[Federal Register Volume 83, Number 157 (Tuesday, August 14, 2018)]
[Proposed Rules]
[Pages 40184-40192]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-17357]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R05-OAR-2017-0700; FRL-9982-10--Region 5]


Air Plan Approval; Indiana; Cross-State Air Pollution Rule

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: The Environmental Protection Agency (EPA) is proposing to 
approve a state submission concerning the Cross-State Air Pollution 
Rule (CSAPR) that was submitted by Indiana on November 27, 2017 as a 
revision to the Indiana State Implementation Plan (SIP). Under CSAPR, 
large electricity generating units (EGUs) in Indiana are subject to 
Federal Implementation Plans (FIPs) requiring the units to participate 
in CSAPR's Federal trading program for annual emissions of nitrogen 
oxides (NO<INF>X</INF>), one of CSAPR's two Federal trading programs 
for annual emissions of sulfur dioxide (SO<INF>2</INF>), and one of 
CSAPR's two Federal trading programs for ozone season emissions of 
NO<INF>X</INF>. This action would approve the State's regulations 
requiring large Indiana EGUs to participate in new CSAPR state trading 
programs for annual NO<INF>X</INF>, annual SO<INF>2</INF>, and ozone 
season NO<INF>X</INF> emissions integrated with the CSAPR Federal 
trading programs, replacing the corresponding FIP requirements. EPA is 
proposing to approve the SIP revision because the submittal meets the

[[Page 40185]]

requirements of the Clean Air Act (CAA or Act) and EPA's regulations 
for approval of a CSAPR full SIP revision replacing the requirements of 
a CSAPR FIP. Under the CSAPR regulations, approval of the SIP revision 
would automatically eliminate Indiana's units' requirements under the 
corresponding CSAPR FIPs addressing Indiana's interstate transport (or 
``good neighbor'') obligations for the 1997 fine particulate matter 
(PM<INF>2.5</INF>) national ambient air quality standard (NAAQS), the 
2006 PM<INF>2.5</INF> NAAQS, the 1997 ozone NAAQS, and the 2008 ozone 
NAAQS. Like the CSAPR FIP requirements that would be replaced, approval 
of the SIP revision would fully satisfy Indiana's good neighbor 
obligations for the 1997 PM<INF>2.5</INF> NAAQS, the 2006 
PM<INF>2.5</INF> NAAQS, and the 1997 ozone NAAQS and would partially 
satisfy Indiana's good neighbor obligation for the 2008 ozone NAAQS.

DATES: Comments must be received on or before September 13, 2018.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-R05-
OAR-2017-0700 at https://www.regulations.gov, or via email to 
<a href="/cdn-cgi/l/email-protection#94f5f6e1e6f5fafbbaf0fbe1f3f8f5e7d4f1e4f5baf3fbe2"><span class="__cf_email__" data-cfemail="3e5f5c4b4c5f5051105a514b59525f4d7e5b4e5f10595148">[email protected]</span></a>. For comments submitted at Regulations.gov, 
follow the online instructions for submitting comments. Once submitted, 
comments cannot be edited or removed from Regulations.gov. For either 
manner of submission, EPA may publish any comment received to its 
public docket. Do not submit electronically any information you 
consider to be Confidential Business Information (CBI) or other 
information whose disclosure is restricted by statute. Multimedia 
submissions (audio, video, etc.) must be accompanied by a written 
comment. The written comment is considered the official comment and 
should include discussion of all points you wish to make. EPA will 
generally not consider comments or comment contents located outside of 
the primary submission (i.e., on the web, cloud, or other file sharing 
system). For additional submission methods, please contact the person 
identified in the FOR FURTHER INFORMATION CONTACT section. For the full 
EPA public comment policy, information about CBI or multimedia 
submissions, and general guidance on making effective comments, please 
visit https://www2.epa.gov/dockets/commenting-epa-dockets.

FOR FURTHER INFORMATION CONTACT: Sarah Arra, Environmental Scientist, 
Attainment Planning and Maintenance Section, Air Programs Branch (AR-
18J), Environmental Protection Agency, Region 5, 77 West Jackson 
Boulevard, Chicago, Illinois 60604, (312) 886-9401, <a href="/cdn-cgi/l/email-protection#9effececffb0edffecfff6defbeeffb0f9f1e8"><span class="__cf_email__" data-cfemail="ef8e9d9d8ec19c8e9d8e87af8a9f8ec1888099">[email protected]</span></a>.

SUPPLEMENTARY INFORMATION: Throughout this document whenever ``we,'' 
``us,'' or ``our'' is used, we mean EPA. This SUPPLEMENTARY INFORMATION 
section is arranged as follows:

I. Overview
II. Background on CSAPR and CSAPR-Related SIP Revisions
III. Conditions for Approval of CSAPR-Related SIP Revisions
IV. Indiana's SIP Submittal and EPA's Analysis
V. What action is EPA taking?
VI. Incorporation by Reference
VII. Statutory and Executive Order Reviews

I. Overview

    EPA is proposing to approve the November 27, 2017 submittal as a 
revision to the Indiana SIP to include CSAPR \1\ state trading programs 
for annual emissions of NO<INF>X</INF> and SO<INF>2</INF> and ozone 
season emissions of NO<INF>X</INF>. Large EGUs in Indiana are subject 
to CSAPR FIPs that require the units to participate in the Federal 
CSAPR NO<INF>X</INF> Annual Trading Program, the Federal CSAPR 
SO<INF>2</INF> Group 1 Trading Program, and the Federal CSAPR 
NO<INF>X</INF> Ozone Season Group 2 Trading Program. CSAPR also 
provides a process for the submission and approval of SIP revisions to 
replace the requirements of CSAPR FIPs with SIP requirements under 
which a state's units participate in CSAPR state trading programs that 
are integrated with and, with certain permissible exceptions, 
substantively identical to the CSAPR Federal trading programs.
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    \1\ Federal Implementation Plans; Interstate Transport of Fine 
Particulate Matter and Ozone and Correction of SIP Approvals, 76 FR 
48208 (August 8, 2011) (codified as amended at 40 CFR 52.38 and 
52.39 and subparts AAAAA through EEEEE of 40 CFR part 97).
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    The SIP revision proposed for approval would incorporate into 
Indiana's SIP state trading program regulations for annual 
NO<INF>X</INF>, annual SO<INF>2</INF>, and ozone season NO<INF>X</INF> 
emissions that would replace EPA's Federal trading program regulations 
for those emissions from Indiana units. EPA is proposing to approve the 
SIP revision because it meets the requirements of the CAA and EPA's 
regulations for approval of a CSAPR full SIP revision replacing a 
Federal trading program with a state trading program that is integrated 
with and substantively identical to the Federal trading program. Under 
the CSAPR regulations, approval of the SIP revision would automatically 
eliminate the obligations of large EGUs in Indiana to participate in 
CSAPR's Federal trading programs for annual NO<INF>X</INF>, annual 
SO<INF>2</INF>, and ozone season NO<INF>X</INF> emissions under the 
corresponding CSAPR FIPs. EPA proposes to find that approval of the SIP 
revision would fully satisfy Indiana's obligations pursuant to the 
``good neighbor'' provisions of CAA section 110(a)(2)(D)(i)(I) to 
prohibit emissions which will significantly contribute to nonattainment 
or interfere with maintenance of the 1997 PM<INF>2.5</INF> NAAQS, the 
2006 PM<INF>2.5</INF> NAAQS, and the 1997 ozone NAAQS in any other 
state and would partially satisfy Indiana's corresponding obligation 
with respect to the 2008 ozone NAAQS.\2\
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    \2\ In a separate action, EPA has proposed to determine that the 
emission reductions required under the FIPs promulgated in the CSAPR 
Update (see the next footnote) fully address the respective states' 
good neighbor obligations with respect to the 2008 ozone NAAQS. 83 
FR 31915 (July 10, 2018). If that separate action is finalized as 
proposed, approval of Indiana's SIP replacing the CSAPR Update FIP 
for the state's sources as proposed in this action would fully 
address Indiana's good neighbor obligation with respect to the 2008 
ozone NAAQS.
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II. Background on CSAPR and CSAPR-Related SIP Revisions

    EPA issued CSAPR in July 2011 to address the requirements of CAA 
section 110(a)(2)(D)(i)(I) concerning interstate transport of air 
pollution. As amended (including the 2016 CSAPR Update \3\), CSAPR 
requires 27 Eastern states to limit their statewide emissions of 
SO<INF>2</INF> and/or NO<INF>X</INF> in order to mitigate transported 
air pollution unlawfully impacting other states' ability to attain or 
maintain four NAAQS: The 1997 PM<INF>2.5</INF> NAAQS, the 2006 
PM<INF>2.5</INF> NAAQS, the 1997 ozone NAAQS, and the 2008 ozone NAAQS. 
The CSAPR emissions limitations are defined in terms of maximum 
statewide ``budgets'' for emissions of annual SO<INF>2</INF>, annual 
NO<INF>X</INF>, and/or ozone season NO<INF>X</INF> by each covered 
state's large EGUs. The CSAPR state budgets are implemented in two 
phases of generally increasing stringency, with the Phase 1 budgets 
applying to emissions in 2015 and 2016 and the Phase 2 (and CSAPR 
Update) budgets applying to emissions in 2017 and later years. As a 
mechanism for achieving compliance with the emissions limitations, 
CSAPR establishes five Federal emissions

[[Page 40186]]

trading programs: A program for annual NO<INF>X</INF> emissions, two 
geographically separate programs for annual SO<INF>2</INF> emissions, 
and two geographically separate programs for ozone-season 
NO<INF>X</INF> emissions. CSAPR also establishes FIP requirements 
applicable to the large EGUs in each covered state.\4\ Currently, the 
CSAPR FIP provisions require each state's units to participate in up to 
three of the five CSAPR trading programs.
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    \3\ See 81 FR 74504 (October 26, 2016). The CSAPR Update was 
promulgated to address interstate pollution with respect to the 2008 
ozone NAAQS and to address a judicial remand of certain original 
CSAPR ozone season NO<INF>X</INF> budgets promulgated with respect 
to the 1997 ozone NAAQS. See 81 FR at 74505. The CSAPR Update 
established new emission reduction requirements addressing the more 
recent NAAQS and coordinated them with the remaining emission 
reduction requirements addressing the older ozone NAAQS, so that 
starting in 2017, CSAPR includes two geographically separate trading 
programs for ozone season NO<INF>X</INF> emissions covering EGUs in 
a total of 23 states. See 40 CFR 52.38(b)(1)-(2).
    \4\ States must submit good neighbor SIPs within three years (or 
less, if the Administrator so prescribes) after a NAAQS is 
promulgated. CAA section 110(a)(1) and (2). Where EPA finds that a 
state fails to submit a required SIP or disapproves a SIP, EPA is 
obligated to promulgate a FIP addressing the deficiency. CAA section 
110(c).
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    CSAPR includes provisions under which states may submit and EPA 
will approve SIP revisions to modify or replace the CSAPR FIP 
requirements while allowing states to continue to meet their transport-
related obligations using either CSAPR's Federal emissions trading 
programs or state emissions trading programs integrated with the 
Federal programs, provided that the SIP revisions meet all relevant 
criteria.\5\ Through such a SIP revision, a state may replace EPA's 
default provisions for allocating emission allowances among the state's 
units, employing any state-selected methodology to allocate or auction 
the allowances, subject to timing conditions and limits on overall 
allowance quantities. In the case of CSAPR's Federal trading programs 
for ozone season NO<INF>X</INF> emissions (or an integrated state 
trading program), a state may also expand trading program applicability 
to include certain smaller EGUs.\6\ If a state wants to replace CSAPR 
FIP requirements with SIP requirements under which the state's units 
participate in a state trading program that is integrated with and 
identical to the Federal trading program even as to the allocation and 
applicability provisions, the state may submit a SIP revision for that 
purpose as well. However, no emissions budget increases or other 
substantive changes to the trading program provisions are allowed. A 
state whose units are subject to multiple CSAPR FIPs and Federal 
trading programs may submit SIP revisions to modify or replace either 
some or all of those FIP requirements.
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    \5\ See 40 CFR 52.38, 52.39. States also retain the ability to 
submit SIP revisions to meet their transport-related obligations 
using mechanisms other than the CSAPR Federal trading programs or 
integrated state trading programs.
    \6\ States covered by both the CSAPR Update and the 
NO<INF>X</INF> SIP Call have the additional option to expand 
applicability under the CSAPR NO<INF>X</INF> Ozone Season Group 2 
Trading Program to include non-EGUs that would have participated in 
the former NO<INF>X</INF> Budget Trading Program.
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    States can submit two basic forms of CSAPR-related SIP revisions 
effective for emissions control periods in 2017 or later years.\7\ 
Specific conditions for approval of each form of SIP revision are set 
forth in the CSAPR regulations, as described in section III below. 
Under the first alternative--an ``abbreviated'' SIP revision--a state 
may submit a SIP revision that upon approval replaces the default 
allowance allocation and/or applicability provisions of a CSAPR Federal 
trading program for the state.\8\ Approval of an abbreviated SIP 
revision leaves the corresponding CSAPR FIP and all other provisions of 
the relevant Federal trading program in place for the state's units.
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    \7\ CSAPR also provides for a third, more streamlined form of 
SIP revision that is effective only for control periods in 2016 or 
2018 (depending on the trading program) and is not relevant here. 
See 40 CFR 52.38(a)(3), (b)(3), (b)(7); 52.39(d), (g).
    \8\ 40 CFR 52.38(a)(4), (b)(4), (b)(8); 52.39(e), (h).
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    Under the second alternative--a ``full'' SIP revision--a state may 
submit a SIP revision that upon approval replaces a CSAPR Federal 
trading program for the state with a state trading program integrated 
with the Federal trading program, so long as the state trading program 
is substantively identical to the Federal trading program or does not 
substantively differ from the Federal trading program except as 
discussed above with regard to the allowance allocation and/or 
applicability provisions.\9\ For purposes of a full SIP revision, a 
state may either adopt state rules with complete trading program 
language, incorporate the Federal trading program language into its 
state rules by reference (with appropriate conforming changes), or 
employ a combination of these approaches.
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    \9\ 40 CFR 52.38(a)(5), (b)(5), (b)(9); 52.39(f), (i).
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    The CSAPR regulations identify several important consequences and 
limitations associated with approval of a full SIP revision. First, 
upon EPA's approval of a full SIP revision as correcting the deficiency 
in the state's implementation plan that was the basis for a particular 
set of CSAPR FIP requirements, the obligation to participate in the 
corresponding CSAPR Federal trading program is automatically eliminated 
for units subject to the state's jurisdiction without the need for a 
separate EPA withdrawal action, so long as EPA's approval of the SIP is 
full and unconditional.\10\ Second, approval of a full SIP revision 
does not terminate the obligation to participate in the corresponding 
CSAPR Federal trading program for any units located in any Indian 
country within the borders of the state, and if and when a unit is 
located in Indian country within a state's borders, EPA may modify the 
SIP approval to exclude from the SIP, and include in the surviving 
CSAPR FIP instead, certain trading program provisions that apply 
jointly to units in the state and to units in Indian country within the 
state's borders.\11\ Finally, if at the time a full SIP revision is 
approved EPA has already started recording allocations of allowances 
for a given control period to a state's units, the Federal trading 
program provisions authorizing EPA to complete the process of 
allocating and recording allowances for that control period to those 
units will continue to apply, unless EPA's approval of the SIP revision 
provides otherwise.\12\
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    \10\ 40 CFR 52.38(a)(6), (b)(10)(i); 52.39(j).
    \11\ 40 CFR 52.38(a)(5)(iv)-(v), (a)(6), (b)(5)(v)-(vi), 
(b)(9)(vi)-(vii), (b)(10)(i); 52.39(f)(4)-(5), (i)(4)-(5), (j).
    \12\ 40 CFR 52.38(a)(7), (b)(11)(i); 52.39(k).
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III. Conditions for Approval of CSAPR-Related SIP Revisions

    Each CSAPR-related abbreviated or full SIP revision must meet the 
following general submittal conditions:
    <bullet> Timeliness and completeness of SIP submittal. The SIP 
submittal completeness criteria in section 2.1 of appendix V to 40 CFR 
part 51 apply. In addition, if a state wants to replace the default 
allowance allocation or applicability provisions of a CSAPR Federal 
trading program, the complete SIP revision must be submitted to EPA by 
December 1 of the year before the deadlines described below for 
submitting allocation or auction amounts to EPA for the first control 
period for which the state wants to replace the default allocation and/
or applicability provisions.\13\ This SIP submission deadline is 
inoperative in the case of a SIP revision that seeks only to replace a 
CSAPR FIP and Federal trading program with a SIP and a substantively 
identical state trading program integrated with the Federal trading 
program.
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    \13\ 40 CFR 52.38(a)(4)(ii), (a)(5)(vi), (b)(4)(iii), 
(b)(5)(vii), (b)(8)(iv), (b)(9)(viii); 52.39(e)(2), (f)(6), (h)(2), 
(i)(6).
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    In addition to the general submittal conditions, a CSAPR-related 
abbreviated or full SIP seeking to address the allocation or auction of 
emission allowances must meet the following further conditions:
    <bullet> Methodology covering all allowances potentially requiring 
allocation. For each Federal trading program addressed by a SIP 
revision, the SIP revision's allowance allocation or auction 
methodology must replace

[[Page 40187]]

both the Federal program's default allocations to existing units \14\ 
at 40 CFR 97.411(a), 97.511(a), 97.611(a), 97.711(a), or 97.811(a) as 
applicable, and the Federal trading program's provisions for allocating 
allowances from the new unit set-aside (NUSA) for the state at 40 CFR 
97.411(b)(1) and 97.412(a), 97.511(b)(1) and 97.512(a), 97.611(b)(1) 
and 97.612(a), 97.711(b)(1) and 97.712(a), or 97.811(b)(1) and 
97.812(a), as applicable.\15\ In the case of a state with Indian 
country within its borders, while the SIP revision may neither alter 
nor assume the Federal program's provisions for administering the 
Indian country NUSA for the state, the SIP revision must include 
procedures addressing the disposition of any otherwise unallocated 
allowances from an Indian country NUSA that may be made available for 
allocation by the state after EPA has carried out the Indian country 
NUSA allocation procedures.\16\
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    \14\ In the context of the approval conditions for CSAPR-related 
SIP revisions, an ``existing unit'' is a unit for which EPA has 
determined default allowance allocations (which could be allocations 
of zero allowances) in the rulemakings establishing and amending 
CSAPR.
    \15\ 40 CFR 52.38(a)(4)(i), (a)(5)(i), (b)(4)(ii), (b)(5)(ii), 
(b)(8)(iii), (b)(9)(iii); 52.39(e)(1), (f)(1), (h)(1), (i)(1).
    \16\ See 40 CFR 97.412(b)(10)(ii), 97.512(b)(10)(ii), 
97.612(b)(10)(ii), 97.712(b)(10)(ii), 97.812(b)(10)(ii).
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    <bullet> Assurance that total allocations will not exceed the state 
budget. For each Federal trading program addressed by a SIP revision, 
the total amount of allowances auctioned or allocated for each control 
period under the SIP revision (prior to the addition by EPA of any 
unallocated allowances from any Indian country NUSA for the state) 
generally may not exceed the state's emissions budget for the control 
period less the sum of the amount of any Indian country NUSA for the 
state for the control period and any allowances already allocated to 
the state's units for the control period and recorded by EPA.\17\ Under 
its SIP revision, a state is free to not allocate allowances to some or 
all potentially affected units, to allocate or auction allowances to 
entities other than potentially affected units, or to allocate or 
auction fewer than the maximum permissible quantity of allowances and 
retire the remainder. Under the CSAPR NO<INF>X</INF> Ozone Season Group 
2 Trading Program only, additional allowances may be allocated if the 
state elects to expand applicability to non-EGUs that would have been 
subject to the NO<INF>X</INF> Budget Trading Program established for 
compliance with the NO<INF>X</INF> SIP Call.\18\
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    \17\ 40 CFR 52.38(a)(4)(i)(A), (a)(5)(i)(A), (b)(4)(ii)(A), 
(b)(5)(ii)(A), (b)(8)(iii)(A), (b)(9)(iii)(A); 52.39(e)(1)(i), 
(f)(1)(i), (h)(1)(i), (i)(1)(i).
    \18\ 40 CFR 52.38(b)(8)(iii)(A), (b)(9)(iii)(A).
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    <bullet> Timely submission of state-determined allocations to EPA. 
The SIP revision must require the state to submit to EPA the amounts of 
any allowances allocated or auctioned to each unit for each control 
period (other than allowances initially set aside in the state's 
allocation or auction process and later allocated or auctioned to such 
units from the set-aside amount) by the following deadlines.\19\ Note 
that the submission deadlines differ for amounts allocated or auctioned 
to units considered existing units for CSAPR purposes and amounts 
allocated or auctioned to other units.
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    \19\ 40 CFR 52.38(a)(4)(i)(B)-(C), (a)(5)(i)(B)-(C), 
(b)(4)(ii)(B)-(C), (b)(5)(ii)(B)-(C), (b)(8)(iii)(B)-(C), 
(b)(9)(iii)(B)-(C); 52.39(e)(1)(ii)-(iii), (f)(1)(ii)-(iii), 
(h)(1)(ii)-(iii), (i)(1)(ii)-(iii).

CSAPR NOX Annual, CSAPR NOX Ozone Season Group 1, CSAPR SO2 Group 1, and
                   CSAPR SO2 Group 2 Trading Programs
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                                                        Deadline for
                               Year of the control  submission to EPA of
            Units                    period            allocations or
                                                       auction results
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Existing....................  2017 and 2018.......  June 1, 2016.
                              2019 and 2020.......  June 1, 2017.
                              2021 and 2022.......  June 1, 2018.
                              2023 and later years  June 1 of the fourth
                                                     year before the
                                                     year of the control
                                                     period.
Other.......................  All years...........  July 1 of the year
                                                     of the control
                                                     period.
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             CSAPR NOX Ozone Season Group 2 Trading Program
------------------------------------------------------------------------
                                                        Deadline for
                               Year of the control  submission to EPA of
            Units                    period            allocations or
                                                       auction results
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Existing....................  2019 and 2020.......  June 1, 2018.
                              2021 and 2022.......  June 1, 2019.
                              2023 and 2024.......  June 1, 2020.
                              2025 and later years  June 1 of the fourth
                                                     year before the
                                                     year of the control
                                                     period.
Other.......................  All years...........  July 1 of the year
                                                     of the control
                                                     period.
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    <bullet> No changes to allocations already submitted to EPA or 
recorded. The SIP revision must not provide for any change to the 
amounts of allowances allocated or auctioned to any unit after those 
amounts are submitted to EPA or any change to any allowance allocation 
determined and recorded by EPA under the Federal trading program 
regulations.\20\
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    \20\ 40 CFR 52.38(a)(4)(i)(D), (a)(5)(i)(D), (b)(4)(ii)(D), 
(b)(5)(ii)(D), (b)(8)(iii)(D), (b)(9)(iii)(D); 52.39(e)(1)(iv), 
(f)(1)(iv), (h)(1)(iv), (i)(1)(iv).
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    <bullet> No other substantive changes to Federal trading program 
provisions. The SIP revision may not substantively change any other 
trading program provisions, except in the case of a SIP revision that 
also expands program applicability as described below.\21\ Any new 
definitions adopted in the SIP revision (in addition to the Federal 
trading program's definitions) may apply only for purposes of the SIP 
revision's allocation or auction provisions.\22\
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    \21\ 40 CFR 52.38(a)(4), (a)(5), (b)(4), (b)(5), (b)(8), (b)(9); 
52.39(e), (f), (h), (i).
    \22\ 40 CFR 52.38(a)(4)(i), (a)(5)(ii), (b)(4)(ii), (b)(5)(iii), 
(b)(8)(iii), (b)(9)(iv); 52.39(e)(1), (f)(2), (h)(1), (i)(2).

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[[Page 40188]]

    In addition to the general submittal conditions, a CSAPR-related 
abbreviated or full SIP revision seeking to expand applicability under 
the CSAPR NO<INF>X</INF> Ozone Season Group 1 or CSAPR NO<INF>X</INF> 
Ozone Season Group 2 Trading Programs (or an integrated state trading 
program) must meet the following further conditions:
    <bullet> Only electricity generating units with nameplate capacity 
of at least 15 MWe. The SIP revision may expand applicability only to 
additional fossil fuel-fired boilers or combustion turbines serving 
generators producing electricity for sale, and only by lowering the 
generator nameplate capacity threshold used to determine whether a 
particular boiler or combustion turbine serving a particular generator 
is a potentially affected unit. The nameplate capacity threshold 
adopted in the SIP revision may not be less than 15 MWe.\23\ In 
addition or alternatively, applicability under the CSAPR NO<INF>X</INF> 
Ozone Season Group 2 Trading Program may be expanded to non-EGUs that 
would have been subject to the NO<INF>X</INF> Budget Trading Program 
established for compliance with the NO<INF>X</INF> SIP Call.\24\
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    \23\ 40 CFR 52.38(b)(4)(i), (b)(5)(i), (b)(8)(i), (b)(9)(i).
    \24\ 40 CFR 52.38(b)(8)(ii), (b)(9)(ii).
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    <bullet> No other substantive changes to Federal trading program 
provisions. The SIP revision may not substantively change any other 
trading program provisions, except in the case of a SIP revision that 
also addresses the allocation or auction of emission allowances as 
described above.\25\
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    \25\ 40 CFR 52.38(b)(4), (b)(5), (b)(8), (b)(9).
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    In addition to the general submittal conditions and the other 
applicable conditions described above, a CSAPR-related full SIP 
revision must meet the following further conditions:
    <bullet> Complete, substantively identical trading program 
provisions. The SIP revision must adopt complete state trading program 
regulations substantively identical to the complete Federal trading 
program regulations at 40 CFR 97.402 through 97.435, 97.502 through 
97.535, 97.602 through 97.635, 97.702 through 97.735, or 97.802 through 
97.835, as applicable, except as described above in the case of a SIP 
revision that seeks to replace the default allowance allocation and/or 
applicability provisions.\26\
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    \26\ 40 CFR 52.38(a)(5), (b)(5), (b)(9); 52.39(f), (i).
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    <bullet> Only non-substantive substitutions for the term ``State.'' 
The SIP revision may substitute the name of the state for the term 
``State'' as used in the Federal trading program regulations, but only 
to the extent that EPA determines that the substitutions do not 
substantively change the trading program regulations.\27\
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    \27\ 40 CFR 52.38(a)(5)(iii), (b)(5)(iv), (b)(9)(v); 
52.39(f)(3), (i)(3).
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    <bullet> Exclusion of provisions addressing units in Indian 
country. The SIP revision may not impose requirements on any unit in 
any Indian country within the state's borders and must not include the 
Federal trading program provisions governing allocation of allowances 
from any Indian country NUSA for the state.\28\
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    \28\ 40 CFR 52.38(a)(5)(iv), (b)(5)(v), (b)(9)(vi); 52.39(f)(4), 
(i)(4).
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IV. Indiana's SIP Submittal and EPA's Analysis

A. Indiana's SIP Submittal

    In the CSAPR rulemaking, EPA determined that air pollution 
transported from EGUs in Indiana would unlawfully affect other states' 
ability to attain or maintain the 1997 Ozone NAAQS, the 1997 
PM<INF>2.5</INF> NAAQS, and the 2006 PM<INF>2.5</INF> NAAQS, and 
included Indiana in the CSAPR ozone season NO<INF>X</INF> trading 
program and the annual SO<INF>2</INF> and NO<INF>X</INF> trading 
programs.\29\ In the CSAPR Update rulemaking, EPA determined that air 
pollution transported from EGUs in Indiana would unlawfully affect 
other states' ability to attain or maintain the 2008 Ozone NAAQS.\30\ 
Indiana's units meeting the CSAPR applicability criteria are 
consequently currently subject to CSAPR FIPs that require participation 
in the CSAPR NO<INF>X</INF> Annual Trading Program, the CSAPR 
SO<INF>2</INF> Group 1 Trading Program, and the CSAPR NO<INF>X</INF> 
Ozone Season Group 2 Trading Program.\31\
---------------------------------------------------------------------------

    \29\ 76 FR 48208, 48213 (August 8, 2011).
    \30\ 81 FR 74504, 74506 (October 26, 2016).
    \31\ 40 CFR 52.38(a)(2), (b)(2); 52.39(b); 52.789(a), (b); 
52.790.
---------------------------------------------------------------------------

    Indiana's November 27, 2017 SIP submittal would incorporate into 
the SIP CSAPR state trading program regulations that would replace the 
CSAPR Federal trading program regulations with regard to Indiana units' 
SO<INF>2</INF> and NO<INF>X</INF> emissions. The SIP submittal includes 
Indiana Rules 326 IAC 24-5, 24-6, and 24-7. In general, each of 
Indiana's CSAPR state trading program rules is designed to replace the 
corresponding Federal trading program regulations. For example, Indiana 
Rule 326 IAC 24-5, NO<INF>X</INF> Annual Trading Program, is designed 
to replace subpart AAAAA of 40 CFR part 97 (i.e., 40 CFR 97.401 through 
97.435).
    With regard to form, some of the individual rules for each Indiana 
CSAPR state trading program are set forth as full regulatory text--
notably the rules governing allocation of the state trading budgets 
among the state's EGUs--but most of the rules incorporate the 
corresponding Federal trading program section or sections by reference.
    With regard to substance, the rules for each Indiana CSAPR state 
trading program differ from the corresponding CSAPR Federal trading 
program regulations in two main ways. First, the Indiana rules omit 
some Federal trading program provisions not applicable to Indiana's 
state trading programs, including provisions setting forth the amounts 
of emissions budgets, NUSAs, Indian country NUSAs, and variability 
limits for other states and provisions relating to EPA's administration 
of Indian country NUSAs. Second, the Indiana rules contain provisions 
that replace the default allowance allocation methodology and process 
from the FIPs with Indiana's own state-administered process. Indiana's 
methodology for determining allocations to existing units generally 
provides for allocations based on each unit's historical heat input 
subject to caps based on each unit's historical maximum emissions. 
Indiana's methodology for allocating NUSA allowances provides for 
allocations to new units based on each unit's recent historical 
emissions followed by allocations to existing units of any allowances 
not allocated to new units. These methodologies are similar to the 
methodologies used by EPA to determine the default allocations to 
existing units and to annually allocate NUSA allowances under the 
Federal trading programs. However, while EPA's default allocations to 
existing units are fixed for all future control periods, Indiana's 
methodology calls for allocations for each successive control period to 
be calculated using more recent data on the units' historical heat 
input and maximum emissions.
    The Indiana rules adopt the Phase 2 NO<INF>X</INF> Annual, 
SO<INF>2</INF> Group 1, and NO<INF>X</INF> Ozone Season Group 2 budgets 
found at 40 CFR 97.410(a)(4)(iv), 97.610(a)(2)(iv), and 
97.810(a)(5)(i), respectively. Accordingly, EPA will evaluate the 
approvability of the Indiana SIP submission consistent with these 
budgets.

B. EPA's Analysis of Indiana's SIP Submittal

1. Timeliness and Completeness of SIP Submittal
    Indiana is seeking to replace EPA-determined allowance allocations 
with state-determined allocations starting with the 2021 control 
periods for all three CSAPR trading programs. For the

[[Page 40189]]

NO<INF>X</INF> Annual and SO<INF>2</INF> Group 1 trading programs, 
under 40 CFR 52.38(a)(5)(i)(B) and 52.39(f)(1)(ii), the deadline for 
submission of state-determined allocations for the 2021 control periods 
is June 1, 2018, triggering a December 1, 2017 SIP submittal deadline 
for these programs under 40 CFR 52.38(a)(5)(vi) and 52.39(f)(6). For 
the NO<INF>X</INF> Ozone Season Group 2 trading program, under 40 CFR 
52.38(b)(9)(iii)(B), the allocation submission deadline for the 2021 
control period is June 1, 2019, triggering a December 1, 2018 SIP 
submittal deadline for this program under 40 CFR 52.38(b)(9)(viii). 
Indiana submitted its SIP revision to EPA on November 27, 2017, and EPA 
has determined that the submittal complies with the applicable minimum 
completeness criteria in section 2.1 of appendix V to 40 CFR part 51. 
Indiana has therefore met the requirements for timeliness and 
completeness of its CSAPR SIP submittal for all three programs.
2. Methodology Covering All Allowances Potentially Requiring Allocation
    In the rules for each Indiana trading program, section 2 adopts the 
full amount of the state's budget under the corresponding Federal 
program, sections 4 and 5 contain provisions replacing the 
corresponding Federal program's default allocations to existing units, 
and sections 6 and 7 contain provisions replacing the corresponding 
Federal program's provisions for allocating allowances from the NUSAs. 
There are no Indian country NUSAs for Indiana, making it unnecessary 
for Indiana's rules to contain provisions addressing the disposition of 
otherwise unallocated allowances from an Indian country NUSA after EPA 
has carried out the Indiana country NUSA allocation procedures. 
Indiana's rules therefore meet the condition under 40 CFR 
52.38(a)(5)(i), 52.38(b)(9)(iii), and 52.39(f)(1) that the state's 
allocation methodology must cover all allowances potentially requiring 
allocation by the state.
3. Assurance That Total Allocations Will Not Exceed the State Budget
    Indiana's rules provide for allocation of total amounts of 
allowances equal to the emissions budgets set for Indiana for the 
control periods in 2017 and subsequent years under the three CSAPR 
trading programs. Indiana's NO<INF>X</INF> Annual trading budget is 
incorporated by reference in 326 IAC 24-5-2(a), Indiana's 
NO<INF>X</INF> Ozone Season Group 2 budget is incorporated in 326 IAC 
24-6-2(a), and Indiana's SO<INF>2</INF> Group 1 budget is incorporated 
by reference in 326 IAC 24-7-2(a). Because there are no Indian country 
NUSAs for Indiana, there is no possibility that additional allowances 
will be made available for allocation under the state's methodology, 
and EPA has not yet allocated or recorded CSAPR allowances for the 
control periods in 2021 or later years for Indiana units. Indiana's 
rules therefore meet the condition under 40 CFR 52.38(a)(5)(i)(A), 
52.38(b)(9)(iii)(A), and 52.39(f)(1)(i) that, for each trading program, 
the total amount of allowances allocated under the SIP revision (before 
the addition of any otherwise unallocated allowances from an Indian 
country NUSA) may not exceed the state's budget for the control period 
less the amount of the Indian country NUSA for the state and any 
allowances already allocated and recorded by EPA.
4. Timely Submission of State-Determined Allocations to EPA
    In the rules for each trading program, section 3 sets out the dates 
by which the state will submit state-determined allowance allocations 
to EPA. For existing units, by June 1, 2018, the state will submit 
allocations for the control periods in 2021 and 2022, and then, 
starting in 2019, by June 1 of every second year the state will submit 
allocations for the two control periods that are four and five years 
after the year of the submittal (for example, the submittal due by June 
1, 2019 will include allocations for the 2023 and 2024 control 
periods). For NUSA allowances, for each control period the state will 
submit first-round allocations by July 1 of the year of the control 
period and second-round allocations by February 6 of the year after the 
control period. These dates match or precede the applicable deadlines 
for submittal of existing unit allocations in 40 CFR 52.38(a)(5)(i)(B), 
52.38(b)(9)(iii)(B), and 52.39(f)(1)(ii) and the applicable deadlines 
for submittal of NUSA allocations in 40 CFR 52.38(a)(5)(i)(C), 
52.38(b)(9)(iii)(C), and 52.39(f)(1)(iii), thereby meeting the 
conditions requiring allocations to be submitted before these 
deadlines.
5. No Changes to Allocations Already Submitted to EPA or Recorded
    The Indiana rules do not include any provisions allowing alteration 
of allocations after the allocation amounts have been provided to EPA 
and no provisions allowing alteration of any allocations made and 
recorded by EPA under the Federal trading program regulations, thereby 
meeting the condition under 40 CFR 52.38(a)(5)(i)(D), 
52.38(b)(9)(iii)(D), and 52.39(f)(1)(iv).
6. No Other Substantive Changes to Federal Trading Program Provisions
    As discussed above, Indiana's rules generally incorporate by 
reference the corresponding provisions (including the definitions) of 
the Federal trading programs, except for the default Federal provisions 
addressing allowance allocations. The state has broad discretion to 
adopt any allowance allocation methodology, subject to limits on the 
total quantities of allowances allocated and the timing of submissions 
of allocation information to EPA. EPA believes that Indiana intends for 
the allocation provisions in its rules to adhere to the limits just 
noted, but EPA also identified several issues concerning provisions of 
the state rules that may not accurately reflect the state's intent in 
adopting the provisions, as discussed below. By letter to EPA dated 
June 11, 2018, the state has clarified its interpretation of these rule 
provisions.\32\ EPA has confirmed that, as clarified, the only 
substantive changes in Indiana's rules concern allowance allocations, 
and that these changes do not exceed the state's broad discretion with 
regard to allowance allocations.
---------------------------------------------------------------------------

    \32\ See the June 11, 2018 letter from Assistant Commissioner 
Keith Bauges to Regional Administrator Cathy Stepp, available in the 
docket.
---------------------------------------------------------------------------

    The first issue concerns instances where the text of two of 
Indiana's CSAPR rules indicates that references to the rules' 
allocation provisions should be substituted for certain references to 
the default Federal allocation provisions, but the state rule text does 
not accurately identify the default Federal provisions being replaced. 
Indiana has clarified that, in the state's NO<INF>X</INF> Ozone Season 
Group 2 rule at 326 IAC 24-6-1(d)(3), the state interprets the rule 
text as replacing a reference to the default Federal allocation 
provisions at ``40 CFR 97.811(a)(2) and (b) and 97.812'', not ``40 CFR 
97.811(a)(2) and (b) 97.812'' as currently written in the rule text, 
and that in the state's SO<INF>2</INF> Group 1 rule at 326 IAC 24-7-
1(d)(3), the state interprets the rule text as replacing the default 
Federal allocation provisions at ``40 CFR 97.611(a)(2) and (b) and 
97.612'', not ``40 CFR 97.611(a)(2) and 97.611(b)'' as currently 
written in the rule text. EPA agrees that the meaning of the rule text, 
as interpreted by the state, is clear from context.
    The second issue concerns an inaccurate terminology definition that 
appears in all three of Indiana's CSAPR rules. In the nomenclature for 
the

[[Page 40190]]

equation to calculate second-round NUSA allocations at 326 IAC 
24.5.7(a)(2)(B), 326 IAC 24.6.7(a)(2)(B), and 326 IAC 24.7.7(a)(2)(B), 
the rule text defines the term ``sum'' as ``the total amount of 
allocations under this subdivision''. In context, the definition of 
``sum'' as written cannot be correct because it is circular with the 
term ``unit allowance'' in the same equation, and if the definition 
were correct, the only situation in which the two sides of the equation 
could be equal--i.e., where the total number of allowances available 
for second-round NUSA allocations equals the sum of the eligible units' 
historical emissions less the sum of the eligible units' first-round 
NUSA allocations--is a situation in which the equation is not supposed 
to be used. In its letter, Indiana has clarified that the state 
interprets the term ``sum'' instead to mean ``the sum under this 
subdivision''--that is, subdivision (2)--which elsewhere in subdivision 
(2) is further defined as the ``the sum of the positive differences 
determined under subdivision (1)''. EPA agrees that the state's 
interpretation of the rule text is reasonable in context and notes that 
it causes the equation to allocate allowances in the same manner as 
EPA's default NUSA allocation methodology would allocate allowances in 
an analogous situation.
    The third issue also arises in all three of Indiana's CSAPR rules 
and concerns a potential conflict between two requirements of the 
state's allocation methodology. The first requirement, set forth at 326 
IAC 24-5-5(d)(3) and (e)(1), 326 IAC 24-6-5(d)(3) and (e)(1), and 326 
IAC 24-7-5(d)(3) and (e)(1), caps the allocation from the state's 
``existing unit budget'' to each individual existing unit at an amount 
based on the unit's historical emissions. The second requirement, set 
forth at 326 IAC 24-5-5(e)(3), 326 IAC 24-6-5(e)(3), and 326 IAC 24-7-
5(e)(3), directs the state to repeat its allocation calculations 
``until the entire existing unit budget is allocated.'' Under Indiana's 
allocation methodology, unlike EPA's default allocation methodology, 
the set of historical emissions data used to determine the caps on 
individual units' allocations is periodically updated, creating the 
possibility that for some future control period, the sum of the 
individual units' applicable caps will be less than the total amount of 
the existing unit budget, causing a conflict between these two 
requirements. In the clarification letter, Indiana acknowledges the 
potential for the conflict of the two requirements, however did not 
find this to be an issue for the 2021 and 2022 allocation cycles. 
Indiana will watch for this issue with future allocation cycles and 
will revise the SIP in a timely matter if it becomes necessary. This 
would include the possibility of an emergency rule if the normal rule 
process was not expeditious enough. EPA agrees that this is a 
reasonable approach if this becomes an issue in future allocation 
cycles.
    EPA concludes that the state's allocation methodology, as clarified 
above, does not exceed the state's broad discretion regarding allowance 
allocations and that the state's rules make no other substantive 
changes to the Federal trading program provisions, thereby meeting the 
condition in 40 CFR 52.38(a)(5), 52.39(f), and 52.38(b)(9).
7. Complete, Substantively Identical Trading Program Provisions
    As discussed above, the Indiana SIP revision adopts state budgets 
identical to the Phase 2 budgets for Indiana under the Federal trading 
programs and adopts almost all of the provisions of the Federal CSAPR 
NO<INF>X</INF> Annual Trading Program, CSAPR SO<INF>2</INF> Group 1 
Trading Program, and CSAPR NO<INF>X</INF> Ozone Season Group 2 Trading 
Program, with the exception of differences in the allocation 
methodology. Under the state's rules, Indiana will determine allowance 
allocations beginning with the 2021 control periods.
    With a few exceptions, the rules comprising Indiana's CSAPR state 
trading program for annual NO<INF>X</INF> emissions either incorporate 
by reference or adopt full-text replacements for all of the provisions 
of 40 CFR 97.402 through 97.435; the rules comprising Indiana's CSAPR 
state trading program for NO<INF>X</INF> ozone season emissions either 
incorporate by reference or adopt full-text replacements for all of the 
provisions of 40 CFR 97.802 through 97.835; and the rules comprising 
Indiana's CSAPR state trading program for SO<INF>2</INF> emissions 
either incorporate by reference or adopt full-text replacements for all 
of the provisions of 40 CFR 97.602 through 97.635. The major exception, 
which as discussed above is a permissible substantive change, is that 
Indiana has adopted rule provisions for a state-administered allocation 
methodology replacing the default EPA-administered allocation 
methodology. The additional minor exceptions discussed below are 
likewise either permissible or required.
    The first additional exception is that the Indiana rules do not 
incorporate the provisions of 40 CFR 97.410(a) and (b), 97.810(a) and 
(b), and 97.610(a) and (b) setting forth the amounts of the Phase 1 
emissions budgets, NUSAs, and variability limits for Indiana and the 
amounts of the Phase 1 and Phase 2 emissions budgets, NUSAs, Indian 
country NUSAs, and variability limits for other states. Omission of the 
Indiana Phase 1 emissions budget, NUSA, and variability limit amounts 
is appropriate because Indiana's state trading programs do not apply to 
emissions occurring in Phase 1 of CSAPR. Omission of the Phase 1 and 
Phase 2 budget, NUSA, Indian country NUSA, and variability limit 
amounts for other states from state trading programs in which only 
Indiana units participate does not undermine the completeness of 
Indiana's state trading programs. Indiana's rules incorporate or 
include full-text replacement provisions for the remaining provisions 
of 40 CFR 97.410, 97.810, and 97.610 that are relevant to trading 
programs applicable only to Indiana units during the control periods in 
2021 and later years.
    The second additional exception is that the Indiana rules do not 
incorporate 40 CFR 97.421(a) through (d), 97.821(a) through (c), and 
97.621(a) through (d) setting forth the recordation schedules for 
allowance allocations for control periods in years before 2021. 
Omission of these provisions is non-substantive because Indiana's rules 
apply only to allocations for control periods in 2021 and later years.
    The third additional exception is that the Indiana rules do not 
incorporate certain provisions of the Federal program regulations 
concerning EPA's administration of Indian country NUSAs. Omission of 
these provisions from Indiana's state trading program rules is 
required, as discussed below.
    None of the omissions undermines the completeness of Indiana's 
state trading programs, and EPA has preliminarily determined that 
Indiana's SIP revision makes no substantive changes to the provisions 
of the Federal trading program regulations. Thus, Indiana's SIP 
revision meets the condition under 40 CFR 52.38(a)(5), 52.38(b)(9), and 
52.39(f) that the SIP revision must adopt complete state trading 
program regulations substantively identical to the complete Federal 
trading program regulations at 40 CFR 97.402 through 97.435, 97.802 
through 97.835, and 97.602 through 97.635, respectively, except to the 
extent permitted in the case of a SIP revision that seeks to replace 
the default allowance allocation and/or applicability provisions.
8. Only Non-Substantive Substitutions for the Term ``State''
    Indiana's CSAPR program rules do not make any substitutions for the 
term

[[Page 40191]]

''State,'' rendering moot the condition in 40 CFR 52.38(a)(5)(iii), 
52.38(b)(9)(v), and 52.39(f)(3) that any such substitutions must be 
non-substantive.
9. Exclusion of Provisions Addressing Units in Indian Country
    Indiana Rules 326 IAC 24-5-1(a), 326 IAC 24-6-1(a), and 326 IAC 24-
7-1(a) incorporate by reference the applicability provisions of the 
Federal trading program rules at 40 CFR 97.404, 97.804, and 97.604, 
respectively. There is no Indian country (as defined for purposes of 
CSAPR) within Indiana's borders, so the applicability provisions of the 
Indiana rules necessarily do not extend to any units in Indian country. 
In addition, Indiana's SIP revision excludes the Federal trading 
program provisions related to EPA's process for allocating and 
recording allowances from Indian country NUSAs (i.e., 40 CFR 
97.411(b)(2), 97.411(c)(5)(iii), 97.412(b), 97.421(h), and 97.421(j) 
for the NO<INF>X</INF> Annual program; 40 CFR 97.811(b)(2), 
97.811(c)(5)(iii), 97.812(b), 97.821(h), and 97.821(j) for the 
NO<INF>X</INF> Ozone Season Group 2 program; and 40 CFR 97.611(b)(2), 
97.611(c)(5)(iii), 97.612(b), 97.621(h), and 97.621(j) for the 
SO<INF>2</INF> Group 1 program). Indiana's SIP revision therefore meets 
the conditions under 52.38(a)(5)(iv), 52.38(b)(9)(vi), and 52.39(f)(4) 
that a SIP submittal must not impose any requirement on any unit in 
Indian country within the borders of the State and must exclude certain 
provisions related to administration of Indian country NUSAs.

V. What action is EPA taking?

    EPA is proposing to approve Indiana's November 27, 2017, submittal, 
incorporating Indiana CSAPR rules in 326 IAC 24-5, 24-6, and 24-7, as a 
revision to Indiana's SIP. These state rules establish Indiana CSAPR 
state trading programs for annual NO<INF>X</INF>, ozone season 
NO<INF>X</INF>, and annual SO<INF>2</INF> emissions for units in the 
state. The Indiana CSAPR state trading programs would be integrated 
with the Federal CSAPR NO<INF>X</INF> Annual Trading Program, the 
Federal CSAPR NO<INF>X</INF> Ozone Season Group 2 Trading Program, and 
the Federal CSAPR SO<INF>2</INF> Group 1 Trading Program, respectively, 
and would be substantively identical to the Federal trading programs 
except for the allowance allocation provisions. If EPA approves the SIP 
revision, Indiana units would generally be required to meet 
requirements under Indiana's CSAPR state trading programs equivalent to 
the requirements the units otherwise would have been required to meet 
under the corresponding CSAPR Federal trading programs. This proposed 
approval also includes the repeal of Indiana CAIR rules which have been 
replaced by CSAPR for applicable EGUs. The rules being repealed from 
the SIP are 326 IAC 24-1, 24-2, and 24-3 (except 3-1, 3-2, 3-4, and 3-
11). EPA is proposing to approve the SIP revision because it meets the 
requirements of the CAA and EPA's regulations for approval of a CSAPR 
full SIP revision replacing a Federal trading program with a state 
trading program that is integrated with and substantively identical to 
the Federal trading program except for permissible differences, as 
discussed in section IV above.
    EPA promulgated FIPs requiring Indiana units to participate in the 
Federal CSAPR NO<INF>X</INF> Annual Trading Program, the Federal CSAPR 
SO<INF>2</INF> Group 1 Trading Program, and the Federal CSAPR 
NO<INF>X</INF> Ozone Season Group 2 Trading Program in order to address 
Indiana's obligations under CAA section 110(a)(2)(D)(i)(I) with respect 
to the 1997 PM<INF>2.5</INF> NAAQS, the 2006 PM<INF>2.5</INF> NAAQS, 
the 1997 ozone NAAQS, and the 2008 ozone NAAQS in the absence of SIP 
provisions addressing those requirements. Approval of Indiana's SIP 
submittal adopting CSAPR state trading program rules for annual 
NO<INF>X</INF>, annual SO<INF>2</INF>, and ozone season NO<INF>X</INF> 
substantively identical to the corresponding CSAPR Federal trading 
program regulations (or differing only with respect to the allowance 
allocation methodology) would fully satisfy Indiana's obligation 
pursuant to CAA section 110(a)(2)(D)(i)(I) to prohibit emissions which 
will significantly contribute to nonattainment or interfere with 
maintenance of the 1997 PM<INF>2.5</INF> NAAQS, the 2006 
PM<INF>2.5</INF> NAAQS, and the 1997 ozone NAAQS in any other state and 
partially satisfy Indiana's corresponding obligation with respect to 
the 2008 ozone NAAQS.\33\ Approval of the SIP submittal therefore would 
correct the same deficiency in the SIP that otherwise would be 
corrected by those CSAPR FIPs. Under the CSAPR regulations, upon EPA's 
full and unconditional approval of a SIP revision as correcting the 
SIP's deficiency that is the basis for a particular CSAPR FIP, the 
requirement to participate in the corresponding CSAPR Federal trading 
program is automatically eliminated for units subject to the state's 
jurisdiction (but not for any units located in any Indian country 
within the state's borders).\34\ Approval of Indiana's SIP submittal 
establishing CSAPR state trading program rules for annual 
NO<INF>X</INF>, annual SO<INF>2</INF>, and ozone season NO<INF>X</INF> 
emissions therefore would result in automatic termination of the 
requirements of Indiana units to participate in the Federal CSAPR 
NO<INF>X</INF> Annual Trading Program, the Federal CSAPR SO<INF>2</INF> 
Group 1 Trading Program, and the Federal CSAPR NO<INF>X</INF> Ozone 
Season Group 2 Trading Program.
---------------------------------------------------------------------------

    \33\ As noted in footnote 2 above, in a separate action EPA has 
proposed to make a determination that, if finalized, would cause 
approval of this SIP revision to also fully satisfy Indiana's good 
neighbor obligation with respect to the 2008 ozone NAAQS.
    \34\ 40 CFR 52.38(a)(6), (b)(10)(i), 52.39(j); see also 
52.789(a)(1), 52.789(b)(2); 52.790(a).
---------------------------------------------------------------------------

    In the SIP submittal, IDEM also requested approval of a revision to 
326 IAC 26-1-5 replacing reliance on CAIR in the state's Regional Haze 
program with reliance on CSAPR. EPA will act on this request in a 
separate rulemaking.

VI. Incorporation by Reference

    In this document, EPA is proposing to include in a final EPA rule 
regulatory text that includes incorporation by reference. In accordance 
with requirements of 1 CFR 51.5, EPA is proposing to incorporate by 
reference Indiana rules 326 IAC 24-5, 326 IAC 24-6, and 326 IAC 24-7, 
effective November 24, 2017. EPA has made, and will continue to make, 
these materials generally available through www.regulations.gov and at 
the EPA Region 5 office (please contact the person identified in the 
FOR FURTHER INFORMATION CONTACT section of this preamble for more 
information).

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 CAA 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 CAA. Accordingly, this 
action merely approves state law as meeting Federal requirements and 
does not impose additional requirements beyond those imposed by state 
law. For that reason, this action:
    <bullet> Is not a significant regulatory action subject to review 
by the Office of Management and Budget under Executive Orders 12866 (58 
FR 51735, October 4, 1993) and 13563 (76 FR 3821, January 21, 2011);
    <bullet> Is not an Executive Order 13771 (82 FR 9339, February 2, 
2017) regulatory action because SIP approvals are exempted under 
Executive Order 12866;
    <bullet> Does not impose an information collection burden under the 
provisions

[[Page 40192]]

of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.);
    <bullet> 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.);
    <bullet> 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);
    <bullet> Does not have Federalism implications as specified in 
Executive Order 13132 (64 FR 43255, August 10, 1999);
    <bullet> Is not an economically significant regulatory action based 
on health or safety risks subject to Executive Order 13045 (62 FR 
19885, April 23, 1997);
    <bullet> Is not a significant regulatory action subject to 
Executive Order 13211 (66 FR 28355, May 22, 2001);
    <bullet> Is not subject to requirements of Section 12(d) of the 
National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 
note) because application of those requirements would be inconsistent 
with the CAA; and
    <bullet> 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, the SIP is not approved to apply on any Indian 
reservation land or in any other area where EPA or an Indian tribe has 
demonstrated that a tribe has jurisdiction. In those areas of Indian 
country, the rule does not have tribal implications and will not impose 
substantial direct costs on tribal governments or preempt tribal law as 
specified by Executive Order 13175 (65 FR 67249, November 9, 2000).

List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Incorporation by 
reference, Intergovernmental relations, Nitrogen dioxide, Ozone, 
Particulate matter, Reporting and recordkeeping requirements, Sulfur 
oxides.

    Dated: July 30, 2018.
Cathy Stepp,
Regional Administrator, Region 5.
[FR Doc. 2018-17357 Filed 8-13-18; 8:45 am]
BILLING CODE 6560-50-P


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