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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 52 and 97

[EPA-HQ-OAR-2009-0491; FRL- ]

RIN 2060-AR22

Revisions to Federal Implementation Plans to Reduce 

Interstate Transport of Fine Particulate Matter and Ozone

AGENCY: Environmental Protection Agency (EPA). 

ACTION: Proposed rule.

SUMMARY: EPA is proposing or seeking comment on 

revisions to the final Transport Rule promulgated on August 

8, 2011. These revisions address discrepancies in unitspecific modeling assumptions that affect the proper 

calculation of Transport Rule state budgets and assurance 

levels in Florida, Louisiana, Michigan, Mississippi, 

Nebraska, New Jersey, New York, Texas, and Wisconsin, as 
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well as new unit set-asides in Arkansas and Texas. EPA is 

also proposing to revise allowance allocations to specific 

units covered by certain consent decrees that restrict the 

use of those allowances. These important technical fixes 

maintain the Transport Rule’s ability to achieve the air 

quality goal of eliminating significant contribution and 

interference with maintenance as quantified by the proper 

application of these methodologies.

EPA is also proposing to amend the assurance penalty 

provisions of the rule to make them effective beginning 

January 1, 2014 in order. to promote the development of 

allowance market liquidity as these revisions are 

finalized. EPA believes that deferring the effective date 

of the assurance provisions would provide additional 

confidence and would in no way compromise the air quality 

goals of the program.

In addition, we are proposing to correct typographical

errors in the rule.

DATES: Comments. Comments must be received on or before 

[INSERT DATE 30 DAYS FROM DATE OF PUBLICATION IN THE 

FEDERAL REGISTER] unless a public hearing is requested in 

which event comments must be received on or before [INSERT 
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DATE 45 DAYS FROM DATE OF PUBLICATION OF NOTICE OF PUBLIC 

HEARING].

Public Hearing. On [INSERT DATE OF PUBLICATION OF NOTICE 

OF PUBLIC HEARING IN THE FEDERAL REGISTER], EPA published a 

notice announcing that if a public hearing on this proposal 

is requested by [INSERT DATE 7 DAYS AFTER PUBLICATION OF 

NOTICE OF PUBLIC HEARING IN THE FEDERAL REGISTER], it will 

be held on October 28, 2011, at 9 a.m. at USEPA. Please 

refer to the public hearing notice published at [INSERT 

CITATION TO PUBLICATION OF NOTICE OF PUBLIC HEARING IN THE 

FEDERAL REGISTER] for additional information on the public 

hearing.

EPA will provide further information about the hearing 

on its webpage if a hearing is requested. Oral testimony 

will be limited to the subject matter of the proposal, the 

scope of which is discussed below. Any member of the 

public may file a written statement by the close of the 

comment period.

ADDRESSES: Submit your comments, identified by Docket ID 

No. EPA-HQ-OAR-2009-0491, by one of the following methods:

 http://www.regulations.gov: Follow the on-line 

instructions for submitting comments.

 Mail: Air and Radiation Docket and Information Center, 
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U.S. Environmental Protection Agency, Mailcode: 2822T, 

1200 Pennsylvania Avenue, NW, Washington, D.C. 20460.

 Hand Delivery: Air and Radiation Docket, EPA West 

Building, Room 3334, 1301 Constitution Avenue, NW, 

Washington, D.C. 20460. Such deliveries are only 

accepted during the Docket’s normal hours of 

operation, and special arrangements should be made for 

deliveries of boxed information.

Instructions: Direct your comments to Docket ID No. EPAHQ-OAR-2009-0491. EPA's policy is that all comments 

received will be included in the public docket without 

change and may be made available online at 

http://www.regulations.gov, including any personal 

information provided, unless the comment includes 

information claimed to be Confidential Business Information 

(CBI) or other information whose disclosure is restricted 

by statute. Do not submit information that you consider to 

be CBI or otherwise protected through www.regulations.gov 

or e-mail. The http://www.regulations.gov website is an 

“anonymous access” system, which means EPA will not know 

your identity or contact information unless you provide it 

in the body of your comment. If you send an e-mail comment 

directly to EPA without going through www.regulations.gov 
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your e-mail address will be automatically captured and 

included as part of the comment that is placed in the 

public docket and made available on the Internet. If you 

submit an electronic comment, EPA recommends that you 

include your name and other contact information in the body 

of your comment and with any disk or CD-ROM you submit. If 

EPA cannot read your comment due to technical difficulties 

and cannot contact you for clarification, EPA may not be 

able to consider your comment. Electronic files should 

avoid the use of special characters, any form of 

encryption, and be free of any defects or viruses. For 

additional information about EPA’s public docket visit the 

EPA Docket Center homepage at 

http://www.epa.gov/epahome/dockets.htm.

Docket: All documents in the docket are listed in the 

http://www.regulations.gov index. Although listed in the 

index, some information is not publicly available, e.g., 

CBI or other information whose disclosure is restricted by 

statute. Certain other material, such as copyrighted 

material, will be publicly available only in hard copy. 

Publicly available docket materials are available either 

electronically in http://www.regulations.gov or in hard 

copy at the Air and Radiation Docket, EPA West Building, 
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Room 3334, 1301 Constitution Avenue, NW, Washington, D.C. 

20460. The Public Reading Room is open from 8:30 a.m. to 

4:30 p.m., Monday through Friday, excluding legal holidays. 

The telephone number for the Public Reading Room is (202) 

566-1744, and the telephone number for the Air and 

Radiation Docket is (202) 566-1742.

FOR FURTHER INFORMATION CONTACT: Gabrielle Stevens, U.S. 

Environmental Protection Agency, Clean Air Markets 

Division, MC 6204J, Ariel Rios Building, 1200 Pennsylvania 

Ave., NW, Washington, D.C. 20460, telephone (202) 343-9252, 

e-mail at stevens.gabrielle@epa.gov. Electronic copies of 

this document can be accessed through the EPA Website at: 

http://epa.gov/crossstaterule.

I. General Information

A. Does this action apply to me?

Regulated Entities. Entities regulated by this action 

primarily are fossil fuel-fired boilers, turbines, and 

combined cycle units that serve generators that produce 

electricity for sale or cogenerate electricity for sale and 

steam. Regulated categories and entities include:

Category NAICS code

Examples of potentially

regulated industries
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Industry 2211, 2212, 2213 Electric service providers

This table is not intended to be exhaustive, but rather to 

provide a guide for readers regarding entities likely to be 

regulated by this action. This table lists the types of 

entities which EPA is now aware could potentially be 

regulated by this action. Other types of entities not 

listed in this table could also be regulated. To determine 

whether your facility, company, business, organization, 

etc., is regulated by this action, you should carefully 

examine the applicability criteria in §§ 97.404, 97.504, 

and 97.604 of title 40 of the Code of Federal Regulations. 

If you have questions regarding the applicability of this 

action to a particular entity, consult the person listed in 

the preceding FOR FURTHER INFORMATION CONTACT section.

B.Where can I get a copy of this document and other related 

information?

In addition to being available in the docket, an electronic 

copy of this proposal will also be available on the World

Wide Web. Following signature by the EPA Administrator, a 

copy of this action will be posted on the transport rule 

Web site http://www.epa.gov/airtransport.

C. What should I consider as I prepare my comments for EPA?
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1. Submitting CBI. Do not submit this information to EPA 

through http://www.regulations.gov or e-mail. Clearly mark 

the part or all of the information that you claim to be 

CBI. For CBI information in a disk or CD–ROM that you mail 

to EPA, mark the outside of the disk or CD–ROM as CBI and 

then identify electronically within the disk or CD–ROM the 

specific information that is claimed as CBI. In addition to 

one complete version of the comment that includes 

information claimed as CBI, a copy of the comment that does 

not contain the information claimed as CBI must be 

submitted for inclusion in the public docket. Information 

so marked will not be disclosed except in accordance with 

procedures set forth in 40 CFR part 2. Send or deliver

information identified as CBI only to the following 

address: Roberto Morales, OAQPS Document Control Officer

(C404–02), U.S. EPA, Research Triangle Park, NC 27711, 

Attention Docket ID No. EPA–HQ–OAR–2009–0491.

2. Tips for preparing your comments.

When submitting comments, remember to:

• Identify the rulemaking by docket number and other 

identifying information (subject heading, Federal Register 

date and page number).
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• Follow directions — The agency may ask you to respond to 

specific questions or organize comments by referencing a 

Code of Federal Regulations (CFR) part or section number.

• Explain why you agree or disagree; suggest alternatives 

and substitute language for your requested changes.

• Describe any assumptions and provide any technical 

information and/ or data that you used.

• If you estimate potential costs or burdens, explain how 

you arrived at your estimate in sufficient detail to allow 

for it to be reproduced.

• Provide specific examples to illustrate your concerns, 

and suggest alternatives.

• Explain your views as clearly as possible, avoiding the 

use of profanity or personal threats.

• Make sure to submit your comments by the comment period 

deadline identified.

D. How is this Preamble Organized?

I. General Information

A. Does this action apply to me?

B. Where can I get a copy of this document and other 

related information?

C. What should I consider as I prepare my comments for EPA?

D. How is the preamble organized?
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II. Summary of Proposed Rule and Background

III. Specific Revisions

A. Budgets/New Unit Set-aside Revisions

B. Allowance Allocation Revisions to Units Covered by 

Existing Utility Consent Decrees

C. Amend the Assurance Penalty Provisions to Make Them 

Effective Starting in 2014

D. Correct Typographical Errors

IV. Recordation of Transport Rule Allowances

V. Statutory and Executive Order Reviews

A. Executive Order 12866: Regulatory Planning and Review

B. Paperwork Reduction Act

C. Regulatory Flexibility Act (RFA)

D. Unfunded Mandates Reform Act

E. Executive Order 13132: Federalism

F. Executive Order 13175: Consultation and Coordination 

with Indian Tribal Governments

G. Executive Order 13045: Protection of Children from 

Environmental Health and Safety Risks

H. Executive Order 13211: Actions that Significantly Affect 

Energy Supply, Distribution, or Use

I. National Technology Transfer Advancement Act
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J. Executive Order 12898: Federal Actions to Address 

Environmental Justice in Minority Populations and LowIncome Populations

II. Summary of Proposed Rule and Background

EPA has identified errors or potential errors in unitspecific modeling assumptions that affect the proper 

calculation of Transport Rule state budgets in Florida, 

Louisiana, Michigan, Mississippi, Nebraska, New Jersey, New 

York, Texas, and Wisconsin, as well as new unit set-asides 

in Arkansas and Texas. EPA is proposing to take the 

following distinct actions to revise individual state 

budgets and new-unit set asides: (1) revise Michigan’s 

annual NOX budget to account for an erroneously assumed 

selective catalytic reduction (SCR) emission control device 

at one unit; (2) revise Nebraska’s annual NOX budget to

account for an erroneously assumed SCR emission control 

device at one unit; (3) revise the Texas SO2 budget to

account for erroneously assumed flue gas desulphurization 

(FGD, or scrubber) emission control devices at three units

and revised assumptions regarding flue gas treatment in 

existing scrubbers at seven units; (4) revise the Arkansas 

ozone-season new unit set-aside to account for erroneously 

omitted projected emissions from one new unit; (5) revise
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the Texas new unit set-aside to account for erroneously 

omitted projected emissions for SO2, ozone-season NOX, and 

annual NOX; (6) revise New Jersey’s ozone season NOX, annual 

NOX, and annual SO2 budgets to account for an erroneously 

assumed scrubber and selective catalytic reduction (SCR) 

emission control devices at one unit, and taking into 

account operational constraints likely to necessitate noneconomic generation at six facilities in 2012; (7) revise

Wisconsin’s annual SO2 and annual NOX budgets to account for 

erroneously assumed FGD and SCR devices at two units; (8) 

revise New York’s annual SO2, annual NOX, and ozone season 

NOX budgets taking into account operational constraints

likely to necessitate non-economic generation at ten units; 

(9) revise Louisiana’s ozone season NOX budget taking into 

account operational constraints likely to necessitate noneconomic generation at twelve units; (10) revise 

Mississippi’s ozone season NOX budget taking into account

operational constraints likely to necessitate non-economic 

generation at four units; (11) revise the Texas annual NOX

and ozone season NOX budgets taking into account operational 

constraints likely to necessitate non-economic generation 

at seven units; and (12) revise Florida’s ozone-season NOX

budget taking into account the unavailability of a 
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previously operating nuclear unit. See section III.A of 

this preamble for further explanation of these revisions. 

These proposed revisions to state budgets also entail 

revisions to the affected states' assurance levels, as the 

variability limits for each state are calculated as a 

percentage of the applicable budget. See the final 

Transport Rule, 76 FR 48208, 48267-68, August 8, 2011

(explaining variability limit derivation). The purpose of 

these revisions is to establish state budgets and new unit 

set-asides that are consistent with the proper application 

of methodologies established in the final Transport Rule. 

The resulting budgets maintain significant emission 

reductions from historic levels and are consistent with the 

final Transport Rule’s methodology for defining significant 

contribution and interference with maintenance. The 

changes represent the proper application of the methodology 

established in the final Transport Rule. No changes to 

that methodology are being proposed, and EPA is not 

reopening the methodology established in the final 

Transport Rule for public comment. EPA is also not 

proposing any change to the levels of stringency (i.e., 

cost per ton) selected in the final Transport Rule’s 

determination of significant contribution and interference 
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with maintenance and is not reopening that issue for public 

comment. See “Significant Contribution Assessment TSD” in 

the docket for this rulemaking for a demonstration of how 

the revisions in this rulemaking represent the proper 

application of and are consistent with the methodology 

developed in the final Transport Rule.

It is EPA’s intent, in conducting this rulemaking, to 

make the revisions in this proposal as well as to conduct a 

clearly defined, time-limited process by which any 

similarly justified revisions to the final Transport Rule 

state budgets are identified and effectuated in a timely 

and expeditious manner.. To that end, EPA is seeking that 

all relevant information that may support similar revisions 

be submitted in full by the comment deadline on this 

rulemaking, such that the Agency may consider whether a 

subsequent and timely rulemaking should address any further 

revisions to the final Transport Rule state budgets. EPA 

believes that the likelihood of additional substantive 

revisions merited to the Transport Rule state budgets is 

limited, considering that EPA has already conducted several 

notice-and-comment processes through initial proposal of 

the Transport Rule and multiple notices of data 

availability (NODAs) to prompt the public to provide the 
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relevant input information that informs the calculation of 

the Transport Rule state budgets. Please see section III.A 

of this preamble for a more detailed description of the 

type of information EPA is requesting in comments on this 

rulemaking for this purpose.

EPA is also proposing revisions to allowance 

allocations at certain units in six states that are 

affected by existing utility consent decrees. EPA has 

identified provisions in certain utility consent decrees 

which the Agency believes would restrict the use of 

Transport Rule allowances allocated to certain units and 

effectively make certain Transport Rule reduction 

requirements marginally more stringent than intended by 

making certain allowances intended for compliance purposes 

unavailable. When establishing the state budgets under the 

final Transport Rule, EPA successfully accounted for the 

emission reduction requirements of these consent decrees; 

therefore, the Transport Rule state budgets sustain the 

environmental protection secured by those existing utility 

consent decrees. However, when dividing those state 

budgets into individual unit-level allowance allocations, 

EPA included allowance allocations to certain units that 

exceed those units’ allowable emissions under the terms of 
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the applicable consent decree. Under these conditions, the 

consent decree provisions of concern identified in this 

proposal would quantify those allowances in excess of 

allowable emissions at the unit in question and prevent 

them from being available for compliance use by any source 

under the Transport Rule programs. Because EPA has already 

secured the environmental improvements required by the 

consent decrees by incorporating their emission reductions 

into the Transport Rule state budgets, there is no 

environmental need to prevent the allowances from being 

used for compliance by sources subject to the Transport 

Rule aside from those sources whose emissions are 

restricted by the terms of the consent decrees to which 

they are subject. Therefore, EPA is proposing to revise

Transport Rule unit-level allowance allocations to the 

specific units affected by these consent decrees to reflect 

their maximum allowable emissions, such that none of the 

allowances affected by the provisions of concern are 

unnecessarily removed from use for compliance by other 

units. While EPA intends to perform this revision to 

benefit program implementation, EPA does not believe 

resolution of this issue is a necessary precondition for 

successful implementation of and compliance with the 
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Transport Rule programs in 2012, because as described in 

section IV of this preamble, notwithstanding these proposed 

revisions, EPA will still be able to distribute 99.7

percent of all existing unit allowances under the state 

budgets established in the final Transport Rule by that 

rule’s November 7 deadline. See section III.B of this 

preamble for further explanation of this revision.

EPA is also proposing in this action to amend the 

assurance penalty provisions of the Transport Rule to make 

them effective January 1, 2014. This change takes account 

of the fact that the revisions described above are being 

proposed, and any information described above concerning 

requested additional revisions may be submitted, close to 

the commencement of the Transport Rule programs. The 

proposed amendment to the assurance provisions is intended 

to promote the development of allowance market liquidity as

these revisions are finalized, thereby smoothing the 

transition from the Clean Air Interstate Rule (CAIR) 

programs to the Transport Rule programs in 2012. See 

section III.C of this preamble for further explanation of 

this revision.

EPA is also proposing to correct typographical errors 

in certain sections of rule text in parts 52 and 97 in the 
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final Transport Rule. See section III.D of this preamble 

for further explanation of these corrections. 

III. Specific Revisions 

A. Budget and New Unit Set-Aside Revisions

After the final Transport Rule was published, EPA 

identified discrepancies in certain data assumptions that 

substantially affected the calculation of a few states' 

budgets in the final rule. Therefore, EPA is proposing the 

following revisions:

(1) Increase Michigan’s 2012 and 2014 annual NOX

budgets in accordance with a revision to the final 

Transport Rule analysis that erroneously assumed 

that an SCR exists at Monroe Unit 2. 

EPA is proposing to revise Michigan’s 2012 and 2014 

annual NOX budgets in accordance with a revision to the 

final Transport Rule analysis that erroneously assumed an

SCR exists at Monroe Unit 2. This SCR is planned, but is 

not expected to be online in 2012 or 2014. Therefore, EPA 

is proposing to adjust its 2012 and 2014 projections to 

reflect projected emissions without an SCR at this unit. 

This would result in a 5,228 ton increase in the state’s 

annual NOX budget. See “Technical Revisions and Adjustments 

to State Budgets TSD” in the docket for this rulemaking for 
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a quantitative demonstration of this proposed revision, as 

well as for the impacts this revision would have on the 

state’s assurance level, new unit set-aside, and Indian 

country new unit set-aside, and “Revisions to Unit Level 

Allocations under the FIP” in the docket for a quantitative 

demonstration of the effect of this revision on unit-level 

allocations under the FIP.

This revised assumption about Monroe Unit 2 would also 

affect the calculation of Michigan’s potential ozone-season 

NOX budget (as well as the state’s assurance level, new unit 

set-aside, Indian country new unit set-aside, and unitlevel allocations under the FIP) if that state is included 

in the Transport Rule ozone-season NOX program as previously 

proposed (76 FR 40662, July 11, 2011). EPA will address 

this issue, along with other public comments submitted on 

that rulemaking, when the Agency finalizes that rulemaking 

later this year.

(2) Increase Nebraska’s 2012 and 2014 annual NOX budgets

in accordance with a revision to the final Transport Rule 

analysis that erroneously assumed that an SCR exists at 

Nebraska City Unit 1.

EPA is proposing to increase Nebraska’s 2012 and 2014 

annual NOX budgets in accordance with a revision to the 
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final Transport Rule analysis that erroneously assumed that 

an SCR exists at Nebraska City Unit 1. There is no SCR 

that is present, planned, or under construction at the 

unit. Therefore, EPA is proposing to adjust its baseline 

emission projections for the state to reflect projected

emissions without an SCR at this unit. This adjustment 

results in an increase of 3,599 tons to the state’s annual 

NOX budget. See “Technical Revisions and Adjustments to 

State Budgets TSD” in the docket for this rulemaking for a 

quantitative demonstration of this proposed revision, as 

well as for the impacts this revision would have on the 

state’s assurance level, new unit set-aside, and Indian 

country new unit set-aside, and “Revisions to Unit Level 

Allocations under the FIP” in the docket to this rulemaking 

for a quantitative demonstration of the effect of this 

proposed revision on unit-level allocations under the FIP.

(3) Increase the Texas 2012 and 2014 SO2 budgets in 

accordance with a revision to the final Transport Rule 

analysis that erroneously assumed that scrubbers exist at 

W. A. Parish Unit 6, J.T. Deely Unit 1, and J.T. Deely 

Unit 2, and that assumed full flue gas treatment in 

existing scrubbers at Martin Lake, Monticello, Sandow, 

W.A. Parish, and Oklaunion facilities.
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EPA is proposing to address several revisions to the 

modeling assumptions affecting the calculation of the Texas 

SO2 budget. In particular, EPA is proposing to increase the 

Texas SO2 budget in accordance with a revision to the final 

Transport Rule analysis that erroneously assumed flue-gas 

desulfurization (FGD) technology is installed on J.T. Deely 

Units 1 and 2 and W.A. Parish Unit 6 by 2012. At the time 

that EPA conducted its final Transport Rule analysis to 

determine state budgets, EPA had information showing that 

FGD retrofits for these sources were originally planned or 

announced to be installed by 20121,2. However, newer 

information shows that these FGDs are no longer scheduled 

to be installed in 2012.

A number of facilities in Texas currently face

limitations regarding the amount of flue gas that can be 

treated in their existing FGDs. In the final Transport 

Rule analysis, EPA relied on the SO2 removal efficiency that 

these facilities reported at their scrubbers to the Energy 

Information Administration (EIA). However, EPA has now 

 

1 Corporate Sustainability Report”, CPS Energy, 2010. P.57. Retrieved 

from http://www.cpsenergy.com/files/Sustainability_Report.pdf

2 Business Wire, (2006). NRG Announces Comprehensive Repowering 

Initiative [Press release]. Retrieved from http://phx.corporateir.net/phoenix.zhtml?c=121544&p=irolnewsArticle_Print&ID=874575&highlight
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determined that the facilities’ reports only intended to 

address the removal efficiency for the portion of the flue 

gas treated in the scrubber. For this reason, that removal 

efficiency should not be applied to the total amount of 

sulfur combusted in the coal consumed (as some of the flue 

gas at these units must be vented without being treated in 

the scrubber as originally constructed). When the SO2

removal rates are decreased to reflect the reported 

operational constraint of each affected scrubber’s flue gas 

treatment, the projected emission level for Texas, after 

all significant contribution identified in the final 

Transport Rule is addressed, correspondingly rises.

Therefore, in accordance with the revised unit-level 

input assumptions regarding existing scrubbers and flue gas 

treatment at the Texas units described above, EPA is 

proposing to increase the state’s 2012 and 2014 SO2 budgets

by 70,067 tons. See “Technical Revisions and Adjustments 

to State Budgets TSD” in the docket for this rulemaking for 

a quantitative demonstration of this proposed revision, as 

well as for the impacts this revision would have on the 

state’s assurance levels, new unit set-aside, and Indian 

country new unit set-aside.
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EPA acknowledges that one utility in Texas has 

provided limited contractual information addressing a 

physical constraint on the volume that the facility's rail 

connection can support in delivered sub-bituminous coal in 

2012. EPA has included this information, in 

the docket for this rulemaking and is requesting additional 

information and comment on whether this information should 

support further revisions to the SO2 state budget for Texas.

(4) Increase Arkansas’ ozone-season NOX new unit setaside in accordance with a revision to the final 

Transport Rule’s calculation of the new unit set-aside 

that erroneously omitted Plum Point Unit 1’s projected 

emissions.

EPA is not proposing to adjust Arkansas’ ozone season 

NOX budget in this rulemaking. However, EPA is proposing to 

adjust the portion of that budget dedicated to the new unit 

set-aside account. In the final Transport Rule, EPA had 

determined a 2 percent new unit set-aside for ozone season 

NOX in the state. That value would be changed to 5 percent

in this rulemaking. The revision is consistent with the 

new unit set-aside methodology described in the final rule. 

The updated value simply reflects the revised 

classification of one unit to be treated as a new unit for 
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purposes of unit-level allowance allocation. This unit, 

Plum Point Unit 1, commenced commercial operation on or 

after January 1, 2010, and therefore should be considered a 

new unit under the final Transport Rule’s unit-level 

allocation methodology (76 FR 48290); however, the final 

Transport Rule erroneously omitted this unit’s projected 

emissions from the calculation of Arkansas’ ozone-season NOX

new unit set-aside. Including this unit’s projected 

emissions in the calculation would yield a revised new unit 

set-aside of 5 percent of the state’s budget instead of the 

previous 2 percent value. See the “Technical Revisions and 

Adjustments to State Budgets TSD” in the docket for this 

rulemaking for a quantitative demonstration of this 

proposed revision.

This proposed revision to Arkansas’ new unit set-aside 

would necessarily result in changes to allowance 

allocations to existing units. See “Revisions to Unit 

Level Allocations under the FIP” tables in the docket to 

this rulemaking for a quantitative demonstration of the

effect of this revision on unit-level allocations under the 

FIP.

(5) Increase Texas’ ozone-season NOX, annual NOX, and 

SO2 new unit set-asides in accordance with a 
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revision to the final Transport Rule’s 

calculations of the new unit set-asides that 

erroneously omitted Oak Grove Unit 2’s projected 

emissions.

EPA is also proposing a revision to the calculation of 

the new unit set-asides for ozone-season NOX, annual NOX, 

and SO2 in Texas. The updated values would simply reflect

the revised classification of one unit to be treated as a

new unit for purposes of unit-level allowance allocation. 

This unit, Oak Grove Unit 2, commenced commercial operation 

on or after January 1, 2010, and therefore should be 

considered a new unit under the final Transport Rule’s 

unit-level allocation methodology; however, the final 

Transport Rule erroneously omitted this unit’s projected 

emissions from the calculation of Texas’s ozone-season NOX, 

annual NOX, and SO2 new unit set-asides. Including this 

unit’s projected emissions in the calculation would yield 

revised new unit set-asides of 4 percent of the state’s 

ozone-season NOX budget, 4 percent of the state’s annual NOX

budget, and 5 percent of the state’s SO2 budget. See the

“Technical Revisions and Adjustments to State Budgets TSD” 

in the docket for this rulemaking for a quantitative 

demonstration of this proposed revision. 
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(6)Increase New Jersey’s 2012 and 2014 ozone-season 

NOX, annual NOX, and SO2 budgets in accordance with 

revisions to the final Transport Rule analysis that 

erroneously assumed that an SCR and scrubber exist at 

BL England Unit 1 and to reflect operational 

constraints likely to necessitate non-economic 

dispatch at six other facilities in 2012. 

EPA is proposing to revise New Jersey’s ozone-season 

NOX, annual NOX, and SO2 budgets in accordance with 

revisions to assumed control technologies at BL England 

Unit 1 as well as operational constraints affecting units 

at six other facilities. The SCR and scrubber that had 

been planned to be installed at BL England Unit 1, and 

which EPA assumed would be in place in 2012, are not 

actually required by a New Jersey administrative order 

until December 2013. Furthermore, the agreement limits 

operation of the unit to the ozone season. Therefore, EPA 

is proposing to adjust New Jersey’s 2012 state budgets to 

reflect projected emissions without an SCR or scrubber at 

this unit and its operation only during the ozone season. 

EPA is also proposing revisions to New Jersey’s state 

budgets based on information demonstrating that northern

New Jersey is an out-of-merit-order dispatch area, meaning 
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that units in that area are frequently dispatched out of 

regional economic order as a result of short-run 

limitations on the ability to meet local electricity demand 

with generation from outside the area. Conditions in this 

out-of-merit-order dispatch area are likely to necessitate

what would otherwise be non-economic generation at six New 

Jersey plants (Bergen, Edison, Essex, Kearny, Linden, and 

Seweren Generating Stations) in the immediate future. EPA 

did not consider these immediate-term conditions in its 

calculation of the New Jersey emission budgets in the final 

Transport Rule. EPA is proposing to adjust New Jersey’s 

emission budgets based on analysis of the frequency these 

units have recently been called to run for non-economic

purposes, according to data provided by the utility 

operating those units.

For this proposal, EPA has calculated the net change 

in the state's 2012 and 2014 total emissions (that inform 

the state budgets) to account for increased generation (and 

related emissions) from the specific units affected by the 

immediate-term non-economic constraints described above, as 

well as for a corresponding reduction in generation (and 

related emissions) at other units within the state, to 
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maintain the electricity supply and demand equilibrium 

modeled in the final Transport Rule. 

EPA re-calculated the emissions from BL England Unit 1 

and the six plants with non-economic generation to account 

for the input assumption changes described above. These 

calculations yield increases to the New Jersey 2012 state 

budgets for annual SO2 of 2,096 tons, annual NOX of 420

tons, and ozone-season NOX of 592 tons; and 2014 state 

budget increases for annual NOX of 112 tons, and ozoneseason NOX of 195 tons. See “Technical Revisions and 

Adjustments to State Budgets TSD” in the docket for this 

rulemaking for a quantitative demonstration of this 

proposed revision, as well as for the impacts this revision 

would have on the state’s assurance level and new unit setaside, and “Revisions to Unit Level Allocations under the 

FIP” in the docket for a quantitative demonstration of the 

effect of this revision on unit-level allocations under the 

FIP.

(7) Increase Wisconsin’s 2014 SO2 budget and 2012 and 

2014 annual NOX budget in accordance with a revision to

the final Transport Rule analysis that erroneously 

assumed that an FGD exists at Weston Unit 3, wet FGDs 
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(instead of dry FGDs) exist at Columbia Units 1 and 2,

and a SCR exists at John P. Madgett Unit 1.

EPA is proposing to increase Wisconsin’s 2014 SO2

budget in accordance with revisions to the Weston Unit 3 

and Columbia Units 1 and 2 FGD status in 2014. EPA had 

assumed that a scrubber would be available at Weston Unit 3 

in 2014 in its base case modeling. There is no FGD 

expected to be online at the facility in 2014. The final 

Transport Rule did not assume an operating scrubber at 

Weston Unit 3 in 2012, but did assume the FGD would be in 

place and operating by 2014. Therefore, EPA is proposing 

to adjust Wisconsin's 2014 SO2 budget to reflect the unit’s 

operation without an FGD in 2014. This would result in a 

5,605 ton increase to Wisconsin’s 2014 annual SO2 budget. 

EPA had also assumed that the two scrubbers being 

installed at Columbia Units 1 and 2 were wet scrubbers. 

Instead, dry scrubbers have been planned and approved at 

these units. In EPA’s modeling, the assumed removal rate 

of a new wet scrubber is 96 percent and a new dry scrubber 

is 92 percent. Therefore, the 2014 modeled remedy 

emissions from these units would be twice their current 

amount, if the assumption of wet scrubbers was changed to 

dry scrubbers for the facility. This adjustment would 
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increase Wisconsin’s 2014 SO2 budget by 2,152 tons. No 

change is needed for 2012 since EPA did not model any 

scrubbers operating at those units in that year. Taking 

into account both this adjustment and the adjustment for 

Weston Unit 3, EPA is proposing to increase the Wisconsin 

2014 SO2 emission budget by a total of 7,757 tons.

EPA is also proposing to increase Wisconsin’s annual 

NOX budget in 2012 and 2014. EPA had assumed a SCR would be 

installed at John P. Madgett Unit 1 in 2012 in its budget 

determination and remedy modeling. There is no SCR 

expected to be online in 2012 or 2014 at the unit. 

Therefore, EPA is proposing to adjust Wisconsin’s annual NOX

budgets to reflect the unit’s operation without a SCR. 

This would result in a 2,473 ton increase to the state’s 

annual NOX budget. 

The revised assumptions about John P. Madgett Unit 1 

would also affect the calculation of Wisconsin’s potential 

ozone-season NOX budget (as well as the state’s assurance

level, new unit set-aside, Indian country new unit setaside, and unit-level allocations under the FIP) if that 

state is included in the Transport Rule ozone-season NOX

program as previously proposed (76 FR 40662, July 11, 

2011). EPA will address this issue, along with other 
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public comments submitted on that rulemaking, when the 

Agency finalizes that rulemaking later this year.

See the “Technical Revisions and Adjustments to State 

Budgets TSD” in the docket for this rulemaking for a 

quantitative demonstration of this proposed revision, as 

well as for the impacts this revision would have on the 

state’s assurance level, new unit set-aside, and Indian 

country new unit set-aside, and “Revisions to Unit Level 

Allocations under the FIP” in the docket for a quantitative 

demonstration of the effect of this revision on unit-level 

allocations under the FIP.

(8) Increase New York’s 2012 and 2014 ozone-season NOX, 

annual NOX, and SO2 budgets in accordance with a 

revision to the final Transport Rule analysis that did 

not reflect operational constraints likely to 

necessitate non-economic dispatch at certain units.

EPA is proposing to increase the New York state ozoneseason NOX, annual NOX, and SO2 budgets in accordance with 

revisions to the assumed operation of several specific 

units in 2012, to satisfy three specific immediate-term 

operational constraints documented by the New York 

Independent System Operator (NYISO). These three 

constraints are referred to here as the N-1-1 Contingency,
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the Minimum Oil Burn Rules, and out-of-merit-order dispatch 

conditions, which collectively affect the likely 2012 and 

2014 operations of specific units in the New York City and 

Long Island areas. 

The N-1-1 Contingency requires that certain units be 

available to deliver generation with advance notice of only 

30 seconds at certain times during the year. These 

specific units require several hours to reach the necessary 

level of generation under these contingency circumstances; 

therefore, the contingency requirement frequently 

necessitates their ongoing operation whether or not the 

contingency is actually triggered at any given time. Based 

on information published by NYISO, EPA identified Arthur 

Kill Generating Station, Ravenswood, and Astoria Generating 

Station as needing to maintain minimum generation levels at

two units in each facility to meet the N-1-1 Contingency

constraint. 

The Minimum Oil Burn Rules require that certain units 

be able to immediately burn oil in the event of a natural 

gas supply disruption to the New York City and Long Island 

area infrastructure. Some units are incapable of 

immediately switching fuel, so they must burn a minimum 

amount of oil on an ongoing basis when operating to comply
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with this requirement. EPA determined that the Minimum Oil 

Burn Rules would require residual fuel oil consumption at 

the Arthur Kill Generating Station, Ravenswood, Astoria 

Generating Station, and Northport facilities. Based on 

information published by the NYISO, EPA determined that 

these units would burn oil in 2012 and 2014 at the same 

proportion of total projected heat input as shown for the 

share of historic heat input reported as residual fuel oil 

at those facilities. 

Data presented in the NYISO 2010 Comprehensive Area 

Transmission Review Study and the NYISO Operating Study, 

Summer 2011, demonstrate that Long Island is an out-ofmerit-order dispatch area, meaning that units in that area 

are frequently dispatched out of regional economic order as 

a result of short-run limitations on the ability to meet 

local electricity demand with generation from outside the 

area. Conditions in this out-of-merit-order dispatch area 

are likely to necessitate in the immediate future what 

would otherwise be non-economic generation at 3 units at 

the Northport facility. 

For this proposal, EPA has calculated the net change 

in the state's total emissions (that inform the state 

budgets) to account for increased generation (and related 
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emissions) from the specific units affected by the 

immediate-term non-economic constraints described above, as

well as for a corresponding reduction in generation (and 

related emissions) at other units within the state, to 

maintain the electricity supply and demand equilibrium 

modeled in the final Transport Rule. These calculations

yield increases to the New York 2012 and 2014 state budgets

for annual SO2 of 3,527 tons, annual NOX of 3,485 tons, and 

ozone-season NOX of 1,911 tons. See “Technical Revisions 

and Adjustments to State Budgets TSD” in the docket for 

this rulemaking for a quantitative demonstration of this 

proposed revision, as well as for the impacts this revision 

would have on the state’s assurance levels, new unit setaside, and Indian country new unit set-aside.

(9) Increase Louisiana’s 2012 and 2014 ozone-season NOX

budgets in accordance with a revision to the final 

Transport Rule analysis to reflect operational 

constraints likely to necessitate non-economic 

dispatch at twelve units.

EPA is proposing revisions to Louisiana’s 2012 and 

2014 state ozone season NOX budgets based on information 

demonstrating that the West of the Atchafalaya Basin 

(WOTAB), Downstream of Gypsy (DSG), and Amite South regions
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of Louisiana are out-of-merit-order dispatch areas, meaning 

that units in those areas are frequently dispatched out of 

regional economic order as a result of short-run 

limitations on the ability to meet local electricity demand 

with generation from outside the area. Conditions in these 

out-of-merit-order dispatch areas are likely to necessitate 

what would otherwise be non-economic generation at five 

Louisiana plants (R.S. Nelson, Nine Mile Point, Michoud, 

Little Gypsy, and Waterford) in the immediate future. EPA 

did not consider these immediate-term conditions in its 

calculation of the Louisiana emission budget in the final 

Transport Rule. EPA is proposing to adjust Louisiana’s 

ozone season NOX emission budget based on analysis 

projecting the minimum frequency these units will have to 

run in the immediate term for non-economic purposes,

according to data provided by the utility operating those 

units.

For this proposal, EPA has calculated the net change 

in the state's total emissions (that inform the state 

budgets) to account for increased generation (and related 

emissions) from the specific units affected by the

immediate-term non-economic constraints described above, as 

well as for a corresponding reduction in generation (and 
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related emissions) at other units within the state, to 

maintain the electricity supply and demand equilibrium 

modeled in the final Transport Rule. 

EPA re-calculated the emissions from the five plants 

with non-economic generation to account for the input 

assumption changes described above. These calculations

yield increases to Louisiana’s 2012 and 2014 state budgets

for ozone-season NOX of 4,231 tons. See “Technical 

Revisions and Adjustments to State Budgets TSD” in the 

docket for this rulemaking for a quantitative demonstration 

of this proposed revision, as well as for the impacts this 

revision would have on the state’s assurance level, new 

unit set-aside, and Indian country new unit set-aside, and 

“Revisions to Unit Level Allocations under the FIP” in the 

docket for a quantitative demonstration of the effect of 

this revision on unit-level allocations under the FIP.

(10) Increase Mississippi’s 2012 and 2014 ozone-season 

NOX budgets in accordance with a revision to the final 

Transport Rule analysis to reflect operational 

constraints likely to necessitate non-economic 

dispatch at certain units.

EPA is proposing revisions to Mississippi’s state 

ozone season NOX budget based on information demonstrating 
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that the Mississippi Region is an out-of-merit-order 

dispatch area, meaning that units in that area are 

frequently dispatched out of regional economic order as a 

result of short-run limitations on the ability to meet 

local electricity demand with generation from outside the 

area. Conditions in this out-of-merit-order dispatch area 

are likely to necessitate what would otherwise be noneconomic generation at three Mississippi plants (Rex Brown, 

Gerald Andrus, and Baxter Wilson) in the immediate future. 

EPA did not consider these immediate-term conditions in its 

calculation of the Mississippi emission budget in the final 

Transport Rule. EPA is proposing to adjust Mississippi’s 

2012 and 2014 ozone season NOX emission budgets based on 

analysis projecting the minimum frequency these units will 

have to run in the immediate-term for non-economic 

purposes, according to data provided by the utility 

operating those units.

For this proposal, EPA has calculated the net change 

in the state's total emissions (that inform the state 

budgets) to account for increased generation (and related 

emissions) from the specific units affected by the 

immediate-term non-economic constraints described above, as 

well as for a corresponding reduction in generation (and 
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related emissions) at other units within the state, to 

maintain the electricity supply and demand equilibrium 

modeled in the final Transport Rule. 

EPA re-calculated the emissions from the three plants 

with non-economic generation to account for the input 

assumption changes described above. These calculations

yield increases to Mississippi’s 2012 and 2014 state 

budgets for ozone-season NOX of 2,136 tons. See “Technical 

Revisions and Adjustments to State Budgets TSD” in the 

docket for this rulemaking for a quantitative demonstration 

of this proposed revision, as well as for the impacts this 

revision would have on the state’s assurance level, new 

unit set-aside, and Indian country new unit set-aside, and 

“Revisions to Unit Level Allocations under the FIP” in the 

docket for a quantitative demonstration of the effect of 

this revision on unit-level allocations under the FIP.

(11) Increase Texas’s 2012 and 2014 annual and ozoneseason NOX budgets in accordance with a revision to the 

final Transport Rule analysis to reflect operational 

constraints likely to necessitate non-economic 

dispatch at certain units.

EPA is proposing revisions to Texas’s 2012 and 2014 

state annual and ozone season NOX budgets based on 
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information demonstrating that the West of the Atchafalaya 

Basin (WOTAB) and Western Regions are out-of-merit-order 

dispatch areas, meaning that units in those areas are 

frequently dispatched out of regional economic order as a 

result of short-run limitations on the ability to meet 

local electricity demand with generation from outside the 

area. Conditions in these out-of-merit-order dispatch 

areas are likely to necessitate what would otherwise be 

non-economic generation at two Texas plants (Lewis Creek 

and Sabine) in the immediate future. EPA did not consider 

these immediate-term conditions in its calculation of the 

Texas emission budgets in the final Transport Rule. EPA is 

proposing to adjust Texas’s emission budgets based on 

analysis projecting the minimum frequency these units will 

have to run in the immediate-term for non-economic 

purposes, according to data provided by the utility 

operating those units.

For this proposal, EPA has calculated the net change 

in the state's total emissions (that inform the state 

budgets) to account for increased generation (and related 

emissions) from the specific units affected by the 

immediate-term non-economic constraints described above, as 

well as for a corresponding reduction in generation (and 
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related emissions) at other units within the state, to 

maintain the electricity supply and demand equilibrium 

modeled in the final Transport Rule. 

EPA re-calculated the emissions from the two plants 

with non-economic generation to account for the input 

assumption changes described above. These calculations

yield increases to Texas’s 2012 and 2014 state budgets for 

annual NOX of 1,375 tons and ozone-season NOX of 1,375 tons. 

See “Technical Revisions and Adjustments to State Budgets 

TSD” in the docket for this rulemaking for a quantitative 

demonstration of this proposed revision, as well as for the 

impacts this revision would have on the state’s assurance 

level, new unit set-aside, and Indian country new unit setaside, and “Revisions to Unit Level Allocations under the 

FIP” in the docket for a quantitative demonstration of the 

effect of this revision on unit-level allocations under the 

FIP.

(12) Increase Florida’s 2012 ozone-season NOX budget in 

accordance with a revision to the final Transport Rule 

analysis to reflect the unavailability of Crystal River 

Unit 3, a nuclear unit.

EPA’s power sector analysis in the final Transport 

Rule that informed its calculation of Florida’s state 
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ozone-season budget included generation from Crystal River 

Unit 3, a nuclear unit that has operated historically. 

However, utilities in Florida have notified EPA that this 

unit will be offline for repairs throughout 2012 and is 

expected to return to service in 2013. As such, EPA 

expects that the generation previously projected in the 

Transport Rule analysis from this unit in 2012 will 

necessarily have a different origin with different emission 

consequences that should be considered in the calculation 

of Florida’s ozone-season NOX state budget. EPA has 

calculated that this replacement generation would yield an 

increase of 819 tons of ozone-season NOX in 2012 and is 

proposing to increase Florida’s 2012 ozone-season NOX budget 

by 819 tons, accordingly. See “Technical Revisions and 

Adjustments to State Budgets TSD” in the docket for this 

rulemaking for a quantitative demonstration of this 

proposed revision, as well as for the impacts this revision 

would have on the state’s assurance level, new unit setaside, and Indian country new unit set-aside, and 

“Revisions to Unit Level Allocations under the FIP” in the 

docket for a quantitative demonstration of the effect of 

this revision on unit-level allocations under the FIP.
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EPA has also received and is making available in the 

public docket for this proposal additional unit-level 

information provided by Florida utilities addressing 

assumptions of each unit's ability to control ozone-season 

NOX. EPA requests comment on all aspects of the data in the 

docket, including whether the emission data provided in 

this information is a more accurate representation of 

achievable NOX emission rates in 2012, and whether using 

this data would be consistent with the methodology used in 

the Transport Rule. EPA specifically requests comment on 

whether this information could support a further revision 

to the state's ozone-season NOX budget, and if so, how such 

a revision should be calculated. See “Information 

Submitted by Florida Utilities” in the docket for this 

rulemaking.

Further Explanation on Revisions and Request for 

Comments. All of the proposed revisions to state budgets 

and new unit set-asides described above would 

correspondingly affect unit-level allowance allocations in 

the states involved. Specifically, any changes to the 

levels of new unit set-asides or state budgets would be 

carried through to unit-level allocations based on the 

final Transport Rule allocation methodology for existing 
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units (including any amendments made to specific unit-level

allocations in this rulemaking, described below). For 

example, if a state budget would increase, then the share 

of that increase going to existing units would be 

apportioned based on the final Transport Rule’s allocation 

methodology to existing units (aside from specific unitlevel allocation adjustments included in this proposal 

pertinent to utility consent decrees, discussed below in 

section III.B of this preamble). Unit-level allocations to 

potential covered sources under the Transport Rule have 

been updated to reflect all of the proposed revisions 

described in this proposal and are set forth in the 

“Revisions to Unit Level Allocations under the FIP” TSD in 

the docket for this rulemaking.

EPA evaluated the likely air quality impacts of the 

revisions presented above using the air quality assessment 

tool, on a state-by-state and case-by-case basis, for the 

SO2 budget increases for Texas, New Jersey, New York, and 

Wisconsin, and compared those estimates to the final 

Transport Rule air quality analysis. The results do not 

change the conclusions that EPA made about the 

appropriateness of controlling upwind emissions at the 

cost-effective thresholds selected in the final Transport 
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Rule to successfully quantify and eliminate significant 

contribution to nonattainment and interference with 

maintenance at downwind receptors. For more information, 

this evaluation can be found in the “Significant 

Contribution Assessment Technical Support Document” in the 

docket for this rulemaking. 

EPA also qualitatively assessed this proposal’s 

revisions to annual NOX and ozone-season NOX state budgets

for 2014. The annual NOX budget increases for Michigan, 

Nebraska, New Jersey, New York, Texas, and Wisconsin are 

5,228, 3,599, 112, 3,485, 1,375 and 2,473 tons, 

respectively. EPA calculates that these revisions

represent increases of 1.2 percent, 2.1 percent, 0.1

percent, 0.8 percent, 0.1 percent, and 1.0 percent,

respectively, of the total annual NOX emission inventories 

for those states in the final Transport Rule’s 2014 control 

scenario analysis. See the “Significant Contribution 

Assessment TSD” in the docket for this rulemaking for more 

details. These increases are minimal compared to each 

state’s total NOX emissions. 

The ozone-season NOX budget increases in 2014 for 

Louisiana, Mississippi, New Jersey, New York, and Texas are

4,231, 2,136, 195, 1,911, and 1,375 tons, respectively. 
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EPA calculates that these revisions represent increases of 

2.2 percent, 2.4 percent, 0.2 percent, 1.0 percent, and 0.2

percent, respectively, of the total ozone-season NOX

emission inventories for those states in the final 

Transport Rule’s 2014 control scenario analysis. See the 

“Significant Contribution Assessment TSD” in the docket for 

this rulemaking for more details. These increases are 

minimal compared to each state’s total ozone-season NOX

emissions.

EPA requests comment on the revised unit-level and 

utility-system operational information described above and 

on the corresponding proposed revisions in state budgets, 

variability limits, new unit set-asides, Indian country new 

unit set-asides, and unit-level allocations resulting from 

the application of such revised information using the 

methodologies set forth in the final Transport Rule for 

developing state budgets, variability limits, new unit setasides, Indian country new unit set-asides, and unit-level 

allocations. EPA is not requesting comment on those 

methodologies set forth in the final Transport Rule. For 

example, EPA is not seeking comment on the methodology by 

which existing unit allocations are determined with regard 

to any given Transport Rule state budget. 
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Moreover, EPA recognizes that parties may be aware of 

other immediate-term unit-specific operational constraints

not accounted for in the final Transport Rule whose 

inclusion may warrant revisions in state budgets, with 

associated revisions to the state assurance levels and

unit-level allocations for existing units. EPA has already 

provided several opportunities –- through the proposed 

Transport Rule and subsequent notices of data availability 

-- for the public, including stakeholders, to present unitlevel information demonstrating constraints on immediateterm operations. However, EPA will accept –- by the 

deadline for comment on this proposal –- submission of 

additional unit-level operational information that would 

have a material impact on the calculation of Transport Rule

state budgets (with associated impacts on corresponding

assurance levels and unit-level allocations for existing 

units). For this purpose, EPA intends a “material impact” 

to reflect a corresponding recalculation of the relevant 

state budget that would be at least 1 percent different 

from that budget’s value as calculated in the final 

Transport Rule (76 FR 48208, August 8, 2011). EPA remains 

focused on successful implementation of the Transport Rule 

programs and does not believe that a change of less than 1 
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percent in a state’s budget would be a meaningful action to 

further this goal. As a result, EPA encourages commenters 

to consider whether or not revisions to a given unit’s or 

group of units’ input assumptions would yield a material 

impact of at least a 1 percent difference in the 

calculation of the relevant state budget before submitting 

this information to EPA for review.

EPA is therefore accepting for review information

provided in comments on this rulemaking specifically 

addressing the following topics for specific electric 

generating units:

(1) Post-combustion pollution control equipment (such 

as SCRs and FGDs) assumed in the final Transport Rule 

analyses to be present by 2012 at the unit in question;

and/or

(2) Immediate-term (i.e., binding on 2012) operational 

requirements necessitating non-economic generation at the 

unit in question, including data that demonstrate why the 

unit in question is required to generate in the immediate 

term for reasons other than the regional economic sale of 

electricity, and how often during the ozone season and 

during the calendar year that such non-economic generation 

is necessitated from that unit.
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EPA will review information provided in comments 

addressing the topics described above and will determine if 

any of the information merits a subsequent proposal of 

revisions to the Transport Rule programs beyond the actions 

presented in this proposal. 

B. Allowance Allocation Revisions to Units Covered by 

Existing Utility Consent Decrees

After the final Transport Rule was published, EPA 

determined that while the state budgets accurately 

incorporated the emission reduction requirements of 

existing utility consent decrees, the unit-level allowance 

allocations under the Transport Rule FIPs did not properly 

account for provisions in those consent decrees that 

effectively require the surrender, or restrict the trading,

of “excess” Transport Rule allowances. As a result, 

Transport Rule allowance allocations to certain units may 

unintentionally reduce the availability of some of those 

allowances to other sources, given the restrictions on the 

use of those allowances by the initial recipient unit 

imposed by the applicable consent decree.

In today’s action, EPA is proposing to add a 

constraint on Transport Rule unit-level allowance 
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allocations designed to reflect the maximum allowable 

emissions at the units affected by existing utility consent 

decrees which contain annual tonnage limits and require the 

surrender or restrict trading of Transport Rule allowances

allocated in excess of annual tonnage limits. See

“Assessment of Impact of Consent Decree Annual Tonnage 

Limits on Transport Rule Allocations TSD” in the docket for 

this rulemaking for information on the consent decrees 

covered by the proposed addition of the new constraint for 

purposes of determining unit-level allocations.

The addition of this constraint would align unit level 

allocations for units described in several existing 

federally-enforceable consent decrees with the annual 

tonnage limits in those decrees. This constraint would

prevent heat input-based allocations from exceeding the 

terms of federally-enforceable consent decrees that contain 

annual tonnage limits for SO2 and/or NOX. Because existing 

consent decrees that establish annual tonnage limits for SO2

and/or NOX do so at the system or facility level, EPA 

calculated unit-level annual tonnage limit equivalents 

(unit-level caps) for purposes of allocating allowances to 

individual units. EPA is not seeking comment on any 

elements of the allocation methodology finalized in the 
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final Transport Rule (76 FR 48288-90). Rather, EPA is 

seeking comment only on the addition of a unit-level 

consent decree constraint and unit-level cap apportionment 

methodology. 

The proposed additional constraint would affect unitlevel allocations in six states -- Alabama, Indiana, 

Kansas, Kentucky, Ohio, and Tennessee -- with units subject 

to existing federally-enforceable consent decree annual 

tonnage limits. These consent decree requirements have 

already been accounted for in the determination of budgets 

for these states. EPA is proposing to establish unit-level 

caps for 82 units covered by annual tonnage limits in 

federally-enforceable consent decrees in these six states. 

The addition of this constraint would not alter any state 

budget. This additional constraint also would have no 

impact on existing unit-level allocations in states that do 

not contain units covered by a federally-enforceable 

consent decree with annual tonnage limits. 

EPA is proposing to revise the Transport Rule unitlevel allocations for the specific units subject to these 

consent decrees, such that allowance allocations would be 

constrained by both historical emissions (as described in 

the final Transport Rule (76 FR 48290)) and a unit-level 
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cap derived from the annual tonnage limit in the federallyenforceable consent decree. Although these revisions would 

not alter the state budgets, they would have the effect of 

increasing the number of allowances within the budget that 

are available for use for compliance purposes and that 

would not otherwise be available without this proposed

change to the allocation of allowances –- such that the 

total number of allowances available would equal the 

state’s emission budget, as intended. These proposed 

revisions are thus intended to revise the application of 

the final Transport Rule’s unit-level allowance allocation 

methodology to enable the proper implementation of state 

budgets under the programs. While EPA intends to perform 

this revision to benefit program implementation, EPA does 

not believe resolution of this issue is a necessary 

precondition for successful implementation of and 

compliance with the Transport Rule programs in 2012, as 

notwithstanding these proposed revisions, EPA will still be 

able to distribute 99.7 percent of all existing unit 

allowances under the state budgets established in the final 

Transport Rule by that rule’s November 7 deadline. See 

section IV of this preamble for further information about 

allowance recordation.
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EPA calculated unit-level caps for each unit subject 

to an SO2 and/or NOX annual tonnage limit contained in a 

federally-enforceable consent decree. A unit-level cap is 

an apportionment of the applicable system- or facility-wide 

consent decree annual tonnage limit. The apportionment of 

a system- or facility-wide consent decree annual tonnage 

limit to a unit level is solely for the purposes of 

Transport Rule allocations and does not modify, or create 

additional, consent decree requirements or limitations. 

EPA is not proposing to limit allocations to units 

covered by consent decrees that do not contain annual SO2

and or NOX annual tonnage limits. The Agency determined 

that calculation of unit-level caps where annual tonnage 

limits do not exist would require the use of unit-level 

projections whose application in setting unit-level 

allocations would be difficult to support and that, in any 

event, adjustment of unit—level allocations using such 

unit-level caps would not be necessary. Calculating a 

unit-level cap from other consent decree directives would 

require projections about future utilization and emissions 

performance of each unit involved, increasing the 

complexity and uncertainty of the approach. Further, EPA 

believes that there are few Transport Rule allowances that 
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might be rendered unavailable for compliance by the consent 

decrees that contain trading restrictions or allowance 

surrender requirements but that do not contain annual 

tonnage limits. 

EPA is proposing to follow a two-step methodology to 

identify the specific unit-level allocation constraints 

that would be associated with this proposed additional 

constraint. First, EPA would determine if the annual 

tonnage limit in an existing federally-enforceable consent 

decree that is already reflected in a state budget is more 

restrictive than the unit-level allocations under the 

Transport Rule by comparing the federally-enforceable 

consent decree annual tonnage limits for calendar year 2012 

and thereafter to aggregate unit-level allocations (as 

determined using the approach finalized in the final 

Transport Rule) for all units affected by the annual 

tonnage limit. If in 2012 or thereafter the collective 

unit-level allocations are greater than the federallyenforceable consent decree annual tonnage limit, EPA would

apply unit-level caps equal, in aggregate, to the 

federally-enforceable consent decree annual tonnage limit. 

If a unit is shut down by a federally-enforceable 

consent decree or, in the case of SO2, repowers to natural 
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gas or shuts down, the unit-level cap would be calculated 

as zero in any year following the required shut down or 

repower when the unit would otherwise receive allocations 

using the approach in the final Transport Rule (76 FR 48287 

and 48289-90).

Second, EPA would calculate unit-level caps for 2012 

and thereafter on Transport Rule allowances for each unit 

covered by a system- or facility-wide annual tonnage limit

in a federally-enforceable consent decree that is more 

restrictive than current allocations for the units 

involved. To accomplish this, EPA would first calculate a 

ratio, expressed as a percentage, comparing the annual 

tonnage limit in the federally-enforceable consent decree 

to the aggregate allocations listed in the “Final Transport 

Rule Unit Level Allocations under the FIP” 

(http://www.epa.gov/crossstaterule/actions.html) for units 

covered by the federally-enforceable consent decree annual 

tonnage limit to the annual tonnage limit. EPA would then 

multiply this ratio by the unit-level allocation listed in 

the “Final Transport Rule Unit Level Allocations under the 

FIP” (http://www.epa.gov/crossstaterule/actions.html) for 

each unit involved. The allocations for a given year would 

be limited to this unit-level cap. As noted above, in some 
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situations the unit level cap for a 2012 or thereafter

would be zero if a federally-enforceable consent decree 

requires the shutdown or repowering of a unit.

An example of how EPA would determine unit level caps 

follows: 

Step 1 – EPA determines that facility ABC consists of 

two units subject to both a federally-enforceable 

consent decree annual tonnage limit and the Transport 

Rule NOX annual program. The consent decree systemwide annual tonnage limit is 3,000 tons in calendar 

year 2012. The NOX allowance heat input-based 

allocation (as described in the final Transport Rule 

(76 FR 48288-90)) for the two units in calendar year 

2012 is 4,000 allowances to Unit 1 and 2,000 

allowances to Unit 2 – a total of 6,000 allowances. 

Because the total of the allowances allocated to the 

two units is higher than the annual tonnage limit, EPA 

needs to calculate unit-level caps for Unit 1 and Unit 

2.

Step 2a – The consent decree system-wide annual 

tonnage limit of 3,000 tons is divided by the systemwide heat input-based allocations of 6,000 tons 

resulting in a ratio of 0.5, or 50 percent.
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Step 2b – EPA calculates the unit-level cap for Unit 1 

as 4,000 allowances x 50 percent, or 2,000 allowances, 

and for Unit 2 as 2,000 allowances x 50 percent, or 

1,000 allowances. 

EPA would apply this additional unit-level constraint 

when calculating existing unit-level allocations under the 

final Transport Rule FIPs. This additional unit level 

constraint would be applied in steps 9 and 10 of the 

methodology described in the preamble to the final 

Transport Rule (76 FR 48290). This additional constraint 

would be applied in step 9 to limit allocations to existing 

units covered by consent decrees. This constraint would be 

applied in step 10 to ensure that any allowances that 

cannot be allocated to existing units (because all existing 

units are subject to either the constraint on maximum 

historical emissions or this additional constraint) would

be directed to the state’s new unit set aside. For 

example, EPA has determined that, if this additional 

constraint is finalized as proposed, all the units in the 

state of Tennessee would be constrained by either 

historical emissions or a unit-level cap for the Transport 

Rule SO2 Group 1 program in calendar years 2013, 2018, 2019,

and each year thereafter. As described above, the new unit 
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set aside for the state of Tennessee would increase in 

2013, 2018, 2019, and each year thereafter, by 8,460, 3,173 

and 5,225 tons respectively. 

EPA is not seeking comment on any aspects of the 

allocation methodology in the final Transport Rule (76 FR 

48290). EPA is only seeking comment on the addition of the 

constraint described above to steps 9 and 10 of that 

methodology. See “Assessment of Impact of Consent Decree 

Annual Tonnage Limits on Transport Rule Allocations TSD” in 

the docket for this rulemaking for further information on 

the proposed addition of the new constraint for purposes of 

determining unit-level allocations.

C. Amend the assurance penalty provisions to make them 

effective starting in 2014

EPA is also proposing in this action to amend the 

effective date of the Transport Rule assurance provisions 

to make them effective beginning on January 1, 2014. 

During outreach discussions with various stakeholders, the 

application of assurance penalties at the outset of the 

program has been raised as a major concern for compliance 

and market development in the early years of the program. 

Several stakeholders have expressed concern that Transport 

Rule allowance market development may be delayed by 
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uncertainty over how each state will transition from 2010 

and 2011 emission levels to meet the projected Transport 

Rule assurance levels in 2012 and 2013. 

Under the assurance provisions, a state’s emissions 

for any control period in a given year must not exceed the 

state assurance level, i.e., the state budget plus the 

state’s variability limit. In order to implement this 

requirement, EPA first determines whether, for the control 

period, any state’s total emissions exceeded the state’s 

assurance level. If a state had emissions exceeding the 

state assurance level, then EPA applies additional criteria 

to determine which owners and operators of units in the 

state will be subject to the assurance penalty, which is a 

requirement to surrender additional allowances. In 

applying the additional criteria, EPA identifies which 

groups of units with a common designated representative 

(DR) in the state had emissions exceeding the respective 

common DR’s share of the state assurance level, and 

calculates what percentage each such group’s emissions 

above the common DR’s share comprise of the state’s 

emissions above the state assurance level. The assurance 

penalty applied to the owners and operators of each of 

those groups of units is the surrender of an amount of 
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allowances equal to the state’s emissions above the state 

assurance level multiplied by the group’s percentage and 

multiplied by two (in order to reflect the penalty of two 

allowances for each ton of the state’s excess emissions). 

EPA implements the assurance penalty provisions through a 

series of notices of data availability that make available 

the necessary calculations and provide an opportunity for 

public objections to the calculations. The requirements 

that owners and operators comply with the assurance 

provisions, including where appropriate the assurance 

penalty, and the procedures followed by the Administrator 

are set forth in 40 CFR 97.406(c)(2) and 97.425 (for the TR 

NOX annual program), 97.506(c)(2) and 97.525 (for the TR NOX

ozone season program), 97.606(c)(2) and 97.625 (for the TR 

SO2 Group 1 program), and 97.706(c)(2) and 97.725 (for the 

TR SO2 Group 2 program).

EPA proposes to determine that amending the assurance 

provisions to take effect starting in 2014 is appropriate. 

EPA believes that a limited postponement of the 

effectiveness of these provisions is justified in order to 

smooth the transition from the existing CAIR programs to 

the new Transport Rule programs. 
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In line with the Court’s remand of CAIR, EPA designed 

the Transport Rule to achieve necessary emission reductions 

by relevant NAAQS attainment deadlines and to ensure that 

necessary reductions will be achieved within each covered 

state. As explained in the final Transport Rule, EPA 

determined that it was appropriate for the Transport Rule 

programs to address emissions in 2012 and beyond in order 

to ensure that the deadlines in the rule were aligned, as 

legally required, with the downwind nonattainment deadlines

(76 FR 48277-48279). CAIR remains in effect to address 

emissions through the end of the 2011 control periods, and 

the Transport Rule programs address emissions in 2012 and 

beyond. 

EPA took several steps in the final Transport Rule to 

ease the transition from the CAIR programs to the Transport 

Rule trading programs. 

The Transport Rule maintains programmatic elements 

that were successfully implemented and recognizable to 

sources from compliance experiences under CAIR while also 

addressing that rule’s legal shortcomings identified by the 

Court. Under both CAIR and the Transport Rule, individual 

units have the flexibility to supplement their own emission 

reductions with the acquisition from the marketplace of any 
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additional allowances needed to cover emissions under the 

Transport Rule programs. Robust markets (e.g., markets 

with a high level of liquidity and accessibility of price 

information) for the CAIR annual NOX, CAIR ozone-season NOX, 

and Acid Rain (SO2) program allowances have been in 

existence for many years. Sources covered by CAIR have 

relied on the availability of these robust markets when 

developing compliance plans. The Transport Rule (TR) 

creates new TR SO2 Group 1, TR SO2 Group 2, TR NOX, and TR 

ozone-season NOX allowances. Markets for these allowances 

are developing now, and EPA is beginning to record the 

allowances in allowance accounts and introduce the 

allowances into the marketplace over a year before the 

Transport Rule programs’ first compliance deadlines 

(December 1, 2012, for the 2012 ozone-season NOX program,

and March 1, 2013, for the 2012 annual NOX and SO2

programs). However, with the allocation revisions proposed 

in this rulemaking and the potential for additional 

revisions based on additional information that might be 

submitted in response to this rulemaking, some allowances 

would be recorded and introduced into the marketplace at 

later dates. 
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Based on observed compliance planning behavior among 

sources anticipating the 2012 control periods, and in light 

of the proposed revisions in this rulemaking and the 

potential for additional revisions based on additional 

information, EPA believes that amending the effective date 

of the assurance provisions to apply in 2014 would ease the 

transition from CAIR to Transport Rule compliance for 

parties across the board by promoting the liquidity of, and 

accessibility of price information in, new Transport Rule 

allowance markets and instilling confidence that utilities 

can flexibly comply through a variety of unit-level 

operational strategies that are not limited by initial 

Transport Rule unit-level allowance allocations.

EPA believes that this change would accelerate the 

development of robust Transport Rule allowance markets and 

facilitate a smooth transition to the Transport Rule 

programs. If, in response to concerns about when robust

markets will develop, utilities were to artificially 

constrain 2012 operational plans to not exceed initially 

allocated allowances, the volume of early trading activity 

might be unnecessarily limited. Early trading activity is 

important for demonstrating market liquidity and assisting 

in price discovery to inform compliance planning by 
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affected sources. Actions by utilities to limit early 

trading activity, therefore, could have negative impacts 

not only on those utilities, but on all participants in the 

Transport Rule trading programs. EPA believes that 

amending the effectiveness of the assurance provisions in 

2012 and 2013 would encourage greater confidence among 

utilities for engaging immediately in cost-effective 

compliance planning that takes into account the flexibility 

of a robust market for acquiring allowances to cover 

emissions to the extent use of allowances is the most 

economic approach for compliance under the Transport Rule 

programs.

Amending the assurance provisions would not affect, in 

any way, the requirements of the rule in 2014 and beyond. 

EPA is proposing only a short postponement of the assurance 

penalty provisions to ensure a smooth transition from CAIR 

to the Transport Rule programs. EPA believes that,

notwithstanding postponement of the assurance penalty 

provisions, the states covered by the Transport Rule 

programs will still achieve the emission reductions in 2012 

and 2013 necessary to eliminate each state’s significant 

contribution to nonattainment and interference with 

maintenance identified in the final Transport Rule (with 
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the revisions included in this proposal). The highly 

detailed state-specific bases on which individual state 

budgets were determined using the approach and 

methodologies developed in the final Transport Rule, and 

included in the record for the Transport Rule, together 

with the derivation of the variability limits from historic 

data reflecting state-level year-to-year variation in power 

sector emissions, support EPA’s belief. EPA noted in the 

Transport Rule proposal that knowledge about installed air 

pollution control equipment “provides greater certainty of 

where [near-term] reductions will occur and how these 

reductions should impact air quality in downwind areas...

Consequently, EPA believes that there is a high level of 

certainty that emissions reductions projected for 2012–2013 

with interstate trading would be achieved within the states 

where they are projected to occur, making imposition of the 

assurance provisions during 2012–2013 unnecessary” (75 FR 

45314-45315). 

In the final Transport Rule, EPA did not disavow the 

proposal’s rationale for starting the assurance provisions 

in 2014; however, the Agency chose to make the assurance 

provisions effective starting in 2012 with the intent to 

err on the side of providing “even further assurance” of 
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securing the targeted emission reductions in upwind states

(76 FR 48296). EPA, therefore, has never concluded that 

starting the assurance provisions in 2014 would fail to 

meet the 110(a)(2)(D) obligation to eliminate significant 

contribution or interference with maintenance in 2012 and 

2013. Moreover, this proposal’s revisions to pollution 

control technology assumptions involve only 17 units of the 

approximately 3,600 units whose known controls inform the 

Transport Rule budgets. EPA continues to believe that, 

because the immediate-term Transport Rule state budgets for 

2012 and 2013 (in contrast with the budgets for 2014 and 

thereafter) are uniquely based on the ability of the known 

existing fleet of EGUs and known existing or soon-to-beinstalled pollution control equipment to deliver emission 

reductions in specific upwind states, there is a high level 

of certainty that the state assurance levels will not be 

exceeded in 2012 and 2013. EPA believes that this nearterm certainty allows the Agency to postpone the 

effectiveness of the Transport Rule’s assurance penalty 

provisions until 2014 without sacrificing the Transport 

Rule’s ability to ensure necessary near-term emission 

reductions in each upwind state, supported by the 

calculation of each upwind state’s emission reduction 
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potential (informing the determination of state budgets) 

under the rule. 

With the proposed, temporary postponement of the 

assurance provisions, EPA believes that, in the near term 

(as well as in the long term), Transport Rule allowance 

markets would provide compliance flexibility at the unit 

level and incentivize cost-effective, unit-level emission 

reductions. In the aggregate, these flexibilities and 

reductions at the unit level would result in achievement in 

each state of the state-level cost-effective emission 

reductions projected in the final Transport Rule (with the 

revisions included in this proposal). In other words, EPA 

is only proposing to postpone temporarily the assurance 

penalty provisions to address the ability of owners and 

operators of individual units to make the cost-effective 

emission reductions in 2012 and 2013 on which EPA’s statelevel emission projections relied in determining each 

state’s amount of significant contribution and interference 

with maintenance under the final Transport Rule. 

Consequently, EPA believes that this proposal to postpone

temporarily the assurance provisions will not yield 

substantially different state-level emission outcomes under 

the Transport Rule programs in 2012 or 2013 than the state-
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level emissions reflected in the state-specific budgets and 

assurance levels in the respective Transport Rule program.

EPA believes that a two year postponement of the 

effective date of the assurance penalty provisions is 

sufficient to guarantee robust market development, is 

consistent with the D.C. Circuit's decision leaving CAIR in 

place during the transition to a new rule, and will not 

interfere with the air quality objectives of the program. 

EPA does not, at this time, believe a longer postponement 

would be justified. EPA requests comment on all aspects of 

this proposal including the length of the postponement.

Since under this proposal, the assurance provisions 

would continue to be effective for 2014 and thereafter, EPA 

maintains that the Transport Rule, revised consistent with 

this proposal, would continue to address and meet the 

Court’s concerns in North Carolina.

Any revisions to state budgets from this proposal that 

are finalized would also include corresponding revisions to 

the relevant assurance levels that would apply in 2014 with 

this proposed postponement.

D. Correct Typographical Errors

EPA is proposing to correct typographical errors in 

certain sections of rule text in parts 52 and 97 in the 
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final Transport Rule. Specifically, EPA proposes to change 

an erroneous reference in 40 CFR 52.39(i)(1)(ii) to “TR SO2 

Group 1 allowances” to refer instead to “TR SO2 Group 2 

allowances” and to redesignate sections 52.745 and 52.746 

in 40 CFR part 52, subpart O as sections 52.731 and 52.732 

and redesignate section 52.2241 in 40 CFR part 52, subpart 

VV as section 52.2441. EPA also proposes to remove some 

redundant words in 40 CFR 97.406(e)(2), 97.606(e)(2), and 

97.706(E)(2). EPA requests comment concerning only the 

specific corrections and not concerning any other aspect of 

the provisions in which these corrections would be made.

IV. Recordation of Transport Rule Allowances

Impacts on Allocations to Existing Units

EPA recognizes that successful implementation of the 

Transport Rule programs in 2012 depends in part on the 

development of robust allowance markets, in which covered 

sources can locate and purchase any additional allowances 

necessary to comply with the rule. As such, EPA intends to 

allocate as many 2012 Transport Rule allowances as possible 

as early as possible to assist implementation and 

compliance planning. While none of the actions presented 

in this proposal would reduce any state’s total number of 

allowances issued under that state’s budgets, some of the 
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actions presented in this proposal would slightly alter 

unit level allocations. For example, as described above,

allocations to certain units covered by consent decrees 

would be limited. EPA does not believe it would be prudent 

or reasonable to record in allowance accounts, before 

taking final action on this proposal, allowance allocations 

in excess of the amount any given unit would receive if 

this proposal is finalized as proposed. EPA proposes to

record by November 7, 2011 for each unit, the lesser of the 

amount that unit would receive under the allocation scheme 

finalized in the Transport Rule or the amount the unit 

would receive if this proposal is finalized as proposed. 

This approach would allow EPA to allocate over 99.7 percent 

of all existing unit allowances under the state budgets 

established in the final Transport Rule by that rule’s

November 7 deadline (76 FR 48398, 48424, 48450, and 48475, 

August 8, 2011). EPA is proposing to allocate the 

remaining 0.3 percent of the allowances no later than 7 

days after finalization of this action is legally 

effective. In addition, if EPA finalizes the proposed 

actions that yield increases to state budgets, the Agency 

will act swiftly to record these additional allowances and 

thereby put them into the marketplace as quickly as 
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possible following this rule’s finalization, so that the 

allowances would be available significantly in advance of 

the compliance deadlines for the 2012 control periods 

(i.e., the allowance transfer deadlines of December 1, 2012 

(for the NOX ozone season program) and March 1, 2013 (for 

the NOX and SO2 annual programs)). See the “Transport Rule 

Allowance Recordation Schedule TSD” in the docket for this 

rulemaking for a demonstration of how many allowances EPA 

will record by November 7, 2011 in each state.

V. Statutory and Executive Order Reviews

A. Executive Order 12866: Regulatory Planning and Review

Under Executive Order 12866 (58 FR 51735, October 4, 

1993), this action is a "significant regulatory action.” 

Accordingly, EPA submitted this action to the Office of 

Management and Budget (OMB) for review under Executive 

Orders 12866 and 13563 (76 FR 3821, January 21, 2011) and 

any changes made in response to OMB recommendations have 

been documented in the docket for this action. 

B. Paperwork Reduction Act

This action does not impose any new information 

collection burden. This action makes relatively minor 

revisions to the emission budgets and allowance allocations 
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or allowance allocations only in certain states in the 

final Transport Rule and corrects minor technical errors 

which are ministerial. However, the Office of Management 

and Budget (OMB) has previously approved the information 

collection requirements contained in the final Transport 

Rule under the provisions of the Paperwork Reduction Act, 

44 U.S.C. 3501 et seq. and has assigned OMB control number 

2060-0667. The OMB control numbers for EPA's regulations in 

40 CFR are listed in 40 CFR part 9.

C. Regulatory Flexibility Act

The Regulatory Flexibility Act (RFA) generally 

requires an agency to prepare a regulatory flexibility 

analysis of any rule subject to notice and comment 

rulemaking requirements under the Administrative Procedure 

Act or any other statute unless the agency certifies that 

the rule will not have a significant economic impact on a 

substantial number of small entities. Small entities 

include small businesses, small organizations, and small 

governmental jurisdictions.

For purposes of assessing the impacts of today’s rule 

on small entities, small entity is defined as: (1) a small 

business as defined by the Small Business Administration’s 

(SBA) regulations at 13 CFR 121.201; (2) a small 
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governmental jurisdiction that is a government of a city, 

county, town, school district or special district with a 

population of less than 50,000; and (3) a small 

organization that is any not-for-profit enterprise which is 

independently owned and operated and is not dominant in its 

field. 

After considering the economic impacts of today’s 

action on small entities, I certify that this action will 

not have a significant economic impact on a substantial 

number of small entities. The small entities directly 

regulated by this action are electric power generators 

whose ultimate parent entity has a total electric output of 

4 million megawatt-hours (MWh) or less in the previous 

fiscal year. We have determined that the changes 

considered in this proposed rulemaking pose no additional 

burden for small entities. The proposed revision to the 

new unit set-asides in Arkansas and Texas would yield an 

extremely small change in unit-level allowance allocations 

to existing units, including small entities, such that it 

would not affect the analysis conducted on small entity 

impacts under the finalized Transport Rule. In all other 

states, the revisions proposed in this rulemaking would 

yield additional allowance allocations to all units, 
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including small entities, without increasing program 

stringency, such that it is not possible for the impact to 

small entities to be any larger than that already 

considered and reviewed in the finalized Transport Rule. 

D. Unfunded Mandates Reform Act

Title II of the Unfunded Mandates Reform Act of 1995 

(UMRA), 2 U.S.C. 1531-1538, requires Federal agencies, 

unless otherwise prohibited by law, to assess the effects 

of their regulatory actions on State, local, and tribal 

governments and the private sector. Federal agencies must 

also develop a plan to provide notice to small governments 

that might be significantly or uniquely affected by any 

regulatory requirements. The plan must enable officials of 

affected small governments to have meaningful and timely 

input in the development of EPA regulatory proposals with 

significant Federal intergovernmental mandates and must 

inform, educate, and advise small governments on compliance 

with the regulatory requirements.

This action does not contain a Federal mandate that 

may result in expenditures of $100 million or more for 

State, local, and tribal governments, in the aggregate, or 

the private sector in any one year. This action is 

increasing the budgets and increasing the total number of 
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allowances or maintaining the same budget but revising 

unit-level allocations in several other states in the 

Transport Rule. Thus, this rule is not subject to the 

requirements of sections 202 or 205 of UMRA.

In developing the final Transport Rule, EPA consulted 

with small governments pursuant to a plan established under 

section 203 of UMRA to address impacts of regulatory 

requirements in the rule that might significantly or 

uniquely affect small governments.

E. Executive Order 13132: Federalism

Executive Order 13132, entitled “Federalism” (64 FR 

43255, August 10, 1999), requires EPA to develop an 

accountable process to ensure “meaningful and timely input 

by State and local officials in the development of 

regulatory policies that have federalism implications.” 

“Policies that have federalism implications” is defined in 

the Executive Order to include regulations that 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.” 

This action does not have federalism implications. It 

will not have substantial direct effects on the States, on 
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the relationship between the national government and the 

States, or on the distribution of power and 

responsibilities among the various levels of government, as 

specified in Executive Order 13132. This action makes 

relatively minor revisions to the emissions budgets and 

allowance allocations or allowance allocations only in 

certain states in the final Transport Rule. Thus, Executive 

Order 13132 does not apply to this rule. EPA did provide 

information to state and local officials during development 

of both the proposed and final Transport Rule.

F. Executive Order 13175: Consultation and Coordination 

with Indian Tribal Governments

This action does not have tribal implications, as 

specified in Executive Order 13175 (65 FR 67249, November 

9, 2000). This action makes relatively minor revisions to 

the emissions budgets and allowance allocations in several 

states in the final Transport Rule and helps ease the 

transition from CAIR. Indian country new unit set-asides 

will increase slightly or remain unchanged in the states 

affected by this action. Thus, Executive Order 13175 does 

not apply to this action. EPA consulted with tribal 

officials during the process of promulgating the final 
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Transport Rule to permit them to have meaningful and timely 

input into its development.

G. Executive Order 13045: Protection of Children from 

Environmental Health and Safety Risks

This action is not subject to EO 13045 (62 FR 19885, 

April 23, 1997) because it is not economically significant 

as defined in EO 12866, and because the Agency does not 

believe the environmental health or safety risks addressed 

by this action present a disproportionate risk to children. 

Analyses by EPA that show how the emission reductions from 

the strategies in the final Transport Rule will further 

improve air quality and children’s health can be found in 

the final Transport Rule RIA.

H. Executive Order 13211: Actions Concerning 

Regulations that Significantly Affect Energy Supply, 

Distribution, or Use

This 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.

EPA believes that there is no meaningful impact to the 

energy supply beyond that which is reported for the 

Transport Rule program in the final Transport Rule.

I. National Technology Transfer and Advancement Act
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Section 12(d) of the National Technology Transfer and 

Advancement Act of 1995 (“NTTAA”), Public Law No. 104-113, 

12(d) (15 U.S.C. 272 note) directs EPA to use voluntary 

consensus standards in its regulatory activities unless to 

do so would be inconsistent with applicable law or 

otherwise impractical. Voluntary consensus standards are 

technical standards (e.g., materials specifications, test 

methods, sampling procedures, and business practices) that 

are developed or adopted by voluntary consensus standards 

bodies. NTTAA directs EPA to provide Congress, through 

OMB, explanations when the Agency decides not to use 

available and applicable voluntary consensus standards. 

As described in section XII.I of the preamble to the 

final Transport Rule, the Transport Rule program requires

all sources to meet the applicable monitoring requirements 

of 40 CFR part 75. Part 75 already incorporates a number of 

voluntary consensus standards. This action, however, does 

not involve technical standards. Therefore, EPA did not 

consider the use of any voluntary consensus standards. 

J. Executive Order 12898: Federal Actions to Address 

Environmental Justice in Minority Populations and LowIncome Populations
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Executive Order (EO) 12898 (59 FR 7629 (Feb. 16, 

1994)) establishes federal executive policy on 

environmental justice. Its main provision directs federal 

agencies, to the greatest extent practicable and permitted 

by law, to make environmental justice part of their mission 

by identifying and addressing, as appropriate, 

disproportionately high and adverse human health or 

environmental effects of their programs, policies, and 

activities on minority populations and low-income 

populations in the United States. 

EPA has determined that this action will not have 

disproportionately high and adverse human health or 

environmental effects on minority or low-income populations 

because it does not affect the level of protection provided 

to human health or the environment. EPA believes that the 

vast majority of communities and individuals in areas

covered by the Transport Rule program inclusive of this 

action, including numerous low-income, minority, and tribal 

individuals and communities in both rural areas and inner 

cities in the eastern and central U.S., will see

significant improvements in air quality and resulting 

improvements in health. EPA’s assessment of the effects of 

the final Transport Rule program on these communities is
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detailed in section XII.J of the preamble to the final 

Transport Rule.

List of Subjects

40 CFR Part 52

Administrative practice and procedure, Air pollution 

control, Incorporation by reference, Intergovernmental 

relations, Nitrogen oxides, Ozone, Particulate matter, 

Regional haze, Reporting and recordkeeping requirements, 

Sulfur dioxide.

40 CFR Part 97

Administrative practice and procedure, Air pollution 

control, Electric utilities, Nitrogen oxides, Reporting and 

recordkeeping requirements, Sulfur dioxide.
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Revisions to Federal Implementation Plans to Reduce 

Interstate Transport of Fine Particulate Matter and Ozone

(page 83 of 84)

Dated: ____________________

______________________________________________________

Lisa P. Jackson

Administrator.

For the reasons set forth in the preamble, parts 52 and 97 

of chapter I of title 40 of the Code of Federal Regulations 

are proposed to be amended as follows:

PART 52—[AMENDED]

1. The authority citation for Part 52 continues to read as 

follows:

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

Subpart A--General Provisions

2. Section 52.39 is amended by revising paragraph 
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(i)(1)(ii) by removing the words "Group 1" and adding, in 

their place, the words "Group 2".

Subpart O--Illinois

3. Section 52.745 is redesignated as §52.731. 

4. Section 52.746 is redesignated as §52.732. 

Subpart VV--Virginia

5. Section 52.2241 is redesignated as §52.2441.

PART 97—[AMENDED]

6. The authority citation for Part 97 continues to read as 

follows:

Authority: 42 U.S.C. 7401, 7403, 7410, 7426, 7601, and 

7651, et seq.

7. Section 97.406 is amended by revising paragraph (e)(2) 

by removing the words “or or” and adding, in their place, 

the word “or”.

8. Section 97.606 is amended by revising paragraph (e)(2) 

by removing the words “or or” and adding, in their place, 

the word “or”.

9. Section 97.706 is amended by revising paragraph (e)(2) 

by removing the words “or or” and adding, in their place, 

the word “or”.