Air Plan Approval; Alabama; Cross-State Air Pollution Rule

AGENCY:

Environmental Protection Agency.

ACTION:

Final rule.

SUMMARY:

The Environmental Protection Agency (EPA) is approving portions of the October 26, 2015, and May 19, 2017, State Implementation Plan (SIP) revisions from Alabama replacing the Cross-State Air Pollution Rule (CSAPR) federal implementation plan (FIP). Under CSAPR, large electricity generating units (EGUs) in Alabama are subject to FIP provisions requiring the units to participate in a federal allowance trading program for ozone season emissions of nitrogen oxides (NO_X). This action approves into Alabama's SIP the State's regulations requiring Alabama's affected units to participate in a new state allowance trading program for ozone season NO_X emissions integrated with the CSAPR federal trading programs, replacing the corresponding CSAPR FIP requirements for Alabama. This state trading program is substantively identical to the federal trading program except with regard to the provisions allocating emission allowances among Alabama units. Under the CSAPR regulations, final approval of these portions of the SIP revisions automatically eliminates Alabama units' FIP requirements to participate in CSAPR's federal allowance trading program for ozone season NO_X emissions. Approval also fully satisfies Alabama's good neighbor obligation under the Clean Air Act (CAA or Act) to prohibit emissions which will significantly contribute to nonattainment or interfere with maintenance of the 1997 8-hour Ozone National Ambient Air Quality Standards (NAAQS) in any other state; and partially satisfies Alabama's good neighbor obligation under the CAA to prohibit emissions which will significantly contribute to nonattainment or interfere with maintenance of the 2008 8-hour Ozone NAAQS in any other state.

DATES:

This rule will be effective November 6, 2017.

ADDRESSES:

EPA has established a docket for this action under Docket Identification No EPA-R04-OAR-2017-0415. All documents in the docket are listed on the www.regulations.gov Web site. Although listed in the index, some information may not be publicly available, i.e., Confidential Business Information or other information whose disclosure is restricted by statute. Certain other material, such as copyrighted material, is not placed on the Internet and will be publicly available only in hard copy form. Publicly available docket materials are available either electronically through www.regulations.gov or in hard copy at the Air Regulatory Management Section, Air Planning and Implementation Branch, Air, Pesticides and Toxics Management Division, U.S. Environmental Protection Agency, Region 4, 61 Forsyth Street SW., Atlanta, Georgia 30303-8960. EPA requests that if at all possible, you contact the person listed in the FOR FURTHER INFORMATION CONTACT section to schedule your inspection. The Regional Office's official hours of business are Monday through Friday 8:30 a.m. to 4:30 p.m., excluding federal holidays.

FOR FURTHER INFORMATION CONTACT:

Ashten Bailey, Air Regulatory Management Section, Air, Pesticides and Toxics Management Division, U.S. Environmental Protection Agency, Region 4, 61 Forsyth Street SW., Atlanta, Georgia 30303-8960. Ms. Bailey can be reached by telephone at (404) 562-9164 or via electronic mail at bailey.ashten@epa.gov.

SUPPLEMENTARY INFORMATION:

I. Background on CSAPR and CSAPR-Related SIP Revisions

EPA issued CSAPR in July 2011 and the CSAPR Update in 2016 to address the requirements of CAA section 110(a)(2)(D)(i)(I) concerning interstate transport of air pollution for specific NAAQS. As amended (including by the 2016 CSAPR Update), CSAPR requires 27 eastern states to limit their statewide emissions of sulfur dioxide (SO₂) and/or NO_X in order to mitigate transported air pollution unlawfully impacting other states' ability to attain or maintain four NAAQS: The 1997 annual PM_2.5 NAAQS, the 2006 24-hour PM_2.5 NAAQS, the 1997 8-hour Ozone NAAQS, and the 2008 8-hour Ozone NAAQS. The CSAPR emissions limitations are defined in terms of maximum statewide “budgets” for emissions of annual SO₂, annual NO_X, and/or ozone season NO_X by each covered state's large EGUs. The CSAPR state budgets are implemented in two phases of generally increasing stringency: The Phase 1 budgets apply to emissions in 2015 and 2016; and the Phase 2 and CSAPR Update budgets apply to emissions in 2017 and later years. As a mechanism for achieving compliance with the emissions limitations, CSAPR establishes five federal emissions trading programs: A program for annual NO_X emissions; two geographically separate programs for annual SO₂ emissions; and two geographically separate programs for ozone season NO_X emissions. CSAPR also establishes FIP requirements applicable to the large EGUs in each covered state. Currently, the CSAPR FIP provisions require each state's units to participate in up to three of the five CSAPR trading programs.

CSAPR includes provisions under which states may submit and EPA will approve SIP revisions to modify or replace the CSAPR FIP requirements while allowing states to continue to meet their transport-related obligations using either CSAPR's federal emissions trading programs or state emissions trading programs integrated with the federal programs, provided that the SIP revisions meet all relevant criteria. Through such a SIP revision, a state may replace EPA's default provisions for allocating emission allowances among the state's units, employing any state-selected methodology to allocate or auction the allowances, subject to timing conditions and limits on overall allowance quantities. In the case of CSAPR's federal trading programs for ozone season NO_X emissions (or an integrated state trading program), a state may also expand trading program applicability to include certain smaller EGUs. If a state wants to replace the CSAPR FIP requirements with SIP requirements under which the state's units participate in a state trading program that is integrated with and identical to the federal trading program even as to the allocation and applicability provisions, the state may submit a SIP revision for that purpose as well. However, no emissions budget increases or other substantive changes to the trading program provisions are allowed. A state whose units are subject to multiple CSAPR federal trading programs may submit SIP revisions to modify or replace either some or all of those FIP requirements.

States can submit two basic forms of CSAPR-related SIP revisions effective for emissions control periods in 2017 or later years. Specific conditions for approval of each form of SIP revision are set forth in the CSAPR regulations, as described in section III below. Under the first alternative—an “abbreviated” SIP revision—a state may submit a SIP revision that upon approval replaces the default allowance allocation and/or applicability provisions of a CSAPR federal trading program for the state. Approval of an abbreviated SIP revision leaves the corresponding CSAPR FIP and all other provisions of the relevant federal trading program in place for the state's units.

Under the second alternative—a “full” SIP revision—a state may submit a SIP revision that upon approval replaces a CSAPR federal trading program for the state with a state trading program integrated with the federal trading program, so long as the state trading program is substantively identical to the federal trading program or does not substantively differ from the federal trading program except as discussed above with regard to the allowance allocation and/or applicability provisions. For purposes of a full SIP revision, a state may either adopt state rules with complete trading program language, incorporate the federal trading program language into its state rules by reference (with appropriate conforming changes), or employ a combination of these approaches.

The CSAPR regulations identify several important consequences and limitations associated with approval of a full SIP revision. First, upon EPA's approval of a full SIP revision as correcting the deficiency in the state's SIP that was the basis for a particular set of CSAPR FIP requirements, the obligation to participate in the corresponding CSAPR federal trading program is automatically eliminated for units subject to the state's jurisdiction without the need for a separate EPA withdrawal action, so long as EPA's approval of the SIP revision as meeting the requirements of the CSAPR regulations is full and unconditional. Second, approval of a full SIP revision does not terminate the obligation to participate in the corresponding CSAPR federal trading program for any units located in any Indian country within the borders of the state, and if and when a unit is located in Indian country within a state's borders, EPA may modify the SIP approval to exclude from the SIP, and include in the surviving CSAPR FIP instead, certain trading program provisions that apply jointly to units in the state and to units in Indian country within the state's borders. Finally, if at the time a full SIP revision is approved EPA has already started recording allocations of allowances for a given control period to a state's units, the federal trading program provisions authorizing EPA to complete the process of allocating and recording allowances for that control period to those units will continue to apply, unless EPA's approval of the SIP revision provides otherwise.

In the CSAPR rulemaking, among other findings, EPA determined that air pollution transported from Alabama would unlawfully affect other states' ability to attain or maintain the 1997 8-hour Ozone NAAQS. In the CSAPR Update rulemaking, EPA determined that air pollution transported from Alabama would unlawfully affect other states' ability to attain or maintain the 2008 8-hour Ozone NAAQS and established an ozone season NO_X budget for Alabama's EGUs representing a partial remedy for the State's interstate transport obligations with respect to that NAAQS; determined that Alabama's previous ozone season NO_X budget established in the CSAPR rulemaking as a partial remedy for the State's interstate transport obligations with respect to the 1997 8-hour Ozone NAAQS now represented a full remedy with respect to that NAAQS; and coordinated compliance requirements by allowing compliance with the new CSAPR Update budget to serve the purpose of addressing the State's obligations with respect to both NAAQS. Alabama units meeting the CSAPR applicability criteria are consequently subject to CSAPR FIP requirements for participation in the CSAPR NO_X Ozone Season Group 2 Trading Program in order to address the State's interstate transport obligations with respect to both the 1997 8-hour Ozone NAAQS (full remedy) and the 2008 8-hour Ozone NAAQS (partial remedy).

On October 26, 2015, Alabama submitted to EPA a SIP revision including provisions that, if approved, would incorporate into Alabama's SIP state trading program regulations that would replace the CSAPR federal trading program regulations with regard to Alabama units' ozone season NO_X emissions. On May 19, 2017, Alabama submitted to EPA a SIP revision that supersedes portions of the October 26, 2015, submittal to reflect changes from the CSAPR Update. On August 4, 2017, Alabama sent a letter clarifying the State's interpretation concerning the allowances for the Indian country new unit set aside for Alabama.

In a notice of proposed rulemaking (NPRM) published on August 17, 2017 (82 FR 39070), EPA proposed to approve the portions of Alabama's October 26, 2015, and May 19, 2017, SIP submittals designed to replace the federal CSAPR NO_X Ozone Season Group 2 Trading Program. The NPRM provides additional detail regarding the background and rationale for EPA's action. Comments on the NPRM were due on or before September 18, 2017. EPA received no adverse comments on the proposed action.

II. Incorporation by Reference

In this rule, EPA is finalizing regulatory text that includes incorporation by reference. In accordance with requirements of 1 CFR 51.5, EPA is finalizing the incorporation by reference of ADEM Administrative Code rules 335-3-8-.39 through 335-3-8-.70, state effective on June 9, 2017, comprising Alabama's TR NO_X Ozone Season Trading Program. EPA has made, and will continue to make, these materials generally available through www.regulations.gov and/or at the EPA Region 4 Office (please contact the person identified in the FOR FURTHER INFORMATION CONTACT section of this preamble for more information). Therefore, these materials have been approved by EPA for inclusion in the SIP, have been incorporated by reference by EPA into that plan, are fully federally enforceable under sections 110 and 113 of the CAA as of the effective date of the final rulemaking of EPA's approval, and will be incorporated by reference by the Director of the Federal Register in the next update to the SIP compilation.

III. Final Actions

EPA is approving the portions of Alabama's October 26, 2015, and May 19, 2017, SIP submittals concerning the establishment for Alabama units of CSAPR state trading programs for ozone season NO_X emissions. The revision adopts into the SIP the state trading program rules codified in ADEM Administrative Code rules 335-3-8-.39 through 335-3-8-.70. These Alabama CSAPR state trading programs will be integrated with the federal CSAPR NO_X Ozone Season Group 2 Trading Program and are substantively identical to the federal trading programs except with regard to the allowance allocation provisions. Following approval of these portions of the SIP revision, Alabama units therefore will generally be required to meet requirements under Alabama's CSAPR state trading programs equivalent to the requirements the units otherwise would have been required to meet under the corresponding CSAPR federal trading programs, but allocations to Alabama units of CSAPR NO_X Ozone Season Group 2 allowances for compliance periods in 2019 and later years will be determined according to the SIP's allocation provisions at Alabama rule 335-3-8-.46 instead of EPA's default allocation provisions at 40 CFR 97.811(a) and (b)(1) and 97.812(a). EPA is approving these portions of the SIP revision because they meet the requirements of the CAA and EPA's regulations for approval of a CSAPR full SIP revision replacing a federal trading program with a state trading program that is integrated with and substantively identical to the federal trading program except for permissible differences with respect to emission allowance allocation provisions.

EPA promulgated the FIP provisions requiring Alabama units to participate in the federal CSAPR NO_X Ozone Season Group 2 Trading Program in order to address Alabama's obligations under CAA section 110(a)(2)(D)(i)(I) with respect to the 1997 8-hour Ozone NAAQS and the 2008 8-hour Ozone NAAQS in the absence of SIP provisions addressing those requirements. Under the CSAPR regulations, upon EPA's full and unconditional approval of a SIP revision as correcting the SIP's deficiency that is the basis for a particular CSAPR FIP, the obligation to participate in the corresponding CSAPR federal trading program is automatically eliminated for units subject to the state's jurisdiction (but not for any units located in any Indian country within the state's borders). Approval of the portions of Alabama's SIP submittal adopting CSAPR state trading program rules for ozone season NO_X substantively identical to the corresponding CSAPR federal trading program regulations (or differing only with respect to the allowance allocation methodology) satisfies Alabama's obligation pursuant to CAA section 110(a)(2)(D)(i)(I) to prohibit emissions which will significantly contribute to nonattainment or interfere with maintenance of the 1997 8-hour Ozone NAAQS in any other state. This approval also partially satisfies Alabama's obligation pursuant to CAA section 110(a)(2)(D)(i)(I) to prohibit emissions which will significantly contribute to nonattainment or interfere with maintenance of the 2008 8-hour Ozone NAAQS in any other state. Thus, the approval corrects the same deficiencies in the SIP that otherwise would be corrected by those CSAPR FIPs. The approval of the portions of Alabama's SIP submittal establishing CSAPR state trading program rules for ozone season NO_X emissions therefore also results in the automatic termination of the obligations of Alabama units to participate in the federal CSAPR NO_X Ozone Season Group 2 Trading Program.

IV. Statutory and Executive Order Reviews

Under the CAA, the Administrator is required to approve a SIP submission that complies with the provisions of the Act and applicable Federal regulations. See 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the CAA. This action merely approves state law as meeting Federal requirements and does not impose additional requirements beyond those imposed by state law. For that reason, this action:

• Is not a significant regulatory action subject to review by the Office of Management and Budget under Executive Orders 12866 (58 FR 51735, October 4, 1993) and 13563 (76 FR 3821, January 21, 2011);
• Does not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.);
• Is certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.);
• Does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4);
• Does not have Federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999);
• Is not an economically significant regulatory action based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997);
• Is not a significant regulatory action subject to Executive Order 13211 (66 FR 28355, May 22, 2001);
• Is not subject to requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because application of those requirements would be inconsistent with the CAA; and
• Does not provide EPA with the discretionary authority to address, as appropriate, disproportionate human health or environmental effects, using practicable and legally permissible methods, under Executive Order 12898 (59 FR 7629, February 16, 1994).

The SIP is not approved to apply on any Indian reservation land or in any other area where EPA or an Indian tribe has demonstrated that a tribe has jurisdiction. In those areas of Indian country, the rule does not have tribal implications as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), nor will it impose substantial direct costs on tribal governments or preempt tribal law.

The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. EPA will submit a report containing this action and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the Federal Register. A major rule cannot take effect until 60 days after it is published in the Federal Register. This action is not a “major rule” as defined by 5 U.S.C. 804(2).

Under section 307(b)(1) of the CAA, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by December 5, 2017. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this action for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. See section 307(b)(2).

List of Subjects in 40 CFR Part 52

• Environmental protection
• Administrative practice and procedure
• Air pollution control
• Incorporation by reference
• Intergovernmental relations
• Nitrogen dioxide
• Ozone
• Reporting and recordkeeping requirements

40 CFR part 52 is amended as follows:

PART 52—APPROVAL AND PROMULGATION OF IMPLEMENTATION PLANS

1. The authority citation for part 52 continues to read as follows:

Authority: 42.U.S.C. 7401 et seq.

Subpart A—General Provisions

2. In § 52.38, paragraph (b)(13)(iv) is amended by removing the word “[none]” at the end of the paragraph and adding in its place the word “Alabama”.

Subpart B-Alabama

3. In § 52.50, the table in paragraph (c) is amended by adding the entries “Section 335-3-8-.39,” “Section 335-3-8-.40,” “Section 335-3-8-.41,” “Section 335-3-8-.42”, “Section 335-3-8-.43”, “Section 335-3-8-.44”, “Section 335-3-8-.45”, “Section 335-3-8-.46”, “Section 335-3-8-.47”, “Section 335-3-8-.48”, “Section 335-3-8-.49”, “Section 335-3-8-.50”, “Section 335-3-8-.51”, “Section 335-3-8-.52”, “Section 335-3-8-.53”, “Section 335-3-8-.54”, “Section 335-3-8-.55”, “Section 335-3-8-.56”, “Section 335-3-8-.57”, “Section 335-3-8-.58”, “Section 335-3-8-.59”, “Section 335-3-8-.60”, “Section 335-3-8-.61”, “Section 335-3-8-.62”, “Section 335-3-8-.63”, “Section 335-3-8-.64”, “Section 335-3-8-.65”, “Section 335-3-8-.66”, “Section 335-3-8-.67”, “Section 335-3-8-.68”, “Section 335-3-8-.69”, and “Section 335-3-8-.70” in numerical order to read as follows: