Document ID: EPA-R09-OAR-2013-0009-0186
Agency: epa
Document Type: Proposed Rule
Title: Air Quality State Implementation Plans; Approvals and Promulgations: Navajo Nation; Regional Haze Requirements for Navajo Generating Station; Supplemental Proposal
Posted Date: 2013-10-22T04:00Z

[Federal Register Volume 78, Number 204 (Tuesday, October 22, 2013)]
[Proposed Rules]
[Pages 62509-62523]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-24281]

[[Page 62509]]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 49

[EPA-R09-OAR-2013-0009; FRL-9901-66-Region9]

Approval of Air Quality Implementation Plans; Navajo Nation; 
Regional Haze Requirements for Navajo Generating Station; Supplemental 
Proposal

AGENCY: Environmental Protection Agency (EPA).

ACTION: Supplemental proposed rule and notice of public hearings.

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SUMMARY: On February 5, 2013, EPA published its proposed source-
specific Federal Implementation Plan (FIP) requiring the Navajo 
Generating Station (NGS), located on the Navajo Nation, to reduce 
emissions of oxides of nitrogen (NOX) under the Best 
Available Retrofit Technology (BART) provision of the Clean Air Act 
(CAA or Act). EPA proposed the BART FIP to reduce visibility impairment 
caused by NGS at 11 National Parks and Wilderness Areas. EPA's proposed 
FIP included: (1) A proposed BART determination; (2) A proposed 
``better than BART'' alternative that achieves greater reasonable 
progress towards the national visibility goals than BART; and (3) a 
framework for evaluating additional alternatives to BART. This 
framework for evaluating additional alternatives was included in the 
proposal due to the unique purpose and history of NGS and the numerous 
stakeholder interests in it. On March 19, 2013 and June 19, 2013, EPA 
provided two extensions of the public comment period based on requests 
of several stakeholders who were actively working to develop an 
alternative to BART. On July 26, 2013, a group of stakeholders, known 
as the Technical Work Group (TWG), submitted to EPA their suggested 
alternative to BART (the ``TWG Alternative''). The TWG Alternative 
establishes a lifetime cap in NOX emissions over 2009-2044 
(the 2009-2044 NOX Cap) that is equivalent to the cumulative 
NOX emissions over 2009-2044 that NGS would emit under EPA's 
proposed BART determination of 0.055 lb/MMBtu achieved within five 
years of the final rule. Due to on-going lease and ownership 
uncertainties, the operators of NGS cannot yet commit to a single 
course of action for maintaining emissions below the 2009-2044 
NOX Cap. The TWG Alternative therefore includes several 
alternative operating scenarios for meeting the 2009-2044 
NOX Cap. EPA did not participate in the TWG or assist in 
developing the TWG Alternative, and has independently evaluated the TWG 
Alternative to determine if it meets the requirements of the CAA and 
the Regional Haze Rule (RHR). In this action, EPA is proposing to 
determine that the TWG Alternative is ``better than BART'' because 
maintaining emissions below the 2009-2044 NOX Cap, as 
provided in the TWG Alternative, achieves greater reasonable progress 
than EPA's proposed BART determination towards the national visibility 
goal. EPA is accepting comment concurrently on today's Supplemental 
Proposal and our proposal from February 5, 2013.

DATES: Comments on EPA's February 5, 2013 proposal and today's 
Supplemental Proposal for NGS must be postmarked no later than January 
6, 2014.

ADDRESSES: Submit comments, identified by docket number EPA-R09-OAR-
2013-0009, by one of the following methods:
    (1) Federal eRulemaking Portal: www.regulations.gov. Follow the on-
line instructions.
    (2) Email: r9ngsbart@epa.gov.
    (3) Mail or deliver: Anita Lee (Air-2), U.S. Environmental 
Protection Agency Region 9, 75 Hawthorne Street, San Francisco, CA 
94105-3901.
    For more detailed instructions concerning how to submit comments on 
this supplemental proposed rule, and for more information on our 
proposed rule, please see the notice of proposed rulemaking, published 
in the Federal Register on February 5, 2013 (78 FR 8274).
    Instructions: All comments will be included in the public docket 
without change and may be made available online at www.regulations.gov, 
including any personal information provided, unless the comment 
includes Confidential Business Information (CBI) or other information 
whose disclosure is restricted by statute. Information that you 
consider CBI or otherwise protected should be clearly identified as 
such and should not be submitted through www.regulations.gov or email. 
www.regulations.gov is an ``anonymous access'' system, and EPA will not 
know your identity or contact information unless you provide it in the 
body of your comment. If you send an email directly to EPA, your email 
address will be automatically captured and included as part of the 
public comment. If EPA cannot read your comment due to technical 
difficulties and cannot contact you for clarification, EPA may not be 
able to consider your comment.
    Hearings: EPA has scheduled five public hearings to accept oral and 
written comments on the proposed rulemaking. Prior to, or concurrent 
with, each public hearing, EPA will be holding an informal open house 
to allow members of the public additional time to review information 
related to EPA's proposed BART determination and Supplemental Proposal, 
and to speak with representatives from EPA. Any comments made to EPA 
staff during the open houses must still be provided in writing or 
orally during the formal public hearing in order to be considered in 
the record. The open house and public hearing schedule is as follows:
    1. LeChee Chapter House (Navajo Nation), located in LeChee, 
Arizona, three miles south of Page on Coppermine Road (Navajo Route 
20), (928) 698-2805, November 12, 2013, concurrent Open House and 
Public Hearing from 10 a.m.-1 p.m., local time;
    2. Page High School Cultural Arts Building, 434 Lake Powell 
Boulevard, located in Page, Arizona, (928) 608-4138, November 12, 2013, 
Open House from 3-5 p.m., local time and Public Hearing from 6-9 p.m., 
local time;
    3. Hopi Day School, Quarter-Mile East Main Street, located in 
Kykotsmovi, Arizona, (928) 734-2467, November 13, 2013, Open House from 
3-5 p.m., local time and Public Hearing from 6-9 p.m., local time;
    4. Phoenix Convention Center, 100 North 3rd Street, located in 
Phoenix, Arizona, (602) 262-6225, November 14, 2013, Open House from 3-
5 p.m., local time and Public Hearing from 6-10 p.m., local time;
    5. Proscenium Theatre, Pima Community College West Campus, Center 
for the Arts Building located two miles west of Interstate-10 on St. 
Mary's Road, (520) 206-6986, in Tucson, Arizona-November 15, 2013, Open 
House from 3-5 p.m., local time and Public Hearing from 6-9 p.m., local 
time.
    EPA will provide oral interpretation services between English and 
Din[eacute] at the open houses and public hearings in LeChee and Page. 
EPA may provide oral interpretation services between English and the 
Hopi language at the open house and public hearing in Kykotsmovi, 
pending availability of a Hopi interpreter. To request additional oral 
interpretation services or to request reasonable accommodation for a 
disability, please contact the person listed in the FOR FURTHER 
INFORMATION CONTACT section, by October 21, 2013. Verbatim transcripts, 
in English, of the hearings and written statements provided at the 
hearings will be included in the docket for this rulemaking.

[[Page 62510]]

    Oral testimony may be limited to five minutes or less for each 
commenter to address the proposal or supplemental proposed rule. We 
will not be providing equipment for commenters to show overhead slides 
or make computerized presentations. The public hearings for the four 
evening events are scheduled to close at 9 p.m. (in Page, Kykotsmovi, 
and Tucson) or 10 p.m. (in Phoenix), but may close later, if necessary, 
depending on the number of speakers wishing to participate.
    Written statements and supporting information submitted 
electronically or by mail during the comment period will be considered 
with the same weight as any oral comments and supporting information 
presented at the public hearings. If you are unable to attend the 
hearings but wish to submit comments on the proposed rule, you may 
submit comments as indicated in the ADDRESSES section above.
    Docket: The index to the docket for this action is available 
electronically at www.regulations.gov and in hard copy at EPA Region 9, 
75 Hawthorne Street, San Francisco, California. While documents in the 
docket are listed in the index, some information may be publicly 
available only at EPA Region 9 (e.g., maps, voluminous reports, 
copyrighted material), and some may not be publicly available in either 
location (e.g., CBI). To inspect the hard copy materials, please 
schedule an appointment during normal business hours with the contact 
listed in the FOR FURTHER INFORMATION CONTACT section.

FOR FURTHER INFORMATION CONTACT: Anita Lee, EPA Region 9, (415) 972-
3958, r9ngsbart@epa.gov.

SUPPLEMENTARY INFORMATION: Throughout this document, ``we'', ``us'', 
and ``our'' refer to EPA.

Table of Contents

I. Background
    A. The Significance of the Navajo Generating Station
    B. EPA's February 5, 2013 Proposed BART Determination
    C. Technical Work Group Agreement
II. Legal Background for Proposing the TWG Alternative to BART as 
Achieving Greater Progress Towards the National Visibility Goal
III. EPA's Technical Evaluation of Greater Reasonable Progress 
Towards the National Visibility Goal
    A. Summary of TWG Alternative to BART
    B. EPA's Technical Evaluation of TWG Alternative to BART
IV. EPA's Supplemental Proposal
V. Statutory and Executive Order Reviews
    A. Executive Order 12866: Regulatory Planning and Review and 
Executive Order 13563: Improving Regulation and Regulatory Review 
13563B. Paperwork Reduction Act
    B. Paperwork Reduction Act
    C. Regulatory Flexibility Act
    D. Unfunded Mandates Reform Act
    E. Executive Order 13132: Federalism
    F. Executive Order 13175: Consultation and Coordination With 
Indian Tribal Governments
    G. Executive Order 13045: Protection of Children From 
Environmental Health Risks and Safety Risks
    H. Executive Order 13211: Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use
    I. National Technology Transfer and Advancement Act
    J. Executive Order 12898: Federal Actions To Address 
Environmental Justice in Minority Populations and Low-Income 
Populations

I. Background

A. The Significance of the Navajo Generating Station

    NGS is a coal-fired power plant located on the Navajo Nation Indian 
Reservation, just east of Page, Arizona, approximately 135 miles north 
of Flagstaff, Arizona. Emissions of NOX from NGS affect 
visibility at 11 National Parks and Wilderness Areas that are 
designated as Class I federal areas, mandated by Congress to receive 
heightened protection: Arches National Park (NP), Bryce Canyon NP, 
Canyonlands NP, Capitol Reef NP, Grand Canyon NP, Mazatzal Wilderness 
Area (WA), Mesa Verde NP, Petrified Forest NP, Pine Mountain WA, 
Sycamore Canyon WA, and Zion NP. These areas support an active tourism 
industry drawing over four million visitors to the Grand Canyon 
National Park alone in 2011.\1\ NGS is subject to the BART requirements 
of the CAA and the RHR based on its age and its effects on visibility 
in Class I areas. For a more detailed discussion of our determination 
that NGS is subject to BART and the requirements of the RHR, please see 
our proposed FIP at 78 FR 8274 and 8277 (February 5, 2013).
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    \1\ See document titled ``Grand Canyon Annual Visitation.pdf'' 
within document number 0005 in the docket for this proposed 
rulemaking at EPA-R09-OAR-2013-0009.
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    NGS is co-owned by six entities: the U.S. Bureau of Reclamation 
(Reclamation)--24.3 percent, Salt River Project Agricultural 
Improvement and Power District (SRP), which also acts as the facility 
operator--21.7 percent, Los Angeles Department of Water and Power 
(LADWP)--21.2 percent, Arizona Public Service (APS)--14 percent, Nevada 
Energy (NV Energy, also known as Nevada Power Company)--11.3 percent, 
and Tucson Electric Power (TEP)--7.5 percent.
    Federal participation in NGS was authorized in the Colorado River 
Basin Project Act of 1968 as a preferred alternative to building 
hydroelectric dams in the Grand Canyon for providing power to the 
Central Arizona Project (CAP).\2\ The CAP is a 336-mile water 
distribution system that delivers about 1.5 million acre-feet (AF) per 
year of Colorado River water from Lake Havasu in western Arizona to 
non-tribal agricultural water users in central Arizona, Indian tribes 
located in Arizona, and municipal water users in Maricopa, Pinal, and 
Pima counties.\3\ The CAP water is used to meet the terms of a number 
of Indian water-rights settlements in central Arizona and to reduce 
groundwater usage in the region.\4\ Electricity from NGS powers the 
pumps that move CAP water to its destinations along the distribution 
system.
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    \2\ See information on the Central Arizona Project at http://www.usbr.gov/projects/Project.jsp?proj_Name=Central+Arizona+Project. See also report by the National 
Renewable Energy Lab (NREL), discussed in more detail in Section 
G.iii of this notice, titled ``Navajo Generating Station and Air 
Visibility Regulations: Alternatives and Impacts'', revision dated 
March 2012 (NREL report) within document number 0005 in the docket 
for this proposed rulemaking at EPA-R09-OAR-2013-0009.
    \3\ See Section titled ``Welcome'' on CAP homepage: http://www.cap-az.com/.
    \4\ See, for example, Section 4 of the NREL report and Comments 
from the Central Arizona Water Conservation District on the NREL 
report to DOI and EPA dated February 23, 201[2], within document 
number 0005 in the docket for this proposed rulemaking at EPA-R09-
OAR-2013-0009.
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    Several tribes located in Arizona including the Gila River Indian 
Community, the Ak-Chin Indian Community, the Tohono O'odham Nation, the 
San Carlos Apache Tribe, the White Mountain Apache Indian Tribe, the 
Fort McDowell Yavapai Nation, the Salt River Pima-Maricopa Indian 
Community, the Navajo Nation, the Yavapai-Apache Nation, the Hopi 
Tribe, the Pascua Yaqui Tribe, the Yavapai-Prescott Tribe, and the 
Tonto Apache Nation, have CAP water allocations or contracts.\5\ In 
exchange for allocations of CAP water at reduced cost and access to 
funds for the development of water infrastructure, the tribes with 
water settlement agreements have released their claims to other water 
in Arizona. Excess NGS power owned by Reclamation that is not used by 
CAP is sold and profits are deposited into a fund to support the tribal 
water settlement agreements.\6\ The U.S. Department of the Interior 
(DOI or the Interior), through Reclamation, plays an important role in 
the implementation of

[[Page 62511]]

these settlement agreements and the management of the funds set aside 
for water infrastructure development for tribes.
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    \5\ See Table 7, 78 FR at 8283 (February 5, 2013).
    \6\ Id.
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    The coal used by NGS is supplied by the Kayenta Mine, operated by 
Peabody Energy and located on reservation lands of both the Navajo 
Nation and the Hopi Tribe. Taxes and royalties from NGS and the Kayenta 
Mine paid to the Navajo Nation and Hopi Tribe contribute to the annual 
revenues for both governments.\7\
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    \7\ Id.
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    Given the extent of federal and tribal interests in NGS, on January 
4, 2013, EPA, DOI, and the Department of Energy (DOE) signed a joint 
federal agency statement (Joint Statement) committing to collaborate on 
several short- and long-term goals, including analyzing and pursuing 
strategies for providing clean, affordable, and reliable power, 
affordable and sustainable water, and sustainable economic development 
to key stakeholders who currently depend on NGS.\8\ The Joint Statement 
also recognizes the trust responsibilities of the Federal government to 
Indian tribes.
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    \8\ See document title ``2013--0104 Joint Federal Agency 
Statement on NGS'' within document number 0005 in the docket for 
this proposed rulemaking at EPA-R09-OAR-2013-0009.
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B. EPA's February 5, 2013 Proposed BART Determination

    As previously stated, NGS is subject to the BART requirements of 
the CAA and the RHR based on its age and its effects on visibility in 
Class I areas. Because NGS is located in Indian country, and because 
the Navajo Nation has not developed a Tribal Implementation Plan to 
implement the BART requirement for NGS, on February 5, 2013, EPA 
proposed a BART determination to require NGS to meet a NOX 
emission limit of 0.055 pound per million British thermal units of heat 
input (lb/MMBtu) within five years of the effective date of a final 
rule.\9\ For a number of reasons, including the importance of NGS to 
numerous Indian tribes located in Arizona and the federal government's 
reliance on NGS to meet the requirements of water settlements with 
several tribes, EPA proposed an Alternative to BART (i.e., Alternative 
1) within the ``better than BART'' framework we outlined. EPA 
recognized that there may be other approaches that could result in 
better visibility benefits over time and that there may be changes in 
energy demand, supply, or other developments over the next several 
decades that may change electricity generation on the Navajo Nation.
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    \9\ Unless otherwise noted, the averaging period, for all 
emission limits, is based on a rolling average of 30 boiler 
operating days.
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    EPA's proposed ``better than BART'' framework established total 
emissions of NOX over 2009-2044 as the ``BART Benchmark'' 
against which an Alternative to BART would be compared.\10\ EPA's 
``better than BART'' framework included a NOX emission 
credit for the early and voluntary installation of LNB/SOFA over the 
2009-2011 timeframe (LNB/SOFA credit).\11\ As discussed in our proposed 
rulemaking, EPA was exercising its authority and discretion under 
section 301(d)(4) of the CAA and 40 CFR 49.11(a) to propose an extended 
timeframe for an alternative measure under the RHR for NGS. We proposed 
the LNB/SOFA credit supporting an extended timeframe based on the 
flexibility under section 301(d)(4) of the CAA, and 40 CFR 
49.11(a).\12\ EPA applied the LNB/SOFA credit to each Alternative to 
BART (adjusted emissions) and compared those values against the BART 
benchmark. Total adjusted emissions of an Alternative to BART over 
2009-2044 that were lower than the BART Benchmark were then determined 
to be ``better than BART'' and result in greater reasonable progress 
towards the national visibility goal than BART. Conversely, 
alternatives that result in total NOX emissions exceeding 
the BART Benchmark would not be acceptable unless those alternatives 
provided additional emission reductions to bridge the deficit in 
NOX emission reductions.
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    \10\ In our proposed rulemaking, we use the term ``BART 
threshold'' to describe the total emissions of NOX over 
2009-2044 against which Alternatives to BART would be compared. 
Although we use the term ``BART benchmark'' here, the two terms are 
intended to be identical in meaning.
    \11\ The NOX reductions achieved by installing the 
modern LNB/SOFA were not required under any regulatory program under 
the CAA and resulted in more NOX emission reductions 
during the period between 2009 and the BART compliance date than if 
LNB/SOFA were installed concurrently with SCR by the BART compliance 
date.
    \12\ See 78 FR 8289 (February 5, 2013).
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    To calculate the value of the LNB/SOFA credit, EPA first calculated 
the total NOX emissions over 2009-2044 that NGS would emit 
if NGS had waited until the proposed BART compliance date to install 
LNB/SOFA concurrently with SCR. EPA then calculated total 
NOX emissions over 2009-2044 with the actual installation 
date of LNB/SOFA in 2009-2011 and installation of SCR by the BART 
compliance date. The difference between the two values was calculated 
to be the LNB/SOFA credit.\13\ Under EPA's proposed framework, EPA 
established, as the BART benchmark, the total NOX emissions 
over 2009-2044 with the actual installation date of LNB/SOFA in 2009-
2011 and installation of SCR by the BART compliance date. For a more 
detailed discussion of this approach, please see our proposed FIP at 78 
FR at 8288-91.
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    \13\ As discussed in greater detail in our proposed rule (78 FR 
at 8289, February 5, 2013), EPA notes that LNB with SOFA is a 
potential control option evaluated under BART and that these 
technologies are typically used in conjunction with SCR or other 
add-on controls to first reduce NOX formation during 
combustion. EPA recognizes that the owners of NGS could have waited 
until the compliance date of the final BART determination before 
installing any new controls, including LNB/SOFA, and that the early 
and voluntary NOX reductions achieved beginning in 2009 
were not required under any regulatory program under the CAA.
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    EPA applied this framework to several alternatives we developed. In 
the February 2013 proposal, we proposed one Alternative to BART that 
would provide an additional three to five years to NGS in the schedule 
for the installation of new post-combustion control equipment to meet 
the proposed BART limit of 0.055 lb/MMBtu (i.e., Alternative 1 
requiring compliance with the proposed BART limit on one unit per year 
in 2021, 2022, and 2023). Additional NOX emissions resulting 
from delayed compliance were offset by the emissions credit NGS 
achieved by its early and voluntary installation of LNB/SOFA. We 
calculated that under this proposed Alternative 1, total adjusted 
emissions of NOX over 2009-2044 were lower than total 
emissions of NOX under EPA's proposed BART determination. 
Therefore, EPA proposed to find that Alternative 1 achieves greater 
reasonable progress than BART.
    In the February 2013 proposal, EPA also described, but did not 
propose, two additional alternatives (Alternatives 2 and 3) that would 
provide an additional five to eight years for NGS to meet the proposed 
BART limit of 0.055 lb/MMBtu (i.e., Alternatives 2 and 3 called for 
compliance with the BART limit on one unit per year over 2023-2025 and 
2024-2026, respectively). Total NOX emissions over 2009-
2044, after accounting for the LNB/SOFA early installation credit, from 
each of these two additional alternatives both exceeded the BART 
Benchmark. However, under our proposed framework, these two additional 
alternatives would be viable if the owners of NGS achieved sufficient 
additional emission reductions to bridge the NOX reduction 
deficit. EPA requested comment on our proposed ``better than BART'' 
framework and how NGS might achieve the emission reduction bridge 
necessary for the longer compliance schedules under

[[Page 62512]]

Alternatives 2 and 3 to qualify as ``better than BART.''
    In both the February 2013 proposal and in the accompanying fact 
sheet, EPA encouraged a robust public discussion of our proposed BART 
determination, our proposed Alternative 1, as well as our proposed 
``better than BART'' framework and other possible alternatives that 
meet the framework. In addition, we recognized the potential need for a 
supplemental proposal if other approaches developed by other parties 
are identified as meeting the requirements of the CAA.\14\
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    \14\ See Fact Sheet at http://www.epa.gov/region9/air/navajo/index.html#proposed.
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    After EPA published the proposed FIP on February 5, 2013, we 
received requests for a 90-day extension of the public comment period 
from the Navajo Nation, the Gila River Indian Community, SRP, and the 
Central Arizona Water Conservation District (CAWCD), the CAP operating 
entity, in order to allow stakeholders additional time to develop 
alternatives to BART for EPA's consideration. Recognizing the 
significant time and effort necessary to develop viable alternatives 
and the critical importance of active participation by affected parties 
in the development of alternatives to BART, on March 19, 2013, EPA 
extended the close of the public comment period to August 5, 2013 (78 
FR 16825).
    On June 10, 2013, EPA signed a notice, published on June 19, 2013, 
of our intent to hold five public hearings throughout the state of 
Arizona (78 FR 36716), at one location each on reservation lands of the 
Navajo Nation and Hopi Tribe, and in Page, Phoenix, and Tucson, 
Arizona.
    On June 20, 2013, SRP submitted a letter, on behalf of itself and 
certain other stakeholders, requesting another extension of the comment 
period for NGS. The SRP letter described work that had been on-going 
for several months with representatives from several organizations (the 
TWG) to develop an Alternative to BART. On July 9, 2013, EPA extended 
the close of the public comment period again to October 4, 2013 (78 FR 
41012). On September 16, 2013, EPA signed a notice extending the close 
of the public comment period a third time, to January 6, 2014.\15\
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    \15\ See document number 0172 in the docket for this proposed 
rulemaking at EPA-R09-OAR-2013-0009.
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C. Technical Work Group Agreement

    On July 26, 2013, a group of stakeholders known as the TWG and 
composed of the Central Arizona Water Conservation District (CAWCD), 
the Environmental Defense Fund (EDF), the Gila River Indian Community 
(Gila River, or the Community), the Navajo Nation, SRP, on behalf of 
itself and the other non-federal Participants, the Department of the 
Interior, and Western Resource Advocates, submitted a document 
memorializing a multi-party agreement (the TWG Agreement) to EPA for 
consideration.\16\ EPA had attended a ``kick-off'' meeting for the TWG 
on March 21, 2013, at which we described our February 5, 2013 proposal, 
but EPA did not have any further participation in the TWG.\17\ As 
described in Section III of the TWG Agreement, ``Summary of Agreement 
Elements; Reasonable Progress Alternative to BART, Obligations of 
Support, and Reservation Right'', the Agreement consists of seven 
elements: (1) A description of a ``Reasonable Progress Alternative to 
BART'' (the TWG Alternative); \18\ (2) a study of options by 
Reclamation for replacing the federal share of energy being generated 
from NGS with low-emitting energy; (3) commitments by Interior to 
reduce or offset emissions of carbon dioxide (CO2) by three 
percent per year and facilitate the development of clean energy 
resources; (4) commitments by Interior to mitigate potential impacts 
from EPA's final BART rule to Affected Tribes; (5) a commitment by 
Interior to carry out the Phase 2 Study by the National Renewable 
Energy Laboratory (NREL) for the purposes of studying options for the 
future of NGS; (6) a commitment by SRP to make funds available for a 
Local Benefit Fund for community improvement projects within 100 miles 
of NGS or the Kayenta Mine; and (7) a summary of obligations of the 
Parties to the Agreement and miscellaneous legal provisions.
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    \16\ See ``Technical Work Group Agreement Related to Navajo 
Generating Station (NGS)'' dated July 25, 2013, and submitted to EPA 
on July 26, 2013, in the docket for this proposed rulemaking at EPA-
R09-OAR-2013-0009-0122.
    \17\ See document number 0033 in the docket for the proposed 
rulemaking at EPA-R09-OAR-2013-0009.
    \18\ The ``Reasonable Progress Alternative to BART'' is a term 
from the TWG Agreement. EPA interprets this term to have the same 
meaning as an Alternative to BART or a ``better than BART'' 
Alternative, however, we do not otherwise use this term in today's 
Supplemental Proposal.
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    The TWG Agreement, in its entirety, is included in the docket for 
this proposed rulemaking. Appendix B to the TWG Agreement is the only 
component of the TWG Agreement that is applicable to today's action. 
EPA is not requesting comment on the provisions of the TWG Agreement 
unrelated to Appendix B, and will not be responding to comments on 
aspects of the TWG Agreement that are not related to our authority 
under section 169A of the CAA to require BART or an Alternative to 
BART.

II. Legal Background for Proposing the TWG Alternative to BART as 
Achieving Greater Progress Towards the National Visibility Goal

    In our proposed BART determination for NGS on February 5, 2013 (78 
FR 8274), we provided a detailed discussion of the statutory and 
regulatory framework for addressing visibility, addressing sources 
located in Indian country under the Tribal Authority Rule (TAR), and 
developing BART determinations pursuant to the CAA and the BART 
Guidelines set forth in Appendix Y to 40 CFR Part 51. Please see 77 FR 
8275-8277 for our discussion on these topics. In the following 
paragraphs, we describe the legal background and authority for 
evaluating Alternatives to BART and for providing additional compliance 
flexibility to NGS.
    Under the CAA, compliance with emission limits determined as BART 
must be achieved ``as expeditiously as practicable but in no event 
later than five years'' after the effective date of the final BART 
determination (See CAA 169A(b)(2)(A) and (g)(4)). Therefore, the BART 
compliance date for NGS would be no later than 2019 if the rule is 
finalized in 2014. As discussed in greater detail in our proposed BART 
determination, EPA recognizes that the circumstances related to NGS 
create unusual and significant challenges for a five-year compliance 
schedule.\19\ Based on those challenges and our discretion under the 
TAR for implementing CAA requirements on tribal lands, we considered 
other options that are consistent with the CAA and RHR, and that 
provide for a more flexible, extended compliance schedule.
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    \19\ SRP expressed concern that the owners of NGS may choose to 
retire the facility if faced with the financial risk of making a 
large capital investment within five years without also having 
certainty that the lease and contract re-negotiations would conclude 
in a timely and favorable manner. EPA understands that the owners of 
NGS face numerous uncertainties and the unusual requirement to 
comply with NEPA for lease and other rights-of-way approvals, which 
apply only to NGS and Four Corners Power Plant, the other coal-fired 
power plant located on the Navajo Nation. EPA also understands the 
importance of the continued operation of NGS and the Kayenta Mine to 
the Navajo Nation and Hopi Tribe as a source of direct revenues 
through lease payments or coal royalties, as well as the importance 
of Reclamation's share of NGS to supply water to many tribes located 
in Arizona in accordance with several water settlement acts.
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    EPA's BART regulations allow an Alternative to BART provided the 
alternative results in greater reasonable progress than would have been 
achieved

[[Page 62513]]

through installation of BART. 40 CFR 51.308(e)(2). The regulations 
provide that an Alternative to BART must ensure that all necessary 
emission reductions occur within the period of the first long-term 
strategy for regional haze (i.e., by 2018) for States that were 
required to submit regional haze SIPs in December 2007. 40 CFR 
51.308(e)(2)(iii). Thus, if states had submitted timely regional haze 
SIPs in 2007 with BART compliance deadlines in 2012, the RHR provided 
over five additional years for the implementation of Alternatives to 
BART.
    In our February 5, 2013 proposal for NGS, EPA proposed an 
Alternative to BART (Alternative 1). In particular, EPA proposed that 
consideration of a compliance schedule beyond 2018 for Alternative 1 at 
NGS was appropriate for a number of reasons, including the importance 
of NGS to numerous Indian tribes located in Arizona and the federal 
government's reliance on NGS to meet the requirements of water 
settlements with several tribes. The timeframe for compliance would 
not, in itself, avoid or mitigate increases in water rates for tribes 
located in Arizona; however, it would provide time for the 
collaborating federal agencies to explore options to avoid or minimize 
potential impacts to tribes, including seeking funding to cover 
expenses for the federal portion of pollution control at NGS.
    In developing this framework, EPA proposed to exercise its 
authority and discretion under section 301(d)(4) of the CAA, 42 U.S.C. 
7601(d)(4), and the TAR, 40 CFR 49.11(a) and proposed an extended 
timeframe for an alternative measure under the RHR for NGS. EPA 
considered this extension of time to be consistent with the general 
programmatic requirements. States and regulated sources accordingly had 
almost 20 years under the RHR to design and implement alternative 
measures to BART. Because of the myriad stakeholder interests and 
complex governmental interests unique to NGS, we are only now 
addressing the BART requirements for NGS. For all the reasons explained 
above, we considered it appropriate to consider an extended compliance 
period for NGS.
    Our proposal to require emission reductions beyond 2018 was 
supported by the Tribal Authority Rule codified at 40 CFR 49.11(a). The 
TAR reflects EPA's commitment to promulgate ``such Federal 
implementation plan provisions as are necessary or appropriate to 
protect air quality'' in Indian country where a tribe either does not 
submit a Tribal Implementation Plan (TIP) or does not receive approval 
of a submitted TIP. (Emphasis added.)
    The use of the term ``provisions as are necessary or appropriate'' 
indicates EPA's determination that it may only be necessary or 
appropriate to promulgate a FIP of limited scope. The United States 
Court of Appeals for the Tenth Circuit has previously endorsed the 
application of this approach in a challenge to the FIP for the Four 
Corners Power Plant, stating: ``[40 C.F.R. 49.11(a)] provides the EPA 
discretion to determine what rulemaking is necessary or appropriate to 
protect air quality and requires the EPA to promulgate such 
rulemaking.'' Ariz. Public Serv. Co. v. EPA, 562 F.3d 1116 (10th Cir. 
2009). The court went on to observe: ``Nothing in section 49.11(a) 
requires EPA . . . to submit a plan meeting the completeness criteria 
of [40 CFR part 51] Appendix V.'' Id. While the decision in Arizona 
Public Service Company focused on 40 CFR Part 51 Appendix V, EPA 
believes the same considerations apply to the promulgation of a FIP 
intended to address the objectives set forth in 40 CFR 51.308(e)(2). In 
particular, EPA has discretion to determine if and when a FIP 
addressing the objectives set forth in 40 CFR 51.308(e)(2) should be 
promulgated, which necessarily includes discretion to determine the 
timing for complying with the requirements of any such FIP.

III. EPA's Technical Evaluation of Greater Reasonable Progress Towards 
the National Visibility Goal

A. Summary of TWG Alternative to BART

    Appendix B of the TWG Agreement contains the TWG Alternative that 
was submitted to EPA for consideration as a ''better than BART'' 
Alternative.\20\ The TWG Alternative was developed by the Technical 
Work Group, which did not include EPA, to satisfy the ``better than 
BART'' requirements of the RHR.\21\ The core element of the TWG 
Alternative is that the TWG Alternative establishes a cap in 
NOX emissions over the period 2009-2044 (the 2009-2044 
NOX Cap). The TWG Alternative then outlines the operating 
scenarios that would be required depending on the final outcome of NGS 
ownership after the expiration of the current lease term at the end of 
2019. The owners of NGS commit to maintaining emissions from NGS below 
the 2009-2044 NOX Cap regardless of the post-2019 ownership 
of NGS and the applicable operating scenario. In general, the operating 
scenarios include specific actions for achieving emission reductions by 
2019 and 2030 to ensure compliance with the 2009-2044 NOX 
Cap. The TWG Alternative also provides for an operating scenario that 
is less well-defined but establishes a second NOX emissions 
cap over the period of 2009-2029 (the 2009-2029 NOX Cap) 
that is equivalent to emission reductions that would be achieved by the 
more well-defined operating scenarios. The 2009-2029 NOX Cap 
would apply in addition to the 2009-2044 NOX Cap. The TWG 
Alternative also includes annual reporting requirements to EPA.
---------------------------------------------------------------------------

    \20\ The TWG Alternative is divided into distinct operating 
scenarios that the TWG calls Alternative A and Alternative B. The 
TWG Alternative further divides Alternative A into sub-scenarios. 
EPA refers to the sub-scenarios under Alternative A as A1, A2, and 
A3. EPA is reviewing all four scenarios (Alternatives A1, A2, A3, 
and B) together as one Alternative.
    \21\ The TWG Agreement also states that the TWG Alternative is 
intended to satisfy any requirements of the Reasonably Attributable 
Visibility Impairment (RAVI) program. On May 5, 2009, the National 
Parks Conservation Association (NPCA) petitioned the Department of 
the Interior to certify that emissions of NOX and 
particulate matter cause visibility impairment at the Grand Canyon 
National Park. This type of visibility impairment, reasonably 
attributable from a single stationary source, is known as Reasonably 
Attributable Visibility Impairment (RAVI). On January 20, 2011, NPCA 
filed a complaint in the United States District Court for the 
District of Columbia contending that the Department of the Interior 
was unreasonably delaying making a finding of reasonable attribution 
from NGS. In a letter dated March 8, 2011 to NPCA, the National Park 
Service (NPS) declined to make such a finding based on EPA's on-
going work related to a BART determination for NGS. On June 30, 
2011, the Court dismissed the complaint holding the NPS letter 
refusing to make the finding of reasonable attribution constituted 
denying the Petitioner's request for a RAVI finding. If NPS were to 
certify RAVI at Grand Canyon from NGS, EPA must determine whether 
visibility impairment at Grand Canyon is indeed reasonably 
attributable to NGS. If EPA were to make a positive attribution 
determination, then EPA would be required to conduct a BART 
determination for NGS. We note, however, that while the process for 
determining whether a given stationary source causes or contributes 
to RAVI or regional haze are different, the process for determining 
BART under both programs is essentially the same. In other words, a 
BART determination for RAVI would likely be the same as a BART 
determination for regional haze. The 2009 NPCA petition, the 2011 
NPCA complaint, the 2011 letter from NPS, and the 2011 Court 
decision are all included in the docket for this proposed 
rulemaking.
---------------------------------------------------------------------------

    The 2009-2044 NOX Cap is calculated based on expected 
emissions that would result if NGS complied with EPA's proposed BART 
emission limit of 0.055 lb/MMBtu on each unit within five years of the 
effective date of a final rule. The TWG Alternative also incorporates 
EPA's proposed credit to NGS for the emission reductions achieved from 
the early and voluntary installation of LNB/SOFA beginning in 2009 (the 
LNB/SOFA credit).
    The TWG Alternative puts forth two main operating scenarios, with 
additional sub-options, for limiting NOX emissions below the 
2009-2044 NOX Cap. These scenarios are called TWG

[[Page 62514]]

Alternatives A and B. The TWG Alternative provides different operating 
scenarios because of current uncertainty over the ownership interests 
in NGS following the expiration of the initial NGS lease term at the 
end of 2019. Specifically, two owners, LADWP and NV Energy, have 
announced plans to divest from any continuing ownership interest in NGS 
after 2019. These owners may retire or sell their interest in NGS. In 
addition, the recent Lease Amendment with the Navajo Nation that 
extends the NGS lease to 2044 includes an option for the Navajo Nation 
to purchase up to a 170 MW ownership share in NGS.\22\
---------------------------------------------------------------------------

    \22\ See Section XI of the ``Amendment No. 1 to Indenture of 
Lease Navajo Units 1, 2, and 3 Between the Navajo Nation and Arizona 
Public Service Company, Department of Water and Power of the City of 
Los Angeles, Nevada Power Company dba NV Energy, Salt River Project 
Agricultural Improvement and Power District, and Tucson Electric 
Company'', within document number 0150 in the docket for this 
proposed rulemaking at EPA-R09-OAR-2013-0009.
---------------------------------------------------------------------------

    Each of the three scenarios under TWG Alternative A (i.e., A1, A2, 
or A3) requires two significant emission reductions, one to occur by 
December 31, 2019 and the other by December 31, 2030. The emission 
reductions in the first step, by December 31, 2019, under TWG 
Alternative A1 would be achieved through closure of one unit. 
Alternative A2 would entail closure of one unit with an increase in 
capacity, not to exceed 189 MW, at the remaining two units; Alternative 
A3 would entail the curtailment of energy production across all three 
units such that the emission reductions are equivalent to the closure 
of approximately one unit. The emission reductions to occur in the 
second step, under Alternatives A1-3, would occur by December 31, 2030, 
and would be achieved by compliance of two units at NGS with an 
emission limit of 0.07 lb/MMBtu, achievable with the installation of 
SCR. Under the TWG Alternative, although the 2009-2044 NOX 
Cap is calculated based on EPA's proposed BART emission limit of 0.055 
lb/MMBtu, the owners of NGS commit to meeting a limit of 0.07 lb/MMBtu 
from the installation of SCR. The operator states that a limit of 0.055 
lb/MMBtu is not achievable for a retrofit application when startup, 
shutdown, and load following emissions are included.\23\
---------------------------------------------------------------------------

    \23\ See Appendix B.1.A.3 of the Technical Work Group Agreement 
on NGS, document number 0122 in the docket for this proposed 
rulemaking. EPA does not consider the limit of 0.07 lb/MMBtu to be a 
BART emission limit, rather, a component of the TWG Alternative. 
Under the TWG Alternative, this higher emission rate is offset by 
the closure of one unit, or the curtailment of generation. In other 
words, despite the higher emission rate under the TWG Alternative 
compared to EPA's proposed BART emission limit, NGS would comply 
with the 2009-2044 NOX Cap because additional emission 
reductions are achieved from closure or curtailment.
---------------------------------------------------------------------------

    Alternative A1 would be triggered if LADWP and NV Energy retire 
their ownership shares of NGS without selling, or if LADWP and NV 
Energy sell their ownership shares to an existing NGS participant and 
the Navajo Nation does not elect to purchase an interest in NGS. 
Alternative A2 is triggered if LADWP or NV Energy sell their ownership 
shares to an existing NGS participant, the Navajo Nation elects to 
purchase an interest in NGS, and the NGS participants can increase the 
capacity of NGS by no more than 189 MW \24\ without triggering major 
source pre-construction permitting requirements.\25\ Alternative A3 is 
triggered if LADWP or NV Energy sell their ownership shares to an 
existing NGS Participant, the Navajo Nation elects to purchase an 
interest in NGS, and the NGS Participants cannot increase the capacity 
of NGS without triggering major source pre-construction permitting 
requirements.
---------------------------------------------------------------------------

    \24\ LADWP owns approximately 477 MW of NGS, while NV Energy 
owns approximately 254 MW. The sum of their shares is 731 MW, which 
is 19 MW short of one 750 MW unit at NGS. The Navajo Nation has the 
option to purchase up to a 170 MW interest in NGS. A 189 MW limit in 
the capacity increase is based on making up the 19 MW shortfall and 
the maximum amount the Navajo Nation can purchase (i.e., the sum of 
19 MW and 170 MW).
    \25\ The Prevention of Significant Deterioration (PSD) Program 
generally requires pre-construction permitting for major sources if 
the intended modification increases emissions of certain air 
pollutants above the PSD significance thresholds. The TWG 
Alternative also cites the Nonattainment New Source Review Program, 
a pre-construction permitting program for areas that are not in 
attainment with the National Ambient Air Quality Standards (NAAQS). 
Currently, this program does not apply to NGS as it is not located 
in an area that is out of attainment with any of the NAAQS.
---------------------------------------------------------------------------

    TWG Alternative B would be triggered if LADWP and/or NV Energy sell 
their ownership interest to a third party (i.e., a party that is not an 
existing NGS participant). TWG Alternative B establishes similar 
emission reductions to Alternative A by setting a second NOX 
emission cap over the 2009-2029 period, i.e., the 2009-2029 
NOX Cap (calculated to be equivalent to the closure of one 
unit in 2020), in addition to the 2009-2044 NOX Cap. 
Alternative B specifies that NOX emissions must be 
maintained below the cap during each applicable period (2009-2029 and 
2009-2044), but does not specify how the NGS owners must operate NGS to 
meet each cap. The TWG Alternative outlines annual emissions reporting 
and planning requirements both to the public and to EPA to ensure 
progress towards emissions goals and maintenance of emissions below the 
2009-2044 NOX Cap.

B. EPA's Technical Evaluation of TWG Alternative to BART

    EPA is proposing to include the TWG Alternative as a second 
``better than BART'' Alternative to achieve compliance with the 
RHR.\26\ We are proposing to determine that the TWG Alternative 
satisfies the requirements of the RHR as discussed below.
---------------------------------------------------------------------------

    \26\ In our proposed action on February 5, 2013, EPA proposed a 
BART determination for NGS and Alternative 1 as a ``better than 
BART'' Alternative. In today's action, we are proposing that the TWG 
Alternative also meets our ``better than BART'' framework. Taken 
together, EPA has proposed a BART determination for NGS, Alternative 
1, and the TWG Alternative.
---------------------------------------------------------------------------

    As stated previously, the TWG Alternative establishes a 2009-2044 
NOX Cap based on expected emissions that would result if NGS 
complied with EPA's proposed BART determination. The TWG Alternative 
also incorporates EPA's proposed LNB/SOFA credit into the 2009-2044 
NOX Cap. In our February 5, 2013 proposed rule, EPA 
established our proposed BART determination as a BART Benchmark based 
on actual emissions and applied the LNB/SOFA credit to each Alternative 
to BART (to calculate ``adjusted'' emissions). Adjusted emissions, from 
each Alternative, were then compared against the BART Benchmark. As 
discussed in the following paragraphs, these two methods of applying 
credit for the early and voluntary installation of LNB/SOFA beginning 
in 2009 are equivalent.\27\
---------------------------------------------------------------------------

    \27\ See also Spreadsheet titled ``Supplemental Better than BART 
Alternatives.xlsx'' in the docket for this proposed rulemaking.
---------------------------------------------------------------------------

    As shown in our proposed rulemaking, EPA's proposed BART Benchmark 
was 358,974 tons of NOX over 2009-2044.\28\ This value was 
calculated assuming compliance with EPA's proposed BART emission limit 
of 0.055 lb/MMBtu on January 1, 2018, based on a final rule effective 
date of January 1, 2013. A final rule effective date of January 1, 2013 
is no longer appropriate for NGS because EPA will

[[Page 62515]]

not issue a final BART rule by that date. The TWG Alternative provided 
an example calculation for the 2009-2044 NOX Cap assuming a 
final rule effective date of December 31, 2013, an emission limit of 
0.055 lb/MMBtu, and the application of the LNB/SOFA credit to the 
cap.\29\ The LNB/SOFA credit, as applied to the cap, assumes that LNB/
SOFA are installed at NGS concurrently with SCR, rather than using the 
actual early installation dates on one unit per year over 2009-2011. 
The example in the TWG Alternative calculates a 2009-2044 
NOX Cap of 480,490 tons and acknowledges that the cap would 
change depending on the actual effective date of the final rule. The 
difference between the BART Benchmark from EPA's proposed rulemaking 
(of 358,974 tons) and the example calculated in the TWG Alternative (of 
480,490 tons) is based on the application of the LNB/SOFA credit to the 
2009-2044 NOX Cap and the use of a different final rule 
effective date, i.e., 2014 instead of 2013. Additionally, in our 
proposed rulemaking, EPA included a transcription error in our 
calculation of the BART Benchmark, which contributes nominally to the 
difference.\30\
---------------------------------------------------------------------------

    \28\ See Table 12 at 78 FR at 8290 and document titled ``BART 
Alternatives.xlsx'' in document number 0005 in the docket for this 
proposed rulemaking at EPA-R09-OAR-2013-0009. In our BART proposal, 
and in calculating the 2009-2044 NOX Cap in this 
Supplemental Proposal, EPA used the average annual NOX 
emissions from NGS over 2001-2008 (34,152 tons) to estimate future 
annual emissions before compliance with the 0.055 lb/MMBtu 
NOX limit. The TWG Alternative also used this value in 
estimating its cap. Estimates for annual emissions in 2020 and 
thereafter were based on the 0.055 lb/MMBtu NOX limit for 
BART and the average heat input over 2001-2008. This method was 
similarly used by EPA in our BART proposal and this Supplemental 
Proposal, as well as the TWG Alternative.
    \29\ Regarding the final rule effective date, see Infra. at 
footnote 33.
    \30\ EPA erroneously used the value 5,343 tons per year to 
represent NOX emissions from NGS after installation of 
SCR. The correct value was 5,345 tons per year. See, for example, 
comparison of cells B23 and C23 in ``emissions'' tab of the 
spreadsheet entitled ``BART Alternatives.xlsx'' in document number 
0005 in the docket for this proposed rulemaking at EPA-R09-OAR-2013-
0009.

       Table 1--Differences Between BART Benchmark and Example Calculation of NOX Cap From TWG Alternative
----------------------------------------------------------------------------------------------------------------
                                                 BART Benchmark
                                                    for NOX                         Assumptions
----------------------------------------------------------------------------------------------------------------
As reported in 2/5/13 Proposed Rulemaking....            358,974  BART compliance by January 1, 2018 (final rule
                                                                   effective January 1, 2013).
Step 1: Correction for Transcription Error...            359,028  Transcription Error of 2 tpy for 27 years =
                                                                   addition of 54 tons.
Step 2: Plus Correction for Revised BART                 377,015  Change BART Compliance date from January 1,
 Compliance Date.                                                  2018 to January 1, 2019 = Difference between
                                                                   LNB/SOFA and SCR+LNB/SOFA for one year =
                                                                   23,325 tons minus 5,345 tons = 17,980 tons.
Step 3: Plus Application of LNB/SOFA Credit..            480,489  Early emission reductions over 2009-2018
                                                                   achieved from LNB/SOFA installation = (34,152
                                                                   tpy * 10 years)--(30,500 + 24,427 + 19,837 +
                                                                   (23,325 * 7 years) = 103,481 tons.
----------------------------------------------------------------------------------------------------------------

    Table 1 shows that the correction for EPA's transcription error, a 
revised BART compliance date, and the application of the LNB/SOFA 
credit to the BART Benchmark instead of alternatives, account for the 
full difference between EPA's BART Benchmark, as reported in our 
proposed rulemaking, and the example calculation from the TWG 
Alternative.\31\
---------------------------------------------------------------------------

    \31\ Id.
---------------------------------------------------------------------------

    Using the value from Table 1 of 480,489 tons, representing total 
NOX emissions over 2009-2044 if LNB/SOFA were installed 
concurrently with SCR by 2019, and the value of 377,015 tons, 
representing total NOX emissions over 2009-2044 with actual 
installation years for LNB/SOFA, the LNB/SOFA credit is 103,481 tons. 
As discussed previously, in our proposed rulemaking, EPA set, as the 
BART Benchmark, the value of total NOX emissions over 2009-
2044 based on the actual early installation years for LNB/SOFA (i.e., 
377,015 tons), and applied the LNB/SOFA credit to BART Alternatives to 
calculated a value for ``adjusted emissions''. If the ``adjusted 
emissions'' were lower than the BART Benchmark, the BART Alternative 
was determined to be ``better than BART''. The TWG Alternative, 
instead, applied the LNB/SOFA credit to the 2009-2044 NOX 
Cap (i.e., resulting in 480,489 tons, very close to the value reported 
by TWG of 480,490 tons), and calculated total emissions from 
Alternatives based on the actual early installation years for LNB/SOFA. 
If emissions from the BART Alternative are lower than the 2009-2044 
NOX Cap, the Alternative is ``better than BART''. Using 
Alternative 1 from our February 5, 2013 proposed rulemaking, i.e., 
compliance with the proposed BART emission limit in 2021, 2022, and 
2023, as an example, Table 2 shows that these two methods of comparing 
Alternatives against BART are equivalent.\32\
---------------------------------------------------------------------------

    \32\ See also Spreadsheet titled ``Supplemental Better than BART 
Alternatives.xlsx'' in the docket for this proposed rulemaking.

   Table 2--EPA and TWG Methods of Comparing Alternatives Against BART
------------------------------------------------------------------------
                                       BART            Alternative 1
------------------------------------------------------------------------
                               EPA Method
------------------------------------------------------------------------
Compliance Years..............  By 2019..........  2021, 2022, 2023.
Total Emissions (tons)........  377,008 tons.....  430,948 tons.
LNB/SOFA Credit...............  n/a..............  103,481 tons.
Adjusted Emissions............  n/a..............  327,467 tons.
Better than BART?.............  n/a..............  Yes, by 49,541 tons
                                                    (377,008-327,467
                                                    tons).
------------------------------------------------------------------------
                               TWG Method
------------------------------------------------------------------------
Compliance Years..............  By 2019..........  2021, 2022, 2023.
Total Emissions (tons)........  377,008 tons.....  430,948 tons.
LNB/SOFA Credit...............  103,481 tons.....  n/a.
Adjusted Emissions............  480,489 tons.....  n/a.
Better than BART?.............  n/a..............  Yes, by 49,541 tons
                                                    (480,489-430,948
                                                    tons).
------------------------------------------------------------------------

[[Page 62516]]

    As discussed previously, EPA anticipates that the compliance date 
for BART would be based on the effective date of the final rule, which 
is typically 60 days following publication of the final rule in the 
Federal Register. Therefore, in calculating the 2009-2044 
NOX Cap, EPA assumes that an effective date of July 1, 2014 
is reasonable and justified.\33\ Based on a July 1, 2014 effective 
date, compliance with the BART emission limit must occur by July 1, 
2019. Using this compliance date, as well as correcting for the 
transcription error in our proposed rulemaking and applying the LNB/
SOFA credit to the BART Benchmark instead of BART Alternatives, EPA 
calculates the 2009-2044 NOX Cap to be 494,899 tons.\34\
---------------------------------------------------------------------------

    \33\ The comment period for EPA's proposed BART determination 
and Supplemental Proposal will close in January 2013. EPA 
anticipates that a final rule that considers and responds to all 
comments cannot be completed until Spring 2014. Because a final rule 
is typically effective 60 days following publication in the Federal 
Register, EPA anticipates the effective date of the final rule will 
occur no earlier than mid-summer 2014.
    \34\ See also Spreadsheet titled ``Supplemental Better than BART 
Alternatives.xlsx'' in the docket for this proposed rulemaking.
---------------------------------------------------------------------------

    In our proposed BART determination on February 5, 2013, we 
established a framework for evaluating other Alternatives to BART, 
centered on our proposed BART determination that calculated a BART 
benchmark for total NOX emissions over 2009-2044. We 
compared total emissions from our proposed alternative, Alternative 1 
(adjusted for the emission reductions associated with the early 
installation of LNB/SOFA) against the BART benchmark to determine that 
Alternative 1 was ``better than BART''. The TWG Alternative to BART 
uses EPA's BART benchmark to establish an emission cap and commits to 
operate NGS in a manner such that total NOX emissions over 
2009-2044 remain below the 2009-2044 NOX Cap, which we 
calculate to be 494,899 tons. In ensuring that total NOX 
emissions over 2009-2044 from NGS remain below the 2009-2044 
NOX Cap, the TWG Alternative meets the criteria of our 
proposed ``better than BART'' framework.
    EPA's technical evaluation has also focused on whether the four 
potential operating scenarios in the TWG Alternative (Alternatives A1-
A3 and B) provide a reasonable basis to ensure the NOX 
emissions will remain below the 2009-2044 NOX Cap of 494,899 
tons.
    The four possible operating scenarios under the TWG Alternative 
(Alternatives A1, A2, A3, and B) are summarized in section III.A of 
this Supplemental Proposal. These four scenarios are also shown in 
Table 3 and compared against the 2009-2044 NOX Cap. The 
2009-2044 NOX Cap reflects the final rule effective date 
that EPA estimates is reasonable and justified for this rulemaking 
(July 1, 2014), resulting in a BART compliance date of July 1, 2019. As 
discussed above, the 2009-2044 NOX Cap incorporates the LNB/
SOFA early installation credit. EPA calculates the 2009-2044 
NOX Cap to be 494,899 tons.
    The three operating scenarios under Alternative A represent 
emission reductions that occur during three distinct periods of time: 
over 2009-2011 (through the early installation of LNB/SOFA), by 2020 
(from closure or curtailment of one unit, and by 2031 (through 
compliance with a NOX limit of 0.07 lb/MMBtu on two units). 
Similarly, Alternative B represents emission reduction that would occur 
during three distinct periods of time: over 2009-2011 (through the 
early installation of LNB/SOFA), any time prior to 2029 (to maintain 
compliance with the 2009-2029 NOX Cap), and any time between 
2029 and 2044 (to maintain compliance with the 2009-2044 NOX 
Cap).
    EPA notes that the closure or curtailment of one unit at NGS in 
2020 would result not only in NOX reductions, but also in 
reductions of other criteria and hazardous air pollutants, such as 
sulfur dioxide (SO2), particulate matter, and mercury.
---------------------------------------------------------------------------

    \35\ Graphical representation of these Alternatives against the 
2009-2044 NOX Cap are shown in Spreadsheet titled 
``Supplemental Better than BART Alternatives.xlsx'' in the docket 
for this proposed rulemaking.

                                                Table 3--Summary of EPA Analysis of TWG Alternative \35\
--------------------------------------------------------------------------------------------------------------------------------------------------------
 
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                        TWG Alternative: Maintain Emissions below 2009-2044 NOX Cap using one of the following
                                                                          operating scenarios:
                                    --------------------------------------------------------------------------------------------------------------------
                                                                       A1                      A2                     A3                     B
--------------------------------------------------------------------------------------------------------------------------------------------------------
Ownership Possibilities If:          LADWP and NV Energy exit without selling ownership interest or by      LADWP or NV Energy
                                      selling to an existing NGS Participant.                                exits by selling to
                                                                                                             a 3rd party, or
                                                                                                             LADWP or NV Energy
                                                                                                             do not exit NGS..
--------------------------------------------------------------------------------------------------------------------------------------------------------
And:                                                         Navajo Nation does not  Navajo Nation          Navajo Nation
                                                              purchase ownership      purchases interest     purchases interest
                                                              interest.               (up to 170 MW).        (up to 170 MW).
--------------------------------------------------------------------------------------------------------------------------------------------------------
And:                                                                                 Owners increase        Owners do not
                                                                                      capacity (does not     increase capacity
                                                                                      trigger permit).       (triggers permit).
--------------------------------------------------------------------------------------------------------------------------------------------------------
Summary of Cap or Operating          2009-2044 NOX Cap =     By 12/31/2019, close    By 12/31/2019, close   Three units could      Maintain total NOX
 Scenarios.                           494,899 tons: By 7/1/   one unit.               one unit.              remain open..          emissions below a
                                      2019, meet limit of    By 12/31/2030, meet     By 12/31/2019,         By 12/31/2019,          2009-2029 NOX Cap
                                      0.055 lb/MMBtu          NOX limit of 0.07 lb/   increase net           curtail generation     (416,865 tons). Cap
                                      through installation    MMBtu on two units..    capacity by no more    by at least 561 MW..   is equivalent to
                                      of LNB/SOFA                                     than 189 MW..         By 12/31/2030, meet     closure of one unit
                                      concurrently with                              By 12/31/2030, meet     NOX limit of 0.07 lb/  by 12/31/2019.
                                      SCR.                                            NOX limit of 0.07 lb/  MMBtu on two units..
                                                                                      MMBtu on two units..
--------------------------------------------------------------------------------------------------------------------------------------------------------

[[Page 62517]]

 
Estimate of Total NOX over 2009-2044.......................  435,819 tons..........                  461,816 tons                  NGS must ensure total
                                                                                                                                    emissions remain
                                                                                                                                    below both Caps.
--------------------------------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------------------------------

    In order to better understand whether the three potential operating 
scenarios under Alternative A provide reasonable assurance that 
emissions from NGS will remain below the 2009-2044 NOX Cap, 
EPA estimated annual NOX emissions for each potential 
operating scenario.\36\ These estimates were based on the specific 
requirements for each scenario and the average heat input and average 
emission rates for each unit operating with LNB/SOFA.\37\ EPA used 
actual emission data, as reported to the EPA Clean Air Markets Program, 
for 2001-2012.\38\ To estimate tons of NOX emitted in the 
future, EPA calculated the product of annual heat input (in MMBtu/year) 
and the annual average NOX emission rate (in lb/MMBtu). In 
Table 3, estimates for total NOX emissions over 2009-2044 
were calculated based on the average annual heat input over 2001-2012, 
and the average annual NOX emission rate achieved over 2011-
2012 (when all three units were operating with LNB/SOFA) for the 2013-
2018 period, and 0.07 lb/MMBtu for the 2020-2044 period.
---------------------------------------------------------------------------

    \36\ Id.
    \37\ Under EPA PSD permit AZ 08-01, November 20, 2008, Units 1-3 
at NGS operate with modern LNB/SOFA with an emission limit of 0.24 
lb/MMBtu. See documents within EPA-R09-OAR-2013-0009-0005.
    \38\ Id. See also http://ampd.epa.gov/ampd/.
---------------------------------------------------------------------------

    As shown in Table 3, estimates for total NOX emissions 
over 2009-2044 for Alternatives A1, A2, and A3 are all below the 2009-
2044 NOX Cap. This indicates that under TWG Alternative A, 
NGS can be reasonably expected to remain below the 2009-2044 
NOX Cap. The TWG Alternative requires the operator of NGS to 
submit an annual report to EPA, which it must also make publicly 
available, that includes annual emissions of SO2 and 
CO2, and annual and cumulative emissions of NOX. 
In addition, EPA is including a provision to require reporting of 
annual heat input at NGS to assess operation and utilization of 
capacity at NGS.
    Consistent with 40 CFR 51.308(e), the enforceable 2009-2044 
NOX Cap will ensure that total emissions of NOX 
are less than those that would be emitted under our proposed BART 
determination. The weight of evidence, including the operating 
scenarios and annual reporting requirements as discussed above, suggest 
that NGS can be reasonably expected to remain below the 2009-2044 
NOX Cap.
    As indicated in Table 3, and as discussed previously, the operating 
scenario under TWG Alternative B does not specify the exact process 
that would be used to comply with the 2009-2044 NOX Cap. To 
ensure that NOX emission reductions are achieved under TWG 
Alternative B in a manner similar to TWG Alternative A1-A3, the TWG 
Alternative imposes a nested NOX emission cap for the 2009-
2029 period (the 2009-2029 NOX Cap) that would apply in 
addition to the 2009-2044 NOX Cap. Under TWG Alternative B, 
the 2009-2029 NOX Cap would be equivalent to total 
NOX emissions over 2009-2029 that would be achieved under 
TWG Alternative A1, i.e., closure of one unit by December 31, 2019. 
Thus, under TWG Alternative B, NGS must still reduce NOX 
emissions over 2009-2029 and 2030-2044 in order to comply with the 
2009-2029 and 2009-2044 NOX Caps, but the operator would 
have flexibility to determine the timing and method of reducing 
emissions.
    To evaluate TWG Alternative B, EPA estimated potential emission 
reduction timeframes that would be needed to comply with the 2009-2029 
and 2009-2044 NOX Caps assuming the owners of NGS elect to 
install SCR on all three units at NGS.\39\ Using the average annual 
heat input over 2001-2012, and the average annual NOX 
emission rate achieved over 2011-2012 (when all three units were 
operating with LNB/SOFA), if NGS achieves emission rates of 0.07 lb/
MMBtu or below after installation of SCR, the owners of NGS would need 
to install SCR on one unit each in 2026, 2027, and 2028 in order to 
comply with the 2009-2029 and 2009-2044 NOX Caps. If NGS 
achieves emission rates of 0.055 lb/MMBtu or below, the owners of NGS 
would need to install SCR on one unit each in 2028, 2029, and 2030 in 
order to comply with the 2009-2029 and 2009-2044 NOX Caps. 
In addition to the option of installing SCR on each unit, under TWG 
Alternative B, the owners of NGS could elect to implement any operating 
scenario (including curtailment, installation of other technologies to 
reduce emissions of NOX, or a combination of options or 
technologies) as long as the operational changes result in reduced 
emissions of NOX sufficient to maintain emissions below the 
applicable NOX Cap.
---------------------------------------------------------------------------

    \39\ Although Alternative B does not specify how the caps will 
be maintained, installation of SCR on all units at NGS is a 
reasonable compliance option, and therefore, EPA is using this as an 
example for further examination of Alternative B. See spreadsheet, 
titled ``Supplemental Better than BART Alternatives.xlsx''.
---------------------------------------------------------------------------

    To ensure compliance, the annual reporting requirements that apply 
to TWG Alternative A would also apply under TWG Alternative B. In 
addition, if TWG Alternative B is triggered, the operator of NGS would 
be required to submit annual Emission Reduction Plans to EPA that would 
identify the potential emission reductions measures and operating 
scenarios to comply with the 2009-2029 or 2009-2044 NOX 
Caps. Each potential operating scenario in each annual Emission 
Reduction Plan must show compliance with the applicable NOX 
Cap.
    Consistent with 40 CFR 51.308(e), the enforceable 2009-2029 and 
2009-2044 NOX Caps will ensure that total emission 
reductions of NOX are greater than those that would be 
achieved under our proposed BART determination. The weight of evidence, 
including possible operating scenarios and the reporting requirements 
as discussed above, indicate that NGS can be reasonably expected to 
remain below the 2009-2029 and 2009-2044 NOX Caps.
    Based on our analysis of the operating scenarios under TWG 
Alternatives A1-A3 and B, EPA is proposing to determine that the TWG 
Alternative meets EPA's ``better than BART'' framework outlined in our 
February 5, 2013 proposed BART determination for NGS.

IV. EPA's Supplemental Proposal

    In addition to our proposed BART determination and Alternative 1 
for NGS dated February 5, 2013, in today's action, EPA is supplementing 
our proposal with the TWG Alternative submitted to EPA on July 26, 2013 
as an additional ``better than BART'' Alternative. Because we are 
supplementing our February 5, 2013 proposed rulemaking with today's

[[Page 62518]]

proposal, after considering public comments, EPA may finalize 
provisions from either or both proposals, i.e., our proposed BART 
determination, proposed Alternative 1, or the TWG Alternative.
    EPA is proposing to determine that the TWG Alternative ensures that 
total emissions of NOX from NGS over 2009-2044 will remain 
below the total emissions from NGS over 2009-2044 that would have 
occurred under BART. In today's action, EPA is proposing to establish 
enforceable requirements to comply with the proposed 2009-2044 
NOX Cap, and if applicable, a 2009-2029 NOX Cap, 
including annual reporting requirements related to heat input, 
emissions of SO2 and CO2, and annual and 
cumulative emissions of NOX. In addition, if the final 
ownership outcome triggers the operating scenarios under Alternatives 
A1-A3, EPA is proposing to establish the emission reduction milestones 
under A1-A3 (closure of one unit or curtailment of electricity 
generation by December 31, 2019, and installation of SCR on two units 
by December 31, 2030) as enforceable requirements. If the final 
ownership outcome triggers Alternative B, EPA is proposing to require 
the owners of NGS to submit annual Emission Reduction Plans to EPA to 
achieve the NOX emission reductions necessary to assure 
compliance with the 2009-2029 and 2009-2044 NOX Caps. EPA is 
also proposing to require the owners of NGS to notify EPA no later than 
December 1, 2019, of the final ownership outcome and the resulting 
applicable operating scenario that it will implement. For the reasons 
outlined above, EPA is supplementing our February 5, 2013 proposed 
rulemaking to also propose the TWG Alternative as a ``better than 
BART'' Alternative that ensures greater reasonable progress towards the 
national visibility goal than BART.
    EPA is accepting public comment concurrently on our February 5, 
2013 proposed BART determination and proposed Alterative 1 and the TWG 
Alternative put forth in today's Supplemental Proposal. From November 
12-15, 2013, EPA will be holding five open house and public hearing 
events throughout Arizona to accept written and oral comment on our 
proposed rulemaking and Supplemental Proposal. The comment period for 
our February 5, 2013 proposed rulemaking and today's Supplemental 
Proposal closes on January 6, 2014.

V. Statutory and Executive Order Reviews

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

    This action supplements our proposed source-specific Federal 
Implementation Plan for the Navajo Generating Station to propose and 
take comment on an additional Alternative to BART that was developed by 
and agreed upon by a group of seven stakeholders. Under the terms of 
Executive Order (EO) 12866 (58 FR 51735, October 4, 1993) and EO 13563 
(76 FR 3821, January 21, 2011), because this proposed rule applies to 
only one facility, it is not a rule of general applicability. This 
proposed rule, therefore, is exempt from review under EO 12866 and EO 
13563.

B. Paperwork Reduction Act

    This action does not impose an information collection burden under 
the provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. 
Burden is defined at 5 CFR 1320.3(b). Under the Paperwork Reduction 
Act, a ``collection of information'' is defined as a requirement for 
``answers to * * * identical reporting or recordkeeping requirements 
imposed on ten or more persons * * *.'' 44 U.S.C. 3502(3)(A). Because 
the Supplemental Proposal applies to a single facility, Navajo 
Generating Station, the Paperwork Reduction Act does not apply.

C. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) generally requires an agency 
to prepare a regulatory flexibility analysis of any rule subject to 
notice and comment rulemaking requirements under the Administrative 
Procedure Act or any other statute unless the agency certifies that the 
rule will not have a significant economic impact on a substantial 
number of small entities. Small entities include small businesses, 
small organizations, and small governmental jurisdictions.
    For purposes of assessing the impacts of today's proposed rule on 
small entities, small entity is defined as: (1) a small business as 
defined by the Small Business Administration's (SBA) regulations at 13 
CFR 121.201; (2) a small governmental jurisdiction that is a government 
of a city, county, town, school district or special district with a 
population of less than 50,000; and (3) a small organization that is 
any not-for-profit enterprise which is independently owned and operated 
and is not dominant in its field.
    After considering the economic impacts of this proposed action on 
small entities, I certify that this proposed action will not have a 
significant economic impact on a substantial number of small entities. 
The Navajo Generating Station is not a small entity and the FIP for 
Navajo Generating Station being proposed today does not impose any 
compliance requirements on small entities. See Mid-Tex Electric 
Cooperative, Inc. v. FERC, 773 F.2d 327 (D.C. Cir. 1985). We continue 
to be interested in the potential impacts of the proposed rule and this 
Supplemental Proposal on small entities and welcome comments on issues 
related to such impacts.

D. Unfunded Mandates Reform Act (UMRA)

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), 2 
U.S.C. 1531-1538, requires Federal agencies, unless otherwise 
prohibited by law, to assess the effects of their regulatory actions on 
State, local, and tribal governments and the private sector. Federal 
agencies must also develop a plan to provide notice to small 
governments that might be significantly or uniquely affected by any 
regulatory requirements. The plan must enable officials of affected 
small governments to have meaningful and timely input in the 
development of EPA regulatory proposals with significant Federal 
intergovernmental mandates and must inform, educate, and advise small 
governments on compliance with the regulatory requirements.
    This rule does not contain a Federal mandate that may result in 
expenditures of $100 million or more for state, local, and tribal 
governments, in the aggregate, or the private sector in any one year. 
EPA anticipates the annual cost to the private sector of this 
Supplemental Proposal, which involves compliance with BART emission 
limits by two units, rather than three units, to be lower than the 
anticipated cost of EPA's proposed BART determination of $64 million 
per year (see Table 2 of EPA's proposed BART determination at 78 FR 
8274, February 5, 2013). Thus, this Supplemental Proposal is not 
subject to the requirements of sections 202 or 205 of UMRA. This 
proposed rule will not impose direct compliance costs on state, local 
or tribal governments. This proposed action will, if finalized, reduce 
the emissions of NOX from a single source, the Navajo 
Generating Station.
    In developing this rule, EPA consulted with small governments 
pursuant to a plan established under section 203 of UMRA to address 
impacts

[[Page 62519]]

of regulatory requirements in the rule that might significantly or 
uniquely affect small governments. EPA put forth an Advanced Notice of 
Proposed Rulemaking on August 28, 2009 regarding our intention to 
propose a BART determination for NGS and the Four Corners Power Plant. 
We received comments from numerous small governments, including tribal 
governments, and governments of several towns in Arizona. This proposed 
rule will not impose direct compliance costs on any small governments. 
However, increased electricity and water costs associated with this 
proposed rule may indirectly affect small governments.

E. Executive Order 13132: Federalism

    This action does not have federalism implications. It will not have 
substantial direct effects on the states, on the relationship between 
the national government and the states, or in the distribution of power 
and responsibilities among the various levels of government, as 
specified in Executive Order 13132. This action proposes emission 
reductions of NOX at a specific stationary source located in 
Indian country. Thus, Executive Order 13132 does not apply to this 
action.

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

    Under Executive Order 13175 (65 FR 67249, November 9, 2000), EPA 
may not issue a regulation that has tribal implications, that imposes 
substantial direct compliance costs, and that is not required by 
statute, unless the federal government provides the funds necessary to 
pay the direct compliance costs incurred by tribal governments, or EPA 
consults with tribal officials early in the process of developing the 
proposed regulation and develops a tribal summary impact statement.
    EPA has concluded that this proposed action will have tribal 
implications, and consequently EPA has consulted with tribal officials 
during the process of developing the proposed regulation and will 
continue to consult with tribal officials during the process to take 
final action. EPA notes that the TWG Alternative, on which this 
Supplemental Proposal is based, was developed by a group of seven 
stakeholders that included the Navajo Nation and the Gila River Indian 
Community. However, we also note that not all tribes that may be 
affected by this proposed alternative were among the stakeholders. 
Other tribes may have views on this alternative and EPA welcomes their 
comments. The proposed regulation will not pre-empt tribal law. The 
proposed regulation will also not impose direct compliance costs on a 
tribal government, because the direct compliance costs of this proposed 
rule, if finalized, will be borne by the owners of NGS. However, 
because several tribes located in Arizona rely directly or indirectly 
on NGS, there may be indirect impacts of this proposed rule on these 
tribes. The Navajo Nation and Hopi Tribe receive coal-related 
royalties, taxes and employment at NGS and the Kayenta Mine that 
contribute to their economies. Several tribes in Arizona have 
allocations of CAP water under existing water settlement agreements. 
Because of the inter-relationship of CAP and NGS, impacts to NGS may 
also impact CAP and the tribes that use CAP water or otherwise benefit 
from CAP according to Congressionally-approved water settlement 
agreements. The importance to tribes of continued operation of NGS and 
affordable water costs cannot be overemphasized. In Section II.B.ii of 
EPA's proposed BART determination dated February 5, 2013 (78 FR8274), 
EPA explains in detail the tribal information that we received and 
considered in this proposed rulemaking.
    In addition to our consultation with tribes discussed in our 
February 5, 2013 proposed rulemaking, EPA has had additional meetings 
and conference calls with tribes at their request since the time we 
received the TWG Alternative, and during our process of evaluating the 
TWG Alternative. On August 22, 2013, we met with Governor Gregory 
Mendoza and other representatives from the Gila River Indian 
Community.\40\ On August 28, 2013, EPA met with President Ben Shelly 
and other representatives from the Navajo Nation.\41\ We held a 
conference call on September 13, 2013 with Chairman LeRoy Shingoitewa 
and another representative from the Hopi Tribe.\42\ Chairman 
Shingoitewa also submitted a letter to EPA, dated August 19, 2013, 
expressing several concerns related to the TWG Alternative.\43\ An 
updated timeline of all correspondence and consultation with tribes on 
NGS is included in the docket for this proposed rulemaking.\44\
---------------------------------------------------------------------------

    \40\ See document number 0152 in the docket for the proposed 
rulemaking at EPA-R09-OAR-2013-0009.
    \41\ See document number 0150 in the docket for the proposed 
rulemaking at EPA-R09-OAR-2013-0009.
    \42\ See document number 0166 in the docket for the proposed 
rulemaking at EPA-R09-OAR-2013-0009.
    \43\ See document number 0134 in the docket for the proposed 
rulemaking at EPA-R09-OAR-2013-0009.
    \44\ See document titled ``Timeline of All Tribal Consultations 
on Navajo BART FIPs as of September 17 2013'' in the docket for this 
proposed rulemaking.
---------------------------------------------------------------------------

    EPA recognizes that the Navajo Nation and the Gila River Indian 
Community participated in the development of the TWG Agreement on NGS 
and were signatories on the Agreement. However, EPA also understands 
from discussions with President Shelly and Governor Mendoza that 
concerns, related to potential impacts to their respective tribes from 
BART and the TWG Alternative, still exist. EPA understands that 
Chairman Shingoitewa has numerous concerns related to the TWG Agreement 
and Alternative, including the exclusion of the Hopi Tribe from the TWG 
and the development of the TWG Agreement, and the extended timeframe 
for the installation of new air pollution controls at NGS under the TWG 
Alternative. EPA will continue to consult with Tribal officials during 
and following the public comment period on the proposed FIP.

G. Executive Order 13045: Protection of Children From Environmental 
Health Risks and Safety Risks

    Executive Order 13045: Protection of Children from Environmental 
Health Risks and Safety Risks (62 FR 19885, April 23, 1997), applies to 
any rule that: (1) is determined to be economically significant as 
defined under Executive Order 12866, and (2) concerns an environmental 
health or safety risk that EPA has reason to believe may have a 
disproportionate effect on children. If the regulatory action meets 
both criteria, the Agency must evaluate the environmental health or 
safety effects of the planned rule on children, and explain why the 
planned regulation is preferable to other potentially effective and 
reasonably feasible alternatives considered by the Agency. This 
proposed rule is not subject to Executive Order 13045 because it 
requires emissions reductions of NOX from a single 
stationary source. Because this proposed action only applies to a 
single source and is not a proposed rule of general applicability, it 
is not economically significant as defined under Executive Order 12866, 
and does not have a disproportionate effect on children. However, to 
the extent that the rule will reduce emissions of NOX, which 
contribute to ozone and fine particulate matter formation as well as 
visibility impairment, the rule will have a beneficial effect on 
children's health by reducing air pollution that causes or

[[Page 62520]]

exacerbates childhood asthma and other respiratory issues.

H. Executive Order 13211: Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use

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

I. National Technology Transfer and Advancement Act

    Section 12(d) of the National Technology Transfer and Advancement 
Act of 1995 (NTTAA), Public Law 104-113, 12 (10) (15 U.S.C. 272 note) 
directs EPA to use voluntary consensus standards (VCS) in its 
regulatory activities unless to do so would be inconsistent with 
applicable law or otherwise impractical. VCS are technical standards 
(e.g., materials specifications, test methods, sampling procedures and 
business practices) that are developed or adopted by the VCS bodies. 
The NTTAA directs EPA to provide Congress, through annual reports to 
OMB, with explanations when the Agency decides not to use available and 
applicable VCS.
    Consistent with the NTTAA, the Agency conducted a search to 
identify potentially applicable VCS. For the measurements listed below, 
there are a number of VCS that appear to have possible use in lieu of 
the EPA test methods and performance specifications (40 CFR Part 60, 
Appendices A and B) noted next to the measurement requirements. It 
would not be practical to specify these standards in the current 
proposed rulemaking due to a lack of sufficient data on equivalency and 
validation and because some are still under development. However, EPA's 
Office of Air Quality Planning and Standards is in the process of 
reviewing all available VCS for incorporation by reference into the 
test methods and performance specifications of 40 CFR Part 60, 
Appendices A and B. Any VCS so incorporated in a specified test method 
or performance specification would then be available for use in 
determining the emissions from this facility. This will be an ongoing 
process designed to incorporate suitable VCS as they become available.

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

    Executive Order 12898 (59 FR 7629, February 16, 1994), establishes 
federal executive policy on environmental justice. Its main provision 
directs federal agencies, to the greatest extent practicable and 
permitted by law, to make environmental justice part of their mission 
by identifying and addressing, as appropriate, disproportionately high 
and adverse human health or environmental effects of their programs, 
policies, and activities on minority populations and low-income 
populations in the United States.
    EPA has determined that this proposed rule, if finalized, will not 
have disproportionately high and adverse human health or environmental 
effects on minority or low-income populations because it increases the 
level of environmental protection for all affected populations without 
having any disproportionately high and adverse human health or 
environmental effects on any population, including any minority or low-
income population. This proposed rule requires emissions reductions of 
NOX from a single stationary source, Navajo Generating 
Station.

List of Subjects in 40 CFR Part 49

    Environmental protection, Air pollution control, Indians, 
Intergovernmental relations, Nitrogen Dioxide.

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

    Dated: September 25, 2013.
Jared Blumenfeld,
Regional Administrator, Region 9.

    Title 40, chapter I of the Code of Federal Regulations is proposed 
to be amended as follows:

PART 49--[AMENDED]

0
1. The authority citation for part 49 continues to read as follows:

    Authority:  42 U.S.C. 7401, et seq.
0
2. Section 49.5513 is amended by adding paragraph (j) to read as 
follows:

Sec.  49.5513  Federal Implementation Plan Provisions for Navajo 
Generating Station, Navajo Nation.

* * * * *
    (j) (1) Applicability. Regional Haze Best Available Retrofit 
Technology limits for this plant are in addition to the requirements of 
paragraphs (a) through (i) of this section. The provisions of this 
paragraph (j) are severable, and if any provision of this paragraph 
(j), or the application of any provision of this paragraph (j) to any 
owner/operator or circumstance, is held invalid, the application of 
such provision to other owner/operators and other circumstances, and 
the remainder of this paragraph (j), shall not be affected thereby. 
Nothing in this paragraph (j) allows or authorizes any Unit to emit 
NOX at a rate that exceeds its existing emission limit of 
0.24 lb/MMBtu as established by EPA permit AZ 08-01 issued on November 
20, 2008.
    (2) Definitions. Terms not defined below shall have the meaning 
given to them in the Clean Air Act or EPA's regulations implementing 
the Clean Air Act and in paragraph (c) of this section. For purposes of 
this paragraph (j):
    (i) 2009-2029 NOX Cap is no more than 416,865 tons of 
NOX. This value is calculated based on the sum of annual 
emissions over January 1, 2009 to December 31, 2029, and closure of one 
unit by December 31, 2019.
    (ii) 2009-2044 NOX Cap is no more than 494,899 tons of 
NOX. This value is calculated based on the sum of annual 
emissions over January 1, 2009 to December 31, 2044, and compliance 
with a BART emission limit of 0.055 lb/MMBtu on each Unit by July 1, 
2019.
    (iii) Boiler Operating Day means a 24-hour period between 12 
midnight and the following midnight during which any fuel is combusted 
at any time in the steam-generating unit. It is not necessary for fuel 
to be combusted the entire 24-hour period.
    (iv) Coal-Fired Unit means any of Units 1, 2, or 3 at Navajo 
Generating Station.
    (v) Continuous Emission Monitoring System or CEMS means the 
equipment required by 40 CFR Part 75 and this paragraph (j).
    (vi) Departing Participant means either Los Angeles Department of 
Water and Power or Nevada Energy, also known as NV Energy or Nevada 
Power Company.
    (vi) Emission limitation or emission limit means the federal 
emissions limitation required by this paragraph.
    (vii) Existing Participant means the existing owners of NGS: Los 
Angeles Department of Water and Power; Nevada Energy, also known as NV 
Energy or Nevada Power Company; Salt River Project Agricultural 
Improvement and Power District; Arizona Public Service Company; and 
Tucson Electric Company, together with the United States, acting 
through the Bureau of Reclamation.
    (ix) lb means pound(s).
    (x) Low-NOX Burners and Separated Over-Fire Air or LNB/SOFA means 
combustion controls installed on one Unit each over 2009-2011.
    (xi) Navajo Nation means the Navajo Nation, a federally recognized 
Indian Tribe.
    (xii) NGS or Navajo Generating Station means the steam electric 
generating station located on the Navajo Reservation near Page, 
Arizona, consisting of Units 1, 2, and 3, each 750

[[Page 62521]]

MW (nameplate rating), the switchyard facilities, and all facilities 
and structures used or related thereto.
    (xiii) NOX means nitrogen oxides expressed as nitrogen dioxide 
(NO2).
    (xiv) Owner(s)/operator(s) means any person(s) who own(s) or who 
operate(s), control(s), or supervise(s) one more of the units of the 
Navajo Generating Station.
    (xv) MMBtu means million British thermal unit(s).
    (xvi) Operating hour means any hour that fossil fuel is fired in 
the unit.
    (xvii) Unit means any of Units 1, 2, or 3 at Navajo Generating 
Station.
    (xviii) Valid Data means CEMs data that is not out of control as 
defined in 40 CFR Part 75.
    (3) BART Determination. BART for NGS is a NOX emission 
limit of 0.055 lb/MMBtu on each Unit with a compliance date of July 1, 
2019, and is used to establish a cap in NOX emissions, known 
as the 2009-2044 NOX Cap. The owner/operator shall 
demonstrate BART compliance by ensuring that total NOX 
emissions from NGS, over January 1, 2009 to December 31, 2044, do not 
exceed the 2009-2044 NOX Cap. The owner/operator shall 
implement the applicable operating scenario, under paragraph (j)(3)(i), 
to ensure NOX emission reductions sufficient to maintain 
total NOX emissions below the 2009-2044 NOX Cap.
    (i) Operating Scenarios to Comply with 2009-2044 NOX Cap.
    (A) Alternative A1.
    (1) By December 31, 2019, the owner/operator shall permanently 
cease operation of one coal-fired Unit.
    (2) By December 31, 2030, the owner/operator shall comply with a 
NOX emission limit of 0.07 lb/MMBtu on each of the two 
remaining coal-fired Units.
    (B) Alternative A2.
    (1) By December 31, 2019, the owner/operator shall permanently 
cease operation of one coal-fired Unit.
    (2) By December 31, 2019, the owner/operator may elect to increase 
net generating capacity of the remaining two coal-fired Units by a 
combined total of no more than 189 MW. The actual increase in net 
generating capacity shall be limited by the sum of 19 MW and the 
ownership interest, in net MW capacity, purchased by the Navajo Nation 
by December 31, 2019. The owner/operator shall ensure that any increase 
in the net generating capacity is in compliance with all pre-
construction permitting requirements, as applicable.
    (3) By December 31, 2030, the owner/operator shall comply with a 
NOX emission limit of 0.07 lb/MMBtu on each of the two 
remaining coal-fired Units.
    (C) Alternative A3.
    (1) By December 31, 2019, the owner/operator shall reduce the net 
generating capacity of NGS by no less than 561 MW. The actual reduction 
in net generating capacity of NGS shall be determined by the difference 
between 731 MW and the ownership interest, in net MW capacity, 
purchased by the Navajo Nation by December 31, 2019.
    (2) By December 31, 2030, the owner/operator shall comply with a 
NOX emission limit of 0.07 lb/MMBtu on two Units.
    (D) Alternative B. In addition to the 2009-2044 NOX Cap 
that applies between January 1, 2009 to December 31, 2044, during the 
January 1, 2009 to December 31, 2029 period, the owner/operator shall 
ensure compliance with the 2009-2029 NOX Cap.
    (ii) Applicability of Alternatives.
    (A) Alternative A1 shall apply if both of the Departing 
Participants retire their ownership interests in NGS by December 31, 
2019, and the Navajo Nation does not purchase an ownership share of NGS 
by December 31, 2019; or if both of the Departing Participants sell 
their ownership interests to Existing Participants, and the Navajo 
Nation does not purchase an ownership share of NGS by December 31, 
2019; or if one of the Departing Participants retires its ownership 
interest and the other Departing Participant sells its ownership 
interest to an Existing Participant, and the Navajo Nation does not 
purchase an ownership share of NGS by December 31, 2019.
    (B) Alternative A2 shall apply if both of the Departing 
Participants sell their ownership interests to Existing Participants, 
the Navajo Nation elects to purchase an ownership share of NGS by 
December 31, 2019, and the owner/operator elects to increase net 
generating capacity of the two remaining Units; or if one of the 
Departing Participants retires its ownership interest and the other 
Departing Participant sells its ownership interest to an Existing 
Participant, the Navajo Nation elects to purchase an ownership share of 
NGS by December 31, 2019, and the owner/operator elects to increase net 
generating capacity of the two remaining Units.
    (C) Alternative A3 shall apply if both of the Departing 
Participants sell their ownership interests to Existing Participants, 
the Navajo Nation elects to purchase an ownership share of NGS by 
December 31, 2019, and the owner/operator does not elect to increase 
net generating capacity; or if one of the Departing Participants 
retires its ownership interest and the other Departing Participant 
sells its ownership interest to an Existing Participant, the Navajo 
Nation elects to purchase an ownership share of NGS by December 31, 
2019, and the owner/operator does not elect to increase net generating 
capacity.
    (D) Alternative B shall apply if, by December 31, 2019, any of the 
Departing Participants sell their ownership interests to a Party that 
is not an Existing Participant.
    (4) Reporting and Implementation Requirements for BART.
    (i) No later than December 1, 2019, the owner/operator must notify 
EPA of the applicable Alternative for ensuring compliance with the 
2009-2044 NOX Cap.
    (ii) Beginning January 31, 2015, and annually thereafter until the 
earlier of December 22, 2044 or the date on which the owner/operator 
ceases conventional coal-fired generation at NGS, the owner/operator 
shall submit to the Regional Administrator, a report summarizing the 
annual heat input, the annual emissions of sulfur dioxide, carbon 
dioxide, and annual and cumulative emissions of NOX from NGS 
for the previous full calendar year. The owner/operator shall make this 
report available to the public, either through a link on its Web site 
or directly on its Web site.
    (iii) No later than December 31, 2020, the owner/operator shall 
submit an application to revise its existing Part 71 Operating Permit 
to incorporate the requirements and emission limits of the applicable 
Alternative to BART under paragraph (j)(3).
    (iv) In addition to the requirements of paragraphs (j)(4)(i), (ii) 
and (iii), if Alternative B applies, the owner/operator shall submit 
annual Emission Reduction Plans to the Regional Administrator.
    (A) No later than December 31, 2019 and annually thereafter through 
December 31, 2028, the owner/operator shall submit an Emission 
Reduction Plan containing anticipated year-by-year emissions covering 
the period from 2020 to 2029 that will assure that the operation of NGS 
will result in emissions of NOX that do not exceed the 2009-
2029 NOX Cap. The Emission Reduction Plan may contain 
several potential operating scenarios and must set forth the past 
annual actual emissions and the projected emissions for each potential 
operating scenario. Each potential operating scenario must demonstrate 
compliance with the 2009-2029 NOX Cap. The Emission 
Reduction Plan shall identify emission reduction measures that may 
include, but are not

[[Page 62522]]

limited to, the installation of advanced emission controls, a reduction 
in generation output, or other operating strategies determined by the 
owner/operator. The owner/operator may revise the potential operating 
scenarios set forth in the Emission Reduction Plan, provided the 
revised plan ensure that NOX emissions remain below the 
2009-2029 NOX Cap.
    (B) No later than December 31, 2029 and annually thereafter, the 
owner/operator shall submit an Emission Reduction Plan containing year-
by-year emissions covering the period from January 1, 2030 to December 
31, 2044 that will assure that the operation of NGS will result in 
emissions of NOX that do not exceed the 2009-2044 
NOX Cap. The Emission Reduction Plan shall identify emission 
reduction measures that may include, but are not limited to, the 
installation of advanced emission controls, a reduction in generation 
output, or other operating strategies determined by the owner/operator. 
The owner/operator may revise the potential operating scenarios set 
forth in the Emission Reduction Plan, provided the revised plan ensure 
that NOX emissions remain below the 2009-2044 NOX 
Cap.
    (5) Continuous emission monitoring system (CEMS).
    (i) At all times, the owner/operator of each unit shall maintain, 
calibrate, and operate a CEMS, in full compliance with the requirements 
found at 40 CFR Part 75, to accurately measure NOX, diluent, 
and stack gas volumetric flow rate from each unit. Valid data means 
data recorded when the CEMS is not out-of-control as defined by Part 
75, as defined in paragraph (j)(2) of this section. All valid CEMS 
hourly data shall be used to determine compliance with the emission 
limitations for NOX in paragraph (j)(3) of this section for 
each unit. If the CEMs data is not valid, that CEMs data shall be 
treated as missing data and not used to calculate the emission average. 
CEMs data does not need to be bias adjusted as defined in 40 CFR Part 
75. Each required CEMS must obtain valid data for at least 90 percent 
of the unit operating hours, on an annual basis.
    (ii) The owner/operator of each unit shall comply with the quality 
assurance procedures for CEMS found in 40 CFR Part 75. In addition to 
these Part 75 requirements, relative accuracy test audits shall be 
calculated for both the NOX pounds per hour measurement and 
the heat input measurement. The calculation of NOX pounds 
per hour and heat input relative accuracy shall be evaluated each time 
the CEMS undergo relative accuracy testing.
    (6) Compliance Determination for NOX Emission Limits.
    (i) Compliance with the NOX emission limits under 
paragraphs (j)(3)(i) shall be determined on a rolling average basis of 
thirty (30) Boiler Operating Days on a unit by unit basis. Compliance 
shall be calculated in accordance with the following procedure: (1) Sum 
the total pounds of NOX emitted from the Unit during the 
current Boiler Operating Day and the previous twenty-nine (29) Boiler 
Operating Days; (2) sum the total heat input to the Unit in MMBtu 
during the current Boiler Operating Day and the previous twenty-nine 
(29) Boiler Operating Days; and (3) divide the total number of pounds 
of NOX by the total heat input in MMBtu during the thirty 
(30) Boiler Operating Days. A new 30 Boiler Operating Day rolling 
average shall be calculated for each new Boiler Operating Day. Each 30 
Boiler Operating Day rolling average shall include all emissions that 
occur during periods within any Boiler Operating Day, including 
emissions from startup, shutdown, and malfunction.
    (ii) If a valid NOX pounds per hour or heat input is not 
available for any hour for a unit, that heat input and NOX 
pounds per hour shall not be used in the calculation for that 30 boiler 
operating day period.
    (7) Recordkeeping. The owner or operator of each unit shall 
maintain the following records for at least five years:
    (i) All CEMS data, including the date, place, and time of sampling 
or measurement; parameters sampled or measured; and results as required 
by Part 75 and as necessary to calculate each unit's pounds of 
NOX and heat input for each hour.
    (ii) Each calendar day rolling average group emission rates for 
NOX calculated in accordance with paragraph (j)(6)(i) of 
this section.
    (iii) Each unit's 30 Boiler Operating Day pounds of NOX 
and heat input.
    (iv) Records of quality assurance and quality control activities 
for emissions measuring systems including, but not limited to, any 
records required by 40 CFR Part 75.
    (v) Records of the relative accuracy calculation of the 
NOX lb/hr measurement and hourly heat input.
    (vi) Records of all major maintenance activities conducted on 
emission units, air pollution control equipment, and CEMS.
    (vii) Any other records required by 40 CFR Part 75.
    (8) Reporting. All reports and notifications under this paragraph 
(j) shall be submitted to the Director, Navajo Environmental Protection 
Agency, P.O. Box 339, Window Rock, Arizona 86515, and to the Director 
of Enforcement Division, U.S. EPA Region IX, at 75 Hawthorne Street, 
San Francisco, CA 94105.
    (i) The owner/operator shall notify EPA within two weeks after 
completion of installation of NOX control technology on any 
of the units subject to this section.
    (ii) Within 30 days after the first applicable compliance date in 
paragraph (j)(3) of this section and within 30 days of every second 
calendar quarter thereafter (i.e., semi-annually), the owner/operator 
shall submit a report that lists for each calendar day, calculated in 
accordance with paragraph (j)(6) of this section, total lb of 
NOX and heat input (as used to calculate compliance per 
paragraph (j)(6), for each unit's last 30 boiler operating days. 
Included in this report shall be the results of the last relative 
accuracy test audit and the calculated relative accuracy for lb/hr 
NOX and heat input performed 45 days prior to the end of 
that reporting period. The end of the year report shall also include 
the percent valid data for each NOX, diluent, and flow 
monitor used in the calculations of compliance with paragraph (j)(6).
    (9) Enforcement. Notwithstanding any other provision in this 
implementation plan, any credible evidence or information relevant as 
to whether the unit would have been in compliance with applicable 
requirements if the appropriate performance or compliance test had been 
performed, can be used to establish whether or not the owner or 
operator has violated or is in violation of any standard or applicable 
emission limit in the plan.
    (10) Equipment Operations. At all times, including periods of 
startup, shutdown, and malfunction, the owner or operator shall, to the 
extent practicable, maintain and operate the unit including associated 
air pollution control equipment in a manner consistent with good air 
pollution control practices for minimizing emissions. Determination of 
whether acceptable operating and maintenance procedures are being used 
will be based on information available to the Regional Administrator, 
or their designee, which may include, but is not limited to, monitoring 
results, review of operating and maintenance procedures, and inspection 
of the unit.
    (11) Affirmative Defense. The affirmative defense provisions of 
paragraphs (c)(1) and (g)(3) of this

[[Page 62523]]

section, related only to malfunctions, apply to this paragraph (j).

[FR Doc. 2013-24281 Filed 10-21-13; 8:45 am]
BILLING CODE 6560-50-P