutant
which may reasonably be anticipated to cause or contribute to a
significant impairment of visibility in any Class I area, and that the
FLMs must concur with any proposed exemption. The commenter argued that
EPA has not demonstrated that any of the BART-eligible Texas EGUs meet
the statutory requirements for an exemption and EPA has not obtained
the concurrence of federal land managers for exempting sources for PM
BART.
The commenter asserted that Texas' screening approach is directly
contrary to the agency's regional haze regulations and mandatory BART
guidelines. The commenter asserted that the Regional Haze Rule and BART
guidelines do not provide for any exemptions from a five-factor BART
analysis for specific pollutant, with the exception of a de minimis
exemption under Sec. 308(e)(1)(ii)(C) for sources that emit less than
15 tons per year of particulate matter. The commenter argued that
neither EPA nor Texas attempted to demonstrate that this de minimis
exemption applies to any of Texas' EGUs.
The commenter also argued that EPA's approval of a pollutant-
specific screening approach arbitrarily departs from the agency's past
practice. Specifically, the commenter claimed that EPA has rejected
similar pollutant-specific approaches to BART determinations in past
regional haze actions. For instance, the commenter asserted that in a
prior regional haze action where EPA partially disapproved the Arizona
Regional Haze SIP (78 FR 46142 (July 30, 2013)), EPA stated that under
the Regional Haze Rule, the determination of whether a source causes or
contributes to visibility impairment is not made on a pollutant-by-
pollutant basis and that once a source is determined to be subject to
BART, the Regional Haze Rule allows for the exemption of specific
pollutants from a BART analysis only if they are below specified de
minimis levels.
The commenter also raised an objection to EPA's reliance on a 2006
guidance document in proposing to approve Texas' application of a
pollutant-specific screening analysis for PM BART. The commenter argued
that the EPA's 2006 guidance document on which EPA based its proposed
approval of Texas' pollutant-specific screening analysis was never
subject to notice and comment and is therefore not binding.
Furthermore, the commenter asserted that EPA did not explain how the
2006 guidance document is applicable in this case given that the
guidance document does not contain an analysis or rationale and does
not cite or incorporate any technical justification for allowing the
use of a pollutant-specific screening approach. The commenter also
argued that the guidance document contemplates the use of a pollutant-
specific screening analysis in situations where a state is subject to
both SO2 and NOX emission reductions under the
Clean Air Interstate Rule, not CSAPR or some other trading program as
in this case. The commenter also argued that reliance on the 2006
guidance document is not appropriate in this case because Texas
participates in CSAPR for ozone season NOX and is therefore
not subject to annual NOX emission limits.
The commenter also asserted that in its screening analysis, Texas
did not provide a rationale or justification for its selection of 0.5
dv as the threshold for contribution to visibility impairment. The
commenter argued that EPA's BART Guidelines do not authorize states or
EPA automatically to use a 0.5 dv contribution threshold, but instead
provide that any threshold states use for determining whether a source
contributes to visibility impairment should not be higher than 0.5 dv.
The commenter claimed that given the number of Texas sources and the
magnitude of their impact at affected Class I areas, a contribution
threshold lower than 0.5 dv may be appropriate.
Response: We are affirming our approval of Texas' pollutant-
specific PM screening analysis and determination that PM BART emission
limits are not required for any Texas EGUs as in accordance with EPA
guidance and the Regional Haze Rule. As we explained in our August 27,
2018 affirmation proposal, in a 2006 EPA memorandum titled ``Regional
Haze Regulations and Guidelines for Best Available Retrofit Technology
(BART) Determinations,'' EPA stated that pollutant-specific screening
can be appropriate where a state is relying on a trading program as a
BART alternative to address both NOX and SO2
BART.\136\ As discussed in the 2006 guidance, for EGU sources that are
addressing the NOX and SO2 BART requirements by
participation in a trading program as a BART alternative, such as CAIR,
the state must still determine whether its BART-eligible EGUs are
subject to review under BART for PM. In this situation, as this is the
only determination that remains and because the task of predicting the
impacts of PM on visibility is a relatively straight-forward exercise,
unlike predicting the impacts of the non-linear reacting pollutants
SO2 and NOX, a pollutant-specific basis to model
only the impact of PM emissions on visibility is recommended to
determine whether a source is subject to BART for PM. We note that the
2006 memorandum is consistent with the BART Guidelines, which provide
that a state ``may choose to perform an initial examination to
determine whether a particular BART-eligible source or group of sources
causes or contributes to visibility impairment in nearby Class I areas.
If your analysis, or information submitted by the sources, shows that
an individual source or group of sources (or certain pollutants from
those sources) is not reasonably anticipated to cause or contribute to
any visibility impairment in a Class I area, then you do not need to
make BART determinations for that source or group of sources (or for
certain pollutants from those sources).'' \137\ In sum, the 2006 EPA
memorandum is consistent with the BART Guidelines and clearly states
that a pollutant-specific analysis for PM emissions is an appropriate
approach in certain carefully circumscribed circumstances, such as are
present here.
---------------------------------------------------------------------------
\136\ See discussion in Memorandum from Joseph Paisie to Kay
Prince, ``Regional Haze Regulations and Guidelines for Best
Available Retrofit Technology (BART) Determinations,'' July 19,
2006. While the memorandum specifies that pollutant-specific
screening is appropriate for states relying on CAIR, it is
reasonable to infer that other trading programs, such as CSAPR and
the Texas SO2 Trading Program, also qualify to use this
approach.
\137\ 40 CFR part 51 Appendix Y, Section III.
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While the commenter is correct that in our January 4, 2017 BART FIP
proposal,\138\ we initially proposed to disapprove Texas' technical
evaluation and determination in the 2009 Regional Haze SIP that PM BART
emission limits are not required for any of Texas' EGUs, this was
because Texas was not participating in CSAPR for SO2 or in
any other SO2 emissions trading program or BART alternative
at the time and thus did not meet the criteria described in our 2006
guidance. In our October 2017 final action, we addressed the
SO2 BART requirements for Texas EGUs under a BART
alternative consisting of an intrastate trading program. Given that
Texas is relying on participation in the CSAPR ozone season trading
program for NOX to
[[Page 49197]]
satisfy NOX BART for Texas EGUs and is now also subject to a
BART alternative consisting of an SO2 intrastate trading
program to satisfy the SO2 BART requirements for Texas EGUs,
Texas is relying on a trading program as a BART alternative to address
both NOX and SO2 BART. Thus, pollutant-specific
screening for PM as performed by Texas in its 2009 SIP submittal was
appropriate, consistent with the BART Guidelines \139\ and the 2006 EPA
memorandum.\140\
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\138\ 82 FR 912.
\139\ 40 CFR part 51 Appendix Y, Section III.
\140\ See Memorandum from Joseph Paisie to Kay Prince,
``Regional Haze Regulations and Guidelines for Best Available
Retrofit Technology (BART) Determinations,'' July 19, 2006.
---------------------------------------------------------------------------
We disagree with the commenter's assertion that EPA's approval of a
pollutant-specific screening approach arbitrarily departs from the
agency's past practice. EPA has previously determined that this
approach is appropriate for EGUs where a State relied on CAIR or CSAPR
to satisfy the BART requirements for SO2 and NOX
and has approved SIPs where the State required its BART-eligible EGUs
to only evaluate PM emissions for determining whether they are subject
to BART, and, if applicable, for performing a BART control assessment.
We also note that in these analyses EPA approved a threshold of 0.5 dv
for determining which sources were subject to BART.\141\
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\141\ See for example the approval of Regional haze SIPs for
Georgia (77 FR 11452 for proposed rule and 77 FR 38501 for final
rule), South Carolina (77 FR 11894 for proposed rule and 77 FR 38509
for final rule), and Kentucky (76 FR 78194 for proposed rule and 77
FR 19098 for final rule).
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With regard to the commenter's assertion that our approval of
Texas' selection of 0.5 dv as the threshold for visibility impairment
for PM was improper, as an initial matter, as explained in our August
2018 proposal to affirm the October 2017 final rule promulgating the
Texas SO2 Trading Program, we did not reopen the subject-to-
BART determinations for sources not covered by the trading program,
which screened out of the BART program based on consideration of all
visibility pollutants.\142\ With respect to the BART sources included
in the trading program, EPA requested comment on its PM-specific
screening analysis.\143\ EPA's basis for approving the 0.5 dv value for
screening purposes was that EPA's BART Guidelines allow states
conducting source-by-source BART determinations to exempt sources with
visibility impacts as high as 0.5 dv.144 145 Further, the
BART Guidelines provide that in setting a contribution threshold,
states should ``consider the number of emissions sources affecting the
Class I areas at issue and the magnitude of the individual sources'
impacts.'' States have the discretion within the Clean Air Act,
Regional Haze Rule, and BART Guidelines to set an appropriate
contribution threshold and are free to use a threshold lower than 0.5
dv if they conclude that the location of a large number of BART-
eligible sources in proximity of a Class I area justifies this
approach. Texas did not determine in its 2009 Regional Haze SIP that
there were circumstances in this case to justify the selection of a
lower threshold. EPA continues to find that Texas was within its
discretion to select a threshold of 0.5 dv in its BART screening
analysis. In light of the above-referenced 2006 memorandum recognizing
the availability of a pollutant-specific approach to BART where BART
sources are already separately controlled for SO2 and
NOX by one or more BART alternative trading programs, we are
finalizing our proposed affirmation that no BART-eligible source in
Texas is subject to BART for PM on a pollutant-specific basis. In
finalizing an affirmation of our approval of Texas' determinations
regarding PM BART, we offer one additional note. We originally proposed
to approve Texas' screening approach in 2014,\146\ and our October 2017
final action again relied on our technical evaluation in that proposal
for the basis of our approval. We therefore incorporate by reference
the technical evaluation regarding this issue from our 2014 proposal
into the record for this action.\147\
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\142\ 83 FR 43598 n. 80.
\143\ Id. 43592-93.
\144\ 70 FR 39104, 39161 (July 6, 2005) and 40 CFR part 51
Appendix Y, Section III.A.1.
\145\ 82 FR at 48346 and 79 FR at 74848.
\146\ See 79 FR 74817, 74848 (Dec. 16, 2014).
\147\ 79 FR 74817, 74848.
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Comment: We received a comment asserting that the 2006 intra-agency
memorandum on which EPA relies to propose approval of Texas' pollutant-
specific screening approach is inconsistent with the Clean Air Act and
the Regional Haze Rule, and EPA's interpretation of its regulations is
therefore not entitled to deference. Bowles v. Seminole Rock & Sand
Co., 325 U.S. 410, 414 (1945) (agency interpretation of its regulation
is not controlling where ``it is plainly erroneous or inconsistent with
the regulation''); see also Auer v. Robbins, 519 U.S. 452, 461 (1997)
(same). The commenter further asserted that courts have repeatedly
criticized agency use of guidance documents in the form of interpretive
rules and policy statements to reinterpret regulations, recognizing the
potential problem that ``[l]aw is made, without notice and comment,
without public participation, and without publication in the Federal
Register or the Code of Federal Regulations.'' Decker v. Northwest
Envtl. Def. Ctr., 133 S. Ct. 1326, 1341 (2013); Perez v. Mortgage
Bankers Ass'n, 135 S. Ct. 1199, 1213-14 (Mar. 9, 2015); see also
Appalachian Power Co. v. EPA, 208 F.3d 1015, 1020 (D.C. Cir. 2000)
(criticizing agency use of guidance documents in the form of
interpretive rules and policy statements, recognizing the potential
problem that ``[l]aw is made, without notice and comment, without
public participation, and without publication in the Federal Register
or the Code of Federal Regulations.'').
Response: EPA has the authority to develop and implement policies
and guidance. EPA sometimes issues policy or guidance to encourage
compliance with environmental requirements. Policy documents may
represent EPA's official interpretation or view of specific issues.
However, ultimately, EPA's actions with regards to guidance documents
must be consistent with applicable statutory and regulatory
requirements. The EPA disagrees that its reference to the 2006 guidance
is inconsistent with the CAA or constitutes a legislative or
interpretive rule, and we have reasonably relied, in part, on this
guidance document in our approval of Texas' determination that no BART-
eligible sources in Texas are subject to BART for PM on a pollutant-
specific basis. As explained in response to similar comments above,
application of pollutant-specific screening for PM is appropriate in
Texas and is not inconsistent or at odds with either the CAA statute or
applicable EPA regulations, for the reasons explained in response to
those comments. We, therefore, disagree that our interpretation of the
2006 memorandum here is inconsistent with the Clean Air Act regarding a
pollutant-specific screening approach for PM BART.
C. Appropriateness of the Texas SO2 Trading Program vs. Source-Specific
BART FIP
Comment: One commenter raised objections to EPA's finalization of
the October 17, 2017 final rule promulgating the Texas SO2
Trading Program, asserting that EPA provided no rational basis for
finalizing a FIP promulgating an intrastate trading program in place of
the source-specific BART FIP proposal that was proposed by EPA in
January 2017. The commenter asserted that the January 2017 BART FIP
proposal was supported by detailed, source-specific analyses of the
cost of
[[Page 49198]]
SO2 controls, the level of control achievable by different
technologies, estimated emissions reductions, and projected visibility
improvement from operation of such controls, and that this
administrative record demonstrated that the 2017 BART FIP proposal
meets the requirements of the Regional Haze Rule and CAA and should
have been finalized by EPA.
Response: While EPA proposed source-specific BART emission limits
in the January 2017 proposal, under the notice and comment rulemaking
process, EPA may decline to finalize a proposed rule or may finalize a
rule with changes from proposal based on consideration of additional
information received during the comment period. Additionally, EPA may
also propose a rule and rationale that differs from its original
proposal and does not have an obligation to finalize the initial
proposed rule as is the case here. We also note that the Regional Haze
Rule does not require source-specific BART determinations, as the
regulations at 40 CFR 51.308(e)(2)-(5) allow states, or EPA if
promulgating a FIP, to adopt a BART alternative in place of source-
specific BART provided that all applicable regulatory requirements
related to the BART alternative are satisfied. EPA's obligations are to
promulgate a final rule that meets the requirements of the CAA and the
Regional Haze Rule, consider and respond to all relevant comments to
the final rule, and provide a record of decision-making for its action
that is not arbitrary and capricious. In this case, informed by
comments we received during the public comment period for the January
2017 proposal from the Texas Commission on Environmental Quality
(TCEQ), the Public Utility Commission of Texas (PUC), Luminant, and
American Electric Power (AEP), urging us to consider as a BART
alternative the concept of emission caps using CSAPR allocations,\148\
and based on our independent determination that a BART alternative
approach under 40 CFR 51.308(e)(2) would meet all statutory and
regulatory requirements and thus be viable for Texas, we did not
finalize the source-specific BART emission limits we had proposed and
instead we addressed the SO2 BART requirement for Texas EGUs
under a BART alternative consisting of an intrastate trading program in
our October 2017 final rule. Having made the determination (in part
through reliance on the analysis of CSAPR as a BART alternative as
explained elsewhere in the record) that the BART-alternative program
satisfies 40 CFR 51.308(e)(2) under the clear weight of evidence test
of 40 CFR 51.308(e)(2)(i)(E), EPA need not further explain or justify
the program based on a comparison of emission reductions, costs, or
visibility improvements that may have been potentially achieved had EPA
finalized the source-specific controls we proposed in January 2017. The
statute and applicable regulations do not mandate that states, or EPA
when it is promulgating a FIP, reach a particular conclusion or outcome
regarding cost-effectiveness or emission reductions when applying the
five-factor BART analysis, or in designing a BART-alternative program
under 40 CFR 51.308(e).
---------------------------------------------------------------------------
\148\ 82 FR 48324 at 48327.
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Comment: We received one comment asserting that EPA never
identified any errors in the January 2017 BART FIP proposal and that
EPA never responded to certain comments submitted on that proposal. The
commenter claimed that EPA did not demonstrate that the intrastate
trading program would achieve greater reasonable progress than the
January 2017 source-specific BART proposal to justify finalizing the
intrastate trading program in place of the source-specific BART FIP and
that EPA cannot ignore the findings it previously made in the January
2017 BART FIP proposal.
Response: Under the notice and comment rulemaking process, EPA may
decline to finalize a proposed rule or may finalize a rule with changes
from the proposal based on consideration of additional information
received during the comment period. As a general matter, EPA may
publish a new proposed rule that supersedes a previously proposed rule
in order to take into account newly available information or changes in
circumstances that would affect the outcome of the final rule, with no
obligation to finalize the originally proposed rule. EPA's obligations
are to promulgate a final rule that meets the requirements of the Clean
Air Act and the Regional Haze Rule, consider and respond to all
relevant comments that are germane to the final rule, and provide a
record of decision-making for its action that is not arbitrary and
capricious. In this case, informed by comments we received during the
public comment period for the January 2017 proposal, and based on our
independent determination that this BART alternative approach under 40
CFR 51.308(e)(2) would meet all regulatory requirements and thus be a
viable approach for Texas, we addressed the SO2 BART
requirement for Texas EGUs under a BART alternative consisting of an
intrastate trading program in our October 2017 final rule instead of
finalizing the source-specific BART emission limits we had proposed. In
the October 2017 final rule, EPA considered and responded to all
comments germane to the final rule and provided a record of decision-
making for the final action. We note that some of the comments we
received on the January 2017 proposal raised specific issues related to
the analyses for the source-specific BART emission limits we proposed,
and those comments were no longer relevant once we determined not to
promulgate the proposed source-specific BART emission limits in our
final action. Therefore, a response to those comments was unnecessary.
While in this case, EPA did not publish a new proposal before issuing
the October 2017 final rule, we explained the basis for our
finalization of the BART alternative in that final action, and we
subsequently published a proposal in August 2018 to affirm our October
2017 final rule and solicited comment on important aspects of the rule,
as discussed in section II.A of this final action. Informed by comments
we received on the August 2018 proposed rule, we issued a supplemental
proposal that proposed changes to the Texas SO2 Trading
Program, as discussed in section II.B of this final action. Having made
the determination in the October 2017 final action, as further affirmed
in today's final action, that the BART-alternative program, as amended
in this final action, satisfies 40 CFR 51.308(e)(2) under the clear
weight of evidence test of 40 CFR 51.308(e)(2)(i)(E), EPA need not
further explain or justify the Texas SO2 Trading Program
based on a comparison of emission reductions, costs, or visibility
improvements that may have been potentially achieved had EPA finalized
the source-specific controls we proposed in January 2017. Further, in
response to the statement contending that EPA cannot ignore the
findings it previously made in the January 2017 proposed rule, we note
that those proposed source-specific BART analyses and control
determinations do not constitute final findings or final Agency action,
as they were proposed by EPA but not finalized.
Comment: We received one comment asserting that the only
justification EPA provided for finalizing the intrastate trading
program in place of the source-specific BART FIP is that the state made
this request during the public comment period for the January 2017 BART
FIP proposal, and that this justification is inappropriate. The
commenter claimed that while the CAA does establish a
[[Page 49199]]
cooperative state-federal framework, this does not justify EPA
deferring to a State's expressed preferences without providing a valid
justification.
Response: This comment mischaracterizes the basis for our
finalization of the Texas SO2 Trading Program in place of
source-specific BART controls in the October 2017 final action. While
we did explain in the October 2017 final action that we received
comments during the public comment period for the January 2017 proposal
from the Texas Commission on Environmental Quality (TCEQ), the Public
Utility Commission of Texas (PUC), Luminant, and American Electric
Power (AEP), urging us to consider as a BART alternative, the concept
of emission caps using CSAPR allocations,\149\ this was not the sole
basis for our finalization of the Texas SO2 Trading Program
in place of source-specific BART controls. Our October 2017 final
action promulgating the Texas SO2 Trading Program was
informed by comments we received during the public comment period for
the January 2017 proposal, and was based on our independent
determination that a BART-alternative approach under 40 CFR
51.308(e)(2) meets all statutory and regulatory requirements and is
thus an appropriate approach for addressing the SO2 BART
requirement for Texas EGUs. In addition to meeting all Clean Air Act
and Regional Haze Rule requirements, we also explained in the October
2017 final action that the Texas SO2 Trading Program would
result in lower costs and added flexibility for affected sources
compared to source-specific SO2 BART controls.
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\149\ 82 FR 48324 at 48327.
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D. Statutory Requirements for FIP Promulgation and Implementation
Comment: We received one comment asserting that the FIP
promulgating the Texas SO2 Trading Program is arbitrary,
capricious, and unlawful because it allows EPA to suspend key
provisions of the intrastate trading program if Texas submits a SIP
revision, without the need for EPA to approve the SIP before those key
provisions of the trading program are suspended. Specifically, the
commenter referred to a provision of the Texas SO2 Trading
Program that provides that the ``Administrator may delay recordation of
Texas SO2 Trading Program allowances for the specified
control periods if the State of Texas submits a SIP revision before the
recordation deadline.'' 40 CFR 97.921(a). Similarly, the trading
program includes a provision that provides that the ``Administrator may
delay recordation of the Texas SO2 Trading Program
allowances for the applicable control periods if the State of Texas
submits a SIP revision by May 1 of the year of the applicable
recordation deadline under this paragraph.'' Id. Sec. 97.921(b). The
commenter claimed that these provisions at 40 CFR 97.921(a) and (b) are
arbitrary and capricious and otherwise unlawful because they are
counter to the CAA's rulemaking requirements given that no provision of
the CAA allows the submission of a SIP to suspend implementation of a
FIP. The commenter also asserted that these provisions of the trading
program violate the CAA and the Regional Haze Rule because suspension
of the trading program would mean that there is no functioning BART
alternative in place in the interim period between state submission of
the SIP and EPA approval of that SIP. Furthermore, the commenter
expressed concern that the Texas SO2 Trading Program does
not include any provision that would resume the intrastate trading
program if the submitted SIP was subsequently found to be deficient.
Response: After considering this comment, we proposed in our
November 2019 supplemental proposal to modify the Texas SO2
Trading Program recordation provisions at 40 CFR 97.921 to make clear
that submission of a SIP revision by the state does not cause any
change in implementation of those provisions unless and until the SIP
revision is approved by EPA. We are adopting that proposed modification
in this final action. As explained in section III.A.1 of this final
notice, we are taking final action to revise 40 CFR 97.921(a), (b), and
(c) of the Texas SO2 Trading Program to condition any
exceptions to scheduled allowance recordation activities on Texas'
submission and EPA's approval of a SIP revision, rather than just on
Texas' submission of a SIP revision. This revision will ensure that the
program remains fully operational unless it is replaced by a SIP
revision that is approved by EPA as meeting SO2 BART
requirements for the covered BART-eligible units.
E. Timing of the Plan for the First Implementation Period
Comment: We received a comment that asserted that the first
planning period for regional haze ends in 2018 and given that the Texas
SO2 Trading Program would not be implemented until the
beginning of 2019, it followed that the Texas SO2 Trading
Program and any other BART alternative for Texas would not meet the
timing requirement for a BART alternative at 40 CFR 51.308(e)(2)(iii).
The commenter also argued that EPA's position in the October 2017 final
rule that the end of the first planning period of the first long-term
strategy for Texas is 2021 and thus the Texas SO2 Trading
Program meets the timing requirement for a BART alternative is
unsupported and is inconsistent with EPA's prior statements identifying
2018 as the close of the first planning period. The commenter asserted
that EPA's position that the January 2017 revisions to the Regional
Haze Rule extended the first planning period contradicts EPA's
statements in the January 2017 rulemaking that the revisions to the
Regional Haze Rule did not alter the requirements for the first
planning period. Additionally, the commenter later asserted, in
response to our supplemental proposal to add an assurance level to the
Texas SO2 Trading Program, that EPA cannot guarantee the
trading program will actually achieve emissions reductions until the
addition of the assurance provisions becomes effective and that given
that the limitations imposed by the assurance level would not be
implemented until the 2021 compliance period, EPA cannot guarantee that
emission reductions under the trading program will actually take place
during the first planning period.
A similar comment submitted by New Jersey asserted that the 2017
Regional Haze Rule revisions extended the time to submit Regional Haze
plan revisions for the second planning period from 2018 to 2021, but
did not extend the date for implementation of BART requirements
associated with the first planning period. New Jersey asserted that
under the Regional Haze Rule, emission reductions needed in the first
planning period are still due by December 31, 2018 and that allowing
Texas to obtain the reductions by the end of 2019, as allowed under the
Texas SO2 Trading Program, negates the intent of the CAA
(specifically the 10-year planning period to assure incremental
progress) and puts additional burden on other contributing states to
maintain progress.
Response: After reviewing the Agency's position in the January 2017
final rule making amendments to the Regional Haze Rule, we are not
finalizing a position in this action that the first planning period has
been extended to July 31, 2021. We agree with the commenter that this
position would be at odds with the national finding in the January 2017
action that our amendments there ``do not affect the
[[Page 49200]]
development and review of state plans for the first implementation
period . . . .'' 82 FR at 3080. Nonetheless, the Texas SO2
Trading Program satisfies the requirement of 51.308(e)(2)(iii),
because, as discussed in section III.A.2 above, the program ensures
that emission reductions that were achieved prior to the end of 2018,
sufficient to meet the requirements of the BART alternative, will be
maintained through an enforceable program.
Actual emission levels from the sources covered by the BART
alternative were below the levels mandated by the alternative by the
end of the first planning period. In the case of the Texas
SO2 Trading Program, sources subject to the trading program
were already emitting SO2 at levels below the program budget
prior to December 31, 2018. As discussed in our November 2019
supplemental proposal, the combined SO2 emissions from Texas
EGUs participating in the intrastate trading program were 179,630
SO2 tons in 2018, which is well below the Texas
SO2 Trading Program budget of 238,395 tons (as well as the
assurance level of 255,083 tons we are finalizing in this action).\150\
Therefore, the emissions reductions secured under the trading program
occurred prior to the end of the period of the first long-term strategy
for regional haze. With the trading program taking effect with the
start of the 2019 calendar year, actual emissions were never allowed to
exceed the amounts called for by the BART alternative. This issue is
further discussed above in section III.A.2. We also note that we have
never stated and do not agree that the existing Texas SO2
Trading Program fails to ensure that all necessary emission reductions
will occur by the end of the first planning period even without the
addition of the assurance provisions. Our purpose in proposing to add
the assurance provisions was merely to further ensure that the
program's design is at least as stringent as the CSAPR SO2
program as applied to Texas, not only on an average annual basis but
also in individual years. Given that actual emission levels from the
sources covered by the BART alternative were below the levels mandated
by the alternative by the end of the first planning period, even before
the addition of the assurance level, we are determining that the Texas
SO2 Trading Program meets the timing requirement for a BART
alternative at 40 CFR 51.308(e)(2)(iii).
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\150\ 84 FR 61853.
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F. Notice and Comment Requirements
Comment: We received a comment that the FIP promulgating the Texas
SO2 Trading Program did not follow the Clean Air Act's
procedural requirements for promulgating a FIP. The commenter claimed
that EPA promulgated the FIP without following the public notice and
comment procedures set forth in 42 U.S.C. 7607(d)(1)(B), (d)(2)-(6),
which the commenter contended violates the Clean Air Act. The commenter
contended that the Clean Air Act's public notice and comment procedures
at U.S.C. 7607(d)(3) require that EPA first publish in the Federal
Register a proposed rule that includes a statement of basis and purpose
and specifies a comment period. The commenter claimed that this
statement of basis and purpose must include a summary of the factual
data on which the proposed rule is based, the methodology used in
obtaining and analyzing the data, and the major legal interpretations
and policy considerations underlying the proposed rule, and that EPA
must allow any person to submit comments as well as give interested
persons an opportunity for the oral presentation of data, views, or
arguments. The commenter asserted that these and other public
participation requirements in Sec. 7607(d) build on those in the
Administrative Procedure Act and are even more protective of the
public's right to notice and comment. The commenter asserted that EPA's
January 2017 proposed rule ``established'' source-specific
SO2 emission limits that would have required the
installation and operation of modern SO2 controls or
upgraded controls for subject to BART Texas EGUs, and that in contrast
to this, the Trading Program in the final rule consisted of an
intrastate emissions trading program that was not presented in the
proposal. The commenter contended that EPA did not follow the
rulemaking procedures required by the CAA given that EPA never proposed
the adoption of a trading program nor did it discuss that it might
consider adopting an intrastate trading program for Texas in lieu of
the source-specific retrofit controls proposed in the January 2017
proposal. Additionally, the commenter asserted that the FIP
promulgating the Texas SO2 Trading Program does not qualify
as a logical outgrowth of the January 2017 proposal. The commenter
contended that the logical outgrowth doctrine applies where a rule
merely clarifies its proposal, or where the agency put commenters on
notice that it was considering approaches different from the proposal.
According to the commenter, the logical outgrowth doctrine does not
apply in this case because (i) the intrastate trading scheme is
different than the January 2017 BART proposal, and (ii) EPA did not
provide notice that it was considering an intrastate trading program
instead of source specific SO2 emission limits.
Response: We explained in our October 17, 2017 final rule that
during the comment period for our January 2017 proposed rule, we
received a comment letter from the Texas Commission on Environmental
Quality (TCEQ) and the Public Utility Commission of Texas (PUC),\151\
urging us to consider as a BART alternative the concept of emission
caps using CSAPR allocations. We also received similar comments from
Luminant and American Electric Power (AEP). Based on our consideration
of these comments and our independent determination that a BART
alternative approach under 40 CFR 51.308(e)(2) would meet all
regulatory requirements and thus be a viable approach for Texas, we
proceeded to address the SO2 BART requirement for Texas EGUs
under a BART alternative consisting of an intrastate trading program in
our October 2017 final rule. In response to a petition for
reconsideration of the October 2017 final rule requesting that the
Administrator reconsider certain aspects of the FIP related to the
Texas SO2 Trading Program, we decided that the October 2017
federal plan could benefit from further public comment.\152\ As a
result, in our August 27, 2018 proposed rule, we proposed to affirm our
October 2017 final rule that approved a portion of the 2009 Texas
Regional Haze SIP and promulgated the intrastate trading program FIP.
In doing so, we provided the public with an opportunity to comment on
all centrally relevant aspects of our Texas SIP approval and of the FIP
that promulgated the Texas SO2 Trading Program, including
our proposal to affirm the October 2017 FIP establishing an intrastate
trading program capping emissions of SO2 from certain EGUs
in Texas as a BART alternative and our determination that this program
satisfies the requirements for a BART alternative. We provided a 60-day
public comment period that ended on October 26, 2018, and held a public
hearing on September 26, 2018. Following that notice and comment
opportunity, the EPA determined that certain additional changes to the
program not included in the August 2018 proposal could be warranted.
Therefore, we issued a
[[Page 49201]]
supplemental notice of proposed rulemaking on November 14, 2019,
providing a 60-day comment period and a public hearing on December 9,
2019. In the November 2019 supplemental proposal,\153\ we proposed to
amend several provisions of the Texas SO2 Trading Program
with the overall objective of strengthening our finding in the October
2017 final rule,\154\ which we proposed to affirm in August 2018,\155\
that the Texas SO2 Trading Program will result in
SO2 emission levels from Texas EGUs that are similar to or
less than the emission levels from Texas EGUs that would have been
realized had Texas continued to participate in the SO2
trading program under CSAPR.\156\ The amendments to the Texas
SO2 Trading Program we are finalizing in this action are
designed to ensure that emission levels in each year under the
intrastate trading program, and their aggregate impact on visibility,
will be similar to or less than what would have been realized from
Texas EGUs from participation in the SO2 trading program
under CSAPR,\157\ thus providing further support to our determination
that the trading program meets the requirements for a BART alternative.
In finalizing our action affirming the intrastate trading program as
amended in this final action, the EPA is addressing all in-scope
comments we have received on both the August 2018 and November 2019
proposal notices, including, as discussed elsewhere in this final
action and in our separate Response to Comments document, comments
regarding the lawfulness and basis for the intrastate trading program
under the CAA and the Regional Haze Rule, and other related comments.
Therefore, to the extent the commenter is alleging that the intrastate
trading program in our October 2017 FIP was promulgated without
following the public notice and comment procedures and public
participation requirements set forth in 42 U.S.C. 7607(d), the agency
has cured any such alleged procedural defect.
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\151\ 82 FR 48324 at 48327.
\152\ 83 FR 43586.
\153\ 84 FR 61850, 61851.
\154\ 82 FR 48324, 48329.
\155\ 83 FR 43591.
\156\ See 83 FR at 43599.
\157\ 83 FR 43592.
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Comment: We received one comment asserting that EPA cannot claim
that the October 2017 trading program was a clarification of the
January 2017 proposed rule. The commenter asserted that the Texas
SO2 Trading Program finalized by EPA in the October 2017
final rule differs in substance from the BART proposal, which the
commenter claimed is evidenced by EPA's addition in the final action of
dozens of pages of regulatory and explanatory text that was not
included in the 2017 BART proposal.
Response: We agree that our October 17, 2017 final rule that
promulgated an intrastate trading program to address the SO2
BART requirement for Texas EGUs cannot be characterized as merely a
clarification of our January 4, 2017 proposed rule, nor has the Agency
made this claim. Based on our consideration of comments we received on
the January 2017 proposal urging us to consider as a BART alternative
the concept of emission caps using CSAPR allocations, and based on our
independent determination that a BART alternative approach under 40 CFR
51.308(e)(2) would meet all regulatory requirements and thus be a
viable approach for Texas, we proceeded to address the SO2
BART requirement for Texas EGUs under a BART alternative consisting of
an intrastate trading program in our October 2017 final rule. In that
final rule, EPA considered and responded to all relevant comments
germane to the final rule and provided a record of decision-making for
the final action. We note that some of the comments we received on the
January 2017 proposal raised specific issues related to our proposed
analyses for the source-specific BART emission limits we proposed.
Given that those source-specific emission limits were not part of our
final action, providing substantive responses to such comments was not
required as they were no longer relevant. As discussed in several
places throughout this final action, in response to a petition for
reconsideration of the October 2017 final rule requesting that the
Administrator reconsider certain aspects of the FIP related to the
Texas SO2 Trading Program, we provided an opportunity for
further public comment on all centrally relevant aspects of the Trading
Program in a proposal published on August 27, 2018, and provided an
opportunity for public comment on proposed amendments to certain
provisions of the Trading Program in a supplemental proposal published
on November 14, 2019. The amendments to the Texas SO2
Trading Program we are finalizing in this final action, which include
minor changes from what we proposed in the November 2019 proposal, are
designed to ensure that emission levels in each year under the
intrastate trading program, and their aggregate impact on visibility,
will be similar to or less than what would have been realized from
Texas EGUs from participation in the SO2 trading program
under CSAPR,\158\ thus providing further support to our determination
that the Texas SO2 Trading Program meets the regulatory
requirements for a BART alternative and is an appropriate approach for
addressing Texas' SO2 BART obligations.
---------------------------------------------------------------------------
\158\ 83 FR 43592.
---------------------------------------------------------------------------
Comment: We received one comment contending that the Texas
SO2 Trading Program cannot be characterized as a logical
outgrowth of the December 2014 proposed rule given that the BART
provisions in the December 2014 proposed rule were abandoned due to
Homer City II, and that EPA otherwise took final action on that
proposed rule in a final action published in January 2016. The
commenter also asserted that further confirmation that the December
2014 proposal was part of a different rulemaking process is provided by
the fact that in the January 2017 BART proposal, EPA did not invite
comments on the December 2014 proposal and also that EPA did not
include the December 2014 proposal or any of the supporting technical
analysis for the December 2014 proposal in the docket for the January
2017 proposal on the date of the publication of the proposed rule, as
required by the CAA at 42 U.S.C. 7607(d)(3).
Response: This commenter is referring to our December 16, 2014
proposed rule in which we proposed, among other things, to rely on our
CSAPR FIP requiring Texas sources' participation in the CSAPR trading
programs to satisfy the NOX and SO2 BART
requirements for Texas' BART-eligible EGUs.\159\ Due to the uncertainty
arising from the D.C. Circuit's remand of Texas' CSAPR budgets, when we
finalized the December 2014 proposal in an action published in January
2016, we did not finalize our proposal to rely on CSAPR to satisfy the
SO2 and NOX BART requirements for Texas
EGUs.\160\ We note that we did not attempt to characterize the Texas
SO2 Trading Program as a logical outgrowth of the December
2014 proposed rule. We agree that the December 2014 proposed rule was a
part of a different rulemaking process, which is supported by the fact
that we did not reference that proposed rule in developing the
intrastate trading program that was finalized in October 2017. We also
did not reference the December 2014 proposal in our August 2018
proposal to affirm the October 2017 final rule.
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\159\ 79 FR 74818.
\160\ See 81 FR 296, 301-02 (Jan. 5, 2016).
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Comment: We received a comment from environmental groups asserting
that the fact that Texas state agencies and industry submitted comments
in
[[Page 49202]]
support of a trading program does not make the October 2017 final rule
promulgating the Texas SO2 Trading Program a ``logical
outgrowth'' of EPA's 2014 proposal given that EPA did not provide
notice to the public that it was proposing or even considering a
trading program. The commenter asserted that the D.C. Circuit has
``made clear that the fact that some commenters actually submitted
comments addressing the final rule is of little significance. The
agency must itself provide notice of a regulatory proposal,'' citing
Ass'n of Private Sector Colls. v. Duncan, 681 F.3d 427, 462 (D.C. Cir.
2012) (citation omitted) (internal quotation marks omitted). The same
environmental groups asserted that they did not have an opportunity to
comment on information that arose in the October 2017 final rule
promulgating the Trading Program, including the consideration of a
trading program as a BART alternative to satisfy BART, the specifics of
EPA's intrastate trading program, or the rationale for adopting that
program. The environmental groups asserted that while they submitted
comments on BART alternatives in response to the comments submitted by
industry--those comments were not based on, or responding to, any
actual or implied proposal by EPA to adopt such an alternative. The
environmental groups contended that their response to industry comments
about industry's desire for a trading program is not a substitute for
having notice and opportunity to comment on EPA's decision to
promulgate a trading program.
Response: We do not take the position that any comments on the
January 2017 proposal could have or did provide a basis for treating
the October 2017 final rule as a ``logical outgrowth'' of the December
2014 proposal, so the premise of this comment is incorrect.
Furthermore, the case cited by commenter is inapposite as it does not
arise under the CAA. The CAA contemplates circumstances in which the
Agency may finalize rules under section 307(d) that reflect changes
from proposal that a commenter is unable to comment on. The appropriate
remedy, when circumstances warrant, is administrative reconsideration,
so that the agency is able to provide the public the opportunity to
comment on those matters (or ``objections'') that are of ``central
relevance'' to the outcome of the rule. See Wisconsin v. EPA, 938 F.3d
303, 331-32 (D.C. Cir. 2019). The commenter's concerns regarding
logical outgrowth have now been addressed by our August 27, 2018
proposal that specifically solicited comment on all key aspects of the
Texas SO2 Trading Program. We are finalizing that proposal
with amendments to certain provisions of the Trading Program after
considering and responding to all comments within scope that we
received during the public comment periods for the August 2018 proposal
and the November 2019 supplemental proposal.
Comment: We received comments from environmental groups asserting
that EPA did not provide responses to certain comments they submitted
during the public comment period for our January 2017 proposal. Those
particular comments submitted by the environmental groups were a
reaction to comments submitted by industry to EPA--also during the
public comment period for our January 2017 proposal--urging us to
consider as a BART alternative the concept of emission caps using CSAPR
allocations in place of source-specific SO2 BART controls.
Specifically, the comments the environmental groups claim EPA did not
respond to asserted that CSAPR is not better than BART. The commenters
contended that EPA had an obligation to respond to those comments given
EPA's reliance on CSAPR to justify the Texas SO2 Trading
Program, and that in not providing a response, EPA violated the CAA's
requirement that a rule ``be accompanied by a response to each of the
significant comments, criticisms, and new data submitted in written or
oral presentations during the comment period.'' 42 U.S.C.
7607(d)(6)(B).
Response: We provided responses in the October 2017 final rule to
each of the in-scope significant comments, criticisms, and new data
submitted in written or oral presentations during the comment period.
We continue to hold the position that comments alleging that CSAPR is
not better than BART were beyond the scope of our January 4, 2017
proposed rule, and they are beyond the scope of our final action now.
We continue to believe that such comments raise issues that are
appropriately addressed in the record of the 2012 CSAPR Better-than-
BART rule \161\ and our 2017 affirmation of CSAPR Better-than-
BART.\162\ In this action, the EPA is relying on the conclusion reached
in those actions, without reopening them or having any intention to
reopen them, that CSAPR remains a valid BART-alternative, including
after taking account of geographic changes in the scope of CSAPR's
coverage since 2012. In particular, because the Texas SO2
Trading Program, as amended in this final action, has been designed to
achieve SO2 emission levels from Texas EGUs that are similar
to or less than what would have been realized from Texas EGUs'
participation in the CSAPR SO2 trading program, we are
making the determination that the Texas SO2 Trading Program
is an appropriate BART alternative for addressing Texas' SO2
BART obligations. Because the Texas SO2 Trading Program will
result in SO2 emissions from Texas EGUs similar to or less
than emissions anticipated under CSAPR, this alternative is an
appropriate approach for addressing Texas' SO2 BART
obligations and, in the context of the operation of the CSAPR ozone-
season NOX trading program and the operation of the CSAPR
annual NOX and SO2 trading programs, will achieve
greater reasonable progress than BART towards restoring visibility,
consistent with the June 2012 ``CSAPR Better-than-BART'' determination
and September 2017 ``CSAPR Better-than-BART affirmation finding.'' As
discussed in section I.D of this final action, EPA has denied a
petition for reconsideration of the 2017 CSAPR Better-than-BART
affirmation that was based in part on an objection that the Texas
program is not of sufficient stringency to satisfy the analysis for
CSAPR. Although our determination in that action is also beyond the
scope of this action here, it means that EPA here can continue to rely
on the CSAPR ``Better-than-BART'' finding in conducting its analysis of
whether the Texas intrastate trading program satisfies the requirements
of 40 CFR 51.308(e)(2).
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\161\ 77 FR 33641.
\162\ 81 FR 74504.
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Comment: One commenter asserted that EPA's August 2018 proposal
affirming the October 2017 final rule promulgating the Texas
SO2 Trading Program and solicitation of comments on only
some elements of the Texas SO2 Trading Program cannot cure
the rule's procedural deficiencies in finalizing the trading program
because the opportunity for public comment is both insufficient and too
late. The commenter contended that based on case law, the purpose of
notice and comment is to provide the public with an opportunity to
influence agency rulemaking, citing U.S. Steel Corp. v. EPA, 595 F.2d
207, 215 (5th Cir. 1979); Nat'l Tour Brokers Ass'n v. U.S., 591 F.2d
896, 902 (D.C. Cir. 1978). The commenter claimed that this opportunity
to influence agency rulemaking is meaningful only when rules remain in
the formative stage and agencies are more likely to give real
consideration to alternative ideas. Furthermore, the commenter asserted
[[Page 49203]]
that agencies do not provide an adequate opportunity to influence the
rulemaking process when they solicit public comment on rules that they
have already labeled as final, as in the case of the Texas
SO2 Trading Program. The commenters stated that the October
2017 FIP promulgating the Texas SO2 Trading Program remained
in effect even while it was open to public comment, thus not providing
the public with a meaningful opportunity to influence the trading
program. Additionally, the commenter noted that EPA has not yet
rescinded or withdrawn the FIP promulgating the Texas SO2
Trading Program even though environmental groups filed a petition for
reconsideration arguing that the Texas SO2 Trading Program
did not follow notice and comment requirements. According to the
commenters, in having the Texas SO2 Trading Program remain
in effect, EPA has continued to violate the CAA's notice and comment
provisions.
The commenter asserted that the D.C. Circuit explained in Nat'l
Tour Brokers Ass'n, 591 F.2d at 902, that agencies are likely to become
more close-minded and defensive once they put their credibility on the
line in the form of final rules. Furthermore, the commenter argued that
agencies cannot cure notice and comment defects by merely soliciting
comments after the promulgation of a final rule. The commenter asserted
that when an agency seeks to save a rule that suffers from a notice and
comment violation, that agency bears the burden of proving that the
violation did not prejudice the public and that the absence of such
prejudice must be clear for the violation to be considered ``harmless''
and the rule to be upheld. The commenter claimed that at this point,
the only legal remedy is for EPA to withdraw the Texas SO2
Trading Program and replace it with a FIP that satisfies the statutory
and regulatory requirements.
Response: In response to the petition for reconsideration
referenced by the commenters, we decided that the October 2017 final
rule could benefit from further public comment.\163\ As a result, in
our August 2018 proposed rule, we proposed to affirm our FIP
promulgating the Texas SO2 Trading Program and in doing so,
we provided the public with an opportunity to comment on all centrally
relevant aspects of the October 2017 final rule, including our
promulgation of the Texas SO2 Trading Program and our
determination that this program satisfies the requirements for a BART
alternative.\164\ We disagree with the commenter that the opportunity
for public comment provided by our August 27, 2018 proposed rule is
insufficient and too late. While the October 2017 final rule remained
in effect when we proposed the August 27, 2018 proposal, in that
proposal we also sought input on whether SO2 BART would be
better addressed through a source-by-source approach (source-specific
BART), the October 2017 SO2 trading program, or some other
appropriate BART alternative. We stated in the August 27, 2018 proposal
that if we were to decide to act pursuant to any comments we receive,
we may initiate a new rulemaking process with a new proposed rule.\165\
We provided a 60-day public comment period that ended on October 26,
2018 and held a public hearing on September 26, 2018, to receive public
comment on our August 27, 2018 proposed rule. As a result of comments
received during that comment period, we subsequently published and took
further comment on a supplemental proposal in November 2019 to make
changes to certain provisions of the Texas SO2 Trading
Program. Our November 2019 supplemental proposal and the amendments to
the trading program we are finalizing in this action are evidence that
our intent was to be open to further comment and that we ultimately
gave real consideration and were influenced by the comments we
received. Therefore, we disagree that we have not provided the public a
fully adequate opportunity to influence the agency's rulemaking or that
the public notice and opportunity to comment on our proposals was not
meaningful.
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\163\ 83 FR 43586.
\164\ 83 FR 43586 at 43590.
\165\ 83 FR at 43587.
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In this respect, our actions are consistent with the requirements
of the CAA under section 307(d). The CAA contemplates that in some
circumstances the public may not be able to comment on important
aspects of a final rule. The appropriate remedy is reconsideration to
afford that opportunity for comment, and thus provide for
administrative exhaustion prior to judicial review, with respect to all
``centrally relevant'' objections to the final rule. The August 2018
proposal afforded the opportunity to comment on all such objections
with respect to the October 2017 final action.
The CAA also contemplates that a final rule may remain in effect
while the EPA undertakes that reconsideration. Even when the EPA is
undertaking a mandatory reconsideration process under section
307(d)(7)(B), the statute provides that the rule ``may be stayed''
(emphasis added) by the Administrator or a court for a period not to
exceed three months. The fact that the Texas SO2 Trading
Program remained in effect and went into operation during the pendency
of the public notice and comment periods in this instance does not in
any manner establish that the agency's notice and comment process on
the August 2018 proposal to reaffirm the final rule is somehow infirm,
or that any alleged defects in the procedure for the October 2017 final
rule are somehow incurable.
Further, the cases cited by commenter are inapposite because they
were not subject to the provisions of CAA section 307(d). In U.S. Steel
Corp. v. EPA, 595 F.2d 207 (5th Cir. 1979), for instance, the court
reviewed EPA's designation of nonattainment areas under section 107 of
the Act. Designations under section 107 are not amongst the enumerated
actions in section 307(d) of the Act that are governed by the
administrative rulemaking procedures of subsection (d), including the
provision for mandatory reconsideration under section 307(d)(7)(B).
Thus, the court in U.S. Steel Corp. was reviewing EPA's action under
the Administrative Procedure Act. See 595 F.2d at 210. The Texas
SO2 Trading Program is a federal implementation plan
promulgated under section 110(c) of the CAA, and thus subject to
section 307(d), pursuant to section 307(d)(1)(B). The court in U.S.
Steel was not confronted with a circumstance in which the agency
promulgated a final rule subject to the provisions of CAA section
307(d) that was substantially different from the proposal, but then
took the necessary steps to provide the opportunity for comment on all
centrally relevant issues, consistent with the process contemplated in
section 307(d)(7)(B). Thus, the U.S. Steel Corp. case cited by the
commenter is not relevant to our final action on the Texas
SO2 Trading Program here.
Comment: One commenter expressed general concern that EPA proposed
to affirm the October 2017 final rule that promulgated the Texas
SO2 Trading Program in the August 2018 proposal without
soliciting comments on certain sections of the final rule.
Response: In response to a petition for reconsideration of the
October 2017 final rule requesting that the Administrator reconsider
certain aspects of the FIP related to the Texas SO2 Trading
Program, we decided that important aspects of the October 2017 federal
plan could benefit from further
[[Page 49204]]
public comment.\166\ Accordingly, in a notice published on August 27,
2018, we proposed to affirm certain aspects of the October 2017 final
rule, and thus opened for comment the following elements, which
effectively covered all of the central objections in the petition for
reconsideration: (1) The proposal to affirm the October 2017 FIP
establishing an intrastate trading program addressing emissions of
SO2 from certain EGUs in Texas as a BART alternative and the
determination that this program satisfies the requirements for BART
alternatives; (2) the proposal to affirm the finding that the BART
alternatives in the October 2017 rulemaking to address SO2
and NOX BART at Texas' EGUs result in emission reductions
adequate to satisfy the requirements of CAA section 110(a)(2)(D)(i)(II)
with respect to visibility for the following NAAQS: 1997 8-hour ozone,
1997 PM2.5 (annual and 24-hour), 2006 PM2.5 (24-
hour), 2008 8-hour ozone, 2010 1-hour NO2, and 2010 1-hour
SO2 NAAQS; and (3) the proposal to affirm our October 2017
approval of Texas' SIP determination that no sources are subject to
BART for PM. The August 2018 affirmation proposed rule also solicited
comment on the specific issues of whether recent shutdowns of sources
included in the trading program and the merger of two owners of
affected EGUs should impact the allocation methodology for certain
SO2 allowances. In addition to soliciting comment on the
above elements and aforementioned specific issues, the August 2018
affirmation proposal also invited comment on additional issues that
could inform our decision making with regard to the SO2 BART
obligations for Texas. First, we sought input on whether SO2
BART would be better addressed through a source-by-source approach
(source-specific BART), the October 2017 SO2 trading
program, or some other appropriate BART alternative. Second, EPA
requested comment on whether a SIP-based program would serve Texas
better than a FIP. Third, we requested public input on whether and how
the SO2 trading program finalized in the October 2017 final
rule addresses the long-term strategy and reasonable progress
requirements for Texas. We find that the issues that EPA enumerated for
reconsideration and solicitation of public comment covered all
centrally relevant aspects of the October 2017 rule. See 83 FR at
43587. As noted by the commenter, we recognize that there were certain
aspects of our October 2017 final rule that we did not reopen and thus
did not solicit further comment on in our August 2018 proposal. We did
not reopen or solicit comment on the following: our October 2017 final
determination that CSAPR addresses the NOX BART requirements
for EGUs in Texas; identification of BART-eligible sources; and our
determination that the BART-eligible EGUs not participating in the
Texas SO2 Trading Program were not causing or contributing
to visibility impairment, and were therefore not subject to BART. We
did not reopen and solicit further comment on these determinations made
in the October 2017 final rule because these aspects of our final rule
were finalized as proposed in the January 2017 proposal after carefully
considering and responding to all comments within scope that we
received during the public comment period.
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\166\ 83 FR 43586.
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G. Subject-to-BART Determinations
Comment: We received a comment from Lower Colorado River Authority
(LCRA) stating their Fayette Power Plant Units 1 & 2 (FPP U1 & U2) are
not subject to BART, contrary to the determination made by EPA in the
January 2017 FIP proposal. The commenter asserted that EPA improperly
used data from 2000-2004, which pre-dated the installation of wet flue
gas desulfurization scrubbers at the units, to assess visibility
impacts of FPP U1 & U2. Although the commenter did not request that EPA
remove FPP U1 & U2 from the Texas SO2 Trading Program at
this time, and actually expressed support of the Texas FIP and the
inclusions of FPP U1 & U2 in the trading program, the commenter
requested that EPA concur that the most currently available data must
be used for visibility impact determinations under the regional haze
program.
Response: We appreciate LCRA's concerns regarding Fayette Power
Plant Units 1 and 2, and we agree that Fayette Units 1 and 2 are
currently equipped with high performing wet FGDs. We note that, as
discussed in our October 2017 final rule and as affirmed in this
rulemaking, we are not making a subject-to-BART determination for those
sources covered by the Texas SO2 Trading Program. The
relevant BART requirement for the participating BART-eligible units are
encompassed by BART alternatives for NOX and SO2
such that we did not deem it necessary to finalize subject-to-BART
findings for these EGUs. In addition, we are affirming our approval of
the determination in the 2009 Texas Regional Haze SIP that none of
these sources are subject to BART for PM. Therefore, comments
concerning the emissions utilized in our subject-to-BART modeling for
the sources participating in the SO2 trading program are no
longer relevant.
H. Visibility Transport
Comment: One commenter asserted that EPA's reliance on the Texas
SO2 Trading Program to satisfy section 110(a)(2)(D)(i)(II)
is arbitrary and capricious both because the Texas SO2
Trading Program itself is unlawful and because EPA's reliance on the
Texas SO2 Trading Program here is based on EPA's claims that
the Texas SO2 Trading Program reduces emissions as much as
CAIR would have. According to the commenter, this is problematic
because EPA cannot use CAIR, given that CAIR was invalidated years ago
by the D.C. Circuit, citing North Carolina, 531 F.3d at 903, and has
been replaced by CSAPR. Thus, the commenter contended that EPA cannot
use CAIR as the benchmark for whether the interstate visibility
transport requirements are met. The commenter also asserted that EPA
disapproved Texas' regional haze plan precisely because it relied on
CAIR and that it is arbitrary and capricious for EPA to now turn around
and claim that interstate visibility transport requirements are
satisfied because the emissions reductions in CAIR will be achieved.
The commenter also asserted that EPA's new rationale of relying on
the emission levels assumed in the CENRAP modeling as a basis for
finding that Texas' emissions will not interfere with other states'
visibility plans is not appropriate given that there is no
demonstration provided to show that the emission assumptions used by
CENRAP in its visibility modeling are in fact sufficient to assure that
Texas emissions do not interfere with measures required to protect
visibility in other states. The commenter also expressed concern that
certain states, such as New Mexico and Colorado, impacted by Texas
emissions are not members of CENRAP, and therefore, the CENRAP process
could not have determined what emissions limits were necessary to
satisfy Texas' visibility transport obligations with respect to New
Mexico and Colorado.
Response: First, we address comments regarding the Texas
SO2 Trading Program as being unlawful, arbitrary, or
capricious, elsewhere in this document. Second, the Texas
SO2 Trading Program, as promulgated in October 2017 and with
the amendments promulgated in this final rule, results in emission
reductions that are adequate to satisfy Texas' visibility transport
obligations under CAA section 110(a)(2)(D)(i)(II) for the following six
NAAQS: (1) 1997 8-hour ozone; (2) 1997 PM2.5 (annual and
[[Page 49205]]
24 hour); (3) 2006 PM2.5 (24-hour); (4) 2008 8-hour ozone;
(5) 2010 1-hour NO2; and (6) 2010 1-hour SO2. The
2009 Texas Regional Haze SIP relied on participation in CAIR to meet
the SO2 BART requirements for Texas EGUs, and this level of
emissions reductions from Texas is what other states relied upon and
assumed during interstate consultation and in the development of their
long-term strategies and reasonable progress goals for their own Class
I areas in their regional haze SIPs. As discussed in section III.B of
this notice, Texas EGU sources were projected to emit approximately
350,000 tons of SO2 annually under CAIR participation. By
comparison, Texas EGUs are anticipated to emit no more than
approximately 290,083 tons of SO2 annually under the Texas
SO2 Trading Program (i.e., 255,083-ton assurance level +
estimated 35,000 tons per year of emissions from units not covered by
the Texas SO2 Trading Program), which is well below the
350,000-ton emissions projection for Texas sources under CAIR and well
below the maximum total annual SO2 emissions assumed for
Texas under CSAPR (i.e., 317,000 tons) in the CSAPR Better-than-BART
analysis. Thus, the Texas SO2 Trading Program as amended in
this final action, ensures SO2 emission reductions from
Texas that are consistent with, and indeed greater than, the level of
emission reductions relied upon by other states during interstate
consultation and thus this level of emissions reductions is adequate to
satisfy the requirements of CAA section 110(a)(2)(D)(i)(II) with
respect to visibility for the six identified NAAQS.\167\
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\167\ 83 FR 43605.
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The commenter makes the claim that CENRAP's modeling of emission
assumptions does not necessarily demonstrate that those assumptions
were in fact sufficient to assure non-interference by Texas' emissions
with measures required to protect visibility in other states. We note
that our 2013 infrastructure-SIP guidance addressing the interstate
visibility transport requirements of the Act (also sometimes referred
to as ``prong 4'') lays out two ways in which a state's infrastructure
SIP submittal may satisfy these requirements.\168\ One way is through a
state's confirmation in its infrastructure SIP submittal that it has an
EPA-approved regional haze SIP in place. In the absence of a fully
approved regional haze SIP, the second method to meet these
requirements is a demonstration that emissions within a state's
jurisdiction do not interfere with other states' plans to protect
visibility. Such a demonstration should point to measures that limit
visibility-impairing pollutants and ensure that the resulting
reductions conform with any mutually agreed emission reductions under
the relevant regional haze regional planning organization (RPO)
process.\169\ Given that the emissions under the Texas SO2
Trading Program--including the assurance provisions--are less than the
level of Texas emissions reductions agreed upon by Texas and other
states during consultation and assumed and relied upon in those other
states' regional haze SIPs, we continue to find that the FIP is
adequate to ensure that emissions from Texas do not interfere with
measures to protect visibility in nearby states.
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\168\ See ``Guidance on Infrastructure State Implementation Plan
(SIP) Elements under CAA sections 110(a)(1) and 110(a)(2)''
(September 13, 2013).
\169\ See id. ``Guidance on Infrastructure State Implementation
Plan (SIP) Elements under CAA sections 110(a)(1) and 110(a)(2),'' at
34 (September 13, 2013). See also 76 FR 22036 (April 20, 2011)
(containing EPA's approval of the visibility requirement of
110(a)(2)(D)(i)(II) based on a demonstration by Colorado that did
not rely on the Colorado Regional Haze SIP).
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The commenter also makes the claim that there is no rational basis
for EPA's reliance on the emission levels assumed in CENRAP modeling as
a basis for finding that Texas' emissions will not interfere with other
states' visibility plans given that there are states whose visibility
is impacted by Texas that are not members of CENRAP. Our basis for
determining that the FIP is adequate to ensure that emissions from
Texas do not interfere with measures to protect visibility in nearby
states is that the emissions reductions secured under the Texas
SO2 Trading Program are consistent with the level of
emissions reductions relied upon by other states during consultation,
which is not limited to consultation amongst CENRAP states.\170\ The
Regional Haze Rule requires that ``Where a state has emissions that are
reasonably anticipated to contribute to visibility impairment in any
mandatory Class I Federal area located in another State or States, the
State must consult with the other State(s) in order to develop
coordinated emission management strategies.'' \171\ Clearly, this
requirement applies regardless of whether the impacted states are
members of the same regional planning organization (RPO) or not. Thus,
Texas had an obligation to consult with states, both in and outside of
CENRAP, whose Class I areas are potentially impacted by Texas
emissions. As documented in the 2009 Texas Regional Haze SIP,\172\
Texas participated in inter-regional planning organization calls during
the SIP development process for the first planning period. Texas also
sent consultation letters to Oklahoma, Louisiana, Missouri, Arkansas,
Colorado and New Mexico. Included with each letter was a discussion of
the CENRAP Particulate Matter Source Apportionment Technology (PSAT)
modeling determining the contribution from each Texas source area to
visibility impairment at Class I areas in the given state. In the 2009
SIP, Texas asserted that it participated fully in the analysis of this
data, including estimation of the base period visibility impairment,
natural visibility condition estimates, and 2018 projections based on
current (at that time) and anticipated future state and federal
controls. For states outside of CENRAP, Texas documented in its 2009
SIP that Colorado's Department of Public Health and Environment
confirmed in a letter dated June 24, 2008, that no further emissions
reductions were requested of Texas at that time. Texas also documented
that as of December 2008, shortly before its submission of the final
SIP to EPA on March 19, 2009, New Mexico had not responded to Texas'
letter to confirm whether or not New Mexico was expecting any
additional emission reductions from Texas sources. Furthermore, New
Mexico did not include in its Regional Haze SIP any additional emission
reductions expected from Texas sources. The Texas emissions reductions
that will result from the Texas SO2 Trading Program and
Texas' participation in CSAPR for ozone season NOX are
consistent with the level of Texas emissions reductions relied upon by
other states both in and outside CENRAP during consultation with Texas.
---------------------------------------------------------------------------
\170\ See CFR 51.308(d)(3)(i)-(iii) addressing the requirements
for consultation with other states.
\171\ 40 CFR 51.308(d)(3)(i).
\172\ See 2009 Texas Regional Haze SIP, section 4.3 titled
``Consultations On Class I Areas In Other States.'' The submittal
can be found in Regulations.gov docket ID EPA-R06-OAR-2016-0611,
document EPA-R06-OAR-2016-0611-0002.
---------------------------------------------------------------------------
It is incorrect to claim that because CAIR was invalidated, EPA and
the states can no longer use the anticipated emissions and reasonable
progress goals established through the consultation process for the
first planning period. Those goals may have been established in part
based on expectations of emissions performance under CAIR, but the
anticipated emissions reductions and the goals for regional haze
purposes remain in effect (though we note that reasonable progress
goals are not binding). Thus, this level of emissions
[[Page 49206]]
provides an appropriate benchmark for assessing whether states are
adequately addressing interstate visibility transport (when such a
demonstration is necessary). We note that this is different than
situations in which states have attempted to rely on CAIR as a BART
alternative despite the fact that CAIR is no longer in operation. Here,
the fact that CAIR no longer exists and has been replaced by CSAPR does
not impact the legitimacy of the level of emission reductions agreed
upon through the consultation process among states, particularly given
that CSAPR is generally more stringent than CAIR. And here, the Texas
program is designed to be more stringent than CSAPR would have been for
SO2 emissions in Texas. See section III.B where we provided
detailed analysis of anticipated emissions under CAIR and the Texas
program. Therefore, we find that Texas' visibility transport
obligations under CAA section 110(a)(2)(D)(i)(II) for the six NAAQS
listed above are satisfied.
Comment: We received one comment asserting that since EPA has not
made any determination of the trading program's visibility impacts on
other states, we cannot make the claim that the Texas SO2
Trading Program was designed to meet the CAA's visibility transport
requirements. The commenter claimed that EPA cannot lawfully claim that
the Texas SO2 Trading Program was designed to meet the
visibility transport requirements of the CAA because the CAA's
visibility good neighbor provision requires and authorizes EPA to
prohibit only those upwind emissions that interfere with measures
required to be included in the applicable implementation plan for any
other State. The commenter cited 42 U.S.C. 7410(a)(2)(D)(i)(II), as
well as E.P.A. v. EME Homer City Generation, L.P., 134 S.Ct. 1584, 1604
(2014) and EME Homer City II, 795 F.3d at 127. The commenter asserted
that if one applies to this case the Supreme Court's precedent
interpreting the analogous good neighbor provision under Section
7410(a)(2)(D)(i)(I), EPA is not required and does not have authority to
regulate upwind emissions unless it first makes the predicate finding
that those upwind emissions interfere with downwind visibility. The
commenter further asserted that if the EPA makes that finding, even
then it may only regulate upwind emissions up to the amounts of
pollution that actually interfere with downwind visibility, again
citing EPA v. EME Homer City Generation, L.P., 134 S.Ct. 1584, 1603
(U.S. 2014) and EME Homer City II, 795 F.3d at 127. The commenter
contended that in affirming its October 2017 final rule that
promulgated the Texas SO2 Trading Program, EPA failed to
make the predicate finding that emissions from Texas are interfering
with downwind states' attainment of the NAAQS and that EPA, therefore,
cannot properly claim that the Texas SO2 Trading Program was
designed to meet the agency's good neighbor ``requirement'' to protect
downwind visibility from ``interfere[nce].''
Response: We disagree that the Texas SO2 Trading Program
cannot be viewed as a program ``designed to meet a requirement other
than BART'' for purposes of the BART alternative analysis under 40 CFR
51.308(e)(2)(i)(C). As relevant to this comment, the Texas program is
designed, among other things, to ensure reductions of SO2
emissions from EGU sources in Texas that meet (and indeed are more
stringent than) the reductions agreed to in the interstate consultation
process for setting RPGs for Class I areas in other states. See section
III.B of this notice, where we explain that the Texas SO2
Trading Program as amended in today's final action ensures emission
reductions in Texas that are adequate to satisfy the requirements of
CAA section 110(a)(2)(D)(i)(II) with respect to visibility for six
NAAQS.
We disagree with the commenter that EPA has not made allegedly
necessary predicate findings under prong 4 in order to claim that the
Texas program is designed to meet prong 4 requirements. The commenter
incorrectly attempts to import into the interstate visibility transport
analysis under prong 4 the policy determinations, regulatory design,
and associated case law of the ``good neighbor provision'' at
110(a)(2)(D)(i)(I), related to addressing significant contribution to
nonattainment and interference with maintenance of the NAAQS in other
states, which we commonly refer to as prongs 1 and 2. Those precedents
are not necessarily applicable given that the agency has long had a
different framework for analysis under prong 4, with an entirely
different set of policy guidance and administrative precedents. As
explained above, our interpretation of section 110(a)(2)(D)(i)(II) with
respect to visibility transport is that one of the pathways by which a
state can meet its visibility transport obligations is through a
demonstration that emissions within a state's jurisdiction do not
interfere with other states' plans to protect visibility. EPA's
September 13, 2013 guidance explains that such a demonstration should
point to measures that limit visibility-impairing pollutants and ensure
that the resulting reductions conform with any mutually agreed emission
reductions under the relevant regional haze regional planning
organization (RPO) process.\173\ This has been EPA's long-standing
interpretation of how a state's visibility transport obligations can be
satisfied, and we have since approved many SIPs and promulgated FIPs
that address CAA section 110(a)(2)(D)(i)(II) with respect to visibility
transport through this pathway. Texas participated in the CENRAP
process in developing its SIP for the first planning period and relying
on the technical work developed through that process, Texas identified
states with Class I areas impacted by Texas emissions and those states
agreed that they are being impacted by emissions from Texas sources.
Furthermore, through the consultation process, Texas made a commitment
to states with Class I areas impacted by emissions from Texas sources
that it would implement CAIR to satisfy its BART requirements and those
states agreed with Texas that anticipated emission reductions due to
the implementation of CAIR would be sufficient to address Texas'
impacts at their Class I areas. The impacted states relied on this
level of emission reductions from Texas sources in developing their
SIPs and establishing their RPGs. As discussed in section III.B. of
this action, given that the revisions to the Texas SO2
Trading Program we are finalizing in today's final action ensure
emission reductions consistent with and below the emission levels
agreed upon by all states during interstate consultation under 40 CFR
51.308(d)(3)(i)-(iii) and relied upon by states impacted by Texas
emissions, we find that these revisions provide further support for our
earlier finding that the BART alternative in the October 2017 FIP
results in emission reductions adequate to satisfy the requirements of
CAA section 110(a)(2)(D)(i)(II) with respect to visibility for the six
identified NAAQS.\174\
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\173\ See ``Guidance on Infrastructure State Implementation Plan
(SIP) Elements under CAA sections 110(a)(1) and 110(a)(2),'' at 34
(September 13, 2013). See also 76 FR 22036 (April 20, 2011)
containing EPA's approval of the visibility requirement of
110(a)(2)(D)(i)(II) based on a demonstration by Colorado that did
not rely on the Colorado Regional Haze SIP.
\174\ See 2009 Texas Regional Haze SIP, section 4.3 titled
``Consultations On Class I Areas In Other States.'' The submittal
can be found at www.regulations.gov, Docket ID EPA-R06-OAR-2016-
0611, Document ID EPA-R06-OAR-2016-0611-0002.
---------------------------------------------------------------------------
Further, EPA has requisite FIP authority under CAA section 110(c)
to address prong 4 for the six NAAQS for
[[Page 49207]]
Texas, given our disapproval of the state's prong 4 submittals. See 82
FR at 48332. Thus, our position is that we have the obligation and
authority to address Texas' interstate visibility transport
obligations. With the emission levels established by the Texas
SO2 Trading Program, as promulgated in October 2017 and
amended by this final rule, we affirm our finding that the emission
levels assumed in the CENRAP modeling are in fact sufficient to assure
that Texas' emissions do not interfere with other states' visibility
plans, and that Texas is achieving emission reductions that satisfy
prong 4 obligations with respect to the six aforementioned NAAQS. For
the reasons just discussed, we can also determine that the intrastate
program is ``designed to meet a requirement other than BART'' for
purposes of 51.308(e)(2)(i)(C).
We also disagree with the comment that EPA does not have the
authority to regulate Texas' emissions with respect to visibility
without first making the finding that emissions from Texas are
interfering with downwind states' attainment of the NAAQS. The
visibility prong (or ``prong 4'') of CAA section 110(a)(2)(D)(i)(II)
requires that the implementation plan submitted by a state contain
adequate provisions prohibiting any source or other type of emissions
activity within the State from emitting any air pollutant in amounts
that will interfere with measures required to be included in the
applicable implementation plan for any other state to protect
visibility. Prong 4 is concerned with visibility and there is no
requirement that EPA first make a finding that a state is interfering
with downwind states' attainment of the NAAQS before approving a SIP or
promulgating a FIP that addresses CAA section 110(a)(2)(D)(i)(II) with
respect to visibility transport.
While the commenter is correct that the regional planning process
by which Texas and surrounding states developed their regional haze
SIPs took place more than a decade ago and in the interim CAIR has been
invalidated and replaced by CSAPR, given that the implementation of
CAIR in Texas is what Texas committed to and what impacted states
agreed with and relied upon in developing their own regional haze SIPs,
we continue to find that it is appropriate to compare the emissions
reductions anticipated from CAIR to the Texas SO2 Trading
Program to determine whether the FIP is adequate to ensure that
emissions from Texas do not interfere with measures to protect
visibility in nearby states as required under CAA section
110(a)(2)(D)(i)(II). We recognize that the process of taking action on
certain SIPs related to regional haze for the first planning period and
interstate visibility transport has taken longer than EPA originally
anticipated when it first promulgated the Regional Haze Rule in 1999.
Notwithstanding this delay, we do not believe it would be reasonable or
practical at this time to require states with outstanding visibility
transport obligations to revisit and/or update their emission reduction
commitments to impacted states for the first implementation period.
Such a process could potentially be time and resource intensive at a
time when states are currently focusing their attention on developing
regional haze implementation plans for the second implementation
period. Thus, we do not believe it would not be reasonable or practical
at this time to require Texas to revisit its emission reduction
commitments to states with Class I areas impacted by Texas emissions
for the first implementation period.
We address other comments that EPA must analyze BART on a source-
by-source basis elsewhere in this document.
I. Reasonable Progress
Comment: We received a comment asserting that the Texas
SO2 Trading Program cannot possibly be designed to satisfy
the reasonable progress requirements for several reasons. As an initial
matter, the commenter claimed that EPA was attempting to bypass the
source-specific analyses required under Sec. 51.308(e)(2)(i)(C) by
simply asserting that the trading program was designed to be part of
the long-term strategy to meet reasonable progress requirements.
Additionally, the commenter asserted that EPA's claim that the Texas
SO2 Trading Program is somehow designed to meet the
reasonable progress requirements is contradicted by EPA's statement
elsewhere in the August 2018 affirmation proposal that it is not taking
action on the reasonable progress elements that the Fifth Circuit
remanded to the agency. The commenter also claimed that setting aside
this inconsistency, the Texas SO2 Trading Program cannot be
designed to satisfy the reasonable progress requirements given that it
makes no progress at all as the allowances available under the trading
program exceed the covered sources' emissions in 2015, 2016, and 2017,
and thus the Texas SO2 Trading Program will not reduce
emissions or improve visibility. Furthermore, the commenter asserted
that the Texas SO2 Trading Program cannot possibly be
designed to satisfy the reasonable progress requirements because EPA
did not consider the four statutory factors for reasonable progress.
The commenter asserted that EPA must conduct a four-factor analysis of
whether pollution controls are needed at individual sources--whether
subject to BART or not--to make reasonable progress and that the Texas
SO2 Trading Program and the Q/d analysis that helped inform
the trading program cannot act as a substitute for a four-factor
reasonable progress analysis given that there are no statutory or
regulatory exemptions that authorize EPA to forego conducting a
separate reasonable progress analysis or that authorize a reasonable
progress alternative program comparable to a BART alternative.
Response: As discussed in Section III.A.2 above, we are not
finalizing a position that the Texas SO2 Trading Program is
designed to meet reasonable progress requirements. While the program
will contribute to meeting Texas' reasonable progress requirements, the
necessary analysis, and potentially, emission controls, to fully
address reasonable progress for Texas will take place in a separate,
future action.
J. Coleto Creek
Comment: We received comments in support of our proposed removal of
the special provisions in the Supplemental Allowance Pool for Coleto
Creek.\175\ We also received a comment stating that the Supplemental
Allowance Pool's treatment of Coleto Creek is unlawful, arbitrary, and
capricious because this provision would allow SO2 emissions
to increase over time. Under Sec. 97.912(a)(3)(i), if Coleto Creek
requires more allowances to be in compliance, those allowances will be
provided up to the amount held in the Supplemental Allowance Pool.
Because that pool's starting balance is 10,000 tons and given that
Coleto Creek's 2016 SO2 emissions totaled 8,231 tons, Sec.
97.912(a)(3)(i) would allow this unit to more than double its 2016
SO2 emissions. Nothing in the Texas SO2 Trading
Program would prevent Coleto Creek from increasing its SO2
emissions to even higher levels, if and when the Supplemental Allowance
Pool has accumulated allowances in excess of 10,000 tons.
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\175\ We note that TCEQ commented in support of removing the
special provisions for Coleto Creek but suggested that implementing
changes to the program is a potential concern given that the program
began in January 2019. TCEQ encourages the EPA to discuss with
program stakeholders appropriate timing for making a change to the
Supplemental Allowance Pool. Our final rule sets the effective date
of the rule changes for program year 2021.
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[[Page 49208]]
The commenter further asserts that because Vistra and Dynegy have
merged, the rationale for having special provisions for Coleto Creek
are longer true, with the combined Dynegy-Vistra company owning several
units other than Coleto Creek covered by the Texas SO2
Trading Program. Given that the factual basis for this provision
concerning Coleto Creek is no longer true, the commenter suggests that
EPA must eliminate 40 CFR 97.912(a)(3)(i).
We also received comments suggesting that we should eliminate the
additional flexibility afforded to Coleto Creek's owner in the
Supplemental Allowance Pool of the SO2 trading program FIP
because Coleto Creek is no longer an isolated unit in the program.
Given the recent merger between Dynegy and Vistra Energy, which owns or
operates several other Texas EGUs that are subject to the Texas
intrastate trading program for SO2, Coleto Creek will now be
part of a larger set of participating units under the same owner/
operator. Because Coleto Creek is no longer at a disadvantage as it was
before, the flexibility afforded to Coleto Creek under the Supplemental
Allowance Pool is no longer necessary. Vistra Energy will be able to
transfer allowances among the multiple participating units should any
one source require additional allowances during any control period
greater than its allocation, including Coleto Creek. Eliminating the
flexibility directly afforded to Coleto Creek under 40 CFR 97.912(a)(3)
as a result of the merger will provide an equal opportunity among the
participating sources for access to the Supplemental Allowance Pool.
Response: When we finalized our Texas SO2 Trading
Program FIP in October 2017, all sources required to participate in the
trading program had the flexibility to transfer allowances among
multiple participating units under the same owner/operator when
planning operations, with the exception of Coleto Creek, which consists
of only one coal-fired unit, and at the time of our October 2017 FIP,
this was the only coal-fired unit in Texas owned and operated by
Dynegy. In light of this, in our October 2017 FIP, we provided Coleto
Creek with additional flexibility by allocating its maximum
supplemental allocation from the Supplemental Allowance Pool as long as
there were sufficient allowances in the Supplemental Allowance Pool
available for allocation, and its actual allocation would not be
reduced in proportion with any reductions made to the supplemental
allocations to other sources. In our August 2018 proposal, we noted
that Dynegy had merged with Vistra, which owns other units that are
subject to the trading program. In the August 2018 proposal, we
solicited comment on eliminating this additional flexibility for Coleto
Creek in light of the recent change in ownership, and we received no
adverse comments on such a change. Therefore, on November 14, 2019, we
published a supplemental notice of proposed rulemaking that proposed to
make this change to the regulations.\176\ After considering all
comments we received on our supplemental proposal, we are finalizing
the removal of the special provisions for Coleto Creek, thus making
moot the comments concerning Coleto Creek's treatment under the
Supplemental Allowance Pool.
---------------------------------------------------------------------------
\176\ 84 FR 61850.
---------------------------------------------------------------------------
We disagree with the commenter's additional statements that, aside
from the treatment of Coleto Creek just discussed, the Supplemental
Allowance Pool is arbitrary and capricious because it would allow
emissions to increase over time. We have responded elsewhere to the
commenter's similar assertion that the Supplemental Allowance Pool
would ``inflate the cap'' in sections IV.A and IV.K of this final
action.
Comment: We also received comments from AEP, NRG Texas, SPS, and
Vistra that side with eliminating the additional flexibility to Coleto
Creek due to the recent change in ownership. The additional flexibility
would give Coleto Creek priority for allocations from the Supplemental
Allowance Pool. AEP states that retaining this flexibility would place
Coleto Creek and its owner in a favorable position in comparison to
other utilities operating in the ERCOT, which would unfairly impact
other EGUs. NRG Texas similarly states this additional flexibility
would significantly reduce the allowances available to other sources.
SPS explains that eliminating the additional flexibility will ensure a
more equitable distribution of allowances for EGUs needing compliance
assistance. Vistra submitted comments on both the August 2018 proposal
and the November 2019 supplemental proposal in support of eliminating
the priority given in the October 2017 final rule to Coleto Creek for
allocations from the Supplemental Allowance Pool given that this
priority is no longer necessary in light of the facility's change in
ownership.
Response: As explained elsewhere in this document, in our August
2018 proposal, we solicited comment on eliminating the additional
flexibility for Coleto Creek in light of the recent change in
ownership, and we received no adverse comments on such a change.
Thereafter, on November 14, 2019, we published a supplemental notice of
proposed rulemaking that proposed to make this change to the
regulations.\177\ After considering all comments we received, we are
finalizing the removal of the special provisions for Coleto Creek, thus
addressing the comments concerning Coleto Creek's treatment under the
Supplemental Allowance Pool.
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\177\ 84 FR 61850.
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K. Assurance Provisions and the Variability Limit
Comment: One commenter asserted that EPA's proposed assurance
provisions are arbitrary and capricious. Assurance levels, like those
established in CSAPR, are designed to account for year-to-year
variability in each state's EGU emissions. EPA concluded that these
emissions could vary from year to year due to normal fluctuations in
electricity demand, weather, economic considerations, etc., and in an
interstate trading program, state-level budgets would not necessarily
ensure emissions outcomes commensurate with each state's good neighbor
obligations. To address this issue, EPA added ``variability limits'',
which provide additional headroom in the states' budgets. In CSAPR,
these variability limits were based on the maximum historical
percentage coal usage (heat input) variability during 2000-2010
experienced by any CSAPR state. The state budget plus the variability
limit equals the ``state assurance level.'' \178\
---------------------------------------------------------------------------
\178\ See generally 76 FR 42866 (July 19, 2011).
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The commenter asserted that EPA states that the addition of an
assurance limit was the result of comments that EPA's Texas
SO2 Trading Program would (1) not provide any regulatory
pressure on EGUs to reduce their emissions and would actually allow
emissions to increase, and (2) would undermine the stringency of the
program based on the availability of supplemental allowances, the
issuance of allocations to already-retired units, the general method of
allocating allowances, and the availability of unlimited allowance
banking.\179\ The commenter asserted that to address these concerns,
EPA proposed to add an assurance level using the same methodology the
agency used in CSAPR. EPA claims, ``to the extent that commenters
claimed the program would be inadequately stringent due to the
allowance allocation methodology, including allocations to retired
units, or
[[Page 49209]]
due to the Supplemental Allowance Pool or allowance banking, these
concerns are effectively rendered moot by the addition of the assurance
level.'' \180\ The commenter contends, however, that a cap on the Texas
SO2 Trading Program does not mitigate the errors concerning
EPA's rules governing its Supplemental Allowance Pool, banking, and
related issues. Were that the case, EPA could simply promulgate any
trading program rule it desired, using any reasoning or allocation
methodology, as long as the end result equaled some desired total
emissions goal.
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\179\ 84 FR at 61852.
\180\ 84 FR at 61854.
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The commenter further asserts that none of the references pointing
to the CSAPR Update Final Rule to support the notion that allocations
to retired units and the availability of banking are important to
ensure market stability provide any rationale or support for allocating
emission credits to already retired EGUs. Allocating allowances to
already retired units only serves to inflate the SO2 budget,
thereby reducing the value of the allowances, which disincentivizes
SO2 reduction. Moreover, the commenter asserts that the
Texas SO2 Trading Program arbitrarily creates a windfall to
operators that have independently chosen to cease operations or
relinquish their permit rights to emit any pollution. Giving
permanently-retired sources and their operators a free pass to emit
more haze-causing pollution than they are legally allowed to emit under
the Clean Air Act cannot comply with the Regional Haze Rule's
requirement that any trading program ``achieve greater reasonable
progress'' than source-specific BART. 40 CFR 51.308(e), (e)(2); see
also 40 CFR 51.308(d)(vi). In a comment submitted following the
supplemental proposal adding an assurance level to the Texas
SO2 Trading Program, the commenter further emphasized that
the agency proposed to give the owners of those already-retired sources
an even bigger emissions ``variability'' cushion, effectively ensuring
that those companies will have no incentive or need to reduce emissions
at any other source. The commenter goes further stating that the
assurance level and variability limit virtually ensure that certain
utilities holding emission credits for already-retired sources will be
allowed to continue polluting at the same or greater levels than
before.
Response: As an initial matter, this action does not reopen any
aspect of the CSAPR regulations. However, in order to facilitate our
response to comments on the proposed amendments to the Texas
SO2 Trading Program, we first respond to the commenter's
statements concerning the CSAPR programs as necessary to correct errors
in the commenter's statements that may also implicate the commenter's
statements concerning the Texas SO2 Trading Program.
Contrary to the commenter's statements, the CSAPR variability limits do
not ``provide headroom in'' or otherwise alter the CSAPR state budgets,
which are fixed amounts for all years from 2017 forward. Rather, a
state's CSAPR variability limit is a defined increment by which the
state's total emissions in a given year may exceed the underlying fixed
CSAPR state budget before any incremental emissions trigger
requirements to surrender more than one allowance per ton of emissions.
Also, the amounts of the CSAPR variability limits were determined based
on an analysis of historical variability in states' consumption of all
fossil fuels for electricity generation, not states' consumption of
only coal for electricity generation.
Turning to the substance of these comments, we continue to believe
that the addition of assurance provisions to the Texas SO2
Trading Program will provide further support for our determination that
the Texas SO2 Trading Program is at least as stringent as
the CSAPR SO2 trading program as applied to Texas and for
that reason is sufficiently stringent to meet the requirements for a
BART alternative under 40 CFR 51.308(e)(2). When promulgating the Texas
SO2 Trading Program, we found that the average annual
emissions authorized by the program's design would be similar to the
emissions authorized under CSAPR and well below the 317,100 tons-per-
year benchmark established by the sensitivity analysis performed in the
2012 ``CSAPR Better-than-BART'' rulemaking. In the supplemental
proposal for this action, in response to comments raising concerns that
the program as originally promulgated in fact might not constrain
emissions in individual years as effectively as CSAPR, we reiterated
these conclusions regarding the program's average annual emissions but
also acknowledged that the program's design might not constrain
emissions in individual years as effectively as CSAPR because of the
lack of provisions comparable to CSAPR's ``assurance provisions.'' We
therefore proposed and in this action are now finalizing the addition
of assurance provisions to the Texas SO2 Trading Program in
order to further ensure that the program's design is at least as
stringent as the CSAPR SO2 program as applied to Texas, not
only on an average annual basis but also in individual years.
The commenter suggests that even where revisions to a trading
program have been specifically designed to achieve a desired total
emissions goal--in this instance, ensuring that statewide emissions
levels in individual years do not exceed the 317,100 tons-per-year
benchmark--the ability of the revisions to in fact achieve that goal is
not the relevant criterion by which we should evaluate the
appropriateness of the revisions, and that we should instead evaluate
the revisions (and the program as a whole) based on whether or not the
revised program also addresses other concerns raised by the commenter.
We disagree with this suggestion. In noting the list of program design
features that the commenter considers problematic, we did not endorse
the full set of concerns that the commenter asserts these design
features raise. Rather, we acknowledged the specific concern as to
whether the program is or is not at least as stringent in individual
years as the CSAPR SO2 trading program, and we proposed
amendments to address that specific concern. While the commenter
asserts that the identified design features raise additional concerns
and believes that we should evaluate the program according to different
criteria, we do not agree. We have addressed the commenter's assertions
regarding the identified design features and additional evaluation
criteria in response to other comments. In general, the commenter
provides no cogent explanation why the addition of an assurance level
(which effectively functions as a ``cap'' as their own language
concedes) would not ensure emissions performance of the program on an
annual basis below that level. Nor has the commenter explained why, if
that is the case, the other objections they raise with respect to
allocations or banking of allowances are of relevance to EPA's
determination that the program achieves the necessary level of
stringency for a BART alternative under 51.308(e)(2).
The commenter's criticism of the discussion in the supplemental
proposal concerning our general rationale for not immediately
discontinuing allocations to retired units has no relevance to the
proposed addition of assurance provisions to the Texas SO2
Trading Program or any of the other proposed amendments in the
supplemental proposal. We have addressed the commenter's assertions
regarding the permissibility of allocating allowances
[[Page 49210]]
to retired units in response to other comments.
Comment: One commenter asserts that EPA's calculation of its
proposed variability limit uses out-of-date data, rather than the most
recent data as used in CSAPR. In promulgating CSAPR, EPA's original
stated reasoning for the need for a variability limit was to account
for ``weather, economic activity, the portion of electric generation
that is fossil fuel fired, and the length and number of outages at
power generation units, which vary over time.'' \181\ The commenter
asserts that in its supplemental proposal for its Texas SO2
Trading Program, EPA simply adopts the variability for Texas (7%) that
was calculated in the CSAPR rulemaking, instead of updating it to
account for more recent data and the units that are actually
participating in the Texas SO2 Trading Program. The CSAPR
heat input data from 2000-2010 are now eight years out of date. Thus,
this data set is no longer suitable for its originally intended
purpose--to account for variations in weather, economic activity, etc.,
that influence electricity generation.
---------------------------------------------------------------------------
\181\ See 76 FR 48,208, 48,265 (Aug. 8, 2011). EPA specifically
notes that the factors that contribute to power sector variability
change with time. Also, note that EPA updated its previous
variability calculations, based on 2002-2008, in part to utilize the
more recent data available to it. EPA should have taken the same
approach in its supplemental proposal.
---------------------------------------------------------------------------
The commenter asserts that EPA must, at a minimum, update the
technical analysis underlying its variability limits, as the agency has
done in other contexts, such as its recent update to CSAPR, for
example, where EPA relied on updated Integrated Planning Model data to
analyze the impact of the updated Transport Rule on the U.S. electric
power sector, as well as its preliminary transport modeling data for
the 2015 ozone NAAQS. In so doing, EPA recognized the many changes to
the distribution and magnitude of electric sector emissions, including
the significant expansion of renewable energy generation resources,
recent EGU retirements and control additions, changes in the cost and
efficacy of pollution control technologies, reductions in electricity
demand, electric system transmission changes, and persistently low
natural gas prices.\182\ In the supplemental proposal for its Texas
SO2 Trading Program, EPA arbitrarily fails to acknowledge--
let alone address--the numerous changes to the electric sector since
the agency adopted its CSAPR variability limits in 2011.\183\
---------------------------------------------------------------------------
\182\ See generally Ex. 1, EPA, ``Documentation for EPA's Power
Sector Modeling Platform v6--November 2018 Reference Case,''
available at https://www.epa.gov/airmarkets/documentation-epas-power-sector-modeling-platform-v6-november-2018-reference-case.
\183\ Motor Vehicle Mfrs. Assn. of United States, Inc. v. State
Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983) (``The agency must
examine the relevant data and articulate a satisfactory explanation
for its action including a `rational connection between the facts
found and the choice made.' ''); Sierra Club v. EPA, 671 F.3d 955,
967 (9th Cir. 2012) (``[I]f new information indicates to EPA that [a
proposed rule] awaiting approval is inaccurate or not current, . . .
EPA should properly evaluate the new information and may not simply
ignore it without reasoned explanation of its choice.'').
---------------------------------------------------------------------------
The commenter states that in addition, the obsoleteness of the heat
input data aside, given the EGU retirements that have occurred since
2010, that data set is much different than what would be calculated
based on the units that would actually participate in EPA's Texas
SO2 Trading Program. The commenter purported to illustrate
this via a table comparing historical heat inputs from 2000-2010 for
units under original CSAPR, units in the Texas trading program, and
units in the Texas program minus retired units. Comparing the columns
showing these heat inputs, commenter asserts that the magnitudes of the
data sets indicate that despite being of the same years, they are
composed of different units. In fact, the heat input data set composed
of only the unretired units that would actually participate in the
Texas SO2 trading program is approximately one third the
size of the data set that EPA is basing its variability analysis on. In
its continued strained attempt to justify its inadequate Texas
SO2 trading program by comparison to CSAPR, commenter claims
EPA ignores its earlier decision to base its variability calculation on
only the units that actually participate in the trading program.
Response: In the supplemental proposal, we proposed to adopt a
variability limit of 7% for the Texas SO2 Trading Program,
where the proposed limit was calculated based on the annual heat input
values for Texas in the same overall data set used to calculate the
analogous variability limit of 18% for the CSAPR SO2
program. In most respects, the Texas SO2 Trading Program has
been designed to replicate relevant aspects of the CSAPR SO2
program. We do not dispute that the Texas electricity sector has
evolved in the years since the CSAPR rulemaking and we agree with the
general principle that the most current data of sufficient quality and
representativeness should be used when conducting new rulemaking
activities. However, we do not believe that acceptance of the general
principle in favor of using more recent data when available necessarily
requires that the principle be applied to every detail of a rulemaking,
such as this one, that is being conducted with an overall purpose of
closely replicating the structure of a previous rulemaking.
Nevertheless, in order to assess the potential impacts of using
more recent data instead of the CSAPR rulemaking data set specifically
for purposes of establishing the amount of the variability limit for
the Texas SO2 Trading Program, we have calculated what the
variability limit would be if it were calculated using the more recent
data set suggested by the commenter. In the following comment, the
commenter states that this calculation would result in a variability
limit of 2%, but as discussed in greater detail in our response to that
comment, the commenter did not actually use the more recent data set
and furthermore made a material error in the calculation procedure.
When the calculation procedure is applied to the more recent data set
and the procedural error is corrected, the result would be a higher
variability limit than we proposed--specifically, 12% instead of 7%.
Because neither this commenter nor any other commenter advocates using
a variability limit higher than 7%, and some other commenters
specifically support use of the variability limit and resulting
assurance level calculated based on values for Texas in the data set
used in the CSAPR rulemaking, we do not find it necessary to use an
updated data set in this instance.
Comment: We received a comment that disagreed with the
computational methodology EPA used to calculate the variability limit
of 7%, arguing that the limit should instead be 2%. The commenter
purported to recalculate what a Texas SO2 Trading Program
variability limit would be if it were based on EPA's original
methodology used in CSAPR. The commenter purported to follow the CSAPR
methodology and use up-to-date data and include only those units that
are expected to be covered by the program.
Response: In this proceeding, we did not seek comment on or reopen
any aspect of the CSAPR regulations. However, in order to facilitate
our response to comments on the proposed amendments to the Texas
SO2 Trading Program, we are responding to the commenter's
statements concerning the CSAPR programs as necessary to correct errors
in the commenter's statements that may also implicate the commenter's
statements concerning the Texas SO2 Trading Program.
[[Page 49211]]
We disagree with the commenter's assertions that we made an error
in the statistical procedure for calculating the variability limits
used in the CSAPR trading programs and the variability limit proposed
for the Texas SO2 Trading Program. In fact, the commenter
made a mistake in the calculation of the variability limits. We have
added to the docket for this action a spreadsheet that is a modified
version of the spreadsheet the commenter submitted to the docket as
Exhibit 3 to the comments on the supplemental proposal.\184\ See the
spreadsheet and the Response to Comments document found in the docket
associated with this final action for a detailed explanation of the
calculation and discussion of how correction of one of the values in
the spreadsheet submitted by the commenter yields values that confirm
the correctness of our calculations.
---------------------------------------------------------------------------
\184\ See ``EPA modified version of commenters Ex_3_-
_Recalculate_TX_SO2_Trading _Variability.xlsx,''
available in the docket for this action.
---------------------------------------------------------------------------
The results of the calculations in this section confirm a CSAPR
SO2 variability limit of 18%. The CSAPR SO2 5%
variability limit asserted by the commenter results only from using the
incorrect value of 11 for the ``size'' variable in the CONFIDENCE
function.
Comment: We received a comment stating that EPA's proposed
assurance level is incorrect because the assurance level EPA borrows
from CSAPR is simply the sum of the SO2 budget and the
variability limit. Because the EPA incorrectly incorporated the Texas
variability limit from CSAPR into its Texas SO2 trading
program, and because EPA's trading budget of 238,393 tons itself is
based on out-of-date and inappropriate data, consequently, EPA's
calculation of its variability limit, which is simply a percentage of
this budget, is flawed. The commenter argues that had EPA re-applied
the original CSAPR allocation methodology using updated information,
and removed retired units, it would have discovered that the individual
allocations in many instances would have changed significantly and the
overall budget would have been reduced significantly. The commenter
asserts that the trading budget would have been reduced from 238,393
tons to 176,332 tons. This represents a decrease of 62,061 tons or an
approximately 26% change. Adding a 2% variability to the revised
trading budget of 176,332 tons would result in an assurance limit of
179,859 tons.
Furthermore, the commenter asserts that even at this lower
emissions level, the Texas SO2 Trading Program will not
serve to place any regulatory pressure on Texas SO2 sources
to reduce their emissions because the 2018 SO2 emissions of
the participating non-retired units--which should be the only units
participating in the program--total 157,119 tons. These emissions are
already below the reduced assurance limit of 179,859 tons commenter
calculated above.
Finally, the commenter states that because the Texas SO2
Trading Program does not provide for a declining cap over time, in
comparison to actual source-by-source BART, even if corrected to remove
retired units it merely preserves the status quo. As such, it violates
the primary objective of the national goal of the visibility program,
which is ``the prevention of any future, and the remedying of any
existing, impairment of visibility in mandatory class I Federal areas
which impairment results from manmade air pollution.''
Response: We disagree with this comment. The commenter correctly
notes that the proposed assurance level for the Texas SO2
Trading Program is derived from the proposed 7% variability limit and
the existing budget for the Texas SO2 Trading Program. Based
on the commenter's beliefs that the variability limit should be 2% and
that the existing budget is unlawfully high, the commenter asserts that
the proposed assurance level is consequently also too high. We disagree
both that the variability limit should be 2% and that the existing
budget is unlawfully high. Accordingly, we also disagree with the
commenter's resulting assertion that the proposed assurance level is
too high. We have addressed the commenter's assertions regarding the
proposed variability limit in response to other comments. As indicated
in those responses, we continue to believe that 7% is an appropriate
value to establish as the variability limit for the Texas
SO2 Trading Program. Likewise, we have also addressed the
commenter's assertions regarding the lawfulness of the existing budget
for the Texas SO2 Trading Program in response to other
comments, and the commenter offers no new criticism of the existing
budget that was not already raised in those previous comments and
addressed in our responses to those comments.
L. Venue
Comment: We received a comment asserting that if EPA retains the
intrastate trading program, the agency must publish a finding that the
Texas SO2 Trading Program ``is based on a determination of
nationwide scope or effect.'' 42 U.S.C. 7607(b)(1). The commenter
asserted that such a finding is necessary because the Texas
SO2 Trading Program is plainly based on such a determination
and should be reviewed in the United States Court of Appeals for the
District of Columbia. The commenter claimed that this is for two
reasons. First, in comparing the Texas SO2 Trading Program
to the Better-than-BART rule to satisfy the requirements of 40 CFR
51.308(e), EPA reinterpreted an established and nationally applicable
law. Second, the commenter claimed that EPA's unlawful interpretation
of 40 CFR 51.308(e) amounts to a revision of a nationally applicable
regulation. The commenter noted that in this comment, the commenter
does not challenge CSAPR itself or EPA's CSAPR Better-than-BART
determination, but is instead asserting that the Texas SO2
Trading Program is based on those rules, which are nationally
applicable and contain determinations of nationwide scope and effect.
The commenter asserted that even if EPA does not publish a finding that
the Texas SO2 Trading Program is based on a determination of
nationwide scope or effect (and does not withdraw the FIP promulgating
the Texas SO2 Trading Program), subsequent legal challenges
will still be properly venued in the D.C. Circuit pursuant to 42 U.S.C.
7607(b)(1).
Response: To the extent commenter is asserting that this action is
``nationally applicable'' for purposes of section 307(b), that claim is
clearly incorrect. As the D.C. Circuit has recently explained, ``[t]he
court need look only to the face of the agency action, not its
practical effects, to determine whether an action is nationally
applicable.'' \185\ On its face, this action is locally applicable
because it applies in only a single state, Texas. This action has
immediate, legal effect only for certain sources within Texas.
Furthermore, EPA is not adopting a new interpretation of its
regulations at 40 CFR 51.308(e)(2); nor is it correct to characterize
EPA's application of those regulations as a revision necessitating
national rulemaking.
---------------------------------------------------------------------------
\185\ Sierra Club v. EPA, 926 F.3d 844, 849 (D.C. Cir. 2019)
(citing Dalton Trucking, 808 F.3d 875, 881 (D.C. Cir. 2015) and Am.
Road & Transp. Builders Ass'n v. EPA, 705 F.3d 453, 456 (D.C. Cir.
2013)).
---------------------------------------------------------------------------
EPA also disagrees that this action must be challenged in the D.C.
Circuit under the ``nationwide scope or effect'' portion of the venue
provision of CAA section 307(b). In general under section 307(b), an
EPA action ``which is locally or regionally applicable'' may be filed
``only in the United States Court of
[[Page 49212]]
Appeals'' covering that area.\186\ The only exception to this mandate
is where the Administrator expressly finds that the locally or
regionally applicable action is based on a determination of nationwide
scope or effect and publishes such a finding. The requirement that the
Administrator find and publish that an otherwise locally or regionally
applicable action is based on a determination of nationwide scope or
effect is an express statutory requirement for application of this
venue exception; this exception is not being invoked by EPA in this
action. EPA has made no finding in this action and is not publishing
any finding that this action is based on a determination of nationwide
scope or effect. The absence of either such a finding or publication of
such a finding makes this venue exception in CAA section 307(b)
inapplicable. Absent an express statement--and publication--that such a
finding has been made, thus invoking the venue exception, there can be
no application of that exception.\187\ CAA section 307 expressly
provides the Agency full discretion to make its own determination of
whether to invoke the exception in the Congressionally-dictated venue
provision.\188\
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\186\ See 42 U.S.C. 7607(b)(1) (emphasis added).
\187\ See, e.g., Lion Oil v. EPA, 792 F.3d 978, 984 n.1 (8th
Cir. 2015) (even where EPA, unlike here, made the necessary finding,
the court found no need to decide application of the venue exception
absent publication of that finding); Texas v. EPA, 829 F.3d 405, 419
(5th Cir. 2016) (``This finding is an independent, post hoc,
conclusion by the agency about the nature of the determinations; the
finding is not, itself, the determination.''). See also Dalton
Trucking v. EPA, 808 F.3d 875 (D.C. Cir. 2015).
\188\ See, e.g., Texas v. EPA, 829 F.3d at 419-20 (the venue
exception ``gives the Administrator the discretion to move venue to
the D.C. Circuit by publishing a finding declaring the
Administrator's belief that the action is based on a determination
of nationwide scope or effect.'') (emphasis added).
---------------------------------------------------------------------------
Even assuming that a court could review the lack of such a finding,
and lack of publication of such a finding, under the arbitrary and
capricious standard,\189\ the EPA's decision not to do so is not
unreasonable in this case. As an initial matter, this action does not
apply to any sources other than those covered by the program in the
State of Texas. By the same token, the applicability of the action does
not span multiple federal judicial circuits. Further, EPA is not
proposing or adopting a new or different interpretation of its
regulations at 40 CFR 51.308(e)(2), nor is it correct to characterize
EPA's application of those regulations as a revision necessitating
national rulemaking. The commenter's characterization of EPA's analysis
as conducting a novel comparison of the Texas program to CSAPR as a
BART alternative is incorrect. In the final action, EPA is making no
such interpretation that 51.308(e)(2) authorizes a comparison between
two BART alternatives. Rather, in this final action, EPA has determined
it is acceptable to continue to rely on the CSAPR-Better-than-BART
analysis (which included Texas) under the unique, state-specific
circumstances presented here: That the intrastate trading program in
Texas achieves the same or better emissions outcomes as the CSAPR
program would have. The CSAPR Better-than-BART analysis on which EPA is
relying uses presumptive BART limits--in compliance with
51.308(e)(2)(i)(C)--to demonstrate greater reasonable progress.
---------------------------------------------------------------------------
\189\ Cf. Sierra Club v. EPA, 926 F.3d 844, 850 (D.C. Cir. 2019)
(declining to resolve whether failure to make a finding is
reviewable but concluding the absence of such a finding was not
arbitrary and capricious under the facts of the case).
---------------------------------------------------------------------------
Further, the application of the nationally applicable 2012 and 2017
CSAPR findings in Texas is a ``locally or regionally applicable''
action; that application does not in itself make the lack of EPA
invoking the exception unreasonable. While the 2012 finding was
appropriately reviewed (and upheld) in the D.C. Circuit, and the 2017
finding is currently being reviewed in the D.C. Circuit, see NPCA v.
EPA, 17-1253 (D.C. Cir.), the application of those findings in Texas is
merely one aspect of this ``locally or regionally applicable'' action.
In any future action that may raise similar circumstances as Texas (and
EPA is aware of no such situation at this time), EPA's determination
whether to promulgate an intrastate trading program as a BART
alternative would be based on a record and analysis specific to the
sources in that state at that time. EPA has announced no national
policy or interpretation that the decisions in this action are, or
would necessarily be, applicable in any future action. Thus, EPA has
not reinterpreted or revised its Regional Haze Rule regulations in this
action, and it is inaccurate to characterize the mere application of
regulations in a case-specific circumstance as a revision of those
regulations. Under such circumstances, EPA's lack of a finding or
publication of such a finding here is hardly unreasonable.
Finally, we note that EPA did not make a finding in the October 17,
2017 final action originally promulgating the Texas SO2
Trading Program that such action was based on a determination of
nationwide scope or effect. This action merely affirms the 2017 action
with certain amendments. Petitioners seeking judicial review of that
action correctly filed for review in the Fifth Circuit, see NPCA v.
EPA, No. 17-60828 (5th Cir.), and that case is being held in abeyance
pending the completion of this action. No petitions for review of the
original FIP action were filed in the D.C. Circuit, nor would it have
been appropriate to do so.
M. Other
Comment: One commenter, while appreciative of the revisions made to
the program by the EPA, expressed concern that without decreasing
emissions assurance limitations or source-specific SO2
limits, improved visibility in protected areas such as the Wichita
Mountains National Wildlife Refuge and Guadalupe Mountains National
Park will not come to fruition as a result of more concentrated
emissions, even if they come from fewer sources.
The commenter also expressed concern for potential impacts to local
air quality. While SO2 emissions from individual sources may
technically meet state-wide air quality targets, there remains a
potential to negatively impact local air quality, damaging both
visibility and human health. The commenter proposed two potential
options that the EPA might consider. The first is to examine historic
emissions by source and define new limits on a per-facility basis
informed by historic emissions that met CSAPR for SO2. This
would ensure that even if some facilities closed, those that remained
operational would not be able to increase their SO2
emissions. The second suggested option would be to implement emission
limits that decline annually. Under a declining emissions-limit
scenario, if plants did close, operational facilities would potentially
still be able to emit more, but to a lesser extent than if the cap
stayed constant. If all regulated facilities stayed open, each polluter
would have to find additional methods to decrease SO2
emissions, further improving visibility and human health.
The commenter also expressed concern in consideration of units not
participating in the program and their contribution to the total
assurance provisions. The Texas SO2 Trading Program will
allot 35,000 tons per year to non-participating sources, effectively
increasing the assurance provision to 290,081 tons per year. While
SO2 emissions in Texas have steadily declined, the Texas
SO2 Trading Program would nearly allow emissions to return
to 2014 levels. The commenter asserts that it is nonsensical to place a
limit on SO2 emissions that does not pressure polluters to
reduce emissions. Previously discussed comments argue
[[Page 49213]]
that unlike source-specific BART control requirements, the Texas
SO2 Trading Program allows for emission to increase compared
to recent emission levels. The state of Texas has clearly made great
strides in decreasing sulfur emissions from coal-fired powerplants and
the EPA has a responsibility to Texans and residents of neighboring
states to maintain that progress, not reverse it.
Response: We appreciate the commenter's concerns and suggestions.
With regards to localized impacts, as previously discussed in response
to other comments, the analysis EPA is relying on does not show
visibility declines compared to the baseline in any Class I area under
the BART alternative. Under the Regional Haze Rule, states are directed
to conduct BART determinations for ``BART-eligible'' sources that may
be anticipated to cause or contribute to any visibility impairment in a
Class I area. States are required to identify the level of control
representing BART after considering the five statutory factors set out
in section 169A(g)(2) for each source subject-to-BART.\190\ However,
the Regional Haze Rule also gives states the flexibility to adopt an
emissions trading program or alternative program in place of requiring
source-specific BART controls, as long as the alternative provides
greater reasonable progress towards improving visibility than BART. As
discussed in section I.A. of this final action, 40 CFR 51.308(e)(2)
specifies how a state must conduct the demonstration to show that an
alternative program will achieve greater reasonable progress than the
installation and operation of BART. As discussed in section III.A.2, we
are taking final action to affirm our determination that the Texas
SO2 Trading Program, as amended in this final action, meets
the requirements of 40 CFR 51.308(e)(2) as a BART alternative for
SO2 to satisfy Texas' Regional Haze obligations. Comments on
EPA's decision to authorize alternative measures, including emissions
trading programs, in the original 1999 Regional Haze Rule are beyond
the scope of this action.
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\190\ The State must take into consideration the five statutory
factors: (1) The costs of compliance, (2) the energy and non-air
quality environmental impacts of compliance, (3) any existing
control technology in use at the source, (4) the remaining useful
life of the source, and (5) the degree of visibility improvement
which may reasonably be anticipated to result.
---------------------------------------------------------------------------
The comment that we have ``allotted'' 35,000 tons to non-
participating units is incorrect. The Texas SO2 Trading
Program only pertains to the particular set of EGUs specified in Table
1 of this final rule. The estimate of emissions from non-participating
units is used as a conservative assumption to allow for a comparison of
SO2 emissions from EGUs in Texas under the Texas program
with emissions under CSAPR.
V. Final Action
A. Regional Haze
We are taking final action to affirm our October 2017 FIP that
established the Texas SO2 intrastate trading program
addressing emissions of SO2 from certain EGUs in Texas as a
BART alternative, with certain amendments to the trading program. These
amendments consist of (1) the addition of assurance provisions; (2)
revisions to the Supplemental Allowance Pool allocation provisions,
including amendments to the allocation methodology such that allowance
allocations are in proportion to each owner's total emissions in excess
of the owner's total base allowance allocations, elimination of the
additional flexibility to transfer allowances originally offered under
the trading program for Coleto Creek, and reduction in the number of
allowances that can be allocated from the Supplemental Allowance Pool
in any year to 16,688 tons plus any allowances added to the pool in
that year from retired units; (3) termination of the opt-in provisions;
and (4) revision of the allowance recordation provisions. We are also
correcting a 2-ton error we made in the allowance allocation for El
Paso Electric's Newman Plant due to a unit-identification error,
thereby increasing the trading program budget from 238,393 tons to
238,395 tons. We are taking final action to affirm our determination
that the Texas SO2 intrastate trading program, as amended in
this final rulemaking, satisfies the Regional Haze Rule requirements
for BART alternatives at 40 CFR 51.308(e)(2). We are also taking final
action to affirm our October 2017 approval of Texas' SIP determination
that no Texas sources are subject to BART for PM.
B. Interstate Visibility Transport
We are taking final action to affirm our finding that Texas'
participation in CSAPR to satisfy NOX BART and our
SO2 intrastate trading program, as amended in this final
rulemaking, fully address Texas' interstate visibility transport
obligations for the following six NAAQS: (1) 1997 8-hour ozone; (2)
1997 PM2.5 (annual and 24 hour); (3) 2006 PM2.5
(24-hour); (4) 2008 8-hour ozone; (5) 2010 1-hour NO2; and
(6) 2010 1-hour SO2. Texas' SO2 emission
reductions under the Texas SO2 intrastate trading program,
as amended in today's final rulemaking, are consistent with the level
of emission reductions relied upon by other states during Regional Haze
consultation, and the intrastate trading program is therefore adequate
to ensure that emissions from Texas do not interfere with measures to
protect visibility in nearby states in accordance with CAA section
110(a)(2)(D)(i)(II).
VI. Statutory and Executive Order Reviews
Additional information about these statutes and Executive Orders
can be found at https://www2.epa.gov/laws-regulations/laws-and-executive-orders.
A. Executive Order 12866: Regulatory Planning and Review and Executive
Order 13563: Improving Regulation and Regulatory Review
This action is not a significant regulatory action and was
therefore not submitted to the Office of Management and Budget (OMB)
for review.
B. Executive Order 13771: Reducing Regulations and Controlling
Regulatory Costs
This action is not an Executive Order 13771 regulatory action
because this action is not significant under Executive Order 12866.
C. Paperwork Reduction Act
This action does not impose any new information collection burden
under the PRA. The Office of Management and Budget (OMB) has previously
approved the information collection activities contained in the
existing Texas SO2 Trading Program regulations as part of
the most recent information collection request (ICR) renewal for the
CSAPR trading programs and has assigned OMB control number 2060-0667.
The revisions approved in this action do not alter the information
collection activities contained in the existing regulations.
D. Regulatory Flexibility Act
I certify that this action will not have a significant impact on a
substantial number of small entities. In making this determination, the
impact of concern is any significant adverse economic impact on small
entities. An agency may certify that a rule will not have a significant
economic impact on a substantial number of small entities if the rule
relieves regulatory burden, has no net burden or otherwise has a
positive economic effect on the small entities subject to the rule.
This rule does not impose any requirements or
[[Page 49214]]
create impacts on small entities. This FIP action under Section 110 of
the CAA will not create any new requirement with which small entities
must comply. Accordingly, it affords no opportunity for the EPA to
fashion for small entities less burdensome compliance or reporting
requirements or timetables or exemptions from all or part of the rule.
We have therefore concluded that, this action will have no net
regulatory burden for all directly regulated small entities.
E. Unfunded Mandates Reform Act (UMRA)
This action does not contain an unfunded mandate of $100 million or
more as described in UMRA, 2 U.S.C. 1531-1538, and does not
significantly or uniquely affect small governments.
F. Executive Order 13132: Federalism
This action does not have federalism implications. It will not have
substantial direct effects on the states, on the relationship between
the national government and the states, or on the distribution of power
and responsibilities among the various levels of government.
G. Executive Order 13175: Consultation and Coordination With Indian
Tribal Governments
This rule does not have tribal implications, as specified in
Executive Order 13175. It will not have substantial direct effects on
tribal governments. Thus, Executive Order 13175 does not apply to this
rule.
H. Executive Order 13045: Protection of Children From Environmental
Health Risks and Safety Risks
Executive Order 13045: Protection of Children From Environmental
Health Risks and Safety Risks \191\ applies to any rule that: (1) Is
determined to be economically significant as defined under Executive
Order 12866; and (2) concerns an environmental health or safety risk
that we have reason to believe may have a disproportionate effect on
children. EPA interprets E.O. 13045 as applying only to those
regulatory actions that concern health or safety risks, such that the
analysis required under Section 5-501 of the E.O. has the potential to
influence the regulation. This action is not subject to Executive Order
13045 because it is not economically significant as defined in
Executive Order 12866, and because the EPA does not believe the
environmental health or safety risks addressed by this action present a
disproportionate risk to children. This action is not subject to E.O.
13045 because it implements specific standards established by Congress
in statutes. However, to the extent this rule will limit emissions of
SO2, the rule will have a beneficial effect on children's
health by reducing air pollution.
---------------------------------------------------------------------------
\191\ 62 FR 19885 (Apr. 23, 1997).
---------------------------------------------------------------------------
I. Executive Order 13211: Actions That Significantly Affect Energy
Supply, Distribution, or Use
This action is not subject to Executive Order 13211 (66 FR 28355
(May 22, 2001)), because it is not a significant regulatory action
under Executive Order 12866.
J. National Technology Transfer and Advancement Act (NTTAA)
This rulemaking does not involve technical standards.
K. Executive Order 12898: Federal Actions To Address Environmental
Justice in Minority Populations and Low-Income Populations
The EPA believes that this action does not have disproportionately
high and adverse human health or environmental effects on minority
populations, low-income populations and/or indigenous peoples, as
specified in Executive Order 12898 (59 FR 7629, February 16, 1994). We
have determined that this rule will not have disproportionately high
and adverse human health or environmental effects on minority or low-
income populations because it increases the level of environmental
protection for all affected populations without having any
disproportionately high and adverse human health or environmental
effects on any population, including any minority or low-income
population. The rule limits emissions of SO2 from certain
facilities in Texas.
L. Congressional Review Act (CRA)
This rule is exempt from the CRA because it is a rule of particular
applicability.
List of Subjects in 40 CFR Part 97
Environmental protection, Administrative practice and procedure,
Air pollution control, Incorporation by reference, Nitrogen dioxide,
Reporting and recordkeeping requirements, Sulfur oxides.
Andrew Wheeler,
Administrator.
For the reasons stated in the preamble, part 97 of chapter I of
title 40 of the Code of Federal Regulations is amended as follows:
PART 97--FEDERAL NOX BUDGET TRADING PROGRAM, CAIR NOX AND SO2
TRADING PROGRAMS, CSAPR NOX AND SO2 TRADING PROGRAMS, AND TEXAS SO2
TRADING PROGRAM
0
1. The authority citation for part 97 is revised to read as follows:
Authority: 42 U.S.C. 7401, 7403, 7410, 7426, 7491, 7601, and
7651, et seq.
Subpart FFFFF--TEXAS SO2 TRADING PROGRAM
0
2. Amend Sec. 97.902 by:
0
a. In the definitions of ``Acid Rain Program'', ``Allowance Management
System'', and ``Allowance Management System account'', capitalizing the
first three words;
0
b. Adding in alphabetical order a definition of ``Assurance account'';
0
c. In the definition of ``Authorized account representative'',
capitalizing the word ``trading'' the first time it appears;
0
d. Adding in alphabetical order definitions of ``Common designated
representative'', ``Common designated representative's assurance
level'', and ``Common designated representative's share''; and
0
e. Revising the definitions of ``General account'' and ``Texas
SO2 Trading Program allowance deduction''.
The additions and revisions read as follows:
Sec. 97.902 Definitions.
* * * * *
Assurance account means an Allowance Management System account,
established by the Administrator under Sec. 97.925(b)(3) for certain
owners and operators of a group of one or more Texas SO2
Trading Program sources and units, in which are held Texas
SO2 Trading Program allowances available for use for a
control period in a given year in complying with the Texas
SO2 Trading Program assurance provisions in accordance with
Sec. Sec. 97.906 and 97.925.
* * * * *
Common designated representative means, with regard to a control
period in a given year, a designated representative where, as of April
1 immediately after the allowance transfer deadline for such control
period, the same natural person is authorized under Sec. Sec.
97.913(a) and 97.915(a) as the designated representative for a group of
one or more Texas SO2 Trading Program sources and units.
Common designated representative's assurance level means, with
regard to a specific common designated representative and control
period in a given year for which the State assurance
[[Page 49215]]
level is exceeded as described in Sec. 97.906(c)(2)(iii):
(1) The amount (rounded to the nearest allowance) equal to the sum
of the total amount of Texas SO2 Trading Program allowances
allocated for such control period under Sec. 97.911, or deemed to have
been allocated under paragraph (2) of this definition, to the group of
one or more Texas SO2 Trading Program units having the
common designated representative for such control period multiplied by
the sum for such control period of the Texas SO2 Trading
Program budget under Sec. 97.910(a)(1) and the variability limit under
Sec. 97.910(b) and divided by the sum of the total amount of Texas
SO2 Trading Program allowances allocated for such control
period under Sec. 97.911, or deemed to have been allocated under
paragraph (2) of this definition, to all Texas SO2 Trading
Program units;
(2) Provided that, in the case of a Texas SO2 Trading
Program unit that operates during, but has no amount of Texas
SO2 Trading Program allowances allocated under Sec. 97.911
for, such control period, the unit shall be treated, solely for
purposes of this definition, as being allocated the amount of Texas
SO2 Trading Program allowances shown for the unit in Sec.
97.911(a)(1).
Common designated representative's share means, with regard to a
specific common designated representative for a control period in a
given year and the total amount of SO2 emissions from all
Texas SO2 Trading Program units during such control period,
the total tonnage of SO2 emissions during such control
period from the group of one or more Texas SO2 Trading
Program units having the common designated representative for such
control period.
* * * * *
General account means an Allowance Management System account,
established under this subpart, that is not a compliance account or an
assurance account.
* * * * *
Texas SO2 Trading Program allowance deduction or deduct Texas SO2
Trading Program allowances means the permanent withdrawal of Texas
SO2 Trading Program allowances by the Administrator from a
compliance account (e. g., in order to account for compliance with the
Texas SO2 Trading Program emissions limitation) or from an
assurance account (e. g., in order to account for compliance with the
assurance provisions under Sec. Sec. 97.906 and 97.925).
* * * * *
Sec. 97.904 [Amended]
0
3. Amend Sec. 97.904 by removing and reserving paragraph (b).
0
4. Amend Sec. 97.906 by:
0
a. In paragraph (b)(2), adding the words ``and assurance provisions''
after the words ``emissions limitation'';
0
b. Redesignating paragraphs (c)(2) through (6) as paragraphs (c)(3)
through (7) and adding a new paragraph (c)(2);
0
c. Revising newly redesignated paragraph (c)(3); and
0
d. In newly redesignated paragraph (c)(4)(ii), removing the text
``paragraph (c)(1)(ii)(A)'' and adding in its place the text
``paragraphs (c)(1)(ii)(A) and (c)(2)(i) through (iii)''.
The additions and revision read as follows:
Sec. 97.906 General provisions.
* * * * *
(c) * * *
(2) Texas SO2 Trading Program assurance provisions. (i) If total
SO2 emissions during a control period in a given year from
all Texas SO2 Trading Program units at Texas SO2
Trading Program sources exceed the State assurance level, then the
owners and operators of such sources and units in each group of one or
more sources and units having a common designated representative for
such control period, where the common designated representative's share
of such SO2 emissions during such control period exceeds the
common designated representative's assurance level for such control
period, shall hold (in the assurance account established for the owners
and operators of such group) Texas SO2 Trading Program
allowances available for deduction for such control period under Sec.
97.925(a) in an amount equal to two times the product (rounded to the
nearest whole number), as determined by the Administrator in accordance
with Sec. 97.925(b), of multiplying--
(A) The quotient of the amount by which the common designated
representative's share of such SO2 emissions exceeds the
common designated representative's assurance level divided by the sum
of the amounts, determined for all common designated representatives
for such sources and units for such control period, by which each
common designated representative's share of such SO2
emissions exceeds the respective common designated representative's
assurance level; and
(B) The amount by which total SO2 emissions from all
Texas SO2 Trading Program units at Texas SO2
Trading Program sources for such control period exceed the State
assurance level.
(ii) The owners and operators shall hold the Texas SO2
Trading Program allowances required under paragraph (c)(2)(i) of this
section, as of midnight of November 1 (if it is a business day), or
midnight of the first business day thereafter (if November 1 is not a
business day), immediately after the year of such control period.
(iii) Total SO2 emissions from all Texas SO2
Trading Program units at Texas SO2 Trading Program sources
during a control period in a given year exceed the State assurance
level if such total SO2 emissions exceed the sum, for such
control period, of the Texas SO2 Trading Program budget
under Sec. 97.910(a)(1) and the variability limit under Sec.
97.910(b).
(iv) It shall not be a violation of this subpart or of the Clean
Air Act if total SO2 emissions from all Texas SO2
Trading Program units at Texas SO2 Trading Program sources
during a control period exceed the State assurance level or if a common
designated representative's share of total SO2 emissions
from the Texas SO2 Trading Program units at Texas
SO2 Trading Program sources during a control period exceeds
the common designated representative's assurance level.
(v) To the extent the owners and operators fail to hold Texas
SO2 Trading Program allowances for a control period in a
given year in accordance with paragraphs (c)(2)(i) through (iii) of
this section,
(A) The owners and operators shall pay any fine, penalty, or
assessment or comply with any other remedy imposed under the Clean Air
Act; and
(B) Each Texas SO2 Trading Program allowance that the
owners and operators fail to hold for such control period in accordance
with paragraphs (c)(2)(i) through (iii) of this section and each day of
such control period shall constitute a separate violation of this
subpart and the Clean Air Act.
(3) Compliance periods. (i) A Texas SO2 Trading Program
unit shall be subject to the requirements under paragraph (c)(1) of
this section for the control period starting on January 1, 2019 and for
each control period thereafter.
(ii) A Texas SO2 Trading Program unit shall be subject
to the requirements under paragraph (c)(2) of this section for the
control period starting on January 1, 2021 and for each control period
thereafter.
* * * * *
0
5. Amend Sec. 97.910 by:
0
a. Revising the section heading;
[[Page 49216]]
0
b. In paragraph (a)(1), removing ``238,393'' and adding in its place
``238,395''; and
0
c. Adding paragraphs (b) and (c).
The revision and additions read as follows:
Sec. 97.910 Texas SO2 Trading Program budget, Supplemental Allowance
Pool budget, and variability limit.
* * * * *
(b) The variability limit for the Texas SO2 Trading
Program budget for the control periods in 2021 and thereafter is 16,688
tons.
(c) The Texas SO2 Trading Program budget in paragraph
(a)(1) of this section does not include any tons in the Supplemental
Allowance Pool budget in paragraph (a)(2) of this section or the
variability limit in paragraph (b) of this section.
0
6. Amend Sec. 97.911 by:
0
a. Revising paragraph (a)(1);
0
b. In paragraph (a)(2), removing the text ``allocated under the Texas
Supplemental Allowance Pool under 40 CFR 97.912.'' and adding in its
place the text ``transferred to the Supplemental Allowance Pool for
potential allocation in accordance with Sec. 97.912.'';
0
c. Removing and reserving paragraph (b);
0
d. In paragraph (c)(1), removing the text ``paragraph (a) or (b)'' and
adding in its place the text ``paragraph (a)''; and
0
e. Revising paragraph (c)(5).
The revisions read as follows:
Sec. 97.911 Texas SO2 Trading Program allowance allocations.
(a)(1) Except as provided in paragraph (a)(2) of this section,
Texas SO2 Trading Program allowances from the Texas
SO2 Trading Program budget will be allocated, for the
control periods in 2019 and each year thereafter, as provided in Table
1 to this paragraph (a)(1):
Table 1 to Paragraph (a)(1)--Texas SO2 Trading Program Allocations
----------------------------------------------------------------------------------------------------------------
Texas SO2
trading
Texas SO2 trading program units ORIS code program Affiliated ownership group
allocation
(tons)
----------------------------------------------------------------------------------------------------------------
Big Brown Unit 1.............................. 3497 8,473 Vistra Energy..
Big Brown Unit 2.............................. 3497 8,559 Vistra Energy.
Coleto Creek Unit 1........................... 6178 9,057 Vistra Energy.
Fayette (Sam Seymour) Unit 1.................. 6179 7,979 Lower Colorado River Authority/
City of Austin.
Fayette (Sam Seymour) Unit 2.................. 6179 8,019 Lower Colorado River Authority/
City of Austin.
Graham Unit 2................................. 3490 226 Vistra Energy.
HW Pirkey Unit 1.............................. 7902 8,882 American Electric Power.
Harrington Unit 061B.......................... 6193 5,361 Xcel Energy.
Harrington Unit 062B.......................... 6193 5,255 Xcel Energy.
Harrington Unit 063B.......................... 6193 5,055 Xcel Energy.
JT Deely Unit 1............................... 6181 6,170 City of San Antonio.
JT Deely Unit 2............................... 6181 6,082 City of San Antonio.
Limestone Unit 1.............................. 298 12,081 NRG Energy.
Limestone Unit 2.............................. 298 12,293 NRG Energy.
Martin Lake Unit 1............................ 6146 12,024 Vistra Energy.
Martin Lake Unit 2............................ 6146 11,580 Vistra Energy.
Martin Lake Unit 3............................ 6146 12,236 Vistra Energy.
Monticello Unit 1............................. 6147 8,598 Vistra Energy.
Monticello Unit 2............................. 6147 8,795 Vistra Energy.
Monticello Unit 3............................. 6147 12,216 Vistra Energy.
Newman Unit 2................................. 3456 1 El Paso Electric.
Newman Unit 3................................. 3456 1 El Paso Electric.
Newman Unit **4............................... 3456 2 El Paso Electric.
Newman Unit **5............................... 3456 2 El Paso Electric.
Sandow Unit 4................................. 6648 8,370 Vistra Energy.
Sommers Unit 1................................ 3611 55 City of San Antonio.
Sommers Unit 2................................ 3611 7 City of San Antonio.
Stryker Unit ST2.............................. 3504 145 Vistra Energy.
Tolk Unit 171B................................ 6194 6,900 Xcel Energy.
Tolk Unit 172B................................ 6194 7,062 Xcel Energy.
WA Parish Unit WAP4........................... 3470 3 NRG Energy.
WA Parish Unit WAP5........................... 3470 9,580 NRG Energy.
WA Parish Unit WAP6........................... 3470 8,900 NRG Energy.
WA Parish Unit WAP7........................... 3470 7,653 NRG Energy.
Welsh Unit 1.................................. 6139 6,496 American Electric Power.
Welsh Unit 2.................................. 6139 7,050 American Electric Power.
Welsh Unit 3.................................. 6139 7,208 American Electric Power.
Wilkes Unit 1................................. 3478 14 American Electric Power.
Wilkes Unit 2................................. 3478 2 American Electric Power.
Wilkes Unit 3................................. 3478 3 American Electric Power.
----------------------------------------------------------------------------------------------------------------
* * * * *
(c) * * *
(5) With regard to the Texas SO2 Trading Program
allowances that are not recorded, or that are deducted as an incorrect
allocation, in accordance with paragraphs (c)(2) and (3) of this
section, the Administrator will transfer such Texas SO2
Trading Program allowances to the Supplemental Allowance Pool for
potential allocation in accordance with Sec. 97.912.
0
7. Amend Sec. 97.912 by:
0
a. In paragraph (a) introductory text, removing the text ``each control
period in 2019 and thereafter,'' and adding in its place the text ``the
control periods in 2019 and 2020,'';
[[Page 49217]]
0
b. In paragraph (a)(1), removing the text ``each subsequent February
15,'' and adding in its place the text ``February 15, 2021,'', and
removing the second period and adding in its place the text ``and
recorded under Sec. 97.921.'';
0
c. In paragraph (a)(2), removing the period and adding in its place the
text ``and recorded under Sec. 97.921.'';
0
d. In paragraph (a)(3)(ii)(A), removing the text ``paragraph (b)'' and
adding in its place the text ``paragraph (d)'';
0
e. In paragraph (a)(3)(ii)(B), removing the text ``paragraph (b)''
wherever it appears and adding in its place the text ``paragraph (d)'',
and adding a new sentence between the existing first and second
sentences;
0
f. In paragraph (a)(3)(iii), removing the text ``paragraph (b)'' and
adding in its place the text ``paragraph (d)'';
0
g. Redesignating paragraphs (a)(4) and (b) as paragraphs (c) and (d)
and adding a new paragraph (b); and
0
h. Revising newly redesignated paragraph (d).
The addition and revision read as follows:
Sec. 97.912 Texas SO2 Trading Program Supplemental Allowance Pool.
(a) * * *
(3) * * *
(ii) * * *
(B) * * * The Administrator will adjust the sources' allocations up
or down by one allowance, starting with the largest allocation and
continuing in descending order, as necessary to cause the sum of the
sources' allocations to equal the total number of allowances in the
Supplemental Allowance Pool available for allocation under paragraph
(d) of this section that remain after any allocation under paragraph
(a)(3)(i) of this section. * * *
* * * * *
(b) For each control period in 2021 and thereafter, the
Administrator will allocate Texas SO2 Trading Program
allowances from the Texas SO2 Trading Program Supplemental
Allowance Pool as follows:
(1) For each control period, the Administrator will assign each
Texas SO2 Trading Program unit to an affiliated ownership
group reflecting the unit's ownership as of December 31 of the control
period. The affiliated ownership group assignments for each control
period will be as shown in Sec. 97.911(a)(1) except that the
Administrator will revise the assignments, based on the information
required to be submitted in accordance with Sec. 97.915(c) and any
other information available to the Administrator, as necessary to
reflect any ownership transfer resulting in a 50% or greater ownership
share of a unit being held by a new owner that the Administrator
determines is not affiliated with the previous holder of a 50% or
greater ownership share of the unit.
(2) No later than February 15, 2022 and each subsequent February
15, the Administrator will review all the quarterly SO2
emissions reports provided under Sec. 97.934(d) for each Texas
SO2 Trading Program unit for the previous control period.
The Administrator will identify each affiliated ownership group of
Texas SO2 Trading Program units as of December 31 of such
control period for which the total amount of emissions reported for the
units in the group for that control period exceeds the total amount of
allowances allocated to the units in the group for that control period
under Sec. 97.911 and recorded under Sec. 97.921.
(3) For each affiliated ownership group of Texas SO2
Trading Program units identified under paragraph (b)(2) of this
section, the Administrator will calculate the amount by which the total
amount of reported emissions for that control period exceeds the total
amount of allowances allocated for that control period under Sec.
97.911 and recorded under Sec. 97.921.
(4)(i) The Administrator will allocate and record allowances from
the Supplemental Allowance Pool as follows:
(A) If the total for all such affiliated ownership groups of the
amounts calculated under paragraph (b)(3) of this section is less than
or equal to the total number of allowances in the Supplemental
Allowance Pool available for allocation under paragraph (d) of this
section, then each such group's allocation of allowances from the
Supplemental Allowance Pool shall equal to the amount calculated for
the group under paragraph (b)(3) of this section.
(B) If the total for all such affiliated ownership groups of the
amounts calculated under paragraph (b)(3) of this section is greater
than the total number of allowances in the Supplemental Allowance Pool
available for allocation under paragraph (d) of this section, then the
Administrator will calculate each such group's allocation of allowances
from the Supplemental Allowance Pool by dividing the amount calculated
under paragraph (b)(3) of this section for the group by the sum of the
amounts calculated under paragraph (b)(3) of this section for all such
groups, then multiplying by the number of allowances in the
Supplemental Allowance Pool available for allocation under paragraph
(d) of this section and rounding to the nearest allowance. The
Administrator will adjust the groups' allocations up or down by one
allowance, starting with the largest allocation and continuing in
descending order, as necessary to cause the sum of the groups'
allocations to equal the total number of allowances in the Supplemental
Allowance Pool available for allocation under paragraph (d) of this
section.
(C) When an affiliated ownership group receives an allocation of
allowances under paragraph (b)(4)(i)(A) or (B) of this section, each
source in the group whose emissions during the control period for which
allowances are being allocated exceed the amount of allowances
allocated to the source under Sec. 97.911 and recorded under Sec.
97.921 will receive a share of the group's allocation. The
Administrator will compute each such source's share by dividing the
amount of the source's emissions during the control period exceeding
the source's allocation under Sec. 97.911 by the sum for all such
sources of the amounts of the sources' emissions during the control
period exceeding the sources' allocations under Sec. 97.911, then
multiplying by the group's allocation under paragraph (b)(4)(i)(A) or
(B) of this section and rounding to the nearest allowance. The
Administrator will adjust the sources' allocations up or down by one
allowance, starting with the largest allocation and continuing in
descending order, as necessary to cause the sum of the sources'
allocations to equal the group's allocation. The Administrator will
then record the calculated allocations of allowances in the applicable
sources' compliance accounts.
(ii) Any unallocated allowances remaining in the Supplemental
Allowance Pool after the allocations determined under paragraph
(b)(4)(i) of this section will be maintained in the Supplemental
Allowance Pool. These allowances will be available for allocation by
the Administrator in subsequent control periods to the extent
consistent with paragraph (d) of this section.
* * * * *
(d) The total amount of allowances in the Supplemental Allowance
Pool available for allocation for a control period is equal to the sum
of the Supplemental Allowance Pool budget under Sec. 97.910(a)(2), any
allowances from retired units pursuant to Sec. 97.911(a)(2) and from
corrections pursuant to Sec. 97.911(c)(5), and any allowances
maintained in the Supplemental Allowance Pool pursuant to paragraph
(a)(3)(iii) or (b)(4)(ii) of this
[[Page 49218]]
section, provided that if the number of allowances in the Supplemental
Allowance Pool exceeds the applicable limit for the control period
under paragraph (d)(1) or (d)(2) of this section, then the
Administrator may only allocate allowances up to such applicable limit.
(1) For the control periods in 2019 and 2020, the total amount of
allowances allocated from the Supplemental Allowance Pool for a control
period may not exceed by more than 44,711 tons the sum of the
Supplemental Allowance Pool budget under Sec. 97.910(a)(2) and any
portion of the Texas SO2 Trading Program budget under Sec.
97.910(a)(1) not otherwise allocated for that control period under
Sec. 97.911(a)(1).
(2) For each control period in 2021 and thereafter, the total
amount of allowances allocated from the Supplemental Allowance Pool for
a control period may not exceed the sum of the variability limit under
Sec. 97.910(b) and any portion of the Texas SO2 Trading
Program budget under Sec. 97.910(a)(1) not otherwise allocated for
that control period under Sec. 97.911(a)(1).
0
8. Amend Sec. 97.913 by revising paragraph (c) to read as follows:
Sec. 97.913 Authorization of designated representative and alternate
designated representative.
* * * * *
(c) Except in this section, Sec. 97.902, and Sec. Sec. 97.914
through 97.918, whenever the term ``designated representative'' (as
distinguished from the term ``common designated representative'') is
used in this subpart, the term shall be construed to include the
designated representative or any alternate designated representative.
Sec. 97.915 [Amended]
0
9. Amend Sec. 97.915 paragraph (d) introductory text and paragraph
(d)(1) by removing the text ``(see Sec. 97.904(b))''.
0
10. Amend Sec. 97.920 by:
0
a. Revising the section heading;
0
b. Redesignating paragraphs (b) through (d) as paragraphs (c) through
(e) and adding a new paragraph (b);
0
c. In newly redesignated paragraph (c)(2)(i) introductory text,
removing the text ``paragraph (b)(1)'' and adding in its place the text
``paragraph (c)(1)'';
0
d. In newly redesignated paragraph (c)(2)(ii), removing the text
``paragraph (b)(5)'' and adding in its place the text ``paragraph
(c)(5)'';
0
e. In newly redesignated paragraphs (c)(3)(i) and (ii), removing the
text ``paragraph (b)(1)'' and adding in its place the text ``paragraph
(c)(1)'';
0
f. In newly redesignated paragraph (c)(4)(i), removing the text
``paragraph (b)(1)'' wherever it appears and adding in its place the
text ``paragraph (c)(1)'';
0
g. In newly redesignated paragraph (c)(4)(ii), removing the text
``paragraph (b)(4)(i)'' and adding in its place the text ``paragraph
(c)(4)(i)'';
0
h. In newly redesignated paragraph (c)(5)(iii) introductory text and
paragraph (c)(5)(iii)(C), removing the text ``paragraph (b)(5)(i)'' and
adding in its place the text ``paragraph (c)(5)(i)'';
0
i. In newly redesignated paragraph (c)(5)(iii)(D), removing the text
``97.920(b)(5)(iv)'' and adding in its place the text
``97.920(c)(5)(iv)'';
0
j. In newly redesignated paragraph (c)(5)(iii)(E), removing the text
``97.920(b)(5)(iv),'' and adding in its place the text
``97.920(c)(5)(iv),'', and removing the text ``97.920(b)(5)'' and
adding in its place the text ``97.920(c)(5)'';
0
k. In newly redesignated paragraph (c)(5)(iv), removing the text
``paragraph (b)(5)(iii)'' and adding in its place the text ``paragraph
(c)(5)(iii)'';
0
l. In newly redesignated paragraph (c)(5)(v), removing the text
``paragraph (b)(5)(iii)(D)'' and adding in its place the text
``paragraph (c)(5)(iii)(D)'', and removing the text ``paragraph
(b)(5)(iv)'' and adding in its place the text ``paragraph (c)(5)(iv)'';
0
m. In newly redesignated paragraph (d), removing the text ``paragraphs
(a) and (b)'' and adding in its place the text ``paragraphs (a), (b),
and (c)''; and
0
n. In newly redesignated paragraph (e), removing the text ``paragraphs
(b)(2)(ii) and (b)(5)'' and adding in its place the text ``paragraphs
(c)(2)(ii) and (c)(5)''.
The revision and addition read as follows:
Sec. 97.920 Establishment of compliance accounts, assurance
accounts, and general accounts.
* * * * *
(b) Assurance accounts. The Administrator will establish assurance
accounts for certain owners and operators and States in accordance with
Sec. 97.925(b)(3).
* * * * *
0
11. Amend Sec. 97.921 by:
0
a. In paragraph (a), removing the second sentence;
0
b. Revising paragraphs (b) and (c);
0
c. Removing and reserving paragraph (d); and
0
d. Adding paragraph (f).
The revisions and addition read as follows:
Sec. 97.921 Recordation of Texas SO2 Trading Program allowance
allocations.
* * * * *
(b) By July 1, 2019, the Administrator will record in each Texas
SO2 Trading Program source's compliance account the Texas
SO2 Trading Program allowances allocated to the Texas
SO2 Trading Program units at the source in accordance with
Sec. 97.911(a) for the control period in the fourth year after the
year of the applicable recordation deadline under this paragraph,
unless provided otherwise in the Administrator's approval of a SIP
revision replacing the provisions of this subpart.
(c) By February 15, 2020, and February 15 of each year thereafter,
the Administrator will record in each Texas SO2 Trading
Program source's compliance account the allowances allocated from the
Texas SO2 Trading Program Supplemental Allowance Pool in
accordance with Sec. 97.912 for the control period in the year of the
applicable recordation deadline under this paragraph, unless provided
otherwise in the Administrator's approval of a SIP revision replacing
the provisions of this subpart.
* * * * *
(f) Notwithstanding paragraphs (a) and (b) of this section, with
respect to the Texas SO2 Trading Program allowances
allocated to Newman Unit **5 in accordance with Sec. 97.911(a) for the
control periods in 2019, 2020, 2021, 2022, 2023, and 2024, the
Administrator will record the allowances in the source's compliance
account by December 31, 2020, unless provided otherwise in the
Administrator's approval of a SIP revision replacing the provisions of
this subpart.
0
12. Add Sec. 97.925 to read as follows:
Sec. 97.925 Compliance with Texas SO2 Trading Program assurance
provisions.
(a) Availability for deduction. Texas SO2 Trading
Program allowances are available to be deducted for compliance with the
Texas SO2 Trading Program assurance provisions for a control
period in a given year by the owners and operators of a group of one or
more Texas SO2 Trading Program sources and units only if the
Texas SO2 Trading Program allowances:
(1) Were allocated for a control period in a prior year or the
control period in the given year or in the immediately following year;
and
(2) Are held in the assurance account, established by the
Administrator for such owners and operators of such group of Texas
SO2 Trading Program sources and units under paragraph (b)(3)
of this section, as of the deadline established in paragraph (b)(4) of
this section.
[[Page 49219]]
(b) Deductions for compliance. The Administrator will deduct Texas
SO2 Trading Program allowances available under paragraph (a)
of this section for compliance with the Texas SO2 Trading
Program assurance provisions for a control period in a given year in
accordance with the following procedures:
(1) By June 1, 2022 and June 1 of each year thereafter, the
Administrator will:
(i) Calculate the total SO2 emissions from all Texas
SO2 Trading Program units at Texas SO2 Trading
Program sources during the control period in the year before the year
of this calculation deadline and the amount, if any, by which such
total SO2 emissions exceed the State assurance level as
described in Sec. 97.906(c)(2)(iii).
(ii) [Reserved]
(2) If the calculations under paragraph (b)(1)(i) of this section
indicate that the total SO2 emissions from all Texas
SO2 Trading Program units at Texas SO2 Trading
Program sources during such control period exceed the State assurance
level as described in Sec. 97.906(c)(2)(iii):
(i) [Reserved]
(ii) By August 1 immediately after the deadline for the
calculations under paragraph (b)(1)(i) of this section, the
Administrator will calculate, for such control period and each common
designated representative for such control period for a group of one or
more Texas SO2 Trading Program sources and units, the common
designated representative's share of the total SO2 emissions
from all Texas SO2 Trading Program units at Texas
SO2 Trading Program sources, the common designated
representative's assurance level, and the amount (if any) of Texas
SO2 Trading Program allowances that the owners and operators
of such group of sources and units must hold in accordance with the
calculation formula in Sec. 97.906(c)(2)(i). By each such August 1,
the Administrator will promulgate a notice of data availability of the
results of the calculations under this paragraph and paragraph
(b)(1)(i) of this section, including separate calculations of the
SO2 emissions from each Texas SO2 Trading Program
source.
(iii) The Administrator will provide an opportunity for submission
of objections to the calculations referenced by the notice of data
availability required in paragraph (b)(2)(ii) of this section.
(A) Objections shall be submitted by the deadline specified in such
notice and shall be limited to addressing whether the calculations
referenced in the notice required under paragraph (b)(2)(ii) of this
section are in accordance with Sec. 97.906(c)(2)(iii), Sec. Sec.
97.906(b) and 97.930 through 97.935, the definitions of ``common
designated representative'', ``common designated representative's
assurance level'', and ``common designated representative's share'' in
Sec. 97.902, and the calculation formula in Sec. 97.906(c)(2)(i).
(B) The Administrator will adjust the calculations to the extent
necessary to ensure that they are in accordance with the provisions
referenced in paragraph (b)(2)(iii)(A) of this section. By October 1
immediately after the promulgation of such notice, the Administrator
will promulgate a notice of data availability of the calculations
incorporating any adjustments that the Administrator determines to be
necessary and the reasons for accepting or rejecting any objections
submitted in accordance with paragraph (b)(2)(iii)(A) of this section.
(3) The Administrator will establish one assurance account for each
set of owners and operators referenced, in the notice of data
availability required under paragraph (b)(2)(iii)(B) of this section,
as all of the owners and operators of a group of Texas SO2
Trading Program sources and units having a common designated
representative for such control period and as being required to hold
Texas SO2 Trading Program allowances.
(4)(i) As of midnight of November 1 immediately after the
promulgation of each notice of data availability required in paragraph
(b)(2)(iii)(B) of this section, the owners and operators described in
paragraph (b)(3) of this section shall hold in the assurance account
established for them and for the appropriate Texas SO2
Trading Program sources and Texas SO2 Trading Program units
under paragraph (b)(3) of this section a total amount of Texas
SO2 Trading Program allowances, available for deduction
under paragraph (a) of this section, equal to the amount such owners
and operators are required to hold with regard to such sources and
units as calculated by the Administrator and referenced in such notice.
(ii) Notwithstanding the allowance-holding deadline specified in
paragraph (b)(4)(i) of this section, if November 1 is not a business
day, then such allowance-holding deadline shall be midnight of the
first business day thereafter.
(5) After November 1 (or the date described in paragraph (b)(4)(ii)
of this section) immediately after the promulgation of each notice of
data availability required in paragraph (b)(2)(iii)(B) of this section
and after the recordation, in accordance with Sec. 97.923, of Texas
SO2 Trading Program allowance transfers submitted by
midnight of such date, the Administrator will determine whether the
owners and operators described in paragraph (b)(3) of this section
hold, in the assurance account for the appropriate Texas SO2
Trading Program sources and Texas SO2 Trading Program units
established under paragraph (b)(3) of this section, the amount of Texas
SO2 Trading Program allowances available under paragraph (a)
of this section that the owners and operators are required to hold with
regard to such sources and units as calculated by the Administrator and
referenced in the notice required in paragraph (b)(2)(iii)(B) of this
section.
(6) Notwithstanding any other provision of this subpart and any
revision, made by or submitted to the Administrator after the
promulgation of the notice of data availability required in paragraph
(b)(2)(iii)(B) of this section for a control period in a given year, of
any data used in making the calculations referenced in such notice, the
amounts of Texas SO2 Trading Program allowances that the
owners and operators are required to hold in accordance with Sec.
97.906(c)(2)(i) for such control period shall continue to be such
amounts as calculated by the Administrator and referenced in such
notice required in paragraph (b)(2)(iii)(B) of this section, except as
follows:
(i) If any such data are revised by the Administrator as a result
of a decision in or settlement of litigation concerning such data on
appeal under part 78 of this chapter of such notice, or on appeal under
section 307 of the Clean Air Act of a decision rendered under part 78
of this chapter on appeal of such notice, then the Administrator will
use the data as so revised to recalculate the amounts of Texas
SO2 Trading Program allowances that owners and operators are
required to hold in accordance with the calculation formula in Sec.
97.906(c)(2)(i) for such control period with regard to the Texas
SO2 Trading Program sources and Texas SO2 Trading
Program units involved, provided that such litigation under part 78 of
this chapter, or the proceeding under part 78 of this chapter that
resulted in the decision appealed in such litigation under section 307
of the Clean Air Act, was initiated no later than 30 days after
promulgation of such notice required in paragraph (b)(2)(iii)(B) of
this section.
(ii) [Reserved]
(iii) If the revised data are used to recalculate, in accordance
with paragraph (b)(6)(i) of this section, the amount of Texas
SO2 Trading Program allowances that the owners and operators
are required to hold for such control period with regard to the Texas
[[Page 49220]]
SO2 Trading Program sources and Texas SO2 Trading
Program units involved--
(A) Where the amount of Texas SO2 Trading Program
allowances that the owners and operators are required to hold increases
as a result of the use of all such revised data, the Administrator will
establish a new, reasonable deadline on which the owners and operators
shall hold the additional amount of Texas SO2 Trading
Program allowances in the assurance account established by the
Administrator for the appropriate Texas SO2 Trading Program
sources and Texas SO2 Trading Program units under paragraph
(b)(3) of this section. The owners' and operators' failure to hold such
additional amount, as required, before the new deadline shall not be a
violation of the Clean Air Act. The owners' and operators' failure to
hold such additional amount, as required, as of the new deadline shall
be a violation of the Clean Air Act. Each Texas SO2 Trading
Program allowance that the owners and operators fail to hold as
required as of the new deadline, and each day in such control period,
shall be a separate violation of the Clean Air Act.
(B) For the owners and operators for which the amount of Texas
SO2 Trading Program allowances required to be held decreases
as a result of the use of all such revised data, the Administrator will
record, in all accounts from which Texas SO2 Trading Program
allowances were transferred by such owners and operators for such
control period to the assurance account established by the
Administrator for the appropriate Texas SO2 Trading Program
sources and Texas SO2 Trading Program units under paragraph
(b)(3) of this section, a total amount of the Texas SO2
Trading Program allowances held in such assurance account equal to the
amount of the decrease. If Texas SO2 Trading Program
allowances were transferred to such assurance account from more than
one account, the amount of Texas SO2 Trading Program
allowances recorded in each such transferor account will be in
proportion to the percentage of the total amount of Texas
SO2 Trading Program allowances transferred to such assurance
account for such control period from such transferor account.
(C) Each Texas SO2 Trading Program allowance held under
paragraph (b)(6)(iii)(A) of this section as a result of recalculation
of requirements under the Texas SO2 Trading Program
assurance provisions for such control period must be a Texas
SO2 Trading Program allowance allocated for a control period
in a year before or the year immediately following, or in the same year
as, the year of such control period.
Sec. 97.926 [Amended]
0
13. Amend Sec. 97.926 paragraph (b) by adding the text ``Sec.
97.925,''after the text ``Sec. 97.924,''.
Sec. 97.928 [Amended]
0
14. Amend Sec. 97.928 paragraph (b) by removing the text ``a
compliance account,'' and adding in its place the text ``a compliance
account or an assurance account,''.
Sec. 97.930 [Amended]
0
15. Amend Sec. 97.930 by:
0
a. In paragraph (b) introductory text, removing the colon and adding in
its place the text ``January 1, 2019.'';
0
b. Removing and reserving paragraphs (b)(1) and (2); and
0
c. In paragraph (b)(3) introductory text, removing the text ``the
applicable deadline under paragraph (b)(1) or (2) of this section'' and
adding in its place the text ``January 1, 2019''.
Sec. 97.931 [Amended]
0
16. In Sec. 97.931 amend paragraph (d)(3) introductory text by
removing in the last sentence the word ``with'' after the text ``is
replaced by''.
Sec. 97.934 [Amended]
0
17. Amend Sec. 97.934 by:
0
a. In paragraph (d)(1) introductory text, removing the text ``the later
of:'' and adding in its place the text ``the calendar quarter covering
January 1, 2019 through March 31, 2019.''; and
0
b. Removing paragraphs (d)(1)(i) and (ii).
[FR Doc. 2020-14408 Filed 8-11-20; 8:45 am]
BILLING CODE 6560-50-P
