Document ID: EPA-R04-OAR-2019-0303-0001
Agency: epa
Document Type: Proposed Rule
Title: Air Quality State Implementation Plans; Approvals and Promulgations: North Carolina; Large Internal Combustion Engines NOX Rule Changes
Posted Date: 2019-06-05T04:00Z

[Federal Register Volume 84, Number 108 (Wednesday, June 5, 2019)]
[Proposed Rules]
[Pages 26031-26041]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-11758]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R04-OAR-2019-0303; FRL-9994-66-Region 4]

SIP Call Withdrawal and Air Plan Approval; NC: Large Internal 
Combustion Engines NOX Rule Changes

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: Environmental Protection Agency (EPA) Region 4 (Region 4) is 
proposing to approve a portion of a State Implementation Plan (SIP) 
revision submitted by the state of North Carolina, through the North 
Carolina Division of Air Quality (NC DAQ), in a letter dated June 5, 
2017, which changes North Carolina's SIP-approved rule regarding 
nitrogen oxides (NOX) emissions from large internal

[[Page 26032]]

combustion engine sources. In so doing, Region 4 is first considering 
adopting an alternative policy regarding startup, shutdown, and 
malfunction (SSM) exemption provisions in SIPs that departs from EPA's 
2015 national policy on this subject and, accordingly, if that policy 
is adopted, is also proposing to withdraw the SIP call issued to North 
Carolina for exemptions contained in the existing SIP-approved 
provisions for SSM events.

DATES: Comments must be received on or before August 5, 2019.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-R04-
OAR-2019-0303 at https://www.regulations.gov. Follow the online 
instructions for submitting comments. Once submitted, comments cannot 
be edited or removed from Regulations.gov. EPA may publish any comment 
received to its public docket. Do not submit electronically any 
information you consider to be Confidential Business Information (CBI) 
or other information whose disclosure is restricted by statute. 
Multimedia submissions (audio, video, etc.) must be accompanied by a 
written comment. The written comment is considered the official comment 
and should include discussion of all points you wish to make. EPA will 
generally not consider comments or comment contents located outside of 
the primary submission (i.e., on the web, cloud, or other file sharing 
system). For additional submission methods, the full EPA public comment 
policy, information about CBI or multimedia submissions, and general 
guidance on making effective comments, please visit https://www2.epa.gov/dockets/commenting-epa-dockets.

FOR FURTHER INFORMATION CONTACT: Joel Huey, Air Planning and 
Implementation Branch, Air and Radiation Division, U.S. Environmental 
Protection Agency, Region 4, 61 Forsyth Street SW, Atlanta, Georgia 
30303-8960. Mr. Huey can be reached by phone at (404) 562-9104 or via 
electronic mail at huey.joel@epa.gov.

SUPPLEMENTARY INFORMATION:

Table of Contents

    The following topics are discussed in this preamble:

I. Background on SIPs
II. EPA's SSM SIP Policy
III. Alternative Policy Under Consideration on Exemption Provisions 
in SIPs
IV. Region 4's Evaluation of the North Carolina SIP and Proposal 
With Respect to the North Carolina SIP Call
V. Region 4's Proposal To Approve North Carolina's June 5, 2017, SIP 
Revision
    A. Summary of North Carolina's June 5, 2017, SIP Revision 
Changes to Rule .1423
    B. Region 4's Analysis of North Carolina's June 5, 2017, SIP 
Revision Changes to Rule .1423
VI. Incorporation by Reference
VII. Proposed Action
VIII. Statutory and Executive Order Reviews

I. Background on SIPs

    Pursuant to Clean Air Act (CAA or Act) section 110, states adopt 
and periodically revise SIPs with a goal of attaining and maintaining 
the national ambient air quality standards (NAAQS).\1\ A SIP or SIP 
revision contains state regulatory or statutory requirements and is 
submitted by the state to EPA for approval. If EPA determines the SIP 
submission meets the applicable requirements of the CAA, EPA must 
approve the submission. Upon EPA's approval of the submission, the SIP 
provisions that EPA approves become federally enforceable.
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    \1\ See 40 CFR part 50.
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    Certain events trigger the need for a state to revise or update its 
SIP. For example, ``infrastructure'' SIP revisions are required after 
EPA promulgates a new or revised NAAQS. Revisions to the SIP are 
required after an area is designated or redesignated nonattainment for 
a NAAQS. A state may be required to revise its SIP after EPA revises 
its rules to clarify certain requirements of the CAA. A state may also 
revise its SIP on its own initiative due to revisions to state law or 
the need to update its regulations. EPA must act on each submitted SIP 
revision in accordance with applicable CAA requirements.
    If EPA determines at any time that a SIP is substantially 
inadequate to attain or maintain the relevant NAAQS, to mitigate 
interstate pollutant transport, or to otherwise comply with CAA 
requirements, EPA will issue a ``SIP call'' pursuant to CAA section 
110(k)(5) requiring the state to revise the SIP to address the 
inadequacy.
    In this action, Region 4 is proposing to approve a SIP revision 
submitted by NC DAQ, through a letter dated June 5, 2017, which seeks 
to change North Carolina's SIP-approved rule regarding NOX 
emissions from large internal combustion engine sources at 15A N.C. 
Admin. Code 02D .1423. Relevant to this action, in 2015 EPA restated 
its national policy prohibiting the inclusion of provisions in SIPs 
that exempt excess emissions during periods of SSM and issued a SIP 
call to North Carolina to address two specific provisions in the 
State's implementation plan that provide discretion to the state agency 
to exempt emissions from being considered a violation of an otherwise 
applicable appropriate rule, in certain circumstances.\2\ Also 
relevant, the June 5, 2017, SIP submission revises a different 
provision in the NC code that was not included in the 2015 SSM SIP call 
but which includes a sub-provision that automatically exempts from 
regulation periods of startup, shutdown and malfunction, not to exceed 
36 consecutive hours, and scheduled maintenance activities.\3\ 
Accordingly, in order to approve the June 5, 2017, SIP revision, Region 
4 is first considering adopting an alternative policy with respect to 
SSM exemption provisions in SIPs. If Region 4 adopts an alternative 
policy, Region 4 is also proposing to withdraw the SIP call issued to 
North Carolina based on the alternative policy under consideration 
regarding SSM exemptions, the rationale for which is discussed in 
Section III in this document. Region 4's proposed approval of the 
NOX emissions SIP revision is described in Section V in this 
document.
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    \2\ See 80 FR 33839, 33964 (June 12, 2015). EPA issued a SIP 
call regarding provisions 15A N.C. Admin. Code 2D .0535(c) and 15A 
N.C. Admin. Code 2D .0535(g).
    \3\ 15A N.C. Admin. Code 02D .1423 was not included in the 2015 
SSM SIP call because, in that action, EPA elected to review the 
specific provisions identified by Sierra Club in its petition 
regarding the SSM SIP call. 80 FR at 33880.
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II. EPA's SSM SIP Policy

    In the final SSM SIP Call Action of 2015,\4\ EPA updated and 
restated its national policy regarding provisions in SIPs that exempt 
periods of SSM events from otherwise applicable emission limitations. 
Referencing previously issued guidance documents and regulatory 
actions, the Agency expressed its interpretation of the CAA that SIP 
provisions cannot include exemptions from emission limitations for 
emissions during SSM events.\5\ EPA's position in the 2015 SSM SIP Call 
was that the general definitions provision of the CAA providing that an 
emission limitation must apply to a source ``continuously'' means that 
an approved SIP cannot include periods during which emissions from 
sources are legally or functionally exempt from regulation.
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    \4\ See 80 FR 33839 (June 12, 2015).
    \5\ Id. at 33976.
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    In the 2015 SSM SIP Call Action, the Agency defined the term 
``automatic exemption'' as a generally applicable SIP provision that 
does not consider periods of excess emissions as violations of an 
applicable emission limitation if certain conditions existed during the 
exceedance period.\6\ The Agency defined a ``director's discretion

[[Page 26033]]

provision'' as a regulatory provision that authorizes a state 
regulatory official to grant exemptions or variances from otherwise 
applicable emission limitations or to otherwise excuse noncompliance 
with applicable emission limitations, where the regulatory official's 
determination would be binding on EPA and the public.\7\ The Agency 
defined ``emission limitation'' in the SIP context, relying on the 
general definition set forth in CAA section 302(k), as a legally 
binding restriction on emissions from a source or source category, such 
as a numerical emission limitation, a numerical emission limitation 
with higher or lower levels applicable during specific modes of source 
operation, a specific technological control measure requirement, a work 
practice standard, or a combination of these things as components of a 
comprehensive and continuous emission limitation.\8\ As stated in the 
2015 SSM SIP Call Action, the Agency took the position that an emission 
limitation ``must be applicable to the source continuously, i.e., 
cannot include periods during which emissions from the source are 
legally or functionally exempt from regulation.'' \9\
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    \6\ Id. at 33977.
    \7\ Id.
    \8\ Id.
    \9\ Id.
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    Relying substantially on its interpretation of the general 
definition of emission limitation in CAA section 302(k)--specifically, 
that that definition provides that emission limitations must limit 
emissions of air pollutants ``on a continuous basis''--the Agency 
explained its position that exemptions from emission limitations in 
SIPs, whether automatic or discretionary, were not permissible in 
SIPs.\10\ EPA explained that even a brief exemption from an otherwise 
applicable limit would render the emission limitation non-
continuous.\11\
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    \10\ Id.
    \11\ Id.
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    With respect to discretionary exemptions, the Agency took the 
position that a regulatory official's grant of an exemption pursuant to 
a ``director's discretion'' exemption could result in air agency 
personnel modifying a SIP requirement without going through the CAA 
statutory process for SIP revisions.\12\ In the 2015 SSM SIP Call 
Action, the Agency did allow that some director's discretion exemptions 
could be included in SIPs, if those exemptions were structured such 
that variances or deviations from the otherwise applicable emission 
limitation or SIP requirement were not valid as a matter of federal law 
unless and until EPA approved the exercise of the director's discretion 
as a SIP revision.\13\
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    \12\ Id. at 33918 (referencing CAA sections 110(k)(3), which 
establishes the framework for EPA to fully or partially approve SIP 
submittals, and 110(l) and 193, which specify that revisions to SIPs 
must be submitted to EPA and can approved only if the Administrator 
determines that the revisions meet specific requirements, including 
non-interference with attainment and reasonable further progress and 
equivalent or greater emission reductions in nonattainment areas). 
See also id. at 33977-78.
    \13\ Id. at 33978.
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    In the 2015 SSM SIP Call Action, EPA relied on Sierra Club v. 
Johnson, 551 F.3d 1019 (D.C. Cir. 2008), as further support for the 
Agency's position on excluding SSM exemption provisions in SIPs.\14\ In 
Sierra Club, the D.C. Circuit evaluated the validity of an SSM 
exemption in a CAA section 112 rule. Reading CAA sections 112 and 
302(k) together, the D.C. Circuit found that ``the SSM exemption 
violates the CAA's requirement that some section 112 standard apply 
continuously.'' \15\ In 2015, EPA interpreted the 2008 Sierra Club 
decision regarding section 112 requirements and applied the reasoning 
of that decision to the requirements of CAA section 110, specifically 
CAA section 110(a)(2)(A), which provides that SIPs shall include 
``enforceable emission limitations and other control measures, means, 
or techniques . . . as may be necessary or appropriate to meet the 
applicable requirements of this chapter.'' \16\ EPA's application of 
the Sierra Club decision to section 110 SIP requirements was based on 
an understanding that the D.C. Circuit was interpreting the definition 
of ``emission limitation'' in CAA section 302(k) that applies generally 
to the Act. Following this reasoning, EPA determined that Sierra Club 
was consistent with the Agency's position, as expressed in previously 
issued guidance documents and regulatory actions that prohibited 
exemption provisions for otherwise applicable emission limits in SIPs 
(such as automatic exemptions granted for startup, shutdown, and 
malfunction events).
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    \14\ See, e.g., id. at 33852, 33874, 33892-94.
    \15\ 551 F.3d at 1027-28.
    \16\ 42 U.S.C. 7410(a)(2)(A) (emphasis added).
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III. Alternative Policy Under Consideration on Exemption Provisions in 
SIPs

    In reviewing the North Carolina SIP revision at issue, as well as 
the existing SIP provisions and other SIP revisions pending in the 
Region, Region 4 is considering the national policy regarding SSM 
exemptions in SIPs included in the 2015 SSM SIP Call Action, described 
previously, and is evaluating whether there is a reasonable alternative 
way to consider SSM provisions in SIPs that allows such exemptions if 
the SIP considered as a whole is protective of the NAAQS.\17\ The 
compilation of state and federal requirements in the SIP result from 
the federal-state partnership that is the foundation of the CAA, as 
well as the various requirements of the Act. Although some SIPs may 
contain SSM exemptions for limited periods applicable to discrete 
standards, SIPs are composed of numerous planning requirements that are 
collectively NAAQS-protective by design. In some cases, these 
overlapping requirements provide additional protection of the standard 
that may lead Region 4 to reasonably conclude that the SIP adequately 
provides for attainment and maintenance of the NAAQS, even if the SIP 
allows exemptions to specific emissions limits for discrete periods, 
such as SSM events. Such redundancy helps ensure that the NAAQS are 
both attained and maintained, a goal of Congress when it created the 
SIP adoption and approval process.\18\ All of these factors could be 
appropriate to consider when evaluating whether a SIP is adequate to 
attain and maintain the NAAQS.
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    \17\ The 2015 SSM Action explained that while a SIP may contain 
provisions that apply during periods of SSM, the applicability of 
those provisions was not plain on the face of the SIP provision. See 
generally 80 FR at 33943. As explained in this document, EPA Region 
4 is considering whether it is reasonable to take a broader 
perspective of its evaluation of SIPs and provisions that ensure 
attainment and maintenance of the NAAQS.
    \18\ See, e.g., H.R. Rep. 91-1783 at 193-95 (1970).
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    As discussed previously, the 2015 SSM SIP Call Action updated and 
restated EPA's SSM policy that SIPs containing any type of SSM 
exemptions were not approvable because exemptions from emission 
limitations created the possibility that a state could not ensure 
attainment or maintenance of the NAAQS for one or more criteria 
pollutants. This policy is predicated on the idea that an emission 
limitation or standard could not apply continuously if the SIP 
permitted exemptions for any period of time from the emission 
limitation or standard. Under this policy, the lack of continuous 
control was viewed as creating a substantial risk that exemptions could 
permit excess emissions that could ultimately result in a NAAQS 
violation. However, as will be discussed further in this section, 
Region 4 is considering whether the general requirements in CAA section 
110 to attain and maintain the NAAQS and the

[[Page 26034]]

inherent flexibilities of the SIP development process create a 
framework in which a state may be able to ensure attainment and 
maintenance of the NAAQS notwithstanding the presence of SSM exemptions 
in the SIP.
    As an initial matter, the D.C. Circuit's decision in Sierra Club 
does not, on its face, apply to SIPs and actions taken under CAA 
section 110. In the 2015 SSM SIP Call Action at 80 FR 33839, EPA took 
the position that the legal reasoning of the D.C. Circuit's Sierra Club 
decision applied equally to SSM exemptions contained in CAA section 112 
rules and in CAA section 110 approved SIPs and relied on that 
interpretation to support the Agency's position that SSM exemptions 
were inconsistent with CAA requirements. At the time, the Agency's 
interpretation was that CAA section 302(k) applied broadly and required 
that emission limitations under the CAA be continuous as a general 
matter. See 80 FR at 33874. Further consideration of the facts 
surrounding the SIP revision submitted by the state of North Carolina 
has shown that an alternative reading of the application of the Sierra 
Club decision to CAA section 110 is possible and appropriate. Simply 
stated, while the Sierra Club decision did not allow sources to be 
exempt from complying with CAA section 112 emission limitations during 
periods of SSM, that finding is not necessarily binding on CAA section 
110 and EPA's consideration of SIPs under section 110.
    The D.C. Circuit in Sierra Club specifically referred to CAA 
section 112 when it framed Petitioners' argument and found that the 
Agency ``constructively reopened consideration of the exemption from 
section 112 emission standards during SSM events.'' \19\ The court's 
analysis reads the definition of emission limitation and standard at 
CAA section 302(k) in the context of CAA section 112: ``When sections 
112 and 302(k) are read together then, Congress has required that there 
must be continuous section 112-compliant standards.'' \20\ Further, 
specific to CAA section 112 rules, the court explained, ``[i]n 
requiring that sources regulated under section 112 meet the strictest 
standards, Congress gave no indication that it intended the application 
of MACT standards to vary based on different time periods.'' \21\ In 
Sierra Club, the court found that when EPA promulgates standards 
pursuant to CAA section 112, CAA section 112-compliant standards must 
apply continuously. The stringency of section 112 was thus an important 
element of the court's decision,\22\ and the court did not make any 
statement explicitly applying its holding beyond CAA section 112.
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    \19\ Sierra Club, 551 F.3d at 1026.
    \20\ Id. at 1027.
    \21\ Id. at 1028.
    \22\ See id. at 1027 (``Section 112(d) provides that 
`[e]missions standards' promulgated thereunder must require MACT 
standards.'') and 1028 (explaining that Congress intended that 
``sources regulated under section 112 meet the strictest 
standards.'').
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    While EPA chose to rely on the Sierra Club decision in the 2015 SSM 
SIP Call Action, the decision itself does not speak to whether the 
rationale articulated with respect to SSM exemptions in CAA section 112 
rules applies to SIPs approved under CAA section 110. As will be 
discussed below, there may be a reasonable basis to conclude the Sierra 
Club decision does not need to be extended to section 110. CAA section 
112 sets forth a prescriptive standard-setting framework; CAA section 
110 does not. CAA sections 112 and 110 have different goals and 
establish different approaches for EPA implementation. Given the Sierra 
Club decision's singular focus on CAA section 112 standards, and the 
vastly different purposes and implementation approaches between CAA 
sections 110 and 112, there may be a reasonable basis for interpreting 
the decision as only applying to CAA section 112.
    CAA section 112 is fundamentally different from CAA section 
110(a)(2)(A). Importantly, the court in Sierra Club recognized that 
Congress intended ``that sources regulated under section 112 meet the 
strictest standards.'' \23\ Under CAA section 112, once a source 
category is listed for regulation pursuant to CAA section 112(c), the 
statute directs EPA to use a specific and exacting process to establish 
nationally applicable, category-wide, technology-based emissions 
standards under section 112(d).\24\ Under section 112(d), EPA must 
establish emission standards for major sources that ``require the 
maximum degree of reduction in emissions of the hazardous air 
pollutants subject to this section'' that EPA determines is achievable 
taking into account certain statutory factors. EPA refers to these 
rules as ``maximum achievable control technology'' or ``MACT'' 
standards. The MACT standards for existing sources must be at least as 
stringent as the average emissions limitation achieved by the best 
performing 12 percent of existing sources in the category (for which 
the Administrator has emissions information) or the best performing 
five sources for source categories with less than 30 sources. See CAA 
section 112(d)(3)(A) and (B). This level of minimum stringency is 
referred to as the MACT floor. For new sources, MACT standards must be 
at least as stringent as the control level achieved in practice by the 
best controlled existing similar source. See CAA section 112(d)(3). EPA 
also must analyze more stringent ``beyond-the-floor'' control options, 
which consider not only the maximum degree of reduction in emissions of 
a hazardous air pollutant (HAP), but must take into account costs, 
energy, and non-air quality health and environmental impacts when doing 
so.\25\
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    \23\ Id. at 1028.
    \24\ EPA can also set work practices under CAA section 112(h).
    \25\ See Cement Kiln Recycling Coal. v. EPA, 255 F.3d 855, 857-
58 (D.C. Cir. 2001).
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    In contrast, the CAA sets out a fundamentally different regime with 
respect to section 110 SIPs, reflecting the principle that SIP 
development and implementation is customizable for each state's 
circumstances and relies on the federal-state partnership.\26\ The CAA 
sets forth the minimum requirements to attain, maintain, and enforce 
air quality standards, while allowing each state to identify and 
effectuate an approach that is appropriate for the sources and air 
quality challenges specific to each state.\27\ It is important to note 
that the NAAQS are levels EPA has identified as safe concentrations of 
particular pollutants and serve as the targets for regional air-quality 
planning; they are fundamentally different in nature than the source-
specific standards EPA issues under section 112. It may not be 
appropriate to directly translate the D.C. Circuit's concern that the 
latter standards must apply ``continuously'' to regulate emissions from 
a particular source to the context of section 110, where a state's plan 
may contain a broad range of measures, including limits on multiple 
sources and source categories' emissions of multiple pollutants--all 
targeted towards attainment and maintenance of a standard that does not 
itself directly apply to any one source. Importantly, regardless of how 
a state constructs its SIP, the NAAQS

[[Page 26035]]

themselves are nationally uniform and continuously applicable.
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    \26\ See, e.g., Virginia v. EPA, 108 F.3d 1397, 1408 (D.C. Cir. 
1997) (``EPA `identifies the end to be achieved, while the states 
choose the particular means for realizing that end.''') (quoting Air 
Pollution Control Dist. v. EPA, 739 F.2d 1071, 1074 (D.C. Cir. 
1984)). See also, e.g., H.R. Rep. No. 95-294, 95th Cong. 1st Sess. 
at 213 (explaining that for nonattainment areas, Congress intended 
to ``give the States more flexibility in determining how to protect 
public health while still permitting reasonable new growth'') (May 
12, 1977).
    \27\ See Virginia v. EPA, 108 F.3d at 1408.
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    The Fourth Circuit has acknowledged that ``[s]tates are accorded 
flexibility in determining how their SIPs are structured'' to ensure 
that the state meets the NAAQS.\28\ Further, the U.S. Supreme Court has 
recognized that the CAA gives a state ``wide discretion'' to formulate 
its plan pursuant to CAA section 110 and went so far as to say that 
``the State has virtually absolute power in allocating emission 
limitations so long as the national standards are met.'' \29\ The U.S. 
Supreme Court has also explained, ``so long as the ultimate effect of a 
State's choice of emission limitations is compliance with the national 
standards for ambient air, the State is at liberty to adopt whatever 
mix of emission limitations it deems best suited to its particular 
situation.'' \30\ State and federal government divide this 
responsibility, which results in a balance of state and federal rights 
and responsibilities. States typically have primary responsibility for 
determining how and to what extent to regulate sources within the state 
to comply with NAAQS.\31\ In fact, EPA has implemented guidance 
addressing a number of requirements in CAA section 110 and specifically 
explained that SIPs could satisfy the requirements of CAA section 
110(a)(2)(A) by simply ``identify[ing] existing EPA-approved SIP 
provisions or new SIP provisions . . . that limit emissions of 
pollutants relevant to the subject NAAQS.'' \32\ Given their 
understanding of emission sources and air quality within their 
jurisdiction, states are uniquely suited and often well-equipped to 
determine how best to implement the NAAQS. Just as the environmental 
and public health concerns faced by each state vary, so too do the 
requirements in each state's implementation plan.
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    \28\ North Carolina ex rel. Cooper v. TVA, 615 F.3d 291, 299 
(4th Cir. 2010).
    \29\ See, e.g., Union Elec. Co. v. EPA, 427 U.S. 246, 250 & 267 
(1976). See also id. at 269 (``Congress plainly left with the 
States, so long as the national standards were met, the power to 
determine which sources would be burdened by regulation and to what 
extent.'').
    \30\ Train v. Natural Res. Def. Council, Inc., 421 U.S. 60, 79 
(1975).
    \31\ See, e.g., Mirant Potomac River, LLC v. EPA, 577 F.3d 223, 
227 (4th Cir. 2009) (``Under Title I, states have the primary 
responsibility for assuring that air quality within their borders 
meets the NAAQS. Title I requires each state to create a State 
Implementation Plan . . . to meet the NAAQS.'').
    \32\ See September 13, 2013, Memorandum from Stephen D. Page, 
``Guidance on Infrastructure State Implementation Plan (SIP) 
Elements under Clean Air Act Sections 110(a)(1) and 110(a)(2)'' at 
page 18.
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    The statutory text of CAA section 110(a)(2)(A) reflects this 
cooperative relationship, providing more flexibility than the text of 
CAA section 112, as outlined earlier in this section. CAA section 
110(a)(2)(A) generally requires that each SIP shall include 
``enforceable emission limitations and other control measures, means, 
or techniques (including economic incentives such as fees, marketable 
permits, and auctions of emissions rights), as well as schedules and 
timetables for compliance, as may be necessary or appropriate to meet 
the applicable requirements of this chapter.'' \33\ EPA has never 
interpreted this provision to require the type of exacting analysis set 
forth in CAA section 112, and it may be reasonable for EPA to decide 
not to apply such an interpretation given the flexibility Congress gave 
states in section 110. The U.S. Supreme Court has recognized that 
principles of statutory construction are not so rigid as to necessarily 
require that the same terminology has the exact same meaning in 
different parts of the same statute.\34\ Terms can have ``different 
shades of meaning,''reflecting ``different implementation strategies'' 
even when used in the same statute.\35\ Emphasizing that ``[c]ontext 
counts,'' the Court explained that ``[t]here is . . . no effectively 
irrebuttable presumption that the same defined term in different 
provisions of the same statute must be interpreted identically.'' \36\ 
It is reasonable for the distinct purposes of CAA sections 110 and 112 
to guide our interpretation of those provisions, the terms used in 
those provisions and how the statute-wide definition of those terms may 
be applied in the different context of those two provisions. In other 
words, the requirement that the ``emissions standards'' that EPA issues 
under section 112, see, e.g., section 112(c)(2), apply continuously 
may, as the D.C. Circuit held, prevent EPA from providing SSM 
exemptions in those standards. However, at the same time, it may be 
reasonable to interpret the concept of continuous ``emission 
limitations'' in a SIP to not be focused on implementation of each, 
individual limit, but rather whether the approved SIP, as a whole, 
operates continuously to ensure attainment and maintenance of the 
NAAQS.
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    \33\ 42 U.S.C. 7410(a)(2)(A).
    \34\ See Envtl. Defense v. Duke Energy Corp., 549 U.S. 561, 574 
(2007).
    \35\ Id. at 574 (citations omitted).
    \36\ Id. at 575-76.
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    In addition, CAA section 110(a)(2)(A) requires that SIPs must 
``include enforceable emission limitations and other control measures, 
means, or techniques . . . as may be necessary or appropriate to meet 
the applicable requirements of this chapter.'' \37\ Region 4 is 
considering whether a state may provide exemptions from emission 
limits, during which times the emission limit may not apply 
continuously because the limit is not in effect, so long as the SIP 
contains a set of emission limitations, control means, or other means 
or techniques, which, taken as a whole, meet the requirements of 
attaining and maintaining the NAAQS under Subpart A. A state may be 
able to demonstrate that a combination of emission limits that apply 
``as may be necessary or appropriate'' during normal operations but not 
during SSM periods and ``other control measures, means, or techniques'' 
that may exist and remain applicable during periods of SSM in which the 
exemptions apply--such as general duty provisions in the SIP, work 
practice standards, best management practices, or alternative emission 
limits--are protective of the NAAQS. Additionally, SIPs typically 
include entirely separate provisions, such as minor source and major 
source new source review provisions regulating construction or 
modification of stationary sources, that also effectively limit 
emissions of NAAQS pollutants within the state. Thus, as the U.S. 
Supreme Court explained in Duke Energy that a term may be interpreted 
differently when used in different parts of the same statute, the CAA 
definition of an emission limitation in section 302(k), when read in 
the context of section 110, could mean states may, at their discretion, 
provide exemptions from specific numerical emission limits during 
periods when it is not practicable or necessary for such limits to 
apply, so long as the SIP contains other provisions that remain in 
effect and ensure the NAAQS are protected. Region 4 is considering 
whether, in some cases, it may be appropriate to approve SIPs 
containing such exemption provisions if it is reasonable to conclude 
that the state's overlapping protective requirements sufficiently 
ensure overall attainment and maintenance of the NAAQS.
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    \37\ 42 U.S.C. 7410(a)(2)(A) (emphasis added).
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    EPA has a statutory duty to approve SIP submissions that meet all 
applicable CAA requirements. If it is reasonable to conclude that a 
SIP's approach to exemptions is consistent with the requirement to 
protect attainment and maintenance of the NAAQS, Region 4 is 
considering that states may include, and EPA may approve, such 
exemptions in their implementation plans. In such cases, it is 
recognized that exemptions from emission limitations may provide 
flexibility to states as they develop

[[Page 26036]]

robust approaches to air quality protection through a set of planning 
requirements.
    In light of these considerations, there may be instances where 
automatic exemptions from emission limits for SSM events in a state's 
implementation plan do not preclude attainment and maintenance of the 
NAAQS, and thus do not preclude approvability; conversely, if the 
specific details of an SSM exemptions are such that the Agency cannot 
reasonably determine that the SIP adequately ensures attainment and 
maintenance of the NAAQS, the subject SIP revision should not be 
approved. Any such finding regarding automatic exemptions would require 
an evaluation of the specific SIP at issue. A finding that automatic 
exemptions do not interfere with attainment and maintenance of the 
NAAQS would rely on an evaluation of whether the SIP as a whole 
contains provisions to ensure that the NAAQS will be sufficiently 
protected while also providing for exempt periods, and a state could 
submit information for EPA to evaluate when making such a finding. In 
addition to reviewing any information provided by the state, EPA can 
consider other available evidence and provide additional analysis, as 
necessary, when reviewing SSM emission limitation exemptions in SIPs.
    If Region 4 adopts the policy outlined in this section, based on 
the analysis provided in Section IV below, Region 4 is considering 
changing the finding from the 2015 SSM SIP Call Action at 80 FR 33840 
that certain SIP provisions included in the North Carolina SIP are 
substantially inadequate to meet CAA requirements. If Region 4 adopts 
this alternative policy, Region 4 proposes to find that the subject SIP 
provisions are not inconsistent with CAA requirements.
    If adopted, the alternative SSM policy is a policy statement and, 
thus, would constitute guidance within Region 4. As guidance, this 
would not bind states, EPA, or other parties, but it would reflect 
Region 4's interpretation of the CAA requirements. The evaluation of 
any SIP provision, and that SIP provision's interaction with the SIP as 
a whole, must be done through notice-and-comment rulemaking.

IV. Region 4's Evaluation of the North Carolina SIP and Proposal With 
Respect to the North Carolina SIP Call

    North Carolina's SIP contains provisions that provide exemptions 
for emissions exceeding otherwise applicable SIP emission limitations 
at the discretion of the state agency during malfunctions (15A Admin. 
Code 2D .0535(c)) and during startup and shutdown (15A Admin. Code 2D 
.0535(g)). In this action, Region 4 is considering adopting an 
alternative policy regarding SSM exemptions and proposing to find the 
North Carolina provisions are not substantially inadequate to meet CAA 
requirements. Therefore, if Region 4 adopts this policy as described 
previously, Region 4 also proposes to withdraw the SIP call originally 
issued to North Carolina and published on June 12, 2015.\38\ As 
explained more fully below, after considering the SIP as a whole, 
Region 4 has identified numerous provisions in the North Carolina SIP 
intended to assure that air quality standards will be achieved. Any 
provisions providing exemptions for periods of SSM do not alter the 
applicability of these general SIP provisions.
---------------------------------------------------------------------------

    \38\ See 80 FR at 33964.
---------------------------------------------------------------------------

    On June 12, 2015, EPA found 15A N.C. Admin. Code 2D .0535(c) and 
15A N.C. Admin. Code 2D .0535(g) were substantially inadequate to meet 
CAA requirements because they provide exemptions during malfunctions 
and during startup and shutdown, respectively, for emissions exceeding 
otherwise applicable SIP emissions limitations at the discretion of the 
state agency. EPA therefore issued a SIP call pursuant to section 
110(k)(5) to North Carolina with respect to these provisions. Region 4 
is considering these provisions in light of the considerations set 
forth above and proposes to withdraw the SIP call for North Carolina 
with respect to these two provisions. As explained, a holistic review 
of a SIP may show that there are protective provisions that ensure 
attainment and maintenance of the NAAQS even though a SIP includes SSM 
exemptions, and we believe that this result is not precluded by the 
D.C. Circuit decision in Sierra Club v. Johnson.
    In analyzing the air quality protections provided by the entirety 
of the North Carolina SIP, Region 4 believes there may be a reasonable 
basis to conclude that the SIP provides numerous overlapping planning 
requirements that are protective of air quality and each individual 
criteria pollutant NAAQS. In fact, both of the provisions that were 
included in the 2015 SSM SIP Call for North Carolina include 
substantial protection of air quality standards within the SIP-called 
provision itself.
    First, the exemption provided at 2D .0535(g) requires that owners 
or operators use best available control practices when operating 
equipment to minimize emissions during start-up and shutdown periods. 
Specifically, it states:
    Start-up and shut-down excess emissions during start-up and shut-
down shall be considered a violation of the appropriate rule if the 
owner or operator cannot demonstrate that the excess emissions are 
unavoidable when requested to do so by the Director. The Director may 
specify for a particular source the amount, time, and duration of 
emissions that are allowed during start-up or shut-down. The owner or 
operator shall, to the extent practicable, operate the source and any 
associated air pollution control equipment or monitoring equipment in a 
manner consistent with best practicable air pollution control practices 
to minimize emissions during start-up and shut-down. (Emphasis added).
    Even though this provision includes an exemption, it also provides 
a backstop that requires sources to use the best practicable air 
pollution control practices to minimize the risk that emissions during 
startup or shutdown periods that could cause an exceedance or violation 
of the NAAQS.
    Second, the exemption provided at 2D .0535(c) outlines seven 
criteria that the director will consider when evaluating whether the 
source qualifies for an emissions limit exemption during a malfunction. 
Specifically, it states:

    Any excess emissions that do not occur during start-up or shut 
down shall be considered a violation of the appropriate rule unless 
the owner or operator of the source of the excess emissions 
demonstrates to the director, that the excess emissions are the 
result of a malfunction. To determine if the excess emissions are 
the result of a malfunction, the director shall consider, along with 
any other pertinent information, the following:
    (1) The air cleaning device, process equipment, or process has 
been maintained and operated, to the maximum extent practicable, in 
a manner consistent with good practice for minimizing emissions;
    (2) Repairs have been made in an expeditious manner when the 
emission limits have been exceeded;
    (3) The amount and duration of the excess emissions, including 
any bypass have been minimized to the maximum extent practicable;
    (4) All practical steps have been taken to minimize the impact 
of the excess emissions on ambient air quality;
    (5) The excess emissions are not part of a recurring pattern 
indicative of inadequate design, operation, or maintenance;
    (6) The requirements of Paragraph (f) of the Regulation have 
been met; and
    (7) If the source is required to have a malfunction abatement 
plan, it has followed that plan.
    All malfunctions shall be repaired as expeditiously as 
practicable. However, the director shall not excuse excess emissions

[[Page 26037]]

caused by malfunctions from a source for more than 15 percent of the 
operating time during each calendar year.

    The existence of these specific criteria themselves provide 
additional protections of the NAAQS because factors considered by the 
director include whether sources minimize emissions and limit the 
extent of emissions which could occur to the greatest extent 
practicable. Additionally, the provision itself establishes bounds on a 
source's ability to employ this exemption, since it prohibits the 
director from excusing excess emissions from a source due to 
malfunctions for more than 15 percent of the operating time. This 
limitation reasonably minimizes the risk that excess emissions from 
malfunctions would contribute to a NAAQS exceedance or violation.
    Apart from the SIP-called provisions discussed previously, the 
North Carolina SIP also contains numerous overlapping requirements 
providing for protection of air quality and the NAAQS, which generally 
control emissions of NAAQS pollutants. First, 15A N.C. Admin. Code 02D 
.0502, which is included in the North Carolina SIP and addresses 
emission control standards generally, provides: ``The purpose of the 
emission control standards set out in this Section is to establish 
maximum limits on the rate of emission air contaminants into the 
atmosphere. All sources shall be provided with the maximum feasible 
control.'' See 40 CFR 52.1770(c)(1). The requirement for ``maximum 
feasible control'' on all sources applies at all times, including 
periods of startup and shutdown. Thus, by requiring sources to be 
subject to emission control standards established at the maximum 
feasible level of control, the SIP ensures that air quality in the 
State will be protected to the highest degree possible. This guiding 
purpose broadly applies to the emission control standards in Section 
.0500 of the North Carolina SIP. North Carolina confirmed as much in 
their comment letter on EPA's 2015 SSM policy, explaining that the 
State's requirement that sources implement ``maximum feasible control'' 
is one of the provisions of the SIP that ``provide assurances that air 
quality and emission standards will be achieved.'' In light of the 
flexibility in CAA section 110(a)(2)(A) and SIP development generally, 
we think it is reasonable for North Carolina to develop an overall 
emissions control approach that requires all sources to implement 
maximum feasible controls even though sources may be exempt from 
particular, otherwise applicable emission standards during some smaller 
subset of SSM periods.
    Second, the North Carolina SIP includes general provisions that 
require sources not to operate in such a way as to cause NAAQS 
violations. 15A N.C. Admin. Code 02D .0501(e) directs all sources to 
operate in a manner that does not cause any ambient air quality 
standard to be exceeded at any point beyond the premises on which the 
source is located, despite the SIP containing SSM exemptions for 
emission limitations. 15A N.C. Admin. Code 2D. 0501(e) states:

    In addition to any control or manner of operation necessary to 
meet emission standards in this Section, any source of air pollution 
shall be operated with such control or in such manner that the 
source shall not cause the ambient air quality standards of Section 
.0400 of this Subchapter to be exceeded at any point beyond the 
premises on which the source is located. When controls more 
stringent than named in the applicable emission standards in this 
Section are required to prevent violation of the ambient air quality 
standards or are required to create an offset, the permit shall 
contain a condition requiring these controls.

    Accordingly, even if the SIP contains exemptions from specific 
emission limits during SSM events, this provision ensures that the 
source at issue must ensure that none of its emissions cause a NAAQS 
exceedance or violation.
    Third, the North Carolina SIP provides additional assurances that 
sources will prevent and correct equipment failures that could result 
in excess emissions by requiring utility boilers (and any source with a 
history of excess emissions, as determined by the director) to have a 
malfunction abatement plan approved by the director. Utility boilers in 
North Carolina contribute to a significant portion of the point source 
pollutant emissions in the State.\39\ 15A N.C. Admin. Code 02D .0535(d) 
states:
---------------------------------------------------------------------------

    \39\ For example, utility boilers in North Carolina contribute 
approximately 24 percent of PM10 emissions, 66 percent of 
SO2 emissions, and 47 percent of NOX emissions 
from total point sources in the State. See spreadsheet titled ``NC 
2014 NEI Summary'' in the docket for this action.

    All electric utility boiler units subject to a rule in this 
section shall have a malfunction abatement plan approved by the 
director. In addition, the director may require any source that he 
has determined to have a history of excess emissions to have a 
malfunction abatement plan approved by the director. The malfunction 
plans of electric utility boiler units and of other sources required 
to have them shall be implemented when a malfunction or other 
breakdown occurs. The purpose of the malfunction abatement plan is 
to prevent, detect, and correct malfunctions or equipment failures 
---------------------------------------------------------------------------
that could result in excess emissions. . . .

    The provision also identifies minimum requirements for a 
malfunction abatement plan. Although specific to electric utility 
boilers (and other sources as required by the Director), this SIP 
provision ensures that subject units are taking steps to prevent, 
detect, and correct malfunctions, even if an SSM exemption applies. 
This provision serves to limit any excess emissions that could result 
from such events, thus limiting the chance that excess emissions would 
result in a NAAQS exceedance or violation.
    Fourth, the North Carolina SIP provides general provisions to 
reduce airborne pollutants and to prevent NAAQS exceedances beyond 
facility property lines, despite the SIP containing SSM exemptions for 
emission limitations, for particulates from sand, gravel, or crushed 
stone operations (at 15A N.C. Admin. Code 2D .0510(a)) and from 
lightweight aggregate operations (at .0511(a)):

    The owner or operator of a [. . .] operation shall not cause, 
allow, or permit any material to be produced, handled, transported 
or stockpiled without taking measures to reduce to a minimum any 
particulate matter from becoming airborne to prevent exceeding the 
ambient air quality standards beyond the property line for 
particulate matter, both PM10 and total suspended 
particulates.

    And in a similar manner, the North Carolina SIP includes general 
provisions to reduce airborne pollutants and to prevent NAAQS 
exceedances beyond facility property lines for particulates from wood 
products finishing plants (at 15A N.C. Admin. Code 2D .0512):

    A person shall not cause, allow, or permit particulate matter 
caused by the working, sanding, or finishing of wood to be 
discharged from any stack, vent, or building into the atmosphere 
without providing, as a minimum for its collection, adequate duct 
work and properly designed collectors, or such other devices as 
approved by the commission, and in no case shall the ambient air 
quality standards be exceeded beyond the property line.

    Accordingly, even if the SIP contains exemptions from specific 
emission limits during SSM events, these provisions ensure that the 
source at issue must ensure that none of its emissions cause a NAAQS 
exceedance or violation.
    Fifth, the North Carolina SIP provides a general requirement at 15A 
N.C. Admin. Code 2D .0521(g) for sources that operate COMS that ``[i]n 
no instance shall excess [opacity] emissions exempted under this 
Paragraph cause or contribute to a violation of any emission standard 
in this Subchapter or 40 CFR part 60, 61, or 63 or any ambient air 
quality

[[Page 26038]]

standard in Section 15A N.C. Admin. Code 2D.0400 or 40 CFR part 50.'' 
Each of these provisions ensures that emissions are minimized to 
protect air quality, independent of an SSM exemption that may also 
apply. Further, as recognized by this provision, federal standards in 
40 CFR parts 60, 61, and 63 applicable to the source apply and regulate 
sources emissions and operation, regardless of any SSM exemption in the 
SIP.
    Finally, we note that the SIP includes an overall strategy for 
bringing all areas into compliance with the NAAQS for all pollutants 
regulated by the CAA. On September 26, 2011 (76 FR 59250), Region 4 
approved into the SIP significant NOX and SO2 
emission limitations from the North Carolina Clean Smokestacks Act 
(NCCSA). This state law became effective in 2007 and set caps on 
NOX and SO2 emissions from public utilities 
operating coal-fired power plants in the State that cannot be met by 
purchasing emissions credits. See 40 CFR 52.1781(h). The NCCSA resulted 
in permanent emission reductions that helped nonattainment areas in the 
State achieve attainment of the 1997 Annual PM2.5 NAAQS.\40\ 
Thus, even if a source could avail itself of an SSM exemption for 
certain emissions, its total emissions must fit within the utility-wide 
cap for the State provided under a law adopted as part of a 
comprehensive plan for improving air quality in North Carolina.
---------------------------------------------------------------------------

    \40\ See Approval and Promulgation of Implementation Plans and 
Designation of Areas for Air Quality Planning Purposes; North 
Carolina: Redesignation of the Hickory-Morganton-Lenoir 1997 Annual 
Fine Particulate Matter Nonattainment Area to Attainment; Proposed 
Rule, 76 FR 58210,58217 (September 20, 2011), and Approval and 
Promulgation of Implementation Plans and Designation of Areas for 
Air Quality Planning Purposes; North Carolina: Redesignation of the 
Greensboro-Winston Salem-High Point 1997 Annual Fine Particulate 
Matter Nonattainment Area to Attainment; Proposed Rule, 76 FR 
59345,59352 (September 26, 2011).
---------------------------------------------------------------------------

    In addition to the general SSM exemption issues discussed 
previously, in the 2015 SSM SIP Call Action, EPA also raised concerns 
that North Carolina's 15A N.C. Admin. Code 2D .0535(c) and 15A N.C. 
Admin. Code 2D .0535(g) are examples of what EPA referred to as 
``director's discretion'' exemptions. These SIP provisions identify 
between five and seven criteria that the Director of North Carolina 
Department of Environmental Quality will evaluate to determine whether 
excess emissions resulting from a malfunction or startup and shutdown, 
respectively, are a violation of the given standard. In the 2015 SSM 
SIP Call Action, EPA took the position that these director's discretion 
provisions were also problematic because they allow air agency 
personnel to modify existing SIP requirements under certain conditions, 
which essentially constituted a variance from an otherwise applicable 
emission limitation. EPA considered director's discretion provisions to 
effectively permit impermissible SIP revisions by allowing air agency 
personnel to make unilateral decisions on an ad hoc basis regarding 
excess emissions during SSM events and, thus, as not in compliance with 
the necessary process required for SIP revisions.\41\
---------------------------------------------------------------------------

    \41\ See 80 FR at 33977 and 33978.
---------------------------------------------------------------------------

    Acknowledging those concerns, we now consider finding that 
director's discretion SSM exemptions may not necessarily make a SIP 
substantially inadequate to meet CAA requirements.\42\ As explained, 
supra in section III, in certain circumstances, Region 4 is considering 
adopting a policy that automatic exemptions during periods of SSM may 
not be inherently inconsistent with CAA section 110(a)(2)(A). Because 
automatic SSM exemptions may not necessarily render the SIP inadequate, 
Region 4 is considering also finding that director's discretion 
exemptions also may not necessarily render the SIP inadequate. Further, 
consistent with the perspective being evaluated by Region 4 that SIPs 
can generally protect against NAAQS violations and that SIP provisions 
containing SSM exemptions may not be inconsistent with CAA 
requirements, Region 4 has reviewed EPA's 2015 interpretation and is 
considering that director's discretion provisions may not constitute an 
improper SIP revision. If a director's discretion provision establishes 
a framework for when and how an air agency director may determine that 
SSM excess emissions do not constitute a violation, and that framework 
was approved into the SIP after going through a public process, any 
action by the director consistent with the provision would simply be 
acting in accordance with the SIP-approved provisions; it would not be 
an unlawful revision of the SIP.
---------------------------------------------------------------------------

    \42\ See Texas v. EPA, 690 F.3d 670 (5th Cir. 2012); Luminant 
Generation Co. v. EPA, 675 F.3d 917 (5th Cir. 2012) (vacating and 
remanding EPA's disapproval of discretionary SIP provisions).
---------------------------------------------------------------------------

    Given the specific criteria contained within them, director's 
discretion provisions would likely excuse emissions in more limited 
circumstances than automatic exemptions. Accordingly, the same 
reasoning that supports our potential position that automatic 
exemptions in SIPs may not be inconsistent with the CAA also informs 
our potential position that the director's discretion provisions in the 
North Carolina SIP that were SIP-called in the 2015 SSM SIP Call may 
not be inconsistent with the CAA. This potential finding would be 
predicated on a holistic finding that included consideration of all of 
the provisions in the North Carolina SIP. Relevant to this evaluation, 
as discussed previously, the North Carolina SIP includes provisions 
that provide for sources to be operated in a manner that does not cause 
an exceedance or violation of the NAAQS, and that requirement is not 
displaced by this director's discretion exemption. The North Carolina 
director's discretion provisions outline the conditions under which air 
agency personnel can make a factual decision that SSM emissions do not 
constitute a violation, and that limitation is part of Region 4's 
holistic consideration of the SIP. The SIP, as approved, provides air 
agency personnel with the framework and authority to exempt excess 
emissions from being a violation. Because that allowance is approved 
into the SIP, and the SIP provisions went through a public comment 
period prior to EPA's final action to approve the SIP, Region 4 is 
evaluating whether acting in accordance with these approved provisions 
would not constitute unlawful SIP revisions.
    As part of the 2015 SSM SIP Call Action, EPA issued CAA section 
110(k)(5) SIP calls to a number of states, including North Carolina 
regarding provisions 15A N.C. Admin. Code 2D .0535(c) and 15A N.C. 
Admin. Code 2D .0535(g).\43\ In the 2015 SSM SIP Call Action, the 
Agency explained that it would evaluate any pending SIP submission or 
previously approved submission through notice-and-comment rulemaking 
and, as part of that action, determine whether a given SIP provision is 
consistent with CAA requirements and applicable regulations.\44\ 
Proposed re-evaluations on those issues are part of this notice-and-
comment action.
---------------------------------------------------------------------------

    \43\ See 80 FR at 33964.
    \44\ Id. at 33976.
---------------------------------------------------------------------------

    As discussed, the North Carolina SIP contains numerous provisions 
that work in concert and provide redundancy to protect against a NAAQS 
exceedance or violation, even if an SSM exemption provision also 
applies. Therefore, based on an analysis of the multiple provisions 
contained in the North Carolina SIP that are designed to be protective 
of the NAAQS, Region 4 proposes to conclude that it is reasonable for 
the North Carolina air agency director to be able to exclude qualifying 
periods of excess emissions

[[Page 26039]]

during periods of SSM without posing a significant risk to attainment 
or maintenance of the NAAQS. Consistent with the alternative policy 
being considered, set forth above, Region 4 has reviewed the 
applicability of the SIP call previously issued to North Carolina, 
including EPA's specific evaluation of the State's subject SIP, and, if 
that policy is adopted, proposes to withdraw the SIP call that was 
issued in the 2015 SSM SIP action with respect to 15A N.C. Admin. Code 
2D .0535(c) and 15A N.C. Admin. Code 2D .0535(g).
    EPA's CAA regulations allow EPA Regions to take actions that 
interpret the CAA in a manner inconsistent with national policy when 
the Region seeks and obtains concurrence from the relevant EPA 
Headquarters office. Pursuant to EPA's regional consistency regulations 
at 40 CFR 56.5(b), the Acting Region 4 Regional Administrator sought 
and obtained concurrence from the relevant office in EPA's Office of 
Air and Radiation to propose an action that outlines an alternative 
policy that is inconsistent with the national EPA policy, most recently 
articulated in the 2015 SSM SIP Action, on provisions exempting 
emissions exceeding otherwise applicable SIP limitations during periods 
of unit startup, shutdown and malfunction at the discretion of the 
state agency and propose action consistent with that alternative 
policy. The concurrence request memorandum is included in the public 
docket for this action.

V. Region 4's Proposal To Approve North Carolina's June 5, 2017, SIP 
Revision

    On September 18, 2001, North Carolina submitted a new rule section 
regarding the control of NOX emissions from large stationary 
combustion sources to Region 4 for approval into its SIP.\45\ The rule 
section--15A N.C. Admin. Code 02D .1400--contains Rule .1423 (``Large 
Internal Combustion Engines'') as well as other rules not related to 
today's proposed action. On August 14, 2002, North Carolina submitted 
to Region 4 a SIP revision with changes to its Section 1400 
NOX rules, including several changes to Rule .1423. Region 4 
did not act on the August 14, 2002, submittal. However, on December 27, 
2002, Region 4 approved the portion of North Carolina's September 18, 
2001, SIP revision incorporating Rule .1423. See 67 FR 78987.
---------------------------------------------------------------------------

    \45\ See Rule .1402--``Applicability'' and the definition of 
``source'' in Rule .1401 for the scope of this rule section.
---------------------------------------------------------------------------

    On June 5, 2017, North Carolina withdrew its August 14, 2002, SIP 
revision and resubmitted identical changes to Rule .1423 as a SIP 
revision as well as the changes to the other rules contained in the 
original 2002 SIP revision.46 47 The State provided this 
resubmission in response to a Region 4 request for a version of the 
rule that highlights, using redline-strikethrough text, the State's 
proposed revisions to the federally approved rule. The June 5, 2017, 
SIP revision relies on the hearing record associated with the August 
14, 2002, SIP revision \48\ because the revised rule text is the same.
---------------------------------------------------------------------------

    \46\ Region 4 is considering the other rule changes through a 
separate rulemaking.
    \47\ On June 28, 2018, North Carolina supplemented its June 5, 
2017, submittal to acknowledge that Rules .1413 and .1414 are not in 
the SIP. This supplement is not relevant to this action.
    \48\ North Carolina held public hearings on May 21, 2001, and 
June 5, 2001, to accept comments on the rule changes contained in 
the August 14, 2002, SIP revision.
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A. Summary of North Carolina's June 5, 2017, SIP Revision Changes to 
Rule .1423

    As mentioned previously, North Carolina's June 5, 2017, SIP 
revision includes several changes to Rule .1423. These changes relate 
to the rule paragraphs on Applicability, Emission limitation, 
Adjustment, Compliance determination and monitoring, Reporting 
requirements, and Recordkeeping requirements, as described below.
     Rule .1423(a), ``Applicability.'' North Carolina modified 
Rule .1423(a) by clarifying that Rule .1423 does not apply to an 
internal combustion (IC) engine of the four specific types listed in 
the rule if it is subject to prevention of significant deterioration 
(PSD) or nonattainment new source review (NNSR).
     Rule .1423(b), ``Emission limitation.'' North Carolina 
corrected Rule .1423(b) by stating that the owner or operator of a 
stationary IC engine ``shall not cause'' NOX emissions in 
excess of the rule limits instead of ``shall cause'' NOX 
emissions in excess of those limits.
     Rule .1423(c), ``Adjustment.'' North Carolina corrected 
Rule .1423(c) by changing the word ``Paragraphs'' to ``Paragraph.''
     Rule .1423(d), ``Compliance determination and 
monitoring.'' North Carolina modified subparagraph (1) of Rule .1423(d) 
(Rule .1423(d)(1)) and subparagraph (2) of Rule .1423(d) (Rule 
.1423(d)(2)) as follows:
    --Rule .1423(d)(1) is revised to add that data obtained from a 
continuous emissions monitoring system (CEMS) and used to determine 
compliance with this rule must meet the applicable requirements 
specified in ``.1404 of this Section'' as well as the applicable part 
60 requirements.
    --Rule .1423(d)(2) is revised to change the conditions in which an 
owner or operator of a subject IC engine may use an alternative 
compliance determination method. Rather than being based on the State 
finding that the procedure can ``measure emissions of nitrogen oxides 
as accurately and precisely as the continuous emission monitoring 
system required under Subparagraph (1) of this Paragraph,'' the revised 
language reads ``show the compliance status of the engine.''
     Rule .1423(e), ``Reporting requirements.'' North Carolina 
modified Rule .1423(e) by adding the missing word ``shall'' to clarify 
that the owner or operator of a subject source must submit 
NOX emission reports and by revising the language to clarify 
that the ozone season ends September 30 of each year.
     Rule .1423(f), ``Recordkeeping requirements.'' North 
Carolina modified Rule .1423(f)(7)(A) to clarify that, when 
NOX standards are exceeded by a unit equipped with a CEMS, 
records must be kept that identify the reason for the ``excess 
emissions,'' the action taken to correct the ``excess emissions,'' and 
the action taken to prevent similar future ``excess emissions'' from 
occurring.

B. Region 4's Analysis of North Carolina's June 5, 2017, SIP Revision 
Changes to Rule .1423

    Region 4 has reviewed North Carolina's changes to Rule .1423, 
``Large Internal Combustion Engines,'' in the State's June 5, 2017, SIP 
revision and is proposing to approve these changes as discussed below.
     Rule .1423(a), ``Applicability.'' Rule .1423(a) states 
that Rule .1423 applies to four listed types of IC engines that are 
subject to Rule .1418 (``New Electric Generating Units, Large Boilers, 
and Large I/C Engines'') and that were permitted after October 30, 
2000. North Carolina's June 5, 2017, revision modifies Rule .1423(a) to 
clarify that Rule .1423 applies to those IC engines which are ``not 
subject to Rule .0530 (prevention of significant deterioration) or Rule 
.0531 (nonattainment area major new source review).'' This revision 
reflects the current language of Rule .1418, which requires that IC 
engines subject to PSD/NNSR must, in most cases, comply with those SIP 
provisions

[[Page 26040]]

rather than the requirements of Rule .1423.\49\
---------------------------------------------------------------------------

    \49\ Rule .1418 establishes NOX emission limits for, 
among other types of units, new large internal combustion engines 
permitted after October 31, 2000. This rule provides that a new 
large internal combustion engine must comply with Rule .1423 if it 
is not covered under Rule .0530 (PSD) or .0531 (NNSR). This rule 
also stipulates that if a new large internal combustion engine is 
covered under Rule .0530 (PSD), it shall comply with the Rule .1423 
requirements or the best available control technology requirements 
of .0530 (PSD), whichever requires the greater degree of reduction.
---------------------------------------------------------------------------

     Rule .1423(b), ``Emission limitations.'' North Carolina 
corrected Rule .1423(b) by stating that the owner or operator of a 
stationary IC engine ``shall not cause'' (rather than ``shall cause'') 
NOX emissions in excess of the specified NOX 
limits. This change corrects a typographical error and is consistent 
with applicable requirements of the CAA and its implementing 
regulations.
     Rule .1423(c), ``Adjustment.'' North Carolina corrected 
Rule .1423(c) by changing the word ``Paragraphs'' to ``Paragraph.'' 
This change corrects a typographical error and is consistent with 
applicable requirements of the CAA and its implementing regulations.
     Rule .1423(d)(1), ``Compliance determination and 
monitoring.'' North Carolina modified Rule .1423(d)(1) to ensure that 
CEMS data used for determination of compliance with this rule meet 
applicable SIP requirements as well as Federal requirements. Rule 
.1423(d)(1) of the State's current federally approved SIP provides that 
the owner or operator of a subject IC engine shall determine compliance 
using ``a [CEMS] which meets the applicable requirements of Appendices 
B and F of 40 CFR part 60, excluding data obtained during periods 
specified in Paragraph (g) of this Rule.'' The rule revision inserts 
``and .1404 of this Section'' following the word ``Rule'' in this text 
to ensure that the CEMS used to obtain compliance data must meet the 
applicable requirements specified in Rule .1404 (in particular, 
Paragraphs (d)(2) and (f)(2) of Rule .1404) as well as the applicable 
part 60 requirements since those provisions specify additional federal 
requirements for obtaining CEMS data. In a letter dated February 22, 
2019 (included in the docket for this proposed rulemaking), NC DAQ 
stated:

    The DAQ's intention in 15A N.C. Admin. Code 02D .1423(D)(1) is 
to cross-reference 15A N.C. Admin. Code 02D .1404, Recordkeeping: 
Reporting: Monitoring:, Paragraphs (d)(2) and (f)(2) since these 
provisions specify additional federal requirements for continuous 
emissions monitoring systems. The DAQ does not interpret the new 
cross-reference to 15A N.C. Admin. Code 02D .1404 to be part of the 
preceding exclusionary language.

    Paragraph (g) of Rule .1423 provides that the emission standards 
therein do not apply during periods of ``(1) start-up and shut-down 
periods and periods of malfunction, not to exceed 36 consecutive hours; 
(2) regularly scheduled maintenance activities.'' As discussed in 
Section IV in this document, Region 4 proposes to find that the 
provisions of Rule .1423(g), when considered in conjunction with other 
elements in the North Carolina SIP, are sufficient to provide adequate 
protection of the NAAQS. North Carolina has bounded the time during 
which a source can employ this exemption, minimizing the potential that 
any excess emissions during these periods would cause or contribute to 
a NAAQS exceedance or violation. Therefore, the exemption, which allows 
for emission standards of the rule to not apply during periods of 
startup, shutdown, and malfunction of up to 36 consecutive hours, or 
maintenance, is not inconsistent with the requirements of the CAA 
section 110.
     Rule .1423(d)(2), ``Compliance determination and 
monitoring.'' North Carolina modified Rule .1423(d)(2) to standardize 
the existing exclusions with those of other rules of the approved SIP. 
Rule .1423(d)(2) of the State's current federally approved SIP 
provides, as an alternative to CEMS, that a source may determine 
compliance using ``an alternate calculat[ion] and recordkeeping 
procedure based on actual emissions testing and correlation with 
operating parameters.'' The current rule qualifies this option as 
follows:

    To use the alternative procedures under Subparagraph (2) of this 
Paragraph, the owner or operator shall demonstrate to the Director 
that the alternative procedure can measure emissions of nitrogen 
oxides as accurately and precisely as the continuous emission 
monitoring system required under Subparagraph (1) of this Paragraph. 
The installation, implementation, and use of this alternate 
procedure shall be approved by the Director before it may be used. 
The Director may approve the alternative procedure if he finds that 
it can measure emissions of nitrogen oxides as accurately and 
precisely as the continuous emission monitoring system required 
under Subparagraph (1) of this Paragraph.

    The rule revision deletes the first sentence of this qualification 
language and revises the condition of the third sentence to provide 
that the Director may approve the alternative procedure if he finds 
that it can ``show the compliance status of the engine'' (rather than a 
finding that the alternative procedure can ``measure emissions of 
nitrogen oxides as accurately and precisely as the continuous emission 
monitoring system required under Subparagraph (1) of this Paragraph''). 
Region 4 notes that this language revision is consistent with language 
already approved in the SIP at Rule .1409(e) for certain internal 
combustion engines.
     Rule .1423(e), ``Reporting requirements.'' North Carolina 
modified Rule .1423(e) by adding the missing word ``shall'' to clarify 
that owner or operator of a subject source must submit NOX 
emission reports and by revising language to clarify that the ozone 
season ends September 30 of each year. These changes are needed to 
correct a typographical error and to add clarity to the existing 
provision.
     Rule .1423(f), ``Recordkeeping requirements.'' North 
Carolina modified subparagraph (7)(A) of Rule .1423(f) by replacing the 
word ``exceedance'' with ``excess emissions'' in three instances. The 
change clarifies that, when NOX standards are exceeded by a 
unit equipped with a CEMS, records must be kept that identify the 
reason for the ``excess emissions,'' the action taken to correct the 
``excess emissions,'' and the action taken to prevent similar future 
``excess emissions'' from occurring. This change provides clarification 
to the regulated community since ``excess emissions'' is defined in the 
State's rules on NOX emissions, under Rule .1401 
(``Definitions''), and ``exceedance'' is not.
    Region 4 is proposing, if the policy outlined supra in section III 
is adopted, to determine that these changes to the North Carolina SIP 
are consistent with CAA requirements.

VI. Incorporation by Reference

    In this document, Region 4 is proposing to include in a final EPA 
rule regulatory text that includes incorporation by reference. In 
accordance with requirements of 1 CFR 51.5, Region 4 is proposing to 
incorporate by reference the North Carolina regulation 15 N.C. Admin. 
Code 02D .1423--``Large Internal Combustion Engines,'' modified to 
clarify applicability, correct typos, standardize exclusions, clarify 
that alternative compliance methods must show compliance status of the 
engine, clarify by adding the word ``shall'' and revising language to 
better define ozone season, and clarify that CEMS records must identify 
the reason for, the action taken to correct, and the action taken to 
prevent excess emissions, state effective on July 15, 2002.

[[Page 26041]]

    EPA has made, and will continue to make, these materials generally 
available through www.regulations.gov and at the EPA Region 4 office 
(please contact the person identified in the For Further Information 
Contact section of this preamble for more information).

VII. Proposed Action

    Region 4 is proposing to withdraw the SIP call issued to North 
Carolina for 15A N.C. Admin. Code 2D .0535(c) and 15A N.C. Admin. Code 
2D .0535(g) pursuant to CAA section 110(k)(5), originally published on 
June 12, 2015. In connection with this proposed withdrawal, Region 4 
proposes to find that these state regulatory provisions included in the 
North Carolina SIP are not substantially inadequate to meet CAA 
requirements.
    Pursuant to section 110 of the CAA, Region 4 is proposing to 
approve the aforementioned changes to Rule .1423 and incorporate these 
changes into the North Carolina SIP. Region 4 has evaluated the changes 
to Rule .1423 as included in North Carolina's June 5, 2017, SIP 
revision, and is proposing to determine that they meet the applicable 
requirements of the CAA and its implementing regulations.

VIII. Statutory and Executive Order Reviews

    Under the CAA, the Administrator is required to approve a SIP 
submission that complies with the provisions of the Act and applicable 
Federal regulations. See 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in 
reviewing SIP submissions, EPA's role is to approve state choices, 
provided they meet the criteria of the CAA. This action merely proposes 
to approve state law as meeting Federal requirements and does not 
impose additional requirements beyond those imposed by state law. For 
that reason, this proposed action:
     Is not a significant regulatory action subject to review 
by the Office of Management and Budget under Executive Orders 12866 (58 
FR 51735, October 4, 1993) and 13563 (76 FR 3821, January 21, 2011);
     Is not an Executive Order 13771 (82 FR 9339, February 2, 
2017) regulatory action because SIP approvals are exempted under 
Executive Order 12866;
     Does not impose an information collection burden under the 
provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.);
     Is certified as not having a significant economic impact 
on a substantial number of small entities under the Regulatory 
Flexibility Act (5 U.S.C. 601 et seq.);
     Does not contain any unfunded mandate or significantly or 
uniquely affect small governments, as described in the Unfunded 
Mandates Reform Act of 1995 (Pub. L. 104-4);
     Does not have Federalism implications as specified in 
Executive Order 13132 (64 FR 43255, August 10, 1999);
     Is not an economically significant regulatory action based 
on health or safety risks subject to Executive Order 13045 (62 FR 
19885, April 23, 1997);
     Is not a significant regulatory action subject to 
Executive Order 13211 (66 FR 28355, May 22, 2001);
     Is not subject to requirements of Section 12(d) of the 
National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 
note) because application of those requirements would be inconsistent 
with the CAA; and
     Results from on a new interpretation and does not provide 
EPA with the discretionary authority to address, as appropriate, 
disproportionate human health or environmental effects, using 
practicable and legally permissible methods, under Executive Order 
12898 (59 FR 7629, February 16, 1994).
    The SIP is not approved to apply on any Indian reservation land or 
in any other area where EPA or an Indian tribe has demonstrated that a 
tribe has jurisdiction. In those areas of Indian country, the rule does 
not have tribal implications as specified by Executive Order 13175 (65 
FR 67249, November 9, 2000), nor will it impose substantial direct 
costs on tribal governments or preempt tribal law.

List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Incorporation by 
reference, Intergovernmental relations, Nitrogen dioxide, Ozone, 
Reporting and recordkeeping requirements, Volatile organic compounds.

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

    Dated: May 20, 2019.
Mary S. Walker,
Acting Regional Administrator, Region 4.
[FR Doc. 2019-11758 Filed 6-4-19; 8:45 am]
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