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, State Implementation Plan (SIP) submittal from Alabama concerning the Cross-State Air Pollution Rule (CSAPR). Under CSAPR, large electricity generating units (EGUs) in Alabama are subject to Federal Implementation Plans (FIPs) requiring the units to participate in CSAPR's federal trading program for annual emissions of nitrogen oxides (NO_X) and one of CSAPR's two federal trading programs for annual emissions of sulfur dioxide (SO₂). This action approves the incorporation into Alabama's SIP of the state's regulations requiring Alabama EGUs to participate in new CSAPR state trading programs for annual NO_X and SO₂ emissions integrated with the CSAPR federal trading programs, replacing the corresponding FIP requirements. These CSAPR state trading programs are substantively identical to the CSAPR federal trading programs except with regard to the provisions allocating emission allowances among Alabama units. EPA is approving the portions of the SIP revision concerning these CSAPR state trading programs because these portions of the SIP revision meet the requirements of the Clean Air Act (CAA or Act) and EPA's regulations for approval of a CSAPR full SIP revision replacing the requirements of a CSAPR FIP. Under the CSAPR regulations, approval of these portions of the SIP revision automatically eliminates Alabama units' obligations to participate in CSAPR's federal trading programs for annual NO_X and SO₂ emissions under the corresponding CSAPR FIPs addressing interstate transport requirements for the 1997 and 2006 Fine Particulate Matter (PM_2.5) national ambient air quality standards (NAAQS). Approval of these portions of the SIP revision fully satisfies Alabama's good neighbor obligation under the CAA to prohibit emissions which will significantly contribute to nonattainment or interfere with maintenance of the 1997 and 2006 PM_2.5 NAAQS in any other state. This approval also addresses the judicial remand of the federally-established CSAPR Phase 2 SO₂ budget for Alabama. EPA is not acting at this time on the portion of Alabama's SIP submittal intended to replace Alabama units' obligations to participate in CSAPR's federal trading program for ozone-season NO_X emissions under a separate CSAPR FIP.

DATES:

This rule is effective September 30, 2016.

ADDRESSES:

EPA has established a docket for this action under Docket Identification No EPA-R04-OAR-2016-0294. 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:

Steven Scofield, Air Regulatory Management Section, Air Planning and Implementation Branch, Air, Pesticides and Toxics Management Division, Region 4, U.S. Environmental Protection Agency, 61 Forsyth Street SW., Atlanta, Georgia 30303-8960. Mr. Scofield can be reached by telephone at (404) 562-9034 or via electronic mail at scofield.steve@epa.gov.

SUPPLEMENTARY INFORMATION:

I. Background on CSAPR and CSAPR-Related SIP revisions

EPA issued CSAPR in July 2011 to address the requirements of CAA section 110(a)(2)(D)(i)(I) concerning interstate transport of air pollution. As amended, CSAPR requires 28 Eastern states to limit their statewide emissions of SO₂ and/or NO_X in order to mitigate transported air pollution unlawfully impacting other states' ability to attain or maintain three NAAQS: the 1997 ozone NAAQS, the 1997 annual PM_2.5 NAAQS, and the 2006 24-hour PM_2.5 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, with the Phase 1 budgets applying to emissions in 2015 and 2016 and the Phase 2 budgets applying to emissions in 2017 and later years. As a mechanism for achieving compliance with the emissions limitations, CSAPR established four federal emissions trading programs: A program for annual NO_X emissions, a program for ozone-season NO_X emissions, and two geographically separate programs for annual SO₂ emissions. CSAPR also established FIP requirements applicable to the large electricity generating units in each covered state. The CSAPR FIP provisions require each state's units to participate in up to three of the four 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. 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 program for ozone-season NO_X emissions (or an integrated state trading program), a state may also expand trading program applicability to include certain smaller electricity generating units. If a state wants to replace CSAPR FIP requirements with SIP requirements under which the state's units participate in a state trading program that is integrated with and identical to the federal trading program even as to the allocation and applicability provisions, the state may submit a SIP revision for that purpose as well. However, no emissions budget increases or other substantive changes to the trading program provisions are allowed. A state whose units are subject to multiple CSAPR FIPs and federal trading programs may submit SIP revisions to modify or replace either some or all of those FIP requirements.

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. 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 implementation plan that was the basis for a particular set of CSAPR FIP requirements, the obligation to participate in the corresponding CSAPR federal trading program is automatically eliminated for units subject to the state's jurisdiction without the need for a separate EPA withdrawal action, so long as EPA's approval of the SIP is full and unconditional. 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.

Certain CSAPR Phase 2 emissions budgets have been remanded to EPA for reconsideration. However, the CSAPR trading programs remain in effect and all CSAPR emissions budgets likewise remain in effect pending EPA final action to address the remands. The remanded budgets include the CSAPR Phase 2 SO₂ emissions budget applicable to Alabama units under the federal CSAPR SO₂ Group 2 Trading Program.

In 2015, EPA proposed to update CSAPR to address Eastern states' interstate air pollution mitigation obligations with regard to the 2008 ozone NAAQS. Among other things, the proposed rule would amend the Phase 2 emissions budget applicable to Alabama units under the CSAPR NO_X Ozone Season Trading Program and would make technical corrections and nomenclature changes that would apply throughout the CSAPR regulations, including the CSAPR FIPs at 40 CFR part 52 and the CSAPR federal trading program regulations for annual NO_X, ozone-season NO_X, and SO₂ emissions at 40 CFR part 97.

In the CSAPR rulemaking, EPA determined that air pollution transported from Alabama would unlawfully affect other states' ability to attain or maintain the 1997 and 2006 PM_2.5 NAAQS and the 1997 ozone NAAQS. Alabama units meeting the CSAPR applicability criteria were consequently made subject to FIP provisions requiring participation in CSAPR federal trading programs for SO₂, annual NO_X, and ozone-season NO_X emissions. On October 26, 2015, Alabama submitted to EPA a SIP revision including provisions that, if all portions were approved, would incorporate into Alabama's SIP CSAPR state trading program regulations that would replace the CSAPR regulations for all three of these federal trading programs with regard to Alabama units for control periods in 2017 and later years. In a notice of proposed rulemaking (NPRM) published on June 28, 2016 (81 FR 41914), EPA proposed to approve portions of Alabama's October 26, 2015, SIP submittal designed to replace the CSAPR federal SO₂ and annual NO_X trading programs. EPA did not propose to take action on the portion of the SIP submittal designed to replace the federal CSAPR ozone-season NO_X 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 July 28, 2016. 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-.07 through 335-3-8-.38 (establishing Alabama's “TR NO_X Annual Trading Program”) and 335-3-5-.06 through 335-3-5-.36 (establishing Alabama's “TR SO₂ Group 2 Trading Program”), effective November 24, 2015. 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. 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).

III. Final Actions

EPA is approving the portions of Alabama's October 26, 2015, SIP submittal concerning the establishment for Alabama units of CSAPR state trading programs for annual NO_X and SO₂ emissions for compliance periods in 2017 and later years. The revision adopts into the SIP the state trading program rules codified in ADEM Administrative Code rules 335-3-8-.07 through 335-3-8-.38 (establishing Alabama's “TR NO_X Annual Trading Program”) and 335-3-5-.06 through 335-3-5-.36 (establishing Alabama's “TR SO₂ Group 2 Trading Program”). These Alabama CSAPR state trading programs will be integrated with the federal CSAPR NO_X Annual Trading Program and the federal CSAPR SO₂ Group 2 Trading Program, respectively, 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 Annual allowances for compliance periods in 2017 and later years will be determined according to the SIP's allocation provisions at Alabama rule 335-3-8-.14 instead of EPA's default allocation provisions at 40 CFR 97.411(a), 97.411(b)(1), and 97.412(a), and allocations to Alabama units of CSAPR SO₂ Group 2 allowances will be determined according to the SIP's allocation provisions at Alabama rule 335-3-5-.13 instead of EPA's default allocation provisions at 40 CFR 97.711(a), 97.711(b)(1), and 97.712(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 Annual Trading Program and the federal CSAPR SO₂ 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 and 2006 PM_2.5 NAAQS in the absence of SIP provisions addressing those requirements. Approval of the portions of Alabama's SIP submittal adopting CSAPR state trading program rules for annual NO_X and SO₂ substantively identical to the corresponding CSAPR federal trading program regulations (or differing only with respect to the allowance allocation methodology) will correct the same deficiency in the SIP that otherwise would be corrected by those CSAPR FIPs. Under the CSAPR regulations, upon EPA's full and unconditional approval of a SIP revision as correcting the SIP's deficiency that is the basis for a particular CSAPR FIP, the 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). The approval of the portions of Alabama's SIP submittal establishing CSAPR state trading program rules for annual NO_X and SO₂ emissions therefore will result in automatic termination of the obligations of Alabama units to participate in the federal CSAPR NO_X Annual Trading Program and the federal CSAPR SO₂ Group 2 Trading Program. Further, when promulgating the FIP provisions requiring Alabama units to participate in those two CSAPR trading programs, EPA found that those FIP requirements would fully satisfy Alabama's obligation pursuant to CAA section 110(a)(2)(D)(i)(I) to prohibit emissions which will significantly contribute to nonattainment or interfere with maintenance of the 1997 and 2006 PM_2.5 NAAQS in any other state. This approval of portions of Alabama's SIP revision as correcting the SIP's deficiency that was the basis for those FIP requirements therefore likewise fully satisfies the state's transport obligation with respect to the 1997 and 2006 PM_2.5 NAAQS.

As noted in EPA's NPRM, the Phase 2 SO₂ budget established for Alabama in the CSAPR rulemaking has been remanded to EPA for reconsideration. With the approval of these portions of the SIP revision as proposed, Alabama has fulfilled its obligations to provide a SIP that addresses the interstate transport provisions of CAA section 110(a)(2)(D)(i)(I) with respect to the 1997 and 2006 PM_2.5 NAAQS. Thus, EPA no longer has an obligation to (nor does EPA have the authority to) address those transport requirements through implementation of a FIP, and approval of these portions of the SIP revision eliminates Alabama units' obligations to participate in the federal CSAPR NO_X Annual Trading Program and the federal CSAPR SO₂ Group 2 Trading Program. Elimination of Alabama units' obligations to participate in the federal trading programs includes elimination of the requirements to comply with the federally-established Phase 2 budgets capping allocations of CSAPR NO_X Annual allowances and CSAPR SO₂ Group 2 allowances to Alabama units under those federal trading programs. As approval of these portions of the SIP revision eliminates requirements to comply with Alabama's remanded federally-established Phase 2 SO₂ budget and eliminates EPA's authority to subject units in Alabama to a FIP, it is EPA's opinion that finalization of approval of this SIP action addresses the judicial remand of Alabama's federally-established Phase 2 SO₂ budget.

Large electricity generating units in Alabama are subject to additional CSAPR FIP provisions requiring them to participate in the federal CSAPR NO_X Ozone Season Trading Program. While Alabama's SIP submittal also seeks to replace the CSAPR FIP requirements addressing Alabama units' ozone-season NO_X emissions, EPA is not acting on that portion of the SIP submittal at this time. Approval of this SIP revision concerning other CSAPR trading programs has no effect on any CSAPR FIP requirements applicable to Alabama units regarding ozone-season NO_X emissions.

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. Accordingly, this action merely approves state law as meeting federal requirements and does not impose additional requirements beyond those imposed by state law. For that reason, this action:

• Is not a significant regulatory action subject to review by the Office of Management and Budget under Executive Orders 12866 (58 FR 51735, October 4, 1993) and 13563 (76 FR 3821, January 21, 2011);
• 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 October 31, 2016. 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 it 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
• Air pollution control
• Incorporation by reference
• Intergovernmental relations
• Nitrogen dioxide
• Ozone
• Particulate matter
• Reporting and recordkeeping requirements
• Sulfur oxides

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 B—Alabama

2. Section 52.50(c) is amended by:

a. Adding seven new entries under “Chapter No. 335-3-5 Control of Sulfur Compound Emissions” for “335-3-5-.06”, “335-3-5-.07”, “335-3-5-.08”, “335-3-5-.11”, “335-3-5-.12”, “335-3-5-.13” and “335-3-5-.14” under each existing entry for “335-3-5-.06”, “335-3-5-.07”, “335-3-5-.08”, “335-3-5-.11”, “335-3-5-.12”, “335-3-5-.13” and “335-3-5-.14” in numerical and date order;

b. Adding in numerical order under “Chapter No. 335-3-5 Control of Sulfur Compound Emissions” new entries for “335-3-5-.09”, “335-3-5-.10”, and “335-3-5-.15” through “335-3-5-.36”;

c. Revising the title to Chapter No. 335-3-8;

d. Adding 21 new entries under “Chapter No. 335-3-8 Control of Nitrogen Oxides Emissions” for “335-3-8-.07”, “335-3-8-.08”, “335-3-8-.09”, “335-3-8-.10”, “335-3-8-.11”, “335-3-8-.12”, “335-3-8-.13”, “335-3-8-.14”, “335-3-8-.16”, “335-3-8-.17”, “335-3-8-.18”, “335-3-8-.20”, “335-3-8-.21”, “335-3-8-.23”, “335-3-8-.24”, “335-3-8-.25”, “335-3-8-.26”, “335-3-8-.27”, “335-3-8-.29”, “335-3-8-.30” and “335-3-8-.33”, under each existing entry for “335-3-8-.07”, “335-3-8-.08”, “335-3-8-.09”, “335-3-8-.10”, “335-3-8-.11”, “335-3-8-.12”, “335-3-8-.13”, “335-3-8-.14”, “335-3-8-.16”, “335-3-8-.17”, “335-3-8-.18”, “335-3-8-.20”, “335-3-8-.21”, “335-3-8-.23”, “335-3-8-.24”, “335-3-8-.25”, “335-3-8-.26”, “335-3-8-.27”, “335-3-8-.29”, “335- 3-8-.30” and “335-3-8-.33”, in numerical and date order; and

e. Adding in numerical order under “Chapter No. 335-3-8 Control of Nitrogen Oxides Emissions” new entries for “335-3-8-.15”, “335-3-8-.19”, “335-3-8-.22”, “335-3-8-.28”, “335-3-8-.31”, “335-3-8-.34”, “335-3-8-.35”, “335-3-8-.36”, “335-3-8-.37” and “335-3-8-.38”.

The additions and revision read as follows: