```

[Federal Register Volume 79, Number 91 (Monday, May 12, 2014)]
[Proposed Rules]
[Pages 26909-26922]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-10845]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R06-OAR-2014-0214; FRL-9910-77-Region 6]

Approval and Promulgation of Implementation Plans; New Mexico; 
Regional Haze and Interstate Transport Affecting Visibility State 
Implementation Plan Revisions; Withdrawal of Federal Implementation 
Plan for the San Juan Generating Station

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: The Environmental Protection Agency (EPA) is proposing to 
approve revisions to the New Mexico Regional Haze State Implementation 
Plan that address the Best Available Retrofit Technology (BART) 
requirement for oxides of nitrogen (NOX) for the Public 
Service of New Mexico (PNM) San Juan Generating Station (SJGS) in San 
Juan County, New Mexico and the New Mexico Visibility Transport SIP 
that address impacts of emissions from the SJGS, as required by the 
Federal Clean Air Act (CAA) mandate to ensure that emissions from 
sources in New Mexico do not interfere with programs in other states to 
protect visibility. In conjunction with these proposed approvals, we 
propose to withdraw the federal implementation plan (FIP) that 
addresses the NOX BART and visibility transport requirements 
for the SJGS. The EPA is taking this action under the CAA.

DATES: Comments must be received on or before June 11, 2014.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-R06-
OAR-2014-0214 by one of the following methods:
     Federal e-Rulemaking Portal: http://www.regulations.gov. 
Follow the online instructions.
     Email: feldman.michael@epa.gov.
     Mail or delivery: Mr. Guy Donaldson, Chief, Air Planning 
Section (6PD-L), Environmental Protection Agency, 1445 Ross Avenue, 
Suite 1200, Dallas, Texas 75202-2733.
    Instructions: Direct your comments to Docket No. EPA-R06-OAR-2014-
0214. Our policy is that all comments received will be included in the 
public docket without change and may be made available online at 
www.regulations.gov, including any personal information provided, 
unless the comment includes information claimed to be Confidential 
Business Information (CBI) or other information whose disclosure is 
restricted by statute. The www.regulations.gov Web site is an 
``anonymous access'' system, which means we will not know your identity 
or contact information unless you provide it in the body of your 
comment. If you send an email comment directly to us without going 
through www.regulations.gov your email address will be automatically 
captured and included as part of the comment that is placed in the 
public docket and made available on the Internet. If you submit an 
electronic comment, we recommend that you include your name and other 
contact information in the body of your comment and with any disk or 
CD-ROM you submit. If we cannot read your comment due to technical 
difficulties and cannot contact you for clarification, we may not be 
able to consider your comment. Electronic files should avoid the use of 
special characters, any form of encryption, and be free of any defects 
or viruses.
    Do not submit information that you consider to be CBI or otherwise 
protected through www.regulations.gov or email. Clearly mark the part 
or all of the information that you claim as CBI. For CBI information in 
a disk or CD ROM that you mail to EPA, mark the outside of the disk or 
CD ROM as CBI and identify electronically within the disk or CD ROM the 
specific information that is claimed as CBI. In addition to one 
complete version of the comment that includes information claimed as 
CBI, you must submit a copy of the comment that does not contain the 
information claimed as CBI for inclusion in the public docket. We will 
not disclose information so marked except in accordance with procedures 
set forth in 40 CFR part 2.
    Docket: The index to the docket for this action is available 
electronically at www.regulations.gov and in hard copy at EPA Region 6, 
1445 Ross Avenue, Suite 700, Dallas, Texas. While all documents in the 
docket are listed in the index, some information may be publicly 
available only at the hard copy location (e.g., copyrighted material), 
and some may not be publicly available at either location (e.g., CBI). 
To inspect the hard copy materials, please schedule an appointment with 
the person listed in the FOR FURTHER INFORMATION CONTACT paragraph 
below or Mr. Bill Deese at 214-665-7253.

FOR FURTHER INFORMATION CONTACT: Michael Feldman, 214-665-9793; 
feldman.michael@epa.gov.

SUPPLEMENTARY INFORMATION: 

Definitions

    For the purpose of this document, we are giving meaning to certain 
words or initials as follows:
    i. The words or initials Act or CAA mean or refer to the Clean Air 
Act, unless the context indicates otherwise.
    ii. The words EPA, we, us or our mean or refer to the United States 
Environmental Protection Agency.
    iii. The initials SIP mean or refer to State Implementation Plan.
    iv. The initials FIP mean or refer to Federal Implementation Plan.
    v. The initials RH and RHR mean or refer to Regional Haze and the 
Regional Haze Rule.
    vi. The initials NMED mean the New Mexico Environmental Department.
    vii. The initials BART mean or refer to Best Available Retrofit 
Technology.
    viii. The initials EGUs mean or refer to Electric Generating Units.
    ix. The initials NOX mean or refer to nitrogen oxides.
    x. The initials SO2 mean or refer to sulfur dioxide.
    xi. The initials H2SO4 mean or refer to sulfuric acid.
    xii. The initials PM2.5 mean or refer to particulate matter with an 
aerodynamic of less than 2.5 micrometers.
    xiii. The initials NAAQS mean or refer to the National Ambient Air 
Quality Standards.
    xiv. The initials RPOs mean or refer to regional planning 
organizations.

[[Page 26910]]

    xv. The initials WRAP mean or refer to the Western Regional Air 
Partnership.
    xvi. The initials GCVTC mean or refer to the Grand Canyon 
Visibility Transport Commission.
    xvii. The initials PNM mean or refer to the Public Service Company 
of New Mexico.
    xviii. The initials SJGS mean or refer to the San Juan Generating 
Station.
    xix. The initials SCR mean or refer to Selective Catalytic 
Reduction.
    xx. The initials SNCR mean or refer to Selective Non-Catalytic 
Reduction.
    xxi. The initials TSD mean or refer to Technical Support Document.

Table of Contents

I. Overview of Proposed Action
    A. Summary of State Submittals and EPA Actions
    B. Proposed Action on NOX BART Determination for SJGS
    C. Proposed Action on Interstate Transport Affecting Visibility
II. What is the background for our proposed actions?
    A. Requirements for Best Available Retrofit Technology
    B. The 1997 NAAQS for Ozone and PM2.5 and CAA 
110(a)(2)(D)(i)
III. Our Analysis of the State of New Mexico's Regional Haze SIP 
Revision for NOX BART
    A. New Mexico's NOX BART Determination
    B. Our Evaluation of New Mexico's NOX BART 
Determination
IV. Our Analysis of New Mexico's Interstate Visibility Transport SIP 
Provisions
V. EPA's Analysis of 110(l)
VI. EPA's Conclusions and Proposed Action
VII. Statutory and Executive Order Reviews

I. Overview of Proposed Action

A. Summary of State Submittals and EPA Actions

    The State of New Mexico adopted and transmitted an Interstate 
Transport SIP revision on September 17, 2007 for the purpose of 
addressing the ``good neighbor'' provisions of the CAA section 
110(a)(2)(D)(i) for the 1997 8-hour ozone NAAQS and the 
PM2.5 NAAQS. The EPA disapproved a portion of that SIP 
submittal addressing the requirements with respect to visibility 
transport (VT) and concurrently promulgated a FIP establishing 
enforceable NOX and SO2 emission limits for the 
SJGS on August 22, 2011. The EPA set SO2 emission limits of 
0.15 pounds per million British Thermal Units (lb/MMBtu) for the four 
units of the SJGS. The EPA set enforceable NOX emission 
limits of 0.05 lbs/MMBtu based upon the EPA's NOX BART 
determination for the SJGS, to ensure that its emissions would meet the 
``good neighbor'' requirement for visibility protection, as well as the 
requirement for NOX BART. 76 FR 52388 (August 22, 2011). The 
EPA's NOX BART emission limits can be met by the 
installation of selective catalytic reduction (SCR) at all four units 
of SJGS. Among other things, the FIP also included a sulfuric acid 
(H2SO4) emission limit to minimize the 
contribution of this pollutant to visibility impairment, since 
emissions of this pollutant can potentially increase due to operation 
of SCR. While the FIP at 49 CFR 52.1628 is currently in place, it may 
be withdrawn if the EPA approves a SIP revision addressing the RH 
requirements for NOX BART and the VT requirements for 
enforceable NOX and SO2 emission limits.
    The State of New Mexico adopted and transmitted RH SIP revisions on 
December 1, 2003 and July 5, 2011 (``2011 RH SIP revision'') that 
addressed the requirements of 40 CFR 51.309. The EPA approved all of 
the two submittals on November 7, 2012 (77 FR 70693) except for the 
submitted NOX BART determination for SJGS. We did not take 
action on this portion of the 2011 RH SIP revision because 
stakeholders, including PNM, the New Mexico Environmental Department 
(NMED), and EPA, initiated discussions on the development of a new 
alternative that, if approved, would impose new NOX BART 
requirements on SJGS and allow for withdrawal of our FIP. In a February 
22, 2013 letter, New Mexico requested that the EPA stay any agency 
review of the NOX BART portion of the 2011 RH SIP revision 
in the interest of pursuing development and a hoped-for approval of an 
alternative.
    Accordingly, New Mexico submitted RH SIP revisions on October 7, 
2013 and November 5, 2013, (``2013 RH SIP revision'') that build on the 
2011 RH SIP revision.\1\ The 2013 RH SIP revision contains a new 
NOX BART determination for the SJGS (referred to as the 
``State Alternative'' \2\). The State Alternative consists of a 
previously un-contemplated control scenario involving unit shutdowns at 
the SJGS. If fully approved by the EPA, the State Alternative 
supersedes the State's previous NOX BART determination that 
was included in the 2011 RH SIP revision. The State Alternative 
reflects the terms of the nonbinding agreement signed between the PNM, 
NMED, and EPA to address the regional haze requirements applicable to 
the SJGS. This agreement is included as Exhibit 5 of the 2013 RH SIP 
revision.\3\ The 2013 RH SIP revision also includes a preconstruction 
permit submitted on November 5, 2013 \4\ that sets a NOX 
emission limit based upon the State Alternative, compliance schedules, 
compliance deadline for shutdown of two units, and monitoring and 
testing requirements. We previously found that the 2013 RH SIP revision 
met the completeness criteria in 40 CFR Part 51, Appendix V on December 
17, 2013.\5\
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    \1\ We are acting on everything not yet acted upon in the 2011 
RH SIP revision that pertains to the 2013 NOX BART 
determination. The 2013 RH SIP revision explains that the revised, 
more recent NOX BART determination would ``supersede'' 
the 2011 NOX BART determination if EPA approves it. 
Certain NMED documents from the 2011 RH SIP revision are relevant to 
the state's 2013 conclusions regarding NOX BART, but 
other information that relates solely to the 2011 NOX 
BART determination would be moot should EPA finalize an approval as 
today proposed.
    \2\ While the descriptor alternative suffices for explaining the 
procedural setting for our review, it is not here being used as a 
regulatory term of art. In other words, we do not intend to suggest 
that the State Alternative is an ``alternative measure'' under 40 
CFR 51.308(e)(2) or that it purports to provide greater reasonable 
progress than BART.
    \3\ Term Sheet Between the U.S. Environmental Protection Agency, 
Public Service Company of New Mexico and the State of New Mexico 
(``Term Sheet''), February 15, 2013.
    \4\ NSR Technical Permit Revision, NSR Permit No. 0063-M6R3, 
November 1, 2013.
    \5\ See letter from EPA to Richard Goodyear, Bureau Chief, Air 
Quality Bureau, NMED, December 17, 2013.
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    New Mexico also adopted and submitted VT SIP revisions on July 5, 
2011 (``2011 VT SIP revision), and on October 18, 2013 and November 5, 
2013 (``2013 VT SIP revision''). The 2011 VT SIP revision, as revised 
in 2013, includes the determination that all sources in New Mexico are 
sufficiently controlled to eliminate interference with the visibility 
programs of other states. It also includes a preconstruction permit for 
the SJGS, submitted on November 5, 2013,\6\ establishing a more 
stringent SO2 emission limit as part of the State 
Alternative and a NOX emission limit reflecting the State 
Alternative.
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    \6\ NSR Technical Permit Revision, NSR Permit No. 0063-M6R3, 
November 1, 2013.
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    New Mexico has incorporated emissions limits and requirements for 
unit shutdowns into the 2013 preconstruction permit that was submitted 
as part of the SIP revisions. Specifically, as a source-specific 
requirement of the New Mexico SIP for regional haze and visibility 
transport, section A112C of the 2013 SJGS permit provides a more 
stringent SO2 emission limit as part of the State 
Alternative and a NOX emission limit reflecting the State 
Alternative. The fuller permit contains three independent scenarios 
under section A112: A, B and C. If the SIP revisions are fully approved 
by the EPA and consistent with the terms of the permit as explained in 
the background section of the permit, Scenario C

[[Page 26911]]

becomes effective and the other two scenarios are moot.

B. Proposed Action on NOX BART Determination for SJGS

    As a ``309'' state, the regulatory requirement for NOX 
BART applies to subject-to-BART sources in New Mexico via 40 CFR 
51.309(d)(4)(vii), which requires that the SIP contain ``BART 
requirements for stationary source PM and NOX emissions.'' 
\7\ We note that we approved New Mexico's BART determination for PM 
emissions from the SJGS in our final action on November 27, 2012. 77 FR 
70693. Today, we are proposing to approve New Mexico's latest 
NOX BART determination for the SJGS and are proposing to 
withdraw our FIP. Upon final approval of the 2013 RH SIP revision, the 
FIP requirements addressing regional haze, including the NOX 
and H2SO4 emission limits,\8\ may be withdrawn 
through a separate Administrator-signed final action.
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    \7\ 40 CFR 51.308(e) contains the basic regulatory requirement 
for BART.
    \8\ Since we are proposing to approve the State Alternative that 
does not include SCR operation, we are also proposing to withdraw 
the H2SO4 emission limit in the FIP as it is 
no longer necessary to protect visibility impairment from the 
facility due to emissions of H2SO4.
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C. Proposed Action on Interstate Transport Affecting Visibility

    We are also proposing to approve the 2011 Visibility Transport SIP 
revision as revised in 2013 as addressing the ``good neighbor'' 
provisions of CAA section 110(a)(2)(D)(i) for the 1997 8-hour ozone 
NAAQS and the PM2.5 NAAQS. Section 110(a)(2)(D)(i)(II) of 
the Act requires that a SIP contain provisions ``prohibiting any source 
or other type of emission activity within the state from emitting any 
air pollutant in amounts which will . . . interfere with measures 
required to be included in the applicable implementation plan for any 
other State under part C [of the CAA] to protect visibility.'' Because 
of the impacts on visibility from the interstate transport of 
pollutants, we interpret the ``good neighbor'' provisions of section 
110 of the Act as requiring states to include in their SIPs either 
measures to prohibit emissions that would interfere with the reasonable 
progress goals set to protect Class I areas in other states, or a 
demonstration that emissions from the State's sources and activities 
will not interfere with other states' visibility programs.
    We are proposing to approve the 2011 Visibility Transport SIP 
revision as revised in 2013 because it demonstrates that emissions from 
all sources in New Mexico are sufficiently controlled to eliminate 
interference with visibility programs of other states. We are proposing 
to approve the 2013 permit for SJGS on the basis that the 
SO2 and NOX emission limits for the SJGS will 
sufficiently prevent emissions from sources in New Mexico from 
interfering with the visibility programs of other states. Consistent 
with our proposed approval of the 2011 Visibility Transport SIP 
revision, as revised in 2013, we are proposing to rescind the 
provisions of the FIP that address NOX and SO2 
emissions for the SJGS for the purpose of meeting the ``good neighbor'' 
requirements of CAA section 110(a)(2)(D)(i)(II) with respect to 
visibility. Upon final approval of the 2011 Visibility Transport SIP 
revision, as revised in 2013, the FIP requirements pertaining to 
SO2 and NOX emission limits for visibility 
transport for the SJGS may be withdrawn through a separate 
Administrator-signed final action.

II. What is the background for our proposed actions?

    In the CAA Amendments of 1977, Congress established a program to 
protect and improve visibility in national parks and wilderness areas. 
See CAA section 169A. Congress amended the visibility provisions in the 
CAA in 1990 to focus attention on the problem of regional haze. See CAA 
section 169B. We promulgated regulations in 1999 to implement sections 
169A and 169B of the Act. These regulations require states to develop 
and implement SIPs to ensure reasonable progress toward improving 
visibility in mandatory Class I Federal areas (Class I areas) by 
reducing emissions that cause or contribute to regional haze.\9\ The 
final actions published at 77 FR 70693 (November 27, 2012) and 76 FR 
52388 (August 22, 2011), and their underlying proposals, contain 
complete discussions of the RHR requirements, generally, as well as the 
detailed background information on those requirements as applicable to 
states such as New Mexico that elected to submit SIPs to satisfy the 
requirements of 40 CFR 51.309, i.e., the regulations specially 
developed for certain Western states opting to address regional haze at 
Colorado Plateau Class I areas by implementing the recommendations of 
the Grand Canyon Visibility Transport Commission. The requirements for 
NOX BART and interstate transport for visibility are the 
only requirements addressed in this proposal, and other regional haze 
requirements are discussed for background purposes only.
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    \9\ See 64 FR 35714 (July 1, 1999); see also 70 FR 39104 (July 
6, 2005) and 71 FR 60612 (October 13, 2006).
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A. Requirements for Best Available Retrofit Technology

    Regional haze SIPs must assure reasonable progress towards the 
national goal of achieving natural visibility conditions in Class I 
areas. Section 169A of the CAA and our implementing regulations require 
states to establish long-term strategies for making reasonable progress 
toward meeting this goal. SIPs must also give specific attention to 
certain stationary sources that were in existence on August 7, 1977, 
but were not in operation before August 7, 1962, and require these 
sources, where appropriate, to install BART controls for the purpose of 
eliminating or reducing visibility impairment.
    Pursuant to 40 CFR 51.309(d)(4)(vii), a regional haze SIP submitted 
under the 309 program to address SO2 emissions must contain 
any necessary long-term strategies and BART requirements for PM and 
NOX. These BART determinations must be submitted pursuant to 
40 CFR 51.308(e). States are directed to conduct BART determinations 
for such sources that may be anticipated to cause or contribute to any 
visibility impairment in a Class I area. Rather than requiring source-
specific BART controls, states also have the flexibility under 40 CFR 
51.308(e)(2) to adopt an emissions trading program or other alternative 
program as long as the alternative program provides greater reasonable 
progress towards improving visibility than BART. The discussion below 
specifically applies to regional haze SIPs that opt to require BART on 
sources subject to the BART requirements, rather than satisfying the 
requirements for alternative measures that would be evaluated under 40 
CFR 51.308(e)(2).
    On July 6, 2005, the EPA published 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'') to assist 
states in determining which of their sources should be subject to the 
BART requirements and the appropriate emission limits for each 
applicable source. The BART Guidelines are not mandatory for all 
sources. However, in making a BART determination for a fossil fuel-
fired electric generating plant (EGU) with a total generating capacity 
in excess of 750 megawatts, a state must use the approach set forth in 
the BART Guidelines. See CAA section 169A(b)(2).

[[Page 26912]]

A state is encouraged, but not required, to follow the BART Guidelines 
in making BART determinations for other types of sources.
    The process of establishing BART emission limitations can be 
logically broken down into three steps: First, states identify those 
sources which meet the definition of ``BART-eligible source'' set forth 
in 40 CFR 51.301; \10\ second, states determine whether such sources 
``emit[] any air pollutant which may reasonably be anticipated to cause 
or contribute to any impairment of visibility in any such area'' (a 
source that fits this description is ``subject to BART'') and; third, 
for each source subject to BART, states identify the appropriate type 
and the level of control for reducing emissions.
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    \10\ BART-eligible sources are those sources that have the 
potential to emit 250 tons or more of a visibility-impairing air 
pollutant, were put in place between August 7, 1962 and August 7, 
1977, and whose operations fall within one or more of 26 
specifically listed source categories. See CAA section 
169A(b)(2)(A).
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    Under the BART Guidelines, states may select a visibility impact 
threshold, measured in deciviews (dv), below which a BART-eligible 
source would not be expected to cause or contribute to visibility 
impairment in any Class I area. The state must document this threshold 
in the SIP and state the basis for its selection of that value. Any 
source with visibility impacts that model above the threshold value 
would be subject to a BART determination review. The BART Guidelines 
acknowledge varying circumstances affecting different Class I areas. 
States should consider the number of emission sources affecting the 
Class I areas at issue and the magnitude of the individual sources' 
impacts. Any visibility impact threshold set by the state should not be 
higher than 0.5 dv. See 40 CFR part 51, app. Y, section III.A.1.
    The BART Guidelines establish the dv as the principal metric for 
measuring visibility. Id. This visibility metric expresses uniform 
changes in visibility impairment in terms of common increments across 
the entire range of visibility conditions, from pristine to extremely 
hazy conditions. Visibility is sometimes expressed in terms of the 
visual range which is the greatest distance, in kilometers or miles, at 
which a dark object can just be distinguished against the sky. The dv 
is a more useful measure for tracking progress in improving visibility 
because each dv change is an equal incremental change in visibility 
perceived by the human eye.
    In their SIPs, states must identify subject-to-BART sources and 
document their BART control determination analyses. In making BART 
determinations, section 169A(g)(2) of the CAA requires that states 
consider the following factors: (1) The costs of compliance; (2) the 
energy and non-air quality environmental impacts of compliance; (3) any 
existing pollution control technology in use at the source; (4) the 
remaining useful life of the source; and (5) the degree of improvement 
in visibility which may reasonably be anticipated to result from the 
use of such technology. States are free to determine the weight and 
significance to be assigned to each factor.
    A regional haze SIP must include source-specific BART emission 
limits and compliance schedules for each source subject to BART. Once a 
state has made its BART determination, the BART controls must be 
installed and operated as expeditiously as practicable, but no later 
than five years after the date of the EPA approval of the regional haze 
SIP. CAA section 169(g)(4); 40 CFR 51.308(e)(1)(iv). In addition to 
what is required by the RHR, general SIP requirements mandate that the 
SIP must also include all regulatory requirements related to 
monitoring, recordkeeping, and reporting for the BART controls on the 
source. See CAA section 110(a).
    Pursuant to 40 CFR 51.309(d)(4)(vii), the 2013 RH SIP revision 
contains an enforceable NOX BART determination. We had 
previously promulgated a FIP that included NOX emission 
limits of 0.05 lb/MMBtu on each of the four units at SJGS to address 
both the requirements of CAA section 110(a)(2)(D)(i)(II) and the 
NOX BART requirements of CAA section 169A and the Regional 
Haze Rule. The FIP also included emission limits for 
H2SO4, which were established to minimize the 
contribution of this pollutant to visibility impairment in light of 
potential increases in emissions due to operation of SCR.

B. The 1997 NAAQS for Ozone and PM2.5 and CAA 110(a)(2)(D)(i)

    On August 15, 2006, we issued our ``Guidance for State 
Implementation Plan (SIP) Submissions to Meet Current Outstanding 
Obligations Under Section 110(a)(2)(D)(i) for the 8-Hour Ozone and 
PM2.5 National Ambient Air Quality Standards'' (2006 
Guidance). We developed the 2006 Guidance to make recommendations to 
states for making submissions to meet the requirements of CAA section 
110(a)(2)(D)(i) for the 1997 8-hour ozone standards and the 1997 
PM2.5 standards.
    As identified in the 2006 Guidance, the ``good neighbor'' 
provisions in section 110(a)(2)(D)(i) of the CAA require each state to 
submit a SIP that prohibits emissions that adversely affect another 
state in the ways contemplated in the statute. Section 110(a)(2)(D)(i) 
contains four distinct requirements related to the impacts of 
interstate transport. The SIP must prevent sources in the state from 
emitting pollutants in amounts which will: (1) Contribute significantly 
to nonattainment of the NAAQS in other states; (2) interfere with 
maintenance of the NAAQS in other states; (3) interfere with provisions 
to prevent significant deterioration of air quality in other states; or 
(4) interfere with efforts to protect visibility in other states. In 
this action, we only address the fourth element regarding visibility.
    The 2006 Guidance stated that states may make a simple SIP 
submission confirming that it is not possible at that time to assess 
whether there is any interference with measures in the applicable SIP 
for another state designed to ``protect visibility'' for the 8-hour 
ozone and PM2.5 NAAQS until regional haze SIPs were 
submitted and approved. Regional haze SIPs were required to be 
submitted by December 17, 2007. 40 CFR 51.308(b).
    Although we received a SIP revision from New Mexico on September 
17, 2007, to meet the requirements of section 110(a)(2)(D)(i), a 
portion of which addressed the fourth element regarding interference 
with the programs of other states to protect visibility, we disapproved 
this portion of the SIP revision for the reasons discussed in our final 
action published on August 22, 2011. 76 FR 52389. That action 
concurrently promulgated a FIP requiring SO2 and 
NOX emission limits for the SJGS to prevent interference 
with programs to protect visibility in other states and finalized a 
determination that, at that time, no additional controls on any other 
sources were necessary.

III. Our Analysis of the State of New Mexico's Regional Haze SIP 
Revision for NOX BART

    The following discussion evaluates the 2013 RH SIP revision 
intended to address the requirements of 40 CFR 51.309(d)(4)(vii) for 
the implementation of NOX BART at SJGS. The BART evaluation 
process consists of three components: (1) An identification of all 
BART-eligible sources, (2) an assessment of whether those BART-eligible 
sources are in fact subject to BART and (3) a determination of any BART 
controls. In our prior review and action on the 2011 RH SIP revision, 
we agreed with New Mexico's identification

[[Page 26913]]

of sources that are BART-eligible and subject to BART, including Units 
1, 2, 3, and 4 of the SJGS. 77 FR 70693 (November 27, 2012). We 
approved the State's PM BART determinations and emission limits for 
these units, as well as the State's participation in the SO2 
emission reduction milestones and backstop trading program, while 
taking no action on the State's NOX BART determinations and 
emission limits for these units. The State's conclusions were also 
consistent with the determinations that the EPA made in the course of 
promulgating its FIP for the SJGS. In that final action we found that 
units 1, 2, 3, and 4 of the SJGS comprise the only New Mexico source 
subject to BART. 77 FR 70693 (November 27, 2012). The focus of our 
current review is on the third component--the determination of 
NOX BART controls for these units.
    The BART Guidelines \11\ describe the BART analysis as consisting 
of the following five basic steps:
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    \11\ 70 FR 39164.
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     Step 1: Identify All Available Retrofit Control 
Technologies,
     Step 2: Eliminate Technically Infeasible Options,
     Step 3: Evaluate Control Effectiveness of Remaining 
Control Technologies,
     Step 4: Evaluate Impacts and Document the Results, and
     Step 5: Evaluate Visibility Impacts.
    The SJGS consists of four coal-fired generating units and 
associated support facilities. Each coal-fired unit burns pulverized 
coal and No. 2 diesel oil (for startup) in a boiler, and produces high-
pressure steam that powers a steam turbine coupled with an electric 
generator. Electric power produced by the units is supplied to the 
electric power grid for sale. Coal for the units is supplied by the 
adjacent San Juan Mine. Units 1 and 2 have a unit capacity of 350 and 
360 MW, respectively. Units 3 and 4 each have a unit capacity of 544 
MW.
    In June 2007, the operator of the SJGS, PNM, submitted its 
NOX BART evaluation to NMED. That analysis was added to and 
revised multiple times to incorporate new information or in response to 
comments/requests from the NMED \12\ for additional visibility modeling 
analyses, control technology considerations, and cost analyses.\13\ 
PNM's April 2013 BART Analysis addendum \14\ (referred to hereafter as 
the ``2013 PNM report'') is an addendum and update to the 2007 
evaluation and subsequent revisions. This analysis adds to and updates 
the previous analyses and considers a new scenario not previously 
evaluated.
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    \12\ Correspondence between PNM and NMED concerning these BART 
analyses is contained in NMED Exhibit 6 of the 2011 RH SIP revision.
    \13\ PNM's 2007 BART analysis and subsequent analyses are 
Exhibit 7a through 7t of the NMED's 2011 RH SIP revision.
    \14\ Public Service of New Mexico, Best Available Retrofit 
Technology Analysis, Addendum, April 1, 2013, submitted as Exhibit 6 
of the 2013 RH SIP revision
---------------------------------------------------------------------------

    The 2013 RH SIP revision under review in this action builds upon 
the 2011 RH SIP revision and its supporting BART analyses, and examines 
a new control scenario including unit shutdowns not previously 
analyzed. For purposes of reviewing projected visibility benefits and 
cost-effectiveness, this scenario, called the State Alternative, is 
compared to the control scenario in the FIP (SCR on all four units) and 
the State's 2011 NOX BART determination (selective non-
catalytic reduction (SNCR) on all four units). The State Alternative 
differs from the NOX BART emission limit of 0.05 lb/MMBtu in 
the FIP (which can be met by the installation of SCR on all four units) 
and the State's earlier submitted, superseded (if the 2013 RH SIP 
revision is fully approved) determination of 0.23 lb/MMBtu (which can 
be met by installation of SNCR on all four units). The State 
Alternative contains several elements, including among other things, 
the installation of SNCR on Units 1 and 4 and enforceable deadlines by 
which Units 2 and 3 will be permanently retired. The emission 
reductions, visibility improvements, and additional non-air quality 
environmental benefits due to the unit shutdowns were an important 
consideration in New Mexico's selection of the State Alternative as 
NOX BART for the SJGS. More specifically, the 2013 RH SIP 
revision requires the following:
     Fifteen (15) months after the EPA final approval of the 
2013 RH SIP revision, but no earlier than January 31, 2016, the PNM 
will complete installation of SNCR technology on the SJGS Units 1 and 4 
and meet an emission limit of 0.23 lb/MMBtu on a rolling 30-day average 
basis; \15\
---------------------------------------------------------------------------

    \15\ The permit conditions at A112C specify the averaging time 
and calculation methodology for the enforceable emission limit for 
NOX on Units 1 and 4 of 0.23 lb/MMBtu on a boiler 
operating day basis, averaged across the two units.
---------------------------------------------------------------------------

     Retirement of the SJGS Units 2 and 3 by December 31, 2017;
     The PNM will commence a program of testing and evaluation, 
after the installation of SNCRs, to determine if additional 
NOX emission reductions can be achieved. The Testing 
Program, consisting of SNCR performance testing, fuel performance 
testing, and long-term performance evaluation, must be completed no 
later than January 31, 2017.\16\
---------------------------------------------------------------------------

    \16\ Unless the long-term performance evaluation is delayed due 
to a delay in the EPA approval or per the language in the Term Sheet 
at paragraph 1(d)(iv) concerning the evaluation period spanning the 
required number of days during both the summer and winter months.
---------------------------------------------------------------------------

    In accordance with section 169A of the CAA, the RHR, and the BART 
Guidelines, New Mexico weighed the five statutory factors in making its 
NOX BART determination. New Mexico's final evaluation is 
available in the revised Chapter 10 and Appendix D of the 2013 RH SIP 
revision. We note that the State Alternative also results in additional 
reductions in the emissions of SO2 on Units 1 and 4. These 
SO2 emission reductions occur separately and apart from the 
SO2 backstop trading program that the EPA has already 
approved as satisfying SO2 BART. These SO2 
reductions will result in increased visibility improvement, and result 
in permitted emissions substantially below the level needed to prevent 
SO2 emissions from New Mexico from interfering with the 
visibility programs of other States, as discussed in our review of the 
State's 2013 Visibility Transport SIP revision below.

A. New Mexico's NOX BART Determination

    In promulgating our FIP, we drew heavily upon the analyses prepared 
by the NMED and PNM that were available at the time. While we agreed 
with some conclusions presented in those analyses, we also disagreed 
with a number of points that are outlined in the proposed and final FIP 
Federal Register notices. 76 FR 491 (January 5, 2011) and 76 FR 52388 
(August 22, 2011). The BART review of the State Alternative in the 2013 
RH SIP revision examines a new control scenario, the State Alternative, 
and compares it to the control scenarios in the FIP and the 2011 RH SIP 
revision. As explained above, the State Alternative is a new control 
scenario proposed by the PNM in coordination with the State that 
includes the shutdown of two units at the SJGS by December 31, 2017. 
Consequently, this control scenario is different than the control 
scenarios contemplated in the FIP and the 2011 RH SIP revision. 
Although the EPA's regulations do not require states to consider a fuel 
switch or a shutdown of an existing unit as part of their BART 
analyses, a state may include such options in its analysis where a 
company voluntarily offers such measures as a strategy for reducing 
emissions.

[[Page 26914]]

i. Identification of All Available Retrofit Emission Control 
Technologies
    The SJGS currently has low-NOX burners (LNB) with 
overfire air (OFA) and a neural network to reduce NOX 
emissions and comply with a 2005 consent decree \17\ emission limit of 
0.30 lb NOX/MMBtu on a daily rolling 30-day average basis. 
To address step 1 of the BART analysis, New Mexico identified a number 
of potentially available NOX control technologies, including 
SNCR, SCR, SNCR/SCR Hybrid, Natural Gas Reburn, Nalco Mobotec ROFA and 
Rotamix, NOXStar, ECOTUBE, PowerSpan ECO, Phenix Clean 
Combustion, and e-SCRUB.
---------------------------------------------------------------------------

    \17\ Consent Decree in The Grand Canyon Trust and Sierra Club, 
Plaintiffs, The State of New Mexico, Plaintiff-Intervenor, v. Public 
Service Company of New Mexico, Defendant, (CV 02-552BB/ACT (ACE)), 
lodged in the United States District Court, District of New Mexico, 
on March 10, 2005, at 15-16.
---------------------------------------------------------------------------

ii. Elimination of Technically Infeasible Options
    To address step 2 of the BART analysis, New Mexico determined that 
the following potentially available NOX control technologies 
are not technically feasible: Natural Gas Reburn, NOXStar, 
ECOTUBE, PowerSpan ECO, Phenix Clean Combustion, and e-SCRUB. This 
conclusion is consistent with our own analysis in development of the 
FIP. New Mexico concluded that SCR, SNCR, SNCR/SCR Hybrid, and Nalco 
Mobotec ROFA and Rotamix are technically feasible control options for 
the SJGS units.
iii. Evaluation of Control Effectiveness of Remaining Control 
Technologies
    Step 3 of the BART analysis requires the evaluation of the control 
effectiveness of the remaining control technologies. Table 1 shows the 
control effectiveness of each remaining control technology in New 
Mexico's BART analysis, based on a baseline emission rate of 0.30 lb/
MMBtu. In its 2011 RH SIP revision, New Mexico revised the achievable 
controlled emission rate of SNCR from its earlier analysis of 0.24 lb/
MMBtu to 0.23 lb/MMBtu, based on tests and an updated performance 
guarantee from the vendor.\18\ New Mexico previously evaluated SCR at 
an emission rate of 0.07 lb/MMBtu and a control efficiency of 77%.\19\ 
In its 2013 RH SIP revision, however, New Mexico revised its evaluation 
of SCR, concluding that at an emission rate of 0.05 lb/MMBtu and a 
control efficiency of 83% are achievable, consistent with our own 
evaluation in the FIP.
---------------------------------------------------------------------------

    \18\ Public Service Company of New Mexico, San Juan Generating 
Station, Revised SNCR Analysis, February 11, 2011 (2011 NM RH SIP, 
NMED Ex. 7t).
    \19\ As we discuss in our FIP regarding NOX BART for 
the SJGS, we found that SCRSCRSCR is capable of achieving an 
emission limit of 0.05 lbs/MMBtu on each of the units of the SJGS, 
based on a 30 boiler operating day average. 76 FR 52388.

    Table 1--New Mexico's determination of NOX Control Effectiveness
------------------------------------------------------------------------
                                                           Controlled
         Control technology                Control        emission rate
                                       efficiency  (%)     (lb/MMBtu)
------------------------------------------------------------------------
ROFA................................                13              0.26
Rotamix (SNCR)......................                23              0.23
SNCR................................                23              0.23
ROFA/Rotamix........................                33              0.20
SCR/SNCR Hybrid.....................                40              0.18
SCR.................................                83              0.05
------------------------------------------------------------------------

iv. Evaluation of Impacts and Documentation of Results
    The BART Guidelines require that the cost of compliance, energy 
impacts, non-air quality environmental impacts, and remaining useful 
life of the facility be analyzed for each potential control technology 
in step 4. Table 2, which is found as Table 10 of the revised Appendix 
D of the 2013 RH SIP revision, summarizes the unit specific cost 
analysis results submitted to the NMED by PNM. The control 
effectiveness for SCR and SNCR in this analysis have been updated and 
the costs of these two options have also been revised to reflect more 
recent cost information submitted by the PNM \20\ to NMED for 
evaluation. The costs associated with ROFA, ROFA/Rotamix and Rotamix 
are based on the 2008 vendor quotes \21\ and later adjusted to 2010 
dollars.\22\ The cost of sorbent injection is included in the cost 
analysis for SCR.\23\ We note that costs for SCR and SNCR options are 
in 2013 dollars and annualized over 30 years, while all remaining 
control options are in 2010 dollars and annualized over 20 years. 
Because the rate of inflation between 2013 and 2010 was minimal (1.07 
percent), the costs are comparable.
---------------------------------------------------------------------------

    \20\ Best Available Retrofit Technology Analysis Addendum, 
Public Service of New Mexico, April 1, 2013, submitted as Exhibit 6 
of the 2013 RH SIP revision
    \21\ PNM San Juan Generating Station BART Analysis of Nalco 
Mobotec NOX Control Technologies, August 29, 2008. NMED 
Exhibit 7n of the 2011 RH SIP revision
    \22\ PNM San Juan Generating Station BART Analysis Update, 
February 11, 2011. NMED exhibit 7t of the 2011 RH SIP revision
    \23\ Table 2 was constructed by PNM to incorporate costs due to 
sorbent injection, as a means of SO3 control in 
conjunction with SCR. This was done by PNM in response to a request 
by NMED. As NMED notes in its BART analysis, it understands there 
are SCR catalysts now on the market that are capable of a much 
smaller SO2 to SO3 conversion. Furthermore, 
our analysis contained in the TSD to the FIP and the FIP indicate 
that anticipated SO3 emissions to be much lower than 
estimated by PNM and finds that sorbent injection is not necessary. 
The TSD for our FIP, ``Visibility Modeling for BART Determination: 
San Juan Generating Station, New Mexico,'' and the proposed and 
final FIP are available in the docket to our FIP and also included 
in the docket for this action.

[[Page 26915]]

                                                Table 2--New Mexico's Analysis of the Impacts and Cost-Effectiveness of NOX Control Technologies
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                        Total  capital       Total                           Incremental
                                                                   Emission       NOX          NOX         investment     annualized          Cost              cost          Energy    Non-air
                       Control technology                         limit  lb/   emissions    reduction        (TCI)        cost (TAC)      effectiveness   effectiveness ($/  impacts    impacts
                                                                    MMBtu        (tpy)        (tpy)        (1,000$)        (1,000$)          ($/ton)            ton)         (1,000$)   (1,000$)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                             Unit 1
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
SCR + sorbent..................................................         0.05          690        3,450         180,862          22,165             6,425             6,749        746     \1\ NA
SNCR/SCR Hybrid................................................         0.18        2,484        1,656         110,683          16,816            10,154            35,917        706      1,762
ROFA/Rotamix...................................................         0.20        2,760        1,380          30,790           6,902             5,001             7,982      1,413          3
Rotamix (SNCR).................................................         0.23        3,174          966          11,822           3,597             3,723               116         51          4
SNCR...........................................................         0.23        3,174          966          17,392           5,400             5,590                80         43     \1\ NA
ROFA...........................................................         0.26        3,588          552          19,256           3,549             6,429  ................      1,363     \1\ NA
Consent Decree.................................................         0.30        4,140        1,254          14,580           1,422             1,134                NA        NA1     \1\ NA
Pre-CD.........................................................         0.43        5,394           NA              NA              NA                NA                NA         NA     \1\ NA
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                             Unit 2
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
SCR + sorbent..................................................         0.05          687        3,433         203,360          24,562             7,157             7,755        729     \1\ NA
SNCR/SCR Hybrid................................................         0.18        2,471        1,648         115,151          17,306            10,503            37,887        346      1,762
ROFA/Rotamix...................................................         0.20        2,746        1,373          30,790           6,902             5,027             8,024      1,413          3
Rotamix (SNCR).................................................         0.23        3,158          961          11,822           3,597             3,742               117         51          4
SNCR...........................................................         0.23        3,158          961          17,392           5,400             5,618                80         43     \1\ NA
ROFA...........................................................         0.26        3,570          549          19,256           3,549             6,462  ................      1,363     \1\ NA
Consent Decree.................................................         0.30        4,119        2,060          14,126           1,378               669                NA     \1\ NA     \1\ NA
Pre-CD.........................................................         0.45        6,179           NA              NA              NA                NA                NA         NA     \1\ NA
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                             Unit 3
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
SCR + sorbent..................................................         0.05        1,072        5,359         264,208          32,585             6,080             6,313      1,107     \1\ NA
SNCR/SCR Hybrid................................................         0.18        3,859        2,572         178,759          26,604            10,342            39,171        507      2,658
ROFA/Rotamix...................................................         0.20        4,287        2,144          35,724           9,810             4,576             7,498      2,810          5
Rotamix (SNCR).................................................         0.23        4,931        1,501          13,919           4,988             3,324              -378         84          5
SNCR...........................................................         0.23        4,931        1,501          17,163           8,224             5,480              -578         51     \1\ NA
ROFA...........................................................         0.26        5,574          857          22,081           5,231             6,100  ................      2,725     \1\ NA
Consent Decree.................................................         0.30        6,431        2,573          12,715           1,240               482                NA     \1\ NA     \1\ NA
Pre-CD.........................................................         0.42        9,004           NA              NA              NA                NA                NA         NA     \1\ NA
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                             Unit 4
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
SCR + sorbent..................................................         0.05        1,052        5,257         235,940          29,508             5,613             5,623      1,102     \1\ NA
SNCR/SCR Hybrid................................................         0.18        3,786        2,524         171,412          25,808            10,226            38,034        507      2,658
ROFA/Rotamix...................................................         0.20        4,206        2,103          35,724           9,810             4,664             7,643      2,810          5
Rotamix (SNCR).................................................         0.23        4,837        1,472          13,919           4,988             3,388              -385         84          5
SNCR...........................................................         0.23        4,837        1,472          17,163           8,224             5,587              -590         51     \1\ NA
ROFA...........................................................         0.26        5,468          841          22,081           5,231             6,218  ................      2,725     \1\ NA
Consent Decree.................................................         0.30        6,309        2,524          12,870           1,256               498                NA     \1\ NA     \1\ NA
Pre-CD.........................................................         0.42        8,833           NA              NA              NA                NA                NA         NA     \1\ NA
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ PNM performed an impact analysis for these technologies and incorporated any monetized energy or non-air environmental impacts into the cost analysis.

    The 2013 RH SIP revision includes a new analysis to inform the 
State's BART determination and its weighing of the statutory factors 
for BART. This analysis contemplates three scenarios, SCR on all four 
units, SNCR on all four units, and the State Alternative, which 
includes unit shutdowns and SNCR on the remaining operating units. 
Table 3 summarizes the cost and impact analysis of the three scenarios 
and relies on aggregating the unit costs, as appropriate, from Table 2. 
The remaining useful life of the units with installed control 
technologies (units not being retired) was determined to be 30 years 
and therefore, the statutory factor of the remaining useful life of the 
source does not weigh in favor of any option over another. New Mexico 
estimated the cost-effectiveness of the State Alternative at $1,049/ton 
compared to $6,218/ton for the four SCR scenario, and $5,561/ton for 
the four SNCR scenario.

                         Table 3--New Mexico's Analysis of the Impacts and Cost-Effectiveness of the Three NOX Control Scenarios
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                             Total
                                         NOX  emission  NOX  emissions   NOX  emission  Total  capital    annualized          Cost            Energy
           Control scenario                  level           (TPY)         reduction       investment     cost  (TAC)   effectiveness ($/     impacts
                                                                             (TPY)      (TCI)  (1000$)      (1000$)           ton)
--------------------------------------------------------------------------------------------------------------------------------------------------------
SCR All Units (FIP)
--------------------------------------------------------------------------------------------------------------------------------------------------------
SJGS 1-SCR............................            0.05             690           3,450         180,862          22,165             6,425             746
SJGS 2-SCR............................            0.05             687           3,433         180,862          24,562             7,157             729
SJGS 3-SCR............................            0.05           1,072           5,359         264,208          32,585             6,080           1,107
SJGS 4-SCR............................            0.05           1,052           5,258         235,940          29,508             5,613           1,102
                                       -----------------------------------------------------------------------------------------------------------------

[[Page 26916]]

 
    Total.............................  ..............           3,500          17,500         861,871         108,820             6,218           3,683
--------------------------------------------------------------------------------------------------------------------------------------------------------
SNCR All Units (State's 2011 BART Determination)
--------------------------------------------------------------------------------------------------------------------------------------------------------
SJGS 1-SNCR...........................            0.23           3,174             966          17,392           5,400             5,590              43
SJGS 2-SNCR...........................            0.23           3,158             961          17,392           5,400             5,618              43
SJGS 3-SNCR...........................            0.23           4,931           1,501          17,163           8,224             5,480              51
SJGS 4-SNCR...........................            0.23           4,837           1,472          17,163           8,224             5,587              51
                                       -----------------------------------------------------------------------------------------------------------------
    Total.............................  ..............          16,100           4,900          69,111          27,248             5,561             187
--------------------------------------------------------------------------------------------------------------------------------------------------------
SNCR Units 1&4 (State Alternative)
--------------------------------------------------------------------------------------------------------------------------------------------------------
SJGS 1-SNCR...........................            0.23           3,174             966          17,392           5,400             5,590              43
SJGS 2-retire.........................             n/a             n/a           4,119             n/a             n/a               n/a             n/a
SJGS 3-retire.........................             n/a             n/a           6,431             n/a             n/a               n/a             n/a
SJGS 4-SNCR...........................            0.23           4,837           1,472          17,163           8,224             5,587              51
                                       -----------------------------------------------------------------------------------------------------------------
    Total.............................  ..............           8,011          12,989          34,556          13,624             1,049              94
--------------------------------------------------------------------------------------------------------------------------------------------------------

    New Mexico also examined the energy and non-air quality 
environmental impacts of the three scenarios. Compared to current 
operations and the four SCR and four SNCR scenarios, the State 
Alternative results in:
     Up to a 53% decrease in water usage at the facility (from 
21,000 acre-feet to 10,161 acre-feet);
     A wastewater generation reduction of up to 50%;
     Reduced energy and non-air quality environmental impacts 
from decreased raw material usage and resource savings, including 
reduced limestone mining, diesel refining, carbon activation, and coal 
mining associated with operations at SJGS; \24\ and
---------------------------------------------------------------------------

    \24\ Table 23 of Appendix D of the 2013 RH SIP revision 
quantifies the reduction in raw material usage.
---------------------------------------------------------------------------

     50% reduction in solid waste (from 1.71 million tons per 
year to 854,130 tons per year).
    New Mexico determined that these energy and non-air quality 
environmental benefits weighed heavily in favor of the State 
Alternative over the four SCR and four SNCR scenarios. In addition to 
the energy and non-air quality environmental benefits outlined above, 
New Mexico noted that the State Alternative will also result in a 
substantial decrease in PM emissions from coal processing, handling, 
and transportation, as well as reductions in greenhouse gas emissions, 
mercury and other hazardous air pollutant emissions, and acid gas 
emissions from the facility.
v. Evaluation of Visibility Impacts
    The final factor to consider in the BART analysis is the degree of 
visibility improvement anticipated to result from the BART control 
options. As part of its 2011 RH SIP revision, New Mexico submitted the 
initial and revised visibility modeling performed by PNM \25\ for the 
SJGS that included modeled visibility impacts at the sixteen Class I 
Areas within 300 km of the facility. For a detailed description and our 
review of this modeling, see the Technical Support Document (TSD) that 
accompanied the proposed FIP (referred to as the ``2011 EPA TSD'').\26\ 
In this earlier analysis, SCR was modeled at an emission rate of 0.07 
lb/MMBtu.
---------------------------------------------------------------------------

    \25\ PNM's 2007 BART analysis and subsequent analyses are 
contained in NMED Exhibits 7a through 7t of the 2011 RH SIP 
revision.
    \26\ Technical Support Document, Visibility Modeling for BART 
Determination: San Juan Generating Station, New Mexico, EPA Region 
6. Docket No. EPA-R06-OAR-2010-0846 and available in the docket for 
this action.
---------------------------------------------------------------------------

    The PNM submitted an updated visibility analysis (see Exhibit 6 of 
the 2013 RH SIP revision) to New Mexico for evaluation that included 
revised emission rates for SO2, and 
H2SO4, and a revised background ammonia 
concentration of 1 ppb. The background ammonia concentration of 1 ppb 
is consistent with the background ammonia concentration used in our 
earlier modeling analysis and detailed in the 2011 EPA TSD. The 
SO2 emission rate for the four SCR and four SNCR control 
scenarios was updated to 0.15 lb/MMBtu, consistent with the EPA 
modeling in support of the FIP, reflective of the emission rate 
determined by the EPA in its August 22, 2011, final action to be 
necessary to satisfy the CAA's visibility transport requirements, and 
set in the submitted 2011 VT SIP revision. The SO2 emission 
rate for the State Alternative was updated to reflect the more 
stringent SO2 limit that results from implementation of the 
State Alternative.\27\ The H2SO4 modeled emission 
rates were revised to be consistent with the estimated current emission 
rates calculated by the EPA and detailed in the 2011 EPA TSD. The 2013 
analysis used the same modeling protocol followed by the EPA in support 
of the FIP and detailed in the 2011 EPA TSD. This modeling compared the 
three control scenarios mentioned above. These modeling scenarios are 
summarized in Table 21 of Appendix D of the 2013 RH SIP revision. A 
description of the modeling protocol used for both the analyses can be 
found in Appendix D of the 2013 RH SIP revision beginning at page 19. A 
summary of visibility modeling inputs for both analyses can be found in 
Tables 16 through 19 of Appendix D and in section 7.6 of Exhibit 6 of 
the 2013 RH SIP revision. The visibility modeling protocol and model 
inputs are also summarized in the 2014 EPA TSD.\28\
---------------------------------------------------------------------------

    \27\ We note that the emission limit for SO2 of 0.10 
lb/MMBtu for Units 1 and 4 is effective as of March 5, 2014.
    \28\ Technical Support Document for the PNM BART Revision to the 
New Mexico Regional Haze State Implementation Plan and Federal 
Implementation Plan, April 2014. (2014 EPA TSD).

---------------------------------------------------------------------------

[[Page 26917]]

    Table 4 below shows the results of New Mexico's visibility 
modeling. This modeling summary depicts the visibility improvement for 
the 98th percentile \29\ of modeled results over the baseline for each 
control scenario. In comparing the four-SCR scenario to the State 
Alternative, the largest average difference over three years is 0.47 dv 
at Mesa Verde, 0.24 dv at Canyonlands, and 0.13 dv at Weminuche. The 
average difference at the 13 other Class I areas is less than 0.1 dv 
between the two control scenarios.
---------------------------------------------------------------------------

    \29\ The visibility analysis focuses on the 98th percentile of 
modeled results to avoid giving undue weight to any extreme results. 
See 70 FR 39121.

                         Table 4--Modeled Average Visibility Improvement of the 98th Percentile Delta-dv Impacts From 2001-2003
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                     Improvement over baseline                              Improvement
                                                            Distance to  ------------------------------------------------ Improvement of  of 4 SCR  over
                      Class I area                          SJGS  (km)                                         State       4 SCR over 4        State
                                                                               4 SCR          4 SNCR        alternative        SNCR         alternative
--------------------------------------------------------------------------------------------------------------------------------------------------------
Arches..................................................             222            1.30            0.48            1.23            0.82            0.07
Bandelier Wilderness....................................             210            0.77            0.28            0.78            0.49           -0.01
Black Canyon of the Gunnison Wilderness.................             203            0.77            0.28            0.72            0.49            0.05
Canyonlands.............................................             170            2.02            0.64            1.78            1.38            0.24
Capitol Reef............................................             232            0.70            0.25            0.74            0.45           -0.04
Grand Canyon............................................             285            0.30            0.10            0.34            0.20           -0.04
Great Sand Dunes National Monument......................             269            0.77            0.29            0.74            0.48            0.03
La Garita Wilderness....................................             169            1.01            0.37            0.95            0.64            0.06
Maroon Bells-Snowmass Wilderness........................             271            0.35            0.13            0.35            0.22            0.00
Mesa Verde..............................................              40            2.91            0.61            2.44            2.30            0.47
Pecos Wilderness........................................             248            0.68            0.24            0.69            0.44           -0.01
Petrified Forest........................................             213            0.26            0.11            0.29            0.15           -0.03
San Pedro Parks Wilderness..............................             155            1.38            0.47            1.29            0.91            0.09
West Elk Wilderness.....................................             216            0.87            0.31            0.79            0.56            0.08
Weminuche Wilderness....................................              98            1.55            0.47            1.42            1.08            0.13
Wheeler Peak Wilderness.................................             258            0.64            0.25            0.67            0.39           -0.03
--------------------------------------------------------------------------------------------------------------------------------------------------------

    In accordance with section 169A of the CAA, the RHR, and the BART 
Guidelines, New Mexico weighed the five statutory factors in comparing 
the State Alternative against the four-SCR and four-SNCR control 
scenarios. New Mexico concluded that the State Alternative results in 
significant visibility benefits that are comparable to the four-SCR 
scenario of the FIP and much greater than the four-SNCR scenario, while 
also reducing overall energy and non-air quality environmental impacts 
at a much lower capital expenditure, annualized costs, and average 
cost-effectiveness. As a result, New Mexico selected the State 
Alternative as BART. New Mexico determined that the schedule provided 
in the 2013 RH SIP revision will result in the implementation of BART 
as expeditiously as practicable, as required under 40 CFR 
51.308(e)(1)(iv). New Mexico selected a NOX BART emission 
limit, achievable through installation and operation of an SNCR 
retrofit on Units 1 and 4 and the shutdown of units 2 and 3, which can 
be found in the preconstruction permit at A112C. In accordance with the 
Term Sheet, the permit requires:
     Fifteen (15) months after the EPA final approval of the 
SIP revision, but no earlier than January 31, 2016, the PNM will 
complete installation of SNCR technology on the SJGS Units 1 and 4 and 
comply with an average nitrogen oxide (NOX) emission limit 
for Units 1 and 4 of 0.23 lb/MMBtu on a daily rolling 30-day average 
basis.
     Retirement of SJGS Units 2 and 3 by December 31, 2017.

B. Our Evaluation of New Mexico's NOX BART Determination

    The FIP that became effective on September 21, 2011 previously 
established NOX BART for SJGS at the emission rate of 0.05 
lb/MMBtu on a 30 boiler operating day average, achievable through 
installation and operation of an SCR retrofit on all four units (76 FR 
52388; August 22, 2011).\30\ At the outset, we note that the 
NOX BART determination for the SJGS that was submitted by 
New Mexico to replace the FIP cannot be disapproved solely on the basis 
that it differs from the determination established in the FIP. The CAA 
defines a FIP as ``a plan (or portion thereof) promulgated by the 
Administrator to fill all or a portion of a gap or otherwise correct 
all or a portion of an inadequacy in a [SIP].'' CAA section 302(y). 
Because a FIP is intended as a gap-filling measure, the EPA encourages 
states to submit approvable SIP revisions that correct the deficiencies 
that a given FIP remedied. Such a SIP revision need not adopt the same 
suite of control options and techniques as the EPA's FIP, nor does it 
necessarily have to be as stringent as the EPA's FIP in all instances. 
Rather, when a State submits a SIP revision to the EPA with the 
intention of replacing a FIP, the EPA must approve the SIP revision so 
long as the SIP revision does not ``interfere with any applicable 
requirement concerning attainment and reasonable further progress . . . 
or any other applicable requirement of [the Act].'' CAA section 110(l). 
In regards to regional haze SIPs and the statutory requirement to make 
BART determinations for certain older major stationary sources, the EPA 
must approve a State's SIP revision so long as the State complies with 
the CAA's visibility protection provisions, the RHR, and the BART 
Guidelines,\31\ and makes a reasonable control determination based on 
the weighing of the five factors. We have analyzed New Mexico's new 
NOX BART determination with these requirements in mind.
---------------------------------------------------------------------------

    \30\ The proposed FIP, the TSD, and Final Rule are added to the 
docket for this rule making. These records contain significant 
technical analyses that we consider available to commenters for this 
proposed action on the State's submittal.
    \31\ The BART determination for SJGS, as a fossil-fuel fired 
power plant having a total generating capacity greater than 750 
megawatts, must be made pursuant to the BART Guidelines. CAA section 
169A(b)(2).
---------------------------------------------------------------------------

    We propose to conclude that New Mexico has met the requirements of 
40 CFR 51.309(d)(4)(vii) and the BART

[[Page 26918]]

Guidelines in determining NOX BART for SJGS. This conclusion 
is based on our review of the 2013 RH SIP revision, including the 
applicable permit conditions and all supporting analyses identified 
above. We also propose to withdraw the FIP requirements pertaining to 
regional haze and rescind the emission limits for NOX and 
H2SO4,\32\ as well as the accompanying compliance 
schedule that would otherwise apply to SJGS. Upon final approval of the 
2013 RH SIP revision, the FIP requirements may be withdrawn through a 
separate Administrator-signed final action. Additionally, our final 
approval action will moot the 2011 RH SIP revision concerning the four-
SNCR scenario.
---------------------------------------------------------------------------

    \32\ Since we are proposing to approve the State Alternative 
that does not include SCR operation, we are also proposing to 
withdraw the H2SO4 emission limit in the FIP 
as it is no longer necessary to protect visibility impairment from 
the facility due to emissions of H2SO4.
---------------------------------------------------------------------------

    New Mexico's revised BART determination includes a control scenario 
proposed by PNM that includes the shutdown of two of the four units at 
the SJGS by December 31, 2017. As such, the control scenario in this 
analysis is different than the control scenarios contemplated in the 
FIP. Although the EPA's regulations do not require states to consider a 
fuel switch or a shutdown of an existing unit as part of their BART 
analyses, a state may include such options in its analysis where a 
company voluntarily offers such measures as a strategy for reducing 
emissions. As discussed previously, New Mexico determined that the 
State Alternative was NOX BART for the SJGS. New Mexico made 
this determination based on an analysis of the five BART factors. Their 
analysis of the five BART factors included consideration of the high 
incremental cost-effectiveness and low incremental visibility 
improvement of the FIP compared with the State Alternative, as well as 
the additional non-air quality environmental and energy benefits of the 
latter. The energy and non-air quality environmental impacts, such as 
reduced solid waste generation, waste water generation, and water and 
energy usage, associated with the State Alternative scenario support 
the conclusion that the State Alternative is BART.\33\ New Mexico also 
noted additional air quality benefits associated with shutting down 
Units 2 and 3. While important, these other air quality benefits, such 
as reduced ozone and PM formation, reduced greenhouse gases, and 
reduced mercury deposition, are not among the BART factors, and were 
not considered in our evaluation of the State's NOX BART 
determination.
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    \33\ [T]he State must take into consideration the technology 
available, the costs of compliance, the energy and non-air quality 
environmental impacts of compliance, any pollution control equipment 
in use at the source, the remaining useful life of the source, and 
the degree of improvement in visibility which may reasonably be 
anticipated to result from the use of such technology. 40 CFR 
51.308(e)(1)(ii)(A).
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    While the BART Guidelines require states to analyze visibility 
improvement on a facility-wide basis,\34\ states have typically 
analyzed the costs of compliance and other BART factors for each 
individual emission unit that comprises the BART-eligible source. 
Nevertheless, we do not interpret the BART Guidelines as requiring 
states to use this approach with regards to analyzing the other BART 
factors. Instead, we believe that states have the flexibility to 
analyze these factors on either a unit-specific or facility-wide basis, 
depending on the unique facts of each case. Here, we believe that New 
Mexico's decision to evaluate the BART factors on a facility-wide basis 
was a reasonable way to take into account the visibility, energy, and 
non-air quality environmental benefits associated with unit shutdowns. 
Had New Mexico used a unit-specific approach, these benefits would have 
been discounted altogether, which would unfairly prevent states and 
sources from considering unit shutdowns as a viable strategy for 
achieving BART. New Mexico's approach is also consistent with the 
State's separate objective to meet the good-neighbor requirement of the 
CAA for visibility, i.e., to ensure that collective emissions from the 
SJGS are not interfering with other states' measures to protect 
visibility.
---------------------------------------------------------------------------

    \34\ The BART Guidelines state that ``you must conduct a 
visibility improvement determination for the source(s) as part of 
the BART determination.'' 40 CFR part 51, app. Y, section IV.D.5 
(emphasis added).
---------------------------------------------------------------------------

i. Visibility Analysis
    We reviewed the CALPUFF modeling that supported the visibility 
impact analysis in the 2013 RH SIP revision. The revised CALPUFF 
modeling followed a modeling protocol consistent with the EPA guidance 
and recommendations, as well as the modeling performed by the EPA in 
support of the FIP. Modeled emission rates were revised to reflect SCR 
control efficiency evaluated in our FIP analysis, as well as the 
sulfuric acid emission rate estimated using the EPA's methodology as 
described in the 2011 EPA TSD. Please see Appendix D and Exhibit 6 of 
the 2013 RH SIP revision, and the EPA's TSDs for more details 
concerning the modeling inputs, model results, and New Mexico's 
evaluation. We note that New Mexico modeled the visibility improvement 
from the State Alternative by including the additional SO2 
reductions attributable to the implementation of the State Alternative, 
but did not include those reductions in the other modeling 
scenarios.\35\ While we have some concerns with the appropriateness of 
including SO2 reductions from Units 1 and 4 in one of the 
NOX BART control options analyzed, rather than as part of 
the facility's baseline emissions, we note that the visibility benefits 
associated with the State Alternative are predominately due to 
NOX reductions resulting from installation of SNCR and the 
significant emission reductions associated with the shutdown of Units 2 
and 3. As a result, we do not think the inclusion of these additional 
SO2 emission reductions meaningfully impact our evaluation 
of the visibility benefits of the evaluated control scenarios.
---------------------------------------------------------------------------

    \35\ The SO2 emission limit of 0.10 lb/MMBtu for 
Units 1 and 4 is effective as of March 5, 2014.
---------------------------------------------------------------------------

    The modeling results indicate the largest differences in average 
98th percentile impacts over the three modeled years between the four-
SCR scenario and the State Alternative are 0.47 dv at Mesa Verde, 0.24 
dv at Canyonlands, and 0.13 dv at Weminuche. The average difference at 
the 13 other Class I areas is less than 0.1 dv between the two control 
scenarios. The largest differences in maximum impacts over the three 
modeled years are 0.47 dv at Mesa Verde, 0.42 dv at Canyonlands, 0.29 
dv at Weminuche, and 0.24 dv at Arches. An analysis of the difference 
in the average number of days with impacts greater than 0.5 dv and 1 dv 
shows that the State Alternative results in nine fewer days with 
impacts greater than 0.5 dv at Mesa Verde, but five more days with 
impacts greater than 1.0 dv. The number of days with impacts greater 
than 0.5 dv and 1 dv are summarized in the table below. Eleven Class I 
areas show no difference in the number of impacted days over 1 dv 
between the four-SCR scenario and the State Alternative. The modeled 
average number of days impacted over 0.5 dv between these two scenarios 
is 1 day or less for 11 of the Class I areas examined, with several 
Class I areas experiencing fewer days over the 0.5 dv threshold under 
the State Alternative control scenario.

[[Page 26919]]

                                              Table 5--Average Number of Days Impacted Over 0.5 and 1.0 dv
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                            Average number of days impacted over 0.5 dv      Average number of days impacted over 1 dv
                                                         -----------------------------------------------------------------------------------------------
                      Class I area                                             State                                           State
                                                               4 SCR        alternative     Difference         4 SCR        alternative     Difference
--------------------------------------------------------------------------------------------------------------------------------------------------------
Arches..................................................              13              14              -1               5               8              -3
Bandelier Wilderness....................................               6               7              -1               1               1               0
Black Canyon of the Gunnison Wilderness.................               4               6              -2               1               1               0
Canyonlands.............................................              23              22               1               8              10              -2
Capitol Reef............................................               6               6               0               2               2               0
Grand Canyon............................................               2               2               0               0               0               0
Great Sand Dunes National Monument......................               3               4              -1               1               1               0
La Garita Wilderness....................................               7               9              -2               0               2              -2
Maroon Bells-Snowmass Wilderness........................               0               0               0               0               0               0
Mesa Verde..............................................             109             100               9              45              50              -5
Pecos Wilderness........................................               4               4               0               0               0               0
Petrified Forest........................................               1               0               1               0               0               0
San Pedro Parks Wilderness..............................              19              19               0               5               5               0
West Elk Wilderness.....................................               3               6              -3               0               1              -1
Weminuche Wilderness....................................              35              41              -6               4               5              -1
Wheeler Peak Wilderness.................................               4               3               1               0               0               0
--------------------------------------------------------------------------------------------------------------------------------------------------------

    New Mexico found, and we agree, that the four-SCR scenario in the 
FIP results in only slightly more visibility benefit than the State 
Alternative at a few of the examined Class I areas when both modeled 
improvement at each Class I area and number of days with significant 
impacts are considered. For many of the Class I Areas, the difference 
in visibility impacts between the two scenarios is negligible. While we 
have some concern with the modeled visibility differences between the 
two control scenarios for Mesa Verde and Canyonlands, we propose to 
find that the State's decision to select the State Alternative was 
ultimately reasonable, especially considering the costs of compliance 
and the energy and non-air quality environmental impacts of the two 
scenarios.
ii. Cost Analysis
    We also reviewed the cost-effectiveness analysis submitted with the 
2013 RH SIP revision. The BART Guidelines require enhanced 
documentation to justify costs that significantly deviate from known 
costs of recent retrofits and to justify departures from the Control 
Cost Manual.\36\ We note that the FIP originally concluded that the PNM 
had not provided the requisite justification or documentation for a 
variety of cost items in their previous cost analyses. In this 
instance, the cost evaluation included with the 2013 RH SIP revision is 
limited to the 2013 PNM Report submitted as Exhibit 6 of the 2013 RH 
SIP revision and the Sargent and Lundy SNCR and SCR Cost Estimates \37\ 
report, submitted as Appendix C of Exhibit 6. New Mexico has not 
provided any additional documentation in the record for the various 
line items in its updated SCR cost estimates. Therefore, as a general 
matter, we cannot conclude that certain line items in SCR cost 
estimates are well supported. In particular, some of our more 
significant areas of concern are: Inclusion of costs for a sorbent 
injection system, how the cost of the balanced draft system was 
assigned to SCR costs, assumptions for the amounts of fees and 
contingencies that account for almost 35% of the total project cost, 
and some of the assumptions supporting the design of the SCR box and 
projected catalyst demands.
---------------------------------------------------------------------------

    \36\ See 70 FR 39168 and 39166 n.15.
    \37\ Public Service of New Mexico San Juan Generating Station 
Units 1, 2, 3 & 4, SNCR and SCR Cost Estimates, Final Report, 
Sargent and Lundy, March 29, 2013.
---------------------------------------------------------------------------

    While we continue to have concerns with the updated cost analysis 
for SCR in the 2013 RH SIP revision, we do not believe that these 
concerns render New Mexico's determination unreasonable. Even if we 
were to use the cost of the four-SCR scenario estimated by the EPA in 
support of the FIP ($345 million for installation of SCR on all four 
units), there is a large difference between the four-SCR scenario and 
the State Alternative, which is estimated to cost $34.5 million. 
Moreover, the small difference in visibility benefits between the two 
scenarios and the environmental and energy benefits of the State 
Alternative continue to support the State's determination that the 
State Alternative is BART. New Mexico came to a similar conclusion when 
considering cost estimates provided by the National Park Service (NPS), 
which found that the four-SCR scenario would cost approximately $374 
million.\38\ Many of our concerns with New Mexico's SCR cost estimates 
either are not applicable to its SNCR cost estimates (e.g., sorbent 
injection and balanced draft) or have a much smaller impact on the 
total estimated cost. Capital costs comprise a relatively small portion 
of the total cost of SNCR, where the bulk of the annual costs are due 
to the cost of sorbent. Consequently, we have chosen to rely on New 
Mexico's cost estimates for SNCR.
---------------------------------------------------------------------------

    \38\ See NMED response to comments from the NPS available as 
NMED Exh. 14 of the 2013 RH SIP revision.
---------------------------------------------------------------------------

    New Mexico estimated the annualized cost of the State Alternative 
to be $13,624,000/yr to reduce NOX emissions by 12,989 tons/
yr, resulting in a cost-effectiveness of $1,049/ton. New Mexico 
estimated the annualized cost of the four-SCR scenario to be 
$108,820,000/yr to reduce NOX emissions by 17,500 tons/yr, 
resulting in a cost-effectiveness of $6,218/ton. The incremental cost-
effectiveness to achieve the additional reduction of 4511 tons/yr 
between the two scenarios is $21,103/ton. If we use the costs for SCR 
from our FIP, then the annualized cost of the four-SCR scenario becomes 
$39,265,670/yr, resulting in an incremental cost-effectiveness of 
$5,684/ton. The latter incremental cost-effectiveness value is in the 
range of costs that states and the EPA have found to be reasonable in 
other regional haze actions. Nevertheless, when these costs are 
considered in combination with the other BART factors, including the 
marginal visibility benefits of the four-SCR scenario at most Class I 
areas and

[[Page 26920]]

the unique energy and non-air quality environmental benefits associated 
with the State Alternative, we propose to find that the State made a 
reasonable determination.
iii. EPA's Conclusion
    In conclusion, we propose to find that when cost, energy and non-
air quality environmental impacts, and anticipated visibility benefits 
are taken into consideration, New Mexico's determination that the State 
Alternative is BART is reasonable. The State Alternative results in 
substantial visibility benefits and energy and non-air quality 
environmental benefits, and is highly cost-effective. The incremental 
visibility benefit of the four-SCR scenario of the FIP over the State 
Alternative is small at most Class I areas, and New Mexico reasonably 
concluded that this small additional visibility benefit did not justify 
the increase in costs associated with installation of SCR on all four 
units. We propose to approve New Mexico's 2013 RH SIP revision, 
including the 2013 permit conditions found at A112C that set the 
emission limits for Units 1 and 4, provide the methodologies for 
calculating the two units' emission rates and showing compliance, 
require the shutdown of Units 2 and 3, and establish the testing and 
monitoring requirements, and we propose to rescind the FIP requirements 
for NOX BART. Upon final approval, the FIP requirements 
addressing NOX BART for the SJGS, including the 
H2SO4 emission limit,\39\ may be withdrawn 
through a separate Administrator-signed final action. Additionally, our 
final approval action will moot the portions of the 2011 RH SIP 
revision not related to the State Alternative.
---------------------------------------------------------------------------

    \39\ As earlier noted, because we are proposing to approve the 
State Alternative that does not include SCR operation, we are also 
proposing to withdraw the H2SO4 emission limit 
in the FIP, as it is no longer necessary to prevent visibility 
impairment from the facility due to emissions of 
H2SO4.
---------------------------------------------------------------------------

IV. Our Analysis of New Mexico's Interstate Visibility Transport SIP 
Provisions

    We are also proposing to approve the 2011 VT SIP revision, as 
revised in 2013, as addressing the ``good neighbor'' provisions of CAA 
section 110(a)(2)(D)(i) for the 1997 8-hour ozone NAAQS and the 
PM2.5 NAAQS with respect to visibility. In developing its 
2011 VT SIP revision, as revised in 2013, New Mexico took note that the 
EPA's FIP had articulated that the Western Regional Air Partnership 
(WRAP) regional planning organization (RPO) assumptions for the SJGS of 
0.27-0.28 lbs/MMBtu for NOX and 0.15 lbs/MMBtu for 
SO2 were the appropriate criteria for approvability of a 
visibility transport SIP and that New Mexico sources other than the 
SJGS are sufficiently controlled to eliminate interference with the 
visibility programs of other states because the federally enforceable 
emission limits for these sources are consistent with those relied upon 
in the WRAP modeling. In developing their regional haze SIPs, New 
Mexico and other member states collaborated through the WRAP. Each 
state developed its regional haze SIP and RPGs based on the WRAP 
modeling and technical analysis. The WRAP modeling was based in part on 
the emissions reductions each state intended to achieve by 2018. As 
explained in the proposed and final FIP notices, we believe that the 
analysis conducted by the WRAP provides an appropriate means to ensure 
that emissions from sources in New Mexico are not interfering with the 
visibility programs of other states, as contemplated in CAA section 
110(a)(2)(D)(i)(II). In developing their visibility projections using 
photochemical grid modeling, the WRAP states assumed a certain level of 
emissions from sources within New Mexico. The EPA's finalized FIP 
required a 0.15 lbs/MMBtu limit for SO2 for SJGS, but 
required a more stringent control of 0.05 lbs/MMBtu for NOX 
in order to satisfy the NOX BART requirements for the SJGS.
    The 2011 VT SIP revision, as revised in 2013, discusses the WRAP 
modeling, uses the legal rationale relying upon the reductions assumed 
in the WRAP modeling, and determines that all sources are sufficiently 
controlled. It includes a revised 2013 permit for the SJGS reflecting 
that the State Alternative requires installation of SNCR at Units 1 and 
4 at SJGS, with a limit of 0.23 lbs/MMBtu for NOX, and the 
shutdown of Units 2 and 3 in 2017. These emission limits for the SJGS 
will well exceed the WRAP assumptions relied upon by other states. The 
2011 VT SIP revision, as revised in 2013 also provides that 
SO2 emissions for the SJGS will be controlled at the level 
of 0.10 lbs/MMBtu at Units 1 and 4, further reducing visibility 
impairment.
    We are proposing to approve the 2011 VT SIP revision, as revised in 
2013, thereby finding that (1) emissions from all sources in New Mexico 
and (2) the SO2 and NOX emission limits for units 
1 and 4 combined with the shutdown of units 2 and 3 as contained in the 
2013 preconstruction permit for the SJGS at A112C, prevent 
SO2 and NOX emissions from New Mexico sources 
from interfering with the visibility programs of other states. 
Therefore, we are proposing to withdraw the provisions of the FIP that 
address SO2 and NOX emissions for the SJGS for 
the purpose of meeting the ``good neighbor'' requirements of CAA 
Section 110(a)(2)(D)(i)(II) with respect to visibility. Upon final 
approval of the 2011 Visibility Transport SIP revision, as revised in 
2013, the FIP requirements pertaining to SO2 and 
NOX emissions for visibility transport may be withdrawn 
through a separate Administrator-signed final action. Additionally, our 
final approval action approving Scenario C in section A112 of the 
permit as a source-specific SIP revision into the New Mexico SIP for RH 
and Visibility Transport will moot scenarios A and B in the permit.

V. EPA's Analysis of 110(l)

    Section 110(l) of the CAA states that ``[t]he Administrator shall 
not approve a revision of a plan if the revision would interfere with 
any applicable requirement concerning attainment and reasonable further 
progress or any other applicable requirement of this chapter.'' 42 
U.S.C. 7410(l). The EPA does not interpret section 110(l) to require a 
full attainment or maintenance demonstration before any changes to a 
SIP may be approved. Generally, a SIP revision may be approved under 
section 110(l) if the EPA finds that it will at least preserve status 
quo air quality, particularly where the pollutants at issue are those 
for which an area has not been designated nonattainment.
    We do not believe an approval, as proposed, will interfere with the 
CAA requirements for BART or for preventing interference with other 
states' programs to protect visibility because our proposal is 
supported by an evaluation that those CAA requirements are met. An 
approval will not result in any substantive changes to the BART 
requirements or other CAA requirements, and the SJGS units will 
continue to be subject to the CAA requirements for BART. The SIP 
replaces a federal determination that was based on different underlying 
facts. We also believe that approval of the submitted SIP revision will 
not interfere with attainment and maintenance of the NAAQS. The 
submitted SIP revision, if approved, will reduce emissions from the 
current levels. The area has not been designated nonattainment for any 
of the national ambient air quality standards and all monitors in the 
area are currently monitoring attainment of the standards. Moreover, 
the SIP revision being approved here will result in reduced 
NOX emissions over current

[[Page 26921]]

levels and thus result in reduced ozone levels in an area that already 
is meeting the ozone standard. In addition, the State's plan, because 
of the shutdown of two units and the lower allowed SO2 
emissions from the remaining units, will result in less SO2 
emissions than our FIP. Thus, approval of the State's plan will not 
contribute to conditions of nonattainment or interfere with maintenance 
of any standard.

VI. EPA's Conclusions and Proposed Action

    The EPA is proposing to approve the NOX BART 
determination for the SJGS included in the 2013 RH SIP revision and the 
accompanying permit conditions at A112C (as described below). This 
conclusion is based on our review of the 2013 RH SIP revision, 
including its applicable permit conditions, and technical data and 
supporting analyses in it and the 2011 RH SIP revision that pertain to 
the 2013 NOX BART determination.\40\ If fully approved by 
the EPA, the State Alternative supersedes the State's previous 
NOX BART determination included in the 2011 RH SIP revision, 
and the EPA's duty to act on the 2011 RH SIP revision's NOX 
BART determination becomes moot.
---------------------------------------------------------------------------

    \40\ We are not proposing action on the 2011 NOX BART 
determinations or materials relating to the 2011 determination that 
have no bearing on the 2013 NOX BART determination--such 
items will be moot and no longer require action if the rulemaking 
for proposed approval is finalized as today proposed.
---------------------------------------------------------------------------

    The EPA is also proposing to approve the 2011 Visibility Transport 
SIP revision, as revised in 2013, that includes the accompanying 
revised 2013 permit conditions at A112C for the SJGS (as described 
below) because they adequately address the ``good neighbor'' provisions 
of CAA section 110(a)(2)(D)(i) for the 1997 8-hour ozone NAAQS and the 
PM2.5 NAAQS with respect to visibility. If Scenario C in 
section A112 of the permit is fully approved into the New Mexico SIP as 
a source-specific SIP revision to meet the RH and Visibility Transport 
CAA requirements, scenarios A and B in the permit become moot.
    As required by Section 110(a)(2)(A) which requires SIPs to have 
enforceable emissions limitations necessary or appropriate to meet the 
applicable requirements of the Act, New Mexico has incorporated 
emissions limits and requirements for unit shutdowns into a 2013 
preconstruction permit that was submitted as part of the SIP revision. 
Specifically, we are proposing to approve as a source-specific 
requirement of the New Mexico SIP for regional haze and visibility 
transport, section A112C of the 2013 SJGS permit into the New Mexico 
SIP. The fuller permit contains three independent scenarios under 
section A112: A, B and C. Under the terms of the permit as explained in 
the background section of the permit, Scenario C becomes effective upon 
the EPA approval of the 2013 RH SIP. Section A112 provides that when 
one scenario is effective, the other two scenarios are moot. If we 
finalize our approval, Scenario C requires, among other things, the 
SO2 emission limit of 0.10 lb/MMBtu and the NOX 
emission limit of 0.23 lb/MMBtu for Units 1 and 4 of the SJGS, and the 
shutdown of Units 2 and 3 by December 31, 2017.\41\ If New Mexico 
wishes to revise any portion of the permit's A112C, other than making 
the emission limits more stringent, it must adopt and submit the permit 
change as a revision to the New Mexico SIP.
---------------------------------------------------------------------------

    \41\ The permit, by its language, further requires the SJGS to 
diligently seek non-EPA regulatory approvals to shut down the units 
by the prescribed date. The PNM's efforts to get necessary 
regulatory approvals may be a consideration in any potential 
enforcement action should the shutdowns not be accomplished by the 
end of 2017.
---------------------------------------------------------------------------

    We are proposing to withdraw the FIP, but note that the 
finalization of the withdrawal must follow a finalized approval of the 
2013 RH SIP revision and the 2011, as revised in 2013, Visibility 
Transport SIP revision and be accomplished via a separate 
Administrator-signed action. The EPA is taking this action under 
section 110 and part C of the CAA.

VII. Statutory and Executive Order Reviews

    Under the CAA, the Administrator is required to approve a SIP 
submission that complies with the provisions of the Act and applicable 
Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in 
reviewing the SIP submissions, the EPA's role is to act on state law as 
meeting Federal requirements and does not impose additional 
requirements beyond those imposed by state law.

A. Executive Order 12866: Regulatory Planning and Review and Executive 
Order 13563: Improving Regulation and Regulatory Review

    This proposed action is not a ``significant regulatory action'' 
under the terms of Executive Order 12866 (58 FR 51735, October 4, 1993) 
and is therefore not subject to review under Executive Orders 12866 and 
13563 (76 FR 3821, January 21, 2011).

B. Paperwork Reduction Act

    This proposed action does not impose an information collection 
burden under the provisions of the Paperwork Reduction Act, 44 U.S.C. 
3501 et seq., because this proposed SIP action under section 110 of the 
CAA will not in-and-of itself create any new information collection 
burdens but simply approves or disapproves certain State requirements 
for inclusion into the SIP. Burden is defined at 5 CFR 1320.3(b).

C. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) generally requires an agency 
to conduct a regulatory flexibility analysis of any rule subject to 
notice and comment rulemaking requirements unless the agency certifies 
that the rule will not have a significant economic impact on a 
substantial number of small entities. Small entities include small 
businesses, small not-for-profit enterprises, and small governmental 
jurisdictions. For purposes of assessing the impacts of today's rule on 
small entities, small entity is defined as: (1) A small business as 
defined by the Small Business Administration's (SBA) regulations at 13 
CFR 121.201; (2) a small governmental jurisdiction that is a government 
of a city, county, town, school district or special district with a 
population of less than 50,000; and (3) a small organization that is 
any not-for-profit enterprise which is independently owned and operated 
and is not dominant in its field. After considering the economic 
impacts of today's proposed rule on small entities, I certify that this 
action will not have a significant impact on a substantial number of 
small entities. This rule does not impose any requirements or create 
impacts on small entities. This proposed SIP action under section 110 
of the CAA will not in-and-of itself create any new requirements but 
simply approves or disapproves certain State requirements for inclusion 
into the SIP. 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. 
The fact that the CAA prescribes that various consequences (e.g., 
emission limitations) may or will flow from this action does not mean 
that the EPA either can or must conduct a regulatory flexibility 
analysis for this action. Therefore, this action will not have a 
significant economic impact on a substantial number of small entities.
    We continue to be interested in the potential impacts of this 
proposed rule on small entities and welcome

[[Page 26922]]

comments on issues related to such impacts.

D. Unfunded Mandates Reform Act

    This action contains no Federal mandates under the provisions of 
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), 2 U.S.C. 
1531-1538 for state, local, or tribal governments or the private 
sector.'' The EPA has determined that the proposed action does not 
include a Federal mandate that may result in estimated costs of $100 
million or more to either state, local, or tribal governments in the 
aggregate, or to the private sector. This action proposes to approve or 
disapprove pre-existing requirements under state or local law, and 
imposes no new requirements. Accordingly, no additional costs to state, 
local, or tribal governments, or to the private sector, result from 
this action.

E. Executive Order 13132, Federalism

    Executive Order 13132, entitled ``Federalism'' (64 FR 43255, August 
10, 1999), requires the EPA to develop an accountable process to ensure 
``meaningful and timely input by state and local officials in the 
development of regulatory policies that have federalism implications.'' 
``Policies that have federalism implications'' is defined in the 
Executive Order to include regulations that 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.''
    This proposed 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, 
as specified in Executive Order 13132, because it merely approves or 
disapproves certain state requirements for inclusion into the SIP and 
does not alter the relationship or the distribution of power and 
responsibilities established in the CAA. Thus, Executive Order 13132 
does not apply to this action.

F. Executive Order 13175, Coordination With Indian Tribal Governments

    This proposed action does not have tribal implications, as 
specified in Executive Order 13175 (65 FR 67249, November 9, 2000), 
because the SIP submittals the EPA is proposing to approve or 
disapprove would not apply in Indian country located in the state, and 
the EPA notes that it will not impose substantial direct costs on 
tribal governments or preempt tribal law. Thus, Executive Order 13175 
does not apply to this action. Consistent with the EPA policy the EPA 
nonetheless is offering consultation to tribes regarding this 
rulemaking action. The EPA will respond to relevant comments in the 
final rulemaking action.

G. Executive Order 13045, Protection of Children From Environmental 
Health Risks and Safety Risks

    The EPA interprets Executive Order 13045 (62 FR 19885, April 23, 
1997) as applying only to those regulatory actions that concern health 
or safety risks, such that the analysis required under section 5-501 of 
the Executive Order has the potential to influence the regulation. This 
proposed action is not subject to Executive Order 13045 because it is 
not an economically significant regulatory action based on health or 
safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 
1997). This proposed SIP action under section 110 of the CAA will not 
in-and-of itself create any new regulations but simply approves or 
disapproves certain state requirements for inclusion into the SIP.

H. Executive Order 13211, Actions That Significantly Affect Energy 
Supply, Distribution or Use

    This proposed 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.

I. National Technology Transfer and Advancement Act

    Section 12(d) of the National Technology Transfer and Advancement 
Act of 1995 (``NTTAA''), Public Law 104-113, section 12(d) (15 U.S.C. 
272 note) directs the EPA to use voluntary consensus standards in its 
regulatory activities unless to do so would be inconsistent with 
applicable law or otherwise impractical. Voluntary consensus standards 
are technical standards (e.g., materials specifications, test methods, 
sampling procedures, and business practices) that are developed or 
adopted by voluntary consensus standards bodies. The NTTAA directs the 
EPA to provide Congress, through OMB, explanations when the Agency 
decides not to use available and applicable voluntary consensus 
standards.
    The EPA believes that this proposed action is not subject to 
requirements of Section 12(d) of the NTTAA because application of those 
requirements would be inconsistent with the CAA.

J. Executive Order 12898: Federal Actions To Address Environmental 
Justice in Minority Populations and Low-Income Populations

    Executive Order 12898 (59 FR 7629 (Feb. 16, 1994)) establishes 
federal executive policy on environmental justice. Its main provision 
directs federal agencies, to the greatest extent practicable and 
permitted by law, to make environmental justice part of their mission 
by identifying and addressing, as appropriate, disproportionately high 
and adverse human health or environmental effects of their programs, 
policies, and activities on minority populations and low-income 
populations in the United States.
    The EPA lacks the discretionary authority to address environmental 
justice in this proposed action. In reviewing SIP submissions, the 
EPA's role is to approve or disapprove state choices, based on the 
criteria of the CAA. Accordingly, this action merely proposes to 
approve or disapprove certain state requirements for inclusion into the 
SIP under section 110 of the CAA and will not in-and-of itself create 
any new requirements. Accordingly, it does not provide the 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.

List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Intergovernmental 
relations, Nitrogen dioxide, Ozone, Particulate matter, Reporting and 
recordkeeping requirements, Sulfur dioxides, Visibility, Interstate 
transport of pollution, RH, Best available control technology.

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

    Dated: April 30, 2014.
Ron Curry,
Regional Administrator, Region 6.
[FR Doc. 2014-10845 Filed 5-9-14; 8:45 am]
BILLING CODE 6560-50-P
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