[Federal Register Volume 83, Number 166 (Monday, August 27, 2018)]
[Proposed Rules]
[Pages 43586-43606]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-18497]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 52 and 97

[EPA-R06-OAR-2016-0611; FRL-9982-50--Region 6]


Promulgation of Air Quality Implementation Plans; State of Texas; 
Regional Haze and Interstate Visibility Transport Federal 
Implementation Plan: Proposal of Best Available Retrofit Technology 
(BART) and Interstate Transport Provisions

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: On October 17, 2017, the EPA published a final rule partially 
approving the 2009 Texas Regional Haze State Implementation Plan (SIP) 
submission and promulgated a Federal Implementation Plan (FIP) for 
Texas to address certain outstanding Clean Air Act (CAA) regional haze 
requirements. Because the EPA believes that certain aspects of the 
final rule could benefit from additional public input, we are proposing 
to affirm our October 2017 SIP approval and FIP promulgation and to 
provide the public with an opportunity to comment on relevant aspects, 
as well as other specified related issues.

DATES: Comments must be received on or before October 26, 2018.
    Public Hearing:
    We are holding an information session, for the purpose of providing 
additional information and informal discussion for our proposal. We are 
also holding a public hearing to accept oral comments into the record:
Date: Wednesday, September 26, 2018
Time: Information Session: 1:30 p.m.-3:30 p.m.
Public hearing: 4:00 p.m.-8:00 p.m. (including a short break)
Location: Joe C. Thompson Conference Center (on the University of Texas 
(UT) Campus), Room 1.110, 2405 Robert Dedman Drive, Austin, Texas 
78712.
For additional logistical information regarding the public hearing 
please see the SUPPLEMENTARY INFORMATION section of this action.

ADDRESSES: Submit your comments, identified by Docket No. EPA-R06-OAR-
2016-0611, at http://www.regulations.gov or via email to <a href="/cdn-cgi/l/email-protection#287a1e777c70056a697a7c684d5849064f475e"><span class="__cf_email__" data-cfemail="3b690d646f6316797a696f7b5e4b5a155c544d">[email protected]</span></a>. Follow the online instructions for submitting comments. 
Once submitted, comments cannot be edited or removed from 
Regulations.gov. The 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. The 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, the full EPA public comment policy, 
information about CBI or multimedia submissions, and general guidance 
on making effective comments, please visit http://www2.epa.gov/dockets/commenting-epa-dockets.
    Docket: The index to the docket for this action is available 
electronically at http://www.regulations.gov and in hard copy at the 
EPA Region 6, 1445 Ross Avenue, Suite 700, Dallas, Texas. While all 
documents in the docket are listed in the index, some information may 
be publicly available only at the hard copy location (e.g., copyrighted 
material), and some may not be publicly available at either location 
(e.g., CBI).
    The Texas regional haze SIP is also available online at: https://www.tceq.texas.gov/airquality/sip/bart/haze_sip.html. It is also 
available for public inspection during official business hours, by 
appointment, at the Texas Commission on Environmental Quality, Office 
of Air Quality, 12124 Park 35 Circle, Austin, Texas 78753.

FOR FURTHER INFORMATION CONTACT: Jennifer Huser, Air Planning Section 
(6MM-AA), Environmental Protection Agency, Region 6, 1445 Ross Avenue, 
Suite 700, Dallas, Texas 75202-2733, telephone 214-665-7347; email 
address <a href="/cdn-cgi/l/email-protection#3f774a4c5a4d11755a515156595a4d7f5a4f5e11585049"><span class="__cf_email__" data-cfemail="b3fbc6c0d6c19df9d6dddddad5d6c1f3d6c3d29dd4dcc5">[email protected]</span></a>.

SUPPLEMENTARY INFORMATION: Throughout this document wherever ``we,'' 
``us,'' or ``our'' is used, we mean the EPA.
    Joe C. Thompson Conference Center parking is adjacent to the 
building in Lot 40, located at the intersection of East Dean Keeton 
Street and Red River Street. Additional parking is available at the 
Manor Garage, located at the intersection of Clyde Littlefield Drive 
and Robert Dedman Drive. If arranged in advance, the UT Parking Office 
will allow buses to park along Dedman Drive near the Manor Garage for a 
fee.
    The public hearing will provide interested parties the opportunity 
to present information and opinions to us concerning our proposal. 
Interested parties may also submit written comments, as discussed in 
the proposal. Written statements and supporting information submitted 
during the comment period will be considered with the same weight as 
any oral comments and supporting information presented at the public 
hearing. We will not respond to comments during the public hearing. 
When we publish our final action, we will provide written responses to 
all significant oral and written comments received on our proposal. To 
provide opportunities for questions and discussion, we will hold an 
information session prior to the public hearing. During the information 
session, EPA staff will be available to informally answer questions on 
our proposed action. Any comments made to EPA staff during an 
information session must still be provided orally during the public 
hearing, or formally in writing within 30 days after completion of the 
hearings, in order to be considered in the record.
    At the public hearing, the hearing officer may limit the time 
available for each commenter to address the proposal to three minutes 
or less if the hearing officer determines it to be appropriate. We will 
not be providing equipment for commenters to show overhead slides or 
make computerized slide presentations. Any person may provide written 
or oral

[[Page 43587]]

comments and data pertaining to our proposal at the public hearing. 
Verbatim English--language transcripts of the hearing and written 
statements will be included in the rulemaking docket.

Table of Contents

I. Background
    A. Overview of the Purpose of Today's Action
    B. Regional Haze
    C. Interstate Transport of Pollutants That Affect Visibility
    D. Previous Actions Related to Texas Regional Haze
II. Summary of This Proposed Action
    A. Regional Haze
    1. SO<INF>2</INF> BART
    2. PM BART
    B. Interstate Transport of Pollutants that Affect Visibility
III. PM BART
IV. The SO<INF>2</INF> Trading Program and Its Implications for 
Interstate Visibility Transport and EGU BART
    A. Background on the Concept of CSAPR As an Alternative to BART
    B. Texas SO<INF>2</INF> Trading Program
    1. Identification of Sources Participating in the Trading 
Program
    2. Texas SO<INF>2</INF> Trading Program as a BART Alternative
    C. Specific Texas SO<INF>2</INF> Trading Program Features
    D. Recent Retirements
    E. Interstate Visibility Transport
V. Proposed Action
    A. Regional Haze
    B. Interstate Visibility Transport
VI. Statutory and Executive Order Reviews

I. Background

A. Overview of the Purpose of Today's Action

    The following overview demonstrates the lengthy and difficult path 
the regional haze program has taken in Texas. EPA maintains that States 
are in the best position to provide flexibility and protect the 
environment while maintaining a strong economic engine. As outlined in 
more detail below, the Texas 2009 Regional Haze SIP relied on the 
defunct Clean Air Interstate Rule (CAIR) to satisfy the Best Available 
Retrofit Technology (BART) requirements. The D.C. Circuit remanded CAIR 
to the EPA in 2009, prior to the state's submission. The CAIR 
requirements were replaced by the Cross-State Air Pollution Rule 
(CSAPR) in 2011. Because of legal challenges, CSAPR in its current form 
does not provide SO<INF>2</INF> emission reductions in Texas and, as 
such, cannot satisfy the BART requirements for SO<INF>2</INF> at 
electrical generating units (EGUs) in Texas. Nonetheless, Texas has not 
provided a replacement SIP submission to address BART for 
SO<INF>2</INF> at its EGUs. Because of court deadlines and without a 
Texas SIP, EPA has been forced to adopt a Federal Implementation Plan 
(FIP) to address BART.
    When EPA proposed a source-specific BART FIP in January 2017,\1\ 
Texas, along with other commenters, suggested to EPA the concept of a 
trading program. In close cooperation with Texas, EPA developed an 
SO<INF>2</INF> trading program that we included in our October 2017 
final rule \2\ and adopted in time to meet our court-ordered deadline. 
Texas entered an agreement with EPA to provide a SIP-based trading 
program that would replace the FIP.\3\ However, in the months since EPA 
promulgated the trading program FIP, Texas has not met its commitment 
to provide a SIP, leaving it without the benefits a State program could 
bring and leaving EPA little choice but to continue to implement a 
federal plan.
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    \1\ 82 FR 912 (Jan. 4, 2017).
    \2\ 82 FR 48324 (Oct. 17, 2017).
    \3\ See Texas Regional Haze MOA with TCEQ dated August 14, 2017 
at docket document number EPA-R06-OAR-2016-0611-0051.
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    On December 15, 2017, EPA received a petition for reconsideration 
of the October 2017 rule requesting that the Administrator reconsider 
certain aspects of the FIP related to the intrastate trading program 
promulgated to address the SO<INF>2</INF> BART requirement for EGUs. As 
stated in our letter in response to that petition dated April 30, 2018, 
we believe certain specific aspects of the federal plan can benefit 
from further public comment. Therefore, in this action, we are 
soliciting comment on: (1) The issuance of a FIP establishing an 
intrastate trading program capping emissions of SO<INF>2</INF> from 
certain EGUs in Texas and our determination that this program meets the 
requirements for an alternative to BART for SO<INF>2</INF>; (2) our 
finding that the BART alternatives in the October 2017 rulemaking to 
address SO<INF>2</INF> and NO<INF>X</INF> BART at Texas' EGUs result in 
emission reductions adequate to satisfy the requirements of CAA section 
110(a)(2)(D)(i)(II) with respect to visibility for a number of NAAQS 
issued between 1997 and 2010; and (3) our approval of Texas' SIP 
determination that no sources are subject to BART for PM<INF>2.5</INF>. 
We are also soliciting comment on the specific issues of whether recent 
shutdowns of sources included in the trading program and the merger of 
two owners of affected EGUs should impact the allocation methodology 
for certain SO<INF>2</INF> allowances. EPA will consider these comments 
in the context of our proposal to affirm the SO<INF>2</INF> trading 
program FIP. We believe that this action, which provides the public an 
opportunity to provide input on the issues raised in the December 15, 
2017 petition for reconsideration of the October 2017 final rule, 
resolves the basis for that petition.
    While soliciting comment on the above three proposed actions, EPA 
also invites comment on additional issues that could inform our 
decision making with regard to the SO<INF>2</INF> BART obligations for 
Texas. First, we seek input on whether SO<INF>2</INF> BART would be 
better addressed through a source-by-source approach (source-specific 
BART), the October 2017 SO<INF>2</INF> trading program, or some other 
appropriate BART alternative. Second, EPA requests comment on whether a 
SIP-based program would serve Texas better than a FIP. Third, we 
request public input on whether and how the SO<INF>2</INF> trading 
program finalized in the October 2017 final rule addresses the long-
term strategy and reasonable progress requirements for Texas.
    We note that, should we decide to act pursuant to any comments we 
receive on these additional policy questions, we may initiate a new 
rulemaking process with a new proposed rule.

B. Regional Haze

    Regional haze is visibility impairment that is produced by a 
multitude of sources and activities that are located across a broad 
geographic area and emit PM<INF>2.5</INF> (e.g., sulfates, nitrates, 
organic carbon (OC), elemental carbon (EC), and soil dust), and its 
precursors (e.g., SO<INF>2</INF>, NO<INF>X</INF>, and, in some cases, 
ammonia (NH<INF>3</INF>) and volatile organic compounds (VOCs)). Fine 
particle precursors react in the atmosphere to form PM<INF>2.5</INF>, 
which impairs visibility by scattering and absorbing light. Visibility 
impairment reduces the clarity, color, and visible distance that can be 
seen. PM<INF>2.5</INF> can also cause serious health effects and 
mortality in humans and contributes to environmental effects, such as 
acid deposition and eutrophication.\4\
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    \4\ Additional information regarding the regulatory background 
of the CAA and regional haze requirements can be found in our 
January 2017 notice of proposed rulemaking for Texas Regional Haze. 
(82 FR 917, January 4, 2017).
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    In Section 169A of the 1977 Amendments to the CAA, Congress created 
a program for protecting visibility in the nation's national parks and 
wilderness areas. This section of the CAA establishes as a national 
goal the prevention of any future, and the remedying of any existing, 
man-made impairment of visibility in 156 national parks and wilderness 
areas designated as mandatory Class I Federal areas. On December 2, 
1980, EPA promulgated regulations to address visibility impairment in 
Class I areas that is

[[Page 43588]]

``reasonably attributable'' to a single source or small group of 
sources, i.e., ``reasonably attributable visibility impairment.'' These 
regulations represented the first phase in addressing visibility 
impairment. EPA deferred action on regional haze that emanates from a 
variety of sources until monitoring, modeling, and scientific knowledge 
about the relationships between pollutants and visibility impairment 
were improved. Congress added section 169B to the CAA in 1990 to 
address regional haze issues, and EPA promulgated regulations 
addressing regional haze in 1999. The Regional Haze Rule revised the 
existing visibility regulations to add provisions addressing regional 
haze impairment and established a comprehensive visibility protection 
program for Class I areas.
    Section 169A of the CAA directs states to evaluate the use of 
retrofit controls at certain larger, often under-controlled, older 
stationary sources in order to address visibility impacts from these 
sources. Specifically, section 169A(b)(2)(A) of the CAA requires states 
to revise their SIPs to contain such measures as may be necessary to 
make reasonable progress toward the natural visibility goal by 
controlling emissions of pollutants that contribute to visibility 
impairment, including a requirement that certain categories of existing 
major stationary sources \5\ built between 1962 and 1977 procure, 
install, and operate the ``Best Available Retrofit Technology'' (BART). 
Larger ``fossil-fuel fired steam electric plants'' are included among 
the BART source categories. Under the Regional Haze Rule, states are 
directed to conduct BART determinations for ``BART-eligible'' sources 
that may be anticipated to cause or contribute to any visibility 
impairment in a Class I area. Following the compilation of the BART-
eligible sources, the sources are examined to determine whether these 
sources cause or contribute to visibility impairment in nearby Class I 
areas.\6\ For those sources that are not reasonably anticipated to 
cause or contribute to any visibility impairment in a Class I area, a 
BART determination is not required. Those sources are determined to be 
not subject-to-BART. Sources that are reasonably anticipated to cause 
or contribute to any visibility impairment in a Class I area are 
determined to be subject-to-BART. For each source subject to BART, 40 
CFR 51.308(e)(1)(ii)(A) requires that states (or EPA, in the case of a 
FIP) identify the level of control representing BART after considering 
the factors set out in CAA section 169A(g). The evaluation of BART for 
EGUs that are located at fossil-fuel-fired power plants having a 
generating capacity in excess of 750 megawatts must follow the 
``Guidelines for BART Determinations Under the Regional Haze Rule'' at 
appendix Y to 40 CFR part 51 (hereinafter referred to as the ``BART 
Guidelines''). Rather than requiring source-specific BART controls, 
states also have the flexibility to adopt an emissions trading program 
or alternative program (sometimes referred to as a ``BART 
alternative'') as long as the alternative provides greater reasonable 
progress towards improving visibility than BART. 40 CFR 51.308(e)(2) 
specifies how a state must conduct the demonstration to show that an 
alternative program will achieve greater reasonable progress than the 
installation and operation of BART. 40 CFR 51.308(e)(2)(i)(E) requires 
a determination, under specific criteria laid out at 40 CFR 
51.308(e)(3) or otherwise based on the clear weight of evidence, that 
the trading program or other alternative measure achieves greater 
reasonable progress than would be achieved through the installation and 
operation of BART at the covered sources. Finally, 40 CFR 51.308(e)(4) 
states that states participating in a Cross-State Air Pollution Rule 
(CSAPR) trading program need not require BART-eligible fossil fuel-
fired steam electric plants to install, operate, and maintain BART for 
the pollutant covered by that trading program.
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    \5\ See 42 U.S.C. 7491(g)(7) (listing the set of ``major 
stationary sources'' potentially subject-to-BART).
    \6\ See 40 CFR part 51, Appendix Y, III, How to Identify Sources 
``Subject to BART''.
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    Under section 110(c) of the CAA, whenever we disapprove a mandatory 
SIP submission in whole or in part, we are required to promulgate a FIP 
within two years unless the state corrects the deficiency and we 
approve the new SIP submittal.

C. Interstate Transport of Pollutants That Affect Visibility

    Section 110(a) of the CAA directs states to submit SIPs that 
provide for the implementation, maintenance, and enforcement of each 
NAAQS, which is commonly referred to as an infrastructure SIP. Among 
other things, CAA section 110(a)(2)(D)(i)(II) requires that SIPs 
contain adequate provisions to prohibit interference with measures 
required to protect visibility in other states. This is commonly 
referred to as ``interstate visibility transport.'' States must submit 
infrastructure SIPs addressing interstate visibility transport, among 
other requirements, which are due to the EPA within three years after 
the promulgation of a new or revised NAAQS (or within such shorter 
period as we may prescribe). A state's failure to submit a complete, 
approvable SIP for interstate visibility transport creates an 
obligation for the EPA to promulgate a FIP to address this requirement.

D. Previous Actions Related to Texas Regional Haze

    On March 31, 2009, Texas submitted a regional haze SIP (the 2009 
Regional Haze SIP) to the EPA that included reliance on Texas' 
participation in trading programs under the Clean Air Interstate Rule 
(CAIR) as an alternative to BART for SO<INF>2</INF> and NO<INF>X</INF> 
emissions from EGUs.\7\ This reliance was consistent with the EPA's 
regulations at the time that Texas developed its 2009 Regional Haze 
SIP,\8\ but at the time that Texas submitted this SIP to the EPA, the 
D.C. Circuit had remanded CAIR (without vacatur).\9\ The court left 
CAIR and our CAIR FIPs in place in order to ``temporarily preserve the 
environmental values covered by CAIR'' until we could, by rulemaking, 
replace CAIR consistent with the court's opinion. The EPA promulgated 
CSAPR to replace CAIR in 2011 \10\ (and revised it in 2012).\11\ CSAPR 
established FIP requirements for a number of states, including Texas, 
to address the states' interstate transport obligation under CAA 
section 110(a)(2)(D)(i)(I). CSAPR addresses interstate transport of 
fine particulate matter and ozone by requiring affected EGUs in these 
states to participate in the CSAPR trading programs and establishes 
emissions budgets that apply to the EGUs' collective annual emissions 
of SO<INF>2</INF> and NO<INF>X</INF>, as well as emissions of 
NO<INF>X</INF> during ozone season.\12\
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    \7\ CAIR required certain states, including Texas, to reduce 
emissions of SO<INF>2</INF> and NO<INF>X</INF> that significantly 
contribute to downwind nonattainment of the 1997 NAAQS for fine 
particulate matter and ozone. See 70 FR 25152 (May 12, 2005).
    \8\ See 70 FR 39104 (July 6, 2005).
    \9\ See North Carolina v. EPA, 531 F.3d 896 (D.C. Cir. 2008), as 
modified, 550 F.3d 1176 (D.C. Cir. 2008).
    \10\ 76 FR 48207 (Aug. 8, 2011).
    \11\ CSAPR was amended three times in 2011 and 2012 to add five 
states to the seasonal NO<INF>X</INF> program and to increase 
certain state budgets. 76 FR 80760 (December 27, 2011); 77 FR 10324 
(February 21, 2012); 77 FR 34830 (June 12, 2012).
    \12\ Ozone season for CSAPR purposes is May 1 through September 
30.
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    Following issuance of CSAPR, the EPA determined that CSAPR would 
achieve greater reasonable progress towards improving visibility than 
would source-specific BART in CSAPR states (a determination often 
referred to as ``CSAPR better than BART'').\13\ In the

[[Page 43589]]

same action, we revised the Regional Haze Rule to allow states that 
participate in the CSAPR trading programs to rely on such participation 
in lieu of requiring EGUs in the state to install BART controls.
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    \13\ 77 FR 33641 (June 7, 2012). This determination was recently 
upheld by the D.C. Circuit. (See Util. Air Regulatory Grp. v. EPA, 
885 F.3d 714 (D.C. Cir. 2018)).
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    In the same action that EPA determined that states could rely on 
CSAPR to address the BART requirements for EGUs, EPA issued a limited 
disapproval of a number of states' regional haze SIPs, including the 
2009 Regional Haze SIP submittal from Texas, due to the states' 
reliance on CAIR, which had been replaced by CSAPR.\14\ The EPA did not 
immediately promulgate a FIP to address those aspects of the 2009 
Regional Haze SIP submittal subject to the limited disapproval of 
Texas' regional haze SIP to allow more time for the EPA to assess the 
remaining elements of the 2009 Texas SIP submittal.
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    \14\ Id.
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    In December 2014, we proposed an action to address the remaining 
regional haze obligations for Texas.\15\ In that action, we proposed, 
among other things, to rely on our CSAPR FIP subjecting Texas to 
participation in the CSAPR trading programs to satisfy the 
NO<INF>X</INF> and SO<INF>2</INF> BART requirements for Texas' EGUs; we 
also proposed to approve the portions of the 2009 Regional Haze SIP 
addressing PM BART requirements for the state's EGUs. Before that rule 
was finalized, however, the D.C. Circuit issued a decision on a number 
of challenges to CSAPR, denying most claims, but remanding the CSAPR 
SO<INF>2</INF> and/or seasonal NO<INF>X</INF> emissions budgets of 
several states to the EPA for reconsideration, including the Phase 2 
SO<INF>2</INF> and seasonal NO<INF>X</INF> budgets for Texas.\16\ Due 
to the uncertainty arising from the remand of Texas' CSAPR budgets, we 
did not finalize our December 2014 proposal to rely on CSAPR to satisfy 
the SO<INF>2</INF> and NO<INF>X</INF> BART requirements for Texas 
EGUs.\17\ Additionally, because our proposed action on the PM BART 
provisions for EGUs was dependent on how SO<INF>2</INF> and 
NO<INF>X</INF> BART were satisfied, we did not take final action on the 
PM BART elements of the 2009 Texas' Regional Haze SIP. In January 2016, 
we finalized action on the remaining aspects of the December 2014 
proposal. This final action disapproved Texas' Reasonable Progress 
Goals for the Big Bend and Guadalupe Mountains Class I areas in Texas, 
Texas's reasonable progress analysis and Texas's long-term strategy. 
EPA promulgated a FIP establishing a new long-term strategy that 
consisted of SO<INF>2</INF> emission limits for 15 coal fired EGUs at 
eight power plants. That rulemaking was challenged, however, and in 
July 2016, the Fifth Circuit granted the petitioners' motion to stay 
the rule pending review. In December 2016, following the submittal of a 
request by the EPA for a voluntary remand of the parts of the rule 
under challenge, the Fifth Circuit Court of Appeals remanded the rule 
in its entirety.\18\
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    \15\ 79 FR 74818 (Dec. 16, 2014).
    \16\ EME Homer City Generation, L.P. v. EPA, 795 F.3d 118, 132 
(D.C. Cir. 2015).
    \17\ 81 FR 296 (Jan. 5, 2016).
    \18\ Texas v. EPA, 829 F.3d 405 (5th Cir. 2016).
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    On October 26, 2016, the EPA finalized an update to CSAPR to 
address the interstate transport requirements of CAA section 
110(a)(2)(D)(i)(I) with respect to the 2008 ozone NAAQS (CSAPR 
Update).\19\ The EPA also responded to the D.C. Circuit's remand of 
certain CSAPR seasonal NO<INF>X</INF> budgets in that action. As to 
Texas, the EPA withdrew Texas' seasonal NO<INF>X</INF> budget finalized 
in CSAPR to address the 1997 ozone NAAQS. However, in that same action, 
the EPA promulgated a FIP with a revised seasonal NO<INF>X</INF> budget 
for Texas to address the 2008 ozone NAAQS.\20\ Accordingly, Texas 
remains subject to CSAPR seasonal NO<INF>X</INF> requirements.
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    \19\ 81 FR 74504 (Oct. 26, 2016).
    \20\ 81 FR 74504, 74524-25.
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    On November 10, 2016, in response to the D.C. Circuit's remand of 
Texas's CSAPR SO<INF>2</INF> budget, we proposed to withdraw the FIP 
provisions that required EGUs in Texas to participate in the CSAPR 
trading programs for annual emissions of SO<INF>2</INF> and 
NO<INF>X</INF>.\21\ We also proposed to reaffirm that CSAPR continues 
to provide for greater reasonable progress than BART following our 
actions taken to address the D.C. Circuit's remand of Texas' 
SO<INF>2</INF> budget and the CSAPR emissions budgets of several 
additional states. On September 29, 2017, we finalized the withdrawal 
of the FIP provisions for annual emissions of SO<INF>2</INF> and 
NO<INF>X</INF> for EGUs in Texas \22\ and affirmed our proposed finding 
that the EPA's 2012 analytical demonstration remains valid and that 
participation in the CSAPR trading programs as they now exist meets the 
Regional Haze Rule's criteria for an alternative to BART.
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    \21\ 81 FR 78954.
    \22\ 82 FR 45481 (Sept. 29, 2017). Texas continues to be subject 
to portions of our CSAPR FIP, under which it participates in CSAPR 
for ozone season NO<INF>X</INF>.
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    On January 4, 2017, we proposed a FIP to address the EGU BART 
requirements for Texas' EGUs. In that action, we proposed to replace 
the 2009 Regional Haze SIP's reliance on CAIR with reliance on our 
CSAPR FIP to address the NO<INF>X</INF> BART requirements for EGUs.\23\ 
This portion of our proposal was based on the CSAPR Update and our 
separate November 10, 2016 proposed finding that the EPA's actions in 
response to the D.C. Circuit's remand would not adversely impact our 
2012 demonstration that participation in the CSAPR trading programs 
meets the Regional Haze Rule's criteria for alternatives to BART 
(sometimes referred to as a finding that ``CSAPR is still better than 
BART'').\24\ We noted that we could not finalize this portion of our 
proposed FIP to address the NO<INF>X</INF> BART requirements for EGUs 
unless and until we finalized our proposed finding that CSAPR was still 
better than BART.
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    \23\ 82 FR 912, 914-15 (Jan. 4, 2017).
    \24\ 81 FR 74504 (Nov. 10, 2016).
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    Our January 4, 2017 proposed action addressing the BART 
requirements for Texas EGUs acknowledged that because Texas would no 
longer be participating in the CSAPR program for SO<INF>2</INF>, and 
thus would no longer be eligible to rely on participation in CSAPR as 
an alternative to source-specific EGU BART for SO<INF>2</INF> under 40 
CFR 51.308(e)(4), there were BART requirements that were left 
unfulfilled with respect to Texas's EGU emissions of SO<INF>2</INF> 
that would need to be fulfilled by either an approved SIP or an EPA-
issued FIP that satisfied the BART requirements under 40 CFR 
51.308(e)(1) or constituted a viable BART alternative under 40 CFR 
51.308(e)(2) for those emissions. EPA proposed to satisfy these 
requirements through a BART FIP, entailing the identification of BART-
eligible EGU sources, screening of sources to identify subject-to-BART 
sources, and source-by-source determinations of SO<INF>2</INF> BART 
controls as appropriate. For those EGU sources we proposed to find 
subject to BART, we proposed to promulgate source-specific 
SO<INF>2</INF> requirements. We proposed SO<INF>2</INF> emission limits 
on 29 EGUs located at 14 facilities.
    In the January 2017 proposal, we also proposed to disapprove the 
portion of the 2009 Regional Haze SIP that made BART determinations for 
PM from EGUs, on the grounds that the demonstration in the 2009 Texas 
Regional Haze SIP relied on underlying assumptions as to how the 
SO<INF>2</INF> and NO<INF>X</INF> BART requirements for EGUs were being 
met that were no longer valid with the proposed source-specific 
SO<INF>2</INF> requirements.\25\ In place of these

[[Page 43590]]

determinations, we proposed to promulgate source-specific PM BART 
requirements based on existing practices and control capabilities for 
those EGUs that we proposed to find subject to BART. Previously, we had 
proposed to approve the EGU BART determinations for PM in the 2009 
Texas Regional Haze SIP, and this proposal had never been 
withdrawn.\26\ At that time, CSAPR was an appropriate alternative for 
SO<INF>2</INF> and NO<INF>X</INF> BART for EGUs. The 2009 Texas 
Regional Haze SIP included a pollutant-specific screening analysis for 
PM to demonstrate that Texas EGUs were not subject to BART for PM. In a 
2006 guidance document,\27\ the EPA stated that pollutant-specific 
screening can be appropriate where a state is relying on a BART 
alternative to address both NO<INF>X</INF> and SO<INF>2</INF> BART. 
However, in the January 2017 proposal, we proposed to disapprove the PM 
BART determination since SO<INF>2</INF> BART was no longer addressed by 
a BART alternative. In our October 2017 FIP, we approved the 2009 
Regional Haze SIP PM BART determination because the SO<INF>2</INF> 
requirements were addressed by a BART alternative, making the original 
pollutant-specific screening demonstration once again an appropriate 
approach.
---------------------------------------------------------------------------

    \25\ In the 2009 Regional Haze Texas SIP, for EGU BART, Texas' 
BART EGUs' emissions of both SO<INF>2</INF> and NO<INF>X</INF> were 
covered by participation in trading programs, which allowed Texas to 
conduct a screening analysis of the visibility impacts from PM 
emissions in isolation. However, modeling on a pollutant-specific 
basis for PM is appropriate only in the narrow circumstance of 
reliance on BART alternatives to satisfy both NO<INF>X</INF> and 
SO<INF>2</INF> BART. Due to the complexity and nonlinear nature of 
atmospheric chemistry and chemical transformation among pollutants, 
EPA has not recommended performing modeling on a pollutant-specific 
basis to determine whether a source is subject to BART, except in 
the unique situation described above. See discussion in Memorandum 
from Joseph Paisie to Kay Prince, ``Regional Haze Regulations and 
Guidelines for Best Available Retrofit Technology (BART) 
Determinations,'' July 19, 2006.
    \26\ 79 FR 74817, 74853-54 (Dec. 16, 2014).
    \27\ See discussion in Memorandum from Joseph Paisie to Kay 
Prince, ``Regional Haze Regulations and Guidelines for Best 
Available Retrofit Technology (BART) Determinations,'' July 19, 
2006.
---------------------------------------------------------------------------

    In our October 2017 rulemaking, we finalized our January 2017 
proposed determination that Texas' participation in CSAPR's trading 
program for ozone-season NO<INF>X</INF> qualifies as an alternative to 
source-specific NO<INF>X</INF> BART. We also determined that the 
SO<INF>2</INF> BART requirements for all BART-eligible coal-fired units 
and a number of BART-eligible gas- or gas/fuel oil-fired units are 
satisfied by a BART alternative for SO<INF>2</INF>--specifically, an 
intrastate trading program addressing emissions of SO<INF>2</INF> from 
certain EGUs in Texas. Finally, we approved the 2009 Regional Haze 
SIP's determination that Texas' EGUs are not subject to BART for PM. 
The remaining BART-eligible EGUs not covered by the SO<INF>2</INF> BART 
alternative were previously determined to be not subject to BART based 
on methods using model plants and CALPUFF \28\ modeling as described in 
our proposed rule and BART Screening technical support document 
(TSD).\29\ With respect to visibility transport obligations, we 
determined that the BART alternative to address SO<INF>2</INF> and 
Texas' participation in CSAPR's trading program for ozone-season 
NO<INF>X</INF> to address NO<INF>X</INF> BART at Texas' EGU fully 
addresses the obligations for six NAAQS.
---------------------------------------------------------------------------

    \28\ CALPUFF (California Puff Model) is a multi-layer, multi-
species non-steady-state puff dispersion modeling system that 
simulates the effects of time- and space-varying meteorological 
conditions on pollutant transport, transformation, and removal. 
CALPUFF is intended for use in assessing pollutant impacts at 
distances greater than 50 kilometers to several hundreds of 
kilometers. It includes algorithms for calculating visibility 
effects from long range transport of pollutants and their impacts on 
Federal Class I areas. EPA previously approved the use of the 
CALPUFF model in BART related analyses (40 CFR part 51 Regional Haze 
Regulations and Guidelines for Best Available Retrofit Technology 
(BART) Determinations; Final Rule; FR Vol. 70 No. 128 Pages 39104--
39172; July 6, 2005). For instructions on how to download the 
appropriate model code and documentation that are available from 
Exponent (Model Developer/Owner) at no cost for download, see EPA's 
website: https://www.epa.gov/scram/air-quality-dispersion-modeling-preferred-and-recommended-models#calpuff.
    \29\ See document at docket identification number EPA-R06-OAR-
0611-0005.
---------------------------------------------------------------------------

    As explained above, EPA received a petition for reconsideration of 
issues related to the SO<INF>2</INF> intrastate trading program 
promulgated in the October 2017 rule. As stated in our letter in 
response to that petition dated April 30, 2018, we believe certain 
specific aspects of the federal plan can benefit from further public 
comment. Therefore, in this notice, we are proposing to affirm certain 
aspects of our SIP approval and of the FIP, and to provide the public 
with an opportunity to comment on those particular aspects, as well as 
other specified related issues.

II. Summary of This Proposed Action

    In this notice, we are taking comment on the following elements: 
(1) This proposal to affirm the October 2017 FIP establishing an 
intrastate trading program addressing emissions of SO<INF>2</INF> from 
certain EGUs in Texas as a BART alternative and the determination that 
this program satisfies the requirements for BART alternatives; (2) this 
proposal to affirm the finding that the BART alternatives in the 
October 2017 rulemaking to address SO<INF>2</INF> and NO<INF>X</INF> 
BART at Texas' EGUs result in emission reductions adequate to satisfy 
the requirements of CAA section 110(a)(2)(D)(i)(II) with respect to 
visibility for a number of NAAQS issued between 1997 and 2010; and (3) 
this proposal to affirm our October 2017 approval of Texas' SIP 
determination that no sources are subject to BART for PM. We are not 
soliciting comment on our final determination that CSAPR addresses the 
NO<INF>X</INF> BART requirements for EGUs in Texas.\30\
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    \30\ For additional information regarding the determination that 
CSAPR addresses the NO<INF>X</INF> BART requirements for EGUs in 
Texas, please see our January 2017 proposal, and our October 2017 
final action, including response to comments. These actions are 
included in the docket for this action.
---------------------------------------------------------------------------

A. Regional Haze

1. SO<INF>2</INF> BART
    In our January 2017 proposed action, we proposed BART limits based 
on our source-specific BART determinations for certain EGUs in Texas. 
We proposed this approach to address the SO<INF>2</INF> BART 
requirements following the remand from the D.C. Circuit in EME Homer 
City II \31\ of certain CSAPR emission budgets that created uncertainty 
regarding our proposed reliance on CSAPR to satisfy the SO<INF>2</INF> 
BART requirements for EGUs in Texas. However, based on comments we 
received in response to our January 2017 proposal, including views 
expressed by Texas, we finalized, as a BART alternative, a program 
establishing emission caps using CSAPR allocations for certain EGUs in 
Texas in our October 2017 final action. The EPA determined that, 
because this BART alternative would result in SO<INF>2</INF> emissions 
from Texas EGUs similar to emissions anticipated under CSAPR, the 
alternative is an appropriate approach for addressing Texas' 
SO<INF>2</INF> BART obligations and, in the context of the operation of 
the CSAPR ozone-season NO<INF>X</INF> trading program and the operation 
of the CSAPR annual NO<INF>X</INF> and SO<INF>2</INF> trading programs, 
will achieve greater reasonable progress than BART towards restoring 
visibility, consistent with the June 2012 ``CSAPR better than BART'' 
and September 2017 ``CSAPR still better than BART'' determinations. In 
today's proposed action, we are proposing to affirm our determination 
that the intrastate trading program is an appropriate SO<INF>2</INF> 
BART alternative for EGUs in Texas.
---------------------------------------------------------------------------

    \31\ EME Homer City Generation, L.P. v. EPA, 795 F.3d 118, 132 
(D.C. Cir. 2015).
---------------------------------------------------------------------------

    The BART alternative has been designed to achieve SO<INF>2</INF> 
emission levels that are functionally equivalent to those projected for 
Texas' participation in the original CSAPR program. The BART 
alternative applies the CSAPR allowance allocations for SO<INF>2</INF> 
to all BART-eligible coal-fired EGUs, several additional coal-fired 
EGUs, and several BART-eligible gas-fired and gas/fuel oil-

[[Page 43591]]

fired EGUs. In addition to being a sufficient alternative to BART, we 
are proposing to affirm our October 2017 determination that the BART 
alternative secures reductions consistent with visibility transport 
requirements and is part of the long-term strategy to meet the 
reasonable progress requirements of the Regional Haze Rule.
    We propose to affirm that the combination of the source coverage 
for this program, the total allocations for EGUs covered by the 
program, and recent and foreseeable emissions trends from those EGUs 
both covered and not covered by the program will result in future EGU 
emissions in Texas that are similar to or less than the SO<INF>2</INF> 
emission levels forecast in the 2012 better-than-BART demonstration for 
Texas EGU emissions assuming CSAPR participation. We propose to affirm 
that the intrastate trading program meets the requirements for a BART 
alternative and therefore satisfies the SO<INF>2</INF> BART 
requirements for the BART-eligible coal-fired EGUs and gas- and gas/
fuel oil-fired EGUs in the following table. See Section IV.B for a 
discussion on identification of sources covered by the program.

       Table 1--Texas EGUs Subject to the FIP SO2 Trading Program
------------------------------------------------------------------------
        Owner/operator                   Units           BART- eligible
------------------------------------------------------------------------
AEP...........................  Welsh Power Plant Unit  Yes.
                                 1.
                                Welsh Power Plant Unit  Yes.
                                 2.
                                Welsh Power Plant Unit  No.
                                 3.
                                H W Pirkey Power Plant  No.
                                 Unit 1.
                                Wilkes Unit 1 *.......  Yes.
                                Wilkes Unit 2 *.......  Yes.
                                Wilkes Unit 3 *.......  Yes.
CPS Energy....................  JT Deely Unit 1.......  Yes.
                                JT Deely Unit 2.......  Yes.
                                Sommers Unit 1 *......  Yes.
                                Sommers Unit 2 *......  Yes.
Dynegy/Vistra.................  Coleto Creek Unit 1...  Yes.
LCRA..........................  Fayette/Sam Seymour     Yes.
                                 Unit 1.
                                Fayette/Sam Seymour     Yes.
                                 Unit 2.
Vistra/Luminant...............  Big Brown Unit 1......  Yes.
                                Big Brown Unit 2......  Yes.
                                Martin Lake Unit 1....  Yes.
                                Martin Lake Unit 2....  Yes.
                                Martin Lake Unit 3....  Yes.
                                Monticello Unit 1.....  Yes.
                                Monticello Unit 2.....  Yes.
                                Monticello Unit 3.....  Yes.
                                Sandow Unit 4.........  No.
                                Stryker ST2 *.........  Yes.
                                Graham Unit 2 *.......  Yes.
NRG...........................  Limestone Unit 1......  No.
                                Limestone Unit 2......  No.
                                WA Parish Unit WAP4 *.  Yes.
                                WA Parish Unit WAP5...  Yes.
                                WA Parish Unit WAP6...  Yes.
                                WA Parish Unit WAP7...  No.
Xcel..........................  Tolk Station Unit 171B  No.
                                Tolk Station Unit 172B  No.
                                Harrington Unit 061B..  Yes.
                                Harrington Unit 062B..  Yes.
                                Harrington Unit 063B..  No.
El Paso Electric..............  Newman Unit 2 *.......  Yes.
                                Newman Unit 3 *.......  Yes.
                                Newman Unit 4 *.......  Yes.
------------------------------------------------------------------------
* Gas-fired or gas/fuel oil-fired units.

    This BART alternative includes all BART-eligible coal-fired units 
in Texas, additional coal-fired EGUs, and some additional BART-eligible 
gas and gas/fuel oil-fired units. Moreover, we propose to affirm that 
the differences in source coverage between CSAPR and this BART 
alternative are either not significant or, in fact, work to demonstrate 
the relative stringency of this BART alternative as compared to CSAPR. 
This relative stringency is demonstrated in the following points:
    A. Covered sources under the BART alternative in this FIP represent 
89% \32\ of all SO<INF>2</INF> emissions from all Texas EGUs in both 
2016 and 2017, and approximately 85% of CSAPR allocations for existing 
units in Texas.
---------------------------------------------------------------------------

    \32\ In 2016, EGUs included in the program emitted 218,291 tons 
of SO<INF>2</INF>, and other EGUs emitted 27,446 tons from other 
EGUs (11.1% of the total emitted by Texas EGUs). In 2017, sources 
included in the program emitted 245,870 tons of SO<INF>2</INF>, and 
other EGUs emitted 30,096 (10.9%).
---------------------------------------------------------------------------

    B. The remaining 11% (100 minus 89) of 2016 and 2017 emissions from 
sources not covered by the BART alternative come from gas units that 
rarely burn fuel oil or from coal-fired units that on average are 
better controlled for SO<INF>2</INF> than the covered sources and 
generally are less relevant to visibility impairment. As such, any 
shifting of generation to non-covered sources, as might occur if a 
covered source were to reduce its operation in order to remain within 
its SO<INF>2</INF> emissions allowance allocation, would

[[Page 43592]]

result in fewer emissions to generate the same amount of electricity.
    C. Furthermore, the non-inclusion of a large number of gas-fired 
units that rarely burn fuel oil reduces the amount of available 
allowances for such units that would typically and collectively be 
expected to use only a fraction of CSAPR emissions allowances. Many of 
these sources typically emit at levels much lower than their allocation 
level. Should sources not participating in the program choose to opt 
in, thereby increasing the number of available allowances, this would 
serve to make the program more closely resemble CSAPR.
    D. The BART alternative does not allow purchasing of allowances 
from out-of-state sources. Emission projections under CAIR and CSAPR 
showed that Texas sources were anticipated to purchase allowances from 
out-of-state sources.<SUP>33 34</SUP>
---------------------------------------------------------------------------

    \33\ See CAIR 2018 emission projections of approximately 350,000 
tons SO<INF>2</INF> emitted from Texas EGUs compared to CAIR budget 
for Texas of 225,000 tons. See section 10 of the 2009 Texas Regional 
Haze SIP.
    \34\ For the projected annual SO<INF>2</INF> emissions from 
Texas EGUs under CSAPR See Technical Support Document for 
Demonstration of the Transport Rule as a BART Alternative, Docket ID 
No. EPA-HQ-OAR-2011- 0729-0014 (December 2011) (2011 CSAPR/BART 
Technical Support Document), available in the docket for this action 
at table 2-4. Certain CSAPR budgets were increased after 
promulgation of the CSAPR final rule (and the increases were 
addressed in the 2012 CSAPR/BART sensitivity analysis memo. See memo 
entitled ``Sensitivity Analysis Accounting for Increases in Texas 
and Georgia Transport Rule State Emissions Budgets,'' Docket ID No. 
EPA-HQ-OAR-2011-0729-0323 (May 29, 2012), available in the docket 
for this action. The increase in the Texas SO<INF>2</INF> budget was 
50,517 tons which, when added to the Texas SO<INF>2</INF> emissions 
projected in the CSAPR + BART-elsewhere scenario of 266,600 tons, 
yields total potential SO<INF>2</INF> emissions from Texas EGUs of 
approximately 317,100 tons. Texas SO<INF>2</INF> emissions projected 
in the CSAPR + BART-elsewhere scenario of 266,600 tons compared to 
the original CSAPR budget of 243,954. The CSAPR budget for Texas 
after adjustments was 294,471 tons.
---------------------------------------------------------------------------

    Based on these points, and applying as appropriate the principles 
of the rules and program design of CSAPR to a program designed to apply 
to and for Texas, we are proposing to affirm our earlier determinations 
regarding SO<INF>2</INF> BART coverage for EGUs by means of a BART 
alternative under an intrastate trading program. In 2014, we had 
originally proposed that participation in a CSAPR SO<INF>2</INF> 
trading program would satisfy the SO<INF>2</INF> BART requirement for 
Texas EGUs.\35\ The October 2017 final action and this proposal rely in 
large part on substantially similar technical elements. In contrast to 
the 2014 proposal, however, the intrastate trading program 
SO<INF>2</INF> BART alternative would not meet the terms of 40 CFR 
51.308(e)(4), as amended, because that regulatory provision provides 
BART coverage for pollutants covered by the CSAPR trading program in 
the State. In September 2017, EPA finalized the removal of Texas from 
the CSAPR SO<INF>2</INF> trading program.\36\ Instead, we are relying 
on the BART alternative option provided under 40 CFR 51.308(e)(2). The 
BART alternative we are proposing to affirm today is supported by our 
determination that the trading program achieves greater reasonable 
progress than BART. The BART alternative is designed to achieve 
SO<INF>2</INF> emission levels from Texas sources similar to the 
SO<INF>2</INF> emission levels that would have been achieved under 
CSAPR. Relying on a quantitative and qualitative assessment of the 
operation of the BART alternative, we propose to affirm our 
determination that emission levels under this program, and their 
aggregate impact on visibility, will be on average no greater than 
those from Texas EGUs that would have been realized from the 
SO<INF>2</INF> trading program under CSAPR. Accordingly, for materially 
the same reasons underlying our June 2012 ``CSAPR better than BART'' 
and September 2017 ``CSAPR still better than BART'' determinations, and 
the March 2018 court opinion \37\ upholding CSAPR better than BART, the 
SO<INF>2</INF> BART FIP for Texas' BART-eligible EGUs participating in 
the trading program will achieve greater reasonable progress than BART 
with respect to SO<INF>2</INF>.
---------------------------------------------------------------------------

    \35\ 79 FR 74817, 74823 (December 16, 2014) (``We propose to 
replace Texas' reliance on CAIR to satisfy the BART requirement for 
EGUs with reliance on CSAPR.''). This part of the 2014 proposal was 
not finalized in the action taken on January 5, 2016, that has since 
been remanded by the Fifth Circuit Court of Appeals. 81 FR 295.
    \36\ 2 FR 45481 (Sept. 29, 2017). See docket EPA-HQ-OAR-2016-
0598 for additional information.
    \37\ Util. Air Regulatory Grp. v. EPA, 885 F.3d 714 (D.C. Cir. 
2018).
---------------------------------------------------------------------------

    In our January 2017 proposed action and in our October 2017 final 
action, we determined that the BART-eligible EGUs not participating in 
the program were not causing or contributing to visibility impairment, 
and were therefore not subject to BART. In today's proposed rule, we 
are not re-opening the determination that these units are not subject 
to BART.
    The Regional Haze Rule at 40 CFR 51.308(e)(2)(iii) requires that 
the emission reductions from BART alternatives occur ``during the 
period of the first long-term strategy for regional haze.'' The 
SO<INF>2</INF> BART alternative that EPA is proposing here will be 
implemented beginning in January 2019, and thus emission reductions 
needed to meet the allowance allocations must take place by the end of 
2019. For the purpose of evaluating Texas' BART alternative, the end of 
the period of the first long-term strategy for Texas is 2021, 
consistent with the requirement that states submit revisions to their 
long-term strategy to address the second planning period by July 31, 
2021.\38\ Therefore, we propose to affirm our determination that 
because the emission reductions from the Texas SO<INF>2</INF> trading 
program will be realized prior to that date, the necessary emission 
reductions will take place within the period of Texas' first long-term 
strategy for regional haze.
---------------------------------------------------------------------------

    \38\ 40 CFR 51.308(f).
---------------------------------------------------------------------------

    In proposing to affirm the regulatory terms and rules for 
implementing the BART alternative, we are mindful of the minimally 
required elements for a BART alternative emissions trading program that 
are specified in the provisions of 40 CFR 51.308(e)(2)(vi)(A)-(L). In a 
generic sense, these types of provisions are foundational to the 
establishment of allowance markets. CSAPR is a prominent example of 
such an allowance market, and we have designed this BART alternative 
guided by transferring and generally incorporating well-tested program 
rules and terms from the provisions of CSAPR; we have ensured that the 
BART alternative will conform to the provisions necessary and 
appropriate that are needed for an emissions trading program covered by 
a cap.
    EPA requests comment on our proposal to affirm the October 2017 FIP 
establishing an intrastate trading program addressing emissions of 
SO<INF>2</INF> from certain EGUs in Texas as a BART alternative and our 
determinations that this program satisfies the requirements for BART 
alternatives.
2. PM BART
    The 2009 Texas Regional Haze SIP included a pollutant-specific 
screening analysis for PM to demonstrate that Texas EGUs were not 
subject to BART for PM. This approach was consistent with a 2006 
guidance document in which the EPA stated that pollutant-specific 
screening can be appropriate where a state is relying on a BART 
alternative to address both NO<INF>X</INF> and SO<INF>2</INF> BART. The 
majority of Texas' BART-eligible EGUs rely on BART alternatives for 
both SO<INF>2</INF> and NO<INF>X</INF> emissions and we approved Texas' 
pollutant-specific screening analysis as appropriate. All of the BART-
eligible sources participating in the SO<INF>2</INF> intrastate trading 
program have visibility impacts from PM alone below the subject-to-BART 
threshold of 0.5 deciviews (dv). Furthermore, the BART-eligible sources 
not participating

[[Page 43593]]

in the intrastate trading program were screened out of BART for all 
visibility impairing pollutants. EPA requests comments on our proposal 
to affirm our October 2017 approval of the portion of the Texas 
Regional Haze SIP that determined that PM BART emission limits are not 
required for any Texas EGUs.

B. Interstate Transport of Pollutants That Affect Visibility

    In our January 5, 2016 final action \39\ we disapproved the portion 
of Texas' SIP revisions intended to address interstate visibility 
transport for six NAAQS, including the 1997 8-hour ozone and 1997 
PM<INF>2.5</INF>.\40\ That rulemaking was challenged, however, and in 
December 2016, following a stay of the rule by the Fifth Circuit Court 
of Appeals in Texas v. EPA and EPA's submittal of a subsequent request 
by the EPA for a voluntary remand of the parts of the rule under 
challenge, the Fifth Circuit Court of Appeals remanded the rule in its 
entirety without vacatur.\41\ In our October 2017 final action, we 
again finalized our disapproval of Texas' SIP revisions addressing 
interstate visibility transport under CAA section 110(a)(2)(D)(i)(II) 
for six NAAQS. As explained in our January 2017 proposal, Texas' 
infrastructure SIP revisions for these six NAAQS relied on its 2009 
Regional Haze SIP, including that SIP's reliance on CAIR as an 
alternative to EGU BART for SO<INF>2</INF> and NO<INF>X</INF>, to meet 
the interstate visibility transport requirements.\42\ We are now 
proposing to affirm that Texas' participation in CSAPR to satisfy 
NO<INF>X</INF> BART and our SO<INF>2</INF> intrastate trading program, 
fully addresses Texas' interstate visibility transport obligations for 
the following six NAAQS: (1) 1997 8-hour ozone; (2) 1997 
PM<INF>2.5</INF> (annual and 24 hour); (3) 2006 PM<INF>2.5</INF> (24-
hour); (4) 2008 8-hour ozone; (5) 2010 1-hour NO<INF>2</INF>; and (6) 
2010 1-hour SO<INF>2</INF>. The basis of this proposed affirmation is 
our determination in the October 2017 final action that the regional 
haze measures in place for Texas are adequate to ensure that emissions 
from the State do not interfere with measures to protect visibility in 
nearby states because the emission reductions are consistent with the 
level of emissions reductions relied upon by other states during 
consultation. EPA requests comment on our proposal to affirm the 
finding that the BART alternatives in the October 2017 rulemaking 
result in emission reductions adequate to satisfy the requirements of 
CAA section 110(a)(2)(D)(i)(II) with respect to visibility for six 
NAAQS issued between 1997 and 2010.
---------------------------------------------------------------------------

    \39\ 81 FR 296 (Jan. 5, 2016).
    \40\ Specifically, we previously disapproved the relevant 
portion of these Texas' SIP submittals: April 4, 2008: 1997 8-hour 
Ozone, 1997 PM<INF>2.5</INF> (24-hour and annual); May 1, 2008: 1997 
8-hour Ozone, 1997 PM<INF>2.5</INF> (24-hour and annual); November 
23, 2009: 2006 24-hour PM<INF>2.5</INF>; December 7, 2012: 2010 
NO<INF>2</INF>; December 13, 2012: 2008 8-hour Ozone; May 6, 2013: 
2010 1-hour SO<INF>2</INF> (Primary NAAQS). 79 FR 74818, 74821; 81 
FR 296, 302.
    \41\ Texas v. EPA, 829 F.3d 405 (5th Cir. 2016).
    \42\ EME Homer City Generation, L.P. v. EPA, 795 F.3d 118, 133-
34 (DC Cir. 2015) (holding that SIPs based on CAIR were unapprovable 
to fulfill good neighbor obligations).
---------------------------------------------------------------------------

III. PM BART

    In our January 2017 proposal, we proposed to disapprove Texas' 
technical evaluation and determination in the 2009 Regional Haze SIP 
that PM BART emission limits are not required for any of Texas' EGUs. 
That SIP included a pollutant-specific screening analysis for PM to 
demonstrate that Texas EGUs were not subject to BART for PM. This 
approach was consistent with a 2006 guidance document \43\ in which the 
EPA stated that pollutant-specific screening can be appropriate where a 
state is relying on a BART alternative to address both NO<INF>X</INF> 
and SO<INF>2</INF> BART. However, because we proposed to address 
SO<INF>2</INF> BART on a source-specific basis, Texas' pollutant-
specific screening was not appropriate and we proposed source-specific 
PM BART emission limits consistent with existing practices and 
controls. In our October 2017 final action, we did not issue source-
specific SO<INF>2</INF> BART determinations. Instead, for the majority 
of Texas' BART-eligible EGUs, we relied on BART alternatives for both 
SO<INF>2</INF> and NO<INF>X</INF> emissions and approved Texas' 
pollutant-specific screening analysis as appropriate.\44\ All of the 
BART-eligible sources participating in the intrastate trading program 
have visibility impacts from PM alone below the subject-to-BART 
threshold of 0.5 deciviews (dv).\45\ Furthermore, the BART-eligible 
sources not participating in the intrastate trading program were 
screened out of BART for all visibility impairing pollutants. As such, 
we are proposing to affirm our October 2017 approval of the portion of 
the Texas Regional Haze SIP that determined that PM BART emission 
limits are not required for any Texas EGUs, and are requesting comment 
on this proposal.
---------------------------------------------------------------------------

    \43\ See discussion in Memorandum from Joseph Paisie to Kay 
Prince, ``Regional Haze Regulations and Guidelines for Best 
Available Retrofit Technology (BART) Determinations,'' July 19, 
2006.
    \44\ We originally proposed to approve Texas' screening approach 
in 2014, and the basis of our proposal today remains consistent with 
the technical evaluation we provided at that time. See 79 FR 74817, 
74848 (Dec. 16, 2014).
    \45\ Stryker Creek is covered by CSAPR for NO<INF>X</INF> and by 
the SO<INF>2</INF> trading program but was not included in the 2009 
Regional Haze SIP. How Stryker Creek is screened out for PM is 
discussed below.
---------------------------------------------------------------------------

    As we explained in the January 2017 proposal, the 2009 Regional 
Haze SIP did not evaluate PM impacts from all BART-eligible EGUs. We 
evaluated and determined that this omission did not affect Texas' 
conclusion that no BART-eligible EGUs should be subject-to-BART for PM 
emissions. In our January 2017 proposal and as finalized in our October 
2017 action, we identified several facilities as BART-eligible that 
Texas did not identify as BART eligible in its 2009 Regional Haze SIP. 
Specifically, we identified the following additional BART-eligible 
sources: Coleto Creek Unit 1 (Dynegy), Dansby Unit 1 (City of Bryan), 
Greens Bayou Unit 5 (NRG), Handley Units 3,4, and 5 (Exelon), Lake 
Hubbard Units 1 and 2 (Luminant), Plant X Unit 4 (Xcel), Powerlane 
Units ST1, ST2, and ST3 (City of Greenville), R W Miller Units 1, 2, 
and 3 (Brazos Elec.), Spencer Units 4 and 5 (City of Garland), and 
Stryker Creek Unit ST2 (Luminant). Based on CALPUFF modeling and a 
model-plant analysis, we found that all of these facilities except 
Coleto Creek and Stryker Creek had impacts from NO<INF>X</INF>, 
SO<INF>2</INF>, and PM below the BART screening level.\46\ CALPUFF 
modeling showed that Stryker Creek Unit ST2 had a visibility impact of 
0.786 dv from NO<INF>X</INF>, SO<INF>2</INF>, and PM. However, Stryker 
Creek Unit ST2 is now covered by a BART alternative for NO<INF>X</INF> 
and SO<INF>2</INF>, so we evaluated the visibility impact of Stryker 
Creek Unit ST2's PM emissions alone. The CALPUFF modeling files and 
spreadsheets included in our January 2017 proposal indicate that light 
extinction from PM (PM<INF>Fine</INF> and PM<INF>Coarse</INF>) is less 
than 1% of total light extinction at all Class I areas. Therefore, 
because the visibility impact attributable to PM emissions from Stryker 
Creek Unit ST2 would be a small fraction (roughly 1%) of the 0.786 dv 
aggregate impact of the unit's emissions from all pollutants, we 
propose to affirm our determination that the source is not subject to 
BART for PM under EPA's 2006 guidance, and are requesting comment on 
this proposal.
---------------------------------------------------------------------------

    \46\ EPA determined that Dansby, Greens Bayou, Handley, Lake 
Hubbard, Plant X, Powerlane, R W Miller, and Spencer are not subject 
to BART based on the methodologies utilizing model plants and 
CALPUFF modeling as described in our January 2017 proposed rule and 
BART Screening TSD (Available in the docket for this action, 
document ID EPA-R06-OAR-2016-0611-0005).
---------------------------------------------------------------------------

    We also evaluated the potential visibility impact of PM emissions 
from

[[Page 43594]]

Coleto Creek Unit 1 using the CAMx modeling that Texas used for PM BART 
screening of its EGU sources in its 2009 Regional Haze SIP.\47\ 
Specifically, we evaluated the modeling results for two facilities 
(LCRA Fayette and Sommers Deely) that have stack parameters similar to 
Coleto Creek's, but that are located closer to Class I areas than 
Coleto Creek. Texas grouped the LCRA Fayette Facility together with 
other sources into Group 2 of their PM screening modeling and found 
that this group's maximum aggregate impacts at all Class I areas were 
less than 0.25 deciviews (dv). Texas also modeled the City Public 
Service Sommers Deely Facility's PM impacts. Maximum impacts at all 
Class I areas from Sommers Deely were less than 0.32 dv. To extend 
these model results to Coleto Creek, we used the Q/D ratio where Q is 
the maximum annual PM emissions \48\ and D is the distance to the 
nearest receptor in a Class I area. If the Q/D ratio of Coleto Creek is 
smaller than the ratios for the two modeling results (Fayette and 
Sommers Deely) then Coleto Creek's impacts can be estimated as less 
than the impacts of these source(s) and thus be screened out. We 
evaluated the closest Class I areas (Big Bend, Guadalupe Mountains, 
Carlsbad, Wichita Mountains, and Caney Creek) and the Q/D ratios were: 
Coleto Creek (0.59-0.86), Fayette (4.25-6.1), and Sommers Deely (6.0-
10.05).\49\ The Q/D ratio for Fayette is 6 to 8 times larger than for 
Coleto Creek, while the Q/D ratio for Sommers Deely is 9 to 11.6 times 
higher than for Coleto Creek. Therefore, if we were to model the PM 
impacts from Coleto Creek, they would be an order of magnitude smaller 
than the impacts from these facilities, which themselves are well below 
the threshold of 0.5 dv. Therefore, we propose to affirm our 
determination that Coleto Creek is not subject to BART for PM 
emissions, and are requesting comment on this proposal.
---------------------------------------------------------------------------

    \47\ Environ Report--``Final Report Screening Analysis of 
Potential BART-Eligible Sources in Texas'', September 27, 2006; 
``Addendum 1--BART Exemption Screening Analysis'', Draft December 6, 
2006; and ``BARTmodelingparameters V2.csv''.
    \48\ This is calculated by using the maximum daily 
PM<INF>10</INF> daily emission rate, adding the maximum daily 
PM<INF>2.5</INF> emission rate and then calculating the total 
emissions in tons per year if this max daily rate happened every 
day.
    \49\ See `Coleto_Creek_Screen_analysis.xlsx'.
---------------------------------------------------------------------------

    We originally proposed to approve Texas' screening approach in 
2014,\50\ and the basis of our proposal today remains consistent with 
the technical evaluation we provided at that time.
---------------------------------------------------------------------------

    \50\ See 79 FR 74817, 74848 (Dec. 16, 2014). Docket number EPA-
R06-OAR-2014-0754.
---------------------------------------------------------------------------

IV. The SO<INF>2</INF> Trading Program and Its Implications for 
Interstate Visibility Transport and EGU BART

    The Regional Haze Rule provides each state with the flexibility to 
adopt an emissions trading program or other alternative measure instead 
of requiring source-specific BART controls, so long as the alternative 
measure is demonstrated to achieve greater reasonable progress than 
BART. In our October 2017 final rulemaking, we acknowledged the State's 
preference and promulgated a BART alternative for SO<INF>2</INF> for 
certain Texas EGUs. The rationale that the BART alternative would be 
better than BART was based on the combination of the source coverage 
for this program and the total allocations for EGUs covered by the 
program, which along with the recent and foreseeable emissions trends 
from EGUs both covered and not covered by the program indicate that the 
BART alternative will result in future EGU emissions in Texas that are 
similar to what was forecast in the 2012 ``CSAPR better than BART'' 
demonstration for Texas EGU emissions that assumed Texas would be 
subject to CSAPR for all pollutants participation. Today's proposed 
rule reiterates our finding in the October 2017 rule and affirms that 
it continues to support the promulgated FIP.

A. Background on the Concept of CSAPR as an Alternative to BART

    In 2012, the EPA amended the Regional Haze Rule to provide that 
participation by a state's EGUs in a CSAPR trading program for a given 
pollutant qualifies as a BART alternative for those EGUs for that 
pollutant.\51\ In promulgating this ``CSAPR-better-than-BART'' rule 
(also referred to as ``Transport Rule as a BART Alternative''), the EPA 
relied on an analytic demonstration based on an air quality modeling 
study \52\ showing that CSAPR implementation meets the Regional Haze 
Rule's criteria for a demonstration of greater reasonable progress than 
BART. In the air quality modeling study conducted for the 2012 analytic 
demonstration, the EPA projected visibility conditions in affected 
Class I areas \53\ based on 2014 emissions projections for two control 
scenarios and on the 2014 base case emissions projections.\54\ One 
control scenario represents ``Nationwide BART'' and the other 
represents ``CSAPR+BART-elsewhere.'' \55\ In the base case, neither 
BART controls nor the EGU SO<INF>2</INF> and NO<INF>X</INF> emissions 
reductions attributable to CSAPR were reflected. To project emissions 
under CSAPR, the EPA assumed that the geographic scope and state 
emissions budgets for CSAPR would be implemented as finalized in 2011, 
and the EPA's final analysis also accounted for several amendments to 
the CSAPR budgets that were finalized in 2012.\56\ The results of that 
analytic demonstration based on this air quality modeling passed the 
two-pronged test set forth at 40 CFR 51.308(e)(3). The first prong 
requires that the alternative program will not cause a decline in 
visibility at any affected Class I area. The second prong requires that 
the alternative program results in improvements in average visibility 
across all affected Class I areas as compared to adopting source-
specific BART. Together, these tests ensure that the alternative 
program provides for greater visibility improvement than would source-
specific BART.
---------------------------------------------------------------------------

    \51\ 40 CFR 51.308(e)(4); see also generally 77 FR 33641 (June 
7, 2012). The D.C. Circuit recently denied a challenge to petition 
seeking review of the 2012 amendments. Utility Air Regulatory Group 
v. EPA, 885 F.3d 714 (D.C. Cir. 2018).
    \52\ See Technical Support Document for Demonstration of the 
Transport Rule as a BART Alternative, Docket ID No. EPA-HQ-OAR-2011-
0729-0014 (December 2011) (2011 CSAPR/BART Technical Support 
Document), and memo entitled ``Sensitivity Analysis Accounting for 
Increases in Texas and Georgia Transport Rule State Emissions 
Budgets,'' Docket ID No. EPA-HQ-OAR-2011-0729-0323 (May 29, 2012), 
both available in the docket for this action.
    \53\ The EPA identified two possible sets of affected Class I 
areas to consider for purposes of the study and found that 
implementation of CSAPR met the criteria for a BART alternative 
whichever set was considered. See 77 FR 33641, 33650 (June 7, 2012).
    \54\ For additional detail on the 2014 base case, see the CSAPR 
Final Rule Technical Support Document, available in the docket for 
this action.
    \55\ The ``Nationwide BART'' scenario reflected implementation 
of presumptive source-specific BART for both SO<INF>2</INF> and 
NO<INF>X</INF> at BART-eligible EGUs nationwide. The ``CSAPR+BART-
elsewhere'' reflected implementation of CSAPR in covered states and 
presumptive source-specific BART for each pollutant in states where 
CSAPR did not apply for that pollutant.
    \56\ CSAPR was amended three times in 2011 and 2012 to add five 
states to the seasonal NO<INF>X</INF> program and to increase 
certain state budgets. 76 FR 80760 (Dec. 27, 2011); 77 FR 10324 
(Feb. 21, 2012); 77 FR 34830 (June 12, 2012). The ``CSAPR-better-
than-BART'' final rule reflected consideration of these changes to 
CSAPR.
---------------------------------------------------------------------------

    For purposes of the 2012 analytic demonstration that CSAPR as 
finalized and amended in 2011 and 2012 provides for greater reasonable 
progress than BART, the analysis included Texas EGUs as subject to 
CSAPR for SO<INF>2</INF> and annual NO<INF>X</INF> (as well as ozone-
season NO<INF>X</INF>). CSAPR's emissions limitations are defined in 
terms of emissions ``budgets'' for the collective emissions from 
affected EGUs in each covered state. Sources can purchase allowances 
from sources outside of the state, so total projected emissions for a 
state may,

[[Page 43595]]

in some cases, exceed the state's emission budget, but aggregate 
emissions from all sources in a state are expected to remain lower than 
or equal to the state's ``assurance level'' given the incentives that 
source owners have under the program to achieve that result. The final 
emission budget under CSAPR for Texas was 294,471 tons per year for 
SO<INF>2</INF>, including 14,430 tons of allowances available in the 
new unit set aside.\57\ The State's ``assurance level'' under CSAPR was 
347,476 tons.\58\ Under CSAPR, the projected SO<INF>2</INF> emissions 
from the affected Texas EGUs in the ``CSAPR + BART-elsewhere'' scenario 
were 266,600 tons per year. In a 2012 sensitivity analysis memo, EPA 
conducted a sensitivity analysis that confirmed that CSAPR would remain 
better-than-BART even if Texas EGU emissions increased to approximately 
317,100 tons.\59\
---------------------------------------------------------------------------

    \57\ Units that are subject to CSAPR but that do not receive 
allowance allocations as existing units are eligible for a new unit 
set aside (NUSA) allowance allocation. NUSA allowance allocations 
are a batch of emissions allowances that are reserved for new units 
that are regulated by the CSAPR, but were not included in the final 
rule allocations. The NUSA allowance allocations are removed from 
the original pool of regional allowances, and divided up amongst the 
new units, so as not to exceed the emissions cap set in the CSAPR. 
Each calendar year, EPA issues three pairs of preliminary and final 
notices of data availability (NODAs), which are determined and 
recorded in two ``rounds'' and are published in the Federal 
Register. In any year, if the NUSA for a given CSAPR state and 
program does not have enough new unit applicants after completion of 
the 2nd round to use up all of the set aside allowances, the 
remaining allowances are allocated to existing CSAPR-affected units.
    \58\ See 40 CFR 97.710 for state SO<INF>2</INF> Group 2 trading 
budgets, new unit set-asides, Indian country new unit set-asides, 
and variability limits.
    \59\ For the projected annual SO<INF>2</INF> emissions from 
Texas EGUs, see Technical Support Document for Demonstration of the 
Transport Rule as a BART Alternative, Docket ID No. EPA-HQ-OAR-2011- 
0729-0014 (December 2011) (2011 CSAPR/BART Technical Support 
Document at Table 2-4), available in the docket for this action. at 
table 2-4. Certain CSAPR budgets were increased after promulgation 
of the CSAPR final rule (and the increases were addressed in the 
2012 CSAPR/BART sensitivity analysis memo. See memo entitled 
``Sensitivity Analysis Accounting for Increases in Texas and Georgia 
Transport Rule State Emissions Budgets,'' Docket ID No. EPA-HQ-OAR-
2011-0729-0323 (May 29, 2012), available in the docket for this 
action. The increase in the Texas SO<INF>2</INF> budget was 50,517 
tons which, when added to the Texas SO<INF>2</INF> emissions 
projected in the CSAPR + BART-elsewhere scenario of 266,600 tons, 
yields total potential SO<INF>2</INF> emissions from Texas EGUs of 
approximately 317,100 tons.
---------------------------------------------------------------------------

    As discussed in Section I.D, in the EPA's final response in 
September 2017 to the D.C. Circuit's remand in EME Homer City II of 
certain CSAPR budgets, we finalized the withdrawal of the requirements 
for Texas' EGUs to participate in the annual SO<INF>2</INF> and 
NO<INF>X</INF> trading programs and also finalized our determination 
that the changes to the geographic scope of the CSAPR trading programs 
resulting from the remand response do not affect the continued validity 
of participation in CSAPR as a BART alternative.\60\ This determination 
that CSAPR remains a viable BART alternative despite changes in 
geographic scope resulting from EPA's response to the CSAPR remand was 
based on a sensitivity analysis of the 2012 analytic demonstration used 
to support the original CSAPR as better-than-BART rulemaking. A full 
explanation of the sensitivity analysis is included in the remand 
response proposal and final rule.\61\
---------------------------------------------------------------------------

    \60\ In addition to the withdrawal of the FIP provisions for 
annual emissions of SO<INF>2</INF> and NO<INF>X</INF> for EGUs in 
Texas, the full set of actions taken to respond to the remand 
includes the 2016 CSAPR Update withdrawing the remanded seasonal 
NO<INF>X</INF> budgets for eleven states and establishing new 
seasonal NO<INF>X</INF> budgets to address a more recent ozone NAAQS 
for eight of those states, and the actions approving Alabama's, 
Georgia's, and South Carolina's SIP revisions establishing state 
CSAPR trading programs for SO<INF>2</INF> and annual NO<INF>X</INF> 
to replace the corresponding federal CSAPR trading programs.
    \61\ 81 FR 78954 (Nov. 10, 2016), 82 FR 45481 (Sept. 29, 2017). 
A petition challenging the EPA's determination regarding the 
continued validity of participation in CSAPR as a BART alternative 
is currently being held in abeyance in the D.C. Circuit. Order, 
Nat'l Parks Conservation Assn. v. EPA, No. 17-1253 (D.C. Cir. Apr. 
10, 2018).
---------------------------------------------------------------------------

B. Texas SO2 Trading Program

    Texas is no longer in the CSAPR program for annual SO<INF>2</INF> 
emissions and accordingly cannot rely on CSAPR as a BART alternative 
for SO<INF>2</INF> under 51.308(e)(4).\62\ Therefore, informed by the 
TCEQ's comments on our January 2017 proposal, in our October 2017 final 
action we addressed the SO<INF>2</INF> BART requirement for coal-fired, 
some gas-fired, and some gas/fuel oil-fired units under a BART 
alternative, which we developed to meet the demonstration requirements 
under 51.308(e)(2). Today we propose to affirm the demonstration in our 
October 2017 action and to retain the SO<INF>2</INF> BART alternative 
for coal-fired, some gas-fired, and some gas/fuel-oil fired units. We 
are soliciting comment on these issues, and in particular, we are 
soliciting comments on the proposal to affirm our determinations that 
the BART alternative meets each of the applicable regulatory 
requirements, as detailed in this section.
---------------------------------------------------------------------------

    \62\ See 82 FR 45481; see also 40 CFR 52.39(c)(2), 
52.2284(c)(1).
---------------------------------------------------------------------------

1. Identification of Sources Participating in the Trading Program
    Under 51.308(e)(2), a State may opt to implement or require 
participation in an emissions trading program or other alternative 
measure rather than to require sources subject to BART to install, 
operate, and maintain BART. Such an emissions trading program or other 
alternative measure must achieve greater reasonable progress than would 
be achieved through the installation and operation of BART. At the same 
time, the Texas trading program should be designed so as not to 
interfere with the validity of existing SIPs in other states that have 
relied on reductions from sources in Texas. As discussed elsewhere, the 
Texas trading program is designed to provide the measures that are 
needed to address interstate visibility transport requirements for 
several NAAQS and to be part of the long-term strategy needed to meet 
the reasonable progress requirements of the Regional Haze Rule.\63\ To 
meet all of these goals, the trading program must not only be inclusive 
of all BART-eligible sources that are treated as satisfying the BART 
requirements through participation in a BART alternative, but must also 
include additional emission sources to the extent required to ensure 
that the trading program as a whole can be shown to both achieve 
greater reasonable progress than would be achieved through the 
installation and operation of BART, and achieve the emission reductions 
assumed by other states in their own regional haze SIPs, and relied 
upon in establishing their reasonable progress goals for their Class I 
areas.
---------------------------------------------------------------------------

    \63\ EPA is not determining now that this proposal serves to 
also resolve the EPA's outstanding obligations with respect to 
reasonable progress that resulted from the Fifth Circuit's remand of 
our reasonable progress FIP. We intend to take future action to 
address the Fifth Circuit's remand.
---------------------------------------------------------------------------

    In order to identify EGUs in the trading program, we began with the 
list of BART-eligible EGUs for which we intended to address the BART 
requirements through a BART alternative. As discussed elsewhere, we 
determined that several BART-eligible gas-fired and gas/oil-fired EGUs 
are not subject-to-BART for NO<INF>X</INF>, SO<INF>2</INF>, and PM, and 
are therefore not included in the trading program. The table below 
lists those BART-eligible EGUs identified for inclusion in the trading 
program.

    Table 2--BART-Eligible EGUs Participating in the Trading Program
------------------------------------------------------------------------
                          Facility                               Unit
------------------------------------------------------------------------
Big Brown (Luminant/Vistra)................................            1
Big Brown (Luminant/Vistra)................................            2
Coleto Creek (Dynegy \64\/Vistra)..........................            1
Fayette (LCRA).............................................            1
Fayette (LCRA).............................................            2
Graham (Luminant)..........................................            2

[[Page 43596]]

 
Harrington Station (Xcel)..................................         061B
Harrington Station (Xcel)..................................         062B
J T Deely (CPS Energy).....................................            1
J T Deely (CPS Energy).....................................            2
Martin Lake (Luminant/Vistra)..............................            1
Martin Lake (Luminant/Vistra)..............................            2
Martin Lake (Luminant/Vistra)..............................            3
Monticello (Luminant/Vistra)...............................            1
Monticello (Luminant/Vistra)...............................            2
Monticello (Luminant/Vistra)...............................            3
Newman (El Paso Electric)..................................            2
Newman (El Paso Electric)..................................            3
Newman (El Paso Electric)..................................            4
O W Sommers (CPS Energy)...................................            1
O W Sommers (CPS Energy)...................................            2
Stryker Creek (Luminant/Vistra)............................          ST2
WA Parish (NRG)............................................         WAP4
WA Parish (NRG)............................................         WAP5
WA Parish (NRG)............................................         WAP6
Welsh Power Plant (AEP)....................................            1
Welsh Power Plant (AEP)....................................            2
Wilkes Power Plant (AEP)...................................            1
Wilkes Power Plant (AEP)...................................            2
Wilkes Power Plant (AEP)...................................            3
------------------------------------------------------------------------

    For a BART alternative that includes an emissions trading program, 
the applicability provisions must be designed to prevent any 
significant potential shifting within the state of production and 
emissions from sources in the program to sources outside the 
program.\65\ Shifting would be logistically simplest among units in the 
same facility, because they are under common management and have access 
to the same transmission lines. In addition, since a coal-fired EGU to 
which electricity production could shift would have a relatively high 
SO<INF>2</INF> emission rate (compared to a gas-fired EGU), such 
shifting could also shift substantial amounts of SO<INF>2</INF> 
emissions. To prevent any significant shifting of generation and 
SO<INF>2</INF> emissions from participating sources to non-
participating sources within the same facility, coal-fired EGUs that 
are not BART-eligible but are co-located with BART-eligible EGUs have 
been included in the program, with the following exceptions. While 
Fayette Unit 3, WA Parish Unit 8 (WAP8), and J K Spruce Units 1 and 2 
were identified as coal-fired units that are not BART-eligible but are 
co-located with BART-eligible EGUs, these units have scrubbers 
installed to control SO<INF>2</INF> emissions such that a shift in 
generation from the participating units to these units would not result 
in a significant increase in emissions. Fayette Unit 3 has a high 
performing scrubber similar to the scrubbers on Fayette Units 1 and 
2,\66\ and has a demonstrated ability to maintain SO<INF>2</INF> 
emissions at or below 0.04 lbs/MMBtu.\67\ Any shifting of generation 
from the participating units at the facility to Fayette Unit 3 would 
result in an insignificant shift of emissions. The scrubber at Parish 
Unit 8 maintains an emission rate four to five times lower than the 
emission rate of the other coal-fired units at the facility (Parish 
Units 5, 6, and 7) that are uncontrolled.\68\ Shifting of generation 
from the participating units at the Parish facility to Parish Unit 8 
would result in a decrease in overall emissions from the source. 
Similarly, J K Spruce Units 1 and 2 have high performing scrubbers and 
emit at emission rates much lower than the co-located BART-eligible 
coal-fired units (J T Deely Units 1 and 2).\69\ In addition, because 
these units not covered by the program are on average better controlled 
for SO<INF>2</INF> than the covered sources and emit far less 
SO<INF>2</INF> per unit of energy produced, we conclude that in 
general, based on the current emission rates of the EGUs, should a 
portion of electricity generation shift to those units not covered by 
the program, the net result would be a decrease in overall 
SO<INF>2</INF> emissions, as these non-participating units are on 
average much better controlled. Relative to current emission levels, 
should participating units increase their emissions rates and decrease 
generation to comply with their allocation, emissions from non-
participating units may see a small increase. Therefore, we have not 
included Fayette Unit 3, WA Parish Unit 8 (WAP8), and J K Spruce Units 
1 and 2 in the trading program. The table below lists those coal-fired 
units that are co-located with BART-eligible units that have been 
identified for inclusion in the trading program.
---------------------------------------------------------------------------

    \64\ Dynegy purchased the Coleto Creek power plant from Engie in 
February 2017. Note that Coleto Creek may still be listed as being 
owned by Engie in some of our supporting documentation which was 
prepared before that sale.
    \65\ 40 CFR 51.308(e)(2)(vi)(A).
    \66\ See the BART FIP TSD, available in the docket for this 
action (Document Id: EPA-R06-OAR-2016-0611-0004), for evaluation of 
the performance of scrubbers on Fayette Units 1 and 2.
    \67\ The annual average emission rate for 2016 for this unit was 
0.01 lb/MMBtu.
    \68\ Parish Units 5 and 6 are coal-fired BART-eligible units. 
Parish Unit 7 is not BART-eligible, but is a co-located coal-fired 
EGU. Unlike Parish Unit 8, these three units do not have an 
SO<INF>2</INF> scrubber installed.
    \69\ The annual average emission rate for 2016 for J K Spruce 
Units 1 and 2 was 0.03 lb/MMBtu and 0.01 lb/MMBtu, respectively. The 
annual average emission rate for 2016 for J T Deely Units 1 and 2 
was 0.52 lb/MMBtu and 0.51 lb/MMBtu, respectively.

     Table 3--Coal-Fired EGUs Co-Located With BART-Eligible EGUs and
                  Participating in the Trading Program
------------------------------------------------------------------------
                          Facility                               Unit
------------------------------------------------------------------------
Harrington Station (Xcel)..................................         063B
WA Parish (NRG)............................................         WAP7
Welsh Power Plant (AEP)....................................            3
------------------------------------------------------------------------

    In addition to these sources, we also evaluated other EGUs for 
inclusion in the trading program based on their potential to impact 
visibility at Class I areas. Addressing emissions from sources with the 
largest potential to impact visibility is required to make progress 
towards the goal of natural visibility conditions and to address 
emissions that may otherwise interfere with measures required to 
protect visibility in other states. EPA, states, and Regional Planning 
Organizations (RPOs) have historically used a Q/D analysis to identify 
those facilities that have the potential to impact visibility at a 
Class I area based on their emissions and distance to the Class I area. 
Where,
    1. Q is the annual emissions in tons per year (tpy), and
    2. D is the nearest distance to a Class I Area in kilometers (km),
    We used a Q/D value of 10 as a threshold for identification of 
facilities that may impact visibility at Class I areas and could be 
included in the trading program in order to meet the goals of achieving 
greater reasonable progress than BART and limiting visibility 
transport. We selected this value of 10 based on guidance contained in 
the BART Guidelines, which states:
    Based on our analyses, we believe that a State that has established 
0.5 deciviews as a contribution threshold could reasonably exempt from 
the BART review process sources that emit less than 500 tpy of 
NO<INF>X</INF> or SO<INF>2</INF> (or combined NO<INF>X</INF> and 
SO<INF>2</INF>), as long as these sources are located more than 50 
kilometers from any Class I area; and sources that emit less than 1000 
tpy of NO<INF>X</INF> or SO<INF>2</INF> (or combined NO<INF>X</INF> and 
SO<INF>2</INF>) that are located more than 100 kilometers from any 
Class I area.\70\
---------------------------------------------------------------------------

    \70\ See 40 CFR part 51, App. Y, Sec.  III (How to Identify 
Sources ``Subject to BART'').
---------------------------------------------------------------------------

    The approach described above corresponds to a Q/D threshold of 10. 
This approach has also been recommended by the Federal Land Managers' 
Air Quality Related Values Work Group (FLAG) \71\ as an initial

[[Page 43597]]

screening test to evaluate the potential impact of a new or modified 
source on air quality related values (AQRV) at a Class I area and 
screen out sources from further visibility analysis. For this purpose, 
a Q/D value is calculated using the combined annual emissions in tons 
per year of SO<INF>2</INF>, NO<INF>X</INF>, PM<INF>10</INF>, and 
sulfuric acid mist (H<INF>2</INF>SO<INF>4</INF>) divided by the 
distance to the Class I area in km. A Q/D value greater than 10 for a 
new or modified major source seeking a permit under the Prevention of 
Significant Deterioration Program or Nonattainment New Source Review 
Program is recommended to have a Class I area AQRV analysis 
conducted.\72\
---------------------------------------------------------------------------

    \71\ Federal Land Managers' Air Quality Related Values Work 
Group (FLAG), Phase I Report--Revised (2010).
    Natural Resource Report NPS/NRPC/NRR--2010/232, October 2010. 
Available at http://www.nature.nps.gov/air/Pubs/pdf/flag/FLAG_2010.pdf.
    \72\ We also note that TCEQ utilized a Q/D threshold of 5 in its 
analysis of reasonable progress sources in the 2009 Texas Regional 
Haze SIP. See Appendix 10-1 of the 2009 Texas Regional Haze SIP.
---------------------------------------------------------------------------

    We considered the results of an available Q/D analysis based on 
2009 emissions to identify facilities that may impact air visibility at 
Class I areas.\73\ Table 4 summarizes the results of that Q/D analysis 
for EGU sources in Texas with a Q/D value greater than 10 with respect 
to the nearest Class I area to the source.
---------------------------------------------------------------------------

    \73\ See the TX RH FIP TSD that accompanied our December 2014 
proposal to address Reasonable Progress requirements 79 FR 74818 
(Dec 16, 2014) ;) and 2009statesum_Q_D.xlsx, available in the docket 
for that action.

                  Table 4--Q/D Analysis for Texas EGUs
              [Q/D Greater than 10, 2009 annual emissions]
------------------------------------------------------------------------
                        Facility                            Maximum Q/D
------------------------------------------------------------------------
H.W. Pirkey (AEP).......................................            35.8
Big Brown (Luminant)....................................           182.9
Sommers-Deely (CPS).....................................            56.9
Coleto Creek (Dynegy)...................................            46.0
Fayette (LCRA)..........................................            61.0
Gibbons Creek (TMPA)....................................            30.8
Harrington Station (Xcel)...............................           107.8
San Miguel..............................................            32.9
Limestone (NRG).........................................            85.1
Martin Lake (Luminant)..................................           367.4
Monticello (Luminant)...................................           425.4
Oklaunion (AEP).........................................            85.0
Sandow (Luminant).......................................            63.0
Tolk Station (Xcel).....................................           148.5
Twin Oaks...............................................            14.2
WA Parish (NRG).........................................            84.3
Welsh (AEP).............................................           230.1
------------------------------------------------------------------------

    Based on the above Q/D analysis, we identified additional coal-
fired EGUs for participation in the SO<INF>2</INF> trading program due 
to their emissions, proximity to Class I areas, and potential to impact 
visibility at Class I areas. While Gibbons Creek is identified by the 
Q/D analysis, the facility does not include any BART-eligible EGUs and 
has installed very stringent controls such that current emissions are 
approximately 1% of what they were in 2009.\74\ Therefore, we do not 
consider Gibbons Creek to have significant potential to impact 
visibility at any Class I area and do not include it in the trading 
program. The Twin Oaks facility, consisting of two units, is also 
identified as having a Q/D greater than 10. However, the Q/D for this 
facility is significantly lower than that of the other facilities, the 
facility does not include any BART-eligible EGUs, and the estimated Q/D 
for an individual unit would be less than 10. We do not consider the 
potential visibility impacts from these units to be significant 
relative to the other coal-fired EGUs in Texas with Q/Ds much greater 
than 10 and do not include it in the trading program. The Oklaunion 
facility consists of one coal-fired unit that is not BART-eligible. 
Annual emissions of SO<INF>2</INF> in 2016 from this source were 1,530 
tons, less than 1% of the total annual emissions for EGUs in the state 
and only 988 tons in 2017. The most recent emissions from this facility 
are small relative to other non-BART units included in the program and 
we have not included Oklaunion in the trading program. Finally, San 
Miguel is identified as having a Q/D greater than 10. The San Miguel 
facility consists of one coal-fired unit that is not BART-eligible. In 
our review of existing controls at the facility performed as part of 
our action to address the remaining regional haze obligations for 
Texas, we found that the San Miguel facility has upgraded its 
SO<INF>2</INF> scrubber system to perform at the highest level (94% 
control efficiency) that can reasonably be expected based on the 
extremely high sulfur content of the coal being burned, and the 
technology currently available.\75\ Since completion of all scrubber 
upgrades,\76\ emissions from the facility on a 30-day boiler operating 
day \77\ rolling average basis have remained below 0.6 lb/MMBtu and the 
2016 annual average emission rate was 0.44 lb/MMBtu. Therefore, we 
found the facility is well controlled and did not include San Miguel in 
the trading program. Other coal-fired EGUs in Texas that are not 
included in the trading program either had Q/D values less than 10 
based on 2009 emissions or were not yet operating in 2009. New units 
beginning operation after 2009 have been or would be permitted and 
constructed using emission control technology determined under either 
Best Available Control Technology (BACT) or Lowest Achievable Emission 
Rate (LAER) review, as applicable, and we do not consider the potential 
visibility impacts from these units to be significant relative to those 
coal-fired EGUs participating in the program. See Table 8 and 
accompanying discussion in the section below for additional information 
on coal-fired EGUs not included in the trading program. The table below 
lists the additional units identified by the Q/D analysis described 
above as potentially significantly impacting visibility that are 
included in the trading program. We note that all of the other coal-
fired units identified for inclusion in the trading program due to 
their BART-eligibility or by the fact that they are co-located with 
BART-eligible coal units would also be identified for inclusion in the 
trading program if the Q/D analysis were applied to them.
---------------------------------------------------------------------------

    \74\ Gibbons Creek's 2016 annual SO<INF>2</INF> emissions were 
only 138 tons compared to 11,931 tons in 2009.
    \75\ 79 FR 74818 (Dec. 16, 2014).
    \76\ San Miguel Electric Cooperative FGD Upgrade Program Update, 
URS Corporation, June 30, 2014. Available in the docket for our 
December 2014 Proposed action, 79 FR 74818 (Dec 16, 2014) as 
``TX166-008-066 San Miguel FGD Upgrade Program.''
    \77\ A boiler operating day (BOD) is any 24-hour period between 
12:00 midnight and the following midnight during which any fuel is 
combusted at any time at the steam generating unit. See 70 FR 39172 
(July 6, 2005).

    Table 5--Additional Units Identified for Inclusion in the Trading
                                 Program
------------------------------------------------------------------------
                          Facility                               Unit
------------------------------------------------------------------------
H.W. Pirkey (AEP)..........................................            1
Limestone (NRG)............................................            1
Limestone (NRG)............................................            2
Sandow (Luminant)..........................................            4
Tolk (Xcel)................................................         171B
Tolk (Xcel)................................................         172B
------------------------------------------------------------------------

    EPA proposes to affirm our determination that the inclusion of all 
of these identified sources (Tables 2, 3, and 5) in an intrastate 
SO<INF>2</INF> trading program will both: (1) Achieve emission levels 
that are similar to those projected in the 2012 ``CSAPR better than 
BART'' determination from original projected participation by all Texas 
EGUs in the CSAPR program for trading of SO<INF>2</INF>; and (2) 
achieve greater reasonable progress than BART. In addition to being a 
sufficient alternative to BART, the trading program secures reductions 
consistent with visibility transport requirements and is part of the 
long-term strategy to meet the reasonable progress requirements of the 
Regional Haze Rule.\78\ The combination of the

[[Page 43598]]

source coverage for this program, the total allocations for EGUs 
covered by the program, and recent and foreseeable emissions from EGUs 
not covered by the program will result in future EGU emissions in Texas 
that on average will be no greater than what was forecast in the 2012 
``CSAPR better than BART'' demonstration for Texas EGU emissions which 
assumed CSAPR participation by Texas. EPA requests comment on our 
proposal to affirm the identification of sources participating in the 
trading program in the October 2017 final rule.
---------------------------------------------------------------------------

    \78\ EPA is not determining at this time that this final action 
fully resolves the EPA's outstanding obligations with respect to 
reasonable progress that resulted from the Fifth Circuit's remand of 
our reasonable progress FIP. We intend to take future action to 
address the Fifth Circuit's remand.
---------------------------------------------------------------------------

2. Texas SO<INF>2</INF> Trading Program as a BART Alternative
    40 CFR 51.308(e)(2) contains the required plan elements and 
analyses for an emissions trading program or alternative measure 
designed as a BART alternative.
    In our October 2017 final action, we finalized our list of all 
BART-eligible sources in Texas, which serves to satisfy 
51.308(e)(2)(i)(A). We are not reopening the identification of BART-
eligible sources, and thus are not requesting comment on this element.
    This proposal includes a list of all EGUs covered by the trading 
program, satisfying the first requirement of 51.308(e)(2)(i)(B). All 
BART-eligible coal-fired units, some additional coal-fired EGUs, and 
some BART-eligible gas-fired and oil-and-gas-fired units are covered by 
the alternative program.\79\ This coverage and our determinations that 
the BART-eligible gas-fired and oil-and-gas-fired EGUs not covered by 
the program are not subject-to-BART for NO<INF>X</INF>, SO<INF>2</INF> 
and PM satisfy the second requirement of 51.308(e)(2)(i)(B).\80\
---------------------------------------------------------------------------

    \79\ See Table 3 above for list of participating units and 
identification of BART-eligible participating units.
    \80\ EPA's determination that these EGU units not covered by the 
program are not subject to BART is final and we are not reopening 
that determination here.
---------------------------------------------------------------------------

    Regarding the requirements of 40 CFR 51.308(e)(2)(i)(C), we are 
proposing to affirm our determination that it is not necessary to make 
determinations of BART for each source subject to BART and covered by 
the program. Under that provision, the demonstration for a BART 
alternative does not need to include determinations of BART for each 
source subject to BART and covered by the program when the 
``alternative measure has been designed to meet a requirement other 
than BART.'' The Texas trading program meets this condition, as 
discussed elsewhere, because it has been designed to meet multiple 
requirements other than BART. This BART alternative extends beyond all 
BART-eligible coal-fired units to include a number of additional coal-
fired EGUs, and some BART-eligible gas-fired and oil-and-gas-fired 
units, capturing the majority of emissions from EGUs in the State, and 
is designed to provide the measures that are needed to address 
interstate visibility transport requirements for several NAAQS. This is 
because for all sources covered by the Texas SO<INF>2</INF> trading 
program, those sources' CSAPR allocations for SO<INF>2</INF> are 
incorporated into the BART alternative, and the BART FIP obtains more 
emission reductions of SO<INF>2</INF> and NO<INF>X</INF> than the level 
of emissions reductions relied upon by other states during consultation 
and assumed by other states in their own regional haze SIPs, including 
their reasonable progress goals for their Class I areas. This BART 
alternative, addressing emissions from both BART eligible and non-BART 
eligible sources, that in combination provides for greater reasonable 
progress than BART, is also designed to be part of the long-term 
strategy needed to meet the reasonable progress requirements of the 
Regional Haze Rule, which remain outstanding after the remand of our 
reasonable progress FIP by the Fifth Circuit Court of Appeals. In our 
January 4, 2017 proposal on BART, we noted that the Fifth Circuit Court 
of Appeals has remanded without vacatur our prior action on the Texas' 
2009 Texas Regional Haze SIP and part of the Oklahoma Regional Haze 
SIP.\81\ We contemplate that future action on this remand, will bring 
closure to the reasonable progress requirement. For these reasons, we 
find that it is not necessary for us to make determinations of BART for 
each source subject to BART and covered by the program. In this 
context, 51.308(e)(2)(i)(C) provides that we may ``determine the best 
system of continuous emission control technology and associated 
emission reductions for similar types of sources within a source 
category based on both source-specific and category-wide information, 
as appropriate.'' In this action, we are relying on the determinations 
of the best system of continuous emission control technology and 
associated emission reductions for EGUs as was used in our 2012 
determination that showed that CSAPR as finalized and amended in 2011 
and 2012 achieves more reasonable progress than BART (``CSAPR better 
than BART''). These determinations were based largely on category-wide 
information.
---------------------------------------------------------------------------

    \81\ Texas v. EPA, 829 F.3d 405 (5th Cir. 2016).
---------------------------------------------------------------------------

    Regarding the requirement of 40 CFR 51.308(e)(2)(i)(D), our 
analysis is that the Texas trading program will effectively limit the 
aggregate annual SO<INF>2</INF> emissions of the covered EGUs to be no 
higher than the sum of their allowances. The Texas SO<INF>2</INF> 
Trading Program is an intrastate cap-and-trade program for listed 
covered sources in the State of Texas modeled after the EPA's CSAPR 
SO<INF>2</INF> Group 2 Trading Program. Authorizations to emit 
SO<INF>2</INF>, known as allowances, are allocated to affected units. 
As discussed elsewhere, the program includes a Supplemental Allowance 
Pool with additional allowances that may be allocated to subject units 
and sources to provide compliance assistance. The average total annual 
allowance allocation for all covered sources is 238,393 tons, with and 
an additional 10,000 tons allocated to the Supplemental Allowance pool. 
In addition, while the Supplemental Allowance pool may grow over time 
as unused supplemental allowances remain available and allocations from 
retired units are placed in the supplemental pool, the total number of 
allowances that can be allocated to sources in a control period from 
the supplemental pool is limited to a maximum 54,711 tons plus the 
amount of any allowances placed in the pool that year from retired 
units and corrections. Therefore, annual average emissions for the 
covered sources will be less than or equal to 248,393 tons, and 
although there will be some with year- to- year variability, that 
variability will be constrained by the number of banked allowances and 
number of allowances that can be allocated in a control period from the 
supplemental pool. The projected SO<INF>2</INF> emission reduction that 
will be achieved by the program, relative to any selected historical 
baseline year, is therefore the difference between the aggregate 
historical baseline emissions of the covered units and the average 
total annual allocation. For example, the aggregate 2014 SO<INF>2</INF> 
emissions of the covered EGUs were 309,296 tons per year, while the 
average total annual allocation for the covered EGUs is 248,393 tons/
year.\82\ Therefore, compared to 2014 emissions, the Texas trading 
program is projected to achieve an average reduction of approximately

[[Page 43599]]

60,903 tons per year.\83\ We note that the trading program allows 
additional sources to opt-in to the program. Should sources choose to 
opt-in in the future, the average total annual allocation could 
increase, up to a maximum of 289,740 tons. For comparison, the 
aggregate 2014 SO<INF>2</INF> emissions of the covered EGUs including 
all potential opt-ins were 343,425 tons per year. Therefore, compared 
to 2014 emissions, the Texas trading program including all potential 
opt-ins is projected to achieve an average reduction of approximately 
53,685 tons per year.
---------------------------------------------------------------------------

    \82\ Texas sources were subject to the CSAPR SO<INF>2</INF> 
trading program in 2015 and 2016 but are no longer subject to that 
program. We therefore select 2014 as the appropriate most recent 
year for this comparison.
    \83\ We note that for other types of alternative programs that 
might be adopted under 40 CFR 51.308(e)(2), the analysis of 
achievable emission reductions could be more complicated. For 
example, a program that involved economic incentives instead of 
allowances or that involved interstate allowance trading would 
present a more complex situation in which achievable emission 
reductions could not be calculated simply be comparing aggregate 
baseline emissions to aggregate allowances.
---------------------------------------------------------------------------

    Regarding the requirement of 40 CFR 51.308(e)(2)(i)(E), the BART 
alternative EPA is proposing to affirm here is supported by our 
determination that, the clear weight of the evidence is that in the 
context of the operation of the CSAPR ozone-season NO<INF>X</INF> 
trading program and the operation of CSAPR annual NO<INF>X</INF> and 
SO<INF>2</INF> trading programs, the Texas trading program achieves 
greater reasonable progress than would be achieved through the 
installation and operation of BART at the covered sources.\84\ The 2012 
demonstration showed that CSAPR as finalized and amended in 2011 and 
2012 meets the Regional Haze Rule's criteria for a demonstration of 
greater reasonable progress than BART. This 2012 demonstration is the 
primary evidence that the Texas trading program achieves greater 
reasonable progress than BART. However, the states participating in 
CSAPR are now slightly different than the geographic scope of CSAPR 
assumed in the 2012 analytic demonstration. In September 2017, we 
determined that the changes resulting from EPA's responses to the D.C. 
Circuit's remand in EME Homer City II to the emissions budgets and 
emissions distributions in states participating in CSAPR trading 
programs had no adverse impact on the 2012 determination that CSAPR 
participation remains better-than-BART.\85\ Regarding SO<INF>2</INF> 
emissions from Texas, as detailed below, the BART alternative is 
projected to accomplish emission levels from Texas EGUs that are 
similar to the emission levels from Texas EGUs that would have been 
realized from participation in the SO<INF>2</INF> trading program under 
CSAPR. The changes to the geographic scope of the NO<INF>X</INF> CSAPR 
programs combined with the expectation that the Texas trading program 
will reduce the SO<INF>2</INF> emissions of EGUs in Texas to levels 
similar to CSAPR-participation levels, despite slight differences in 
EGU participation between the two SO<INF>2</INF> programs, lead to the 
proposed finding here that, in the context of the operation of the 
CSAPR ozone-season NO<INF>X</INF> trading program and the operation of 
CSAPR annual NO<INF>X</INF> and SO<INF>2</INF> trading programs, the 
Texas BART alternative program is better-than-BART.
---------------------------------------------------------------------------

    \84\ EPA's determination that Texas' participation in CSAPR for 
ozone-season NO<INF>X</INF> satisfies NO<INF>X</INF> BART for EGUs 
is final and we are not reopening that determination here.
    \85\ 82 FR 45481 (Sept. 29, 2017).
---------------------------------------------------------------------------

    The differences in Texas EGU participation in CSAPR and this BART 
alternative are either not significant or, in some cases, work to 
demonstrate the relative stringency of the BART alternative as compared 
to CSAPR. If Texas EGUs were still required to participate in CSAPR's 
SO<INF>2</INF> trading program, a determination that CSAPR is an 
acceptable BART alternative for Texas EGUs would be plainly consistent 
with EPA's previous findings and regulations. The Texas trading program 
will result in average annual emissions from the covered EGUs and other 
EGUs in Texas that are no higher than if Texas EGUs were still required 
to participate in CSAPR's SO<INF>2</INF> trading program, and thus the 
clear weight of evidence is that, overall, the Texas trading program in 
conjunction with CSAPR will provide more reasonable progress than BART. 
We have considered the question of whether, in applying this portion of 
the Regional Haze Rule, we should take as the baseline the application 
of source-specific BART at the covered sources. We are proposing to 
interpret the rule to not require that approach in this situation, 
given that 51.308(e)(2)(i)C) provides for an exception (which we are 
exercising) to the requirement for source-specific BART determinations 
for the covered sources. As discussed previously, we are not making any 
source-specific BART determinations in this action, nor did Texas do so 
in its 2009 Regional Haze SIP submission.
    Table 6 identifies the participating units and their proposed unit-
level allocations under the Texas SO<INF>2</INF> trading program. These 
allocations are the same as under CSAPR.

   Table 6--Allocations for Texas EGUs Subject to the FIP SO2 Trading
                                 Program
------------------------------------------------------------------------
                                                            Allocations
         Owner/operator                   Units                (tpy)
------------------------------------------------------------------------
AEP............................  Welsh Power Plant Unit            6,496
                                  1.
                                 Welsh Power Plant Unit            7,050
                                  2.
                                 Welsh Power Plant Unit            7,208
                                  3.
                                 H W Pirkey Power Plant            8,882
                                  Unit 1.
                                 Wilkes Unit 1..........              14
                                 Wilkes Unit 2..........               2
                                 Wilkes Unit 3..........               3
CPS Energy.....................  JT Deely Unit 1........           6,170
                                 JT Deely Unit 2........           6,082
                                 Sommers Unit 1.........              55
                                 Sommers Unit 2.........               7
Dynegy/Vistra..................  Coleto Creek Unit 1....           9,057
El Paso Electric...............  Newman Unit 2..........               1
                                 Newman Unit 3..........               1
                                 Newman Unit 4..........               2
LCRA...........................  Fayette/Sam Seymour               7,979
                                  Unit 1.
                                 Fayette/Sam Seymour               8,019
                                  Unit 2.
Luminant/Vistra................  Big Brown Unit 1.......           8,473
                                 Big Brown Unit 2.......           8,559
                                 Martin Lake Unit 1.....          12,024

[[Page 43600]]

 
                                 Martin Lake Unit 2.....          11,580
                                 Martin Lake Unit 3.....          12,236
                                 Monticello Unit 1......           8,598
                                 Monticello Unit 2......           8,795
                                 Monticello Unit 3......          12,216
                                 Sandow Unit 4..........           8,370
                                 Stryker ST2............             145
                                 Graham Unit 2..........             226
NRG............................  Limestone Unit 1.......          12,081
                                 Limestone Unit 2.......          12,293
                                 WA Parish Unit WAP4....               3
                                 WA Parish Unit WAP5....           9,580
                                 WA Parish Unit WAP6....           8,900
                                 WA Parish Unit WAP7....           7,653
Xcel...........................  Tolk Station Unit 171B.           6,900
                                 Tolk Station Unit 172B.           7,062
                                 Harrington Unit 061B...           5,361
                                 Harrington Unit 062B...           5,255
                                 Harrington Unit 063B...           5,055
rrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrr
    Total......................  .......................         238,393
------------------------------------------------------------------------

    The total annual allocation for all sources in the Texas 
SO<INF>2</INF> trading program is 238,393 tons. In addition, a 
Supplemental Allowance pool initially holds an additional 10,000 tons 
for a maximum total annual allocation of 248,393 tons. The 
Administrator may allocate a limited number of additional allowances 
from this pool to sources whose emissions exceed their annual 
allocation, pursuant to the provisions in the FIP. \86\ Under CSAPR, 
the total allocations for all existing EGUs in Texas is 279,740 tons, 
for a total of 294,471 tons including the state new-unit set aside of 
14,430 tons and the Indian country new-unit set aside.\87\ As shown in 
Table 7, the coverage of the Texas SO<INF>2</INF> trading program 
represents 81% of the total CSAPR allocation for Texas and 85% of the 
CSAPR allocations for existing units. The Supplemental Allowance pool 
contains an additional 10,000 tons, compared to the new unit set aside 
(NUSA) allowance allocation under CSAPR of 14,430 tons. Examining 2016 
emissions, the EGUs covered by the program represent 89% of total Texas 
EGU emissions.
---------------------------------------------------------------------------

    \86\ See 40 CFR 97.912.
    \87\ An Indian Country new unit set-aside is established for 
each state under the CSAPR that provides allowances for future new 
units locating in Indian Country. The Indian Country new unit set-
aside for Texas is 294 tons. See 40 CFR 97.710.

 Table 7--Comparison of Texas SO2 Trading Program Allocations to Previously Applicable CSAPR Allocations and to
                                                 2016 Emissions
----------------------------------------------------------------------------------------------------------------
                                                             % of total
                                    Annual allocations       previously
                                   in the Texas trading   applicable CSAPR    2016 Emissions     2017 Emissions
                                    program  (tons per      allocations      (tons per year)    (tons per year)
                                           year)         (294,471 tons per
                                                               year)
----------------------------------------------------------------------------------------------------------------
Texas SO2 Trading program sources  238,393.............                 81            218,291            245,870
Total EGU emissions..............  ....................  .................            245,737            275,965
Supplemental Allowance pool......  10,000..............                3.4  .................  .................
Existing Sources not covered by    No allocation.......                 16             27,446             30,096
 trading program.
----------------------------------------------------------------------------------------------------------------

    The remaining 11% of the total 2016 or 2017 emissions due to 
sources not covered by the program come from coal-fired units that on 
average are better controlled for SO<INF>2</INF> than the covered 
sources (26,795 tons in 2016; 29,514 tons in 2017) and gas units that 
rarely burn fuel oil (651 tons in 2016; 582 tons in 2017). The table 
below lists these coal-fired units. We note that Sandow 5A and 5B were 
shut down in early 2018.\88\ The aggregate annual emission rate in 2016 
and 2017 was 0.50 lb/MMBTU for the coal-fired units participating in 
the trading program compared to 0.12 lb/MMBTU for the coal-fired units 
not covered by the program.\89\ Therefore, we expect that in general, 
based on the current emission rates of the EGUs, should a portion of 
electricity generation shift to units not covered by the program, the 
net result would be a decrease in overall SO<INF>2</INF> emissions, as 
these non-participating units are on average much better controlled and 
emit far less SO<INF>2</INF> per unit of energy produced.
---------------------------------------------------------------------------

    \88\ See letter dated February 14, 2018 from Kim Mireles of 
Luminant to the TCEQ requesting to cancel certain air permits and 
registrations for Sandow 5 Units 5A and 5B available in the docket 
for this action.
    \89\ See ``Texas EGUs 2016 and 2017 annual emissions.xlsx'' 
available in the docket for this action.

[[Page 43601]]



                      Table 8--Coal-Fired EGUs Not Covered by the Texas SO2 Trading Program
----------------------------------------------------------------------------------------------------------------
                                                                    Previously
                                                                    applicable         2016         2016 Annual
                                                                       CSAPR         Emissions        average
                                                                    allocation        (tons)       emission rate
                                                                      (tons)                        (lb/MMBtu)
----------------------------------------------------------------------------------------------------------------
Fayette/Sam Seymour Unit 3......................................           2,955             231            0.01
Gibbons Creek Unit 1............................................           6,314             138            0.02
JK Spruce Unit 1................................................           4,133             467            0.03
JK Spruce Unit 2................................................             158             151            0.01
Oak Grove Unit 1................................................           1,665           3,334            0.11
Oak Grove Unit 2 *..............................................             N/A           3,727            0.12
Oklaunion Unit 1................................................           4,386           1,530            0.11
San Miguel Unit 1...............................................           6,271           6,815            0.44
Sandow Station Unit 5A..........................................             773           1,117            0.11
Sandow Station Unit 5B..........................................             725           1,146            0.10
Sandy Creek Unit 1 *............................................             N/A           1,842            0.09
Twin Oaks Unit 1................................................           2,326           1,712            0.21
Twin Oaks Unit 2................................................           2,270           1,475            0.23
WA Parish Unit WAP8.............................................           4,071           3,112            0.16
                                                                 -----------------------------------------------
    Total.......................................................          36,047          26,795  ..............
----------------------------------------------------------------------------------------------------------------
* Oak Grove Unit 2 and Sandy Creek Unit 1 received allocations from the new unit set aside under the CSAPR
  program.

    The exclusion of a large number of gas-fired units that rarely burn 
fuel oil further limits allowances in the program as compared to CSAPR 
because CSAPR allocated these units allowances that are higher than 
their recent and current emissions. In 2016, these units emitted 651 
tons of SO<INF>2</INF>, but received allowances for over 5,000 tons. By 
excluding these sources from the program, those unused allowances are 
not available for purchase by other EGUs. We note the trading program 
does allow non-participating sources that previously had CSAPR 
allocations to opt-in to the trading program and receive allocations 
equivalent to their CSAPR allocation. Should some sources choose to 
opt-in to the program, the total number of allowances will increase by 
the collective amount of the allowances they receive. This will serve 
to increase the percentage of CSAPR allowances represented by the Texas 
SO<INF>2</INF> trading program and increase the portion of emissions 
covered by the program, with the result that the Texas program will 
more closely resemble the CSAPR program as it would have applied to 
Texas.
    Finally, the Texas SO<INF>2</INF> trading program does not allow 
EGUs to purchase allowances from sources in other states. Under CSAPR, 
Texas EGUs were allowed to purchase allowances from other Group 2 
states, a fact which could, and was projected in CSAPR modeling to, 
result in an increase in annual allowances used in the State above its 
budget. CSAPR also included a variability limit that was set at 18% of 
the State budget and an assurance level equal to the State's budget 
plus the variability limit. The assurance level for Texas was set at 
347,476 tons. The CSAPR assurance provisions are triggered if the 
State's emissions for a year exceed the assurance level. These 
assurance provisions require some sources to surrender two additional 
allowances per ton beyond the amount equal to their actual emissions, 
depending on their emissions and annual allocation level. In effect, 
under CSAPR, EGUs in Texas could have emitted above the allocation if 
willing to pay the market price of allowances, and the cost associated 
with each incremental ton of emissions could triple if in the aggregate 
they exceeded the assurance level.
    The Texas trading program, by contrast, will have 248,393 tons of 
allowances allocated every year, with no ability to purchase additional 
allowances from sources outside of the State, preventing an increase 
beyond that annual allocation.\90\ This includes an annual allocation 
of 10,000 allowances to the Supplemental Allowance pool. The 
Supplemental Allowance pool may grow over time as unused supplemental 
allowances remain available and allocations from retired units are 
placed in the supplemental pool, but the total number of allowances 
that can be allocated in a control period from in this supplemental 
pool is limited to a maximum 54,711 tons plus the amount of any 
allowances placed in the pool that year from retired units and 
corrections. The 54,711-ton value is equal to 10,000 tons annually 
allocated to the pool plus 18% of the total annual allocation for 
participating units, mirroring the variability limit from CSAPR. The 
total number of allowances that can be allocated in a single year is 
therefore 293,104, which is the sum of the 238,393 budget for existing 
units plus 54,711. Annual average emissions for the covered sources 
will be less than or equal to 248,393 tons with some year to year 
variability constrained by the number of banked allowances and 
allowances available to be allocated during a control period from the 
Supplemental Allowance pool. If additional units opt into the program, 
additional allowances will be available corresponding to the amounts 
that those units would have been allocated under CSAPR. The projected 
SO<INF>2</INF> emissions from the affected Texas EGUs in the CSAPR + 
BART-elsewhere scenario were 266,600 tons per year. In a 2012 
sensitivity analysis memo, EPA conducted a sensitivity analysis that 
confirmed that CSAPR would remain better-than-BART if Texas EGU 
emissions increased to approximately 317,100 tons.\91\ Under the Texas 
SO<INF>2</INF>

[[Page 43602]]

trading program, annual average EGU emissions are anticipated to remain 
well below 317,100 tons per year as annual allocations for 
participating units are held at 248,393 tons per year. Sources not 
covered by the program emitted less than 27,500 tons of SO<INF>2</INF> 
in 2016 and are not projected to significantly increase from this 
level. Any new units would be required to be well controlled and, 
similar to the existing units not covered by the program, they would 
not significantly increase total emissions of SO<INF>2</INF>. 
Furthermore, as discussed above, any load shifting to these new non-
participating units would be projected to result in a net decrease in 
emissions per unit of electricity generated and at most a small 
increase in total SO<INF>2</INF> emissions compared to them not having 
been brought into operation. We note that total emissions of 
SO<INF>2</INF> from all EGU sources in Texas in 2016 were 245,737 tons.
---------------------------------------------------------------------------

    \90\ We note the trading program does allow non-participating 
sources that previously had CSAPR allocations to opt-in to the 
trading program and receive an allocation equivalent to the CSAPR 
level allocation. Should some sources choose to opt-in to the 
program, the total number of allowances will increase by that 
amount.
    \91\ For the projected annual SO<INF>2</INF> emissions from 
Texas EGUs, see 2011 CSAPR/BART Technical Support Document, at Table 
2-4, available in the docket for this action. Certain CSAPR budgets 
were increased after promulgation of the CSAPR final rule (and the 
increases were addressed in the 2012 CSAPR/BART sensitivity analysis 
memo), See memo titled ``Sensitivity Analysis Accounting for 
Increases in Texas and Georgia Transport Rule State Emissions 
Budgets,'' Docket ID No. EPA-HQ-OAR-2011-0729-0323 (May 29, 2012), 
available in the docket for this action. The increase in the Texas 
SO<INF>2</INF> budget was 50,517 tons which, when added to the Texas 
SO<INF>2</INF> emissions projected in the CSAPR + BART-elsewhere 
scenario of 266,600 tons, yields total potential SO<INF>2</INF> 
emissions from Texas EGUs of approximately 317,100 tons.
---------------------------------------------------------------------------

    We also note that state-wide EGU SO<INF>2</INF> emissions in Texas 
have decreased considerably since the 2002 baseline period, reflecting 
market changes and reductions due to requirements such as CAIR/CSAPR. 
In 2002, Texas EGU emissions were 560,860 tons of SO<INF>2</INF> 
compared to emissions of 245,737 tons in 2016, a reduction of over 56%. 
The Texas SO<INF>2</INF> trading program locks in the large majority of 
these reductions by limiting allocation of allowances to 248,393 tons 
per year for participating sources. While the Texas program does not 
include all EGU sources in the State, as discussed above, the EGUs 
outside of the program contribute relatively little to the total state 
emissions and these units on average are better controlled for 
SO<INF>2</INF> than the units subject to the Texas program.
    In sum, we propose to affirm and request comment on the 
determination that the Texas Trading Program will result in 
SO<INF>2</INF> emissions from Texas EGUs similar to emissions 
anticipated under CSAPR and thus that the weight of evidence supports 
the conclusion that the SO<INF>2</INF> Trading Program meets the 
requirements of a BART alternative. The differences in source coverage 
are either not significant, or, in some cases, work to demonstrate the 
relative stringency of the Program compared to CSAPR.

C. Specific Texas SO<INF>2</INF> Trading Program Features

    The Texas SO<INF>2</INF> Trading Program is an intrastate cap-and-
trade program for listed covered sources in the State of Texas. The EPA 
is proposing to affirm our promulgation of the Texas SO<INF>2</INF> 
Trading Program under 40 CFR 52.2312 and subpart FFFFF of part 97. The 
State of Texas may choose to remain under the Texas SO<INF>2</INF> 
Trading Program in our FIP or replace it with an appropriate SIP if it 
chooses to develop and submit one to EPA and EPA is able to approve it. 
If the State of Texas is interested in pursuing delegation of the Texas 
SO<INF>2</INF> Trading Program, the request would need to provide a 
demonstration of the State's statutory authority to implement any 
delegated elements.
    The Texas SO<INF>2</INF> Trading Program is modeled after the EPA's 
CSAPR SO<INF>2</INF> Group 2 Trading Program, and we are proposing to 
affirm that the Program satisfies the requirements of 51.308(e)(2)(vi). 
Similar to the CSAPR SO<INF>2</INF> Group 2 Trading Program, the Texas 
SO<INF>2</INF> Trading Program sets an SO<INF>2</INF> emission budget 
for affected units and sources in the State of Texas. Authorizations to 
emit SO<INF>2</INF>, known as allowances, are allocated to affected 
units. The Texas SO<INF>2</INF> Trading Program provides flexibility to 
affected units and sources by allowing units and sources to determine 
their own compliance path; this includes adding or operating control 
technologies, upgrading or improving controls, switching fuels, and 
using allowances. Sources can buy and sell allowances and bank (save) 
allowances for future use as so long as each source holds enough 
allowances to account for its emissions of SO<INF>2</INF> by the 
allowance transfer deadline shortly after the end of the compliance 
period.
    Pursuant to the requirements of 51.308(e)(2)(vi)(A), the 
applicability of the Texas SO<INF>2</INF> Trading Program is defined in 
40 CFR 97.904. Section 97.904(a) identifies the subject units, which 
include all BART-eligible coal-fired EGUs, additional coal-fired EGUs, 
and several BART-eligible gas-fired and gas/fuel oil-fired EGUs, all of 
which were previously covered by the CSAPR SO<INF>2</INF> Group 2 
Trading Program. Additionally, pursuant to 40 CFR 97.904(b), the 
Trading Program provides an opportunity for any other unit in the State 
of Texas that was subject to the CSAPR SO<INF>2</INF> Group 2 Trading 
Program to opt-in to the Texas SO<INF>2</INF> Trading Program. We 
discuss in Section IV.B how the applicability results in coverage of 
the Texas SO<INF>2</INF> trading program representing 81% of the total 
CSAPR allocation for Texas and 85% of the CSAPR allocations for 
existing units, and how potential shifts in generation would result in 
a reduction of emissions or, at worst, an insignificant increase in 
emissions. The Texas SO<INF>2</INF> Trading Program establishes the 
statewide SO<INF>2</INF> budget for the subject units at 40 CFR 
97.910(a). This budget is equal to the sum of the allowances for each 
subject unit identified under 97.904(a) and 97.911(a). As units opt-in 
to the Texas SO<INF>2</INF> Trading under 97.904(b), the allowances for 
each of these units will equal their CSAPR SO<INF>2</INF> Group 2 
allowances under 97.911(b). We specifically solicit comment on 
retention or elimination of the provision that provides opportunity for 
certain units to opt-in to the Texas SO<INF>2</INF> trading Program.
    Additionally, the EPA has established a Supplemental Allowance Pool 
with a budget of 10,000 tons of SO<INF>2</INF> to provide compliance 
assistance to subject units and sources. Section 40 CFR 97.912 
establishes how allowances are allocated from the Supplemental 
Allowance Pool to sources (collections of participating units at a 
facility) that have reported total emissions for that control period 
exceeding the total amounts of allowances allocated to the 
participating units at the source for that control period (before any 
allocation from the Supplemental Allowance Pool). For any control 
period, the maximum supplemental allocation from the Supplemental 
Allowance Pool that a source may receive is the amount by which the 
total emissions reported for its participating units exceed the total 
allocations to its participating units (before any allocation from the 
Supplemental Allowance Pool). If the total amount of allowances 
available for allocation from the Supplemental Allowance Pool for a 
control period is less than the sum of these maximum allocations, 
sources will receive less than the maximum supplemental allocation from 
the Supplemental Allowance Pool, where the amount of supplemental 
allocations for each source is determined in proportion to the source's 
respective maximum allocations, with one exception. While all other 
sources required to participate in the trading program have flexibility 
to transfer allowances among multiple participating units under the 
same owner/operator when planning operations, Coleto Creek consists of 
only one coal-fired unit and, as of the issuance of the October 2017 
final action, was the only coal-fired unit in Texas owned and operated 
by Dynegy. It was conceivable that insufficient incentives would exist 
to compel Dynegy's competitors in the electric market to make their 
additional allowances available for purchase by Dynegy. To provide this 
source additional flexibility, Coleto Creek will be allocated its 
maximum supplemental

[[Page 43603]]

allocation from the Supplemental Allowance Pool as long as there are 
sufficient allowances in the Supplemental Allowance Pool available for 
this allocation, and its actual allocation will not be reduced in 
proportion with any reductions made to the supplemental allocations to 
other sources. We note that Dynegy and Vistra--which owns other units 
that are subject to the trading program, some of which have ceased 
operation and thus will not need to use their allowances--have recently 
merged, and we specifically solicit comment on whether we should retain 
or eliminate this additional flexibility for Coleto Creek in light of 
this recent change in ownership.\92\
---------------------------------------------------------------------------

    \92\ https://www.vistraenergy.com/vistra-dynegy-merger/.
---------------------------------------------------------------------------

    Section 97.921 establishes how the Administrator will record the 
allowances for the Texas SO<INF>2</INF> Trading Program and ensures 
that the Administrator will not record more allowances than are 
available under the program consistent with 40 CFR 51.308(e)(2)(vi)(B). 
The monitoring, recordkeeping, and reporting provisions for the Texas 
SO<INF>2</INF> Trading Program at 40 CFR 97.930-97.935 are consistent 
with those requirements in the CSAPR SO<INF>2</INF> Group 2 Trading 
Program. The provisions in 40 CFR 97.930-97.935 require the subject 
units to comply with the monitoring, recordkeeping, and reporting 
requirements for SO<INF>2</INF> emissions in 40 CFR part 75; thereby 
satisfying the requirements of 51.308(e)(2)(vi)(C)-(E). The EPA will 
implement the Texas SO<INF>2</INF> Trading Program using the Allowance 
Management System, which will provide a consistent approach to 
implementation and tracking of allowances and emissions for the EPA, 
subject sources, and the public consistent with the requirements of 40 
CFR 51.308(e)(2)(vi)(F). The requirements at 40 CFR 97.913-97.918 for 
designated and alternate designated representatives are consistent with 
the requirements of 40 CFR 51.308(e)(2)(vi)(G) and are also consistent 
with the EPA's other trading programs under 40 CFR part 97. Allowance 
transfer provisions for the Texas SO<INF>2</INF> Trading Program at 40 
CFR 97.922 and 97.923 provide procedures that allow timely transfer and 
recording of allowances; these provisions will minimize administrative 
barriers to the operation of the allowance market and ensure that such 
procedures apply uniformly to all sources and other potential 
participants in the allowance market, consistent with 40 CFR 
51.308(e)(2)(vi)(H). Compliance provisions for the Texas SO<INF>2</INF> 
Trading Program at 40 CFR 97.924 prohibit a source from emitting a 
total tonnage of SO<INF>2</INF> that exceeds the tonnage value of its 
SO<INF>2</INF> allowance holdings as required by 40 CFR 
51.308(e)(2)(vi)(I). The Texas SO<INF>2</INF> Trading Program includes 
automatic allowance surrender provisions at 40 CFR 97.924(d) that apply 
consistently from source to source and the tonnage value of the 
allowances deducted shall equal at least three times the tonnage of the 
excess emissions, consistent with the penalty provisions at 40 CFR 
51.308(e)(2)(vi)(J). The Texas SO<INF>2</INF> Trading Program provides 
for banking of allowances under 40 CFR 97.926; Texas SO<INF>2</INF> 
Trading Program allowances are valid for compliance in the control 
period of issuance or may be banked for future use, consistent with 40 
CFR 51.308(e)(2)(vi)(K). 40 CFR 51.308(e)(2)(vi)(L) requires periodic 
program evaluation to assess whether the program is accomplishing its 
goals and whether modifications to the program are needed to enhance 
performance of the program. The CAA and EPA's implementing regulations 
require comprehensive periodic revisions of implementation plans for 
regional haze under 40 CFR 51.308(f) and periodic review of the state's 
regional haze approach under 40 CFR 51.308(g) to evaluate progress 
towards the reasonable progress goals for Class I areas located within 
the State and Class I areas located outside the State affected by 
emissions from within the State. Because the Texas SO<INF>2</INF> 
Trading Program is a BART-alternative and part of the long-term 
strategy for Texas' Regional Haze obligations, this program will be 
reviewed in each comprehensive periodic revision and progress report. 
We anticipate these revisions and progress reports will provide the 
information needed to assess program performance, as required by 40 CFR 
51.308(e)(2)(vi)(L). In sum, the EPA is proposing to affirm our 
determination that the promulgation of the Texas SO<INF>2</INF> Trading 
Program meets the requirements of 40 CFR 51.308(e)(2) as a BART 
alternative for Texas' Regional Haze obligations.
    As previously discussed, the EPA modeled the Texas SO<INF>2</INF> 
Trading Program after the EPA's CSAPR SO<INF>2</INF> Group 2 Trading 
Program. Relying on a trading program structure that is already in 
effect enables the EPA, the subject sources, and the public to benefit 
from the use of the Allowance Management System's forms, and of 
familiar and tested monitoring, recordkeeping, and reporting 
requirements. However, there are a few features of the Texas 
SO<INF>2</INF> Trading Program that are separate and unique from the 
EPA's CSAPR. First, the program does not address new units that are 
built after the inception of the program; these units would be 
permitted and constructed using emission control technology determined 
under either BACT or LAER review, as applicable, and would emit at 
emission rates much lower than the average emission rate of those units 
participating in the program. Second, the Texas SO<INF>2</INF> Trading 
Program provides that Texas sources that were previously covered under 
the CSAPR SO<INF>2</INF> Group 2 Trading Program, but that are not 
subject to the requirements of subpart FFFFF of part 97, can opt-in to 
the Texas SO<INF>2</INF> Trading Program at the allocation level 
established under CSAPR. Finally, the Texas SO<INF>2</INF> Trading 
Program includes a Supplemental Allowance Pool to provide some 
compliance assistance to units whose emissions exceed their 
allocations. The amount of allocations to the Supplemental Allowance 
Pool each year is less than the portion of the Texas budget under the 
CSAPR SO<INF>2</INF> Group 2 Trading Program that would have been set 
aside each year for new units (and which would have been allocated to 
existing units to the extent not needed by new units).

D. Recent Retirements

    Vistra permanently retired Big Brown,\93\ Monticello,\94\ and 
Sandow \95\ this year. This is new information that arose after we 
issued our October 2017 FIP. There are now a significant amount of 
allowances that would be allocated to retired units. We also note that 
Welsh Unit 2 shut down in 2016 \96\ and the JT Deely units have been 
announced for retirement at the end of 2018. After all these recent and 
planned shutdowns, 74,313 tons of allowances would be allocated to 
retired units. In 2017, these units emitted 105,844 tons of 
SO<INF>2</INF>. We

[[Page 43604]]

specifically solicit comment on how these shutdowns should impact the 
provision at 40 CFR 97.911(a)(2) regarding allocations to retired units 
for a period of five years, including comment on the alternative 
proposal described below.
---------------------------------------------------------------------------

    \93\ See letter dated March 27, 2018 from Kim Mireles of 
Luminant to the TCEQ requesting to cancel certain air permits and 
registrations for Big Brown available in the docket for this action.
    \94\ See letter dated February 8, 2018 from Kim Mireles of 
Luminant to the TCEQ requesting to cancel certain air permits and 
registrations for Monticello available in the docket for this 
action.
    \95\ See letter dated February 14, 2018 from Kim Mireles of 
Luminant to the TCEQ requesting to cancel certain air permits and 
registrations for Sandow 5 Units 5A and 5B available in the docket 
for this action.
    \96\ Welsh Unit 2 was retired on April 16, 2016 pursuant to a 
Consent Decree (No. 4:10-cv-04017-RGK) and subsequently removed from 
the Title V permit (permit no. O26). We have included the Consent 
Decree, permitting notes, and new Title V permit showing that the 
Unit is removed in the docket for this action.
---------------------------------------------------------------------------

    In light of these shutdowns, we solicit comment on a different 
approach to calculating the total number of allowances that can be 
allocated in a control period from the supplemental allowance pool. The 
54,711-ton value discussed above is equal to 10,000 tons annually 
allocated to the pool plus 18% of the total annual allocation for 
participating units, mirroring the variability limit from CSAPR (40 CFR 
97.912(b)). In this alternative approach, the total limit would be 
41,335 tons, calculated as 10,000 tons annually allocated to the pool 
plus 18% of the total annual allocation for participating units minus 
the annual allocation for the participating units that have been 
permanently retired as of January 1, 2019. The total number of 
allowances that can be allocated in a single year would therefore be 
not 293,104, but rather 279,728, which is the sum of the 238,393 budget 
for existing units plus 41,335.\97\ Annual average emissions for the 
covered sources will be less than or equal to 248,393 tons, and 
although there will be with some year-to-year variability, that 
variability will be constrained by the number of banked allowances and 
allowances available to be allocated during a control period from the 
Supplemental Allowance pool.
---------------------------------------------------------------------------

    \97\ See ``Texas EGUs 2016 and 2017 annual emissions.xlsx,'' 
available in the docket for this action.
---------------------------------------------------------------------------

E. Interstate Visibility Transport

    In our October 2017 final action, we determined that the BART 
alternatives to address SO<INF>2</INF> and NO<INF>X</INF> BART at 
Texas' EGUs provided measures that are adequate to ensure that 
emissions from the State do not interfere with measures to protect 
visibility in nearby states, and thus the October 2017 final action 
satisfies the interstate visibility transport requirements. An EPA 
guidance document (2013 Guidance) on infrastructure SIP elements states 
that CAA section 110(a)(2)(D)(i)(II)'s interstate visibility transport 
requirements can be satisfied by approved SIP provisions that the EPA 
has found to adequately address a state's contribution to visibility 
impairment in other states.\98\ The EPA interprets interstate 
visibility transport to be pollutant-specific, such that the 
infrastructure SIP submission need only address the potential for 
interference with protection of visibility caused by the pollutant 
(including precursors) to which the new or revised NAAQS applies.\99\ 
The 2013 Guidance lays out two ways in which a state's infrastructure 
SIP submittal may satisfy interstate visibility transport. One way is 
through a state's confirmation in its infrastructure SIP submittal that 
it has an EPA approved regional haze SIP in place. In the absence of a 
fully approved regional haze SIP, a demonstration that emissions within 
a state's jurisdiction do not interfere with other states' plans to 
protect visibility meets this requirement. Such a demonstration should 
point to measures that limit visibility-impairing pollutants and ensure 
that the resulting reductions conform with any mutually agreed emission 
reductions under the relevant regional haze regional planning 
organization (RPO) process.\100\
---------------------------------------------------------------------------

    \98\ See ``Guidance on Infrastructure State Implementation Plan 
(SIP) Elements under Clean Air Act Sections 110(a)(1) and (2)'' 
included in the docket for this action.
    \99\ See id. at 33.
    \100\ See id., at 34; 76 FR 22036 (April 20, 2011) (containing 
EPA's approval of the visibility requirement of 110(a)(2)(D)(i)(II) 
based on a demonstration by Colorado that did not rely on the 
Colorado Regional Haze SIP).
---------------------------------------------------------------------------

    To develop its 2009 Regional Haze SIP, TCEQ worked through its RPO, 
the Central Regional Air Planning Association (CENRAP), to develop 
strategies to address regional haze, which at that time were based on 
emissions reductions from CAIR. To help states in establishing 
reasonable progress goals for improving visibility in Class I areas, 
the CENRAP modeled future visibility conditions based on the mutually 
agreed emissions reductions from each state. The CENRAP states then 
relied on this modeling in setting their respective reasonable progress 
goals.
    We are proposing to affirm our determination that the October 2017 
final action is adequate to ensure that emissions from Texas do not 
interfere with measures to protect visibility in nearby states because 
the BART FIP emission reductions are consistent with the level of 
emission reductions relied upon by other states during consultation. 
The 2009 Texas Regional Haze SIP relied on CAIR to meet SO<INF>2</INF> 
and NO<INF>X</INF> BART requirements for EGUs. Under CAIR, Texas EGU 
sources were projected to emit approximately 350,000 tpy of 
SO<INF>2</INF>. As discussed elsewhere, Texas EGU SO<INF>2</INF> 
emissions for sources covered by the trading program will be 
constrained by the number of available allowances. Average annual 
emissions for the covered sources will be less than or equal to 248,393 
tons with some year to year variability constrained by the number of 
banked allowances and number of allowances that can be allocated in a 
control period from the supplemental pool. Sources not covered by the 
program emitted less than 27,500 tons of SO<INF>2</INF> in 2016 and are 
not projected to significantly increase from this level. Any new units 
would be required to be well controlled and similar to the existing 
units not covered by the program, they would not significantly increase 
total emissions of SO<INF>2</INF>. Additionally, the FIP relies on 
CSAPR as an alternative to EGU BART for NO<INF>X</INF>, which exceeds 
the emission reductions relied upon by other states during 
consultation. As such, we are proposing to affirm that the BART 
alternatives in the October 2017 final action are sufficient to address 
the interstate visibility transport requirement under CAA section 
110(a)(2)(D)(i)(II) for the six NAAQS, and request comment on this 
determination.

V. Proposed Action

A. Regional Haze

    We are proposing to affirm our approval of the portion of the Texas 
Regional Haze SIP that addresses the BART requirement for EGUs for PM. 
To address the SO<INF>2</INF> BART requirements for EGUs, we are 
proposing to affirm our FIP to replace Texas' reliance on CAIR with 
reliance on an intrastate SO<INF>2</INF> trading program for certain 
EGUs identified in Table 9. This proposed action would also be part of 
the long-term strategy to address the reasonable progress requirements 
for Texas EGUs, which remain outstanding after the remand of our 
reasonable progress FIP by the Fifth Circuit Court of Appeals.
    In this proposed action we are also specifically soliciting comment 
on whether we should retain or eliminate the additional flexibility for 
Coleto Creek in Section 40 CFR 97.912 that establishes how allowances 
are allocated from the Supplemental Allowance Pool to this source in 
light of this recent change in ownership after the merger of Dynegy and 
Vistra. In light of recent and planned shutdowns, we specifically 
solicit comment on how these shutdowns should impact the provision at 
40 CFR 97.911(a)(2) regarding allocations to retired units for a period 
of five years. We also solicit comment on a different approach to 
calculating the total number of allowances that can be allocated in a 
control period from the supplemental allowance pool pursuant to 40 CFR 
97.912(b). In addition, we are specifically soliciting comment on

[[Page 43605]]

retention or elimination of the provision under 40 CFR 97.904(b) that 
provides opportunity for certain units to opt-in to the Texas 
SO<INF>2</INF> trading Program.

       Table 9--Texas EGUs Subject to the FIP SO2 Trading Program
------------------------------------------------------------------------
            Owner/ operator                           Units
------------------------------------------------------------------------
AEP....................................  Welsh Power Plant Units 1, 2,
                                          and 3.
                                         H W Pirkey Power Plant Unit 1.
                                         Wilkes Units 1*, 2*, and 3*.
CPS Energy.............................  JT Deely Units 1 and 2, Sommers
                                          Units 1* and 2*.
Dynegy.................................  Coleto Creek Unit 1.
LCRA...................................  Fayette/Sam Seymour Units 1 and
                                          2.
Luminant/Vistra........................  Big Brown Units 1 and 2.
                                         Martin Lake Units 1, 2, and 3.
                                         Monticello Units 1, 2, and 3.
                                         Sandow Unit 4.
                                         Stryker ST2*.
                                         Graham Unit 2*.
NRG....................................  Limestone Units 1 and 2.
                                         WA Parish Units WAP4*, WAP5,
                                          WAP6, WAP7.
Xcel...................................  Tolk Station Units 171B and
                                          172B.
                                         Harrington Units 061B, 062B,
                                          and 063B.
El Paso Electric.......................  Newman Units 2*, 3*, and 4*.
------------------------------------------------------------------------
* Gas-fired or gas/fuel oil-fired units.

B. Interstate Visibility Transport

    In our October 2017 final action, we determined that the BART 
alternatives to address SO<INF>2</INF> and NO<INF>X</INF> BART at 
Texas' EGUs were adequate to satisfy the interstate visibility 
transport requirements for these NAAQS: (1) 1997 8-hour ozone; (2) 1997 
PM<INF>2.5</INF> (annual and 24-hour); (3) 2006 PM<INF>2.5</INF> (24-
hour); (4) 2008 8-hour ozone; (5) 2010 1-hour NO<INF>2</INF>; and (6) 
2010 1-hour SO<INF>2</INF>. The emission reductions from Texas sources 
associated with these BART alternatives are consistent with the level 
of emission reductions relied upon by other states when setting their 
reasonable progress goals. Consistent with our decision in the October 
2017 rulemaking, we are proposing to affirm that the measures in the 
FIP are therefore adequate to ensure that emissions from Texas do not 
interfere with measures to protect visibility in nearby states with 
respect to the NAAQS enumerated above in accordance with CAA section 
110(a)(2)(D)(i)(II).

VI. Statutory and Executive Order Reviews

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

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

B. Executive Order 13771: Reducing Regulations and Controlling 
Regulatory Costs

    This proposed action is not an Executive Order 13771 regulatory 
action because this action is not significant under Executive Order 
12866.

C. Paperwork Reduction Act

    This proposed action does not impose any new information collection 
burden under the PRA. The information collection activities in the 
October 2017 final rule promulgating the Texas SO<INF>2</INF> Trading 
Program at 40 CFR part 97, subpart FFFFF are being submitted to the 
Office of Management and Budget (OMB) under the PRA as part of the 
current Information Collection Request (ICR) renewal for the CSAPR 
trading programs. OMB has previously approved the information 
collection activities for the CSAPR trading programs and has assigned 
OMB control number 2060-0667. The ICR document that the EPA prepared 
for the renewal has been assigned EPA ICR number 2391.05. You can find 
a copy of the ICR at https://www.regulations.gov under Docket ID Number 
EPA-HQ-OAR-2018-0209. An agency may not conduct or sponsor, and a 
person is not required to respond to, a collection of information 
unless it displays a currently valid OMB control number.

D. Regulatory Flexibility Act

    I certify that this proposed action will not have a significant 
impact on a substantial number of small entities. In making this 
determination, the impact of concern is any significant adverse 
economic impact on small entities. An agency may certify that a rule 
will not have a significant economic impact on a substantial number of 
small entities if the rule relieves regulatory burden, has no net 
burden or otherwise has a positive economic effect on the small 
entities subject to the rule. This proposed rule does not impose any 
requirements or create impacts on small entities. This proposed FIP 
action under Section 110 of the CAA will not create any new requirement 
with which small entities must comply. Accordingly, it affords no 
opportunity for the EPA to fashion for small entities less burdensome 
compliance or reporting requirements or timetables or exemptions from 
all or part of the rule. The fact that the CAA prescribes that various 
consequences (e.g., emission limitations) may or will flow from this 
action does not mean that the EPA either can or must conduct a 
regulatory flexibility analysis for this action. We have therefore 
concluded that this proposed action will have no net regulatory burden 
for all directly regulated small entities.

E. Unfunded Mandates Reform Act (UMRA)

    This proposed action does not contain an unfunded mandate of $100 
million or more as described in UMRA, 2 U.S.C. 1531-1538, and does not 
significantly or uniquely affect small governments.

F. Executive Order 13132: Federalism

    This proposed action does not have federalism implications. It will 
not have substantial direct effects on the states, on the relationship 
between the national government and the states, or on the distribution 
of power and responsibilities among the various levels of government.

G. Executive Order 13175: Consultation and Coordination With Indian 
Tribal Governments

    This proposed rule does not have tribal implications, as specified 
in Executive Order 13175. It will not have substantial direct effects 
on tribal governments. Thus, Executive Order 13175 does not apply to 
this rule.

H. Executive Order 13045: Protection of Children from Environmental 
Health Risks and Safety Risks

    Executive Order 13045: Protection of Children From Environmental 
Health Risks and Safety Risks \101\ applies to any rule that: (1) Is 
determined to be economically significant as defined under Executive 
Order 12866; and (2) concerns an environmental health or safety risk 
that we have reason to believe may have a disproportionate effect on 
children. EPA interprets E.O. 13045 as applying only to those 
regulatory actions that concern health or safety risks, such that the 
analysis required under Section 5-501 of the E.O. has the potential to 
influence the regulation. This proposed action is not subject to 
Executive Order 13045 because it is not economically

[[Page 43606]]

significant as defined in Executive Order 12866, and because the EPA 
does not believe the environmental health or safety risks addressed by 
this proposed action present a disproportionate risk to children. This 
proposed action is not subject to E.O. 13045 because it implements 
specific standards established by Congress in statutes. However, to the 
extent this proposed rule will limit emissions of SO<INF>2</INF>, the 
proposed rule will have a beneficial effect on children's health by 
reducing air pollution.
---------------------------------------------------------------------------

    \101\ 62 FR 19885 (Apr. 23, 1997).
---------------------------------------------------------------------------

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

    This proposed action is not subject to Executive Order 13211 (66 FR 
28355 (May 22, 2001)), because it is not a significant regulatory 
action under Executive Order 12866.

J. National Technology Transfer and Advancement Act (NTTAA)

    This proposed action involves technical standards. The EPA has 
decided to use the applicable monitoring requirements of 40 CFR part 
75. Part 75 already incorporates a number of voluntary consensus 
standards. Consistent with the Agency's Performance Based Measurement 
System (PBMS), part 75 sets forth performance criteria that allow the 
use of alternative methods to the ones set forth in part 75. The PBMS 
approach is intended to be more flexible and cost-effective for the 
regulated community; it is also intended to encourage innovation in 
analytical technology and improved data quality. At this time, EPA is 
not recommending any revisions to part 75; however, EPA periodically 
revises the test procedures set forth in part 75. When EPA revises the 
test procedures set forth in part 75 in the future, EPA will address 
the use of any new voluntary consensus standards that are equivalent. 
Currently, even if a test procedure is not set forth in part 75, EPA is 
not precluding the use of any method, whether it constitutes a 
voluntary consensus standard or not, as long as it meets the 
performance criteria specified; however, any alternative methods must 
be approved through the petition process under 40 CFR 75.66 before they 
are used.

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

    The EPA believes that this proposed action does not have 
disproportionately high and adverse human health or environmental 
effects on minority populations, low-income populations and/or 
indigenous peoples, as specified in Executive Order 12898 (59 FR 7629, 
February 16, 1994). We have determined that this proposed rule will not 
have disproportionately high and adverse human health or environmental 
effects on minority or low-income populations because it increases the 
level of environmental protection for all affected populations without 
having any disproportionately high and adverse human health or 
environmental effects on any population, including any minority or low-
income population. The proposed rule limits emissions of SO<INF>2</INF> 
from certain facilities in Texas.

List of Subjects

40 CFR Part 52

    Environmental protection, Air pollution control, Incorporation by 
reference, Intergovernmental relations, Nitrogen dioxide, Ozone, 
Particulate matter, Reporting and recordkeeping requirements, Sulfur 
dioxides, Visibility, Interstate transport of pollution, Regional haze, 
Best available retrofit technology.

40 CFR Part 97

    Environmental protection, Administrative practice and procedure, 
Air pollution control, Intergovernmental relations, Nitrogen dioxide, 
Reporting and recordkeeping requirements, Sulfur dioxides.

    Dated: August 17, 2018.
Anne Idsal,
Regional Administrator.
[FR Doc. 2018-18497 Filed 8-24-18; 8:45 am]
 BILLING CODE 6560-50-P


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