1 

# TECHNICAL SUPPORT DOCUMENT

Arkansas CAIR NO X 

## Ozone Season Trading Program

SIP Revision

Regulations of the Arkansas Plan of Implementation for

Air Pollution Control Regulation 19

Chapter 14 – CAIR NOx Ozone Season Trading Program General Provisions

Sections 19.1401 and 19.1404

March 24, 2014

FOR FURTHER INFORMATION CONTACT: Ms. Adina Wiley, United States Environmental Protection Agency Region 6, Air Permits Section (6PD-R), 1445 Ross Avenue, Dallas, Texas, 75202-2733, (214) 665-21152 Subject: Review of Revisions to the Ar kansas State Implementation Plan Regulation 19; Chapter 14 – Sections 19.1401 and 19.1404

Contents:

I. Executive Summary

II. Background for State Submittal

III. Summary of State Submittal

IV. Technical Review

A. Part 51, Appendix V Completeness Determination for the September 16, 2009,

SIP Revision

B. Evaluation of the September 16, 2009 Revi sion with Respect to the Arkansas

SIP

C. Evaluation of the Arkansas CAIR NO X Ozone Season Trading Program SIP Revision with respect to Secti on 110(l) of the Clean Air Act

V. Conclusion3 I. Executive Summary

This technical support document (TSD) review s proposed revisions to the Arkansas State Implementation Plan (SIP) concerning the Cl ean Air Interstate Rule (CAIR) Nitrogen Oxides (NO X ) Ozone Season Trading Program.

On December 5, 2008 and June 26, 2009, the Ar kansas Pollution C ontrol and Ecology Commission adopted revi sions to the CAIR NO X Ozone Season Trading Program at Regulation 19, Chapter 14, Sections 19.1401 and19.1404. The Governor of Arkansas, Mike Beebe, submitted these provisions as a SIP revision in a lett er dated September 16, 2009. The adopted rule updates the incor poration by reference of the CAIR NO X Ozone Season Trading Program at 40 CFR part 96, subparts AAAA-HHHH (with the exception of subpart EEEE and all references to opt-in un its) to include the correcting amendments published on October 19, 2007 (72 FR 52190). The adopted rule also corrects an

abbreviation in the allowance allo cation methodology at Section 19.1404(A).

This review will determine if the revisi ons to Sections 19.1401 and 19.1404 comply with the Clean Air Act and EPA regulations and guidance.4 II. Background for State Submittal

Summary of the Clean Air Interstate Rule

EPA published CAIR on May 12, 2005 (70 FR 25162) . In CAIR, EPA determined that

28 states and the District of Columbia contribute significantly to nonattainment and

interfere with maintenance of the 1997 national ambient air quality standards (NAAQS) for fine particles (PM 2.5 ) and/or the 1997 8-hour ozone NAAQS in downwind states in the eastern part of the country. As a result , EPA required those upwi nd states to revise

their SIPs to include control measures th at reduce emissions of sulfur dioxide (SO 2 ), which is a precursor to PM 2.5 formation, and/or nitrogen oxides (NO X ), which is a precursor to both ozone and PM 2.5 formation. For jurisdictions that contribute significantly to downwind PM 2.5 nonattainment, CAIR sets annual state-wide emission reduction requirements (i.e., budgets) for SO 2 and NO X . Similarly, for jurisdictions that contribute significantly to 8-hour ozone nonattai nment, CAIR sets state-wide emission budgets for NO X for the ozone season (May 1 st to September 30 th ). Under CAIR, states may implement these reduction requirements by participating in the EPA-administered cap-and-trade programs or by adopti ng any other control measures.

Additionally, on April 28, 2006, EPA published two additional CAIR-related final rules

that added the states of Delaware and New Jers ey to the list of states subject to CAIR for

1997 PM 2.5 and announced EPA’s final decisions on reconsideration of five issues, without making any substantive changes to the CAIR requirements. On October 19, 2007, EPA amended CAIR to clarify the defini tion of “cogeneration unit” and, thus, the applicability of the CAIR trading program to cogeneration units.

EPA was sued by a number of parties on vari ous aspects of CAIR, and on July 11, 2008,

the DC Circuit Court found CAIR unlawful. North Carolina v. EPA , 531 F.3d 896 (DC Cir. 2008). The Court's origin al decision vacated CAIR. Id. at 929-30. However, the Court subsequently remanded CAIR to EP A without vacatur because it found that allowing CAIR to remain in effect until it is replaced would preserve the environmental values covered by CAIR. On August 8, 2011, EPA finalized its Cross State Air Pollution Rule (Transport Rule) inte nded to replace the remanded CAIR. However, on August 21,

2012, the D.C. Circuit issued a deci sion vacating the Transport Rule. EME Homer City

Generation, L.P. v. EPA , 696 F.3d 7 (D.C. Cir. 2012). The Court again ordered EPA to continue implementing CAIR in the interim pending promulgation of a replacement rule. Subsequently, the Supreme Cour t granted the United States' petition for certiorari and agreed to review the D.C. Circuit's decision in EME Homer City, and held oral arguments on December 10, 2013. A decision is currently pending. In the meantime, EPA intends to

act in accordance with the D.C. Circuit’s instruction in EME Homer City to continue implementing CAIR. CAIR requirements are in place, its regional control programs are operating while EPA develops replacement ru les in response to the pertinent court decisions, and CAIR requirements remain in effect for Arkansas. The instant actions have no impact on the legal st atus of CAIR or CSAPR.5 General Overview of CAIR Implementation

CAIR establishes State-wide emission budgets for SO 2 and NO X and is to be implemented in two phases. The first phase of NO X reductions started in 2009 and continues through 2014, while the first phase of SO 2 reductions started in 2010 and continues through 2014. The second phase of reductions for both NO X and SO 2 starts in 2015 and continues thereafter. CAIR requires States to implement the budgets by either: (1) requiring EGUs to participate in the EPA- administered cap-and-trade programs; or (2) adopting other control measures of the Stat e's choosing and demonstrating that such control measures will result in comp liance with the applicable State SO 2 and NO X budgets.

The May 12, 2005 and April 28, 2006, CAIR rules provide model rules that States must adopt (with certain limited changes, if desire d) if they want to participate in the EPAadministered trading programs. With two excep tions, only States that choose to meet the requirements of CAIR through methods that ex clusively regulate EGUs are allowed to participate in the EPA-administ ered trading programs. One exception is for States that adopt the opt-in provisions of the model rules to allow non-EGUs individually to opt into the EPA-administered trading programs. Th e other exception applies to States that

choose to include all no n-EGUs from their NO X SIP Call trading programs in their CAIR

NO X ozone season trading programs. 1

States have the flexibility to choose the type of control measures they use to meet the requirements of CAIR. EPA antic ipated that most States w ould choose to meet the CAIR requirements by selecting an option that re quires EGUs to participate in the EPAadministered CAIR cap-and-trade programs. For such States, EPA provides two approaches for submitting and obtaining approval for CAIR SIP revisions. States may submit full SIP revisions that adopt the mode l CAIR cap-and-trade rules. If approved, these SIP revisions fully replace the CAIR FIPs. Alternatively, States may submit

abbreviated SIP revisions. These SIP revi sions do not replace th e CAIR FIPs; however, the CAIR FIPs provide that, when approve d, the provisions in these abbreviated SIP revisions be used instead of or in conj unction with, as approp riate, the corresponding provisions of the CAIR FIPs (e.g., the NO X allowance allocation methodology).CAIR is scheduled to be implemented in tw o phases. The first phase of NO X reductions starts in 2009 and continues through 2014, wh ile the first phase of SO 2 reductions starts in 2010 and continues through 2014. The second phase of reductions for both NO X and SO 2 starts in 2015 and continues th ereafter. The phased approach provides adequate lead time for States to incorporate the new rule into State regulations and allows sources sufficient time to comply with the new emission cap s. Under CAIR, Stat es will achieve the required emissions reductions using one of tw o options for compliance: 1) require fossilfuel fired boilers to participate in an EPA- administered interstate cap and trade system that caps emissions in two st ages, or 2) meet an individua l State’s air emission limits through measures of the State's choosing.

1 Arkansas did not adopt opt-in provisions in the original CAIR SIP submittal. Arkansas is not subject to

the NO X SIP Call. Therefore, the Arkansas and Louisiana CAIR regulations only pertain to EGUs.6 The EPA-administered CAIR trading programs are based on the successful cap-and-trade dynamics of the Acid Rain Program. EPA has established State emission budgets for

NO X annual emissions, NO X ozone season emissions, and SO 2 emissions. The State budgets are in tons of pollutant and provide a cap for each State. Each State allocates the emissions budgets for each pollutant to particip ating sources in the St ate. Participating sources can choose to operate at their allocate d emissions level, above, or below it. If a source chooses to operate above its allo cation amount then the source must obtain additional allowances to demonstrate complian ce with the program. If a source chooses to operate below its allocation amount then the source has a surplus of allowances that can be sold to another participati ng source or banked for future use.

How does the Clean Air Interstate Rule NO X Annual and Ozone Season Trading Programs Work?

Under both the NO X annual and ozone season tradi ng programs, a CAIR allowance represents the authorizat ion to emit one ton of NO X , regardless of the CAIR phase in which the allowance is allocated. Complian ce is demonstrated separately each control period for the NO X annual and ozone season programs.

How does the Clean Air Interstate Rule SO 2 Trading Program Work?

The SO 2 model rule is designed to satisfy the ongoing statutory requirements of the Title

IV Acid Rain SO 2 cap and trade program. As a result, the model SO 2 cap and trade rule

builds on and coordinates with the Title IV SO 2 program to ensure that the required

reductions under CAIR are achieved while preserving the efficacy of the Title IV program. The model CAIR SO 2 cap and trade program w ill utilize the Title IV allowances for compliance at a ratio of 2 allo wances per ton of emissions for allowances allocated for 2010 through 2014, and 2.86 allowances per ton of emissions for allowances

allocated for 2015 or thereafter. Title IV allowances will con tinue to be freely transferable among sources covered by the Ac id Rain Program and sources covered by

the model SO 2 cap and trade program under CAIR. However, each Title IV allowance used to comply with Title IV will be removed from the source’s allowance tracking system and cannot be used again for co mpliance, either in the CAIR model SO 2 cap and trade program or the Acid Rain Program.7 III. Summary of State Submittal

On May 12, 2005, EPA found that Arkansas contri buted significantly to the transport of

8-hour ozone emissions to downwind counties in Texas. Thus, Arkansas was required to address CAIR requirements for NO X ozone season emissions. To address the concerns of interstate transport, the ADEQ initiated a stakeholder process to work with affected industry and EPA Region 6. As a result of the stakeholder process, ADEQ submitted a

full CAIR NO X Ozone Season SIP revision on Augus t 10, 2007 that incorporated by

reference the CAIR NO X Ozone Season Trading Program at 40 CFR Part 96, subparts AAAA-HHHH, with the exception of EEEE and all references to opt-in units. The full

CAIR NO X ozone season SIP revision included provisions to replace the allowance allocation methodology at EEEE.

EPA approved the full CAIR NO X ozone season SIP revision through a direct final rulemaking action on September 26, 2007 (72 FR 54556). Because EPA received no

comments on the direct final notice, the AR CAIR NO X Ozone Season Trading Program

went into effect on November 26, 2007.

ADEQ presented proposed revisions to the CAIR NO X Ozone Season Trading Program on April 24, 2008 to interested stakeholders. Af ter receiving feedback from stakeholders, ADEQ proceeded with rulemaking and proposed revisions to the CAIR NO X Ozone Season Trading Program on May 26, 2008. The proposed revisions update the incorporation by refere nce of the CAIR NO X Ozone Season Trading Program at 40 CFR part 96, subparts AAAA-HHHH (with the excepti on of subpart EEEE and all references to opt-in units) to include the correcting amendments published on October 19, 2007 (72 FR 52190). The proposal also corrected an abbreviation in the allowance allocation methodology at Section 19.1404(A). EPA submitted supportive comments on July 3,

2008.

ADEQ did not proceed with adoption of th e revisions because of the July 11, 2008, vacatur of the CAIR and CAIR FIPs by the U.S. Court of Appeals for the D.C. Circuit. ADEQ resumed rulemaking after the Court re manded CAIR to the EPA. On June 26, 2009, ADEQ adopted the revisions that were proposed May 26, 2008. Governor Beebee submitted these SIP revisions on September 16, 2009.

Incorporation by Reference

The Arkansas CAIR NO X Ozone Season Trading Program SIP revision at section 19.1401 incorporates by reference 40 CFR Part 96, Subparts AAAA – HHHH, with the exception of EEEE, as promulgated by EPA on May 12, 2005, and further revised on April 28, 2006, December 13, 2006, and October 19, 2007. Additionally, section 19.1401 states that Subpart IIII and all references to opt-in units are not incorporated into

the Arkansas SIP.

Allowance Allocation Methodology

Sections 19.1402 – 19.1404 of the Arkansas CAIR NO X Ozone Season Trading Program8 SIP revision establish the NO X ozone season allowance allocation methodology that is to be used in place of 40 CFR Part 96, Subpart EEEE. Sections 19.1402 and 19.1403 were not revised by ADEQ in the September 16, 2009 SIP revision. These Sections are presented below to provide information about the program, they are not under review.

State Ozone Season Trading Budget

Section 19.1402 establishes that the Arkansas NO X Ozone Season budget is 11,515 tons per control period from 2009-2014 and 9,596 pe r control period star ting with the 2015 control period. These budgets are as listed in 40 CFR 51.123(q)(2 ) (11,515 tons in 2009- 2014 and 9,596 tons in 2015 and thereafter); en suring that the Arkansas allocation methodology will not allocate more allowances than the state NO X ozone season budget,

consistent with 40 CFR 51.123.

Allowance Allocation Timing Requirements

Section 19.1403 establishe s the dates by which the ADEQ must submit NO X ozone season allocations to EPA for recordati on in CAIR complianc e accounts. Section 19.1403 is divided further based on operating hi story; 19.1403(A) provides the allowance allocation timing for the EGUs with a baseline gross electric generation as defined in 19.1404(A), and 19.1403(B) provides the allowance allocation timing for the EGUs without a baseline gross electr ic generation. No later than April 30, 2007, the ADEQ will

determine and submit to the EPA the CAIR NO X ozone season allowances for the control periods 2009, 2010, and 2011, for EGUs with a baseline gross electric generation. Additionally for the EGUs with a baseline gross electric generation, the ADEQ will

determine and submit to the EPA the CAIR NO X ozone season allowances by October 31, 2008, for the year 2012, and by October 31 of each year thereafter for the 4 th year after the notification deadline. For EGUs w ithout a baseline gross el ectric generation, the ADEQ will determine and submit to EPA the NO X ozone season allowance allocations by July 31 of the year for which the allowances are allocated.

Determining Baseline Gross Electric Generation

Baseline gross electric generation is dete rmined in accordance with section 19.1404(A) for CAIR units that have operated each cale ndar year during a period of five or more calendar years. The baseline gross electric ge neration is the average of the three highest

amounts of a CAIR unit’s cont rol period gross electrical output over the five years immediately preceding the year in which alloca tions are due to EPA. If a generator is served by two or more units, the gross electrical output of the generator will be apportioned to each unit based on the unit’s share of the total control period heat input for that year.

The ADEQ submitted a letter to the EPA date d June 7, 2007, to further explain section 19.1404(A). Once a unit has operated for five or more calendar years before the

allocation submittal deadline and had a calculabl e baseline gross electric generation, the

unit cannot be considered a non-baseline unit in the future . For example, if a unit operated from 2000-2006, the unit would have a calculable baseline gross electric9 generation used for the 2007, 2008, and 2009 c ontrol period allocations. If the unit shutdown or suspended operations for 2007 a nd started operating ag ain in 2008, the unit

would still be considered a baseline unit. The year 2007 would have zero electric output

recorded in the baseline calculation.

The ADEQ revised Section 19.1404(A) to co rrect the unit abbreviation used in determining the baseline gross el ectric generation. The rule has been revised to correctly use MWh rather than MW, as was initially adopted.

Allowance Allocation Methodology for Units with Baseline Gross Electric Generation

Section 19.1404(c) establishes the allocation methodology for CAIR units with a baseline gross electric generation as calculated pursuant to secti on 19.1404(A). For each control period, the ADEQ will allocate to all units wi th a calculable baseline a total amount of allowances equal to 95% of the total oz one season budget established in 19.1402. These

units will receive allowances proportional to their share of th e total baseline gross electric generation for all such units; i.e., the ratio of the unit’s baseline gross electric generation to the total baseline gross electric generation multiplied by the total amount of allowances allocated each control period to units with baseline data.

Allowance Allocation Methodology for Units without Baseline Gross Electric Generation

Section 19.1404(D) establishe s the allocation methodology fo r CAIR units without a calculable baseline. For these units, the ADEQ will establish a new unit set-aside for each control period equal to 5% of the tota l ozone season budget in section 19.1402.

Starting with the later of the 2009 control pe riod or the first control period after the control period in which the CAIR unit comm ences commercial operation, the DesignatedRepresentative for the non-baseline units may submit a request to the ADEQ for the setaside allowances. This request must be submitted to the ADEQ no later than January 1 st of the first control period in which the ne w unit set-aside allowances are requested and

after the date in which the new unit comme nces commercial operation. The request for allowances may not exceed the unit’s total tons of NO X emissions during the previous control period.

On or after February 1 st of each control period, the ADEQ will determine the total amount of new unit set-aside allowances requ ested. If the total amount of allowances requested is less than the to tal new unit set-aside pool (5% of the overall State budget) the ADEQ will allocate the new unit set-aside allowa nces as requested to each unit. If the total amount of requested allowances is greate r than the total new unit set-aside pool, the ADEQ will determine the allocations by multip lying the ratio of each unit’s requested

number of allowances to the total amount of requested allowances by the new unit setaside amount. The ADEQ will then notify each unit’s Designated Representative of the

amount of new unit set-aside a llowances the unit will receive.

If there are allowances remaining in the ne w unit set-aside after the non-baseline units10 receive their allocations, the ADEQ will alloca te these remaining allowances to units with calculable baseline gr oss electric generation. The ADEQ will multiply the remaining number of allowances by the ratio of the baseline unit’s allocation for that control period to the total amount of allowanc es allocated to the baseline units (95% of the overall State budget in section 19.1402).

Comments Received on the State Submittal

ADEQ conducted a public hearing on June 26, 2008, for the proposed revisions to Regulation 19 that updated the CAIR NO X Ozone Season Trading Program incorporation by reference date and corrected a unit abbr eviation. During the public comment period, the ADEQ received supportive comments from EPA Region 6.

The SIP revision submitted for review in cluded a copy of each comment received and ADEQ’s analysis and response to each commen t. Additionally, the SIP submittal clearly

identified where revisions were made as a result of comments received.11 IV. Technical Review

This technical review of the September 16, 2009 Arkansas CAIR NO X Ozone Season Trading Program SIP revision consists of a comparison between the relevant CAA requirements and the corresponding sections in the SIP submittal. The submittal is first reviewed for completeness as a SIP submittal under Part 51, Appendix V. Second, the CAIR revisions are reviewed using the SIP requirements for CAIR specific requirements and for CAIR trading program specific requi rements. Finally, a section-by-section review of the submittal in comparison to 40 CFR Part 51 is presented to determine whether the submittal satisfies the requirem ents for preparation, adoption, and submittal of a SIP revision. These analyses produce a written evaluation that was used to make a

determination of whether or not the Arkansas CAIR NO X Ozone Season Trading Program SIP submittal was in agreement with the CAA and other EPA policies or guidance.

A. Part 51, Appendix V Completeness Determination for the September 16, 2009,

Arkansas SIP Revision

B. Evaluation of the September 16, 2009 Revisi ons with respect to the Arkansas SIP

C. Evaluation of the Arkansas CAIR NO X Ozone Season Trading Program SIP Revision with respect to Secti on 110(l) of the Clean Air Act12 A. Part 51, Appendix V Completeness Determination for the September 16, 2009, Arkansas SIP Revision

The criteria for completeness determination are found in Appendix V to Part 51 - Criteria for determining the completeness of plan submissions and ar e outlined below:

1.0 Purpose: This appendix V sets forth th e minimum criteria for determining whether a State implementation plan submitted for consideration by EPA is an official submission for purposes of review under § 51.103.

1.1 The EPA shall return to the submitting offi cial any plan or revision thereof which

fails to meet the criteria set forth in this appendix V, and request corrective action, identifying the component(s) absent or in sufficient to perform a review of the submitted plan.

1.2 The EPA shall inform the submitting offici al whether or not a plan submission meets the requirements of this appendix V within 60 days of EPA's receipt of the submittal, but no later than 6 months after the date which the State was required to submit the plan or revision. If a comple teness determination is not made by 6 months from receipt of a submittal, the submittal shall be deemed complete by operation of law on the date 6 months from receipt. A determination of completeness under this paragraph means that the submission is an official submission for purposes of §51.103.

The attached checklist outlines the basi c criteria included under 2.1, 2.2, and 2.3 of Appendix V.13 SIP Completeness Checklist for the September 16, 2009, Arkansas

SIP Revision

When preparing a SIP revision request, the SIP reviewer should go through this list to help identify that the package submitted to EPA is complete. States can use the check list to assure SIP submittals meet Appendix V criteria.

Administrative Materials (2.1)

1. The package is sent with a formal submitta l letter from the Governor or his or her designee requesting EPA's approval of the revision.

The Arkansas CAIR NO X Ozone Season Trading Program SIP revision was submitted by Governor Mike Beebe on September 16, 2009.

2. Evidence is included that the State has a dopted the revision in the State code or body of regulations, or that the State ha s issued the permit, order, consent agreement (hereafter document) in final fo rm. This evidence would include the date of adoption or final i ssuance and the effective date of revision, if different from adoption/issuance date.

The revisions to Regulation Number 19, Re gulations of the Arkansas Plan of Implementation for Air Pollution Contro l, were adopted by the Arkansas Pollution Control and Ecology Commission on December 5, 2008 and June 26, 2009, and became effective on January 15, 2009 and July 18, 2009, respectively.

3. Evidence is included that the State has necessary legal authority under State law to adopt and implement the revision, e .g., a citation of the appropriate State authority.

The authority for promulgating changes to the Arkansas St ate Implementation Plan, Regulation Number 19 is found in th e Arkansas Code Annotated (A.C.A.) §8-1-203(b)(1).

4. A copy is included of th e actual regulation or docum ent submitted for approval and incorporation by reference into the SI P including an indication of the changes made to the existing approved plan wher e applicable. The submittal shall be a copy of the official State regulation document signed, stamped, and dated by the appropriate State official i ndicating that it is fully enforceable by the State. The effective date of the regulation document shall, whenever possible, be indicated in

the document itself.

The SIP submittal included a copy of the actual revisions to Regulation 19. The SIP submittal also included a copy of the Arkansas Register Transmittal Sheet that demonstrates ADEQ submitted the adopted revisions to Regulation 19 for publication in the Arkansas Register.14 5. Evidence is included that the State followe d all the procedural requirements of its

laws and/or its constitution in the conducting and completing the adoption/issuance of the plan.

The SIP submittal included a demonstration by Mike Bates, Air Director of the ADEQ, that the ADEQ followed all the procedural requireme nts of its laws and/or its constitution in the conducting and completing the adoption/issuance of the plan. Additionally, Michael O’Mally, the Administrative Hearing Officer of the Arkansas Pollution Control and Ecology Commission, certified that the rules were adopted in compliance with Act 434 of 1967 as amended.

6. Evidence is included that public noti ce was given of the proposed changes consistent with the procedures approved by EPA, including the date of publication of such notice, (e.g., notarize d or certified copies of any public notices published in newspapers). (The notice should be at least 30 days prior to the public hearing(s).

Notice of public comment period and he aring for the SIP revision was published on May 26 and 27, 2008, in the Arkansas Democr at Gazette. A copy of the notice published in the Arkansas Democrat Gazette was provided as an example.

7. A certification is included indicating that public hearin g(s) was/were held in accordance with the information provided in the public notice(s) and the State's laws and constitution, if applicable.

William Thompson, Chairman of the Ar kansas Pollution Control and Ecology Commission, certified that the revisions to Regulation 19 were adopted pursuant to public notice and hearing, and in consid eration of public comments received. The State’s legal authority to adopt and impl ement revisions to the SIP is found in the Arkansas Code Annotated (A.C.A.) §8-1-203(b)(1).

8. A compilation of public comments and the State's response is included.

During the public comment period, the ADEQ received comments from EPA Region 6. The SIP submittal included a copy of all public comments and the State’s responsiveness summary.15 Technical Support (2.2)

The State should include the following techni cal information in its SIP revision request package.

1. Identification of all regu lated pollutants affected by the revision is included.

This submittal incorporates by reference the Federal CAIR NO X

ozone season trading program, with the exception of the Federal allowance allocation provisions. This SIP revision also est ablishes the Arkansas allowance allocation methodology to be used in place of the Federal methodology in the CAIR NO X Ozone Season Trading Program.

2. Identification of the locations of affected sources including the EPA

attainment/nonattainment de signation of the locations and the status of the attainment plan for the aff ected area(s) is included.

CAIR subject sources are located throughout the State of Arkansas. Participation in CAIR is not contingent upon an area’s attainment or nonattainment designation.

3. Quantification of the changes in SIP allowable emissions from the affected sources is included. (Examples include estimates of changes in current actual

emissions from affected sources and/or , where appropriate, quantification of changes in actual emissions from affect ed sources through calculations of the

differences between certain baseline levels and allowable emissions anticipated if the revisions were approved.)

The September 16, 2009 AR CAIR NO X

Ozone Season Trading Program SIP

revision does not revise the SIP- approved Section 19.1402. Section 19.1402

establishes that the statewide NO X

ozone season emission budgets will be equivalent to the tons of NO X emissions listed for Arkansas in the State ozone season trading budgets under 40 CFR 51.123 and 96.340. EPA’s technical support for CAIR provided the estimated change in actual NO X emissions from the affected sources.

4. Demonstration is included that the NAAQS/PSD increments/RFP demonstration and visibility as applicable would be pr otected if the revision were approved and implemented.

EPA provided demonstration in the Ma y 12, 2005, final CAIR that the cap and trade mechanisms would provide for a d ecrease in emission levels on a national level (70 FR 25195 and its accompanying technical support).16 5. FOR REDESIGNATIONS:

a. Is there a fully approved maintena nce plan for the primary ambient air quality standards for at least 10 years as requir ed by §175A of the Clean

Air Act?

Not applicable.

b. Are contingency measures included?

Not applicable.

7. Modeling information, if app licable, is required to s upport the proposed revision.

EPA provided modeling information in the development and proposal of the CAIR programs; this modeling supported the incl usion of the State of Arkansas in

CAIR.

7. Evidence is included where necessary, that emission limitations are based on

continuous emission reduction t echnology (e.g., add-on controls, industrial/process equipment designs, reformulated materials, etc.).

Evidence of emission limitations based on CEM technology is not applicable. However, since Arkansas has incorporat ed by reference the Federal CAIR NO X Ozone Season Trading Program monitori ng and reporting requirements at 40 CFR part 96, subpart HHHH, the CAIR sources in Arkansas must comply with the requirements in 40 CFR part 75.

8. Evidence is included indicating that a SI P revision contains emission limitations, work practice standards, and recordk eeping/reporting requirements to ensure

stated emission levels.

The State’s rules are clear about what enti ties are affected, the dates by which the ADEQ must submit the NO X

ozone season allocations to EPA, and the methods the ADEQ will use in calculating th e allocations. The methodology for calculating an affected entity’s NO X ozone season allowances is replicable because the methodology relies on the gr oss electric generation and emissions determined from monitoring and recordkeep ing requirements in 40 CFR part 75.

9. Compliance/enforcement strategies including how compliance will be determined in practice (including at what frequency).

Determination of compliance is specified on case-by-case basis in each individual permit. Each individual permit holder is required to hold allo wances at the end of the control period that total the amount of NO X

ozone season tons emitted during the control period.17 10. As appropriate, special economic and tec hnological jus tifications are included per applicable EPA policies or an explana tion why such justifications are not necessary should be included. For exampl e, requests for alternative RACT may require such justification.

These justifications are not applicable fo r this CAIR SIP revision. EPA provided economic and technical analyses in the development of the CAIR FIP programs.

Exceptions (2.3)

The EPA, for purposes of expediting the revi ew of the plan, has adopted a procedure referred to as “parallel proces sing.” Parallel processing allo ws a State to submit the plan prior to actual adoption by the State and provides an opportunity for the State to consider EPA comments prior to submission of a final plan for final review and action.

Governor Beebe did not request parallel processi ng of this SIP revisi on. Therefore, this exception does not apply to the Arkansas CAIR NO X Ozone Season Trading Program SIP

revision.

The September 16, 2009 SIP Submittal revising the Arkansas CAIR NO X Ozone Season Trading Program meets the comple teness criteria at Part 51, Appendix V,

Sections 2.1 – 2.3.18 B. Evaluation of the September 16, 2009, Submittal with respect to the

Arkansas SIP

Arkansas is subject to the requirements of 40 CFR 51.123(q) – (cc). Arkansas chose to adopt a CAIR SIP revision that inco rporated by reference the CAIR NO X Ozone Season Trading Program at 40 CFR Part 96, Subpa rts AAAA – HHHH; with the exception of EEEE, which the ADEQ replaced with a st ate-specific allocation methodology in the Arkansas SIP. EPA approved the Arkansas CAIR NO X Ozone Season SIP on September 26, 2007, as fully implementing the requirements of the CAIR NO X Ozone Season Program by requiring certain EGUs to partic ipate in the EPA-administered CAIR capand-trade program for NO X ozone season emissions. See 72 FR 54556. The record for this decision includes EPA’s analys is of how the Arkansas CAIR NO X Ozone Season SIP and allocation methodology satisfy all require d elements of the CAA and CAIR.

The September 16, 2009, SIP revision ame nded the existing SIP-approved CAIR NO X Ozone Season SIP and allocation methodology, but did not replace any of the

fundamental elements of the approved Arkansas CAIR NO X Ozone Season Program. As such, EPA is not going to evaluate the basis for the original approval of the Arkansas

CAIR NO X Ozone Season Program in this TSD. Rather, this review focuses on the changes submitted on September 16, 2009, to the existing Arkansas SIP and whether these changes are consistent with the CAA and EPA’s regulations and guidance pertaining to CAIR.

ADEQ has submitted one revision to the Arkansas CAIR NO X Ozone Season regulations covering two separate rule adoptions:

 ADEQ adopted revisions to Regulation 19, Chapter 14 on December 5, 2008. These revisions were submitted on September 16, 2009.

 ADEQ also adopted revisions t Regula tion 19, Chapter 14 on June 26, 2009 and submitted these revisions on September 16, 2009.

The following table provides a line item ev aluation of each of the submitted revisions against the SIP-approved Arkansas CAIR NO X Ozone Season Program.19Table 1: Analysis of Revisions to the AR CAIR NOXOzone Season ProgramSIP Approved 9/26/2007 at 72 FR 54556As adopted by ADEQ on June 22, 2007Adopted on December 5, 2008Submitted on September 16, 2009Adopted on June 26, 2009Submitted on September 16, 2009Reg. 19.1401 Adoption of Regulations40 CFR Part 96, Subparts AAAA-HHHH for theCAR NO, Ozone Season Trading Program, asfinalized by the U.S. Environmental ProtectionAgency (EPA) on May 12, 2005, and furtherrevised by EPA on April 28, 2006, with correctingamendments on December 13, 2006, are hereinincorporated by reference with the exception ofSubpart EEEE (CAIR NOx Ozone SeasonAllowance Allocations) and all references to CARNO, Ozone Season Opt-in Units, which, alongwith Subpart 1111 (CAR NOx Ozone Season Optin Units), are not incorporated. The followingregulations replace 40 CFR 96 Subpart EEEE.No change 40 CFR Part 96, Subparts AAAA-HHHH for theCAIR NO, Ozone Season Trading Program, asfinalized by the U.S. Environmental ProtectionAgency (EPA) on May 12, 2005, and furtherrevised by EPA on April 28, 2006, with correctingamendments on December 13, 2006, and onOctober 19,2007, are herein incorporated byreference with the exception of Subpart EEEE(CAIR NOx Ozone Season AllowanceAllocations) and all references to CAIR NOxOzoneSeason Opt-in Units, which, along with Subpart1111 (CAIR NO, Ozone Season Opt-in Units), arenot incorporated. The following regulationsreplace 40 CFR 96 Subpart EEEE.This revision is approvable. Updates IBR date tomost recent federal changes to addresscogeneration revisions.Reg. 19.1402 State Trading BudgetThe Arkansas State trading budgets for annualallocations for CAIR NOx Ozone Seasonallowances have been set by EPA as follows: forthe control periods of 2009 through 2014, 11,515tons per control period; and for the control periodsfor 2015 and beyond, 9,596 tons per controlperiod. The total number of allowances allocatedby the State of Arkansas shall not exceed thesebudgets for their respective control periods.No change No changeReg. 19.1403 Timing Requirements for CAIRNOx Ozone Season Allowance Allocations(A).For EGUs allocated allowances under Reg.19.1404(B) and (C), the Department willNo change No change20SIP Approved 9/26/2007 at 72 FR 54556As adopted by ADEQ on June 22, 2007Adopted on December 5, 2008Submitted on September 16, 2009Adopted on June 26, 2009Submitted on September 16, 2009determine and notify the Administrator ofeach unit's allocation of CAR NO, OzoneSeason allowances byApril 30,2007, for2009,2010, and 201 1 and by October31,2008, and October 3 1 of each yearthereafter for the 4th year after the notificationdeadline.(B).For EGUs allocated allowances under Reg.19.1404(D), the Department will determineand notify the Administrator of each unit'sallocation of CAIR NOx Ozone Seasonallowances by July 3 1 of the year for whichthe CAR NO, Ozone Season allowances areallocated.No change No changeReg. 19.1404 CAIR NOx Ozone Season Allowance Allocations(A).The baseline gross electric generation (inMW) used with respect to CAIR NOx OzoneSeason allowance allocations under paragraph(B) of this section for each CAIR NOXOzoneSeason unit that has operated each calendaryear during a period of 5 or more consecutivecalendar years, the average of the 3 highestamounts of the unit's control period grosselectrical output over the 5 years immediatelypreceding the year in which allocations aredue to EPA, provided that gross electricaloutput of a generator served by two or moreunits will be attributed to each unit inproportion to each unit's share of the totalcontrol period heat input of such units for theyear. For the allocations allocated for 2009,2010, 2011, baseline data will be determinedusing gross electrical output for years 2000through 2004.(A).The baseline gross electric generation (inMW) used with respect to CAIR NOx OzoneSeason allowance allocations under Reg.19.1404(B) paragraph (B) of this section foreach CAIR NOx Ozone Season unit that hasoperated each calendar year during a periodof 5 or more consecutive calendar years, theaverage of the 3 highest amounts of the unit’scontrol period gross electrical output over the5 years immediately preceding the year inwhich allocations are due to EPA, providedthat gross electrical output of a generatorserved by two or more units will be attributedto each unit in proportion to each unit’s shareof the total control period heat input of suchunits for the year. For the allocationsallocated for 2009, 2010, 2011, baseline datawill be determined using gross electricaloutput for years 2000 through 2004.(A).The baseline gross electric generation (inMWh) used with respect to CAIR NOxOzone Season allowance allocations underReg. 19.1404(B) paragraph (B) of this sectionfor each CAIR NOx Ozone Season unit thathas operated each calendar year during aperiod of 5 or more consecutive calendaryears, the average of the 3 highest amounts ofthe unit’s control period gross electricaloutput over the 5 years immediatelypreceding the year in which allocations aredue to EPA, provided that gross electricaloutput of a generator served by two or moreunits will be attributed to each unit inproportion to each unit’s share of the totalcontrol period heat input of such units for theyear. For the allocations allocated for 2009,2010, 2011, baseline data will be determined21SIP Approved 9/26/2007 at 72 FR 54556As adopted by ADEQ on June 22, 2007Adopted on December 5, 2008Submitted on September 16, 2009Adopted on June 26, 2009Submitted on September 16, 2009This revision is non-substantive correction forformatting. Revision is approvable.using gross electrical output for years 2000through 2004.This revision is non-substantive correction forformatting. Revision is approvable.(B).With regard to the timing requirementscontained in Reg. 19.1403, for each controlperiod in 2009 and thereafter, the Departmentwill allocate to all CAIR NOx Ozone Seasonunits in the State that have baseline grosselectric generation (as determined underparagraph (A) of this section) a total amountof CAIR NOXOzone Season allowances equalto 95 percent for a control period, of the tonsof NOx emissions in the State trading budgetunder Reg. 19.1402 (except as provided inparagraph (E) of this section).(B).With regard to the timing requirementscontained in Reg. 19.1403, for each controlperiod in 2009 and thereafter, the Departmentwill allocate to all CAIR NOx Ozone Seasonunits in the State that have baseline grosselectric generation (as determined under Reg.19.1404(A) paragraph (A) of this section) atotal amount of CAIR Nox Ozone Seasonallowances equal to 95 percent for a controlperiod, of the tons of Nox emissions in theState trading budget under Reg. 19.1402(except as provided in Reg. 19.1404 (E)paragraph (E) of this section).This revision is non-substantive correction forformatting. Revision is approvable.No further changes(C).The Department will allocate CAIR NOXOzone Season allowances to each CAIR NOXOzone Season unit under paragraph (B) of thissection in an amount determined bymultiplying the total amount of CAIR NOxOzone Season allowances allocated underparagraph (B) of this section by the ratio ofthe baseline gross electric generation of suchCAIR NOx Ozone Season unit to the totalamount of baseline gross electric generationof all such CAIR NO, Ozone Season units inthe State and roundingto the nearest wholeallowances as appropriate.(C).The Department will allocate CAIR NOxOzone Season allowances to each CAIR NoxOzone Season unit under Reg. 19.1404(B)paragraph (B) of this section in an amountdetermined by multiplying the total amountof CAIR NOx Ozone Season allowancesallocated under paragraph (B) of this sectionby the ratio of the baseline gross electricgeneration of such CAIR NOx Ozone Seasonunit to the total amount of baseline grosselectric generation of all such CAIR NOxOzone Season units in the State and roundingNo further changes22SIP Approved 9/26/2007 at 72 FR 54556As adopted by ADEQ on June 22, 2007Adopted on December 5, 2008Submitted on September 16, 2009Adopted on June 26, 2009Submitted on September 16, 2009to the nearest whole allowances asappropriate.This revision is non-substantive correction forformatting. Revision is approvable.(D).For each control period in 2009 and thereafter,the Department will allocate CAIR NOXOzone Season allowances to CAIR NOxOzone Season units in the State that do not yethave a baseline gross electric generation (asdetermined under paragraph (A) of thissection), in accordance with the followingprocedures:(D).For each control period in 2009 andthereafter, the Department will allocate CAIRNox Ozone Season allowances to CAIR NOxOzone Season units inthe State that do notyet have a baseline gross electric generation(as determined under Reg. 19.1404(A)paragraph (A) of this section), in accordancewith the following procedures:This revision is non-substantive correction forformatting. Revision is approvable.No further changes1.The Department will establish a separatenew unit set-aside foreach control period.Each new unit set-aside will be allocatedCAIR NOx Ozone Season allowancesequal to 5 percent of the amount of tonsof NOx emissions in the State tradingbudget under Reg. 19.1402.No changes No changes2.The CAIR designated representative ofsuch a CAIR NOXOzone Season unitmay submit to the Department a request,in a format specifiedby the Department,to be allocated CAIR NOXOzone Seasonallowances, starting with the later of thecontrol period in 2009 or the first controlperiod after the control period in whichthe CAIR NOx Ozone Season unitcommences commercial operation anduntil the first control period for the whichthe unit is allocated CAIR NOXOzoneSeason allowances under paragraph (B)2.The CAIR designated representative ofsuch a CAIR NOx Ozone Season unitmay submit to the Department a request,in a format specifiedby the Department,to be allocated CAIR NOx Ozone Seasonallowances, starting with the later of thecontrol period in 2009 or the first controlperiod after the control period in whichthe CAIR NOx Ozone Season unitcommences commercial operation anduntil the first control period for the whichthe unit is allocated CAIR NOx OzoneSeason allowances under Reg.No further changes23SIP Approved 9/26/2007 at 72 FR 54556As adopted by ADEQ on June 22, 2007Adopted on December 5, 2008Submitted on September 16, 2009Adopted on June 26, 2009Submitted on September 16, 2009of this section. The CAIR NOXOzoneSeason allowance allocation request mustbe submitted on or before January 1 ofthe first control period for which theCAIR NOXOzone Season allowances arerequested and after the date on which theCAIR NOXOzone Season unitcommences commercial operation.19.1404(B) paragraph (B) of this section.The CAIR Nox Ozone Season allowanceallocation request must be submitted onor before January 1 of the first controlperiod for which the CAIR NOx OzoneSeason allowances are requested and afterthe date on which the CAIR NOx OzoneSeason unit commences commercialoperation.This revision is non-substantive correction forformatting. Revision is approvable.3.In a CAIR NOx Ozone Season allowanceallocation request under paragraph (D)(2)of this section, the CAIR designatedrepresentative may request for a controlperiod CAIR NOx Ozone Seasonallowances in an amount not exceedingthe CAIR NOx Ozone Season unit's totaltons of NOx emissions during the controlperiod immediately before such controlperiod.3.In a CAIR NOx Ozone Season allowanceallocation request under Reg.19.1404(D)(2) paragraph (D)(2) of thissection, the CAIR designatedrepresentative may request for a controlperiod CAIR NOx Ozone Seasonallowances in an amount not exceedingthe CAIR NOx Ozone Season unit’s totaltons of NOx emissions during the controlperiod immediately before such controlperiod.This revision is non-substantive correction forformatting. Revision is approvable.No further changes4.The Department will review each CAIRNOx Ozone Season allowance allocationrequest under paragraph (D)(2) of thissection and will allocate CAIR NOxOzone Season allowances for eachcontrol period pursuant to such request asfollows:4.The Department will review each CAIRNOx Ozone Season allowance allocationrequest under Reg. 19.1404(D)(2)paragraph (D)(2) of this section and willallocate CAIR NOx Ozone Seasonallowances for each control periodpursuant to such request as follows:This revision is non-substantive correction forformatting. Revision is approvable.No further changes24SIP Approved 9/26/2007 at 72 FR 54556As adopted by ADEQ on June 22, 2007Adopted on December 5, 2008Submitted on September 16, 2009Adopted on June 26, 2009Submitted on September 16, 2009a)The Department will accept an allowanceallocation request only if the requestmeets, or is adjustedby the Departmentas necessary to meet, the requirements ofparagraphs (D)(2) and (3) of this section.a)The Department will accept an allowanceallocation request only if the requestmeets, or is adjustedby the Departmentas necessary to meet, the requirements ofReg. 19.1404(D)(2) and (3) paragraphs(D)(2) and (3) of this section.This revision is non-substantive correction forformatting. Revision is approvable.No further changesb)On or after February 1 of the controlperiod, the Department will determine thesum of the CAIR NOXOzone Seasonallowances requested (as adjusted underparagraph (D)(4)(a) of this section) forthe control period.b)On or after February 1 of the controlperiod, the Department will determine thesum of the CAIR NOx Ozone Seasonallowances requested (as adjusted underReg. 19.1404(D)(4)(a) paragraph(D)(4)(a) of this section) for the controlperiod.This revision is non-substantive correction forformatting. Revision is approvable.No further changesc)If the amount of CAIR NOx OzoneSeason allowances in the new unitsetaside for the control period is greaterthan or equal to the sum under paragraph(D)(4)(b) of this section, then theDepartment will allocate the amount ofCAIR NOXOzone Season allowancesrequested (as adjusted under paragraph(D)(4)(a) of this section) to each CAIRNOx Ozone Season unit covered byparagraph (D)(4)(a) of this section.c)If the amount of CAIR NOx OzoneSeason allowances in the new unitsetaside for the control period is greaterthan or equal to the sum under Reg.19.1404 paragraph (D)(4)(b) of thissection, then the Department will allocatethe amount of CAIR NOx Ozone Seasonallowances requested (as adjusted underReg. 19.1404 paragraph (D)(4)(a) of thissection) to each CAIR NOx OzoneSeason unit covered by Reg. 19.1404paragraph (D)(4)(a) of this section.This revision is non-substantive correction forformatting. Revision is approvable.No further changesd)If the amount of CAIR NOx OzoneSeason allowances in the new unitsetaside for the control period is less thand)If the amount of CAIR NOx OzoneSeason allowances in the new unitsetaside for the control period is less thanNo further changes25SIP Approved 9/26/2007 at 72 FR 54556As adopted by ADEQ on June 22, 2007Adopted on December 5, 2008Submitted on September 16, 2009Adopted on June 26, 2009Submitted on September 16, 2009the sum under paragraph (D)(4)(b) of thissection, then the Department will allocateto each CAIR NOXOzone Season unitcovered by an allowance allocationrequest accepted under paragraph(D)(4)(a) of this section the amount of theCAIR NOXOzone Season allowancesrequested (as adjusted under paragraph(D)(4)(a) of this section), multiplied bythe amount of CAIR NOx Ozone Seasonallowances in the new unit set-aside forthe control period, divided by the sumdetermined under paragraph (D)(4)(b) ofthis section, and rounded to the nearestwhole allowance as appropriate.the sum under Reg. 19.1404 paragraph(D)(4)(b) of this section, then theDepartment will allocate to each CAIRNOx Ozone Season unit covered by anallowance allocation request acceptedunder Reg. 19.1404 paragraph (D)(4)(a)of this section the amount of the CAIRNOx Ozone Season allowances requested(as adjusted under Reg. 19.1404paragraph (D)(4)(a) of this section),multiplied by the amount of CAIR NOxOzone Season allowances in the new unitset-aside for the control period, dividedby the sum determined under Reg.19.1404 paragraph (D)(4)(b) of thissection, and rounded to the nearest wholeallowance as appropriate.This revision is non-substantive correction forformatting. Revision is approvable.e)The Department will notify each CAIRdesignated representative that submittedan allowance allocation request of theamount of CAIR NOXOzone Seasonallowances (if any) allocated for thecontrol period to the CAIR NOx OzoneSeason unit covered by the request.No changes No changes(E).If, after completion of the procedures underparagraphs (D)(4) of this section for acontrol period, any unallocated CAIR NOxOzone Season allowances remain in thenew unit set-aside for the control period, theDepartment will allocate to each CAIR NOXOzone Season unit that was allocated CAIR(E).If, after completion of the proceduresunder Reg. 19.1404 paragraphs (D)(4) ofthis section for a control period, anyunallocated CAIR NOx Ozone Seasonallowances remain in the new unit setaside for the control period, theDepartment will allocate to each CAIRNo further changes26SIP Approved 9/26/2007 at 72 FR 54556As adopted by ADEQ on June 22, 2007Adopted on December 5, 2008Submitted on September 16, 2009Adopted on June 26, 2009Submitted on September 16, 2009NOXOzone Season allowances underparagraph (B) of this section an amount ofCAIR NOXOzone Season allowances equalto the total amount of such remainingunallocated CAIR NOXOzone Seasonallowances, multiplied by the unit'sallocation under paragraph (B) of thissection, divided by 95 percent of theamount of tons of NOXemissions in theState trading budget under Reg. 19.1402,and rounded to the nearest whole allowanceas appropriate.NOx Ozone Season unit that wasallocated CAIR NOx Ozone Seasonallowances under Reg. 19.1404 paragraph(B) of this section an amount of CAIRNox Ozone Season allowances equal tothe total amount of such remainingunallocatedCAIR NOx Ozone Season allowances,multiplied by the unit’s allocation underReg. 19.1404(B) paragraph (B) of thissection, divided by 95 percent of theamount of tons of NOx emissions in theState trading budget under Reg. 19.1402,and rounded to the nearest wholeallowance as appropriate.This revision is non-substantivecorrection for formatting. Revision isapprovable.Table 1 above demonstrates thatthe revisions to the AR CAIR NOXozone season program at Regulation 19, Chapter 14 adopted onDecember 5, 2008, and June 26, 2009 and submitted on September 16, 2009 are approvable. These revisions substantively update theIBR date to reflect the most current federal revisions to the CAIR NOXozone season program. There are also numerous nonsubstantive revisions to correct for formatting.27 C. Evaluation of the Arkansas CAIR NO X Ozone Season Trading Program SIP Revision with respect to Section 110(l) of the Clean Air Act

Section 110(l) of th e CAA states:

Each revision to an implementation plan s ubmitted by a State under this Act shall be adopted by such State after re asonable notice and public hearing. The Administrator shall not approve a revi sion of a plan if the revision would interfere with any applicable requirem ent concerning attainment and reasonable further progress (as defined in section 171 ), or any other applicable requirement of this Act.

EPA approved the Arkansas CAIR NO X Ozone Season Trading Program as part of the Arkansas SIP on September 26, 2007. The Sept ember 16, 2009, revisions to the Arkansas SIP amend the existing SIP-approved CAIR program. EPA developed the CAIR in an effort to reduce the transport of SO 2 and NO X emissions that cont ribute significantly to

nonattainment of the 8-hour ozone and PM 2.5 NAAQS. During the development process, EPA demonstrated through mode ling the projected ozone and PM 2.5 nonattainment areas

in 2010, 2015, and 2020, that CAIR w ill not interfere with attain ment of the standards; rather this modeling demonstrated that CAIR in concert with other Federally approved control measures will actually br ing existing areas of ozone and PM 2.5 nonattainment into

attainment with the ozone and PM 2.5 NAAQS. 2 Additionally, source s subject to CAIR are still bound by their permit conditions under New Source Review and Title V. These sources can participate in the cap-and-trade aspects of the CAIR but cannot exceed their permit limits for NO X . The Arkansas New Source Review and Title V permitting programs are designed such that the issuance of a permit will not interfere with existing SIP requirements or with the attainment of a NAAQS. As long as the adopted rules are consistent with the SIP development requi rements at 40 CFR Part 51 and the specific CAIR program requirements, then EPA finds that the program will not interfere with

attainment or reasonable furthe r progress or any other applicable requirement of the Act.

2 Please see EPA’s analysis titled “Contributions of CAIR/CAMR/CAVR to NAAQS Attainment: Focus on Control Technologies and Emission Reductions in the Power Sector” prepared by the Office of Air and Radiation on April 18, 2006.28 V. Conclusion

This technical support document has evaluate d the revisions to the Arkansas CAIR NO X Ozone Season trading program adopted on December 5, 2008 and July 26, 2009 and submitted as a revision to the Arkansas SIP on September 16, 2009. EPA’s evaluation demonstrates that the ADEQ has appropriate ly updated the IBR date to reflect EPA’s most recent revisions to the CAIR applicab ility. EPA also evaluated numerous formatting and typographical revisions and found those to improve clarity and readability of the SIP.

It is recommended that EPA propose a pproval of the September 16, 2009 revision.

Because these are noncontroversial revisions EP A should consider a direct final approval.