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[Federal Register Volume 76, Number 1 (Monday, January 3, 2011)]
[Rules and Regulations]
[Pages 15-17]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-32968]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R06-OAR-2005-TX-0012; FRL-9246-3]

Approval and Promulgation of Implementation Plans; Texas; 
Emissions Banking and Trading of Allowances Program

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: EPA is approving portions of four revisions to the Texas State 
Implementation Plan (SIP) that create and amend the Emissions Banking 
and Trading of Allowances (EBTA) Program. The EBTA Program establishes 
a cap and trade program to reduce emissions of oxides of nitrogen 
(NOX) and sulfur dioxide (SO2) from participating 
electric generating facilities. The Texas Commission on Environmental 
Quality (TCEQ) originally submitted the EBTA program to EPA as a SIP 
revision on January 3, 2000. Since that time, the TCEQ has submitted 
SIP revisions for the EBTA Program on September 11, 2000; July 15, 
2002; and October 24, 2006. EPA has determined that these changes to 
the Texas SIP comply with the Federal Clean Air Act (the Act or CAA) 
and EPA regulations, are consistent with EPA policies, and will improve 
air quality. This action is being taken under section 110 and parts C 
and D of the Act.

DATES: This final rule will be effective February 2, 2011.

ADDRESSES: EPA has established a docket for this action under Docket ID 
No. EPA-R06-OAR-2005-TX-0012. All documents in the docket are listed in 
the http://www.regulations.gov index. Although listed in the index, 
some information is not publicly available, e.g., CBI or other 
information whose disclosure is restricted by statute. Certain other 
material, such as copyrighted material, will be publicly available only 
in hard copy. Publicly available docket materials are available either 
electronically in http://www.regulations.gov or in hard copy at the Air 
Planning Section (6PD-L), Environmental Protection Agency, 1445 Ross 
Avenue, Suite 700, Dallas, Texas 75202-2733. The file will be made 
available by appointment for public inspection in the Region 6 FOIA 
Review Room between the hours of 8:30 a.m. and 4:30 p.m. weekdays 
except for legal holidays. Contact the person listed in the FOR FURTHER 
INFORMATION CONTACT paragraph below or Mr. Bill Deese at 214-665-7253 
to make an appointment. If possible, please make the appointment at 
least two working days in advance of your visit. There will be a 15 
cent per page fee for making photocopies of documents. On the day of 
the visit, please check in at the EPA Region 6 reception area at 1445 
Ross Avenue, Suite 700, Dallas, Texas.
    The State submittal related to this SIP revision, and which is part 
of the EPA docket, is also available for public inspection at the State 
Air Agency listed below during official business hours by appointment:
    Texas Commission on Environmental Quality, Office of Air Quality, 
12124 Park 35 Circle, Austin, Texas 78753.

FOR FURTHER INFORMATION CONTACT: If you have questions concerning 
today's final rule, please contact Ms. Adina Wiley (6PD-R), Air Permits 
Section, Environmental Protection Agency, Region 6, 1445 Ross Avenue 
(6PD-R), Suite 1200, Dallas, TX 75202-2733. The telephone number is 
(214) 665-2115. Ms. Wiley can also be reached via electronic mail at 
wiley.adina@epa.gov.

SUPPLEMENTARY INFORMATION: Throughout this document, whenever ``we'', 
``us'', or ``our'' is used, we mean the EPA.

Table of Contents

I. What final action is EPA taking?
II. What is the background for this action?
III. What are EPA's responses to comments received on the proposed 
action?
IV. Statutory and Executive Order Reviews

I. What final action is EPA taking?

    We are fully approving severable portions of four revisions to the 
Texas State Implementation Plan (SIP) that create and amend the 
Emissions Banking and Trading of Allowances (EBTA) Program. The EBTA 
Program establishes a cap and trade program to reduce emissions of 
oxides of nitrogen (NOX) and sulfur dioxide (SO2) 
from participating electric generating facilities. The TCEQ originally 
submitted the EBTA program to EPA as a SIP revision on January 3, 2000. 
Since that time, the TCEQ has submitted SIP revisions for the EBTA 
Program on September 11, 2000; July 15, 2002; and October 24, 2006.
    EPA acted on the above SIP revisions through a direct final 
rulemaking and accompanying proposed rule action on November 16, 2010, 
at 75 FR 69884 and 75 FR 69909, respectively. In our direct final 
action we stated that we would withdraw our direct final approval if we 
received relevant adverse comments before December 16, 2010. Because 
EPA received one adverse comment, we withdrew our direct final action 
on December 15, 2010. As we discussed in our direct final and proposed 
rulemaking actions, we are proceeding with a final action and 
responding to the comments received in this notice. Today, we are 
approving the EBTA program and subsequent revisions as we proposed and 
find that they comply with the CAA and EPA regulations, are consistent 
with EPA policies, and will improve air quality. This final approval is 
being taken under parts C and D of the CAA.

II. What is the background for this action?

    The TCEQ created the EBTA Program to implement the requirements of 
Texas Senate Bill 7 (SB 7), from the 76th Legislature, 1999, which 
deregulated the electric utility industry. Under Texas SB 7, TCEQ was 
required to develop a permitting system and a mass cap and trade system 
to distribute allowances for use by electric generating facilities. The 
EBTA program is designed to achieve a 50 percent reduction in 
NOX emissions and a 25 percent reduction in SO2 
emissions, both based on 1997 heat input data, from participating 
sources. EPA has taken separate action on the permitting system 
required under Texas SB 7 and established at 30 TAC Chapter 116, 
Subchapter I (See docket EPA-R06-OAR-2005-TX-0031).
    In our November 16, 2010, direct final action, we presented our 
evaluation of the EBTA program. Generally, SIP rules must be 
enforceable and must not relax existing requirements. See Clean Air Act 
sections 110(a), 110(l), and 193. EPA's review of the January 3, 2000; 
September 11, 2000; July 15, 2002; and October 24, 2006 SIP revisions 
finds that all 4 SIP submittals are consistent with the requirements at 
40 CFR Part 51 and are considered complete SIP submittals in accordance 
with 40 CFR Part 51, Appendix V. This detailed analysis is available in 
the Technical Support Document (TSD) for this rulemaking. Additionally, 
we reviewed the EBTA program with respect to EPA's

[[Page 16]]

Economic Incentive Program (EIP) Guidance ``Improving Air Quality with 
Economic Incentive Programs'' (EPA-452/R-01-001, January 2001) (EIP 
Guidance). Our analysis, as detailed in the TSD accompanying this 
rulemaking, finds that the EBTA program is consistent with the criteria 
for discretionary source specific emissions cap programs. The EBTA 
program will provide compliance flexibility to participating electric 
generating facilities in Texas and achieve the programmatic emission 
reduction goals of Texas SB 7. Further, EPA finds that the EBTA program 
is consistent with section 110(l) of the CAA and will not interfere 
with any applicable requirements concerning attainment and reasonable 
further progress towards attainment of the NAAQS or any other 
applicable requirements of the Act.

III. What are EPA's responses to comments received on the proposed 
action?

    EPA received one adverse comment on our proposed action, available 
in the docket. As discussed previously, because we received an adverse 
comment within the comment period, EPA withdrew our direct final 
rulemaking on December 15, 2010. We are proceeding with a separate 
final action on the EBTA program in this notice.
    Comment 1: The comment EPA received states in its entirety: ``No 
cap and trade other than through Congress!''
    Response 1: The commenter did not provide any basis for why cap and 
trade should only be done through Congress or provide any specific 
comment on the EBTA program. There is nothing in the comment that 
convinces EPA that the EBTA program should not be approved. The Clean 
Air Act was enacted by Congress. 42 U.S.C.A. 7401. Under the Act, EPA 
is authorized to set clean air standards. 42 U.S.C.A. 7409. States are 
authorized to choose control strategies to meet these standards. 42 
U.S.C.A. 7410(a). EPA can approve the strategies into State 
implementation plans, as long as the strategies are consistent with the 
Act. 42 U.S.C.A. 7410(l). As we stated in our proposal, and in section 
II of this notice, EPA finds the EBTA program to be consistent with the 
Act. EPA is making no changes to our proposed action as a result of 
this comment.

IV. Statutory and Executive Order Reviews

    Under the Clean Air Act, 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 SIP submissions, EPA's role is to approve State 
choices, provided that they meet the criteria of the Clean Air Act. 
Accordingly, this action merely approves State law as meeting Federal 
requirements and does not impose additional requirements beyond those 
imposed by State law. For that reason, this action:
     Is not a ``significant regulatory action'' subject to 
review by the Office of Management and Budget under Executive Order 
12866 (58 FR 51735, October 4, 1993);
     Does not impose an information collection burden under the 
provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.);
     Is certified as not having a significant economic impact 
on a substantial number of small entities under the Regulatory 
Flexibility Act (5 U.S.C. 601 et seq.);
     Does not contain any unfunded mandate or significantly or 
uniquely affect small governments, as described in the Unfunded 
Mandates Reform Act of 1995 (Pub. L. 104-4);
     Does not have Federalism implications as specified in 
Executive Order 13132 (64 FR 43255, August 10, 1999);
     Is not an economically significant regulatory action based 
on health or safety risks subject to Executive Order 13045 (62 FR 
19885, April 23, 1997);
     Is not a significant regulatory action subject to 
Executive Order 13211 (66 FR 28355, May 22, 2001);
     Is not subject to requirements of Section 12(d) of the 
National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 
note) because application of those requirements would be inconsistent 
with the Clean Air Act; and
     Does not provide EPA with the discretionary authority to 
address, as appropriate, disproportionate human health or environmental 
effects, using practicable and legally permissible methods, under 
Executive Order 12898 (59 FR 7629, February 16, 1994).
    In addition, this rule does not have Tribal implications as 
specified by Executive Order 13175 (65 FR 67249, November 9, 2000), 
because the SIP is not approved to apply in Indian country located in 
the State, and EPA notes that it will not impose substantial direct 
costs on Tribal governments or preempt Tribal law.
    The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the 
Small Business Regulatory Enforcement Fairness Act of 1996, generally 
provides that before a rule may take effect, the agency promulgating 
the rule must submit a rule report, which includes a copy of the rule, 
to each House of the Congress and to the Comptroller General of the 
United States. EPA will submit a report containing this action and 
other required information to the U.S. Senate, the U.S. House of 
Representatives, and the Comptroller General of the United States prior 
to publication of the rule in the Federal Register. A major rule cannot 
take effect until 60 days after it is published in the Federal 
Register. This action is not a ``major rule'' as defined by 5 U.S.C. 
804(2).
    Under section 307(b)(1) of the Clean Air Act, petitions for 
judicial review of this action must be filed in the United States Court 
of Appeals for the appropriate circuit by March 4, 2011. Filing a 
petition for reconsideration by the Administrator of this final rule 
does not affect the finality of this action for the purposes of 
judicial review nor does it extend the time within which a petition for 
judicial review may be filed, and shall not postpone the effectiveness 
of such rule or action. This action may not be challenged later in 
proceedings to enforce its requirements. (See section 307(b)(2).)

List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Incorporation by 
reference, Intergovernmental relations, Nitrogen oxides, Ozone, 
Volatile organic compounds.

    Dated: December 21, 2010.
Carl E. Edlund,
Acting Regional Administrator, Region 6.
    40 CFR part 52 is amended as follows:

PART 52--[AMENDED]

0
1. The authority citation for part 52 continues to read as follows:

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

Subpart SS--Texas

0
2. The table in Sec.  52.2270(c) entitled ``EPA Approved Regulations in 
the Texas SIP'' is amended by adding a new centered heading titled 
``Division 2--Emissions Banking and Trading of Allowances'' immediately 
after the entry for Section 101.311 under Chapter 101--General Air 
Quality Rules, Subchapter H--Emissions Banking and Trading, followed by 
new entries for sections 101.330, 101.331, 101.332, 101.333, 101.334, 
101.335, 101.336, 101.338 and 101.339.
    The additions read as follows:

Sec.  52.2270  Identification of plan.

* * * * *
    (c) * * *

[[Page 17]]

                                    EPA Approved Regulations in the Texas SIP
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                                                       State approval/
        State citation              Title/Subject      submittal date     EPA approval date       Explanation
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                                     Chapter 101--General Air Quality Rules
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                                                  * * * * * * *
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                                   Subchapter H--Emissions Banking and Trading
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                                                  * * * * * * *
Section 101.311..............  Program Audits and            11/10/04  9/6/06, 71 FR 52698.    .................
                                Reports.
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                             Division 2--Emissions Banking and Trading of Allowances
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Section 101.330..............  Definitions...........      12/16/1999  1/3/2011 [Insert FR     .................
                                                                        page number where
                                                                        document begins].
Section 101.331..............  Applicability.........      12/16/1999  1/3/2011 [Insert FR     .................
                                                                        page number where
                                                                        document begins].
Section 101.332..............  General Provisions....      12/16/1999  1/3/2011 [Insert FR     .................
                                                                        page number where
                                                                        document begins].
Section 101.333..............  Allocation of               08/09/2000  1/3/2011 [Insert FR     .................
                                Allowances.                             page number where
                                                                        document begins].
Section 101.334..............  Allowance Deductions..      12/16/1999  1/3/2011 [Insert FR     .................
                                                                        page number where
                                                                        document begins].
Section 101.335..............  Allowance Banking and       12/16/1999  1/3/2011 [Insert FR     .................
                                Trading.                                page number where
                                                                        document begins].
Section 101.336..............  Emission Monitoring,        12/16/1999  1/3/2011 [Insert FR     .................
                                Compliance                              page number where
                                Demonstration, and                      document begins].
                                Reporting.
Section 101.338..............  Emission Reductions         10/04/2006  1/3/2011 [Insert FR     .................
                                Achieved Outside the                    page number where
                                United States.                          document begins].
Section 101.339..............  Program Audits and          10/04/2006  1/3/2011 [Insert FR     .................
                                Reports.                                page number where
                                                                        document begins].
 
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[FR Doc. 2010-32968 Filed 12-30-10; 8:45 am]
BILLING CODE 6560-50-P
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