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###### Environmental Protection Agency

          - 40 CFR Part 52 
          - [PA 153-4100a; FRL-6702-3] 

# AGENCY:

Environmental Protection Agency (EPA). 

# ACTION:

Direct final rule. 

# SUMMARY:

                        EPA is taking direct final action to approve revisions to the Commonwealth of Pennsylvania State Implementation Plan (SIP). The revision consists of amendments to Pennsylvania's Nitrogen Oxides (NOX) Allowance Requirements. The revisions implement the Ozone Transport Commission's (OTC) September 27, 1994 Memorandum of Understanding (MOU) in the Commonwealth of Pennsylvania. In accordance with the MOU, the revisions implement the Pennsylvania portion of a regional NOX                         cap and trade program that significantly reduces NOX                         emissions generated within the Ozone Transport Region (OTR). EPA is approving these revisions in accordance with the requirements of the Clean Air Act.                     

# DATES:

                        This rule is effective on August 7, 2000 without further notice, unless EPA receives adverse written comment by July 6, 2000. If EPA receives such comments, it will publish a timely withdrawal of the direct final rule in the                         **Federal Register**                         and inform the public that the rule will not take effect.                     

# ADDRESSES:

Written comments may be mailed to David L. Arnold, Chief, Ozone & Mobile Sources Branch, Mailcode 3AP21, U.S. EPA, Region III, 1650 Arch Street, Philadelphia, PA 19103. Copies of the documents relevant to this action are available for public inspection during normal business hours at the Air Protection Division, EPA, Region III, 1650 Arch Street, Philadelphia, PA 19103 and Pennsylvania Department of Environmental Protection, Bureau of Air Quality, P.O. Box 8468, 400 Market Street, Harrisburg, PA 17105. 

# FOR FURTHER INFORMATION CONTACT:

Cristina Fernandez, (215) 814-2178, or by e-mail at fernandez.cristina@epa.gov. 

# SUPPLEMENTARY INFORMATION:

## I. Background 

                    On December 19, 1997, the Pennsylvania Department of Environmental Protection (DEP) submitted a revision to its SIP. The revision consists of amendments to Title 25 of the Pennsylvania Code including Chapter 121—Definitions and Chapter 123—NOX                     Allowance Requirements. On December 27, 1999, DEP submitted a subsequent revision to its SIP amending Chapter 121—Definitions and Chapter 123—NOX                     Allowance Requirements. This regulation is part of a regional NOX                     reduction program based upon an MOU drawn between the member states of the OTC. The OTC adopted a MOU on September 27, 1994, committing the signatory states to the development and implemenation of a two phase region-wide reduction in NOX                     emissions by 1999 and 2003, respectively. As reasonably available control technology (RACT) to reduce NOX                     emissions was required to be implemented by May of 1995, the MOU refers to the reduction in NOX                     emissions to be achieved by 1999 as Phase II; and the reduction in NOX                     emissions to be achieved by 2003 as Phase III. The OTC member states include Maine, New Hampshire, Vermont, Massachusetts, Connecticut, Rhode Island, New York, New Jersey, Pennsylvania, Maryland, Delaware, the northern counties of Virginia, and the District of Columbia. All of the OTC members, with the exception of the Commonwealth of Virginia, signed the September 27, 1994 MOU. The OTC MOU requires a reduction in ozone season NOX                     emissions from utility and large industrial combustion facilities within the OTR in order to further the effort to achieve the health-based National Ambient Air Quality Standard (NAAQS) for ozone. In the MOU, the OTC states agreed to propose regulations for the control of NOX                     emissions in accordance with the following guidelines:                 

                    1. The level of NOX                     required would be established from a 1990 baseline emissions level.                           ( print page 35841)    

2. The reduction would vary by location, or zone, and would be implemented in two phases utilizing a region wide trading program. 

3. The reduction would be determined based on the less stringent of each of the following: 

                    a. By May 1, 1999, the affected facilities in the inner zone shall reduce their rate of NOX                     emissions by 65% from baseline, or emit NOX                     at a rate no greater than 0.20 pounds per million Btu. (This is a Phase II requirement.)                 

                    b. By May 1, 1999, the affected facilities in the outer zone shall reduce their rate of NOX                     emissions by 55% from baseline, or shall emit NOX                     at a rate no greater than 0.20 pounds per million Btu. (This is a Phase II requirement.)                 

                    c. By May 1, 2003, the affected facilities in the inner and outer zones shall reduce their rate of NOX                     emissions by 75% from baseline, or shall emit NOX                     at a rate no greater than 0.15 pounds per million Btu. (This is a Phase III requirement.)                 

                    d. By May 1, 2003, the affected facilities in the Northern zone shall reduce their rate of NOX                     emissions by 55% from baseline, or shall emit NOX                     at a rate no greater than 0.20 pounds per million Btu. (This is a Phase III requirement.)                 

                    A Task Force of representatives from the OTC states, organized through the Northeast States for Coordinated Air Use Management (NESCAUM) and the Mid-Atlantic Regional Air Management Association (MARAMA), was charged with the task of developing a Model Rule that would implement the program defined by the OTC MOU. During 1995 and 1996, the NESCAUM/ MARAMA NOX                     Budget Task Force worked with EPA and developed a model rule as a template for OTC states to adopt their own rules to implement the OTC MOU. The model was issued May 1, 1996. The model rule was developed by and for the OTC states to implement the Phase II reductions called for in the MOU to be achieved by May 1, 1999. The model rule does not include the implementation of Phase III.                 

## Summary of SIP Revision 

                    Pennsylvania's Chapter 121—Definitions and Chapter 123—Nitrogen Oxides Allowance Requirements are based upon and are consistent with the “NESCAUM/MARAMA NOX                     Budget Rule” issued in May 1, 1996. The model rule was developed by the states in the OTR using the EPA's economic incentive rules (67 FR 16690) which were published on April 7, 1994, as the general regulatory framework.                 

                    On December 19, 1997, the Pennsylvania DEP submitted a revision to its SIP. The revision consists of amendments to Title 25 of the Pennsylvania Code including Chapter 121—Definitions and Chapter 123—NOX                     Allowance Requirements. Chapter 121—Definitions includes the terms used in Chapter 123—NOX                     Allowances Requirements. Chapter 123—NOX                     Allowances Requirements consists of twenty sections: (1) Purpose; (2) Source NOX                     allowance requirements and NOX                     allowance control period; (3) General NOX                     allowance provisions; (4) Source authorized account representative requirements; (5) Allowance Tracking System (NATS) provisions; (6) NOX                     allowance transfer protocol; (7) NOX                     allowance transfer procedures; (8) Source emissions monitoring requirements; (9) Source emissions reporting requirements; (10) Source compliance requirements; (11) Failure to meet source compliance requirements; (12) Source operating permit provision requirements; (13) source record keeping requirements; (14) General NOX                     allocation provisions; (15) Initial NOX                     allowance NOX                     allocations; (16) Source opt-in provisions; (17) New NOX                     affected source provisions; (18) Emission reduction credit provisions; (19) Bonus NOX                     allowance awards; (20) Audit. Appendix A to Chapter 123 is where the budgeted sources and their NOX                     allowance allocations are identified. On December 27, 1999, DEP submitted amendments to its December 19, 1997 SIP revision request. The amendments revise Chapter 121—Definitions and Chapter 123—NOX                     Allowance Requirements. In Chapter 121—Definitions, the term “NOX                     affected source” was modified to clarify that only individual emission units of 15 MWe or greater are included in the definition. In addition, the definition of “NOX                     affected source” was further clarified to exclude emergency electrical generating units used to power safety equipment at nuclear power plants. In Chapter 123—NOX                     Allowance Requirements, Section 123.115—Initial NOX                     Allowance NOX                     Allocations was modified to remove the Washington Power Company allocation. Appendix A to Chapter 123 was renamed to Appendix E, and was modified in four ways. First, the NOX                     affected sources identified through the process described in Section 123.117—New NOX                     Affected Source Provisions were added to Appendix E. Second, the accounting error that resulted in over-allocating the 1999 budget was corrected with a pro rata reduction in all NOX                     affected sources emissions. Third, several sources mistakenly included in the previous Appendix A were deleted. Finally, the last column of the previous Appendix A was deleted and the “Baseline NOX                     lb/MMBtu” column was renamed to add the term “Bonus Allowances”.                 

                    EPA is publishing this rule without prior proposal because the Agency views this as a noncontroversial amendment and anticipates no adverse comment. However, in the “Proposed Rules” section of today's                     **Federal Register**                    , EPA is publishing a separate document that will serve as the proposal to approve Pennsylvania's NOX                     Allowance Requirements if adverse comments are filed. This rule will be effective on August 7, 2000 without further notice unless EPA receives adverse comment by July 6, 2000.  If EPA receives adverse comment, EPA will publish a timely withdrawal in the                     **Federal Register**                     informing the public that the rule will not take effect. EPA will address all public comments in a subsequent final rule based on the proposed rule. EPA will not institute a second comment period on this action. Any parties interested in commenting must do so at this time.                 

## II. Final Action 

                    EPA is approving revisions to the Pennsylvania SIP consisting of Chapter 121—Definitions and Chapter 123—NO                    X                     Allowance Requirements, submitted on December 19, 1997 and amended on December 27, 1999. These revisions implement Pennsylvania's portion of Phase II of the OTC's MOU to reduce nitrogen oxides.                 

## III. Administrative Requirements 

### A. General Requirements 

                    Under Executive Order 12866 (58 FR 51735, October 4, 1993), this action is not a “significant regulatory action” and therefore is not subject to review by the Office of Management and Budget. This action merely approves state law as meeting federal requirements and imposes no additional requirements beyond those imposed by state law. Accordingly, the Administrator certifies that this rule will not have a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601*et seq.*). Because this rule approves pre-existing requirements under state law and does not impose any additional enforceable duty beyond that required by state law, it does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates                           ( print page 35842)                        Reform Act of 1995 (Pub. L. 104-4). For the same reason, this rule also does not significantly or uniquely affect the communities of tribal governments, as specified by Executive Order 13084 (63 FR 27655, May 10, 1998). This rule 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 (64 FR 43255, August 10, 1999), because it merely approves a state rule implementing a federal standard, and does not alter the relationship or the distribution of power and responsibilities established in the Clean Air Act. This rule also is not subject to Executive Order 13045 (62 FR 19885, April 23, 1997), because it is not economically significant. In reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the Clean Air Act. In this context, in the absence of a prior existing requirement for the State to use voluntary consensus standards (VCS), EPA has no authority to disapprove a SIP submission for failure to use VCS. It would thus be inconsistent with applicable law for EPA, when it reviews a SIP submission, to use VCS in place of a SIP submission that otherwise satisfies the provisions of the Clean Air Act. Thus, the requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) do not apply. As required by section 3 of Executive Order 12988 (61 FR 4729, February 7, 1996), in issuing this rule, EPA has taken the necessary steps to eliminate drafting errors and ambiguity, minimize potential litigation, and provide a clear legal standard for affected conduct. EPA has complied with Executive Order 12630 (53 FR 8859, March 15, 1988) by examining the taking implications of the rule in accordance with the “Attorney General's Supplemental Guidelines for the Evaluation of Risk and Avoidance of Unanticipated Taking” issued under the executive order. This rule does noYt impose an information collection burden under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501*et seq.*).                 

### B. Submission to Congress and the Comptroller General 

                    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 rule 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**                    . This rule is not a “major rule” as defined by 5 U.S.C. 804(2).                 

### C. Petitions for Judicial Review 

                    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 August 7, 2000. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this rule 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 to approve Pennsylvania's NOX                     Allowance Requirements may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).)                 

# List of Subjects in 40 CFR Part 52

      - Environmental protection
      - Air pollution control
      - Incorporation by reference
      - Intergovernmental relations
      - Nitrogen dioxide
      - Ozone
      - Reporting and recordkeeping requirements

Dated: April 24, 2000. 

Bradley M. Campbell, 

Regional Administrator, Region III. 

40 CFR part 52 is amended as follows: 

# PART 52—[AMENDED] 

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

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

# Subpart NN—Pennsylvania 

2. Section 52.2020 is amended by adding paragraph (c)(145) to read as follows: 

§ 52.2020 

* * * * *

(c) * * * 

(145) Revisions to the Pennsylvania State Implementation Plan adopting the Nitrogen Oxides Allowance Requirements submitted on December 19, 1997 and December 27, 1999 by the Secretary of the Pennsylvania Department of Environmental Protection: 

(i) Incorporation by reference. 

(A) Letter of December 19, 1997 from the Secretary of the Pennsylvania Department of the Environmental Protection transmitting the Nitrogen Oxides Allowance Requirements. 

(B) Letter of December 27, 1999 from the Secretary of the Pennsylvania Department of the Environmental Protection transmitting the Nitrogen Oxides Allowance Requirements. 

(C) Revisions to 25 PA Code, Chapters 121 and 123 pertaining to Nitrogen Oxides Allowance Requirements, effective November 1, 1997. 

                            (                            *1*                            ) Revisions to section 121.1—definitions of: account, account number, acquiring account, compliance account, electric generating facility, fossil fuel, fossil fuel fired, general account, heat input, indirect heat exchange combustion unit, maximum heat input capacity, NATS-NOX                             allowance tracking system, NETS-NOX                             emissions tracking system, NOX                             allocation, NOX                             allowance, NOX                             allowance CEMS-NOX                             allowance continuous emission monitoring system, NOX                             allowance control period, NOX                             allowance curtailment, NOX                             allowance deduction, NOX                             allowance transfer, NOX                             allowance transfer deadline, NOX                             budget, NOX                             budget administrator, OTC MOU-ozone transport commission memorandum of understanding, replacement source.                         

                            (                            *2*) Addition of sections 123.101 through 123.120, except for section 123.115.                         

(D) Revisions to 25 PA Code, Chapters 121 and 123 pertaining to Nitrogen Oxides Allowance Requirements, effective March 11, 2000. 

                            (                            *1*                            ) Revisions to section 121.1—definition of NOX                             affected source.                         

                            (                            *2*) Addition of section 123.115 and Appendix E.                         

(ii) Additional material. 

                            (A) Nitrogen Oxide (NOX) Memorandum of Understanding Implementation Plan of December 9, 1997.                         

                            (B) Letter of March 31, 2000 from the Director of the Pennsylvania Department of the Environmental Protection amending the Chapter 123 NOX                             Allowance Program.                         

[FR Doc. 00-13769 Filed 6-5-00; 8:45 am] 

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