[Federal Register Volume 82, Number 157 (Wednesday, August 16, 2017)]
[Proposed Rules]
[Pages 38866-38874]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-17227]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R04-OAR-2017-0452; FRL-9966-43-Region 4]


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

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: The Environmental Protection Agency (EPA) is proposing to 
approve portions of a revision to the Georgia State Implementation Plan 
(SIP) concerning the Cross-State Air Pollution Rule (CSAPR) and the 
Clean Air Interstate Rule (CAIR) that was submitted by Georgia on July 
26, 2017. Under CSAPR, large electricity generating units (EGUs) in 
Georgia are subject to Federal Implementation Plans (FIPs) requiring 
the units to participate in CSAPR's federal trading program for annual 
emissions of nitrogen oxides (NO<INF>X</INF>), one of CSAPR's two 
federal trading programs for annual emissions of sulfur dioxide 
(SO<INF>2</INF>), and one of CSAPR's two federal trading programs for 
ozone season emissions of NO<INF>X</INF>. This action would approve the 
State's regulations requiring large Georgia EGUs to participate in new 
CSAPR state trading programs for annual NO<INF>X</INF>, annual 
SO<INF>2</INF>, and ozone season NO<INF>X</INF> emissions integrated 
with the CSAPR federal trading programs, replacing the corresponding 
FIP requirements. EPA is proposing to approve the portions of the SIP 
revision concerning these CSAPR state trading programs because these 
portions of the SIP revision meet the requirements of the Clean Air Act 
(CAA or Act) and EPA's regulations for approval of a CSAPR full SIP 
revision replacing the requirements of a CSAPR FIP. Under the CSAPR 
regulations, approval of these portions of the SIP revision would 
automatically eliminate Georgia's units' obligations under the 
corresponding CSAPR FIPs addressing interstate transport requirements 
for the 1997 Annual Fine Particulate Matter (PM<INF>2.5</INF>) National 
Ambient Air Quality Standards (NAAQS), the 2006 24-hour 
PM<INF>2.5</INF> NAAQS, and the 1997 8-hour Ozone NAAQS. Approval of 
these portions of the SIP revision would satisfy Georgia's good 
neighbor obligation for the 1997 Annual PM<INF>2.5</INF> NAAQS, the 
2006 24-hour PM<INF>2.5</INF> NAAQS, and the 1997 8-hour Ozone NAAQS. 
In addition, approval of this revision would remove from Georgia's SIP 
those state trading program rules adopted to comply with CAIR.

DATES: Comments must be received on or before September 15, 2017.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-R04-
OAR-2017-0452 at http://www.regulations.gov. Follow the online 
instructions for submitting comments. Once submitted, comments cannot 
be edited or removed from Regulations.gov. EPA may publish any comment 
received to its public docket. Do not submit electronically any 
information you consider to be Confidential Business Information (CBI) 
or other information whose disclosure is restricted by statute. 
Multimedia submissions (audio, video, etc.) must be accompanied by a 
written comment. The written comment is considered the official comment 
and should include discussion of all points you wish to make. EPA will 
generally not consider comments or comment contents located outside of 
the primary submission (i.e., on the web, cloud, or other file sharing 
system). For additional submission methods, the full EPA public comment 
policy, information about CBI or multimedia submissions, and general 
guidance on making effective comments, please visit http://www2.epa.gov/dockets/commenting-epa-dockets.

FOR FURTHER INFORMATION CONTACT: Ashten Bailey, Air Regulatory 
Management Section, Air, Pesticides and Toxics Management Division, 
U.S. Environmental Protection Agency, Region 4, 61 Forsyth Street SW., 
Atlanta, Georgia 30303-8960. Ms. Bailey can be reached by telephone at 
(404) 562-9164 or via electronic mail at <a href="/cdn-cgi/l/email-protection#0567646c69607c2b64766d71606b456075642b626a73"><span class="__cf_email__" data-cfemail="e18380888d8498cf80928995848fa1849180cf868e97">[email protected]</span></a>.

SUPPLEMENTARY INFORMATION: 

I. Summary

    EPA is proposing to approve the portions of the July 26, 2017, 
revision to the Georgia SIP concerning CSAPR \1\ trading programs for 
annual emissions of NO<INF>X</INF> and SO<INF>2</INF> and ozone season 
emissions of NO<INF>X</INF>. Large EGUs in Georgia are subject to CSAPR 
FIPs that require the units to participate in the federal CSAPR 
NO<INF>X</INF> Annual Trading Program, the federal CSAPR SO<INF>2</INF> 
Group 2 Trading Program, and the federal CSAPR NO<INF>X</INF> Ozone 
Season Group 1 Trading Program. CSAPR also provides a process for the 
submission and approval of SIP revisions to replace the requirements of 
CSAPR FIPs with SIP requirements under which a state's units 
participate in CSAPR state trading programs that are integrated with 
and, with certain permissible exceptions, substantively identical to 
the CSAPR federal trading programs.
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    \1\ Federal Implementation Plans; Interstate Transport of Fine 
Particulate Matter and Ozone and Correction of SIP Approvals, 76 FR 
48208 (August 8, 2011) (codified as amended at 40 CFR 52.38 and 
52.39 and subparts AAAAA through EEEEE of 40 CFR part 97).
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    The portions of the SIP revision proposed for approval would 
incorporate into Georgia's SIP state trading program regulations for 
annual NO<INF>X</INF> and SO<INF>2</INF> and ozone season 
NO<INF>X</INF> emissions that would replace EPA's federal trading 
program regulations for those emissions from Georgia units.\2\ EPA is 
proposing to approve these portions of the SIP revision because they 
meet the requirements of the CAA and EPA's regulations for approval of 
a CSAPR full SIP revision replacing a federal trading program with a 
state trading program that is integrated with and substantively 
identical to the federal trading program. Under the CSAPR regulations, 
approval of these portions of the SIP revision would automatically 
eliminate the obligations of large EGUs in Georgia to participate

[[Page 38867]]

in CSAPR's federal trading programs for annual NO<INF>X</INF>, annual 
SO<INF>2</INF> and ozone season NO<INF>X</INF> emissions under the 
corresponding CSAPR FIPs. EPA proposes to find that approval of these 
portions of the SIP revision would satisfy Georgia's obligation 
pursuant to CAA section 110(a)(2)(D)(i)(I) to prohibit emissions which 
will significantly contribute to nonattainment or interfere with 
maintenance of the 1997 Annual PM<INF>2.5</INF> NAAQS, the 2006 24-hour 
PM<INF>2.5</INF> NAAQS, and the 1997 8-hour Ozone NAAQS in any other 
state.
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    \2\ Under Georgia's regulations, the State will retain EPA's 
default allowance allocation methodology and EPA will remain the 
implementing authority for administration of the trading program. 
See sections IV and V.B.2, below.
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    The Phase 2 SO<INF>2</INF> budget established for Georgia in the 
CSAPR rulemaking has been remanded to EPA for reconsideration.\3\ If 
EPA finalizes approval of the portions of the SIP revision as proposed, 
Georgia will have fulfilled its obligations to provide a SIP that 
addresses the interstate transport provisions of CAA section 
110(a)(2)(D)(i)(I) with respect to the 1997 Annual PM<INF>2.5</INF> 
NAAQS and the 2006 24-hour PM<INF>2.5</INF> NAAQS. Thus, EPA would no 
longer be under an obligation to (nor would EPA have the authority to) 
address those interstate transport requirements through implementation 
of a FIP, and approval of these portions of the SIP revision would 
eliminate Georgia units' obligations to participate in the federal 
CSAPR NO<INF>X</INF> Annual Trading Program and the federal CSAPR 
SO<INF>2</INF> Group 2 Trading Program. Elimination of Georgia units' 
obligations to participate in the federal trading programs would 
include elimination of the federally-established Phase 2 budgets 
capping allocations of CSAPR NO<INF>X</INF> Annual allowances and CSAPR 
SO<INF>2</INF> Group 2 allowances to Georgia units under those federal 
trading programs. As approval of these portions of the SIP revision 
would eliminate Georgia's remanded federally-established Phase 2 
SO<INF>2</INF> budget and eliminate EPA's authority to subject units in 
Georgia to a FIP, it is EPA's opinion that finalization of approval of 
this SIP action would address the judicial remand of Georgia's 
federally-established Phase 2 SO<INF>2</INF> budget.\4\
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    \3\ EME Homer City Generation, L.P. v. EPA (EME Homer City II), 
795 F.3d 118, 138 (D.C. Cir. 2015).
    \4\ Although the court in EME Homer City II remanded Georgia's 
Phase 2 SO<INF>2</INF> budget because it determined that the budget 
may be too stringent, nothing in the court's decision affects 
Georgia's authority to seek incorporation into its SIP of a state-
established budget as stringent as the remanded federally-
established budget or limits EPA's authority to approve such a SIP 
revision. See 42 U.S.C. 7416, 7410(k)(3).
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    In addition, approval of the portions of the SIP revision 
identified above would remove Georgia's state trading programs 
provisions adopted to implement CAIR. EPA is proposing approval of this 
removal because CAIR is no longer in effect and has been replaced by 
CSAPR. As a result, the removal of CAIR is consistent with the CAA.
    At this time, EPA is not acting on the portions of the submittal 
related to Georgia's Regional Haze SIP under the Clean Air Act or the 
visibility transport (prong 4) infrastructure SIP.
    Section II provides background information on CAIR. Section III of 
this document summarizes the relevant aspects of the CSAPR federal 
trading programs and FIPs as well as the range of opportunities states 
have to submit SIP revisions to modify or replace the FIP requirements 
while continuing to rely on CSAPR's trading programs to address the 
states' obligations to mitigate interstate air pollution. Section IV 
describes the specific conditions for approval of such SIP revisions. 
Section V contains EPA's analysis of Georgia's SIP submittal, and 
Section VI sets forth EPA's proposed action on the submittal. Section 
VII addresses statutory and Executive Order reviews.

II. Background on CAIR

    To help reduce interstate transport of ozone and PM<INF>2.5</INF> 
pollution in the eastern half of the United States, EPA finalized CAIR 
in May 2005.\5\ CAIR addressed both the 1997 Ozone and PM<INF>2.5</INF> 
NAAQS and required 28 states, including Georgia, and the District of 
Columbia to limit emissions of NO<INF>X</INF> and SO<INF>2</INF>. For 
CAIR, EPA developed three separate cap and trade programs that could be 
used to achieve the required reductions: the CAIR NO<INF>X</INF> ozone 
season trading program, the CAIR NO<INF>X</INF> annual trading program, 
and the CAIR SO<INF>2</INF> trading program. Georgia was subject to 
CAIR requirements only with respect to annual NO<INF>X</INF> and 
SO<INF>2</INF> emissions.
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    \5\ 70 FR 25172 (May 12, 2005).
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    On December 23, 2008, CAIR was remanded to EPA by the United States 
Court of Appeals for the District of Columbia Circuit (D.C. Circuit) in 
North Carolina v. EPA, 531 F.3d 896 (D.C. Cir. 2008), modified on 
rehearing, 550 F.3d 1176. This ruling allowed CAIR to remain in effect 
until a new interstate transport rule consistent with the Court's 
opinion was developed. While EPA worked on developing a new rule to 
address the interstate transport of air pollution, the CAIR program 
continued as planned with the NO<INF>X</INF> annual and ozone season 
programs beginning in 2009 and the SO<INF>2</INF> annual program 
beginning in 2010.
    In response to the remand of CAIR, EPA promulgated CSAPR on July 6, 
2011.\6\ Along with provisions discussed more fully in the following 
section, the rule contained provisions that would sunset CAIR-related 
obligations on a schedule coordinated with the implementation of CSAPR 
compliance requirements. CSAPR was to become effective January 1, 2012; 
however, the timing of CSAPR's implementation was impacted by a number 
of court actions. On December 30, 2011, the D.C. Circuit stayed CSAPR 
prior to its implementation, and EPA was ordered to continue 
administering CAIR on an interim basis.\7\ In a subsequent decision on 
the merits, the Court vacated CSAPR based on a subset of petitioners' 
claims.\8\ However, on April 29, 2014, the U.S. Supreme Court reversed 
that decision and remanded the case to the D.C. Circuit for further 
proceedings.\9\ Throughout the initial round of D.C. Circuit 
proceedings and the ensuing Supreme Court proceedings, the stay on 
CSAPR remained in place, and EPA continued to implement CAIR.
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    \6\ See 76 FR 48208 (August 8, 2011).
    \7\ Order of December 30, 2011, in EME Homer City Generation, 
L.P. v. EPA, D.C. Cir. No. 11-1302.
    \8\ EME Homer City Generation, L.P. v. EPA, 696 F.3d 7 (D.C. 
Cir. 2012), cert. granted 133 U.S. 2857 (2013).
    \9\ EPA v. EME Homer City Generation, L.P., 134 S. Ct. 1584, 
1600-01 (2014).
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    Following the April 2014 Supreme Court decision, EPA filed a motion 
asking the D.C. Circuit to lift the stay in order to allow CSAPR to 
replace CAIR in an equitable and orderly manner while further D.C. 
Circuit proceedings were held to resolve remaining claims from 
petitioners. Additionally, EPA's motion requested to toll, by three 
years, all CSAPR compliance deadlines that had not passed as of the 
approval date of the stay. On October 23, 2014, the D.C. Circuit 
granted EPA's request, and on December 3, 2014 (79 FR 71663), in an 
interim final rule, EPA set the updated effective date of CSAPR as 
January 1, 2015, and tolled the implementation of CSAPR Phase 1 to 2015 
and CSAPR Phase 2 to 2017. In accordance with the interim final rule, 
the sunset date for CAIR was December 31, 2014, and EPA began 
implementing CSAPR on January 1, 2015.\10\
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    \10\ See 40 CFR 51.123(ff) (sunsetting CAIR requirements related 
to NO<INF>X</INF>); 40 CFR 51.124(s) (sunsetting CAIR requirements 
related to SO<INF>2</INF>).
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III. Background on CSAPR and CSAPR-Related SIP Revisions

    As discussed above, EPA issued CSAPR in July 2011 to address the 
requirements of CAA section 110(a)(2)(D)(i)(I) concerning interstate 
transport of air pollution. As amended (including by the 2016 CSAPR

[[Page 38868]]

Update \11\), CSAPR requires 27 Eastern states to limit their statewide 
emissions of SO<INF>2</INF> and/or NO<INF>X</INF> in order to mitigate 
transported air pollution unlawfully impacting other states' ability to 
attain or maintain four NAAQS: The 1997 Annual PM<INF>2.5</INF> NAAQS, 
the 2006 24-hour PM<INF>2.5</INF> NAAQS, the 1997 8-hour Ozone NAAQS, 
and the 2008 8-hour Ozone NAAQS. The CSAPR emissions limitations are 
defined in terms of maximum statewide ``budgets'' for emissions of 
annual SO<INF>2</INF>, annual NO<INF>X</INF>, and/or ozone season 
NO<INF>X</INF> by each covered state's large EGUs. The CSAPR state 
budgets are implemented in two phases of generally increasing 
stringency, with the Phase 1 budgets applying to emissions in 2015 and 
2016 and the Phase 2 (and CSAPR Update) budgets applying to emissions 
in 2017 and later years. As a mechanism for achieving compliance with 
the emissions limitations, CSAPR establishes five federal emissions 
trading programs: a program for annual NO<INF>X</INF> emissions, two 
geographically separate programs for annual SO<INF>2</INF> emissions, 
and two geographically separate programs for ozone-season 
NO<INF>X</INF> emissions. CSAPR also establishes FIP requirements 
applicable to the large EGUs in each covered state.\12\ Currently, the 
CSAPR FIP provisions require each state's units to participate in up to 
three of the five CSAPR trading programs.
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    \11\ See 81 FR 74504 (October 26, 2016). The CSAPR Update was 
promulgated to address interstate pollution with respect to the 2008 
8-hour Ozone NAAQS and to address a judicial remand of certain 
original CSAPR ozone season NO<INF>X</INF> budgets promulgated with 
respect to the 1997 8-hour Ozone NAAQS. See 81 FR at 74505. The 
CSAPR Update established new emission reduction requirements 
addressing the more recent NAAQS and coordinated them with the 
remaining emission reduction requirements addressing the older ozone 
NAAQS, so that starting in 2017, CSAPR includes two geographically 
separate trading programs for ozone season NO<INF>X</INF> emissions 
covering EGUs in a total of 23 states. See 40 CFR 52.38(b)(1)-(2).
    \12\ States are required to submit good neighbor SIPs within 
three years (or less, if the Administrator so prescribes) after a 
NAAQS is promulgated. CAA section 110(a)(1) and (2). Where EPA finds 
that a state fails to submit a required SIP or disapproves a SIP, 
EPA is obligated to promulgate a FIP addressing the deficiency. CAA 
section 110(c). EPA found that Georgia failed to make timely 
submissions required to address the good neighbor provision with 
respect to the 1997 Annual PM<INF>2.5</INF> and 8-hour Ozone NAAQS 
(70 FR 21147, April 25, 2005), and the 2008 8-hour Ozone NAAQS (80 
FR 39961, June 13, 2015). In addition, EPA disapproved Georgia's SIP 
revision submitted to address the good neighbor provision with 
respect to the 2006 24-hour PM<INF>2.5</INF> NAAQS. 76 FR 43159 
(July 20, 2011). Accordingly, as a part of CSAPR and the CSAPR 
Update, EPA promulgated FIPs applicable to sources in Georgia 
addressing the good neighbor provision with respect to the 1997 
annual PM<INF>2.5</INF>, 1997 8-hour Ozone NAAQS, and the 2006 24-
hour PM<INF>2.5</INF> NAAQS. As discussed below, when EPA finalized 
the CSAPR Update, EPA determined that Georgia did not interfere with 
nonattainment or maintenance for the 2008 8-hour Ozone NAAQS.
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    CSAPR includes provisions under which states may submit and EPA 
will approve SIP revisions to modify or replace the CSAPR FIP 
requirements while allowing states to continue to meet their transport-
related obligations using either CSAPR's federal emissions trading 
programs or state emissions trading programs integrated with the 
federal programs, provided that the SIP revisions meet all relevant 
criteria.\13\ Through such a SIP revision, a state may replace EPA's 
default provisions for allocating emission allowances among the state's 
units, employing any state-selected methodology to allocate or auction 
the allowances, subject to timing conditions and limits on overall 
allowance quantities. In the case of CSAPR's federal trading programs 
for ozone season NO<INF>X</INF> emissions (or an integrated state 
trading program), a state may also expand trading program applicability 
to include certain smaller EGUs.\14\ If a state wants to replace CSAPR 
FIP requirements with SIP requirements under which the state's units 
participate in a state trading program that is integrated with and 
identical to the federal trading program even as to the allocation and 
applicability provisions, the state may submit a SIP revision for that 
purpose as well. However, no emissions budget increases or other 
substantive changes to the trading program provisions are allowed. A 
state whose units are subject to multiple CSAPR FIPs and federal 
trading programs may submit SIP revisions to modify or replace either 
some or all of those FIP requirements.
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    \13\ See 40 CFR 52.38, 52.39. States also retain the ability to 
submit SIP revisions to meet their transport-related obligations 
using mechanisms other than the CSAPR federal trading programs or 
integrated state trading programs.
    \14\ States covered by both the CSAPR Update and the 
NO<INF>X</INF> SIP Call have the additional option to expand 
applicability under the CSAPR NO<INF>X</INF> Ozone Season Group 2 
Trading Program to include non-EGUs that would have participated in 
the former NO<INF>X</INF> Budget Trading Program.
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    States can submit two basic forms of CSAPR-related SIP revisions 
effective for emissions control periods in 2017 or later years.\15\ 
Specific conditions for approval of each form of SIP revision are set 
forth in the CSAPR regulations, as described in section IV below. Under 
the first alternative--an ``abbreviated'' SIP revision--a state may 
submit a SIP revision that upon approval replaces the default allowance 
allocation and/or applicability provisions of a CSAPR federal trading 
program for the state.\16\ Approval of an abbreviated SIP revision 
leaves the corresponding CSAPR FIP and all other provisions of the 
relevant federal trading program in place for the state's units.
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    \15\ CSAPR also provides for a third, more streamlined form of 
SIP revision that is effective only for control periods in 2016 and 
is not relevant here. See 40 CFR 52.38(a)(3), (b)(3), (b)(7); 
52.39(d), (g).
    \16\ 40 CFR 52.38(a)(4), (b)(4), (b)(8); 52.39(e), (h).
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    Under the second alternative--a ``full'' SIP revision--a state may 
submit a SIP revision that upon approval replaces a CSAPR federal 
trading program for the state with a state trading program integrated 
with the federal trading program, so long as the state trading program 
is substantively identical to the federal trading program or does not 
substantively differ from the federal trading program except as 
discussed above with regard to the allowance allocation and/or 
applicability provisions.\17\ For purposes of a full SIP revision, a 
state may either adopt state rules with complete trading program 
language, incorporate the federal trading program language into its 
state rules by reference (with appropriate conforming changes), or 
employ a combination of these approaches.
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    \17\ 40 CFR 52.38(a)(5), (b)(5), (b)(9); 52.39(f), (i).
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    The CSAPR regulations identify several important consequences and 
limitations associated with approval of a full SIP revision. First, 
upon EPA's approval of a full SIP revision as correcting the deficiency 
in the state's implementation plan that was the basis for a particular 
set of CSAPR FIP requirements, the obligation to participate in the 
corresponding CSAPR federal trading program is automatically eliminated 
for units subject to the state's jurisdiction without the need for a 
separate EPA withdrawal action, so long as EPA's approval of the SIP is 
full and unconditional.\18\ Second, approval of a full SIP revision 
does not terminate the obligation to participate in the corresponding 
CSAPR federal trading program for any units located in any Indian 
country within the borders of the state, and if and when a unit is 
located in Indian country within a state's borders, EPA may modify the 
SIP approval to exclude from the SIP, and include in the surviving 
CSAPR FIP instead, certain trading program provisions that apply 
jointly to units in the state and to units in Indian country within the 
state's borders.\19\ Finally, if at the time a full SIP revision is 
approved EPA has already started recording allocations of allowances 
for a given control period to a state's units, the

[[Page 38869]]

federal trading program provisions authorizing EPA to complete the 
process of allocating and recording allowances for that control period 
to those units will continue to apply, unless EPA's approval of the SIP 
revision provides otherwise.\20\
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    \18\ 40 CFR 52.38(a)(6), (b)(10)(i); 52.39(j).
    \19\ 40 CFR 52.38(a)(5)(iv)-(v), (a)(6), (b)(5)(v)-(vi), 
(b)(9)(vi)-(vii), (b)(10)(i); 52.39(f)(4)-(5), (i)(4)-(5), (j).
    \20\ 40 CFR 52.38(a)(7), (b)(11)(i); 52.39(k).
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    On July 28, 2015, the D.C. Circuit issued a decision on a number of 
petitions related to CSAPR, which found that EPA required more 
emissions reductions than may have been necessary to address the 
downwind air quality problems to which some states contribute. The 
Court remanded several CSAPR emission budgets to EPA for 
reconsideration, including the Phase 2 SO<INF>2</INF> trading budget 
for Georgia.\21\ However, Georgia has proposed to voluntarily adopt 
into their SIP a CSAPR state trading program that is integrated with 
the federal trading program and includes a state-established 
SO<INF>2</INF> budget equal to the state's remanded Phase 2 
SO<INF>2</INF> emission budget.\22\ EPA notes that nothing in the 
Court's decision affects Georgia's authority to seek incorporation into 
its SIP of a state-established budget as stringent as the remanded 
federally-established budget or limits EPA's authority to approve such 
a SIP revision. The CSAPR regulations provide each covered state with 
the option to meet its transport obligations through SIP revisions 
replacing the federal trading programs and requiring the state's EGUs 
to participate in integrated CSAPR state trading programs that apply 
emissions budgets of the same or greater stringency. Under the CSAPR 
regulations, when such a SIP revision is approved, the corresponding 
FIP provisions are automatically withdrawn.
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    \21\ EME Homer City II, 795 F.3d 118; See also EME Homer City 
Generation, L.P. v. EPA, 696 F.3d 7 (D.C. Cir. 2012), EPA v. EME 
Homer City Generation, L.P., 134 S. Ct. 1584 (2014). The D.C. 
Circuit also remanded SO<INF>2</INF> budgets for Alabama, South 
Carolina, and Texas. The court also remanded Phase 2 ozone-season 
NO<INF>X</INF> budgets for eleven states, which did not include 
Georgia.
    \22\ See memo entitled ``The U.S. Environmental Protection 
Agency's Plan for Responding to the Remand of the Cross-State Air 
Pollution Rule Phase 2 SO<INF>2</INF> Budgets for Alabama, Georgia, 
South Carolina and Texas'' from Janet G. McCabe, EPA Acting 
Assistant Administrator for Air and Radiation, to EPA Regional Air 
Division Directors (June 27, 2016), available at https://www.regulations.gov/document?D=EPA-HQ-OAR-2016-0598-0003. The memo 
directs the Regional Air Division Directors to share the memo with 
state officials. The EPA also communicated orally with officials in 
Alabama, Georgia, South Carolina, and Texas in advance of the memo.
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IV. Conditions for Approval of CSAPR-Related SIP Revisions

    Each CSAPR-related abbreviated or full SIP revision must meet the 
following general submittal conditions:
    <bullet> Timeliness and completeness of SIP submittal. The SIP 
submittal completeness criteria in section 2.1 of appendix V to 40 CFR 
part 51 apply. In addition, if a state wants to replace the default 
allowance allocation or applicability provisions of a CSAPR federal 
trading program, the complete SIP revision must be submitted to EPA by 
December 1 of the year before the deadlines described below for 
submitting allocation or auction amounts to EPA for the first control 
period for which the state wants to replace the default allocation and/
or applicability provisions.\23\ This SIP submission deadline is 
inoperative in the case of a SIP revision that seeks only to replace a 
CSAPR FIP and federal trading program with a SIP and a substantively 
identical state trading program integrated with the federal trading 
program.
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    \23\ 40 CFR 52.38(a)(4)(ii), (a)(5)(vi), (b)(4)(iii), 
(b)(5)(vii), (b)(8)(iv), (b)(9)(viii); 52.39(e)(2), (f)(6), (h)(2), 
(i)(6).
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    In addition to the general submittal conditions, a CSAPR-related 
abbreviated or full SIP seeking to address the allocation or auction of 
emission allowances must meet the following further conditions:
    <bullet> Methodology covering all allowances potentially requiring 
allocation. For each federal trading program addressed by a SIP 
revision, the SIP revision's allowance allocation or auction 
methodology must replace both the federal program's default allocations 
to existing units \24\ at 40 CFR 97.411(a), 97.511(a), 97.611(a), 
97.711(a), or 97.811(a) as applicable, and the federal trading 
program's provisions for allocating allowances from the new unit set-
aside (NUSA) for the state at 40 CFR 97.411(b)(1) and 97.412(a), 
97.511(b)(1) and 97.512(a), 97.611(b)(1) and 97.612(a), 97.711(b)(1) 
and 97.712(a), or 97.811(b)(1) and 97.812(a), as applicable.\25\ In the 
case of a state with Indian country within its borders, while the SIP 
revision may neither alter nor assume the federal program's provisions 
for administering the Indian country NUSA for the state, the SIP 
revision must include procedures addressing the disposition of any 
otherwise unallocated allowances from an Indian country NUSA that may 
be made available for allocation by the state after EPA has carried out 
the Indian country NUSA allocation procedures.\26\
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    \24\ In the context of the approval conditions for CSAPR-related 
SIP revisions, an ``existing unit'' is a unit for which EPA has 
determined default allowance allocations (which could be allocations 
of zero allowances) in the rulemakings establishing and amending 
CSAPR. A document describing EPA's default allocations to existing 
units is available at https://www.epa.gov/sites/production/files/2017-05/documents/csapr_allowance_allocations_final_rule_tsd.pdf.
    \25\ 40 CFR 52.38(a)(4)(i), (a)(5)(i), (b)(4)(ii), (b)(5)(ii), 
(b)(8)(iii), (b)(9)(iii); 52.39(e)(1), (f)(1), (h)(1), (i)(1).
    \26\ See 40 CFR 97.412(b)(10)(ii), 97.512(b)(10)(ii), 
97.612(b)(10)(ii), 97.712(b)(10)(ii), 97.812(b)(10)(ii).
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    <bullet> Assurance that total allocations will not exceed the state 
budget. For each federal trading program addressed by a SIP revision, 
the total amount of allowances auctioned or allocated for each control 
period under the SIP revision (prior to the addition by EPA of any 
unallocated allowances from any Indian country NUSA for the state) 
generally may not exceed the state's emissions budget for the control 
period less the sum of the amount of any Indian country NUSA for the 
state for the control period and any allowances already allocated to 
the state's units for the control period and recorded by EPA.\27\ Under 
its SIP revision, a state is free to not allocate allowances to some or 
all potentially affected units, to allocate or auction allowances to 
entities other than potentially affected units, or to allocate or 
auction fewer than the maximum permissible quantity of allowances and 
retire the remainder. Under the CSAPR NO<INF>X</INF> Ozone Season Group 
2 Trading Program only, additional allowances may be allocated if the 
state elects to expand applicability to non-EGUs that would have been 
subject to the NO<INF>X</INF> Budget Trading Program established for 
compliance with the NO<INF>X</INF> SIP Call.\28\
---------------------------------------------------------------------------

    \27\ 40 CFR 52.38(a)(4)(i)(A), (a)(5)(i)(A), (b)(4)(ii)(A), 
(b)(5)(ii)(A), (b)(8)(iii)(A), (b)(9)(iii)(A); 52.39(e)(1)(i), 
(f)(1)(i), (h)(1)(i), (i)(1)(i).
    \28\ 40 CFR 52.38(b)(8)(iii)(A), (b)(9)(iii)(A).
---------------------------------------------------------------------------

    <bullet> Timely submission of state-determined allocations to EPA. 
The SIP revision must require the state to submit to EPA the amounts of 
any allowances allocated or auctioned to each unit for each control 
period (other than allowances initially set aside in the state's 
allocation or auction process and later allocated or auctioned to such 
units from the set-aside amount) by the following deadlines.\29\ Note 
that the submission deadlines differ for amounts allocated or auctioned 
to units considered existing units for CSAPR purposes and amounts 
allocated or auctioned to other units.
---------------------------------------------------------------------------

    \29\ 40 CFR 52.38(a)(4)(i)(B)-(C), (a)(5)(i)(B)-(C), 
(b)(4)(ii)(B)-(C), (b)(5)(ii)(B)-(C), (b)(8)(iii)(B)-(C), 
(b)(9)(iii)(B)-(C); 52.39(e)(1)(ii)-(iii), (f)(1)(ii)-(iii), 
(h)(1)(ii)-(iii), (i)(1)(ii)-(iii).

[[Page 38870]]



------------------------------------------------------------------------
                                                        Deadline for
                             Year of the control    submission to EPA of
          Units                    period              allocations or
                                                      auction results
------------------------------------------------------------------------
  CSAPR NO Annual, CSAPR NO Ozone Season Group 1, CSAPR SO Group 1, and
                   CSAPR SO Group 2 Trading Programs:
------------------------------------------------------------------------
Existing.................  2017 and 2018.........  June 1, 2016.
                           2019 and 2020.........  June 1, 2017.
                           2021 and 2022.........  June 1, 2018.
                           2023 and later years..  June 1 of the fourth
                                                    year before the year
                                                    of the control
                                                    period.
Other....................  All years.............  July 1 of the year of
                                                    the control period.
------------------------------------------------------------------------
             CSAPR NO Ozone Season Group 2 Trading Program:
------------------------------------------------------------------------
Existing.................  2019 and 2020.........  June 1, 2018.
                           2021 and 2022.........  June 1, 2019.
                           2023 and 2024.........  June 1, 2020.
                           2025 and later years..  June 1 of the fourth
                                                    year before the year
                                                    of the control
                                                    period.
Other....................  All years.............  July 1 of the year of
                                                    the control period.
------------------------------------------------------------------------

    <bullet> No changes to allocations already submitted to EPA or 
recorded. The SIP revision must not provide for any change to the 
amounts of allowances allocated or auctioned to any unit after those 
amounts are submitted to EPA or any change to any allowance allocation 
determined and recorded by EPA under the federal trading program 
regulations.\30\
---------------------------------------------------------------------------

    \30\ 40 CFR 52.38(a)(4)(i)(D), (a)(5)(i)(D), (b)(4)(ii)(D), 
(b)(5)(ii)(D), (b)(8)(iii)(D), (b)(9)(iii)(D); 52.39(e)(1)(iv), 
(f)(1)(iv), (h)(1)(iv), (i)(1)(iv).
---------------------------------------------------------------------------

    <bullet> No other substantive changes to federal trading program 
provisions. The SIP revision may not substantively change any other 
trading program provisions, except in the case of a SIP revision that 
also expands program applicability as described below.\31\ Any new 
definitions adopted in the SIP revision (in addition to the federal 
trading program's definitions) may apply only for purposes of the SIP 
revision's allocation or auction provisions.\32\
---------------------------------------------------------------------------

    \31\ 40 CFR 52.38(a)(4), (a)(5), (b)(4), (b)(5), (b)(8), (b)(9); 
52.39(e), (f), (h), (i).
    \32\ 40 CFR 52.38(a)(4)(i), (a)(5)(ii), (b)(4)(ii), (b)(5)(iii), 
(b)(8)(iii), (b)(9)(iv); 52.39(e)(1), (f)(2), (h)(1), (i)(2).
---------------------------------------------------------------------------

    In addition to the general submittal conditions, a CSAPR-related 
abbreviated or full SIP revision seeking to expand applicability under 
the CSAPR NO<INF>X</INF> Ozone Season Group 1 or CSAPR NO<INF>X</INF> 
Ozone Season Group 2 Trading Programs (or an integrated state trading 
program) must meet the following further conditions:
    <bullet> Only electricity generating units with nameplate capacity 
of at least 15 MWe. The SIP revision may expand applicability only to 
additional fossil fuel-fired boilers or combustion turbines serving 
generators producing electricity for sale, and only by lowering the 
generator nameplate capacity threshold used to determine whether a 
particular boiler or combustion turbine serving a particular generator 
is a potentially affected unit. The nameplate capacity threshold 
adopted in the SIP revision may not be less than 15 MWe.\33\ In 
addition or alternatively, applicability under the CSAPR NO<INF>X</INF> 
Ozone Season Group 2 Trading Program may be expanded to non-EGUs that 
would have been subject to the NO<INF>X</INF> Budget Trading Program 
established for compliance with the NO<INF>X</INF> SIP Call.\34\
---------------------------------------------------------------------------

    \33\ 40 CFR 52.38(b)(4)(i), (b)(5)(i), (b)(8)(i), (b)(9)(i).
    \34\ 40 CFR 52.38(b)(8)(ii), (b)(9)(ii).
---------------------------------------------------------------------------

    <bullet> No other substantive changes to federal trading program 
provisions. The SIP revision may not substantively change any other 
trading program provisions, except in the case of a SIP revision that 
also addresses the allocation or auction of emission allowances as 
described above.\35\
---------------------------------------------------------------------------

    \35\ 40 CFR 52.38(b)(4), (b)(5), (b)(8), (b)(9).
---------------------------------------------------------------------------

    In addition to the general submittal conditions and the other 
applicable conditions described above, a CSAPR-related full SIP 
revision must meet the following further conditions:
    <bullet> Complete, substantively identical trading program 
provisions. The SIP revision must adopt complete state trading program 
regulations substantively identical to the complete federal trading 
program regulations at 40 CFR 97.402 through 97.435, 97.502 through 
97.535, 97.602 through 97.635, 97.702 through 97.735, or 97.802 through 
97.835, as applicable, except as described above in the case of a SIP 
revision that seeks to replace the default allowance allocation and/or 
applicability provisions.\36\
---------------------------------------------------------------------------

    \36\ 40 CFR 52.38(a)(5), (b)(5), (b)(9); 52.39(f), (i).
---------------------------------------------------------------------------

    <bullet> Only non-substantive substitutions for the term ``State.'' 
The SIP revision may substitute the name of the state for the term 
``State'' as used in the federal trading program regulations, but only 
to the extent that EPA determines that the substitutions do not 
substantively change the trading program regulations.\37\
---------------------------------------------------------------------------

    \37\ 40 CFR 52.38(a)(5)(iii), (b)(5)(iv), (b)(9)(v); 
52.39(f)(3), (i)(3).
---------------------------------------------------------------------------

    <bullet> Exclusion of provisions addressing units in Indian 
country. The SIP revision may not impose requirements on any unit in 
any Indian country within the state's borders and must not include the 
federal trading program provisions governing allocation of allowances 
from any Indian country NUSA for the state.\38\
---------------------------------------------------------------------------

    \38\ 40 CFR 52.38(a)(5)(iv), (b)(5)(v), (b)(9)(vi); 52.39(f)(4), 
(i)(4).
---------------------------------------------------------------------------

V. Georgia's SIP Submittal and EPA's Analysis

A. Georgia's SIP Submittal as It Relates to CSAPR

    In the CSAPR rulemaking, EPA determined that air pollution 
transported from EGUs in Georgia would unlawfully affect other states' 
ability to attain or maintain the 1997 8-hour Ozone NAAQS, the 1997 
Annual PM<INF>2.5</INF> NAAQS, and the 2006 24-hour PM<INF>2.5</INF> 
NAAQS, and included Georgia in the CSAPR ozone season NO<INF>X</INF> 
trading program and the annual SO<INF>2</INF> and NO<INF>X</INF> 
trading programs.\39\ In the CSAPR Update rulemaking, EPA determined 
that Georgia was not linked to any identified downwind nonattainment or 
maintenance receptors for the 2008 8-hour Ozone NAAQS.\40\ Georgia's 
units meeting the CSAPR applicability criteria are consequently 
currently subject to CSAPR FIPs that require participation in

[[Page 38871]]

the CSAPR NO<INF>X</INF> Annual Trading Program, the CSAPR 
NO<INF>X</INF> Ozone Season Group 1 Trading Program, and the CSAPR 
SO<INF>2</INF> Group 2 Trading Program.\41\
---------------------------------------------------------------------------

    \39\ 76 FR 48208, 48213 (August 8, 2011).
    \40\ 81 FR 74504, 74506 (October 26, 2016). EPA also determined 
in the CSAPR Update rulemaking that Georgia had no further transport 
obligation under CAA section 110(a)(2)(D)(i)(I) with respect to the 
1997 Ozone NAAQS beyond the ozone season NO<INF>X</INF> emission 
reduction requirements established in the original CSAPR rulemaking. 
Id. at 74525.
    \41\ 40 CFR 52.38(a)(2), (b)(2); 52.39(c); 52.584(a), (b); 
52.585.
---------------------------------------------------------------------------

    Georgia's July 26, 2017, SIP revision incorporates into the SIP 
CSAPR state trading program regulations that would replace the CSAPR 
federal trading program regulations with regard to Georgia units' 
SO<INF>2</INF> and NO<INF>X</INF> emissions. The SIP submittal includes 
revisions to two Georgia rules: Rule 391-3-1-.02(12), ``Clean Air 
Interstate Rule NO<INF>X</INF> Annual Trading Program,'' is replaced by 
``Cross State Air Pollution Rule NO<INF>X</INF> Annual Trading 
Program;'' and Rule 391-3-1-.02(13), ``Clean Air Interstate Rule 
SO<INF>2</INF> Annual Trading Program,'' is replaced by ``Cross State 
Air Pollution Rule SO<INF>2</INF> Annual Trading Program.'' In 
addition, the submittal adds Rule 391-3-1-.02(14), ``Cross State Air 
Pollution Rule NO<INF>X</INF> Ozone Season Trading Program.'' In 
general, each rule in Georgia's CSAPR state trading program rule is 
designed to replace the corresponding federal trading program 
regulations. For example, Georgia Rule 391-3-1-.02(12), Cross State Air 
Pollution Rule NO<INF>X</INF> Annual Trading Program, is designed to 
replace subpart AAAAA of 40 CFR part 97 (i.e., 40 CFR 97.401 through 
97.435).
    With regard to form, some of the individual rules for each Georgia 
CSAPR state trading program are set forth as full regulatory text--
notably the rules identifying the trading budgets, NUSA, Indian country 
NUSA, and the definition of ``Permitting Authority''--but most of the 
rules incorporate the corresponding federal trading program section or 
sections by reference.
    With regard to substance, the rules for each Georgia CSAPR state 
trading program differ from the corresponding CSAPR federal trading 
program regulations in two main ways. First, the term permitting 
authority is defined as the Georgia Environmental Protection Division 
of the Georgia Department of Natural Resources for units in Georgia 
only. Second, the Georgia rules omit some federal trading program 
provisions not applicable to Georgia's state trading programs, 
including provisions setting forth the amounts of emissions budgets, 
NUSAs, Indian country NUSAs, and variability limits for other states 
and provisions relating to EPA's administration of Indian country 
NUSAs.
    The Georgia rules adopt the Phase 2 annual NO<INF>X</INF> and 
SO<INF>2</INF> budgets and the Group 1 ozone season NO<INF>X</INF> 
budgets found at 40 CFR 97.410(a)(2)(iv), 97.710(a)(2)(iv), and 
97.510(a)(4)(iv), respectively. Accordingly, EPA will evaluate the 
approvability of the Georgia SIP submission consistent with these 
budgets.
    At this time, EPA is proposing to take action on the portions of 
Georgia's SIP submission designed to replace the federal CSAPR 
NO<INF>X</INF> Annual Trading Program, the federal CSAPR SO<INF>2</INF> 
Group 2 Trading Program, and the federal CSAPR NO<INF>X</INF> Ozone 
Season Group 1 Trading Program with regard to Georgia units.\42\
---------------------------------------------------------------------------

    \42\ In addition and as discussed above, the EPA is also 
proposing to take action on the portions of the SIP submittal 
related to removal of CAIR.
---------------------------------------------------------------------------

B. EPA's Analysis of Georgia's SIP Submittal as It Relates to CSAPR

    As described in section V.A above, at this time EPA is proposing to 
take action on the portions of Georgia's SIP submittal designed to 
replace the federal CSAPR NO<INF>X</INF> Annual Trading Program, the 
federal CSAPR SO<INF>2</INF> Group 2 Trading Program, and the federal 
CSAPR NO<INF>X</INF> Ozone Season Group 1 Trading Program \43\ for 
Georgia units.\44\ The analysis discussed in this section addresses 
only the portions of Georgia's SIP submittal related to CSAPR on which 
EPA is taking action at this time. For simplicity, throughout this 
section EPA refers to the portions of the submittal on which EPA is 
proposing to take action as ``the submittal'' or ``the SIP revision'' 
without repeating the qualification that at this time EPA is analyzing 
and proposing to act on only portions of the SIP submittal.
---------------------------------------------------------------------------

    \43\ Georgia's rules incorporate the provisions of, and, if 
approved, would replace the federal CSAPR NO<INF>X</INF> Ozone 
Season Group 1 Trading Program. See 40 CFR 52.38(b)(5). Following 
the CSAPR Update, Georgia is the only state whose units participate 
in this trading program; units in other states participate in the 
CSAPR NO<INF>X</INF> Ozone Season Group 2 Trading Program. See 40 
CFR 52.38(b)(2)(i); CSAPR Update, 81 FR at 74509. As a result, 
Georgia units will be unable to trade allowances with units in other 
states. See CSAPR Update, 81 FR at 74509. EPA notes that federal 
regulations provide an option for Georgia to join the Group 2 
trading program. 40 CFR 52.38(b)(6); CSAPR Update, 81 FR at 74509.
    \44\ The other portions of the state submittal will be addressed 
in separate actions.
---------------------------------------------------------------------------

1. Timeliness and Completeness of SIP Submittal
    Georgia submitted its SIP revision to EPA on July 26, 2017, and EPA 
has determined that the submittal complies with the applicable minimum 
completeness criteria in section 2.1 of appendix V to 40 CFR part 51. 
The SIP submission deadline specified in 40 CFR 52.38(a)(5)(vi) and 
(b)(5)(vii) and 52.39(i)(6) is defined with reference to certain 
separate CSAPR deadlines for submission of state-determined allowance 
allocations to EPA and is therefore inoperative in the case of a SIP 
revision that does not seek to replace the EPA-administered allowance 
allocation methodology and process set forth in the federal trading 
program rules. Because Georgia is seeking to replace the federal 
trading program rules with substantively identical state trading 
program rules and is not seeking to replace the EPA-administered 
allowance allocation methodology and process, the SIP submission 
deadline does not apply.\45\
---------------------------------------------------------------------------

    \45\ See 40 CFR 52.38(a)(5)(vi), (b)(5)(vii); 52.39(i)(6).
---------------------------------------------------------------------------

2. Complete, Substantively Identical Trading Program Provisions
    As discussed above, the Georgia SIP revision adopts state budgets 
identical to the Phase 2 budgets for Georgia under the federal trading 
programs and adopts almost all of the provisions of the federal CSAPR 
NO<INF>X</INF> Annual Trading Program, CSAPR SO<INF>2</INF> Group 2 
Trading Program, and CSAPR NO<INF>X</INF> Ozone Season Group 1 Trading 
Program, including the default allocation provisions. Under the State's 
rules, EPA will administer the programs and will retain the authority 
to allocate and record allowances.
    With a few exceptions, the Georgia rules comprising Georgia's CSAPR 
state trading program for annual NO<INF>X</INF> emissions either 
incorporate by reference or adopt full-text replacements for all of the 
provisions of 40 CFR 97.401 through 97.435; the Georgia rules 
comprising Georgia's CSAPR state trading program for SO<INF>2</INF> 
emissions either incorporate by reference or adopt full-text 
replacements for all of the provisions of 40 CFR 97.701 through 97.735; 
and the Georgia rules comprising Georgia's CSAPR state trading program 
for NO<INF>X</INF> ozone season emissions either incorporate by 
reference or adopt full-text replacements for all of the provisions of 
40 CFR 97.501 through 97.535.
    The first exception is that paragraphs 391-3-1-.02(12)(a), 391-3-
1-.02(13)(a), and 391-3-1-.02(14)(a) of the Georgia rules substitute 
``Environmental Protection Division of the Georgia Department of 
Natural Resources'' for the term ``permitting authority'' for units 
located within the state of Georgia. This substitution properly retains 
the definition in 40 CFR 97.402 \46\ for units

[[Page 38872]]

outside of the State's jurisdiction. This modification of the federal 
trading program rules merely provides clarity to Georgia sources, and 
these substitutions do not substantively change the provisions of 
CSAPR's federal trading program regulations. As a result, this change 
is permitted under 40 CFR 52.38(a)(5), 52.38(b)(5) and 52.39(i).
---------------------------------------------------------------------------

    \46\ As clarified in a letter from Georgia dated July 21, 2017, 
there is a typographical error such that each of Georgia's three 
CSAPR rules references 40 CFR 97.402, instead of referencing 40 CFR 
97.702 in 391-3-1-.02(13)(a) and 40 CFR 97.502 in paragraph 391-3-
1-.02(14)(a). See July 21, 2017 Letter from Karen Hayes (Director, 
Air Protection Division, Georgia EPD) to V. Anne Heard (Acting 
Regional Administrator, EPA Region 4), available in the docket to 
this action. EPA views this typographical error as non-substantive 
because the underlying definition for the term ``permitting 
authority'' is the same for all three trading programs. Compare, 
e.g., 40 CFR 97.402 (Permitting authority means ``permitting 
authority'' as defined in 40 CFR 70.2 and 71.2) with 40 CFR 97.502 
(Permitting authority means ``permitting authority'' as defined in 
40 CFR 70.2 and 71.2). Regardless, Georgia has committed to fixing 
this error in the future.
---------------------------------------------------------------------------

    The second exception is that paragraphs 391-3-1-.02(12), 391-3-
1-.02(13), and 391-3-1-.02(14) of the Georgia rules omit the provisions 
of 40 CFR 97.410(a) and (b), 97.710(a) and (b), and 97.510(a) and (b), 
setting forth the amounts of the Phase 1 emissions budgets, NUSAs, and 
variability limits for Georgia and the amounts of the Phase 1 and Phase 
2 emissions budgets, NUSAs, Indian country NUSAs, and variability 
limits for other states. Omission of the Georgia Phase 1 emissions 
budget, NUSA, and variability limit amounts is appropriate because 
Georgia's state trading programs do not apply to emissions occurring in 
Phase 1 of CSAPR. Omission of the Phase 1 and Phase 2 budget, NUSA, 
Indian country NUSA, and variability limit amounts for other states 
from state trading programs in which only Georgia units participate 
does not undermine the completeness of the state trading programs. 
Georgia's rules include full-text replacement provisions for the 
remaining provisions of 40 CFR 97.410, 97.710, and 97.510 that are 
relevant to trading programs applicable only to Georgia units during 
Phase 2 of CSAPR.
    The third exception is that Georgia Rules 391-3-1-.02(12), 391-3-
1-.02(13), and 391-3-1-.02(14) omit 40 CFR 97.411(b)(2), 
97.411(c)(5)(iii), 97.412(b), 97.421(h), 97.421(j), 97.711(b)(2), 
97.711(c)(5)(iii), 97.712(b), 97.721(h), 97.721(j), 97.511(b)(2), 
97.511(c)(5)(iii), 97.512(b), 97.521(h), and 97.521(j) concerning EPA's 
administration of Indian country NUSAs. Omission of these provisions 
from Georgia's state trading program rules is required, as discussed in 
section V.B.4 below.
    None of the omissions undermine the completeness of Georgia's state 
trading programs, and EPA has preliminarily determined that Georgia's 
SIP revision makes no substantive changes to the provisions of the 
federal trading program regulations. Thus, Georgia's SIP revision meets 
the condition under 40 CFR 52.38(a)(5), 52.39(i), and 52.38(b)(5) that 
the SIP revision must adopt complete state trading program regulations 
substantively identical to the complete federal trading program 
regulations at 40 CFR 97.402 through 97.435, 97.702 through 97.735, and 
97.502 through 97.535, respectively, except to the extent permitted in 
the case of a SIP revision that seeks to replace the default allowance 
allocation and/or applicability provisions.
3. Only Non-Substantive Substitutions for the Term ``State''
    The Georgia rules do not make any substitutions for the term 
``State.''
4. Exclusion of Provisions Addressing Units in Indian Country
    Georgia Rules 391-3-1-.02(12)(b), 391-3-1-.02(13)(b), and 391-3-
1-.02(14)(b) incorporate by reference the applicability provisions of 
the federal trading program rules at 40 CFR 97.402, 97.702, and 97.502, 
respectively. There is no Indian country (as defined for purposes of 
CSAPR) within Georgia's borders, so the applicability provisions of the 
Georgia rules necessarily do not extend to any units in Indian country. 
In addition, as required under 40 CFR 52.38(a)(5)(iv), 52.39(i)(4) and 
52.38(b)(5)(v), Georgia's SIP revision excludes federal trading program 
provisions related to EPA's process for allocating and recording 
allowances from Indian country NUSAs (i.e., 40 CFR 97.411(b)(2), 
97.411(c)(5)(iii), 97.412(b), 97.421(h), 97.421(j), 97.711(b)(2), 
97.711(c)(5)(iii), 97.712(b), 97.721(h), 97.721(j), 97.511(b)(2), 
97.511(c)(5)(iii), 97.512(b), 97.521(h) and 40 CFR 97.521(j)). 
Georgia's SIP revision therefore meets the conditions under 
52.38(a)(5)(iv), 52.39(i)(4) and 52.38(b)(5)(v) that a SIP submittal 
must not impose any requirement on any unit in Indian country within 
the borders of the State and must exclude certain provisions related to 
administration of Indian country NUSAs.

C. Georgia's SIP Submittal as It Relates to CAIR, and EPA's Analysis

    In addition, Georgia's July 26, 2017, submittal seeks to remove 
state trading program rules adopted to comply with the CAIR from 
Georgia's SIP at 391-3-1-.02(12), ``Clean Air Interstate Rule 
NO<INF>X</INF> Annual Trading Program,'' and Rule 391-3-1-.02(13), 
``Clean Air Interstate Rule SO<INF>2</INF> Annual Trading Program,'' 
because the CAIR program has been replaced by CSAPR.\47\
---------------------------------------------------------------------------

    \47\ As discussed above in section V.A., the State seeks to 
replace these provisions with state rules related to CSAPR.
---------------------------------------------------------------------------

    In this action, EPA proposes to approve the removal of these CAIR-
related provisions from Georgia's SIP. As explained above, the D.C. 
Circuit remanded CAIR to EPA in 2008; however, the Court left CAIR in 
place while EPA worked to develop a new interstate transport rule. 
CSAPR was promulgated to respond to the Court's concerns and to replace 
CAIR. The implementation of CSAPR was delayed for several years beyond 
its originally expected implementation timeframe of 2012, and 
therefore, the sunsetting of CAIR was also deferred. CAIR was 
implemented through the 2014 compliance periods and was replaced by 
CSAPR on January 1, 2015. EPA promulgated regulations to sunset the 
CAIR program and it is no longer in effect.\48\ EPA therefore proposes 
to approve the removal of Georgia's SIP provisions related to CAIR.
---------------------------------------------------------------------------

    \48\ 40 CFR 51.123(ff) (requirements related to NO<INF>X</INF>); 
40 CFR 51.124(s) (requirements related to SO<INF>2</INF>).
---------------------------------------------------------------------------

VI. Incorporation by Reference

    In this rule, EPA is proposing to include in a final EPA rule 
regulatory text that includes incorporation by reference. In accordance 
with requirements of 1 CFR 51.5, EPA is proposing to incorporate by 
reference Georgia Rules for Air Quality Control, Rule 391-3-1-.02(12), 
Rule 391-3-1-.02(13), and Rule 391-3-1-.02(14), state effective on July 
20, 2017, comprising Georgia's Cross State Air Pollution Rule 
NO<INF>X</INF> Annual Trading Program, Georgia's Cross State Air 
Pollution Rule SO<INF>2</INF> Annual Trading Program, and Georgia's 
Cross State Air Pollution Rule NO<INF>X</INF> Ozone Season Trading 
Program, respectively. EPA has made, and will continue to make, these 
materials generally available through www.regulations.gov and/or at the 
EPA Region 4 office (please contact the person identified in the For 
Further Information Contact section of this preamble for more 
information).

VII. EPA's Proposed Action on Georgia's Submittal

    EPA is proposing to approve the portions of Georgia's July 26, 
2017, SIP submittal concerning the establishment for Georgia units of 
CSAPR state trading programs for annual NO<INF>X</INF>, annual 
SO<INF>2</INF> emissions and ozone season NO<INF>X</INF> emissions. The 
proposed revision would revise Georgia Rules for Air Quality Control to 
include CSAPR as follows:

[[Page 38873]]

391-3-1-.02(12) will be revised to include Georgia's ``Cross State Air 
Pollution Rule NO<INF>X</INF> Annual Trading Program;'' 391-3-1-.02(13) 
will be revised to include Georgia's ``Cross State Air Pollution Rule 
SO<INF>2</INF> Annual Trading Program;'' and 391-3-1-.02(14) will be 
added to include ``Georgia's Cross State Air Pollution Rule 
NO<INF>X</INF> Ozone Season Trading Program.'' These Georgia CSAPR 
state trading programs would be integrated with the federal CSAPR 
NO<INF>X</INF> Annual Trading Program, the federal CSAPR SO<INF>2</INF> 
Group 2 Trading Program, and the federal CSAPR NO<INF>X</INF> Ozone 
Season Group 1 Trading Program, respectively, and would be 
substantively identical to the federal trading programs.\49\ If EPA 
approves these portions of the SIP revision, Georgia units would 
generally be required to meet requirements under Georgia's CSAPR state 
trading programs equivalent to the requirements the units otherwise 
would have been required to meet under the corresponding CSAPR federal 
trading programs. EPA is proposing to approve these portions of the SIP 
revision because they meet the requirements of the CAA and EPA's 
regulations for approval of a CSAPR full SIP revision replacing a 
federal trading program with a state trading program that is integrated 
with and substantively identical to the federal trading program except 
for permissible differences, as discussed in section V above.
---------------------------------------------------------------------------

    \49\ As previously discussed in sections IV and V.B.2, under 
Georgia's regulations, the State will retain EPA's default allowance 
allocation methodology and EPA will remain the implementing 
authority for administration of the trading program.
---------------------------------------------------------------------------

    EPA promulgated FIPs requiring Georgia units to participate in the 
federal CSAPR NO<INF>X</INF> Annual Trading Program, the federal CSAPR 
SO<INF>2</INF> Group 2 Trading Program, and the federal CSAPR 
NO<INF>X</INF> Ozone Season Group 1 Trading Program in order to address 
Georgia's obligations under CAA section 110(a)(2)(D)(i)(I) with respect 
to the 1997 Annual PM<INF>2.5</INF> NAAQS, the 2006 24-hour 
PM<INF>2.5</INF> NAAQS, and the 1997 8-hour Ozone NAAQS in the absence 
of SIP provisions addressing those requirements. Approval of the 
portions of Georgia's SIP submittal adopting CSAPR state trading 
program rules for annual NO<INF>X</INF>, annual SO<INF>2</INF>, and 
ozone season NO<INF>X</INF> substantively identical to the 
corresponding CSAPR federal trading program regulations (or differing 
only with respect to the allowance allocation methodology) would 
satisfy Georgia's obligation pursuant to CAA section 110(a)(2)(D)(i)(I) 
to prohibit emissions which will significantly contribute to 
nonattainment or interfere with maintenance of the 1997 Annual 
PM<INF>2.5</INF> NAAQS, the 2006 24-hour PM<INF>2.5</INF> NAAQS, and 
the 1997 8-hour Ozone NAAQS in any other state and therefore would 
correct the same deficiency in the SIP that otherwise would be 
corrected by those CSAPR FIPs. Under the CSAPR regulations, upon EPA's 
full and unconditional approval of a SIP revision as correcting the 
SIP's deficiency that is the basis for a particular CSAPR FIP, the 
obligation to participate in the corresponding CSAPR federal trading 
program is automatically eliminated for units subject to the state's 
jurisdiction (but not for any units located in any Indian country 
within the state's borders).\50\ Approval of the portions of Georgia's 
SIP submittal establishing CSAPR state trading program rules for annual 
NO<INF>X</INF>, annual SO<INF>2</INF>, and ozone season NO<INF>X</INF> 
emissions therefore would result in automatic termination of the 
obligations of Georgia units to participate in the federal CSAPR 
NO<INF>X</INF> Annual Trading Program, the federal CSAPR SO<INF>2</INF> 
Group 2 Trading Program, and the federal CSAPR NO<INF>X</INF> Ozone 
Season Group 1 Trading Program.
---------------------------------------------------------------------------

    \50\ 40 CFR 52.38(a)(6), (b)(10), 52.39(j); see also 
52.584(a)(1), 52.584(b)(1); 52.585(a).
---------------------------------------------------------------------------

    As noted in section III above, the Phase 2 SO<INF>2</INF> budget 
established for Georgia in the CSAPR rulemaking has been remanded to 
EPA for reconsideration. If EPA finalizes approval of these portions of 
the SIP revision as proposed, Georgia will have fulfilled its 
obligations to provide a SIP that addresses the interstate transport 
provisions of CAA section 110(a)(2)(D)(i)(I) with respect to the 1997 
Annual PM<INF>2.5</INF> NAAQS, the 2006 24-hour PM<INF>2.5</INF> NAAQS, 
and the 1997 8-hour Ozone NAAQS. Thus, EPA would no longer be under an 
obligation to (nor would EPA have the authority to) address those 
transport requirements through implementation of a FIP, and approval of 
these portions of the SIP revision would eliminate Georgia units' 
obligations to participate in the federal CSAPR NO<INF>X</INF> Annual 
Trading Program, the federal CSAPR SO<INF>2</INF> Group 2 Trading 
Program, and the federal CSAPR NO<INF>X</INF> Ozone Season Group 1 
Trading Program. Elimination of Georgia units' obligations to 
participate in the federal trading programs would include elimination 
of the federally-established Phase 2 budgets capping allocations of 
CSAPR NO<INF>X</INF> Annual allowances, CSAPR SO<INF>2</INF> Group 2 
allowances, and CSAPR NO<INF>X</INF> Ozone Season Group 1 allowances to 
Georgia units under those federal trading programs. As approval of 
these portions of the SIP revision would eliminate Georgia's remanded 
federally-established Phase 2 SO<INF>2</INF> budget and eliminate EPA's 
authority to subject units in Georgia to a FIP, it is EPA's opinion 
that finalization of approval of this SIP action would address the 
judicial remand of Georgia's federally-established Phase 2 
SO<INF>2</INF> budget.
    In addition, EPA is proposing to approve the portions of Georgia's 
July 26, 2017, SIP revision removing Georgia's state trading provisions 
adopted to implement CAIR: Georgia Rules for Air Quality control at 
provisions 391-3-1-.02(12), ``Clean Air Interstate Rule NO<INF>X</INF> 
Annual Trading Program'' and 391-3-1-.02(13) ``Clean Air Interstate 
Rule SO<INF>2</INF> Annual Trading Program.'' If EPA finalizes approval 
of the proposed SIP revision, these CAIR provisions will be removed 
from the SIP. As explained above, CAIR was implemented through the 2014 
compliance periods and was replaced by CSAPR on January 1, 2015. EPA 
has promulgated regulations to sunset the CAIR program and it is no 
longer in effect.\51\ EPA therefore proposes to approve the removal of 
Georgia's SIP provisions related to CAIR.
---------------------------------------------------------------------------

    \51\ 40 CFR 51.123(ff) (requirements related to NO<INF>X</INF>); 
40 CFR 51.124(s) (requirements related to SO<INF>2</INF>).
---------------------------------------------------------------------------

VIII. Statutory and Executive Order Reviews

    Under the CAA, the Administrator is required to approve a SIP 
submittal that complies with the provisions of the Act and applicable 
federal regulations. See 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in 
reviewing SIP submittals, EPA's role is to approve state choices, 
provided that they meet the criteria of the CAA. Accordingly, this 
proposed action merely approves state law as meeting federal 
requirements and does not impose additional requirements beyond those 
imposed by state law. For that reason, this proposed action:
    <bullet> Is not a significant regulatory action subject to review 
by the Office of Management and Budget under Executive Orders 12866 (58 
FR 51735, October 4, 1993) and 13563 (76 FR 3821, January 21, 2011);
    <bullet> does not impose an information collection burden under the 
provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.);
    <bullet> is certified as not having a significant economic impact 
on a substantial number of small entities under the Regulatory 
Flexibility Act (5 U.S.C. 601 et seq.);
    <bullet> does not contain any unfunded mandate or significantly or 
uniquely affect small governments, as described

[[Page 38874]]

in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4);
    <bullet> does not have Federalism implications as specified in 
Executive Order 13132 (64 FR 43255, August 10, 1999);
    <bullet> is not an economically significant regulatory action based 
on health or safety risks subject to Executive Order 13045 (62 FR 
19885, April 23, 1997);
    <bullet> is not a significant regulatory action subject to 
Executive Order 13211 (66 FR 28355, May 22, 2001);
    <bullet> is not subject to requirements of Section 12(d) of the 
National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 
note) because application of those requirements would be inconsistent 
with the CAA; and
    <bullet> does not provide EPA with the discretionary authority to 
address, as appropriate, disproportionate human health or environmental 
effects, using practicable and legally permissible methods, under 
Executive Order 12898 (59 FR 7629, February 16, 1994).
    The SIP is not approved to apply on any Indian reservation land or 
in any other area where EPA or an Indian tribe has demonstrated that a 
tribe has jurisdiction. In those areas of Indian country, the rule does 
not have tribal implications as specified by Executive Order 13175 (65 
FR 67249, November 9, 2000), nor will it impose substantial direct 
costs on tribal governments or preempt tribal law.

List of Subjects in 40 CFR Part 52

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

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

    Dated: August 7, 2017.
V. Anne Heard,
Acting Regional Administrator, Region 4.
[FR Doc. 2017-17227 Filed 8-15-17; 8:45 am]
 BILLING CODE 6560-50-P


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