Document ID: EPA_FRDOC_0001-21280
Agency: epa
Document Type: Notice
Title: Allocations of Cross-State Air Pollution Rule Allowances from New Unit Set-Asides for the 2017 Compliance Year
Posted Date: 2017-09-18T04:00Z

[Federal Register Volume 82, Number 179 (Monday, September 18, 2017)]
[Notices]
[Pages 43537-43539]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-19822]

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ENVIRONMENTAL PROTECTION AGENCY

[FRL-9966-42-OAR]

Allocations of Cross-State Air Pollution Rule Allowances From New 
Unit Set-Asides for the 2017 Compliance Year

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice of data availability (NODA).

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SUMMARY: The Environmental Protection Agency (EPA) is providing notice 
of the availability of data on emission allowance allocations to 
certain units under the Cross-State Air Pollution Rule (CSAPR). EPA has 
completed final calculations for the first round of allocations of 
allowances from the CSAPR new unit set-asides (NUSAs) for the 2017 
control periods and has posted spreadsheets containing the calculations 
on EPA's Web site. The only change from the preliminary calculations is 
the elimination of allocations of CSAPR SO2 Group 2 
allowances to four units in Georgia that for purposes of the 
preliminary calculations were incorrectly identified as new units 
instead of existing units.

DATES: September 18, 2017.

FOR FURTHER INFORMATION CONTACT: Questions concerning this action 
should be addressed to Robert Miller at (202) 343-9077 or 
miller.robertl@epa.gov or to Kenon Smith at (202) 343-9164 or 
smith.kenon@epa.gov.

SUPPLEMENTARY INFORMATION: Under each CSAPR trading program where EPA 
is responsible for determining emission allowance allocations, a 
portion of each state's emissions budget for the program for each 
control period is reserved in a NUSA (and in an additional Indian 
country NUSA in the case of states with Indian country within their 
borders) for allocation to certain units that would not otherwise 
receive allowance allocations. Each NUSA allowance allocation process 
involves up to two rounds of allocations to eligible units, termed 
``new'' units, followed by the allocation to ``existing'' units of any 
allowances not allocated to new units.\1\ In a NODA published in the 
Federal Register on June 21, 2017 (82 FR 28243), we provided notice of 
preliminary calculations for the first-round 2017 NUSA allowance 
allocations. We also described the process for submitting any 
objections to the preliminary calculations. This NODA concerns the 
final calculations for this round of 2017 NUSA allocations.
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    \1\ The procedures for annually allocating allowances from each 
NUSA to eligible units are set forth in the CSAPR regulations at 40 
CFR 97.411(b) and 97.412 (CSAPR NOX Annual Trading 
Program), 97.511(b) and 97.512 (CSAPR NOX Ozone Season 
Group 1 Trading Program), 97.611(b) and 97.612 (CSAPR SO2 
Group 1 Trading Program), 97.711(b) and 97.712 (CSAPR SO2 
Group 2 Trading Program), and 97.811(b) and 97.812 (CSAPR 
NOX Ozone Season Group 2 Trading Program).
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    EPA received written objections from four parties in response to 
the June 21

[[Page 43538]]

NODA.\2\ For the reasons discussed below, we have concluded that none 
of the written objections provides a valid basis for altering the 
preliminary calculations of NUSA allowance allocations.
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    \2\ A fifth written objection was withdrawn prior to EPA's 
drafting of this notice.
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    The first written objection was submitted by a representative for a 
combustion turbine that commenced commercial operation in 2007 in 
simple cycle configuration and that in 2016 was modified to combined 
cycle configuration through the installation of additional equipment 
including a heat recovery steam generator, duct burners, and a steam 
turbine. According to the objection, the additional equipment should be 
treated for CSAPR purposes as a separate, new affected unit that is 
eligible for allocations of CSAPR NUSA allowances.\3\
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    \3\ The objection seeks NUSA allocations of CSAPR NOX 
Annual, CSAPR SO2 Group 2, and CSAPR NOX Ozone 
Season Group 2 allowances. However, the facility is located in 
Kansas, and allocations of 2017 CSAPR NOX Annual 
allowances to units in Kansas are governed by a SIP revision rather 
than by the allocation procedures in the federal CSAPR regulations. 
81 FR 42256 (June 29, 2016). EPA therefore addresses the objection 
only as it relates to allowances for the remaining two programs.
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    EPA disagrees with this objection based primarily on our 
interpretation of the CSAPR definitions of ``combustion turbine'' and 
``unit.'' The CSAPR definition of ``combustion turbine'' covers two 
possible equipment configurations--the equipment required for simple 
cycle operation, consisting of a compressor, combustor, and turbine, 
and the equipment required for combined cycle operation, consisting of 
the preceding equipment plus a heat recovery steam generator, duct 
burners (if any), and a steam turbine.\4\ The facility in question 
meets the CSAPR definition of ``combustion turbine'' both before and 
after the addition of the new equipment described above; the effect of 
adding the new equipment is simply to cause the facility to meet a 
different provision of the definition. Nothing in the definition 
suggests that the addition of equipment to a given facility that causes 
a different provision of the definition to apply should be interpreted 
as splitting that facility into two separate combustion turbines, as 
the objection claims. Moreover, our interpretation that the facility in 
question remains a single combustion turbine is strongly supported by 
the CSAPR definition of ``unit,'' which encompasses a ``combustion 
turbine'' and further states in relevant part that ``[a] unit that 
undergoes a physical change . . . shall continue to be treated as the 
same unit.'' \5\ The objection asserts that this definition means that 
only the original equipment is ``the same unit,'' while the additional 
equipment comprising the ``physical change'' is a separate unit, but we 
disagree. To the contrary, we believe a plain reading of the definition 
indicates that a unit to which a physical change has been made remains 
``the same unit'' but with a physical change.
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    \4\ The full definition states: ``Combustion turbine means an 
enclosed device comprising: (1) If the device is simple cycle, a 
compressor, a combustor, and a turbine and in which the flue gas 
resulting from the combustion of fuel in the combustor passes 
through the turbine, rotating the turbine; and (2) If the device is 
combined cycle, the equipment described in paragraph (1) of this 
definition and any associated duct burner, heat recovery steam 
generator, and steam turbine.'' 40 CFR 97.702, 97.802.
    \5\ The full definition states: ``Unit means a stationary, 
fossil-fuel-fired boiler, stationary, fossil-fuel-fired combustion 
turbine, or other stationary, fossil-fuel-fired combustion device. A 
unit that undergoes a physical change or is moved to a different 
location or source shall continue to be treated as the same unit. A 
unit (the replaced unit) that is replaced by another unit (the 
replacement unit) at the same or a different source shall continue 
to be treated as the same unit, and the replacement unit shall be 
treated as a separate unit.'' 40 CFR 97.702, 97.802.
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    In summary, we interpret the CSAPR regulations as providing that 
the facility in question remains the same, single ``combustion 
turbine'' for CSAPR purposes after the addition of the new equipment as 
it was before the addition of the new equipment.\6\ Because we do not 
agree that the additional equipment should be treated as a separate, 
new affected unit for CSAPR purposes, it is unnecessary to address the 
portions of the objection concerning the quantities of NUSA allowances 
for which such a new unit theoretically would be eligible.
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    \6\ EPA further notes that the facility's representatives have 
not complied with multiple CSAPR requirements that would apply if 
the additional equipment in fact did constitute a separate, new 
affected unit for CSAPR purposes. For example, they have not 
submitted a certificate of representation identifying the additional 
equipment as a new affected unit, see 40 CFR 97.415(d), 97.715(d), 
97.815(d), have not submitted a monitoring plan identifying such a 
new unit (or identifying the new stack as a common stack serving 
multiple units), see Sec. Sec.  97.434(b), 97.734(b), 97.834(b), and 
have not reported any separate hourly emissions or heat input data 
for such a new unit, see Sec. Sec.  97.434(d), 97.734(d), 97.834(d).
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    The second and third written objections were submitted by 
representatives of two facilities whose units are treated as new units 
for purposes of the original CSAPR trading programs but are treated as 
existing units for purposes of the more recent CSAPR NOX 
Ozone Season Group 2 trading program. The units in question commenced 
commercial operation in 2011 and 2012 and their owners have identified 
them as affected by CSAPR. In the CSAPR rulemaking finalized in 2011 
that established the original four CSAPR trading programs, EPA 
determined that all likely affected units that commenced commercial 
operation prior to January 1, 2010 should be treated as existing units 
for purposes of these four trading programs.\7\ In the CSAPR Update 
rulemaking finalized in 2016 that established the CSAPR NOX 
Ozone Season Group 2 Trading Program, we determined that all likely 
affected units that commenced commercial operation prior to January 1, 
2015 should be treated as existing units for purposes of this trading 
program.\8\ Under these criteria, the units in question are new units 
for purposes of the original four CSAPR trading programs and existing 
units for purposes of the CSAPR NOX Ozone Season Group 2 
Trading Program. The facilities' representatives object to the units' 
classification as existing units under this last trading program and 
request that the units be classified instead as new units eligible for 
allocations of NUSA allowances under this program.
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    \7\ 76 FR 48208, 48288-91 (August 8, 2011).
    \8\ 81 FR 74504, 74563-66 (October 26, 2016).
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    As noted above, allocations of NUSA allowances under the CSAPR 
NOX Ozone Season Group 2 Trading Program are governed by 40 
CFR 97.811(b) and 97.812. The regulations provide a detailed set of 
procedures that EPA must follow when allocating NUSA allowances, 
including procedures for identifying the units eligible for each round 
of NUSA allocations for each control period. Under Sec.  
97.811(b)(1)(ii)(B), objections to our preliminary calculations of 
first-round allocations ``shall be limited to addressing whether the 
calculations (including the identification of the CSAPR NOX 
Ozone Season Group 2 units) are in accordance with Sec.  97.812(a)(2) 
through (7) and (12) and Sec. Sec.  97.830 through 97.835''--in other 
words, whether the calculations (including identification of eligible 
units) have been performed in accordance with the detailed procedures 
set forth in the regulations. The objections to the June 21 NODA fall 
outside this narrow scope. The January 1, 2015 cutoff date used to 
determine whether a particular unit is an existing unit for purposes of 
this trading program was established as part of the CSAPR Update 
rulemaking and can be revised only through another rulemaking. The 
process of allocating NUSA allowances is strictly an administrative 
process that implements regulations already in effect, not a

[[Page 43539]]

rulemaking process in which regulations may be revised.
    EPA has confirmed that the units in question are not eligible to 
receive allocations of NUSA allowances under the regulations for the 
CSAPR NOX Ozone Season Group 2 Trading Program. Under Sec.  
97.812(a)(3), first-round allocations are determined for ``each CSAPR 
NOX Ozone Season Group 2 unit described in paragraph (a)(1) 
of this section''--i.e., Sec.  97.812(a)(1). This paragraph of the 
regulations identifies three categories of units eligible for first-
round allocations: First, units that have not been allocated allowances 
as existing units pursuant to Sec.  97.811(a)(1); second, units that 
have been allocated allowances as existing units from a given state's 
budget for a given control period but have lost those allocations under 
the trading program's correction provisions (because the units either 
are not located in that state or are not subject to the program at the 
start of that control period); and third, units that have ceased 
operation for a sufficient length of time to lose their allocations as 
existing units and have subsequently resumed operation.\9\ As discussed 
above, the units in question meet the criteria established in the CSAPR 
Update rulemaking to be considered existing units for purposes of the 
CSAPR NOX Ozone Season Group 2 Trading Program, and the 
units accordingly have been allocated allowances as existing units 
pursuant to Sec.  97.811(a)(1). The units do not fall within one of the 
categories of units eligible for NUSA allocations as set forth in Sec.  
97.812(a)(1), and the regulations do not provide us with the authority 
either to grant exceptions for individual units or to identify 
additional categories of eligible units beyond those set forth in Sec.  
97.812(a)(1).
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    \9\ See Sec.  97.812(a)(1)(i), (ii), and (iii), respectively.
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    As an alternative to having the facility's units reclassified as 
new units for purposes of the CSAPR NOX Ozone Season Group 2 
Trading Program, the third written objection also seeks modifications 
to the data used to compute the units' allocations of allowances as 
existing units under that program. However, like the January 1, 2015 
cutoff date, EPA's determinations of which data should be used to 
determine allowance allocations to existing units were made in the 
CSAPR Update rulemaking \10\ and can be revised only through another 
rulemaking, not through the administrative process of allocating NUSA 
allowances. The objection is therefore outside the scope of the June 21 
NODA.
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    \10\ See 81 FR at 74564-65.
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    Finally, the fourth written objection seeks modifications to the 
total amount of the NUSA for Oklahoma under the CSAPR NOX 
Ozone Season Group 2 Trading Program. Again, EPA's determinations 
regarding the NUSA total amounts were made in the CSAPR Update 
rulemaking; further, the actual amounts are codified in the CSAPR 
regulations.\11\ The total amount of the NUSA for Oklahoma can be 
revised only through another rulemaking, not through the administrative 
process of allocating NUSA allowances, so the objection is outside the 
scope of the June 21 NODA.
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    \11\ See 81 FR at 74565; 40 CFR 97.810(a)(17)(ii).
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    In addition to the written objections discussed above, EPA also 
received a telephone inquiry that led to the discovery of an error in 
the preliminary calculations for NUSA allocations of CSAPR 
SO2 Group 2 allowances. Specifically, because of incorrect 
processing of a change in the plant code used to identify certain 
existing units at the Wansley power plant in Georgia, Wansley CC units 
6A, 6B, 7A, and 7B were incorrectly identified as new units eligible to 
receive NUSA allocations. We have corrected the error and these units 
are not allocated allowances as new units in the final calculations.
    The final unit-by-unit data and allowance allocation calculations 
are set forth in Excel spreadsheets titled 
``CSAPR_NUSA_2017_NOx_Annual_1st_Round_Final_Data'', 
``CSAPR_NUSA_2017_NOx_OS_1st_Round_Final_Data'', and 
``CSAPR_NUSA_2017_SO2_1st_Round_Final_Data'', available on EPA's Web 
site at https://www.epa.gov/csapr/csapr-compliance-year-2017-nusa-nodas. The three spreadsheets show our final determinations of first-
round 2017 NUSA allocations under the CSAPR NOX annual, 
CSAPR NOX ozone season (Group 1 and Group 2), and CSAPR 
SO2 (Group 1 and Group 2) trading programs, respectively.
    EPA notes that an allocation or lack of allocation of allowances to 
a given unit does not constitute a determination that CSAPR does or 
does not apply to the unit. We also note that allocations are subject 
to potential correction.

(Authority: 40 CFR 97.411(b), 97.511(b), 97.611(b), 97.711(b), and 
97.811(b).)

    Dated: July 27, 2017.
Karen L. Orehowsky,
Acting Director, Clean Air Markets Division, Office of Atmospheric 
Programs, Office of Air and Radiation.
[FR Doc. 2017-19822 Filed 9-15-17; 8:45 am]
 BILLING CODE 6560-50-P