50456 Federal Register / Vol. 62, No. 186 / Thursday, September 25, 1997 / Proposed Rules

ENVIRONMENTAL PROTECTION

AGENCY

40 CFR Part 74

[FRL–5892–3]

RIN 2060–AH36

Acid Rain Program: Revisions to

Sulfur Dioxide Opt-Ins

AGENCY: Environmental Protection

Agency (EPA).

ACTION: Proposed rule.

SUMMARY: Title IV of the Clean Air Act,

as amended by Clean Air Act

Amendments of 1990, (‘‘the Act’’)

authorizes the Environmental Protection

Agency (‘‘EPA’’ or ‘‘Agency’’) to

establish the Acid Rain Program. The

purpose of the Acid Rain Program is to

significantly reduce emissions of sulfur

dioxide and nitrogen oxides from

electric generating plants in order to

reduce the adverse health and ecological

impacts of acidic deposition (or acid

rain) resulting from such emissions.

This proposal is intended to promote

participation in the opt-in program by

clarifying existing regulations, allowing

a limited exception to the general rule

of one designated representative for all

affected units at a source, revising the

conditions under which the Agency

may cancel current-year allowance

allocations, and allowing thermal

energy plans to be effective on a

quarterly basis.

DATES: Comments on the regulations

proposed by this action must be

received on or before October 27, 1997,

unless a hearing is requested by October

6, 1997. If a hearing is requested,

written comments must be received by

November 10, 1997.

Public Hearing. Anyone requesting a

public hearing must contact the EPA no

later than October 6, 1997. If a hearing

is held it will take place October 9,

1997, beginning at 10:00 am.

ADDRESSES: Comments. All written

comments must be identified with the

appropriate docket number (Docket No.

A–97–23) and must be submitted in

duplicate to EPA Air Docket Section

(6102), Waterside Mall, Room M1500,

1st Floor, 401 M Street, SW, Washington

DC 20460.

Docket. Docket No. A–97–23,

containing supporting information used

to develop the proposal is available for

public inspection and copying from 8:00

a.m. to 5:30 p.m., Monday through

Friday, excluding legal holidays, at

EPA’s Air Docket Section at the above

address.

FOR FURTHER INFORMATION CONTACT:

Kathy Barylski at (202) 233–9074 Acid

Rain Division (6204J), U.S.

Environmental Protection Agency, 401

M St., S.W., Washington, DC 20460; or

the Acid Rain Hotline at (202) 233–

9620. Electronic copies of this

rulemaking and technical support

documents can be accessed through the

Acid Rain Division website at http://

www.epa.gov/acidrain.

SUPPLEMENTARY INFORMATION:

I. Affected Entities

II. Background

III. Part 74: Opt-Ins

A. Designated Representatives

B. Thermal Energy Plans

C. Deduction of Allowances from ATS

Accounts

D. Miscellaneous

IV. Administrative Requirements

A. Executive Order 12866

B. Unfunded Mandates Act

C. Paperwork Reduction Act

D. Regulatory Flexibility Act

E. Miscellaneous

I. Affected Entities

Entities potentially affected by this

action are fossil-fuel fired boilers or

turbines that serve generators producing

electricity, generate steam, or cogenerate

electricity and steam. Regulated

categories and entities include:

Category Examples of regulated entities

Industry Electric service providers, boilers

from a wide range of industries.

This table is not intended to be

exhaustive, but rather provides a guide

for readers regarding entities potentially

affected by this action. This table lists

the types of entities that EPA is now

aware could potentially be affected by

this action. Other types of entities not

listed in the table could also be affected.

To determine whether your facility is

affected by this action, you should

carefully examine the applicability

criteria in § 74.2 of title 40 of the Code

of Federal Regulations and the revised

§§ 72.6, 72.7, 72.8, and 72.14 proposed

on December 27, 1996 (61 FR 68340). If

you have questions regarding the

applicability of this action to a

particular entity, consult the persons

listed in the preceding FOR FURTHER

INFORMATION CONTACT section.

II. Background

The overall goal of the Acid Rain

Program is to achieve significant

environmental benefits through

reductions in emissions of sulfur

dioxide (SO2) and nitrogen oxides

(NOX), the primary precursors of acid

rain. To achieve this goal at the lowest

cost to society, the program employs

both traditional and innovative, marketbased approaches for controlling air

pollution. In addition, the program

encourages energy efficiency and

promotes pollution prevention.

The Acid Rain Program departs from

traditional regulatory methods by

introducing an SO2 allowance trading

system that lowers the cost of reducing

emissions by allowing electric utilities

to seek out the least costly methods of

control. Utility units affected under title

IV are allocated allowances based on the

product of their historic utilization and

emission rates prescribed in the Clean

Air Act. These units may trade

allowances, provided that at the end of

each year, each unit holds enough

allowances to cover its annual SO2

emissions.

Although the Acid Rain Program is

mandated only for utility sources,

section 410 provides opportunities for

SO2-emitting sources not otherwise

affected by title IV requirements (e.g.,

industrial sources) to participate

through the opt-in program. Entry of

combustion sources into the opt-in

program is voluntary. Opt-in sources are

allocated allowances and, by making

cost-effective emissions reductions so

that their allowance allocations will

exceed their emissions, will have

allowances that may be sold in the SO2

allowance trading system. These

marketable allowances provide greater

compliance flexibility for affected utility

units.

III. Part 74: Opt-Ins

A. Designated Representative

Under the opt-in rules issued April 4,

1995 (60 FR 17100), combustion or

process sources located at the same

location as affected units are required to

have the same designated representative

as the affected units. EPA has received

comment that, in some limited

circumstances, the requirement for the

same designated representative will

inhibit entry or continued participation

in the opt-in program of opt-in sources

that could otherwise make cost-effective

emissions reductions. The commenter

described a situation where combustion

sources and a process source are owned

by an industrial company and Phase I

units at the same affected source are

partly owned by a utility. The industrial

company uses electricity to operate the

process sources and, for this purpose,

generates electricity at its wholly-owned

combustion sources and supplements

the generation with electricity obtained

from the utility-owned unit. The

industrial company is concerned that

having a single designated

representative for all these facilities may

result in confidential business

information—particularly concerning
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the process source operations and the

industrial company’s own generation

costs—being available to the designated

representative, who is an employee of

the utility and would not otherwise

have access to such information.

According to the commenter, the

industrial company’s participation in

the opt-in program may be jeopardized

because of its concern over the potential

competitive disadvantage that could

result from this arrangement. The

commenter raised the issue in a petition

for review filed on June 5, 1995

challenging the existing opt-in

regulations. On January 9, 1997, EPA

and the commenter entered into a

settlement of the litigation initiated by

the June 5, 1995 petition.

In response to the above comment and

consistent with the settlement, EPA is

establishing a procedure for nonutility

combustion or process sources located

with affected utility units to elect an

exception to the general requirement

that there be only one designated

representative for all affected units at a

source. EPA is establishing this

procedure for nonutililty opt-in sources

because their participation, which

Congress viewed as beneficial, in the

Acid Rain Program is voluntary.

Nonutility opt-in sources are part of

industrial operations that are very

different businesses from electric

utilities. Although EPA recognizes the

recent trend toward increased

competition in the electricity market,

the concern over confidentiality of

business information and the potential

adverse effect of disclosure of

information on a company’s

competitiveness are likely to be greater

for nonutility businesses. These factors

are thus more likely to discourage

industrial sources from opting in to the

Acid Rain Program.

Under EPA’s proposed new approach,

the certifying official of an electing optin source must certify to the

Administrator that the combustion or

process source meets the following

criteria: that the opt-in source (1) is

located at the same source as one or

more affected utility units and (2) is a

nonutility opt-in source, i.e., has no

owner or operator of which the

principal business is the sale,

transmission, or distribution of

electricity to the public or that is a

public utility under the jurisdiction of a

State or local utility regulatory

authority. In addition, a certificate of

representation meeting the generally

applicable requirements for such

certificates must be submitted. The

Administrator will rely on the

submitted certificate, unless the

Administrator determines that the optin source does not actually meet the

election requirements.

EPA notes that its general approach

has been, and continues to be, to make

opt-in sources subject to the same

requirements as other affected units. 60

FR 17101. In fact, EPA has previously

explained that section 410 requires that

combustion sources meet the same

monitoring requirements as other

affected units. 59 FR 50088, 50095

(1993); see also 42 U.S.C. 7651i(e)

(requiring opt-in sources to meet the

monitoring requirements of section 412

of the Clean Air Act). In deciding

whether to impose on opt-in sources the

same single-designated-representative

requirement that other affected sources

must meet, EPA must balance, on one

hand, the importance of imposing

consistent requirements on all affected

units and, on the other hand, Congress’

desire to encourage voluntary entry of

opt-in sources into the Acid Rain

Program. EPA believes that allowing, in

a few cases in order to encourage

voluntary participation, a separate

designated representative for an opt-in

source will not adversely affect the Acid

Rain Program. EPA anticipates that

there will be few opt-in sources that will

qualify for the proposed election.

Balancing these considerations, EPA is

proposing to revise the regulations to

allow for such limited exceptions.

B. Thermal Energy Plans

The opt-in rule allows combustion

sources to become opt-in sources at the

beginning of any calendar quarter, not

only at the beginning of a calendar year.

See 40 CFR 74.28. However, EPA notes

that the thermal energy provision at

§ 74.47 only provides for calendar year

plans. This may create a problem in

cases where the replacement of thermal

energy is supposed to begin some time

after January 1 of the calendar year. The

opt-in source would have to delay

replacement of thermal energy for a

period of up to almost 12 months after

the replacement would otherwise begin

to coordinate the replacement with the

commencement of the thermal energy

plan. EPA believes that allowing

thermal energy plans to begin after the

first calendar quarter provides

additional flexibility to opt-in sources

without unduly burdening the Agency

because EPA anticipates that there will

be few opt-in sources requesting such

plans.

Therefore, EPA is proposing revisions

to allow (and take account of the

possibility of) the submission of thermal

energy plans at the beginning of any

calendar quarter. For example, certain

revisions require that, where a thermal

energy plan is to begin during a quarter

after the first quarter, the plan must

include information related to the

amount of the replacement thermal

energy to be provided for the first partial

year of the plan. Information on the

replacement thermal energy in

subsequent full years of the plan must

also be provided. The allowances

transferred to the replacement unit are

based on the amount of replacement

thermal energy; for the first calendar

year allowances will reflect the

replacement energy provided during the

partial year, and for any subsequent

years, allowances will reflect the

replacement energy during the full year.

C. Deduction of Allowances From ATS

Accounts

The opt-in rule not only restricts

transfer of future year opt-in allowances,

it also allows EPA to cancel current-year

opt-in allowances in the event that an

opt-in source has excess emissions and

has shut down. For operating opt-in

sources, EPA draws upon future-year

allowances in the opt-in’s Allowance

Tracking System (ATS) account to offset

excess emissions. However, when the

opt-in source shuts down, future-year

allowances are eliminated and EPA

retains the option of canceling opt-in

allowances, even when those

allowances have been transferred to

other ATS accounts.

EPA has received comment that

retaining such option may unduly

restrict transfer of opt-in allowances and

that the option is unnecessarily broad,

considering EPA’s other processes. This

issue was raised in the June 5, 1995

petition for review of the existing optin regulations and is addressed in the

January 9, 1997 settlement, which

petition and settlement are discussed

above. EPA agrees that EPA’s

recordation process and EPA’s process

regarding confirmation reports appear to

generally offer sufficient protection to

prevent transfer of opt-in allowances

before the Agency is assured that those

allowances are not needed to cover

excess emissions.

Thus, in response to the comment and

consistent with the settlement, EPA is

proposing to provide that an opt-in

allowance may not be deducted under

§ 74.50(a) from any ATS account, other

than the account of the opt-in source

allocated such allowance, (i) after EPA

has completed the process of

recordation as set forth in § 73.34(a)

following the deduction of allowances

from the opt-in source’s compliance

subaccount for the year for which such

allowance may first be used or (ii) if the

opt-in source claims under in an annual

compliance certification report an

estimated reduction in heat input from
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improved efficiency, under

§ 74.44(a)(1)(B), after EPA has

completed action on the confirmation

report concerning such claimed

reduction pursuant to

§§ 74.44(c)(2)(iii)(E)(3)–(E)(5) for the

year for which such allowance may first

be used.

For any given compliance year and,

for opt-in sources claiming reductions

from improved efficiency, the

recordation process and action on

confirmation reports will probably be

completed before the end of the year

following the compliance year. For

1995, EPA actually completed the

recordation process on July 2, 1996. For

1996, EPA completed the process on

June 12, 1997. However, because

confirmation reports are not due to EPA

until July 1, EPA expects to complete

action on such reports by September of

the same year.

D. Miscellaneous

EPA is proposing a number of

modifications and corrections to the

combustion source opt-in rules to reflect

changes in the Acid Rain Program and

operating permits program under title V

of the Clean Air Act since the

publication of the final opt-in rule on

April 4, 1995. In particular the Agency

has finalized operating permit rules in

part 71 and proposed changes to part 72.

The following types of miscellaneous

changes are proposed:

1. References to part 71 are added to

part 74 where appropriate.

2. References to exemptions under

§§ 72.7, 72.8 and 72.14 are added where

appropriate in order to reflect the

proposed revisions to part 72 that

provide that exempt units are not

affected units. Units exempted under

these sections may not become opt-in

units.

3. Repetitive language concerning the

effect of withdrawal of an opt-in source

from the Acid Rain Program on prior

violations of opt-in requirements is

removed. A similar change was

proposed to language in part 72

concerning the effect of exemptions

under §§ 72.7, 72.8 and 72.14 on prior

violations. See 61 FR 68369–68371

(similar language in ‘‘Special

Provisions’’ for each exemption).

4. Corrections are made so that

language concerning the use of

improved efficiency of an opt-in source

to account for reduced utilization is

consistent with similar provisions in

part 72 concerning reduced utilization

of affected utility units. See 40 CFR

72.91(a)(5) and (b)(2).

5. The formula for determining how

many allowances should be retained in

the allowance account of an opt-in

source with a thermal energy plan is

revised. The revision takes into account

the fact that the opt-in source’s

allowance account may include

allowances acquired by the opt-in

source as well as allowances allocated

to it by EPA.

6. Incorrect references to sections in

parts 74 and 75 are corrected.

IV. Administrative Requirements

A. Executive Order 12866

Under Executive Order 12866, 58 FR

51735 (October 4, 1993), the

Administrator must determine whether

the regulatory action is ‘‘significant’’

and therefore subject to Office of

Management and Budget (OMB) review

and the requirements of the Executive

Order. The Order defines ‘‘significant

regulatory action’’ as one that is likely

to result in a rule that may:

(1) Have an annual effect on the

economy of $100 million or more or

adversely affect in a material way the

economy, a sector of the economy,

productivity, competition, jobs, the

environment, public health or safety, or

State, local, or tribal governments or

communities;

(2) Create a serious inconsistency or

otherwise interfere with an action taken

or planned by another agency;

(3) Materially alter the budgetary

impact of entitlements, grants, user fees,

or loan programs or the rights and

obligations of recipients thereof; or

(4) Raise novel legal or policy issues

arising out of legal mandates, the

President’s priorities, or the principles

set forth in the Executive Order.

Pursuant to the terms of Executive

Order 12866, it has been determined

that this proposed rule is a ‘‘significant

regulatory action’’ because the rule

seems to raise novel legal or policy

issues. As such, this action was

submitted to OMB for review. Any

written comments from OMB to EPA,

any written EPA response to those

comments, and any changes made in

response to OMB suggestions or

recommendations are included in the

docket. The docket is available for

public inspection at the EPA’s Air

Docket Section, which is listed in the

ADDRESSES section of this preamble.

B. Unfunded Mandates Act

Section 202 of the Unfunded

Mandates Reform Act of 1995

(‘‘Unfunded Mandates Act’’) requires

that the Agency prepare a budgetary

impact statement before promulgating a

rule that includes a federal mandate that

may result in expenditure by State,

local, and tribal governments, in

aggregate, or by the private sector, of

$100 million or more in any one year.

Section 203 requires the Agency to

establish a plan for obtaining input from

and informing, educating, and advising

any small governments that may be

significantly or uniquely affected by the

rule.

Under section 205 of the Unfunded

Mandates Act, the Agency must identify

and consider a reasonable number of

regulatory alternatives before

promulgating a rule for which a

budgetary impact statement must be

prepared. The Agency must select from

those alternatives the least costly, most

cost-effective, or least burdensome

alternative that achieves the objectives

of the rule, unless the Agency explains

why this alternative is not selected or

the selection of this alternative is

inconsistent with law.

Because this proposed rule is

estimated to result in the expenditure by

State, local, and tribal governments or

the private sector of less than $100

million in any one year, the Agency has

not prepared a budgetary impact

statement or specifically addressed the

selection of the least costly, most costeffective, or least burdensome

alternative. Because small governments

will not be significantly or uniquely

affected by this rule, the Agency is not

required to develop a plan with regard

to small governments.

The proposed revisions to part 74 will

not have a significant effect on regulated

entities or State permitting authorities.

The revisions potentially reduce the

burden certain opt-in sources, by

allowing the election of a separate

designated representative and by

allowing thermal energy plans to begin

on the calendar quarter. Also, the

revisions potentially reduce the burden

on the utility sector by revising when

EPA may deduct allowances from ATS

accounts.

C. Paperwork Reduction Act

This action proposing revisions to the

opt-in rule would not impose any new

information collection burden. OMB has

previously approved the information

collection requirements contained in the

opt-in rules, 40 CFR part 74, under the

provisions of the Paperwork Reduction

Act, 44 U.S.C. 3501, et seq. and has

assigned OMB control number 2060–

0258. 60 FR 17111.

Burden means the total time, effort, or

financial resources expended by persons

to generate, maintain, retain, or disclose

or provide information to or for a

Federal agency. This includes the time

needed to review instructions; develop,

acquire, install, and utilize technology

and systems for the purposes of

collecting, validating, and verifying
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information, processing and

maintaining information, and disclosing

and providing information; adjust the

existing ways to comply with any

previously applicable instructions and

requirements; train personnel to be able

to respond to a collection of

information; search data sources;

complete and review the collection of

information; and transmit or otherwise

disclose the information.

Copies of the ICR may be obtained

from Sandy Farmer, Information Policy

Branch; EPA; 401 M. St. SW (mail code

2136); Washington, DC 20460 or by

calling (202) 260–2740. Include the ICR

and/or OMB number in any

correspondence.

D. 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 government jurisdictions. This

proposed rule would not have a

significant impact on a substantial

number of small entities.

In the preamble of the April 4, 1995

opt-in rule, the Administrator certified

that the rule, including the provisions

revised by today’s rule, would not have

a significant economic impact on small

entities. 60 FR 17111. Today’s revisions

are not significant enough to change the

overall economic impact addressed in

the April 4, 1995 preamble. Moreover,

as discussed above, the revisions

provide regulated entities with

additional flexibility (e.g., the option to

have a separate designated

representative and to have a thermal

energy plan that begins in the second,

or later, quarter of the year). Therefore,

I certify that this action will not have a

significant economic impact on a

substantial number of small entities.

E. Miscellaneous

In accordance with section 117 of the

Act, issuance of this rule was preceded

by consultation with any appropriate

advisory committees, independent

experts, and federal departments and

agencies.

List of Subjects in 40 CFR Part 74

Environmental protection, Acid rain,

Air pollution control, Reporting and

recordkeeping requirements, Sulfur

oxides.

Dated: September 9, 1997.

Carol M. Browner,

Administrator.

For the reasons set forth in the

preamble, 40 CFR part 74 is proposed to

be amended as set forth below.

PART 74—[AMENDED]

1. The authority citation for part 74

continues to read as follows:

Authority: 42 U.S.C. 7601 and 7651, et seq.

2. Section 74.3 is amended by:

i. In paragraph (b), revising the phrase

‘‘parts 70 and 72’’ to read ‘‘parts 70, 71,

and 72’’;

ii. In paragraph (b), revising the

phrase ‘‘part 70’’ to read ‘‘parts 70 and

71’’; and

iii. Adding at the end of paragraph (d)

the words ‘‘, consistent with subpart E

of this part.’’

3. Section 74.4 is amended by adding

paragraph (c) to read as follows:

§ 74.4 Designated Representative.

* * * * *

(c)(1) Notwithstanding paragraph (b)

of this section, a certifying official of a

combustion or process source that is

located at the same source as one or

more affected utility units and that has

no owner of which the principal

business is the sale, transmission, or

distribution of electricity or that is a

public utility under the jurisdiction of a

State or local utility regulatory

commission may elect to designate, for

such combustion or process sources, a

different designated representative than

the designated representative for the

affected utility units.

(2) In order to make such an election,

the certifying official shall submit to the

Administrator, in a format prescribed by

the Administrator: a certification that

the combustion or process source for

which the election is made meets each

of the requirements for election in

paragraph (c)(1) of this section; and a

certificate of representation for the

designated representative of the

combustion or process source in

accordance with § 72.24 of this chapter.

The Administrator will rely on such

certificate of representation in

accordance with § 72.25 of this chapter,

unless the Administrator determines

that the requirements for election in the

paragraph (c)(1) are not met.

§ 74.14 [Corrected]

4. Section 74.10 is amended by

removing from paragraph (a)(2) the

word ‘‘§ 74.62’’ and adding in its place

the words ‘‘§ 75.20 of this chapter’’.

§ 74.10 [Corrected]

5. Section 74.14 is amended by

removing from paragraph (b)

introductory text the words ‘‘part 70’’

and adding in their place the words

‘‘parts 70 and 71’’ and by removing from

paragraph (b)(6)(ii) the word

‘‘approved’’ and adding in its place the

words ‘‘approved for operating

permits’’.

§ 74.16 [Corrected]

6. Section 74.16 is amended by

removing from paragraph (a)(12) the

word ‘‘;’’ and adding in its place the

words ‘‘and does not have an exemption

under § 72.7, 72.8, or 72.14 of this

chapter;’’.

§ 74.18 [Corrected]

7. Section 74.18 is amended by

removing from paragraph (d) the words

‘‘§ 74.46(c)’’ and adding in their place

‘‘§ 74.46(b)(2)’’ and by removing the last

sentence from paragraph (e).

§ 74.22 [Corrected]

8. Section 74.22 is amended by

removing from paragraph (c)(2) the

words ‘‘§ 74.20(a)(2)(A)’’ and adding in

their place the words ‘‘§ 74.20(a)(2)(i)’’.

§ 74.26 [Corrected]

9. Section 74.26 is amended by

removing from paragraph (a)(2) the

words ‘‘in which’’ and adding in their

place the words ‘‘for which’’.

§ 74.42 [Corrected]

10. Section 74.42 is amended by

removing from paragraph (a) the word

‘‘(a).’’

§ 74.44 [Corrected]

11. Section 74.44 is amended by:

i. Removing from paragraph

(a)(1)(i)(G) the words ‘‘demand side

measures that improve the efficiency of

electricity or steam consumption’’ and

adding in their place the words

‘‘specific measures’’;

ii. Removing from paragraph (a)(2)(i)

the words ‘‘or for the first two calendar

years after the effective date of a thermal

energy plan governing an opt-in source

in accordance with § 74.47 of this

chapter’’;

iii. Adding in paragraph (a)(2)(iii) the

words ‘‘of this section’’ after the word

‘‘(a)(2)(ii)’’;

iv. Removing from paragraph

(c)(2)(ii)(B)(1) the words ‘‘opt-in

sources.’’ and adding in their place the

words ‘‘opt-in sources and Phase I

units.’’;

v. Removing from the formula in

paragraph (c)(2)(iii)(F) the words ‘‘=

allowances allocated’’ and adding in

their place the words ‘‘allowances

allocated or acquired’’;

vi. Removing from paragraph

(c)(2)(iii)(F) the words ‘‘ ‘Allowances

allocated’ shall be the number of
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allowances allocated under section

§ 74.40 for the calendar year.’’ and

adding in their place the words ‘‘

’Allowances allocated or acquired’ shall

be the number of allowances held in the

source’s compliance subaccount at the

allowance transfer deadline plus the

number of allowances transferred for the

previous calendar year to all

replacement units under an approved

thermal energy plan in accordance with

§ 74.47(a)(6).’’;

vii. Removing from paragraph

(c)(2)(iii)(E)(3) the words ‘‘allowances

necessary’’ and adding in their place the

words ‘‘allowances that he or she

determines is necessary’’.

12. Section 74.47 is amended by:

i. By adding in paragraph (a)(3)(i),

after the word ‘‘year’’ in each place it

appears, the word ‘‘and quarter’’;

ii. Adding in the first sentence of

paragraph (a)(3)(vii), after the word

‘‘year’’, the words ‘‘and quarter’’; and

iii. Revising paragraphs (a)(1),

(a)(3)(viii), (a)(3)(ix), (a)(3)(x), (a)(3)(xi),

(a)(3)(xii), and (a)(4) to read as follows:

§ 74.47 Transfer of allowances from the

replacement of thermal energy—

combustion sources.

(a) Thermal energy plan. (1) General

provisions. The designated

representative of an opt-in source that

seeks to qualify for the transfer of

allowances based on the replacement of

thermal energy by a replacement unit

shall submit a thermal energy plan

subject to the requirements of § 72.40(b)

of this chapter for multi-unit

compliance options and this section.

The effective period of the thermal

energy plan shall begin at the start of the

calendar quarter (January 1, April 1, July

1, or October 1) for which the plan is

approved and end December 31 of the

last full calendar year for which the optin permit containing the plan is in

effect.

* * * * *

(3) * * *

(viii) The estimated annual amount of

total thermal energy to be reduced at the

opt-in source, including all energy flows

(steam, gas, or hot water) used for any

process or in any heating or cooling

application, and, for a plan starting

April 1, July 1, or October 1, such

estimated amount of total thermal

energy to be reduced starting April 1,

July 1, or October 1 respectively and

ending on December 31;

(ix) The estimated amount of total

thermal energy at each replacement unit

for the calendar year prior to the year for

which the plan is to take effect,

including all energy flows (steam, gas,

or hot water) used for any process or in

any heating or cooling application, and,

for a plan starting April 1, July 1, or

October 1, such estimated amount of

total thermal energy for the portion of

such calendar year starting April 1, July

1, or October 1 respectively;

(x) The estimated annual amount of

total thermal energy at each replacement

unit after replacing thermal energy at

the opt-in source, including all energy

flows (steam, gas, or hot water) used for

any process or in any heating or cooling

application, and, for a plan starting

April 1, July 1, or October 1, such

estimated amount of total thermal

energy at each replacement unit after

replacing thermal energy at the opt-in

source starting April 1, July 1, or

October 1 respectively and ending

December 31;

(xi) The estimated annual amount of

thermal energy at each replacement

unit, including all energy flows (steam,

gas, or hot water) used for any process

or in any heating or cooling application,

replacing thermal energy at the opt-in

source, and, for a plan starting April 1,

July 1, or October 1, such estimated

amount of thermal energy replacing

thermal energy at the opt-in source

starting April 1, July 1, or October 1

respectively and ending December 31;

(xii) The estimated annual total fuel

input at each replacement unit after

replacing thermal energy at the opt-in

source and, for a plan starting April 1,

July 1, or October 1, such estimated total

fuel input after replacing thermal energy

at the opt-in source starting April 1, July

1, or October 1 respectively and ending

December 31;

* * * * *

(4) Submission. The designated

representative of the opt-in source

seeking to qualify for the transfer of

allowances based on the replacement of

thermal energy shall submit a thermal

energy plan to the permitting authority

by no later than six months prior to the

first calendar quarter for which the plan

is to be in effect. The thermal energy

plan shall be signed and certified by the

designated representative of the opt-in

source and each replacement unit

covered by the plan.

* * * * *

13. Section 74.50 is amended by

redesignating the introductory text

paragraph (a) as paragraph (a)(1),

redesignating paragraphs (a)(1) through

(a)(4) as paragraphs (a)(1)(i) through

(a)(1)(iv), and adding paragraph (a)(2) to

read as follows:

§ 74.50 Deducting opt-in source

allowances from ATS accounts.

(a) * * *

(2) An opt-in allowance may not be

deducted under paragraph (a)(1) of this

section from any Allowance Tracking

System Account other than the account

of the opt-in source allocated such

allowance:

(i) After the Administrator has

completed the process of recordation as

set forth in § 73.34(a) of this chapter

following the deduction of allowances

from the opt-in source’s compliance

subaccount for the year for which such

allowance may first be used; or

(ii) If the opt-in source includes in the

annual compliance certification report

estimates of any reduction in heat input

resulting from improved efficiency

under § 74.44(a)(1)(i), after the

Administrator has completed action on

the confirmation report concerning such

estimated reduction pursuant to

§§ 74.44(c)(2)(iii)(E)(3), (4), and (5) for

the year for which such allowance may

first be used.

* * * * *

[FR Doc. 97–24414 Filed 9–24–97; 8:45 am]

BILLING CODE 6560–50–P